Auditor Report of Chalet Hotels Ltd.

Mar 31, 2025

To the Members of Chalet Hotels Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Chalet Hotels Limited (the "Companyâ) which comprise the standalone balance sheet as at 31 March 2025, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including material accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2025, and its profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Emphasis of Matter

a. We draw attention to Note 42 (c) to the standalone financial statements regarding the ongoing litigation in respect of leasehold rights to proportionate undivided interest in land and building at Vashi (Navi Mumbai) purchased from K Raheja Corp Private Limited, on which the Company''s Four Points by Sheraton Hotel has been built. The allotment of land by City & Industrial Development Corporation of Maharashtra Limited (''CIDCO'') to K Raheja Corp Private Limited has been challenged under two public interest litigations. On 21 November 2014, the Honourable High Court at Bombay ordered K Raheja Corp Private Limited to restore the land to its original condition (which would interalia require the buildings thereon to be demolished) and hand over the vacant possession thereof to CIDCO within six months of the date of judgement. K Raheja Corp Private Limited has filed a special leave petition against the abovementioned order in the Honourable Supreme Court of India. The Hon''ble Supreme Court of India on 21 January 2015 has passed Status Quo Order and the matter is currently pending with it. The agreement for purchase of leasehold rights between the Company and K Raheja Corp Private Limited was subject to the outcome of the litigation and the management does not expect any potential material loss to be borne by the Company. Pending the outcome of proceedings and a final closure of the matter, no adjustments have been made in the standalone financial statements as at 31 March 2025 to the carrying value of the leasehold rights (reflected as prepayments) aggregating to Rs 46.14 million (31 March 2024: Rs 47.34 million) and the hotel assets thereon (reflected as property, plant and equipment) aggregating to Rs 347.22 million as at 31 March 2025 (31 March 2024: Rs 366.17 million).

Our opinion is not modified in respect of this matter.

Key Audit Matter

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue Recognition

See Note 29 to standalone financial statements

The key audit matter

How the matter was addressed in our audit

The Company is principally engaged as a hotel owner and property owner. It''s revenue comprises hotel revenue (including hotel room revenue, food and beverage revenue and other hotel-related revenue) and rental income from investment properties.

The accounting policies for the different revenue streams are set out in Note 1.3 B to the Standalone financial statements. Revenue is a key performance indicator of the Company and there is risk of overstatement of revenue due to fraud resulting from pressure to achieve targets and earnings expectations. Based on the above we have identified revenue recognition as a Key Audit Matter.

Our audit procedures included:

â¢ Tested the Company''s revenue recognition accounting policies and its compliance with Ind AS 115;

â¢ Tested design, implementation and operating effectiveness of the controls, assisted by IT specialists, of the revenue recognition process;

â¢ Tested the general information technology controls and key application controls surrounding revenue recognition;

â¢ Tested on a sample basis revenue recognized in the correct financial period by tracing it to invoices, receipts, etc;

â¢ Tested the adequacy of disclosures relating to the Revenue recognition in the financial statements;

â¢ Tested the details of unbilled revenue and its compliance with Ind AS 115;

â¢ Tested on a sample basis invoices recorded during the year for identification of point in time for transfer of control to the customer; and

â¢ Performed substantive analytical procedures including year on year variance analysis and cash to sales reconciliation for the financial year.

Other Information

The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the financial statements and auditor''s report(s) thereon. The Company''s annual report is expected to be made available to us after the date of this auditor''s report.

Our opinion on the standalone financial statements does not cover the other information and we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the Company''s annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the relevant laws and regulations.

Management''s and Board of Directors'' Responsibilities for the Standalone Financial Statements

The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

â¢ Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the "Annexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2 A. As required by Section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except for the matter stated in the paragraph 2(B)(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 and that the back-up of certain units which form part of the ''books of account and other relevant books and papers in electronic mode'' have not been maintained on the servers physically located in India.

c. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.

d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on 01 April 2025 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2025 from being appointed as a director in terms of Section 164(2) of the Act.

f. the modification relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2A(b) above on reporting under Section 143(3)(b) of the Act and paragraph [2B(f)] below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

g. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure Bâ.

B. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a. The Company has disclosed the impact of pending litigations as at 31 March 2025 on its financial position in its standalone financial statements - Refer Note 10 and 42 to the standalone financial statements.

b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

d (i) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the Note 63(i) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediariesâ), with the understanding, whether recorded in writing or

otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(ii) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the Note 63(ii) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(iii) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances performed, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.

e. The final dividend paid by the Company during the year, in respect of the same declared for the previous year, is in accordance with Section 123 of the Act to the extent it applies to payment of dividend.

f. Based on our examination which included test checks, except for the instances mentioned below, the Company has used accounting software for maintaining of books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective softwares:

i. The feature of audit trail was not enabled in the application layer of the accounting softwares used for maintaining the books of account relating to revenue, inventory, accounts payables, accounts receivables, payroll, general ledger and other related records.

ii. The feature of audit trail was not enabled in the database layer to log any direct data changes for the on-premise accounting softwares used for maintaining the books of account relating to revenue, inventory, accounts payables, accounts receivables, general ledger.

iii. The feature of audit trail was not enabled in the database layer of the accounting software relating to general ledger and other related records used for maintaining the books of account to log any direct data changes for the period from 01-Apr-2024 to 14-Mar-2025.

iv. Based on the examination of an independent auditor''s report in relation to controls at service organization for accounting software used for maintenance of revenue, inventory, general ledger, accounts payable, accounts receivable, general ledger which are operated by a third-party software service provider, we are unable to comment whether audit trail feature for the said software was enabled at the application layer and operated throughout the year for all

relevant transactions recorded in the respective software or whether there were any instances of the audit trail feature being tampered with.

v. Based on the examination of an independent auditor''s report in relation to controls at service organization for accounting software used for maintenance of revenue, inventory, general ledger, accounts payable, accounts receivable, general ledger which are operated by a third-party software service provider, we are unable to comment whether audit trail feature for the said software was enabled at the database layer and operated throughout the year for all relevant transactions recorded in the respective software or whether there were any instances of the audit trail feature being tampered with.

vi. Based on the examination of an independent auditor''s report in relation to controls at service organization for accounting software used for maintenance of revenue, inventory, general ledger, accounts payable, accounts receivable, general ledger which are operated by a third-party software service provider, we are unable to comment whether audit trail feature for the said software was enabled at the database layer for the period from 1 April, 2024 to 30 September, 2024 and for the period from 1 March, 2025 to 31 March, 2025 for all relevant transactions recorded in the respective software or whether there were any instances of the audit trail feature being tampered with.

vii. Based on the examination of an independent auditor''s report in relation to controls at service organization for accounting software used for maintenance of revenue, inventory, general ledger, accounts payable, accounts receivable, general ledger which are operated by a third-

party software service provider, we are unable to comment whether audit trail feature for the said software was enabled for the period from 1 January, 2025 to 31 March, 2025 for all relevant transactions recorded in the respective software or whether there were any instances of the audit trail feature being tampered with.

For the periods where audit trail (edit log) facility was enabled and operated for the respective accounting software, we did not come across any instance of the audit trail feature being tampered with.

Additionally, the audit trail has been preserved by the Company as per the statutory requirements for record retention except for the periods where audit trail was not enabled for the respective software in the prior year.

C. With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants Firm''s Registration No.:101248W/W-100022

Suhas Pai

Partner

Place: Mumbai Membership No.: 119057

Date: 12 May 2025 ICAI UDIN:25119057BMOVSF3582

Mar 31, 2024

Chalet Hotels Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Chalet Hotels Limited (the "Companyâ) which comprise the standalone balance sheet as at 31 March 2024, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including material accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2024, and its profit and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

appropriate to provide a basis for our opinion on the

standalone financial statements.

Emphasis of Matter

a. We draw attention to Note 43(c) to the standalone financial statements regarding the ongoing litigation in respect of leasehold rights to proportionate undivided interest in land and building at Vashi (Navi Mumbai) purchased from K Raheja Corp Private Limited, on which the Company''s Four Points by Sheraton Hotel has been built. The allotment of land by City & Industrial Development Corporation of Maharashtra Limited (''CIDCO'') to K Raheja Corp Private Limited has been challenged under two public interest litigation. On 21 November 2014, the Honourable High Court at Bombay ordered K Raheja Corp Private Limited to restore the land to its original condition (which would interalia require the buildings thereon to be demolished) and hand over the vacant possession thereof to CIDCO within six months of the date of judgement. K Raheja Corp Private Limited has filed a special leave petition against the abovementioned order in the Honourable Supreme Court of India. The Hon''ble Supreme Court of India on 21 January 2015 has passed Status Quo Order and the matter is currently pending with it. The agreement for purchase of leasehold rights between the Company and K Raheja Corp Private Limited was subject to the outcome of the litigation and the management does not except any potential material loss to be borne by the Company. Pending the outcome of proceedings and a final closure of the matter, no adjustments have been made in the standalone financial statements as at 31 March 2024 to the carrying value of the leasehold rights (reflected as prepayments) aggregating to Rs 47.34 million (31 March 2023: 48.54 million) and the hotel assets thereon (reflected as property, plant and equipment) aggregating to Rs 366.17 million as at 31 March 2024 (31 March 2023: Rs 348.46 million). Our opinion is not modified in respect of this matter.

Key Audit Matter

Revenue Recognition

See Note 1.3 B to standalone financial statements

The key audit matter

How the matter was addressed in our audit

Our audit procedures included:

â¢ Tested the Company''s revenue recognition accounting policies and its compliance with Ind AS 115;

The key audit matter

How the matter was addressed in our audit

The accounting policies for the different revenue streams are set out in Note 1.2 B to the Standalone financial statements. Revenue is a key performance indicator of the Company and there is risk of overstatement of revenue due to fraud resulting from pressure to achieve targets and earnings expectations. Based on the above we have identified revenue recognition as a Key Audit Matter.

â¢ Tested design, implementation and operating effectiveness of the controls, assisted by IT specialists, of the revenue recognition process;

â¢ Tested the general information technology controls and key application controls surrounding revenue recognition;

â¢ Tested on a sample basis revenue recognized in the correct financial period by tracing it to invoices, receipts, etc;

â¢ Tested the adequacy of disclosures relating to the Revenue recognition in the financial statements;

â¢ Tested the details of unbilled revenue and its compliance with Ind AS 115;

â¢ Tested on a sample basis invoices recorded during the year for identification of point in time for transfer of control to the customer; and

â¢ Performed substantive analytical procedures including year on year variance analysis and cash to sales reconciliation for the financial year.

Other Information

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management''s and Board of Directors'' Responsibilities for the Standalone Financial Statements

accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

2. A. As required by Section 143(3) of the Act, we

report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except that the back-up of certain units which form part of the ''books of account and other

relevant books and papers in electronic mode has not been maintained on servers physically located in India (refer note 64) and for the matters stated in the paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on 31 March 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 from being appointed as a director in terms of Section 164(2) of the Act.

f. the modification relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph b above on reporting under Section 143(3)(b) and paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a. The Company has disclosed the impact of pending litigations as at 31 March 2024 on its financial position in its standalone financial statements - Refer Note 10 and 43 to the standalone financial statements.

b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

d. (i) The management has represented

that, to the best of its knowledge and belief, other than as disclosed in the Note 62(i) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(ii) The management has represented that, to the best of its knowledge and belief, other than as disclosed in the Note 62(ii) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(iii) Based on the audit procedures performed that have been considered reasonable and appropriate in the

circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.

As stated in Note 20(e) to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with Section 123 of the Act to the extent it applies to declaration of dividend.

f. Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account, which has a feature of recording audit trail (edit log) facility except for the instances mentioned below. For accounting software for which audit trail feature is enabled, the audit trail facility has been operating throughout the year for all relevant transactions recorded in the respective softwares:

(i) The feature of audit trail was not enabled in the application layer of the accounting software used for maintaining the books of account relating to general ledger and other related records, for certain elements/ fields relating to areas such as revenue, inventory, accounts payables, accounts receivables, general ledger and certain related master tables.

(ii) The feature of audit trail was not enabled at the database level for accounting softwares (database SQL) used for maintaining the books

of account to log any direct data changes.

(iii) Based on the examination of an independent auditor''s report in relation to controls at service organization for accounting software used for maintenance of revenue, inventory, general ledger, accounts payable which are operated by a third-party software service provider, we are unable to comment whether audit trail feature for the said software was enabled and operated throughout the year for all relevant transactions recorded in the respective software or whether there were any instances of the audit trail feature being tampered with.

For the periods where audit trail (edit log) facility was enabled and operated for the respective accounting software, we did not come across any instance of audit trail feature being tampered with during the course of our audit.

C. With respect to the matter to be included in the Auditor''s Report under Section 197(16) of the Act:

For B S R & Co. LLP

Chartered Accountants Firm''s Registration No.:101248W/W-100022

Suhas Pai

Partner

Place: Mumbai Membership No.: 119057

Date: 13 May 2024 ICAI UDIN:24119057BKFIBK9885

Mar 31, 2023

The Board of Directors present your Company''s Thirty Eighth Annual Report along with the Audited Financial Statements for the Financial Year ended March 31,2023.

FINANCIAL HIGHLIGHTS

Your Company''s financial performance for the Financial Year ended March 31,2023 is summarized below:

('' in million)
Particulars	Standalone		Consolidated
	For the year ended		For the year ended
	March 31,2023	March 31,2022	March 31,2023	March 31,2022
Revenue from Operations	11,284.67	5,078.07	11,284.67	5,078.07
Other Income	509.14	219.27	494.87	219.32
Total Income	11,793.81	5,297.34	11,779.54	5,297.39
Total Expenses	6,733.13	4,090.74	6,756.50	4,093.30
EBITDA from Continuing operations	5,060.68	1,206.60	5,023.04	1,204.09
(Loss) from Discontinued operations	_-	(65.37)	_-	(65.37)
EBITDA	5,060.68	1,141.23	5,023.04	1,138.72
Depreciation and Amortisation Expenses	1,173.09	1,184.23	1,173.09	1,184.23
Finance Costs	1,538.14	1,440.67	1,544.74	1,444.13
Profit / (Loss) before Exceptional Items and Tax	2,349.45	(1,483.66)	2,305.21	(1,489.64)
Exceptional Items	423.08	(44.58)	423.08	(44.58)
Profit / (Loss) before Tax	2,772.53	(1,528.23)	2,728.29	(1,534.22)
Tax expense/(credit)	894.88	(719.53)	895.39	(719.53)
Profit/(Loss)for the year	1,877.65	(808.72)	1,832.90	(814.69)
Total Comprehensive Income / (Expense) for the year	1,873.01	(807.22)	1,828.26	(813.19)
Earnings per equity share Basic ('')	9.16	(3.94)	8.94	(3.98)
Earnings per equity share Diluted ('')	9.15	(3.94)	8.94	(3.98)
Note: The Financial Statements of the Company have been approved by the giving effect to the Scheme of Arrangement and Amalgamation of Belaire (wholly owned subsidiaries) into the Company.		3oard of Directors at the meeting held on July 3, 2023, after Hotels Private Limited and Seapearl Hotels Private Limited

The year under review started on a positive note. The Company witnessed a sharp bounce back in business with the Company recording all-time high Revenue and EBITDA in three out of four quarters. Various strategic and tactical initiatives by the Company continue to yield positive results. The Company has maintained its focus on growth and prudent capital allocation along with its unwavered commitment to the environment and sustainability goals.

This year also marked two strategic initiatives:

- Entering into a long-term license agreement for development of a ~400 room Hotel at Terminal 3 at Delhi International Airport. The development of the Hotel at New Delhi is being undertaken through a Special Purpose Vehicle set up for the purpose, viz. Chalet Airport Hotel Private Limited, which is a Wholly Owned Subsidiary of the Company, and will give the Company an entry into the North India market.

- Acquisition of ''The Dukes Retreat'' at Lonavala, the Company''s maiden leisure property. This was purchased through acquisition of shares of The Dukes Retreat Private Limited and Sonmil Industries Private Limited.

The two initiatives are in line with the planned strategy of diversification of geography and segments.

The Company''s overall performance showed considerable improvement with Total Income at ''11,793.81 million, a leap of 2.2 times over the previous year and PAT at ''1,877.65 million. Rental & Annuity Revenue of ''999.98 million contributed 8% to the Company''s Total Revenue as on March 31, 2023, as against ''1,019.75 million, which was 19% of the Company''s Total Revenue in the previous year.

During the year under review, the Company completed various projects as per details given below:

- renovation of 121 rooms and the banquet facilities at ''The Westin Mumbai Powai Lake'';

- expansion work on 88 rooms at Novotel Pune Nagar Road;

- construction of the commercial tower at Whitefield, viz. CIGNUS Whitefield BangaloreÂ®- Tower 1 has been completed and three floors have been handed over to the tenants for fit-out;

- conversion of the mall at Bengaluru to commercial premises.

Work on the 168 room hotel i.e. The Westin Hyderabad, HITEC City has been completed and the Hotel has commenced operations from June 04, 2023.

DEVELOPMENT PIPELINEâ¢ Hospitality

- Conversion of the commercial centre (erstwhile Accenture Learning Centre) at Bengaluru to Hotel rooms is in final stages of designing and approval as on the date of this Report.

- The detailed design and plans are being worked upon for the construction of a 5-star Hotel at Terminal 3, Delhi International Airport having ~400 rooms. This Hotel is expected to be completed in FY2026.

â¢ Rental & Annuity

- The Company had repurposed the land use of earlier proposed 150 room Hotel at The Westin Complex, Powai to a Commercial office space with potential leasable area of ~0.75 million sq. ft.. The Project is at the design and approval stage.

- The superstructure for the commercial project at Powai has been completed and internal work is being carried out towards receipt of Occupancy Certificate. The premises are expected to be ready for handover to tenants in Q2 FY2024.

â¢ Residential Project - Koramangala, Bengaluru

The Company has received all approvals to recommence work in respect of the residential project at Koramangala, Bengaluru and work is in full swing. Sales are expected to commence in Q2 FY2024. The Company will also be developing a Commercial building for strata sale on the same land parcel.

GOING CONCERN

During the year under review, the Hospitality sector saw a significant improvement in business and the Hospitality Revenues grew by 2.5 times to ''10,284.69 million. Total Revenue for the Company grew by 2.2 times to ''11,793.81 million. The Company has followed prudent cash flow management and rationalised various

processes to tighten, control and manage costs. All monetary obligations for the Company were met out of cash generated from operations. Accordingly, the Financial Statements for the year under review have been prepared on a Going Concern basis.

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

CAPITAL STRUCTURE Authorised Share Capital

Pursuant to the amalgamation of Belaire Hotels Private Limited and Seapearl Hotels Private Limited into the Company, the Authorised Share Capital of your Company increased from ''4,451,000,000 to ''5,981,000,000.

Paid-up Equity Share Capital

During the year under review, the Paid-up Equity Share Capital of your Company increased by ''10,000 consequent to the exercise of 1,000 Stock Options into 1,000 fully paid-up Equity Shares having a face value of ''10 each under Chalet Hotels Limited - Employee Stock Option Plan 2018. The Paid-up Equity Share Capital of your Company as on March 31,2023 stands at ''2,050,248,640.

Paid-up Preference Share Capital

During the year under review, fourth and final call of ''250,000,000 was made in respect of the Series B Zero Coupon Non-Cumulative, Non-Convertible, Redeemable Preference Shares (''NCRPS'') resulting in an increase in the Paid-up Preference Share Capital of the Company from ''1,910,000,000 to ''2,160,000,000, thereby making both, Series A and Series B NCRPS, fully paid up. The amounts raised have been utilised in line with the Subscription Agreement referred to hereinbelow.

Your Company had entered into a Subscription Agreement dated June 04, 2018 with Mr. Ravi C. Raheja and Mr. Neel C. Raheja, Promoters of the Company, wherein they had agreed to provide your Company with funds required to meet any costs, expenses and liabilities pertaining to the Koramangala Residential project, including any costs and expenses towards the ongoing litigation and the completion of the Koramangala Residential project, by way of subscription by themselves or by their Designated Nominees to 20,000 Zero Coupon Non-Cumulative, Non-Convertible, Redeemable Preference Shares (''NCRPS'' / ''Subscription Securities'') of ''100,000 each in two series (viz. Series A and Series B) of 10,000 NCRPS each, aggregating to ''2,000 million (Initial Subscription Amount). Further, the Promoters of the Company have also agreed to provide additional funds as may be required to meet the project expenses and have accordingly provided additional funds by way of an interest-free loan amounting to ''450 million as on March 31,2023 and ''800 million as on the date of this Report, towards meeting the

project expenses.

BORROWINGS

During the year under review, the Company availed of additional borrowing facilities, which were deployed, inter-alia, for meeting Project requirements and repayment of high-cost debt. At the end of the year, the Company''s borrowing on a standalone basis stood at ''25,658.46 million and at ''25,696.41 million on a consolidated basis (both excluding Preference Share Capital and Loan from Promoter-Director of ''2,242.30 million) as at March 31, 2023, as compared to ''23,557.16 million on a standalone basis and ''23,593.15 million on consolidated basis (both excluding Preference Share Capital of ''1,746.67 million) as at March 31, 2022.

All foreign currency borrowings were repaid during the Financial Year 2023. The same were at USD15.11 million, as at March 31,2022.

APPROPRIATIONS / DIVIDEND

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations''), the Company has adopted the Dividend Distribution Policy, setting out the broad principles for guiding the Board and the Management in matters concerning declaration and distribution of dividend, which is attached as Annexure I hereto and is also available on the Company''s website at www.chalethotels. com/wordpress/wp-content/uploads/2021/04/Dividend-Distribution-Policy.pdf.

In line with the Dividend Distribution Policy, no dividend is being recommended by the Board of Directors on the Equity Shares of the Company for the year under review. As per the terms of issue of the 0.001% Non-Cumulative, Redeemable Preference Shares (''NCRPS'') of ''100,000 each and subject to the Articles of Association of the Company, the NCRPS (other than the Subscription Securities) issued are, subject to the availability of profits during any financial year, entitled to a nominal dividend of ''1 on each Preference Share per year, which amounts to ''1,600 for the year under review.

Further, an amount of ''1,873.01 million has been transferred to Retained Earnings for the year under review. Pursuant to the applicable provisions of the Companies Act, 2013 (''the Act''), read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the IEPF Rules''), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF; established by the Government of India, after completion of seven years. Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven

consecutive years or more shall also be transferred to the demat account of the IEPF Authority. The Company does not have any unpaid or unclaimed dividends and accordingly, the aforesaid provisions are not applicable to the Company.

DEPOSITS

Your Company has neither accepted nor renewed any amount falling within the purview of provisions of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. As such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the Balance Sheet.

LOAN FROM DIRECTORS

Pursuant to the Subscription Agreement entered into with the Company on June 04, 2018, Mr. Ravi Raheja and Mr. Neel Raheja, Promoters and Non-Executive Directors of the Company had agreed to provide financial support for the Koramangala Project in addition to the Initial Subscription as and when required. In view of the same and pursuant to the approval of the Board of Directors and the Members of the Company, Mr. Ravi Raheja and Mr. Neel Raheja have extended interest free loans aggregating to ''450 million to the Company during the year under review.

LOANS, INVESTMENTS, GUARANTEES AND SECURITIES

Your Company is engaged in ''infrastructural activities'' covered under Schedule VI of the Act and is therefore exempt from the provisions of Section 186 of the Act with regards to Loans, Investments, Guarantees and Securities. Details of loans given, guarantee and security provided in connection with a loan and investments made by your Company are given in Note No. 7, 8, 14 and 55 of the Revised Standalone Financial Statements.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, your Company earned foreign exchange of ''3,465 million as compared to ''392 million in the previous year.

The total foreign exchange outgo of your Company during the year under review was ''915 million as compared to ''562 million in the previous year.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company has four subsidiaries and two associates as on the date of this Report. There has been no material change in the nature of the business of the subsidiaries. The Company does not have any Joint Venture.

Brief updates with regard to each subsidiary for the year

under review are as given below:

- Chalet Hotels & Properties (Kerala) Private Limited is a subsidiary of your Company, which had insignificant or no operations during the year under review.

- Chalet Airport Hotel Private Limited (''CAHPL'') is a wholly-owned subsidiary of the Company which was incorporated on August 18, 2022 having the same line of business as its Holding Company. The Company was incorporated as an SPV for the implementation of the Hotel project at Delhi. The Company entered into a long-term License Agreement for development of a ~400 room hotel at Terminal 3 at Delhi International Airport.

- The Board of Directors of the Company on March 22, 2023, approved the acquisition of 100% of the Equity Shares of Sonmil Industries Private Limited (Sonmil) and accordingly post completion of the transaction, Sonmil has become a wholly owned subsidiary of the Company on March 23, 2023. Sonmil earns income from leasing of land and reported a Total Income of ''3.16 million and Net Loss (after tax) of ''0.09 million.

- The Board of Directors of the Company on March 22, 2023, approved the acquisition of 82.28% of the Equity Shares of The Dukes Retreat Private Limited (''Dukes'') and accordingly post completion of the transaction, Dukes has become a subsidiary of the Company on March 23, 2023. The balance 17.72% of the Equity Shares of Dukes are held by Sonmil, wholly owned subsidiary of the Company. Dukes reported a Total Income of ''332.58 million and Net Profit (after tax) of ''69.79 million.

The Company had filed a Scheme of Arrangement and Amalgamation of Belaire Hotels Private Limited and Seapearl Hotels Private Limited (together referred as "Transferor Companiesâ) with the Company, which inter-alia aims at synergy in operations, greater financial strength and improvement in the position of the merged entity. The Appointed Date for the Scheme is April 01, 2020. Pursuant to the Order dated February 05, 2021 passed by the Hon''ble National Company Law Tribunal, Mumbai Bench (''Hon''ble NCLT''), meetings of the Equity Shareholders and Preference Shareholders of the Company were held on April 12, 2021, wherein they accorded their approval to the said Scheme. The Hon''ble NCLT vide its Order dated May 19, 2023, approved the Scheme and the Effective Date of the Scheme is June 19, 2023.

Further, the Company has considered March 31,2023 as the acquisition date for the purpose of purchase price allocations/consolidation in respect of Dukes and Sonmil, since the financial performance of these entities for the period from March 23, 2023 to March 31, 2023 is not material to the consolidated financial performance of the Company.

In terms of provisions of Section 136 of the Act, the

audited financial statements of the subsidiary companies can be accessed on the website of the Company viz. www.chalethotels.com/annual-reports/.

Your Company holds 33.1% of the Equity Share Capital of Krishna Valley Power Private Limited and 26.1% of the Equity Share Capital of Sahyadri Renewable Energy Private Limited, being entities engaged in generation of hydropower. Your Company continues to hold the aforesaid securities, however it does not have the ability to participate and neither is involved in the operations and/ or relevant activities of these companies/ entities, and neither has exposure or rights to variable returns. Hence, the aforementioned entities have not been considered as Associate companies in the consolidation of Financial Statements.

The Revised Consolidated Financial Statements of your Company and its Subsidiaries, prepared in accordance with the relevant Accounting Standards, duly audited by the Statutory Auditors, forms part of this Annual Report. The statement under Rule 5 of the Companies (Accounts) Rules, 2014 relating to Subsidiaries and Associates in Form AOC-1 is annexed as Annexure II to this Report. The Company does not have any material subsidiary, however, the Company has formulated a policy for determining material subsidiary(ies) and such policy has been disclosed on the Company''s website at www.chalethotels.com/wordpress/wp-content/ uploads/2021/04/Policy-for-Determination-of-Material-Subsidiaries.pdf.

MANAGEMENT DISCUSSION & ANALYSIS, CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORTS

A detailed note on the state of the Company''s affairs is covered in the Management Discussion & Analysis section of the Annual Report.

Your Company has complied with the Corporate Governance requirements under the Act and Listing Regulations, the details of which are mentioned in a separate section viz. Report on Corporate Governance. Further, the Business Responsibility & Sustainability Report, also forms an integral part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company at its Meeting held on May 01,2023 had, based on the recommendation of the Compensation, Nomination and Remuneration Committee re-appointed Mr. Hetal Gandhi and Ms. Radhika Piramal for a second term of Five years and Mr. Joseph Conrad D''souza and Mr. Arthur William DeHaast as Independent Directors for a second term of Four years, all of which would be effective June 12, 2023. The re-appointments were also approved by the Members of the Company by way of Postal Ballot on June 5, 2023.

Further, Mr. Sanjay Sethi, Managing Director and CEO of the Company holds office upto February 8, 2024. On the basis of the recommendation of the Compensation, Nomination and Remuneration Committee, the Board of Directors at the meeting held on May 9, 2023, have approved the re-appointment of Mr. Sanjay Sethi as the Managing Director and CEO of the Company for a further period upto January 31, 2026. The same is also being placed for approval of the Members of the Company at the forthcoming Annual General Meeting (''AGM'').

In accordance with the Act and the Articles of Association of the Company, Mr. Ravi Raheja is liable to retire by rotation and being eligible, has offered himself for re-appointment. Accordingly, the re-appointment of Mr. Ravi Raheja is being placed for approval of the Members at the ensuing AGM. The information pertaining to the Directors being re-appointed as required pursuant to the Listing Regulations and Secretarial Standard-2, forms part of the Notice convening the AGM.

During the year under review, except for professional fees paid to Mr. Arthur DeHaast, Independent Director, no other Non-Executive Directors of the Company had any pecuniary relationship or transactions with the Company, other than receipt of Sitting Fees towards attending meeting of Board of Directors and / or Committees thereof.

During the year under review, there were no changes in the Directors and Key Managerial Personnel of the Company.

ANNUAL RETURN

As provided under Sections 92(3) and 134(3)(a) of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, as amended from time to time, the draft Annual Return of your Company in Form MGT-7 for the Financial Year 2023, is hosted on the website of your Company at www.chalethotels.com/ annual-reports/.

NUMBER OF BOARD MEETINGS

During the Financial Year 2023, the Board of Directors met five times. The details of the meetings held have been given in Corporate Governance Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

On the basis of internal financial control framework and compliance systems in place and the work carried out by the Internal and Statutory Auditors, including audit of internal financial controls over financial reporting and internal reviews performed by the Management and the Audit Committee, the Board is of the opinion that your Company''s internal financial controls were reasonable and adequate for the Financial Year 2023.

Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) In the preparation of the accounts for the Financial Year ended March 31, 2023, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) The Board of Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent in order to give a true and fair view of the state of affairs of your Company at the end of the Financial Year and of the profit of your Company for the Financial Year ended March 31,2023;

(iii) The Board of Directors have taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

(iv) The Financial Statements for the Financial Year ended March 31, 2023 have been prepared on a ''going concern'' basis;

(v) The Board of Directors have laid down internal financial controls for your Company which it believes are adequate and are operating effectively; and

(vi) The Board of Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and are operating effectively.

ACCOUNTING TREATMENT

The Accounting Treatment is in line with the applicable Indian Accounting Standards (''Ind AS'') recommended by The Institute of Chartered Accountants of India and prescribed by the Central Government in accordance with Section 133 of the Act.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS INCLUDING REFERENCE TO THE FINANCIAL STATEMENTS

The Internal Financial Control Systems including inter-alia the Internal Audit and Internal Controls are commensurate with the size and scale of your Company''s operational and commercial activities.

Your Company has provided an adequate system of internal control covering all corporate functions and franchise hotels. The internal control systems provide assurance regarding the effectiveness and efficiency of

operations, safeguarding of assets, reliability on financial controls and compliance with applicable laws. The operations of the hotel are largely managed through globally reputed hospitality companies which have their respective internal control systems in place.

Based on the recommendation of the Audit Committee, the Board has approved the appointment of M/s. Deloitte Touche Tohmatsu India LLP as Internal Auditors of the Company for the Financial Year 2024. The Chief Internal Auditor who reports to the Audit Committee oversees the Internal Audit function of the Company. The reports by the Internal Auditors are placed before the Audit Committee for their review and improvements.

AUDITORS & AUDITORS'' REPORT Statutory Auditors

The Audit Committee and the Board of Directors at their respective meetings held on May 10, 2022 approved the re-appointment of M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) as the Statutory Auditors of the Company for a second term of five years i.e. from the conclusion of the 37^thAGM till the conclusion of the 42^nd AGM, which was also approved by the Members at the 37^th AGM of the Company held on September 14, 2022.

The Report of the Statutory Auditors along with its Annexures forms a part of this Annual Report. The Auditors'' Report to the Members for the year under review was issued with an unmodified opinion.

Explanation or Comments on Qualifications, Reservations, Adverse Remarks or Disclaimers made by the Auditors

There are no qualifications, reservations or adverse remarks or disclaimers made by Statutory Auditors in their Revised Report on the Revised Financial Statements for the Financial Year 2023. However, the Statutory Auditors have drawn attention i.e. Emphasis of Matter with regard to Note 39I(c)of the Revised Standalone Financial Statements, in their report, details of which are as follows:

"Emphasis of Matter

We draw attention to Note 391(c) to the revised standalone financial statements regarding the ongoing litigation in respect of leasehold rights to proportionate undivided interest in land and building at Vashi (Navi Mumbai) purchased from K Raheja Corp Private Limited, on which the Company''s Four Points By Sheraton Hotel has been built. The allotment of land by City & Industrial Development Corporation of Maharashtra Limited (''CIDCO'') to K Raheja Corp Private Limited has been challenged under two public interest litigations. On 21 November 2014, the Honourable High Court at Bombay ordered K Raheja Corp Private Limited to restore

the land to its original condition (which would interalia require the buildings thereon to be demolished) and hand over the vacant possession thereof to CIDCO within six months of the date of judgement. K Raheja Corp Private Limited has filed a special leave petition against the abovementioned order in the Honourable Supreme Court of India. The Hon''ble Supreme Court of India on 21 January 2015 has passed Status Quo Order and the matter is currently pending with it. The agreement for purchase of leasehold rights between the Company and K Raheja Corp Private Limited was subject to the outcome of the litigation and the management does not expect any potential material loss to be borne by the Company. Pending the outcome of proceedings and a final closure of the matter, no adjustments have been made in the revised standalone financial statements as at 31 March 2023 to the carrying value of the leasehold rights (reflected as prepayments) aggregating to ''48.54 million (31 March 2022: ''49.74 million) and the hotel assets thereon (reflected as property, plant and equipment) aggregating to ''348.46 million as at 31 March 2023 (31 March 2022: ''372.12 million). Our opinion is not modified in respect of this matter."

The Auditors have clarified that their opinion is not qualified in respect of the above matter.

Detailed explanation in respect of the matter has been provided under Note 391(c) of the Revised Standalone Financial Statements and are self-explanatory.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. KDA & Associates, Company Secretaries in Practice, to undertake Secretarial Audit for Financial Year 2023. The Secretarial Audit Report issued by them is annexed herewith as Annexure IV. There are no qualifications, reservations, adverse remarks or disclaimers in the report.

Further, the subsidiaries of the Company as mentioned above do not meet the criteria for material unlisted subsidiaries. Therefore, the provisions of Regulation 24A of the Listing Regulations, in respect of Secretarial Audit are not applicable to them, for the year under review.

Cost Audit

Your Company has been maintaining cost accounting records as specified by the Central Government under Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014. Further, your Company was also required to conduct an audit of cost records as specified by the Central Government under Section 148 of the Act and the Rules framed thereunder for the Financial Year under review. The Board of Directors appointed

M/s. Chirag Trilok Shah & Co., Practicing Cost Accountant (Membership Number 23277 and Firm Registration Number 004442) as the Cost Auditor for conducting the audit of cost records for the Financial Year 2023, at the remuneration approved by the Members at the previous AGM.

During the year under review, none of the Auditors as mentioned above have reported any fraud and therefore no details are required to be disclosed under Section 134(3)(ca) of the Act.

BOARD EFFECTIVENESS AND BOARD EVALUATION

Pursuant to Section 134(3)(p) of the Act, as amended from time to time, and Regulations 17 and 25 of the Listing Regulations, the Board of Directors had carried out an annual evaluation of its own performance, Individual Directors and its Committees, for the Financial Year under review. A structured questionnaire was prepared after taking into consideration the Guidance Note issued by SEBI on Board Evaluation, covering various aspects of the Board''s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. The feedback and suggestions received from all the Directors have been discussed by the Independent Directors, Compensation, Nomination & Remuneration Committee and the Board of Directors at their respective meetings. The Directors expressed their satisfaction with the evaluation process.

INDEPENDENT DIRECTORS

All the Independent Directors have confirmed that they meet the criteria of independence as laid down under the Act and Listing Regulations. They have declared that they do not suffer from any disqualifications specified under the Act and are not aware of any circumstances or situations which exist or may be reasonably anticipated that could impair or impact the ability to discharge their duties.

Based on such confirmation / declaration, in the opinion of the Board, the Independent Directors of your Company fulfil the conditions specified under the Act and the Listing Regulations and are independent of the management. Further, all the Independent Directors have registered their names in the databank of Independent Directors maintained by the Indian Institute of Corporate Affairs and the Independent Director to whom online self-assessment proficiency test was applicable, has completed the same.

COMMITTEES

Your Company has constituted Committees of the Board as per the requirements of the Act and the Listing Regulations. Details of constitution, meetings held, attendance of the members and terms of reference of the said Committees, have been enumerated in the Corporate Governance Report which forms a part of the Annual Report.

Corporate Social Responsibility and ESG (''CSR and ESG'') Committee

Your Company had adopted a CSR Policy indicating the Company''s broad philosophy and objectives, which is available on the website of your Company at www.chalethotels.com/wordpress/wp-content/ uploads/2021/09/CSR-Policy.pdf.

The annual report on CSR activities and details about the composition of CSR and ESG Committee along with the initiatives undertaken by the Company on CSR activities during the year under review is annexed as Annexure III to this Report.

Compensation, Nomination and Remuneration Committee

Your Company had in compliance with the provisions of Section 178 of the Act and Regulation 19 of the Listing Regulations, adopted a Policy for Appointment of Directors and Remuneration of Directors and Senior Management. The salient features of the said Policy are outlined in the Corporate Governance Report. The same is available on the website of your Company viz. www.chalethotels.com/wordpress/wp-content/ uploads/2021/04/Policy-for-Appointment-of-Directors-Remuneration-of-Director-and-Senior-Management.pdf.

The Compensation, Nomination and Remuneration (''CNR'') Committee of your Company, while formulating the above policy, has ensured that:

â¢ the level and composition of remuneration be reasonable and sufficient to attract, retain and motivate Directors/employees of the quality required to run the Company successfully;

â¢ relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

â¢ remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and performance linked bonuses reflecting short and long term performance objectives appropriate to the working of the Company and its goals.

The remuneration / compensation / commission (including annual increments, if any) paid to Directors and Senior Management including KMP of the Company is determined by the CNR Committee and are as per the terms laid down in the said Policy. The Managing Director & CEO of your Company does not receive remuneration or commission from any of the subsidiaries of your Company.

Audit Committee

The Committee comprises of three Independent Directors i.e. Mr. Joseph Conrad D''Souza (Chairperson), Mr. Hetal Gandhi (Member) and Mr. Arthur DeHaast (Member) and Mr. Ravi C. Raheja, Promoter and Non-Executive Director (Member). During the year under review, Mr. Arthur DeHaast was appointed as the member of the Committee by the Board of Directors at the meeting held on January 24, 2023. During the year under review, all the recommendations made by the Committee were accepted by the Board.

EMPLOYEE STOCK OPTION SCHEME (ESOP)

The Board had granted 2,00,000 Stock Options, each exercisable into 1 Equity Share of ''10 each at a price of ''320 per share to the Eligible Employee under the Chalet Hotels Limited - Employee Stock Option Plan 2018, to vest in three tranches. The Board of Directors of the Company, based on the recommendation of CNR Committee had approved variation in the terms of the Scheme and recommended extension of the exercise period from two years to four years, which was also approved by the Members of the Company by way of Postal Ballot by requisite majority on June 20, 2022.

Based on the recommendation of the CNR Committee at its meeting held on April 20, 2022, the Board of Directors at its meeting held on May 10, 2022 approved the CHL Employee Stock Option Plan 2022 and thereby granted 12,17,831 Options exercisable into an equal number of Equity Shares of the Company to the Eligible Employees as per the Scheme. The same was also approved by the Members of the Company by way of Postal Ballot by requisite majority on June 20, 2022.

Presently, your Company has the following ESOP Schemes:

- Chalet Hotels Limited - Employee Stock Option Plan 2018

- CHL Employee Stock Option Plan 2022

The applicable disclosures as stipulated under Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 have been made available on the website of the Company at www.chalethotels.com/annual-reports/. Further, a certificate from M/s. KDA & Associates, Secretarial Auditors of the Company, with respect to implementation of ESOP and confirming that the Scheme is in compliance with the relevant SEBI Regulations and the Members approval obtained; shall be available for inspection by Members of the Company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

In line with the requirements of the Act and in accordance with the Listing Regulations, your Company has formulated a policy on dealing with Related Party Transactions (''RPTs'')

which is available on the website of the Company at www.chalethotels.com/wordpress/wp-content/ uploads/2022/12/CHL-Related-Party-Policy.pdf.

During the year under review, the transactions / contracts / arrangements entered into by the Company with related party(ies) as defined under the provisions of the Act and Listing Regulations, were in the Ordinary Course of Business at arms'' length and were entered into with the prior approval of the Audit Committee and the Board of Directors of the Company. The disclosure in Form AOC-2 is not applicable to the Company for the Financial Year 2022-23 and hence does not form part of this Report. Approval of the Members was sought at the AGM held on September 14, 2022 in respect of a Material Related Party Transaction for raising of funds from the Promoters of the Company upto an amount of ''1,000 million and the Company has availed of ''450 million as on March 31, 2023.

All transactions with related parties are placed before the Audit Committee for its approval. Omnibus Approval is obtained on an each financial year basis, from the Independent Directors of the Audit Committee in respect of Related Party Transactions which are repetitive in nature or unforeseen, based on the criteria specified and approved by the Board upon recommendation of the Committee. The Committee and the Board reviews on a quarterly basis, all transactions entered into by your Company pursuant to the Omnibus Approvals so granted.

RISK MANAGEMENT

The Committee comprises of two Independent Directors i.e. Mr. Arthur William DeHaast (Chairperson) & Mr. Joseph Conrad D''Souza (Member), Mr. Neel C. Raheja, Promoter and Non-Executive Director (Member) and Mr. Sanjay Sethi, Managing Director & CEO (Member) and two members of Senior Management i.e. Mr. Milind Wadekar, Chief Financial Officer (Member) and Mr. Rajneesh Malhotra, Chief Operating Officer (Member). There were no changes in the composition of the Committee during the year under review. Further, your Company has adopted 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 continual basis.

Your Company is faced with risks of different types, each of which needs varying approaches for mitigation. The risk management framework defines the risk management approach across the enterprise. The risk framework which seeks to create transparency, minimise adverse impact on business objective and enhance your Company''s competitive advantage, is reviewed by the Risk Management Committee periodically. An impact analysis of the identified risks including risk mitigation approach and risk mitigation status is also done at regular intervals taking into consideration the changing business environment and additional steps taken by the Company to further mitigate the risks. The Policy is available on the Company''s website at www.chalethotels.com/wordpress/

wp-content/uploads/2021/1 2/Risk-Management-Policy-renamed-as-on-October-28-2021.pdf.

Details of the key risks faced by your Company and measures for mitigation have been provided on pages 43 and 44 of the Integrated Reporting section of the Annual Report.

Vigil Mechanism / Whistle Blower Policy

Your Company has, in accordance with Section 177 of the Act and Regulation 22 of the Listing Regulations, formulated a Vigil Mechanism / Whistle Blower Policy for its Directors and Employees, to enable reporting of any wrongdoing within the Company / branches / hotels that fall short of your Company''s business principles on ethics and good business practices.

Your Company''s Vigil Mechanism / Whistle Blower Policy provides a formal mechanism to the Directors and all the employees of the Company to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct. The said policy is available on the Company''s website at www.chalethotels.com/wordpress/wp-content/ uploads/2023/05/Vigil-Mechanism-and-Whistle-Blower-Policy-Rev-May-09-2023.pdf.

The Policy covers the adequate safeguards against victimisation of Directors and employees who avail of the mechanism and have also provided them direct access to the Chairperson of the Audit Committee. Matters reported under the Vigil Mechanism are informed to the Audit Committee from time to time. It is affirmed that no personnel of the Company has been denied access to the Chairperson of the Audit Committee.

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

During the year under review, there were no significant and material orders passed by Regulators, Courts or Tribunals impacting the Going Concern status and Company''s operations in future.

PREVENTION OF SEXUAL HARASSMENT

Your Company has complied with provisions relating to the constitution of Internal Complaints Committee in compliance with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the Rules framed thereunder in respect of the Corporate Office and various units. The policy in this regard is available on the Company''s website at www.chalethotels.com/wordpress/ wp-content/uploads/2023/05/POSH-Policy Rev May-09-2023.pdf.

During the year under review, your Company received 7 complaints on sexual harassment, out of which 6 were resolved and 1 complaint remained pending as at the year end and has been resolved as on the date of this Report. Appropriate actions were taken, wherever necessary. The Company also conducts workshops from time to time to promote awareness on the issue.

Your Company continues its strong stand against any kind of sexual harassment and has zero tolerance for sexual harassment at workplace.

HUMAN CAPITAL INITIATIVES AND PARTICULARS OF EMPLOYEES

Your Company focuses on building on its strength by developing the capability of its employees, through training and development and work life balance. During the year under review, your Company has undertaken various initiatives towards nurturing talent, keeping its people connected and taking various steps for maintaining the physical and emotional wellbeing of its employees. Further, your Company has been listed as a Great Place to WorkÂ® in 2023 for the fourth year in a row.

The 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, is annexed to this Report as Annexure V.

Further, 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, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules forms part of this Report.

Having regard to the provisions of the second proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the Members of the Company and others entitled thereto. Any Member interested in obtaining such information may write to the Company Secretary at companysecretary@chalethotels. com and the same will be furnished on request. The Annual Report including the aforesaid information is also available on the Company''s website.

INTEGRATED REPORTING

Your Company being among the top 500 listed companies in the country in terms of market capitalization, has voluntarily provided Integrated Report, which encompasses both financial and non-financial information and stakeholders'' relationships to enable well informed decisions and have a better understanding of the Company''s value creation model. The Report also touches upon aspects such as organisation''s strategy, governance framework, performance and prospects of value creation based on the six forms of capital viz. financial, manufactured, intellectual, human, social & relationship and natural capitals. The Integrated Report also includes ESG parameters and Company''s performance vis-a-vis these.

ENVIRONMENTAL INITIATIVES AND ENERGY MANAGEMENT

The Company was the first Hospitality Company, globally, to join Climate Group''s RE100, EP100 and EV100 initiatives linked to renewable electricity, energy efficiency and electric mobility respectively. Under these initiatives, the Company has made the following commitments:

- RE100 (Renewable Electricity): All properties under the Company''s portfolio will move to 100% renewable electricity by year 2031

- EP100 (Energy Productivity): Aim to double revenue per unit of electricity consumed by the year 2029, considering a baseline year of 2016

- EV100 (Electric Vehicles): 100% of the vehicle fleet deployed across the properties in the portfolio, that is used for guest transport, will transition to Electric Vehicles by 2025 as part of its committed goals on climate.

Towards this, during the year under review, the Company completed installation of EV charging stations at all its properties, accessible to both, employees as well as visitors. The Company continues its endeavor to maintain a balance with the environment and a steady focus on sustainability and various initiatives continue to be rolled out. Detailed reporting on the aspects of ESG are covered in the Integrated Section of this Annual Report.

Towards achieving its Net Zero target, GHG emissions inventorisations exercise is under progress and completion of Net Zero timeline commitment to the Science Based Targets Initiative (SBTi) is targeted for December 2023.

As required by Section 134 of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, the information relating to conservation of energy is annexed as Annexure VI to this Report.

The information relating to technology absorption is not given since the same is not applicable to the Company.

MATERIAL CHANGES AND COMMITMENTS

The Hon''ble NCLT on May 19, 2023, approved the Scheme of Amalgamation of Belaire Hotels Private Limited and Seapearl Hotels Private Limited with the Company. The

Appointed Date for the same is April 1, 2020 and the Effective Date is the date of filing of the Scheme with the Registrar of Companies i.e. June 19, 2023.

Other than the one mentioned above, there have been no material changes and commitments affecting the financial position of your Company, which have occurred between the end of the Financial Year to which the Financial Statements relate and the date of this Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

Your Company is in compliance with the applicable Secretarial Standards, issued by The Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these matters during the year under review:

- Issue of Equity Shares with differential rights as to dividend, voting or otherwise.

- Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except Employees'' Stock Option Schemes referred to in this Report.

- Payment of remuneration or commission to Managing Director & CEO of the Company from any of its subsidiaries.

- Proceedings filed by or against the Company under the Insolvency and Bankruptcy Code, 2016.

- Onetime settlement with any Bank or Financial Institution.

ACKNOWLEDGEMENTS

Your Directors would like to thank the Members for their support received and their continued confidence in the Company. Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the Regulatory and Statutory Authorities, Government and its agencies, hotel & retail operating partners, Stock Exchanges, Depositories, lenders, legal advisors, Registrar & Share Transfer Agent, Auditors, vendors and other key stakeholders.

Your Directors place on record their gratitude to the Company''s employees at all levels.

Mar 31, 2022

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTSOpinion

We have audited the standalone financial statements of Chalet Hotels Limited ("the Companyâ), which comprise the standalone balance sheet as at 31 March 2022, and the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows for the year then ended, and notes to the Standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "standalone financial statementsâ).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, and its loss and other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us, is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.

Emphasis of Matter

a) We draw attention to Note 40 (c) of the standalone financial statements, in respect of the entire building comprising of the hotel and apartments therein, purchased together with a demarcated portion of the leasehold rights to land at Vashi (Navi Mumbai), from K. Raheja Corp Private Limited, on which the Company''s Four Points by Sheraton Hotel has been built. The allotment of land by City & Industrial Development Corporation of Maharashtra Limited (''CIDCO'') to K. Raheja Corp Private Limited has been challenged by two public interest litigations and the matter is currently pending with the Honorable Supreme Court of India. Pending the outcome of proceedings and a final closure of the matter no adjustments have been made in respect of the above in the standalone financial statements for the year ended 31 March 2022. The balance of prepaid lease rental in relation to such leasehold land as of 31 March 2022 is Rs. 49.74 million (31 March 2021: Rs. 50.93 million) and carrying value of property, plant and equipment as at 31 March 2022 is Rs. 372.12 million (31 March 2021: Rs. 400.77 million). Our opinion is not modified in respect of the above matter.

Key Audit Matters

Deferred Tax Assets (refer note 22 to the standalone financial statements)
The Key Audit Matter	How the matter was addressed in our audit
The carrying amount of the Deferred tax assets represents 5.34 % of the Company''s total assets. Recognition and measurement of deferred tax assets Under Ind AS, the Company is required to reassess recognition of deferred tax asset at each reporting date. The Company has recognised deferred tax assets on brought forward losses / deductions and other temporary differences, as set out in note 22 to the standalone financial statements. The Company''s deferred tax assets in respect of brought forward losses / deductions are based on the projected profitability. Such projected profitability is based on approved business plans, which demonstrate availability of sufficient taxable income to utilise such losses / deductions. We focused on this area as recognition of deferred tax requires significant judgment in estimating future taxable income and accordingly recognition of deferred tax.	Our audit procedures included: â¢ Obtained the approved business plans, projected profitability statement. â¢ Evaluated the design and testing the operating effectiveness of controls over quarterly assessment of deferred tax balances and underlying data. â¢ Evaluated the projections of future taxable profits. Testing the underlying data and assumptions used in the profitability projections and performing sensitivity analysis. â¢ Assessed the recoverability of deferred tax assets by evaluating profitability, Company''s forecasts and fiscal developments. â¢ Considered the adequacy of the Company''s disclosures on deferred tax and assumptions used. The Company''s disclosures concerning income taxes are included in note 22 to the standalone financial statements.
Impact of COVID 19 on Going concern
The Key Audit Matter	How the matter was addressed in our audit
The impact of the COVID-19 pandemic and measures to control the virus, have created uncertainties related to going concern for the Company. The Company has assessed the impact of COVID-19 on the future cash flow projections. The Company has prepared a range of scenarios to estimate cash flows from operating activities and the financing requirements. Based on the above, the standalone financial statements of the Company for the year ended March 31,2022 have been prepared on a going concern basis. In view of uncertainties identified outlined above, we identified a key audit matter related to going concern due to the significant judgement required to conclude on the going concern assumption.	Our audit procedures included: â¢ Obtained understanding of the key controls relating to the Company''s forecasting process. â¢ Obtained an understanding of key assumptions adopted by the Company in preparing the cash flow forecast, for revenue, fixed costs, operating costs, capital expenditure and commitments. Assessed the key assumptions based on our understanding of the Company''s business. â¢ Compared the future expected cash flows in the cash flow forecast with the Company''s business plan approved by the Board of Directors â¢ Performed sensitivity analysis to the cash flow forecast by considering plausible changes to the key assumptions adopted by the Company and its impact on the going concern assumption. â¢ Obtained details of borrowing disbursed subsequent to the year end and tested with underlying documentation. â¢ Assessed compliance with the loan covenants during the year, and subsequent to the year-end. â¢ Assessed the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, along with the other information accompanying the standalone financial statements. â¢ Considered the adequacy of the Company''s disclosure in respect of management''s assessment of going concern assumption.

Litigations and Claims (refer note 10,28 35 and 40 to the standalone financial statements)

The Key Audit Matter

How the matter was addressed in our audit

As at 31 March 2022, the Company has two key litigations pertaining to Bengaluru Residential project carried under inventories and leasehold rights to land at Vashi (Navi Mumbai) from K. Raheja Corp Private Limited.

We focused on this area as a key audit matter due to inherent uncertainty in measurement as per accounting standards to determine amount to be provided for and the disclosures to be made

Our procedures included, amongst others:

â¢ Evaluated the design and implementation of the Company''s controls over the assessment of litigations and completeness of disclosures and tested operating effectiveness of these controls.

â¢ Read correspondence from the Company''s external lawyers in response to our requests for significant litigations and assessed the competence and objectivity of the external lawyers; and

â¢ Additionally, considered effect of new information post 1 April 2022 till the date of signing of the report to evaluate any change required in the Company''s position on the litigation and claims as at 31 March 2022.

â¢ Assessed the Company''s disclosures adequately reflect the quantitative and qualitative considerations in relation to the matters in accordance with auditing standards.

Other Information

The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditors'' report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

Management''s and Board of Directors'' Responsibilities for the Standalone Financial Statements

The Company''s management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities;

selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements (Continued)

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also

â¢ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and

to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2020 ("the Orderâ) issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the "Annexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

A) As required by Section 143(3) of the Act, we report

that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act;

e) On the basis of the written representations received from the directors as on 31 March 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of Section 164(2) of the Act; and

f) With respect to the adequacy of the internal financial controls with reference to the standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure Bâ.

(B) With respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations as at 31 March 2022 on its financial position in its standalone financial statements -Refer Notes 10 and 40 to the standalone financial statements;

b) The Company has made provision, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long-term contracts including derivative contracts, Refer note 28 to the standalone financial statements;

c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company;

d) (i) The management has represented that,

to the best of its knowledge and belief, other than as disclosed in Note 56 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

â¢ directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiariesâ) by or on behalf of the Company or

â¢ provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(ii) The management has represented, that, to the best of its knowledge and belief, other than as disclosed in Note 56 to the standalone financial statements, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Partiesâ), with the understanding,

whether recorded in writing or otherwise, that the Company shall:

â¢ directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiariesâ) by or on behalf of the Funding Party or

â¢ provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.

(iii) Based on such audit procedures as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) contain any material misstatement.

e) The Company has neither declared nor paid any dividend during the year.

i. In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its Managing Director and CEO during the current year, is in accordance with the provisions of Section 197 read with Schedule V to the Act. The remuneration paid to the Managing Director and CEO is as per the limits laid down under Section 197 read with Schedule V to the Act and as approved by the shareholder''s through special resolution in the Annual General Meeting held on 12 August 2021. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants Firm''s Registration No: 101248W/W-100022

Mansi Pardiwalla

Partner

Mumbai Membership No: 108511

10 May 2022 UDIN: 22108511AIROFR1165

Mar 31, 2019

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the Standalone Ind AS Financial Statements of Chalet Hotels Limited (formerly known as Chalet Hotels Private Limited) (âthe Companyâ), which comprise the Standalone Balance Sheet as at 31 March 2019, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows for the year then ended, and notes to the Standalone Ind AS Financial Statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as âStandalone Ind AS Financial Statementsâ).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS Financial Statements give the information required by the Companies Act, 2013 (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2019 and loss (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143 (10) of the Act. Our responsibilities under those SAs are further described in the Auditorsâ Responsibilities for the Audit of the Standalone Ind AS Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone Ind AS financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note 42 (c) of the standalone Ind AS financial statements, in respect of the entire building comprising of the hotel and apartments therein, purchased together with a demarcated portion of the leasehold rights to land at Vashi (Navi Mumbai), from K. Raheja Corp Private Limited, on which the Companyâs Four Points by Sheraton Hotel has been built. The allotment of land by City & Industrial Development Corporation of Maharashtra Limited (âCIDCOâ) to K. Raheja Corp Private Limited has been challenged by two public interest litigations and the matter is currently pending with the Honorable Supreme Court of India. Pending the outcome of proceedings and a final closure of the matter, no adjustments have been made in the standalone Ind AS financial Statements as at and for the year ended 31 March 2019 to the carrying value of the leasehold rights (reflected as prepayments) and the hotel assets thereon aggregating to Rs. 497.90 million and Rs. 503.79 million as at 31 March 2019 and 31 March 2018 respectively.

We draw attention to Note 49 to the standalone Ind AS financial statements, relating to remuneration paid to the Managing Director & CEO and to the Executive Director & CFO of the Company for the financial year ended 31 March 2019, being in excess of the limits prescribed under Section 197 of the Act by Rs. 52.41 Million, which is subject to the approval of the shareholders.

Our opinion is not qualified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone Ind AS financial statements of the current period. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Deferred tax assets (refer note 23 to the standalone Ind AS financial statements)

Key Audit Matter	How the matter was addressed in our audit
The carrying amount of the Deferred Tax Assets of Rs. 732.40 million	Our audit procedures included:
represents 2% of the Companyâs total assets.	-	In respect of deferred tax assets, we analysed Companyâs
The Company has recorded deferred tax assets on expenditure		assumptions used to determine the manner in which the timing
on specified business under Section 35AD and unabsorbed carry		differences, including the recoverability of the deferred tax assets,
forward tax losses, to the extent that the same will be recoverable		would be realised by comparing this to evidence obtained in
using the estimated future taxable income based on the approved		respect of cash flow forecasts, business plans and minutes of
business plans and budgets of the Company. The Company has		Directors and Audit Committee meetings and our knowledge
generated taxable income for the financial year ended 31 March		of the business;
2019 and has adjusted the carry forward losses partially. The	-	Regarding recognised deferred tax asset resulting from
Company is expected to continue generating taxable income		unabsorbed carry forward tax losses, we analysed Companyâ
going forward.		assessment for recovery of deferred tax assets;
We focused on this area as recognition of deferred tax requires	-	We used, amongst others, budgets, forecasts and tax laws to
significant judgment in estimating future taxable income and accordingly recognition of deferred tax.		assess Managementâs assumptions;
		We tested the underlying data for the key deferred tax and tax provision calculations; and
	-	We also assessed the adequacy of the Companyâs disclosure included in Note 23 relating to unrecognised deferred tax assets.

Litigation and Claims (refer to note 42 to the standalone Ind AS financial statements)

The Key Audit Matter	How the matter was addressed in our audit
As at 31 March 2019, the Company has two key litigations pertaining	Our procedures included, amongst others:
to its Land at Bengaluru Residential project carried under inventories	- Making enquiries of management and the legal department head
and leasehold rights to land at Vashi (Navi Mumbai) from K. Raheja Corp Private Limited.	to obtain their view on significant legal matters; - Reviewing the information held by the Company and assessing the
We focused on this area as a key audit matter due to the amounts involved as well as the inherent uncertainty in the application of the	impact of this evidence on the appropriateness of the provision;
measurement aspects of accounting standards to determine the	- Assessing correspondence from the Companyâs external lawyers
amount, if any, to be provided for and the disclosures to be made in	in response to our requests for confirmation of all significant
respect of this matter.	litigations; and - Assessing whether the Companyâs disclosures adequately reflect the quantitative and qualitative considerations in relation to the matters in accordance with auditing standards.

Other Information

The Companyâs Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the standalone Ind AS financial statements and our auditorsâ report thereon.

Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone Ind AS financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Managementâs Responsibility for the Standalone Ind AS Financial Statements

The Companyâs Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act, with respect to the preparation of these standalone Ind AS

financial statements that give a true and fair view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Ind AS Financial Statements, management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Companyâs financial reporting process.

Auditorsâ Responsibility for the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorsâ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone Ind AS financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorsâ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of Section 143 (11) of the Act, we give in the âAnnexure Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order.

(A) As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flows dealt with by this report are in agreement with the books of account;

(d) In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act;

(e) On the basis of the written representations received from the directors as on 31 March 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2019 from being appointed as a director in terms of Section 164 (2) of the Act; and

(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.

(B) With respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations as at 31 March 2019 on its financial position in its Standalone Ind AS Financial Statements - Refer note 36 and 42 to the Standalone Ind AS Financial Statements;

ii. the provision has been made in the Standalone Ind AS Financial Statements, as required under the applicable law or Ind AS, for material foreseeable losses, on long-term contracts including derivative contracts, Refer notes 12, 27 and 29 to the Standalone Ind AS Financial Statements;

iii. there are no amounts which are required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2019; and

iv. the disclosures in the Standalone Ind AS Financial Statements regarding holdings as well as dealings in Specified Bank Notes during the period from 8 November 2016 to 30 December 2016 have not been made in these Standalone Ind AS Financial Statements since they do not pertain to the financial year ended 31 March 2019.

i. we draw attention to note 49 to the Standalone Ind AS Financial Statements, relating to remuneration paid to the Managing Director & CEO and to the Executive Director & CFO of the Company for the financial year ended 31 March 2019, being in excess of the limits prescribed under Section 197 of the Act by Rs. 52.41 million, which is subject to the approval of the shareholders. Our opinion is not modified in respect of this matter; and

ii. the Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

With reference to the Annexure A referred to in the Independent Auditorsâ Report to the members of the Company on the Standalone Ind AS Financial Statements for the year ended 31 March 2019, we report the following:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets and investment properties.

(b) The Company has a regular programme of physical verification of its fixed assets and investment property by which all fixed assets and investment property are verified by the management according to a phased programme designed to cover all the items over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the policy, the Company has physically verified certain property, plant and equipment and investment properties during the year and no material discrepancies were noticed in respect of assets verified during the year and have been dealt with in books of account.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties comprising of freehold land and buildings and lease agreement in respect of the leasehold land and building, as listed in Notes 2 and 4 of the Standalone Ind AS Financial Statements, are held in the name of the Company, except as stated in the table below:

Land / building	Number of cases	Freehold	Notes in the standalone Ind AS financial statements	Gross block(Rs. in million)	Net block (Rs. in million)	Remarks
Building	1	Freehold	2	536.33	342.93	Refer note 42 (c) in the standalone Ind AS financial statements in respect of the matter which is presently under litigation

Further in respect of the leasehold land acquired by the Company, attention is invited to the table below:

Land / building	Number of cases	Lease hold	Notes in the standalone Ind AS financial statements	Gross block (Rs. in million)	Net block (Rs.in million)	Remarks
Land	1	Leasehold	11	65.06	53.32	Refer note 42 (c) in the standalone Ind AS financial statements in respect of the matter which is presently under litigation

(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. The Company does not have any stock lying with third parties at the year-end. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been dealt with in books of account.

(iii) The Company has granted unsecured loans to nine companies and one body corporate covered in the register maintained under Section 189 of the Companies Act, 2013 (âthe Actâ). The Company has not granted any loans, secured or unsecured, to limited liability partnership, firms or other parties covered in the register required to be maintained under Section 189 of the Act.

(a) According to the information and explanations given to us and based on the audit procedures conducted by us, we are of the opinion that the rate of interest and other terms and conditions of unsecured loans granted by the Company to the companies and the body corporate covered in the register required to be maintained under Section 189 of the Act are not, prima facie, prejudicial to the interest of the Company.

(b) According to the information and explanations given to us and based on the audit procedures conducted by us, the unsecured loans granted to the companies and the body corporate and the interest thereon has repaid as demanded during the year.

(c) There are no overdue amounts of more than 90 days in respect of the unsecured loans granted to the companies and the body corporate by the Company.

(iv) In our opinion and according to the information and explanations given to us and based on the legal opinion obtained conducted by the Company and the resolution passed by the Board of Directors of the Company, the unsecured loans granted by the Company are in compliance with the provisions of Section 185 of the Act. The Company has not provided any security during the year to the parties covered under Sections 185 of the Act. According to the information and explanations given to us, the provisions of Section 186 of the Act in respect of the loans given are not applicable to the Company, since it is covered as a Company engaged in infrastructural facilities. The Company has complied with the provisions of Section 186 of the Act in respect of investments made during the year. The Company has not provided any guarantee or security during the year. Accordingly, compliance under 186 of the Act in respect of providing guarantees and securities are not applicable to the Company.

(v) In our opinion, and according to the information and explanations given to us, the Company has not accepted deposits as per the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government for the maintenance of cost records under Section 148(1) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident fund, Duty of Customs, Employeesâ State Insurance, Goods and Services tax, Labour cess, Professional tax, Property tax, Cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. Amounts deducted / accrued in the books of account in respect of undisputed statutory dues of Income-tax have generally been regularly deposited during the year by the Company with the appropriate authorities, though there have been slight delays in a few cases. As explained to us, the Company did not have any dues on account of wealth tax.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Duty of Customs, Employeesâ State Insurance, Profession tax, Property Tax, Labour cess, Income-tax, Goods and Services tax, Cess and other material statutory dues were in arrears as at 31 March 2019 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Income-tax, Sales tax, Service tax, Value added tax and Goods and Services tax as at 31 March 2019, which have not been deposited with the appropriate authorities on account of any dispute, except as stated below:

Name of the statute	Nature of the dues	Demand Rupees in millions	Amount paid Rupees in millions	Financial year (F.Y.) to which the amount relates	Forum where dispute is Pending
Finance Act, 1994	Demand for service tax under reverse charge mechanism on Expenditure in Foreign currency case.	17.20	0.51	2006-07 & 2007-08	CESTAT, Mumbai
Finance Act, 1994	Denial of cenvat credit of service tax paid on Marriott fees paid	55.76		2004-05 to 2010-11	CESTAT, Mumbai
Finance Act, 1994	Denial of input credit on services relating to rent a cab service	4.97		2012-13 to 2014-15	Commissioner (appeals), Mumbai
Finance Act, 1994	Demand for service tax on Telephone services and Laundry wet cleaning service as accommodation services	4.06		May 2011 to June 2012	Commissioner (appeals), Hyderabad
Finance Act, 1994	Service tax demand on treating In-room dining and Mini-bar services as âAccommodationâ instead of âRestaurant Servicesâ by Service tax Department.	6.88		2012-13 to 2014-15	Commissioner (appeals), Hyderabad

Finance Act, 1994	Letter demanding Interest on Cenvat credit availed not utilized raised by the service tax department	3.20	-	Oct-2006 to Apr 2008	Assistant Commissioner of Service Tax, Hyderabad
MVAT Act, 2002	Joint Commissioer has included Service Tax in the Gross Turnver and charged VAT on the same demand is not included in the Demand Notice as the same is covered under section 23 (8) of MVAT Act	9.35	-	2012-13	Joint Commissioner Appeals LTU-2
MVAT Act, 2002	Demanding VAT on	1.59	0.40	FY	Deputy Commissioner,
	Sale of cocktail			2010-11 to 2012-16	Hyderabad
MVAT Act, 2002	Demanding VAT on	1.76	0.22	FY	Asst.Commissioner
	Sale of cocktail			2013-14 to FY 15-16	(CT) LTU
Income Tax Act, 1961	Entire Expenses debited to Profit & Loss account capitalised to WIP and Interest income assessed as âIncome from Other Sourcesâ.	3.73	-	2010-11	ITAT
Income Tax Act, 1961	Entire Expenses debited to Profit & Loss account capitalised to WIP and Interest income assessed as âIncome from Other Sourcesâ.	6.54	-	2012-13	CIT(A)
Foreign Trade Policy	Recovery of SFIS benefits	5.74	-	2017	Karnataka High Court
(Duty of Customs) Foreign Trade Policy	granted to foreign brands Foreign brands not	218.33	-	2009-14	Gujrat High Court
(Duty of Customs)	eligible for SFIS duty credit scripts

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted during the year in repayment of loans or borrowings to banks or financial institutions. The Company does not have any loans or borrowings from government and dues to debenture holders during the year.

(ix) During the year Company has raised monies by way of initial public offering of equity shares. According to the information and explanations given to us and based on our examination of the records of the Company, monies were applied for the purpose for which those were raised. The monies raised by way of term loan has been applied for the purpose for which it was raised.

(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the management.

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, due to inadequate profits during the current year, the managerial remuneration paid to the directors of the company is in excess of the limits specified under Section 197 of the Act read with Schedule V to the Act. The Company is in the process of obtaining approval from Shareholders for such excess remuneration paid. Refer note 49 of the Standalone Ind AS Financial Statements.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company and the Nidhi Rules, 2014 are not applicable to it. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to us, the Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements as required by Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has made preferential allotment of Zero% Non-cumulative, Non-convertible redeemable preference shares during the year in compliance with the requirements of Section 42 of the Act. The total money raised aggregating to Rs. 510,000,000 has been fully utilised by the Company for the purpose for which it was raised. The Company has not made any other private placement or preferential allotment of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

Annexure B to the Independent Auditorsâ Report - 31 March 2019

Report on the Internal Financial Controls with reference to the aforesaid Standalone Ind AS Financial Statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)

(Referred to in paragraph (A) (f) under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date) Opinion

We have audited the internal financial controls with reference to Standalone Ind AS Financial Statements of Chalet Hotels Limited (formerly known as Chalet Hotels Private Limited) (âthe Companyâ) as of 31 March 2019 in conjunction with our audit of the Standalone Ind AS Financial Statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to Standalone Ind AS Financial Statements and such internal financial controls were operating effectively as at 31 March 2019, based on the internal financial controls with reference to standalone Ind AS financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (the âGuidance Noteâ).

Managementâs Responsibility for Internal Financial Controls

The Companyâs management and the Board of Directors are responsible for establishing and maintaining internal financial controls based on the internal controls with reference to standalone Ind AS financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note.

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditorsâ Responsibility

Our responsibility is to express an opinion on the Companyâs internal financial controls with respect to standalone Ind AS financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, prescribed under Section 143 (10) of the Act, to the extent applicable to an audit of internal financial controls with reference to standalone Ind AS financial statements. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone Ind AS financial statements were established and maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with respect to standalone Ind AS financial statements and their operating effectiveness. Our audit of internal financial controls with respect to standalone Ind AS financial statements included obtaining an understanding of internal financial controls with respect to standalone Ind AS financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorsâ judgement, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system with reference to standalone Ind AS financial statements.

Meaning of Internal Financial Controls with reference to Standalone Ind AS Financial Statements

A companyâs internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial controls with reference to financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls with reference to standalone Ind AS financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone Ind AS financial statements to future periods are subject to the risk that the internal financial control with reference to standalone Ind AS financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For B S R & Co. LLP

Chartered Accountants

Firmâs Registration No: 101248W/W-100022

Aniruddha Godbole

Mumbai Partner

10 May 2019 Membership No: 105149

Mar 31, 2018

REPORT ON THE AUDIT OF STANDALONE IND AS FINANCIAL STATEMENTS

We have audited the accompanying standalone Ind AS financial statements of Chalet Hotels Limited (formerly known as Chalet Hotels Private Limited) (âthe Companyâ), which comprise the standalone balance sheet as at March 31, 2018, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows for the year then ended, and summary of the significant accounting policies and other explanatory information (collectively referred to as âstandalone Ind AS financial statementsâ).

MANAGEMENTâS RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs, loss (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (âInd ASâ) prescribed under Section 133 of the Act.

This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone Ind AS financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

AUDITORSâ RESPONSIBILITY

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

We are also responsible to conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entityâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditorâs report to the related disclosures in the standalone Ind AS financial statements or, if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditorâs report. However, future events or conditions may cause an entity to cease to continue as a going concern.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31, 2018, its loss (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

EMPHASIS OF MATTER

We draw attention to the following notes to the standalone Ind AS financial statements:

1. Note 43 (c) in respect of the entire building comprising of the hotel and apartments therein, purchased together with a demarcated portion of the leasehold rights to land at Vashi (Navi Mumbai), from K. Raheja Corp Private Limited, on which the Companyâs Four Points by Sheraton Hotel has been built. The allotment of land by City & Industrial Development Corporation of Maharashtra Limited (âCIDCOâ) to K. Raheja Corp Private Limited has been challenged by two public interest litigations and the matter is currently pending with the Honorable Supreme Court of India. Pending the outcome of proceedings and a final closure of the matter, no adjustments have been made in the standalone Ind AS financial statements as at and for the year ended March 31, 2018 to the carrying value of the leasehold rights (reflected as prepayments) and the hotel assets thereon aggregating to Rs.506 million, Rs.535 million and Rs.574 million as at March 31, 2018, March 31, 2017 and April 1, 2016 respectively; and

2. Note 42 (b) in respect of the Scheme of Arrangement (âthe Schemeâ) between Genext Hardware & Parks Private Limited (âGenextâ) and the Company for demerger of the Hotel undertaking and Retail undertaking (âdemerged undertakingâ) of Genext which has been approved by the National Company Law Tribunal (âNCLTâ) at Mumbai and Bengaluru and other regulatory authorities on September 11, 2017, with effect from the Appointed date specified in the Scheme i.e. November 1, 2016. The Scheme has been accounted in the manner prescribed by the NCLT order i.e. the book values of the assets, liabilities and reserves of the demerged undertaking of Genext as of November 1, 2016 have been recorded by the Company and the identity of the reserves have been maintained. The excess of the book value of the net assets and reserves of the demerged undertaking of Genext acquired over the face value of the shares issued by the Company amounting to Rs.189.53 million has been debited to Goodwill in accordance with the Scheme. This accounting treatment is different from that prescribed under Ind AS 103 on Business Combination.

Our opinion is not qualified in respect of these matters.

OTHER MATTERS

The comparative standalone financial statements of the Company as at and for the year ended March 31, 2017 and the transition date standalone balance sheet as at April 1, 2016 included in these standalone Ind AS financial statements, are based on the previously issued standalone financial statements prepared in accordance with Section 133 of the Act and audited by Deloitte Haskins & Sells LLP, Chartered accountants, for the years ended March 31, 2017 and March 31, 2016 whose reports dated July 27, 2017 and August 3, 2016 respectively, expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have been audited by us.

Our opinion is not modified in respect of this matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the âAnnexure Aâ, a statement on the matters specified in paragraphs 3 and 4 of the said Order.

2. As required by Section 143(3) of the Act, we report that:

(a) we have sought and obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the standalone balance sheet, the standalone statement of profit and loss, the standalone cash flow statement and the standalone statement of changes in equity dealt with by this report are in agreement with the books of account;

(d) in our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act;

(e) on the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164(2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ; and

(g) with respect to the other matters to be included in the Auditorsâ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us :

i. the Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - refer notes 37 and 43 to the standalone Ind AS financial statements;

ii. the Company has made provision, as required under the applicable law or accounting standards for material foreseeable losses on long-term contracts and derivative contracts -refer notes 12, 28 and 30 to the standalone Ind AS financial statements;

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company; and

iv. the disclosures in the standalone Ind AS financial statements regarding holdings as well as dealings in specified bank notes during the period from November 8, 2016 to December 30, 2016 have not been made since they do not pertain to the financial year ended March 31, 2018. However, amounts as appearing in the audited standalone financial statements as at and for the year ended March 31, 2017 have been disclosed.

ANNEXURE A TO THE INDEPENDENT AUDITORSâ REPORT - MARCH 31, 2018

With reference to the Annexure A referred to in the Independent Auditorsâ Report to the members of the Company on the standalone Ind AS financial statements for the year ended March 31, 2018, we report the following:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets and investment property.

(b) The Company has a regular programme of physical verification of its fixed assets and investment property, by which all fixed assets and investment property are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the above programme, the Company has verified certain fixed assets and investment property during the year and no discrepancies were noticed in respect of assets verified during the year.

(c) According to the information and explanations given to us and based on the examination of the registered transfer deeds provided to us and based on confirmations directly received by us from the lenders where the title deeds have been mortgaged as security for loans taken from Banks and financial institutions, we report that, the title deeds, of immovable properties comprising of freehold land and buildings as listed in Notes 2 and 4 of the standalone Ind AS financial statements, are held in the name of the Company, except as stated in the table below:

Land / building	Number of cases	Freehold	Notes in the standalone Ind AS financial statements	Gross block (Rs. in million)	Net block (Rs. in million)	Remarks
Building	1	Freehold	2	958.78	449.27	Refer note 43 (c) in the standalone Ind AS financial statements in respect of the matter which is presently under litigation
Land	1	Freehold	2	286.64	286.64
Building	1	Freehold	2	1,978.10	1,500.45	Acquired as part of Scheme of arrangement (Refer note 42 (b) to the standalone Ind AS financial statements), pending
Land	1	Freehold	4	337.12	337.12	to be transferred in the name of the Company.
Building	1	Freehold	4	1,779	1,328.98
Land	1	Freehold	4	80.01	80.01	Acquired as part of Scheme of arrangement (Refer note 42
Building	1	Freehold	4	893.38	842.22	(a) to the standalone Ind AS financial statements), pending to be transferred in the name of the Company.

Further in respect of the leasehold land acquired by the Company, attention is invited to the table below:

Land	Number of cases	Lease hold	Note in standalone Ind financial statements	Gross block (Rs. in million)	Net block (Rs. in million)	Remarks
Land	1	Leasehold	11	65.06	54.52	Refer note 43 (c) in the standalone Ind AS financial statements in respect of the matter which is presently under litigation

(ii) As explained to us, the inventories have been physically verified during the year by the management at reasonable intervals. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been dealt with in books of accounts.

(iii) The Company has granted unsecured loans to four companies and one body corporate covered in the register maintained under Section 189 of the Companies Act, 2013 (âthe Actâ). The Company has not granted any loans, secured or unsecured, to limited liability partnerships, firms or other parties covered in the register required to be maintained under Section 189 of the Act.

(a) According to the information and explanations given to us and based on the audit procedures conducted by us, we are of the opinion that the rate of interest and other terms and conditions of unsecured loans granted by the Company to companies and a body corporate covered in the register required to be maintained under Section 189 of the Act are not, prima facie, prejudicial to the interest of the Company.

(b) According to the information and explanations given to us and based on the audit procedures conducted by us, the unsecured loan granted to companies and a body corporate and interest thereon are repayable on demand. The borrowers have been regular in payment of principal and interest as demanded.

(iv) In our opinion and according to the information and explanation given to us and based on the legal opinion obtained by the Company and the resolution passed by the Board of directors of the Company, the unsecured loans granted by the Company are in compliance with the provisions of Section 185 of the Act. The Company has not provided any guarantees or security to the parties covered under Section 185 of the Act. According to the information and explanations given to us, the provisions of Section 186 of the Act in respect of the loans given are not applicable to the Company, since it is covered as a company engaged in business of providing infrastructural facilities. The Company has complied with the provisions of Section 186 of the Act in respect of investments made during the year. The Company has not provided any guarantee or security during the year. Accordingly, compliance under Section 186 of the Act in respect of providing guarantees and securities are not applicable to the Company.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 148(1) of the Act and are of the opinion that prima facie, prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Provident fund, Duty of customs, Value added tax, Goods and Service tax, Luxury tax, Property tax, Professional tax, Cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. According to the information and explanations given to us and on the basis of our examination of records of the Company, amounts deducted / accrued in the books of account in respect of undisputed statutory dues including Employeesâ State Insurance, Income-tax, Sales tax, Service tax and Duty of excise dues have generally been regularly deposited during the year by the Company with the appropriate authorities, though there have been slight delays in a few cases.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident fund, Employeesâ State Insurance, Income-tax, Sales tax, Service tax, Duty of customs, Duty of excise, Value added tax, Goods and Service tax, Property tax, Luxury tax, Professional tax, Cess and other material statutory dues were in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Income-tax, Sales tax, Duty of excise and Goods and Service tax which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Service tax, Duty of customs and Value added tax have not been deposited as on March 31, 2018 by the Company on account of disputes:

			Amount
			deposited	Financial
			on account	year (F.Y.)
		Demand	of demand	to which
Name of the		Rupees	Rupees in	the amount	Forum where dispute is
statute	Nature of the dues	in million	million	relates	pending
Finance Act 1994	Denial of CENVAT credit of service tax	53.62	-	FY 2004-05 to	Order-in-Appeal awaited
(Service Tax)	paid for Marriott Executive Apartment.			FY 2010-11	from the CESTAT, Mumbai
Finance Act 1994 (Service Tax)	Demand for service tax under reverse charge mechanism on Expenditure in Foreign currency.	17.70		April 2006 to March 2008	Order-in-Appeal awaited from the CESTAT, Mumbai
Finance Act 1994	Service tax demand on treating In	6.53	-	FY 2012-13 to	Order-in-Appeal awaited
(Service Tax)	room dining and Mini-bar services as âAccommodationâ instead of âRestaurant Servicesâ by Service tax Department.			FY 2014-15	from the Commissioner (Appeals- Hyderabad)
Finance Act 1994	Denial of input credit on services relating	4.73	-	FY 2012-13 to	Commissioner (Appeals),
(Service Tax)	to rent a cab service			FY 2014-15	Mumbai
Finance Act 1994	Demand for service tax on Telephone	3.89	-	May 2011 to	Commissioner (Appeals),
(Service Tax)	services and Laundry wet cleaning service treated as accommodation services			June 2012	Hyderabad
Finance Act 1994	Letter demanding Interest on Cenvat	3.20	-	October 2006	Assistant Commissioner
(Service Tax)	credit availed not utilised raised by the service tax department			to April 2008	of Service Tax, Hyderabad
Finance Act 1994	Show cause letter on treating In-	3.07	-	October 2014	Commissioner CGST,
(Service Tax)	room dining and Mini-bar services as âAccommodationâ instead of âRestaurant Servicesâ by Service tax Department			to June 2017	Bangalore
Finance Act 1994	Show cause notice on denial of cenvat	1.98	-	FY 2012-13 to	Commissioner CGST,
(Service Tax)	credit on garden maintenance			FY 2015-16	Mumbai
Finance Act 1994	Audit query letter received treating In-	1.44	-	February 2013
(Service Tax)	room dining and Mini-bar services as âAccommodationâ instead of âRestaurant Servicesâ by Service tax Department			to September 2014	Commissioner CGST, Bangalore
Finance Act 1994 (Service Tax)	Demand of penalty for non-payment of service tax on reimbursement of Travel Agentâs Commission	0.41		FY 2012-13 to FY 2014-15	Commissioner (Appeals), Hyderabad
Foreign Trade	Recovery of SFIS benefits granted to	5.74	-	FY 2016-17
Policy (Duty of	foreign brands				Karnataka High Court
customs)
Maharashtra VAT	Joint Commissioner has included Service	9.35	-	FY 2012-13
Act,2002	Tax in the Gross Turnover and charged VAT on the same. However, the same demand is not included in the Demand Notice as the same is covered under Section 23(8) of MVAT Act.				Joint Commissioner Appeals LTU-2
Andhra Pradesh	Demanding VAT on sale of cocktail	1.76	0.22	FY 2013-14 to	Assistant Commissioner
VAT				2015-16	(CT) LTU
Andhra Pradesh	Demanding VAT on sale of cocktail	1.59	0.40	FY 2010-11 to	Deputy Commissioner,
VAT				2012-13	Hyderabad

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to a financial institution and banks. The Company did not have any outstanding loans or borrowings to government and dues to debenture holders during the year.

(ix) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments) during the year. In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they are raised.

(xi) The Company is a private limited company as at and for the year ended March 31, 2018 and thus the provisions of Section 197 of the Act are not applicable to the Company. Accordingly, paragraph 3(xi) of the Order is not applicable to the Company.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company as specified in Nidhi Rules, 2014. Accordingly paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Section 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards. In our opinion and according to the information and explanations given to us, the Company is not a public company as at and for the year ended March 31, 2018 and hence provisions with respect to Section 177 are not applicable.

(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any noncash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) According to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, paragraph 3(xvi) of the Order is not applicable to the Company.

ANNEXURE B TO THE INDEPENDENT AUDITORSâ REPORT - MARCH 31, 2018

(Referred to in our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)

We have audited the internal financial controls over financial reporting of Chalet Hotels Limited (formerly known as Chalet Hotels Private Limited) (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

The Companyâs management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (âICAIâ). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Act.

Auditorsâ Responsibility

Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companyâs assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For B S R & Co. LLP

Chartered Accountants

Firmâs Registration No : 101248W/W-100022

Aniruddha Godbole

Mumbai Partner

June 12, 2018 Membership No: 105149

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