Directors Report of Chalet Hotels Ltd.

Mar 31, 2025

The Board of Directors present your Company''s Fortieth Annual Report along with the Audited Financial Statements for the Financial Year ended March 31, 2025.

FINANCIAL HIGHLIGHTS

Your Company''s financial performance for the Financial Year ended March 31, 2025 is summarized below:

(? in million)
Particulars	Standalone		Consolidated
	For the year ended		For the year ended
	March 31, 2025	March 31, 2024	March 31, 2025	March 31, 2024
Revenue from Operations	16,265.65	13,915.56	17,178.25	14,172.52
Other Income	551.51	271.07	362.97	197.86
Total Income	16,817.16	14,186.63	17,541.22	14,370.38
Total Expenses	9,174.68	8,211.03	9,819.33	8,326.60
EBITDA	7,642.48	5,975.60	7,721.89	6,043.78
Depreciation and Amortization Expenses	1,571.46	1,358.12	1,787.96	1,383.70
Finance Costs	1,371.23	1,932.67	1,590.82	1,966.55
Profit Before Tax	4,699.79	2,684.81	4,343.11	2,693.53
Tax expense/(credit)	2,984.08	(98.01)	2,918.17	(88.28)
Profit for the year	1,715.71	2,782.82	1,424.94	2,781.81
Total Comprehensive Income for the year	1,710.69	2,774.43	1,423.51	2,773.42
Earnings per equity share - Basic (?)	7.86	13.56	6.53	13.54
Earnings per equity share - Diluted (?)	7.85	13.54	6.52	13.53

APPROPRIATIONS / DIVIDEND

The Company has adopted a Dividend Distribution Policy, setting out the broad principles for guiding the Board and Management in the matters concerning declaration and distribution of dividend pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations''). The same is annexed as Annexure I hereto and is also available on the Company''s website at www.chalethotels. com/wordpress/wp-content/uploads/2023/11/Dividend-Distribution-Policy.pdf.

In line with the Dividend Distribution Policy and considering the Company''s growth trajectory, no dividend is being recommended by the Board of Directors on the Equity Shares of the Company for the year under review.

Further, an amount of ? 1,710 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 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.

BUSINESS UPDATE Expansion/Milestones

The Company continues to pursue growth opportunities in line with its strategy to diversify the portfolio in terms of geography and offering. During the year under review, the Company acquired Mahananda Spa and Resorts Private Limited, a Company headquartered in Rishikesh, owning The Westin Resort & Spa, Himalayas, a 141 room hotel at Rishikesh in the state of Uttarakhand.

The Company also commissioned its commercial offering at Powai in Mumbai viz. CIGNUS PowaiÂ® Tower 1 and the property has seen strong leasing momentum.

The residential project at Koramangala, Bengaluru has received Occupancy Certificates for 9 buildings and more than 90% of inventory has been sold as on date.

Financial

The Company continued to strengthen its position and has reported strong operational and financial performance across all four quarters this year. The Total Income of the Company increased by 18.54%, reaching ? 16,817 million on a standalone level and by 22.07%, reaching ? 17,541 million on a consolidated level. This growth is attributed to our strong asset portfolio, stringent cost management, and a strong focus on maximizing revenue streams across all assets. Hospitality Revenue of ? 14,296 million contributed to 8789% of Total Revenue and the Rental & Annuity Revenues at ? 1,970 million contributed to 12.11% of the Company''s Total Revenue for the Financial Year ended March 31, 2025. The Net Profit after Tax of the Company stood at ? 1,716 million as compared to ? 2,783 million for the previous year.

A detailed analysis of the business and financial performance is included in the Management Discussion and Analysis report which forms a part of this Annual Report.

DEVELOPMENT PIPELINE

The Company is working on various projects that are at different stages of completion towards capacity addition as well as upgradation of existing assets:

Hospitality

- ~125-130 additional guest rooms at Bengaluru Marriott Hotel Whitefield

- ~280 room hotel viz. ''Hyatt Regency'' at Airoli, Navi Mumbai

- ~170 room 5-star luxury hotel at Varca in Goa Subsidiaries:

- renovation of 80 rooms at The Dukes Retreat, Khandala has been completed during the year under review and further addition of ~65-70 rooms is underway

- ~385-390 room ''Taj'' at Terminal 3, Delhi International Airport

Rental & Annuity

- construction work at the CIGNUS PowaiÂ® Tower 2 has commenced and is expected to be completed in FY 2027.

Residential Project - Koramangala, Bengaluru

- The first 9 towers of the project are ready for handover and the process will be commenced soon. Unit sales for the project and pricing are trending higher than expected. Construction work on the last 2 residential towers and the commercial building is underway.

CAPITAL STRUCTURE Authorized Share Capital

During the year under review, there was no change in the Authorized Share Capital of the Company. The Authorized Share Capital of your Company as on March 31, 2025 is '' 5,981,000,000 consisting of 38,21,00,000 Equity Shares of Face Value of '' 10 each amounting to '' 382,10,00,000 and 21,600 Preference Shares of Face Value of '' 1,00,000 each amounting to '' 216,00,00,000.

Paid-up Equity Share Capital

During the year under review, the Paid-up Equity Share Capital of your Company increased by '' 12,98,14,070 from '' 205,47,40,080 to '' 218,45,54,150.

- Pursuant to approval of the Members through a Special Resolution by means of Postal Ballot on March 10, 2024, the Company raised funds through a Qualified Institutions Placement (''QlP'') by issue and allotment of 1,26,26,263 fully paid-up Equity Shares to the eligible Qualified Institutional Buyers on April 03, 2024. The proceeds of the QIP were utilized towards repayment/pre-payment of certain outstanding borrowings and towards general corporate purposes.

- Eligible Employees have exercised 3,55,144 Stock Options resulting in issue and allotment of 3,55,144 fully paid-up Equity Shares having a face value of '' 10 each under CHL Employee Stock Option Plan 2022.

The Paid-up Equity Share Capital of your Company as on March 31, 2025 stands at '' 218,45,54,150 comprising of 21,84,55,415 Equity Shares having a Face Value of '' 10 each.

Paid-up Preference Share Capital

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, by way of subscription by themselves or by their Designated Nominees to 20,000 Zero Coupon NonCumulative, 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).

The Company redeemed 1,600, 0.001% Non-Cumulative Redeemable Preference Shares having a Face Value of '' 1,00,000 each on May 27, 2024 with the consent of the Preference Shareholders and pursuant to the approval of the Board of Directors at their meeting held on May 13, 2024.

The Paid-up Preference Share Capital of your Company as on March 31, 2025 was '' 200,00,00,000 comprising of 20,000, 0.00% Non-Cumulative, Non-Convertible Redeemable Preference Shares having a Face Value of '' 1,00,000 each.

BORROWINGS

The Company avails of credit facilities from time to time to be deployed for various purposes such as capital expenditure and working capital requirements and repayment of high cost debt. During the year under review, the Company availed of additional borrowings amounting to '' 5,988 million and repaid '' 9,898 million existing debt. As on March 31, 2025, the Company''s borrowing stood at '' 20,908 million on a standalone basis and at '' 23,574 million on a consolidated basis (both excluding Preference Share Capital, amounting to '' 1,969 million), as compared to '' 24,762 million on a standalone and '' 26,855 million on a consolidated basis (excluding Preference Share Capital and Loan from Promoter-Directors, amounting to '' 2,648 million) as at March 31, 2024.

Debentures

The Company has on March 25, 2025, issued and allotted 7,500, 8.35% Listed, Rated, Secured, Non-Cumulative, Taxable, Transferrable, Redeemable, Non-Convertible Debentures (''Listed NCDs'') having a Face Value of '' 1,00,000 each on a private placement basis. The proceeds of the said Listed NCDs have been utilized towards repayment of outstanding Overdraft/ Working Capital Demand Loan balances of the Company.

Credit Ratings

The Company had the following Credit Ratings as on March 31, 2025:

ICRA Limited: Long Term Banking Facilities (Fund based and unallocated limits) are rated as [ICRA] A (Outlook: Positive) (Previous Rating: [ICRA] A (Outlook: Positive)) and Short Term Banking Facilities (Non-Fund based and unallocated limits) are rated as [ICRA] A1 (Previous Rating: [ICRA] A1).

India Ratings & Research Private Limited: Term Loans, NonConvertible Debentures and Fund-based Working Capital limits are rated as IND AA- / Stable (Previous Rating: IND A-/Positive) and Non-Fund based Working Capital limits are rated as IND A1 (Previous Rating: IND A2 ).

CRISIL Ratings Limited: Non-Convertible Debentures are rated as CRISIL AA-/Stable.

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 had extended interest free loans aggregating to '' 1,100 million to the Company which has been repaid entirely as on March 31, 2025.

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 loan and investments made by your Company are given in Note No.60 of the Standalone Financial Statements.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, your Company earned foreign exchange of '' 6,112 million as compared to '' 4,916 million in the previous year.

The total foreign exchange outgo of your Company during the year under review was '' 1,630 million as compared to '' 1,557 million in the previous year.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company has six subsidiaries and three 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 in relation 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 having the same line of business as its Holding Company. CAHPL is developing a ~385-390 room hotel at Terminal 3 at Delhi International Airport which is to be branded as ''Taj'' and has entered into a Franchise and Technical Services & Development Assistance Agreement with The Indian Hotels Company Limited in this regard.

- The Dukes Retreat Private Limited (''Dukes'') is a subsidiary of the Company and owner and operator of The Dukes Retreat, Khandala which will be a 147 room full service resort, post completion of capacity addition which is currently underway.

- Sonmil Industries Private Limited (''Sonmil'') is a wholly owned subsidiary of the Company owning the land on which The Dukes Retreat, Khandala is situated.

- Mahananda Spa and Resorts Private Limited is a wholly owned subsidiary and owning company of The Westin Resort & Spa, Himalayas, a 141 room hotel at Rishikesh in the state of Uttarakhand.

- Ayushi and Poonam Estates LLP is the owning entity of Courtyard by Marriott, Aravali Resort, a 158 room hotel in the National Capital Region (NCR).

The Board of Directors on February 10, 2025 approved the acquisition of Mahananda Spa and Resorts Private Limited, owning company of The Westin Resort & Spa, Himalayas, a 141 room hotel at Rishikesh. Accordingly, the Company has

considered the period from February 11, 2025 to March 31, 2025 for the purpose of purchase price allocations/consolidation of financial statements of the said company.

The Board of Directors of the Company had approved the amalgamation of Sonmil and Dukes, which are wholly owned subsidiary and subsidiary of the Company respectively, with the Company, which inter-alia aims at simplified corporate structure, synergy in operations, greater financial strength and improvement in the position of the merged entity. Thereafter, the Company had filed a Scheme of Arrangement and Amalgamation of Sonmil and Dukes with the Company. Pursuant to the Order dated March 18, 2025 passed by the Hon''ble National Company Law Tribunal, Mumbai Bench, a meeting of the Equity Shareholders of the Company is proposed to be convened and held on May 13, 2025 for approval of the said Scheme.

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, 26.1% in Sahyadri Renewable Energy Private Limited and 26% in TP Agastaya Limited, being entities engaged in generation of hydropower and solar power respectively. 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, nor 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 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.

As at the end of the year under review, the Company has one material subsidiary, i.e. Mahananda Spa and Resorts Private Limited. The policy for determining material subsidiaries has been disclosed on the Company''s website at www.chalethotels. com/wordpress/wp-content/uploads/2024/02/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.

Further, the Business Responsibility & Sustainability Report, also forms an integral part of this Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors, on the basis of the recommendation of the Compensation, Nomination and Remuneration Committee, at its meeting held on October 24, 2024 appointed Mr. Shwetank Singh (DIN: 02976637), who was the Chief Growth and Strategy Officer, as the Executive Director of the Company for a period of three years w.e.f October 24, 2024. The said appointment was approved by the Members of the Company through Postal Ballot on December 13, 2024.

In accordance with the Act and the Articles of Association of the Company, Dr. Sanjay Sethi (DIN: 00641243) is liable to retire by rotation and being eligible, has offered himself for re-appointment. Accordingly, the re-appointment of Dr. Sanjay Sethi is being placed for approval of the Members at the ensuing Annual General Meeting (''AGM''). The information pertaining to the Director 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, none of the Non-Executive Directors of the Company had any pecuniary relationship or transactions with the Company, other than receipt of Sitting Fees towards attending meetings of Board of Directors and / or Committees thereof. Further, pursuant to the approval of the Members of the Company at the AGM held on August 10, 2023, the Independent Directors of the Company will be paid Commission for the Financial Year 2025.

During the year under review, Mr. Milind Wadekar stepped down as the Chief Financial Officer and a Key Managerial Personnel of the Company with effect from June 30, 2024 and Mr. Nitin Khanna was appointed as the Chief Financial Officer and consequently as a Key Managerial Personnel with effect from July 1, 2024. Mr. Rajneesh Malhotra, Chief Operating Officer, who was designated as a Key Managerial Personnel of the Company also stepped down with effect from October 31, 2024.

Except as stated above, there were no other changes in the Directors and Key Managerial Personnel of the Company during the year under review.

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 2025, is hosted on the website of your Company at www. chalethotels.com/annual-reports/.

NUMBER OF BOARD MEETINGS

During the Financial Year 2025, 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 2025. 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, 2025, 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, 2025;

(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, 2025 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.

GOING CONCERN

The Company continues to deliver strong performance backed by robust operational strategies, resulting in improving Key Performance Indicators such as occupancy rates, Average Daily Rate (ADR), and Revenue Per Available Room (RevPAR). Also, leasing of the Commercial premises has further reinforced the Company''s revenues. The Company continues to adopt prudent cash flow management and implements various processes to tighten, control and manage costs and deliver improved margins. 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. The nature of the Company''s business and activities has not undergone any change during the year under review.

ACCOUNTING TREATMENT

The accounting treatment adopted by the Company is in line with 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 the Internal Audit and Internal Controls are commensurate with the size and scale of your Company''s operational and commercial activities. The managed hotels are operated through globally reputed hospitality companies which have their respective internal control systems in place. Your Company has provided an adequate system of internal control covering the franchise hotels, the commercial and residential business as well as all corporate functions. 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.

Based on the recommendation of the Audit Committee, the Board has approved the appointment of M/s. PriceWaterhouse Coopers Services LLP as Internal Auditors of the Company for the Financial Year 2026. 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 Audit

The Audit Committee and the Board of Directors at their respective meetings held on May 10, 2022 approved the reappointment 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 37th AGM till the conclusion of the 42nd AGM, which was also approved by the Members at the 37th 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 on Financial Statements 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 report on the Financial Statements for the Financial Year 2025. However, the Statutory Auditors have drawn attention i.e. Emphasis of Matter with regard to Note 42(c) of the Standalone Financial Statements, in their report, details of which are as follows:

âEmphasis of Matter

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 '' 46.14 million (31 March 2024: '' 47.34 million) and the hotel assets thereon (reflected as property, plant and equipment) aggregating to '' 347.22 million as at 31 March 2025 (31 March 2024: '' 366.17 million).

Our opinion is not modified in respect of this matter.â

The Auditors have clarified that their opinion is not modified in respect of the above matter. Detailed explanation in respect of the matter has been provided under Note 42(c) of the 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 2025. 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.

Pursuant to Regulation 24A(1) of the Listing Regulations, the Secretarial Audit Report of Mahananda Spa and Resort Private Limited, the Company''s material unlisted Indian subsidiary for Financial Year 2025, is annexed as Annexure V.

No other subsidiary of the Company meets the criteria for material unlisted subsidiaries as per the provisions of Regulation 24A of the Listing Regulations.

Further, in view of the recent amendment to the Listing Regulations, it is proposed to appoint M/s. KDA & Associates, Company Secretaries in Practice as the Secretarial Auditors of the Company for a term of five years from Financial Year 2026 to Financial Year 2030. The proposal for the said appointment is being placed for the approval of the Members at the ensuing AGM.

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 2025, 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 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 confirmations / declarations, in the opinion of the Board, the Independent Directors of your Company fulfill 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 the following Committees of the Board as per the requirements of the Act and the Listing Regulations:

- Audit Committee;

- Compensation, Nomination and Remuneration Committee;

- Corporate Social Responsibility and ESG Committee;

- Stakeholders'' Relationship Committee; and

- Risk Management Committee.

The 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.

Policy on Compensation, Nomination and Remuneration

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 & 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. https://www. chalethotels.com/wordpress/wp-content/uploads/2025/02/ Policy-for-Appointment-of-Directors-Remuneration-of-Director-and-Senior-Management-29012025-website.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 and Executive Director of your Company do not receive remuneration or commission from any of the subsidiaries of your Company.

Corporate Social Responsibility

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.

During the year under review, the Company has undertaken voluntary activities in line with its philosophy and objectives and pursuant to the approval of the CSR and ESG Committee. 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.

EMPLOYEE STOCK OPTION SCHEME (ESOP)

During the year under review, the Company had the following ESOP Schemes:

- CHL Employee Stock Option Plan 2022

- CHL Employee Stock Option Plan 2023

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

During the year under review, the transactions / contracts / arrangements have been entered into by the Company with related party(ies) as defined under the provisions of the Act and Listing Regulations with the prior approval of the Audit Committee and the Board of Directors of the Company, as applicable. The disclosure in Form AOC-2 is not applicable to the Company for the Financial Year 2025 and hence does not form part of this Report. Omnibus Approval is obtained on an each financial year basis, from 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 said Committee. The Audit Committee and the Board review transactions with related parties on a quarterly basis.

RISK MANAGEMENT

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, minimize 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.

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, which is available on the Company''s website at https://www.chalethotels.com/wordpress/wp-content/uploads/2021/12/Risk-Management-Policy-renamed-as-on-October-28-2021.pdf.

Certain risks faced by your Company and measures for mitigation have been provided in the Integrated Report which is a part 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 / units 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, the employees and other stakeholders of the Company to report their concerns

about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct. The said policy is available on the Company''s website at https://www.chalethotels.com/ wordpress/wp-content/uploads/2024/08/Vigil-Mechanism-and-Whistle-Blower-Policy-Rev-July252024.pdf.

The Policy provides adequate safeguards against victimization 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.

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 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 https://www.chalethotels.com/ wordpress/wp-content/uploads/2025/06/POSH-Policy-Rev-June-20-2025.pdf.

During the year under review, eight complaints on sexual harassment were received and six complaints have been resolved. Further, the two complaints pending as on March 31, 2025 have 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 Work Â® Certified, for the sixth time in a row and certified in the 2025 list of ''India''s Best Workplacesâ¢ for Women 2024 - Mid-size (Top 50)''. 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 VI. 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, 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 [email protected] and the same will be furnished on request. The Annual Report including the aforesaid information is also available on the Company''s website.

ENVIRONMENTAL INITIATIVES AND ENERGY MANAGEMENT

The Company has committed to achieve Net Zero GHG Emissions by 2040 and has developed a roadmap towards achieving the same. During the year, the Company also made progress towards its commitments to Climate Group''s RE100, EP100 and EV100 initiatives linked to renewable energy, energy productivity and electric mobility respectively.

The Company has also made significant progress in ESG rankings whereby Chalet ranked 6th in the Dow Jones Sustainability Index assessment 2024 under Hotels, Resorts, and Cruise Lines category and secured ''B'' score in CDP Climate Change and Water Security assessments.

The Company also discloses its initiatives on environment stewardship, employee and community well-being and responsible business practices through its Integrated Report section of this Annual Report and the Business Responsibility and Sustainability Report.

As required under 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 VII to this Report. The information relating to technology absorption is not given since the same is not applicable to the Company.

INTEGRATED REPORT

Your Company has provided Integrated Report for the financial year under review, which encompasses both financial and nonfinancial information and stakeholders'' relationships to enable well informed decisions and a better understanding of the Company''s value creation model. The Report also touches upon aspects such as organization''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 visa-vis these.

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

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

MATERIAL CHANGES AND COMMITMENTS

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.

- 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 express their deepest appreciation to the Members for their support received and their continued confidence in the Company''s vision and endeavors. Your

Directors extend their gratitude and sincerely appreciate the assistance and co-operation received from the Regulatory and Statutory Authorities, Government and its agencies, hotel operating partners, Stock Exchanges, Depositories, lenders, legal advisors, Registrar & Share Transfer Agent, Auditors, vendors and other key stakeholders.

We are also immensely grateful to our Company''s employees at all levels whose hard work, expertise, and commitment are the driving force behind our success.

Mar 31, 2024

The Board of Directors present your Company''s Thirty Ninth Annual Report along with the Audited Financial Statements for the Financial Year ended March 31,2024.

FINANCIAL HIGHLIGHTS

Your Company''s financial performance for the Financial Year ended March 31,2024 is summarized below:

(Rs. in Million)
Particulars	Standalone		Consolidated
	For the year ended		For the year ended
	March 31,2024	March 31,2023	March 31, 2024	March 31, 2023
Revenue from Operations	13,915.56	11,284.67	14,172.52	11,284.67
Other Income	271.07	509.14	197.86	494.87
Total Income	14,186.63	11,793.81	14,370.38	11,779.54
Total Expenses	8,211.03	6,733.13	8,326.60	6,756.50
EBITDA	5,975.60	5,060.68	6,043.78	5,023.04
Depreciation and Amortization Expenses	1,358.12	1,173.09	1,383.70	1,173.09
Finance Costs	1,932.67	1,538.14	1,966.55	1,544.74
Profit before Exceptional Items and Tax	2,684.81	2,349.45	2,693.53	2,305.21
Exceptional Items	-	423.08	-	423.08
Profit before Tax	2,684.81	2,772.53	2,693.53	2,728.29
Tax expense/(credit)	(98.01)	894.88	(88.28)	895.39
Profit for the year	2,782.82	1,877.65	2,781.81	1,832.90
Total Comprehensive Income for the year	2,774.43	1,873.01	2,773.42	1,828.26
Earnings per equity share Basic (?)	13.56	9.16	13.54	8.94
Earnings per equity share Diluted (?)	13.54	9.15	13.53	8.94

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/2023/11/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 0.001% Non-Cumulative, Redeemable Preference Shares of ? 100,000 each and pursuant to the Articles of Association of the Company, the said Preference Shares 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, and will be paid post approval of the Members at the ensuing Annual General Meeting (''AGM'').

Further, an amount of ? 2,774.43 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 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.

BUSINESS UPDATE

In order to capitalize on emerging market opportunities and diversify our revenue streams, we have embarked on strategic initiatives to expand our presence in key markets and explore new business segments. FY 2024 marked two such strategic initiatives:

- addition of ''Courtyard By Marriott, Aravali Resort'' having 158 keys, in the National Capital Region to the Company''s portfolio, through acquisition of partners'' share in Ayushi and Poonam Estates LLP, owning entity of the resort. This is the second leisure property in the Company''s portfolio in line with our stated growth strategy to expand into the leisure space.

- launch of a second Hotel in Hyderabad, ''The Westin Hyderabad HITEC City'' which is a 168-key property, managed and operated by an all-women team in partnership with Marriott International.

The Company added 88 rooms to the ''Novotel Pune Nagar Road'' taking the total inventory for the said Hotel to 311 rooms.

During the year, the Company''s subsidiary has entered into a Franchise and Technical Services & Development Assistance Agreement with The Indian Hotels Company Limited for a ''Taj'' branded ~385-390 room Hotel at Terminal 3 at Delhi International Airport.

The Company has demonstrated strong operational and financial performance across all four quarters this year. Total Income increased by 20%, reaching '' 14,186.63 million and PAT increased by 48%, reaching '' 2,782.82 million. This growth can be attributed to our strong asset portfolio, stringent cost management, and a focus on maximizing revenue streams across all assets. Hospitality Revenue of '' 12,674.80 million contributed to 89% of Total Revenue and the Rental & Annuity Revenues at '' 1,240.76 million contributed to 9% of the Company''s Total Revenue for the Financial Year ended March 31,2024.

DEVELOPMENT PIPELINE Hospitality

- construction of the ~385-390 room ''Taj'' at Terminal 3, Delhi International Airport has commenced and it is expected to be operational in FY 2026

- work on ~125-130 additional guest rooms at Bengaluru Marriott Hotel Whitefield has commenced

- development of ~280 rooms hotel viz. ''Hyatt Regency'' at Airoli, Navi Mumbai is at design stage

- renovation of 80 rooms and expansion of ~65-70 rooms at The Dukes Retreat, Lonavala is progressing as per plans for completion in FY 2025

Rental & Annuity

- construction work at the CIGNUS PowaiÂ® Tower 1 is nearing completion and the leasing process has commenced.

- construction work at the CIGNUS PowaiÂ® Tower 2 has commenced and is expected to be completed in FY 2027.

Residential Project - Koramangala, Bengaluru

- The first 9 towers of the project are nearing completion and Unit sales along with pricing are trending higher than expected. The construction work on the last 2 towers is in progress along with the construction work for a 0.15 msf commercial building for sale on the same land.

CAPITAL STRUCTURE Authorized Share Capital

During the year under review, the Authorized Share Capital of the Company increased pursuant to the amalgamation of Belaire Hotels Private Limited and Seapearl Hotels Private Limited with the Company. The Authorized Share Capital of your Company as on March 31, 2024 is '' 5,981,000,000 consisting of 38,21,00,000 Equity Shares of Face Value of '' 10 each amounting to '' 382,10,00,000 and 21,600 Preference Shares of Face Value of '' 1,00,000 each amounting to '' 216,00,00,000.

Paid-up Equity Share Capital

During the year under review, the Paid-up Equity Share Capital of your Company increased by '' 44,91,440 consequent to the exercise of 4,49,144 Stock Options into 4,49,144 fully paid-up Equity Shares having a face value of '' 10 each under Chalet Hotels Limited - Employee Stock Option Plan 2018 and CHL Employee Stock Option Plan 2022. The Paid-up Equity Share Capital of your Company as on March 31,2024 stands at '' 205,47,40,080.

The Company has through a Qualified Institutions Placement (''QIP''), issued and allotted 1,26,26,263 fully paid-up Equity Shares to the Eligible Qualified Institutional Buyers on April 03, 2024, pursuant to approval of the Members through a Special Resolution approved by means of Postal Ballot on March 10, 2024. This resulted in the increase in the total paid-up Equity Share Capital of the Company from '' 205,47,40,080 comprising of 20,54,74,008 Equity Shares having a Face Value of '' 10 each to '' 218,10,02,710 comprising of 21,81,00,271 Equity Shares having a Face Value of '' 10 each, post the end of the Financial Year. The proceeds of the QIP have been utilized towards repayment/pre-payment of certain outstanding borrowings and towards general corporate purposes.

Paid-up Preference Share Capital

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, NonConvertible, 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 '' 1,100 million as on March 31,2024 towards meeting the project expenses, out of which an amount of '' 400 million has been repaid during the year.

The Company also has 1,600, 0.001% Non-Cumulative Redeemable Preference Shares having a Face Value of '' 1,00,000 each which were due for redemption on December 21, 2023. The redemption date was extended by a period of three years to December 21,2026 pursuant to a resolution passed by the Members at the AGM held on August 10, 2023 and consequent alteration of the Articles of Association of the Company.

BORROWINGS

The Company avails of borrowings from time to time to be deployed for various purposes such as meeting Project and working capital requirements and repayment of high-cost debt. During the year under review, the Company availed of additional borrowings amounting to '' 6,532 million and repaid '' 5,139 million existing debt. As on March 31, 2024, the Company''s borrowing stood at '' 24,762 million on a standalone basis and at '' 26,815 million on a consolidated basis (both excluding Preference Share Capital and Loan from Promoter-Directors, amounting to '' 2,688 million), as compared to '' 25,658 million on a standalone and consolidated basis (excluding Preference Share Capital and Loan from Promoter-Directors, amounting to '' 2,280 million) as at March 31, 2023. Further, certain borrowings have been repaid from the funds raised from the issue of shares under QIP post end of the Financial Year under review.

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 '' 650 million to the Company during the year under review. As on March 31, 2024, the Promoters have provided an interest-free loan of '' 1,100 million, out of which an amount of '' 400 million was repaid during the year under review.

LOANS, INVESTMENTS, GUARANTEES AND SECURITIES

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, your Company earned foreign exchange of '' 4,916 million as compared to '' 3,465 million in the previous year.

The total foreign exchange outgo of your Company during the year under review was '' 1,557 million as compared to '' 915 million in the previous year.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company has four subsidiaries and three 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 in relation 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 having the same line of business as its Holding Company. CAHPL entered into a Franchise and Technical

Services & Development Assistance Agreement with The Indian Hotels Company Limited for a ''Taj'' branded ~385-390 room hotel at Terminal 3 at Delhi International Airport.

- The Dukes Retreat Private Limited (''Dukes'') is a subsidiary of the Company and owner and operator of The Dukes Retreat, Lonavala an 80-room full-service resort, which is undergoing renovation and capacity addition.

- Sonmil Industries Private Limited (''Sonmil'') is a wholly owned subsidiary of the Company owning the land on which The Dukes Retreat, Lonavala is situated.

The Board of Directors on February 29, 2024 approved the acquisition of partners'' share in Ayushi and Poonam Estates LLP, the owning entity of Courtyard By Marriott, Aravali Resort in Faridabad. Accordingly, the Company has considered the period from March 01,2024 to March 31, 2024 for the purpose of purchase price allocations/ consolidation of the said LLP.

The Company had filed a Scheme of Arrangement and Amalgamation of Belaire Hotels Private Limited and Seapearl Hotels Private Limited with the Company. The Hon''ble National Company Law Tribunal, Mumbai Bench approved the said Scheme vide its Order dated May 19, 2023. The Appointed Date of the Scheme was April 01, 2020 and the Effective Date was June 19, 2023, when the said Order was filed with the Registrar of Companies. The Board of Directors of the Company have approved the amalgamation of Sonmil and Dukes, which are wholly owned subsidiary and subsidiary of the Company respectively, with the Company, which inter-alia aims at simplified corporate structure, synergy in operations, greater financial strength and improvement in the position of the merged entity.

Your Company holds 33.1% of the Equity Share Capital of Krishna Valley Power Private Limited, 26.1% in Sahyadri Renewable Energy Private Limited and 26% in TP Agastaya Limited, being entities engaged in generation of hydropower and solar power respectively. 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.

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/2024/02/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 (DIN: 00106895) and Ms. Radhika Piramal (DIN: 02105221) as Independent Directors for a second term of Five years and Mr. Joseph Conrad D''Souza (DIN: 00010576) and Mr. Arthur William DeHaast (DIN: 07893738) as Independent Directors for a second term of Four years w.e.f. June 12, 2023. The re-appointments were also approved by the Members of the Company by way of Postal Ballot on June 05, 2023.

Further, on the basis of the recommendation of the Compensation, Nomination and Remuneration Committee, the Board of Directors at the meeting held on May 09, 2023 re-appointed Mr. Sanjay Sethi (DIN: 00641243) as the Managing Director and CEO of the Company for a further period upto January 31,2026 w.e.f February 09, 2024 and the same was approved by the Members of the Company at the AGM held on August 10, 2023.

In accordance with the Act and the Articles of Association of the Company, Mr. Neel Raheja (DIN: 00029010) is liable to retire by rotation and being eligible, has offered himself for re-appointment. Accordingly, the re-appointment of Mr. Neel 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, none of the Non-Executive Directors of the Company had any pecuniary relationship or transactions with the Company, other than receipt of Sitting Fees towards attending meetings of Board of Directors and / or Committees thereof. Further, pursuant to the approval of the Members of the Company by way of Postal Ballot on June 05, 2023, the Independent Directors of the Company will be paid Commission for the Financial Year 2024.

The Board of Directors at the meeting held on July 28, 2023 appointed Mr. Shwetank Singh as the Chief Growth and Strategy Officer of the Company on the basis of the recommendation of the Compensation, Nomination and Remuneration Committee, and designated him as a Key Managerial Personnel with effect from August 02, 2023.

Except as stated above, there were no other changes in the Directors and Key Managerial Personnel of the Company during the year under review.

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 2024, is hosted on the website of your Company at www.chalethotels.com/ annual-reports/.

NUMBER OF BOARD MEETINGS

During the Financial Year 2024, the Board of Directors met eight times. The details of the meetings held have been given in Corporate Governance Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

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

(i) i n the preparation of the accounts for the Financial Year ended March 31, 2024, 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 31,2024;

(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, 2024 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.

GOING CONCERN

As our operational performance was marked by efficiency and effectiveness in delivering exceptional guest experiences, our Key Performance Indicators such as occupancy rates, Average Daily Rate (ADR), and Revenue Per Available Room (RevPAR) have shown steady improvement, reflecting the success of our operational strategies. We believe that effective cash flow management is essential for maintaining financial stability and ensuring the smooth operation of a business thereby enabling strategic investments for future growth. The Company has followed prudent cash flow management and continues to rationalize 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.

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 the Internal Audit and Internal Controls are commensurate with the size and scale of your Company''s operational and commercial activities.

The managed hotels are operated through globally reputed hospitality companies which have their respective internal control systems in place. Your Company has provided an adequate system of internal control covering the franchise hotels as well as all corporate functions. 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.

Based on the recommendation of the Audit Committee, the Board has approved the appointment of M/s. PriceWaterhouse Coopers Services LLP as Internal Auditors of the Company for the Financial Year 2025. 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 37th AGM till the conclusion of the 42nd AGM, which was also approved by the Members at the 37th 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 Report on the Financial Statements for the Financial Year 2024. However, the Statutory Auditors have drawn attention i.e. Emphasis of Matter with regard to Note 43(c) of the Standalone Financial Statements, in their report, details of which are as follows:

"Emphasis of Matter

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 November 21, 2014, the Honorable 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 Honorable Supreme Court of India. The Hon''ble Supreme Court of India on January 21, 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 March 31, 2024 to the carrying value of the leasehold rights (reflected as prepayments) aggregating to '' 47.34 million (March 31, 2023: 48.54 million) and the hotel assets thereon (reflected as property, plant and equipment) aggregating to '' 366.17 million as at March 31,2024 (March 31,2023: '' 348.46 million).

Our opinion is not modified in respect of this matter."

The Auditors have clarified that their opinion is not modified in respect of the above matter. Detailed explanation in respect of the matter has been provided under Note 43(c) of the 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 2024. 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

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 2024, 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

Based on such confirmations / declarations, 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 the following Committees of the Board as per the requirements of the Act and the Listing Regulations:

- Audit Committee;

- Compensation, Nomination and Remuneration Committee;

- Corporate Social Responsibility and ESG Committee;

- Stakeholders'' Relationship Committee; and

- Risk Management Committee.

Policy on Compensation, Nomination and Remuneration

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/2023/11 /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

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.

Corporate Social Responsibility

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.

EMPLOYEE STOCK OPTION SCHEME (ESOP)

Based on the recommendation of the CNR Committee at its meeting held on May 30, 2023, the Board of Directors at its meeting held on July 03, 2023 formulated the CHL Employee Stock Option Plan 2023 to create and grant upto a maximum of 10,00,000 Employee Stock Options, in one or more tranches, to the Eligible Employees from time to time. The same was also approved by the Members of the Company in the AGM by way of Special Resolution held on August 10, 2023.

During the year under review, the Company had the following ESOP Schemes:

- Chalet Hotels Limited - Employee Stock Option Plan 2018

- CHL Employee Stock Option Plan 2022

- CHL Employee Stock Option Plan 2023

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 2024 and hence does not form part of this Report. Approval of the Members was sought at the AGM held on August 10, 2023 in respect of material modification of a

Material Related Party Transaction for raising of additional funds from the Promoters of the Company upto an amount of '' 1,000 million and an amount of '' 700 million is outstanding as on March 31,2024.

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 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

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, which is available on the Company''s website at www.chalethotels.com/wordpress/ wp-content/uploads/2021/12/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 65 to 68 of the Integrated Reporting section of the Annual Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company''s Vigil Mechanism / Whistle Blower Policy provides a formal mechanism to the Directors, the employees and other stakeholders of the Company to report their concerns about unethical behavior, 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.

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, five complaints on sexual harassment were received and six complaints including one from the previous year have been resolved. 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

Further, your Company has been listed as a Great Place to Work Â® Certified, for the fifth time in a row and certified in the 2023 list of ''India''s Best Workplacesâ¢ for Women 2023 - Mid-size (Top 50).

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, 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.

ENVIRONMENTAL INITIATIVES AND ENERGY MANAGEMENT

Your Company was the first Hospitality Company, globally, to join Climate Group''s RE100, EP100 and EV100 initiatives and make commitments linked to renewable electricity, energy efficiency and electric mobility respectively and continues in its commitment towards the environment. The Company has undertaken various initiatives during the year under review to maintain a balance with the environment with a steady focus on sustainability. Detailed reporting on the aspects of ESG are covered in the Integrated Reporting Section of this Annual Report and the Business Responsibility and Sustainability Report. As required under 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.

INTEGRATED REPORTING

Your Company has provided Integrated Report for the financial year under review, which encompasses both financial and non-financial information and stakeholders'' relationships to enable well informed decisions and a better understanding of the Company''s value creation model. The Report also touches upon aspects such as organization''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.

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

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

MATERIAL CHANGES AND COMMITMENTS

The Company issued and allotted 12,626,263 Equity Shares under QIP to the Eligible Qualified Institutional Buyers on April 03, 2024 as detailed hereinabove.

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

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:

- I ssue 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 express their deepest appreciation to the Members for their support received and their continued confidence in the Company''s vision and endeavors. Your Directors extend their gratitude and sincerely appreciate 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.

We are also immensely grateful to our Company''s employees at all levels whose hard work, expertise, and commitment are the driving force behind our success.

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

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

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.

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

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;

(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

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.

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.

Cost Audit

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

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.

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

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

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

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.

COMPLIANCE WITH SECRETARIAL STANDARDS

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

The Board of Directors present your Company''s Thirty Seventh Annual Report along with the Audited Financial Statements for the Financial Year ended March 31,2022.

Financial Results

Your Company''s financial performance for the Financial Year ended March 31,2022 is summarized below:

'' in million
Particulars	Standalone		Consolidated
	For the year ended		For the year ended
	March 31,2022	March 31, 2021	March 31,2022	March 31, 2021
Revenue from Operations	4,807.97	2,755.06	5,078.07	2,855.76
Other Income	206.74	203.16	219.32	219.44
Total Income	5,014.71	2,958.22	5,297.39	3,075.20
Total Expenses	3,836.10	2,614.58	4,093.30	2,785.16
EBITDA from Continuing Operations	1,178.61	343.64	1,204.09	290.04
(Loss) from Discontinued Operations	(65.37)	(36.76)	(65.37)	(36.76)
EBITDA	1,113.24	306.88	1,138.72	253.28
Depreciation and Amortization Expenses	1,090.92	1,076.34	1,184.23	1,174.62
Finance Costs	1,399.54	1,450.08	1,444.13	1519.78
(Loss) before Exceptional items and Tax	(1,377.22)	(2,219.54)	(1,489.64)	(2,441.12)
Exceptional Items	(44.58)	(41.71)	(44.58)	(41.71)
(Loss) before tax	(1,421.80)	(2,261.25)	(1,534.22)	(2,482.83)
Tax expense/(credit)	(720.35)	(1,093.21)	(719.53)	(1,091.55)
(Loss) for the year	(701.45)	(1,168.04)	(814.69)	(1,391.28)
Total Comprehensive (Expense) attributable to Owners of the Company	(701.16)	(1,168.47)	(813.19)	(1,391.00)
Earnings Per Share (Basic & Diluted) (?)	(3.42)	(5.70)	(3.98)	(6.78)

The Company, in continuation of its strategy to stay resolute in the face of unforeseen changes, implemented various strategic and tactical changes during the year under review to bring about a turnaround and march ahead. All this was done while staying focussed on Company''s sustainable development goals, whereby, we aim at making a positive impact on the environment and thereby contributing to our people and our planet.

During the year under review, the Company (including its subsidiary):

- completed the brand upgrade of Renaissance to The Westin. The Hotel is flagged as ''The Westin Mumbai Powai Lake'' from March 01, 2022. The lobby, Indian restaurant, oriental tapas bar, deli, gym, spa and 150 rooms have been renovated. Renovation of the balance 150 rooms in Tower 2 and banquets to commence from June 2022.

- re-strategized asset mix and repurposed retail assets in Mumbai (The Orb) and Bengaluru (Inorbit Mall) to commercial office space. Conversion of The Orb is complete and ~50% of the area has been let out as at March 31, 2022. Conversion of the Inorbit Mall at Bengaluru is underway and expected to be completed by Q3 FY 2022-23.

- realigned the Company''s strategy with changing market dynamics and decided to change the use in respect of the land from the proposed 150 room Hotel at The Westin Complex, Powai to a proposed ~0.75 million sq. ft. of Commercial office space.

- started work on 88 unfinished rooms at Novotel Pune (Belaire Hotels Private Limited). These rooms are expected to be operational by Q3 FY 2022-23.

- work on the Commercial Projects at Powai, Mumbai and Whitefield, Bengaluru are in full swing, which are expected to be completed by Q4 FY 2022-23 and Q2 FY 2022-23 respectively.

- arrived at a settlement with Hindustan Aeronautics Limited (HAL) and obtained their NOC, to get necessary regulatory approvals and recommence construction at Koramangala, Bengaluru in due course.

Work at The Westin Hyderabad HITEC City has been on hold since March 2020. Keeping in mind the improved market dynamics, deliberation to start work is ongoing.

The sentiments remained volatile through the year in tandem with the pandemic impacting the Hospitality business. However, the year closed on a positive note with business bouncing back by the second half of February 2022.

Rental & Annuity Revenue of '' 1,050 million contributed 20% to the Company''s Total Revenue as on March 31,2022, as against '' 931 million, which was 33% of the Company''s Total Revenue in the previous year.

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

Going Concern

During the year under review, though the hospitality operations of your Company remained affected by the pandemic, there was an improvement in comparison with the previous financial year with revenue growing by 103% to '' 4,100 million. Your Company has managed its cash flows effectively through stable revenues from the Rental & Annuity Segment and tight control on costs. The Company has met all monetary obligations out of cash generated from operations and debt raised. Accordingly, the Financial Statements for the year under review have been prepared on a Going Concern basis.

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

The ''Retail & Commercial'' segment has been renamed as ''Rental & Annuity'' segment, in line with the various strategic initiatives undertaken during the year under review.

Capital Structure Authorized Share Capital

During the year under review, there was no change in the Authorized Share Capital of the Company. The Authorized Share Capital of your Company is '' 4,451,000,000/-.

Paid-up Equity Share Capital

During the year under review, there was no change in the Paid-up Equity Share Capital of the Company. The Paid-up Equity Share Capital of your Company stands at '' 2,050,238,640/-.

Paid-up Preference Share Capital

During the year under review, further calls were made in respect of the Series B Zero Coupon Non-Cumulative, NonConvertible, Redeemable Preference Shares (''NCRPS'') thereby resulting in an increase in the Paid-up Preference Share Capital of the Company from '' 1,410,000,000 to '' 1,910,000,000/-. Further, the Company has made the final call of '' 250,000,000 on the Series B NCRPS, post the end of the Financial Year, thereby making both, Series A and Series B NCRPS, fully paid up and increasing the paid-up Preference Share Capital of the Company to '' 2,160,000,000/-. The amounts raised have been utilized in line with the Subscription Agreement referred to hereinbelow.

Your Company had entered into a Subscription Agreement dated June 4, 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). The Promoters of your Company have further agreed that in the event the amount required towards meeting the project expenses exceeds the Initial Subscription Amount, the Promoters shall provide such additional funds as may be required to meet the project expenses.

Borrowings

During the year under review, the Company availed of additional borrowing facilities, inter-alia, for its Projects and meeting working capital requirements. At the end of the year, the Company''s borrowing on a standalone basis stood at '' 22,963.40 million and at '' 23,593.15 million on a consolidated basis (both excluding Preference Share Capital of '' 1,746.67 million) as at March 31,2022, as compared to '' 18,505.38 million on a standalone basis and '' 19,388.62 million on consolidated basis (both excluding Preference Share Capital of '' 1,194.61 million) as at March 31,2021.

The foreign currency borrowings as on March 31, 2022 along with those of the subsidiary company were lower at USD 15.11 million as compared to USD 20.80 million as at March 31,2021.

Subsequent to the year end, the Company has repaid the foreign currency borrowing amounting to USD 7.32 million on April 26, 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/policies/.

No dividend is being recommended by the Board of Directors on the Equity Shares and the 0.001% NonCumulative, Non-Convertible Redeemable Preference Shares for the year under review.

On account of the losses incurred during the Financial Year under review, no amount has been proposed to be transferred to Reserves.

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.

Development Pipeline Hospitality

Your Company will continue to evaluate the demand dynamics in order to assess its decision on recommencement of the Hotel Project, The Westin Hyderabad HITEC City and

proposed new hotel at Airoli, Navi Mumbai. The work on expansion of the Novotel in Pune with additional 88 rooms has commenced and expected to be completed by Q3 FY 2022-23.

Rental & Annuity

The Company has decided to repurpose the land use of proposed 150 room Hotel at The Westin Complex, Powai to a Commercial office space with potential leasable area of ~0.75 million sq. ft., subject to receipt of regulatory approvals. Consequently, the potential development pipeline now assumes the construction of leasable area of nearly 2.2 million sq. ft. across the two locations, namely Powai at Mumbai and Whitefield at Bengaluru. It is to be noted that the development plan underway is for 1.4 million sq. ft. Also, considering the retail assets of the Company at Sahar, Mumbai and re-purposing of some assets at Whitefield, Bengaluru, the total leasable area including the office building already in operation will be ~3 million sq. ft.

Residential Project - Koramangala, Bengaluru

The Hon''ble Karnataka High Court on May 29, 2020 (''Order''), delivered its judgement in the writ petition filed by your Company, in connection with the cancellation by Hindustan Aeronautics Limited (''HAL'') of its height permission for the project of your Company. The Hon''ble High Court had by the judgement inter-alia allowed the writ petition in part and quashed the cancellation of the height NOC by HAL [in so far as cancellation of NOC for construction upto 62 meters above ground level, so that the top of the structure when erected shall not exceed 932 meters Above Mean Sea Level (''AMSL'')] and remanded the matter to HAL for resurvey within a time bound manner and thereafter, based on the re-survey, to proceed further in accordance with law to file an appeal challenging the said Order. Both, HAL and the Company had filed an appeal challenging certain parts of the Order.

The Company and HAL after discussions, signed terms for an amicable settlement of all the disputes between the parties on October 22, 2021, as per which the Company would undertake demolition of already constructed structures above 932 meters AMSL. Further, the Hon''ble Karnataka High Court on October 26, 2021, disposed of the Writ Appeals in terms of the settlement. The Company has executed Supplemental MOUs with all existing flat owners, with revised terms, inter-alia, consenting to the revised development plans, subject to applicable regulatory approvals. Further, flat owners above 10th floor have consented to relocate to lower floors.

Demolition work of the area above 10th floor for all the 9 buildings has been completed in April 2022, and the NOC from HAL has been received. Process for obtaining all other approvals are underway.

The Company shall commence work on receipt of all necessary approvals.

Deposits

Your Company has neither accepted nor renewed any amount falling within the purview of provisions of Section 73 of the Companies Act, 2013 (''the Act'') read with the Companies (Acceptance of Deposit) 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

During the year under review, your Company has not accepted loans from any of its Directors.

Loans, Investments, Guarantees and Securities

Your Company falls within the definition of ''Infrastructure Company'' as provided under Schedule VI of the Act and is therefore exempt from the provisions of Section 186 of the Act with regard to Loans, Investments, Guarantees and Securities. Details of loans given, 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 Standalone Financial Statements.

Foreign Exchange Earnings and Outgo

During the year under review, your Company and its subsidiary, earned foreign exchange of '' 380.18 million and '' 11.46 million respectively, as compared to '' 166.27 million and '' 3.62 million respectively in the previous year.

The total foreign exchange outgo of your Company and its subsidiary during the year under review was '' 525.82 million and '' 36.58 million, respectively, as compared to '' 377.33 million and '' 57.97 million, respectively, in the previous year.

Subsidiaries, Associates and Joint Ventures

The Company has three subsidiaries and two associates as on March 31, 2022. There has been no material change in the nature of the business of the subsidiaries. The Company does not have any Joint Venture. Further, no company became or ceased to be a Subsidiary, Joint Venture or Associate of the Company during the year under review.

Belaire Hotels Private Limited (''BHPL'') and Seapearl Hotels Private Limited (''SHPL'') are wholly-owned subsidiaries of the Company. BHPL is the owner of ''Novotel Pune Nagar Road'' Hotel. During the year under review, BHPL reported a Total Income of '' 278.70 million and Net Loss (after tax) of '' (111.02) million. SHPL had insignificant or no operations and reported a Total Income of '' 4.04 million and Net Profit (after tax) of '' 2.72 million during the year under review. The Company had filed a Scheme of Arrangement and Amalgamation of Belaire Hotels Private Limited and Seapearl Hotels Private Limited 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 (''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. As on the date of this Report, the final order of the NCLT is awaited.

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

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 had for securing the supply of renewable energy acquired 26.1% 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 statement under Rule 8 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/policies/.

Management Discussion and Analysis, Corporate Governance and Business Responsibility Reports

Your Company has complied with the requirements of Corporate Governance under the Act and the Listing Regulations. A separate section on Corporate Governance, a detailed report on Management Discussion & Analysis and Business Responsibility Report form an integral part of this Annual Report.

Directors and Key Managerial Personnel

The Board of Directors of the Company at its Meeting held on November 10, 2020 had, based on the recommendation of the Compensation, Nomination and Remuneration Committee, reappointed Mr. Sanjay Sethi as the Managing Director & CEO of the Company for a further period of three years w.e.f. February 09, 2021, which was approved by the Members at the Annual General Meeting (''AGM'') held on August 12, 2021.

In accordance with the Act and the Articles of Association of the Company, Mr. Sanjay Sethi (DIN: 00641243) is liable to retire by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. Accordingly, the re-appointment of Mr. Sanjay Sethi is being placed for approval of the Members at the ensuing AGM. The information pertaining to the Director being re-appointed as required pursuant to the Listing Regulations and Secretarial Standard-2 forms part of the Notice convening the ensuing AGM.

Mr. Milind Wadekar, VP - Finance & Tax and the Interim Chief Financial Officer of the Company was appointed as the Chief Financial Officer of the Company effective August 10, 2021. Mr. Rajneesh Malhotra, Chief Operating Officer was designated as a Key Managerial Personnel w.e.f. October 28, 2021.

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.

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 Annual Return of your Company in Form MGT-7 for the Financial Year 2021-22, is hosted on the website of your Company at www.chalethotels.com/annual-reports/.

Number of Board Meetings

During the Financial Year 2021-22, the Board of Directors met five times. The details of the meetings held have been given in Corporate Governance Report.

Directors'' Responsibility Statement

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 31,2022, 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 loss of your Company for the Financial Year ended March 31,2022;

(iv) The Financial Statements for the Financial Year ended March 31, 2022 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

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 2022-23. 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.

During the year under review, there were no material or serious instances of fraud falling within the purview of Section 143 (12) of the Act and Rules made thereunder, by officers or employees reported by the Statutory Auditors of the Company during the course of the audit. Therefore, no details are required to be disclosed under Section 134(3)(ca) of the Act.

Auditors and Auditors'' Report Statutory Auditors

At the AGM of your Company held on September 22, 2017, M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022), were appointed as the Statutory Auditors for a term of five consecutive years.

The Audit Committee and the Board 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 for a second term of five years i.e. from conclusion of the 37th AGM till the conclusion of the 42nd AGM. The necessary resolution seeking your approval for their appointment as Statutory Auditors is included in the Notice of the ensuing AGM along with other necessary disclosures required under the Act and the Listing Regulations.

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 report on the Financial Statements for the Financial Year 202122. However, the Statutory Auditor has drawn attention i.e. Emphasis of Matter with regard to Note 40(c) of the Standalone Financial Statements, in their report, details of which are as follows:

"Emphasis of Matter

We draw attention to Note 40(c) of the standalone financial statements, in respect of the entire building comprizing 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 '' 49.74 million (31 March 2021: '' 50.93 million) and carrying value of property, plant and equipment as at 31 March 2022 is '' 372.12 million (31 March 2021: '' 400.77 million).

Our opinion is not modified in respect of the above matter."

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

Detailed explanation in respect of the matter has been provided under Note No. 40(c) of the 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. BNP & Associates, Company Secretaries in Practice (Firm Registration No. P2014MH037400) to undertake Secretarial Audit for Financial Year 2021-22. 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.

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 Mr. Chirag Shah, Proprietor of 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 2021-22, at the remuneration approved the Members at the previous AGM.

During the year under review, no material fraud had been reported under Section 143(12) of the Act 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 at the meeting of the Board of Directors held on May 10, 2022. The Directors expressed their satisfaction with the evaluation process.

Independent Directors

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 Directors to whom online self-assessment proficiency test was applicable, have completed the same.

Committees

Corporate Social Responsibility (''CSR'') Committee

Your Company had adopted a CSR Policy indicating the broad philosophy and objectives, which is available on the website of your Company at www.chalethotels.com/ policies/.

The annual report on CSR activities and details about the composition of CSR 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 same is available on the website of your Company viz. www.chalethotels.com/policies.

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 of the quality required to run the Company successfully;

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

The remuneration / compensation / commission (including annual increments, if any) for the Directors and Senior Management will be determined and recommended by the CNR Committee and will be subject to approval by the Board.

Audit Committee

The Committee comprises of two Independent Directors i.e. Mr. Joseph Conrad D''Souza (Chairperson), Mr. Hetal Gandhi (Member) and Mr. Ravi C. Raheja, Promoter and Non-Executive Director (Member). There were no changes in the composition of the Committee during the year under review. During the year under review, all the recommendations made by the Committee were accepted by the Board.

Further, on October 21, 2021, the Board of Directors had formed a separate Risk Management Committee and renamed the Audit and Risk Management Committee to Audit Committee.

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 Mr. Sanjay Sethi, Managing Director & CEO of your Company, under the Chalet Hotels Limited -Employee Stock Option Plan 2018, to vest in three tranches. The two tranches of the ESOPs granted had already vested whereas the third and final tranche has vested during the year under review. The first tranche that was unexercised has since lapsed during the year under review. No options have been exercised during the year under review or till date. The Board of Directors of the Company had at its meeting held on May 10, 2022, approved variation in the terms of the Scheme and recommended extension of the exercise period from two years to four years, based on the recommendation of the CNR Committee, subject to approval of the Members of the Company.

In terms of the provisions of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, the details of the Stock Options granted under the ESOP Scheme have been made available on the website of the Company at www.chalethotels.com, under the head ''Annual Reports'' in the Investor Relations section. Further, certificate from M/s. BNP & Associates, Secretarial Auditors of the Company, with respect to implementation of ESOP, would be placed at the ensuing AGM for inspection by the Members of the Company.

Further, the Board of Directors of the Company at the said meeting also approved a new ESOP Scheme, viz. CHL Employee Stock Option Plan 2022 envisaging a grant of 1,217,831 Options exercisable into an equal number of Equity Shares of the Company. The same was based on the recommendation of the CNR Committee and is subject to approval of the Members of the Company.

Particulars of Contracts or Arrangements with Related Parties

The transactions / contracts / arrangements entered into by the Company with related party(ies) as defined under the provisions of Section 2(76) of the Companies Act, 2013, during the financial year under review were in Ordinary Course of Business and on an Arm''s Length basis.

The disclosure in Form AOC-2 is not applicable to the Company for the Financial Year 2021-22 and hence does not form part of this Report.

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

Your Company had a combined Audit and Risk Management Committee looking after the functions of both the Committees and has constituted a separate Risk Management Committee with effect from October 21,2021 as required under the Listing Regulations and approved its Terms of Reference. 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 need varying approaches for mitigation. The Risk Management framework defines the risk management approach across the enterprise. The risk framework which seeks to create transparency, minimize 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. The Policy is available on the Company''s website at www.chalethotels.com/policies/.

Details of the key risks faced by your Company and measures for mitigation have been provided on page 53 of the Integrated Reporting section of the Annual Report.

Vigil Mechanism Policy and Whistle Blower Policy

Your Company has, in accordance with Section 177 of the Act, formulated a 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 and 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 or ethics policy. The said policy is available on the Company''s website at www.chalethotels.com/policies/.

The Policy covers the adequate safeguards against victimization of Directors and employees who avail of the mechanism and also have 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

The Hon''ble Karnataka High Court on October 26, 2021, disposed of the Writ Appeals in respect of the residential project at Bengaluru, upon amicable settlement of all the disputes with HAL.

Please refer to the section ''Residential Project - Koramangala, Bengaluru'' in this Report, for more details.

Prevention of Sexual Harassment

During the year under review, your Company received and/ or resolved three complaints on sexual harassment, and appropriate action has been 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

Further, your Company has been certified by the Great Place to WorkÂ® Institute for the third time in a row for benchmarking and planning actions to strengthen its workplace culture.

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.

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 organization''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 management team of your Company sets its goals for improvement, leading to various initiatives including conservation of energy. With an aim to maintain a balance with the environment and a steady focus on sustainability, your Company has led various initiatives including sourcing of energy from renewable resources. Your Company has become 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, Chalet has made the following commitments:

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

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

â¢ 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 and all properties will be equipped with EV Charging points accessible to both employees and visitors.

Various aspects of ESG are being covered in the Integrated Section of this Annual Report.

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

Compliance with Secretarial Standards

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.

- Revision in financial statements as provided under Section 139 of the Act.

Acknowledgements

Your Company lauds the Central Government, State Governments, Municipal Corporations and other government bodies for their initiatives to combat the pandemic and steps in aiding the industry to emerge out of this crisis.

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

Mar 31, 2019

Dear Members Chalet Hotels Limited,

The Board of Directors are pleased to present your Companyâs Thirty Fourth Annual Report and the Audited Financial Statements of your Company for the Financial Year ended March 31, 2019.

Financial Results

Your Companyâs financial performance for the Financial Year ended March 31, 2019 is summarized below:

(Rs. in million)

	Standalone		Consolidated
Particulars	For the year ended		For the year ended
	March 31, 2019	March 31, 2018	March 31, 2019	March 31, 2018
Revenue from Operations	9,871.73	7,955.47	9,871.73	7,955.47
Other Income	436.03	447.44	476.08	557.31
Total Income	10,307.76	8,402.91	10,347.81	8,512.78
Total Expenses	6,670.40	5,504.65	6,679.47	5,508.01
Earnings before Interest, Depreciation, Amortisation & Tax before Exceptional Items	3,637.36	2,898.26	3,668.34	3,004.77
Depreciation and Amortisation Expenses	1,154.17	1,116.33	1,154.17	1116.33
Finance Costs	2,651.51	2,092.60	2,656.69	2119.21
(Loss) / Profit before Exceptional Items and Tax	(168.32)	(310.67)	(142.52)	(230.77)
Exceptional Items	(40.96)	(1,217.52)	(40.96)	(1,217.52)
(Loss) / Profit before Income Tax	(209.28)	(1,528.19)	(183.48)	(1,448.29)
Tax Expense	(107.21)	(519.54)	(107.21)	(519.54)
(Loss) / Profit for the year	(102.07)	(1,008.65)	(76.27)	(928.75)
Other Comprehensive Income / (Expense) for the year net of tax	(7.68)	14.66	(7.68)	14.66
Total Comprehensive Income / (Expense) for the year	(109.75)	(993.99)	(83.95)	(914.09)
Total Comprehensive Income / (Expense) attributable to Owners of the Company	-	-	(83.95)	(914.09)

Dividend

No dividend has been recommended by the Board of Directors for the year under review.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ), 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 Companyâs website viz. www.chalethotels.com.

Capital Structure Authorised Share Capital

At the beginning of the year, the Authorised Share Capital of your Company was Rs. 1,880 million.

An increase in the Authorised Share Capital amounting to Rs. 2,330 million was initiated by your Company. Further, an increase of Rs. 241 million took place pursuant to the Registrar of Companies giving effect to the increase in capital pursuant to the Scheme of Amalgamation (approved in the previous year under Orders passed by the National Company Law Tribunal, Mumbai Bench on August 2, 2017 and the National Company Law Tribunal, Bengaluru Bench on March 14, 2018) of Magna Warehousing & Distribution Private Limited with your Company. Pursuant to the above, the Authorised Share Capital of your Company has increased by Rs. 2,571 million to Rs. 4,451 million.

Of the above, the Authorised Share Capital in respect of Equity Shares increased from Rs. 1,720 million to 2,051 million and in respect of Preference Shares there was an increase from Rs. 160 million to 2,400 million.

Pursuant to a resolution passed by the Shareholders of your Company at their Extraordinary General Meeting held on January 9, 2019, your Company reclassified the Authorised Share Capital as summarised below:

Particulars	Face Value in Rs.	Pre- Reclassification No. of Shares	Total Face Value Rs. in Million	Post-Reclassification No. of Shares	Total Face Value Rs. in Million
Equity Shares	10	205,100,000	2,051	229,100,000	2,291
0.001% Non-Cumulative Redeemable Preference Shares (2400 being reclassified as Equity & 1600 subsisting)	1,00,000	4,000	400	1,600	160
0% Non-Cumulative, Non-Convertible Redeemable Preference Shares	1,00,000	20,000	2,000	20,000	2,000
Total Authorised Share Capital			4,451		4,451

Equity Share Capital

During the year under review, your Company has made a Fresh Issue of 33,928,571 Equity Shares of Rs.10 each aggregating to a face value of Rs. 339.28 million under the Initial Public Offering (âIPOâ) as detailed herein below.

Issue of Preference Shares

During the year under review, your Company has entered into Subscription Agreement dated June 4, 2018 with Mr. Ravi C. Raheja and Mr. Neel C. Raheja, Promoters of the Company, wherein they have 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) of Rs. 1,00,000 each, in 2(Two) series (viz. Series A and Series B) of 10,000 each, aggregating to Rs. 2,000 million. Accordingly, the Company has allotted 20,000 NCRPS to the subscribers on June 26, 2018.

An amount of Rs. 510 million has been called up and paid as on the date of the Balance Sheet. The amounts raised have been utilised in line with the subscription agreement referred to herein above.

The Promoters of your Company have agreed that in the event that the amount required towards meeting the project expenses exceeds the initial subscription amount, the Promoters shall, either directly or through their designated nominees, subscribe to such additional number of subscription securities as may be required to meet the project expenses.

Conversion into a Public Limited Company

During the year under review pursuant to receipt of necessary approvals from the Registrar of Companies, Mumbai, Maharashtra, your Company was converted into a Public Limited Company with effect from June 6, 2018.

Initial Public Offering

During the year under review, your Company had made its Initial Public Offering (IPO) of 58,613,571 Equity Shares of Rs. 10 each comprising of a Fresh Issue of 33,928,571 Equity Shares and an Offer for Sale (OFS) of 24,685,000 Equity Shares by some of its promoters, at a premium of Rs. 270 per Equity Share. As per the object of the offer, the net proceeds of the fresh issue were to be utilised towards repayment / prepayment of certain indebtedness and for general corporate purposes.

Your Company raised an amount of Rs. 9,500 million from the Fresh Issue and the Promoters raised Rs. 6,910 million under the OFS. Pursuant to the issue, the Equity Shares of your Company got listed on National Stock Exchange of India Limited (NSE) and BSE Limited (BSE) on February 7, 2019.

The funds raised by your Company from the Fresh Issue have been completely utilised in accordance with the objects of the IPO. There have been no deviation or variation in the terms of utilisation.

Post the issue, 71.41% of the Equity Share Capital of your Company is held by the Promoters.

Borrowings:

The aggregate borrowings of your Company stood at Rs. 15,460.32 million (including Preference Share Capital of Rs. 518.18 million) as at March 31, 2019 as compared to Rs. 27,253.09 million (including Preference Share Capital of Rs. 160 million) as at March 31, 2018.

The foreign currency borrowings as on March 31, 2019 were lower at US$ 26.11 million as compared to US$ 75.85 million as at March 31, 2018.

Your Company has repaid borrowings amounting to Rs. 13,742.34 million during the under review, from IPO proceeds and from refund of other advances, during the year under review.

Projects Under Development

Your Companyâs proposed development pipeline consists of the following projects:

Hotels

The development pipeline based on conveyance/letter of intent/memorandum of understanding executed, assumes an addition of 3 (Three) hotels with a cumulative inventory of ~580 rooms. Of this, two proposed hotels would be in the Mumbai Metropolitan District and one proposed hotel at Hyderabad.

Commercial, Retail and Office Space

The proposed development pipeline assumes a construction of leasable area of over a million square feet across two locations, namely Mumbai and Bengaluru.

Re-Branding Hotels

Your Company has entered into a memorandum of understanding with Marriott Hotels India Private Limited for rebranding w.e.f. April 1, 2020, of the existing hotel viz. Renaissance Mumbai Convention Centre Hotel as âWestin Mumbai Powaiâ. The product improvement plan for the proposed branding will be undertaken.

Residential Project - Koramangala, Bengaluru

The residential development project at Bengaluru is on hold as the matter is sub-judice before the Honâble Karnataka High Court on account of a dispute on the permissible height of the structure.

Deposits

Your Company has neither accepted nor renewed any deposits during the year under review.

Loan from Directors

During the year under review, your Company has not accepted loans from any of its Directors.

Loans, Guarantees or Investments

Your Company falls within the definition of âInfrastructure Companyâ as provided under Companies Act, 2013 (âActâ) and is therefore exempt from the provisions of Section 186 of the Act with regard to Loans and Guarantees. Details of investments made by your Company are given in Note 7 of the standalone Financial Statements.

Foreign Exchange Earnings and Outgo

During the year under review, your Company earned foreign exchange of Rs. 4,968.05 million as compared to Rs. 4,610.00 million in the previous year.

The total foreign exchange outgo during the year was Rs. 1,262.53 million as compared to Rs. 899.00 million in the previous year.

Subsidiaries and Associate Companies

Chalet Hotels & Properties (Kerala) Pvt. Ltd. is a subsidiary of your Company, which had insignificant or no operations during the year under review. The audited financial statements of the subsidiary company have been made available on the website of the Company viz: www.chalethotels.com

During the year under review, Chalet Hotels & Properties (Kerala) Pvt. Ltd. had issued 27,777,770 Equity Shares of Rs. 10 each at par on rights basis to the existing shareholders of your Company. Your Company subscribed to 25,000,000 Equity Shares. The amount raised by the subsidiary has been utilised towards reduction of debt.

Your Company has for securing the supply of renewable energy acquired 20.8% of the Equity Share Capital of Krishna Valley Power Private Limited and 26% of the Equity Share Capital of Sahyadri Renewable Energy Private Limited, being entities engaged in generation of hydro power. Your Company does not have the ability to participate and neither is involved in the operations and/or activities of these companies/entities, and neither has exposure or rights to variable returns. Accordingly, the financials of these companies have not been considered for the consolidation of Financial Statements.

The Consolidated Financial Statements of your Company and its Subsidiary, prepared in accordance with the relevant Accounting Standards, duly audited by the Statutory Auditors, form a part of the Annual Report and are reflected in the Consolidated Accounts.

The statement under Rule 8 of the Companies (Accounts) Rules, 2014 relating to Subsidiaries & Associates is annexed as an Annexure II to this report.

Corporate Governance, Business Responsibility Report & Management Discussion & Analysis

Your Company has complied with the Corporate Governance requirements under the Act and Listing Regulations. A separate section on Corporate Governance and detailed reports on Management Discussion & Analysis and Business Responsibility form an integral part of this report.

Directors

During the course of the year under review, Mr. Chandru L. Raheja has resigned from the Board of Directors with effect from April 26, 2018 and Mr. Ramesh M. Valecha & Mr. Rajeev Chopra have resigned from the Board of Directors with effect from May 2, 2018 and have consequently ceased to be Directors of your Company.

The Board places on record its appreciation for the valuable guidance and assistance received from these Directors during their respective tenures.

Mr. Hetal Gandhi, Mr. Joseph Conrad DâSouza, Mr. Arthur De Haast and Ms. Radhika Piramal have been appointed as Non-Executive & Independent Directors on the Board of Directors for a period of 5 years with effect from June 12, 2018.

Mr. Hetal Gandhi has been appointed as the Chairman of the Board of Directors of your Company with effect from June 12, 2018.

Mr. Sanjay Sethi, Managing Director & CEO and Mr. Rajeev Newar, Executive Director & CFO are due to retire by rotation at the ensuing Annual General Meeting of your Company, and being eligible, offer themselves for re-appointment. The approval of the shareholders for their appointment / re-appointment as Directors has been sought in the Notice convening the AGM of your Company.

In view of inadequacy of profits for payment of managerial remuneration, your Company is also seeking approval of the shareholders by way of special resolutions for payment of remuneration to Mr. Sanjay Sethi, Managing Director & CEO and Mr. Rajeev Newar, Executive Director & CFO.

Annual Return

The Annual Return of your Company for the Financial Year 2018 - 2019 shall be hosted on the website of your Company, i.e. www.chalethotels.com, under the Head âAnnual Returnsâ in the Investor Section.

The details forming part of the extract of the Annual Return in Form no. MGT-9 as per Section 92(3) and 134(3) of the Act, read with the rules framed thereunder is annexed as Annexure III hereto.

Number of Board Meetings

During the Financial Year 2018-2019, the Board of Directors met 13 (thirteen) times. The details of the meetings are given in the Corporate Governance Report.

Directorsâ 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 Companyâs internal financial controls were reasonable and adequate for the Financial Year 2018-19.

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

(i) I n the preparation of the accounts for the Financial Year ended March 31, 2019, 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 loss of your Company for the Financial Year ended March 31, 2019;

(iv) The Financial Statements for the Financial Year ended March 31, 2019 have been prepared on a âgoing concernâ basis;

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

(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.

Adequacy of Internal Financial Control Systems

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

Your Company has appointed M/s PricewaterHouse Coopers Private Limited as Internal Auditors. The reports of the Internal Auditors are placed before the Audit Committee for their review and improvements.

Details of Fraud

No material frauds were detected during the year under review.

Board Effectiveness & Board Evaluation Annual Board Evaluation

Pursuant to the provisions of the Act and Listing Regulations, the Board of Directors has carried out an annual evaluation of its own performance including its committees, for the Financial Year under review. For the aforesaid purpose a structured questionnaire was prepared after taking into consideration the guidance note issued by SEBI on Board evaluation, covering various aspects of the Boardâs 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 performance evaluation of the Independent Directors was carried out by the entire board (excluding the Director being evaluated). The feedback and suggestions received from all the Directors would be discussed at the subsequent Board Meeting. The Directors expressed satisfaction with the evaluation process.

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 fall under any disqualifications specified under the Act.

Committees

Your Company has constituted Committees of the Board as per the requirements of the Act and Listing Regulations. Details of constitution of the Committees have been enumerated in the Corporate Governance Report which forms a part of the Annual Report.

Corporate Social Responsibility (CSR)

Your Company has adopted a CSR Policy indicating the broad philosophy and objectives, which is available on the website of your Company, viz. www.chalethotels.com. A CSR Committee of the Board of Directors has been constituted, details of which are enumerated in the Corporate Governance Report which forms a part of the Annual report.

In view of your Company having inadequate average net profits in the immediately preceding three financial years, your Company did not entail any obligation towards CSR for the Financial Year under review. Your Company is however committed to the social cause, works as a responsible corporate citizen and is making all efforts to reduce its carbon footprint. The annual report on CSR activities and details about the composition of CSR committee as required by Section 135(2) of the Act is annexed as Annexure IV to this report.

Compensation, Nomination & Remuneration Policy

Your Company has in compliance with the provisions of Section 178 of the Act and Regulation 19 of the Listing Regulations, on May 10, 2019, adopted a Policy for Appointment of Directors and remuneration of Directors and Senior Management. The same is available on the website of your Company viz. âwww.chalethotels.comâ

Salient features

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

- the level and composition of remuneration be reasonable and sufficient to attract, retain and motivate directors and senior management of the quality required to run the Company successfully;

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

- remuneration to directors, key management 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 compensation payable to the Wholetime Directors and Senior Management Personnel have been reviewed by the CNR Committee. The annual increment to the Wholetime Directors and Senior Management of your Company has been approved by the Board based upon recommendation of the CNR Committe. The Policy is available on the website of the Company viz: www.chalethotels.com

Employee Stock Option Scheme (ESOP)

During the year under review, the Board has based on the recommendation of the Compensation, Nomination & Remuneration Committee, granted options in respect of 2,00,000 Equity Shares of Rs. 10 each at a price of Rs. 320 each to Mr. Sanjay Sethi, Managing Director & CEO of your Company, under the Chalet Hotels Limited Employee - Stock Option Plan 2018 (ESOP).

In terms of the provisions of the SEBI (Share Based Employee Benefits) Regulations, 2014, the details of the Stock Options granted under the ESOP Scheme has been made available on the website of the Company at https://www.chalethotels.com/annualreport/ Further, BSR & Co LLP, Statutory Auditors are issuing a certificate with respect to implementation of Employee Stock Option Scheme, in accordance with the said Regulations.

Statutory Auditors

At the Annual General Meeting of your Company held on September 22, 2017, M/s B S R & Co., LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022), were appointed as the Statutory Auditors for a term of five consecutive years.

The Report of the Statutory Auditor along with its Annexure forms a part of this Annual Report. The Auditorsâ Report to the members for the year under review was issued with 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 Auditor in their report on the financial statements for the Financial Year 2018-2019. However, the Statutory Auditor has drawn attention i.e. an Emphasis of Matter with regard to Note No 42 (c) and Note 49 of the Standalone Financial Statements, in their report, details of which are as follows:

(1) Note 42 (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 lndia. 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.

(2) We draw attention to Note 49 to the standalone annual financial results, relating to remuneration paid to the Managing Director & CEO and Executive Director & CFO of the Company for the financial year ended 31 March 2019, being and excess of the limit prescribed under section 197 of the Companies Act 2013 by Rs. 52.41 Million, which is subject to the approval of the shareholders.

The Statutory Auditor has clarified that their opinion is not qualified in respect of these matters.

Detailed explanation in respect of the matter at Item No. 1 has been provided under Note No 42(c) of the Standalone Financial Statements.

During the current year, the managerial remuneration paid by your Company to its Managing Director & CEO and Executive Director & CFO is in excess of limits laid down under Section 197 of the Act read with Schedule V to the Act by Rs. 52.41 million. Your Company is in the process of obtaining approval from its shareholders at the forthcoming Annual General Meeting for such excess remuneration paid.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed M/s. Alwyn Jay & Co., Company Secretaries in Practice (Firm Registration No. P2010MH021500) to undertake Secretarial Audit for Financial Year 2018 - 19. The Secretarial Audit Report is annexed herewith as Annexure V. There are no qualifications or reservations in the report.

Cost Audit

During the current year, audit of cost records as specified under section 148(2) of the Act, was not applicable to 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 (ââRPTsââ) which is available of the website of your Company viz. âwww.chalethotels.comâ.

All contracts, arrangements or transactions entered into during the year under review by the Company with Related Parties were in ordinary course of business and on an armâs length basis.

During the year under review, the Company had not entered into any contract/ arrangement/ transaction with Related Parties, which are materiallysignificant as per thePolicy adopted by your Company. The Policy is available on the Companyâs website at https://www.chalethotels.com/policies/

Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 along with the justification for entering into such contract or arrangement in Form AOC-2 does not form part of the report. However, the Directors draw attention of the members to Note No. 49 of the Standalone Financial Statement which sets out related party disclosures.

Risk Management

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. This framework seeks to create transparency, minimize adverse impact on business objective and enhance your Companyâs competitive advantage. The Policy is available on the Companyâs website at https://www.chalethotels.com/policies/

The Risk Management framework defines the risk management approach across the enterprise. Your Company is faced with risks of different types, each of which need varying approaches for mitigation. Details of various risks faced by your Company are provided in the Management Discussion and Analysis.

Further, your Company has constituted a Risk Management Committee of your Company as required under the Listing Regulations as amended by the SEBI (Listing Obligations & Disclosure Requirements) (Amendment) Regulations, 2018.

Vigil Mechanism Policy & Whistle Blower Policy

Your Company has, in accordance with Section 177 of the Act, drawn a Vigil Mechanism Policy for its Directors and Employees, to enable reporting of any wrongdoing within the Company/ Branches/ Hotels that falls short of your Companyâs business principles on ethics and good business practices. The said policy is available on https://www.chalethotels.com/policies/

Adequacy of Internal Financial Controls with Reference to the Financial Statements

Your Company has in place 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, safeguard of assets, reliability of financial control and compliance with applicable laws. The operations of the hotel are largely managed through globally reputed hospitality companies which have their internal control systems in place.

Significant and Material Orders Passed by Regulators, Courts or Tribunals Impacting the Going Concern Status and Companyâs Operations in Future

During the year under review, there have been no significant and material orders passed by regulators, courts or tribunals impacting the going concern status and your Companyâs operations in future.

The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013

Your Company has constituted an Internal Complaints Committee in compliance with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. The said policy is available on https://www.chalethotels.com/policies/

During the year under review, your Company received 4 (four) complaints on sexual harassment, all of which have been resolved and appropriate action taken, wherever necessary. There are no pending cases. Workshops have been conducted from time to time to promote awareness on the issue.

Human Capital Initiatives & Particulars of Employees

Your Company focuses on building on the capability of its employees, through training and development and work life balance. During the year under review your Company has undertaken various training initiatives for nurturing and developing talent.

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.

Further, 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, 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. The said information is available for inspection at the registered office of the Company during business hours on working days of the Company, upto the date of ensuing AGM. Any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The Annual Report including the aforesaid information is also available on the Companyâs website.

Environmental Initiatives and Energy Management

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.

Technology absorption: Not applicable to your Company.

Material Changes and Commitments

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.

Acknowledgements

Your Directors would like to thank the shareholders for the support received during the IPO 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, stock exchanges, depositories, merchant bankers, monitoring agency, banks & financial institutions, legal counsels, registrar & share transfer agent, advertising agencies, auditors, hotel operators, vendors and other key stakeholders. Your Directors place on record their gratitude to the employees at all levels.

For and on behalf of the Board of Directors of Chalet Hotels Limited

Hetal Gandhi

Place: Mumbai Chairman

Date: May 10, 2019 (DIN: 00106895)

Mar 31, 2018

The Directors have pleasure in presenting their 33^rd Annual Report together with its Audited Financial Statements for the Financial Year ended March 31, 2018.

The Financial Statements for the year ended March 31, 2018 have been prepared in accordance with Indian Accounting Standards (Ind AS) as per The Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of The Companies Act, 2013 (âthe Actâ) and other relevant provisions and amendments as applicable. The financial statements for the year ended March 31, 2017 have been restated to conform with Ind AS.

FINANCIAL RESULTS

(Rs. in million)

	Consolidated		Standalone
	For the year ended		For the year ended
Particulars	March 31, 2018	March 31, 2017	March 31, 2018	March 31, 2017
Revenue from Operations	8,155.80	7,118.05	8,155.80	7,118.04
Other Income	356.98	1,871.83	247.11	1,871.86
TOTAL INCOME	8,512.78	8,989.88	8,402.91	8,989.90
TOTAL EXPENSES	5,508.01	4,907.36	5,504.65	4,906.28
EBITDA before exceptional items	3,004.77	4,082.52	2,898.26	4,083.62
(Loss)/Profit before Exceptional items and Tax	(230.77)	633.18	(310.67)	660.21
Exceptional items	(1,217.52)	-	(1,217.52)	-
(Loss)/Profit before income tax	(1,448.29)	633.18	(1,528.19)	660.21
Tax Expense	(519.54)	(757.92)	(519.54)	(757.92)
(Loss)/Profit for the year	(928.75)	1,391.10	(1,008.65)	1,418.13

PERFORMANCE REVIEW :

The results of operations for the financial year 2018 compared to the financial year 2017 were particularly affected by the following factors:

- the completion of the demerger/merger and transfer of hotel, retail and commercial project at Whitefield, Bengaluru into your Company, effective November 1, 2016, as an entire business undertaking. Pursuant to the transfer, the Company recognized revenues and expenses in relation to hotel operations and 324 keys at our hotel at Whitefield, Bengaluru and lease income and expenses for the retail operations at Whitefield, Bengaluru, for five months in the financial year 2017 as compared to the full year in the financial year 2018;

- an increase in ADR and occupancy levels for our hotels from Rs.7,821.71 and 67.46%, respectively, for the financial year 2017 to Rs.7,857.55 and 72.76%, respectively, for the financial year 2018;

- an increase in your total number of keys from 2,259 as of March 31, 2017 to 2,328 as of March 31, 2018; and

- decrease in profit on sale of investments to Rs.114.57 million for the financial year 2018 from Rs.1,301.24 million for the financial year 2017 was due to sale of equity in Associates held for sale, in the financial year 2017.

TOTAL INCOME

Total income was Rs.8,512.78 million for the financial year 2018 against Rs.8,989.88 million for the financial year 2017 due to lower other income

REVENUE FROM OPERATIONS

Revenue from operations increased by 14.58% to Rs.8,155.80 million for the financial year 2018 from Rs.7,118.05 million for the financial year 2017, primarily due to:

- an increase in hospitality revenue from room income by 22.59% to Rs.4,855.89 million for the financial year 2018 from Rs.3,961.01 million for the financial year 2017 due to recognition of room revenues in relation to hotel operations at Whitefield, Bengaluru and improvement in operating revenues from the existing keys in line with an increase in ADR and occupancy levels, together with an increase in the total number of keys;

- an increase in hospitality revenue from sale of food, beverages by 21.25% to Rs.2,821.93 million for the financial year 2018 from Rs.2,327.42 million for the financial year 2017

- an increase in other hospitality revenue by 38.33% to Rs.717.11 million for the financial year 2018 from Rs.518.42 million for the financial year 2017

- an increase in revenue from retail and commercial operations by 71.35% to Rs.240.77 million for the financial year 2018 from Rs.140.51 million for the financial year 2017

- a decrease in other hospitality revenue in export benefits and entitlements by 36.35% to Rs.200.33 million for the financial year 2018 from Rs.314.74 million for the financial year 2017 as per entitlements and availment; and

- reversal in revenues booked in real estate operations of Rs.680.23 million for the financial year 2018 and Rs.144.05 million for the financial year 2017.

Other income decreased by 80.93% to Rs.356.98 million for the financial year 2018 from Rs.1,871.83 million for the financial year 2017, primarily due to decrease in profit on sale of investments.

TOTAL EXPENSES:

Total expenses increased by 12.24% to Rs.5,508.01 million for the financial year 2018 from Rs.4,907.36 million for the financial year 2017, primarily due to an increase in food and beverages consumed, operating supplies consumed, employee benefits expense and other expenses, partially offset by a decrease in real estate development costs, including due to recognition of expenses in relation to hotel operations at our hotel at Whitefield, Bengaluru and lease income and expenses for the retail operations at Whitefield, Bengaluru, for five months in the financial year 2017 as compared to the full year in the financial year 2018 and in line with a general growth in our business. Earnings before interest, depreciation, amortisation and tax (EBITDA) before exceptional items stood at Rs.3,004.77 million in the financial year 2018 as compared to Rs.4,082.52 million in financial year 2017.

(Loss)/Profit before exceptional items and tax stood at Rs.230.77) million in the financial year 2018 as against Rs.633.18 million in the financial year 2017.

Tax expenses Credit of Rs.519.54) million for the financial year 2018 as compared to Credit of Rs.757.92) million for the financial year 2017, due to higher deferred tax credit in the financial year 2017.

STANDALONE PERFORMANCE:

Total Income was at Rs.8,402.91 million for the financial year 2018 as compared to Rs.8,989.90 million for the financial year 2017. Loss for the year was at Rs.1,008.65 million for the financial year 2018 as compared to profit of Rs.1,418.13 million for the financial year 2017.

EXCEPTIONAL ITEMS:

During the year 2013-14, Hindustan Aeronautics Limited (HAL) had raised an objection with regard to the permissible height of buildings of the Companyâs Bengaluru Residential Project (âProjectâ). Pursuant to an interim order passed by the Karnataka High Court, in the petition filed by the Company, the Company had suspended construction activity at the Project and sale of flats.

Pending the outcome of the proceedings and a final closure of the matter, your Company suspended revenue recognition based on the percentage completion method after financial year ended March 31, 2014. Further, in case of cancellations subsequent to March 31, 2014, your Company reversed the revenue and derecognised margins in the respective year of cancellation. Your Company also recompensed flat owners, in accordance with mitigation plans framed by the Company on account of the delay in completion of the Project.

During the year ended March 31, 2018, without prejudice to its rights and remedies under law and keeping the commercial considerations in perspective, the Board of Directors of the Company, decided that the Company should evaluate options that would allow re-commencement of construction. Accordingly, your Company has reassessed the cost implications and the impact thereof up to March 31, 2018 have been provided for in the financial statements. Please refer Note No. 37 of the Notes to Accounts of the Standalone and Consolidated Ind AS Financial Statement.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

Subsequent to the Balance Sheet date, the Promoter-Directors of the Company have entered into an agreement to provide funds to the Company either by themselves or through their Nominees, to meet its cash flow requirements for the Project to the extent of Rs.2000 million by way of subscription to â0â% Non-Cumulative Non-convertible Redeemable Preference Shares of the Company, for which a Subscription Agreement has been executed by them.

The proceeds of issue of Preference Shares will be deposited in a separate Designated Bank Account of the Company and will be utilised for meeting future cash outflows of the Project. The redemption of Preference Shares shall be at the end of 20 years from the date of issue, or earlier, out of surplus from the Project, subject to applicable law/s.

(LOSS)/PROFIT FOR THE YEAR

The Consolidated loss for the year was Rs.928.75) million, as compared to profit of Rs.1,391.10 million for the previous year. This was largely due to profit on sale of investments in the previous year.

BORROWINGS

The aggregate borrowings of the Company stood at Rs.27,253.09 million as on March 31, 2018 as compared to Rs.26,358.73 million in the Previous Year ended March 31, 2017. The foreign currency borrowings stood at US$ 75.85 Million as of March 31, 2018 (US$ 87.05 Million as at March 31, 2017).

DEPOSITS

The Company has neither accepted nor renewed any deposits during the year under review.

LOAN FROM DIRECTORS

During the year under review, the Company has not accepted loans from any of its Directors.

LOANS, GUARANTEES OR INVESTMENTS

Your Company is exempt from the provisions of Section 186 of the Companies Act, 2013 (âActâ) with regard to Loans and Guarantees.

Details of Investments made by the Company are given in the notes to the Financial Statements.

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year under review, the Company earned foreign exchange of Rs.461 crores from services to hotel guests. The total foreign exchange outgo during the year was Rs.89.80 crores towards import of capital goods, payment towards technical and consultation fees, design services, travelling expenses and reimbursements of costs and other expenses.

CONVERSION INTO A PUBLIC LIMITED COMPANY

Pursuant to receipt of necessary approvals from the Registrar of Companies, Mumbai, Maharashtra, your Company was converted into a Public Limited Company with effect from June 6, 2018.

CAPITAL RAISE

Your Company is proposing a capital raise through an Initial Public Offering. The Company is in the process of seeking relevant approvals for the same.

SUBSIDIARIES AND ASSOCIATE COMPANIES

Magna Warehousing & Distribution Pvt. Ltd., Chalet Hotels & Properties (Kerala) Pvt. Ltd. and Grandwell Properties & Leasing Pvt. Ltd. were the subsidiaries of your company during the year under review.

Magna Warehousing & Distribution Pvt. Ltd. has been amalgamated with your Company on March 31, 2018 and has ceased to exist from that date. The Financial Statements of the Company have been drawn, as per Ind AS, taking into consideration the financials from November 01, 2016, i.e. the Appointed Date for the amalgamation.

Your Company has transferred its entire investment in Grandwell Properties & Leasing Pvt. Ltd.(Grandwell) during the year and therefore Grandwell ceased to be its subsidiary w.e.f. March 31, 2018.

Chalet Hotels & Properties (Kerala) Pvt. Ltd., and Grandwell Properties & Leasing Pvt. Ltd. had insignificant or no operations during the year under review.

The statement under Rule 8 of the Companies (Accounts) Rules, 2014 relating to Subsidiaries is annexed as an Annexure I to this report.

MERGERS AND AMALGAMATIONS

Your Company has filed two schemes of Arrangement with the National Company Law Tribunal (NCLT), one for amalgamation of its fully owned subsidiary Magna Warehousing & Distribution Private Limited (Magna) and the other for demerging the Hotel and Retail undertakings at Bengaluru of Genext Hardware & Parks Private Limited (Genext) with it.

The Appointed Date for amalgamation of Magna was November 1, 2016. The Company has received the order of the NCLT approving the Scheme of Arrangement during the year under review, by virtue of which all the Assets and Liabilities of Magna stand transferred to and vested in your Company with effect from March 31, 2018, the Effective Date of the Scheme.

The Appointed Date for demerger by Genext was November 1, 2016. The Company has received the order of the NCLT approving the Scheme of Arrangement during the year under review, by virtue of which the Hotel Undertaking and the Mall Undertaking at Whitefield, Bengaluru stand transferred to and vested in the Company with effect from October 1, 2017, the Effective Date of the Scheme.

DIRECTORS

During the year, Mr. Sanjay Sethi, Managing Director & CEO ceased to be in the employment and accordingly ceased to be the Managing Director & CEO from October 1, 2017.

Mr. Sethi rejoined the Company on February 05, 2018 as a CEO and was subsequently appointed as an Additional Director on the Board of Directors and as Managing Director & CEO of the Company w.e.f. February 09, 2018.

He holds office up to the date of the forthcoming Annual General Meeting (ââAGMââ) of the Company. The Board recommends his reappointment for which the approval of the shareholders will be sought at the ensuing Annual General Meeting of your Company.

During the course of the financial year under review, Mr. Rajeev Chopra, Mr. Arthur De Haast and Mr. Rajeev Newar joined the Board of Directors of the Company.

Mr. Rajeev Newar was appointed as Executive Director w.e.f. August 03, 2017 and Chief Financial Officer of the Companyw.e.f. May 1, 2018. Mr. Ramesh M. Valecha has ceased to be an Executive Director w.e.f. August 1, 2017.

Mr. Chandru L. Raheja has resigned from the Board of Directors of the Company with effect from April 26, 2018. Further, Mr. Ramesh M. Valecha and Mr. Rajeev Chopra have resigned from the Board of Directors of the Company with effect from May 2, 2018.

Mr. Hetal Gandhi, Mr. Conrad DâSouza and Mr. Arthur De Haast who have been associated with the Company, as Non-Executive Directors have been formally appointed as Non-Executive & Independent Directors for a period of 5 years with effect from June 12, 2018. Ms. Radhika Piramal has been inducted into the Board of Directors as Non-Executive & Independent Director for a period of 5 years with effect from June 12, 2018. The Board of Directors of the Company have appointed Mr. Hetal Gandhi as Chairman of the Board of Directors of the Company with effect from June 12, 2018.

NUMBER OF BOARD MEETINGS

During the year 2017-2018, the Board of Directors met six times.

DIRECTORSâ 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 Companyâs internal financial controls were reasonable and adequate for the Financial Year 2017-18.

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 year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The 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 that period;

(iii) The 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) They have prepared the Financial Statements for the financial year ended March 31, 2018 on a âgoing concernâ basis;

(v) The Directors have laid down internal financial controls for the company which are adequate and are operating effectively;

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

AUDIT COMMITTEE

Mr. Conrad DâSouza, Mr. Hetal Gandhi and Mr. Neel C. Raheja are members of the Audit Committee of the Company. The Audit Committee met five times during the year under review.

The Companyâs standalone and consolidated financial statements for the year were reviewed by the Audit Committee at its meeting held on June 12, 2018 and recommended the same for approval by the Board of Directors.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

As per Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014, a CSR Committee has been duly constituted. The Committee has recommended to the Board of Directors a CSR Policy indicating the broad philosophy, and objectives.

As per Section 135 of the Companies Act, 2013, a Company is required to spend 2% of the Average Net Profits made by the Company in the immediately preceding three financial years for CSR activities. In the case of the Company, average net profits are negative and therefore there was no obligation towards CSR for the Financial Year under review. Details with regard to CSR have been annexed as Annexure II.

COMPANYâS POLICY RELATING TO DIRECTORS APPOINTMENT, REMUNERATION AND DISCHARGE OF DUTIES

The provisions of Section 178 of the Companies Act, 2013 were not applicable to the Company. However, the Company has a Remuneration Committee which approves the remuneration payable to Directors.

STATUTORY AUDITORS

At the Annual General Meeting of the Company held on September 22, 2017, M/s B S R & Co., LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022), were appointed as the Statutory Auditors for a term of five consecutive years.

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 report on the financial statements for the year 2017-2018. However, the statutory auditor has drawn attention i.e. an Emphasis of Matter with regard to Note No 43(c) and Note No 42(b) of the Standalone Financial Statements, in their report, details of which are as follows:

(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 lndia. 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 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 31 March 2018, 31 March 2017 and 1 April, 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 11 September 2017, with effect from the Appointed date specified in the Scheme i.e. 1 November 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 1 November 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.

The auditor has clarified that their opinion is not qualified in respect of these matters.

Secretarial Audit in terms of Section 204 of the Companies Act, 2013 is not applicable to the Company for the year under review.

INTERNAL AUDITORS

Pricewaterhouse Coopers Private Limited have been appointed as the Internal Auditors of the Company for the year 2017-18.

EXTRACT OF THE ANNUAL RETURN

The extract of the Annual Return for the Financial Year 20172018 is annexed hereto as an Annexure III to the Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

In line with the requirements of the Act, your Company has formulated a policy on dealing with Related Party Transactions (ââRPTsââ) The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and Related Parties. RPTs are placed before the Audit Committee and the Board for review on a quarterly basis.

The transactions / arrangements with Related Parties were in accordance with the Related Party Framework approved by the Board and on Arm Lengths basis as well as in the ordinary course of the Companyâs business as defined therein. These transactions have been reviewed by the Audit Committee and the Auditors.

The particulars of contracts and / or transactions with Related Parties required to be reported as per Section 188 is furnished as an Annexure IV to this Report.

RISK MANAGEMENT POLICY

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. This framework seeks to create transparency, minimize adverse impact on business objective and enhance your Companyâs competitive advantage.

VIGIL MECHANISM POLICY

Your Company has, in accordance with Section 177 of the Companies Act, 2013, drawn a Vigil Mechanism Policy for its Directors and Employees, to enable reporting of any wrongdoing within the company/branches/hotels that falls short of the Companyâs business principles on ethics and good business practices.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place 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, safeguard of assets, reliability of financial control and compliance with applicable laws. The operations of the hotel are largely managed through globally reputed hospitality company which have their internal control systems in place.

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

- K Raheja Corp Pvt Limited (KRC) was allotted the land by CIDCO. The Hotel & Apartments at Vashi, Navi Mumbai were subsequently acquired by your company from K Raheja Corp Pvt Limited.

Honâble Bombay High Court had cancelled the allotment of land by CIDCO to KRC and instructed vacation of premises, inter-alia, comprising the Hotel & Apartments at Vashi Navi Mumbai. Upon a Special Leave Petition being preferred before the Honâble Supreme Court, the Court had ordered maintaining status quo in the matter. The case is yet to be disposed-off and hence sub-judice. CIDCO had also passed an Order in December 2014 directing vacation of the open space used as entry and exit points to the hotel on the same property. A Writ petition against the Order is pending before the Honâble Bombay High Court which has also ordered that status quo is to be maintained.

- With regard to the Companyâs residential development project at Bengaluru, the same is on hold as the matter is subjudice before the Honâble Karnataka High Court on account of a dispute on the permissible height of the structure. Your company as well as Hindustan Aeronautics Ltd. (HAL) have filed their respective objections/ cross objections. An order of the court is awaited.

Your company has received legal advice based on which the management expects a favourable outcome.

SHARE CAPITAL

During the year under review your Company had issued 18,953,040 Equity Shares of Rs.10/- each and 1,600 Non-Cumulative Redeemable Preference Shares of Rs.100,000/each, to the shareholders of Genext Hardware & Parks Pvt. Ltd. as consideration for the Hotel Undertaking and Retail Undertaking which were acquired pursuant to the Scheme of Arrangement. With this issue, the paid-up Equity Share Capital has gone up from Rs.1,521,422,530 /- to Rs.1,710,952,930 /. The Preference Share Capital of the Company is Rs.160,000,000/-.

THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

During the year under review, your Company received 3 complaints on sexual harassment, all of which have been resolved and appropriate action taken, wherever necessary. There are no pending cases. Workshops have been conducted to promote awareness on the issue.

HUMAN CAPITAL INITIATIVES & PARTICULARS OF EMPLOYEES

A statement containing information relating to employees as required by Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as an Annexure V to this report.

Your Company employs various policies, processes and methods to counter these risks effectively.

Acknowledgements

Your Directors express their sincere appreciation for the assistance and co-operation received from the regulatory and statutory authorities, government and its agencies, banks & financial institutions, vendors and service providers. Your Directors place on record their gratitude to the employees at all levels.

For and on behalf of the Board of Directors of Chalet Hotels Limited

SANJAY SETHI RAJEEV NEWAR

Managing Director & CEO Executive Director & CFO

DIN: 00641243 DIN: 00468125

Place: Mumbai

Date: June 12, 2018

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