HLV Ltd Management Discussions.

1. Overview of Industry

As per one of the leading industry survey report, in the year 2018, at an all India level, occupancy is the highest for the last 10 years and the average room rate is also the highest since 2012. Occupancy levels were at 66% during the financial year 2018-19 as against 64% in the previous year. Average rate grew at 6.25% in 2018. It indicates that markets are now on a steady path of recovery.

RevPAR growth in year 2018 witnessed a growth of 9.6% over previous year and it is touching level of Rs. 4,000. As per one industry survey report, at this rate, RevPAR will take another five years to reach at the level of boom period of 2006-2008.

On an average, 90,000 rooms were sold per day. Markets, other than the key markets have increased supply share from 28% in 2014 to 33% in 2018. The leisure market remains under served with only 19% inventory share. Bangalore and New Delhi achieved 7% ADR growth. Delhi and Mumbai had occupancy of 70%, both markets achieved over 11% RevPar growth. While occupancy dropped in Bangalore due to continued supply addition, its RevPar crossed Rs. 4,000 mark for the first time since the last 8-9 years. In second year continuously, Goa has lost occupancy.

F&B and banquets continue to carry significant revenue share, increasing even at lower tier hotels. MICE and weddings will remain key business elements.

2. The Leela - Dynamism in our strides

Your Company operates nine hotels with 2,688 guest rooms. The details of the hotels are as follows:

(a) Owned Hotels: No. of Rooms
(1) The Leela, Mumbai 391
(2) The Leela Palace, Bengaluru 357
(3) The Leela Palace, Udaipur 80
(4) The Leela Palace, New Delhi 254
(5) The Leela Palace, Chennai 326
Total 1,408
(b) Managed Hotels:
(1) The Leela Ambience Gurgaon Hotel & Residences 411
Delhi (NCR), Gurugram
(2) The Leela, Kovalam 183
(3) The Leela, Goa 206
(4) The Leela Ambience Convention Hotel, Delhi 480
Total 1,280
Grand Total 2,688

Apart from above 9 hotels, the Company has taken over Prestigious Mahatma Mandir Convention Centre at Gandhinagar in the year 2018 under management contract. The Company did a success event of Vibrant Gujarat in January 2019.

It is the Companys endeavor to ensure that each of its hotels become the market leaders in terms of RevPAR at the respective locations it operates and the Company has been able to achieve this feat in most of the destinations it is operating.

3. A. Sales & Marketing alliances

(i) Global Hotel Alliance

Global Hotel Alliance is today the worlds largest alliance of independent luxury hotel brands. Based on the airline alliance model, the alliance currently has more than 30 member brands, all with their own unique character, encompassing over 550 upscale and luxury hotels, spread across 75 countries. GHA uses a shared technology platform to operate an award winning, multi-brand loyalty program, DISCOVERY. Currently the total DISCOVERY membership base has crossed 14 million worldwide members.

DISCOVERY is about making your stay and travel unforgettable. Discovery program believes that rewarding members with authentic, memorable experiences is much more valuable than collecting points. With this in mind, DISCOVERY instead rewards travelers with Local Experiences. Designed by our local experts, these specially curated experiences offer members the access to a large selection of exclusive activities which are not easily available to the general public.

(ii) Preferred Hotels & Resorts

The Preferred Hotels & Resorts (PHR) represents over 850 independent and distinctive hotels, resorts & residences across 85 countries. Through its five global collections – Legend, LVX, Lifestyle, Connect, and Preferred Residences – Preferred Hotels & Resorts connects discerning travelers to the singular luxury hospitality experience that meets their needs and life and style preferences for each occasion. Preferred Hotels & Resorts brings strategic advantage through its Global Sales team comprising of 80 sales associates covering Corporate, Group & Leisure segments in 30 global offices.

3. B. Sales, Marketing and PR Representations

The Leela Palaces, Hotels and Resorts continue to engage the services of Sales representation companies across key geographies in the world. These companies are assigned the responsibility to engage with the major tour operators and retail agencies in their respective source markets. These are: Mason Rose in UK, Kartagener Associates Inc. in North America; CA- Hotel Consulting in France and other French speaking markets of Belgium and Switzerland; and H&W Enterprise, sro in Russia & CIS.

4. Investment in Technology

CRS & Distribution platform - Sabre: The Company has recently signed-up with Sabre Hospitality Solutions to switch our Central Reservations System & Distribution Platform to Sabre CRS. This will help the company to direct connect with all the 4 Global Distribution Systems, OTAs, Metasearch partners & b2b channels. The switchover is being carried out in various phases so as to stabilize the processes and prevent any revenue leakages, which was the case with the earlier service provider Oracle.

Business Intelligence platform – Revnomix

Business intelligence (BI) comprises the strategies and technologies used by enterprises for the data analysis of business information. BI technologies provide historical, current and predictive views of business operations. Common functions of business intelligence technologies include reporting, online analytical processing, analytics, data mining, process mining, complex event processing, business performance management, benchmarking, predictive analytics and prescriptive analytics. BI technologies can handle large amounts of structured and sometimes unstructured data to help identify, develop and otherwise create new strategic business opportunities. They aim to allow for the easy interpretation of these big data. Identifying new opportunities and implementing an effective strategy based on insights can provide businesses with a competitive market advantage and long-term stability.

5. Awards and Accolades

The Leela Palace Chennai

TripAdvisor 2019 Travellers Choiceawards – ranked #25 among "Top 25 Luxury Hotels of India", January 2019

Conde Nast Traveller Top 50 Restaurant Awards– China XO, December 2018

BBC Food Awards – China XO wins for the best Asian Restaurant in South Zone, December 2018

Hotelier India Awards – Balamurali P, Laundry Manager of the Year, December, 2018.

BW Hotelier India Awards – Hitesh Sangwan, awarded F&B Manager of the Year, March 2018

Booking.com – 9 out of 10, Guest Review Award 2018

Hotels.com – 9.4 out 10, Loved by Guests Most Wanted Award 2018

Agoda.com – Gold Circle Award 2018

MakeMyTrip.com – 4.4 out of 5, Top Rated Hotel 2018-19

The Leela Palace Udaipur

Preferred Hotels & Resorts, Preferred Award of excellence --"Hotel of the Year"-March2019

Travel + Leisure India & South Asia for Best Luxury Hotel in India November 2018

BW Hoteliers Indian Hospitality Summit and Awards 2018 - Jury Award for Outstanding Performance: Rajesh Namby, March 2018

TripAdvisor ranked # 2 in Top 25 Hotels in India January 2018

TripAdvisor ranked # 4 in Top 25 Best Luxury Hotels in India January 2018

TripAdvisor ranked # 7 in Top 25 Hotels in Asia January 2018

TripAdvisor ranked # 13 in Top 25 Hotels in the World January 2018

TripAdvisor ranked # 16 in Top 25 Luxury Hotels in Asia January 2018

The Leela Palace New Delhi

2019 Tripadvisor Travelers Choice Winner, The Leela Palace New Delhi, February 2019

The Times Food & Nightlife Awards 2019 – Le Cirque, The Best Italian Premium Dining in Delhi, March 2019

Eazydiner Foodie Awards, Virs Choice Awards - Hotel of the year – The Leela Palace New Delhi, March 2019

Travel+Leisure Delicious Food awards 2018, Best Italian restaurant - Le Cirque, The Leela Palace New Delhi, August 2018

BBC Good FOOD Awards 2018 Best Italian restaurant - Le Cirque, The Leela Palace New Delhi, June 2018

BBC Good FOOD Awards 2018

Best Design Restaurant- Megu, The

Leela Palace New Delhi, June 2018

Epicurean Guild Awards 2018 Megu- Best Japanese Restaurant, January 2018

India Wine Awards 2018, Outstanding World-class wine list - Le Cirque, October 2018

India Wine Awards 2018, Best wine program offering best experiences to its patrons, October 2018

Conde Nast UK Readers Choice awards, ‘The 20 best hotels in Asia & the Indian subcontinent 2018 October 2018

Conde Nast USA Readers Choice awards, Top Hotels in India October 2018

‘Favourite Indian Business Hotel at Conde Nast Traveller Readers Travel Awards 2018, November 2018

‘Most Valued Hotel Partner at Expedia Group, Annual Partner Awards 2018, December 2018

Megu ranked 12th among top 50 restaurants in India atConde Nast Traveller Top Restaurant Awards 2018, December 2018

Conde Nast Traveler Gold List 2019 - The hotel made to the list of worlds best 78 hotels, resorts and cruises, December 2018

North India Best Employer Awards 2018 at 13th Employer Branding Awards, December 2018

Winner for 2018 Gold Circle Award by AGODA, December 2018

Ranked amongst Top 25 Luxury Hotels India by TripAdvisor 2019 Travellers Choice

Conde Nast Traveller – Middle East Gold List 2019 - The hotel made to the list of worlds best 41 hotels, resorts and cruises, February 2019

National Best Employer Brand 2018 at 13th Employer Branding Awards, February 2019

101 Top HR minds India and Hotel Industry Abhishek Anand

Hotelier India Awards 2018, Unsung Hero of the year Preeti Makhija

The Leela Palace Bangalore

Times Food & Nightlife awards 2019 – Library Bar, In the category of Best Luxury Bar in Nightlife, December 2018

Hotelier India Awards (10th Edition) – Pratik Vashisht, Front Office Manager of the Year (winner), December 2018

Restaurant India 2018 Awards South India Edition, Jamavar, Best

Indian Restaurant in Bengaluru, December 2018

Food Food India Awards 2018 (Editorial Choice Awards) National ,

Awards, General Manager of the year- Kunal Chauhan, December 2018

Food Food India Awards 2018 (Editorial Choice Awards) National ,

Awards, Callebaut pastry Chef of the year- Avijit Ghosh, December 2018

Food Food India Awards 2018 (Jury Choice Awards) , National Awards,

Best Restaurant Design- Jamavar, December 2018

BBC Good Food - Food Food Awards 2018, South India, Best North

Indian Restaurant (Five-Star Hotel) – Jamavar, September 2018

BBC Good Food - Food Food Awards 2018, South India, Best

Restaurant Design – Jamavar, September 2018

BBC Good Food - Food Food Awards 2018, South India, Chef of the

Year (Five-Star Hotel) – Chef Farman Ali, September 2018

BBC Good Food - Food Food Awards 2018, South India, Best Patisserie

Chef – Chef Avijit Ghosh, September 2018

BBC Good Food - Food Food Awards 2018, South India, General

Manager of the year –Mr.Kunal Chauhan, September 2018

Zee Business Travel Awards, "Best Luxury Hotel" in India, September

2018

India Wine Awards, Le Cirque Signature for "Excellence in Restaurant

Wine Program", September 2018

Preferred Hotels & Resorts 2018 Awards of Excellence, "Hotel of the

Year – India, Middle East & Africa", May 2018

BW Hotelier India Awards 2018 Shalabh Arora, DoSM, awarded

"DoSM of the Year - South Region", March 2018

BW Hotelier India Awards 2018 Bhaskar Masineni, Corporate Chief

Engineer, awarded "Special jury for outstanding performance", March 2018

BW Hotelier India Awards 2018 Mir Zafar Ali, Executive Chef, awarded " Executive Chef of the Year - National level", March 2018

Times Food and Night Life Awards Le Cirque Signature voted "Best

European in premium dining", January 2018

Eazydiner Awards Peoples Choice Citrus as Best Cafe in Hotel,

July 2018

Eazydiner Awards Vir Sanghvis Choice Chef Purushotham J Naidu for Lifetime Achievement Award, July 2018

The Leela Goa

Asian Voice Political and Public Life Awards 2019- Awarded Best International Resort of the Year, March 2019

FoodFood India Awards 2018 (National)- Awarded Best Resort of the Year, December 2018

The Leela Ambience Gurugram Hotel And Residences

The Times Food & Nightlife awards 2019- Best All Day Dining Award 2019- Spectra, March, 2019

The Times Food & Nightlife awards 2019- Bar With Best Ambience:

Rubicon Bar, March, 2019

Eazydiner foodie awards 2019- Spectra being awarded the Best All

Day Dining Restaurant, March, 2019

Eazydiner foodie awards 2019- The Innovative Hotelier of the year:

General Manager, Jaideep Anand, March, 2019

Hospitality India Magazine- Hotelier of the year, luxury segment- Mr.

Jaideep Anand, General Manager, October, 2018

T+Ls First Readers Choice Food Awards, The Delicious Food Awards

2018- The Leela Patisserie-The Best Patisserie Hotel, August, 2018

Food Food Awards 2018 & Chocolate Summit (North)- Nidhi Verma,

PR Person of the year, June, 2018

Food Food Awards 2018 & Chocolate Summit (North)- Anurag

Barthwal, Callebut Pastry Chef of the year, June, 2018

Food Food Awards 2018 & Chocolate Summit (North), Best Hotel,

June, 2018

The Times Food & Nightlife awards Rubicon awarded Best Bar with ambience - Luxurious Night Life, March 2018

The Times Food & Nightlife awards - Spectra awarded Best Restaurant for Best Global cuisine Gurgaon, March 2018.

The Times Food & Nightlife awards The Leela Patisserie awarded

Best Bakery, March 2018

BW Indian Hospitality Awards Nidhi Verma awarded PR & Marcom

Manager of the year, National, March 2018

BW Indian Hospitality Awards Anil Kumar awarded Chief Engineer of the year, North zone, March 2018

The Leela Ambience Convention Hotel, Delhi

Hospitality India – 14th Annual International Travel Awards 2018 - Award for the Best Luxury Convention Hotel in India, October 2018

Todays Traveller Awards - Award for the Best Luxury MICE Hotel, August 2018

The Leela Mumbai

Best of India .Biz Awards- Sameer Sud, General Manager, awarded the title of ‘Indias Top 10 Hospitality General Managers, December 2018

India Wine Awards 2018- Le Cirque Signature recognized as a top wine destination in India, September 2018

India Wine Awards 2018- Le Cirque Signature honoured for housing one of the most outstanding, world-class wine lists in the country, September 2018

Safari India South Asia Travel Awards 2018- Sameer Sud, General

Manager, presented with the title of ‘Best Professional in Hospitality, September 2018

Indian Sommelier Championship 2018- Gaurav Dixit, Introductory

Sommelier and Assistant Restaurant Manager, awarded the 1st Runner-Up position, September 2018

FoodFood Awards 2018 (West) - Abhisek Basu, Executive Assistant

Manager-Food & Beverage, recognized as the ‘F&B Person of the Year, August 2018

Wine Spectator Award of Excellence 2018 Le Cirque Signature honoured for having one of the most outstanding restaurant wine lists in the world, July 2018

Stars of the Industry Awards Sameer Sud, General Manager, conferred with the title of ‘Hospitality Super Star, February 2018

The Leela - Corporate

Travel + Leisure USA Worlds Best Awards – The Leela Palaces, Hotels and Resorts ranked the #7 in the ‘Top 15 Hotel Brands in the World, July 2018

6. Opportunities, Threats, Risks and Concerns

The hotel business is dependent on global and domestic economic conditions. Further, your Company has the risk of heavy dependence on a few specific locations in India. There is also the risk of dependence mainly on higher luxury segment. However, the Companys hotels enjoy premium over the other competitors and are the RevPAR leaders in many of the locations, where the Company operates indicating the high operating profitability.

The Companys gearing has reached high levels due to the investments

made in the hotels in Udaipur, Delhi and Chennai and plots of land at Agra and Hyderabad. Because of the recession thereafter in the Hotel Industry, the expected profitability estimates could not be achieved. Also due to the subdued nature of the equity market, no equity offerings of any form could be made. A report on the Companys debt position and the steps being taken to overcome the problem of high leveraging is mentioned under point 14 in this report.

7. Risk Management - Leveraging our experience

Risk management is an integral part of the Companys business process. With the help of experts in this field, risks are carefully mapped and a risk management framework is evolved. Pertinent policies and methods are being reviewed and modified to mitigate such risks.

The Company has taken several measures at all its properties to protect the safety and security of its customers. In addition to the physical security measures, the Company has also taken sufficient insurance cover to meet the financial obligations which may arise from any untoward incidents.

To counter the risk of competition, your Company focuses on providing exceptional services, consistently, across all its hotels.

8. Efficient Internal Control systems

The Company has a well-structured internal audit function. Under the guidance and supervision of an independent Audit Committee, independent and reputed firm of Chartered Accountants conduct regular audits and review adherence to control systems and procedures.

The effectiveness of internal controls is reviewed through the internal audit process. The focus of these reviews is as follows:

- Identification of weaknesses and areas of improvement

- Compliance with defined policies and processes

- Safeguarding of tangible and intangible assets

- Management of business and operational risks

- Compliance with applicable statutes

The Audit Committee of the Board oversees the adequacy of the internal control environment through regular reviews of the audit findings and monitoring implementation of internal audit recommendations.

9. Human resources and industrial relations

A focused attention on attracting the best talent available in the market, which could help the Company to drive a culture oriented towards high performance and excellence.

The Company has implemented an effective customer feedback system which is yielding good results. This platform helps the team to align all its efforts in delivering relevant high quality services to the guests whilst seeking to constantly improve on standards. Industrial relations throughout the year were cordial in all the hotels of the Company.

As on 31st March, 2019, the total manpower was 3781 (including contract labour and fixed term contractors).

10. Corporate Social Responsibility and Environmental Initiatives

Your Company recognizes the need to minimise the adverse impact of its operations, on the environment. The Company maintains large gardens in and around its properties. The Company has made substantial investments

for improving energy efficiencies and fresh and waste water management in its hotel properties. The Companys hotels in New Delhi and Chennai have been conferred Platinum LEED Certification.

11. Health and Safety Management System

Health and Safety Management System in the Company aims to reduce, eliminate or control workplace hazards and associated risks of illness or injuries to the employees, customers and contractors who might be affected by the Companys activities.

Your Company is committed to ensure healthy and safe working environment for all concerned and to improve the Health and Safety parameters. The Companys Bengaluru Unit has established and implemented an Occupational Health and Safety Management System which satisfies OHSAS 18001.

Under a well-designed program, the Company:

complies with the requirements of all relevant statutory, regulatory and other provisions.

provides and maintains safe & healthy work place through operational procedures, safe systems and methods of work.

provides sufficient information, instruction, training and supervision to enable all employees to identify, minimize and manage hazards and to contribute positively to safety at work.

organises audits and mock drills on site to ensure that operations are in compliance with health and safety management requirements and for emergency preparedness.

ensures that appropriate resources are available to fully implement health and safety policy and continuously review the policys relevance with respect to legal and business development.

seeks continuous occupational health and safety improvements through the establishment of safety management objectives, targets and programs.

12. Expansion / upgradation Plans

In order to resolve the Companys debt problem, the Company has entered into a binding agreement with BSREP III INDIA BALLET PTE. LTD. ("Brookfield") on 18th March, 2019 to sell its hotel business undertakings, hotel operations business, 100% shareholding in its subsidiary company and all intellectual property owned by the Company used in and held for use in the hotel owned and managed by it. As part of the transaction, the Company and the Promoters of the Company have agreed to certain exclusivity, non-compete and non-solicit restrictions. Hence, the Company is not planning for any expansion in the near future.

13. Analysis / highlights of operating performance, financial results and Balance Sheet

The financial statements for the year ended on 31st March, 2019 has been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 as amended from time to time. The financial statement of your Company forms part of this annual report and the analysis / highlights are given below:

Discontinued operations: Since the Company has entered into a framework agreement with BSREP III INDIA BALLET PTE. LIMITED (Brookfield) on 18th March, 2019 to sell its hotel business undertaking at New Delhi, Udaipur, Bengaluru and Chennai, Hospitality and hotel operations business and its 100% shareholding in its subsidiary company which owns property at Agra and all intellectual property owned by the Company used in and held for use in the hotel owned and managed by it, and the shareholders of the Company have approved the transaction through Postal ballat on 24th April, 2019, the accounting standard IndAS 105 "Non-current assets held for sale and Discontinued operations" becomes applicable. As required by IndAS 105, the assets and liabilities covered in the Brookfield transaction are shown as "Assets included in disposal group(s) held for sale" and "Liabilities included in disposal group(s) held for Sale" in the Balance Sheet as on 31st March, 2019. The profit / loss of the business undertakings proposed to be sold has been classified as profit / loss from ‘discontinued operations and profit and loss for the corresponding previous year ended 31st March, 2018 has been restated / reclassified accordingly.

Operational revenue from continuing operation:

The revenue from operations was Rs. 15,434.43 lakhs in FY 2018-19 against

Rs. 13,783.52 lakhs in FY 2017-18. Food & Beverages increased by 14%. Room Revenue increased by 10% mainly due to increase in occupancy.

Other income was Rs. 418.36 lakhs in FY 2018-19 as compared to Rs. 645.28 Lakhs in FY 2017-18. Total revenue was Rs. 15,852.79 lakhs in FY 2018-19 against Rs. 14,428.80 lakhs FY 2017-18.

Operating Expenses: Food & Beverages consumption increased by 11% as compared to last year. Employee Benefit expenses increased by 4% as compared to last year.

Finance costs and interest liability:

Finance cost increased by Rs. 26.96 Lakhs as compared to previous year.

Depreciation and Amortization:

Depreciation and amortization expenses for the year was Rs. 957.52 lakhs as against Rs. 1,326.08 lakhs in previous year.

Other expenses:

Other expenses amounted to Rs. 8,295.99 lakhs as against Rs. 7,981.53 lakhs, an increases by 4%.

Profit/ (Loss) after Tax: The Company incurred a (loss) of Rs. (3,779.63) lakhs during the FY 2018-19 as against a (loss) ofRs. (5,184.88) lakhs during the previous year from continued operations. The net (loss) from both the continued and discontinued operations was Rs. (11,889.48) lakhs during the FY 18-19 as compared to

Rs. (2,321.63) lakhs during the previous year. The total loss during the current financial year was higher mainly on account of the Exchange rate loss of

Rs. 7,992.04 lakhs on the foreign currency loans classified under discontinuing operations.

Property, Plant and Equipment (PPE):

The net Property, Plant, Equipment, capital work in progress, intangible assets, investment property and assets held for sale as on 31st March, 2019 was Rs. 26,983.91 lakhs as against Rs. 3,74,499.34 lakhs as on the last day of the previous year. The carried value of PPE as on 31st March, 2019 is substantially lower as the PPE of the hotel undertaking proposed to be sold are classified as Assets included in disposal group(s) held for sale.

Secured and Unsecured Loans:

The details of the Companys debts (in Rs. lakhs) are as follows:

Particulars 31.3.2019 31.3.2018
Secured Loans:
Long term debt 71,052.24 3,07,305.08
Current Maturities of Long Term 2,84,242.97 58,861.80
Debt
Interest accrued on borrowings 5,514.60 2,625.73
Unsecured Loans 5,742.66 11,955.25
Total 3,66,552.47 3,80,747.86

Share Capital:

As on 31st March, 2019, the paid up Equity share capital of the Company stood at Rs. 12,611.04 lakhs divided into 63,05,51,766 equity shares of the face value Rs. 2 each, same as in the previous year.

Transfer to Reserves

In absence of distributable profits / earnings, it is not proposed to transfer any amount to reserves for the financial year 2018-19.

Net worth:

The details of Companys net worth (in Rs. lakhs) are as follows:

Particulars 31-Mar-19 31-Mar-18
Share Capital 12,611.04 12,611.04
Reserves & Surplus 13,957.91 25,825.30
TOTAL 26,568.95 38,436.34
Less:
Revaluation Reserve 32,574.38 33,377.27
Intangible Assets / Intangible Assets
under development 61.82 229.02
Net worth (6,067.25) 4,830.05

Financial Ratios:

Since, the Company as on 31st March, 2019 has classified the assets of the hotel undertaking proposed to be sold as "Assets included in disposal group(s) held for sale", the financial ratios for the financial year ended 31st March, 2019 are not comparable with the financial ratios of the previous financial year.

Return on Net-worth:

The Company has reported a Net loss for the current and the previous financial year and therefore the return on net-worth is negative for the current financial year ending 31st March, 2019 and the previous year.

14. Debt Reduction Plans

The Company had restructured its debts under the Corporate Debt Restructuring (CDR) mechanism, with January 1, 2012 as the cut-off date. One of the main conditions of the CDR Package was that the Company should bring down the debt by Rs. 2,03,076 lakhs by selling the Delhi Hotel by 31st March, 2014. Due to the continued economic recession, the Company could not sell the hotel. The CDR Empowered Group in their meeting held on 28th June, 2014 declared the CDR as failed and approved exit of the Company from the CDR system. Pursuant thereto, on 30th June, 2014, 14 of the erstwhile CDR lenders with exposure of about 95.6% of the CDR debt assigned their debt to JM Financial Asset Reconstruction Company Limited (JMFARC) and 1 lender with exposure of about 1% of the CDR debt, to Phoenix ARC Private Limited.

The Company sold its Goa hotel in December 2015 for Rs. 72,112 lakhs and the entire net proceeds were used for debt reduction. The Company has also been using EBIDTA and realisations from non-core assets for debt servicing.

At present, the Company has received a proposal from BSREP III India Ballet Pte. Ltd. or its affiliates ("Brookfield") for acquiring the Companys hotel undertakings in Delhi, Bengaluru, Chennai and Udaipur as well as the Companys business of hotel management operations, as well as to purchase the 100% shareholdings of LPRL, which owns property and holds licenses for the development of a hotel in Agra. It is a composite proposal for the acquisition of the aforementioned hotels and related assets, as well as the "The Leela" brand and other associated brands and intellectual property rights. Brookfield, through the Purchaser Entities, will purchase and consummate all of what is mentioned herein simultaneously.

The Audit Committee and the Board of Directors of the Company, in its meeting held on 18th March, 2019, have approved the Transaction. The Members of the Company have approved the transaction through a postal ballot on 24th April, 2019.

The proposed consideration of Rs. 395,000 lakhs to be received from the transaction would be used to repay the existing lenders of the Company by way of one time settlement, after which all borrowings from all banks and financial institutions would have been repaid. Subsequent to the above transaction, the Company will continue to have and operate the hotel in Mumbai, certain land in Hyderabad (valued at about Rs. 4,000 lakhs) and the joint development project of residential apartments with Prestige Developers in Bengaluru (the balance value of which is about Rs. 9,000 lakhs).

However, the Company is awaiting clearance and approval from the lenders and regulatory authorities for concluding the transaction.

15. Cautionary Statement

Statements made in the Managements Discussion and Analysis Report describing the Companys objectives, projections, estimates, predictions and expectations may be ‘forward-looking statements, within the meaning of applicable securities laws and regulations. As "forward-looking statements" are based on certain assumptions and expectations of future events over which the Company exercises no control, the Company cannot guarantee their accuracy nor can it warrant that the same will be realized by the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments or events or for any loss any investor may incur based on the "forward-looking statements".