Sri Havisha Hospitality & Infrastructure Ltd Directors Report

To

The Shareholders,

Sri Havisha Hospitality and Infrastructure Limited Dear Esteemed Members,

1. INTRODUCTION:

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, 2024.

2. FINANCIAL PERFORMANCE:

The Financial performance of the Company for the year 2023-24 is indicated below:

Rupees in Lakh

Particulars	2023-24	2022-23
Gross Income	1612.39	1799.56
EXPENSES
Cost of materials consumed	267.50	226.30
Employee benefit expenses	534.33	497.70
Finance costs	519.50	19.48
Depreciation and amortisation expenses	225.45	78.84
Other expenses	462.84	772.25
Total expenses (IV)	2009.62	1594.57
Profit / (Loss) before tax (V+VI)	(397.23)	204.99
Total Tax Expenses	17.67	55.25
Net Profit / (Loss) for the year after tax (V-VI)	(414.91)	149.74

3. PERFORMANCE REVIEW:

The total revenue for FY 2023-24 is Rs. 1612.39 Lakhs, which is lower than the previous years total revenue of Rs. 1799.56 Lakhs. The Company reported after tax loss of Rs. 414.91 Lakhs for the FY 2023-24 as against the profit of Rs. 149.74 Lakhs for FY 2022-23.

The Company executed the lease agreement with Airports Authority of India (AAI) for renewal of the leasehold rights of the land for another 30 years from the year 2023. Interest Expense on lease liability has been provided as per Ind AS 116 and the Finance Cost for the year ended 31 March 2024 of Rs. 519.50 Lakhs includes Interest expense on lease liability of INR 497.15 lakhs which is notional. It may be noted that as IND AS 116 is made applicable for the FY 2023-24 onwards, such provision was not required in FY 22-23.

4. STATE OF AFFAIRS AND FUTURE OUTLOOK OF THE COMPANY:

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 three 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. 3 mock up room and suites are already done and being used at a higher tariff for the past few months. The feedback on the same from the guests is very good. We are now implementing total similar renovation for 19 rooms and suites which will be completed in the next few weeks. Thereafter we will be taking up the remaining renovation of the Hotel in a phased manner, 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 healthy occupancy levels witnessed in the Financial Year 2023-24.

As you are aware, in the last annual general meeting of the company held on September 28, 2023, shareholders of the company approved to issue and allot 4,55,00,000 sweat equity shares subject to the maximum limit equivalent to 15% of the Paid up capital of the Company. To comply with the Regulation No:166A of the SEBI (ICDR) Regulations, 2018 and Regulation No:

3 of SEBI (SAST) Regulations, 2011, the Company during the Year 2024-2025 made an application to the Stock Exchanges for their approval to issue and allot 1,50,00,000 sweat equity shares equivalent to less than 5% of the paid up capital of the company. The company is awaiting the approval of the Stock Exchanges for the same.

The validity of the Resolution dated 28^th September, 2023 for sweat equity is one year from the date of passing the resolution by the shareholders of the company. Consequently the Resolution lapses by period of limitation on 27^th September, 2024. Hence a fresh resolution is proposed in order to facilitate the Company to issue sweat equity shares of 1,50,00,000 during the Financial Year 2025-2026 within the overall limit read with the applicability of relevant Regulations.

In view of the unrelenting and persistent efforts put in by your companys Chairman & Managing Director in achieving the renewal of the Hotels land lease renewal for another 30 years along with the first right of refusal thereafter, it is proposed to allot Sweat Equity as above 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.

The efforts of Mr. Manohar for one time settlement is more in the nature of physical stress and involvement and quantification of such efforts in monetary terms is not possible. His value addition remains an appreciative contribution to the overall growth of the Company and has become a decisive factor for the shareholders to consider and approve sweat equity to Mr. Manohar.

Therefore it is proposed that Mr. Manohar shall be adequately compensated for his efforts as above through issue and allotment of 1,50,00,000 Sweat Equity Shares of Rs. 2 each fully paid up for his Non-cash consideration and value addition to the company.

The massive renovation of the entire Hotel that is taken up now along with addition of more rooms to the Hotel is expected to result in substantial increase in revenues and lead to considerable profitability. 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.

5. DIVIDEND:

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, 2024.

6. DEPLOYMENT OF FUNDS:

Rs. In lakhs

Sources of Funds
Share Holders Funds	2978.03
Non - Current Liabilities	3689.01
Current Liabilities	925.98
Total	7593.02
Application of Funds
Non-Current Assets	5971.80
Other Non - Current Assets	971.30
Current Assets	501.88
Long Term Loans & Advances	13.78
Other Current Assets	134.26
Total	7593.02

7. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THEFINANCIAL YEAR AND DATE OF REPORT:

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.

8. SIGNIFICANT AND MATERIAL ORDERS:

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.

9. TRANSFER TO RESERVES:

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 TOINT 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

• Mr. Annaiahsetty Bala Setty (DIN- BMYPS7465N) was appointed as Non-executive Non Independent Director of the company at the Annual General Meeting held on September 29, 2019. He attained the age of seventy five years as on June 11, 2023.

To comply with the provisions of the Act and Regulation 17(1A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations and on the recommendation of the Nomination and Remuneration Committee (NRC) and with consent of the Board of Directors of the Company, be and is hereby appointed by special resolution as a Non Executive Non Independent director of the company for the period of 5 (Five) consecutive years commencing from September 28, 2023 to September 27, 2028 liable to retire by rotation at annual general meeting held on September 28, 2023.

• In accordance with the requirements of the Act and the Companys Articles of Association, Mr. Annaiahsetty Bala Setty, retires by rotation and being eligible, offers himself for reappointment. A resolution seeking shareholders approval for his re-appointment forms part of the Notice.

• During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2024 are:

S. No.	Name	Designation
1.	Mr. Venkat Manohar Dontamsetti	Managing Director
2.	Mrs. Satya Pinjala	Whole Time Director
3.	Mr. Chandrasekhara Prasad Chodavarapu	Chief Financial Officer
4.	Mr. Sonu Kumar	Company Secretary

14. BOARD MEETINGS:

Four 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 thereunder 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 with an 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. earlier 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 2023-24 and their report is being obtained.

The Board also appointed Krishna Kumar & Associates as Secretarial Auditor to conduct Secretarial Audit of the Company for Financial Year 2024-25.

c) COST RECORDS

Pursuant to Section 148(1) of the Act and the relevant rules made thereunder 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, 2024.

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 65.83% of the Paid-Up Equity Share Capital of the Company was demater ialized as on 31st March, 2024 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 2023-2024 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, 2013with respect to Directors Responsibility Statement, it is hereby confirmed:

(i) that in the preparation of the accounts for the financial year ended March 31, 2024 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, 2024 on 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 isfurnished below:

Directors	116.12 Lakhs
KMP	23.65 Lakhs
Ratio	4.91:1

28. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2024 is available on the Companys website at https://www.srihavisha.in/agm-2024/sri- havisha-annual-report-fy-2023-24.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 thereunder, including constitution of the Internal Complaints Committee headed by Ms Shanthi Pothapragada.

During the financial year Financial Year 2023-24, 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 reenactments) 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 Consumption measures taken

a. The Company has initiated effective measures for saving all forms of Energy.

b. Additional investments and proposals, if any being implemented for reduction in consumption of energy.

c. Impact of the measures at (a) and (b) above for reduction of energy consumption.

d. Total Energy Consumption and Energy Consumption per unit of product.

> Energy Conservation Measures

The following Energy Conservation Measures were implemented during the year.

a. Auto switching off of A/c Units, Exhaust Fans, Street Lights.

b. Reduction in compressed air consumption by fixing Regulators and Auto Controllers.

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. Earlier 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:

Current Year	(Rs. in Lakhs)
1) Foreign Exchange earned	NIL
2) Foreign Exchange used	NIL
a. Import of Capital Goods	NIL
b. Import of raw materials and spares	NIL
c. Travelling and other expenditure	NIL

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.

	For and on behalf of the Board
	SRI HAVISHA HOSPITALITY AND
	INFRASTRUCTUE LIMITED
PLACE: HYDERABAD	D.V.MANOHAR
DATE: 13.08.2024	CHAIRMAN & MANAGING DIRECTOR