CHL Ltd Directors Report.

TO THE MEMBERS

Your Directors have pleasure in presenting the 41st Annual Report of the Company along with the Audited Financial Statements for the Financial Year ended 31st March, 2020.

1. FINANCIAL RESULTS AND OPERATIONALPERFORMANCE

(Rs. in Lacs)
S. No. Particulars 2019-20 2018-19
1. Total Revenue 6073.54 7075.50
2. Less: Expenses 5598.48 5782.39
3. Profit before Tax 475.06 1293.11
4. Less : Net Tax Expenses 188.51 312.16
5. Profit after Tax 286.55 980.95
6. Other Comprehensive Income - 5.89
7. Total Comprehensive Income 286.55 986.84

The gross revenue of the Company for the year under revie wat Rs.6073.54 Lacs was lower by 14.16% than that of the previous years gross revenue at Rs.7075.50 lacs.

The Profit before tax after depreciation and finance cost at Rs.475.06 Lacs for the year under review was lower by 63.26% as compared to Rs.1293.11 Lacs for the previous year.

Net Profit after providing tax for the year under review was Rs.286.55 Lacs as compared to Rs 980.95 Lacs for the previous year, thus lower by 70.78% over 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 provisionsof the Act.

Consolidated Financial Statements

The directors also present the audited consolidated financial statements incorporating the duly auditedfinancial 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

Being a Corporate Guarantor to the Loan availed by your subsidiary Company CJSCCHL International from EXIM Bank, your Company has to seek prior permission from the EXIM Bank for declaration of Dividend. The EXIM Bank as per the normal practice would not agree to give prior permission for it in view of the pending adjudication in the Honble Supreme Court.Hence your Directors are constrained not to recommend any Dividend for the year under review.

4. BOARD/ COMMITTEE MEETINGS

The number of Board/ Committee Meetings held during the year under review is given under Corporate Governance Report.

5. COVID-19 PANDEMIC OUTBREAK - IMPACT ON HOSPITALITY SECTOR

The economic impact of the outbreak has been devastating the Hotel Industry.With the number of cases rising sharply on a daily basis, even if the pandemic is contained soon, the ripple-effects will be felt across the world well into the year, pushing all major economies into a possible recession.

The Travel & Tourism sector across the globe is undoubtedly the biggest casualty of the COVID-19 pandemic. Several countries have issued travel advisories and are in lock down mode, with all major global business, social and sporting events getting cancelled since February, 2020. The biggest collateral damage of worldwide lock downs can now be clearly seen on travel and hospitality industry and India is no exception.Hotel demand has rapidly dropped to virtually zero in a matter of just weeks beginning Mid- March, 2020.

Due to outbreak of Corona Virus epidemic, your company stopped operations w.e.f 23th March, 2020. The Hospitality industries are not allowed to star to perations till 18th August, 2020 keeping in mind the guidelines issued by Central Government/ Local Government. The business of the Hospitality sector is mainly depending upon the domestic/foreigntourists. Since 25th March, 2020 all domestic and International air travel passengers are prohibited to operate. Although during the slow down period business in all sectors is affected ingeneral, in particular the Hospitality business has been severely affected and practically there is no business at all. Since then there is no inflow of domestic and foreign tourists and business of the company has affected badly and practically there is no revenue during this period. The improvement/revival of Hospitality industry is depending on the improvement of other manufacturing and service sectors. Hotels, restaurants and other hospitality services, except those meant for housing health/ police/Government officials/ healthcare workers/ stranded persons including tourists and for quarantine facilities; and running of canteens at bus depots, railway stations and airports. Restaurants shall be permitted to operate kitchens for home delivery of food items.

Since 23rd March, 2020 onwards, our Hotel stopped operation as perthe Central/ State Governments directions. Profitability for the Quarter (Ist April 2020 to 30th June, 2020) Financial Year 2020-21 of the Company has been severely affected during this period as well as for theperiod till the operation of the Hotel is allowed to continue and becomes normal. The Hotel operations is allowed to continue w.e.f 19th August, 2020. And it will take another 3 to 4 Months to make the operation of the Hotel normal.

Strength

Despite all odds your Organization is stronge nough to revive and come back strongly to generate profits in the coming years.

6. APPOINTMENTS/RE-APPOINTMENTS AND CESSATION OF DIRECTORS

(a) Re-appointment of retiring Directors

Mr. Ashok Kumar Malhotra (DIN: 00676603) and Ms. Kajal Malhotra (DIN: 01319170) Directors who retire by rotation and being eligible, have offered themselves for re-appointment. The Board recommends their appointments.

(b) Re-designation of Executive Chairman of the Company

Dr. Lalit Kumar Malhotra (DIN: 00213086), Executive Chairman of the Company, re-designated as Non- Executive Chairman of the Company w.e.f 01.07.2020, and hence he is ceased to be an Executive Chairman of the Company w.e.f 01.07.2020 and he is not entitled to draw any remuneration w.e.f 01.07.2020 and becomes Non-Executive, Non-Independent Director of the Company w.e.f 01.07.2020.

(c) Cessation of Independent Director

The tenure of Mr. Ramesh Chandra Sharma (DIN: 00023274) as Non-Executive Independent Director of the Company, who is above the age of 75 (Seventy years) years, has come to end on 17.09.2020 and he, due to his health issues, doesnt offer himself to re-appoint as Non-Executive Independent Director of the Company. Hence, from 18.09.2020 he ceases to be a Non-Executive Independent Director of the Company. The Board of Directors in its Board Meeting held on 7th September, 2020 noted his cessation as Non-Executive Independent Director.

(d) Other Independent Directors

(i) At the 40th Annual General Meeting of the held on the 12th August, 2019, Mr. Lalit Bhasin (DIN: 00002114) holding the position of an Independent Director whose tenure is coming to end w.e.f 28th Day of September 2019, 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 or till such earlier date to conform with the policy on retirement and as may be determined by any applicable statutes, rules, regulations or guidelines.

(ii) At the 40th Annual General Meeting of the held on the 12th August, 2019, Mr. Subhash Ghai (DIN: 00019803) holding the position of an Independent Director whose tenure is coming to end w.e.f 28th Day of September 2019, 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 or till such earlier date to conform with the policy on retirement and as may be determined by any applicable statutes, rules, regulations or guidelines.

(iii) At the 40th Annual General Meeting of the held on the 12th August, 2019, Mr. Yash Kumar Sehgal (DIN: 03641168) holding the position of an Independent Director whose tenure is coming to end w.e.f 28th Day of September 2019, 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 or till such earlier date to conform with the policy on retirement and as may be determined by any applicable statutes, rules, regulations or guidelines.

(iv) At the 37th Annual General Meeting of the held on the 12th August, 2016, Mr. Alkesh Tacker (DIN:00513286) was appointed as an Independent Director of the Company for a 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. The prief profile of the Independent Directors forms part of the Corporate Governance Report.

7. 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 and Mr. G.J. Varadarajan, Company Secretary, are formalized as the Key Managerial Personnel of the Company.

Cessation of Chief Financial Officer (CFO) and Vice President (Finance) (VPF) of the Company

As per the terms of the appointment of Mr. Narender Kumar Goel, Vice President (Finance) (VPF) and Chief Financial Officer (CFO) of the Company, his tenure comes to end on 30th June, 2020 and with no further extension in his tenure, he ceased to be the Vice President (Finance) (VPF) and Chief Financial Officer (CFO) of the Company w.e.f., 1st July, 2020.

8. MANAGEMENT DISCUSSION ANDANALYSIS

As required under the Listing Regulation with the Stock Exchange, the Management Discussion and Analysis Report is enclosed as a part of the Report.

9. SUBSIDIARY COMPANY

Your subsidiary, CJSC CHL International, a Joint Venture company incorporated in Tajikistan has developed a Five-Star Hotel at Dushanbe, the capital of Tajikistan. The hotel is now operative in name of "Hilton Dushanbe". The Hotel project was financed by the Export Import Bank of India.

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 Honble Supreme Court of Tajikistan, which was dismissed by the Honble 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 Honble Supreme Court of which is pending for adjudication.

Further, the EXIM Bank filed an Original Application before the Debts Recovery Tribunal - I, Delhi invoking the personal Guarantee of Mr. Lalit Kumar Malhotra, Chairman of CHL Limited, which is also pending 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 2019-20.

10. 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 2019-20 no complaint was received on sexual harassment.

11. 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/ Whistle Blower Policy link.

12. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith.

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

14. 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 Company.

15. 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:

a. In the preparation of the Annual Accounts for the Financial Year 2019-20, the applicable accounting standards have been followed and there is no material departure;

b. 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;

c. 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;

d. They have prepared the Annual Accounts on a going concern basis;

e. 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

f. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. CORPORATE GOVERNANCE

Your Company has taken adequate steps to adhere all the stipulations laid down in the Listing Regulation. A report on the Corporate Governance along with certificate from Practicing Company Secretary confirming the Compliance is included as part of the report.

17. LISTING WITH STOCK EXCHANGE

The Listing fee is being paid for the year 2020 - 2021 to the BSE Limited, where the Companys Shares are listed.

18 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.

19. 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 Directors is furnished in extract of Annual Return MGT-9.

20. DEMATERIALISATION OF SHARES

As on 31st March, 2020, 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, 5,39,97,922 (98.50%) Equity Shares of the Company stand dematerialized and balance 8,20,368 (1.497%) equity shares are still in physical form.

21. AUDITORS & AUDITORS REPORT

Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed there under, M/s DGA & Co., Chartered Accountants, New Delhi were appointed as Statutory Auditors of the Company from the conclusion of the 40th Annual General Meeting (AGM) of the Company held on 12th August 2019 till the conclusion of the 43rd AGM, for a further period of three years.

The Auditors Report is unqualified. The notes to the Accounts referred to in the Auditors Report are self-explanatory and therefore do not call for any further clarifications under section 134 of the Companies Act, 2013.

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.

22. STATUTORY AUDIT

The Report of the Statutory Auditors of the Company along with the Notes to Schedules forms part of the Annual Report 2019-20 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 Companies Act, 2013.

23. 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.

24. INTERNAL CONTROL

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys 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.

25. RISK MANAGEMENT

The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Companys process and policies for determining risk tolerance and review managements measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis.

26. CHANGES IN THE NATURE OF BUSINESS

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

27. MICRO, SMALL AND MEDIUM ENTERPRISES (MSME)

Your Company has registered on 03.07.2020 as ‘Medium Enterprise under the ‘Micro, Small and Medium Enterprises Development Act, 2006 vide registration number: UDYAM-DL-09-0000001.

28. DEPOSITS FROM PUBLIC

The Company has not accepted any deposits 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.

29. 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.

30. RELATED PARTY TRANSACTIONS

During the year under review, there is no related party transaction covered under Section 188(1) of the Companies Act, 2013. Other Related party transactions that were entered during the financial year were on an arms length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Companys Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company.

The Board of Directors of the Company has on the recommendation of the Audit Committee, adopted a policy to regulate transactions 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.

31. 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 of the Managing Director (qualitative).

A separate meeting of the Independent Directors ("Annual ID meeting") was convened on 12/02/2020, 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 Boards 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.

32. 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

33. 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 confidence reposed in the management and the Company.

For and on behalf of the Board
Dr. Lalit Kumar Malhotra
Place: New Delhi Chairman
Date: 7th September, 2020 DIN: 00213086