Your Directors have pleasure in presenting the 39th Annual Report of the Company alongwith the Audited Financial Statements for the Financial Year ended 31st March 2018.
|1. FINANCIAL RESULTS AND OPERATIONAL PERFORMANCE || ||(Rs. in Lacs) |
|Particulars ||2017-18 ||2016-17 |
|1. Total Revenue ||6433.58 ||6475.21 |
|2. Less: Expenses ||5110.76 ||5416.22 |
|3. Profit before Tax ||1322.82 ||1058.99 |
|4. Less : Net Tax Expenses ||503.87 ||368.23 |
|5. Profit after Tax ||818.95 ||690.76 |
|6. Other Comprehensive Income ||4.22 ||12.26 |
|7. Total Comprehensive Income ||823.17 ||703.02 |
The gross revenue of the Company for the year under review at Rs.6433.58 Lacs was lowerby 0.64% than that of the previous year's gross revenue at Rs. 6475.21 lacs.
The Profit before tax after depreciation and finance cost at Rs.1322.82 Lacs for theyear under review was higher by 24.91% as compared to Rs. 1058.99 Lacs for the previousyear.
Net Profit after providing tax for the year under review was Rs.818.95 Lacs as comparedto Rs 690.76 Lacs for the previous year thus higher by 18.56% over the previous year.
The total comprehensive income for the year under review was Rs.823.17 Lacs as comparedto Rs.703.02 Lacs for the previous year thus higher by 17.09% over the previous year.
2. FIRST-TIME ADOPTION OF IND AS
The Financial Statements for the year ended 31st March 2018 are the first the Companyhas prepared in accordance with Ind AS. For periods up to and including the year ended31st March 2018 the Company prepared its Financial Statements in accordance withaccounting standards notified under section 133 of the Companies Act 2013 read togetherwith paragraph 7 of the Companies (Accounts) Rules 2014 ("Indian GAAP" or"previous GAAP").
Accordingly the Company has prepared financial statements which comply with Ind ASapplicable for periods ending on 31st March 2018 together with the comparative perioddata as at and for the year ended 31st March 2017. In preparing these FinancialStatements the Company's opening balance sheet was prepared as at 1st April 2016 theCompany's date of transition to Ind AS.
In view of the pending adjudication in Economic Court of Tajikistan as well as NationalCompany Law Appellate Tribunal your Company being a Corporate Guarantor to the Loanavailed by your subsidiary Company CHL International from EXIM Bank has to seek priorpermission from the EXIM Bank for declaration of Dividend. The EXIM Bank as per the normalpractice would not agree to give prior permission for it. Hence your Directors areconstrained not to recommend any Dividend for the year under review.
4. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Ms. Kajal Malhotra (DIN : 01319170) and Mr. Ashok Kumar Malhotra (DIN : 00676603)Directors who retire by rotation and being eligible have offered themselves forre-appointment. The Board recommends their appointments.
In the 36th Annual General Meeting Dr. Lalit Kumar Malhotra (DIN : 00213086) wasreappointed as Chairman and Managing Director of the Company for a period of three yearscommencing from 15.07.2015 to 14.07.2018 and he completes his current tenure on 14.07.2018and it is proposed to reappoint him for a further period beginning from 15.07.2018 to14.07.2021.
Pursuant to the provisions of Section 203 of the Act Dr. Lalit Kumar MalhotraChairman & Managing Director Mr. Luv Malhotra Joint Managing Director Mr. GaganMalhotra Executive Director Mr. Narender Kumar Goel Vice President (Finance)/ChiefFinancial Officer and Mr. G. J. Varadarajan Company Secretary are formalized as the KeyManagerial Personnel of the Company.
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and provisionsof the Listing Regulations. The profile of the Independent Directors forms part of theCorporate Governance Report.
5. MANAGEMENT DISCUSSION AND ANALYSIS
As required under the Listing Regulation with the Stock Exchange the ManagementDiscussion and Analysis Report is enclosed as a part of the Report.
6. SUBSIDIARY COMPANY
Your subsidiary CHL International a Joint Venture company in Dushanbe Tajikistan hasdeveloped a Five-Star Hotel known as the Sheraton at Dushanbe the capital of Tajikistan.This project has been financed by the Export Import Bank of India by way of a Term Loanaggregating to USD 32.50 million. The hotel has been in operation since 2015.
Pursuant to the case filed by CHL International our subsidiary Company against theExport-Import Bank of India (EXIM Bank) in the Economic Court of Dushanbe Tajikistanthe case was decided by the Court vide its Order dated 01/05/2018 wherein the claims madeby
CHL International were partly accepted and the EXIM Bank inter alia was directed toreconcile the account amend the loan agreements and to disburse the balance principalamount. During the pendency of above case filed by CHL International the EXIM Bankinitiated the proceedings under IBC and filed petition before Hon'ble National Company LawTribunal (NCLT) against CHL Limited being the Corporate Guarantor of the Loan. Vide orderdated 11/01/2018 the NCLT dismissed the case filed by EXIM Bank. Pursuant to thedismissal the EXIM Bank filed an appeal before Hon'ble Company Law Appellate Tribunal(NCLAT) and the same is pending adjudication.
There are no Associate Companies within the meaning of Section 2(6) of the CompaniesAct 2013 ("Act"). Further there has been no material change in the nature ofbusiness of the subsidiary.
In terms of provision to sub section (3) of Section 129 of the Act the salientfeatures of the Financial Statement of the subsidiary is set out in the prescribed formAOC-1 which forms part of the Annual Report
7. DISCLOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013
The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed there under. During the financial year2017-18 no complaint was received on sexual harassment.
8. WHISTLE BLOWER /VIGIL MECHANISM
In pursuant to the provisions of Section 177(9) and (10) of the Companies Act 2013 aVigil Mechanism for Directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.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 annexedherewith.
10. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.
11 MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THECOMPANY
Your Directors would like to inform that no material changes and commitments haveoccurred between the end of the financial year under review and the date of this reportthat may adversely affect the financial position of the Company.
12 CONSOLIDATION OF FINANACIAL STATEMENT
As stipulated by regulation 33 of the Listing Regulations the Consolidated FinancialStatements have been prepared in accordance with the applicable Accounting Standards. TheAudited Consolidated Financial Statements together with the Auditors' Report forms part ofthe Annual Report.
13. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(5) of the Act and based on therepresentations received from the management the Directors hereby confirm that: i. In thepreparation of the Annual Accounts for the Financial Year 2017-18 the applicableaccounting standards have been followed and there is no material departure; ii. They haveselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the Financial year and of the profit of theCompany for the Financial year; iii. They have taken proper and sufficient care to thebest of their knowledge and ability for the maintenance of adequate accounting records inaccordance with the provisions of the Act. They confirm that there are adequate systemsand controls for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; iv. They have prepared the Annual Accounts on a goingconcern basis; v. They have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and operating properly; andvi. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
14. CORPORATE GOVERNANCE
Your Company has taken adequate steps to adhere all the stipulations laid down in theListing Regulation. A report on the Corporate Governance along with certificate fromPracticing Company Secretary confirming the Compliance is included as part of the report.
15. LISTING WITH STOCK EXCHANGE
The Company confirms that it has paid the Annual Listing Fee for the year 2018-19 toBSE Limited (BSE) where the Company's Shares are listed.
16. (a) PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information pursuant to Section 197 (12) of the Act read with Rule 5(1) 5(2) and5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 in respect of directors key managerial personnel and employees of the
Company is given in Annexure and form part of the report. There are no employeesdrawing remuneration above the limits specified under section 197 (12) of the CompaniesAct 2013 read with Rule 5(2) of the Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014.
(b) REMUNERATION RATIO OF THE KEY MANAGERIAL PERSONNEL
The information required pursuant to section 197 read with rule 5 of the Companies(Appointment and Remuneration of the managerial Personnel) Rules 2014 and Companies(Particulars of Employees ) Rules 1975 in respect of employees of the Company andDirectors is furnished in extract of Annual Return MGT 9.
17. DEMATERIALISATION OF SHARES
The total paid up equity share capital of the Company is Rs. 109636580 comprising of54818290 equity shares of Rs. 2/- each. Out of the total equity shares 52139770(95.12%) Equity Shares of the Company stand dematerialized and balance 26 78 520 (4.88%)equity shares are still in physical form.
18. AUDITORS & AUDITORS' REPORT
Pursuant to the provisions of Section 139 of the Act and the rules framed there underM/s DGA & Co. Chartered Accountants were appointed as Statutory Auditors of theCompany from the conclusion of the 38th Annual General Meeting (AGM) of the Company heldon 18th September 2017 till the conclusion of the 40th AGM for a period of two years.
The Auditors' Report is unqualified. The notes to the Accounts referred to in theAuditors' Report are self-explanatory and therefore do not call for any furtherclarifications under section 134 of the Companies Act 2013.
M/s Gulvardhan Malik & Co. Chartered Accountants have been conducting periodicInternal Audit of all the operations of the Company. Internal Audit Reports are regularlyplaced before the Audit Committee for their review and for recommendation to the Board.
According to the provision of section 204 of the Companies Act 2013 read with Rule 9of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 M/sA. Chadha & Associates. Company Secretaries is continuing as Secretarial Auditor ofthe Company.
19. 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.
20. RISK MANAGEMENT
The Risk Management is overseen by the Audit Committee of the Company on a continuousbasis. The Committee oversees Company's process and policies for determining risktolerance and review management's measurement and comparison of overall risk tolerance toestablished levels. Major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuous basis.
21 CHANGE IN THE NATURE OF BUSINESS
During the year under review there has been no change in the nature of business of theCompany.
22. DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
23. CORPORATE SOCIAL RESPONSIBILITY (CSR)
As per section 135 and Schedule VII of the Companies Act 2013 your Company hasconstituted the Corporate Social Responsibility Committee of Board of Directors whichpresently comprises of three members viz Mr Yash Kumar Sehgal Chairman Mr Lalit BhasinMember and Mr Luv Malhotra Member. The CSR policy as approved by Board of Directors inpursuance of section 134 (3) (o) of the Act is annexed and form part of this report.Further the Annual Report on CSR activity in pursuance of Rule 8 of the Companies(Corporate Social Responsibility Policy) Rules 2014 describing inter-alia theinitiatives taken by the Company in implementation of its CSR Policy is annexed and formspart of this Report.
24. RELATED PARTY TRANSACTIONS
During the year under review there is no related party transaction covered underSection 188(1) of the Companies Act 2013. Other Related party transactions that wereentered during the financial year were on an arm's length basis and were in the ordinarycourse of business. There were no materially significant related party transactions withthe Company's Promoters Directors Management or their relatives which could have had apotential conflict with the interests of the Company.
The Board of Directors of the Company has on the recommendation of the AuditCommittee adopted a policy to regulate transactions between the Company and its RelatedParties in compliance with the applicable provisions of the Companies Act 2013 theRules there under and the Listing Agreement. This Policy was approved by the Board and hasbeen uploaded on the website of the Company at www.chl.co.in.
25. BOARD EVALUATION
The performance evaluation of the Board its Committees and Individual Directors wasconducted and the same was based on questionnaire and feedback from all the Directors onthe Board as a whole Committees and self-evaluation. Directors who were designated heldseparate discussions with each of the Directors of the Company and obtained their feedbackon overall Board effectiveness as well as each of the other Directors. Based on thequestionnaire and feedback the performance of every Director was evaluated in the meetingof the Nomination and Remuneration Committee (NRC). The Meeting of NRC also reviewedperformance of the Managing Director (qualitative).
A separate meeting of the Independent Directors ("Annual ID meeting") wasconvened on 14/02/2018 which reviewed the performance of the Board (as a whole) theNon-Independent Directors and the Chairman & Managing Director. Post the Annual IDMeeting the collective feedback of each of the Independent Directors was discussed by theChairman of the NRC with the Board's Chairman covering performance of the Board as awhole; performance of the Non-Independent Directors and performance of the Board Chairman.
Some of the key criteria for performance evaluation are as follows Performanceevaluation 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(3)(m) OF THE COMPANIES ACT 2013 READ WITH RULE 8 OFTHE COMPANIES (ACCOUNTS) RULES 2014 Conservation of Energy
Energy conservation continues to receive priority attention at all levels. All effortsare made to conserve and optimize use of energy with continuous monitoring improvement inmaintenance and distribution systems and through improved operational techniques. To givethrust on energy conservation "optimum utilization of natural light" isfocused on and energy saving lighting solution such as light emitting diodes and solarpanel and devices such as automated controls and sensors are fitted in wherever necessaryand feasible and it is being continuously adopted.
The Company being in the hospitality industry particulars on technological absorptionor expenditure on research and development are not applicable.
Foreign Exchange Earnings and Outgo
During the year under review your Company has earned Rs. 1535.55 Lacs foreign exchange(previous year Rs. 2197.59 Lacs) and used foreign exchange to the extent of Rs. 804.07Lacs (previous year Rs. 859.96 Lacs).
Your Directors wish to convey their appreciation to the business associates for theirsupport and contribution during the year. Your Directors would also like to thank CentralGovernment and State Government especially Department of Tourism employees shareholderscustomers suppliers alliance partners and bankers for the continued support given bythem to the Company and their confidence reposed in the management and the Company.
| ||For and on behalf of the Board |
|Place: New Delhi ||Dr. Lalit Kumar Malhotra |
|Date: 28th May 2018 ||Chairman & Managing Director |