CHL Director Discussions


Dear Members,

The Board of Directors is delighted to present the 44th Annual Report of the Company along with the Audited Financial Statements for the Financial Year ended 31st March 2023.

In compliance with the applicable provisions of the Companies Act, 2013, ("the Act"), and the Securities and Exchange Board of India ("SEBI") (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), this Board?s Report is prepared based on the standalone financial statements of the Company for the year under review and also present the key highlights of performance of subsidiaries to the overall performance of the Company during the year under review.

1. FINANCIAL RESULTS AND OPERATIONAL PERFORMANCE Lacs INR

S. No. Particulars 2022-2023 2021-2022
1. Total Revenue 8300.34 3808.75
2. Less: Expenses 5951.12 3575.15
3. Profit/(Loss) before Tax and Prior period items 2349.23 233.60
4. Prior Period Items (0.32) 2.49
5. Profit/(Loss) before Tax 2348.91 236.09
6. Less : Net Tax Expenses 478.43 45.81
7. Profit/(Loss) after Tax 1870.48 190.28
8. Other Comprehensive Income (23.41) 25.27
9. Total Comprehensive Income/(Loss) 1847.08 215.55
10. Reserves and Surplus 12144.86 10272.02

The gross revenue of the Company for the year under review at Rs. 8300.34 Lacs as compare to the previous year?s gross revenue which was at Rs. 3808.75 Lacs.

The Profit/(Loss) before tax after depreciation and finance cost at Rs. 2349.23 Lacs for the year under review as compared to Rs. 233.60

Lacs for the previous year.

Net Profit/(Loss) after providing tax for the year under review was Rs. 1870.48 Lacs as compared to Rs. 190.28 Lacs for the previous year.

The total comprehensive income for the year under review was Rs. 1847.08 lacs as compared to the Rs. 215.55 lacs for the previous year.

2. FINANCIAL STATEMENTS

Standalone Financial Statements

The annexed financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under section 133 of the

Companies Act, 2013 (the Act), Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time and other relevant provisions of the Act.

Consolidated Financial Statements

The Board also present the Audited Consolidated Financial Statements incorporating the duly Audited Financial Statements of the subsidiary, and as prepared in compliance with the Companies Act, 2013, applicable Accounting Standards and SEBI Listing Regulations, 2015 as prescribed by SEBI.

3. DIVIDEND

The company has not recommended any dividend during the year under review.

4. Macroeconomic Impact on Hospitality Sector

In the mid and an end of the FY2022-23, the hospitality industry received a significant boost from the domestic leisure segment, which is also expected to continue the recovery in demand. Domestic tourism is creeping nearly pre-pandemic levels, with hotels reporting occupancies close to those seen before the Covid-19 outbreak. The hospitality business all over the world has faced lot of challenges and losses in the business in the last two-three years due to pandemic. The industry is drifting surge in business from both domestic and international market. Leisure markets have continued to lead recovery. The post-pandemic urge to travel remains strong, which should drive continued growth in 2023.

The Asian Development Bank (ADB) projects the growth in India?sgrossdomesticproduct(GDP)tomoderateto6.4%infiscalyear

(FY) 2023 ending on 31 March 2024 and rise to 6.7% in FY2024, driven by private consumption and private investment on the back of government policies to improve transport infrastructure, logistics, and the business ecosystem. The growth moderation for India in FY2023 is premised on an ongoing global economic slowdown, tight monetary conditions, and elevated oil prices. However, FY2024 is expected to see faster growth in investment, thanks to supportive government policies and sound macroeconomic fundamentals, lower nonperforming loans in banks, and significant corporate deleveraging that will enhance bank Asian Development Bank?s (ADB) Outlook, April 2023].

Despite all factors, the Indian Hospitality industry should have been more cautious from inflationary impacts on Indian economy with increase in crude oil prices and interest rate hikes, if again by the Reserve Bank of India to control inflation. The Indian rupee weakness against the US dollar also added to the inflationary pressures.

In the year 2022-23 the Government Authorities with lifted all restrictions in the wake of significant improvement in Covid-19 situations more or less in the country, new fatalities are reducing with higher rates of vaccinations and awareness. In some regions of the country, authorities made caution for public to continuing facemask wearing in Public places.

5. DIRECTORS

(a) Re-appointment of retiring Director

Ms. Kajal Malhotra (DIN: 01319170) Director who retires by rotation and being eligible, has offered herself for re-appointment. The

Board recommends her appointment. (b) Independent Directors

(i) At the 40th Annual General Meeting of the company held on the 12th August, 2019, Mr. Lalit Bhasin (DIN: 00002114) was re-appointed as an Independent Director of the Company w.e.f 29th Day of September 2019 for a further period of 5(Five) consecutive years not liable to retire by rotation. (ii) At the 40th Annual General Meeting of the company held on the 12th August, 2019, Mr. Subhash Ghai (DIN: 00019803) was re-appointed as an Independent Director of the Company w.e.f 29th Day of September 2019 for a further period of 5(Five) consecutive years not liable to retire by rotation. (iii) At the 40th Annual General Meeting of the company held on the 12th August, 2019, Mr. Yash Kumar Sehgal (DIN: 03641168) was re-appointed as an Independent Director of the Company w.e.f 29th Day of September 2019 for a further period of 5(Five) consecutive years not liable to retire by rotation.

(iv) At the 42th Annual General Meeting of the company held on the 31st August, 2021, Mr. Alkesh Tacker (DIN: 00513286) was reappointed as an Independent Director of the Company w.e.f 12th Day of August, 2021 for a further period of 5(Five) consecutive years not liable to retire by rotation.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and provisions of the Listing Regulations.

(c) Appointment/Re-appointment

There is no appointment / re-appointment of Directors in the year under review.

(d) Resignation

There is no resignation of Directors including Independent Directors, Non-Executive and Non- Independent Directors during the year under review.

6. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 203 of the Companies Act, 2013, Mr. Luv Malhotra, Managing Director, Mr. Gagan Malhotra, Executive

Director, Mr. Gopal Prasad, Chief Financial Officer and Mr. Dinesh Kumar Maurya, Company Secretary (w.e.f February 10th, 2023), are the

Key Managerial Personnel of the Company. Mr. G. J. Varadarajan has resigned from the post of Company Secretary w.e.f February 10th, 2023, due to his health issue and medical conditions.

7. MANAGEMENT DISCUSSION AND ANALYSIS

As a part of regulatory requirement of the Listing Regulations, a separate section on the Management Discussion and Analysis Report forms an integral part of the Integrated Annual Report.

8. SUBSIDIARY COMPANY

CJSC CHL International is a subsidiary company incorporated in Tajikistan has developed a Five-Star Hotel at Dushanbe, the capital of

Tajikistan. The Hotel project was financed by the Export Import Bank of India. The Hotel is operating under the Brand name "Hilton".

The hospitality business all over the world has faced lots of challenges and losses in the business in the last two-three years due to Covid-19. The Hotel industry demand is recovering at a sharp pace after the third wave of pandemic aided by easing restrictions and people precautionary measures to fight against Covid.

Pursuant to the filing of case before the Economic Court of Tajikistan by the CJSC CHL International, our subsidiary company, against the

Export Import Bank of India (EXIM Bank) in respect of loan availed by it, the Economic Court of Tajikistan partially accepted the claims of CJSC CHL International vide its Order dated 01.05.2018. Against this Order, EXIM Bank appealed to the Hon?ble Supreme Court of Tajikistan, which was dismissed by the Hon?ble Supreme Court of Tajikistan, vide its Order dated 14.08.2018.

During the pendency of case in the Economic Court of Tajikistan, the EXIM Bank initiated the proceedings under IBC Code 2016 in the National Company Law Tribunal (NCLT) against CHL Limited, invoking its Corporate Guarantee, which was dismissed vide its Order dated 11.01.2018. The EXIM Bank, against this Order, appealed to National Company Law Appellate Tribunal (NCLAT), New Delhi and the same was also dismissed vide its Order dated 16.01.2019. Subsequently, EXIM Bank has filed Civil Appeal before Hon?ble Supreme Court of

India which is pending for adjudication.

CJSC CHL International filed a fresh law suit against the EXIM Bank of India on 31.12.2020 in the Economic Court of Tajikistan. The

Economic Court of Tajikistan passed an Interim Order dated 11-01-2021 suspending "any action on loan agreement between the CHL International and EXIM Bank of India dated 23.09.2010, 26.08.2013 and 18.03.2015, including Mortgage Agreement, Mortgage of real estate, Pledge of shares of CHL International" along with Personal Guarantees and Corporate Guarantees. Against this order dated

11.01.2021, the EXIM Bank appealed to the Supreme Economic Court of Tajikistan. The Supreme Economic Court of Tajikistan dismissed the appeal made by EXIM Bank vide its Order dated 30.03.2021.

Further, the EXIM Bank filed an Original Application before the Debts Recovery Tribunal I, Delhi invoking the personal Guarantee of Mr. Lalit Kumar Malhotra, the then Chairman of CHL Limited, which is pending adjudication and also EXIM Bank filed against CHL Limited before the Hon?ble Debts Recovery Tribunal - I (DRT-I), Delhi which is pending for adjudication. A fresh suit was filed in Economic Court of Tajikistan, Dushanbe on 04.01.2021 against EXIM Bank stating that few clauses/Articles of Loan

Agreements are in violation of the Law of Tajikistan. The Court passed an Order on 11.01.2021 suspending the operation of the Loan and other documents till the disposal of the suit. Against this order, EXIM Bank appealed to the Hon?ble Supreme Economic Court of Tajikistan and this appeal was rejected on 30.03.2021. Due to restrictions of travelling from India because of Covid-19, Hearings were suspended by City Economic Court of Tajikistan. On restoring the hearings in January, 2022, the suit was dismissed by the Economic Court of Tajikistan and against this order CHL International made an appeal to the Court and is still pending for adjudication.

There is no Associate Company within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). Further there has been no material change in the nature of business of the subsidiary.

In terms of provision to sub section (3) of Section 129 of the Act, the salient features of the Financial Statement of the subsidiary is set out in the prescribed form AOC-1, which forms part of the Annual Report 2022-2023.

9. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2022-2023, no complaint was received on sexual harassment.

10. WHISTLE BLOWER /VIGIL MECHANISM

In pursuant to the provisions of Section 177(9) and (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy is available on the website of the Company at www.chl.co.in under investors section.

11. ANNUAL RETURN

Pursuant to Section 92(3) and Section 134(3)(a) of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return (Form MGT-7) of the Company as on March 31, 2023, is available on the website of the Company at https://chl. co.in/welcome/investor/form_MGT-7. The extract of the Annual Retrun in Form MGT-9 is also annexed here with.

12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments if any, covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

13. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

Your Directors would like to inform that no material changes and commitments have occurred between the end of the financial year under review and the date of this report that may adversely affect the financial position of the .

14. DIRECTORS? RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(5) of the Act, and based on the representations received from the management, the Directors hereby confirm that: i. In the preparation of the Annual Accounts for the Financial Year 2022-2023, the applicable accounting standards have been followed and there is no material departure; ii. They 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 of the Company for the Financial Year; iii. They have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. They have prepared the Annual Accounts on a going concern basis; v. They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

15. CORPORATE GOVERNANCE

Your Company has taken adequate steps to adhere all the stipulations laid down in the Listing Regulations. A report on the Corporate

Governance along with certificate from Practicing Company Secretary confirming the Compliance is included as part of the

16. LISTING WITH STOCK EXCHANGE

The Listing fee has been paid for the year 2023-2024 to the BSE Limited, where the Company?s Shares are listed.

17. (a) PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information pursuant to Section 197 (12) of the Act, read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, in respect of directors, key managerial personnel and employees of the Company is given in

Annexure and form part of the report. There are no employees drawing remuneration above the limits specified under section 197 (12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014.

(b) REMUNERATION RATIO OF THE KEY MANAGERIAL PERSONNEL

The information required pursuant to section 197 read with rule 5 of the Companies (Appointment and Remuneration of the managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Key managerial personnel is furnished in extract of Annual Return MGT-9.

18. DEMATERIALISATION OF SHARES

As on 31st March, 2023, the total paid up equity share capital of the Company is Rs. 109,636,580 comprising of 5,48,18,290 equity shares of Rs. 2/- each. Out of the total equity shares, 5,40,74,487 (98.643%) Equity Shares of the Company stand dematerialized and balance 7,94,053 (1.449%) equity shares are still in physical form.

19. AUDITORS & AUDITORS? REPORT Statutory Auditors

Initially, Statutory Auditors of the company, M/s DGA & Co., Chartered Accountants, New Delhi (Firm Registration No. 003486N) was appointed as Statutory Auditors of the company for a period of Two years to hold office from the conclusion of 38th Annual General

Meeting (AGM) till the conclusion of the 40th AGM. Thereafter, in the 40th AGM of the company, M/s DGA & Co., Chartered Accountant was reappointed for a period of Three years to hold office from the conclusion of 40th AGM of the company till the conclusion of 43th AGM of the Company. Further, M/s DGA & Co., was reappointed for a period of one year from the conclusion of 43rd AGM of company till the conclusion 44th AGM of company.

Their tenure is coming to end from the conclusion of the 44th Annual General Meeting of the company. Subject to the approval of the shareholders of the company and pursuant to the provisions of Section 139 of the Act and the rules framed there under, the Board of Directors in its meeting held on 29th May, 2023 re-appointed as a Statutory Auditor of the company for a period of one year from the conclusion of 44th Annual General Meeting of the company till the conclusion of 45th Annual General Meeting of the company. In the ensuing Annual General Meeting, the firm is being appointed as per the Notice of the 44th Annual General Meeting.

The Audit Committee in its meeting held on 29.05.2023 has recommended the aforesaid reappointment.

Internal Auditors

M/s Gulvardhan Malik & Co., Chartered Accountants have been conducting periodic Internal Audit of all the operations of the Company. Internal Audit Reports are regularly placed before the Audit Committee for their review and for recommendation to the Board.

Secretarial Auditors

According to the provision of section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s A. Chadha & Associates, Company Secretaries is continuing as Secretarial Auditor of the Company.

20. STATUTORY AUDIT

The Report of the Statutory Auditors of the Company along with the Notes to Schedules forms part of the Annual Report 2022-2023 and contains an Unmodified Opinion without any qualification, reservation, disclaimer or adverse remark.

The Statutory Auditors of the Company have not reported any fraud as specified in Section 143(12) of the CompaniesAct, 2013.

21. COST AUDIT

The Company is not required to maintain cost records as specified by the Central Government under Section 148(1) of the Companies Act,

2013.

22. INTERNAL CONTROL

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company?s policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. The information about internal controls is set out in the

Management Discussion & Analysis report which is attached and forms part of this Report.

23. RISK MANAGEMENT

The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Company?s process and policies for determining risk tolerance and review management?s measurement and comparison of overall risk tolerance to by the businesses and functions are systematically addressed through mitigating actions on a establishedlevels.Majorrisksidentified continuous basis.

24. CHANGE IN THE NATURE OF BUSINESS

During the year under review, there has been no change in the nature of business of the Company.

25. MICRO, SMALL AND MEDIUM ENTERPRISES (MSME)

Your Company is a ‘Medium Enterprise? under the ‘Micro, Small and Medium Enterprises Development Act, 2006? vide registration number dated 03.07.2020: UDYAM-DL-09-0000001.

26. DEPOSITS FROM PUBLIC

The Company has not accepted any deposit from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per section 135 and Schedule VII of the Companies Act, 2013, your Company has already constituted the Corporate Social Responsibility Committee of Board of Directors. The present members are Mr. Yash Kumar Sehgal, Chairman, Mr. Lalit Bhasin, Member and Mr. Luv Malhotra, Member. The CSR policy as approved by Board of Directors in pursuance of section 134 (3) (o) of the Act is annexed and form part of this report. Further, the Annual Report on CSR activity in pursuance of Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014, describing inter-alia the initiatives taken by the Company in implementation of its CSR Policy is annexed and forms part of this Report.

28. RELATED PARTY TRANSACTIONS

During the year under review, there were no contracts or arrangements or transactions entered in to, which were not arm?s length basis. There were no materially significant related party transactions with the which could have had a potential conflict with the interest of the Company.

The Board of Directors of the Company has on the recommendation of the Audit Committee, adopted a policy to regulate transactions if any, between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules there under and the Listing Regulations. This Policy was approved by the Board and is available on the website of the Company at www. chl.co.in.

In terms of provision to clause (h) sub section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014, the salient features of the Related Party Transactions of the Company is set out in the prescribed Form AOC-2, which forms part of the Annual Report 2022-23.

29. DISCLOSURES Meetings of the Board

Four Meetings of the Board of Directors were held during the year. The particulars of the meetings held and attended by each Director are detailed in the Corporate Governance Report.

Audit Committee

The Audit Committee comprises of Mr. Yash Kumar Sehgal, Chairman, Mr. Lalit Bhasin and Mr. Luv Malhotra. During the year under review, recommendations, if any, made by the Audit Committee were accepted by the Board.

Nomination and Remuneration Committee

Nomination and Remuneration Committee comprises of Mr. Lalit Bhasin, Chairman, Mr. Yash Kumar Sehgal and Ms. Kajal Malhotra. Stakeholders? Relationship Committee

The Stakeholders? Relationship Committee comprises of Mr. Yash Kumar Sehgal, Chairman, Mr. Lalit Bhasin and Ms. Kajal Malhotra.

Risk Management Committee

The Risk Management Committee of the Company consists of Mr. Yash Kumar Sehgal, Chairman, Mr. Lalit Bhasin, Member, Mr. Luv Malhotra, Member and Mr. Navneet Dhawan, Executive employee.

Corporate Social Responsibility Committee

Corporate Social Responsibility Committee comprises of Mr. Yash Kumar Sehgal, Chairman, Mr. Lalit Bhasin, Member and Mr. Luv Malhotra, Member.

30. BOARD EVALUATION

The performance evaluation of the Board, its Committees and Individual Directors was conducted and the same was based on questionnaire and feedback from all the Directors on the Board as a whole, Committees and self-evaluation. Directors, who were designated, held separate discussions with each of the Directors of the Company and obtained their feedback on overall Board effectiveness as well as each of the other Directors. Based on the questionnaire and feedback, the performance of every Director was evaluated in the meeting of the Nomination and Remuneration Committee (NRC). The Meeting of NRC also reviewed performance (qualitative) of the Managing Director.

A separate meeting of the Independent Directors ("Annual ID meeting") was convened on 10/02/2023, which reviewed the performance of the Board (as a whole), the Non-Independent Directors and the Chairman & Managing Director. Post the Annual ID Meeting, the collective feedback of each of the Independent Director was discussed by the Chairman of the NRC with the Board?s Chairman covering performance of the Board as a whole as well as performance of the Non-Independent Directors and performance of the Board Chairman.

Some of the key criteria for performance evaluation are as follows – Performance evaluation of Directors

Attendance at Board or Committee meetings.

Contribution at Board or Committee meetings.

Guidance/support to management outside Board/Committee meetings.

Performance evaluation of Board and Committees

Degree of fulfillment of Key responsibilities

Board structure and composition

Establishment and delineation of responsibilities to committees.

Effectiveness of Board processes, information and functioning.

Board culture and dynamics.

Quality of relationship between Board and Management.

Efficacy of communication with external stakeholders.

31. PARTICULARS AS PER SECTION 134(3) (m) OF THE COMPANIES ACT, 2013 READ WITH RULE 8 OF THE COMPANIES (ACCOUNTS) RULES 2014.

(a) Conservation of Energy

Energy conservation continues to receive priority attention at all levels. All efforts are made to conserve and optimize use of energy with continuous monitoring, improvement in maintenance and distribution systems and through improved operational techniques. To give thrust on energy conservation, "optimum utilization of natural light", is focused on and energy saving lighting solution such as light emitting diodes and solar panel and devices such as automated controls and sensors are fitted in wherever necessary and feasible and it is being continuously adopted.

(b) Technology Absorption: Nil

(c) Foreign Exchange Earnings and Outgo

During the year under review, your company has earned Rs. 902.42 Lacs Foreign Exchange (Previous Year Rs. 217.86 Lacs) and used foreign exchange to the extent of Rs. 4.01 Lacs (Previous year Rs. 4.58 Lacs).

32. ACKNOWLEDGEMENTS

Your Directors wish to convey their appreciation to the business associates for their support and contribution during the year. Your Directors would also like to thank Central Government and State Government especially Department of Tourism, employees, shareholders, customers, suppliers, alliance partners and bankers for the continued support given by them to the Company and their confidencereposed in the management and the Company.

For and on behalf of the Board
Place: New Delhi Luv Malhotra
Date: 29th May, 2023 Chairman
DIN: 00030477