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Chalet Hotels Ltd.

BSE: 542399 Sector: Services
NSE: CHALET ISIN Code: INE427F01016
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OPEN 120.00
PREVIOUS CLOSE 100.70
VOLUME 17247
52-Week high 395.00
52-Week low 99.00
P/E 30.89
Mkt Cap.(Rs cr) 2,337
Buy Price 112.15
Buy Qty 1.00
Sell Price 113.80
Sell Qty 20.00
OPEN 120.00
CLOSE 100.70
VOLUME 17247
52-Week high 395.00
52-Week low 99.00
P/E 30.89
Mkt Cap.(Rs cr) 2,337
Buy Price 112.15
Buy Qty 1.00
Sell Price 113.80
Sell Qty 20.00

Chalet Hotels Ltd. (CHALET) - Director Report

Company director report

Dear Members

Chalet Hotels Limited

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

Financial Results

Your Company's financial performance for the Financial Year endedMarch 31 2019 is summarized below:

(Rs. in million)
Particulars Standalone For the year ended Consolidated For the year ended
March 31 2019 March 31 2018 March 31 2019 March 31 2018
Revenue from Operations 9871.73 7955.47 9871.73 7955.47
Other Income 436.03 447.44 476.08 557.31
Total Income 10307.76 8402.91 10347.81 8512.78
Total Expenses 6670.40 5504.65 6679.47 5508.01
Earnings before Interest Depreciation Amortisation & Tax before 3637.36 2898.26 3668.34 3004.77
Exceptional Items
Depreciation and Amortisation Expenses 1154.17 1116.33 1154.17 1116.33
Finance Costs 2651.51 2092.60 2656.69 2119.21
(Loss) / Profit (168.32) (310.67) (142.52) (230.77)
Exceptional Items (40.96) (1217.52) (40.96) (1217.52)
(Loss) / Profit before Income Tax (209.28) (1528.19) (183.48) (1448.29)
Tax Expense (107.21) (519.54) (107.21) (519.54)
(Loss) / Profit for the year (102.07) (1008.65) (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 yearunder review.

Pursuant to Regulation 43A of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (‘Listing Regulations') the Companyhas adopted the Dividend Distribution Policy setting out the broad principles for guidingthe Board and the Management in matters concerning declaration and distribution ofdividend which is attached as Annexure-I hereto and is also available on theCompany's website viz. www.chalethotels.com.

Capital Structure

Authorised Share Capital

At the beginning of the year the Authorised Share Capital of yourCompany was Rs. 1880 million.

An increase in the Authorised Share Capital amounting to Rs. 2330million was initiated by your Company. Further an increase of Rs. 241 million took placepursuant to the Registrar of Companies giving effect to the increase in capital pursuantto the Scheme of Amalgamation (approved in the previous year under Orders passed by theNational Company Law

Tribunal Mumbai Bench on August 2 2017 and the National Company LawTribunal Bengaluru Bench on March 14 2018) of Magna Warehousing & DistributionPrivate Limited with your Company. Pursuant to the above the Authorised Share Capital ofyour Company has increased by Rs. 2571 million to Rs. 4451 million.

Of the above the Authorised Share Capital in respect of Equity Sharesincreased from Rs. 1720 million to 2051 million and in respect of Preference Sharesthere was an increase from Rs. 160 million to 2400 million.

Pursuant to a resolution passed by the Shareholders of your Company attheir Extraordinary General Meeting held on January 9 2019 your Company reclassified theAuthorised 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 205100000 2051 229100000 2291
0.001% Non-Cumulative Redeemable Preference Shares (2400 being reclassified as Equity & 1600 subsisting) 100000 4000 400 1600 160
0% Non-Cumulative Non-Convertible 100000 20000 2000 20000 2000
Redeemable Preference Shares
Total Authorised Share Capital 4451 4451

Equity Share Capital

During the year under review your Company has made a Fresh Issue of33928571 Equity Shares of Rs. 10 each aggregating to a face value of Rs. 339.28 millionunder the Initial Public Offering ("IPO") as detailed herein below.

Issue of Preference Shares

During the year under review your Company has entered intoSubscription Agreement dated June 4 2018 with Mr. Ravi C.

Raheja and Mr. Neel C. Raheja Promoters of the Company wherein theyhave agreed to provide your Company with funds required to meet any costs expenses andliabilities pertaining to the Koramangala Residential project including any costs andexpenses towards the ongoing litigation and the completion of the Koramangala Residentialproject by way of subscription by themselves or by their designated nominees to 20000Zero Coupon Non-Cumulative Non-Convertible Redeemable Preference Shares(NCRPS) of Rs.100000 each in 2(Two) series (viz. Series A and Series B) of 10000 each aggregatingto Rs. 2000 million. Accordingly the Company has allotted 20000 NCRPS to thesubscribers on June 26 2018. An amount of Rs. 510 million has been called up and paid ason the date of the Balance Sheet. The amounts raised have been utilised in line with thesubscription agreement referred to herein above.

The Promoters of your Company have agreed that in the event that theamount required towards meeting the project expenses exceeds the initial subscriptionamount the Promoters shall either directly or through their designated nomineessubscribe to such additional number of subscription securities as may be required to meetthe project expenses.

Conversion into a Public Limited Company

During the year under review pursuant to receipt of necessary approvalsfrom the Registrar of Companies Mumbai Maharashtra your Company was converted into aPublic 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 58613571 Equity Shares of Rs. 10each comprising of a Fresh Issue of 33928571 Equity Shares and an Offer for Sale (OFS)of 24685000 Equity Shares by some of its promoters at a premium of Rs. 270 per EquityShare. As per the object of the offer the net proceeds of the fresh issue were to beutilised towards repayment / prepayment of certain indebtedness and for general corporatepurposes. Your Company raised an amount of Rs. 9500 million from the Fresh Issue and thePromoters raised Rs. 6910 million under the OFS. Pursuant to the issue the Equity Sharesof your Company got listed on National Stock Exchange of India Limited (NSE) and BSELimited (BSE) on February 7 2019. The funds raised by your Company from the Fresh Issuehave been completely utilised in accordance with the objects of the IPO. There have beenno deviation or variation in the terms of utilisation. Post the issue 71.41% of theEquity Share Capital of your Company is held by the Promoters.

Borrowings:

The aggregate borrowings of your Company stood at Rs. 15460.32 million(including Preference Share Capital of Rs. 518.18 million) as at March 31 2019 ascompared to Rs. 27253.09 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 atUS$ 26.11 million as compared to US$ 75.85 million as at March 31 2018.

Your Company has repaid borrowings amounting to Rs. 13742.34 millionduring the under review from IPO proceeds and from refund of other advances during theyear under review.

Projects Under Development

Your Company's proposed development pipeline consists of thefollowing projects:

Hotels

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

Commercial Retail and Office Space

The proposed development pipeline assumes a construction of leasablearea 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 withMarriott Hotels India Private Limited for rebranding w.e.f. April 1 2020 of the existinghotel viz. Renaissance Mumbai Convention Centre Hotel as ‘Westin Mumbai Powai'.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 thematter is sub-judice before the Hon'ble Karnataka High Court on account of a disputeon the permissible height of the structure.

Deposits

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

Loan from Directors

During the year under review your Company has not accepted loans fromany of its Directors.

Loans Guarantees or Investments

Your Company falls within the definition of "Infrastructure

Company" as provided under Companies Act 2013 ("Act")and is therefore exempt from the provisions of Section 186 of the Act with regard to Loansand Guarantees. Details of investments made by your Company are given in Note 7 of thestandalone Financial Statements.

Foreign Exchange Earnings and Outgo

During the year under review your Company earned foreign exchange ofRs. 4968.05 million as compared to Rs. 4610.00 million in the previous year.

The total foreign exchange outgo during the year was Rs. 1262.53million as compared to Rs. 899.00 million in the previous year.

Subsidiaries and Associate Companies

Chalet Hotels & Properties (Kerala) Pvt. Ltd. is a subsidiary ofyour Company which had insignificant or no operations during the year under review. Theaudited financial statements of the subsidiary company have been made available on thewebsite of the Company viz: www.chalethotels.com During the year under review ChaletHotels & Properties (Kerala) Pvt. Ltd. had issued 27777770 Equity Shares of Rs. 10each at par on rights basis to the existing shareholders of your Company. Your Companysubscribed to 25000000 Equity Shares. The amount raised by the subsidiary has beenutilised towards reduction of debt.

Your Company has for securing the supply of renewable energy acquired20.8% of the Equity Share Capital of

Krishna Valley Power Private Limited and 26% of the Equity ShareCapital of Sahyadri Renewable Energy Private Limited being entities engaged in generationof hydro power.

Your Company does not have the ability to participate and neither isinvolved in the operations and/or activities of these companies/entities and neither hasexposure or rights to variable returns. Accordingly the financials of these companieshave not been considered for the consolidation of Financial Statements.

The Consolidated Financial Statements of your Company and itsSubsidiary prepared in accordance with the relevant

Accounting Standards duly audited by the Statutory Auditors form apart of the Annual Report and are reflected in the Consolidated Accounts.

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

Corporate Governance Business Responsibility Report & ManagementDiscussion & Analysis

Your Company has complied with the Corporate Governance requirementsunder the Act and Listing Regulations. A separate section on Corporate Governance anddetailed reports on Management Discussion & Analysis and Business Responsibility forman integral part of this report.

Directors

During the course of the year under review Mr. Chandru L. Raheja hasresigned 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 fromMay 2 2018 and have consequently ceased to be Directors of your Company. The Board placeson record its appreciation for the valuable guidance and assistance received from theseDirectors during their respective tenures.

Mr. Hetal Gandhi Mr. Joseph Conrad D'Souza 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 effectfrom June 12 2018.

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

Mr. Sanjay Sethi Managing Director & CEO and Mr. Rajeev NewarExecutive Director & CFO are due to retire by rotation at the ensuing Annual GeneralMeeting of your Company and being eligible offer themselves for re-appointment. Theapproval of the shareholders for their appointment / re-appointment as Directors has beensought in the Notice convening the AGM of your Company.

In view of inadequacy of profits for payment of managerialremuneration your Company is also seeking approval of the shareholders by way of specialresolutions for payment of remuneration to Mr. Sanjay Sethi Managing Director & CEOand 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 ‘Annual Returns' in the Investor Section.

The details forming part of the extract of the Annual Return in Formno. MGT-9 as per Section 92(3) and 134(3) of the Act read with the rules framedthereunder 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 GovernanceReport.

Directors' Responsibility Statement

On the basis of internal financial control framework and compliancesystems in place and the work carried out by the

Internal and Statutory Auditors including audit of internal financialcontrols over financial reporting and internal reviews performed by the Management and theAudit Committee the Board is of the opinion that your Company's internal financialcontrols were reasonable and adequate for

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

(i) In the preparation of the accounts for the Financial Year endedMarch 31 2019 the applicable Accounting Standards have been followed along with properexplanation relating to material departures;

(ii) The Board of Directors have selected such accounting policies andapplied them consistently and made judgments and estimates that were reasonable andprudent in order to give a true and fair view of the state of affairs of your Company atthe end of the financial year and of the loss of your Company for the Financial Year endedMarch 31 2019;

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

(iv) The Financial Statements for the Financial Year ended March 312019 have been prepared on a ‘going concern' basis;

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

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

Accounting Treatment

The Accounting Treatment is in line with the applicable

Indian Accounting Standards (IND-AS) recommended by the Institute ofChartered Accountants of India and prescribed by the Central Government.

Adequacy of Internal Financial Control Systems

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

Your Company has appointed M/s PricewaterHouse Coopers Private Limitedas Internal Auditors. The reports of the Internal Auditors are placed before the AuditCommittee 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 theBoard of Directors has carried out an annual evaluation of its own performance includingits committees for the Financial Year under review. For the aforesaid purpose astructured questionnaire was prepared after taking into consideration the guidance noteissued by SEBI on Board evaluation covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its Committees Boardculture execution and performance of specific duties obligations and governance.

The performance evaluation of the Independent Directors was carried outby the entire board (excluding the Director being evaluated). The feedback and suggestionsreceived from all the Directors would be discussed at the subsequent Board Meeting. TheDirectors expressed satisfaction with the evaluation process.

All the Independent Directors have confirmed that they meet thecriteria of independence as laid down under the Act and Listing Regulations. They havedeclared that they do not fall under any disqualifications specified under the Act.

Committees

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

Corporate Social Responsibility (CSR)

Your Company has adopted a CSR Policy indicating the broad philosophyand 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 ofwhich are enumerated in the Corporate Governance Report which forms a part of the Annualreport. In view of your Company having inadequate average net profits in the immediatelypreceding three financial years your Company did not entail any obligation towards CSRfor the Financial Year under review. Your Company is however committed to the socialcause works as a responsible corporate citizen and is making all efforts to reduce itscarbon footprint. The annual report on CSR activities and details about the composition ofCSR committee as required by Section 135(2) of the Act is annexed as Annexure IV tothis report.

Compensation Nomination & Remuneration Policy

Your Company has in compliance with the provisions of Section 178 ofthe Act and Regulation 19 of the Listing Regulations on May 10 2019 adopted a Policyfor Appointment of Directors and remuneration of Directors and Senior Management. The sameis available on the website of your Company viz. ‘www.chalethotels.com'

Salient features

The Compensation Nomination & Remuneration ("CNR")

Committee of your Company while formulating the above policy hasensured that:

• the level and composition of remuneration be reasonable andsufficient senior management of the quality required to run the Company successfully;

• relationship of remuneration to performance is clear and meetsappropriate performance benchmarks; and

• remuneration to directors key management personnel and seniormanagement involves a balance between fixed and performance linked bonuses reflectingshort and long term performance objectives appropriate to the working of the Company andits goals.

The compensation payable to the Wholetime Directors and SeniorManagement Personnel have been reviewed by the CNR Committee. The annual increment to theWholetime Directors and Senior Management of your Company has been approved by the Boardbased upon recommendation of the CNR Committe. The Policy is available on the website ofthe Company viz: www.chalethotels.com

Employee Stock Option Scheme (ESOP)

During the year under review the Board has based on the recommendationof the Compensation Nomination & Remuneration Committee granted options in respectof 200000 Equity Shares of Rs. 10 each at a price of Rs. 320 each to Mr. Sanjay SethiManaging 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 BasedEmployee Benefits) Regulations 2014 the details of the Stock Options granted under theESOP Scheme has been made available on the website of the Company athttps://www.chalethotels.com/annualreport/ Further BSR & Co LLP Statutory Auditorsare issuing a to implementation of Employee Stock Option Scheme in accordance with thesaid Regulations.

Statutory Auditors

At the Annual General Meeting of your Company held on September 222017 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 consecutiveyears.

The Report of the Statutory Auditor along with its Annexure forms apart of this Annual Report. The Auditors' Report to the members for the year under reviewwas 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 ordisclaimers made by Statutory Auditor in their report on the financial statements for theFinancial Year 2018-2019. However the Statutory Auditor has drawn attention i.e. anEmphasis of Matter with regard to Note No 42 (c) and Note 49 of the Standalone FinancialStatements in their report details of which are as follows: to attract retain andmotivate directors and (1) Note 42 (c) in respect of the entire building comprising of thehotel and apartments therein purchased together with a demarcated portion of theleasehold rights to land at Vashi (Navi Mumbai) from K. Raheja Corp Private Limited onwhich the Company's Four Points by Sheraton Hotel has been built. The allotment of land byCity & Industrial Development Corporation of Maharashtra Limited ('CIDCO') to K RahejaCorp Private Limited has been challenged by two public interest litigations and the matteris currently pending with the Honorable Supreme Court of lndia. Pending the outcome ofproceedings and a final closure of the matter no adjustments have been made in thestandalone Ind AS financial statements as at and for the year ended 31 March 2019 to thecarrying value of the leasehold rights (reflected as prepayments) and the hotel assetsthereon aggregating to Rs. 497.90 million and Rs. 503.79 million as at 31 March 2019 and31 March 2018 respectively.

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

The Statutory Auditor has clarified that their opinion is not qualifiedin respect of these matters. Detailed explanation in respect of the matter at Item No. 1has been provided under Note No 42(c) of the Standalone Financial Statements. with respectDuring the current year the managerial remuneration paid by your Company to its ManagingDirector & CEO and Executive Director & CFO is in excess of limits laid down underSection 197 of the Act read with Schedule V to the Act by Rs. 52.41 million. Your Companyis in the process of obtaining approval from its shareholders at the forthcoming AnnualGeneral Meeting for such excess remuneration paid.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Companyhad appointed M/s. Alwyn Jay & Co. Company Secretaries in Practice (Firm RegistrationNo. P2010MH021500) to undertake Secretarial Audit for Financial Year 2018 – 19. TheSecretarial Audit Report is annexed herewith as Annexure V. There are noqualifications or reservations in the report.

Cost Audit

During the current year audit of cost records as specified undersection 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 theListing Regulations your Company has formulated a policy on dealing with Related PartyTransactions (''RPTs'') which is available of the website of your Company viz.‘www.chalethotels.com'.

All contracts arrangements or transactions entered into during theyear under review by the Company with Related Parties were in ordinary course of businessand on an arm's length basis.

During the year under review the Company had not entered into anycontract/ arrangement/ transaction with Related Parties which are materially significantby your Company. The Policy is available on the Company's website athttps://www.chalethotels.com/policies/ Accordingly particulars of contracts orarrangements with related parties referred to in Section 188(1) of the Companies

Act 2013 along with the justification for entering into such contractor arrangement in Form AOC-2 does not form part of the report. However the Directors drawattention of the members to Note No. 49 of the Standalone Financial Statement which setsout related party disclosures.

Risk Management

Your Company has adopted a Risk Management Policy pursuant to theprovisions of Section 134 of the Act to identify and evaluate business risks andopportunities for mitigation of the same on a continual basis. This framework seeks tocreate transparency minimize adverse impact on business objective and enhance yourCompany's competitive advantage. The Policy is available on the Company'swebsite at https://www.chalethotels.com/policies/ The Risk Management framework definesthe risk management approach across the enterprise. Your Company is faced with risks ofdifferent types each of which need varying approaches for mitigation. Details of variousrisks faced by your Company are provided in the Management Discussion and Analysis.

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

Vigil Mechanism Policy & Whistle Blower Policy

Your Company has in accordance with Section 177 of the Act drawn aVigil Mechanism Policy for its Directors and Employees to enable reporting of anywrongdoing within the Company/ Branches/ Hotels that falls short of your Company'sbusiness principles on ethics and good business practices. The said policy is available onhttps://www.chalethotels.com/policies/

Adequacy of Internal Financial Controls with Reference to the FinancialStatements

Your Company has in place an adequate system of internal controlcovering all corporate functions and franchise hotels. The Internal control systemsprovide assurance regarding the effectiveness and efficiency of operations safeguard ofassets reliability of financial control and compliance with applicable laws. Theoperations of the hotel are largely managed through globally reputed hospitality companieswhich have their internal control systems in place.

Significant

Regulators Courts or Tribunals Impacting the Going Concern Status andCompany's Operations in Future

During the year under review there have been no significant andmaterial orders passed by regulators courts or tribunals impacting the going concernstatus and your Company's operations in future. as per the Policy adopted

The Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013

Your Company has constituted an Internal Complaints Committee incompliance with the requirements of The Sexual Harassment of Women at the Workplace(Prevention Prohibition & Redressal) Act 2013. The said policy is available onhttps://www.chalethotels.com/policies/ During the year under review your Company received4 (four) complaints on sexual harassment all of which have been resolved and appropriateaction taken wherever necessary.

There are no pending cases. Workshops have been conducted from time totime to promote awareness on the issue.

Human Capital Initiatives & Particulars of Employees

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

In terms of the provisions of Section 197(12) of the Act read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended a statement showing the names and other particulars ofthe employees drawing remuneration in excess of the limits set out in the said rules formspart of this report. Further the disclosures pertaining to remuneration and other detailsas 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 thisReport. Having regard to the provisions of the second proviso to Section 136(1) of theAct the Annual Report excluding the aforesaid information is being sent to the members ofthe Company and others entitled thereto. The said information is available for inspectionat the registered office of the Company during business hours on working days of theCompany upto the date of ensuing AGM. Any member interested in obtaining such informationmay write to the Company Secretary and the same will be furnished on request.

The Annual Report including the aforesaid information is also availableon the Company's 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 AnnexureVI to this report.

Technology absorption: Not applicable to your Company.

Material Changes and Commitments

There have been no material changes and commitments affecting thefinancial position of your Company which have occurred between the end of the financialyear to which the financial statements relate and the date of this report.

Acknowledgements

Your Directors would like to thank the shareholders for the supportreceived during the IPO and their continued confidence in the Company. Your Directorswould like to express their sincere appreciation for the assistance and co-operationreceived from the regulatory and statutory authorities government and its agencies stockexchanges depositories merchant bankers monitoring agency banks & financialinstitutions legal counsels registrar & share transfer agent advertising agenciesauditors hotel operators vendors and other key stakeholders. Your Directors place onrecord 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)