Directors' Report To, The Members, Your Directors present the 7th Annual Report of the Board of Directors of your Company along with the Balance Sheet, Profit and Loss Account and Cash Flow Statement for the year ended March 31, 2016. FINANCIAL PERFORMANCE For the financial year 2015-16, the footfalls of the Theme Park and the Water Park put together stood at 1.55 million, versus 1.06 million, in the previous year i.e. a growth of 46%. The revenues from operations stood at Rs.2,523.91 million, versus Rs.1,894.22 million in previous year signifying growth of 33% on a YoY basis. Consequently, the EBITDA for FY 2015-16 is Rs.402.05 million, versus Rs.205.25 million in the previous year signifying growth of 96%. The outstanding secured loan as on March 31, 2016 aggregate to Rs.9,628.64 million. The said outstanding is post pre-payment done vide IPO proceeds. The weighted average rate of interest is 12.04 % p.a. Your Company had sold land admeasuring out of overall 170 acres of surplus land approximately 138 acres, to Walkwater Properties Private Limited ("WPPL"), wholly owned subsidiary company of the Company in FY 2014-15 and the transfer was completed during FY 2015-16. In consideration of the said transfer 21,151,321 equity shares of Rs.10 each at a premium of Rs.40 per share aggregating to Rs.1, 057, 566, 026 were issued and allotted to the Company by WPPL. THE STATE OF COMPANY AFFAIRS Your Company owns & operates an Integrated Entertainment Holiday Destination "IMAGICA" which is build to match global standards and includes a theme park, a water park, a snow park, a hotel, and other associated activities such as retail & merchandise, food and beverages, etc. During the year under review, your Company launched its Hotel 'Novotel Imagica Khopoli' on September 16, 2015 with 116 rooms in the first phase out of a total of 287 rooms proposed. Your Company is pleased to inform that hotel has delivered average occupancy of 75% in the first 6 months of its operations. Novotel Imagica, within a short period since it's launch, has been able to establish its niche in the leisure and social segments and has firmly established Imagica's position as a multi-day family holiday destination. With the philosophy of positioning Imagica as an exciting holiday destination; your Company has launched a new brand logo embodying the Imagica experience as "Imagica badi interesting jagah hai". Your Company completed the Snow Park and the same was opened to public in April, 2016. The Snow Park is built over an area of 30,000 sq. feet and is the largest Snow based attraction in India. EXTRACT OF ANNUAL RETURN Extract of annual return is enclosed in Annexure 1. DIVIDEND & TRANSFER TO RESERVES In view of the loss for the year under review, no amount is proposed to be transferred to the reserve(s) and your Directors have not recommended payment of any dividend for the year under review. NUMBER OF BOARD MEETINGS During the year ended March 31, 2016, the Board of Directors met 5 (five) times viz., on, May 27, 2015, August 3, 2015, November 2, 2015, January 28, 2016 and March 10, 2016. The maximum interval between any two meetings did not exceed 120 days. Details of the meetings of the Board alongwith the attendance of the Directors therein have been disclosed as part of the Corporate Governance Report forming part of this Annual Report. COMPOSITION OF AUDIT COMMITTEE The composition of Audit Committee of the Company is as follows: 1. Mr. Steven A. Pinto, Chairman; 2. Mr. Ghulam Mohammed; 3. Mr. Prashant Purker; and 4. Ms. Anjali Seth. DECLARATION OF INDEPENDENCE BY DIRECTOR Pursuant to the provisions under Section 134(3)(d) of the Companies Act, 2013, with respect to statement on declaration given by Independent Directors under Section 149(6) of the Companies Act, 2013, the Board hereby confirms that all the Independent Directors of the Company have given a declaration and have confirmed that they meet the criteria of independence as provided in the said Section 149(6) and relevant Regulation of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. DIRECTORS Pursuant to Section 152 of the Companies Act, 2013, Mr. Kapil Bagla, Director of the Company, retires by rotation and being eligible, offers himself for re-appointment at the ensuing Annual General Meeting. During the year under review, Mr. Prashant Purker ceased to be a Nominee Director w.e.f. May 13, 2015 and thereafter he was appointed as an Independent Director of the Company w.e.f May 27, 2015 for a period of 5 years. The Board made the following appointments based on the recommendations of the Nomination and Remuneration Committee: • Ms. Pooja Deora was appointed as an Additional Director with effect from May 24, 2016; • Ms. Meghna Ghai Puri was appointed as an Additional Independent Director of the Company with effect from May 24, 2016 ; and • Mr. Ashutosh Kale was appointed as an Additional Director of the Company with effect from May 24, 2016. The aforesaid appointments were made to hold office upto the date of the ensuing Annual General Meeting of the Company pursuant to Section 161 of the Companies Act, 2013 (the "Act"). The Company has received notice in writing from a Member along with the deposit of requisite amount as required under Section 160 of the Act proposing their candidature for the office of Director of the Company. The brief resume of the Directors being appointed/ re-appointed, the nature of their expertise in specific functional areas, names of companies in which they have held Directorship(s), Committee Membership(s)/ Chairmanship(s), their shareholding etc., is given in the section on Corporate Governance Report forming part of this Annual Report. KEY MANAGERIAL PERSONNELS The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Act are as follows: Mr. Kapil Bagla : Whole Time Director and Chief Executive Officer Mr. Rakesh Khurmi : Chief Financial Officer Ms. Madhulika Rawat : Company Secretary During the year under review, Mr. Ghanshyam Jhala, resigned as Company Secretary and Compliance Officer of the Company with effect from the close of business hours of October 9, 2015 and Ms. Madhulika Rawat was appointed as the Company Secretary and Compliance Officer of the Company with effect from November 2, 2015. SUBSIDIARY COMPANIES Walkwater Properties Private Limited is the only subsidiary company of your Company. During the period under review, no Company became/ ceased to be a subsidiary of your Company. A separate statement in terms of Section 129(3) of the Act containing salient features of the financial statements of the subsidiary of your Company in Form AOC 1 forms part of this Annual Report. Pursuant to the Section 136 of the Act which has exempted companies from attaching the Annual Reports and other particulars of its subsidiary companies along with Annual Report of the Company, the Annual Report of Walkwater Properties Private Limited is not attached with this Annual Report. The financial statements of the subsidiary company and related information shall be uploaded on the website of your Company which can be accessed using the link www.adlabsimagica.com/investor_docs/Annual%20 Accounts%202015-16.pdf and the same is available for inspection by the Members at the registered office of your Company during business hours on all working days up to the date of the Annual General Meeting, as required under Section 136 of the Act. Any Member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the registered office address of your Company. Your Company has approved a policy for determining material subsidiaries and the same is uploaded on the Company's website which can be accessed using the link <https://www.adlabsimagica.com/investor_docs/Material%20> Subsidiary%20Policy.pdf. DEPOSITS During the year under review, your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. Thus, as on March 31, 2016, there were no deposits which were unpaid or unclaimed and due for repayment. AUDITORS Statutory Auditors M/s. A. T. Jain & Co., Chartered Accountants, the Statutory Auditors of the Company hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received letter from M/s. A. T. Jain & Co., Chartered Accountants, to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Act and that they are not disqualified for such appointment within the meaning of Section 141 of the Act. The observations and comments given by Auditors in their report read together with notes to Accounts are self explanatory and hence do not call for any further comments under Section 134 of the Act. The Auditors' Report does not contain any qualification, reservation or adverse remark. Secretarial Auditor Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Aabid & Co., Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 201516. The Report of the Secretarial Audit in Form MR 3 for the financial year 2015-16 is annexed as Annexure 2 to the Report. There are no qualifications, reservations or adverse remarks made by Secretarial Auditor in his report. The Board has appointed M/s. Aabid & Co., Company Secretaries as Secretarial Auditors for the financial year 2016-17. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND The provisions of Section 125(2) of the Act do not apply as there was no dividend declared and paid by the Company. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE During the year under review, there were no such orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS The Company has adequate internal control procedures commensurate with its size and nature of business. The business control procedures ensure efficient use and protection of Company's resources and compliance with policies, procedures and statutory requirements. Further Internal auditors are appointed to carry audit assignments and to periodically review the transactions across the divisions and evaluate effectiveness of internal control systems. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT During the year, there were no loans and guarantees given under Section 186 of the Act. Particulars of investments have been disclosed as part of the financial statements of your Company for the year under review, as Note 13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 OF THE ACT IN THE PRESCRIBED FORM All contract(s) / arrangement(s) / transaction(s) entered into by your Company with its related parties, during the year under review, were: • in "ordinary course of business" of the Company; • on "an arm's length basis"; and • not "material", as per the provisions of Section 188(1) of the Act read with Companies (Meetings of Board and its Powers) Rules, 2014. Accordingly, Form AOC-2, prescribed under the provisions of Section 134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, for disclosure of details of Related Party Transactions, which are "not at arm's length basis" and also, which are "material & at arm's length basis", is not provided as an annexure of the Directors' Report. However, details of the Related Party Transactions entered into during the year under review and as on March 31, 2016, are disclosed as part of the financial statements of your Company for the year under review, as Note 31. Further, pursuant to the provisions of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Board has, approved and adopted a Policy on Related Party Transactions. The said policy is available on your Company's website viz. www.adlabsimagica.com . MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY There have been no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this report. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/ TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations. RISK MANAGEMENT Board has constituted a Risk Management Committee of the Board, to assist the Board with regard to the identification, evaluation and mitigation of operational, strategic and external risks. Risk Management Committee works towards identifying internal and external risks and implementing risk mitigation steps. On quarterly basis, status updates are provided to the Board of Directors of the Company. More details on risks and threats have been disclosed in the section "Management Discussion and Analysis". CORPORATE SOCIAL RESPONSIBILITY (CSR) CSR is a company's sense of responsibility towards the community and environment in which it operates. It is the continuing commitment by business to behave ethically and contribute to economic development of the society at large and building capacity for sustainable livelihoods. The Company believes in conducting its business responsibly, fairly and in a most transparent manner. It continually seeks ways to bring about an overall positive impact on the society and environment where it operates and as a part of its social objectives. This policy has been formally formulated and adopted in terms of Section 135 of the Act and Rules framed thereunder to undertake CSR activities. The Company has always made consistent efforts to maintain an active corporate social responsibility portfolio. The Company has duly constituted CSR Committee comprising of Mr. Steven A. Pinto, Mr. Prashant Purker and Mr. Manmohan Shetty. The responsibilities of the CSR Committee include: 1) Formulating and recommending to the Board of Directors the CSR Policy and indicating activities to be undertaken. 2) Recommending the amount of expenditure for the CSR activities. 3) Monitoring CSR activities from time to time. In view of the losses for the year under review, your Company was not required to spend any amount towards the CSR activities, as per the applicable provisions of Section 135 of the Act. Accordingly, the details of the CSR activities during the year under review are not provided in this Report. NOMINATION AND REMUNERATION POLICY The Company follows a policy on nomination and remuneration of Directors and Senior Management Employees. The Policy is approved by the Nomination and Remuneration Committee. The policy on the above is attached as Annexure 3. FORMAL ANNUAL EVALUATION The Company has devised a policy for performance evaluation of its individual directors, the Board and the Committees constituted by it, which includes criteria for performance evaluation. In line with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual evaluation of its own performance, working of the Committees and the Directors individually. The Board performance was evaluated based on inputs received from all the Directors after considering criteria such as Board's effectiveness in decision making, in providing necessary advice and suggestions to the Company's management, etc. A separate meeting of the Independent Directors was also held during the year for evaluation of the performance of the Non Independent Directors, the Board as a whole and that of the Chairman. The Nomination and Remuneration Committee has also reviewed the performance of the individual directors based on their knowledge, level of preparation and effective participation in meetings, contribution towards positive growth of the Company, etc. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134 (5) of the Act with respect to the Directors' Responsibility Statement, it is hereby confirmed that: (a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (b) the directors have 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; (c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the directors have prepared the annual accounts on a going concern basis; (e) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (f) the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. CONSOLIDATED FINANCIAL STATEMENTS The audited consolidated financial statements, for the financial year ended March 31, 2016, based on the financial statements received from the subsidiary company, as approved by its Board of Directors has been prepared in accordance with Accounting Standard 21 (AS-21) on "Consolidated Financial Statements" read with the Accounting Standards and Rules as applicable. VIGIL MECHANISM The Company has established a Vigil Mechanism that enables the Directors and Employees to report genuine concerns. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases. Details of the Vigil Mechanism policy are made available on the Company's website www.adlabsimagica.com . PARTICULARS OF EMPLOYEES Disclosures with respect to the remuneration of Directors and employees as required under Section 197 (12) of the Act and Rule 5(1) Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided separately as Annexure 4 to this Report. Details of employee remuneration as required under provisions of Section 197(12) of the Act and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be made available at the registered office of the Company during working hours, pursuant to the provisions of the first proviso to Section 136(1) of the Act and any member interested in obtaining such information may write to the Company Secretary and the same will be made available to any such member on request. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS All new Independent Directors (IDs) inducted into the Board are given an orientation. Presentations are made by Executive Directors (EDs) and Senior Management giving an overview of the Company's operations, to familiarise the new IDs with the Company's business operations. The new IDs are given an orientation on our products, group structure and subsidiary company, Board constitution and procedures, matters reserved for the Board, and the Company's major risks and risk management strategy. The Policy on the Company's Familiarisation Programme for IDs can be accessed at <https://www>. adlabsimagica.com/investor_docs/Familiarisation%20programme%20 for%20Independent%20Directors.pdf. HUMAN RESOURCES The Company regards human resources as a valuable asset. The Company encourages a performance driven culture and enables the employees with focused training at regular intervals. Further, the training needs of the staff at all divisions are periodically assessed and training programmes are conducted using internal resources and/or engaging external facilitators and trainers. The total number of permanent employees on the rolls of the Company as on the year end were 879. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure 5 to this Report. CORPORATE GOVERNANCE The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate section on corporate governance under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with the certificate from the Practicing Company Secretary confirming the compliance, is annexed and forms part of this Annual Report. MANAGEMENT DISCUSSION & ANALYSIS Management Discussion and Analysis is annexed as Annexure 6. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has always believed in providing a safe and harassment free workplace for every individual working in the Company's premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Policy on Prevention of Sexual Harassment at Workplace has been formulated by the Company. The policy aims to develop a harmonious and productive working environment free from sexual harassment. The Company also ensures all allegations of sexual harassment are investigated and dealt with effectively and appropriately. During the year under review, the Company received 7 complaints pertaining to sexual harassment. All the complaints have been resolved as on March 31, 2016. ACKNOWLEDGEMENTS Your Directors would like to express their sincere appreciation for the cooperation and assistance received from shareholders, bankers, financial institutions, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff of the Company during the financial year. For and on behalf of the Board of Directors Manmohan Shetty Chairman (DIN: 00013961) Place: Mumbai Date: May 24, 2016 |