REPORT ON CORPORATE GOVERNANCE
1. Company's Philosophy
Hotel Leelaventure Limited (Company) has committed itself to the philosophy of good Corporate Governance in all its dealings, utmost integrity in its conduct and in compliance with the highest standards of corporate values and ethics. The Company considers Corporate Governance as a continuous journey to provide a congenial environment to harmonise the goals of maximizing the stakeholders' value and maintaining a customer centric focus in all its dealings with the outside world, besides keeping important segments of the society adequately informed. The Code of Conduct for Directors and Senior Managers adopted by the Board of Directors in terms of Clause 49 of the Listing Agreement has further enhanced the standards of Corporate Governance in the Company.
2. Board of Directors
2.1 Size and Composition of the Board
As on 31st March, 2015, the Board comprised of 14 Directors, ofwhich 7 were Independent Directors, 4 Non-Executive Non-Independent Directors and 3 Executive Directors. The Chairman is an Executive Promoter Director.
The Directors possess experience and specialized knowledge in diverse fields, such as hoteliering, project management, legal, banking, finance, administration, corporate governance, etc.
The particulars of Directors seeking appointment / reappointment have been included in the Notice of the Annual General Meeting.
Board Meetings and Attendance
The Board of Directors met 5 times during the year - on 27th May, 2014, 11th August, 2014, 18th September, 2014, 5th November, 2014 and 12th February, 2015 and the gap between two Board meetings did not exceed four calendar months. The meetings of the Board of Directors were held at the Registered Office of the Company. Meetings were scheduled well in advance and the Notice, detailed Board agenda, management reports and other explanatory Board notes were circulated well in advance to all the Board members to enable the Board to take informed decisions.
2.4 Familiarization Programme for Independent Directors
The Board has adopted a Familiarization Program ("the Program") for Independent Directors ofthe Company. The Program aims to provide insights into the Company to enable the Independent Directors to understand the business model and business operations of the Company and the industry to enable the directors to contribute significantly to the Company. This Familiarization Program has been uploaded on the Company's website for public information and a web link for the same is <http://www.theleela.com/> upload/finance/corporate-goveranance-policies/program-independent-directors.pdf.
3. Audit Committee
The Audit Committee of the Board was reconstituted with effect from 11th August, 2014. In accordance with the provisions of Section 177 of the Companies Act, 2013 (the Act) and the revised Clause 49 of the Listing Agreement, the scope and terms of reference of the Audit Committee have been amended.
The members have varied expertise in banking, finance, accounting and legal matters. The Chairperson of the Audit Committee was present at the last Annual General Meeting held on 18th September, 2014. The Chairman & Managing Director, Co-Chairman & Managing Director, Director-Finance & CFO are permanent invitees for the meetings. The Statutory Auditors and the Internal Auditors are also invited to the meetings. The Company Secretary acts as Secretary to the Audit Committee.
During the year under review, the Audit Committee met 4 times - on 27th May, 2014, 11th August, 2014, 5th November, 2014 and 12th February, 2015. The Committee generally meets on the day of the Board meeting, except when otherwise considered expedient.
Terms of Reference of Audit Committee
The terms of reference of this Committee are, inter alia, to cover the matters specified under Clause 49 of the Listing Agreements and in the Companies Act, 2013. The Audit Committee of the Board, inter alia, provides assurance to the Board on the existence of an effective internal control environment that ensures:
• efficiency and effectiveness of operations;
• safeguarding of assets and adequacy of provisions for all liabilities;
• reliability of financial and other management information and adequacy of disclosures; and
• compliance with all relevant statutes.
Powers of Audit Committee
The Audit Committee is empowered, pursuant to its terms of reference, inter-alia:
• To investigate any activity within its terms of reference.
• To seek information from any employee.
• To obtain outside legal or other professional advice.
• To secure attendance of outsiders with relevant expertise, if it considers necessary.
Role of Audit Committee
The role of the Audit Committee includes the following:
• Oversight of the company's financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;
• Recommendation for appointment, remuneration and terms of appointment of auditors of the company;
• Approval of payment to statutory auditors for any other services rendered by the statutory auditors;
• Reviewing, with the management, the annual financial statements and auditor's report thereon before submission to the Board for approval, with particular reference to:
• Matters required to be included in the Director's Responsibility Statement to be included in the Board's report in terms of clause (c) of sub-section 3 of section 134 of the Companies Act, 2013.
• Changes, if any, in accounting policies and practices and reasons for the same.
• Major accounting entries involving estimates based on the exercise of judgment by management.
• Significant adjustments made in the financial statements arising out of audit findings.
• Compliance with listing and other legal requirements relating to financial statements.
• Disclosure of any related party transactions.
• Qualifications in the draft audit report.
• Reviewing, with the management, the quarterly financial statements before submission to the Board for approval;
• Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter;
• Review and monitor the auditor's independence and performance, and effectiveness of audit process;
• Approval or any subsequent modification of transactions of the company with related parties;
• Scrutiny of inter-corporate loans and investments;
• Valuation of undertakings or assets of the company, wherever it is necessary;
• Evaluation of internal financial controls and risk management systems;
• Reviewing, with the management, performance of statutory and internal auditors and adequacy of the internal control systems;
• Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure, coverage and frequency of internal audit;
• Discussion with internal auditors of any significant findings and follow up thereon;
• Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board;
• Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern;
• To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors;
• To review the functioning of the Whistle Blower mechanism;
• Approval of appointment of CFO (i.e., the whole-time Finance Director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate;
• Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
Review of information by Audit Committee
The Audit Committee mandatorily reviews the following:
• Management discussion and analysis of financial condition and results of operations;
• Statement of significant related party transactions (as defined by the Audit Committee), submitted by management;
• Management letters / letters of internal control weaknesses issued by the statutory auditors;
• Internal audit reports relating to internal control weaknesses; and
• The appointment, removal and terms of remuneration of the Chief Internal Auditor.
4. Nomination and Remuneration Committee
Composition, Meeting and Attendance
In accordance with the provisions of Section 178 of the Companies Act, 2013 (the Act) and revised Clause 49 of the Listing Agreement, the 'Remuneration Committee' has been re-designated as the 'Nomination and Remuneration Committee' with amended role and powers. The Company Secretary acts as the Secretary of the Committee.
Role and terms of reference of the Nomination and Remuneration Committee
The role and terms of reference of the Committee inter-alia include the following:
• To identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and carry out evaluation of every director's performance.
• To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the directors, key managerial personnel and other employees.
• To formulate criteria for evaluation of Independent Directors and the Board and devise a policy for Board diversity.
• To carry out any other function as is mandated by the Board from time to time and / or enforced by any statutory notification, amendment or modification, as may be applicable.
• To perform such other functions as may be necessary or appropriate for the performance of its duties.
Remuneration Policy for Directors
In terms of the revised Clause 49 of the Listing Agreement and Companies Act, 2013, the Board at its meeting held on 12th February, 2015 has approved the remuneration policy for Directors. The said policy has broadly laid down the following criteria for determining the remuneration of Executive and Non-executive Directors:
Remuneration of Executive Directors
The remuneration of the Executive Directors is recommended by the Nomination & Remuneration Committee (N&RC) to the Board for approval after considering the relevant factors such as functions, role and responsibilities, comparison with the remuneration paid by peer companies, industry benchmarking, regulatory guidelines as applicable, etc. The Board considers the recommendations of N&RC and approves the remuneration, with or without modifications, subject to shareholders' and regulatory approvals. The Company has also obtained approval of the Central Government for the remuneration being paid to executive directors.
The remuneration packages of the Executive Directors comprise of salaries and allowances, contribution to provident funds, etc. The payments made during the financial year 2014-15 are as follows:
The Company has been paying remuneration to the executive directors within the ceiling approved by the shareholders and the Ministry of Corporate Affairs (MCA). The Company is not paying any bonus, pension, performance linked incentives, etc. to the executive directors. The Company also has not issued any stock options to the Executive directors. The Service Agreement with the Managing Directors provides for a notice period of six months and with Director- Finance & CFO provides for a notice period of 3 months.
Remuneration of Non-Executive Directors (NEDs)
The NEDs are paid sitting fees for attending each meeting of the Board of Directors or any committee thereof as approved by the Board, within the permissible limit prescribed under the Companies Act, 2013, Listing Agreement and other regulatory guidelines, as amended from time to time. Any change in sitting fees shall be recommended by the N&RC and approved by the Board of Directors. The N&RC considers the following factors while recommending the change in the sitting fees to the Board:
(a) Contribution expected from Directors considering size and complexity of organization,
(b) Comparison with the peer companies / Industry benchmarking,
(c) Regulatory guidelines as applicable, etc.
The NEDs are entitled to reimbursement of expenses for participation in the meeting of the Board and Committee thereof.
The Non-Executive Directors were paid sitting fees of Rs. 20,000 till 11th August 2014 and Rs.30,000 thereafter, for attending each meeting of the Board or Committee thereof.
The details of sitting fees paid during the financial year 2014-15 are given below:
5. Stakeholders' Grievance Committee
In accordance with the provisions of Section 178 of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement, the "Shareholders' / Investors'
Grievances Committee" has been re-designated as the "Stakeholders' Relationship Committee" with amended scope in terms thereof. The Company Secretary acts as the Secretary of the Committee.
Composition, Meeting and Attendance
The Committee met on 27th May, 2014 and 5th November, 2014 during the year.
Mr. Dinesh Kalani, Company Secretary acts as the Compliance Officer and has been regularly interacting with the Registrar & Share Transfer Agents (RTA), to ensure that the complaints / grievances of the shareholders / investors are attended to without delay and where deemed expedient, the complaints are referred to the Chairman of the Committee or discussed at its meetings.
During the year, the Registrar had approved 36 share transfers comprising 38,765 shares and processed 224 requests for de-materialization of 3,52,210 shares. There were no valid requests pending for share transfers at the end of the year.
Broad Terms of Reference
• Oversee and review all matters connected with the transfer of the Company's securities, including issue of duplicate share and debenture certificates.
• Monitor redressal of investors' / shareholders' / security holders' grievances.
• Oversee the performance of the Company's Registrar and Share Transfer Agents.
• Carry out any other function as referred by the Board from time to time or enforced by any statutory notification / amendment or modification as may be applicable.
7.1 Disclosures on materially significant related party transactions
All transactions entered into with Related Parties as defined under the Companies Act, 2013 and Clause 49 of the Listing Agreement during the financial year were in the ordinary course of business and on arms-length basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no materially significant transactions with related parties during the financial year which were in conflict with the interest of the Company. Suitable disclosure as required by the Accounting Standards (AS18) have been made in the notes to the Financial Statements. The details of the transactions with related parties, if any, are placed before the Audit Committee from time to time. The Board of Directors at its Meeting held on 12th February, 2015 has formulated a policy on materiality of Related Party Transactions and also on dealing with Related Party Transactions pursuant to the provisions of the Companies Act, 2013 and Listing Agreement. The same is displayed on the website of the Company and the link is <http://www.theleela.com/upload/finance/corporate-goveranance->policies/policy-related-party-transactions.pdf
7.2 Disclosure on Non-compliances by the Company
During the last three years, there were no strictures or penalties imposed by either the Securities and Exchange Board of India or the Stock Exchanges or any statutory authority for non-compliance of any matter related to the capital markets.
7.3 Whistle Blower Policy
The Company has implemented the Whistle Blower Policy pursuant to which Whistle Blowers can raise concerns relating to Reportable Matters (defined in the policy) such as fraud, bribery, corruption, illegality, health & safety, environmental issues and wastage/ misappropriation of Company's funds/assets, etc. Further, the mechanism adopted by the Company encourages the Whistle Blower to report genuine concerns or grievances and provides for adequate safeguards against victimization of Whistle Blower who avail of such mechanism and also provides for direct access to the Members of the Audit Committee and its Chairman, if required. The details of complaints received and the action taken are reviewed periodically by the Audit Committee. None of the Whistle Blowers have been denied access to the Audit Committee of the Board. The above policy has been uploaded on the website of the Company, viz. www.theleela.com
7.4 CMD / CFO Certification
The CMD and the CFO have issued the certificate as required under the provisions of Clause 49 of the Listing Agreement, certifying that the financial statements do not contain any untrue statement and these statements represent a true and fair view of the Company's affairs. The said certificate is annexed and forms part of the Annual Report.
7.5 Code of Conduct
The Board of Directors has amended the Code of Conduct for the Board of Directors and Senior Management to align with the provisions of the Companies Act, 2013. The confirmation from the Chairman & Managing Director regarding compliance with the code by all the Directors and Senior Management forms part of the Report. The Code of Conduct is displayed on the website of the Company.
7.6 Code of Conduct for Prevention of Insider Trading
The Company has adopted a revised Code of Conduct for Prevention of Insider Trading in accordance with the requirements of SEBI (Prohibition of Insider Trading) Regulations, 2015 with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares beyond threshold limits. Further, it prohibits the purchase or sale of Company's shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed.
7.7 Other Disclosures
The Company has adhered to all the mandatory requirements of Corporate Governance norms as prescribed by Clause 49 of the Listing Agreement, to the extent applicable.
Brief profile of the Directors retiring by rotation and eligible for re-appointment and Directors proposed to be appointed will be attached to the notice convening the Annual General Meeting.
8. Means of Communication
The Company communicates with its shareholders through its Annual Report, General Meeting, Newspapers and the Company's web-site. Information and latest updates and announcements made by the Company can be accessed at Company's website: www.theleela.com which includes the following:
• Quarterly /Half-Yearly /Annual Financial Results
• Quarterly Shareholding Pattern
• Annual Reports
• Quarterly Corporate Governance Report
• Investor Presentation made to analysts
The Company regularly publishes its quarterly and annual financial results in newspapers like Financial Express, Free Press Journal and Navashakti.
9. Subsidiary Company
The Company has a material unlisted Indian subsidiary. An Independent Director of the Company has been appointed as a director on the Board of said subsidiary. The minutes of the subsidiary companies are periodically placed before and reviewed by the Board of Directors.
10. General Shareholder Information
CIN : L55101MH1981PLC024097
ii) Registration Date 20th March, 1981
iii) Address of the Registered office and contact details
Hotel Leelaventure Limited The Leela, Mumbai, Sahar, Mumbai - 400 059 Tel. +91-22-6691 1182/83 Fax +91-22-6691 1458 E-mail: email@example.com Website: www. theleela.com
iv) The Company's hotels
(A) Owned hotels:
(1) The Leela Mumbai, Sahar, Mumbai - 400 059
(2) The Leela Goa, Mobor, Cavelossim, Goa - 403 731
(3) The Leela Palace Bangalore, 23, Old Airport Road, Bangalore - 560 008
(4) The Leela Palace Udaipur, Lake Pichola, P.O. Box No. 125, Udaipur - 313 001
(5) The Leela Palace New Delhi, Diplomatic Enclave, Chanakyapuri, New Delhi - 110 023
(6) The Leela Palace Chennai, Satyadev Avenue Extension, MRC Nagar, Raja Annamalapuram, Chennai- 600 028
(B) Managed hotels and Residences:
(1) The Leela Ambience Gurgaon Hotel & Residences, Ambience Island, National Highway - 8, Gurgaon - 122 002, Delhi N.C.R.
_(2) The Leela Kovalam, Trivandrum - 695 527, Kerala_
34th Annual General Meeting
Day / Date : Tuesday, 22nd September, 2015
Time : 11.00 a.m.
Venue : Shree Bhaidas Maganlal Sabhagriha, U-1, Juhu Vile Parle Development Scheme, Vile Parle West, Mumbai- 400 056
Financial Calendar for the Year
Financial Year : 1st April to 31st March
Dividend Payment : The Company has not proposed any divided for the financial year ended 31st March, 2015.
Book Closure Dates : Saturday, 19th September, 2015 to Tuesday 22nd September, 2015 (both days inclusive) for the purpose of Annual General Meeting.
Listing on Stock Exchanges :
I) BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai - 400 001
II) National Stock Exchange of India Limited
Exchange Plaza, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051
Whole-sale Debt Market Segment
BSE Limited, Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai - 400 001
Unaudited Financial reporting for the quarter ending (tentative)
30th June, 2015 : 12th August, 2015
30th September, 2015 : 6th November, 2015
31st December, 2015 : 10th February, 2016
31st March, 2016 : 26th May, 2016
Share Transfer System
The Board has delegated the authority for approving transfer, transmission, etc. of the Company's equity shares to the Company Secretary and the authorized representatives of the Registrar and Share Transfer Agent. The Share Certificates in physical form are generally processed weekly and returned within 15 days from the date of receipt, if the documents are proper and valid in all respects. A summary of the transfer / transmission so approved is placed before the Board at periodic intervals. The Company obtains from a Practising Company Secretary a half-yearly certificate of compliance with the share transfer formalities as required under Clause 47(c) of the Listing Agreement with Stock Exchanges, and files a copy of the certificate with the Stock Exchanges concerned.
Dematerialisation of shares and liquidity
The trading in Equity Shares of the Company is permitted only in dematerialized form. Considering the advantages of trading in demat form, members are encouraged to consider dematerialisation of their shares.
Shareholders seeking dematerialization / rematerialization of their shares need to approach their Depository Participants (DP) with whom they maintain demat accounts. The DP will generate an electronic request and will send the physical share certificates to the Registrar and Share Transfer Agents ("the Registrar") of the Company. Upon receipt of the request and share certificates, the Registrar will verify the same. Upon verification, the Registrar will request National Securities Depository Ltd. (NSDL) / Central Depository Services (India) Ltd. (CDSL) to confirm the demat request. The demat account of the respective shareholder will be credited with equivalent number of shares. In case of rejection of the request, the decision is communicated to the shareholder.
In respect of rematerialization, upon receipt of the request from the shareholder, the DP generates a request and its verification is done by the Registrar. The Registrar then requests NSDL and CDSL to confirm the same. Thereafter, eligible number of shares is issued in physical form to the shareholder within 21 days.
Address for correspondence
The correspondence address of the Compliance Officer and the Registrar & Share Transfer Agent for equity shares are as follows:
a) Compliance Officer:
Name of the Compliance Officer : Mr. Dinesh Kalani, Company Secretary Address : The Leela, Sahar, Mumbai - 400 059 Telephone +91-22-6691 1182/83 E-mail firstname.lastname@example.org Fax +91-22-66911458 Designated E-mail ID for investor grievances email@example.com
(b) Registrar & Share Transfer Agent for Equity Shares
M/s. Sharepro Services (India) Pvt. Ltd. has been appointed as one point agency for dealing with shareholders. Shareholders correspondence should be addressed to the Company's Registrar & Share Transfer Agent at the address mentioned below:
M/s. Sharepro Services (India) Pvt. Limited
Unit: Hotel Leelaventure Limited 13 A/B Samhita Warehousing Complex, 2nd Floor, Off. Andheri Kurla Road Sakinaka Telephone Exchange Lane Sakinaka, Andheri (East) Mumbai - 400 072 Tel : + 91 22 6772 0300 / 6772 0400 / 6772 0344 Fax : + 91 22 2859 1568 E-mail: firstname.lastname@example.org
Website: www. shareproservices.com Contact persons: Mr. K. G. Abraham / Mr. Pascol Pereira
Investor relations centre of Registrar:
M/s. Sharepro Services (India) Pvt. Limited 912, Raheja Centre, Free Press Journal Road Nariman Point, Mumbai - 400 021 Tel : + 91 22 6613 4700 Fax : + 91 22 2282 5484
Scrip Information - Equity Shares Particulars
Scrip Code / Information
BSE Limited 500193
National Stock Exchange of India Limited HOTELEELA
Demat ISIN allotted by NSDL / CDSL INE 102A01024
Face Value Rs. 2 each