Benares Hotels Ltd

The Directors take pleasure in presenting the Fifty Fourth Annual Report of BENARES HOTELS LIMITED (“BHL” or “the Company”) along with the Audited Financial Statements for the Financial Year ended March 31, 2025.

OPERATING AND FINANCIAL RESULTS

*Dividend declared in FY 2023-24 and paid during the year under review.

COMPANY'S OPERATIONS AND PERFORMANCE

The Total Income for the Financial Year (FY) ended March 31, 2025 stood at Rs. 14,067 lakhs as compared to Rs. 12,380 Lakhs in the previous year and the Gross Operating Profit (EBIDTA) stood at Rs. 6,452 lakhs as compared to Rs. 5,436 Lakhs in the previous year. The profit before Tax for the year was Rs. 5,811 lakhs as compared to Rs. 4,809 lakhs in the previous year. The profit after Tax for the year was Rs. 4,325 lakhs as compared to Rs. 3,604 lakhs in the previous year.

DIVIDEND

The Board recommended a dividend @ 250% i.e. Rs. 25/- per fully paid Equity share on 13,00,000 Equity shares of face value Rs. 10 each, for the year ended March 31, 2025 (Previous year: Rs. 25 per share).

The dividend on Equity Shares is subject to the approval of the Shareholders at the Annual General Meeting (AGM) scheduled to be held on Tuesday, August 12, 2025. The dividend once approved by the Shareholders will be paid on and after Friday, August 22, 2025.

The dividend on Equity Shares, if approved by the Members, would involve a cash outflow of Rs. 325 lakhs.

TRANSFER TO RESERVES

The Board of Directors has decided to retain the entire amount of profit for FY 2024-25 appearing in the Statement of profit and loss.

SHARE CAPITAL

During the year under review, there has been no change in the share capital of the Company.

HOLDING AND SUBSIDIARY COMPANIES

The Indian Hotels Company Limited (IHCL) is the ultimate Holding Company of BHL. The Company does not have any subsidiary company.

DIRECTORS

In accordance with the requirement of the Companies Act, 2013 (the Act) and the Company's Articles of Association, Mr. Beejal Desai (DIN: 03611725) retires by rotation and being eligible, offers himself for reappointment. The necessary resolution for his re-appointment forms part of the Notice convening the AGM. During the year under review, Mrs. Rukmani Devi (DIN: 07624616) ceased to be an Independent Director of the Company consequent to completion of her second term of five (5) years as an Independent Director in the Company on August 27, 2024. The Board places on record its appreciation for her invaluable contribution and guidance provided to the Company during her tenure.

Based on the recommendations of the Nomination and Remuneration Committee (NRC) and in accordance with the provisions of the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations), Ms. Anita Belani (DIN: 01532511) was appointed as an Additional Director in a capacity of Independent Director for a period of five (5) years with effect from January 14, 2025 subject to the approval of the Members, by way of Special Resolution as required under the provisions of the Companies Act, 2013 and SEBI Listing Regulations. The members of the Company have approved her appointment vide Postal Ballot w.e.f. March 4, 2025. In the opinion of the Board, Ms. Belani is a person of integrity and possesses the requisite qualifications, experience and expertise required for discharging her duties as an Independent Director of the Company. In terms of Section 149 of the Act, and Regulation 16(1) of the SEBI Listing Regulations Mr. Moiz Miyajiwala, Mr. Puneet Raman and Ms. Anita Belani are the Independent Directors of the Company as on the date of this report.

In terms of Regulation 25(8) of SEBI Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. Based upon the declarations received from the independent Directors, the Board of Directors has confirmed that they meet the criteria of Independence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI Listing Regulations and that they are Independent of the Management. In the opinion of the Board, there has been no change in the circumstances affecting their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further in terms of Section 150 read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014, as amended, the Independent Directors of the Company have registered their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.

During the year under review, the Non Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and commission and reimbursement of expenses, if any, incurred by them for the purpose of attending meetings of the Board/Committee and General Meeting of the Company.

KEY MANAGERIAL PERSONNEL ('KMP')

During the year under review, there has been no change in the KMPs of the Company.

Pursuant to the provision of Section 203 of the Act, the KMPs of the Company as on March 31, 2025 are:

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company has an ongoing familiarization Programme for the Independent Directors with respect to their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. All the Board members of the Company are afforded every opportunity to familiarize themselves with the Company, statutory changes impacting the Company, its Management and its operations and all the information /documents sought by them is/are shared with them for enabling a good understanding of the Company, its various operations and the industry of which it is a part. The details of the familiarization Programme for Independent Directors are disclosed on the Company's website under the weblink: https://www.benareshotelslimited.com/benareshotelslimited/Independent-Directors-familiarization-programme-BHL.pdf

NUMBER OF MEETINGS OF THE BOARD

During the year under review, five (5) Board Meetings were held and the intervening gap between the meetings did not exceed the period of one hundred and twenty days. The details of meetings of the Board are provided in the Corporate Governance Report, which forms a part of the Annual Report.

STATUTORY AUDITORS

At the 52nd AGM of the Company held on August 24, 2023, the Members approved the re-appointment of PKF

Sridhar & Santhanam LLP, Chartered Accountants (Firm Registration No. 003990S/S200018), as the Statutory Auditors of the Company to hold office for a period of four consecutive years, from the conclusion of the 52nd AGM till the conclusion of the 56th AGM of the Company to be held in the year 2027, to audit and examine the books of account of the Company. The Statutory Auditors' Report on the Financial Statements of the Company for FY 2024-25 does not contain any qualifications, reservations, adverse remarks or disclaimer. The Statutory Auditors of the Company have not reported any fraud as specified under Section 143 (12) of the Act during the year under review

SECRETARIAL AUDITORS

In terms of Section 204 of the Act and Rules made thereunder, M/s. D. S. Associates, Practicing Company Secretary (C.P. No. 7347) was appointed as Secretarial Auditor of the Company to conduct the Secretarial Audit of records and documents of the Company for FY 2024-25 and their report is annexed as Annexure 1 to this report. The Secretarial Audit report contains a few observations. The details of which are mentioned below:

Observation 1: During the period under review, the Company was non-compliant with the provisions of Regulation 17(1) relating to the composition of the Board of Directors, Regulation 19(1)/(2) relating to the constitution of the Nomination and Remuneration Committee, and Regulation 20(2)/(2A) relating to the constitution of the Stakeholders Relationship Committee, of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for the quarter ended December 31, 2024. In respect of the said non-compliances, BSE Limited has imposed a monetary penalty on the Company.

Board's Clarification:

The aforesaid non-compliance arose on account of a temporary vacancy in the position of an Independent Director, which impacted the composition of the Board and its committees.

Considering the tremendous growth of the Company in terms of revenue and market capitalisation over the past few years, the Company took reasonable time to identify and finalize the potential candidate in place of Mrs. Rukmani R Gohil, Independent Director (DIN: 00552831) whose term expired on August 27, 2024.

Following a diligent selection process, the Board appointed Ms. Anita Belani as an Independent Director of the Company w.e.f. January 14, 2025. The Company has since regularized the composition of the Board and its committees, and the same is now in full compliance with the SEBI Listing Regulations. The penalty imposed by the stock exchange has been duly paid, and an application seeking waiver of the same has also been submitted. The delay in compliance was unintentional and occurred despite the Company's best efforts to promptly fill the resulting vacancy within the permissible time frame.

Observation 2: During the period under review, it was observed that a set of promoters namely Ms. M K Krishna Priya and Ms. M K Vishnupriya (''Promoters'') executed trades in the equity shares of the company via gift, acquisition/disposal from open market without obtaining prior approval from the Compliance Officer as mandated under Clause 4(1) of Schedule B to the SEBI (Prohibition of Insider Trading) Regulations, 2015, read with Regulation 9(1) of SEBI (Prohibition of Insider Trading) Regulations, 2015.

Board's Clarification:

The Audit Committee and the Board of the Company took cognizance of the breach of the Company's Code of Conduct by a set of promoters and levied a penalty for trading in securities of the Company (even in the nature of gift) for violating the PIT Regulations and to disgorge the notional profits earned from the contra trades to the SEBI Investor Protection and Education Fund (IPEF). The concerned Promoters has deposited the penalty amount to SEBI IPEF. The Company has since sensitized all designated persons, including the Promoters, regarding the pre-clearance requirements under the Code of Conduct for Prevention of Insider Trading Pursuant to the requirements of Regulation 24A of the SEBI Listing Regulations, the Board of Directors of the Company at their meeting held on April 28, 2025, approved the appointment of M/s D.S. Associates, a peer reviewed Practicing Company Secretary firm, as the Secretarial Auditor of the Company for a term of five consecutive financial years, commencing from FY 2025 26 up to FY 2029 30, to conduct the Secretarial Audit, subject to the approval of the Members at the ensuing Annual General Meeting. The necessary resolution for the appointment of M/s D.S. Associates forms part of the Notice convening the ensuing AGM scheduled to be held on Tuesday, August 12, 2025.

COST AUDITORS

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

ANNUAL RETURN

As provided under Section 92(3), Section 134(3)(a) and Rule 12 of Companies (Management and Administration) Rules, 2014, the Annual Return in Form MGT-7 for FY 2024-25 is available on the website of the Company at https://www.benareshotelslimited.com/en-in/agm-2025

VIGIL MECHANISM

Your Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behavior. In line with the Tata Code of Conduct (TCoC), any actual or potential violation, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the employees in pointing out such violations of the TCoC cannot be undermined.

In accordance with Section 177(9) of the Act and Regulation 22 of SEBI Listing Regulations, the Company has established the necessary vigil mechanism that provides a formal channel for all its Directors, Employees and other stakeholders to report concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct. The details of the policy have been disclosed in the Corporate Governance Report, which forms a part of the Annual Report and is also available on https://www.benareshotelslimited.com/benareshotelslimited/Policies-bhl-whistle-blower-policy-revised-21-07-2023.pdf

CORPORATE SOCIAL RESPONSIBILITY

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure 2 of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2014, as amended from time to time. For other details regarding the CSR and Sustainability Committee, please refer to the Corporate Governance Report, which is a part of the Annual report. The CSR policy is available on https://www.benareshotelslimited.com/benareshotelslimited/Policies-BHL-CSR-POLICY-2021-2022.pdf

Selection and procedure for nomination and appointment of Directors

The Nomination and Remuneration Committee (NRC) engages with the Board to evaluate the characteristics, skills, expertise, and experience required for the effective functioning of the Board in alignment with the Company's strategic objectives to ensure a well-balanced and competent Board. The selection process considers diversity, independence (where applicable), through a rigorous assessment, including their professional background, industry knowledge, and ability to contribute to Board deliberations. Based on this assessment, the NRC identifies and shortlists potential candidates who possess the required competencies and align with the Company's strategic vision, corporate values, and governance standards and recommends their nomination to the Board.

Criteria for determining qualifications, positive attributes and independence of a Director

In terms of the provisions of Section 178(3) of the Act, and Regulation 19 of the SEBI Listing Regulations, the NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors, the key features of which are as follows:

Qualifications - The Board nomination process encourages diversity of thought, experience, knowledge, age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise.

Positive Attributes - Apart from the duties of Directors as prescribed in the Act, the Directors are expected to demonstrate high standards of ethical behaviour, communication skills and independent judgement. The Directors are also expected to abide by the respective Code of Conduct as applicable to them.

Independence - A Director will be considered independent if he/she meets the criteria laid down in Section 149(6) of the Act, the Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations. The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act is available on https://www.benareshotelslimited.com/benareshotelslimited/Policies-remuneration.pdf

WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 (POSH Act)

The Company has always believed in providing a safe and harassment-free workplace for every individual working in the Company. The Company has complied with the applicable provisions of the POSH Act, and the rules framed thereunder, including constitution of the Internal Complaints Committee. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the POSH Act and the same is available on the Company's website at https://www.benareshotelslimited.com/benareshotelslimited/Policies-BHL-POSH-Policy-Final.pdf

During the financial year 2024-25, the Company has not received any complaint on sexual harassment. No case remains pending as on March 31, 2025.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are annexed to this report as Annexure 3.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, during the year the Company had no employees who were in receipt of the remuneration in excess of the limits set out in the said Rules.

BUSINESS OVERVIEW

An analysis of the Business and Financial Results are given in the Management Discussion and Analysis, which forms a part of the Annual Report.

FINANCE COST

Finance cost for the year ended March 31, 2025 was Rs. 38.16 lakhs (Previous year: Rs. 37.57 Lakhs). Breakup

of the total interest cost of Rs. 38.16 lakhs are as follows:

DEPRECIATION: Rs. 602.99 Lakhs (Previous Year: Rs. 590.12 Lakhs)

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company falls within the scope of the definition 'infrastructure company' as provided by the Act. Accordingly, the Company is exempt from the provisions of Section 186 of the Act with regards to Loans, Guarantees, Securities provided and Investments. Therefore, no details are provided.

BORROWINGS

During the year under report, the Company has not accepted any borrowings. The borrowings are Nil as on

March 31, 2025. (Previous Year: Nil)

CAPITAL EXPENDITURE

During FY 2024-25, the Company's outlay towards capital expenditure was Rs. 1,883.68 lakhs (Previous Year:

Rs. 731.26 lakhs).

DEPOSITS FROM PUBLIC

The Company does not accept and/or renew Fixed Deposits from the general public and shareholders. There were no over dues on account of principal or interest on public deposits including the unclaimed deposits at the end of FY 2024-25 (Previous year: Nil).

RELATED PARTY TRANSACTIONS

In line with the requirements of the Act and the SEBI Listing Regulations, as amended, the Company has formulated a Policy on Related Party Transactions for identifying, reviewing, approving and monitoring of Related Party Transactions and the same can be accessed on the Company's website at https://www.benareshotelslimited.com/benareshotelslimited/Policies-Related-Party-Transaction-Policy.pdf During the year under review, all Related Party Transactions that were entered into were in the Ordinary Course of Business and at Arms' Length basis and were approved by the Audit and Risk Management Committee. Transactions, which were repetitive in nature, were approved through omnibus route. None of the transactions with related parties are material in nature or fall under the scope of Section 188(1) of the Act. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, as amended, in Form AOC-2 is not applicable to the Company for FY 2024-2025 and hence the same is not provided.

CORPORATE GOVERNANCE

As required by SEBI Listing Regulations, the report on the Management Discussion and Analysis; and Corporate Governance along with the Practicing Company Secretary's Certificate regarding compliance of conditions of Corporate Governance norms as stipulated in Regulation 34 read along with Schedule V of the SEBI Listing Regulations are attached as a separate report which forms part of the Annual Report.

MEETINGS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

DIRECTORS' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants, including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit and Risk Management Committee, the Board is of the opinion that the Company' internal financial controls were adequate and effective during the FY 2024-2025.

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that: a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) they have prepared the annual accounts on a going concern basis; e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

THE COMPANY

There are no material changes affecting the financial position of the Company subsequent to the close of FY 2024-25 till the date of this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review, no significant material orders were passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company's operations.

RISK MANAGEMENT

The Audit and Risk Management Committee is responsible for monitoring and reviewing the Risk Management plan and ensuring its effectiveness. The Audit and Risk Management Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuous basis. The details of the Committee and its term of reference are set out in the Corporate Governance Report. Your Company has a Risk Management Policy, pursuant to the provisions of Section 134 of the Act, to identify and evaluate business risks and opportunities for mitigation of the same on a continuous basis. This framework seeks to create transparency, minimize adverse impact on business objective and enhance your Company's competitive advantage. The risk management framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework enables risks to be appropriately rated and graded in accordance with their potential impact and likelihood. The two key components of risks are the probability (likelihood) of occurrence and the impact (consequence) of occurrence, if the risk occurs. Risk is analyzed by combining estimates of probability and impact in the context of existing control measures.

The key business risks identified by the Company and its mitigation plans are as under:

A. CONSERVATION OF ENERGY: The Company has always been conscious of the need for conservation of energy and has been sensitive in making progress towards this end. The company has replaced old heat pumps resulting into higher efficiency & minimizing energy consumption. Also, company has installed Variable Frequency Drives (VFDs) on HVAC pumps to precisely match motor output to actual operational demands, resulting in reduced energy waste.

B. TECHNOLOGY ABSORPTION: There is no material information on technology absorption to be furnished. The Company continues to adopt and use the latest technologies to improve the efficiency and effectiveness of its business operations.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO: In terms of the provisions of Section 134(3)(m) of the Act, read with Rule 8(3)(C) of The Companies (Accounts) Rules, 2014, the foreign exchange earned in terms of actual inflows during the year and the foreign exchange outgo during the year in terms of actual outflows is furnished below:

PROCEEDINGS UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year under review, there were no proceedings that were filed by the Company or against the Company, which are pending under the Insolvency and Bankruptcy Code, 2016 as amended, before National Company Law Tribunal or other Courts.

VALUATION

During the year under review, there were no instances of onetime settlement with any Banks or Financial

Institutions.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

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

The Internal Auditors monitors and evaluate the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of Internal Audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. All significant audit observations and corrective actions suggested are presented to the Audit and Risk Management Committee of the Board for review. The internal financial controls as laid down are adequate and were operating effectively during the year under review.

The Board's Audit and Risk Management Committee oversees the adequacy of the internal control environment through periodic reviews of audit findings and by monitoring implementation of internal audit recommendations through compliance reports. In addition, as required under Section 143 of the Act, the Statutory Auditors have evaluated and expressed an opinion on the Company's internal financial controls over financial reporting based on the audit for the FY 2024-25. In their opinion, the Company has, in all material respects, adequate internal controls over financial reporting and such internal financial controls over financial reporting were operating effectively as on March 31, 2025.

COMMITTEES OF THE BOARD

a. Audit and Risk Management Committee

b. Nomination and Remuneration Committee

c. Corporate Social Responsibility and Sustainability Committee

d. Stakeholders' Relationship Committee

During the year under review, all recommendations of the Committees were approved by the Board. The details including the composition of the Committees including attendance at the meetings and terms of reference are included in the Corporate Governance Report, which forms a part of the Annual Report.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees, and individual Directors pursuant to the provisions of the Act and SEBI Listing Regulations.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure, Degree of fulfilment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, etc.); effectiveness of board processes, information and functioning, etc.; extent of co-ordination and cohesiveness between the Board and its Committees; and Quality of relationship between Board Members and the Management.

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India (SEBI) on January 5, 2017.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Board as a whole and the Chairman of the Company was evaluated, taking into account the views of Non-Executive Directors. The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In the Board Meeting that followed the meeting of the Independent Directors and meeting of NRC, the performance of the Board, its committees, and individual Directors was also discussed. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

The evaluation process reaffirmed the Board's confidence in the Company's ethical standards, the cohesiveness among Board members, the adaptability of the Board and management in addressing challenges, and the management's openness in sharing strategic information with the Board.

ACKNOWLEDGMENT

The Directors thank the Company's customers, vendors, investors, partners and all other stakeholders for their continuous support.

The Directors appreciate and value the contribution made by all our employees and their families.