Kamat Hotels (India) Ltd

Dear Members,

Your Directors are pleased to present the 37^th Annual Report of Kamat Hotels (India) Limited ("the Company") along with the Audited Financial Statements (Standalone and Consolidated) of the Company for the Financial Year ended 31^st March, 2024.

FINANCIAL SUMMARY:

The financial summary for the year under review is as below:

(Rs. in lakhs except per Share figures)

* Previous Year Figures have been regrouped/rearranged wherever necessary.

PERFORMANCE REVIEW:

The average occupancy of the hotels of the Company i.e. 'The Orchid, Mumbai', was around 77% and IRA by Orchid Hotels, Mumbai (Formerly known as VITS, Mumbai) was around 76%. The Company expanded its portfolio with the opening of new properties and renovated existing ones to enhance guest experiences. This includes adding more rooms and modernizing facilities to keep up with current hospitality trends.

Note: The Company has sold the IRA by Orchid Hotels, Mumbai (Formerly known as VITS, Mumbai) to Lateral Hospitality Private Limited with effect from 26^th October, 2023, however, the Company has taken on lease the same for managing the operations of hotel.

STANDALONE FINANCIAL PERFORMANCE:

The total revenue from operations of the Company for the year was recorded at Rs. 22,291.39 lakhs (of which the turnover of Rs. 12,149.97 lakhs pertains to The Orchid, Mumbai, Rs. 4,870.11 lakhs pertains to IRA by Orchid Hotels, Mumbai and Rs. 5,271.31 lakhs pertains to other units) as against Rs. 22,374.46 lakhs in the previous year. The Company's profit after tax is Rs. 4,523.95 lakhs as compared to Profit after tax of Rs. 26,180.72 lakhs of previous year (excluding other comprehensive income).

CONSOLIDATED FINANCIAL PERFORMANCE:

The total revenue from operations of the Company for the year was recorded at Rs. 30,434.52 lakhs as against Rs. 29,508.17 lakhs in the previous year. The Company's profit after tax is Rs. 4,484.72 lakhs as compared to Profit after tax of Rs. 31,288.27 lakhs of previous year (excluding other comprehensive income).

MANAGEMENT/ FRANCHISEE / CONTRACTS/ OTHERS:

During the year under review, the agreements entered for Management of The Orchid Hotel, Pune and IRA by Orchid Hotels, Bhubaneswar (VITS, Bhubaneswar) is continued. Also, the arrangement under the Business Contract Agreement for operations of Mahodadhi Palace, Puri is continued.

New openings and other Strategic Initiatives by the Company:

- The Company has opened two new units namely The Orchid Hotel in Jamnagar, Gujarat and IRA by Orchid Hotels in Sambhajinagar, Maharashtra with effect from 1^st December, 2023, and 15^th December, 2023, respectively. Both the hotels are on lease and managed by the Company.

- The Company has through its wholly owned subsidiary, Mahodadhi Palace Private Limited (MPPL) has signed a Joint Development Agreement (JDA) with Constrict Hospitality Private Limited (Special Purpose Vehicle set up for the purpose) to develop and construct a Five Star Luxury Heritage Hotel with 120 rooms at Mahodadhi Palace, Puri in Odisha.

The opening of hotels in Bhavnagar, Chandigarh, Noida and Dehradun are currently in pipeline and soon to be opened in the Financial year 2024-25. The Company has already entered into Lease agreements and MOU for the Management and Operations of these upcoming properties.

During the Financial year 2024-25, the Company has already opened two new hotels. First being, IRA by Orchid Hotels, Ayodhya, Uttar Pradesh with effect from 17^th April, 2024, which is on lease and managed by the Company. Other being, The Orchid - Toyam, Pune, Maharashtra, which is opened under the brand of the Company "The Orchid" with effect from 31^st May, 2024, under the Management contract.

These strategic arrangements have allowed Company to expand its portfolio in the hospitality industry and tap into the potential of these diverse markets. The lease agreements granted the Company the right to use and operate the hotels enabling to a broader customer base.

DIVIDEND:

In order to prioritize debt reduction and fortify Company's financial stability, your Directors do not recommend any Dividend for the F.Y. 2023-24.

TRANSFER TO RESERVES:

The Company has not transferred any amount to the General Reserve for the financial year ended 31^st March, 2024.

DEPOSITS:

The Company did not accept any deposits within the meaning of Section 73 of the Companies Act, 2013 and Rules made there under at the beginning of the year. During the year under review, the Company has neither invited nor accepted any deposit under Section 73 of the Companies Act, 2013, and the rules made there under and no deposit was remaining unpaid or unclaimed as at the end of the year.

ANNUAL RETURN:

As provided under Section 92(3) and Section 134(3)(a) of the Companies Act, 2013, the annual return in Form MGT-7 is available on the website of the Company at https://www.khil.com/annual-reports.html .

SHARE CAPITAL:

As on 31^st March, 2024, the Authorised Share Capital of the Company stood at Rs. 3,425 lakhs (excluding forfeited share capital) divided into 3,42,50,000 equity shares of Rs. 10/- each.

On 23^rd February, 2023, the Company has allotted 58,96,014 (Fifty Eight Lakhs Ninety Six Thousand Fourteen) warrants each convertible into equity shares of Rs. 10/- each. The issue price of the warrant is Rs. 97/- ("Warrant Issue Price") which includes warrant subscription price Rs. 24.25 per warrant and the warrant exercise price Rs. 72.75 per warrant.

During the year under review and upto the date of this report, certain promoter / promoter group and Public (Non Promoter group) exercised the option of conversion of warrants into Equity Shares upon the payment of balance 75% of the warrant issue price i.e. Rs. 72.75 and accordingly, the Board on 7^th March, 2024, 7^th May, 2024 and on 12^th August, 2024 considered and approved the conversion of warrants and allotted 12,53,601 and 6,25,601 and 3,53,761 Equity Shares respectively having face value of Rs. 10 each to the persons/ entities belonging to promoter / promoter group and Public (Non-Promoter group) mentioned in the below table:

Therefore, the issued and paid-up capital of the Company stood at Rs. 25,90,64,640/- consisting of 2,59,06,464 equity shares of Rs. 10/- each as on 31^st March, 2024.

And consequent to the allotment dated 7^th May, 2024 and 12^th August 2024, the issued and paid-up capital of the Company stood at Rs. 26,88,58,260/- consisting of 2,68,85,826 equity shares of Rs. 10/- each.

Further, there was no deviation in the use of the proceeds from the objects stated in the explanatory statement of the Notice dated 14^th December, 2022.

Debentures:

At the beginning of the financial year under review, the Company had Outstanding 29,750 "14% Rated Listed Secured Redeemable Non-Convertible Debentures" (NCDs) having face value of Rs. 100,000 each (Rupees One Lakh) aggregating to Rs. 297.50 Crore.

On 26^th October, 2023, the Company had partially redeemed the Debentures and paid off Rs. 125 Crores as per the terms of repayment stated in the Debenture Trust Deed. The said redemption was pursuant to face value, hence the face value of the Debentures reduced from Rs. 1,00,000 each to Rs. 57,983 each. Consequent to the said redemption, the Company had Outstanding 29750 NCDs of face value Rs. 57,983 each aggregating to Rs. 172.50 Crores.

Further on 28^th March, 2024, the Company purchased 19,750 NCDs of face value Rs. 57,983 each, from the existing debenture holder of the Company namely "Purple Clover Tree LLP". The total purchase consideration for 19,750 NCDs amounted to Rs. 128.45 Crores (includes Principal, Interest Cost and Redemption Premium). The Debentures purchased by the Company were extinguished consequent to which the Company had Outstanding 10,000 NCDs of face value Rs. 57,983 each.

Therefore, considering the above repayments, the Outstanding NCDs of the Company has reduced from Rs. 297.50 Crore in the previous year to Rs. 57.983 Crores in the Current year.

In addition to above, we are pleased to inform you that on 26^th July, 2024, the Company has fully redeemed the 10,000 Outstanding NCDs of face value Rs. 57,983 each by full and final payment of aggregate amount of Rs. 63.078 Crores (includes Principal, Interest Cost and Redemption Premium).

Therefore, as on the date of this report the Company has no outstanding 14% Rated Listed Secured Redeemable NonConvertible Debentures (NCDs).

BORROWINGS:

During the financial year under review, the Company has availed a refinancing facility from AXIS Finance Limited, of an amount not exceeding Rs. 200 Crores. Out of the said facility, the Company has availed and deployed Rs.134 Crores for meeting the repayment obligations of high-cost debt (NCDs of the Company).

The total long term borrowings of the Company on the Standalone basis stood at Rs. 170.69 Crores and at Rs. 191.06 Crores on a Consolidated basis for the year ended 31^st March, 2024, as compared to Rs. 168.34 Crores on the Standalone basis and Rs. 188.70 Crores on Consolidated basis as at 31^st March, 2023.

CREDIT RATING:

During the last financial year, Company obtained credit rating for its aforesaid debentures from Acuite Ratings and Research Limited (rating agency). The rating agency assigned "ACUITE C" to the NCDs vide their letter dated 24^th January, 2023. The Credit rating of the Company remains unchanged during the year under review.

MATERIAL CHANGES AND COMMITMENTS:

1. Scheme of Arrangement: The Board of Directors in their meeting held on 23^rd May, 2024, have approved the Scheme of Arrangement (Merger by Absorption of two transferor Companies into transferee company) between Savarwadi Rubber Agro Private Limited ("First Transferor Company" and "SRAPL') and Treeo Resorts Private Limited ("Second Transferor Company" and "TRPL') and Kamat Hotels (India) Limited ("Transferee Company" and "KHIL') and their respective Shareholders and Creditors ("the Scheme") in accordance with the provisions of Sections 230 to 232 read with Section 66 of the Companies Act, 2013, ("the Act") and other applicable provisions, if any, of the Companies Act, 2013, and the rules made thereunder including Companies (Compromise, Arrangements & Amalgamations) Rules, 2016, as amended from time to time, and in accordance with the provisions of Memorandum and Articles of Association of the Company, subject to the requisite approval of the shareholders/ creditors/ debenture holders/ debenture trustee of the Company and the sanction of the jurisdictional National Company Law Tribunal (NCLT) and/or such other competent authority, as may be applicable.

The First Transferor Company is a part of the promoter and promoter group of the Transferee Company. However, neither of the Transferor Companies are engaged in significant business operations. The First Transferor Company owns a freehold land in Vile Parle East, Mumbai, which houses a Sewage Treatment Plant (STP) Unit utilized by the Transferee Company. The Transferee Company continues to utilize this property. The Second Transferor Company owns a non-agricultural land and building situated on Mumbai-Ahmedabad Highway in the village of Saye, Palghar District, Thane, which makes it suitable and ideally located for KHIL to develop and operate future hotel/resort projects including residential projects on this TRPL land. The Management of the Transferee Company is of the view that the proposed Scheme of merger by absorption/ amalgamation will enhance stakeholders' wealth and streamline the group's structure, resulting in improved administrative and operational efficiency. Therefore, to simplify and enhance operational efficiency, it is proposed to restructure the group by merging the two Transferor Companies into the Transferee Company. A robust governance structure to ensure enhance compliances.

The Company had submitted to the Stock Exchanges the Draft Scheme of Arrangement for merger by Absorption between Savarwadi Rubber Agro Private Limited (SRAPL), Treeo Resort Private Limited (TRPL) and Kamat Hotels (India) Limited (KHIL) along with all the other documents required as per the checklist provided by both the Exchanges.

However, as per the requirements of the Stock exchanges, the Company has revised the draft Scheme along with its annexures in their duly convened Board meeting held on 12^th August, 2024. Thereafter the revised draft Scheme has been submitted to the Stock Exchanges. The details with respect to the revised draft Scheme has also been updated at the website of the Company at https://www. khil.com/merger.html.

2. Further, with reference to Note no. 46.4(ii) and Note no. 52.4(ii) of the Standalone and Consolidated Financial Statements for the year ended 31^st March, 2024, respectively, which are annexed to this Report, the Board and the Board Committee of the Company in their meetings held on 12^th August, 2024, accorded their approval to compensate Savarwadi Rubber Agro Private Limited ("First Transferor Company" and "SRAPL') for the purpose of allowing the Company to use the Sewage Treatment Plant (STP unit) situated on the plot area owned by SRAPL. The Compensation payable to SRAPL would be through issue and allotment of New Equity Shares of Kamat Hotels (India) Limited ("the Company") to the shareholders of SRAPL pursuant to the Scheme of Arrangement as per the Share Exchange ratio derived by the Registered Valuer, which was considered and approved by the Board and Board Committees. The aforesaid issue and allotment of Shares to SRAPL will be post receipt of approval on the Draft Scheme of Merger by absorption from the Shareholders and National Company Law Tribunal (NCLT) and such other approvals as may be required in this regard.

There have been no other material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report. There has been no change in the nature of business of the Company.

REPORT ON THE PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES IN TERMS OF RULE 8(1) OF COMPANIES (ACCOUNTS) RULES, 2014:

In accordance with the provisions of the Companies Act, 2013 ("the Act"), SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and Ind AS 110, the Audited Consolidated Financial Statement forms part of the Annual Report.

A copy of Audited Financial Statements of the Subsidiaries/ Associates/Joint Ventures shall be made available for the inspection at the Registered Office of the Company during business hours. Any shareholder interested in obtaining a copy of separate Financial Statement of the Subsidiaries/ Associates/ Joint Ventures shall make specific request in writing to the Corporate Secretarial Department of the Company.

The Audited Financial Statements of the Subsidiaries/ Associates/Joint Ventures are also available on the website of the Company. In view of this, the Balance Sheet, Statement of Profit and Loss and other related documents of the Subsidiaries/ Associates/ Joint Ventures are not attached in this Annual Report. However, the statement containing the salient features which is required to be given in Form AOC -1 are provided with the Consolidated Financial Statement of the Company, hence not repeated for the sake of brevity. As on 31^st March, 2024, the Company has following Subsidiaries and Joint Venture Company:

WHOLLY OWNED SUBSIDIARY COMPANIES:

1. Orchid Hotels Pune Private Limited

2. Mahodadhi Palace Private Limited

3. Kamats Restaurants (India) Private Limited

4. Fort Jadhavgadh Hotels Private Limited

5. Orchid Hotels Eastern (I) Private Limited

6. Envotel Hotels Himachal Private Limited (with effect from 1^st October, 2023)

JOINT VENTURE COMPANY:

1. Ilex Developers and Resorts Limited

During the year under review, the Company has acquired 100% Shareholding in Envotel Hotels Himachal Private Limited with the view of capitalizing on the potential synergies between the entities, thereby creating a more streamlined and cost-effective operational model, consequently making it the Wholly Owned Subsidiary of the Company with effect from 1^st October, 2023.

Further, the Company had not sold or liquidated any of its Subsidiaries / Associates / Joint Ventures and no Subsidiaries / Associates / Joint Ventures ceased to be Subsidiaries / Associates / Joint Ventures of the Company and all Subsidiaries / Associates / Joint Ventures of the Company are operative.

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

As on the date of this report, the Company has 10 (Ten) Directors out of which 2 (Two) are Executive Directors, 2 (Two) are Non-Executive Non-Independent Directors, and 6 (Six) are Independent Directors.

a. Directors retiring by rotation:

In accordance with the provisions of the Act and the Articles of Association of the Company, Ms. Vidita V. Kamat (DIN: 03043066), Directors of the Company, retire by rotation, at the ensuing Annual General Meeting, and being eligible, offers herself for re-appointment.

b. Independent Directors:

The Company has received necessary declaration from each of the Independent Directors, under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of Independence as laid down in Section 149(6) of the Companies Act, 2013, and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In the opinion of the Board, the Independent Directors, fulfill the conditions of independence specified in Section 149(6) of the Act and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. There has been no change in the circumstances affecting their status as Independent Directors of the Company. The Independent Directors have also confirmed that they have complied with the Company's Code of Business Conduct & Ethics.

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). The Independent Directors of the Company possess the requisite experience and they have successfully qualified the online proficiency selfassessment test conducted by The Indian Institute of Corporate Affairs (IICA) for Independent Directors Data Bank except Mr. Tej Contractor and Mr. Ajit Naik. However, they will be appearing for the said online proficiency self-assessment test in due course of time.

c. Appointments:

The Board of Directors at its meeting held on 27^th May, 2023, appointed the following Directors:

The regularization of the Executive director and Independent Directors was approved by the Members by postal ballot dated 27^th July 2023.

The Company has appointed Mr. Kaushal K. Biyani as an Additional Director under Non-Executive NonIndependent category at their Board Meeting held on 12^th August, 2024. His appointment will be regularized by the members in the 37^th AGM of the Company to be held on Friday, 27^th September, 2024.

d. Woman Director:

In terms of the provisions of Section 149(1) of the Companies Act, 2013, and Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has complied with the requirement of having atleast one Independent Woman Director on the Board of the Company.

e. Non-Executive Directors:

Your Company has optimum combination of Executive and Non- Executive Directors on the Board. As stipulated under Regulation 17 of SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015, half of the Board comprises of Independent Director. (Ms. Vidita V. Kamat is the Non-Executive Director and other six Directors are Independent Directors of the Company.)

During the year under review, the designation of Mr. Sanjeev B. Rajgarhia has been changed from Non Executive Director to Non- Executive Independent Director with effect from 1^st October, 2023.

During the year under review, Mr. Apurva S. Muthalia resigned from the post of Independent Director of the Company with effect from 5^th January, 2024. His resignation was on account of his pre-occupation and other work related commitments.

Further, Mr. Kaushal K. Biyani and Mr. Hrishikesh B. Parandekar, nominated by Purple Clover Tree LLP (The Debenture holder) has tendered their resignation from Directorship (in capacity of Nominee Directors) of the Company with effect from 4^th April, 2024, on account of repayment of entire outstanding amount due to Purple Clover Tree LLP

Further, on 12^th August, 2024 the Company appointed Mr. Kaushal K. Biyani as an Additional Director under Non-Executive Non-Independent category.

f. Key Management Personnel (KMP):

During the year under review, Mr. Nikhil Singh is appointed as the Company Secretary and Compliance Officer of the Company with effect from 30^th August, 2023. The Compliances and filings related to the appointment of the Company Secretary were fulfilled in accordance with the provisions of the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

As on the date of this report, Dr. Vithal V. Kamat, Executive Chairman and Managing Director, Mrs. Smita Nanda, Chief Financial Officer and Mr. Nikhil Singh, Company Secretary and Compliance Officer are the Key Managerial Personnel of the Company in accordance with the provisions of Section 203 of the Companies Act, 2013, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

NUMBER OF MEETINGS OF THE BOARD:

During the year under review, 6 (Six) meetings of the Board of Directors were held.

The intervening gap between the two Board meetings was not more than 120 days. The particulars of the meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms a part of this Report.

AUDIT COMMITTEE:

The composition of the Audit Committee as required to be disclosed under Section 177(8) of the Companies Act, 2013, including the terms of reference and the details of the meetings along with the attendance of the Committee Members thereof is furnished in the Corporate Governance report which forms part of this Annual Report. During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.

NOMINATION AND REMUNERATION COMMITTEE:

In terms of Section 178(3) of the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a policy on Director's appointment, nomination and remuneration of Directors and Senior Management Employees including, inter alia, criteria for determining qualifications, positive attributes, independence of directors and policy on Board diversity was formulated by the Nomination and Remuneration Committee and has been adopted by the Board of Directors. The said policy is also made available on the website of the Company www.khil.com and its web link is https://www.khil.com/ other-policies.html .

The composition of the Committee including the terms of reference and the details of the meetings along with the attendance of the Committee Members thereof is furnished in the Corporate Governance report which forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY:

The Company understands the importance of the society in smooth functioning of the business. Thus, to acknowledge the constant support provided by the society, the Company involves itself in different corporate social responsibility activities.

Brief outline of Corporate Social Responsibility (CSR Policy) of Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in “Annexure A" of this report in the format prescribed under the Companies (CSR Policy) Rules, 2014. The CSR Policy is available on the website of the Company.

The CSR Committee on a continuous basis manifests the activities through which it can have positive impact on the society and be beneficial for larger good of the people.

The details of Committee including the terms of reference, composition and attendance of the Members thereof is furnished in the Corporate Governance report which forms part of this annual report.

MEETING OF INDEPENDENT DIRECTORS:

The meeting of Independent Directors was conducted to enable the Independent Directors to discuss matters pertaining to inter alia review the performance of Non Independent Directors and the Board as a whole, review the performance of the Executive Chairman of the Company (taking into account the views of the Executive and Non- Executive Directors), review the performance of the Company, assess the quality, quantity and timeliness of flow of information between the Company, Management and the Board which is necessary for the Board to effectively and reasonably perform their duties.

The meeting of the Independent Directors for the financial year under review was held on 18^th March, 2024.

The Chairman of the meeting of Independent Directors apprises the Chairman of the Company regarding the views/ concerns, if any, of Independent Directors.

DIRECTOR'S RESPONSIBILITY STATEMENT:

Your Director's state that:

1. In the preparation of the annual accounts for the year ended 31^st March, 2024, the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed and that there are no material departures from the same;

2. 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 as at 31^st March, 2024, and of the profit of the Company for the financial year ended on that date;

3. They 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 the Company and for preventing and detecting fraud and other irregularities;

4. The annual accounts have been prepared on a going concern basis;

5. The Directors have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively; and

6. Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

SECRETARIAL STANDARDS:

Your Directors confirm that the Company is in compliance with applicable Secretarial Standards issued by Institute of Company Secretaries of India.

STATUTORY AUDITORS:

M/s. N. A. Shah Associates LLP, Chartered Accountants, Mumbai were re-appointed as Statutory Auditors of your Company for the term of Five years commencing from the 35^th Annual General Meeting held on 28^th September, 2022, until the conclusion of 40^th AGM of the Company to be held in the year 2027.

Further, there is no qualification, adverse remark or observation in their audit report. However, there is emphasis on matter cited by the auditor which is self-explanatory.

During the year under review, the Auditors had not reported any instances of fraud or matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

The Company has received Eligibility certificate letter from M/s. N. A. Shah Associates LLP, Chartered Accountants, Mumbai, to the effect that their appointment, is within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013, and that they are not disqualified for appointment.

SECRETARIAL AUDIT:

In terms of the provision of the Section 204 of the Companies Act, 2013, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. DM & Associates, Company Secretaries LLP, Practicing Company Secretaries, to conduct the Secretarial Audit for the financial year ended 31^st March, 2024. The Secretarial Audit Report for the Financial Year ended 31^st March, 2024, issued by M/s. DM & Associates, Company Secretaries LLP, Practicing Company Secretaries is annexed herewith marked as "Annexure Bl" to this Annual Report. The observation / adverse remark contained in the Audit report is self-explanatory and no further management's clarification is required.

COST AUDIT:

The Company is not required to maintain cost records as specified by the Central Government under Section 148(1) of the Act.

EMPLOYEE REMUNERATION: [DETAILS AS PER SECTION 197(12) READ WITH RULE 5 OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014):

Disclosures relating to remuneration of Directors, Key Managerial Personnel (KMPs) and employees as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in "Annexure C" to this Report. During the year under review, there were no employees falling under the criteria specified under Section 197(12) of the Companies Act, 2013, and rule 5(2) of the of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. However, other information as required under said rule may be obtained by the Members by writing to the Company Secretary of your Company and the same be furnished on request and is also made available on the Company's website i.e. www.khil.com.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management's Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is as annexed at “Annexure D".

CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by the Securities and Exchange Board of India (SEBI). The Report of Corporate Governance as stipulated under the Listing Regulations is annexed at “Annexure E". The requisite Certificate from M/s. DM & Associates, Company Secretaries LLP, Practicing Company Secretaries confirming compliance with the conditions of Corporate Governance is attached to the report on Corporate Governance.

VIGIL MECHANISM:

The Company has established a Vigil Mechanism for Directors and Employees to report genuine concerns. The Vigil Mechanism enable the Directors, Employees and all Stakeholders of the Company to report genuine concerns and provides for adequate safeguards against victimization of person who use Vigil Mechanism and also makes provision for direct access to the Chairman of the Audit Committee.

The detail of Vigil Mechanism is put on the Company's website and can be accessed at www.khil.com and its web link is https://www.khil.com/other-policies.html.

RISK MANAGEMENT:

Your Company has a well defined Risk Management framework, which is designed to enable risk to be identified, assessed and mitigated appropriately.

A quarterly review report on compliance with Risk Management framework of the Company is placed before the Audit Committee of the Company.

During the year under review, no risk threatening the existence of the Company was identified.

FAMILIARISATION PROGRAMMES FOR INDEPENDENT DIRECTORS:

The Company constantly endeavors to familiarize its Independent Directors on the functioning of the Company, so that they are aware of the functions of the Company and their expertise can be utilized for the betterment of the Company. In this view, the Company has conducted Familiarization Programmes to familiarize the Independent Directors of the Company. Details of the same are disclosed on the website of the Company and the web link of the same is https://www.khil.com/other-policies.html.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

Particulars of loans given, guarantees given, investments made and securities provided by the Company under Section 186 of the Companies Act, 2013, are given as under:

(Rs. In lakhs)

* Movement in the year represents Fair value adjustment and investment in Subsidiary.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY:

To comply with the provisions of Section 188 of the Companies Act, 2013 ("the Act") and Rules made thereunder read with Regulation 23 of SEBI (LODR) Regulations, your Company took necessary prior approval of the Audit Committee before entering into related party transactions. All contracts / arrangements / transactions entered into by the Company during the Financial Year 2023-24, with related parties, as defined under the Act and SEBI (LODR) Regulations were in the ordinary course of business and on arm's length basis.

The Company has formulated a Policy on Related Party Transactions which is available on Company's website at https://www.khil.com/other-policies.html. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties.

The Audit Committee has granted omnibus approval for the transactions (which are repetitive in nature) and the same was reviewed by the Audit Committee and Board of Directors.

During the year, the Company has not entered into any contract, arrangement or transaction with Related Parties that could be considered material in accordance with the Related Party Transaction Policy of the Company.

Suitable disclosure as required under Ind-AS 24 has been made in Notes to the Financial Statements forming part of the Annual Report.

Since all transactions which were entered into during the Financial Year 2023-24, were on arm's length basis and in the ordinary course of business and there was no material related party transaction entered by the Company during the Financial Year 2023-24, as per Policy on Related Party Transactions, hence no detail is required to be provided in Form AOC-2 prescribed under Clause (h) of Subsection (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS:

The Company has established the procedure for performance evaluation of the Board, Committees and other Individual Directors (including Independent Directors) which include criteria for performance evaluation of Non-executive Directors and Executive Directors.

The performance evaluation process inter-alia considers attendance of Directors at Board and Committee Meetings, acquaintance with business, communication inter-se board members, effective participation, domain knowledge, and compliance with code of conduct, vision and strategy, etc.

The Board carried out an annual performance evaluation of its own performance, its Committees, and that of its Individual Directors.

DISCLOSURE OF PECUNIARY RELATIONSHIP:

During the year, there was no pecuniary relationship or transactions between Non-Executive Directors and the Company. No payment, except sitting fees, was given to Non-Executive Directors of the Company. No convertible instruments are held by any of the Non-Executive Directors.

DETAILS OF SHARES ISSUED WITH DIFFERENTIAL VOTING RIGHTS AND SWEAT EQUITIES:

During the year under review, the Company has not issued any shares with differential voting rights as to dividend, voting or otherwise and sweat equity shares.

EMPLOYEE STOCK OPTION SCHEME:

During the year under review, no option was granted or vested to any Employee or Directors of the Company.

PROVISION OF MONEY BY COMPANY FOR PURCHASE OF ITS OWN SHARES BY EMPLOYEES OR BY TRUSTEES FOR THE BENEFIT OF EMPLOYEES:

The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustee for the benefit of employees.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Conservation of Energy:

The Company continued energy conservation efforts during the year. It has closely monitored power consumption and running hours on day to day basis, thus resulting in optimum utilization of energy.

1. Chiller Plant VFD is Installed which saves 325 Units daily. Both Daikin and train chiller water lines are insulated. VFD installed for 3 primary pumps, cooling tower and condenser pump saves 450 units daily in winter.

2. Cooling Tower (CT) fan is equipped with temperature control. 2 fans of 5 HP are temperature controlled. Replace normal fans with BLDC fans. Total 6 fans replaced with BLDC fans.

3. At the back of the house, 11 watt PL lamp have been replaced with 7 watt LED lights and 36 watt tube lights have been replaced with 22 watt panel light. Similarly, at the parking area, 40 watt tube light has been replaced with 18 watt LED tube light. Motion sensor are installed on 18 watt tube lights of the Parking area. New LED lights has been fixed in various Hotel Lobby and various other areas.

4. 9 VFD (Variable Frequency Drive) are installed for domestic and flushing hydro pneumatics water pump. Heat pumps are used for hot water generation Pump which uses the heat of the AC system to heat the water thus reducing carbon footprint. Rain water is used for flushing System. All guest toilets have motion sensor taps installed. A total of 23 motion sensor taps have been installed.

5. Motion sensor are installed in prive (Private) wing and in 18 guest rooms bathroom lights.

6. The master control panels are installed in each room of the Hotel to control the room temperature. Once the Pumba Panel is turned on by the guest, it automatically controls the temperature of the room depending upon the humidity and temperature of the room. This enables the optimization of energy usage and prevents obnoxious usage of resources by the guest.

1. All taps in and showers contain special aerators which increases the water force and reduce outflow saving water. Using these aerators saves up to 70% of water.

2. A normal flush tank flushes 14 liters of water where as Geberit flush tank flushes 7 liters of water in a single flush action

3. Recycle and Reuse of water: The Orchid Hotel, Mumbai uses Central Sewage Treatment Plant which recycles the water and sewage water generated by the hotel at various points. All the waste and sewage water generated in hotel is collected in STP collection tank. Part of this treated water is stored in tank for use in horticulture, irrigation and various water bodies spread over the campus. The other part of the treated water is then passed through a water softening plant and pumped to water tank for the cooling towers.

1. The Orchid hotel follows robust waste management system by segregating the waste at source. This brand ethos is very religiously followed at all the hotel points wherever applicable.

2. The Orchid Hotel creates in-house vermi-compost using their wet waste. The wet waste is then kept in the bin for almost 2 months to get a fine quality vermi-compost. The Orchid uses this vermi-compost for its gardening and also supplies the same to various gardens of Mumbai city.

(i) The efforts made towards technology absorption: There is no material information on technology absorption to be furnished. However, the Company continues to absorb and use the latest technologies for efficient and effective functioning of the operations of the Hotels and of the Company.

(ii) The benefits derived like product improvement, cost reduction, product development or import substitution: N.A.

(iii) I n case of imported technology (imported during the last three years reckoned from the beginning of the financial year)

a) the details of technology imported: N.A.

b) the year of import: N.A.

c) whether the technology been fully absorbed: N.A.

d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof: N.A.

(iv) The expenditure incurred on Research and Development: N.A.

The activities of the Company at present do not involve technology absorption and research and development.

Earnings: Rs. 916.98 Lakhs (Previous Year Rs. 843.75 Lakhs)

Utilization (including import of capital goods): Rs. 62.59 Lakhs (Previous Year Rs. 527.03 Lakhs)

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:

During the year under review, no significant or material orders were passed by the regulators or courts or tribunals which had an impact on the going concern status of the Company and its operations in future.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENT:

Your Company has in place adequate internal financial controls with reference to financial statements, commensurate with the size, scale and complexity of its operations. The Company has laid down standards, processes and structures which enable implementation of internal financial control across the organization and ensure that the same are adequate and operating effectively. Financial Controls are operative for all the business activities of the Company and no material weakness in the design or operation of any control was observed. During the year, the internal financial controls as laid down are adequate and were operating effectively.

Furthermore, in accordance with Section 149(8), read with the Code for Independent Directors laid down under Schedule IV, Clause II (4) of the Companies Act, 2013, the Independent Directors have satisfied themselves on the integrity of financial information and have ensured that Financial Controls and systems are robust and secure.

The Board has empowered the Audit Committee to periodically review and confirm that the mechanism remains effective and fulfill the objectives for which they have been created.

DISCLOSURES RELATING TO UNCLAIMED SUSPENSE ACCOUNT AS PER REGULATION 34(3) READ WITH SCHEDULE V(F) OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS), REGULATION, 2015:

The voting rights on the shares in unclaimed suspense account shall remain frozen till the rightful owner of such shares claims the shares.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

Your Company has zero tolerance towards any action on the part of any employee which may fall under the ambit of 'Sexual Harassment' at workplace, and is fully committed to uphold and maintain the dignity of every employee in the Company. The Company's policy provides for protection against sexual harassment of women at workplace and for prevention and redressal of such complaints. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year, no complaints pertaining to sexual harassment were received.

EMPLOYEE RELATIONS:

The Management realises the role and importance of its employees for growth of the business. Therefore, the Company continuously strives to maintain cordial relationship with its employees. They are also given opportunities to rise and have impact on the working of the Company.

ACKNOWLEDGEMENTS:

The Directors place on record their appreciation for the sincere and whole hearted co-operation extended by all concerned, particularly Company's Bankers, Financial Institutions, Debenture holders, Security Trustees, Stock Exchanges, Department of Tourism, Municipal authorities, the Government of Maharashtra, Goa and Odisha, the Central Government, Suppliers, Clientele and the employees of the Company and look forward to their continued support. The Directors also thank the Shareholders for continuing their support and confidence in the Company and its management.