DRAFT LETTER OF OFFER
(Private & Confidential)
For Equity Shareholders of the Company Only
[The Company was originally incorporated as Cosmopolitan Builders and Hoteliers Private Limited vide certificate of incorporation dated 16/03/1979.
Subsequently, the company was converted into a public limited company and the name was changed to Cosmopolitan Builders and Hoteliers Ltd.
Further, the name of the company was changed to “Cosmopolitan Hotels Ltd.” vide fresh certificate of incorporation dated 29/04/1982. The company
is renamed as “CHL Ltd” vide fresh certificate of incorporation dated 11/12/1997]
Registered Office:
Hotel Crowne Plaza, New Friends Colony, New Delhi 110 025
Tel: +91-011-2683 5070, 4167 2222; Fax: +91-011- 2683 7758, 2683 6288
Contact person: Mr. G.J. Varadarajan, Company Secretary & Compliance Officer
Email: cs@chl.co.in; Website: www.crowneplazadelhi.com
ISSUE OF 54,81,829 EQUITY SHARES OF RS. 10/- EACH AT A PREMIUM OF RS. 40/- PER SHARE AGGREGATING TO
RS.2740.91 LACS ON RIGHTS BASIS TO THE EXISTING EQUITY SHAREHOLDERS OF THE COMPANY IN THE RATIO OF 1
(ONE) EQUITY SHARE FOR EVERY 2 (TWO) EQUITY SHARES (I.E. 1:2) HELD ON [••] (RECORD DATE). THE FACE VALUE OF
THE EQUITY SHARE IS RS. 10/- PER SHARE AND THE ISSUE PRICE IS 5 TIMES OF THE FACE VALUE.
GENERAL RISKS
Investment in equity and equity related securities involves a degree of risk and investors should not invest any funds in this issue
unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an
investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Issuer and the
Issue including the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board of
India (SEBI) nor does SEBI guarantee the accuracy or the adequacy of this document. The attention of investors is drawn to the
statement of Risk Factors beginning on page no. vi of this Letter of Offer.
ISSUER’S ABSOLUTE RESPONSIBILITY
The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Letter of Offer contains all
information with regard to the Issuer and the Issue, which is material in context of the Issue, that the information contained in this
Letter of Offer is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions,
expressed herein are honestly held and that there are no other facts, the omission of which makes this document as a whole or any of
such information or the expression of any such opinions or intentions misleading in any material respect.
LISTING
The existing Equity shares of the company are listed on Bombay Stock Exchange Limited (BSE), (Designated Stock Exchange) and Delhi
Stock Exchange (DSE). The Company has received in-principle approvals from BSE vide its letter no. [••] dated [••] and DSE vide its
letter no [••] dated [••] for listing of the equity shares being issued in terms of this Letter of Offer.
LEAD MANAGER TO THE ISSUE
KEYNOTE CORPORATE SERVICES LIMITED
4th Floor, Balmer Lawrie Building,
5, J. N. Heredia Marg, Ballard Estate,
Mumbai - 400001
Tel : +91 -022 -30266000-3
Fax: + 91 -022 -22694323
E-mail: mbd@keynoteindia.net
Website: www.keynoteindia.net
SEBI Regn. No.: INM 000003606
ISSUE OPENS ON
[••]
REGISTRAR TO THE ISSUE
BEETAL FINANCIAL & COMPUTER SERVICES (P) LTD
BEETAL HOUSE, 3rd Floor, 99 Madangir,
Behind Local Shopping Centre,
New Delhi- 110062.
Tel.: +91-011-29961281;
Fax: +91-011-29961284
Website: www.beetalfinancial.com
E-mail: chl@beetalfinancial.com
SEBI Registration No.: INR 000000262
LAST DATE FOR RECEIVING
REQUESTS FOR SPLIT FORMS
[••]
ISSUE CLOSES ON
[••]
I. TABLE OF CONTENTS
SECTION
I
II
III
IV
V
VI
VII
VIII
IX
CONTENTS
Definitions and Abbreviations
Certain Conventions; Use of Market Data
Forward Looking Statements
RISK FACTORS
PART I
INTRODUCTION
Summary
General Information
Capital Structure
Objects of the Issue
Basis for Issue Price
Statement of Tax Benefits
ABOUT THE COMPANY
Industry Overview
Business Overview
Regulations and Policies
History
Management
Promoters
Promoter Group Companies
PART II
FINANCIAL INFORMATION
Auditors’ Report
Management’s Discussion and Analysis
LEGAL AND OTHER INFORMATION
Outstanding Litigations and Defaults
Material Developments
Government Approvals
REGULATORY AND STATUTORY DISCLOSURES
Authority for the Issue
Prohibition by SEBI
Disclaimer Clause
Filing
Stock Market Data
OFFERING INFORMATION
MAIN PROVISIONS OF ARTICLES OF ASSOCIATION
OTHER INFORMATION
Material Contracts and Documents for Inspections
PART III
Declarations
Page Nos.
i
iv
v
vi
1
7
11
17
21
23
31
35
40
42
46
58
60
68
84
90
97
98
99
99
99
103
104
106
123
132
134
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DEFINITIONS/ABBREVIATIONS
CONVENTIONAL / GENERAL TERMS
Term
Act
Depositories Act
Depository
FY/ Financial year or Fiscal Year
Security Certificate
Security(ies)
SE/ Stock Exchange(s)
Description
The Companies Act, 1956 and subsequent amendments thereto
The Depositories Act, 1996 as amended from time to time
A Depository registered with SEBI under the SEBI (Depositories &
Participant) Regulations, 1996 as amended from time to time
The twelve months ended March 31st of a particular year
Equity Share Certificate
Equity Share(s)
BSE
ISSUE RELATED TERMS
Term
Articles
Board
BSE/Designated Stock Exchange
CAF
Directors
Equity Shareholders
Equity Shares
Lead Manager/ LM
Issue/ Rights Issue
Issue Price
Issuer/ Company/ CHL
Letter of Offer/ LOO/ Offer
Document
Description
Articles of Association of CHL Limited
Board of Directors of CHL Limited
Bombay Stock Exchange Limited
Composite Application Form
Directors on the Board of CHL Limited
Equity Shareholders of the Company whose name appear as:
Beneficial Owners as per the list furnished by the depositories
in respect of Equity Shares held in electronic form and
On the Register of Members of the Company in respect of the
Equity Shares held in Physical form
Equity Shares of the Company of Rs.10/- each
Lead Manager to the Issue i.e. Keynote Corporate Services Limited
Issue of 54,81,829 equity shares of Rs. 10/- each at a premium of Rs.
40/- per share aggregating Rs.2740.91 lacs on rights basis to the
existing equity shareholders of the company in the ratio of 1 (one)
equity share for every 2 (two) equity shares (i.e. 1:2) held on [•]
(record date) as per this Letter of Offer.
Rs.50/- per share (Face value of Rs.10/- per share)
CHL Limited
This Letter of Offer dated [•] circulated to the Equity Shareholders
and filed with the Stock Exchanges.
ABBREVIATIONS
Abbreviations
AGM
CDSL
CLB
DCA
DIN
DP
Full Form
Annual General Meeting
Central Depository Services (India) Limited
Company Law Board
Department of Company Affairs
Director Identification Number
Depository Participant
i
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Abbreviations
EGM
EPS
FCNR Account
FDI
FEMA
FI
FII (s)
GOI
NA
NAV
NR
NRE Account
NRI(s)
NRO Account
NSDL
NOF
MOU
PAN
PAT
PBDT
PBIDT
PBT
PAT
P/E Ratio
ROC
ROI
RBI
SCRR
SEBI
Full Form
Extraordinary General Meeting
Earnings Per Share
Foreign Currency Non Resident Account
Foreign Direct Investment
Foreign Exchange Management Act, 1999 read with rules and
regulations there under and amendments thereto
Financial Institution
Foreign Institutional Investors registered with SEBI under
applicable laws
Government of India
Not Applicable
Net Asset Value
Non Resident
Non Resident External Account
Non Resident Indians
Non Resident Ordinary Account
National Securities Depository Limited
Net Owned Funds
Memorandum of Understanding
Permanent Account Number
Profit After Tax
Profit Before Depreciation and Tax
Profit Before Interest Depreciation and Tax
Profit Before Tax
Profit After Tax
Price/Earnings
Registrar of Companies, NCR of Delhi and Haryana, New Delhi
Return on Investment
Reserve Bank of India
Securities Contracts (Regulations) Rules, 1957 as amended from time
to time.
Securities and Exchange Board of India
COMPANY/INDUSTRY RELATED TERMS
Term
CAMP
CAGR
CEA
CEB
CST
CIT
FCNR Account
FIPB
GOI
GDA
Description
Customer Asset Management Process
Compounded Annual Growth Rate
Central Electricity Authority
Central Electricity Board
Central Sales Tax
Commissioner of Income Tax
Foreign Currency Non Resident Account
Foreign Investment Promotion Board
Government of India
Ghaziabad Development Authority
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Term
ITAT
NOIDA
RTGS
SICA
USD
Description
Income Tax Appellate Tribunal
New Okhla Industrial Development Authority
Real Time Gross Settlement
Sick Industrial Companies Act
U S Dollar
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CERTAIN CONVENTIONS; USE OF MARKET DATA
In this Letter of Offer, unless the context otherwise requires, all references to one gender also refers to
another gender and the word "Lakh" or "Lac" means "one hundred thousand" and the word "million" means
"ten lac" and the word "Crore" means "ten million" and the word “One hundred crore” means “One
Billion”. In this Letter of Offer, any discrepancy in any table between total and the sum of the amounts
listed are due to rounding-off.
Throughout this Letter of Offer, all figures have been expressed in Lacs unless otherwise stated. All
references to “India” contained in this Letter of Offer are to the Republic of India.
For additional definitions used in this Letter of Offer, see the section “Definitions and Abbreviations” on
page i of this Letter of Offer. Industry data used throughout this Letter of Offer has been obtained from
industry publications and other authenticated published data. Industry publications generally state that the
information contained in those publications has been obtained from sources believed to be reliable but that
their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although the
Company believes that the industry data used in this Letter of Offer is reliable, it has not been
independently verified. Similarly, internal Company reports, while believed by the Company to be reliable,
have not been verified by any independent sources.
CURRENCY OF PRESENTATION
In this Letter of Offer, all references to “Rupees” and “Rs.” are to the legal currency of India.
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FORWARD-LOOKING STATEMENTS
This Letter of Offer contains certain “forward-looking statements”. These forward looking statements can
generally be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”,
“intend”, “objective”, “plan”, “project”, “shall”, “will”, “will continue”, “will pursue” or other words or
phrases of similar import. Similarly, statements that describe the objectives, plans or goals also are forwardlooking statements.
All forward looking statements are subject to risks, uncertainties and assumptions about the company that
could cause actual results to differ materially from those contemplated by the relevant forward-looking
statement. Important factors that could cause actual results to differ materially from the expectations
include, among others:
♦
♦
♦
♦
♦
♦
♦
♦
General economic and business conditions in India;
The ability to successfully implement the strategy, growth and expansion plans and technological
changes;
Changes in the value of Rupee and other currency changes;
Changes in the Indian and international interest rates;
Changes in fiscal, economic or political conditions in India ;
Changes in laws and regulations that apply to the customers of the Company;
Increasing competition and the conditions of the customers of the Company and
Changes in political conditions in India.
For further discussion of factors that could cause actual results to differ, please see the section titled “Risk
Factors” beginning on page no. vi of this Letter of Offer. By their nature, certain market risk disclosures are
only estimates and could be materially different from what actually occurs in the future. As a result, actual
future gains or losses could materially differ from those that have been estimated. Neither the Company,
the Directors, any member of the Lead Manager team nor any of their respective affiliates have any
obligation to update or otherwise revise any statements reflecting circumstances arising after the date
hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to
fruition. In accordance with SEBI requirements, the Company and the Lead Manager will ensure that
investors in India are informed of material developments until such time as the grant of listing and trading
permission by the Stock Exchanges.
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SECTION I - RISK FACTORS
An investment in equity shares involves a high degree of risk. The investors shall carefully consider all of
the information in this Letter of Offer, in evaluating the Company and its business, including the risks
and uncertainties described below, before making any investment decision. If any of the following risks
actually occur, the business, financial condition and results of operations may suffer, the trading price of
the Equity Shares could decline, and the investors may lose all or part of their investment.
Unless specified or quantified in the relevant risk factors below, the financial or other implications of any
of the risks described in this section cannot be quantified:
INTERNAL RISK FACTORS AND RISKS RELATING TO COMPANY’S BUSINESS
1.
Outstanding Litigations/disputes/cases pending against the Company/ Promoters / Directors and
Group companies
I.
Litigations against the Company
The Company is involved in certain legal proceedings, incidental to its business and operations,
which if determined against the Company, could have an adverse impact on the results of its
operations and financial condition. The Summary of the litigations is as follows:
Litigations
No. of
Cases
Cases Against the Company
Income Tax Related
- At CIT – Appeal/ITAT stage
- At High Court stage
Civil
Labour related
Cases filed by the Company
Civil Cases
Financial
implications where
quantifiable
(Rs. in Lacs)
7
1
5
2
335.37
66.39
277.00
Not Quantifiable
1
0.50
For details of pending litigations please refer to “Legal and other Information” commencing on page no.90
II. Litigations pending against Group Companies
There are 4 litigations involving an amount of Rs.443.83 lacs pending against one of the group
company.
For details of pending litigations please refer to “Legal and other Information” commencing on page no.90
III. Litigations against the Directors
Some of our directors are involved in certain legal proceedings, summary of which is as follows:
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Sr.
No
Particulars
No. of
cases/disputes
1. Criminal Cases
2. Civil and Others Cases
3. Securities related
2
3
3
Amount involved where
quantifiable
(Rs. in lacs)
Nil
24.14
Nil
For details of pending litigations please refer to “Legal and other Information” commencing on page no. 90
2.
Contingent liabilities
The details of contingent liabilities not provided for as per the Balance Sheet for period ended
31/03/2008 is as follows:
(Rs. in lacs)
Particulars
As on March
31st,2008
Demand claims not acknowledged as debt or which are under litigation
8.00
Bank guarantees furnished
13.88
Disputed demand for taxes, duties and other levies pending adjudication in
335.37
appeal
Total
357.25
In the event, any of the contingent liabilities materialize, it may have an adverse effect on the
company’s financial condition and future financial performance.
3. The success of our business is highly dependent on our ability to attract customers to our hotel
Various factors affect the customer footfalls, including choice of location and geographical region.
Factors such as the regional economy, weather conditions, natural disasters, social unrest as well as
government regulations may also affect the result of our operations.
4. The success of our business is dependant on supply chain management
We strive to keep optimum inventory at our hotel to control our working capital requirements. A
strong supply chain management system is essential to ensure availability of required goods at hotel.
Food and grocery items require efficient supply chain management as this involves items which are
perishable or have limited shelf life. Inefficient supply chain management could adversely affect the
results from operations.
5.
Our revenues are seasonal in nature
Our revenues are generally higher during the 7 months period (September – March) of each fiscal
year as compared to the entire fiscal year. Any disturbances/disruptions during the period may lead
to reduction in our revenues and can have a material adverse impact on our financial performance.
Further, our revenues are generally lower during April to August. As a result, the quarter to quarter
comparison of historical results may not be accurate or a meaningful indicator of our performance.
6.
Increased competition in the hotel sector may adversely affect the operation of our hotel.
We compete for guests with other hotels in a highly competitive industry. Our success would be
dependant on our ability to compete in areas such as room rates, quality of accommodation, service
vii
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levels, brand recognition among others. Most of our current operations are in Delhi where we face
competition from existing hotel players and will also have to compete with any new hotel properties
coming up in the city. There can be no assurance that new or existing competitors will not
significantly lower rates or offer greater convenience, services or amenities or significantly expand or
improve facilities in the market in which we operate. Such developments would affect our ability to
compete with them and have a negative impact on our profitability and financial condition.
7.
Our existing business is confined to one state and one country.
Presently we are operating only one 5 star deluxe hotel property located in Delhi. This results in risk
of concentration of business. Any law and order problem in Delhi may affect our operations.
8.
We have group companies/ ventures that have activities similar to our business.
Some of our group companies like Mela Hotels Ltd., CHL (South) Hotels Ltd. are in the same line of
business and to that extent, there might be some conflict in the interest.
9. Attracting and Retaining Key personnel
The success of any company depends upon its management team and key personnel and the
Company’s ability to attract and retain such persons. The resignation or loss of key management
personnel may have an adverse impact on our business. The hotel services heavily depends on the
interaction by the qualified and skilled personnel with the customers.
10. Loss making group companies
The following group companies have made losses during one or more of the last three financial years
as per the company’s financial results.
(Rs. in Lacs)
For the Year Ended 31st March
Name of the Entities
2007
2006
2005
Kyjol Entertainment Media Private Limited
83.86
12.54
(0.69)
Mela Hotels Limited
(39.19)
(26.06)
(21.27)
CHL (South) Hotels Limited
(119.08)*
31.72
* figures for period of 18 months ended on 30th Sep. 2007
*
EXTERNAL RISK FACTORS
1. The hotel industry is subject to significant regulations.
We are subject to numerous laws and regulations in all of the jurisdictions in which we operate,
including those relating to the preparation and sale of food and beverages, safety norms, health, excise
and entertainment licensing laws. Our properties are also subject to laws and regulations governing
relationships with employees in such areas as minimum wage and maximum working hours,
overtime, working conditions, hiring and terminating of employees and work permits.
2. Changes in the policies of Government of India may affect the operations of the company
A significant change in India’s economic liberalization and deregulation policies could affect business
and economic conditions in India. Taxes and levies affect the cost and prices of the company’s
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business. Any change in the policies, regulations and other levies regulated or imposed by either
Central or State Government of India may have an adverse impact on the company’s business.
3. A slowdown in economic growth in India could cause the Company’s business to suffer.
The performance of the company along with the quality and growth of the assets are necessarily
dependent on the health of the overall Indian economy. A slowdown in the Indian economy could
adversely affect the business. India’s economy could be adversely affected by a general rise in interest
rates, weather conditions adversely affecting commodity and energy prices or various other factors. In
addition, the Indian economy is in a state of transition. The share of the services sector of the economy
is rising while that of the industrial, manufacturing and agricultural sectors is declining. It is difficult
to gauge the impact of these fundamental economic changes on the business. Any slowdown in the
Indian economy or future volatility in global commodity prices could adversely affect the business.
4.
Disruptions or lack of basic infrastructure such as electricity supply and water supply could
adversely affect our operations.
The hotel industry is a service industry and any disruption in basic infrastructure such as supply of
electricity and water could affect the operations of our hotels and the services to our guests. This could
have an adverse effect on our business, profitability and financial conditions.
5.
The Company’s business is exposed to the effects of exchange rate fluctuations.
The Company’s assets, earnings and cash flows are influenced by fluctuations in exchange rates of
other currencies against the rupee, and more particularly by movements in the US dollar. Any such
fluctuations in exchange rates may affect company’s operations and financial conditions.
NOTES
♦
The book value per Equity Share of Rs.10/- each is Rs. 55.69 as on 31/03/ 2008.
♦
The Net worth of the company as on 31/03/2008 was Rs. 6106.15 lacs.
♦
The average cost of acquisition of Equity Shares for the promoters is Rs. 10/- per share
♦
Other than as disclosed either in Related Party Transactions or otherwise, the
promoters/Directors/ Key Management Personnel of the Company have no interest other than
reimbursement of expenses incurred or normal remuneration or benefits arising out of the
shareholding/employment in the Company or out of any business relation with any of the
ventures in which they are interested. For interests of promoters and directors, please refer the
chapters “Management” and “Promoters” beginning on pages 46 and 58 of this Offer Document.
For related party transactions, refer to page no. 77 of the Auditor’s Report under the section titled
‘Related Party Transactions’.
♦
Investors are advised to refer to the paragraph on “Basis for Issue Price” on page 21 of this Offer
Document before making an investment in this Issue.
♦
Investors are free to contact the company secretary for any complaint/ information/ clarification
pertaining to this Issue.
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♦
All information shall be made available by the Lead Manager and the Company to the public and
investors at large and no selective or additional information would be available only to a section of
the investors in any manner whatsoever.
♦
The Lead Manager and the Company shall update this Letter of Offer and keep the shareholders
informed of any material changes till the listing and trading commencement.
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PART I
SECTION II - INTRODUCTION
This is only a summary and does not contain all the information that you should consider before
investing in the Equity Shares. You should read the entire Letter of Offer, including the information
contained in the chapters titled “Risk Factors” and “Financial Statements” and related notes beginning on
pages vi and 68 of this Letter of Offer before deciding to invest in the Equity Shares.
INDUSTRY SUMMARY
The liberalization of Indian economy in 1991 and the integration of India into the global economy has
given impetus to business travellers and tourist travellers. This has intensified and elevated room rates
and occupancy levels in India. The successful growth story of “Hotel industry in India” seconds only to
China in Asia Pacific. The hotel industry is linked to tourism industry and the growth in the Indian
tourism industry has fueled the growth of Indian hotel industry. The growing economy and increased
business opportunities in India have acted as a boon for Indian Hotel industry. The arrival of low cost
airlines and the associated price war have given domestic tourists a host of options. The “Incredible
India” destination campaign and the recently launched “Atithi Devo Bhavah” campaign have also helped
in the growth of domestic and international tourism and consequently the hotel industry.
The Government’s move to declare hotel and tourism industry as a high priority sector with a provision
for 100% foreign direct investment (FDI) has also provided a further impetus in attracting investments in
this industry. One of the major reasons for increase in demand for hotel rooms in the country is the high
growth in sectors like information technology, telecom, retail and real estate.
India travel recognition:
•
•
•
•
•
•
•
India has been elected to head the UN World Tourism Organization (UNWTO), the highest
policy making world tourism body represented by 150 countries.
The world’s leading travel and tourism journal, “Conde Nast Traveller”, ranked India as the
numero uno travel destination in the world.
The Association of British Travel Agents (ABTA) has ranked India as No.1 amongst the top 50
places for 2006.
The “Incredible India” campaign has been ranked as the Highest Recall Advertisement
worldwide by “Travel and Leisure”.
India was adjudged Asia’s leading destination at the regional World Travel Awards (WTA).
India’s Taj Mahal continues to figure in the seven wonders of the world.
Bangalore based Leela Palace Kempinski has been rated as the favourite business hotel in the
world in a Readers’ Choice Awards by Conde Nast Traveller.
(Source: extracts from www.buzzle.com/articles/growth-of-the-hotel-industry-in-india.html as on 3rd
July2008 and www.ibef.org/ tourism and hospitality)
The opening up of the aviation industry in India has exciting opportunities for hotel industry as it relies
on airlines to transport 80% of international arrivals. The government's decision to substantially upgrade
28 regional airports in smaller towns and privatization & expansion of Delhi and Mumbai airport will
improve the business prospects of hotel industry in India. Substantial investments in tourism
infrastructure are essential for Indian hotel industry to achieve its potential. The upgrading of national
highways connecting various parts of India has opened new avenues for the development of budget
hotels in India. Taking advantage of this opportunity, Tata group and another hotel chain called
'Homotel' have entered this business segment.
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According to a report, Hotel Industry in India, currently, has supply of 110,000 rooms and there is a
shortage of 150,000 rooms fueling hotel room rates across India. According to estimates, demand is going
to exceed supply by at least 100% over the next 2 years. Five-star hotels in metro cities allot same room,
more than once a day to different guests, receiving almost 24-hour rates from both guests against 6-8
hours usage. With demand-supply disparity, hotel rates in India are likely to rise by 25% annually and
occupancy by 80%, over the next two years. This will affect the competitiveness of India as a cost-effective
tourist destination.
To overcome this shortage, Indian hotel industry is adding about 60,000 quality rooms, currently in
different stages of planning and development, which should be ready by 2012. Hotel Industry in India is
also set to get a fillip with Delhi hosting 2010 Commonwealth Games. Government has approved 300
hotel projects, nearly half of which are in the luxury range. The future scenario of Indian hotel industry
looks extremely rosy. It is expected that the budget and mid-market hotel segment will witness huge
growth and expansion while the luxury segment will continue to perform extremely well over the next
few years.
(Source: Extracts from http://www.iloveindia.com/economy-of-india/hotel-industry.html as on
17/07/2008)
There are some 1,980 hotels approved and classified by the Ministry of Tourism, Government of India,
with a total capacity of about 110,000 hotel rooms. Revenues of the hotel and restaurant industry in India
during the financial year 2006-07 was Rs 604.32 billion, a growth of 21.27% over the previous year,
primarily driven by foreign tourist arrivals, which increased by 14.17%. The hospitality industry is poised
to grow at a faster rate and is expected to reach Rs 826.76 billion by 2010.
While the potential of hotel industry is great, there are several constraints for the industry to grow. High
cost of land in the country often discourages an investor to put in money in construction of new hotels.
Construction of hotels is highly capital intensive and it is estimated that to construct a single five-star
room, it costs around Rs 1.25 crore. As a result there is no incentive to construct new hotel properties and
there is a mismatch between demand and supply leading to higher occupancy rates and increasing prices.
In fact, average rate of hotel rooms in five-stars has gone up from Rs.4,000/- five years ago to Rs. 16,000/now. Though this rate can be affordable for business travellers, it is very difficult for leisure travellers to
pay such exorbitant rates.
Across the country there is no rationalisation of taxes as states charge different rates. Secondly,
multiplicity of taxes like value added tax and service tax further compounds the problem. Tax holidays
are available only to hotels at heritage sites and so this measure is restrictive for the growth of the hotel
industry.
In order to increase the stock of hotel rooms, the Federation of Hotel and Restaurant Associations of India
suggested to the government that the floor area ratio of the existing hotels should be increased. This was
a couple of years before and will help create additional rooms in the existing properties and ease the
burden of shortage of hotel rooms in the country. The proposal is yet to be implemented.
(Source: Extracts from http://www.financialexpress.com/news/hotel-industry as on 17/07/2008)
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COMPANY SUMMARY
CHL Ltd. was originally incorporated as a private limited company with the Registrar of Companies NCR
of Delhi & Haryana vide certificate of incorporation dated 16th March, 1979 under the Companies Act,
1956 as Cosmopolitan Builders and Hoteliers Private Limited. Subsequently the company was converted
into a public limited company as Cosmopolitan Builders and Hoteliers Ltd. The name of the company was
again changed to Cosmopolitan Hotels Ltd. vide fresh certificate of incorporation dated 29th April 1982.
Presently, the company is named as CHL Ltd. vide fresh certificate of incorporation dated 11th December
1997. The company is promoted by Malhotra family who also has various businesses in India, Kuwait and
UAE. They have formed an international chain known as Malbros Group.
The hotel “Crowne Plaza” is having 242 rooms and suites, restaurants, banquets, conference halls, health
center, swimming pool and discotheque spanning over an area of 7,405 sq. mts. The hotel is located
around 23 kms from the Delhi International Airport and 9 kms from Connaught Place. The hotel is
situated on National Highway No.2 on road to Mathura and the place is surrounded by commercial areas
like Nehru Place, Okhla Industrial Area and NOIDA. The hotel has an office space of approx. 9,000 sq.ft
and 30,000 sq. ft. for commercial use. The office space is utilized by various reputed companies like
Hewlett Packard, AMD, Abbott Vascular, Toyo Inc. (Japan), etc.
The company has International Hotel License Agreement with Intercontinental Group (formerly: M/s.
Bass Hotels and Resorts Asia Pacific), an international chain of hotels for the use of its brand name
“Crowne Plaza”.
One of the restaurants of the Hotel by the name of “Sampan”, is a well established Chinese/ Thai
restaurant and famous in the city. Sampan is a roof top restaurant from where one can have a panoramic
view of the entire city and adjoining areas. The discotheque of the hotel with the name Mirage is very
famous amongst the youngsters in the city. It is equipped with modern gadgets and musical equipments.
3
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
SUMMARY OF FINANCIAL DATA
Please read the following data in conjunction with the detailed Auditors’ Report commencing on page
no. 68 under the heading ‘FINANCIAL INFORMATION
Statement of Profit and Loss Account:
Particulars
(Rs. in lacs)
For the Financial years ended 31st March
2008
2007
2006
2005
2004
INCOME
Sales & Services
Increase (Decrease) in
inventories
Other Income
Total Income
8709.35
7625.73
5668.07
4301.2
3209.08
479.24
9,188.59
451.66
8,077.39
314.85
5,982.92
102.13
4,403.33
138.67
3,347.75
EXPENDITURE
Food and beverages consumed
Staff Costs
Operating & General Expenses
Depreciation
Deferred Revenue expenditure
Selling Expenses
Interest
Total expenditure
583.71
1,584.84
2,368.22
364.46
1.40
601.70
489.50
5,993.83
545.15
1,194.97
2,322.97
315.27
1.40
583.35
489.25
5,452.36
468.57
916.17
1,990.60
325.49
1.40
427.10
310.24
4,439.57
433.88
707.52
1,982.19
238.27
3.04
305.41
147.51
3,817.82
319.61
571.17
1,521.96
241.74
3.04
176.31
137.46
2,971.29
3,194.76
1,089.61
2,625.03
922.41
1,543.35
503.03
585.51
191.58
376.46
174.97
2,105.15
1,702.62
1,040.32
393.93
201.49
57.07
(0.20)
(0.91)
-
-
2,048.08
1,702.82
1,041.23
393.93
201.49
Net Profit before tax and extra
ordinary items
Taxation
Net Profit/(Loss) before extra
ordinary items
Adjustment of Last years'
Provisions
Net Profit after Extraordinary
items
4
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Statement of Assets & Liabilities:
(Rs. in lacs)
2005
5939.37
2650.45
3288.92
3288.92
2004
5656.24
2617.79
3038.45
29.01
3067.46
791.95
338.91
119.87
243.14
555.06
2613.98
1329.32
4741.50
217.53
452.97
1945.41
1618.56
4234.47
215.33
253.41
1171.02
484.38
2124.14
214.96
195.27
755.35
632.80
1798.38
3,485.78
3514.18
3612.01
1373.98
850.59
198.96
541.88
1,460.09
176.96
563.14
1357.38
178.33
550.04
1096.02
171.04
592.22
910.25
233.25
645.24
761.60
5,686.71
6,106.14
5,611.66
4,575.95
5,436.40
3,372.08
3,047.49
2,704.48
2,490.68
2,495.03
1,096.37
5,012.57
(2.80)
1096.37
3483.79
(4.21)
1096.37
2281.32
(5.61)
1096.37
1615.12
7.01)
1096.37
1408.71
10.05)
6,106.14
4,575.95
3,372.08
2,704.48
2,495.03
Description
Gross Block
Less Depreciation
Net Block
Capital Work in Progress
Sub Total (A)
2008
8,537.27
3,030.96
5,506.31
5,506.31
2007
7317.09
3135.48
4181.61
57.08
4238.69
2006
6702.55
2943.70
3758.85
23.21
3782.06
B
Investments (B)
1,144.74
1207.42
C
Current Assets, Loans &
Advances
Inventories
Sundry Debtors
Cash and Bank Balances
Loans and Advances
Sub Total ( C )
380.87
619.47
1,277.31
2,864.15
5,141.80
A
D
Liabilities and Provisions
Secured Loans
Unsecured Loans :
Security Deposit
Deferred Tax Liabilities
Current Liabilities and
Provision
Total Liabilities ( D)
Networth (A+B+C-D)
Net Worth Represented by
Share Capital:Equity Share Capital
Reserves and Surplus
Less:- Miscellaneous Expenses
not w/off)
Total Net Worth
5
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
THE ISSUE
Type of Issue
Type of
Instrument
No. of equity
shares
Face Value
(Rs.)
Issue Price
(Including
Premium
of Rs. 40)
Consideration
Rights Issue
Equity Shares
54,81,829
10/-
50/-
Cash
ISSUE BREAK-UP
Particulars
No. of Equity Shares
Equity Shares offered (Issue Size)
Entitlement Ratio
Market Lot
Equity shares outstanding prior to the Issue
Equity shares outstanding after the issue
54,81,829 Equity Shares
The Equity Shares are being offered on rights basis
to the existing Equity Shareholders of the Company
in the ratio of 1 (One) Equity Share for every 2 (Two)
Equity Shares held as on the Record Date [•]
The market lot for the Equity Shares in
dematerialized mode is one. In case of physical
certificates, the Company would issue one certificate
for the Equity Shares allotted to one folio
(“Consolidated Certificate”).
1,09,63,658 Equity Shares
1,64,45,487 Equity Shares
USE OF PROCEEDS:
Please see section titled “Objects of the Issue” on page 17 of this Offer Document
ISSUE PROGRAMME
ISSUE OPENS ON
[•]
LAST DATE FOR RECEIVING
REQUESTS FOR SPLIT FORMS
[•]
6
ISSUE CLOSES ON
[•]
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
GENERAL INFORMATION
Dear shareholder(s),
The Board of Directors in their meeting held on 28/07/2006 have recommended the rights issue of equity
shares of the Company to the existing share holders of equity shares in the ratio of one equity share for
every two equity shares (i.e.1:2) held by them on a date to be announced by the Board (record date). A
Special resolution under Section 81 (1) (A) of the Companies Act 1956 was passed at the Annual General
Meeting of the share holders of the company held on 27/09/2006 authorizing the Board of the company
to raise capital up to Rs. 2740.91 lacs.
The Board of Directors at their meeting held on 15/06/2007 have decided to make the following offer to
the existing shareholders of the Company:
“Issue of 54,81,829 Equity Shares of Rs. 10/- each at premium of Rs. 40/- per share aggregating to Rs.
2740.91 lacs on rights basis to the existing Equity Shareholders of the Company in the ratio of 1 (One)
Equity Share of every two (two) Equity Share held on [••] (Record Date) .
The draft Letter of Offer was filed with SEBI on 29/06/2007. The Company pursued the then objects of
the issue of developing the property at Jaipur. During the said period the Government of Rajasthan had
proposed increase in Floor Area Ratio (FAR) from 0.10: 1 to 0.20: 1. Said increase would result in increase
in number of rooms of resorts from 60 (proposed) to 100. However, the said facility shall be extended for
the hotel construction after notification of the said decision in the official gazette. As it would have
benefited the Company tremendously, the Company awaited the said notification which was delayed
and is yet to be announced. The Company also incurred additional expenses on account of commitment
charges payable to Bank resulting in increase in the cost of the project. Further as per the New Hotel
policy of Rajasthan Government, tax holiday period is available to new hotel, who can complete the
construction by March, 2009. This benefit was also not possible to be availed by the company due to delay
in raising the funds as construction period required is 18-24 month. Thus the Company decided to
withdraw the draft Letter of Offer. Accordingly the draft Letter of Offer was withdrawn vide our letter
dated 28/04/2008.
Our Board of Directors in their meeting held on 28/04/2008 decided to approach Bombay Stock
Exchange Ltd. (BSE) for obtaining listing permission for equity shares of the company and then pursue
the rights issue. Our Company received listing/trading permission from BSE vide their letter dated
13/06/2008 and trading in the equity shares of the Company commenced w.e.f. 04/07/2008. On
attaining the listing, Company is proposing to proceed with the rights issue.
The Board of Directors in their meeting held on 25/07/2008 approved the draft Letter of Offer afresh in
respect of the proposed rights issue of the Company in terms of above mentioned resolution.
Name of the Company
Registered Office
CIN No.
PAN No.
Contact person:
Registrar of Companies
: CHL Limited
: Hotel Crowne Plaza,
New Friends Colony,
New Delhi 110 025
Tel: +91-011- 2683 5070, 4167 2222
Fax: +91-011-2683 7758, 2683 6288
Email: cs@chl.co.in
Website: www.crowneplazadelhi.com
: L55101DL1979PLC009498
: AAACC2587M
: Mr. G.J. Varadarajan, Company Secretary & Compliance Officer
: B- Block Paryavaran Bhawan, CGO Complex, Lodhi Road, New
Delhi – 110 003
7
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
IMPORTANT
1.
This Issue is applicable to such Equity Shareholders whose names appear as beneficial owners as per
the list to be furnished by the depositories in respect of the Equity Shares held in the electronic form
and on the Register of Members of the Company at the close of business hours on [••] (Record Date)
2.
Your attention is drawn to the section on risk factors starting from page no. vi of this Letter of Offer.
3.
Please ensure that you have received the CAF with this Letter of Offer.
4.
Please read the Letter of Offer and the instructions contained herein and in the CAF carefully before
filling in the CAFs. The instructions contained in the CAF are an integral part of this Letter of Offer
and must be carefully followed. An application is liable to be rejected for any non compliance of the
instructions as mentioned in the CAF.
5.
All enquiries in connection with this Letter of Offer or CAFs should be addressed to the Registrar to
the Issue, quoting the Registered Folio number/ DP and Client ID number and the CAF number as
mentioned in the CAFs.
6.
The Lead Manager and the Company shall make all information available to the Equity Shareholders
and no selective or additional information would be available for a section of the Equity Shareholders
in any manner whatsoever including at presentations, in research or sales reports etc. after filing of
the Letter of Offer with SEBI.
7.
All the legal requirements as applicable till the filing of the Letter of Offer with the Designated Stock
Exchange have been complied with.
Board of Directors
The Board of Directors of the Company comprises of:
Name of the Director
Dr. L.K. Malhotra
Mr. D.V. Malhotra
Mr. B.N. Malhotra
Mr. O.P. Bajaj
Mr. A.K. Malhotra
Mr. Kumud Malhotra
Mr. Luv Malhotra
Mr. Harish C Bhasin
Mr. Subhash Ghai
Mr. R.C. Sharma
Designation
Chairman &
Managing Director
Director
Director
Director
Director
Director
Whole time Director
Director
Director
Director
Status
Executive Director
DIN
00213086
Non-Executive Non-Independent Director
Non-Executive Non-Independent Director
Non-Executive Independent Director
Non-Executive Non-Independent Director
Non-Executive Independent Director
Executive Director
Non-Executive Independent Director
Non-Executive Independent Director
Non-Executive Independent Director
00072040
00558454
00570940
00676603
00571138
00030477
00002132
00019803
00023274
For further details about the directors of the company; please refer page no. 46
ISSUE MANAGEMENT TEAM
Legal Advisors to the issue
M/s. Chadha & Associates,
Chamber no. 161, New Block,
Delhi High Court,
New Delhi – 110 003
Tel : 91 – 011- 233 88671
Fax: 91 – 011 – 233 84726
Email : chadhaandassociates@rediffmail.com
Auditors to the Company
M/s. G.Rai & Co.,
Chartered Accountants,
29A/1, Asaf Ali Road,
New Delhi- 110 002
Tel : 91- 011- 23231847
Fax : 91- 011- 23234189
Email: graico@airtelmail.in
8
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Tax Auditor to the company
M/s. L.N.Malik & Co.
Chartered Accountants,
18/13 WEA Karol Baug,
New Delhi – 110 005
TeL : 91- 011- 287 55911
Fax: 91- 011- 287 58178
Lead Manager to the Issue
Registrar to the Issue
KEYNOTE CORPORATE SERVICES LIMITED
4th Floor Balmer Lawrie Bldg,
5, J.N. Heredia Marg,
Ballard Estate, Mumbai – 400 001
Tel: 91-022- 30266000-3
Fax: 91-022- 22694323
Website: www.keynoteindia.net
E-mail: mbd@keynoteindia.net
SEBI Regn No: INM 000003606
Contact Person: Ms. Swati Sinha
Beetal Financial & Computer Services (P) Ltd
BEETAL HOUSE, 3rd Floor, 99 Madangir,
Behind Local Shopping Centre, New Delhi- 110062.
Tel.: +91-011-29961281;
Fax: +91-011-29961284
Website: www.beetalfinancial.com
E-mail: chl@beetalfinancial.com
SEBI Registration No.: INR 000000262
Contact Person:Mr. S.P Gupta
Bankers to the Company
HDFC Bank Ltd.
B-6/3, Safdarjung Enclave,
DDA Commercial Complex,
Opp. Deer Park, New Delhi – 110 029
Tel: +91 – 011- 4139 2100
Fax: + 91 – 011 – 4165 2283
Contact person: Mr. Sumit Aggarwal
e-mail: corporatehelp@hdfcbank.com
Honkong Shanghai Banking Corporation Ltd.
25, Barakhamba Road,
New Delhi – 110 001
Tel: +91 – 011 – 2373 8989
Fax: +91 – 011 – 4159 2222
Contact Person: Mr. Swapnil Pavale
e-mail : info@hsbc.co.in
Bankers to the issue
HDFC Bank Ltd.
B-6/3, Safdarjung Enclave,
DDA Commercial Complex,
Opp. Deer Park, New Delhi – 110 029
Tel: +91 – 011- 4139 2100
Fax: + 91 – 011 – 4165 2283
Contact person: Mr. Sumit Aggarwal
e-mail: corporatehelp@hdfcbank.com
Honkong Shanghai Banking Corporation Ltd.
HSBC, 52/ 60 M.G. Road,
Fort Mumbai 400 001
Tel: +91 – 022 – 4035 7458
Fax: +91 – 022 – 4035 7657
Contact Person: Mr. Swapnil Pavale
e-mail : swapnilpavale@hsbc.co.in
Company Secretary and Compliance Officer
Mr. G.J. Varadarajan
Hotel Crowne Plaza,
New Friends Colony,
New Delhi 110 025
Tel: 91-011- 2683 5070/ 4167 2222
Fax: 91-011 – 2683 7758, 2683 6288
Email: cs@chl.co.in
9
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Investors can contact the Compliance Officer or the Registrar to the issue in case of any pre-Issue or
post-Issue related problems such as non-receipt of letters of allotment, credit of allotted Equity Shares
in the respective beneficiary account or refund orders, etc.
INTER SE ALLOCATION OF RESPONSIBILITIES
Not applicable
CREDIT RATING/DEBENTURE TRUSTEE
This being Rights Issue of equity shares, no Credit Rating or appointment of Debenture Trustee is
required.
MONITORING AGENCY
Not Applicable
APPRAISING ENTITY
Not Applicable
MINIMUM SUBSCRIPTION
i. If the Company does not receive minimum subscription of 90% of the issue, the entire
subscription shall be refunded to the applicants within forty two days from the date of closure of
the issue.
ii. If there is delay in the refund of subscription by more than 8 days after the company becomes
liable to pay the subscription amount (i.e., forty two days after closure of the issue), the company
will pay interest for the delayed period, at prescribed rates in sub-sections (2) and (2A) of Section
73 of the Companies Act, 1956.
IMPERSONATION
Attention of the applicants is specifically drawn to the provisions of Sub-Section (1) of Section 68A of
the Companies Act, 1956 which is reproduced below:
"Any person who(a) makes in a fictitious name an application to a Company for acquiring, or subscribing for, any
shares therein, or
(b) otherwise induces a Company to allot or register any transfer of shares therein to him, or any other
person in a fictitious name, shall be punishable with imprisonment for a term which may extend
to five years."
UNDERWRITING/ STANDBY SUPPORT
This issue of equity shares is not being underwritten and/or no standby support is being sought for the
said issue.
10
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
CAPITAL STRUCTURE OF THE COMPANY
Details as on the date of Letter of Offer
Aggregate Value
at Nominal Price
(Rs.)
Aggregate Value
at Issue Price
(Rs.)
A. Authorized Capital
30,00,00,000
3,00,00,000 Equity Shares of Rs. 10/- each
30,00,00,000
B. Issued, Subscribed & Paid-up Capital
1,09,63,658 Equity Shares of Rs. 10/- each, fully paid – up
10,96,36,580
10,96,36,580
C. Present Rights Issue
54,81,829 Equity shares of Rs. 10/- each for cash at
premium of Rs. 40 per Equity Share
5,48,18,290
27,40,91,450
16,44,54,870
38,37,28,030
D. Post Issue Capital
1,64,45,487 Equity shares of Rs. 10/- each
E. Share Premium Account
--
Before the offer
21,92,73,160
After the offer
Notes to Capital Structure:
1. Changes in the Authorized Capital of the Company:
Sr.
No.
1.
2.
3.
4.
5.
Details of increase in authorized share capital
Date
Incorporation Rs. 50.00 Lacs divided into 50,000 equity shares of Rs. 100/- each
Increased to Rs. 300.00 lacs divided into 2,00,000 equity shares of Rs. 100/- each
and 1,00,000 preference shares of Rs. 100/- each
Increased to Rs. 500.00 lacs divided into 5,00,000 equity shares of Rs. 100/- each
(includes reclassification of the preference shares into equity shares)
Increased to Rs. 600.00 lacs divided into 6,00,000 equity shares of Rs. 100/- each
- Change of Face value from Rs. 100/- each to Rs. 10/- each
- 60,00,000 equity shares of Rs. 10/- each
Increased to Rs. 750.00 lacs divided into 60,00,000 equity shares of Rs. 10/- each
and 1,50,000 13.5% Redeemable Cumulative Preference shares Rs. 100/- each
1979
17/11/1980
15/06/1981
23/01/1982
27/08/1982
01/02/1983
6.
Increased to Rs. 875.00 lacs divided into 72,50,000 equity shares of Rs. 10/- each
and 1,50,000 13.5% Redeemable Cumulative Preference shares Rs. 100/- each
21/09/1988
7.
Increased to Rs. 1500.00 lacs divided into 1,35,00,000 equity shares of Rs. 10/each and 1,50,000 13.5% Redeemable Cumulative Preference shares Rs. 100/each
Increased to Rs. 3000.00 lacs divided into 3,00,00,000 equity shares of Rs. 10/each (includes reclassification of the preference shares into equity shares)
29/09/1995
8.
11
27/09/2006
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
2. Details of increase in the paid-up Equity Share capital are as follows:
Date of
Allotment
Issue
Price
(Rs.)
100
No. of
Shares
Cumulative
No. of shares
Nature of allotment
Consideration
Incorporation
Face
Value
(Rs.)
100
20
20
Cash
30/04/1979
100
100
3,940
3,960
30/07/1979
100
100
1,040
5,000
20/02/1981
100
100
15,000
20,000
20/08/1981
100
100
34,080
54,080
26/01/1981
100
100
1,61,618
2,15,698
01/01/1982
100
100
36,424
2,52,122
31/01/1983
28/10/1983
20/01/1984
06/09/1984
13/03/1985
29/01/1990
29/11/1995
29/05/1996
18/02/1997
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
10
13,50,000
3,75,440
77,520
1,71,020
4,800
23,75,820
30,00,000
1,72,400
9,15,438
38,71,220
42,46,660
43,24,180
44,95,200
45,00,000
68,75,820
98,75,820
1,00,48,220
1,09,63,658
Subscribers to the
Memorandum
Allotment to Promoters,
friends and relatives
Allotment to Promoters,
friends and relatives
Allotment to Promoters,
friends and relatives
Allotment to Promoters,
friends and relatives
Allotment to Promoters,
friends and relatives
Allotment to Promoters,
friends and relatives
Public Issue
Preferential Issue
Preferential Issue
Preferential Issue
Preferential Issue
Preferential Issue
Preferential Issue
Preferential Issue
Preferential Issue
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
Cash
3. Promoters’ Contribution and Lock-in
The present issue being a rights issue, provisions of promoters’ contribution and lock-in are not
applicable
4. Present Rights Issue:
Type of Instrument
Ratio
Face Value (Rs.)
No. of shares
Issue Price
(Rs.)
Consideration
Equity Shares
1:2
10/-
54,81,829
50/-
Cash
5. Pre & Post issue shareholding pattern of the Company assuming full subscription in the rights issue
is given below :Pre-issue
Number of
%
Shares
Category of Shareholder
(A)
1
(a)
(b)
(c)
(d)
Shareholding of Promoter and Promoter
Group
Indian
Individuals/ Hindu Undivided Family
Central Government/ State
Government(s)/Government company
Bodies Corporate
Financial Institutions/ banks
12
Post-issue
Number of
%
Shares
7,23,122
-
6.60
-
10,84,683
-
6.60
-
-
-
-
-
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Category of Shareholder
(e)
2
(a)
(b)
(c)
(d)
(B)
1
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
2
(a)
(b)
(c)
(d)
(e)
(f)
(C)
Any Other (specify)
Sub- Total (A)(1)
Foreign
Individuals (Non-Resident Individuals/
Foreign non Individuals)
Bodies Corporate
Institutions
Any other (specify)
Sub-Total (A)(2)
Total Shareholding of Promoter and
Promoter Group (A)= (A)(1)+(A)(2)
Public shareholding
Institutions
Mutual Funds/ UTI
Financial Institutions/ Banks
Central Government/ State Government(s)
Venture Capital Funds
Insurance Companies
Foreign Institutional Investors
Foreign Venture Capital Investors
Any Other (specify)
( Foreign National)
Sub-Total (B)(1)
Non-institutions
Bodies Corporate
Individualsi. Individual shareholders holding nominal
share capital up to Rs. 1 lakh.
ii. Individual shareholders holding nominal
share capital in excess of Rs. 1 lakh.
Individuals (Non-Resident Individuals/
Foreign non Individuals)
Overseas Corporate Bodies
Clearing Members
Non Resident Indians
Sub-Total (B)(2)
Total public shareholding (B)= (B)(1)+(B)(2)
TOTAL (A)+(B)
Shares held by Custodians and against
which Depository Receipts have been issued
GRAND TOTAL (A)+(B)+(C)
13
Pre-issue
Number of
%
Shares
7,23,122
6.60
Post-issue
Number of
%
Shares
10,84,683
6.60
6,42,206
5.86
9,63,309
5.86
64,57,660
70,99,866
78,22,988
58.90
64.76
71.36
96,86,490
1,06,49,799
1,17,34,482
58.90
64.76
71.36
4,99,290
-
4.55
-
7,48,935
-
4.55
-
4,99,290
4.55
7,48,935
4.55
4,100
0.04
6,150
0.04
2,58,110
1,68,750
2.35
1.54
3,87,165
2,53,125
2.35
1.54
22,10,420
20.16
33,15,630
20.16
26,41,380
31,40,670
1,09,63,658
-
24.09
28.64
100.00
39,62,070
47,11,005
1,64,45,487
24.09
28.64
100.00
1,09,63,658
100.00
1,64,45,487
100.00
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
6. The shareholding pattern of the promoter group is as detailed below
Particulars
a) Promoters
Resident
NRI’s
SUB – TOTAL
b) Immediate relatives of promoters
(Spouse, Parent, Child, Brother,
Sister):
SUB – TOTAL
c) Company in which 10% or more of
the share capital is held by the
promoter/his immediate relative,
firm or HUF in which the promoter
or his immediate relative is a
member.
SUB – TOTAL
d) Company in which the Company
mentioned in © above holds 10% or
more of the share capital
SUB – TOTAL
e) HUF in which aggregate share of the
promoter
and
his
immediate
relatives is equal or more than 10%
of the total.
SUB – TOTAL
GRAND TOTAL
Present
No. of equity
% of
shares of Rs.
present
10/- each
capital
Post Rights
No. of equity % of post
shares of Rs.
issue
10/- each
capital
7,23,122
6,42,206
13,65,328
-
6.60
5.86
12.46
-
10,84,683
9,63,309
20,47,992
-
6.60
5.86
12.46
-
-
-
-
-
64,57,660
58.90
96,86,490
58.90
64,57,660
58.90
96,86,490
58.90
-
-
-
-
-
-
-
-
-
-
-
-
78,22,988
71.36
1,17,34,482
71.36
The promoters/ promoter group collectively intend to subscribe to their rights entitlement as well as the
entire unsubscribed portion from public shareholders, if any, in this rights issue in full. As a result of this
subscription and consequent allotment, the promoters/promoter group may acquire shares over and above
their entitlement in the issue which may result in their shareholding in the company being above their current
holding. Presuming no subscription is received from other shareholders and the promoters/promoter group
subscribing to the entire unsubscribed portion, their shareholding shall increase to 80.90 % of the post rights
issue equity capital of the Company. This subscription and acquisition of additional equity shares by the
Promoter/promoter group, if any, will not result in change of control of the management of the Company
and shall be exempt in terms of provision to Regulation 3(1)(b)(ii) of the SEBI (Substantial Acquisition of
Shares and Takeover) Regulations, 1997.
The promoters/promoter group have confirmed that in case the Rights Issue of the Company is completed
with their subscribing to equity shares over and above their entitlement and as a result, if the public
shareholding in the Company after the Issue falls below the permissible minimum level as specified in the
listing condition or listing agreement, they will make an offer for sale of their holdings so that the public
shareholding is raised to the minimum level specified in the listing agreement or in the listing conditions
within a period of 3 months, as per the requirements of sub-clause 17.2 of SEBI (Delisting of Securities)
Guidelines, 2003 or as per any amendment thereto.
14
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
7. The Company has not issued any warrant, option, convertible loan, debenture or any other securities
convertible at a later date into equity, which would entitle the holders to acquire further equity shares of
the Company.
8. Equity shares of the Company are being traded in compulsory dematerialized mode. The market lot of the
equity shares is 1 (one).
9. There are no transactions in the securities of the Company during preceding 6 months which were
financed/undertaken directly or indirectly by the promoters, their relatives, their group companies or
associates or by the above entities directly or indirectly through other persons.
10. a) The ten largest shareholders two years prior to the date of filing of this Letter of Offer with Stock
Exchanges are as follows:
Sr.
No
1
Name of the Shareholders
No. of Equity Shares
Malbros Investments Inc.
2.
Industrial Development Bank of India
3
4
5
Mr. V. K. Sabharwal
Ms. Veena Sawhney
Dr. L.K. Malhotra as individual and on behalf of M/s
Ultima Leasing and Financing
Pushpa Devi Bajaj
Mr. O.P. Bajaj
Mrs. Usha Malhotra
Mr. Dharam Veer Malhotra
Mr. Ashwani Bajaj
6
7
8
9
10
% of Issued
Capital
64,57,660
58.90
4,98,990
4,86,950
4,68,200
4.55
4.44
4.27
4,11,536
3,78,780
2,11,030
1,92,366
1,78,448
1,62,250
3.75
3.45
1.92
1.75
1.63
1.48
10. b) The ten largest shareholders 10 days prior to the date of filing of this Letter of Offer with Stock
Exchanges are as follows:
Sr.
No
1
Name of the Shareholders
No. of Equity Shares
Malbros Investments Inc.
2.
Industrial Development Bank of India
3
4
5
Mr. V. K. Sabharwal
Ms. Veena Sawhney
Dr. L.K. Malhotra as individual and on behalf of M/s
Ultima Leasing and Financing
Pushpa Devi Bajaj
Mr. O.P. Bajaj
Mrs. Usha Malhotra
Mr. Dharam Veer Malhotra
Mr. Ashwani Bajaj
6
7
8
9
10
% of Issued
Capital
64,57,660
58.90
4,98,990
4,86,950
4,68,200
4.55
4.44
4.27
4,11,536
3,78,780
2,11,030
1,92,366
1,78,448
1,62,250
3.75
3.45
1.92
1.75
1.63
1.48
10. c) The ten largest shareholders as on the date of filing of this Letter of Offer with Stock Exchanges are as
follows:
15
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Sr.
No
1
Name of the Shareholders
No. of Equity Shares
Malbros Investments Inc.
2.
Industrial Development Bank of India
3
4
5
Mr. V. K. Sabharwal
Ms. Veena Sawhney
Dr. L.K. Malhotra as individual and on behalf of M/s
Ultima Leasing and Financing
Pushpa Devi Bajaj
Mr. O.P. Bajaj
Mrs. Usha Malhotra
Mr. Dharam Veer Malhotra
Mr. Ashwani Bajaj
6
7
8
9
10
% of Issued
Capital
64,57,660
58.90
4,98,990
4,86,950
4,68,200
4.55
4.44
4.27
4,11,536
3,78,780
2,11,030
1,92,366
1,78,448
1,62,250
3.75
3.45
1.92
1.75
1.63
1.48
11. The Company/Promoters/Directors/Lead Managers have not entered into buy back or similar
arrangements for purchase of securities issued by the Company.
12. As on the date of filing of the Letter of offer there are no partly paid up shares in the company. The
entire issue price is to be paid on application hence there will be no partly paid up shares arising out
of the issue.
13. The equity shares of the company are of face value of Rs.10/- each and marketable lot is 1 (one). At
any given time there shall be only one denomination for the shares of the company and the
disclosures and accounting norms specified by SEBI from time to time will be complied with.
14. The company shall not make any further issue of capital whether by way of issue of bonus shares,
preferential allotment, rights issue or public issue or in any other manner during the period
commencing from the submission of the letter of offer to SEBI for the Rights issue till the securities
referred in the letter of offer have been listed or application money if any is refunded.
15. Further, presently the company does not have any proposal, intention, negotiation or consideration
to alter the capital structure by way of split/ consolidation of the denomination of the shares/ issue
of shares on a preferential basis or issue of bonus or rights or public issue of equity shares or any
other securities within a period of six months from the date of opening of the present issue. However,
if business needs of the company so require, the company may alter the capital structure by way of
split/ consolidation of the denomination of the shares/ issue of shares on preferential basis or issue
of bonus or rights or public issue of shares or any other securities whether in India or abroad during
the period of six months from the date of listing of the equity shares issued under this letter of offer
or from the date the application moneys are refunded on account of failure of the issue, after seeking
and obtaining all the approvals which may be required for such alteration.
16. The Company has not raised any bridge loan against the proceeds of the issue.
17. The total number of shareholders in the company as on 30/06/2008 is 1516.
16
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
OBJECTS OF THE ISSUE
The objects of the present rights issue are to finance:
•
•
•
•
•
•
Cost of Renovation of the existing hotel building and internal facilities.
Purchase of new vehicles for guests.
Preliminary expenses for new property at Jaipur.
Cost of Miscellaneous fixed assets including Computer Software and Hardware.
Contingencies.
Issue Expenses.
The main object clause of the Memorandum of Association of the Company enables the Company to
undertake the activities for which the funds are being raised and also for the activities which the
Company has been carrying presently.
Cost of the Project/ Funds requirement
The cost of the project as estimated by our management is as follows:
Sr.
No.
1
2
3
4
5
6
(Rs. In lacs)
Amount
Particulars
Renovation of hotel building
Purchase of new vehicles
Pre-operative expenses at Jaipur
Miscellaneous Expenses
Contingencies
Issue Expenses
Total
1,650.00
597.00
250.00
161.60
41.40
40.91
2,740.91
Means of Finance
Particulars
Present rights issue of 54,81,829 equity shares of Rs.10/each at a issue price Rs. 50/- per share
(Rs in lacs)
Amount
2,740.91
Details of Cost of Project
• Renovation of the existing hotel building and internal facilities
Presently, Company is running a 5 Star Deluxe hotel viz., Hotel “Crowne Plaza, Delhi” located in South
Delhi. The hotel started in November 1982 and has been upgraded from time to time. Our Company now
proposes to renovate the said property to be of highest quality standards and more
comfortable/amenable to the guests. This will enable the hotel to continue to provide state of art facilities
comparable to international standards of 5 star hotel. The total cost for the said renovation is estimated at
Rs.1650.00 lacs. The Company has already obtained the estimate for the said renovation from Sudhir
Sharma, Architect and Interior Designer, New Delhi. The details of the estimates are as follows :
Sr. No.
1
2
3
4
5
6
Particulars
Renovation of coffee shop and seven restaurant
Renovation of main kitchen
Replacing external facia tiles with prodema finish
Repair and rectification of the porch and road
Replacement of capacitor panels
Replacement of A.C. screw chiller 550 Tr.
17
(Rs. In lacs)
Amount
500.00
300.00
300.00
200.00
25.00
75.00
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Sr. No.
7
8
9
10
11
12
13
Particulars
Air condition of laundry and replacement of ext. systems
Renovation of staff section below the pool
Renovation of staff lockers with air-condition
Replacement of boiler chimney
Replacement of service elevator
Replacement of exhaust blowers/air-condition Laundry
Replacement of 1250 KVA D.G. Set
Total
Amount
20.00
25.00
30.00
15.00
40.00
50.00
70.00
1650.00
• Purchase of new vehicles for guests
Our hotel has been maintaining a fleet of about Thirty Six (36) vehicles to cater to various requirements of
the hotel and its guests. This enables the Company to provide services to the guests and also for the
internal requirements for transportation of goods and other materials. Our Company proposes to increase
the fleet of vehicles by procuring some new vehicles required for the purposes of servicing the guests and
also for transportation of guests and staff to various locations. The details of vehicles identified by the
Company are as follows :
(Rs. In lacs)
Sr. No.
Particulars
Qty.
Amount
1
BMW 7 Series
2
180.00
2
Mercedes 350
2
200.00
3
Toyoto Corcer 16 Seater
1
65.00
4
Volks Wagon Transformer (Bus)
1
60.00
5
Nissan Infinity
1
50.00
6
Nissan Tera
2
42.00
Total
597.00
• Preliminary expenses for new property at Jaipur
The Company has purchased a piece of land admeasuring 12 Bighas and 6 Biswas (about 7.8 acres)
located at village Rupaki Nangal, Tehsil & District Jaipur at a cost of Rs.2.46 crores. The Company is
planning to develop the said property to establish a 5 star Resort cum Spa. The Company proposes to
procure all the permissions required for the purposes of setting up of the resort in future. The said
preliminary cost is proposed to be financed from the proceeds of the rights issue. The break up of such
cost includes following:
(Rs. In lacs)
Sr. No.
Particulars
Amount
1
Land conversion and boundary wall including landscaping
200.00
2
Conveyance, stamp duty registration etc.
25.00
3
Legal expenses
25.00
Total
250.00
• Miscellaneous fixed assets including Computer Software and Hardware
The Company proposes to strengthen administrative set up at the existing facility and also to establish a
set up at Jaipur to look after the property. The cost for additional computers and other peripherals and
furniture & fixtures is estimated at Rs. 161.60 lacs, the break up of which as follows :
18
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Sr. No.
1
2
3
4
5
6
7.
8.
Particulars
Computers/ Notebooks
Printers
Scanner
UPS
Softwares
Hardware/ Servers
Training on New Software
Furniture & Fixture
Total
Qty.
20
5
2
2
(Rs. In lacs)
Amount
10.00
1.70
1.30
4.10
17.20
64.30
23.00
40.00
161.60
• Issue Expenses
Issue expenses includes fees payable to the Lead Manager to the Issue, Printing and Distribution,
advertisement expenses, depository charges and other registration fees, listing fees, legal fees etc. The
break up of the same is as follows:
(Rs. In lacs)
Sr. No.
Particulars
Amount
1
Fees payable to intermediaries
30.00
2
Printing distribution expenses
6.51
3
Advertisement & Publicity
2.00
4
Listing fees and other expenses
2.40
Total
40.91
• Contingencies
The Company proposes to reserve expenses in the form of contingencies to the extent of about 2.5% of the
cost of renovation i.e. about Rs.41.40 lacs.
Schedule of Implementation / Utilization of Issue Proceeds
Sr.
No.
1
Major Activities
Commencement
Completion
Commenced
June/July 2009
2
Renovation of the existing hotel building and
internal facilities
Purchase of new vehicles for guests
Commenced
December 2008
3
Pre-operative expenses at Jaipur
Commenced
March 2009
4
Miscellaneous fixed assets including Computer
Software and Hardware
Issue Expenses
Commenced
October 2008
Commenced
December 2008
5
19
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Sources & Deployment of Funds
Deployment of Funds
The Company has already deployed funds to the extent of Rs. 482.96 Lacs on the objects of the issue as
certified by the Malik & Co., Chartered Accountants vide their certificate dated 14th July 2008, the details
of which are as follows Particulars
Sr. no.
Amount
(Rs. in lacs)
280.00
42.00
8.37
147.29
5.30
482.96
1
2
3
4
5
Renovation of the existing hotel buildings
Purchase of vehicles
Pre-operative expenses at Jaipur
Miscellaneous Fixed Assets/expenses
Issue expenses
Total
Sources of Funds
Particulars
Amount
(Rs. in lacs)
482.96
Internal Accruals
Interim Use of Funds
Pending deployment, the funds raised through the rights issue would be deployed by the company
judiciously in the fixed deposits of the Banks and other short term investment opportunities.
Basic Terms of the Issue
The Equity shares being offered are subject to the provisions of the Companies Act, 1956, the
Memorandum and Articles of Association of the Company, the terms of this Letter of offer and other
terms and conditions as may be incorporated in the Allotment advice and other documents /certificates
that may be executed in respect of the issue. The Equity shares shall also be subjected to laws as
applicable, guidelines, notifications and regulations relating to the issue of capital and listing and trading
of securities issued from time to time by SEBI, GOI, RBI, ROC and /or other authorities as in force on the
date of issue and to the extent applicable
20
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
BASIS FOR ISSUE PRICE
(a)
Earnings Per Share (EPS):
Year Ended
EPS
(Rs)
9.49
15.53
19.20
31/03/2006
31/03/2007
31/03/2008
Weighted Average EPS
(b)
Weights
1
2
3
16.36
Price Earning Ratio (PE)
Particulars
P/E (based on EPS for the period ended 31/03/2008 of Rs. 19.20 )
P/E (based weighted average EPS)
(c)
2.60
3.06
Return on Net worth (RONW):
Year Ended
31/03/2006
31/03/2007
31/03/2008
Weighted Average RONW
RONW
(%)
30.85
37.21
34.48
Weights
1
2
3
34.79
(d)
Minimum RONW required to maintain pre-issue weighted average EPS of Rs. 16.36 is 30.41 %
(e)
Net Asset Value (NAV)
(f)
Pre issue as on March 31, 2008 (Rs.)
55.69
Post Issue (Rs.)
53.79
Industry P/E Ratio
Highest (GL Hotels )
Lowest (H.S.India)
Industry Composite
Source: Capital Market Issue July 14 - July 27, 2008; Segment- Hotels
55.07
3.70
14.40
Comparison of key ratios with the companies in the same industry group
Company Name
Viceroy Hotels
H.S. India
Jaypee Hotels
Blue Coast Hotel
Kamat Hotels
GL Hotels
Face
Equity RONW Book
Sales for
value (Rs. in Cr.)
%
Value
the year
Rs.
31/03/2008 ended
(Rs.)
31/03/2008
(Rs. in Cr.)
10
42.41
5.00
55.40
74.00
10
10.50
8.20
15.50
10
55.49
10.10
25.70
170.0
10
6.55
51.30
134.40
96.00
10
13.20
15.70
122.30
147.60
10
17.29
6.70
151.10
64.10
21
EPS
(Rs.)
1.50
2.70
3.20
22.90
21.60
7.10
P/E
Ratio at the
market price
as on
23/07/2008
35.07
3.93
25.19
7.44
5.69
50.70
Market
price as
on
23/07/2008
(Rs.)
52.60
10.60
80.60
170.30
122.95
360.00
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Company Name
Royal Orchid Hotel
Fomento Resorts
Face
Equity RONW Book
Sales for EPS
P/E
value (Rs. in Cr.)
%
Value
the year (Rs.) Ratio at the
Rs.
31/03/2008 ended
market price
(Rs.)
31/03/2008
as on
(Rs. in Cr.)
23/07/2008
10
27.23
21.60
64.70
86.00 11.30
7.77
10
16.00
38.40
17.00
45.80
7.10
24.65
CHL
10
10.96
34.33
56.13
87.10 19.20
Source: Capital Market, Issue July 14 - July 27, 2008 Segment- Hotels and www.bseindia.com
10.94
Market
price as
on
23/07/2008
(Rs.)
87.85
175.00
210.00
The Companies in the above list have been selected on the basis that they are listed Companies engaged
in the business of Hospitality services. However, their performance may not be directly comparable with
that of the company’s business as they cater to different segments of the market and therefore their
business portfolio may vary.
Considering the above factors, the issue price of Rs.50/- per equity share is justified.
22
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
STATEMENT OF TAX BENEFITS
The Board of Directors,
CHL Limited,
Hotel Crowne Plaza,
New Friends Colony,
New Delhi-110025.
Dear Sirs
We hereby certify that the enclosed annexure states the possible tax benefits available to CHL Limited
(the Company) and to the Shareholders of the Company under the provisions of the Income-tax Act, 1961
and other direct and indirect tax laws presently in force in India. Several of these benefits are dependent
on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws.
Hence, the ability of the Company or its Shareholders to derive tax benefits is dependent upon fulfilling
such conditions, which based on business imperatives the Company faces in the future, the Company
may or may not choose to fulfill.
The benefits discussed in the enclosed statement are not exhaustive. This statement is only intended to
provide general information to the investors and is neither designed nor intended to be substitute for
professional tax advice. A shareholder is advised to consult his/her/their own tax consultants with
respect to the tax implications of an investment in the equity shares particularly in view of the fact that
certain recently enacted legislation may not have a direct legal precedent or may have a different
interpretation on the benefits, which an investor can avail.
We do not express our opinion or provide assurance as to whether, The Company or its shareholders will
continue to obtain these benefits in future, or the conditions prescribed for availing the benefits have
been/would be met with.
The contents of this annexure are based on information, explanations and representations obtained from
the Company and on the basis of our understanding of the business activities and operations of the
Company.
This report is intended solely for your information and for the inclusion in the offer Documents in
connection with the proposed Rights Issue of the Company and is not to be used, referred to or
distributed for any other purpose without our prior written consent.
For L.N. MALIK & CO.
Chartered Accountants
Sd/(L.N. Malik)
Partner.
Membership No. 10423
Date: 21/06/2008
Place: New Delhi
23
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
ANNEXURE TO THE CERTIFICATE
The Auditors of the Company L. N. Malik & Co., Chartered Accountants have advised the Company vide
their letter dated 21/06/2008 that under the current Direct Tax Law, the following tax benefits interalia
will be available to the company and the shareholders of the Company. A shareholder is advised to
consider in his own case the tax implication of an investment in the shares. The Statement of tax benefits
certificate from the Auditors of the Company is reproduced below:
SPECIAL TAX BENEFIT AVAILABLE TO CHL LIMTED AND ITS SHAREHOLDERS
The Company does not enjoy any “Special Tax Benefits”. All the benefits as mentioned in the statement
are as per the current tax laws amended by the Finance Act, 2008 and will be available only to the sole/
first named holder incase the shares are held by joint holders.
STATEMENT OF POSSIBLE TAX BENEFITS
(A) BENEFITS TO THE COMPANY
UNDER THE INCOME TAX ACT, 1961
1.
Subject to the Compliance of certain conditions laid down in Section 32 of the Income Tax Act,
1961 (hereinafter referred to as the Act) the Company will be entitled to a deduction for
depreciation:(a) In respect of tangible assets;
(b) In respect of intangible assets being in the nature of know-how, patents, copyrights,
trademarks, licenses, franchises or any other business or commercial rights of similar nature
acquired on or after 1st day of April, 1998, owned, wholly or partly, by the Company and
used for the purposes of business or profession, at the rates prescribed under the Income Tax
Rules, 1962;
2.
The company will be entitled to claim expenditure incurred in respect of Voluntary Retirement
Scheme under Section 35DDA of the Act in five equal annual installments.
3.
Income by way of dividend (as referred to in Sec 115-O of the Act) received from other domestic
companies will be exempt from tax.
4.
In accordance with the provisions of section 10(38) of the Act, long term capital gains arising on
the transfer of securities shall be exempted from tax if such transaction is entered into on at
recognized stock exchange in India and such transaction is chargeable to Securities Transaction
Tax. Under Section 111A of the Act, Short term capital gains accruing to Company from transfer
of short term capital assets, being securities, in a transaction entered into on a recognized stock
exchange in India and such transaction is chargeable to Securities Transaction Tax shall be
chargeable to tax @ 15% plus applicable surcharge and education cess.
5.
Subject to the provisions of section 112 of the Act, Long term capital gains, other than those
mentioned in 4 above, will be chargeable to tax @ 20% (plus applicable surcharge and education
cess) with indexation benefit and @ 10% (Plus applicable surcharge and education cess) if
computed without indexation benefit in case of shares.
6.
Income in respect of Units from a Mutual Fund u/s 10(23D) of the Act will be exempt in the
hands of the Company u/s 10(35) of the Act.
1.
In accordance with and subject to the conditions specified in section 54EC and section 54ED of
the Act, the company would be entitled to exemption from tax on long-term capital gain [not
covered by Section 10(36) and Section 10(38) of the Act] if such capital gain is invested in any of
24
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
the long-term specified assets (hereinafter referred to as the “new asset") to the extent and in the
manner prescribed in the said sections. If the new asset is transferred or converted into money at
any time within a period of three years in case of new assets specified in section 54EC and within
a period of one year in case of new assets specified in section 54ED, from the date of its
acquisition, the amount of capital gains for which exemption is availed earlier would become
chargeable to tax as long term capital gains in the year in which such new asset is transferred or
converted into money.
UNDER THE CUSTOM TARIFF
In terms of Notification No. 97/2004-CUS, capital goods ( including second-hand) and spares imported
EPCG license issued under Export Import policy are subjected to 5% concession al Custom duty plus
education cess, subject to fulfillment of export obligation. In terms of Notification No. 92/2004-CUS,
Food items and alcoholic beverages will have Duty Free Credit entitlement benefit @ 5% of the total
foreign exchange earned in the preceding financial year, subject to conditions. Samples imported into
India to the value limit of Rs. 10,000 subject to conditions would be exempt from payment of Custom
duty vide Ministry’s circular dated 13.11.1998 at 1998 (104) E.L.T T56-T58.
(B) TO THE SHAREHOLDERS OF THE COMPANY – UNDER THE INCOME TAX ACT, 1961;
Resident Shareholders
1)
In terms of section 10(32) of the IT Act, any income of minor children, included in the total income
of the parent under section 64(1A) will be exempt from tax to the extent of Rs.1,500 per minor
child.
2)
Under section 10(34) of the Act, income by way of dividends referred to in Section 115-O received
on the shares of the company is exempted from income tax.
3)
Under section 10(38) of the Act, any long term capital gains arising to a shareholder from transfer
of long term capital asset being equity shares in the company ( i.e. capital asset held for a period of
12 months or more) would not be liable to tax in the hands of the shareholder of the following
conditions are satisfied:
a) The transaction of sale is entered into on or after Ist October, 2004, and
b) The transaction is chargeable to securities transaction tax as explained earlier
4)
Under section 48 of the Act read with section 2(42A), if the company s shares are sold after being
held for more than twelve months, the gains ( in cases not covered under section 10(38) of the Act],
if any, will be treated as long term capital gains and the gains shall be calculated by deducting
from the gross consideration, the indexed cost of acquisition.
5)
Under section 54EC of the Act and subject to the conditions and to the extent specified therein,
long term capital gains [other than those exempt under section 10(38)] arising on the transfer of
shares of the Company will be exempt from capital gains tax if the capital gain is invested within a
period of 6 months after the date of such transfer for a period of at least 3 years in Bonds specified
in that section. If only a part of the capital gain is so reinvested, the exemption shall be
proportionately reduced.
However, the amounts so exempted shall be chargeable to tax subsequently, if the Bonds are
transferred or converted into money within three years from the date of their acquisition.
6)
Under section 54ED of the Act and subject to the conditions and to the extent specified therein,
long term capital gains [ other than those exempt under section 10(38) of the Act] on the transfer of
shares of the Company before 01/04/2006, will be exempt form capital gains tax if the capital gains
are invested in shares of an Indian Company forming part of an eligible issue of capital, within a
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period of 6 months after the date of such transfer and held for a period of at least one year. Eligible
public issue means issue of equity shares which satisfies the following conditions, namely
a) The issue is made by a public company formed and registered in India;
b) The shares forming part of the issue are offered for subscription to the public;
If only a part of the capital gain is so reinvested, the exemption shall be proportionately reduced.
However, the amounts so exempted shall be chargeable to tax subsequently, if the new equity
shares are transferred or converted into money within one year from the date of their acquisition.
7)
Under section 54F of the Act, long term capital gains (other than those exempt Under section 10(38)
of the Act] arising to an individual or Hindu Undivided Family (HUF) on transfer of shares of the
company will be exempt from capital gain tax subject to conditions, if the net consideration from
such shares are used for purchase of residential house property within a period of one year before
and two years after the date on which the transfer took place or for construction of residential
house property within a period of three years after the date of transfer.
8)
In terms of section 88E of the Act, the securities transaction tax paid by the shareholder in respect
of the taxable securities transactions entered into in the course of his business would be eligible for
rebate from the amount of income-tax on the income chargeable under the head Profits and gains
of business or profession arising from taxable securities transactions. As such, no deduction will
be allowed in computing the income chargeable to tax as capital gains, such amount paid on
account of securities transaction tax. ( up to Asstt Year 2008-09). Further no rebate u/s 88 E shall be
allowable from AY 2009-10 onwards and STT paid shall be allowable as business expenditure.
9)
Under section 111A of the Act and other relevant provisions of the Act, short- term capital gains
(i.e. if shares are held for a period not exceeding 12 months), arising on transfer of shares in the
company listed on a recognized stock exchange, on which Security Transaction Tax is charged,
shall be taxed at a rate of 15% (plus applicable surcharge and education cess). Short term capital
gains arising from transfer of shares in a Company, other than covered by section 111A of the Act,
shall be subject to tax as calculated under the normal provisions of the Act.
10) Under section 112 of the Act and other relevant provisions of the Act, Long term capital gains,
[other than those exempt under section 10(38) of the Act], arising on transfer of shares in the
Company, shall be taxed at a rate of 20% (plus applicable surcharge and education cess) after
indexation as provided in the second proviso to section 48. The amount of such tax should
however be limited to 10% (plus applicable surcharge and education cess) without indexation, at
the option of the shareholder, if the transfer is made after listing of shares.
Non Resident Shareholders:
1)
Dividend income received from Company qualifies for exemption under section 10 (34) of the IT
Act.
2)
As per the provisions of section 10 (38) of the IT Act long term capital gains arising from the sate
of the shares of the Company will be exempt from tax if the transaction is entered into in a
recognized stock exchange in India and such transaction is chargeable to Securities Transaction
Tax.
3)
As per the provision of Section 111 A, short term capita gains arising from the sale of Company’s
shares in a transaction entered into in a recognized stock exchange in India and such transaction is
chargeable to Securities Transaction Tax, will be chargeable to tax @ 15% plus applicable
surcharge and education cess.
4)
As per the provisions of section 112 of the IT Act, the long term capital gains from the transfer of
the shares of the Company, otherwise than as mentioned above, shall be charged to tax:
a) @ 20% plus applicable surcharge and education cess, if the gains are computed after considering
the benefit of indexation;
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b)@10% plus applicable surcharge and education cess, if the gains are computed without
considering the benefit of indexation.
5)
Non Resident Indian members of the Company can elect to be governed by special provisions as
enunciated in section 115 C to 115 I of the Income tax act, according to which exemption from
capital gains tax is available subject to those complying with conditions stated in those sections.
a)
Under Section 115E of the Act, any income from investment acquired out of convertible foreign
exchange will be taxable at 20% (plus applicable Surcharge and Education Cess) while income
from long-term capital gains on transfer of shares the Company acquired out of convertible
foreign exchange shall be taxed at the rate of 10% (plus applicable Surcharge and Education Cess).
b)
Under Section 115F of the Act, and subject to the conditions and to
the extent specified therein, long-term capital gain arising to a Non-Resident Indian from transfer
of shares of the Company acquired out of convertible foreign exchange shall be except from
capital gains tax to the extent the net consideration is invested within six months of the date
transfer of the asset in any specified asset or in any saving certificates referred to in clause (4B) of
Section 10 of the A and the new asset is held for a period of at least three years.
c)
Under Section 115G of the Act, it is not necessary for a Non-Resident Indian to file a return of
income under Sector 139(1) of the Act, if his total income consists only of investment income
and/or long term capital gains earned on transfer of such investment acquired out of convertible
foreign exchange, and the tax has been deducted at source from such income under the provisions
of Chapter XVII-B of the Act.
d)
Under Section 115H of the Act, where a Non-Resident Indian becomes assessable as resident in
India in any subsequent year he may furnish to the Assessing Officer a declaration in writing
along with the return of income for the assessment year for which he is so assessable to the effect
that the provisions of Chapter XII-A of the Act shall continue to apply to him in relation to the
investment income (other than on shares in the Company) derived from any foreign exchange
asset as defined therein. On doing so, the provisions of Chapter XII- A of the Act shall continue to
apply to him in relation to such income for that assessment year and for every subsequent
assessment year until the transfer or conversion into money of such assets.
e)
Under Section 115I of the Act, where a Non-Resident Indian opts not to be governed by the
provisions of Chapter XII-A of the Act for any assessment year, his total income for that
assessment year (including taxable income arising from investment in the Company) will be
computed according to the other provisions of the Act, and he will therefore be eligible to get
concessions applicable to a resident individual and will be liable to tax accordingly.
6)
In accordance with, and subject to provisions of Section 48 of the Act, capital gains arising out of
transfer of capital assets being shares in the Company shall be computed by converting the cost of
acquisition, expenditure in connection with such transfer and full value of the consideration
received or accruing as a result of the transfer of the capital assets into the same foreign currency
as was initially utilised in the purchase of shares and the capital gains computed in such foreign
currency shall be reconverted into Indian currency, such that the aforesaid manner of computation
of capital gains shall be applicable in respect of capital gains accruing/arising from every
reinvestment thereafter and sale of shares of the Company. Cost indexation benefits will not be
available in such a case.
7)
In accordance with, and subject to the conditions and to the extent specified in Section 54EC of the
Act, long-term capital gains lax arising on transfer of the shares of the Company shall be exempt
from tax to the extent the gains are invested within six months from the date of transfer in the
purchase of long-term specified assets and are held for a period of 3 years.
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8)
In accordance with, and subject to the conditions and to the extent specified in section 54ED of the
Act, long-term capital gains tax arising on transfer of the shares of the Company shall be exempt
from capital gains tax to the extent the gains are invested within six months from the date of
transfer in acquiring equity shares forming part of an eligible issue of capital. In addition the
shares should be held for at least one year.
9)
In accordance with, and subject to the conditions and to the extent specified in Section 54F of the
Act, long-term capital gains tax arising on transfer of the shares of the Company held by an
individual shall be exempt from capital gains tax in proportion to the net sales consideration
utilised, within a period of one year before or two years after the date of transfer, in the purchase
of a new residential house, or for construction of a residential house within three years and the
Individual or HUF does not own any other residential house.
(C). FOREIGN INSTITUTIONAL INVESTORS:
1)
Income by way of dividend (referred to in Section 115-O of the Act) is exempt from tax Section
10(34) of the Act.
2)
Under Section 115AD capital gain arising on transfer of short term capital assets, being shares and
debentures in a company, are taxed as follows:
a) Short term capital gain on transfer of shares entered in a recognized stock exchange which is
subject to Securities Transaction Tax shall be taxed @ 15% (plus applicable Surcharge and
Educational Cess): and
b) Short tem capital gains on transfer of shares/debentures other than those mentioned above would
be taxable @ 30% (plus applicable Surcharge and Education Cess).
3)
Under Section 54EC of the Act, Capital gain arising from transfer of long term capital assets (other
than those exempt u/s 10 (38) shall be exempt from tax, subject to the conditions and to the extent
specified therein, if the capital gain are invested within a period of six months from the date of
transfer in specified bonds and the bonds are held for a period at least three years.
4)
Under Section 54ED of the Act, capital gain arising from transfer of long term capital assets,
being listed securities or units (other than those exempt u/s. 10 (38), shall be exempt from tax,
subject to the conditions and to the extent specified therein, if the capital gain is invested in public
issued of equity shares issued by an Indian Public Company within a period of six months from
the date of such transfer. If only a part of the capital gain is so reinvested, the exemption shall be
proportionately reduced. However, the amount so exempted shall be chargeable to tax
subsequently, if the new equity shares are transferred or converted into money within one year
from the date of their acquisition. In addition the shares should be held for at least one year.
5)
As per section 90(2) of the Act, the provisions of the Act would prevail over the provisions of the
tax treaty to the extent they are more beneficial to the non-resident. Thus, a non-resident can opt to
be governed by the beneficial provisions of an applicable tax treaty.
Note: There is a legal uncertainty over whether a FII can elect to be governed by the normal provisions of
the Act, instead of the provisions of section 115AD. Investors are advised to consult their tax advisors in
this regard.
(D). MUTUAL FUNDS
In case of a shareholder being a mutual fund, as per the provisions of section 10(23D) of the Act, any
income of mutual funds registered under the Securities and Exchange Board of India Act, 1992 or
Regulations made hereunder, mutual funds set up by public sector banks or public financial
institutions and mutual funds authorised by the Reserve Bank of India are exempt from income-tax,
subject to the conditions notified by Central Government in this regard.
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(E). INFRASTRUCTURE CAPITAL COMPANIES/FUNDS OR CO-OPERATIVE BANK
As per the provisions of Section 10(23G) of the Act, any income by way of dividends [ other than
dividends referred to in section 115-O], interest or long-term capital gains of an infrastructure
capital fund or an infrastructure capital company [or a co-operative bank] from investments made
on or after the 1st day of June, 1998 by way of shares or long-term finance in any enterprise or
undertaking wholly engaged in the business referred to in sub-section (4) of section 80-IA or subsection (3) of section 80-IAB or a housing project referred to in sub-section (10) of section 80-IB or a
hotel project or a hospital project and which has been approved by the Central Government on an
application made by it in accordance with the rules made in this behalf and which satisfies the
prescribed conditions :
Provided that the income, by way of dividends, other than dividends referred to in section 115-O,
interest or long-term capital gains of an infrastructure capital company, shall be taken into account
in computing the book profit and income-tax payable under section 115JB.
Explanation 1.
For the purposes of this clause,
(a)
infrastructure capital company means such company as has made investments by way of acquiring
shares or providing long term finance to an enterprise wholly engaged in the business referred to in
this clause;
(b)
infrastructure capital fund means such fund operating under a trust deed registered under the
provisions of the Registration Act, 1908 (16 of 1908) established to raise monies by the trustees for
investment by way of acquiring shares or providing long-term finance to an enterprise wholly
engaged in the business referred to in this clause;
(c)
long-term finance shall have the meaning assigned to it in clause (viii) of sub-section (1) of section
36;
(d) co-operative bank shall have the meaning assigned to it in clause (dd) of section 2 of the Deposit
Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961);
(e)
interest includes any fee or commission received by a financial institution for giving any guarantee
to, or enhancing credit in respect of, an enterprise which has been approved by the Central
Government for the purposes of this clause;]
(f)
hotel project means a project for constructing a hotel of not less than three-star category as classified
by the Central Government;
(g)
hospital project means a project for constructing a hospital with at least one hundred beds for
patients.
Explanation 2.
For the removal of doubts, it is hereby declared that any income by way of dividends, interest or
long-term capital gains of an infrastructure capital fund or an infrastructure capital company from
investments made before the 1st day of June, 1998 by way of shares or long-term finance in any
enterprise carrying on the business of developing, maintaining and operating any infrastructure
facility shall not be included and the provisions of this clause as it stood immediately before its
amendment by the Finance (No. 2) Act, 1998 (21 of 1998) shall apply to such income
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F) BENEFITS TO MEMBERS OF THE COMPANY UNDER THE WEALTH TAX ACT, 1957
Shares of company held by the shareholder will not be treated as an asset within the meaning of
section 2(ea) of the Wealth Tax Act, 1957, hence shares are not liable to Wealth Tax.
G) BENEFITS TO THE MEMBERS OF THE COMPANY UNDER THE GIFT TAX ACT, 1958.
Gifts made after Ist October, 1998 is not liable for any gift tax and hence gift of shares of the
company would not be liable for any gift tax.
Notes:
1.
2.
3.
4.
All the above benefits are as per the current tax law as amended by the Finance Act, 2008.
The stated benefits will be available only to the sole/first named holder in case the shares are held
by joint holders.
In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be
further subject to any benefits available under the Double Taxation Avoidance Agreements, if any,
between India and the country in which the non-resident has fiscal domicile.
In view of the individual nature of tax consequences, each investor is advised to consult
his/her/their own tax advisor with respect to specific tax consequence of his/her participation in
the scheme.
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SECTION III - ABOUT COMPANY
The Industry information presented in this section has been extracted from publicly available documents, which
have not been prepared or independently verified by the Company, the Lead Managers or any of their respective
affiliates or advisors or the sources referred to herein.
In this Section, we have relied on and referred to information regarding the industry and competitors from market
research reports, and other publicly available sources. Although we believe that this information is reliable, we have
not independently `verified the accuracy and completeness of the information.
INDUSTRY OVERVIEW
The liberalization of Indian economy in 1991 and the integration of India into the global economy has
given impetus to business travellers and tourist travellers. This has intensified and elevated room rates
and occupancy levels in India. The successful growth story of “Hotel industry in India” seconds only to
China in Asia Pacific. The hotel industry is linked to tourism industry and the growth in the Indian
tourism industry has fueled the growth of Indian hotel industry. The growing economy and increased
business opportunities in India have acted as a boon for Indian Hotel industry. The arrival of low cost
airlines and the associated price war have given domestic tourists a host of options. The “Incredible
India” destination campaign and the recently launched “Atithi Devo Bhavah” campaign have also helped
in the growth of domestic and international tourism and consequently the hotel industry.
The government’s move to declare hotel and tourism industry as a high priority sector with a provision
for 100% foreign direct investment (FDI) has also provided a further impetus in attracting investments in
this industry. One of the major reasons for increase in demand for hotel rooms in the country is the high
growth in sectors like information technology, telecom, retail and real estate.
India travel recognition:
India has been elected to head the UN World Tourism Organization (UNWTO), the highest policy
making world tourism body represented by 150 countries.
• The world’s leading travel and tourism journal, “Conde Nast Traveller”, ranked India as the numero
uno travel destination in the world.
• The Association of British Travel Agents (ABTA) has ranked India as No.1 amongst the top 50 places
for 2006.
• The “Incredible India” campaign has been ranked as the Highest Recall Advertisement worldwide by
“Travel and Leisure”.
• India was adjudged Asia’s leading destination at the regional World Travel Awards (WTA).
• India’s Taj Mahal continues to figure in the seven wonders of the world.
• Bangalore based Leela Palace Kempinski has been rated as the favourite business hotel in the world
in a Readers’ Choice Awards by Conde Nast Traveller.
(Source: extracts from www.buzzle.com/articles/growth-of-the-hotel-industry-in-india.html as on 3rd
July 2008 and www.ibef.org/ tourism and hospitality)
•
The opening up of the aviation industry in India has exciting opportunities for hotel industry as it relies
on airlines to transport 80% of international arrivals. The government's decision to substantially upgrade
28 regional airports in smaller towns and privatization & expansion of Delhi and Mumbai airport will
improve the business prospects of hotel industry in India. Substantial investments in tourism
infrastructure are essential for Indian hotel industry to achieve its potential. The upgrading of national
highways connecting various parts of India has opened new avenues for the development of budget
hotels in India. Taking advantage of this opportunity Tata group and another hotel chain called 'Homotel'
have entered this business segment.
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According to a report, Hotel Industry in India currently has supply of 110,000 rooms and there is a
shortage of 150,000 rooms fueling hotel room rates across India. According to estimates demand is going
to exceed supply by at least 100% over the next 2 years. Five-star hotels in metro cities allot same room,
more than once a day to different guests, receiving almost 24-hour rates from both guests against 6-8
hours usage. With demand-supply disparity, hotel rates in India are likely to rise by 25% annually and
occupancy by 80%, over the next two years. This will affect the competitiveness of India as a cost-effective
tourist destination.
To overcome, this shortage Indian hotel industry is adding about 60,000 quality rooms, currently in
different stages of planning and development, which should be ready by 2012. Hotel Industry in India is
also set to get a fillip with Delhi hosting 2010 Commonwealth Games. Government has approved 300
hotel projects, nearly half of which are in the luxury range. The future scenario of Indian hotel industry
looks extremely rosy. It is expected that the budget and mid-market hotel segment will witness huge
growth and expansion while the luxury segment will continue to perform extremely well over the next
few years. (Source: Extracts from http://www.iloveindia.com/economy-of-india/hotel-industry.html as
on 17/07/2008)
There are some 1,980 hotels approved and classified by the Ministry of Tourism, Government of India,
with a total capacity of about 110,000 hotel rooms. Revenues of the hotel and restaurant industry in India
during the financial year 2006-07 was Rs 604.32 billion, a growth of 21.27% over the previous year,
primarily driven by foreign tourist arrivals, which increased by 14.17%. The hospitality industry is poised
to grow at a faster rate and is expected to reach Rs 826.76 billion by 2010.
The gap between demand and supply of hotel rooms is also growing. There is a shortage of 1,50,000
rooms fuelling hotel room rates across India. According to industry estimates, demand is going to exceed
supply by at least 100% over the next two years. Five-star hotels in metro cities allot same room, more
than once a day to different guests, receiving almost 24-hour rates from both guests against 6-8 hours
usage. With demand-supply disparity, hotel rates in India are likely to rise by 25% annually and
occupancy by 80%, over the next two years.
While the potential of hotel industry is great, there are several constraints for the industry to grow. High
cost of land in the country often discourages an investor to put in money in construction of new hotels.
Construction of hotels is highly capital intensive and it is estimated that to construct a single five-star
room it costs around Rs 1.25 crore. As a result there is no incentive to construct new hotel properties and
there is a mismatch between demand and supply leading to higher occupancy rates and increasing prices.
In fact, average rate of hotel rooms in five-stars has gone up from Rs 4,000 five years ago to Rs. 16,000
now. Though this rate can be affordable for business travellers, it is very difficult for leisure travellers to
pay such exorbitant rates.
Across the country there is no rationalization of taxes as states charge different rates. Secondly,
multiplicity of taxes like value added tax and service tax further compound the problem. Tax holidays are
available only to hotels at heritage sites and so this measure is restrictive for the growth of the hotel
industry.
In order to increase the stock of hotel rooms, the Federation of Hotel and Restaurant Associations of India
suggested to the government that the floor area ratio of the existing hotels should be increased. This was
a couple of years before and will help create additional rooms in the existing properties and ease the
burden of shortage of hotel rooms in the country. The proposal is yet to be implemented. (Source:
Extracts from http://www.financialexpress.com/news/hotel-industry as on 17/07/2008)
Historical Highlights of the Indian hotel industry
•
The financial year 2006-07 witnessed an increase in All India average occupancy by 2.8 percentage
points while average rate increased by nearly 16.0%. Five-star deluxe hotels recorded the highest
occupancy and average rate during the period whereas heritage hotels registered the least occupancy
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and on-star hotels the least average rates. With reference to inventory size, hotels having more than
150 rooms recorded the highest occupancy and average rate but the increase in both these criteria was
seen maximum in hotels with an inventory ranging between 50-150 rooms registering an occupancy
growth of 2.9 percentage points and 34.4% growth in average rate. There is a greater difference in the
occupancies recorded by chain affiliated versus independent hotels in 2006-2007 as compared to 200506, with the former registering an occupancy 2.9 points higher than the latter.
•
December, followed by November and February, were the busiest months in 2006-07. July through
September witnessed a dip in occupancy with July witnessing the lowest occupancy at 58%.
•
On the human resource front, the number of hotels having a training department in 2006-07 increased
marginally, which could be attributed to higher number of respondents over the previous financial
year. Managers continue to be the most trained employees in a hotel.
•
The domestic business traveler represented the largest slice of the market segmentation pie of the
Indian hotel industry at 36.8% followed by domestic tourist/leisure FIT at 19.0%. Incentive based
group travel has witnessed a setback owing to insufficient room availability and high rates. It is
worthwhile to note that the airline crew segment showed increase despite the fall in the number of
respondents under this parameter. This could be possibly due to the higher number of airlines
entering the aviation sector.
•
The percentage of repeat guests in 2006-07 recorded a growth across most categories especially the
unapproved hotels (from 43.6% in 2005-06 to 57.9% in 2006-07). However, the heritage hotels showed
a sharp decline.
•
Direct enquiry / hotel representation was the most preferred source of advance reservations in the
Indian hotel market followed by travel agent and tour operators. Global Distribution Systems (GDS)
was the least used source.
•
Over 90.0% of the hotels across all categories continued to use print advertising as a marketing
medium like the previous year. Radio advertising, despite being the least preferred marketing
medium, showed an increase in usage over the previous financial year 2005-06. Five-star deluxe and
five-star hotels used this mode of marketing the most.
•
Cash sales scored the highest (46.9%) with regards to payment methods used in hotels followed by
credit card sales (29.5%). Visa credit cards were the most widely used followed by Mastercard/
Eurocard and American Express credit cards.
•
Amongst the varied range of technology available for hotels, 93.6% used an accounting system
making it the most widely used technology in hotels. Internet/E-mail usage showed a considerable
growth of 4.9 percentage points despite the lower number of respondents under this parameter. Like
the previous year, even 2006-07 witnessed lowest usage of yield management systems among the
different technology available for hotels.
•
With reference to monitoring the performance of environment management practices, energy
consumption (electricity) was given the highest priority by majority of the hotels in the survey group
followed by energy consumption (gas) and water consumption. Use of pesticides and herbicides in
dry rations was the least monitored environment management practice issue with the All India
average at 30.5% followed by solid waste production (quality) at 32.0%.
•
As illustrated in the table, the All India average Net Income has consistently increased over the last
five years across all three parameters (Percentage of Revenue, PAR and POR). While Net income as a
percentage of Revenue has gone up in the five-star deluxe, five-star, four-star and heritage categories
the one, two and three-star hotels have seen a decline in this figure in 2006-07 as compared to 2005-06.
Rising fixed and variable expenses have affected the one, two and three-star hotels negatively, and
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higher year on year average room rates and rising occupancies have been able to do little to increase
Net Income as a Percentage of Revenue in these segments.
•
Rooms still continue to be the highest revenue generator for hotels followed by Food and Beverage.
The trend in Rooms, and Food and Beverage revenue, as a Percentage of Revenue has been illustrated
in the graph below :
•
Banquets & Conferences and Telephone & other were departments that witnessed a substantial
decline in 2006-07. This could be owing to a lesser number of responses from large-format hotels
where Banquets & Conferences is a significant revenue generating stream. In the case of telephone &
other, the decline in revenue may be attributed to widespread availability of mobile phones with
enhanced features; extensive VOIP usage; and alternate modes of internet connectivity such dial-up
modems, offered free of charge by most business hotels in the higher room categories.
Simultaneously, the expenses related with the Telephone & other department saw a sharp rise in
2006-07, the highest in five years.
•
Operating Expenses declined steadily over the last five years with expenses related to energy
contributing predominantly towards this decrease. This survey finding is in sync with the fact that
monitoring energy consumption (electricity) has been given high priority by majority of the hotels in
recent years, as mentioned earlier in this section. Automation too has assisted in bringing the
Operating Expenses down. The graph below highlights the trend in the Energy Expense as a
Percentage of Revenue over the last five years.
•
Hotels in the five-star deluxe and five star categories recorded the maximum utilization of energy
management systems. Energy costs of five-star deluxe and five-star properties in 2006-07 represented
5.9% and 7.5% of total revenue, compared with 7.0% and 9.2% in 2005-06. Energy costs declined
across all hotel categories in 2006-2007 over the previous year, except for the one star and other hotel
categories.
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•
House Profit (Gross Operating Profit after deducting management and franchise fees) as a percentage
of Revenue has increased and consistently over the last five years.
•
The graph below highlights the Revenue and profitability as an average per hotel. The year 2004-05
appears the best because of the higher number of five-star hotels and/or large format hotels that
participated that year and this is not to say that performance of hotels has not improved over the past
two years.
New Delhi – National Capital Region (NCR)
New Delhi – NCR witnessed an occupancy rise of 7.4 percentage points and an increase of 11.3%in
average room rate during 2006-07. Consistent rise in hotel demand has been supported by the addition of
around 15 million square feet of Grade ‘A’ and Built-to-suit (BTS) office space. The demand-supply
imbalance has worsened over the past year owing to hotel projects being delayed due to long-drawn
procedures for clearances and discouraging FSI norms. However, with the commonwealth games
nearing, the focus on hospitality projects is gaining prominence, at least on paper. We believe that the
expansion of the existing airport, Delhi-Gurgaon expressway nearing completion and proposed SEZ
developments would enhance the demand for hotel accommodation in the Delhi-Gurgaon region.
However, the development of the proposed international airport in Noida could divert a significant
portion of this demand towards the Delhi-Noida sector.
Noida and Greater Noida would also benefit from the tourism circuit owing to their proximity to Agra.
As both Gurgaon and Noida are nascent markets, an addition of around 20,000 rooms of which nearly
half are being actively developed, is expected to lead to heavy correction in occupancies and rates in the
medium term. However, the state government’s efforts to get many or even half of these rooms to come
on line before 2010 for the commonwealth games is likely to be a miserable failure.(Source: extracts from
FHRAI and HVS Hospitality Services – Indian Hotel Industry Survey 2006-07)
BUSINESS OVERVIEW
CHL Ltd. was originally incorporated as a private limited company with the Registrar of Companies NCT
of Delhi & Haryana vide certificate of incorporation dated 16th March, 1979 under the Companies Act,
1956 as Cosmopolitan Builders and Hoteliers Private Limited. Subsequently the company was converted
into a public limited company as Cosmopolitan Builders and Hoteliers Ltd. The name of the company was
again changed to Cosmopolitan Hotels Ltd. vide fresh certificate of incorporation dated 29th April 1982.
Presently, the company is named as CHL Ltd. vide fresh certificate of incorporation dated 11th December
1997. The company is promoted by Malhotra family, who also have various businesses in India, Kuwait
and UAE. They have formed an international chain known as Malbros Group.
35
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
The hotel “Crowne Plaza” is having 242 rooms and suites, restaurants, banquets, conference halls, health
center, swimming pool and discotheque spanning over an area of 7,405 sq. mts. The hotel is located
around 23 kms from the Delhi International Airport and 9 kms from Connaught Place. The hotel is
situated on National Highway No.2 on road to Mathura and the place is surrounded by commercial areas
like Nehru Place, Okhla Industrial Area and NOIDA. The hotel has an office space of approx. 9,000 sq.ft
and 30,000 sq. ft. for commercial use. The office space is utilized by various reputed companies like
Hewlett Packard, AMD, Abbott Vascular, Toyo Inc. (Japan), etc.
The company has International Hotel License Agreement with Intercontinental Group (formerly: M/s.
Bass Hotels and Resorts Asia Pacific), an international chain of hotels for the use of its brand name
“Crowne Plaza”.
One of the restaurants of the Hotel by the name of “Sampan” is a well established Chinese/ Thai
restaurant and famous in the city. Sampan is a roof top restaurant with live band from where one can have
a panoramic view of the entire city and adjoining areas. The discotheque of the hotel with the name
“Mirage” is very famous amongst the youngsters in the city. It is equipped with modern gadgets and
musical equipments.
INFRASTRUCTURE FACILITIES AND UTILITIES
The hotel is having 242 rooms comprises of 140 Superior Spacious rooms, 92 designed club room with a
exclusive Club Lounge, 8 Deluxe suits, one room for physically disabled guest and one Presidential suite
comprising of 5 rooms including a conference room.
The hotel has following facilities to meet Food & Beverage requirement of clients:a) SEVEN: An interactive restaurant serving traditional Indian Food in a contemporary style with seven
different cooking techniques under one roof. In this outlet, food is cooked in front of the guest to their
taste. The guest can enjoy the food with light old live classic Indian music performed by the
traditional music team.
b) SAMPAN: A 94 cover restaurant in a Chinese style, for authentic Cantonese and Szechwan specialties
with a live band and a panoramic roof top view of the city. Sampan is very well known restaurant of
South Delhi. The restaurant remains full to its capacity during weekends.
c) LE CAFÉ: The 24 hour coffee shop with multi-cuisine restaurant. The restaurant provides Buffet
lunch and dinner. The restaurant also organizes food festivals from time to time.
d) ATRIUM LOUNGE BAR: The bar is at ground level of the hotel. The bar provides one of the
world’s finest liquor and spirits with live music every evening. The guests can relish their drinks
while watching important sports event on the big television screen displayed in the bar.
e) ROYALE MIRAGE: Royal Mirage is a discotheque, well known in Delhi. Music ranging from DJ, hip
hop to house and trance are played in one of the advanced acoustic ambience here. Royal Mirage is
very popular amongst youngsters.
f)
PASTRY SHOP: The hotel has an exclusive Pastry shop in which variety of pastry, cookies and cakes
are available at affordable price.
g) BANQUET HALLS: The hotel has four banquet halls having capacity ranging from 20 to 500 persons.
These halls meet the demand for various parties, conferences, shows, marriages etc. The hotel has a
Roof Top Open Air Terrace Garden to cater small parties for persons who like to have food in open
air atmosphere.
36
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
h) HEALTH CLUB CUM BEAUTY PARLOUR: ’Club One’ is the fitness center, which offers a full
fledged ayurvedic treatment center cum spa, gym, cardiopulmonary rehabilitation and weight
control programme. It has a separate beauty parlor for men & women managed by professionals. It
has a swimming pool with light beverage service. The business centre located at the lobby level
provides all types of service pertaining to communication and internet facilities to guest.
HUMAN RESOURCES
The present strength of the Company is 571 employees which are as follows:
Department
Corporate Office
Project Office
Accounts/IT
F & B Control
Material Management
HRD
Management Trainee
Sales
Front Office
Security
Engineering
House Keeping
Laundry
F & B Service
F & B Production
Kitchen Stewarding
Health Club
Total
No. of Employees
Executive
Staff
Total
13
12
06
0
19
07
05
04
04
09
04
01
12
0
18
01
39
22
08
34
10
32
10
71
02
08
13
70
11
80
02
22
07
15
183
388
25
6
26
9
13
5
12
19
61
42
42
81
10
83
91
24
22
571
Presently, the existing manpower is sufficient to handle the estimated growth of the Company. The
company shall take necessary steps for recruitment of additional manpower as and when required.
Property:
Details of property taken on lease by the company
Sr. No.
1
2
Property location
Office Premises No.304, Admeasuring 242.51 sq. ft. carpet
area on 3rd Floor, Sai Chambers, Opp. Santacruz Railway
Station (East) – Mumbai 400 055
18/6 Conningham Road, Bangalore – 560 052
Rent paid
(p.m)
Rs.24,150/-
Rs. 11,236/-
Valid upto
22
months
commencing
from 01/12/2007
12
months
commencing
from 01/02/2008
Water:
The hotel’s water supply requirements are fulfilled by Delhi Jal Board. The approx. supply is 5000 KL per
month and the hotel has its own tubewell.
37
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Electricity
The hotel has uninterrupted power supply in Delhi by Delhi Electricity Board with 2221 KW watt of
electricity. The hotel has three Generators of 3000 KVA capacity, which provides 100% back up
arrangements.
Trademarks
The company has hotel trade mark “Crowne Plaza” under international license agreement. Further the
company has also registered the trade mark of “Sampan” for its roof top restaurant.
COMPETITION
CHL currently operates in Delhi where it faces competition from existing hotel players like:
•
•
•
•
•
•
•
•
•
Asian Hotels Limited
EIH Limited
Bharat Hotels Limited
Indian Hotels Company Limited
Jaypee Hotels Limited
CJ International Limited
Royal Manor Hotels & Industries Limited
ITC Hotels Limited
Nehru Place Hotels Limited
MARKETING SET-UP
The Company has its own sales team based in Delhi and has three sales Offices located at Bangalore,
Mumbai and Chennai. Apart from this, the Company has marketing and reservation tie-up with
Intercontinental Group of Hotels for its brand ‘Crowne Plaza’ globally. The Company has also tie-up
with various tour operators like TCI, SITA, Kauni, Cox & Kings etc. The corporate groups like Ranbaxy,
LG etc., have patronized CHL as their recognized hotel officially.
MARKETING STRATEGY
The strategy of the Company is to retain its clients by providing discounts and other facilities like:
•
First Choice Club Card: A customer can have this card by paying the prescribed membership fees,
which offers free of one night stay and discount on the beverages consumed by the member. This
card is valid for a period of one year from the date of issue.
•
Discounts to frequent visitors: CHL offers reward points, which can be redeemed against other
services to its frequent visitors.
•
‘Club One’ Card: CHL offers discount on facilities like Swimming, Beauty parlor, Health spa,
Ayurvedic treatment etc to the card holders. Also, it gives special discount on the food and beverages
ordered in the Health spa.
COLLABORATIONS
The Company has signed an International Hotel License Agreement for franchise / marketing
collaboration with Bass Hotels & Resorts Inc (now known as Intercontinental group of hotels) for using
their brand name ‘CROWNE PLAZA’ for a period of Ten years from January, 2001 to January, 2010.
The Important terms of the agreement are:
• CHL will use the name Crowne Plaza for its property situated at New Friends Colony, New
Delhi.
• CHL will pay Royalty fees to M/s Bass Hotels & Resorts, Inc. at rate of 2% of the Gross Room
Revenues with deduction for sales and Room taxes only.
38
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
•
•
•
•
Bass Hotels & Resorts, Inc. will provide all technical assistance to promote the property in
tourism sector.
Bass Hotels & Resorts, Inc. will do global advertising and assist in booking of accommodation
globally.
Training Programmes and materials.
Advertising publicity and other marketing programmes and Materials.
SWOT Analysis of CHL
Strengths
• Strong brand recognition: Our hotel has a well established brand image both nationally and
internationally.
• Locational Advantages: Performance of the companies in hotel sector largely depends on the
proper selection of location of their hotel properties. In this context, the location of CHL’s present
properties is strategic. The company has presence in Delhi.
• Sales & Distribution strategy: Our hotel has a dynamic sales force that has enabled the company
to create its brand image.
• International level service standards: Our hotel provides international cuisine and living
standards with international service level standards.
Weaknesses
•
•
The company runs only one 5 star deluxe Hotel and hence suffer from risk of concentration of
business and at times not able to offer alternate arrangement for our guests.
Common Wealth Games 2010: The demand for rooms is expected to increase exponentially
during the Common Wealth Games 2010 but the same demand may subside post completion of
the Common Wealth Games.
Opportunities
• Increasing inbound tourism: The increase in inbound tourism due to increase in medical
tourism, adventure tourism, heritage tourism, wellness tourism, pilgrimage tourism, eco-tourism
and others have provided our company an opportunity to tap the untapped demand.
• Increase in the leisure expenditure: With the increase in the earning population of the country
and the urge to spend on leisure and entertainment, there is a huge demand gap of hotel rooms
and entertainment facilities to be filled in.
• Established brand provides opportunities to expand in newer locations enabling the company to
offer services at multiple locations.
• The demand for rooms is expected to increase exponentially during the Common Wealth Games
2010.
Threats
• Low priced luxury hotels: With increase in the low cost airlines and no frills hotels; the company
faces a threat from the low price hotels coming up around the city and nearby areas.
• Fierce competition from existing players in the category.
Our competitive strengths
•
Strong value proposition: We strive to provide our customers a superior experience during
their stay in our hotel. We provide various amenities required by business travellers at prices
which we believe are at par with the services provided. This is achieved by identifying facilities
which would enhance services to our customers and allocating our financial resources
accordingly.
39
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
REGULATIONS AND POLICIES
The material laws and regulations that may be applicable to the Company as and when it undertakes
specific projects, include the following:
1. Electricity Act, 2003
The Electricity Act, 2003 (“Electricity Act”) was enacted with effect from June 10, 2003, repealing and
replacing the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948 and the Electricity Regulatory
Commissions Act, 1998. The Electricity Act seeks to provide for demarcation of the roles of generation,
transmission and distribution to provide for individual accountability of each. The main features of the
Electricity Act include the following:
♦
de-licensing generation, making captive-generation freely permissible, but hydro projects require
approval of the State Government and clearance of the CEA for the projects with capital expenditure
exceeding limits proposed by the Central Government, which would go into the issues of dam safety
and optimal utilization of water resources;
♦
establishment of Transmission Utility at the Central as well as State level, which would be a
Government company and would have responsibility of ensuring that the transmission network is
being developed in a planned and coordinated manner to meet the requirements of the sector;
♦
providing open access for transmission, distribution and trading;
♦
specifying technical standards, grid standards and safety requirements;
♦
introducing power trading as a distinct activity from power generation, transmission and
distribution;
♦
prescribing the functions and duties of CEA, which was constituted under the Electricity (Supply)
Act, 1948 and continuing under the Electricity Act;
♦
prescribing the respective functions of the Central and State Regulatory Commissions, which were
constituted under the Electricity Regulatory Commission Act, 1998 and continuing under the
Electricity Act;
♦
formulating of National Electricity Policy;
♦
formulating of National Tariff Policy;
♦
provides for restructuring of the State Electricity Boards; and
♦
conferring power of determination of the tariff with the Central and State Regulatory Commissions.
2. Environment Protection Act, 1986 and Rules, 1986
Three major statutes, which seek to regulate and protect the environment against pollution related
activities in India, are the Water (Prevention and Control of Pollution) Act, 1974 (“Water Pollution Act”),
the Air (Prevention and Control of Pollution) Act, 1981 (“Air Pollution Act”) and the Environment
Protection Act, 1986 (“Environment Act”). These Acts apply to power projects.
The Water Pollution Act was enacted with an aim to prevent and control water pollution and to maintain
or restore wholesomeness of water. This Act constitutes a Central Pollution Control Board and State
Pollution Control Board. One of the main functions of the Central Board is to promote the cleanliness of
streams and wells in different areas of the States. This Act debars any person, from establishing any
industry, operation or process or any treatment and disposal system, which is likely to discharge sewage
or trade effluent into a stream or well or sewer without taking prior consent of the State Pollution Control
Board.
40
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
The Air Pollution Act was enacted to prevent, control and abate air pollution. The Central and State
Boards constituted under the Water Pollution Act has been assigned to perform the functions under the
Air Pollution Act as well. This Act, inter alia, stipulates that no person shall, without the prior consent of
the State Board, establish or operate any industrial plant in an air pollution control area.
The Environment Act has been enacted to protect and improve the environment. This Act empowers the
Central Government to make rules for various purposes including prescribing the standards of quality of
air, water or soil for various areas and purposes and prescribing the maximum allowable limits of
concentration of various environmental pollutants for different areas.
In India the issue of management, storage and disposal of hazardous waste is regulated by the
Hazardous Waste Management Rules, 1989 made under the Environment Protection Act. Under these
rules, the Prevention and Control of Pollution Boards are empowered to grant authorization for
collection, treatment, storage and disposal of hazardous waste, either to the occupier or the operator of
the facility.
The Ministry of Environment and Forests conducts Environment Impact Assessment (EIA). The Ministry
receives proposals for expansion, modernization and setting up of projects and the impact which such
projects would have on the environment is assessed by the Ministry before granting clearances for the
proposed projects.
OTHERS:
Apart from the above, other laws and regulations that may be applicable to the Company include the
Following:
Employees’ State Insurance Act, 1948;
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952;
Payment of Gratuity Act, 1972;
Payment of Bonus Act, 1965;
Payment of Wages Act, 1936;
Contract labour (Regulation and Abolition) Act, 1970.
41
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
HISTORY
The Company was originally incorporated on 16/03/79 as a private limited Company under the
provisions of the Companies Act, 1956 with the name and style ‘Cosmopolitan Builders and Hoteliers
Private Ltd.’ having its registered Office at B-6, Asaf Ali Road, New Delhi-110002. It was later
converted into a public limited company vide special resolution dated 23/01/82 and consequently, the
name of the Company was changed to ‘Cosmopolitan Builders and Hoteliers Ltd.’ Further, the Company
changed its name to ‘Cosmopolitan Hotels Limited’ and received a fresh Certificate of Incorporation
dated February 29/04/82. The Company was again renamed as “CHL Limited” on 11/12/97. As of date,
the Registered office of the Company is situated at “Hotel Crowne Plaza, New Friends Colony, New
Delhi- 110025”.
CHANGES IN REGISTERED OFFICE OF THE COMPANY:
Reasons for
Date of Change
Change
B-6, Asaf Ali Road, D-898, New Friends
More convenient 23rd February, 1981
location
New Delhi – 110002
Colony, New Delhi
D-898,
New Hotel Crowne Plaza,
Company shifted 16th October 1982
Friends
its
own
New Friends Colony, to
premises
Colony, New Delhi
New Delhi
Previous Address
New Address
The Company made public issue of 13,50,000 equity shares of Rs.10/- each at par in December 1982. The
public issue closed on 29/12/1982. The said public issue was for the purposes of setting up a five-star
deluxe hotel of international standard at New Delhi. The total cost of the project was Rs.15.50 crores
which was established with the assistance of financial institutions like IDBI, IFCI & ICICI in the form of
term loan. The hotel was established as per the objects of the issue and was successful in catering to the
enhanced tourist traffic during 1982 Asian games held in New Delhi.
Hotel Crowne Plaza, New Delhi
Hotel Crowne Plaza started in November 1982 with the ninth Asian Games being held in the
capital. CHL had a tie up with the ACCOR group, an international chain of hotel, and were called Sofitel
Surya. CHL disassociated with the ACCOR group and entered into a franchise arrangement with The
Best Western International, one of the biggest chains in the world in terms of independently run hotels.
The said arrangement ended on December 31, 1998 and thereafter, CHL became The Surya. With effect
from January 2001, CHL have joined hands with M/s Bass Hotels & Resorts Inc. (now known as
Intercontinental Group), to rebrand the hotel as Crowne Plaza Delhi. This hotel, which stands for true
excellence in courtesy and hospitality is also conveniently located close to Delhi’s prime commercial
centers and is an ideal base to explore the tourists and historical attractions of the city.
Distances
From Indira Gandhi International Airport
From the City Center (Connaught place)
From domestic airport
From New Delhi railway station
From Old Delhi railway station
23 kms.
9 kms.
18 kms.
12 kms.
16 kms.
The main objective of the company is to run the business of a 5 – star Deluxe Hotel in South Delhi and to
provide all the facilities/comforts as per the needs of the tourists/corporate bodies.
The company is being managed under the chairmanship of Dr. L.K. Malhotra, who has vast experience in
Hospitality industry. He is also President of PHD Chamber of Commerce & Industries, New Delhi. He is
assisted by his son Mr. Luv Malhotra for day to day operations of the hotel.
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CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
The hotel is having 242 rooms comprises of 140 Superior Spacious rooms, 92 designed club room with a
exclusive Club Lounge, 8 Deluxe suits, one room for physically disabled guest and one Presidential suite
comprising of 5 rooms including a conference room.
CHANGES IN MEMORANDUM
Dates on which some of the main clauses of the Memorandum of Association of the Company have been
altered citing the details of amendment are as under:
Date
of Amendment
Shareholders
Approval
Change in Authorized share capital
EGM – 17.11.1980
The Authorized share capital increased from Rs. 50,00,000 to Rs. 3,00,00,000
AGM – 15.06.1981
The Authorized share capital increased from Rs. 3,00,00,000 to Rs. 5,00,00,000 –
Clause V of the Memorandum of Association was altered accordingly
EGM – 23.01.1982
The Authorized share capital increased from Rs. 5,00,00,000 to Rs. 6,00,00,000Clause V of the Memorandum of Association was altered accordingly
AGM – 27.02.1982
The face value of the equity shares of Rs. 100/- each was converted into equity
shares of Rs. 10/-each.
EGM – 01.02.1983
The Authorized share capital increased from Rs. 6,00,00,000 to Rs. 7,50,00,000Clause V of the Memorandum of Association was altered accordingly
AGM – 21.09.1988
The Authorized share capital increased from Rs. 7,50,00.000 to Rs. 8,75,00,000=
Clause V of the Memorandum of Association was altered accordingly
AGM - 29.09.1995
The Authorized share capital increased from Rs. 8,75,00,000 to Rs. 15,00,00,000Clause V of the Memorandum of Association was altered accordingly
AGM - 27.09.2006
The Authorized share capital increased from Rs. 15,00,00,000 to Rs. 30,00,00,000Clause V of the Memorandum of Association was altered accordingly
Change in Object Clause
AGM - 30.08.1986
Object Clauses 12 and 13 were added under “Other Objects” in the
Memorandum
AGM – 12.09.1997
Clauses 12 and 13 were deleted appearing under “Other Objects” and the same
were brought in under IIIA main objects as sub clauses 5 & 6
EGM by Postal Object Clauses 12 to 37were added under “Other Objects” in the memorandum.
Ballet - 05.11.2004
Change in Name Clause
EGM - 23.01.1982
The words Private was deleted and the name of the company was changed from
Cosmopolitan Builders and Hoteliers Pvt. Ltd. to Cosmopolitan Builders and
Hoteliers Ltd.
EGM - 23.01.1982
The name of the company was changed from Cosmopolitan Builders and
Hoteliers Ltd. to Cosmopolitan Hotels Limited and a fresh Certificate of
incorporation dated 29.04.1982 was obtained.
AGM – 30.08.1996
The name of the clause was again changed from Cosmopolitan Hotels Limited
to CHL Limited and a fresh certificate of incorporation dated 11.12.1997 was
obtained.
MAIN OBJECTS OF THE COMPANY:
1.
To carry on the business of hotel, restaurant, cafe, tavern, beer-house, refreshment room and
lodging-house keepers and licensed victuallers.
2.
To purchase, erect or otherwise acquire, establish and equip, act as collaborators, technicians,
financiers of any other hotels in India or in any other part of the world.
To act as agents of any hotel company or as buying and selling agents to any hotel company and
to do and perform all and singular the several duties, services and functions which the agents,
3.
43
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
4.
buying and selling agents of any hotel company usually do.
To construct, acquire, rent out or manage, lease theatres, cinema houses, auditoriums, studios and
other buildings.
5.
To carry on the business of manufacturers and dealers in the renewable energy systems and the
connected components (Solar photovoltaics, solar thermal, hydel, wind, biomass, cogen,
concentrator system, solar chimney, hydrogen power etc.) including semi conductor
materials/devices, transistors, rectifiers, zenerdiodes, thermistors, integrated and hybrid circuit
relays and variators, potentiometers, connectors, printed circuits, coils, chokes, transformers,
switches, volume controls, plugs, sockets, batteries, accumulators, cables, piezo electric quartz
crystals of all types etc.
6.
To carry on business as producers, manufacturers, processors, converters, refiners, makers,
stockists, dealers, importers, exporters, traders, retailers, agents, buyers or sellers of various
items' for non- conventional/renewable energy systems such as oxygen, acetylene,
ammonia, carbon dioxide, nitrogen, hydrogen, helium and other types and kinds of gases
required for or used in industries for application and manufacture of the renewable energy
systems/products including agriculture, clinics, hospitals, refrigerators, aviation, transport
vehicles, space rockets and crafts, communication, power' plants, domestic or public lighting,
heating, cooling purposes, lighters, plant producing water, chemicals or fuels, pesticides,
defence or warfare establishments, horticulture, forest or plant, protection and growth and
other allied purposes and to service, repair, manufacture, market or deal in machinery, plants,
spares, cylinders, containers, gadgets, appliances and accessories required for, working on, using
or producing any such systems.
7.
To carry on in India or elsewhere the business of dealing in gold and to manufacture, produce,
design, develop, modify, build, encourage, refine, repair, process, prepare, fabricate, alter,
dismantle, provide, exchange, remove, set, convert, finish, polish, cut, fit, trim, contract,
sub-contract, supply, turn to account, let on hire, buy, sell, import, export, wholesale, retail and
to act as agent, broker, adatia, job worker, consignor, contractor, vendor, collaborator, stockist,
distributor or otherwise to deal in all shapes, sizes, varieties, designs, applications,
combinations & uses of apparel, ornaments, gems, jewelleries, goods, watches, clocks,
cutleries, fabrics, utensils, antiques, articles, & things, their parts, accessories,
fittings,
components, ingredients, and materials thereof made partly or wholly of gold, silver,
platinum, or other precious metals and alloys thereof together with precious, semi
precious, imitation, synthetic, natural or other varieties of stones and materials whatsoever and to
do all incidental acts and things necessary for the attainment of above objects.
8.
To carry on in India or elsewhere the business as manufacturers, producers, processors,
importers, exporters, agents, brokers, wholesalers, showroom owners, retailers, distributors,
exchangers, traders, buyers, sellers, job workers, stockists and to market, promote, organize,
design, develop, cut, sort & grade or otherwise to deal in all shapes, sizes, varieties,
specifications, descriptions, applications, modalities, fashions & uses of garments for
men, women & children including sportswear, activewears, dailywears, fashionwears,
partywears, wearing apparels, underwears, purses, belts, wallets and other allied goods
made from cotton, silk, synthetics, jute, velvet, woollen, leather, rexin or with any combination
thereof and to participate in local, national and international trade fairs, sales exhibitions,
seminars, fashion shows or any other sates promotion scheme and to do all incidental acts and
things necessary for the attainment of above objects.
9.
To carry on in India or elsewhere the business of financing, money lending, bin
discounting, factoring, corporate lending to advance money with or without securities, to
provide finance to industrial enterprises on short term, medium term & long term basis; to
provide finance on the securities of shares, stocks, bonds, debentures or other similar
instruments, to provide clean loan, to provide loans against FOR held with the Company, to
44
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
participate in consortium finance with other institutions or body corporates, but the Company
shall not do Banking business as defined in Banking Regulation Act, 1949; to take acceptances &
obligations, to provide guarantees & counter guarantees, to provide bridge loans, to provide forex
advisory services & loan syndication services and to arrange and provide other financial services
and to act as consultant, advisor, manager, representative, retainer or in other capacity for the
purpose of accomplishments of the objects under these presents; to carry on the business of
Foreign Exchange, Money Changing and all other business connected with Foreign
Exchange not amounting to Banking business.
SUBSIDIARY OF THE COMPANY
There is no subsidiary of the company.
SHAREHOLDERS’ AGREEMENTS
There is no separate agreement between any shareholder and the company as on date of filing of this
letter of offer.
STRATEGIC/ FINANCIAL PARTNER
The Company does not have any Strategic Partner & Financial Partner as on the date of filing of this
Letter of Offer.
OTHER AGREEMENTS
The Company has entered into an International Hotel License Agreement with M/s Bass Hotels
& Resorts, Inc. (now known as Intercontinental Group, USA) to use their brand name ‘Crowne Plaza’
for a period of Ten years from January, 2001 to January, 2010.
The Important terms of the agreement are:
CHL will use the name Crowne Plaza for its property situated at New Friends Colony,
New Delhi.
CHL will pay Royalty fees to M/s Bass Hotels & Resorts, Inc. at rate of 2% of the Gross
Room Revenues with deduction for sales and Room taxes only.
Bass Hotels & Resorts, Inc. will provide all technical assistance to promote the property
in tourism sector.
Bass Hotels & Resorts, Inc. will do global advertising and assist in booking of
accommodation globally.
Training Programmes and materials
Advertising publicity and other marketing programmes and Materials
Except the contracts/agreements mentioned above and entered in the ordinary course of business
carried on or included to be carried by the Company, the Company has not entered into
any other agreement/contracts.
45
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
MANAGEMENT
The details of the board of directors of the company are given below:
Name, Age,
Designation, Son of,
Address and
Occupation
Dr. L K Malhotra (64)
Chairman & Managing
Director
S/o : Late Shri A.N.
Malhotra
D-6/22, Vasant Vihar
New Delhi 110057
Occupation: Business
Date of
Appointment
Qualification
No of
shares
held
25/10/1980
Hon’y Ph. D in
Business
Management
4,11,536
Remuneration &
Commission
(Rs. in lacs)
241.14
Other directorship
Mr. D V Malhotra (69)
Director
S/o : Late Shri A.N.
Malhotra
P O Box No.251
Safat 13003,
Kuwait
Occupation: Business
15/07/1985
Graduate
1,78,446
4.55
1. Malbros Investment Inc.
2. CHL International
3. Ultima
Leasing
and
Financing (Partner)
4. United Overseas (Partner)
5. Growmore
General
Trading Co. WLL, Kuwait
6. Al-zahem & Malhotra
General
Trading
Co.
WLL, Kuwait
7. Ogab & Hanoud Malek
Trading Co. WLL, Kuwait
Mr. A K Malhotra (59)
Director
S/o : Late Shri A.N.
Malhotra
A-22, Kirti Nagar
New Delhi 110015
Occupation: Business
15/07/1985
Graduate
800
4.55
1.
2.
3.
4.
Mela Hotels Ltd.
Malbros Farms (P) Ltd.
ICS India Pvt. Ltd.
Vatsal Foods Pvt. Ltd.
Mr. O P Bajaj (74)
Director
S/o: Shri R.L. Bajaj
40, Villa Bajaj
SOI No.19
Sukhumvit Road
Bangkok (Thailand)
Occupation:
Business
30/12/1982
Graduate
2,11,030
4.55
1.
Prime Real Estate
Company Ltd.
Prosperity Development
Company Ltd.
1. Mohan Meakin Ltd.
2. Mohan Rocky Spring
Water Breweries Ltd.
3. Malbros Capital Services
(P) Ltd.
4. Kyjol
Entertainment
Media Pvt. Ltd.
5. CHL (South) Hotels Ltd.
6. CHL International
7. Taurus Investment Trust
Co. Ltd.
8. CHL Biotech Pvt. Ltd.
9. Ultima
Leasing
and
Financing (Partner)
2.
46
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Name, Age,
Designation, Son of,
Address and
Occupation
Mr. B N Malhotra (77)
Director
S/o : Late Shri A.N.
Malhotra, Post Box
No.20267
Safat, Kuwait
Occupation: Business
Date of
Appointment
Qualification
No of
shares
held
Remuneration &
Commission
(Rs. in lacs)
4.55
Other directorship
29/09/1995
Graduate
94,996
Mr. Kumud Malhotra
(47)
Director
S/o: Late Shri. Sudesh
Malhotra
30, Willowbrook
Road, Holmdel
NJ 07733 USA
Occupation: Business
12/09/1997
M.Sc. in
Science
Construction
Management
& Project
Engineering
30,000
4.55
1. On
Track
Technocrat
Developer Pvt. Ltd.
2. Regal Manor Builders,
USA
3. Regal Manor Inc.
4. Gulistan
Builders
&
Promotors Pvt Ltd.
Mr. Subhash Ghai
(64)
Director
S/o: Shri. Krishan
Dayal Ghai
12, Cliff Tower, Mount
Mary Road, Bandra
(W) Mumbai 400 050
Occupation: Film
Production
29/11/1997
Graduate in
Cinema from
Film &
Television
Institute of
India, Pune
NIL
4.55
1. Mukta Arts Limited
2. Whistling
Woods
International Limited
3. Connect 1 Limited
4. Red
Carpet
Films
Limited
5. Mukta Tele Arts Pvt. Ltd.
6. Inter Airwings Pvt. Ltd.
7. Mukta Shakti Combines
8. Metro Films (Partner)
9. Mukta Arts (Partner)
Mr. Luv Malhotra (35)
Executive Director
S/o: Shri. L. K. Malhotra
D-6/22, Vasant Vihar
New Delhi 110057
Occupation: Business
22/09/2000
M Sc. (Eco.)
from
University of
Buckingham,
U.K
45,550
133.24
1. Kyjol Entertainment Media
Pvt. Ltd.
2. CHL
(South)
Hotels
Limited
3. ICS (India) Pvt. Ltd.
4. Malbros Capital Services
Pvt. Ltd.
5. On
Track
Technocrat
Developer Pvt Ltd.
6. CHL Biotech Pvt. Ltd.
7. CHL International
Mr. Harish Chander
Bhasin (68)
Director
S/o: Late Shri R. R.
Bhasin
C-2/7,
Safdarjung
31/10/2001
Graduate
NIL
4.55
1. AHL Hotels Limited
2. CHL
(South)
Hotels
Limited
3. Taurus Investment Trust
Company Ltd.
4. HB Corporate Services Ltd.
1.
2.
3.
4.
47
Mela Hotels Ltd.
Malsons
Trading
Company Inc
Al-zahem & Malhotra
Trading
Corporation
WLL, Kuwait
Ogab & Hamoud Malek
Trading Co. WLL Kuwait
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Name, Age,
Designation, Son of,
Address and
Occupation
Development
Area
New Delhi 110 016
Occupation: Business
Date of
Appointment
Mr. R C Sharma (68)
Director
S/o: Shri G.D. Sharma
N 1, Green Park
Extension
New Delhi-16
Occupation: Retd. IPS
Officer
30/04/2003
Qualification
No of
shares
held
Remuneration &
Commission
(Rs. in lacs)
Other directorship
5. Bhasin Shares & Stock
Brokers Limited
6. Raja Ram Bhasin Shares &
Stock Brokers Limited
7. Raja Ram Bhasin & Co.
8. Machino Polymers Limited
Graduate
NIL
4.55
1. Sir Shadilal Enterprises
Ltd.
2. HB Portfolio Ltd.
3. PCI Limited.
4. SIS Limited
5. Insec Securites & Finance
Ltd.
6. FORE
School
of
Management,
Delhi
(Trustee)
BOARD OF DIRECTORS
Dr. L.K. Malhotra, aged 64 yrs, is Hon’y Ph. D in Business Management. He has an experience of 44
years in various industries. Initially he started his career with M/s A. N. Malhotra & Sons, Kuwait
which was engaged in the trading of consumer products. He was responsible for the management of
sales & Marketing division of the firm. After associating with various trades in Kuwait he finally
shifted to India and joined CHL Limited in the capacity of Managing Director in the year 1985. He is
Secretary for Indo Kuwait NRI Forum and President of Forum For Better Delhi. With the bifurcation of
USSR and formation of various countries under CIS, he took active interest in promoting the
relationship between India and Tajikastan and was instrumental to arrange Government level
discussions between the Government of India and Tajikastan. Vide a presidential decree issued by the
President of the Republic of Tajikistan he was appointed as Honorary Consul of Tajikistan for India in
1994 and continued till they opened their Embassy in New Delhi in 2003. He is the President of PHD
Chambers of Commerce and Industry. He is President & Chairman of Mataji Melan Devi Society
(Regd.), a Charitable Trust. He is also a trustee member of Swami Ram Tirath Mission, Dehradun.
Mr. D.V. Malhotra, aged 69 yrs, is a Non Resident Indian based at Kuwait and is one of the prominent
figures of Indian origin in Kuwait. He is one of the promoters of our hotel and is known industrialist
with wide and vast experience in the field of General Trading and Hotel business.
Mr. A.K. Malhotra aged 59 yrs. He has been associated with the company since long. He is a hotelier
and has an experience of more than 20 years in the field. He is the Managing Director of Mela Hotels
Limited.
Mr. O.P. Bajaj aged 74 yrs, is a Non Resident Indian based at Bangkok. He has vast experience in the
area of managing and running hotels and is a well-known industrialist in Bangkok. He owns three
hotels in Bangkok.
Mr. B.N. Malhotra aged 77 yrs. He is one of the outstanding personalities in Kuwait and popularly
known among the Indians at Kuwait. He has established his business at Kuwait since long and has
48
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
wide experience in business and is one of the prominent figures in the industrial life of Kuwait
Mr. Kumud Malhotra aged 47 yrs is an American Citizen of Indian Origin and actively connected with
Project Engineering both in India and in America. He is Bachelor of Architecture (Honours) from IIT
Kharagpur, India and Master of Science in Construction Management & Project Engineering, from
University of Michigan, USA. He has an experience of 26 years in the field of Construction &
Architecture.
Mr. Subhash Ghai aged 64 yrs, He is renowned and well known leading film director. He is an
eminent and outstanding personality in the film industry with 32 years of experience. He ventured into
selling of films directly to the overseas clients through his film ‘Saudagar’in the year 1991. He has been
honoured by the United States Senate in October 1996 for his achievements as Producer & Director. He
is responsible for bringing insurance coverage to Indian Film Industry with ‘Taal’ being the first film to
get insured. He is the founder of “Whistling Woods International” – an institute for film training. He is
also working on introduction of digital production systems to be installed in theaters, which will result
into reducing the cost of prints to producers on one hand and reduction of running costs of prints to
the theatre owners. He is one of the prominent figures in the business and industrial life of Mumbai.
Mr. Luv Malhotra aged 35 yrs, MSc. (Economics) from University of Buckingham. He has an
experience of 10 years in the field of Hospitality industry. He joined the hotel as General Manager (Coordination) in the year 1998. Thereafter, he was inducted on the Board of our hotel as an Executive
Director in the year 2000. He looks after strategic planning and day to day operations of the Company.
He is Hon’y Joint Secretary of Hotels & Restaurant Association of Northern India.
Mr. Harish Chander Bhasin aged 68 yrs is well known in the Financial Services Industry. He has
founded HB Group, which is engaged in financial services. He has vast and wide experience and in
depth skill in financial fields especially in capital market and investment management. He has been on
the Board since 2001.
Mr. R.C. Sharma aged 68 yrs, is a Retired I.P.S. Officer and former Director of Central Bureau of
Investigation. He has rich and vast experience in the fields of public administration and
information technologies.
RELATIONSHIP AMONG DIRECTORS
Mr. B. N. Malhotra, Mr. D V. Malhotra, Dr. L.K. Malhotra and Mr. A. K Malhotra are brothers. Mr. Luv
Malhotra is the son of Dr. L.K. Malhotra.
CHANGE IN BOARD OF DIRECTORS DURING THE LAST THREE YEARS
There has been no change in the Board of Directors of the Company in the last three years.
BORROWING POWERS OF THE BOARD OF DIRECTORS
The Articles of Association of the company authorized the board to borrow, the extract of which is as
follows:
Article 86 provides that the Board may from time to time, at its discretion, by a resolution passed at a
meeting of the Board and not by circulation accept deposits from the member either in advance of calls
or otherwise and generally raise or borrow or secure the payment of any sum or sums of money for the
purpose of the company that the total amount borrowed at any time together with the money
already borrowed by the company (except the temporary loans) shall not, without the consent of the
Company in general meeting, exceed the aggregate of paid-up capital and free reserves of the Company.
The present borrowing power of the board is upto Rs. 300 Crores which has been approved by the
members in the Annual General Meeting held on 27th September, 2006.
49
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
INTEREST OF DIRECTORS
All the Directors of the company may be deemed to be interested to the extent of remuneration,
commission and fees, if any, payable to them for attending meetings of the Board and reimbursement of
expenses. All the directors may also be deemed to be interested to the extent of equity shares, if any,
already held by them and /or by their friends /relatives in the Company that may be subscribed for or
allotted to them in the present offer and also to the extent of any dividend payable to them and other
distributions in respect of the said equity shares. All the directors may also be deemed to be interested to
the extent of normal transactions, if any, with the company. The Directors may also be regarded as
interested in the equity shares, if any, held or that may be allotted to the companies, firms and trust in
which they are interested as directors, members, partners and or trustees.
CORPORATE GOVERNANCE
The core principle of Corporate Governance is that Management must have the executive freedom to
drive the enterprise forward and the freedom of Management should be exercised with a framework
of checks and balances with accountability towards performance and progress. The company’s
Governance Principle is the establishment of a set of systems or process whereby the directors are
entrusted with responsibilities and duties of corporate affairs. Maximization of shareholders’ wealth is
the corner stone of the governance. It hinges on total transparency, integrity and accountability of
the management, which includes non-executive directors. It is about commitment to values and
ethical business conduct and a high degree of transparency.
Details of various committees are as follows:
i) Audit Committee
Terms of Reference of the Audit Committee are as per statutory guidelines that inter-alia, include
overseeing financial reporting processes, reviewing Quarterly, Half yearly and Annual financial
results, adequacy of internal control systems, internal audit function, discussions with the auditors
about the scope of audit including the observations of the auditors and discussion with internal
auditors on any significant findings and also to investigate any activity within its terms of reference
and to seek any information it requires from any employees and to secure the attendance of
outsiders with relevant experience and expertise, where considered necessary. .
Members of Audit Committee
Mr. O.P Bajaj
Mr. Luv Malhotra
Mr. R.C Sharma
Mr. Harish C. Bhasin
Designation
Nature of Directorship
Chairman
Member
Member
Member
Independent Director
Whole Time Director
Independent Director
Independent Director
ii) Remuneration Committee
The Company has a Remuneration Committee, comprising of the three directors Mr. O.P. Bajaj, Mr.
Harish C Bhasin, and Mr. Subhash Ghai.
Non-Executive Directors
The remuneration of the Non-Executive Directors (NEDs) of the Company is decided by the Board of
Directors. The NEDs are paid remuneration by way of Commission and Sitting Fees. In terms of the
approval of the members at the 26th Annual General Meeting of the Company held on 10th September
2005, commission is paid at a rate not exceeding one per cent of the net profits of the
Company calculated in accordance with the provisions of Sections 198, 349 and 350 of the Companies
50
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Act, 1956. The commission amongst the NEDs is distributed equally.
The Company did not have any pecuniary relationship or transactions with the Non Executive
Directors and Executive Directors during the financial year 2006-2007.
Sitting Fees
The Sitting fee for attending the meeting of the Board of Directors was increased from Rs. 10,000/- to
Rs. 20,000/- w.e.f. 27.09.2006.
Sitting fees was increased from Rs. 5000/- to Rs. 10,000/- w.e.f. 20.10.2006 and further increased to Rs.
20,000/- w.e.f. 31.01.2007 for attending each meeting of Audit Committee, Shareholders/Investor
Grievance Committee and of Remuneration Committee.
Remuneration policy of the company is as given below:
For Dr. L.K. Malhotra, Chairman and Managing Director
Overall Remuneration as per the resolution passed by the shareholders of the company in the AGM
held on 27th September, 2006:
Subject to the provisions of Sections 198, 269 and 309 and other applicable provisions of the Act and
modifications/amendments thereof, if any, the remuneration payable to Managing Director and
Executive Director of the company, in any financial year, shall not exceed 10% (ten percent) of the net
profits of the company for both of them together. In any financial year, during the tenure of Dr. L. K.
Malhotra, if the company has no profits or its profits are inadequate, the remuneration payable to the
Managing Director shall be as per the Schedule XIII of the Act.
Within the aforesaid ceiling, the remuneration payable to Dr. L.K. Malhotra, Chairman & Managing
Director shall be as under with effect from 1st August 2006:
Basic Salary
:
Rs. 5,00,000 per month
House Rent Allowance
:
Accommodation with amenities such as Gas. Electricity Water, House
Furnishing and Repairs, the aggregate monetary value of which being
limited to 60% of basic salary per month for the purpose of which limit,
perquisites shall be evaluated as per Income Tax Rules, wherever
applicable and in the absence of any such Rule, Perquisites shall be
evaluated at actual cost.
Commission
:
To be paid within the overall limit of the net profit in a financial year
computed in the manner laid down under Section 349 of the Companies
Act 1956.
Medical Reimbursement
: Expenses incurred for self and family subject to a ceiling of one month’s
salary
Leave Travel Concession
: for Self & Family once a year, subject to a ceiling of one month’s salary.
Club Fees
: Maximum of two clubs not including admission and Life Membership fees
Personal Accident Insurance : Premium not to exceed Rs. 10,000 p.a.
Car & Telephone
: Company’s car with driver for Company’s business. Official telephone facility
at residence. Personal long Distance telephone calls shall be billed by the
company.
51
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Provident Fund, Gratuity, Encashment of Leave
Company’s contribution to Provident Fund, Gratuity, encashment of leave at the end of the tenure to
the extent these either singly or together are not taxable under the Income Tax Act, shall not be included
in the computation of limits for the remuneration or perquisites purpose.
Resolved Further that the Board of Directors be and is hereby specifically authorized to , at any time,
alter and vary the terms and conditions of the remuneration to be paid in case of absence or inadequacy
of profits, in such manner but so as not to exceed the limits prescribed in Schedule XIII read with
Sections 198, 309 and other applicable provisions, if any, of the Act or any amendments thereto or reenactments thereof.
For Mr. Luv Malhotra, Executive Director
Overall Remuneration as per the resolution passed by the shareholders of the company in the AGM
held on 27th September, 2006:
Resolved that subject to the provisions of Sections 198, 269 and 309 and other applicable provisions of the
Companies Act, 1956, Mr. Luv Malhotra be and is hereby re-appointed as Executive Director of the
company for a period of 5 years commencing from 22nd September 2005 to 21st September 2010 and the
payment of remuneration and perquisites to him shall be as under:Basic Salary
: Rs. 2,00,000 per month
House Rent Allowance
: Accommodation with amenities such as Gas. Electricity Water, House
Furnishing and Repairs, the aggregate monetary value of which being
limited to 60% of basic salary per month for the purpose of which limit,
perquisites shall be evaluated as per Income Tax Rules, wherever
applicable and in the absence of any such Rule, Perquisites shall be
evaluated at actual cost.
Commission
: To be paid within the overall limit of the net Profit in a financial year
computed in the manner laid down under Section 349 of the Companies
Act 1956.
Medical Reimbursement
salary
: Expenses incurred for self and family subject to a ceiling of one month’s
Leave Travel Concession
: for Self & Family once a year, subject to a ceiling of one month’s salary.
Club Fees
: Maximum of two clubs not including admission and the Life Membership fees
Personal Accident Insurance : Premium not to exceed Rs. 10,000 p.a.
Car & Telephone
: Company’s car with driver for Company’s business. Official telephone facility
at residence. Personal long Distance telephone calls shall be billed by the
company.
Provident Fund, Gratuity, Encashment of Leave
Company’s contribution to Provident Fund, Gratuity, encashment of leave at the end of the tenure to the
extent these either singly or together are not taxable under the Income Tax Act, shall not be included in
the computation of limits for the remuneration or perquisites purpose.
Overall Remuneration:
Subject to the provisions of Sections 198, 269 and 309 and other applicable provisions of the Act and
modifications/amendments thereof, if any, the remuneration payable to Managing Director and
Executive Director of the company, in any financial year, shall not exceed 10% (ten percent) of the net
52
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
profits of the company for both of them together. In any financial year, during the tenure of Mr. Luv
Malhotra, if the company has no profits or its profits are inadequate, the remuneration payable to the
Executive Director shall be as per the Schedule XIII of the Act.
Resolved Further that the Board of Directors be and is hereby specifically authorised to , at any time, alter
and vary the terms and conditions of the remuneration to be paid in case of absence or inadequacy of
profits, in such manner but so as not to exceed the limits prescribed in Schedule XIII read with Sections
198, 309 and other applicable provisions, if any, of the Act or any amendments thereto or re-enactments
thereof.
The Members of the remuneration committee are:
Members of
Remuneration
Mr. O.PCommittee
Bajaj
Mr. Subhash Ghai
Mr. Harish C. Bhasin
Designation
Nature of Directorship
Chairman
Member
Member
Independent Director
Independent Director
Independent Director
Remuneration paid to Working Directors as on 31
Name of Directors
Dr. L.K. Malhotra
Mr. Luv Malhotra
Salary &
Allowance
(Rs. in lacs)
103.20
41.28
st
March, 2008:
Commission
(Rs. in Lacs)
Service Tenure
Upto
137.94
91.96
14.07.2010
21.09.2010
iii) Investor Grievances Committee
The Committee was constituted by the Board in their meeting of Oct 31, 2001. Mr. Harish C Bhasin and
Mr. A. K. Malhotra are the members of this committee. Mr. O.P. Bajaj is the Chairman of the
Committee w.e.f. 30/01/2006. The Company Secretary is the Compliance Officer. The committee
attends to the investors/shareholders, correspondence and share transfers expeditiously and usually
reply is sent within a period of 15 days of receipt, except in those cases, which are disputed, and subjudice. The company furnishes necessary documents/ information to the shareholders.
The Company received 20 shareholder’s grievances during the year which interalia included nonreceipt of Annual Report and past years’ dividend. The grievances were duly attended to and the
company has furnished necessary documents/information to the shareholders. No grievances were
pending at the year- end.
The Members of the Committee are as under:
Members of Grievance
Committee
Mr. O.P Bajaj
Mr. A.K. Malhotra
Mr. Harish C. Bhasin
Designation
Nature of Directorship
Chairman
Member
Member
Independent Director
Non Executive Director
Independent Director
53
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Shareholding of the Directors
Sr.
No.
1.
2.
3.
4.
5.
6.
7.
Name
Mr. L.K. Malhotra
Mr. A.K. Malhotra
Mr. O.P. Bajaj
Mr. Kumud Malhotra
Mr. D.V. Malhotra
Mr. B.N. Malhotra
Mr. Luv Malhotra
No. of Equity
Shares of
Rs.10/- each
4,11,536
800
2,11,030
30,000
1,78,448
94,996
45,550
CHANGES IN DIRECTORS DURING LAST THREE YEARS
There are no changes in the directors of the Company for last three years
54
CHL Limited
_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
ORGANISATION STRUCTURE
Chairman & Managing
Director
Exe Sec
Executive Director
Advisor to CMD
Vice President Finance
Vice President –
Corporate
Development
Project
Account
s
Corporate
Accounts
Operations
Corporate Manager –
Business Development
Front
Office
Rooms
Division
Manager
F&B
Security
House
keeping
Executive
Chef
Chief
Security
Officer
Executive
House
keeper
(Advisor)
Chief Engineer
Executive
Sous Chef
Sr Manager
– Civil
Mngr
Manager
Project –
Finance
Front
Office
Engineer
Civil
Training
Mngr
Horti
culture
F&B
Manager
FO
Manager
Asst FO
manager
Asst Civil
Engineer
House
keeping
HRD
Mini
Bar
HR
Mngr
Sales
Engineer
ing
Director
of Sales
Chief
Engineer
Manager – Corporate
Affairs
IT
IT
Manager
Laundry
Asst Fin
Controller
MngrHealth
Club
Asst Shift
Engineer
Company Secretary
VP HR / Dir HR
TBA
Busines
s
Centre
Guest
Service
Centre
F&B
operation
s
Reser
vations
F&B
Banquet
Tele
phones
Auto Cad
Engineer
55
Club
Lounge
Reception
Sr MngrEngnr
Kitchen
Stewarding
Mngr-Prj
TBA
Asst IT
Manager
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
DETAILS OF KEY MANAGERIAL PERSONNEL
The Company is managed by its Board of Directors, assisted by qualified professionals, with vast
experience in the field of production/engineering/distribution/marketing/finance and corporate laws.
Following are the key functionaries in different functions of the Company excluding the
promoters/directors of the Company: Sr.
No.
1.
2.
3.
4.
Name &
Designation
Age
(Years)
Date
Qualifications Remuneration Number Experience
of
Per annum of shares
in the
appointme(Rs. in lacs)
held
Company
nt
02/04/2007
B.Sc
24.00
15,000
1 year
and
4 months
Mr. Gagan
Malhotra
VP Corporate
Development
Mr. N.K. Goel
VP (Finance)
40
54
03/04/2003
Mr. Tejpal Uberoi
VP&GM
50
Mr. G.J.
Varadarajan
Company
Secretary
5. Mr.
T.S.
Lakshminarayan
Corporate Chief
Engineer
6. Mr. Gulshan
Singh Chib
HRD Manager
7. Mr. R.N. Juyal
Mgr.
Corporate Affairs
8. Mr. Merwyn
Norohna
F&B Manager
9. Mr. Navneet
Dhawan
Corporate
Manager
10. Mr. Munish
Bhatia
Director Sales
FCA
Previous Company
and Total Experience
United Exports
(15 Years)
14.40
3,200
06/02/2008 M.A. & Hotel
Mgmt
14.40
Nil
5 years
and
4 months
5 months
Niclos Ltd.
(25 Years)
56
16/06/2008
ACS, ICWA,
LLB
7.20
Nil
1 month
53
01/05/2003
Diploma in
Electronic &
Electricals
10.00
300
5 years
and 7
months
33
01/11/2007 B Sc; PGDBM
10.00
Nil
9 months
Spicejet Ltd
(8 Years)
54
01/06/1982
B.A.
6.50
Nil
(25 Years)
32
07/07/2006
BHM
10.00
Nil
26 years
and 2
months
2 years and
1 month
Grand Hyatt
(14 Years)
45
01/04/2001
MBA
7.20
Nil
7 years and
4 months
HSBC Bank
(25 Years)
38
05/05/2008
Diploma in
Hotel
Management
10.00
Nil
3 months
Bharat Hotels Ltd.
(15 Years)
Park Royal
Intercontinental
(25
Years)
Atlantic Hotels Pvt
Ltd
(28 Years)
Hotel
Intercontinental
(30 Years)
All the above mentioned key managerial personnel are permanent employees of the Company. The
remuneration of each of key managerial personnel includes salary, bonus, Company’s contribution to
Provident Fund, Leave Travel Allowance/Concession, Medical Expenses and value of other facilities
inclusive of accommodation as may be applicable in each case. The Company has not offered any profit
sharing plan to its Key Managerial Personnel.
56
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Changes in Key Managerial Personnel in the Last Three Years
Name
Mr. Sumant Jaidka
Mr. Merwyn Norohna
Mr. Gagan Malhotra
Mr V. Ranga Rao
Mr. Gulshan Singh Chib
Mr. G J Varadarajan
Mr. C. Stephan
Mr Greesh Bindra
Mr. Tej Pal Uberoi
Mr G J Varadarajan
Mr. Rajiv Murishwar
Mr. Manish Bhatia
Date of Appointment
Date of Resignation
07.07.2006
02.04.2007
01.11.2007
02.02-2008
06.02.2008
17.06.2008
05.05.2008
06.06.2006
31.10.2007
20.12.2007
30.04.2008
29.02.2008
15.07.2008
Employee Stock Option Schemes
Till date, the Company has not introduced any Employees Stock Option Scheme/Employee Stock Purchase
Scheme.
Interest of Key Managerial Personnel
No amount or benefit has been paid or given within the two preceding years or intended to be given to
any of the directors or key managerial personnel except the normal remuneration for services rendered
as directors, officers or employees.
Payment or Benefit (Non-Salary Related) to officers of the Company
Except as stated in this Letter of Offer, no amount or benefit has been paid or given or is intended to be
paid or given during the preceding two years to any of its officers except for the normal remuneration paid
to Directors, officers or employees since the incorporation of the Company.
Shareholding of Key Employees
None of the Key Managerial Personnel are holding any equity shares of the company other than stated
above.
Loans to Key Managerial Personnel
There are no loans outstanding against Key Managerial Personnel as on date.
Bonus or Profit sharing plan for the Key Managerial Personnel
There is no profit sharing plan for any Key Managerial Personnel. However, the Company pays bonus to
all its permanent employees.
57
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
PROMOTERS
Promoters being an individual
Dr. L.K. Malhotra, aged 64 yrs, is Hon’y Ph. D in Business Management. He has
an experience of 44 years in various industries. Initially he started his carrer
with M/s A. N. Malhotra & Sons, Kuwait which was engaged in the trading of
consumer products. He was responsible for the management of sales &
Marketing division of the firm. After associating with various trades in Kuwait
he finally shifted to India and joined CHL Limited in the capacity of Managing
Director in the year 1985. He is Secretary for Indo Kuwait NRI Forum and
President of Forum For Better Delhi. With the bifurcation of USSR and formation
of various countries under CIS, he took active interest in promoting the
relationship between India and Tajikastan and was instrumental to arrange
Government level discussions between the Government of India and Tajikastan.
Vide a presidential decree issued by the President of the Republic of Tajikistan he
was appointed as Honorary Consul of Tajikistan for India in 1994 and continued
till they opened their Embassy in New Delhi in 2003. He is the President of PHD
Chambers of Commerce and Industry. He is the President & Chairman of Mataji
Melan Devi Society (Regd.), a Charitable Trust. He is also a trustee member of
Swami Ram Tirath Mission, Dehradun.
Driving Licence No. : P09092000185616
PAN No. : AAJPM1119K
Mr. D.V. Malhotra, aged 69 yrs, is a Non Resident Indian based at Kuwait and
is one of the prominent figures of Indian origin in Kuwait. He is known
industrialist and has wide and vast experience in the field of General Trading
and Hotel business.
Driving Licence No. : P09122003311443
PAN No. : AGTPM2323M
Mr. B.N. Malhotra aged 77 yrs. He is one of the outstanding personalities in
Kuwait and popularly known among the Indians at Kuwait.
He has
established his business at Kuwait since long and has wide experience in
business and is one of the prominent figures in the industrial life of Kuwait
Driving License no: 231051800276
PAN No. : AFKPM6859A
Mr. Luv Malhotra aged 35 yrs, MSc. (Economics) from University of
Buckingham. He has an experience of 10 years in the field of Hospitality
industry. He joined our company as General Manager (Coordination) in the
year 1998. Thereafter, he joined the Board of CHL as an Executive Director in
the year 2000. He looks after strategic planning and day to day operations of the
Company. He is Hon’y Joint Secretary of Hotels & Restaurant Association of
Northern India.
Driving Licence No. : 91111537
PAN No. : AAJPM1121H
58
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
We confirm that the Permanent Account Number, Bank Account Numbers, Passport Number have been
submitted to the Stock Exchanges at the time of filing of the letter of offer. Further, the promoters have
not been detained as willful defaulter by the Reserve Bank of India or any other Government authority
and there are no violations of securities laws committed by the promoter in the past or any such
proceedings are pending against the promoters.
The Promoters have not been detained as willful defaulters by the Reserve Bank of India or any other
Government authority and there are no violations of securities laws committed by the Promoters in the
past or any such proceedings are pending against the Promoters.
INTEREST OF PROMOTERS
All the Promoters who are on the Board of Company may be deemed to be interested to the extent of the
sitting fees and other remuneration for the services rendered and the reimbursement of expenses, if any,
payable to them under the articles. The Promoters may also be deemed to be interested to the extent of
the shares, if any, held by them or by the relatives or by firms or companies of which any of them is a
partner and a director/member respectively.
Except as mentioned above the promoters do not have any interest in the business of the company.
Common Pursuits
Except as stated in the Related Party information on page no. 77 of this letter of offer, to the extent of
reimbursement of expenses incurred or normal remuneration or benefits and their shareholding in the
company as stated under the section titled “Capital structure of the company” appearing on page no. 11
of this letter of offer, the promoters of the company have no interest in the business of the company.
Payment of benefit to the promoters of our company
There is no payment or benefit to be given to the promoters of the Company other than being a
shareholder or remuneration as a Director of the Company.
Dividend Policy
The declaration and payment of dividends will be recommended by the Board of Directors and
shareholders, in their discretion, and will depend on a number of factors, including but not limited to the
earnings, capital requirements and overall financial condition. The company has consistently been paying
dividend for the past 4 years. The last dividend paid by the company was interim dividend of 20% for the
year ended on 31/03/2008.
59
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
PROMOTER GROUP COMPANIES
Details of companies within the Promoter Group Companies
1. Malbros Capital Services Pvt. Limited
The company was incorporated on 25th January, 2000 as a private limited company having its registered
office at Hotel Crowne Plaza, New Delhi – 110 065. The CIN no. of the company is
U67120DL2000PTC103441. The company is engaged in the business of investment activities and is an
unlisted company.
Board of Directors
Sr. no.
Name
1
Dr. Lalit Kumar Malhotra
2
Mr. Luv Malhotra
Shareholding Pattern
Sr.no.
Name of the Share Holders
1
2
3
Total
Dr. Lalit Kumar Malhotra
Mr. Luv Malhotra
Mr. A. K. Malhotra
No. of Shares of
Rs. 10/- each
10,010
10
10
10,030
Brief Audited Financial Results of the Company is as follows:
(Rs. in Lacs)
Financial Year Ended 31st March
Particulars
2006-07
2005-06
2004-05
Total Income
NIL
18.00
18.00
Profit/ Loss after Tax
NIL
11.50
8.06
Share Capital
1.00
1.00
1.00
32.68
32.68
20.40
NIL
114.58
80.31
325.82
325.82
203.39
10
10
10
Reserves and Surplus
(excluding revaluation reserve)
Earnings Per Share (in Rs.)
Book Value per Equity Share (in Rs.)
Face Value per Share (in Rs.)
Other Details
Public Issue or rights Issue in the preceding 3 years
Whether the company has become a sick company within the meaning of sick industrial
companies( Special Provision) Act 1985 or is under winding up
No
No
2. Kyjol Entertainment Media Pvt. Limited
The company was Originally incorporated on 24th September, 1991 under the name of Malbros Textiles
Pvt. Ltd. Consequent to the change in the main object clause, the name of the Company was changed to
Kyjol Entertainment Media Pvt. Ltd vide fresh certificate of Incorporation dated 17th December, 2004. The
CIN no. of the company is U67120DL2000PTC103441. The company is engaged in the business of
production of films and other entertainment activities and media services. The company is not listed on
any stock exchange.
60
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Board of Directors
Sr. no.
Name
1
Dr. L. K. Malhotra
2
Mrs. Sunita Malhotra
3
Ms. Kajal Malhotra
4
Mr. Luv Malhotra
Shareholding Pattern
Sr.no.
1
2
3
4
Name of the Share Holders
Dr. L. K. Malhotra
Mrs. Sunita Malhotra
Ms. Kajal Malhotra
Mr. Luv Malhotra
Total
No. of Shares of Rs. 10/- each
10,21,010
32,000
10,93,010
5,50,000
26,96,020
Brief Audited Financial Results of the Company is as follows:
Particulars
Total Income
Profit/ Loss after Tax
Share Capital
Reserves and Surplus
(excluding revaluation reserve)
Earnings Per Share (in Rs.)
Book Value per Equity Share (in Rs.)
(Rs. in Lacs)
Financial Year Ended 31st March
2006-07
2005-06
2004-05
109.09
20.88
Nil
83.76
12.54
(0.69)
269.60
22.30
22.30
26.93
Nil
Nil
3.10
5.62
Nil
10.37
NIL
NIL
10
10
10
Face Value per Share (in Rs.)
Other Details
Public Issue or rights Issue in the preceding 3 years
Whether the company has become a sick company within the meaning of sick industrial
companies (Special Provision) Act 1985 or is under winding up.
No
No
3. CHL (South) Hotels Limited
The company was incorporated on 22nd June, 2005 as a limited company having its registered office at
Hotel Crowne Plaza, New Delhi 110 065. The CIN no. of the company is U74999DL20005PLC135749. The
company is engaged in the business of running hotels and restaurants and providing lodging services.
The company is not listed on any stock exchange.
61
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Board of Directors
Sr. no.
Name
1
Dr. L. K. Malhotra
2
Mr. Harish Chander Bhasin
3
Mr. Luv Malhotra
4
Mr. Lalit Bhasin
5
Mr. Narendra Kumar Goel
6
Mr. Rama Nand Juyal
Shareholding Pattern
Sr.no.
1
2
3
4
5
6
7
8
9
Name of the Share Holders
CHL Limited
HB Estate Developers Ltd.
Dr. L. K. Malhotra
Mr. Harish Chander Bhasin
Mr. Luv Malhotra
Mr. Lalit Bhasin
Mr. Narendra Kumar Goel
Mr. Rama Nand Juyal
Mrs. Anju Bhasin
Total
No. of Shares of Rs. 10/- each
1,00,000
1,00,000
10,010
20,10,010
10,010
10,010
10
10
20,00,000
42,40,060
Brief Audited Financial Results of the Company is as follows:
Particulars
Total Income
For 18 months
period ended
30th Sep 2007*
(Rs. in Lacs)
For the period
30th June 2005 to
31st March 2006
52.68
46.61
(119.08)
31.72
24.00
24.00
Reserves and Surplus
(excluding revaluation reserve)
NIL
NIL
Earnings Per Share (in Rs.)
NIL
NIL
215.81
329.91
10
10
Profit/ Loss after Tax
Share Capital
Book Value per Equity Share (in Rs.)
Face Value per Share (in Rs.)
* Approval obtained from ROC for extension of period from 12 months to 18 months.
Other Details
Public Issue or rights Issue in the preceding 3 years
Whether the company has become a sick company within the meaning of sick industrial
companies( Special Provision) Act 1985 or is under winding up
4.
62
No
No
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
CHL International
The company was incorporated on 29th June 2001as a Joint Stock Company. The company is registered
with Tajikistan Government having its registered office at 48, Ayni Street, Dushanbe, Tajikistan. The
company is engaged in the business of developing and managing hotels in Tajikistan & other CIS
Countries.
Board of Directors:
Sr. no.
Name
1
Dr. L. K. Malhotra
2
Mr. D. V. Malhotra
3
Mr. Luv Malhotra
4
Mr. Lalit Bhasin
5
Mr. Narender Kumar Goel
List of Shareholders
Sr.no.
Name of the Share Holders
1
2
M/s CHL Limited
M/s Al-Zahem & Malhotra General Trading & Contracting Co.
Total
*Conversion rate: 3.41 Somani = 1 USD as on 24/07/2008
Number of
Shares held of
Somoni 100/each*
27,650
40,150
67,800
Brief Audited Financial Results of the Company is as follows:
(Rs. in Lacs)
Particulars
Total Income *
Financial Year Ended
2007
31st December
2006
2005
NIL
NIL
NIL
Profit/ (Loss) after Tax
(11.33)
(7.96)
NIL
Share Capital
106.30
106.30
106.30
Reserves and Surplus
(excluding revaluation reserve)
NIL
NIL
NIL
Earnings Per Share (in Rs.)
NIL
NIL
NIL
Book Value per Equity Share (in Rs.)
NA
NA
NA
Face Value per Share (in Rs.)
NA
NA
NA
* Hotel at Dushanbe is under construction stage, and as there is no income in the company due to
which the financials are not available.
Other Details
Public Issue or rights Issue in the preceding 3 years
Whether the company has become a sick company within the meaning of sick industrial
companies( Special Provision) Act 1985 or is under winding up
63
No
No
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
5. Mela Hotels Limited
The company was incorporated on 26th December, 1985 as a limited company having its registered office
at A-173, New Friends Colony, New Delhi 110 065. The CIN no. of the company is
U55101DL1985PLC022874. The company is engaged in the business of running hotels and restaurants.
The company is not listed on any stock exchange.
Board of Directors
Sr. no.
Name
1
Mr. A. K. Malhotra
2
Mr. B. N. Malhotra
3
Brig. Kapil Mohan
4
Mr. Vinod Chopra
5
Mr. Banwari Lal Rathi
6
Mr. Ravi Kant Chadha
7
Mr. Neel Kamal Malhotra
8
Mr. Gagan Malhotra
9
Ms. Sunita Malhotra
Shareholding pattern:
Sr.no.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Name of the Share Holders
Number of Shares
held of Rs. 10/- each
45,340
40,010
64,610
25,010
10
10
10
50,32,500
3,20,000
3,20,000
1,60,000
75,000
64,000
1,000
7,50,000
5,00,000
5,00,000
78,97,500
Dr. Lalit Kumar Malhotra
Mrs. Sunita Malhotra
Mr. A. K. Malhotra
Ms. Renu Malhotra
Ms. Mela Devi Malhotra
Mr. A. Srinivasan
Mr. K. S. Suri
Malbros Investments Inc.
I.F.C.I. Limited
I.D.B.I. Limited
I.C.I.C.I. Limited
Unites Sales Ltd.
United Exports
Brig. Kapil Mohan
Mr. D. V. Malhotra
Mrs. Usha Malhotra
Mr. Lokesh Malhotra
Total
13% Redeemable Cumulative Preference (shares of Re. 100 each) Shareholders
Sr.no.
1
2
Name of the Share Holders
Number of Shares
held
1,00,000
1,00,000
2,00,000
Malbros Investments Inc.
Mr. Neel Kamal Malhotra
Total
64
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Brief Audited Financial Results of the Company is as follows:
(Rs. in Lacs)
Financial Year Ended 31st March
Particulars
2006-07
2005-06
2004-05
Total Income
262.57
259.61
302.81
Profit/ Loss after Tax
(38.90)
(25.42)
(49.39)
Share Capital
989.75
989.75
989.75
NIL
NIL
NIL
(0.83)
(0.65)
(0.60)
10
10
10
Reserves and Surplus
(excluding revaluation reserve)
Earnings Per Share (in Rs.)
Book Value per Equity Share (in Rs.)
Face Value per Share (in Rs.)
Other Details
Public Issue or rights Issue in the preceding 3 years
Whether the company has become a sick company within the meaning of sick industrial
companies( Special Provision) Act 1985 or is under winding up
No
No
6. CHL Biotech (Pvt.) Ltd
The company was incorporated on 2nd November, 2007 as a private limited company having its
registered office at Hotel Crowne Plaza, New Delhi 110 065. The CIN no. of the company is
U24233DL2007PTC170086. The company is engaged in the activities of purchasing and manufacturing of
drugs and chemicals for medicinal purposes. The company is not listed on any stock exchange.
Board of Directors
Sr. no.
Name
1
Dr. L. K. Malhotra
2
Mr. Luv Malhotra
3
Mr. Narender Kumar Goel
List of Shareholders
Sr.no.
1
2
3
Name of the Share Holders
Mr. Luv Malhotra
Mr. Narender Kumar Goel
M/s CHL Limited
Total
Number of Shares
held of Rs. 10/- each
10,000
10,000
10,000
30,000
As the company has been incorporated in the month on November 2007, no financials have been made.
Other Details
Public Issue or rights Issue in the preceding 3 years
Whether the company has become a sick company within the meaning of sick industrial
companies( Special Provision) Act 1985 or is under winding up
7. On Track Technocrat Developer Pvt. Ltd.
65
No
No
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
The company was incorporated on 14th February, 2007 as a private limited company having its registered
office at 197, Sukhdev Vihar, New Delhi 110 025. The CIN no. of the company is
U45200DL2007PTC159278. The company is engaged in construction work relating to building, hotels etc.
The company is not listed on any stock exchange.
Board of Directors
Sr. no.
Name
1
Mr. Kumud Malhotra
2
Mr. Narender Kumar Goel
3
Mr. Luv Malhotra
Shareholding pattern:
Sr.no.
1
2
3
Name of the Share Holders
Mr. Kumud Malhotra
Mr. Narender Kumar Goel
Mr. Luv Malhotra
Total
Number of Shares
held of Rs. 10/- each
10,000
10,000
10,000
30,000
Brief Audited Financial Results of the Company is as follows:
(Rs. in Lacs)
Particulars
2006-07
Total Income
Nil
Profit/ Loss after Tax
Nil
Share Capital
3.00
Reserves and Surplus
(excluding revaluation reserve)
Nil
Earnings Per Share (in Rs.)
Nil
Book Value per Equity Share (in Rs.)
10
Face Value per Share (in Rs.)
10
Other Details
Public Issue or rights Issue in the preceding 3 years
Whether the company has become a sick company within the meaning of sick industrial
companies( Special Provision) Act 1985 or is under winding up
No
No
Disassociation by Promoters
The promoters have not disassociated themselves from any of the Companies during three preceding
years except.
Common Pursuits
There are no common pursuits among the Company and the Group Companies.
66
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Litigation
For details on outstanding litigations against Group Companies please refer page no. 90 this Letter of
Offer
Related Party Transactions
For details of Related Party Transaction please refer to details given under the section titled “Related
Party Transactions” on page no. 77 this Letter of Offer.
67
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
PART II
SECTION IV - FINANCIAL INFORMATION
Auditor’s Report
25th July 2008
The Board of Directors,
CHL Limited,
Hotel Crowne Plaza,
New Friends Colony,
New Delhi – 110 025
Dear Sir,
As required by Part II of Schedule II of the Companies Act, 1956 and Guidelines titled Securities and
Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 in general and clause 6.10
of the said guidelines in particular issued by the Securities and Exchange Board of India (SEBI) in
pursuance of Section 11 of Securities and Exchange Board of India Act, 1992, we have examined the
financial information contained in the statements annexed to this report which are to be included in the
Letter of Offer in connection with the proposed Right Issue of the Company.
We have examined the ‘Statement of Profit and Loss (Annexure-I) of the Company for the years ended on
March 31, 2004, 2005, 2006, 2007 and 2008 and the ‘Statement of Assets and Liabilities – as on those dates
(Annexure – II), the ‘Statement of Cash Flows – for the years ended on those dates (Annexure – III), and
the related financial statement schedules (Annexure IV to XVI) as extracted from the audited financial
statements for each of the financial years ended on March 31, 2004, 2005, 2006, 2007 adopted by the
members of the company and audited financial statements for March 31st 2008 to be adopted by the
members of the company after making the necessary and relevant disclosures as appropriate and
required to be made, in our opinion, in accordance with the provisions of Part II and Schedule II of the
Companies Act, 1956 and SEBI Guidelines.
The accounts as given in the enclosed statements do not require any restatement since:
a.
b.
c.
There have been no adjustments for the changes in accounting policies retrospectively in
respective financial years.
There have been no adjustments for the material amounts in the respective financial years to
which they relate.
There are no extra-ordinary items that need to be disclosed separately in the accounts and
qualification requiring adjustments.
We have examined the following financial information relating to the Company proposed to be included
in the Letter of Offer, approved by the Board of Directors and annexed to this report.
a.
Significant accounting policies
(Annexure IV)
b.
Notes to Accounts (Annexure V)
c.
Statement of Dividend (Annexure – VI)
d. Statement of Accounting Ratios (Annexure – VII)
e.
Statement of Capitalization (Annexure – VIII)
f.
Statement of Other Income (Annexure – IX)
68
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
g.
Tax Shelter Statement (Annexure – X)
h. Statement of Secured Loans (Annexure – XI)
i.
Statement of Unsecured Loans (Annexure – XII)
j.
Statement of Sundry Debtors (Annexure – XIII)
k.
Statement of Loans & Advances (Annexure – XIV)
l.
Statement of Sundry Creditors and Provisions (Annexure – XV)
m. Statement of Investments (Annexure – XVI)
This report is intended solely for the use of CHL Limited, for the purpose of inclusion in the Letter of
Offer in connection with the proposed Right Issue of the Company. This report may not be used or relied
upon by, or disclosed, referred to or communicated by yourself (in whole or in part) to any third party for
any purpose other than the stated use, except with our written consent in each instance, and which
consent, may be given, only after full consideration of the circumstances at that time.
For G.Rai & Co,
Chartered Accountants,
sd/(Gulshan Rai)
Proprietor
M.No. 3921
69
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Annexure I
Statement of Profit and Loss Account:
Particulars
(Rs. in lacs)
For the Financial years ended 31st March
2008
2007
2006
2005
2004
INCOME
Sales & Services
Increase (Decrease) in
inventories
Other Income
Total Income
8709.35
7625.73
5668.07
4301.2
3209.08
479.24
9,188.59
451.66
8,077.39
314.85
5,982.92
102.13
4,403.33
138.67
3,347.75
EXPENDITURE
Food and beverages consumed
Staff Costs
Operating & General Expenses
Depreciation
Deferred Revenue expenditure
Selling Expenses
Interest
Total expenditure
583.71
1,584.84
2,368.22
364.46
1.40
601.70
489.50
5,993.83
545.15
1,194.97
2,322.97
315.27
1.40
583.35
489.25
5,452.36
468.57
916.17
1,990.60
325.49
1.40
427.10
310.24
4,439.57
433.88
707.52
1,982.19
238.27
3.04
305.41
147.51
3,817.82
319.61
571.17
1,521.96
241.74
3.04
176.31
137.46
2,971.29
3,194.76
1,089.61
2,625.03
922.41
1,543.35
503.03
585.51
191.58
376.46
174.97
2,105.15
1,702.62
1,040.32
393.93
201.49
57.07
(0.20)
(0.91)
-
-
2,048.08
1,702.82
1,041.23
393.93
201.49
Net Profit before tax and extra
ordinary items
Taxation
Net Profit/(Loss) before extra
ordinary items
Adjustment of Last years'
Provisions
Net Profit after Extraordinary
items
70
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Annexure II
Statement of Assets & Liabilities:
(Rs. in lacs)
2005
5939.37
2650.45
3288.92
3288.92
2004
5656.24
2617.79
3038.45
29.01
3067.46
791.95
338.91
119.87
243.14
555.06
2613.98
1329.32
4741.50
217.53
452.97
1945.41
1618.56
4234.47
215.33
253.41
1171.02
484.38
2124.14
214.96
195.27
755.35
632.80
1798.38
3,485.78
3514.18
3612.01
1373.98
850.59
198.96
541.88
1,460.09
176.96
563.14
1357.38
178.33
550.04
1096.02
171.04
592.22
910.25
233.25
645.24
761.60
5,686.71
6,106.14
5,611.66
4,575.95
5,436.40
3,372.08
3,047.49
2,704.48
2,490.68
2,495.03
1,096.37
5,012.57
(2.80)
1096.37
3483.79
(4.21)
1096.37
2281.32
(5.61)
1096.37
1615.12
7.01)
1096.37
1408.71
10.05)
6,106.14
4,575.95
3,372.08
2,704.48
2,495.03
Description
Gross Block
Less Depreciation
Net Block
Capital Work in Progress
Sub Total (A)
2008
8,537.27
3,030.96
5,506.31
5,506.31
2007
7317.09
3135.48
4181.61
57.08
4238.69
2006
6702.55
2943.70
3758.85
23.21
3782.06
B
Investments (B)
1,144.74
1207.42
C
Current Assets, Loans &
Advances
Inventories
Sundry Debtors
Cash and Bank Balances
Loans and Advances
Sub Total ( C )
380.87
619.47
1,277.31
2,864.15
5,141.80
A
D
Liabilities and Provisions
Secured Loans
Unsecured Loans :
Security Deposit
Deferred Tax Liabilities
Current Liabilities And
Provision
Total Liabilities ( D)
NET WORTH (A+B+C-D)
Net Worth Represented by
Share Capital:Equity Share Capital
Reserves and Surplus
Less:- Miscellaneous Expenses
not w/off)
Total Net Worth
71
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Annexure III
Cash Flow Statement for the year ended 31st March:
Particulars
A) Cash Flow From Operating Activities
Net Profit before Tax & Extraordinary Items
Adjustments for
Depreciation
Dividend Income
Misc. Expense Written off
Extra Ordinary Items
Loss/(Profit) on Sale of Assets
Scrapped/Discarded Assets written off
Loss on Sale of Investment
Interest Expenditure
Interest Received
Operating Profit before Working Capital
Changes
Adjustments for
(Increase) Decrease in Inventories
Increase (Decrease) in Trade Payables
(Increase) Decrease in Receivables
Cash generated from Operations
Income Tax (Paid)/Refund
Net Cash from Operating Activities (A)
B) Cash Flow from Investing Activities
Purchase of Fixed Assets
Sale of Fixed Assets
Purchase of Investment
Sales of Investment
Advance to Associate Companies
Inter corporate Deposit
Interest Received
Dividend Received
Net Cash used in Investing Activities (B)
C) Cash Flow from Financing Activities
Proceeds from issue of Capital
Interest Paid
Increase Decrease in Security Deposit
Dividend Paid
Dividend Tax Paid
Increase (Decrease) in Secrued Loans (Term
Loan)
Increase (Decrease) in Secured Loans
(Working Capital)
Net Cash used in Financing Activities ( C )
Net increase/ decrease in cash and cash
equivalents (A+B+C)
Cash & Cash Equivalent as on 1st April
Cash & Cash Equivalent as on 31st March
(Rs. in lacs)
2005
2004
2008
2007
2006
3,194.75
2,626.77
1,586.01
585.51
376.46
364.46
(33.28)
1.40
2.39
79.69
(44.98)
489.49
(317.70)
3,736.22
315.27
(78.59)
1.40
(1.74)
(102.12)
119.28
8.59
489.26
(236.14)
3,141.98
325.49
(22.36)
1.40
(42.65)
(102.36)
11.64
3.01
310.24
(152.25)
1,918.17
238.27
(5.22)
3.04
241.74
(0.25)
3.04
27.57
217.44
7.60
147.51
(75.42)
1,146.30
1.60
9.07
36.77
137.53
(93.15)
712.81
(137.73)
94.15
(207.58)
3,485.06
(1,167.08)
2,317.98
(25.61)
201.15
(112.35)
3,205.17
(936.48)
2,268.69
(2.19)
233.10
(322.48)
1,826.60
(602.43)
1,224.17
(0.38)
121.18
55.27
1,322.37
(126.97)
1,195.40
(52.74)
41.44
(71.56)
629.95
116.70
746.65
(1,721.39)
7.24
(1,317.18)
1,424.85
(487.00)
(875.00)
289.15
33.28
(2,646.05)
(910.12)
10.34
(1,121.11)
807.77
321.33
236.14
78.59
(577.06)
(843.19)
9.90
(759.26)
408.57
(1,007.69)
152.25
22.36
(2,017.06)
(693.65)
8.88
(332.47)
85.87
(48.35)
75.42
5.22
(899.08)
(169.55)
73.48
4.44
93.15
0.25
1.77
(489.49)
22.00
(438.16)
(74.53)
(566.94)
(489.26)
(1.37)
(380.78)
(53.82)
1,674.31
(310.24)
7.30
(321.68)
(46.13)
1,081.81
(147.51)
(62.21)
(163.20)
(23.06)
355.86
(137.53)
(1,772.14)
1,156.22
159.47
(18.41)
(1,008.59) (1,023.06)
(1,336.66)
668.57
1,567.28
774.39
119.35
415.67
(515.55)
232.87
1,171.02
1,945.41
755.35
1,171.02
522.48
755.35
538.53
2,613.98
1,277.32
72
1,945.41
2,613.98
(1.14)
(358.47)
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Annexure IV
SIGNIFICANT ACCOUNTING POLICIES
Annexed to and forming part of the Statement of Accounts for the year ended 31st March 2008.
A) BASIS OF PREPRATION OF FINANCIAL STATEMENTS
1. The financial statements are prepared under the historical cost convention method, except as stated
otherwise, in accordance with generally accepted accounting principles and mandatory
Accounting Standard, issued by the Institute of Chartered Accountant of India and referred to in
section 211(3C) of the Companies Act, 1956.
2. USE OF ESTIMATES
The preparation of financial statements requires estimates and assumptions to be made that affect
the reported amount of assets and liabilities on the date of financial statements and the reported
amount of revenues and expenses during the reporting period. Difference between the actual
results and estimates are recognized in the period in which the results are known / materialized.
B) FIXED ASSETS AND DEPRECIATION
1. Fixed assets are stated at cost, less impairment losses if any. Cost includes all expenditure
necessary to bring the assets to its working condition for its intended use. Capital work in progress
comprises of advances paid to suppliers of material, labor, services and other related expenditure
where the fixed asset is not ready for its intended use as at the balance sheet date. In the case of
new undertaking, preoperative expenses are capitalized upon the commencement of commercial
operations.
2. Cost of asset(s) replaced but still usable is not reduced from the cost of the asset(s) till it is sold /
discarded. If the cost of the asset(s), discarded / sold is not ascertainable, cost of replacement of
such asset(s), (discounted as per “indexed cost formula” prescribed under Income Tax Act, 1961) is
taken as the cost of such asset(s) for the purpose of deduction from the cost.
3. Expenses on complete renovation / rebuilding of an existing asset resulting in substantial increase
in useful life are capitalized. Residual value of the original asset, renovated or rebuilt is reduced
from the cost.
4. Increase in cost of the asset(s) (acquired prior to 01/04/1988) on account of exchange fluctuation in
foreign currency loan, is treated as a separate asset. No adjustment is made in the carrying cost of
these asset(s), in respect of assets(s) sold / discarded if the cost of such asset was not ascertainable.
The depreciation on such assets is provided at weighted average rate based on residual life of the
asset which is as follows: Class of Asset
Building
Plant & Machinery
Depreciation
Rate (%)
1.89
9.20
5. Depreciation on other tangible assets is provided on straight-line method basis in accordance with
the provisions of section 205 (2) (b) of the Act, in the manner and at the rates specified in Schedule
XIV of the said Act.
6. Intangible Assets are depreciated on straight line method over the useful life thereof, which is
taken as three years.
73
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
C) IMPAIRMENT OF ASSETS
The carrying amounts of the asset(s) are reviewed at each balance sheet date to assess whether they
are recorded in excess of their recoverable amounts, and where carrying amounts exceed the
recoverable amount of the ass, asset(s) are written down to their recoverable amount.
D) INTANGIBLE ASSETS
Accounting treatment of intangible assets like computer software is made in accordance with AS-26.
E) ASSETS ON LEASE
Accounting treatment of assets taken on lease after 01/04/01 is being made in accordance with AS-19.
F) BORROWING COST
Borrowing costs that are attributable to the acquisition, construction or production of qualifying
assets are capitalized as part of cost of such assets. A qualifying asset is an asset that necessarily
requires a substantial period of time to get ready for its intended use or sale. All other borrowing
costs are recognized as an expense in the period in which they are incurred.
G) FOREIGN CURRENCY TRANSACTION
1. Transactions denominated in foreign currencies are normally recorded at the exchange rate
prevailing on the date of the transaction.
2. Monitory items denominated in foreign currencies at the year end are restated at year end rates.
3. Non monitory foreign currency items are stated at cost.
4. Any income or expense on account of exchange difference either on settlement or on translation is
recognized as revenue except in cases where they relate to acquisition of fixed assets in which case
they are adjusted to the carrying cost of such assets or where the amount of difference is not
material.
H) INVESTMENTS
Long term investments are carried at cost. However, provision is made to recognize a decline, other
than temporary, in the value of long term investments.
Current investments are carried at lower of cost and fair value, determined on an individual basis.
I)
CURRENT ASSETS
Inventories are valued at lower of cost and estimated net realizable value after providing for cost of
obsolescence and other anticipated loss whenever considered necessary. Cost is determined by using
the first in, first out (FIFO) basis.
Linen, Glassware, Chinaware etc. issued to rooms and outlets are treated as replacement of old/worn
out items and charged to Profit & Loss Account and items in use at the close of the year are included
in inventories.
J)
RETIREMENT AND OTHER EMPLOYEES BENEFITS
74
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Consequent to the adoption of Accounting Standard 15 (Revised 2006) on “Employees Benefits”, the
company has classified various benefits to employees under “Defined Contribution Pans, and
Defined Benefit Plans”.
i.
Defined Contribution Plan
a)
Contributions payable by the company to the concern Government Authorities in respect to
Provident Fund, Family Pension Fund and Employees State Insurance are charged to the
Profit and Loss Account on accrual basis.
b)
Gratuity liability as on the Balance Sheet date is determined by the insurance company with
whom the company has taken a group gratuity policy, on the basis of actuarial valuation
using projected unit credit method and such liability has been provided in these accounts.
ii. Defined Benefit Plan
Short term compensated absences are recognized as expense, at the undiscounted amount, in
Profit and Loss Account of the year in which they are incurred.
Long term compensated absences are provided for based on the actuarial valuation as per
projected unit credit method, as at the Balance Sheet date.
Actuarial gains and losses are immediately taken to Profit and Loss Account as income or
expenses without resorting to any amortization.
K) RECOGNITION OF INCOME & EXPENDITURE
i. Sales and Services are stated net of discount / allowances.
ii. Claims recoverable are recognized to the extent admitted by the parties. License fee from shops are
recognized in the year of receipts, as per practice consistently followed. Unclaimed credit balances
and excess provision of expenditure are treated as revenue of the year in which such amounts
cease to be Company’s liability.
iii. Discarded assets (carpets etc.) are charged to the profit & loss account at written down value.
Amount realized, if any, on sale of such items is treated as income. . Scrap value is recognized, if
material.
iv. Claims by customers under reward schemes of sales promotion program are recognized on
acceptance.
L) CONTINGENT LIABILITIES
Contingent Liabilities are disclosed after careful examination of the facts and legal aspects of the
matter involved.
M) TAXATION
Provision for current taxation is made in accordance with Income Tax Laws applicable to the
assessment year. Wealth tax for the year is provided as per the Wealth Tax Act and Rules 1957.
Deferred tax is recognized on time difference between the accounting income and the taxable income
for the year and quantified using the tax rates and laws enacted or substantively enacted as on the
Balance Sheet date.
75
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Deferred tax asset is recognized and carried forward to the extent there is a reasonable certainty that
sufficient future taxable income will be available against which such deferred tax assets can be
realized.
N) LIABILITIES
Liabilities in respect contractors engaged in extensive repairs/renovation of guest floors, outlets,
facilities and for provision of services relating thereto are accounted for in the year in which the same
are put to commercial use. All payments till completion are shown under the head “Advances
recoverable in cash or in kind”
O) Prior period and extraordinary items and changes in Accounting Policies having material impact on
the financial affairs of the company are disclosed.
76
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Annexure V
NOTES ON ACCOUNTS
1. Contingent liabilities not provided for in respect of
2007-2008
(Rs. in lacs)
8.00*
i)
Demands Claims not acknowledged as debt or which
are under litigation
ii) Bank Guarantees furnished
13.88
iii) Disputed demands for taxes duties and other levies
335.37
pending adjudication in appeal
* includes claim against which FDR for Rs. 6.08 lacs furnished.
2. Amount due to SSI Unit for a period exceeding 30 days
2006-2007
(Rs.in lacs)
27.00*
Nil
14.80
350.21
Nil
3. The company has not received information from vendors regarding their status under the Micro,
Small and Medium Enterprises Development Act 2006 and hence disclosure relating to the amounts
unpaid at the year end with interest paid / payable under this Act has not been given.
4. Extra-ordinary item – payment to DDA
Nil
1.74
5. Depreciation on intangible asset viz computer software has been provided at straight line method.
No depreciation has been provided on building, plant and machinery in NSEZ, acquired during the
year through public auction as the same was not put to use till the year end.
6. a. Debts due to or by the company, in some cases are unconfirmed and/or under reconciliation. In
the opinion of the management the impact of adjustment, if any, on reconciliation is not likely to be
significant.
b. Rs.57.07 lacs as stated in annexure I (Profit and Loss a/c) represents provision for Employees
Retirement benefits on mandatory implementation of Accounting Standard 15 (Revised) in this
year.
7. In the opinion of the management, the assets of the company have a value on realization, in the
normal course of business, at least equal to the amounts stated in the balance sheet.
8. DEFERRED REVENUE EXPENDITURE
The amount represents non refundable fee paid to S. C. Hotels for use of brand name Crowne Plaza
amortized during the year.
9. AS-17 on Segment Reporting is not applicable as the company is engaged only in hotel business and at
one location.
10. Related party transactions
-
Associate Companies
CHL (South) Hotels Limited
CHL International
CHL Biotech Pvt. Ltd.
-
Key Management Personnel
Dr. L.K.Malhotra
Mr. Luv Malhotra
-
Entities controlled by Directors
Kyjol Entertainment Media Pvt Ltd.
77
Managing Director
Executive Director
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
or their relatives
-
Sr.
no
a)
c)
3.
Entities where Director(s)
and/or their relatives are
Partner/Trustee/Director
Name of Party
United
Overseas/United
Exports
Mataji Melan Devi
Society
d)
Mohan Meakin Ltd
f)
CHL International
g)
CHL
(South)
Hotels Ltd
CHL
Biotech
Pvt. Ld.
h)
(Rs.in lacs)
Nature of Transaction Bal. O/s recei- Written off/
Transaction
value
vable/(payable) Written
as on 31.3.2008
back
(0.90)
NIL
A firm in which
Purchase of
6.50
Director’s relative Rice
is partner
A Trust in which Donation
NIL
NIL
11.00
Director is
Trustee
A company in
NIL
NIL
Supply of
0.27
which Director is Liquor
Director
An associate
Advance/
32.00
909.02
NIL
Company
Investment
An associate
Advance/
1148.00
450.00
NIL
Company
Investment
An associate
Advance/
11.08
5.00
NIL
Company
Investment
Relationship
Managerial Remuneration to Directors
Particulars
Salary & Allowances
Contribution to P.F.
Other benefit/perquisites
Commission to Directors
Sitting Fee to other Directors
4.
2007-08
134.40
10.08
3.00
267.72
9.80
(Rs. in lacs)
2006-07
120.40
9.12
1.85
207.25
6.95
2007-08
5.06
1.12
(Rs. in lacs)
2006-07
3.37
1.68
Auditors Remuneration
Particulars
As Audit Fee
For Other Services
5.
Mela Hotels Limited
Malbros Capital Services Pvt Ltd.
On Track Technocrat Developer Pvt Ltd.
United Overseas/United Exports
Mataji Melan Devi Society
Mohan Meakin Ltd.
Deferred Tax Liabilities
Particulars
Depreciation
Miscellaneous Expenditure to
the extent not amortised
Deferred Tax Liabilities
2007-08
1604.11
2.80
1606.91
546.19
(Rs. in lacs)
2006-07
1652.57
4.21
563.14
6. A. The company has been exempted vide order No. 46/50/2006/CL-III dated 10/02/2006 of Ministry
of Company Affairs, Government of India u/s 211(4) of the Companies Act, 1956 from the
78
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
disclosure of quantitative details of turnover, stocks, purchases, production and consumption of
raw material for the financial years ended 31st March 2006, 31st March 2007 and 31st March 2008.
2007-08
B. C.I.F. Value of Imports
a) Food & Beverage
b) Wine & Liquor – through canalizing agencies.
c) Components and spare parts
d) Capital Goods
C.
D
Expenditure in Foreign Currency – on payment
basis
i. Technical Services
ii. Others
Nil
108.88
Nil
174.52
Nil
79.28
Nil
127.61
226.25
148.97
175.10
123.57
5174.60
4823.77
187.63
226.01
Earning in Foreign Exchange – on receipt basis
On account of hotel services and sales made
through Travel Agents
E.
Rs. in lacs
2006-07
Remittance in Foreign Currency on account of
Dividend
7.
Amount transferred to investor education and protection fund as required under section 205 C of the
Companies Act as Rs. NIL (Previous Year Rs. 1.72 lacs)
8.
Previous year’s figures have been regrouped and rearranged wherever necessary to make it
comparable with the Current Years figures. All figures have been rounded off to nearest rupee.
79
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Annexure VI
Statement of Dividend
Particulars
Equity Shares
No. of Equity Shares of Rs. 10/- each
Rate of Dividend (Net)
Dividend Amount (Rs. In Lacs)
Dividend Tax
31/03/2004
(Rs. in lacs)
31/03/2005 31/03/2006 31/03/2007 31/03/2008
109.636
15%
164.45
21.07
109.636
15%
164.45
23.06
109.636
30%
368.91
46.13
109.636
40%
438.55
61.81
109.636
40%
438.55
80.74
Annexure VII
Statement of Accounting Ratios
Particulars
2008
Earnings per share
Net Profit after Tax (Rs. Lacs)
No. of Shares (in lacs)
EPS (Rs.)
Return on Net Worth
Profit after Tax (Rs. Lacs)
Net Worth (Rs. Lacs)
Return on Net Worth (%)
Net Assets Value per share
Total Assets (Rs. Lacs)
Total Liabilities (Rs. Lacs)
Asset Value (Rs. Lacs ) (a-b)
Less : Share Application money
received
Net Asset Value (Lac Rs.) (e)
No. Shares (in lacs)
Net Assets Value per Share (Rs.)
(Rs. in lacs)
Financial Year Ending
2007
2006
2005
2004
a
b
a/b
2105.15
109.636
19.20
1702.62
109.636
15.53
1040.32
109.636
9.49
393.93
109.636
3.59
201.49
109.636
1.84
a
b
a/b
2105.15
6106.15
34.48
1702.62
4575.95
37.21
1040.32
3372.08
30.85
393.93
2704.48
14.57
201.49
2495.03
8.08
a
b
a-b
11792.85
5686.71
6106.14
10187.61
5611.66
4575.95
8808.48
5436.42
3372.08
5933.52
3229.04
2704.48
4985.71
2490.68
2495.03
d
c-d
f
e/f
0.00
6106.14
109.636
55.69
0.00
4575.95
109.636
41.74
0.00
3372.08
109.636
30.76
0.00
2704.48
109.636
24.67
0.00
2495.03
109.636
22.76
Annexure VIII
Statement of Capitalization
(Rs. in lacs)
Particulars
Loans - Secured and Unsecured
Short Term Debt
Long Term Debt
Total Loans
Shareholders' funds :
Share Capital
Reserves & Surplus
Total Shareholders' funds :
Total Long Term Debt/Shareholders' funds
Pre-Issue
(as on 31/03/08)
Post-Issue
538.53
2947.24
3485.77
538.53
2947.24
3485.77
1096.37
5057.65
6154.02
0.57 : 1
1644.56
7250.39
8894.945
0.39 : 1
80
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Annexure IX
Statement of Other Income
Particulars
Interest on FDRs/Others
Miscellaneous Income
Surplus on sale of assets/investments
Total
2008
317.70
116.56
44.98
479.24
(Rs. in lacs)
Financial Year ended on 31st March
2007
2006
2005
2004
236.14
152.25
75.42
93.15
113.40
60.23
26.71
45.52
102.12
102.36
451.66
314.84
102.13
138.67
Note: All items of 'other income’ are recurring and have arisen out of normal business activity
Annexure X
Tax Shelter Statement
Particulars
Profit as per books of account before Tax
Tax Rate %
Tax at Notional Rate
Adjustments
Difference between tax depreciation and book
Depreciation
Other Adjustments
Net Adjustment
Tax Saving /(Loss) on this difference
Total Taxation
Taxation on Extra ordinary items
Tax on Profits before extra ordinary items
(Rs. in lacs)
Financial Year / Period ended
2008
2007
2006
2005
2004
3,194.75 2,625.03 1,543.36
585.51
376.46
33.99% 33.66% 33.66%
33.66% 35.88%
1,085.90
883.59
519.49
197.08
135.07
(11.15)
(343.45)
(354.60)
(120.53)
1,079.70
1,079.70
49.64
(44.76)
4.88
1.64
885.63
(0.59)
886.22
111.53
(109.43)
2.10
0.71
523.11
(14.36)
537.47
(43.11)
100.88
57.77
19.45
241.79
241.79
29.12
(405.57)
(376.45)
(135.07)
28.94
28.94
Annexure XI
Statement of Secured Loans
A breakup of salient terms of all our material loans (Secured) as on March 31, 2008 is as below
(Rs. in lacs)
Sr.
Lender
Loan
Amount
Interest
Repayment
Security Created
No.
Sanctioned Outstanding
Rate
Schedule
A
Term Loans
1
HSBC Bank, New
3,400.00
2,833.33
10.95%
72 months
First Charge on
Delhi
Fixed/ Current Assets
B
Working Capital
Loans
1
ICICI Bank, New
285.00
2.57 1% over
Overdraft
Secured Against Fixed
Delhi
FD rates
Deposit
2
HDFC Bank, New
300.00
128.88 1% over
Overdraft
Secured Against Fixed
Delhi
FD rates
Deposit
3
HDFC Bank, New
448.00
407.08 1% over
Overdraft
Secured Against Fixed
Delhi
FD rates
Deposit
81
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Annexure XII
Statement of Unsecured Loans
Particulars
1. Security Deposits - From
Shops/Offices
Amount
(Rs. In lacs)
Rate of Interest
198.96
Interest Free
(Rs. in lacs)
Terms of
Repayment
When the
shop/office vacated
Annexure XIII
Statement of Sundry Debtors
Particulars
Sundry Debtors (unsecured, considered good, unless otherwise stated)
Exceeding Six months
Others
Total
(Rs. in lacs)
Amount
0.29
619.18
619.47
Annexure XIV
Statement of Loans & Advances
Particulars
Loans & Advances (unsecured, considered good, unless otherwise stated)
Advances recoverable in cash or in kind or for value to be received
Intercorporate Deposit Short Term
Earnest Money Deposit
Advances to Suppliers
Income Tax Refundable
Advances to Associate Company
Other Advances
Total
Annexure XV
Statement of Sundry Creditors & Provisions
(Rs. in lacs)
Amount
Particulars
Current Liabilities
Sundry Creditors
Unclaimed Dividend
Sub Total
Provisions
Taxation
Dividend
Tax on Dividend
Retirement Benefits
Sub Total
1093.20
14.82
1108.02
1.97
219.27
37.27
93.56
352.07
1460.09
Total
82
(Rs. in lacs)
Amount
49.55
875.00
25.35
243.03
214.64
1364.02
92.56
2864.15
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Annexure XVI
Statement of Investment
Particulars
Long Term Investment in Quoted Shares
Long Term Investment in Unquoted Shares
Long Term Investment in Associate Companies
Investment In Mutual Funds
Total
(Rs. in lacs)
Amount
149.02
0.26
405.45
590.00
1144.73
83
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
MANAGEMENT’S DISCUSSION AND ANALYSIS
Industry Structure and Developments:
The liberalization of Indian economy in 1991 and the integration of India into the global economy has
given impetus to business travellers and tourist travellers. This has intensified and elevated room rates
and occupancy levels in India. The successful growth story of “Hotel industry in India” seconds only to
China in Asia Pacific. The hotel industry is linked to tourism industry and the growth in the Indian
tourism industry has fueled the growth of Indian hotel industry. The growing economy and increased
business opportunities in India have acted as a boon for Indian Hotel industry. The arrival of low cost
airlines and the associated price war have given domestic tourists a host of options. The “Incredible
India” destination campaign and the recently launched “Atithi Devo Bhavah” campaign have also helped
in the growth of domestic and international tourism and consequently the hotel industry.
The Government’s move to declare hotel and tourism industry as a high priority sector with a provision
for 100% foreign direct investment (FDI) has also provided a further impetus in attracting investments in
this industry. One of the major reasons for increase in demand for hotel rooms in the country is the high
growth in sectors like information technology, telecom, retail and real estate.
India travel recognition:
•
•
•
•
•
•
•
India has been elected to head the UN World Tourism Organization (UNWTO), the highest
policy making world tourism body represented by 150 countries.
The world’s leading travel and tourism journal, “Conde Nast Traveller”, ranked India as the
numero uno travel destination in the world.
The Association of British Travel Agents (ABTA) has ranked India as No.1 amongst the top 50
places for 2006.
The “Incredible India” campaign has been ranked as the Highest Recall Advertisement
worldwide by “Travel and Leisure”.
India was adjudged Asia’s leading destination at the regional World Travel Awards (WTA).
India’s Taj Mahal continues to figure in the seven wonders of the world.
Bangalore based Leela Palace Kempinski has been rated as the favourite business hotel in the
world in a Readers’ Choice Awards by Conde Nast Traveller.
The opening up of the aviation industry in India has exciting opportunities for hotel industry as it relies
on airlines to transport 80% of international arrivals. The government's decision to substantially upgrade
28 regional airports in smaller towns and privatization & expansion of Delhi and Mumbai airport will
improve the business prospects of hotel industry in India. Substantial investments in tourism
infrastructure are essential for Indian hotel industry to achieve its potential. The upgrading of national
highways connecting various parts of India has opened new avenues for the development of budget
hotels in India. Taking advantage of this opportunity, Tata group and another hotel chain called
'Homotel' have entered this business segment.
To overcome the shortage of availability of rooms, Indian hotel industry is adding about 60,000 quality
rooms, currently in different stages of planning and development, which should be ready by 2012. Hotel
Industry in India is also set to get a fillip with Delhi hosting 2010 Commonwealth Games. Government
has approved 300 hotel projects, nearly half of which are in the luxury range. The future scenario of
Indian hotel industry looks extremely rosy. It is expected that the budget and mid-market hotel segment
will witness huge growth and expansion while the luxury segment will continue to perform extremely
well over the next few years.
There are some 1,980 hotels approved and classified by the Ministry of Tourism, Government of India,
with a total capacity of about 110,000 hotel rooms. Revenues of the hotel and restaurant industry in India
during the financial year 2006-07 was Rs 604.32 billion, a growth of 21.27% over the previous year,
primarily driven by foreign tourist arrivals, which increased by 14.17%. The hospitality industry is poised
to grow at a faster rate and is expected to reach Rs 826.76 billion by 2010.
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CHL Limited
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While the potential of hotel industry is great, there are several constraints for the industry to grow. High
cost of land in the country often discourages an investor to put in money in construction of new hotels.
Construction of hotels is highly capital intensive and it is estimated that to construct a single five-star
room, it costs around Rs 1.25 crore. As a result there is no incentive to construct new hotel properties and
there is a mismatch between demand and supply leading to higher occupancy rates and increasing prices.
In fact, average rate of hotel rooms in five-stars has gone up from Rs.4,000/- five years ago to Rs. 16,000/now. Though this rate can be affordable for business travellers, it is very difficult for leisure travellers to
pay such exorbitant rates.
Across the country there is no rationalisation of taxes as states charge different rates. Secondly,
multiplicity of taxes like value added tax and service tax further compounds the problem. Tax holidays
are available only to hotels at heritage sites and so this measure is restrictive for the growth of the hotel
industry.
An analysis of reasons for the changes in significant items of income and expenditure is given
hereunder:1.
Unusual or infrequent events or transactions
There have been no unusual or infrequent events or transactions of the company.
2.
Significant economic changes that materially affected or are likely to affect income from
continuing operations
Volitality in foreign exchange rates may have an effect on our revenues from foreign
travellers. We believe that barring this factor, there are no significant economic changes that
materially affect or likely to affect income from continuing operations.
3.
Known trends or uncertainties that have had or are expected to have a material adverse
impact on sales, revenue or income form continuing operations
Our average occupancy and food and beverages income is dependent on the demand and
supply of hotel rooms and the restaurant services provided. There are several new hotels
mushrooming around the city and increase in the hotels with similar to our service standards
would influence the sales and revenues form continuing operations.
4.
Future changes in relationship between costs and revenues
We are continuously working to create efficient processes and systems in our hotel and
restaurant operations aimed at cost control and reduction. We expect to continue this effort of
improving our processes and methodologies for setting up new hotel properties and
operating our hotels. Other than as mentioned in the risk factors of this letter of offer, to the
best of our knowledge, there are no known factors, which will affect the future relationship
between the costs and revenue.
5.
The extent to which material increases in net sales or revenue are due to increased sales
volume, introduction of new services or increased in sales prices.
There has not been any introduction of new services during the past financial year.
6.
Total turnover of each major industry segment in which the company operated
Indian hospitality sector has witnessed a significant mismatch in the demand- supply
scenario resulting from a huge growth in domestic as well as international business and
leisure tourists. According to recent estimates, Indian tourism demand is expected to grow at
10.05% (CAGR) over the next ten years (2008-2017), which would place India as the third
most rapidly growing in the travel and tourism demand for the period 2008-2017. the tourist
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arrival is expected to touch new heights fuelled by emergence of low cost airlines, growing
thrust by the government on tourism and infrastructure and India’s emergence as on
outsourcing hub.
7.
Status of any publicly announced new service
We have not announced any new service.
8.
The extent to which the business is seasonal
The business is seasonal during the period from September to March and hence the revenues
generated by the company during this period are higher as compared to each quarter.
9.
Dependence on single or few suppliers/ customers
We cater to a wide customer base including international and domestic suppliers/ customers.
We do not depend on a single customer as our customer base is well dversified.
10. Competitive conditions
The company operates in a highly competitive environment and faces competition from the
existing hotels in Delhi such as Asian Hotels Limited, EIH Limited, Bharat Hotels Limited,
Indian Hotels Company Limited, Jaypee Hotels Limited, CJ International Limited, Royal
Manor Hotels & Industries Limited, ITC Hotels Limited and Nehru Place Hotels Limited.
Details of material developments after the date of last balance sheet
Except as stated elsewhere in this letter of offer, to our knowledge no circumstances have arose since the
date of the last financial statements which materially and adversely affects or is likely to affect, the
operations or profitability of the company, to the value of our assets or our ability to pay our material
liabilities. There has been no material developments in the company after the last balance sheet date.
Discussions of Financial/ operational performance: The details of financial performance from the year
31st March 2005 to 31st March 2008 as per the audited financial results are given in the table below:
Statement of Profits & Loss –
Particulars
Income
Sales and services
Other Income
Expenditure
Food and beverages
Staff costs
Operating and General Expenses
Selling Expenses
Profit before Interest, Depreciation
and Tax
Interest
Depreciation
Profit before Tax
Provision for Taxation
Profit after Tax
31st,
March
2008
31st,
March
2007
31st,
(Rs. in Lacs)
March 31st,
2005
March
2006
8,709.35
479.24
7,625.73
451.66
5,668.07
314.85
4,301.20
102.13
583.71
1,584.84
2,368.22
601.70
5,139.87
545.15
1,194.97
2,322.97
583.35
3,429.55
468.57
916.17
1,990.60
427.10
2,179.08
438.88
707.52
1,982.19
305.41
971.29
489.50
364.46
3,194.76
1,089.61
2,105.15
489.25
315.27
2,625.03
922.41
1,702.62
310.24
325.49
1,543.35
503.03
1,040.32
147.51
238.27
585.51
191.58
393.93
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CHL Limited
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Comparison of recent financial years with the previous financial years.
Comparisons of FY 2008 over 2007
Income
Income from Rooms, Food, Beverage and other Services for the year ended 31st March 2008 is Rs. 8709.35
lacs as against Rs. 7625.73 lacs for the year ended 31st March 2007 reflecting a growth of 14.21%. This is
because of the fact that tourism industry in metropolitan cities is growing @ 11% resulting in increase in
average room revenue due to paucity of hotel rooms. During the year the hotel operated at an average
occupancy rate of 87%.
Other Income
The Other income grew by about 6% over past year i.e. Rs. 479.24 lacs for the year ended 31/03/2008 as
against Rs. 451.66 lacs for the year ended 31/03/2007. This includes income from investment, fixed
deposits and disposal of scrap and other materials.
Food & Beverage Cost
The expenses on Food & Beverage cost has increased by 10.70%, which is mainly on account of increase in
raw material cost and higher occupancy rate in rooms.
Staff Cost
The staff cost has increased by 33% which includes remuneration to whole-time Directors, who are
entitled to 10% of the Net Profit. Further, the salary of staff has increased by 15%.
Operating & General Expenses
There are no substantial increases in operating and general expenses. The increase is about 2% over the
past year which is commensurate with the level of occupancy. These expenses normally comprise of linen
and room supplies, laundry expenses, power & fuel cost, water expenses etc. The increase is normal as
compared to earlier years as a result of cost control implemented during the year.
Selling Expenses
The expenses has increased by 3% i.e. Rs. 601.70 lacs for the year ended 31/3/2008 as against Rs. 583.35
lacs in the previous year. The increase is mainly due to higher payments of fees payable to its franchisers
on account of increase in average room rates and occupancy. Beside the use of plastic money has
increased the commission payable on credit cards.
Financial Expenses
The company has been able to keep interest component at the same level as that of the last year by better
utilization of working capital facilities.
Depreciation
Depreciation is provided in accordance with the rates and rules specified in Schedule XIV of the
Companies Act 1956 on the Straight Line Basis. The Depreciation for the year ended 31/03/2008 is Rs.
364.46 lacs as compared of last year figure of Rs. 315.27 lacs. The proportionate increase was on account of
increase in Fixed Assets of the Company and full year depreciation of last year addition of rooms.
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Taxation
The company has made provision for taxation for the year ended 31/03/2008 Rs. 1089.61 lacs as
compared to Rs. 922.41 lacs for the corresponding previous year ended on 31/03/2007. The increase in
taxation is due to higher profitability.
Net Profit After Tax
The net profit after providing tax is Rs. 2105.15 lacs as compared to Rs. 1702.62 lacs for the previous year
showing an increase of 23.64% over the previous year, and added to Net worth of the company.
Comparisons of FY 2007 over 2006
Income
Income from Rooms, Food, Beverage Smokes and other service for the year ended 31/03/2007 is Rs.
7625.73 lacs as against Rs. 5668.07 lacs for the year ended 31/03/2006 reflecting a growth of 34.54%.
During the year the hotel operates at an average occupancy rate of 89%. The company added 42 rooms
during the year which were lying idle as a commercial place. The increase in income is due to increase in
average room rates, addition to rooms and contracting with various airlines fro its crew members on long
term basis.
Other Income
The other income grew by about 44% over the past year i.e. Rs. 451.66 lacs for the year ended 31/03/2007
as against Rs. 314.84 lacs for the year 31/03/2006. The increase is mainly due to income from investments
and interest on deposits by better utilization of surplus funds.
Food & Beverage Cost
The expenses on Food, Beverage & Smokes has shown an increase of 16.34% i.e. Rs. 545.15 lacs for the
year ended 31/03/2007 as compared to Rs. 468.57 lacs in the year ended 31/03/2006. The increase is
mainly due to increase in room counts.
Staff Cost
The Staff cost for the year ended 31/03/2007 is Rs. 119.50 lacs as against Rs. 916.17 lacs during the year
ended 31/03/2006. The increase is due to increase in staff cost by 15% and the remuneration of Whole
time Directors of 10% of the profits.
Operative & General Expenses
Operative and General Expenses for the year ended 31/03/2007 is Rs. 232.30 lacs as compared to Rs.
199.06 lacs for the period ended 31/03/2006 reflecting an increase of 16.70% over previous year. The
increase is due to increase in room numbers and supplies made to these rooms.
Selling Expenses
Selling expenses for the year ended 31/03/2007 are Rs. 583.35 lacs as against Rs. 427.10 lacs during
previous corresponding period. During the year, gave emphasis to familarise its facilities by printing in
magazines, newspapers and media. The increase in room revenues also increases the franchise fee
payable to franchisers.
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Financial Expenses
For the year ended 31/03/2007 the company took the loan for renovation from banks and has to pay one
time upfront fee. Thus the expenses increased from 310.24 lacs (as on 31/03/2006) to Rs. 489.25 lacs
(31/03/2007).
Depreciation
Depreciation is provided in accordance with the rates and rules specified in Schedule XIV of the
Companies Act 1956 on the Straight Line Basis. The Depreciation for the year ended 31/03/2007 is Rs.
315.27 lacs as compared of last year figure of Rs. 325.49 lacs. The decrease is due to the fact that the
company did not claimed for depreciation on commercial space as it has gone under renovation.
Taxation
The company has made provision for taxation for the year ended 31/03/2007 Rs. 922.41 lacs as compared
to Rs. 503.03 lacs for the corresponding previous year ended on 31/03/2007. The increase in taxation is
due to higher profitability.
Net Profit After Tax
The net profit after providing tax is Rs. 1702.62 lacs (as on 31/03/2007) as compared to Rs. 1040.33 lacs for
the previous year showing an increase of 64% over the previous year, added to Net worth of the
company.
WORKIG RESULTS
Information relating to the Company sales, gross profit etc., as required by the Ministry of Finance vide
circular No.F2/5/SE/76 dated February 5, 1977 read with the amendments of even No. dated March 8,
1977 as under:
The unaudited working results of the Company for the period from 01/04/2008 to 30/06/2008 are given
hereunder:
(Rs. in lacs)
For 3 months
Particulars
period ended
30/06/2008
Net Income from Operations
1871.60
Other Income
58.29
1929.89
Total Income
Total Expenditure
1123.16
Interest
87.17
Depreciation
92.50
Profit/(loss)before tax
627.06
Provision for tax
224.34
Net Profit/Loss
402.72
Paid up Equity Share Capital
1096.37
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SECTION V - LEGAL AND OTHER INFORMATION
OUTSTANDING LITIGATIONS AND DEFAULTS
Except as described below and in the notes to the financial statements, there are no contingent liabilities
not provided for, outstanding litigations, disputes, non payment of statutory dues including
disputed/contested tax liabilities of any nature including government claims, overdues to banks/
financial institutions, defaults including those against banks/ financial institutions, defaults in dues
towards instrument holders like debenture holders, fixed deposits, and arrears on cumulative preference
shares issued by the Company or the companies/firms promoted by the Company, defaults in creation of
full security as per terms of issue/ other liabilities, proceedings initiated for economic/ civil/ any other
offences (including past cases where penalties may or may not have been awarded and irrespective of
whether they are specified under paragraph (i) of Part 1 of Schedule XIII of the Companies Act, 1956)
against CHL Limited save and except the following:
A) OUTSTANDING LITIGATION INVOLVING THE ISSUER COMPANY: CHL Limited
LITIGATION SUMMARY – CHL LIMITED
Financial implications
where quantifiable)
(Rs. in Lacs)
No. of
Cases
Litigations
Cases Against the Company
Income Tax Related
- At CIT – Appeal/ITAT stage
- At High Court stage
Civil
Labour related
Cases filed by the Company
Civil Cases
7
1
5
2
335.37
66.39
277.00
Not Quantifiable
1
0.50
PENDING LEGAL CASES AGAINST THE COMPANY
Income Tax Related - At CIT – Appeal/ITAT stage
Dues relating to Income Tax as listed below have not been deposited / paid on account of dispute with
the related authorities as detailed below :
S.
No.
Name of the Statue
1
Income-tax Act 1961
2
3
4
5
6
7
Income-tax Act 1961
Income-tax Act 1961
Income-tax Act 1961
Income-tax Act 1961
Income-tax Act 1961
Income-tax Act 1961
Total
Nature of Dues
Amount
(Rs. in lacs)
Period to which
the amount relate
I. Tax
36.07
AY 2000-01
Forum where
dispute is
pending
ITAT
I. Tax
I. Tax
I. Tax (Penalty)
I. Tax (Penalty)
I. Tax
I. Tax
51.76
43.75
83.73
0.10
33.83
86.13
335.37
AY 2000-01
AY 2001-02
AY 2001-02
AY 2001-02
AY 1999-00
AY 2005-06
CIT(Appeal)
ITAT
ITAT
ITAT
CIT(A)
CIT(A)
Income Tax Related - At High Court stage
Case No./
Year
ITA
No.
634/2006
Case Title
Forum
Nature of Case
Status and Impact
Income Tax
Department
Vs.
CHL
Ltd.
Delhi High
Court
The department (Income
Tax)
has
moved
an
application
against
the
orders
of
CIT/ITAT
The High Court has referred the
case to bench of board to decide
the case.
Two appeals are
pending.
Disputed demands
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CHL Limited
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Case No./
Year
Case Title
Forum
Nature of Case
(appeal)
allowing
the
company to take benefit of
deductions u/s 80HHD,
before set-off of brought
forward losses of earlier
year. The case pertains to
Assessment year 1996-97 &
1997 -98.
Status and Impact
amounts to Rs.66.39 lacs.
Civil
Case No./
Year
CWP No.
1711314/2004
Case Title
Forum
Nature of Case
Status and Impact
CHL Ltd.
Vs.
Municipal
Corpn of
Delhi.
Delhi High
Court
The next date of hearing in
this matter is 25th Nov. 2008.
In this matter, in view of the
court orders and also the
orders
in
the
Hotel
Federation’s matter, who
have also filed similar
petitions on account of the
said order of the Hon’ble
High Court. CHL is paying
the house tax which is
approximately Rs.22.03 lacs
every year.
RFA
No.
77/2005 of
2005
M/s. Surya
Hotel (CHL
Ltd.) Vs.
Pragrine
Security
Delhi High
Court
244/06/92
of 1992
Pallavi
Anand
(Group
Interior) Vs.
This
suit
was
filed
initially in
the
High
A demand of House Tax of
Rs. 2.5 Crores was raised by
Municipal Corpn. of Delhi
against CHL Ltd. on
account of increase in the
property tax. The house tax
is being calculated on the
basis of introduction of a
new scheme of multiple
factor
and
amendment
having been made in the
Municipal Corpn. Act. The
house
Tax
is
being
calculated on the multiple
factor which is in the case of
a 5 star hotel being 10. The
main contention in the said
matter by the hotel industry
and more particularly the 5
star hotel that the fixation of
the multiple factor is illegal,
arbitrary and has created
hardship for 5 star hotels,
since the House tax is
increased
many
fold.
Similar kind of petition has
also been filed by the Hotel
Federation of India.
Appeal against the order of
the Lower Court granting
decree of amounting Rs.6
lacs on account of security
dues of the security agency
deployed by the Hotel for
the security in the Hotel.
Suit for recovery of Rs.19
lacs on account of some
work done for interior in
the Hotel some in 198991
Appeal admitted on 31st
October 2006, now for final
hearing as per the regular
board of High Court
This
case
has
been
compromised and has been
dismissed
as
satisfied.
Consent term has been filed
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Case No./
Year
Case Title
Forum
Nature of Case
Status and Impact
Surya Hotel
(CHL Ltd.)
Court
which has
been later
on sent to
lower court
on account
of
Pecuniary
Jurisdiction
Delhi High
Court
1990. Earlier a winding up
petition was also filed by
Group Interior (Ms. Pallavi
Anand) in the High Court
of
Delhi
which
was
dismissed by Delhi High
Court.
with the High Court.
Pending for final disposal.
The winding up petition
was filed by the petitioner
in the year 1991 in Delhi
High Court. This pertains
to alleged dues for work of
Interiors done by Group
Interior for which suit has
been filed by them for
Rs.19 lacs.
Recovery of approximately
Rs. 2 lacs – Case filed by
M/s. Witness Silver against
hotel for nonpayment of
dues for silver plating.
In view of compromise and
full & final settlement,
Appeal does not survive.
Pending for final disposal.
244/06/92
of 1992
M/s. Pallavi
Anand
(Group
Interior) Vs.
Surya Hotel
(CHL Ltd.)
208 of 2002
M/s.
Witness
Silver
Vs.
Surya Hotel
Delhi
Lower
Court
Next hearing is fixed on
16.9.2008
Labour Related
Case
No./Date
of Filing
CWP No.
3734/2003
Case Title
Forum
Nature of Case
Status and Impact
Surya Hotel
(CHL Ltd.
Vs.
Workmen of
Surya hotel
Delhi High
Court
An award was passed by
the Labour Court against
the CHL Ltd. (Surya Hotel,
now Crowne Plaza Hotel)
wherein on a reference
made
by
the
labour
authorities
certain
enhancement in the salary,
dearness allowance and
other perquisites of the
employee of the hotel were
raised and it was ordered
by virtue of this award in
the year 2003 that the
employees
be
given
enhancement
in
their
wages, dearness allowance
and other perquisites with
effect from the date of the
award. Since the hotel is
already giving more wages
and perquisites etc., the said
award was challenged by
Admitted and will be heard
in the regular course of
hearing by the High Court.
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CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Case
No./Date
of Filing
Case Title
Forum
Nature of Case
Status and Impact
CHL Ltd. in the Hon’ble
High Court by way of civil
writ petition. The Hon’ble
court was very pleased to
stay the operation of the
impugned award. The said
petition was later on
admitted by high Court and
now will be heard on
regular board.
CWP No.
200/2003
Workman of
Surya Hotel
Vs.
Surya
Hotel (CHL
Ltd)
Delhi High
Court
As stated above the award
was given by the labour
court in favour of the
employees of the hotel from
the date of the award.
However the employees
chose to file a civil writ
petition against the award
stating that it should be
made applicable from the
date of demand and not
from the date of award.
This petition is also being
heard along with the
petition of the Hotel
No. 3734/2003
The operation of the Award
has been stayed by the High
Court and it will be heard
on its hearing i.e. regular
hearing of the High Court.
The order of the admission
was passed by the High
Court on 16th April 2007.
PENDING LEGAL CASES FILED BY CHL LTD.
Civil
Case No.
M/40/2005
Case Title
CHL Ltd. Vs.
Alpine
Destination
Forum
Metropolitan
Magistrate,
New Delhi
Nature of Case
Recovery of Hotel Dues about
Rs. 50,000/- on account of non
payment of hotel bills for stay
of guest.
B) OUTSTANDING LITIGATIONS/ DISPUTES/
DIRECTORS OF THE ISSUER COMPANY
DEFAULTS
Status and Impact
Case is now fixed on
31.7.2008
for
arguments.
AGAINST
PROMOTERS/
There are no outstanding litigations towards tax liabilities or any criminal/ civil prosecution for any
offences (irrespective of whether they are specified under paragraph (i) of Part 1 of Schedule XIII of the
Companies Act, 1956), disputes, defaults, non-payment of statutory dues, proceedings initiated for
economic offences or securities related or other offences against the Directors/Promoters of our Company
except the following:
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___________________________________________________________________________________________________________________________________________________________________________________________
Litigations against Mr. Subhash Ghai
Case Title
Investigation
u/s 237 of the
Companies Act,
1956.
Forum
High
Court of
Mumbai
Nature of Case
The Company Law Board passed an
order in 2002 directing the Central Govt.
to undertake an investigation u/s 237 of
the Companies Act 1956. The Company
aggrieved by the order, moved to
Bombay High Court and obtained a stay
on the order
Status and Impact
Appeal filed against the
Company Law Board order
has been admitted and is
pending for hearing.
Litigations against Mr. Harish Chander Bhasin
Case Title
State Vs. P.K.
Kaul
Crl.C/709/2/05
(FIR
No.129/04, P.S. Tuglak
Road – out of complaint
no.1536/2003)
Kiran Overseas Vs. State &
Ors
Crl
M.C.
No.3746/2003
Forum
Metropolitan
Magistrate Sh. A.K.
Chaturvedi Patiala
House
Delhi High Court
Nature of Case
Complaint
u/s
420/120B/406/409
IPC against the
directors of Kiran
Overseas
Exports
Ltd.
(Mr.
H.C.
Bhasin has been
arrayed
in
the
matter as the then
director of Kiran
Overseas
Exports
Ltd.
Status and Impact
In terms of the settlement
reached the payments are
being made and the matter
will
be
closed
as
withdrawn in due course.
(Mr. H.C. Bhasin was only
a non executive director
and had resigned from the
company
w.e.f.
26/11/1997)
Petition u/s 482 of
Cr.
PC.
For
quashing of criminal
complaint
no.1536/2003
&
order dated 02.09.03
passed
by
MM
(direction
for
investigation
u/s
156 (3) of Cr. P.C.
In terms of the settlement
reached the payments are
being made and the matter
will
be
closed
as
withdrawn in due course
(Mr. H.C. Bhasin was only
a non executive director
and had resigned from the
Company
w.e.f.
26/11/1997)
Next date of
26.09.2008
for
proceedings.
hearing
further
The petitioners have been
directed to complete the
terms of settlement and
make entire payment in
compliance with order
dated 02.04.2008, failing
which
the
interim
protection granted shall be
automatically withdrawn
Next date
17.09.2008
94
of
hearing
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Case Title
H.C. Bhasin Vs. Bank of
Baroda RFA No.178/05
(Appeal filed by Mr. H.C.
Bhasin as Proprietor of
M/s Raja Ram Bhasin &
Co.)
CS/152/03/97(2013/97)
Forum
Delhi High Court
Nature of Case
Appeal u/s 96 of
CPC against the
Judgement
and
decree
dated
04.11.04 passed in
suit no. 90/03/1990
by Sh. V.K. Yadav,
ADJ. Appeal has
been admitted
Status and Impact
Date of hearing not yet
listed
PNB Asset Mgmt. Co. Ltd.
Vs. Sh. Harish Bhasin (as
proprietor of M/s Raja
Ram Bhasin & Co.)
CS/152/03/97(2013/97)
Add. District Judge
Suit for recovery of
dues
with
Pendenlite & future
interest
till
realization
Proceedings continuing.
Arguments
applications.
on
misc.
Securities related
There are certain enquiries/ adjudication/ proceedings pending against HB Portfolio Ltd. and HB
Securities Ltd. where Mr. Harish Chander Bhasin is a Director. The details of the same are as follows:
1.
In relation to certain trading in the scrip of DCM Shriram Consolidated Ltd., SEBI has issued
Show Cause Notice to the Company under SEBI Act and different SEBI Regulations including
SEBI (Prohibition of Fraudulent & Unfair Trade Practices relating to Securities market)
Regulations, 1995/ 2003 and SEBI (Stock Brokers and Sub- Brokers) Regulations, 1995, etc.
In response, the company has submitted its reply without prejudice to its right to make
additional submissions on the basis of inspection of documents (for which request has been made
and yet to be granted by SEBI) based on which the show cause notices has been issued.
In the meanwhile the Company had filed Application for passing of Consent Order as per the
provisions of SEBI Circular No. EFD/ED/Cir-1/2007 dated 20th April 2007 and the same is
pending.
2.
In relation to certain trading in the scrips of Alps Industries Ltd., CEAT Ltd., DCM Shriram
Consolidated Ltd., Jagsonpal Pharmaceuticals Ltd, Jai Prakash Industries Ltd., Jindal Steel &
Power Ltd. & VXL Industries Ltd., SEBI has issued Show Cause Notice to the Company under
SEBI Act and different SEBI Regulations including SEBI (Prohibition of Fraudulent & Unfair
Trade Practices relating to Securities market) Regulations, 1995/ 2003 and SEBI (Stock Brokers
and Sub- Brokers) Regulations, 1995, etc.
In the matter of trading in the scrip of Jai Prakash Industries Ltd, the Company has sent detailed
reply to the Show Cause Notice under Regulation 6 of SEBI (procedure for Holding Enquiry by
Enquiry Officer and Imposing Penalty) Regulations, 2002, and provided all details as required by
SEBI and vide order dated 20.6.2007 no penalty has been imposed and the matter stands disposed
off.
In respect of trading in other scrips, the company has submitted its reply without prejudice to its
right to make additional submissions on the basis of inspection of documents (for which request
has been made and yet to be granted by SEBI) based on which the show cause notices has been
issued.
95
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
However, in the meanwhile in the matter of trading in the scrips of Jindal Steel & Power Ltd. and
Jagsonpal Pharmaceuticals Ltd, Alps Industries Ltd., CEAT Ltd., DCM Shriram Consolidated
Ltd., & VXL Industries Ltd, the Company had filed Applications for passing of Consent Order as
per the provisions of SEBI Circular No. EFD/ED/Cir-1/2007 dated 20th April 2007 and the same
is pending.
3.
A warning letter dated 25/05/2001 was issued by SEBI to HB Portfolio Ltd. as manager to the
open offer in respect open offer made to the shareholders of MCS Ltd. for delay in payment of
consideration to few investors.
Litigations against Mr. R. C. Sharma
A warning letter dated 25/05/2001 was issued by SEBI to HB Portfolio Ltd. as manager to the open offer
in respect open offer made to the shareholders of MCS Ltd. for delay in payment of consideration to few
investors. Mr. R.C. Sharma is one of the Director in HB Portfolio Ltd.
C)
OUTSTANDING LITIGATION PERTANING TO GROUP COMPANIES
There are no outstanding litigation, disputes, non-payment of statutory dues, overdues to banks /
financial institutions, defaults against banks / financial institutions, defaults in dues towards instrument
holders like debenture holders, fixed deposits, and arrears on cumulative preference shares issued,
defaults in creation of full security as per terms of issue, other liabilities, proceedings initiated for
economic / civil / any other offences (including past cases where penalties may or may not have been
awarded and irrespective of whether they are specified under paragraph (i) of Part I of Schedule XIII of
the Companies Act, 1956) against the promoter group companies except the following:
M/S Mela Hotels Limited
Date of Filing
Case No.
Writ no
30815/2003
order of Adj. IV
Ghaziabad.
Dated
10.07.2003
Writ no.
54672/2000
Tax appeal 2005
Central Excise
Appellate
Tribunal
Case Title
Forum
Nature of Case and
financial implication
Alleged unauthorized
occupation of land by
company
claim of Rs. 407.32 lacs
Status
Mela Hotel
vs. GDA
Justice G P
Mishra
Allahabad High
Court stay order
Dated 21.07.03
Mela hotel vs.
Ghaziabad
Development
Authority
Mela hotel vs.
Authority
House Tax
GDA
Mela Hotel
Vs. CESAT
Allahabad High
Court
Alleged unauthorised
occupation of land by
company
On regular
board for
hearing
JSCC Ghaziabad
Disputed taxes claimed by
Nagar Nigam Ghaziabad
Rs.32.85 lacs
On regular
board for
hearing
High Court
Delhi
Disputed Claim of Service
Tax
Rs. 3.66 lacs
Case Sent for
Legal Review to
Delhi High
Court
On regular
board for
hearing
Amounts due to small-scale undertakings
There are no outstanding to small scale undertakings to which the issuer company owes a sum exceeding
Rs. 1 Lac which is outstanding for more than 30 days.
96
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
MATERIAL DEVELOPMENTS AFTER THE DATE OF THE LAST BALANCE SHEET
The Directors of the company in their opinion hereby state that there is no material development after the
date of the last financial statements disclosed in the Letter of Offer which is likely to materially and
adversely affect or is likely to affect the trading or profitability of the Company or the value of its assets,
or its ability to pay its liabilities within the next twelve months.
97
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
GOVERNMENT APPROVALS
In View of the approvals listed below, M/s. CHL Limited confirms that it undertake this issue and its
current business activities and no further major approvals from any governmental or regulatory authority
or any other entity are required to undertake the offer or continue its business activities. Unless otherwise
stated, these approvals are all valid as of date of this Letter of Offer.
GOVERNMENT APPROVALS/LICENSING ARRANGEMENTS
Sr.
No.
1.
Issuing Authority
Registration No./License No.
Validity upto
Eating House
(Atrium Snacks Bar)
Eating House
(Sampan Restaurant)
Eating House (Seven
Restaurant)
Eating House (Coffee
Shop.)
Eating House
(Mirage)
Lodging House &
Coffee Shop
Health Trade License
(Atrium Snacks Bar)
Health Trade License
(Sampan Restaurant)
Health Trade License
(Seven Restaurant)
Health Trade License
(Swimming Pool)
Lift Licenses
(Total nos. 6)
31/12/2007 *
2.
HRACC, Dept. of
Tourism
D C P (licensing)
3.
D C P (licensing)
ETHL/DCP(Lic)/2000/237/NFC
4.
D C P (licensing)
ETHL/DCP(Lic)/1995/96/SN Puri
5.
D C P (licensing)
ETHL/DCP(Lic)/1995/97/SN Puri
6
D C P (licensing)
ETHL/DCP(Lic)/1984/35/SN Puri
7.
D C P (licensing)
ETHL/DCP (Lic)/1998/72/SN Puri
8.
MCD (Health)
1572
9.
MCD (Health)
6152
10.
MCD (Health)
5875
11.
MCD (Health)
5876
12.
MCD (Health)
8175
13.
Electrical Inspector
Govt. of NCT of
Delhi
1069-1074
14.
Excise Deptt.
Govt.of NCT of
Delhi
Excise Deptt.
Govt.of NCT of
Delhi
L-3/L-5/9/EX/H/2006-07
BAR License L-3
L-3/L-5/9/EX/H/2006-07
BAR License L-5
31/03/2008 *
1. Sampan Bar
2. Atrium Bar.
3.Mirage Bar.
4. Le café Bar.
5. Seven Bar
Mirage (Discotheque) 31/03/2011
15.
23-HRACC/(1)/07
Nature of
Registration/License
Classification
Certificate
Lodging House
69/ER/A/SD/DCP/Lic of
16/05/1991
16.
MCD (Health)
6105
* Applied for renewal with concerned authorities.
98
06/01/2013
31/03/2008 *
31/12/2007 *
31/12/2007 *
31/12/2007 *
31/12/2007 *
31/03/2011
31/03/2011
31/03/2011
31/03/2011
31/03/2008 *+
22/03/2003
Fees for
renewal
has been
paid every
year.
31/03/2008 *
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
SECTION VI - REGULATORY AND STATUTORY DISCLOSURES
AUTHORITY FOR THE PRESENT ISSUE
The Board of Directors in their meeting held on 28/07/2006 have recommended the rights issue of equity
shares of the Company to the existing share holders of equity shares in the ratio of one equity share for
every two equity shares (i.e.1:2) held by them on a date to be announced by the Board (record date) for a
total amount of Rs. 2740.91 lacs.
Special resolution was passed at the Annual General Meeting of the share holders of the company held
on 27.09.2006 authorizing the Board of the company to raise capital up to Rs. 2740.91 lacs.
The Board of Directors at their meeting held on 15.06.2007 have decided to make the following offer to
the existing shareholders of the Company:
“Issue of 54,81,829 Equity Shares of Rs. 10/- each at premium of Rs. 40 per share aggregating to Rs. 27.41
Crores on rights basis to the existing Equity Shareholders of the Company in the ratio of 1 (One) Equity
Share of every two (two) Equity Share held on [••] (Record Date).”
The Board of Directors approved the Letter of Offer in their Board Meeting held on 25.07.2008.
PROHIBITION BY SEBI
The Company, its Promoters, Directors or any of the Company’s associates or group companies with which
the Directors of the Company are associated as Directors or Promoters have not been prohibited from
accessing the capital market under any order or direction passed by SEBI.
ELIGIBILITY FOR THE ISSUE
CHL Limited (CHL) is an existing listed Company. It is eligible to offer this Rights Issue in terms of Clause
2.4.1(iv) of the SEBI (DIP) Guidelines, 2000.
The promoters, their relatives, CHL Limited group companies are not detained as wilful defaulters by
RBI/Government authorities and there are no violations of securities laws committed by them in the past or
pending against them.
DISCLAIMER CLAUSE
AS REQUIRED, A COPY OF THIS OFFER DOCUMENT HAS BEEN SUBMITTED TO THE
SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI).
“IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF OFFER DOCUMENT TO SEBI
SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN
CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER
FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE
ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE
OR OPINIONS EXPRESSED IN THE OFFER DOCUMENT. LEAD MANAGER, KEYNOTE
CORPORATE SERVICES LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE
OFFER DOCUMENT ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI
(DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES IN FORCE FOR THE TIME BEING.
THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION
FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.
99
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS
PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL
RELEVANT INFORMATION IN OFFER DOCUMENT, LEAD MANAGER IS EXPECTED TO
EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS
RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD
MANAGER KEYNOTE CORPORATE SERVICES LIMITED HAS FURNISHED TO SEBI A DUE
DILIGENCE CERTIFICATE DATED 25/07/2008 IN ACCORDANCE WITH SEBI (MERCHANT
BANKERS) REGULATIONS 1992 WHICH READS AS FOLLOWS :
1.
WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO
LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH
COLLABORATORS ETC. AND OTHER MATERIALS MORE PARTICULARLY REFERRED TO
IN THE ANNEXURE HERETO IN CONNECTION WITH THE FINALISATION OF THE LETTER
OF OFFER PERTAINING TO THE SAID ISSUE;
2.
ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY,
ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT
VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE,
PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE
DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE
COMPANY, WE CONFIRM THAT:
a) THE LETTER OF OFFER FORWARDED TO THE BOARD IS IN CONFORMITY WITH
THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;
b) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE AS ALSO
THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY THE BOARD, THE GOVERNMENT
AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY
COMPLIED WITH; AND
c)
THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE TRUE, FAIR AND
ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS
TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE
IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, THE
SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 AND OTHER
APPLICABLE LEGAL REQUIREMENTS.
3.
WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE
LETTER OF OFFER ARE REGISTERED WITH THE BOARD AND THAT TILL DATE
SUCH REGISTRATION IS VALID.
4.
WE CERTIFY THAT REQUIREMENTOF PROMOTER’S CONTRIBUTION UNDER CLAUSE 4.10
{SUB-CLAUSE (a), (b) or (c) } ARE NOT APPLICABLE IN RESPECT OF THE SAID ISSUE.
5.
WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE
FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN
OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION
OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN
CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS
MEMORANDUM OF ASSOCIATION.
6.
WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT
THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK
ACCOUNT AS PER THE PROVISIONS OF SECTION 73(3) OF THE COMPANIES ACT, 1956
100
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER
PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN
THE OFFER DOCUMENT. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED
INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY
CONTAINS THIS CONDITION.
7.
WE CERTIFY THAT NO PAYMENT IN THE NATURE OF DISCOUNT, COMMISSION,
ALLOWANCE OR OTHERWISE SHALL BE MADE BY THE ISSUER OR THE
PROMOTERS, DIRECTLY OR INDIRECTLY, TO ANY PERSON WHO RECEIVES
SECURITIES BY WAY OF FIRM ALLOTMENT, IF ANY, IN THE ISSUE.
8.
WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE LETTER OF OFFER THAT THE
INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR
PHYSICAL MODE.
9.
WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE
LETTER OF OFFER :
a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE
SHALL BE ONLY ONE DENOMINATION FOR THE SHARES OF THE COMPANY AND
b) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH
DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD (SEBI) FROM
TIME TO TIME.
CAUTION STATEMENT / DISCLAIMER CLAUSE OF THE ISSUER AND THE LEAD MANAGER.
The Issuer Company and the Lead Manager accept no responsibility for statements made otherwise than in
this Offer Document or in the advertisement or in any other material issued by or at the instance of the
Company and the Lead Managers and any one placing reliance on any other source of information would
be doing so at his/her/their own risks.
DISCLAIMER IN RESPECT OF JURISDICTION
This offer is being made in India to persons resident in India (including Indian nationals resident in India
who are majors, Hindu Undivided Families, companies, corporate bodies and societies registered under the
applicable laws in India and authorized to invest in shares, Indian mutual funds registered with SEBI,
Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI
permission), Trusts registered under the Societies Registration Act, 1860, or any other Trust law and who
are under their constitution to hold and invest in shares), Foreign Collaborators and to NRIs, OCBs and
FIIs as defined under the Indian laws. This Offer Document does not, however, constitute an offer to sell or
an invitation to subscribe to securities issued hereby in any jurisdiction other than India. Any person into
whose possession this Offer Document comes is required to inform himself about and to observe any such
restrictions. Any dispute arising out of this Offer will be subject to the jurisdiction of appropriate court(s)
in Delhi, India only.
No action has been or will be taken to permit a public offering in any jurisdiction where action would be
required for that purpose, except that this Offer Document has been submitted to the SEBI. Accordingly,
the equity shares represented thereby may not be offered or sold, directly or indirectly, and this Offer
Document may not be distributed, in any jurisdiction, except in accordance with the legal requirements
applicable in such jurisdiction. Neither the delivery of Offer Document nor any sale hereunder shall, under
any circumstances, create any implication that there has been no change in the affairs of the CHL Limited.
since the date hereof or that the information contained herein is correct as of any time subsequent to this
date.
101
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
LISTING
Presently the Equity shares of CHL Limited are listed on Bombay Stock Exchange Limited (BSE)
(Designated Stock Exchange) and Delhi Stock Exchange.
The Company has received in-principle approvals from BSE vide its letter no. [••] dated [••] and from DSE
vide its letter no. [••] dated [••] for listing of the equity shares being issued in terms of this Letter of Offer.
If the permissions to deal in and for an official quotation of the equity shares are not granted by the stock
exchange, the Company shall forthwith repay, without interest, all monies received from the applicants. In
case of delay interest shall be paid in accordance with the provisions of Section 73 of the Act.
DISCLAIMER CLAUSE OF THE BOMBAY STOCK EXCHANGE LIMITED (BSE), THE DESIGNATED
STOCK EXCHANGE
Bombay Stock Exchange Limited (the Exchange) has given vide its letter dated [••], permission to this
Company to use the Exchange’s name in this Letter of Offer as one of the Stock Exchanges on which this
Company’s securities are proposed to be listed. The Exchange has scrutinized this letter of offer for its
limited internal purpose of deciding on the matter of granting the aforesaid permission to the Company.
The Exchange does not in any manner:
(i) Warrant, certify or endorse the correctness or completeness of any of the contents of this letter of offer;
or
(ii) Warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or
(iii) Take any responsibility for the financial or other soundness of this Company, its promoters, its
management or any scheme or project of this Company;
And it should not for any reason be deemed or construed that this letter of offer has been cleared or
approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of
this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have
any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person
consequent to or in connection with such subscription/acquisition whether by reason of anything stated or
omitted to be stated herein for any other reason whatsoever.
DISCLAIMER CLAUSE OF DELHI STOCK EXCHANGE LIMITED (DSE)
The Delhi Stock Exchange Association Ltd. has given its no objection to the company vide its letter dated [••]
to use name of the Exchange in this Offer Document as one of the Stock Exchanges on which the company’s
securities are proposed to be listed. The Delhi Stock Exchange has scrutinized this draft offer document for
its limited internal purpose of deciding on the matter of granting the aforesaid permission to the company.
The Delhi Stock Exchange does not in any manner:
a) Warrant, certify or endorse the correctness or completeness of any of the contents of this offer
document;
b) Warrant that this company’s securities will be listed or continue to be listed on DSE
c) Take any responsibility for the financial or other soundness of this company, its promoters, the
management or any scheme or project of this company.
and it should not be, for any reason be deemed or construed that this offer document has been cleared or
approved by DSE. Every person who desires to apply for or otherwise acquires any securities of this
company may do so pursuant to independent enquiry, investigations and analysis and shall not have any
claim against DSE, whatsoever, by reason of any loss which may be suffered by such person consequent to
102
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
or in connection with such subscription/ acquisition whether by reason of anything stated in the offer
document or any other reason whatsoever.
FILING
A copy of this Letter of Offer has been filed with SEBI, SEBI Bhavan, Plot No. C-4A, G-Block, Bandra Kurla
Complex, Bandra (East), Mumbai – 400 051., Bombay Stock Exchange Ltd., (BSE) (Designated Stock
Exchange) Phiroze Jeejeebhoy Towers, Dalal Street, Fort, Mumbai (BSE) and with Delhi Stock Exchange,
DSE House, 3/1, Asaf Ali Road, New Delhi 110 002.
IMPERSONATION
Attention of the applicants is specifically drawn to the provisions of Sub-Section (1) of Section 68A of the
Companies Act, 1956 which is reproduced below:
"Any person who(a) makes in a fictitious name an application to a Company for acquiring, or subscribing for, any shares
therein, or
(b) otherwise induces a Company to allot or register any transfer of shares therein to him, or any other
person in a fictitious name, shall be punishable with imprisonment for a term which may extend to
five years."
CONSENTS
Consents in writing of: (a) the Directors, the Company Secretary and Compliance Officer, the Auditors,
Bankers to the Company and Bankers to this Issue; and (b) Lead Manager to this Issue, Registrar to this
Issue and legal advisors to the Issue to act in their respective capacities have been obtained and filed with
Stock Exchanges at the time of filing this Letter of Offer and such consents have not been withdrawn up to
the time of delivery of the Letter of Offer for registration with the stock exchanges.
The Auditors of the Company have given their written consent for the inclusion of their Report in the form
and content as appearing in this Offer Document and also the tax benefits accruing to the Company and its
members and such consents and reports have not been withdrawn up to the time of delivery of the Letter of
Offer for registration with the Stock Exchanges.
EXPERT OPINION
Except as stated elsewhere in this Offer Document, the Company has not obtained any expert opinion.
EXPENSES OF THE ISSUE
The total expenses of the issue are estimated to be around Rs. 40.91 lacs. All expenses with respect to the
issue would be met out of the proceeds of the issue. The split of issue expenses is as under: (Rs. in Lacs)
Activity
Estimated Expense
Fees to the intermediaries
30.00
Printing distribution expenses
6.51
Listing fees and other expenses
2.40
Advertisement & Publicity
2.00
Total estimated Issue expenses
40.91
103
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
Fees payable to Lead Managers
The total fees payable to the Lead Manager will be as per the Memorandum of Understanding signed
between the company and the Lead Manager, a copy of which is available for inspection at the Registered
office of CHL Limited.
Fees payable to Registrar to the Issue
The total fees payable to the Registrar to the issue will be as per the Memorandum of Understanding
signed amongst the company and the Registrar to the issue, a copy of which is available for inspection at
the registered office of CHL Limited.
Underwriting Commission, Brokerage And Selling Commission
No Underwriting, Brokerage and selling Commission will be payable for this issue.
Previous Issue Details
The company has not made any public/rights issue of its equity shares during the last five years.
Issues otherwise than for cash
The Company has not made any issue otherwise than for cash.
Commission and Brokerage on Previous Issues
The Company has not made any Public / Rights Issue during last five years. Hence no commission or
brokerage has been paid.
Promise Vis-A-Vis Performance
During the last five years no public/right issue has been made.
Outstanding Debentures or Bonds
As on the date of filing of this Letter of Offer, CHL Limited does not have any Bond Issue.
Outstanding Preference Shares
As on the date of filing of this Letter of Offer, the Company does not have any outstanding preference
shares.
Stock Market Data
The equity shares of the company are listed on The Bombay Stock Exchange Ltd. (BSE) and The Delhi Stock
Exchange Association (DSE).
There has been no trading in the equity shares of the company on DSE since 1999.
The equity shares of the company were listed on BSE w.e.f 04/07/2008 and the weekend price of equity
shares of CHL Ltd on BSE are as follows:
104
CHL Limited
___________________________________________________________________________________________________________________________________________________________________________________________
High
(Rs)
Particulars
July 2008*
247.95
High
Date
11/07/2008
Volume
on date of
high
(no of
shares)
11,551
Low
Date
Low
(Rs)
50.00
04/07/2008
Volume
on date
of Low
(no of
shares)
245
Average
Price
(Rs.)
Total
Volume
(no. of
shares)
148.98
41,356
* The equity shares of the company were listed on BSE w.e.f. 04/07/2008
Week ended
04/07/2008
11/07/2008
18/07/2008
25/07/2008
Price (Rs)
100.00
217.25
210.00
205.00
The market price of the equity shares of the company as on 25/07/2008 the date on which the board of
Directors approved this Letter of Offer is Rs.205.00 (BSE).
The equity shares of the company were in no delivery period from to [••] to [••]
The cum-rights closing price of the shares of the company as on [••] was Rs. [••]on BSE
The ex-rights closing price of the shares of the company as on [•] was Rs. [•] on BSE
INVESTOR GRIEVANCE REDRESSAL SYSTEM
The investor grievances against the Company will be handled by the Registrars and Share Transfer Agent
in consultation with the secretarial department of the Company. To handle the grievances received, the
Company has appointed Mr. G.J. Varadarajan as the Compliance Officer. He will supervise redressal of
complaints received from the investors at the office of the Company as well as the Registrars to the Rights
Issue and ensure timely settlement.
All grievances related to the offer may be addressed to the Registrar to the Rights Issue quoting the
application No. (Including prefix), Number of equity shares applied for, amount paid on application,
date, Bank and branch/ Collection center where application was submitted.
The normal time taken by CHL Limited for redressal of investor grievance is given below:Sr .No
1
2.
3.
4.
5.
6.
7.
8.
Type of Request
Procedure for Issue of Duplicate Share Certificate
Non-receipt of Transfer of Shares
Procedure for transmission of shares
Non receipt of demat/ remat shares
Non receipt of dividend
Non receipt of Annual Report
Change of residual Address/Bank Mandate
Non receipt of consolidation/split of share certificates
Normal Time Taken
(No of Days)
20
5
7
5
15
15
3
5
Change in Auditors
There has been no change in the Auditors of the company during the past three years.
Capitalisation of Reserves or Profits
The company has not capitalized its reserves or profit during the last five years.
Revaluation of Assets
The company has not revalued its asset during the last five years.
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SECTION VII - OFFERING INFORMATION
A. TERMS OF THE ISSUE
The Equity Shares now being offered are subject to the provisions of the Act and the terms and conditions
of this Letter of Offer, the CAF, the Memorandum and Articles of Association of the Company, the
approvals from the Government of India, FIPB and RBI, if applicable, the provisions of the Act, guidelines
issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities
issued by Government of India and/or other statutory authorities and bodies from time to time, Listing
Agreements entered into by the Company with Stock Exchanges, terms and conditions as stipulated in the
allotment advice or letter of allotment or Security Certificate and rules as may be applicable and introduced
from time to time, the FEMA and the Letters of Allotment/Equity Shares to be issued. Over and above such
terms and conditions, the Equity Shares shall also be subject to applicable laws, guidelines, notifications
and regulations relating to issue of capital and listing of securities issued from time to time by SEBI, the
Government of India, RBI and or other authorities.
Ranking of equity shares
The new Equity Shares proposed to be issued shall rank in all respects pari-passu with existing fully paid
up Equity Shares.
Mode of payment of dividend
The dividend is paid to all the eligible shareholders as per the provisions of Companies Act.
Face value & issue price
The Face Value of Equity Shares of the company is Rs.10/-. The Equity Shares are being issued at Rs. 50/each including premium of Rs. 40 per equity share in the present rights issue.
Rights of equity shareholders
The Shareholders are entitled to receive dividend, as and when declared and bonus and rights shares, as
and when issued. Further, the rights of the above and other holders of shares are subject to the provisions of
the Companies Act, 1956, the Memorandum and the Articles of Association of the Company, the terms of
this Letter of Offer and other laws as applicable from time to time.
Market lot
The market lot for the Equity Shares held in the demat mode is one share. In case of physical certificate, the
Company would issue one certificate for the Equity Shares allotted to one person (“Consolidated
Certificate”). In respect of consolidated certificate, the Company will, only upon request from the equity
shareholder, split & return such consolidated certificate into smaller denomination within 7 days time in
conformity with the clause 3 of the Listing Agreement. No fee would be charged by the Company for
splitting the consolidated certificate.
Nomination
In terms of Section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant
can nominate any person by filling the relevant details in the CAF in the space provided for this purpose.
The sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders (being
individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the joint-
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holders, as the case may be, shall become entitled to the Equity Shares. Person(s), being a nominee,
becoming entitled to the Equity Shares by reason of the death of the original
Equity Shareholder(s), shall be entitled to the same rights to which he would be entitled if he/she were the
registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may also
make a nomination to appoint, in the prescribed manner, any person to become entitled to the Equity
Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall
stand rescinded upon the sale/disposal of the Equity Share by the person nominating. A buyer will be
entitled to make a fresh nomination in the manner prescribed. When two or more persons hold the Equity
Share(s), the nominee shall become entitled to receive the shares only on the demise of all the holders.
Fresh nominations can be made only in the prescribed form available on request at the Registered office of
the Company located at Hotel Crowne Plaza, New Friends Colony, New Delhi – 110 025 or such other
place at such addresses as may be notified by the Company. The applicant can make the nomination by
filling in the relevant portion in the CAF. Only one nomination would be applicable for one folio. Hence, in
case the shareholder(s) has (have) already registered the nomination with the Company, no further
nomination need to be made for Equity Shares to be allotted in this Issue under the same folio.
In case the allotment of Equity Shares is in dematerialized form, there is no need to make a separate
nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective
Depository Participant of the applicant would prevail. If the applicant requires to change the
nomination, they are requested to inform their respective Depository Participant.
Minimum subscription
i)
If the Company does not receive the minimum subscription of 90% of the issue, the entire subscription
shall be refunded to the applicants within forty two days from the date of closure of the Issue.
ii) If there is a delay in the refund of subscription by more than 8 days after the Company becomes liable
to pay the subscription amount (i.e. forty two days after closure of the issue), the Company shall pay
interest for the delayed period at rates prescribed under sub-sections (2) and (2A) of Section 73 of the
Companies Act, 1956.
Disposal of odd lots
The Company has not made any arrangements for the disposal of odd lot Equity Shares arising out of this
Issue. The Company will issue certificates of denomination equal to the number of Equity Shares being
allotted to the Equity Shareholder.
Restrictions on transfer and transmission of shares and on their consolidation/ splitting
There are no restrictions on transfer and transmission and on their consolidation/splitting of shares issued
pursuant to this issue.
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ISSUE PROCEDURE
BASIS OF THE OFFER
The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose
names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity
Shares held in the electronic form and on the Register of Members of the Company in respect of Equity
Shares held in the physical form at the close of business hours on the Record Date. The Company has in
consultation with the Designated Stock Exchange fixed the Record Date for determining the shareholders
who are entitled to receive this offer for Equity Shares on a rights basis. The Equity Shares are being offered
for subscription in the ratio of one equity share for every two equity shares held by the Equity
Shareholders. The shareholders whose names appear as beneficial owners as per the list furnished by the
depositories in respect of the Equity Shares held in electronic form and on the register of members of the
Company in respect of the shares held in physical form on [••] at the close of business hours shall be entitled
to the Equity Shares on the Rights basis in the ratio of one equity shares for every one equity share held by
them.
OPTION TO SUBSCRIBE
Applicants to the Equity Shares of the Company issued through this Rights Issue shall be allotted the
securities in dematerialized (electronic) form. The Company has signed a tripartite agreement with
National Securities Depository Limited (NSDL) and Beetal Financial & Computer Services (P) Ltd. on
22/07/2008 and with Central Depository Services (India) Limited (CDSL) and Beetal Financial & Computer
Services (P) Ltd. on 14/07/2008, which enables the Investors to hold and trade in securities in a
dematerialized form, instead of holding the securities in the form of physical certificates.
RIGHTS ENTITLEMENT
As your name appears as beneficial owner in respect of the shares held in the electronic form or appears in
the register of members as an equity shareholder of the Company on the Record Date, you are entitled to
this Rights Offer. The number of Equity Shares to which you are entitled is shown in Block I of Part A of the
enclosed CAF and as shown in part A of the enclosed CAF.
FRACTIONAL ENTITLEMENT
On applying the rights ratio the rights entitlement may lead to fractional entitlement to some of the
shareholders. In such an event the fractional entitlement will be rounded off to the next higher integer. The
additional entitlement shall be made available out of the entitlement of one of the promoters. The
adjustment will be made in the composite application form so as to ensure the allocation is made within the
issue size.
JOINT-HOLDERS
Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed (so far
as the company is concerned) to hold the same as joint-holders with benefits of survivorship subject to
provisions contained in the Articles.
OFFER TO NON-RESIDENT EQUITY SHAREHOLDERS/ APPLICANTS
Applications received from NRIs and other NR shareholders for allotment of Equity Shares shall be, inter
alia, subject to the conditions imposed from time to time by the RBI under the FEMA in the matter of refund
of application moneys, allotment of Equity Shares, issue of Letter of Allotment / share certificates, payment
of interest, dividends, etc. General permission has been granted to any person resident outside India to
apply shares offered on rights basis by an Indian Company in terms of FEMA and the rules and regulations
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there under. Vide notification dated June 18, 2003, bearing number FEMA 94/2003, RBI has granted general
permission to Indian companies to issue rights/bonus shares to existing non-resident shareholders. The
existing non-resident shareholders may apply for issue of additional shares and the Company may allot the
same subject to the condition that the overall issue of shares to non-residents in the total paid up capital
does not exceed the sectoral cap. In other words, non-residents may subscribe for additional shares over
and above shares offered on rights basis by the company and renounce the shares offered in full or part
thereof in favour of a person named by them. Residents may subscribe for additional shares over and above
the shares offered on rights basis by the Company and also renounce the shares offered either in full or part
thereof in favour of a person named by them. The Equity Shares issued under the Rights Issue and
purchased by NR shall be subject to the same conditions including restrictions in regard to the repatriability
as are applicable to the previously held Equity Shares against which Equity Shares under the Rights Issue
are issued.
However, as per the provisions of AP DIR circular No. 14 dated September 16, 2003 (issued by the RBI),
such shareholders who have been allotted the Equity Shares as OCBs would not be permitted to participate
in the Rights Issue. Accordingly, shareholders/ applicants who are OCBs and wishing to participate in the
Rights Issue would be required to submit approvals in relation thereto from the FIPB and the RBI. The
Board of Directors may at its absolute discretion, agree to such terms and conditions as may be stipulated
by RBI while approving the allotment of Equity Shares, payment of dividend etc. to the Equity
Shareholders who are NR.
NOTICES
All notices to the Equity Shareholder(s) required to be given by the Company shall be published in one
English national daily with wide circulation, one Hindi national daily with wide circulation and/or, will be
sent by ordinary post to the registered holders of the Equity Share(s) from time to time.
ISSUE OF DUPLICATE EQUITY SHARE CERTIFICATE
If any Equity Share Certificate(s) is/are mutilated or defaced or the pages for recording transfers of Equity
Shares are fully utilized, the Company against the surrender of such Certificate(s) may replace the same,
provided that the same will be replaced as aforesaid only if the Certificate numbers and the Distinctive
numbers are legible.
If any Equity Share Certificate(s) is/are destroyed, stolen, lost or misplaced, then upon production of proof
thereof to the satisfaction of the Company and upon furnishing such indemnity/ surety and/or such other
documents as the Company may deem adequate, duplicate Equity Share Certificate(s) shall be issued.
OPTIONS AVAILABLE TO THE EQUITY SHAREHOLDERS
The Equity Shareholders will be having the following five options:
•
•
•
•
•
Apply for his entitlement in part
Apply for his entitlement in part and renounce the other part
Renounce his entire entitlement
Apply for his entitlement in full
Apply for his entitlement in full and apply for additional Equity Shares
HOW TO APPLY
For Resident Indian Shareholders
Application should be made only on the enclosed CAF provided by the Company. The enclosed CAF
should be completed in all respects, as explained in the instructions indicated in the CAF. Applications will
not be accepted by the Lead Managers or by the Registrar to the Issue or by the Company at any offices
except in the case of postal applications as per instructions given in the Letter of Offer. Payment should be
made in cash (not more than Rs.20,000/-) or by cheque/bank draft/ drawn on any bank (including a co109
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operative bank) which is situated at and is a member or a sub-member of the bankers clearing house
located at the centre where the CAF is submitted and which is participating in the clearing at the time of
submission of the application. Outstation cheques/money orders/postal orders will not be accepted and
CAFs accompanied by such cheques/money orders/postal orders are liable to be rejected.
For Non-Resident Shareholders
Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares shall,
inter alia, be subject to the conditions as may be imposed from time to time by the RBI, in the matter of
refund of application moneys, allotment of Equity Shares, issue of letters of allotment/certificates/
payment of dividends etc. Letter of Offer and CAF shall be dispatched to non-resident Equity Shareholders
in India only.
For applicants residing at places other than designated Bank collecting branches.
Applicants residing at places other than the cities where the Bank collection centres have been opened
should send their completed CAF by registered post/speed post to the Registrars to the Issue, Beetal
Financial & Computer Services (P) Ltd. along with demand drafts, net of demand draft and postal charges,
payable at Delhi in favour of “CHL Limited - Rights Issue” crossed “A/c Payee only” so that the same are
received on or before closure of the Issue i.e. [••].
The Company will not be liable for any postal delays and applications received through mail after the
closure of the Issue are liable to be rejected and returned to the applicants. Applications by mail should not
be sent in any other manner except as mentioned below.
All application forms duly completed together with cash/cheque/demand draft for the application
money must be submitted before the close of the subscription list to the Bankers to the Issue named
herein or to any of its branches mentioned on the reverse of the CAF. The CAF along with application
money must not be sent to the Company or the Lead Manager to the Issue or the Registrar to the Issue
except as mentioned above. The applications are required to strictly adhere to these instructions. Failure
to do so could result in the application being liable to be rejected by the Company, the Lead Manager
and the Registrar not having any liabilities to such applicants.
The CAF consists of four parts:
Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares
Part B: Form for renunciation
Part C: Form for application for renounces
Part D: Form for request for split application forms
You may exercise any one of the following options with regard to the Equity Shares offered to you, using
the enclosed CAF:
Sr.
No
1.
2.
3.
Options available
Action Required
Accept whole or part of the Equity
Shares offered to you without
renouncing the balance
Fill in and sign Part A indicating in Block III of Part
A the number of Equity Shares accepted. If you
accept all the equity share offered in Block II of Part
A you may apply for additional Equity Shares.
Indicate in Block IV the additional Equity Shares
applied for.
Fill in and sign Part B indicating the number of
Equity Shares renounced in Block VII and handover
the ENTIRE FORM to the renounce. The renounce/
joint (s) must fill in and sign Part C of CAF.
Renounce all the Equity Shares offered
to you to one person (joint are deemed
as one person) without your applying
for any of the Equity Shares offered to
you.
Accept a part of your entitlement and
Fill in and sign Part D for the Split Form and send
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Sr.
No
4.
Options available
renounce the balance or part of it to one
or more (s).
OR
Renounce your entitlement or part of it
to one or more persons (joint renounces
are deemed as one person).
Action Required
the ENTIRE CAF to the Registrar to the Issue.
On receipt of Split Forms :
a For the Equity Shares you are accepting, fill in
and sign Part A.
b For the Equity Shares you are renouncing fill in
and sign Part B indicating the number of Equity
Shares renounced in Block VII. Each of the
renounces should fill in and sign Part C.
Note: If application is made jointly with any other person(s) who is/are not already joint holders or change
in the sequence of names of joint holders, it will amount to renunciation and the procedure mentioned in (2)
above will have to be followed.
Acceptance of Offer
You may accept the Offer and apply for the Equity Shares offered, either in full or in part by filling Block III
of Part A of the enclosed CAF and submit the same along with the application money payable to the
bankers to the Issue or any of the branches as mentioned on the reverse of the CAF before the close of the
banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board
thereof in this regard. Applicants at centers not covered by the branches of collecting banks can send their
CAF together with the demand draft, net of demand draft and postal charges, payable at Delhi to the
Registrar to the Issue by registered post. Such applications sent to anyone other than the Registrar to the
Issue are liable to be rejected.
You may apply for the Equity Shares offered wholly or in part by filling in the enclosed CAF and
submitting the same along with the application money to the Bankers to the Issue or its designated
branches on or before the closure of the subscription list. The CAF should be complete in all respects, as
explained in the INSTRUCTIONS indicated in the CAF. The CAF should not be detached under any
circumstances, otherwise the application(s) will be rejected forthwith.
Application for additional Equity Shares
You are also eligible to apply for additional Equity Shares over and above the number of Equity
Shares offered to you provided you have applied for all the shares offered to you without renouncing them
in full or in part. However, the additional Equity Shares cannot be renounced in full or in part, in favour of
any other person(s).
If you desire to apply for additional Equity Shares, you may fill in the number of additional Equity Shares
in Part A of the CAF. The allotment of additional Equity Shares will be at the sole discretion of the Board on
an equitable basis with reference to the number of Equity Shares held by you on the Record Date in
consultation with The Designated Stock Exchange. In the case of requests for additional Equity Shares by
Non Residents, the allotment will be subject to the approval of Reserve Bank of India. The Board may reject
any application for additional Equity Shares without assigning any reasons thereof. The renounces can also
make an application for additional shares.
Renunciation
You may renounce all or any of the Equity Shares, you are entitled to in favour of any individual, limited
companies, or statutory corporations / institutions. However renunciation in favour of more than three
persons as joint holders, trust or society (unless the same is registered under the Societies Registration Act,
1860 or any other applicable trust laws and is under its constitution to hold shares in a company), OCBs,
minors (unless acting through natural or legal guardians), Partnership Firms, or their nominees, or any of
them will not be accepted.
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Any renunciation from Resident(s) to Non- Resident(s) is subject to the renounce(s)/ renounce(s) obtaining
requisite approval(s) of the Reserve Bank of India (RBI) and the said permission must be attached to the
CAF.
Procedure for renunciation
(i) To Renounce in WHOLE
If you wish to renounce this offer in whole, please complete PART 'B' of the CAF enclosed with the Letter of
Offer for the number of Equity Shares renounced and deliver the CAF duly signed to the person(s) in
whose favour the Equity Shares are so renounced. All joint holders must sign as per specimen signatures
recorded with the Company at the place provided for the purpose and in the same order.
The person(s), in whose favour the offer has been renounced (renounces) should complete and sign PART
C of the CAF. In case of joint renounces, all joint renounces must sign.
(ii) To Renounce in PART
If you wish to accept this offer in part and renounce the balance of this offer the CAF must first be split into
the requisite number of forms, by applying to the Registrar to the Issue. Please indicate your requirement of
split forms in the space provided for this purpose in PART D of the CAF and return the entire CAF to the
Registrar to the Issue so as to reach them latest by the close of business hours on or before the last date for
receiving requests for split forms i.e. [••] .
If you wish to apply for Equity Shares jointly with any person(s) who is/are not already joint holder(s) with
you, then it would amount to renunciation and the procedure of renunciation as mentioned above shall
have to be followed. Even a change in the sequence of the name of joint holders shall amount to
renunciation and the procedure as stated above shall have to be followed.
Further, this right of renunciation is subject to the express condition that the Board shall be entitled in
its absolute and unqualified discretion to reject any such request for allotment of Equity Shares from (s)
without assigning any reason thereof save where the Equity Shares have been renounced in favour of a
person who is already a member of the Company.
Please note that:
a) Part A of the CAF must not be used by any person(s) other than those in whose favour this offer
has been made. If used, this will render the application invalid.
b) Only the person to whom this Letter of Offer has been addressed and NOT the renouncees shall be
entitled to split forms. Forms once split cannot be resplit.
Request for spilt forms:
•
•
Request for Split Forms should be addressed to the Registrar to the Issue so as to reach them on or
before the last date for receiving of request for split forms by filling in PART D of the CAF.
Requests for Split Forms will be entertained only once.
Availability of duplicate CAF
In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will
issue a duplicate CAF on the request of the applicant who should furnish the registered folio number/ DP
and Client ID number and his/ her full name and address to the Registrar to the Issue. Please note that the
request for duplicate CAF should reach the Registrar to the Issue within 15 days from the Issue Opening
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Date. Please note that those who are making the application in the duplicate form should not utilize the
original CAF for any purpose including renunciation, even if it is received/ found subsequently. If the
applicant violates any of these requirements, he / she shall face the risk of rejection of both the applications
as well as forfeiture of amounts remitted along with the applications.
Application on Plain Paper
An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the
duplicate CAF may make an application to subscribe to the Rights Issue on plain paper, along with a
Demand Draft payable at Delhi which should be drawn in favour of “CHL Limited- Rights Issue” crossed
A/c Payee Only and send the same by registered post directly to the Registrar to the Issue.
The application on plain paper, duly signed by the applicants including joint holders, in the same order as
per specimen recorded with the Company, must reach the office of the Registrar to the Issue before the
Issue Closing Date i.e.; [••] and should contain the following particulars:
Name of Issuer, being CHL Limited.
Name and address of the Equity Shareholder including joint holders
Registered Folio Number/ DP and Client ID no.
Number of shares held as on [••] (Record Date).
Certificate numbers and distinctive numbers, if held in physical form
Number of Rights Equity Shares entitled
Number of Rights Equity Shares applied for out of entitlement
Number of additional Equity Shares applied for, if any
Total number of Equity Shares applied for
Total amount paid at the rate of Rs. [••]/-per Equity Share
Particulars of cheque/draft
Savings/Current Account Number and name and address of the Bank where the Equity
Shareholder will be depositing the refund order
Each of the applicant should mention his/her Permanent Account Number (PAN) allotted under
the IT Act.
In case of Non-Resident shareholders, NRE/FCNR/NRO Account No., name and address of the
bank and branch.
Signature of Equity Shareholders to appear in the same sequence and order as they appear in the
records of the Company
Payment in such cases, should be through a demand draft, net of demand draft and postal charges,
payable at Delhi be drawn in favour of “CHL Limited - Rights Issue” crossed “A/c Payee only”.
Please note that those who are making the application on plain paper shall not be entitled to renounce their
rights and should not utilize the original CAF for any purpose including renunciation even if it is received
subsequently. If the applicant violates any of these requirements, he/she shall face the risk of rejection of
both the applications as well as forfeiture of amounts remitted along with the applications. The Company
shall refund such application amount to the applicant without any interest thereon.
Quoting of PAN/GIR no. in the application forms
Pursuant to the circular MRD/DoP/Circ-05/2007 dated April 27, 2007, SEBI has mandated Permanent
Account Number (PAN) to be the sole identification number for all participants transacting in the securities
market, irrespective of the amount of the transaction with effect from July 2, 2007. Each of the applicants
should mention his/her PAN allotted under the IT Act. Applications without this information will be
considered incomplete and are liable to be rejected. It is to be specifically noted that Bidders should not
submit the GIR number instead of the PAN, as the Bid is liable to be rejected on this ground.
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Last date for submission of CAF
The last date for receipt of CAF by the Bankers to the Issue together with the amount payable on
application is [••]. If the relevant CAF together with amount payable there under is not received by the
Bankers/Registrar to the Issue on or before the close of banking hours on the aforesaid last date the offer
contained in this Letter of Offer shall be deemed to have been declined and the Board shall be at liberty to
dispose of the Equity Shares hereby offered as provided under "Basis of Allotment".
Incomplete application
CAFs which are not complete or are not accompanied with the application money amount payable are
liable to be rejected.
TERMS OF PAYMENT
The entire amount of Rs. 50/- per share is payable on application by all shareholders/applicants.
MODE OF PAYMENT
For Resident Shareholders/Applicants
Payment(s) must be made by cheque/demand draft and drawn on any bank (including a co-operative
bank) which is situated at and is a member or a sub-member of the Bankers' Clearing House located at the
centre where the CAF is submitted. A separate cheque/draft must accompany each CAF. Only one mode of
payment should be used. Money orders, postal orders and outstation cheques will not be accepted and
applications accompanied by any such instruments will be rejected.
Shareholders/Applicants residing at places other than those mentioned in the CAF and applicants who
wish to send their applications but not having collection centres should send their application by Registered
Post, ONLY to the Registrar to the Issue enclosing a demand draft drawn on a clearing Bank and payable at
Delhi ONLY net of bank charges and postal charges, before the closure of the issue.
Such cheque/drafts should be payable to "CHL Limited - Rights Issue". All cheques/ drafts must be
crossed 'A/c Payee only’.No receipt will be issued for the application money received. However, the
Collection Centre receiving the application will acknowledge receipt of the application by stamping and
returning the acknowledgement slip at the bottom of each CAF. The Company is not responsible for any
postal delay/ loss in transit on this account.
For Non-Resident Shareholders/Applicants
As regards the application by non-resident equity shareholders, the following further conditions shall
apply:
Application with repatriation benefits
Payment by NRIs/ FIIs/ foreign investors must be made by demand draft/cheque payable at Delhi or
funds remitted from abroad in any of the following ways:
•
•
•
•
By Indian Rupee drafts purchased from abroad and payable at Delhi or funds remitted from abroad
(submitted along with Foreign Inward Remittance Certificate); or
By cheque/draft on a Non-Resident External Account (NRE) or FCNR Account maintained in Delhi; or
By Rupee draft purchased by debit to NRE/ FCNR Account maintained elsewhere in India and payable
in Delhi; or
FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.
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All cheques/drafts submitted by non-residents applying on repatriable basis should be drawn in favour of
"CHL Limited - Rights Issue - NR" payable at Delhi and crossed ‘A/c Payee only’ for the amount payable.
A separate cheque or bank draft must accompany each application form. Applicants may note that where
payment is made by drafts purchased from NRE/FCNR accounts as the case may be, an Account Debit
Certificate from the bank issuing the draft confirming that the draft has been issued by debiting the
NRE/FCNR account should be enclosed with the CAF. In the absence of the above the application shall be
considered incomplete and is liable to be rejected.
In the case of NRIs who remit their application money from funds held in FCNR/NRE Accounts, refunds
and other disbursements, if any shall be credited to such account details of which should be furnished in
the appropriate columns in the CAF. In the case of NRIs who remit their application money through Indian
Rupee Drafts from abroad, refunds and other disbursements, if any will be made in US Dollars at the rate of
exchange prevailing at such time subject to the permission of RBI. The Company will not be liable for any
loss on account of exchange rate fluctuation for converting the Rupee amount into US Dollars or for
collection charges charged by the applicant’s Bankers.
Application without repatriation benefits
As far as non-residents holding shares on non-repatriation basis is concerned, in addition to the modes
specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account
maintained in Delhi or Rupee Draft purchased out of NRO Account maintained elsewhere in India but
payable at Delhi. In such cases, the allotment of Equity Shares will be on non-repatriation basis.
All cheques/drafts submitted by non-residents applying on non-repatriation basis should be drawn in
favour of "CHL Limited - Rights Issue” payable at Delhi and must be crossed ‘A/c Payee only’ for the
amount payable. The CAF duly completed together with the amount payable on application must be
deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours
on or before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.
If the payment is made by a draft purchased from an NRO account, an Account Debit Certificate from the
bank issuing the draft, confirming that the draft has been issued by debiting the NRO account, should be
enclosed with the CAF. In the absence of the above, the application shall be considered incomplete and is
liable to be rejected.
New demat account shall be opened for holders who have had a change in status from resident Indian to
NRI.
Note:
•
•
•
•
In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the
investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to
Income Tax Act, 1961.
In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the
Equity Shares cannot be remitted outside India.
The CAF duly completed together with the amount payable on application must be deposited with the
Collecting Bank indicated on the reverse of the CAF before the close of banking hours on or before the
Issue Closing Date. A separate cheque or bank draft must accompany each CAF.
In case of an application received from non-residents, allotment, refunds and other distribution, if any,
will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of
making such allotment, remittance and subject to necessary approvals.
Application will not be accepted by the Lead Manager or by the Company.
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Note on cash payment (section 269 SS)
Having regard to the provisions of Section 269 SS of the Income Tax Act, 1961, subscriptions against
applications for securities should not be effected in cash and must be effected only by ‘Account Payee’
cheques or ‘Account Payee’ bank drafts, if the amount payable is Rs. 20,000/- or more. In case payment is
effected in contravention of this provision, the application is liable to be rejected.
FORFEITURE
The allotment shall be made only on receipt of full application money as mentioned in “Terms of Payment”.
As such there will be no partly paid-up shares emerging from this issue and hence no requirement of any
forfeiture.
APPLICATION UNDER POWER OF ATTORNEY
In case of applications under Power of Attorney or by Limited Companies or Bodies Corporate or Societies
registered under the applicable laws, a certified copy of the Power of Attorney or the relevant authority, as
the case may be, along with the certified copy of the Memorandum and Articles of Association or Bye-laws,
as the case may be, must be lodged separately by registered post at the office of the Registrar to the Issue
simultaneously with the submission of the CAF, indicating the serial number of the CAF and the name of
the bank and the branch office where the application is submitted within 10 days of closure of the offer,
failing which the application is liable to be rejected. In case the Power of Attorney is already registered with
the Company, then the same need not be furnished again. However, the serial number of the Registration
under which the Power of Attorney has been registered with the Company must be mentioned below the
signature of the Applicant.
BANK DETAILS OF THE APPLICANT
The applicant must fill in the relevant column in the CAF giving particulars of Savings Bank/Current
Account Number and the name of the Bank with whom such accounts is held, to enable the Registrar to the
Issue to print the said details in the Refund Orders, if any, after the name of the payees. Please note that
provision of Bank Account details has now been made mandatory and applications not containing such
details are liable to be rejected.
APPLICATION NUMBER ON THE CHEQUE/DEMAND DRAFT
To avoid any misuse of instruments, the applicants are advised to write the application number and name
of the first applicant on the reverse of the cheque / demand draft.
GROUNDS FOR TECHNICAL REJECTIONS
Applicants are advised to note that applications are liable to be rejected on technical grounds, including the
following:
Amount paid does not tally with the amount payable for;
In case of physical shareholders, bank account details (for refund) are not given;
Age of first applicant not given in case of joint holder(s);
PAN not stated or copy of GIR number furnished instead of PAN. See the section titled “Issue
Procedure – Permanent Account Number or PAN/ GIR;
Cash applications for an amount exceeding Rs.20,000/-;
In case of Application under power of attorney or by limited companies, corporate, trust, etc.,
relevant documents are not submitted;
If the signature of the existing shareholder does not match with the one given on the Application
Form and for renounces if the signature does not match with the records available with their
depositories;
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If the Applicant desires to have shares in electronic form, but the CAF does not have the Applicant’s
depository account details;
CAFs are not submitted by the Applicants within the time prescribed as per the CAF and the Letter
of Offer;
Applications not duly signed by the sole/joint Applicants;
Applications by OCBs unless accompanied by specific approval from the RBI permitting the OCBs
to invest in the Issue;
In case no corresponding record is available with the Depositories that matches three parameters,
namely, names of the Applicants (including the order of names of joint holders), the Depositary
Participant’s identity (DP ID) and the beneficiary’s identity;
Applications by ineligible Non-residents (including on account of restriction or prohibition under
applicable local laws) and where last available address in India has not been provided;
Multiple applications.
GENERAL
(a) All applications should be made on the printed CAF provided by the Company and should be
complete in all respects. Applications which are not complete in all respects or are made otherwise
than as herein provided or not accompanied by proper application money in respect thereof will
be refunded without interest.
(b) Please read the instructions in the enclosed CAF carefully.
(c) ALL COMMUNICATIONS IN CONNECTION WITH YOUR APPLICATION FOR THE
EQUITY SHARES INCLUDING ANY CHANGE IN YOUR REGISTERED ADDRESS
SHOULD BE ADDRESSED TO THE REGISTRAR TO THE ISSUE.
(d) Application Forms must be filled in ENGLISH in BLOCK LETTERS.
(e) Signatures should be either in English or Hindi or the languages specified in the Eighth Schedule
to the Constitution of India. Signatures other than in the aforementioned languages or thumb
impressions must be attested by a Notary Public or a Special Executive Magistrate under his/her
official seal.
(f) In case of Joint Holders, all joint holders must sign the relevant parts of the Application Form in
the same order and as per the specimen signatures recorded with the Company.
(g) In case of joint applicants, refunds and all payments will be made to the person whose name
appears first on the application form and all communications will be addressed to him/her. To
prevent any fraudulent encashment of refund orders by third parties, the Sole/First Applicant
must indicate Saving / Current Account number and the name of the bank and its branch with
whom such account is held in the space provided in the CAF for the purpose so that Refund
Orders are printed with these details after the name. Applications without this information are
liable to be rejected.
(h) The Application Form should be presented to the Bank in its entirety. If any of the Part(s) A,B,C
and D of the Application Form(s) is /are detached or separated, such application will
forthwith be rejected.
(i) All shareholders must submit the CAF along with remittance only to the Bankers to the Issue
mentioned elsewhere in this Letter of Offer and not to the Company, the Registrar or the Lead
Manager.
(j) Any dispute or suit action or proceedings arising out of or in relation to this Letter of Offer or in
respect of any matter or thing herein contained and claimed by either party against the other shall
be instituted or adjudicated upon or decided solely by the appropriate Court where Registered
Office of the Company is situated.
(k) The last date for receipt of CAF along with the amount payable is [••]. However, the Board will
have the right to extend the same for such period as it may determine from time to time, but not
exceeding 60 days from the date of opening of the subscription list. If the CAF together with the
amount payable there under is not received by the bankers to the issue on or before the closure of
the banking hours on the aforesaid date, or such date as may be extended by the Board, the offer
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contained in this Letter of Offer shall be deemed to have been declined and the Board shall be at
liberty to dispose the Rights hereby offered.
For further instructions please read CAF carefully.
DEMATERIALISATION
As per the provisions of the Depositories Act, 1996, the shares of a body corporate may be held in
dematerialized form i.e. not in the form of physical certificates but be fungible and be represented by the
statement issued through electronic mode. The equity shares of CHL Limited are traded in the demat
segment The Company has entered into a tripartite agreement dated 22/07/2008 with the National
Securities Depository Ltd. (NSDL) and Beetal Financial & Computer Services (P) Ltd. for dematerialization
of the equity shares of the Company. The Company has also entered into a tripartite agreement dated
14/07/2008 with the Central Depository Services Limited (CDSL) and Beetal Financial & Computer
Services (P) Ltd. for of the equity shares of the Company. The ISIN No. granted to the equity shares of the
Company is INE 790D01012.
An applicant has the option to seek allotment in physical or demat mode. An applicant who seeks allotment
in demat mode must have at least one Beneficiary Account with any of the Depository Participants (DP) of
NSDL or CDSL registered with SEBI, prior to the application. Such applicants must necessarily fill in the
details (including the Beneficiary Account Number and Depository Participant’s ID Number) appearing
under the head “Request for shares in electronic form” in the CAF.
Applicant must indicate in the CAF, the number of shares they wish to receive in electronic form out of
the total number of equity shares applied for. In case of partial allotment, shares will first be allotted in
electronic form and the balance, if any, will be allotted in physical form.
Names in the CAF should be identical to those appearing in the account details in the Depository. In case
of joint holders, the name should necessarily be in the same sequence as they appear in the account details
in the Depository.
No separate application for demat and physical shares is to be made. If such applications are made the
application for physical shares will be treated as multiple applications and rejected accordingly. It may be
noted that electronic shares can be traded only on the stock exchanges having electronic connectivity with
NSDL and CDSL.
Non-transferable allotment letters/ refund orders will be directly sent to the applicant by the Registrar to
the Issue
The applicant is responsible for the correctness of the applicants’ demographic details given in the share
application form vis-à-vis those with his/her DP. Equity shares allotted in demat mode will be credited
directly to the respective Beneficiary Account.
DISPOSAL OF APPLICATION AND APPLICATION MONEY
The Board reserves the right to reject applications in case the application concerned is not made in terms of
this Letter of Offer. In case an application is rejected in full the whole of the application money received will
be refunded to the first named applicant and where an application is rejected in part, the excess application
money will be refunded to the first named applicant within 6 weeks from the date of closure of the
subscription list in accordance with Section 73 of the Act. If there is delay of refund of application money by
more than 8 days after the Company becomes liable to pay (i.e. forty-two days after the closure of Issue),
the Company will pay interest for the delayed period at the rate prescribed under sub-Section (2) and (2A)
of Section 73 of the Act.
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The subscription monies received in respect of this Issue will be kept in a separate bank account and the
Company will not have access to nor appropriate the funds until it has satisfied the Stock Exchange with
suitable documentary evidence that minimum subscription of 90% of the application money for the Issue
has been received.
No acknowledgment will be issued for the application monies received by the Company. However, the
Bankers to the Issue at its collection branches to the Issue receiving the CAF as applicable as per the terms
of this Draft Letter of Offer, will acknowledge its receipt by stamping and returning the acknowledgment
slip at the bottom of each CAF. Except for the reasons stated under “Grounds for Technical Rejections” on
page 119 of this Draft Letter of Offer and subject to valid application, acknowledgement of receipt of
application money given by the collection agent shall be valid and binding on issuer and other persons
connected with the Issue.
BASIS OF ALLOTMENT
In the event of the issue being oversubscribed, the basis of allotment will be made only within the overall
size of the Rights Issue, as stated in the Letter of Offer and the Board will proceed to allot the Equity Shares
in consultation with the designated stock exchange in the following order of priority:
1.
Full allotment to the Shareholders who have applied for their Rights entitlement, either in full or in part
and also the (s) who have applied for Equity Shares renounced in their favour either in full or in part
(subject to the other provisions contained under the paragraph titled “Renunciation”).
2.
Allotment to the shareholders who have applied for additional Equity Shares provided that they have
applied for all the Equity Shares offered to them, provided there is a surplus after making full allotment
under (1) above. The allotment of such additional Equity Shares will be made as far as possible on the
basis of the Equity Shares held as on the Record Date.
3.
Allotment to the renounces who have applied for all the Equity Shares renounced in their favour and
have applied for additional Equity Shares, as the Board may in its absolute discretion deem fit,
provided there is a surplus after making full allotment (1) and (2) above.
4.
Allotment to any other person as the Board may in their absolute discretion deem fit, provided there is
a surplus after making full allotment under (1), (2), (3) above.
The issue will become undersubscribed after considering the number of shares applied as per the
entitlement plus additional shares. The undersubscribed portion can be applied for only after the close of
the Issue.
The promoters/directors/associates/promoter group intend to subscribe to their rights entitlement as well
as the entire undersubscribed portion from public and/or foreign collaborator, if any, in this rights issue in
full. Presuming no subscription is received from other shareholders and the promoters/directors/
associates/ promoter group subscribing to the entire unsubscribed portion, their shareholding shall
increase to 80.90% of the post rights issue equity capital of the Company. As a result of this subscription
and consequent allotment, the promoters/ directors/ associates may acquire shares over and above their
entitlement in the issue which may result in their shareholding in the company being above their current
holding. This subscription and acquisition of additional equity shares by the Promoter/ Directors/
Associates, if any, will not result in change of control of the management of the Company and shall be
exempt in terms of provision to Regulation 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and
Takeover) Regulations, 1997.
The Promoter/Directors/Associates have confirmed that in case the Rights Issue of the Company is
completed with their subscribing to equity shares over and above their entitlement and as a result, if the
public shareholding in the Company after the Issue falls below the permissible minimum level as specified
in the listing condition or listing agreement, they will make an offer for sale of their holdings so that the
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public shareholding is raised to the minimum level specified in the listing agreement or in the listing
conditions within a period of 3 months, as per the requirements of sub-clause 17.2 of SEBI (Delisting of
Securities) Guidelines, 2003 or as per any amendment thereto
LETTERS OF ALLOTMENT OR REFUND ORDERS
Company shall ensure despatch of refund orders, if any, by under the Certificate of Posting or registered
post or speed post or through modes as mentioned in section, Terms of the Issue clause “Mode of Payment”
as stated below, as applicable, only at the sole or First Applicant’s sole risk within 42 days of closure of the
Rights Issue, and adequate funds for making refunds to unsuccessful applicants as per the mode(s)
disclosed shall be made available to the Registrar to the Issue by the issuer.
In case of those shareholders who have opted to receive their Right Entitlement Shares in dematerialized
form by electronic credit under the depository system, an advice regarding the credit of the Equity Shares
shall be given separately.
Allotment of Equity Shares to non-residents and the issue of letters of allotment/share certificates to
nonresidents shall be subject to the approval received from RBI.
For Non-Resident Applicants, refunds, if any, will be made as under:
Where applications are accompanied by Indian Rupee Drafts purchased abroad and payable at Delhi,
India, refunds will be made in convertible foreign exchange equivalent to Indian Rupees to be
refunded. Indian Rupees will be converted into foreign exchange at the rate of exchange, which is
prevailing on the date of refund. The exchange rate risk on such refunds shall be borne by the
concerned applicant and the Company shall not bear any part of the risk.
Where the applications made are accompanied by NRE/FCNR/NRO cheques, refunds will be credited
to NRE/FCNR/NRO accounts respectively, on which such cheques are drawn and details of which are
provided in the CAF.
MODE OF PAYMENT OF REFUND
Applicants should note that on the basis of name of the applicants, Depository Participant’s name,
Depository Participant-Identification number and Beneficiary Account Number provided by them in the
Composite Application Form, the Registrar to the Issue will obtain from the Depositories, the applicant’s
bank account details including nine digit MICR code. Hence, applicants are advised to immediately
update their bank account details as appearing on the records of the depository participant. Please note
that failure to do so could result in delays in credit of refunds to applicants at the applicant’s sole risk and
neither the Lead Manager nor the Company shall have any responsibility and undertake any liability for
the same.
The payment of refund, if any, would be done through various modes in the following order of preference:
I.
Direct Credit – For investors having their Bank Account with the Collecting Bankers, the refund
amount would be credited directly to their Bank Account with the Collecting Bankers.
II. RTGS – Investors desirous of taking direct credit of refund through RTGS, will have to provide the
IFSC code in the Composite Application Form
ECS - Payment of refund would be done through ECS for applicants residing at one of the 68 centres,
where clearing houses are managed by the RBI, State Bank of India, Punjab National Bank, State Bank
of Indore, Union Bank of India, Andhra Bank, Corporation Bank, Bank of Baroda, State Bank of
Travancore, Central Bank of India, Canara Bank, Oriental Bank of Commerce, United Bank of India,
State Bank of Hyderabad and State Bank of Bikaner and Jaipur will get refunds through ECS.
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This would be subject to availability of complete Bank Account details including MICR code from the
depositories.
For all the other applicants except for whom payment of refund is possible through I, II and III, the refund
orders would be despatched under the Certificate of Posting for refund orders upto Rs. 1,500/- and through
Registered Post or Speed Post for refund orders exceeding Rs. 1,500/-. These refund orders will be drawn
on the Collection Bank(s) and payable at par at the places where applications are accepted. Bank charges, if
any, for encashing such cheques or pay orders will be borne by the Applicants.
INTEREST IN CASE OF DELAY IN ALLOTMENT / DESPATCH
The Company will issue and dispatch letters of allotment/ share certificates and/ or letters of regret along
with refund order or credit the allotted securities to the respective beneficiary accounts, if any within a
period of six weeks from the date of closure of the Issue. If such money is not repaid within 8 days from the
day the Company becomes liable to pay it, the Company shall pay that money with interest at the rate of
15% per annum as stipulated under Section 73 of the Act.
UNDERTAKING
The Company undertakes that:
i)
the complaints received in respect of the Issue shall be attended to by the issuer company
expeditiously and satisfactorily.
ii) all steps for completion of the necessary formalities for listing and commencement of trading at all
stock exchanges where the securities are to be listed are taken within seven working days of
finalization of basis of allotment.
iii) funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be
made available to the Registrar to the issue by the issuer.
iv) where refunds are made through electronic transfer of funds, a suitable communication shall be sent
to the applicant within 42 days of closure of the issue, giving details of the bank where refunds shall
be credited along with amount and expected date of electronic credit of refund;
v) the certificates of the securities/ refund orders to the non-resident Indians shall be dispatched
within specified time.
vi) no further issue of securities shall be made till the securities offered through this Letter of Offer are
listed or till the application moneys are refunded on account of non-listing, under subscription, etc.
vii) At any given time there shall be only one denomination for the shares of the company and
viii) The company shall comply with such disclosure and accounting norms specified by the Board
(SEBI) from time to time.
The Issuer and Lead Manager shall update the Letter of Offer and keep the investors informed of any
material changes till the listing and trading commences.
UTILISATION OF ISSUE PROCEEDS
The Board of Directors declares that:
(i)
all monies received out of issue of shares or debentures to public shall be transferred to separate
bank account other than the bank account referred to in sub-section (3) of section 73 of the
Companies Act, 1956;
(ii)
details of all monies utilized out of the issue referred to in sub-item(i) shall be disclosed under an
appropriate separate head in the balance sheet of the issuer company indicating the purpose for
which such monies had been utilized; and
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(iii) details of all unutilized monies out of the issue of shares or debentures, if any, referred to in subitem (i) shall be disclosed under an appropriate separate head in the balance sheet of the issuer
company indicating the form in which such monies have been invested.
(iv) the utilization of monies received under promoters’ contribution and from firm allotments and
reservations shall be disclosed under an appropriate head in the balance sheet of the issuer
company, indicating the purpose for which such monies have been utilized.
(v)
the details of all monies out of the funds received under promoters’ contribution and from firm
allotments and reservations shall be disclosed under a separate head in the balance sheet of the
issuer company, indicating the form in which such monies have been invested.
The promoters/ directors of CHL Limited, Mr. L.K. Malhotra, Mr. D.V. Malhotra, Mr. A.K. Malhotra, Mr.
O.P. Bajaj, Mr. B.N. Malhotra, Mr. Kumud Malhotra, Mr. Subhash Ghai, Mr. Luv Malhotra, Mr. Harish
Chander Bhasin and Mr. R.C. Sharma confirm that no information/material likely to have a bearing on the
decision of investors in respect of the shares offered in terms of this draft letter of offer has been suppressed
withheld and / or incorporated in the manner that would amount to mis-statement/misrepresentation and
in the event of its transpiring at any point in time till allotment/refund, as the case may be, that any
information/material has been suppressed/withheld and/ or amounts to a mis-statement/
misrepresentation, the promoters/directors undertake to refund the entire application monies to all
subscribers within 7 days thereafter without prejudice to the provisions of section 63 of the companies act.
ACCESS TO FUNDS
The funds received against this Issue will be kept in a separate Bank Account and the Company will not
have any access to such funds unless it satisfies the Designated Stock Exchange with suitable documentary
evidence that the minimum subscription of 90% of the Issue has been received by the Company.
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SECTION VIII - MAIN PROVISIONS OF ARTICLES OF ASSOCIATION
SHARE CAPTIAL AND VARIATION OF RIGHTS
3.
The Share Capital of the company is Rs. 30,00,00,000 (Rupees Thirty Crore) divided into
3,00,00,000 (Three Crore) Equity shares of Rs. 10/- (Rs. Ten each.)
3A Subject to the provisions of Section 80 of the Companies Act, 1966, the Board shall have the power to
issue Cumulative Redeemable Preference Shares, which may at the option of the Company be
liable to be redeemed at any time after the expiry of 12 years but within a period of 15 years from the
date of their issue. The said redemption will be made either out of profits of the Company, which
would otherwise be available for dividend or out of the proceeds of fresh issue of shares made for the
purpose of redemption. The holders of redeemable preference shares shall be paid out of the
profits which the Directors shall determine to distribute by way of dividend a fixed cumulative
dividend @ 13.5%. On winding up they shall be paid all arrears of preferential dividend whether
earned or declared or not, down to the commencement of winding up, and shall also be repaid the
amount of capital paid-up or credited as paid up on the preference share, held by them.
4.
Subject to the provisions of these Articles the shares shall be under the control of the Board who may
allot or otherwise dispose of the same to such persons, on such terms and conditions, at such time,
either at par or at a premium or discount and for such consideration as the Board thinks fit provided,
that where at any time it is proposed to increase the Subscribed Capital of the Company by
allotment of further shares, then subject to the manner set out in Section 81 (1-A) of the Act, the
Board shall issue such shares in the manner set out in Section 81 (1) of the Act. Provided
further option or right to call, for subscription of shares shall not be given by the Board to any person
except with the sanction of the Company in general meeting.
5.(1) If at any time the share capital is divided into different classes of shares, the rights attached to any
class, (unless otherwise provided by the terms of issue of the shares of that class) may subject to the
provisions of Section 106 and 107 of the Act and whether or not the Company is being wound
up, be varied, modified, commuted, abrogated or dealt with, with the consent in writing of the
holders of three-fourths of the issued shares of that class or with the sanction of a Special
Resolution passed at a separate meeting of the holders of the shares of that class.
(2) To every such separate meeting the provisions of these Articles relating to general meetings
shall mutatis mutandis apply, but so that the necessary quorum shall be two persons at least
holding or representing by proxy one-third of issued shares of the class in question.
6.
The rights conferred upon the holders of any class issued with preferred or other rights shall not,
unless otherwise expressly provided by the terms of issue of the shares of that class, be deemed to
be varied by the creation or issue of further shares ranking pari passu therewith.
7.(1) The Company shall have the power to pay commission on issue of shares and debentures as
permissible under Section 76 of the Act provided that the rate percent, or the amount of the
commission paid or agreed to be paid shall be disclosed in the manner required by that
section.
(2) The rate of the commission shall not exceed in the case of shares, five per cent of the price at
which the shares are issued and in the case of debentures, two and a half per cent of the price at
which the debentures are issued
(3) The commission may be satisfied by the payment of cash or the allotment of fully or partly
paid shares or debentures or partly in one way and partly in the other.
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(4) The Company shall also have the power to pay brokerage on any issue of shares or
debentures at the maximum rates permissible by the regulation of a recognized Stock
Exchange in India.
8.
Except as required by law, no person shall be recognised by the Company as holding any share upon
any trust and the company shall not be bound by or be compelled in any way to recognise (even
when having notice thereof), any equitable, contingent, future or partial interest or claim in any
share, or any interest or claim in any fractional part of a share or (except only as by these Articles or
by law otherwise, provided) any other rights in respect of any share except an absolute rights
to the entirety thereof in the registered holder.
9.(1) Every person whose name is entered as a Member in the Register of Members or in the Register of
holders of debentures shall be entitled to receive within three months after allotment or within one
month of lodgement of shares or debentures for registration of transfer or within such other
period as the conditions of issue shall provide:(a) One certificate for all his shares or debentures without payment; or
(b) Several certificates, each for one or more of his shares or debentures, upon payment of one
rupee or such smaller amount as the Board may decide for every certificate after the first.
(2) Every certificate shall be under the seal and shall specify the shares or debentures to which it
relates and the amount paid up thereon.
(3) In respect of any share or shares or any debentures held jointly by several persons, the company
shall not be bound to issue more than one certificate, and delivery of a certificate for share
or debentures to one of several joint holders shall be sufficient delivery to all such holders
10.(1)If a share or debenture certificate is torn, defaced, lost or destroyed, it may be renewed on payment
of such fee as may be decided by the Board from time to time but not exceeding two rupees and on
such terms, if any, as to evidence and indemnity and the payment of our-of-pocket expenses incurred
by the Company in investigating evidence, as the Board thinks fit.
(2)No fee shall be charged for :(a) Registration of transfer of shares and debentures;
(b) Sub-division and consolidation of shares and debentures certificates and sub-division of letters
of allotment and split, consolidation, renewal and pucca transfer receipts into denominations
corresponding to the market units of trading:
(c) Sub-division of renounceable letters of rights;
(d) Issue of new certificates in replacement of those which are old, decrepit or worn out or where
the cages on the reverse for recording transfers have been fully utilised;
(e) Registration of any Power of Attorney, Probate, Letters of Administration or similar other
documents.
BOARD OF DIRECTORS
74.
Unless otherwise determined by a general meeting the number of Directors shall not be less than 3
nor more than 15 including nominated Directors, referred to in Article 77.
76. A director shall not be required to hold qualification shares but nevertheless shall be entitled to
attend, speak and preside at any general meeting of the Company and at any separate meeting of
the holders of any class of shares in the Company.
77.
(1) Notwithstanding anything to the contrary contained in these Articles, so long as any moneys
remain owing by the Company to the Industrial Finance Corporation of India (IFCI) Industrial
Development Bank of India (lDBI), The Industrial Credit & Investment Corporation of India
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Limited (ICICI) and Life Insurance Corporation of India (LlC) or to any other Finance
Corporation or Credit Corporation or to any other Financing Company or Body out of any
loans granted by them to the Company or so long as IFC!, IDBI, ICICI, IIC and Unit Trust of
India (UTI) or any other Financing Corporation or Credit Corporation or any other
Financing Company or Body (each of which IFCI, IDBI, ICICI, LIC and UTI or any other
Finance Corporation or Credit Corporation or any other Financing Company or Body is
hereinafter in this Article referred to as 'The Corporation") continue to hold debentures in the
Company by direct subscription or private placement, or so long as the Corporation holds
shares in the Company as a result of underwriting or direct subscription or so long as any liability
of the Company arising out of any Guarantee furnished by the Corporation on behalf of the
Company remains outstanding, the Corporation shall have a right to appoint from time to time,
any person or persons as a Director or Directors, whole time or non-whole time, (which
Director or Directors is/are hereinafter referred to as "Nominee Directors") on the Board of the
Company and to remove from such office any person or persons so appointed and to appoint
any person or persons in his or their place/s
(2) The Board of Directors of the Company shall have no power to remove from office the Nominee
Director/s. At the option of the Corporation such Nominee Director/s shall not be required to
hold any share qualification in the Company. Also at the option of the Corporation such
Nominee Director/s shall not be liable to retirement by rotation of Directors. Subject as
aforesaid, the Nominee Director/s shall be entitled to the same rights and privileges and be
subject to the same obligations as any other Director of the Company.
(3) The Nominee Director/s so appointed shall hold the said office only so long as any moneys
remain owing by the Company to the Corporation or so long as the Corporation holds Debentures
in the Company as a result of direct subscription or private placement or so long as the Corporation
holds shares in the Company as a result of underwriting or direct subscription or the liability of
the Company arising out of the Guarantee is outstanding and the Nominee Director/s so
appointed in exercise of the said power shall ipso facto vacate such office immediately the
moneys owing by the Company to the Corporation are paid off or on the corporation ceasing to
hold Debentures/Shares in the Company or on the satisfaction of the liability of the Company
arising out of the Guarantee furnished by the Corporation.
(4) The Nominee Director/s appointed under this Article shall be entitled to receive all notices
to attend all General Meetings, Board Meetings and the Meeting of the Committee of
which the Nominee Director/s is/are member/s as also the minutes of such meetings. The
Corporation shall also be entitled to receive all such notices and minutes.
(5) The Company shall pay to the Nominee Director/s sitting fees and expenses to which the other
Directors of the Company are entitled, but if any other fees, commission, moneys or remuneration
in any form is payable to the Directors of the Company, the fees, commission, moneys and
remuneration in relation to such Nominee Director/s shall accrue to the Corporation and the
same shall accordingly be paid by the Company directly to the Corporation. Any expenses
that may be incurred by the Corporation or such Nominee Director/s in connection with their
appointment or Directorship shall also be paid or reimbursed by the Company to the Corporation
or, as the case may be, to such nominee Director/s. Provided that if any such Nominee
Director/s is an officer of the Corporation the sitting fees, in relation to such Nominee
Director/s shall also accrue to the Corporation and the same shall accordingly be paid by the
Company directly to the Corporation.
(6) In the event of the Nominee Director/s being appointed as whole time Director/s such
nominee Director/s shall exercise such powers and have such rights as are usually
exercised or available to a whole time Director in the management of the affairs of the
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Company. Such whole time Director/s shall be entitled to receive such remuneration, fees,
commission and moneys as may e approved by the Corporation.
78. (1) Not less than two third of total number of Directors of the Company shall:
(a) be persons whose period of office is liable to determination by retirement of Directors
by rotation and
(b) save as otherwise provided in the Act, be appointed by the Company in General
meeting.
(2) At every Annual General Meeting of the Company, one-third of the Directors, for the time
being as are liable to retire by rotation or if their number is not three or a multiple of three
then the number nearest to one-third, shall retire from office.
(3) Subject to the provisions of the Act and these Articles a retiring Director shall be eligible for
re-appointment.
(4) The Directors to retire by rotation at every Annual General Meeting shall be those who have
been longest in office since their last appointment, but as between persons who become
directors on the same day those to retire shall, in- default of and subject to an agreement
among themselves, be determined by lot
(5) Managing Director/Executive Director/Whole Time Director/Part Time Director/Non
Executive Director Of the Company shall retire as per the provisions of the Companies Act
1956 and Rules named thereunder and/or any applicable statute rules/regulations framed
from time to time.
79. (1) Each Director shall be entitled to receive out of the funds of the Company for his services in
attending meeting of the Board or a Committee of the Board, such fees as may be prescribed
under the Act or by the Central Government from time to time for each meeting of the Board or a
Committee of the Board attended by him
(2) The Board may allow and pay to any Director who is not a bonafide resident of the place where
the meetings of the Board are ordinarily held and who shall come to such place for the purpose
of attending any meeting, such sum as the Board may consider fair compensation for
travelling, boarding, lodging and other expenses, in addition to his fee for attending such meeting
as above specified, and if any director be called upon to go or reside out of the ordinary place of
his residence on the Company's business, he shall be entitled to be repaid and reimbursed any
travelling, hotel or other expenses incurred in connection with the business of the company.
80. The Directors (other than Managing/Whole-time Directors) may be paid in respect of each
financial year of the Company remuneration by way of commission upto one per cent of the net
profits of the company if the Company has Managing/Whole-time directors or Manager or upto
three per cent of the net profits of the Company in any other case and the total commission so
payable shall be divided among such Directors pro rata to the period of office held by
them unless otherwise agreed upon among them
81. Subject to Sections 198, 309, 310 and 314 of the Act, if any Director, being willing, shall be
called upon to perform extra services or to make any special exertion in going or residing
anywhere for any of the purposes of the Company, the Board may remunerate such
Director either by fixed sum or by a percentage of profit or otherwise and such
remuneration may be either in addition to or in substitution of any remuneration to which
he may be entitled as a Director.
82. A director of the Company may be or become a Director of any Company promoted by
the Company or in which it may be interested as a vendor, share-holder or otherwise, and
such Director shall not be accountable for any benefits received by him as Director of such
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other Company.
83. (1)The office of a Director shall ipso facto become vacant under the circumstances mentioned in
Section 283 or any other provisions of the Act.
(2) A Director may resign his office at any time by notice in writing addressed to the
Company or to the Board of Directors.
(3) Subject to the provisions of Section 284 of the Act, a Director may be removed from office
before the expiry of his period of office
THE SEAL
106.(1) The Board shall provide a common seal for the purpose of the Company and shall have power
from time to time to destroy the same and substitute a new seal in lieu thereof.
(2) The Board shall provide for the safe custody of the Seal.
(3) Save as provided under the Companies (Issue of Share Certificates) Rules, 1960, the Seal
shall not be affixed to any instrument except in the presence of an officer, including a
Director, manager or secretary, authorised by the Board in this behalf, from time to time,
who shall sign every instrument to which the Seal is affixed
107.
The Company may exercise the powers conferred by Section 50 of the Act with regard to having
an official seal for use abroad, and such powers shall vest in the Board.
DIVIDENDS AND RESERVES
108.
The declaration of the Board as to the amount of net profits of the Company shall be conclusive
109.
The Company in general meeting may declare dividends, but no dividend shall exceed the
amounts recommended by the Board.
110.
Subject to the provisions of the Act, the Directors may. from time to time, pay to the Members on
account of the next forthcoming dividend, such interim dividend as in their judgment the
position of the company may justify.
111.(1) The Board may, before recommending any dividend, set aside out of the profits of the company
such sums as it thinks proper as reserve or reserves or reserves which shall, at the discretion
of the Board, be applicable for any purpose to which the profits of the company may be
properly applied, including provisions for meeting contingencies or for equalizing
dividends, and pending such application may, at the like discretion, either be employed in
the business of the Company or be invested in such investments (other than shares of the
Company) as the Board may from time to time think fit.
(2) The Board may also carry forward any profits which it may think expedient not to divide
without setting them aside as a reserve.
112.(1) Subject to the rights of persons, if any, entitled to shares with special rights as to dividends, all
dividends shall be declared and paid according to the amounts paid up or credited as paid up
on shares in respect whereof the dividend is paid.
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(2) No amount paid or credited as paid on a share in advance of calls shall be treated for the
purposes of this Article as paid on the share.
(3) All dividends shall be apportioned and paid proportionate to the amounts paid or credited as
paid on the shares during any portion or portions of the period in respect of which the dividend
is paid; but if any share is issued on terms providing that it shall rank for dividend as
from a particular date such share shall rank for dividend accordingly
113. The Board may deduct from any dividend payable to any member all sums of money. If any
presently payable by him to the Company on account of calls or otherwise in relation to the
shares of the company.
114. The company in general meeting may decide that any dividend payable to the members may be
set off against any call payable by the members or any call in arrear by that member.
115.(1) Any dividend, interest or other moneys payable in respect of shares may be paid in cash or
cheque, warrant or postal order sent through the post or by money order directed to the
registered address of the holder or, in the case of joint holders, to the registered address of one
of the joint holders who is first named on the Register of Members, or to such person
and to such address as the holder or joint holders may, in writing direct.
(2) Every such cheque or warrant shall be made payable to the order of the person to whom it is sent.
(3) The Company shall not be responsible for the loss of any cheque, warrant or postal order sent by
post or by money order in respect of dividends, whether by request or otherwise, at the registered
address or the address communicated to the company before-hand by the member or for any
dividend lost to the member or person entitled thereto by the forged endorsement of any cheque or
warrant or the fraudulent or improper recovery thereof by any other means
(4) The company may issue a duplicate cheque or dividend warrant or interest warrant to a
shareholder or holder of debentures on furnishing such indemnity or otherwise as it may think proper.
116. Anyone or two or more joint holders of shares may give effectual-receipts for any dividends,
bonuses or other moneys payable in respect of such shares.
117. Notice of any dividend that may have been declared shall be given to the persons entitled to share
therein in the manner mentioned in the Act.
118. No dividend shall bear interest against the Company.
119. No unclaimed dividend shall be forfeited by the Board unless the claim thereto becomes barred
by law and the company shall comply with the provisions of Section 205A of the Act, in respect of any
unclaimed or unpaid dividend
CAPITALISATION OF PROFITS
122 (1) The Company in general meeting may, upon the recommendation of the Board resolve that:
(a) It is desirable to capitalise any part of the amount for the time being standing to the credit
of any of company's reserve accounts or to the credit of the profit and loss account. or
otherwise available for distribution; and
(b) that such sum be accordingly set free for distribution in the manner specified in clause (2)
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amongst the members who would have been entitled thereto, if distributed by way of
dividend and in the same proportion
(2) The sum aforesaid shall not be paid in cash but shall be applied, subject to the provision
contained in clause (3) either in or towards(a) paying up any amounts for the time being unpaid on any shares held by such members respectively;
(b) paying up in full unused shares in or debentures of the company to be allotted and distributed,
credited as fully paid up to any amongst such members in the proportions aforesaid; or
(c) partly in the way specified in sub-clause (a) and partly in that specified in sub-clause (b).
(3) A share premium account and a capital redemption reserve account may, for the purposes of this
Article, only be applied in the paying up of unissued shares to be issued to members of the company as
fully paid bonus shares.
(4) The Board shall give effect to the resolution passed by the company in pursuance of this Article
123. (1) Whenever such a resolution as aforesaid shall have been passed, the Board shall(a) make all appropriations and applications of the undivided profits resolved to be capitalised
thereby, and all allotments and issues of fully paid shares, if any; and
(b) generally do all acts and things required to give effect thereto.
(2) The Board shall have full power(a) to make such provision, by the issue of fractional certificates or by payment in cash or
otherwise as it thinks fit, in the case of shares becoming distributable in fractions; and also
(b) to authorise any person to enter, on behalf of all the members entitled
thereto, into an agreement with the Company providing for the allotment to them
respectively, credited as fully paid up, of any further shares to which they may be entitled
upon such capitalisation, or as the case may require, for the payment by the company on
their behalf, by the application thereto of their respective proportions of the profits resolved
to be capitalised, of the amounts or any part of the amounts remaining unpaid on their
existing shares.
(3) Any agreement made under such authority shall be effective and binding on all such members.
124. A general meeting may resolve that any surplus money arising from the realisation of any
capital assets of the company or any investments representing the same or any other
undistributed profits of the company be distributed amongst the members in the footing that
they receive the same as capital.
WINDING UP
125 (1) If the company shall be wound up, the liquidator may, with the sanction of a special resolution
of the company and any other sanction required by the Act, divide amongst the members, in specie or
kind, the whole or any part of the assets of the company, whether they shall consist of property of the
same kind or not.
(2) For the purpose aforesaid, the liquidator may fix such value as he deems fair upon any property to
be divided as aforesaid and may determine how such division shall be carried out as between the
members or different classes of members
(3) The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees
upon such trusts for the benefit of the contributories as the liquidator, with the like sanction, shall
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think fit, but so that no member shall be compelled to accept any shares or other securities
wherein there is any liability.
INDEMNITY AND RESPONSIBILITY
126.(1) Subject to the provisions of Section 201 of the Act. every Director or the Managing Director,
Manager, Secretary and other Officer or employee, servant or auditor for the time being, of the
Company and the Trustees (if any) for the time being acting in relation to any of the affairs of the
Company and every one of them shall be indemnified by the Company against. and it shall be the
duty of the Directors out of the funds of the Company to pay all costs, losses and expenses
(including traveling expenses) which any such Director, Managing Director, Officer or employee and
the trustees (if any) for the time being acting in co-relation to any of the affairs of the company may
incur or become liable to by reason of any contract entered into or any act or deed done by him as
such Director, officer or servant or in any way in the discharge of his duties.
(2) Subject as aforesaid every Director, Managing Director, Manager, Secretary or other officer or
employee, servant or auditor of the company or the Trustees (if any) for the time being acting in
relation to any of the affairs of the company and every one of them shall be indemnified against
any liability incurred by him in defending any proceedings, whether civil or criminal, in which
judgment is given in his favour or in which he is acquitted or in connection with any
application under Section 633 of the act in which relief is given to him by the Court.
127.Subject to the provisions of Section 201 of the Act, no Director or Managing Director or other
officer of the company shall be liable for the acts, omissions, receipts, neglects, defaults of any other
Director or officer or for joining in any omission, receipt or other act for conformity or for any loss or
expense suffered by the Company through insufficiency or deficiency of title to any property
acquired by order of the Directors for or on behalf of the company or for the insufficiency or
deficiency of any security in or upon which any of the moneys of the Company shall be invested or
for any loss or damage arising from the bankruptcy, insolvency or tortuous act of any person or with
whom any moneys, securities or effects shall be entrusted or deposited or for any loss occasioned by
any error of judgment or oversight on his part or for any other loss, damage or misfortune whatever,
which shall happen in the execution of duties of his office or in relation thereto, unless the same
happens through his own dishonesty, willful neglect or default.
SECRECY
128.
Every Director, manager, auditor, trustee, member of committee, officer, servant, agent,
accountant or other person employed in the business of the company shall, if so required by the
Board before entering upon his duties, sign a declaration pledging himself to observe a strict secrecy
respecting all transactions and affairs of the company with the customers and the state of the
accounts with individuals and in matters relating thereto, and shall by such declaration pledge
himself not to reveal any of the matters which may come to his knowledge in the discharge of his
duties except when required so to do by the Board or by any meeting or by a court of law and except
so far as may be necessary in order to comply with any of the provisions in these presents contained.
129. No member or other person (other than a Director) shat! be entitled to enter the property of the
company or to inspect or examine company's premises or properties or the Books of accounts of the
company without the permission of the Board of Directors of the Company for the time being or to
require discovery of or any information respecting any detail of the Company's trading or any matter
which is or may be in the nature of a trade secret, mystery of trade or secret process or of any matter
whatsoever which may relate to the conduct of business of the Company and which in the opinion of
the Board it will be inexpedient in the interest of the Company to disclose or communicate Company
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and for the valuation of any such securities or property as such price and in such manner as the
meeting may approve and all holders of shares shall, subject to the provisions of Section 395 of the
Act, be bound to accept and shall be bound by any valuation or distribution so authorised, and
waive all rights in relation thereto; save only such statutory rights, if any under Section 494 of the
Act as are incapable of being varied or excluded by these Articles in case the Company is proposed
to be or is in the course of being wound up.
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SECTION IX - OTHER INFORMATION
MATERIAL CONTRACTS AND DOCUMENTS
The Contracts referred to in para (A) below (not being contracts entered into in the ordinary course of the
business carried on by the Company or entered into more than two years before the date of this Letter of
Offer) which are or may be deemed material, have been entered into by the Company.
The contracts together with the documents referred to in paragraph (B) below, copies of all of which have
been attached to the copy of this Letter of Offer may be inspected at the Registered Office of the Company
between 11.00 a.m. - 4.00 p.m. on any working day from the date of this Letter of Offer until the closing of
the subscription list.
A. MATERIAL CONTRACTS
1.
Copy of Memorandum of Understanding dated 03/07/2008 between the Company and Keynote
Corporate Services Limited, Lead Manager to the Issue.
2.
Copy of Memorandum of Understanding dated 02/06/2008 between the Company and Beetal
Financial & Computer Services Ltd., Registrar to the Issue.
3.
Copy of tripartite agreement dated 22/07/2008 between the Company, National Securities Depository
Limited (NSDL) and Beetal Financial & Computer Services Ltd. ., Registrar to the Issue.
4.
Copy of tripartite agreement dated 14/07/2008 between the Company, Central Depository Services
(India) Limited (CDSL) and Beetal Financial & Computer Services Ltd.., Registrar to the Issue.
B. DOCUMENTS FOR INSPECTION
1. Copy of Memorandum of Articles and Articles of Association of CHL Limited.
2. Copy of Certificate of Incorporation of Company dated 16/03/1979 and Fresh Certificate of
Incorporation dated 11/12/1997.
3. Copies of Annual report of CHL Limited for the year ended, 31/03/2004, 31/03/2005, 31/03/2006,
31/03/2007, and Auditor’s report for the year ended 31/03/2008 and un-audited results for three
months ended 30/06/2008.
4. Memorandum and Articles of Association and copies of Annual Report for the year ended, 31/03/2005,
31/03/2006, 31/03/2007 of the Promoter Group Companies.
5. Copy of the Board resolution dated 28/07/2006 recommending the rights issue of the company & copy
of Special Resolution under Section 81 and 81(1) (A), and other relevant provisions of Companies Act,
1956 dated 27/09/2006 passed at the Annual General Meeting of the company authorizing present
issue of equity shares & Copy of the Board resolution dated 25/07/2008.
6. Copy of certificate dated 25/07/2008 issued by M/s. G Rai & Co, Chartered Accountants & Statutory
Auditors of the Company reporting financials of the company in terms of Part II Schedule II of the
Companies Act, 1956 and including capitalization statement, taxation statement, accounting ratios.
7. Copy of Certificate dated 21/06/2008 issued by M/s. L.N. Malik, Chartered Accountants & Tax
Auditors, regarding tax benefits accruing to the company and its shareholders.
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8. Copy of certificate for sources and deployment of funds dated 14/07/2008 by M/s. L.N. Malik &
Company, Chartered Accountants.
9. Copies of Consents from the Directors of the Company , Statutory Auditors of the company ,
Bankers to the Company, Lead Managers to this Issue, legal advisors to this Issue, Company
Secretary & Compliance Officer, Registrar to this Issue, as referred to, in their respective capacities.
10. Due diligence certificate dated 25/07/2008 to SEBI from the Lead Mangers Keynote Corporate Services
Limited.
11. Copies of in-principle approval received from BSE vide letter no. [••]dated [••] and DSE vide letter no [••]
dated [••]
12. Copy of SEBI observation letter No. [••] dated [••] and compliance thereof.
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DECLARATION
All the relevant provisions of the Companies Act, 1956, and the guidelines issued by the
Government of India or the guidelines issued by Securities and Exchange Board of India,
established under Section 3 of the Securities and Exchange board of India Act, 1992, as the case
may be, have been complied with and no statement made in this Offer Document is contrary to
the provisions of the Companies Act, the Securities and Exchange Board of India Act, 1992 or
rules made there under or guidelines issued, as the case may be. We further certify that all
statements in this Offer Document are true and correct.
SIGNED BY THE DIRECTORS OF CHL LIMITED
Sd/-
sd/-
Dr. L.K. Malhotra
Chairman & Managing Director
D.V. Malhotra*
Sd/A.K. Malhotra
sd/O.P. Bajaj
Sd/B.N. Malhotra
sd/Kumud Malhotra
Sd/Subhash Ghai
sd/Luv Malhotra
Executive Director
Sd/Harish Chander Bhasin
sd/R.C. Sharma
Sd/N.K. Goel
Vice President - Finance
* By his Constituted Attorney
Date: 25/07/2008
Place: New Delhi