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Inox Leisure Ltd.

BSE:532706  |  NSE:INOXLEISUREQ  |  58888:inll  |  IND:Film/TV Production & Distribution  |  ISIN code:INE312H01016  |  SECT:Media & Entertainment

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You can view full text of the Director's Report for Inox Leisure Ltd.
Director Report
Mar2017   Mar 2018

To the Members of INOX LEISURE LIMITED

The Directors take pleasure in presenting to you their Nineteenth Annual Report together with the Audited Financial Statements for the Financial Year ended 31st March, 2018.

1. FINANCIAL RESULTS

(Rs. in Lakhs)

Consolidated

Standalone

2017-18

2016-17

2017-18

2016-17

Income

Revenue from operations (net of taxes)

126,732.28

114,980.94

126,732.28

114,980.94

Other operating Income

8,079.55

7,090.47

8,079.55

7,090.47

Total Income from Operations

134,811.83

122,071.41

134,811.83

122,071.41

Less: Total Expenses

122,746.78

116,000.05

122,747.18

116,001.03

Profit from operations before Other Income and

12,065.05

6,071.36

12,064.65

6,070.38

Finance Cost and Exceptional Items

Add: Other Income

1,446.53

911.55

1,444.00

905.42

Profit from operations after Other Income and before Finance Cost and Exceptional Items

13,511.58

6,982.91

13,508.65

6,975.80

Less: Finance Cost

2,889.63

2,528.11

2,889.47

2,528.09

Profit from ordinary activities after finance cost

10,621.95

4,454.80

10,619.18

4,447.71

but before exceptional items and share of profit of joint ventures

Share of profit / (loss) of joint ventures

(3.43)

8.12

-

-

Profit before exceptional items and tax

10,618.52

4,462.92

10,619.18

4,447.71

Add/(Less): Exceptional items

(854.16)

-

(854.16)

-

Profit from ordinary activity before Taxation

9,764.36

4,462.92

9,765.02

4,447.71

Add/(Less): Provision for Taxation

For the year

(3,671.89)

(1,559.97)

(3,671.28)

(1,558.72)

Taxation pertaining to earlier years

5,370.47

158.54

5,370.47

158.70

Net Profit for the year

11,462.94

3,061.49

11,464.21

3,047.69

Profit for the year attributable to:

Equity holders of the Parent

11,462.92

3,061.45

-

-

Non-controlling interests

0.02

0.04

-

-

11,462.94

3,061.49

-

-

Other Comprehensive Income

A) Items that will not be reclassified to Profit &

Loss

(i) Actuarial gain/(loss) on employee defined benefit plan

100.21

(61.77)

100.21

(61.77)

(ii) Tax on above

(35.02)

21.38

(35.02)

21.38

Total Other Comprehensive Income

65.19

(40.39)

65.19

(40.39)

Total Comprehensive Income for the year comprising Profit & Other Comprehensive Income

11,528.13

3,021.10

11,529.40

3,007.30

Profit brought forward form earlier year/s

18,023.93

15,002.87

18,028.75

15,021.45

On account of change in non-controlling interest

(0.02)

(0.04)

Balance Carried forward to Balance Sheet

29,552.04

18,023.93

29,558.15

18,028.75

During the year under review, 6 Multiplex Cinema Theatres with 24 screens and one screen in an existing Multiplex Theatre were added. An agreement for 1 Multiplex Cinema Theatre with 1 Screen was discontinued. Accordingly, the tally of Multiplex Cinema Theatres of your Company stands at 123 Multiplexes with 492 screens and 1,21,573 seats as on 31st March, 2018.

Detailed analysis of the Financial Performance of the Company has been given in the Management Discussion and Analysis annexed to this Report.

2. CONSOLIDATED FINANCIAL STATEMENTS

As per Regulation 33 of the Securities and Exchange Board of India (Listing, Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and applicable provisions of the Companies Act, 2013 (“the Act”) read with the Rules issued thereunder, the Consolidated Financial Statements of the Company for the Financial Year 2017-18 have been prepared in compliance with applicable Accounting Standards and on the basis of Audited Financial Statements of the Company and its subsidiaries companies (including a joint venture company which became a subsidiary on 5th March, 2018), as approved by the respective Board of Directors.

The Consolidated Financial Statements together with the Auditors’ Report form part of this Annual Report. The Audited Standalone and Consolidated Financial Statements for the Financial Year 2017-18 shall be laid before the Annual General Meeting for approval of the Members of the Company.

3. DIVIDEND

With a view to finance the Company’s ongoing projects and considering future expansion plans, no Dividend has been recommended by the Board of Directors for the Financial Year ended 31st March, 2018.

In accordance with Regulation 43A of the Listing Regulations, the Company has formulated a ‘Dividend Distribution Policy’ and details of the same have been uploaded on the Company’s website https://www.inoxmovies.com/Corporate.aspx?Section=3.

4. TRANSFER TO RESERVES

During the year under review, the Company has not transferred any amount to General Reserves.

5. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mr. Vivek Jain (DIN: 00029968) retires by rotation and being eligible, offers himself for re-appointment.

Mr. Haigreve Khaitan (DIN: 00005290), Mr. Amit Jatia (DIN: 00016871) and Mr. Kishore Biyani (DIN: 00005740), Independent Directors of the Company were appointed in the 15th Annual General Meeting of the Company for a period of 5 consecutive years from 1st April 2014 upto 31st March, 2019. Their first term as Independent Director after the commencement of the Companies Act, 2013 will conclude on 31st March, 2019 and accordingly the approval of the Members is being sought by way of Special Resolution for the re-appointment of the above mentioned Independent Directors for a period of 5 consecutive years from 1st April, 2019 upto 31st March, 2024.

Necessary resolutions in respect of Director seeking re-appointment and in respect of appointment of above mentioned Independent Directors along with their brief Resume pursuant to Regulation 36(3) of the Listing Regulations are provided in the Notice of the Annual General Meeting forming part of this Annual Report.

During the year under review, there is no change in the Key Managerial Personnel of the Company. Subsequent to the end of the financial year, Mr. Dhanraj Mulki, Company Secretary & Compliance Officer resigned with effect from 17th April, 2018 and Mr. Parthasarathy Iyengar was appointed as a Company Secretary & Compliance Officer and designated as a Key Managerial Person of the Company with effect from 18th June, 2018.

6. NOMINATION & REMUNERATION POLICY

The Nomination and Remuneration Policy of the Company is annexed to this report as Annexure A.

7. DECLARATION OF INDEPENDENCE

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Section 149 (6) of the Act read with the Schedules and Rules issued thereunder as well as Regulation 16 of Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

8. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

Details of Familiarisation Programme for Independent Directors is given in the Corporate Governance Report.

9. PERFORMANCE EVALUATION

Performance Evaluation forms containing criteria for evaluation of Board as a whole, Committees of the Board and individual Directors and Chairperson of the Company were sent to all the Directors with a request to provide their feedback to the Company on the Annual Performance Evaluation of Board as a whole, Committees of Board, Individual Directors and Chairperson of the Company for the Financial Year 2017-18. Further, based on the feedback received by the Company, the Compensation, Nomination and Remuneration Committee at its Meeting held on 29th January, 2018 had noted that Annual Performance of each of the Directors including Chairman is highly satisfactory and decided to continue the terms of appointment of all the Independent Directors of the Company.

10. MEETINGS OF THE BOARD

During the year under review, the Board met 4 (Four) times and details of Board Meetings held are given in the Corporate Governance Report. The intervening gap between the two Meetings was within the time limit prescribed under Section 173 of the Act read with Regulation 17 (2) of the Listing Regulations.

11. DIRECTORS’ RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134 (3)(c) of the Act:

i. in the preparation of the Annual Accounts for the financial year ended 31st March, 2018, the applicable Accounting Standards and Schedule III of the Companies Act, 2013, have been followed and there are no material departures from the same;

ii. the Directors had selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the Financial Year and of the Profit of the Company for that period;

iii. the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors had prepared the Annual Accounts on a going concern basis;

v. the Directors had laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

vi. the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

12. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the Loan or Guarantee or Security is proposed to be utilized by the recipient are provided in the Standalone Financial Statements of the Company. Please refer to Note nos. 8, 9, 10, 42, 45 and 48 to the Standalone Financial Statements of the Company.

13. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All Contracts / Arrangements / Transactions entered by the Company during the year under review with Related Parties are approved by the Audit Committee and/or Board, as per the provisions of Section 188 of the Act read with the Rule 15 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 23 of the Listing Regulations. During the year under review, the Company had not entered into any Contract / Arrangement / Transaction with Related Parties which could be considered material in accordance with the Policy of the Company on Materiality of Related Party Transactions.

The Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions as approved by the Board may be accessed on the Company’s Website at the link https://www.inoxmovies.com/Corporate.aspx?Section=3.

All transactions entered with Related Parties for the year under review were on arm’s length basis. Further, there are no material related party transactions during the year under review with any Related Party. Hence, disclosure in Form AOC-2 is not required to be annexed to this Report.

14. DEPOSITS

The Company has not accepted any deposits covered under Chapter V of the Act.

15. SUBSIDIARY COMPANY INCLUDING JOINT VENTURE

The Company has following Subsidiaries:

A. Shouri Properties Private Limited

The Company is holding 99.29% Equity Shares of Shouri Properties Private Limited (SPPL). SPPL is engaged in the business of operating a multiplex cinema theatre.

B. Swanston Multiplex Cinemas Private Limited

Swanston Multiplex Cinemas Private Limited (SMCPL) has become a wholly-owned subsidiary of the Company with effect from 5th March, 2018. SMCPL was engaged in the business of operating multiplex cinema theatres in India. The Company has filed the Scheme of Amalgamation (the Scheme) of SMCPL with the Company with National Company Law Tribunal, Bench at Ahmedabad for its approval and the same is awaited.

A separate statement containing the salient features of financial statements of all subsidiaries of the Company (including a joint venture company which became a subsidiary on 5th March, 2018) forms a part of consolidated financial statements in compliance with Section 129 and other applicable provisions, if any, of the Act. In accordance with Section 136 of the Act, the financial statements of the subsidiary companies are available for inspection by the members at the Registered Office of the Company during business hours on all days except Saturdays, Sundays and public holidays upto the date of the Annual General Meeting (‘AGM’).Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents required to be attached to this report have been uploaded on the website of the Company www.inoxmovies.com. The Company has formulated a policy for determining material subsidiaries. The policy may be accessed on the website of the Company www.inoxmovies.com.

The Report on the highlights of performance and financial position of each of the Subsidiary Companies of the Company in Form no. AOC-1 pursuant to first proviso to sub-section (3) of Section 129 of the Act and Rule 5 of Companies (Accounts) Rules, 2014 along with the contribution of the Subsidiary Companies to overall performance of the Company during the year in terms of Rule 8 of Companies (Accounts) Rules, 2014 is annexed to this Report as Annexure B.

16. INTERNAL FINANCIAL CONTROLS

The Company has adequate internal financial controls commensurate with its size and nature of its business. The Board has reviewed internal financial controls of the Company and the Audit Committee monitors the same in consultation with Internal Auditors of the Company and these are tested Independently by M/s. BSR & Associates, LLP, Chartered Accountants.

17. INDEPENDENT AUDITOR’S REPORT

There are no reservations, qualifications or adverse remarks in the Independent Auditor’s Report. The notes forming part of the accounts are self-explanatory and do not call for any further clarifications under Section 134 (3) (f) of the Act.

18. INDEPENDENT AUDITORS

Members, at their 18th Annual General Meeting (AGM) held on 28th September, 2017 had appointed M/s Kulkarni and Company, (Firm Registration No.: 140959W), Chartered Accountants, Pune as Independent Auditors of the Company from the conclusion of the eighteenth AGM till the conclusion of the twenty-third AGM of the Company to be held in 2022, subject to the ratification of their appointment at every AGM, if required under law. The requirement to place the matter relating to appointment of Auditors for ratification by Members at every Annual General Meeting has been done away with vide notification dated May 7, 2018 issued by the Ministry of Corporate Affairs, New Delhi. Accordingly, no resolution is proposed for ratification of appointment of Auditors, who were appointed in the Annual General Meeting held on 28th September, 2017.

M/s. Kulkarni and Company, Chartered Accountants (Firm Registration No.: 140959W), have confirmed that they are not disqualified from continuing as Auditors of the Company.

19. COST AUDITORS

In terms of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Company is not required to include Cost Accounting Records in its books of accounts in respect of generation of electricity by Wind Mills of the Company since the Wind Mills of the Company satisfy the criteria of Captive Generating Plant as defined in Rule 3 of The Electricity Rules, 2005. Accordingly, the Company is not required to appoint the Cost Auditors for the Financial Year 2018 - 19.

20. SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Act read with Rule 9 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Samdani Shah & Associates, a firm of Practising Company Secretaries to conduct Secretarial Audit of the Company. The Secretarial Audit Report given by M/s. Samdani Shah & Kabra (erstwhile M/s. Samdani Shah & Associates) in Form No. MR-3 is annexed to this Report at Annexure - C.

There is no qualification in the Secretarial Report submitted by M/s. Samdani Shah & Kabra (erstwhile M/s. Samdani Shah & Associates) to the Company.

21. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of the Listing Regulations is presented in a separate Section forming part of this Annual Report.

22. CORPORATE GOVERNANCE REPORT

Pursuant to Regulation 34 of the Listing Regulations, Corporate Governance Report and Auditors’ Certificate regarding compliance of conditions of Corporate Governance is annexed to this report.

In compliance with the requirements of Regulation 17 (8) of the Listing Regulations, a Certificate from the Chief Executive Officer and Chief Financial Officer of the Company was placed before the Board.

All the Board Members and Senior Management Personnel of the Company had affirmed compliance with the Code of Conduct for Board and Senior Management Personnel. A declaration to this effect duly signed by the Chief Executive Officer is enclosed as a part of the Corporate Governance Report.

23. BUSINESS RESPONSIBILITY REPORT

Since your company is not part of the top 500 companies as per market capitalization on the stock exchanges where the shares of the Company are listed as on 31st March 2018, it is not mandated to publish Business Responsibility Report. However, as best governance practice Business Responsibility Report is included. A Business Responsibility Report as per Regulation 34 of the Listing Regulations, detailing the various initiatives taken by the Company on the environmental, social and governance front forms an integral part of this report. The said report is available on the website of the Company https://www.inoxmovies.com/Corporate. aspx?Section=3.

24. EXTRACT OF ANNUAL RETURN

In terms of Section 92 (3) of the Act read with Rule 12 of the Companies (Management & Administration) Rules, 2014, the extract of Annual Return as provided in Form No. MGT -9 is annexed to this Report at Annexure - D.

25. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in respect of Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo pursuant to Section 134 of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, in the manner prescribed is annexed to this Report at Annexure - E.

26. EMPLOYEE STOCK OPTION SCHEME

During the year under review, 1,67,500 options were granted to the employees of the Company. However, no shares were allotted pursuant to the grant in the current year. There are no changes in the Scheme and the Scheme is in compliance with the SEBI (Share Based Employee Benefit) Regulations, 2014.

The disclosures as required under the SEBI (Share Based Employee Benefit) Regulations, 2014 have been disclosed on the website of the Company and the same can be viewed at https://www.inoxmovies.com/Corporate.aspx?Section=3.

27. PARTICULARS OF EMPLOYEES

Disclosure pertaining to remuneration and other details as required under Section 197 (12) read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this Report at Annexure - F.

In accordance with the provisions of Section 197 (12) of the Act, read with Rules 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing the name and other particulars of the employees drawing remuneration in excess of the limits set out in the aforesaid Rule forms part of this Report. However, in terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Members of the Company excluding information on employees’ particulars which is available for inspection by the Members at the Registered Office of the Company during the business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining such information, the member may write to the Company Secretary at the Registered Office of the Company.

28. CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES

The Corporate Social Responsibility (CSR) Committee of the Company comprises of Mr. Haigreve Khaitan, Independent Director, Mr. Pavan Jain and Mr. Deepak Asher, Non Independent Directors of the Company. The CSR Policy of the Company is disclosed on the website of the Company which can be viewed at https://www.inoxmovies.com/Corporate.aspx?Section=3.

The report on CSR activities as per Companies (Corporate Social Responsibility) Rules, 2014 is annexed to this Report at Annexure - G.

29. INSURANCE

The Company’s property and assets have been adequately insured.

30. RISK MANAGEMENT

The Board of Directors of the Company at its Meeting held on 31st October, 2017 has approved Enterprise Risk Management (ERM) of the Company which is derived from COSO ERM - Aligning Risk with Strategy and Performance 2016 (Draft) framework established by committee of sponsoring organizations. Enterprise Risk Management is “The culture, capabilities, and practices, integrated with strategy-setting and its execution, that organizations rely on to manage risk in creating, preserving, and realizing value”. The Company has, therefore, adopted Residual risk approach and the Board of Directors at its Meeting held on 7th May, 2018 have approved Enterprise Risk Register, Risk Reporting and its Monitoring system. In the Board’s view, there are no material risks, which may threaten the existence of the Company. For further details, please refer to the Management Discussion and Analysis Report annexed to this report.

31. INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a Policy on Prevention, Prohibition and Redressal of sexual harassment at the workplace in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has formed Internal Complaints Committee to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.

The following is the summary of sexual harassment complaints received and disposed off during the year 2017-18.

Number of complaints received 14

Number of complaints disposed off 13

32. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THIS REPORT

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year of the company to which the Financial Statements relate and the date of this Report.

33. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

There are no orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company’s operations in future.

34. ACKNOWLEDGEMENT

Your Directors express their gratitude to all other external agencies for the assistance, co-operation and guidance received. Your Directors place on record their deep sense of appreciation for the dedicated services rendered by the workforce of the Company.

By Order of the Board of Directors

Pavan Jain

Place: Mumbai Chairman

Date: 24th July, 2018 (DIN:00030098)

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