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Directors Report of CHL Ltd.

Mar 31, 2015

THE MEMBERS OF CHL LIMITED

The Directors have pleasure in presenting the 36th Annual Report of the Company along with the Audited Financial Statements for the Financial Year ended 31st March, 2015.

1. FINANCIAL RESULTS AND OPERATIONAL PERFORMANCE (Rs. in Lacs)

S. No. Particulars 2014-15 2013-14

1 Gross Income 5,852.54 6,019.76

2 Profit Before Interest and Depreciation 864.62 954.66

3 Finance Charges 404.90 347.34

4 Provision for Depreciation 412.17 422.20

5 Net Profit Before Tax 47.55 185.12

6 Provision for Tax 11.42 73.82

7 Net Profit After Tax 48.11 126.54

Sales and other incomes for the year under review at Rs. 5,852.54 lacs are lower by 2.78% than that of the previous year's sales and other income at Rs. 6,019.76 lacs.

Operating profit before depreciation, Interest and tax at Rs. 864.62 lacs for the year under review is lower by 9.43% as compared to Rs. 954.66 lacs for the previous year.

Net Profit after providing tax for the year under review is Rs. 48.11 lacs as compared to Rs 126.54 lacs for the previous year, thus lowered by 61.98% over the previous year. This is due to high fixed cost, finance cost and operational cost accompanied by low tariff rate and low occupancy because of oversupply of rooms and cut throat competition.

2. ECONOMIC ENVIRONMENT AND BUSINESS REVIEW

While the new government has been able to project India as a investment hub, in reality, the flow of Foreign Institutional Investments uncover the truth that there is a lot to be done by the new government. However, the policy paradigm by the new government has boosted investors' sentiments strongly apart from a number of global factors. Overall in the past one year the Indian markets have led this rally with substantial increase in the investments in various sectors.

The Indian hospitality industry has emerged as one of the key industries driving growth of the services sector in India. The fortunes of the hospitality industry have always been linked to the prospects of the tourism industry and tourism is the foremost demand driver of the industry. The Indian hospitality industry has recorded healthy growth fuelled by robust inflow of foreign tourists as well as increased tourist movement within the country and it has become one of the leading players in the global industry. The industry is likely to experience robust growth on the back of rising disposable incomes and favorable industry statistics.

The tourism and hospitality sector is among the top 15 sectors in India to attract the highest Foreign Direct Investment (FDI). During the period April 2000-February 2015, this sector attracted around US$ 7,862.08 million of FDI, according to the data released by Department of Industrial Policy and Promotion (DIPP).

The Indian government has realized the country's potential in the tourism industry and has taken several steps to make India a global tourism hub. Some of the major initiatives taken by the Government of India to give a boost to the tourism and hospitality sector of India are as follows:

- The Government of India has set aside Rs. 500 crore (US$ 79.17 million) for the first phase of the National Heritage City Development and Augmentation Yojana (HRIDAY). The 12 cities in the first phase are Varanasi, Amritsar, Ajmer, Mathura, Gaya, Kanchipuram, Vellankani, Badami, Amaravati, Warangal, Puri and Dwarka which will be developed as smart cities.

- The Government of India is extending visa on arrival facility to 150 countries in stages from the current 43 countries. This is a big leap towards the promotion of tourism in India.

In the recent years there are new hotel projects including entry of foreign hotel chains that are coming up in and around Delhi and the other Metropolitan cities. The Indian Hotel room market for ten metros is expected to expand at a compound rate. The supplies of rooms are outpacing its demand. These new hotels have added further competition to the already existing cut throat competition resulting in low tariff but at the same time cost of material that has gone up will threaten the profitability.

3. DIVIDEND

Your Company, due to inadequacy of profit, is not in a position to declare Dividend for the financial year 2014-15.

4. DIRECTORS

Mr. A. K. Malhotra and Mr. O. P. Bajaj, Directors who retire by rotation and being eligible, have offered themselves for re- appointment. The Board recommends their appointment.

Mr. R. C. Sharma, an Independent Director who retires by rotation and being eligible has offered himself for re-appointment for a period of 5 (Five) consecutive years and not liable to retire by rotation. The Board recommends his appointment.

Ms. Kajal Malhotra has been appointed as an Additional Director w.e.f. 09.02.2015 pursuant to Section 149(1) of the Companies Act, 2013 and clause 49(11)(A)(1) of the Listing Agreement. She has good grip in finance and has legal acumen. As a Woman Director in the Company she will contribute a lot in the affairs of the Company. Pursuant to the Section 161(1) of the Companies Act, 2013 Ms. Kajal Malhotra holds office only upto the date of the forthcoming Annual General Meeting of the Company and is eligible for appointment as Director. The Board recommends her appointment.

Pursuant to the provisions of Section 203 of the Act, the appointment of Dr. L. K. Malhotra, Chairman & Managing Director Mr. Luv Malhotra, Joint Managing Director, Mr N. K. Goel, Vice President (Finance)/Chief Financial Officer and Mr. G. J. Varadarajan, Company Secretary, are formalized as the Key Managerial Personnel of the Company.

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 Clause 49 of the Listing Agreement.

5. MANAGEMENT DISCUSSION AND ANALYSIS

As required under Clause 49 of the Listing Agreement with the Stock Exchange, the Management Discussion and Analysis Report is enclosed as a part of the Report.

6. SUBSIDIARY COMPANY

You are all well aware that CHL International, a Joint Venture Company at Dushanbe, Tajikistan, which promoted a Hotel project at Dushanbe, Tajikistan has been financed by Export Import Bank of India (EXIM Bank) by way of term loan. The EXIM Bank has financed the project by sanctioning a further additional term loan of USD 6 Million, thus aggregating the term loan of USD 32.50 Mn.

The hotel was inaugurated partly in September, 2014 due to requirement of rooms by Tajikistan Government for Shanghai Cooperation Organization, under the brand name Sheraton Dushanbe. The soft opening (trial run) of the hotel was commenced in the last week of December, 2014 and it has commenced its full operation w.e.f. 01.04.2015.

There are no Associate Companies 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 proviso 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 as Annexure B.

Performance and financial position of the subsidiary company is separately given in the Annual Report.

7. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (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 thereunder. During the financial year 2014-15, one complaint was received on sexual harassment which is under process of enquiry.

8. WHISTLE BLOWER /VIGIL MECHANISM

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.chl.co.in under investors/ Whistle Blower Policy link.

9. EXTRACT OF ANNUAL RETURN

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

10. 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.

11. CONSOLIDATION OF FINANACIAL STATEMENT

The duly audited consolidated financial statement as required under the Accounting Standard 21 and provisions of Clause 32 of the Listing Agreement has been prepared after considering the audited financial statement of your Company and its subsidiary.

The annual accounts of the subsidiary shall be kept for inspection by shareholders in the head office of the holding company and the subsidiary company.

12. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 134(5) of the Act, and based on the representations received from the management, the directors hereby confirm that

i. in the preparation of the annual accounts for the Financial Year 2014-15, the applicable accounting standards have been followed and there are no material departures;

ii. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the financial year;

iii. they have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and

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

13. CORPORATE GOVERNANCE

Your Company has taken adequate steps to adhere all the stipulations laid down in clause 49 of the Listing Agreement. A report on the Corporate Governance along with certificate from Practicing Company Secretary confirming the Compliance with the conditions of Corporate Governance as stipulated under clause 49 of the Listing Agreement is includes as a part of the report. In the ensuing Annual General Meeting its appointment is being ratified.

14. LISTING WITH STOCK EXCHANGE

The Company confirms that it has paid the Annual Listing Fee for the year 2015-16 to Bombay Stock Exchange Limited (BSE), where the Company's Shares are listed. Securities and Exchange Board of India (SEBI) vide its Order passed on 19.11.2014 has withdrawn the recognition granted to Delhi Stock Exchange Limited (DSE) and DSE is derecognized w.e.f.19.11.2014. Pursuant to de-recognition, Listing of shares of your Company at DSE became ineffective and got automatically de-listed and the same has been informed to the shareholders by the Company through public notice.

15. PARTICULARS OF EMPLOYEES

Employees of the Company drawing remuneration above the limits specified under Section 197(12) of the Companies Act, 2013 read rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below.

16. DEMATERIALISATION OF SHARES

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. 4,68,56,192 (85.48%)Equity Shares of the Company stand dematerialized and balance 79,62,098 (14.52%) equity shares are still in physical form.

17. AUDITORS' REPORT

Auditors' observations are suitably explained in notes to the Accounts and are self explanatory.

18. AUDITORS Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s G Rai & Co. Chartered Accountants, were appointed as statutory auditors of the Company from the conclusion of the 35th Annual General Meeting (AGM) of the Company held on 29th September, 2014 till the conclusion of the 38th AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.

Internal Auditors

M/s L.N. Malik & Co. Chartered Accountants had been conducting periodic internal audit of all operations of the Company. As per Section 144 of the Companies Act, 2013, Statutory Auditors of a subsidiary company can not function as Internal Auditor of its holding company (CHL Limited). Pursuant to section 138 of the Companies Act, 2013, M/s Gulvardhan Malik & Co., Chartered Accountants was appointed as an Internal Auditor of the company w.e.f. 15.11.2014. 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 & Co., Company Secretaries is continuing as Secretarial Auditor of the Company.

19. REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:

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 hereunder:

(Rs. in Lacs) S. Name Designation Remuneration Remuneration No. paid FY paid FY 2014-15 2013-14

1. Dr. L. K. Malhotra Chairman & 84 42 Managing Director

2. Mr. Luv Malhotra Joint Managing 42 42 Director

3. Mr. Gagan Malhotra Executive Director 42 42

4. Mr. N. K. Goel Vice President 21.75 21.12 (Finance)/CFO

5. Mr. G. J. Varadarajan Company Secretary 7.49 7.27

Name Increase in Ratio/Times remuneration per Median from previous of employee year remuneration

Dr. L. K. Malhotra 42 44.24

Mr. Luv Malhotra Nil 22.12

Mr. Gagan Malhotra Nil 22.12

Mr. N. K. Goel 0.63 11.46

Mr. G. J. Varadarajan 0.22 3.94

20. INTERNAL CONTROL

The information about internal controls is set out in the Management Discussion & Analysis report which is attached and forms part of this Report.

21. RISK MANAGEMENT

The Risk Management is overseen by the Audit Committee of the Company on a continuous basis. The Committee oversees Company's process and policies for determining risk tolerance and review management's measurement and comparison of overall risk tolerance to established levels. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis. For details, please refer to the Management Discussion and Analysis report which form part of the Board Report.

22. DEPOSIT 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.

23. CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per section 135 and Schedule VII of the Companies Act, 2013, the Company is not required to constitute a Corporate Social Responsibility Committee and formulate policy as it does not fall within purview of Section 135(1) of the Companies Act, 2013.

24. 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 arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company's 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 Agreement. This Policy was approved by the Board and has been uploaded on the website of the Company at www.chl.co.in under Related Party Policy link.

25. 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). Ms. Kajal Malhotra, Additional Director, appointed on 09.02.2015, was excluded from the process of evaluation.

A separate meeting of the independent directors ("Annual ID meeting") was convened, 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 Directors was discussed by the Chairman of the NRC with the Board's Chairman covering performance of the Board as a whole; 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.

26. PARTICULARS AS PER SECTION 134(4)(m) OF THE COMPANIES ACT, 2013 READ WITH RULE 8 OF THE COMPANIES (ACCOUNTS) RULES 2014

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.

Technology Absorption

The Company being in the hospitality industry, particulars on technological absorption or expenditure on research and development are not applicable.

Foreign Exchange Earnings and Outgo

During the year under review, your Company has earned Rs.1446.46 lacs Foreign Exchange (previous year Rs. 1760.29 lacs) and used foreign exchange to the extent of Rs. 334.80 lacs (previous year Rs. 306.00 lacs).

27. 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 Place: New Delhi Dr. L. K. Malhotra Date: 11th August, 2015 Chairman & Managing Director


Mar 31, 2014

Dear Members,

The Directors are pleased to present their 34th Annual Report together with the Audited Accounts for the year ended 31st March 2014.

1. FINANCIAL RESULTS AND OPERATIONAL PERFORMANCE

2013-14 2012-13 Particulars (Rs. in Lacs) (Rs. in Lacs)

Total Income

Sales 5746.80 5590.41

Other Income 272.96 6019.76 283.47 5873.88

Less:Total Expenses

(Inclusive of exceptional items) 5049.76 4275.31

Gross Profit before 969.90 1598.57 Interest, Depreciation and Tax

Less : Financial 347.34 375.76

: Depreciation 422.20 769.54 474.36 850.12

Profit Before Tax 200.36 748.45

Less: Provision for Tax 73.56 243.99

Net Profit after Tax 126.80 504.46

Add : Profit brought forward from last year 4542.57 4372.95

Profit available for appropriation 4669.37 4877.41

APPROPRIATIONS

Transferred to General Reserves 30.00 80.00

Proposed Dividend on equity shares including interim dividend - 219.27

Tax on Dividend - 35.57

Balance carried to Balance Sheet 4639.37 4542.57

Sales and other incomes for the year under review at Rs 6019.76 lacs is higher by 2.48% than that of the previous year''s sales and other income at Rs. 5873.88 lacs.

Operating profit before depreciation, finance charges and tax at Rs. 969.90 lacs for the year under review is lower by 39.32% as compared to Rs.1598.57 lacs for the previous year. Net Profit after providing tax for the year under review is Rs. 126.80 lacs as compared to Rs. 504.46 lacs for the previous year, thus lower by 74.86% over the previous year. This is due to high fixed cost accompanied by operational cost in the context of meager increase in turnover.

2. ECONOMIC ENVIRONMENT AND BUSINESS REVIEW

The Indian tourism and hospitality industry has emerged as one of the key drivers of growth among the services sectors in India. Tourism in India is an employment generator and a significant source of foreign exchange for the country, apart from being an economic activity that helps local and host communities. In 2013, the travel and tourism industry contributed Rs 2.17 trillion (US$ 36 billion) or 2 per cent to the country''s gross domestic product (GDP). This is expected to rise to Rs 4.35 trillion (US$ 72.17 billion) in the coming years.

The tourism industry in India is thriving due to an increase in foreign tourist arrivals (FTA) and a greater number of Indians travelling to domestic destinations than before. The revenue from domestic tourism is likely to grow by 8.2 per cent in 2014 as compared to 5.1 per cent a year ago, according to the World Travel and Tourism Council (WTTC). Hotels are also an extremely important component of tourism industry. India''s travel and tourism industry is expected to grow by about 7.3 per cent in 2014, according to WTTC.

The Government of India has contributed significantly to the growth and development of the industry by providing policy and infrastructural support such as simplification of visa procedures and tax holidays for hotels. Further, the tourism policy of the government aims at speedy implementation of tourism projects, development of integrated tourism circuits, special capacity building in the hospitality sector and new marketing strategies.

FTAs during the period January–March 2014 stood at 21.27 lakh as compared to FTAs of 20.27 lakh during the corresponding period of 2013, registering a marginal growth of 4.9%. FTAs during March 2014 were 6.69 lakh as compared to 6.40 lakh during March 2013, a growth of 4.5 %.

During the year under review the Domestic Tourism Industry remained sluggish with marginal increase of Foreign Tourist Arrivals. But, consequent to the addition of more than 10,000 rooms in Delhi/NCR and other Metropolitan cities like Mumbai, Chennai, Bangaluru and Hyderabad the Hotel Industry was particularly impacted and your Hotel is not an exception to it. Weak pricing scenario and increase in operating costs in an inflationary environment has particularly affected the profitability of Hotel Industry and your company is equally impacted in such challenging business environment. With the formation of the New Government our economy should re-gain a trajectory of high growth and outlook for the company in expected to grow.

3. DIVIDEND

Your Company, due to inadequacy of profit, is not declaring Dividend for the financial year 2013-14.

4. DIRECTORS

Mr. Subhash Ghai, Mr. D. V. Malhotra and Mr. Lalit Bhasin, Directors of the Company are due to retire by rotation at the forthcoming Annual General Meeting. Mr. Subash Ghai and Mr. Lalit Bhasin who are already on the Board of the Company as Independent Directors are being appointed in the same position in the forth coming Annual General Meeting for a period of 5 (five) consecutive years and shall not retire by rotation. Mr. D.V. Malhotra a non-independent director being eligible, offer himself for re-appointment.

Mr. Yash Kumar Sehgal has vast experience in the field of finance. He held various positions at Commercial Bank of Kuwait, Oman for more than two decades in the past.. He has a good expertise in framing policies and procedure for various services of the Bank. Mr. Yash Kumar Sehgal was appointed as an Additional Director of the Company w.e.f. 25.09.2013 holding the position of an Independent Director He holds office till the conclusion of the ensuing Annual General Meeting. The company has received notice from the shareholder/s proposing the appointment of Mr. Yash Kumar Sehgal as independent Director for a period of 5 (five) consecutive years and shall not retire by rotation.

5. MANAGEMENT DISCUSSION AND ANALYSIS

As required by Clause 49 of the Listing Agreement with the Stock Exchange(s), Management Discussion and Analysis is annexed to the Annual Report.

6. SUBSIDIARY COMPANY

CHL International, a Joint Venture Company at Dushanbe, Tajikistan, is under final phase of its Hotel project at Dushanbe Tajikistan. The Export Import Bank of India has financed the Hotel Project by sanctioning a term loan of USD 26.50 million for which your company has given a corporate guarantee. It is expected to commence its operation soon under the brand name Sheraton Dushanbe.

The statement as required under Section 212 of the Companies Act, 1956 in respect of the subsidiary company is annexed and forms an integral part of the Annual Report.

7. CONSOLIDATION OF FINANACIAL STATEMENT

The duly audited consolidated financial statement as required under the Accounting Standard 21 and provisions of Clause

32 of the Listing Agreement has been prepared after considering the audited financial statement of your Company and its

subsidiary.

The Annual Accounts of the Subsidiary companies and the detailed information shall be made available to the shareholders

seeking any information relating to consolidated accounts at any point of time. The annual accounts of the subsidiary shall

be kept for inspection by shareholders in the head office of the holding company and the subsidiary company.

The summarized position of the Subsidiary has been appended to the report.

8. DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies Act 1956, the Directors confirm as under:

(i) That in the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper

explanation relating to material departures. (ii) The accounting policies have been applied consistently, judgments and estimates made are responsible and prudent

so as to give a true and fair view of the State of Affairs of the Company as at the end of the accounting year and of the

profit of the Company for that period. (iii) That proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of

this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities have

been made. (iv) That the Annual Accounts have been prepared on a going concern basis.

9. CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement, a Report on Corporate Governance together with Practicing Company Secretary''s certificate is annexed to the Annual Report.

10. INFORMATION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 217(2A) OF THE COMPANIES ACT 1956 READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES RULES 1975, AS AMENDED) EMPLOYED THROUGHT THE YEAR/PART OF THE YEAR.

There are no employees of the Company drawing remuneration above the limits specified under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules 1975.

11. SECRETARIAL AUDIT

As directed by Security and Exchange Board of India (SEBI), Secretarial Audit is being carried out by Practicing Company Secretary. The finding of the Secretarial Audit have been satisfactory.

12. AUDITORS'' REPORT

As regards Auditors'' observations, the notes on accounts are self-explanatory and do not call for any further clarification.

13. AUDITORS

Statutory Auditors

M/s G Rai & Co. Chartered Accountants, Auditors of the Company, retire at the close of the Annual General Meeting and are eligible for re-appointment. In terms of Section 139 of the Companies Act, 2013 they can be appointed for a remaining term of 3 years starting from the conclusion of the ensuing Annual General Meeting until the conclusion of the 38th Annual General Meeting of the company (subject to ratification of their appointment at each Annual General Meeting.

The company has received letter from the Statutory Auditors to the effect that their re-appointment, if made, would be within the prescribed limit under section 141(3)(g) of the Companies Act. 2013 and that they are not disqualified for re- appointment.

Internal Auditors

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

14. FIXED DEPOSITS

The Company has not accepted deposits within the meaning of Company''s (Acceptance of Deposits) Rules 1975 from public during the year. There is no unpaid or unclaimed deposits lying with the Company.

15. PARTICULARS AS PER COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF DIRECTORS) RULES 1988

Conservation of Energy

Efforts on energy conservation are being pursued continuously. Regular repairs and maintenance of all equipment/ materials are carried out to ensure optimum efficiency. 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. Your Company, being engaged in the Hotel business, details as per Form ''A'' are not applicable.

Technology Absorption

The Company being in the hospitality industry, particulars on technological absorption or expenditure on research and development are not applicable.

Foreign Exchange Earnings and Outgo

During the year under review, your Company earned Foreign Exchange equivalent to Rs. 1760.29 lacs (previous year Rs. 1570.42.lacs ) and used foreign exchange to the extent of Rs. 306.00 lacs (previous year Rs. 77.18 lacs).

16. ACKNOWLEDGEMENTS

Your Directors wish to thank Central and State Governments, especially Department of Tourism, Company''s Bankers, customers, suppliers for the valuable cooperation and support.

The Board of Directors also expresses their sincere thanks to the shareholders for the support and the confidence reposed in the Company.

The Board takes this opportunity to thank all employees of the Company at all levels for their commitment and dedication. Your Directors look forward to the bright future.

For and on behalf of the Board Place: New Delhi Dr L.K. Malhotra Date: 9th August, 2014 Chairman & Managing Director


Mar 31, 2012

TO THE MEMBERS OF CHL LIMITED

The Directors are pleased to present their 33rd Annual Report together with the Audited Accounts for the year ended 31st March 2012.

1. FINANCIAL RESULTS AND OPERATIONAL PERFORMANCE

2011-12 2010-11 Particulars (Rs. in lacs) (Rs. in lacs)

Total Income

Sales 6,238.55 6,561.03

Other Income 424.26 6,662.81 374.93 6,935.96

Less: Total Expenses 4,906.15 4,846.03

(Inclusive of exceptional items)

Gross Profit before Interest, Depreciation and Tax 1,756.66 2,089.93

Less : Financial Charges 485.80 436.35

Depreciation 485.13 431.26

970.93 867.61

Profit Before Tax 785.73 1,222.32

Less: Provision for Tax 329.60 338.48

Net Profit after Tax 456.13 883.83

Add : Profit brought forward from last year 4,251.67 3,881.38

Profit available for appropriation 4,707.80 4,765.21

APPROPRIATIONS

Transferred to General Reserves 80.00 130.00

Proposed Dividend on equity shares including interim dividend 219.28 328.91

Tax on Dividend 35.57 54.63

Balance carried to Balance Sheet 4,372.95 4,251.67

Sales and other incomes for the year under review at Rs. 6,662.81 lacs is lower than that of the previous year's sales and other incomes at Rs. 6,935.96 lacs by 3.93%.

Operating profit before depreciation finance charges and tax at Rs. 1,756.66 lacs for the year under review as compared to Rs. 2,089.93 lacs for the previous year, is lower by 15.95 %.

Net Profit after providing tax for the year under review is to Rs. 456.13 lacs as compared to Rs. 883.83 lacs for the previous year, thus lower by 48.39% over the previous year.

2. BUSINESS REVIEW

The success story of the 'Hotel Industry in India' seconds only to China in Asia-Pacific. India is witnessing an unpredictable growth in hotel construction and will be adding almost 1,14,000 hotel guest rooms to its inventory over the next five years. Hotel industry in India is supporting a large number of population. From labour class to working professionals, the tourist sector provides employment over 50 million people in India and it is the single largest employment generator. The Federation of Hotel and Restaurant Association of India (FHRAI) has sought support from the government in the 12th year plan for the development of the tourism sector including budgetary allocation aiming to increase the foreign flow for this sector.

While reviewing operating performance of the hotel industries it was analyzed that hotel industry in India is recovering from the blows it suffered in the year 2008 first due to financial meltdown in America in September and later due to terrorists attack at Mumbai. The foreign tourist flow in India is substantially reduced by 18-20% during these periods. The onset of the global economic slowdown still has a greater impact on the profitability of the sector determined by occupancy rate. The local competition has also increased due to number of hotels coming up in and around Delhi which adversely affect the occupancy rate and profitability of the company.

3. DIVIDEND

The Board has already declared an interim dividend @ Rs. 1.00 per equity share in the Board Meeting held on 10.02.2012 for the financial year ended 31.03.2012.

The Board further recommended a Final Dividend @ Rs. 1.00 per equity share in respect of the Financial Year under review.

The Final Dividend, together with the Interim Dividend, will make the total dividend @ Rs. 2.00 (20%) per share in respect of the Financial Year. As per the provisions of the Income Tax Act 1961, the tax on Dividend will be borne by the Company.

The overall distribution of Dividend for the year under review will be Rs 254.85 lacs including Corporate Dividend Tax.

4. DIRECTORS

Mr. Subhash Ghai and Mr. D. V. Malhotra, Directors of the Company are due to retire by rotation at the forthcoming Annual General Meeting and they, being eligible, offer themselves for re-appointment.

Mr. Lalit Bhasin was appointed as a Director of the Company in Casual Vacancy arisen due to demise of Shri H. C. Bhasin. He will vacate office at the ensuing Annual General Meeting. Pursuant to Section 257 of the Companies Act, 1956, it is proposed to appoint him as a director of the company with effect from the date of the ensuing Annual General Meeting of your company. Your Board recommends for the approval of members the appointment of Mr. Lalit Bhasin as a Director of the Company.

5. MANAGEMENT DISCUSSION AND ANALYSIS

As required by Clause 49 of the Listing Agreement with the Stock Exchange(s), Management Discussion and Analysis is annexed to the Annual Report.

6. SUBSIDIARY COMPANY

As you are aware, CHL International, a Joint Venture Company at Tajikistan, is constructing a hotel at Dushanbe at Tajikistan. The CHL International has entered into an agreement with Starwood, Sheraton brand for marketing, management and operation of the hotel.

The hotel is at the advance stage of completion and interior fitout works and procurement of hotel operating system are in full swing.

The statement as required under Section 212 of the Companies Act, 1956 in respect of the subsidiary company is annexed and forms an integral part of the Annual Report.

In terms of circular No. 2/2011 dared 08th February 2011, issued by Ministry of Corporate Affairs, Government of India, the Board of Directors has, at the meeting held on 23.07.2011, passed a resolution giving consent for not attaching the Balance Sheet, Statement of Profit and Loss and other Documents of the subsidiary company.

7. CONSOLIDATION OF FINANACIAL STATEMENT

The duly audited consolidated financial statement as required under the Accounting Standard 21 and provisions of Clause 32 of the Listing Agreement has been prepared after considering the audited financial statement of your Company and its subsidiary.

The Annual Accounts of the Subsidiary companies and the detailed information shall be made available to the shareholders seeking any information relating to consolidated accounts at any point of time. The annual accounts of the subsidiary shall be kept for inspection by shareholders in the head office of the holding company and the subsidiary company.

The summarized position of the Subsidiary has been appended to the report.

8. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies Act 1956, the Directors confirm as under:

(i) That in the preparation of Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

(ii) The accounting policies have been applied consistently, judgments and estimates made are responsible and prudent so as to give a true and fair view of the State of Affairs of the Company as at the end of the accounting year and of the profit of the Company for that period.

(iii) That proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities have been made.

(iv) That the Annual Accounts have been prepared on a going concern basis.

9. CORPORATE GOVERNANCE

As required by Clause 49 of the Listing Agreement, a Report on Corporate Governance together with Practicing Company Secretary's certificate is annexed to the Annual Report.

10. INFORMATION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 217(2A) OF THE COMPANIES ACT 1956 READ WITH THE COMPANIES (PARTICULARS OF EMPLOYEES RULES 1975, AS AMENDED) EMPLOYED THROUGHT THE YEAR/PART OF THE YEAR

There are no employees of the Company drawing remuneration above the limits specified under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particular of Employees) Rules 1975.

11. SECRETARIAL AUDIT

As directed by Security and Exchange Board of India (SEBI), Secretarial Audit is being carried out by Practicing Company Secretary. The finding of the Secretarial Audit have been satisfactory.

12. AUDITORS' REPORT

As regards Auditors' observations, the notes on accounts are self-explanatory and do not call for any further clarification.

13. AUDITORS

Statutory Auditors

M/s G Rai & Co. Chartered Accountants, Auditors of the Company, retire at the close of the Annual General Meeting and are eligible for re-appointment. The Company has received confirmation from the firm that the appointment will be within the limits prescribed under section 224(1) (B) of the Companies Act, 1956. The Audit Committee of the Board has recommended their appointment. The necessary resolution is being placed before the shareholder for their approval.

Internal Auditors

M/s L.N. Malik & Co. Chartered Accountants have been conducting periodic internal audit of all operations of the Company. Internal Audit Reports are being laid down before the Audit Committee for their review and for recommendation to the Board.

14. AUDITORS OF SUBSIDIARY COMPANY

M/s G. Rai & Co. Chartered Accountants, has resigned from the Auditorship of the Subsidiary Company and M/s L. N. Malik & Co. Chartered Accountants, has been appointed as auditors of the Subsidiary Company in their place for the financial year 2012-2013.

15. FIXED DEPOSITS

The Company has not accepted deposits within the meaning of Company's (Acceptance of Deposits) Rules 1975 from public during the year. There is no unpaid or unclaimed deposits lying with the Company.

16. PARTICULARS AS PER COMPANIES (DISCLOSURE OF PARTICULARS IN THE REPORT OF DIRECTORS) RULES 1988 Conservation of Energy

Efforts on energy conservation are being pursued continuously. Regular repairs and maintenance of all equipment/materials are carried out to ensure optimum efficiency. To give thrust on energy conservation, "optimum utilization of natural light", is focused on and energy saving lights and devices are fitted in wherever necessary and feasible. Your Company, being engaged in the Hotel business, details as per Form 'A' are not applicable.

Technology Absorption

The Company being in the hospitality industry, particulars on technological absorption or expenditure on research and development are not applicable.

Foreign Exchange Earnings and Outgo

During the year under review, your Company earned Foreign Exchange equivalent to Rs 1600.17 lacs (previous year Rs. 2088.42.lacs ) and used foreign exchange to the extent of Rs. 139.22 lacs (previous year Rs. 348.24 lacs).

17. ACKNOWLEDGEMENTS

Your Directors wish to thank Central and State Governments, especially Department of Tourism, Company's Bankers, customers, suppliers for the valuable cooperation and support.

The Board of Directors also expresses their sincere thanks to the shareholders for the support and the confidence reposed in the Company.

The Board takes this opportunity to thank all employees of the Company at all levels for their commitment and dedication. Your Directors look forward to the bright future.

For and on behalf of the Board

Place : New Delhi Dr L.K. Malhotra

Date : 9th August, 2012 Chairman & Managing Director

 
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