You are here » Home » Companies » Company Overview » Chalet Hotels Ltd

Chalet Hotels Ltd.

BSE: 542399 Sector: Services
BSE 00:00 | 24 Jun 304.20 5.85






NSE 00:00 | 24 Jun 305.05 7.05






OPEN 300.00
VOLUME 28336
52-Week high 332.15
52-Week low 146.50
Mkt Cap.(Rs cr) 6,237
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 300.00
CLOSE 298.35
VOLUME 28336
52-Week high 332.15
52-Week low 146.50
Mkt Cap.(Rs cr) 6,237
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Chalet Hotels Ltd. (CHALET) - Director Report

Company director report

Dear Members

Chalet Hotels Limited

The Board of Directors present your Company's Thirty Sixth AnnualReport along with the Audited Financial Statements for the Financial Year ended March 312021.

Financial Results

Your Company's financial performance for the Financial Year endedMarch 31 2021 is summarised below:

(Rs. in million)
Standalone Consolidated
Particulars For the year ended For the year ended
March 31 2021 March 31 2020 March 31 2021 March 31 2020
Revenue from Operations 2843.17 9762.45 2943.87 9808.49
Other Income 207.10 272.44 223.38 278.97
Total Income 3050.27 10034.89 3167.25 10087.46
Total Expenses 2702.77 6542.16 2873.35 6379.52
EBITDA from Continuing Operations 347.50 3492.73 293.90 3707.94
(Loss) from Discontinued Operations (40.62) (62.82) (40.62) (62.82)
EBITDA 306.88 3429.91 253.28 3645.12
Depreciation and Amortisation Expenses 1076.34 1113.66 1174.62 1133.17
Finance Costs 1450.08 1446.13 1519.78 1461.76
(Loss) / Profit before Exceptional Items and Tax (2219.54) 870.12 (2441.12) 1050.19
Exceptional Items (41.71) (41.71) (41.71) (41.71)
(Loss) / Profit before tax (2261.25) 828.41 (2482.83) 1008.48
Tax Expense (1093.21) 12.27 (1091.55) 12.22
(Loss) / Profit for the year (1168.04) 816.14 (1391.28) 996.26
Total Comprehensive Income / (Expense) attributable to Owners of the Company - - (1390.48) 1015.48
Earnings Per Share (Basic & Diluted) (5.70) 3.98 (6.78) 5.01

This has been an unprecedented year. Your Company geared-up to combatthe impact of the pandemic on business and tackle cashflow requirements through variouscost saving initiatives rationalisation of expenses across all verticals and addition ofnew revenue streams. Our associates at every hotel stood strong amidst challenging timesto serve our guests with a smile. Your Company participated in the fight against COVID byhousing doctors & medics at its hotels providing meals PPE's and othernecessities to the frontline workers.

All the projects with the exception of renovation at the RenaissanceMumbai Convention Centre Hotel at Powai were initially kept on hold. Post evaluation ofthe demand dynamics of the respective markets your Company restarted work on theCommercial Building Projects at Powai Mumbai and Whitefield Bengaluru.

Further the Board of Directors of your Company has decided torepurpose a retail mall The Orb at Sahar Mumbai into Commercial Office space afterassessment of mid to long term impact of the pandemic. A portion of the said mall atSahar Mumbai continues to house some retail outlets.

Our initiatives led to performance looking up during the third andfourth quarter of the financial year. However the second wave across the country has ledto restrictions on travel and lockdown orders in several parts of the country includingthe geographies that your Company operates in.

The efforts of various industry forums some of which yourCompany's offcials actively engage with and hold executive committee positions havebeen instrumental in hotels receiving Industry Status with effect from April 01 2021both in Maharashtra and Karnataka. With this change hospitality industry will be chargedfor utilities and property tax at industrial rates along with other benefits available toindustries.

Further a detailed note on the state of the Company's affairs andthat of its subsidiaries is covered in the Management Discussion & Analysis section ofthe Annual Report.

Going Concern

During the year under review the hospitality operations of yourCompany had been adversely impacted in line with the impact on hospitality industry. YourCompany has however managed its cash flows effectively through stable revenues from thecommercial office segment. The Company has met all monetary obligations out of cashgenerated from operations and debt raised. Accordingly the Financial Statements for theyear under review have been prepared on a going concern basis. Further there has been nochange in the nature of business of the Company.

Capital Structure

Authorised Share Capital

During the year under review there was no change in the AuthorisedShare Capital of the Company. The Authorised Share Capital of your Company is `4451000000/-.

Paid-up Equity Share Capital

During the year under review there was no change in the paid-up EquityShare Capital of the Company. The Paid-up Equity Share Capital of your Company stands at `2050238640/-.

Paid-up Preference Share Capital

During the year under review there was no change in paid-up PreferenceShare Capital of the Company which stood at ` 1410000000/-.

Your Company had entered into a Subscription Agreement dated June 42018 with Mr. Ravi C. Raheja and Mr. Neel C. Raheja Promoters of the Company whereinthey 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' / ‘Subscription Securities') of ` 100000 each in two series(viz. Series A and Series B) of 10000 each aggregating to ` 2000 million (InitialSubscription Amount). The Promoters of your Company have further agreed that in the eventthe amount required towards meeting the project expenses exceeds the Initial SubscriptionAmount the Promoters shall provide such additional funds as may be required to meet theproject expenses. The NCRPS have been fully subscribed. An amount of ` 1000 million and `250 million has been called and paid-up as on the date of the Balance Sheet in respect ofthe Series A NCRPS and Series B NCRPS respectively. The amounts raised have been utilisedin line with the Subscription Agreement referred to hereinabove.

Further keeping in mind the project requirements and expected capitalexpenditure to be incurred it has been decided to raise upto ` 1000 million from thePromoters or their Designated Nominees either by way of a further issue upto a maximum of10000 Zero Coupon Non-Cumulative Non-Convertible Redeemable Preference Shares viz.Series C NCRPS of ` 100000 each or Unsecured Loans or Inter Corporate Deposits. TheSeries C NCRPS if issued will be allotted in tranches based on the requirement of funds.


The borrowing of your Company on a standalone basis stood at `18505.38 million and on a consolidated basis stood at ` 19388.63 million (both excludingPreference Share Capital of ` 1194.61 million) as at March 31 2021 as compared to `16732.44 million on a standalone basis and ` 17907.49 million on consolidated basis(both excluding Preference Share Capital of ` 1107.99 million) as at March 31 2020.

The foreign currency borrowings as on March 31 2021 along with thoseof the subsidiary company were lower at US$ 20.80 million as compared to US$ 26.24 millionas at March 31 2020.

Appropriations / Dividend

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 at No dividend is beingrecommended by the Board of Directors on the Equity Shares and the 0.001% Non-CumulativeNon-Convertible Redeemable Preference Shares for the year under review.

On account of the losses incurred during the Financial Year underreview no amount has been transferred to Reserves. Pursuant to the applicable provisionsof the Companies Act 2013 (‘the Act') read with the Investor Education andProtection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 (‘theIEPF Rules') all unpaid or unclaimed dividends are required to transferred by theCompany to the IEPF; established by the Government of India after completion of sevenyears. Further according to the IEPF Rules the shares on which dividend has not beenpaid or claimed by the shareholders for seven consecutive years or more shall also betransferred to the demat account of the IEPF Authority. The Company does not have anyunpaid or unclaimed dividends and accordingly the aforesaid provisions are not applicableto the Company.

Projects Under Development

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


All the projects pertaining to development of new hotels expansion andproduct improvement plans excluding the lobby renovation at Renaissance Mumbai ConventionCentre Hotel Powai were kept on hold during the year under review. Your Companyreaffirms its decision that the proposed development pipeline will be paced appropriatelyafter assessment of the impact of COVID-19 on its business demand and consumer behaviour.

Commercial Retail and Office Space

The proposed development pipeline assumes the construction of leasablearea of nearly 1.2 million square feet across two locations namely Powai at Mumbai andWhitefield at Bengaluru including capex on repurposing of the retail asset at SaharMumbai. Additionally repurposing of some portions of the retail asset at Sahar Mumbai isongoing. The new developments have started progressing after being suspended due toimposition of lockdowns across the country during the year under review. The finalisationof plans for the repurposing of assets is underway.

Re-Branding Hotels

Your Company had entered into an agreement with Marriott Hotels IndiaPrivate Limited and its a_liates (Marriott) for rebranding of the existing hotel viz.Renaissance Mumbai Convention Centre Hotel Powai as ‘Westin Mumbai PowaiLake'. The requisite upgrade of the asset for the same is expected to be completed intwo phases in the FY 2021-22 and FY 2022-23.

Residential Project – Koramangala Bengaluru

The residential development project at Bengaluru was on hold during theyear under review due to the pending writ petition. The Hon'ble Karnataka High Courton May 29 2020 (‘Order') delivered its judgement in the writ petition filed byyour Company in connection with the cancellation by Hindustan Aeronautical Limited(‘HAL') of its height permission for the project of your Company. TheHon'ble High Court had by the judgement inter-alia allowed the writ petition in partand quashed the cancellation of the height NOC by HAL [in so far as cancellation of NOCfor construction upto 62 meters above ground level so that the top of the structure whenerected shall not exceed 932 meters Above Mean Sea Level (‘AMSL')] and remandedthe matter to HAL for re-survey of site AMSL within a time bound manner and thereafterbased on the re-survey to proceed further in accordance with law. HAL filed an appealchallenging the said order. In November 2020 your Company also filed an appealchallenging certain parts of the order. Both matters are pending. Your Company isproposing completion of the project and is in discussions with the customers forconsenting to a revised development inter-alia by limiting the height to 40 meters andadding a residential wing and a commercial building. The Company has also initiated theprocess for renewing/applying for permissions. Subject to the conclusion of discussionswith the customers and obtaining order from the Court and NOC from HAL for the reviseddevelopment work on the project is expected to commence in the next few months.


Your Company has neither accepted nor renewed any deposits during theyear under review and as such no amount on account of principal or interest on depositsfrom 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 fromany of its Directors.

Loans Investments Guarantees and Securities

Your Company falls within the definition of ‘InfrastructureCompany' as provided under Schedule VI of the Act and is therefore exempt from theprovisions of Section 186 of the Act with regard to Loans Investments Guarantees andSecurities. Details of loans given security provided in connection with a loan andinvestments made by your Company are given in Note No. 7 8 15 and 42 of the StandaloneFinancial Statements.

Foreign Exchange Earnings and Outgo

During the year under review your Company and its subsidiary earnedforeign exchange of ` 166.27 million and ` 3.62 million respectively as compared to `4253.37 million and ` 78.77 million respectively in the previous year.

The total foreign exchange outgo of your Company and its subsidiaryduring the year under review was ` 377.33 million and ` 57.97 million respectively ascompared to ` 896.42 million and ` 93.05 million respectively in the previous year.

Subsidiaries Associates and Joint Ventures

The Company had three subsidiaries and two associates as on March 312021. 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 aSubsidiary 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 which were acquired in theprevious year.

BHPL is the owner of ‘Novotel Pune Nagar Road' Hotel. Duringthe year under review BHPL reported a Total Income of ` 110.88 million and Net (Loss)after tax of ( ` 221.35) million.

SHPL had insignificant or no operations and reported a Total Income of` 6.31 million and Net Profit (after tax) of ` 3.64 million during the year underreview.

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

During the year under review the Company had filed a Scheme ofArrangement and Amalgamation of Belaire Hotels Private Limited and Seapearl Hotels PrivateLimited with the Company which inter-alia aims at synergy in operations greaterfinancial strength and improvement in the position of the merged entity. The AppointedDate for the Scheme is April 1 2020.

Pursuant to the Order dated February 05 2021 passed by the Hon'bleNational Company Law Tribunal Mumbai Bench (‘NCLT') meetings of the EquityShareholders and Preference Shareholders of the Company were held on April 12 2021wherein they accorded their approval to the said Scheme. The final order of the NCLT isawaited.

In terms of provisions of Section 136 of the Act the audited financialstatements of the subsidiary companies can be accessed on the website of the Company

Your Company had for securing the supply of renewable energy acquired20.8% of the Equity Share Capital of Krishna Valley Power Private Limited and 26% of theEquity Share Capital of Sahyadri Renewable Energy Private Limited being entities engagedin generation of hydropower. Your Company continues to hold the aforesaid securitieshowever it does not have the ability to participate and neither is involved in theoperations and/or relevant activities of these companies/ entities and neither hasexposure or rights to variable returns. Hence the aforementioned entities have not beenconsidered as Associate companies in the consolidation of Financial Statements. TheConsolidated Financial Statements of your Company and its Subsidiaries prepared inaccordance with the relevant Accounting Standards duly audited by the Statutory Auditorsform a part 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 in Form AOC-1 is annexed as Annexure IIto this Report.

The Company does not have any material subsidiary however the Companyhas formulated a policy for determining material subsidiary(ies) and such policy has beendisclosed on the Company's website at

Management Discussion and Analysis Corporate Governance and BusinessResponsibility Reports

Your Company has complied with the requirements of Corporate Governanceunder the Act and the Listing Regulations. A separate section on Corporate Governance adetailed report on Management Discussion & Analysis and Business Responsibility Reportform an integral part of this Report.

Directors and Key Managerial Personnel

The Board of Directors of the Company at its Meeting held on November10 2020 had based on the recommendation of the Compensation Nomination &Remuneration Committee reappointed Mr. Sanjay Sethi as the Managing Director & CEO ofthe Company for a further period of three years w.e.f. February 9 2021 subject to theapproval of the Members. The Board recommends his re-appointment as the Managing Director& CEO for which the approval of the Members is being sought in the Notice conveningthe Annual General Meeting (‘AGM') of the Company.

Further in view of inadequacy of profits for payment of managerialremuneration the Company is also seeking approval of the Members by way of a specialresolution for payment of remuneration and waiver in respect of excess remuneration paid /payable to Mr. Sanjay Sethi Managing Director & CEO. In accordance with the Act andthe Articles of Association of the Company Mr. Neel C Raheja (DIN: 00029010) is liable toretire by rotation at the ensuing AGM and being eligible has offered himself forre-appointment. Accordingly the re-appointment of Mr. Neel C Raheja is being placed forapproval of the Members at the ensuing AGM. Mr. Rajeev Newar had expressed his desire tostep down as Executive Director & CFO of the Company. Accordingly he ceased to be anExecutive Director at the end of his term with effect from August 02 2020 and as theChief Financial Officer with effect from August 19 2020. Further Mr. Milind Wadekar VP- Finance & Tax of the Company was appointed as the Interim Chief Financial Officer ofthe Company effective September 15 2020.

The disclosures pertaining to Directors being re-appointed as requiredpursuant to the Listing Regulations and Secretarial Standard-2 is given in the ExplanatoryStatement to the Notice convening the AGM.

Except for professional fees paid to Mr. Arthur DeHaast theNon-Executive Directors of the Company had no pecuniary relationship or transaction withthe Company other than sitting fees.

In view of the COVID-19 pandemic and challenges faced by the Companythereby the remuneration of employees including Key Managerial Personnel & SeniorManagement was restructured as a mitigation measure whereby a certain percentagecomponent of the current compensation was made variable pay effective April 01 2020. Theterms of remuneration of Mr. Sanjay Sethi Managing Director & CEO was restructuredaccordingly which was approved by the Board of Directors at its meeting held on June 082020 pursuant to recommendations of the Compensation Nomination & RemunerationCommittee. However the component of the compensation which was converted to variable hasbeen reinstated w.e.f. December 01 2020.

Annual Return

As provided under Section 92(3) and 134(3)(a) of the Act read withRule 12 of the Companies (Management and Administration) Rules 2014 as amended from timeto time the Annual Return of your Company in Form MGT-7 for the Financial Year 2020-21shall be hosted on the website of your Company

Number of Board Meetings

During the Financial Year 2020-21 the Board of Directors met fivetimes. 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 compliancesystems in place and the work carried out by the Internal and Statutory Auditorsincluding audit of internal financial controls over financial reporting and internalreviews performed by the Management and the Audit & Risk Management Committee theBoard is of the opinion that your Company's internal financial controls werereasonable and adequate for the Financial Year 2020-21.

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

(i) In the preparation of the accounts for the Financial Year ended March 31 2021 theapplicable Accounting Standards have been followed along with proper explanation relatingto material departures;

(ii) The Board of Directors have selected such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent in order togive a true and fair view of the state of affairs of your Company at the end of theFinancial Year and of the loss of your Company for the Financial Year ended March31 2021;

(iii) The Board of Directors have taken proper and sufficient care to the best of theirknowledge and ability for the maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of your Company and forpreventing and detecting fraud and other irregularities;

(iv) The Financial Statements for the Financial Year ended March 31 2021 have beenprepared on a ‘going concern' basis;

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

(vi) The Board of Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and such systems are adequate and are operatingeffectively.

Accounting Treatment

The Accounting Treatment is in line with the applicable IndianAccounting Standards (‘Ind AS') recommended by The Institute of CharteredAccountants of India and prescribed by the Central Government in accordance with Section133 of the Act.

Adequacy of Internal Financial Controls including reference to theFinancial Statements

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 provided an adequate system of internal controlcovering all corporate functions and franchise hotels. The internal control systemsprovide assurance regarding the effectiveness and efficiency of operations safeguardingof assets reliability on financial controls and compliance with applicable laws. Theoperations of the hotel are largely managed through globally reputed hospitality companieswhich have their respective internal control systems in place.

Based on the recommendation of the Audit & Risk ManagementCommittee the Board has approved the appointment of Ernst & Young LLP as InternalAuditors of the Company for Financial Years 2021-22 and 2022-23. The Chief InternalAuditor who reports to the Audit & Risk Management Committee oversees the InternalAudit function of the Company. The reports by the Internal Auditors are placed before theAudit & Risk Management Committee for their review and improvements.

Details of Fraud

During the year under review there were no material or seriousinstances of fraud falling within the purview of Section 143 (12) of the Act and Rulesmade thereunder by officers or employees reported by the Statutory Auditors of theCompany during the course of the audit. Therefore no details are required to be disclosedunder Section 134 (3)(ca) of the Act.

Board Effectiveness & Board Evaluation

Pursuant to Section 134(3)(p) of the Act as amended from time to timeand Regulations 17 and 25 of the Listing Regulations the Board of Directors had carriedout an annual evaluation of its own performance Individual Directors and its Committeesfor the Financial Year under review. A structured questionnaire was prepared after takinginto consideration the Guidance Note issued by SEBI on Board Evaluation covering variousaspects of the Board's functioning such as adequacy of the composition of the Boardand its Committees Board culture execution and performance of specific dutiesobligations and governance. The feedback and suggestions received from all the Directorshave been discussed at the meeting of the Board of Directors held on May 18 2021. TheDirectors expressed their satisfaction with the evaluation process.

Independent Directors

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 suffer from any disqualifications specified under the Act andare not aware of any circumstances or situations which exist or may be reasonablyanticipated that could impair or impact the ability to discharge their duties.

Further all the Independent Directors have registered their names inthe databank of Independent Directors maintained by the Indian Institute of CorporateAffairs.


Your Company has constituted Committees of the Board as per therequirements of the Act and the Listing Regulations. Details of constitution meetingsheld attendance of the members and terms of reference of the said Committees have beenenumerated in the Corporate Governance Report which forms a part of the Annual Report.

Corporate Social Responsibility (‘CSR')

Your Company had adopted a CSR Policy indicating the broad philosophyand objectives which is available on the website of your Company

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

Compensation Nomination & Remuneration

Your Company had in compliance with the provisions of Section 178 ofthe Act and Regulation 19 of the Listing Regulations adopted a Policy for Appointment ofDirectors and Remuneration of Directors and Senior Management. The same is available onthe website of your Company viz. policies.

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

• the level and composition of remuneration be reasonable and sufficient toattract retain and motivate Directors of the quality required to run the Companysuccessfully;

• relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and

• remuneration to Directors Key Managerial Personnel and Senior Managementinvolves a balance between fixed and performance linked bonuses reflecting short and longterm performance objectives appropriate to the working of the Company and its goals.

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

Employee Stock Option Scheme (ESOP)

The Board had granted an option in respect of 200000 Equity Shares of` 10 each at a price of ` 320 each to Mr. Sanjay Sethi Managing Director & CEO ofyour Company under the Chalet Hotels Limited - Employee Stock Option Plan 2018 to vestin three tranches. The first tranche of ESOPs granted had vested in the previous yearwhereas the second tranche was vested during the year under review. No options have beenexercised during the year under review or till date.

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 havebeen made available on the website of the Company at under the head‘Annual Reports' in the Investor Relations section. Further certificate from BS R & Co. LLP Statutory Auditors of the Company with respect to implementation ofESOP would be placed at the ensuing AGM for inspection by the Members of the Company.

Statutory Auditors

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

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

Explanation or Comments on Qualifications Reservations AdverseRemarks or Disclaimers made by the Auditors

There are no qualifications reservations or adverse remarks ordisclaimers made by Statutory Auditors in their report on the Financial Statements for theFinancial Year 2020-21. However the Statutory Auditor has drawn attention i.e. Emphasisof Matter with regard to Note 42(c) and Note 49 of the Standalone Financial Statements intheir report details of which are as follows:

Emphasis of Matter

a) We draw attention to Note 42(c) of the standalone financialstatements in respect of the entire building comprising of the hotel and apartmentstherein purchased together with a demarcated portion of the leasehold rights to land atVashi (Navi Mumbai) from K. Raheja Corp Private Limited on which the Company's FourPoints by Sheraton Hotel has been built. The allotment of land by City & IndustrialDevelopment Corporation of Maharashtra Limited (‘CIDCO') to K. Raheja CorpPrivate Limited has been challenged by two public interest litigations and the matter iscurrently pending with the Honorable Supreme Court of India. Pending the outcome ofproceedings and a final closure of the matter no adjustments have been made in thestandalone financial statements as at and for the year ended 31 March 2021 to the carryingvalue of the leasehold rights (reflected as prepayments) aggregating to ` 50.93 million(31 March 2020: ` 52.13 million) and the hotel assets thereon (reflected as propertyplant and equipment) as at 31 March 2021 is ` 400.77 million (31 March 2020: ` 427.21million) respectively.

Our opinion is not modified in respect of the above matter. b) We drawattention to Note 49 to the standalone financial statements relating to remuneration paid/ payable to the Managing Director & CEO of the Company for the financial year ended31 March 2021 being in excess of limits prescribed under Section 197 of the Act by `47.49 million of which the proportionate remuneration from 09 February 2021 of ` 6.63million is subject to approval of the shareholders. Our opinion is not modified in respectof the above matter. The Auditors have clarified that their opinion is not qualified inrespect of these matters.

Detailed explanation in respect of the matters at Item No. 1 and 2 havebeen provided under Note No. 42(c) and Note No. 49 of the Standalone Financial Statements.

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. BNP & Associates Company Secretaries in Practice (FirmRegistration No. P2014MH037400) to undertake Secretarial Audit for Financial Year 2020-21.The Secretarial Audit Report is annexed herewith as Annexure IV. There are noqualifications reservations adverse remarks or disclaimers in the report. Further thesubsidiaries of the Company as mentioned above do not meet the criteria for materialunlisted subsidiaries. Therefore the provisions of Regulation 24A of the ListingRegulations in respect of Secretarial Audit are not applicable for the year under review.

During the year under review the Secretarial Auditor had not reportedany fraud under Section 143(12) of the Act and therefore no details are required to bedisclosed under Section 134(3)(ca) of the Act.

Cost Audit

Your Company has been maintaining cost accounting records as specifiedby the Central Government under Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014. Further your Company was also required to conduct anaudit of cost records as specified by the Central Government under Section 148 of the Actand the Rules framed thereunder for the financial year under review. The Board ofDirectors appointed Mr. Vikas Vinayak Deodhar Cost Accountant (Membership No. 3813) asthe Cost Auditor for conducting the audit of cost records for the Financial Year 2020-21at the remuneration approved by the Members at the previous AGM.

Audit & Risk Management Committee

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

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 on the website of your Company atwww.chalethotels. com/policies/.

The contracts arrangements or transactions entered into during theyear under review by the Company with Related Parties were in the Ordinary Course ofBusiness and 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 materiallysignificant as per the Policy adopted by your Company.

The disclosure in Form AOC-2 is not applicable to the Company for theFinancial Year 2020-21 and hence does not form part of this Report.

Risk Management

Your Company has constituted an Audit and Risk Management Committee asrequired under the Listing Regulations. Further your Company has adopted a RiskManagement Policy pursuant to the provisions of Section 134 of the Act to identify andevaluate 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 needvarying approaches for mitigation. The Risk Management framework defines the riskmanagement approach across the enterprise. The risk framework which seeks to createtransparency minimise adverse impact on business objective and enhance yourCompany's competitive advantage is reviewed by the Audit & Risk ManagementCommittee periodically. An impact analysis of the identified risks including riskmitigation approach and risk mitigation status is also done at regular intervals takinginto consideration the changing business environment. The Policy is available on theCompany's website at

Details of the key risks faced by your Company and measures formitigation have been provided on Page 44 of the Integrated Reporting section of the AnnualReport.

Vigil Mechanism Policy & Whistle Blower Policy

Your Company has in accordance with Section 177 of the Act drawn aWhistle Blower Policy for its Directors and Employees to enable reporting of anywrongdoing within the Company / branches / hotels that fall short of your Company'sbusiness principles on ethics and good business practices.

Your Company's Vigil Mechanism & Whistle Blower Policyprovides a formal mechanism to the Directors and all the employees of the Company toreport their concerns about unethical behaviour actual or suspected fraud or violation ofthe Company's Code of Conduct or ethics policy. The said policy is available on theCompany's website at policies/.

The Policy covers the adequate safeguards against victimisation ofDirectors and employees who avail of the mechanism and also have provided them directaccess to the Chairperson of the Audit & Risk Management Committee. Matters reportedunder the Vigil Mechanism are informed to the Audit & Risk Management Committee fromtime to time. It is affirmed that no personnel of the Company has been denied access tothe Chairperson of the Audit & Risk Management Committee.

Significant and Material Orders passed by Regulators Courts orTribunals impacting the Going Concern status and Company's operations in future

During the year under review judgement had been passed by theHon'ble Karnataka High Court in respect of the residential project at Bengaluru.Please refer to the section ‘Residential Project – Koramangala Bengaluru'for more details in this Report.

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

Your Company has complied with provisions relating to the constitutionof Internal Complaints Committee in compliance with the requirements of The SexualHarassment of Women at the Workplace (Prevention Prohibition & Redressal) Act 2013in respect of the Corporate Office and various units. The said policy is available on theCompany's website at www.chalethotels. com/policies/.

During the year under review your Company received and/or resolvedthree complaints on sexual harassment and appropriate action has been taken wherevernecessary. There are no pending cases. The Company also conducts workshops 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 towards nurturing talent keeping itspeople connected and taking various steps for maintaining the physical and emotionalwellbeing of its employees. Your Company also rolled out health hygiene and safetyprotocols and technology and app-based solutions to ensure employee health and safety.

Further your Company has been certified by the Great Place to WorkInstitute for the second time in a row for benchmarking and planning actions to strengthenits workplace culture. The disclosures pertaining to remuneration and other details asrequired 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 thisReport as Annexure V.

Further in terms of the provisions of Section 197(12) of the Act readwith Rules 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.

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 theMembers of the Company and others entitled thereto. Any Member interested in obtainingsuch information may write to the Company Secretary at companysecretary@chalethotels.comand the same will be furnished on request. The Annual Report including the aforesaidinformation is also available on the Company's website.

Integrated Reporting

Your Company being among the top 500 listed companies in the country interms of market capitalisation has voluntarily provided Integrated Report whichencompasses both financial and non-financial information to enable its Members to takewell informed decisions and have a better understanding of the Company's long termperspective. The Report also touches upon aspects such as organisation's strategygovernance framework performance and prospects of value creation based on the six formsof capital viz. financial manufactured intellectual human social & relationshipand natural capitals.

Environmental Initiatives and Energy Management

The management team of your Company sets its goals for improvementleading to various initiatives including conservation of energy. With an aim to maintain abalance with the environment and a steady focus on sustainability your Company has ledvarious initiatives including sourcing of energy from renewable resources. As a part ofits efforts to ensure constant focus on sustainability and to support the deployment ofthis promise objectives have been articulated for the year that lay out improvementtargets that have led to conservation of energy. The Company's policy and prioritiesconcerning Environment Social and Governance initiatives are articulated as a separateESG Report which is being made available on Various aspects of ESGare also being covered in the Integrated Section of this Annual Report.

Your Company has embarked on its journey towards managing environmentalimpact and has set its targets therefor. As a part of the Climate Group's EV 100initiative which the Company has applied it is proposed to move to electric vehicles atthe hotels as a part of embracing a greener business model by reducing dependence onfossil fuels and to set up charging infrastructure at all our assets for use by guests andemployees by the year 2023. As required by Section 134 of the Act read with Rule 8 ofCompanies (Accounts) Rules 2014 the information relating to conservation of energy isannexed as Annexure VI to this Report.

The information relating to technology absorption is not given sincethe same is not applicable to your Company.

Material Changes and Commitments

There have been no material changes and commitments a_ecting 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.

Compliance with Secretarial Standards:

Your Company is in compliance with the applicable SecretarialStandards issued by the Institute of Company Secretaries of India and approved by theCentral Government under Section 118(10) of the Act.


Your Directors would like to thank the Members for their supportreceived and their continued confidence in the Company. Your Directors would like toexpress their sincere appreciation for the assistance and co-operation received from theRegulatory and Statutory Authorities Government and its agencies hotel & retailoperating partners Stock Exchanges Depositories lenders legal advisors Registrar& Share Transfer Agent Auditors vendors and other key stakeholders. Your Companylauds the Central Government State Governments Municipal Corporations and othergovernment bodies for their initiatives to combat the pandemic and steps in aiding theindustry to emerge out of this crisis.

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