Robust Hotels Ltd

REPORT

BOARD'S REPORT Dear Members,

Your Board has pleasure in presenting the 17^th Annual Report of the Company together with the audited financial statements of the Company for the financial year ended 31^st March, 2024.

REVIEW OF HOTEL OPERATION:

The operating performance of the Hotel Hyatt Regency Chennai is given below: (Rs. In Lakhs)

Post COVID, the business of the hotel started recovering in the 2^nd half of previous financial year with figures exceeding the pre-pandemic level. The performance has further improved during the year under review as shown above.

Even though the occupancy level was less than the previous year due to renovation work undertaken during the year, the performance exceeded the targets and recorded an overall better performance compared to last year.

FINANCIAL PERFORMANCE:

The financial performance of the Company for the year under review is as follows:

BUSINESS AND OPERATIONS REVIEW:

The topline of Rs.130.97 crores is the highest ever achieved by the company in a year. The company's total revenue has shown a growth of 19% as compared to last Financial Year while the Hotel operating income has increased by 15% for the same period. This is mainly due to increase in Room Revenue and Food & Beverage Revenue by 6% and 25% respectively.

Your company has also taken initiatives to reduce the interest cost by reducing the rate of interest on the term loan of HDFC Limited (now HDFC Bank). Along with this, repayments during the year have resulted in reduction in interest cost by 30%.

The above factors along with stringent cost controls and operating efficiencies have enabled the company to reflect a positive profit for the first time since its incorporation with a Profit before Tax (PBT) of Rs. 747 lakhs as compared to Loss before Tax of Rs.314 lakhs last fiscal year.

The de-merger of company from AHEL is continuing to pave way for the company to become financially stronger.

The above results are encouraging and your directors are hopeful for much better performance in the periods to come.

RENOVATION OF GUEST ROOMS:

As you are aware, the company started the renovation of guest floors in 2021 during the COVID-19 pandemic with three guest floors, being one third of its inventory. The company has further renovated another three more guest floors during the Financial year 2023-24 and thereby the Hotel now being operated with two third of renovated rooms. Renovations undertaken is supporting the Hotel in its strategy towards repositioning the Hotel in the city and improving the Average Room Rentals with better guest experience. This initiative will yield sustainable growth in Rooms Revenue in the years to come. The company also has plans to renovate the remaining guest floors.

REFINANCE OF HDFC TERM LOAN:

As you are aware, the company took a Term Loan of Rs.150 crores from HDFC Ltd (now HDFC Bank) to complete the Chennai Hotel Project in 2010. Later, during COVID-19 pandemic, the company availed Emergency Credit Line Guarantee Scheme (ECLGS) facility from HDFC Bank to the tune of Rs. 44 crores to meet the business requirements. The balance of these loans as on 31^st Dec 2023 was Rs. 89.30 Lakhs.

Huge repayment commitments were a concern and hence the company was continuously exploring the opportunity of refinancing the term loan with better terms. During the last quarter of FY 2023-24, the company received a sanction for a term loan of Rs.165 crores from AXIS Finance Limited with extended tenure @ 10.25% p.a. This has been utilized to repay the existing debt of Rs.90.84 crores which includes interest and other charges.

INVESTMENT IN ASIAN HOTELS (WEST) LIMITED (AHWL):

The investment in shares of AHWL, which was originally made by Asian Hotels (East) Limited, Kolkata (AHEL) and was part of its Security Trading Unit, has moved to the books of the Company pursuant to the effectiveness of scheme of demerger on 21^st September, 2022.

In the year 2021, AHWL loan account with Yes Bank Ltd became Non-Performing Assets and AHWL was admitted under Corporate Insolvency Resolution Process (CIRP) on 16th September, 2022 after JM Financial Asset Reconstruction Company had moved an application u/s 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) before Hon'ble National Company Law Tribunal, New Delhi Bench. Your promoters fought tooth and nail with the all concerned before the Tribunal/Appellate Tribunal, New Delhi Benches for three years and ultimately, pursuant to agreements with the promoters of AHWL, a settlement was arrived at and application under Section 12A of the IBC, 2016 was moved. As a part of settlement, your Company contributed an amount of Rs. 55 crores in the form of Bank Guarantee/ Fixed Deposit and ultimately AHWL came out of CIRP pursuant to the order issued by the Appellate Tribunal dated 9th January, 2024.

Accordingly, the Resolution Professional has paid off all the Creditors of AHWL and handed over the Hotel in Mumbai and the Corporate office in Gurgaon back to AHWL. AHWL is now in the process of streamlining its Corporate functions with completion of all backlog secretarial and listing compliances including preparation of Financial Statements and efforts are on to get the ban on trading of its shares lifted sooner.

EXTENSION OF SUPPORT TO NOVAK HOTELS:

Pursuant to the agreement and financial support provided by the promoters of your Company, a Special Purpose Vehicle named M/s. Novak Hotels Private limited (Novak Hotels) for acquiring, renovating and re-opening the Hyatt Regency Mumbai (Mumbai Hotel) was incorporated and made as Wholly Owned Subsidiary to AHEL later on 9^th November, 2023.

Both your Company and AHEL have supported Novak Hotels with necessary funds for depositing money as per the order of Appellate Tribunal dated 9^th January 2024 to revive AHWL and to acquire the Mumbai Hotel. Your Company during the year lent a sum of Rs. 122.64 crores by way of short-term loan out of the available surplus funds and term loan borrowed from AXIS Finance Limited. The short-term loan will be repaid by Novak Hotels in due course of time.

DISCLOSURE OF PARTICULARS OF LOANS/ADVANCES/INVESTMENTS OUTSTANDING DURING THE FINANCIAL YEAR:

The Company has not given any loans and advances to any other body corporate and associates except to M/s. Novak Hotels Private Limited, stated above with the prior approval of shareholders under Section 186 of the Companies Act, 2013 during the financial year 2023-24.

The details of the investments made by the Company and guarantees provided by the Company are given in the notes to the financial statements.

DIVIDEND:

Board has not recommended dividend for the financial year 2023-24.

SHARE CAPITAL:

There is no change in the Share Capital of the company during the financial year 2023-24.

DEPOSITS:

The Company has not accepted any deposit from public during the year.

CHANGE IN THE NATURE OF BUSINESS:

There has been no change in the nature of business of the company.

MATERIAL CHANGES AND COMMITMENTS:

As already explained in the report, the following material changes and commitments affecting the financial position of the Company occurred during the year under review;

1. Term Loan disbursed by AXIS Finance limited to the tune of Rs.160 crores mainly utilized to re-finance the existing debt of the company and

2. Extension of support to Novak Hotels with a short-term loan of Rs.122.64 crores to enable them to acquire the Mumbai Hotel.

HOLDING, SUBSIDIARY & ASSOCIATE COMPANY:

As on date of reporting, the Company does not have any Subsidiary or Associate Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Pursuant to the provisions of Section 149, 152 & 203 of the Companies Act, 2013, the Board of Directors is duly constituted. The Directors and key managerial persons as on date of this report:

During the year under review, following changes occurred in the composition of the Board of Directors and KMP:

All the Directors have submitted form MBP-1 with your Company as required under Section 184 read with Rule 9 of the Companies (Meetings of Board and its Powers) Rules, 2014 along with DIR-8 as required under Section 164 of the Companies Act, 2013.

DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

All the Independent Directors of the Company have given their declaration under Section 149 (7) of the Companies Act,2013, confirming that they are in compliance with the criteria as laid down in the said Section for being an Independent Director of the Company. Further, there has been no change in the circumstances which may affect their status as Independent Director during the year.

The Statement of Declarations from Independent Directors that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 and the relevant rules and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015 has been obtained from Independent Directors and the Board has taken on record the same.

All the Independent Directors have registered with the databank of Independent Directors developed by the Indian Institute of Corporate Affairs in accordance with the provisions of Section 150 of the Companies Act, 2013 and obtained ID registration certificate. Further the Independent Directors have also declared that in the event of expiry of their registration with the Data bank, they shall take the necessary steps to renew their registration in accordance with the relevant rules of the Companies Act 2013.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF DIRECTOR:

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for the selection and appointment of Directors, Senior Management and their remuneration.

NUMBER OF MEETINGS OF BOARD:

The details of the number of meetings of the Board of Directors are included as a part of Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

COMPOSITION OF AUDIT COMMITTEE:

The Audit Committee of the Company has been constituted in accordance with the provisions of Section 177 of the Companies Act, 2013 read with Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015. The details of the Audit Committee are included as a part of Corporate Governance Report.

COMPOSITION OF NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee of the Company has been constituted in accordance with the provisions of Section 178 of the Companies Act, 2013 read with Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the Nomination and Remuneration Committee are included as part of the Corporate Governance Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE:

The constitution of Stakeholders Relationship Committee is as per the provisions of Section 178(5) of the Companies Act, 2013 read with Regulation 20 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the Stakeholder's Relationship Committee are included as part of the Corporate Governance Report.

EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND DIRECTORS:

The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations, 2015.

The evaluation of the Board of Directors was based on criteria such as appropriateness of Board composition and structure, decisions passed by the Board of Directors, awareness on Industry operations, compliance with applicable laws, succession planning, strategic planning, implementation of guidelines or strategies decided by the Board of Directors etc.

The evaluation of the Committees was based on criteria such as composition, functioning, competencies of the members, frequency of meetings, procedures, monitoring, advisory role, timely reporting to Board of Directors, etc.

SEPARATE MEETING OF INDEPENDENT DIRECTORS:

During the year 2023-24, the Independent Directors of the Company had met on 31^st January, 2024 to review the performance of the Non-Independent Directors, Chairman (after taking into account the views of Executive and Non-Executive Directors of the Company) and Board as a whole and also to assess the, quality, quantity and timeliness of the flow of information between the Company's Management and the Board.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The Board members were provided with necessary documents, reports and internal policies to enable them to familiarize with the Company's procedures and practices. The details of such familiarization programs for the Independent Directors are posted on the website of the Company.

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM:

The Company has formulated and adopted a vigil mechanism for employees to report genuine concerns to the Chairman of the Audit Committee. The policy provides opportunities for employees to access in good faith, the Audit Committee, if they observe unethical and improper practices. The Whistle Blower policy of the Company is available in the website of the Company. The link for the same is http://www.robusthotels.in/

PREVENTION OF INSIDER TRADING:

The Company has adopted a code for prevention of insider trading with a view to regulate trading and securities by the Directors and Designated Employees of the Company. The code requires pre-clearance for dealing in the Company's securities and prohibits the purchase or sale of Company's Securities while in possession of unpublished price sensitive information and during the period when the trading window is closed.

RISK MANAGEMENT:

The Board oversees risk identification, its mitigation and its management through the office of the Chief Financial Officer of the Company.

CLOSURE OF REGISTER OF MEMBERS AND SHARE TRANSFER BOOKS:

The Register of Members and Share Transfer Books of the company will be closed suitably prior to holding Annual General Meeting.

M/s. V Singhi and Associates, Chartered Accountants, Kolkata (Firm Registration No.- 311017E) were appointed as the Statutory Auditors of the Company at the Annual General Meeting held on 05^th September, 2022 to hold office up to the conclusion of the 20th Annual General Meeting of the Company The report of the Statutory Auditors on Financial Statements for the financial year under review does not contain any qualification, reservation, adverse remark or disclaimer. Also, no offence of fraud was reported by the Auditors of the Company.The notes on accounts referred to in the Auditors' Report are self-explanatory and therefore, do not call for any further comments.

INTERNAL AUDITOR:

Pursuant to Section 138 of the Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, your Board, based on the recommendation of the Audit Committee, re-appointed M/s. S.P.R & Co, Chartered Accountants, Chennai (Firm No: 009784S), to conduct internal audit for the financial year 2023-24.

SECRETARIAL AUDITOR:

Pursuant to the provisions of Section 204 of the Companies Act, 2013, your Board had appointed M/s. V Mahesh

& Associates, Practicing Company Secretary, Chennai (C.P No: 2473) to undertake Secretarial Audit of your Company for the financial year 2023-24. The Secretarial Audit Report in Form MR-3 for the financial year ended 31^st March, 2024 is annexed herewith marked as Annexure-III to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

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

The information required pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, pertaining to conservation of energy, technology absorption and foreign exchanges earning and outgo to the extent possible in the opinion of your Directors, is annexed hereto being Annexure-II and forming part of this Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

During the financial year 2023-24, the contracts and arrangements entered by the Company with related parties were on "Arm's Length" basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interests of the Company at large.

The policy on dealing with Related Party Transactions as approved by the Board is available on the Company's Website. https://robusthotels.in/ The details of contracts or arrangements with related parties entered during the year are given in form AOC-2 and is appended as Annexure I to the Board's report.

Information on transactions with related parties to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are provided in the accompanying notes to the financial statements.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Pursuant to Schedule V of Regulation 34(3) of the Listing Regulations, 2015, report on Management Discussion and Analysis as Annexure-IV and Corporate Governance Report as per Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, 2015 as Annexure-V and Compliance Certificate on Corporate Governance from the Practicing Company Secretaries are annexed to this Report.

COPY OF ANNUAL RETURN:

The duly certified copy of Annual Return for the Financial Year ended 31st March 2024, as prescribed under Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 shall be placed on the website of the Company www.robusthotels.in

PARTICULARS OF EMPLOYEES:

The Company has no employee falling under the categories mentioned in Rules 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

INTERNAL FINANCIAL CONTROL:

Your Company has an Internal Control System which is commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is well defined in the organization. To maintain its objectivity and independence, the reporting is done to the Chairman of the Audit Committee of the Board.

The Audit Committee monitors and evaluates the efficacy and adequacy of internal control systems in your Company, its compliance with operating systems, accounting procedures and policies of your Company. Based on the Internal Audit Report, the Management undertakes corrective action in their respective areas and thereby strengthens the controls. Significant audit observations and corrective actions suggested are presented to the Audit Committee of the Board. In the view of the Statutory Auditors of the Company, the internal financial controls with respect to financial reporting were adequate and operating effectively during the financial year.

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

The Company has in place proper measures for prevention of sexual harassment in accordance with the requirements of the Sexual Harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013. The Company did not receive any complaint during the financial year 2023-24.

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

No significant or material orders were passed by the regulators or courts or Tribunals which impact the going concern status and Company's operations in future.

SECRETARIAL STANDARDS OF ICSI:

The Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India and approved by the Central Government.

GENERAL:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: (i) Details relating to deposits covered under Chapter V of the Companies Act, 2013.

(ii) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(iii) Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

(iv) The Company do not have any subsidiary and hence, the question of Directors of the Company receiving any remuneration or commission from its subsidiary does not arise.

(v) Policy to be developed and implemented by the Company on corporate social responsibility as, the provision of Section 135 of the Companies Act, 2013.

Details in respect of frauds reported by auditors under sub-section (12) of_section 143_other than those which are reportable to the Central Government is Nil.

(vi) Disclosure of maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is not applicable to the Company and accordingly such accounts and records are not made and maintained.

DIRECTORS' RESPONSIBILITY STATEMENT:

In accordance with the provisions of sections 134(3)(c) and 134(5) of the Companies Act, 2013 for the preparation of the annual accounts for the financial year ended 31st March, 2024 and based upon representation from the management, the Board states that: a) in the preparation of the annual accounts for the financial year ended 31st March, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) the Directors 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 under review and of the profit and loss of the Company for that period; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts for the year ended 31st March, 2024 on a ‘going concern' basis; e) the directors have laid down internal financial controls to be followed by the Company and that such financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

ACKNOWLEDGEMENT:

The Directors wish to express their sincere thanks for the valuable assistance extended by Financial Institutions, Banks, Investors and Government of Tamil Nadu to the Company. The Directors also extend their sincere thanks to the employees for their support.