Sri Havisha Hospitality & Infrastructure Ltd Directors Report

The Directors take pleasure in presenting the Annual Report of Sri Havisha Hospitality and Infrastructure Limited (‘the Company or ‘SHHIL) along with the Audited Financial Statements for the Financial Year ended March 31, 2023.

The Financial performance of the Company for the year 2022-23 is indicated below:

Rupees in Lakh

The total revenue for FY 2022-23 is Rs.1799.56 Lakhs, which is nearly double than the previous years total revenue of Rs. 909.14 Lakhs. The Company reported after tax Profit of Rs. 149.74 Lakhs for the FY 2022-23 as against the profit of Rs. 57.83 Lakhs for FY 2021-22.

For over three decades, SHHIL has been a purpose driven organisation. Our vision is to be one of the most dynamic hospitality company in India. We strive to create value through operating best-in-class hospitality brand, inspired by our legacy and driven by a determination to create memorable experiences and lasting impact. Our strategy is driven by this purpose and it remains an unwavering promise to all stakeholders. Our unique culture and our peoples commitment, enables us to pursue our purpose towards creating value for the organisation by providing our guests superior experiences. We hold a deep appreciation for the contribution of every stakeholder and deliver value to them. Over the past few years, we have demonstrated our commitment to a clearly articulated strategy of diversifying our revenue profile.

After the merger of Shri Shakti Resorts & Hotels Ltd which is an existing operational company with our company, the overall revenues and growth have been considerably increasing for the past two years as could be seen from the financial performance above. A major achievement is getting the land lease for our hotel at Begumpet Airport renewed for another 30 years with effect from 1^st Jan, 2023, after herculean efforts. Consequent to this notable development, our company is taking up a substantial renovation of our hotel property at Hyderabad. Three mock up room and suites are being done now and that will be followed by floor wise renovation ensuring at the same time that the hotel will continue to be operational. Your company is also planning to add more rooms as the need is felt to considerably increase the room inventory in view of the very healthy occupancy levels witnessed in the Financial Year 22-23.

In view of the unrelenting and persistent efforts put in by to your companys Chairman & Managing Director in achieving the renewal of the above land lease renewal for 30 years, it is proposed to allot Sweat Equity to him. Mr. Manohar who was the original allottee of the above land from Airports Authority through a public tender transferred that land to Shri Shakti Resorts & Hotels Ltd without taking any consideration whatsoever and implemented the project and successfully running the hotel and related businesses. Shri Shakti Resorts & Hotels Ltd is merged with our Company viz., Sri Havisha Hospitality and Infrastructure Ltd as per NCLT Order dated 16^th Nov, 2021. The lease expired on 19^th Nov, 2019 and Mr. Manohar has put in herculean efforts starting from 2017 itself for the renewal of the lease. The lease deed to this effect is signed between Airports Authority of India and Sri Havisha Hospitality and Infrastructure Limited represented by Mr. D. V. Manohar on 27^th July, 2023.

It is an irrefutable fact that the business growth and future prospects of your company are substantially enhanced consequent to the above.

Further Mr. Manohar is instrumental in turning around your Company from accumulated losses of about Rs 100 crores to the present profitable position. When Govt. of India couldnt implement its commitment to remove subsidy on LPG over 3 years, entire private LPG Industry was badly affected. In such situation, Mr. Manohar cleared Bank loans of about Rs 106 Crores under One Time Settlement and made your Company debt - free in FY 2007-08. Thereafter he ensured your Companys survival all these years despite nil revenues. After the merger with Shri Shakti Resorts & Hotels Ltd, your Company is now turned profitable.

Therefore it is proposed that Mr. Manohar shall be adequately compensated for his efforts as above through issue and allotment of 45500000 Sweat Equity Shares of Rs. 2 each fully paid up for his Non-cash consideration and value addition to the company.

Hence, your directors are confident that these plans achieve better results in coming years. The endeavour of your directors is to maximize the returns to shareholders and we reiterate our commitment to achieve this in the near future.

In view of the accumulated losses and the need to conserve available funds for the renovation and operations of the Company, your Company has considered it prudent to not to propose dividend for the financial year ended March 31, 2023.

Rs. In lakhs

There are no material changes and commitments for the likely impact affecting financial position between end of the financial year and the date of the report.

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform you that our Company executed Lease Deed on 27^th July,

2023 with Airports Authority of India (AAI), New Delhi for the renewal of Land Leasehold Rights of the Company for another Thirty Years with effect from 01.01.2023, at Begumpet Airport, Hyderabad.

As permitted under the provisions of the Companies Act, 2013, the Board feels that the profit of the Company can be utilised in other profitable way, considering the same no amount of the Profit has been transferred to the Reserve.

10. DEPOSITS:

The Company has not accepted any deposits covered under chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 for the year under review.

11. PARTICULARS OF LOAN, GUARANTEE OR INVESTMENTS:

Your Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 with respect to Loans, guarantee or investments made.

12. REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE

COMPANIES

During the year under review, the Company did not have any subsidiary, associate and joint venture company.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to Regulation 17(1C) and Regulation 17(1A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including any statutory modification(s) or re-enactment thereof for the time being in force) and provisions of the Companies Act, 2013, the Company has taken the approval of the Shareholders on May 11, 2022 for the appointment of above mentioned all the directors of the company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2023 are:

14. BOARD MEETINGS:

Six meetings of the Board were held during the year under review. For details of meetings of the Board, please refer to the Corporate Governance Report, which forms a part of the Annual Report.

15. DECLARATION BY INDEPENDENT DIRECTORS:

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed there under and Regulation 16(1)(b) of SEBI Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company. In terms of Regulation 25(8) of SEBI Listing Regulations, they have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties withan objective independent judgment and without any external influence. The Board of Directors of the Company has taken on record the declaration and confirmation submitted by the Independent Directors after undertaking due assessment of the veracity of the same.

The Independent Directors of the Company have confirmed that they have registered their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules,2014 (as amended).

16. EVALUATION OF THE BOARDS PERFORMANCE:

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees, and individual Directors pursuant to the provisions of the Act and SEBI Listing Regulations.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the Board Composition and Structure; Degree of fulfilment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, etc.); Effectiveness of board processes, information and functioning, etc.; Extent of co-ordination and cohesiveness between the Board and its Committees; and Quality of relationship between Board Members and the Management.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee Members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of Executive Directors and Non-Executive Directors.

The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In the Board Meeting that followed the meeting of the Independent Directors and meeting of NRC, the performance of the Board, its committees, and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

17. POLICY ON DIRECTORS/ APPOINTMENT AND REMUNERATION:

The policy of the Company on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of the Companies Act, 2013 is adopted by the Board. We affirm that the remuneration paid to the Directors is as per the terms laid out in nomination and remuneration policy of the Company.

18. AUDITORS:

a) THE STATUTORY AUDITORS

M/s P. Suryanarayana & Co., Chartered Accountants were appointed as Statutory Auditors of your Company at the Annual General Meeting held on 12th August, 2022 for a period of five years commencing from the conclusion of the 29^th AGM of the Company until the conclusion of the 34^th AGM of the Company to be held on in the year 2027. M/s P. Suryanarayana & Co. has completed its first term as the Statutory Auditors of the Company and was re-appointed as the Statutory Auditors of the Company for another term of five years.

The Report given by Auditors on Financial Statements of the Company is part of this report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their report.

b) SECRETARIAL AUDITORS:

Section 204 of the Companies Act, 2013 inter alia requires every listed Company to annex to its Board Report, a Secretarial Audit Report, given in the prescribed form by a Company Secretary in practice. The Board appointed Krishna Kumar & Associates, Practicing Company Secretaries, represented by CS A. Krishna Kumar as the Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial Year 2022-23 and their report is annexed to this report.

The Board also appointed Krishna Kumar & Associates as Secretarial Auditor to conduct Secretarial Audit of the Company for Financial Year 2023-24. The Secretarial Auditor has given following observation in his report.

The composition of Board of Directors was not in accordance with the provisions of Regulation 17(1) & 17(1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for few days during the first quarter of year under review ie 30th June 2022. However the Company has complied with the above Regulations subsequently.

c) COST RECORDS

Pursuant to Section 148(1) of the Act and the relevant rules made there under the Company is not required to maintain cost records hence the same is not maintained by the Company.

19. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS:

As per SEBI LODR, Management Discussion and Analysis, Corporate Governance Report and Practicing Company Secretarys Certificate regarding compliance of conditions of Corporate Governance forms part of this Annual Report.

Pursuant to Regulation 34 of the SEBI LODR, the Management Discussion and Analysis is presented in a separate section forming part of this Annual Report. As required under the provisions of the SEBI LODR, the Audit Committee of the Company has reviewed the Management Discussion and Analysis report of the Company for the year ended March 31, 2023.

20. RISK MANAGEMENT COMMITTEE:

The Company has a robust risk management framework in place, which provides an integrated approach for identifying, assessing, mitigating, monitoring, and reporting of various risks associated with the business of the Company. The Audit Committee has been entrusted by the Board with the primary responsibility to monitor and review risk management, assessment and minimization procedures and to develop, implement and monitor the risk management plan and identify, review and mitigate all elements of risks which the Company may be exposed to.

Further, the Audit Committee handles risk management, assessment and minimization procedures and also periodically reviews with them the existing procedures and measures to improvise the same. The Company has in place adequate internal financial controls with reference to financial statements. Key risks and threats to the Company and internal controls and their adequacy are analyzed in the Management Discussion and Analysis, which forms part of this Report.

21. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

Though pursuant to the provisions of Section 135 read with Schedule VII of the Companies Act, 2013, the Company does not fall under the criteria of CSR Policy, the Company is actively promoting cycling which is the most eco-friendly means of commuting.

22. PERSONNEL:

During the year none of the employees is in receipt of remuneration in excess of the limits prescribed u/s. 197(12) of the Companies Act, 2013, read with Rule 5 and 35 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

23. DEMATERIALISATION OF SHARES:

Around 65.47% of the Paid-Up Equity Share Capital of the Company was dematerialized as on 31st March, 2023 and the balance Paid-Up Equity Share Capital is in physical form. The Companys Registrar is XL Softech Systems Limited, 3 Sagar Society, Banjara Hills, Hyderabad.

24. LISTING WITH STOCK EXCHANGES:

The Companys securities are listed at BSE Limited and National Stock Exchange of India Ltd. and the new Listing Agreement as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been entered with both the Exchanges.

25. RELATED PARTY TRANSACTIONS:

During the year under review, all Related Party Transactions that were entered into were in the Ordinary Course of Business and at Arms Length Basis. All transactions entered into with related parties were approved by the Audit Committee. None of the transactions with related parties are material in nature or fall under the scope of Section 188(1) of the Act.

The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is not applicable to the Company for the FY 2022-2023 and hence the same is not provided.

26. DIRECTORS RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134(3)(C) OF THE COMPANIES ACT, 2013:

Pursuant to the requirement under Section 134(3)(C) of the Companies Act, 2013 with respect to Directors Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the accounts for the financial year ended March 31, 2023 the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) that the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit or loss of your Company for the year under review;

(iii) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the Provisions of the Companies Act, 2013 for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities.

(iv) that the Directors have prepared the accounts for the financial year ended 31, 2023on a ‘going concern basis.

(v) The Directors have laid down internal financial controls, which are adequate and are operating effectively.

(vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

27. REMUNERATION RATIO OF THE DIRECTORS AND KMP:

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial personnel) Rules 2014 and Companies (Particulars of employees) Rules 1975 in respect of employees of the Company and Directors is furnished below:

28. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return as on March 31, 2023 is available on the Companys website at https://www.shrishakti.com/agm-2023/sri-havisha-annual-report-fy-2022-23.html

29. SECRETARIAL STANDARDS:

The Directors state that the applicable Secretarial Standards i.e., SS-1 and SS-2, issued by the Institute of Company Secretaries of India, relating to Meetings of Board of Directors and General Meetings respectively have been duly complied with.

30. DISCLOSURES AS PER 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. The Company has complied with the applicable provisions of the POSH Act, and the rules framed there under, including constitution of the Internal Complaints Committee headed by Ms Shanthi Pothapragada.

During the financial year Financial Year 2022-23, the Company did not receive any instance of such event of sexual harassment.

31. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION

(12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:

The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Act (including any statutory modification(s) or re-enactment(s) for the time being in force).

32. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE:

Information under Section 134(3) (m)of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 is given below

A. CONSERVATION OF ENERGY:

Energy Conservation Measures

B. TECHNOLOGY ABSORPTION:

The Company has taken up several initiatives for undertaking Research and Development (R&D) on Technology, Absorption, Adaptation and Innovation during the year. The Company has indigenously developed a Conversion Kit with fixed tank for Three Wheelers to run on LPG. The Company holds two patents jointly with M/s. Automotive Research Association of India (ARAI) towards the same.

C. FOREIGN EXCHANGE EARNINGS AND OUTGOINGS:

(Rs. in Lakhs) Current Year

33. WHISTLE BLOWER POLICY:

The Company has adopted a Whistle Blower Policy as part of vigil mechanism to provide appropriate avenues to the Directors and employees to bring to the attention of the management any issue which is perceived to be in violation of or in conflict with the Code of Business Principles of the Company.

ACKNOWLEDGEMENT:

The Directors thank the Companys customers, vendors, investors and academic partners for their continuous support. The Directors also thank the Government of India, Governments of various states in India, concerned Government departments &agencies and our Bankers for their co-operation.

The Directors appreciate and value the contribution made by all our employees and their families and the contribution made by every other member of the SHHIL family, for making the Company what it is.