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Updated:20 Sep, 2019, 15:45 PM IST

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Updated:20 Sep, 2019, 16:01 PM IST

DIRECTORS' REPORT

DEAR MEMBERS,

The Directors take pleasure in presenting the 14th Annual Report together with the audited financial statements for the year ended March  31, 2016

2. Dividend

Your Directors are pleased to recommend a final dividend of Rs. 0.5/– per equity share of Rs. 10 each. The Company had distributed an interim dividend of Rs. 1.50/– per equity share of Rs. 10 each in March 2016. The total dividend for the year ended March 31, 2016 would accordingly be Rs. 2.00/– per equity share of Rs. 10 each as compared to Rs. 1.50 /– per equity share of Rs. 10 each during previous financial year.

3. Transfer to Reserves

The Company proposes to transfer an amount of Rs. 598.16 lakhs to the General Reserves. An amount of Rs. 16,506.66 lakhs is proposed to be retained for the year under review.

4. Share Capital

The Authorised Equity Share Capital of the Company is Rs. 6,000 lakhs. Paid–up Share Capital as on March 31, 2016 was Rs. 5,650.07 lakhs. The Company has neither issued shares with differential rights as to dividend, voting or otherwise nor issued shares (including sweat equity shares) to the employees or Directors of the Company, under any Scheme

No disclosure is required under Section 67(3)(c) of the Act, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said Section are not applicable.

5. Deposits

During the year under review, the Company has not accepted deposits from the public falling within the ambit of Section 73 of the Act, and the Rules framed thereunder.

6. Directors and KMP

Mr. Kochouseph Chittilappilly retires by rotation at the ensuing Annual General Meeting as per the provisions of Section 152 (6) & (7) of the Companies Act, 2013 and being eligible offers himself for re–appointment. The Board recommends his re–appointment. During the fiscal year, Mr. D S Sachdeva was appointed as Chief Executive Officer.

7. Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, to the best of their knowledge and belief the Directors states  that

(I) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(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 and loss 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; and

(V) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(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.

Based on the framework of internal financial controls, compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors the reviews performed by management and the relevant board committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2015–16.

8. Internal Control Systems

a. Internal control systems and their adequacy

The Company has in place well defined and adequate internal controls commensurate with the size of the Company and the same were operating effectively throughout the year.

The Company has an external Internal Audit (IA) function. The scope and authority of the IA function is defined before commencing the Audit. To maintain its objectivity and independence, the IA function reports to the Audit Committee of the Board. The IA function evaluates the efficacy and adequacy of internal control system, its compliance with operating systems and policies of the Company and accounting procedures at all locations of the Company. Based on the report of IA function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

b. Internal Controls over Financial Reporting

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

The Company has adopted accounting policies which are in line with the Accounting Standards and the Act. These are in accordance with generally accepted accounting principles in India. Changes in policies, if required, are made in consultation with the Auditors and are approved by the Audit Committee.

The Company has a robust financial closure, certification mechanism for certifying adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates.

9. Sexual Harassment of Women at Workplace

The Company is an equal opportunity employer and consciously strives to build a work culture that promotes dignity of all employees. As required under the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has implemented a policy on prevention, prohibition and redressal of sexual harassment at workplace. All women, permanent, temporary or contractual including those of service providers are covered under the policy. An Internal Complaints Committee comprising of four members has been set up which includes three women to redress complaints relating to sexual harassment. Besides, in each of the units there is one nodal person who receives and forward complaints to the first instance person (FIP) who is a woman" or directly to the Committee

During the year, the Company has received one complaint on sexual harassment and the same was resolved to the satisfaction of the aggrieved candidate. Awareness programmes were conducted across the Company to sensitize the employees to uphold the dignity of their colleagues at workplace, particularly with respect to prevention of sexual harassment. Some employees were sent to attend training program conducted by external agency.

10. Health and Safety

Health and Safety (H&S) of employees and all stakeholders is an overarching value of your Company. Company's policies stress to conduct the business in a manner that helps create a healthy and safe environment for all stakeholders (employees, contractors and customers) based on the adoption of a true safety culture. They further directs that H&S be embedded in everything the Company does when it comes to its people, its processes, its customers, in delivering results and in leading sustainability. The H&S rules define essential behavior necessary to ensure safety. Identifying H&S not as a separate activity but as a critical success factor for operational performance, the policy places personal responsibility on every individual employee at all levels for ensuring safe working conditions in their respective work areas coupled with a fair and transparent consequence management process, in the event of negligence or willful disregard for safety rules. The policy and rules were widely communicated across the organization to employees and contractor workmen.

11. Board Meetings

The Board met six times during the financial year, the details of which are given in the corporate governance report that forms part of this Report. The intervening gap of 120 days between any two meetings was within the period prescribed by the Companies Act, 2013.

12. Declaration from Independent Directors

The Company, for the year ended 31st March, 2016, has received declarations from Independent Directors of the Company viz., Mr. George Jospeh and Mr. M.P. Ramachandran, which state that they fulfill the criteria to act as Independent Director as envisaged in Section 149 (6) & (7)of the Companies Act, 2013.

13. Training of Independent Directors

To familarise the Independent Directors with strategy, operations and functions of the Company, the whole–time Directors/ senior management personnel made presentations about the Company's strategy, operations, service offerings, organization structure, finance, human resources, technology, quality, safety and hygiene and risk management.

14. Nomination and Remuneration Policy

The Company has adopted a Nomination and Remuneration Policy to fulfill the requirements as envisaged in Section 178 (2), (3) and (4) of the Companies Act, 2013. The said policy is enclosed to the Report as annexure and also available on the website of the Company www.wonderla.com

15. Annual Performance evaluation of Board, Committees and Directors

The evaluation of the Board, its Chairman, individual Directors and Committees of the Board was undertaken in compliance with the provisions of Section 134(3)(p) of Companies Act, 2013 and Schedule IV of the Companies Act, 2013.

The performance and effectiveness of the Board and its Committees is fundamental to the success of the Company and there is a rigorous evaluation each year to assess how well the Board, its Committees, the Directors and the Chairman are performing. The evaluation process, during the fiscal year, was led by the Chairman with support from the Company Secretary. The process consisted of the completion, by all Directors, of a comprehensive questionnaire evaluating the performance of the Board, its Committees and individual Directors. The questionnaire considered Board processes and their effectiveness, Board composition, Board objectives, Board support, and content of discussion and focus at Board meetings and invited Directors to indicate where specific improvements could be made. Completion of the questionnaire by each Director was followed by one–to–one discussions between each Director and the Chairman where the Board's role and structure, process, relationships and any emerging issues were discussed.

The overall results of the evaluation were considered by the Chairman and the principal recommendations were presented by him for review and discussion by the Board. The evaluation concluded that good progress had been achieved in most of the areas identified for action and that the Board and its Committees have continued to work very effectively in relation to most dimensions. Improvements are seen in many of the areas of focus identified in the evaluation undertaken. In addition, the Chairman has concluded that each Director contributes effectively and demonstrates full commitment to his/ her duties.

The Chairman, taking into account the views of the other Directors, reviewed the performance of Executive Directors'. The performance of the Chairman is reviewed by the Non–Executive Directors, led by the Independent Director (ID), taking into account the views of the Executive Directors. Following the latest review, the ID considered and discussed with the Chairman the feedback relating to the Chairman's performance that had been received from the Directors as part of the Chairman's evaluation questionnaire. Following these discussions with the Chairman, the ID was able to confirm that the performance of the Chairman continues to be effective, and that the Chairman continues to demonstrate appropriate commitment to his role.

16. Auditors

The provisions of Section 139 (1) of Companies Act, 2013, envisage that every Company shall appoint Statutory Auditor for a term of 5 years commencing from April 1, 2014. However the third proviso to Section 139 (2) of the said Act has given time up to April 1, 2017 to comply with the provisions of Section 139 (1). In view of this requirement, the Company proposes to appoint M/s. B S R & Co. LLP, Chartered Accountants as Statutory Auditor of the Company for a period of 5 years commencing from 14th Annual General Meeting (AGM) in 2016 to 19th AGM  in 2021.

The firm has expressed willingness for the appointment. The Board recommends their appointment as statutory auditors.

17 Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made there under, Mr. Somy Jacob of Somy Jacob & Associates, Practising Company Secretaries, was appointed to conduct Secretarial Audit of records of the Company for the FY 2015–16. The Secretarial Audit Report on the Secretarial and Legal compliances of the Company for the FY 2015–16 is enclosed and forms part of Directors' Report.

18. Members of Audit Committee

Mr. George Joseph, an Independent Non–Executive Director, is the Chairman of the Audit Committee. Mr. Arun K Chittilappilly, Managing Director of the Company and Mr. M.P. Ramachandran, Independent Non–Executive Director, are other members of Audit Committee. All members of the Audit Committee are financially literate, and Mr. George Joseph and Mr. M.P. Ramachandran have related financial management expertise by virtue of their comparable experience and background. The Company Secretary acts as the Secretary to the Committee. Chief Financial Officer and Chief Executive Officer are permanent invitees to the Meetings of the Audit Committee. The concerned partners/ authorized representatives of the Statutory Auditors and the Internal Auditors are also invited to the meetings of the Audit Committee.

19. Board Diversity Policy

The Company recognizes and embraces the importance of a diverse Board for its success. We believe that a truly diverse Board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us, retain our competitive advantage. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board of Directors. The Board Diversity Policy is available on the website of the Company.

20. Related party transactions

The Company has formulated a policy on materiality of related party transactions and the procedure to deal with related party transactions. The detailed policy is available on the website of the Company (www.wonderla.com/investor– relations/prospectus–and–policies). The related party transactions, if any, are reported to the Audit Committee on quarterly basis for its review. The related party transactions, during the year under review, are disclosed in Notes to accounts of the financial statements.

21. Vigil Mechanism

The Vigil (Whistle Blower) Mechanism at Wonderla aims to provide a channel to the directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of Conduct or Policy.

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations and in order to maintain these standards, the Company encourages its Directors and employees who have genuine concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment.

The mechanism provides for adequate safeguards against victimization of Directors and employees who avail the mechanism and also provide for direct access to the Chairman of Audit Committee. This neither releases employees from their duty of confidentiality in the course of their work nor can it be used as a route for raising malicious or unfounded allegations about a person/ situation. The detailed policy content is available on the website of the Company.

22. Risk Management Policy

The Company has formulated a Risk Management policy to identify, reduce and prevent undesirable incidents or outcomes and to review past incidents and implement changes to prevent or reduce future incidents in the day to day operations of the Company. This involves reviewing operation in detail, identifying potential risks and likelihood of their occurrence and documenting the techniques to avoid, mitigate the potential risks or reduce their impact.

The Company has constituted a Risk Management Committee under the Chairmanship of Managing Director, Mr. Arun K Chittilappilly. The other members of the Committee include Mr. George Joseph, Non Executive Chairman, Ms. Priya Sarah Cheeran Joseph, Executive Director, Mr. Nandakumar T, Chief Financial Officer and Mr. Sivadas M, Senior General Manager. Detailed policy is available on website of the Company – www.wonderla.com

23. Corporate Social Responsibility (CSR) initiatives

The Annual Report on CSR activities as per the provisions of Section 135 of the Companies Act, 2013 and The Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed.

24. Corporate Governance Report

The Company has complied with the corporate governance requirements as stipulated under SEBI (LODR) Regulations, 2015 and the certificate of compliance obtained from M/s. B S R & Co. LLP, Chartered Accountants, is annexed to the Directors report.

25. Management Discussion and Analysis

The Management Discussion and Analysis Report is annexed and forms part of the Directors' Report.

26. Awards/ Recognitions/ Rankings

Wonderla Bangalore and Kochi have been ranked as India's No. 1 and No. 2 respectively amongst the top 10 amusement parks in India and Asia's No. 7 and No. 9 respectively amongst Asia's leading amusement parks as per Trip Advisor's travellers' choice 2015 report.

Wonderla Kochi branch has been awarded the best Kerala State Tourism Award for the fourth consecutive year.

27. Extract of Annual Return

The Extract of Annual Return pursuant to Section 92 (3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014, is enclosed to the Directors Report as annexure.

28. Particulars of loans, guarantees and investments

The particulars of loans given, guarantees provided and investments made by the Company pursuant to Section 186 of the Companies Act, 2013 for the year ended 31st March, 2016 are provided in Notes to the financial statements.

29. Conservation of energy, technology absorption, foreign exchange earnings and outgo

The information on conservation of energy, technology absorption, foreign exchange earnings and outgo pursuant to Section 134 (3) (m) and Rule 8 (3) of The Companies (Accounts) Rules, 2014 is enclosed.

30. Particulars of Employees

The particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed. As on 31st March 2016, the Company has 711 permanent employees.

31. Variations in market capitalization of the Company

The Equity shares of the Company are listed on BSE and NSE. The market capitalization of the Company as on March 31, 2016 was Rs. 2,192.51 Crores as against Rs. 1,476.36 Crores as on March 31, 2015, registering growth of around 48%. The Price Earnings Ratio has gone up from 28.43 on March 31, 2015 to 36.70 on March 31, 2016. The closing price of Company's equity shares on BSE and NSE as of March 31, 2016 was Rs. 388.70 and Rs. 388.05 respectively representing 210.44% increase over the IPO price.

32. Acknowledgement

The Directors acknowledge the unstinted commitment and valued contribution of all employees towards the success of the Company. Their hard work and dedication have been pivotal to the Company's growth.

Your Directors are grateful to all the shareholders of the Company for their trust, confidence and support. Your Directors are also thankful for the cooperation and assistance received from the customers, vendors, financial institutions, Banks, capital market intermediaries, Lawyers, Regulatory and government authorities.

For and on behalf of the Board

Wonderla Holidays Limited

George Joseph

Chairman

Place : Bangalore

Date : 24th May, 2016

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