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Lemon Tree Hotels Ltd.

BSE: 541233 Sector: Services
NSE: LEMONTREE ISIN Code: INE970X01018
BSE 00:00 | 25 May 59.35 -4.60
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(-7.19%)
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OPEN 63.85
PREVIOUS CLOSE 63.95
VOLUME 593072
52-Week high 71.40
52-Week low 36.10
P/E
Mkt Cap.(Rs cr) 4,702
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 63.85
CLOSE 63.95
VOLUME 593072
52-Week high 71.40
52-Week low 36.10
P/E
Mkt Cap.(Rs cr) 4,702
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Lemon Tree Hotels Ltd. (LEMONTREE) - Director Report

Company director report

TO

THE MEMBERS

OF LEMON TREE HOTELS LIMITED

Your Directors have pleasure in presenting the Twenty Ninth AnnualReport of the Company together with audited Financial Statements for the Financial Yearended March 31 2021.

FINANCIAL RESULTS AND OPERATIONS

The financial performance on the basis of Standalone & ConsolidatedFinancial Statements for the year ended March 31 2021 is summarized below:

(Rs. in Lakhs)

Standalone Consolidated
Particulars As on March 31 2021 As on March 31 2020 As on March 31 2021 As on March 31 2020
Total Income 8394.44 27324.13 26497.92 67522.02
Profit before depreciation Finance Costs Tax and Exceptional items 2275.66 11306.08 8326.15 25429.27
Less: Depreciation 2251.03 2425.82 10755.32 9224.72
Less: Finance Costs 4819.30 4815.50 19045.72 16155.57
Profit / (Loss) before Exceptional items and Tax (4794.67) 4064.76 (21474.89) 48.98
Less: Exceptional items 592.07 - - -
Share of Profit/Loss of associate - - (399.53) (266.66)
Profit / (Loss) before Tax (5386.74) 4064.76 (21874.42) (217.68)
Less:
Current Tax - 689.98 (1.57) 990.43
Deferred Tax/MAT Credit entitlement (1313.67) 154.98 (3218.68) 97.34
Profit / (Loss) after Tax (4073.07) 3219.80 (18654.17) (1305.45)
Add: Other Comprehensive Income net of taxes (3.33) 9.72 (22.20) 1.24
Total Comprehensive Income/Loss (4076.40) 3229.52 (18676.36) (1304.20)
Less: Non - controlling Interest - - (5957.79) (355.03)
Total Comprehensive Income/(Loss) for the year attributable to Equity Holders of the Parent (4076.40) 3229.52 (12718.57) (949.17)
Earning Per Equity Share of the face value of ` 10 each
Basic (0.52) 0.41 (1.61) (0.12)
Diluted (0.52) 0.41 (1.61) (0.12)

Further key financial and operational highlights of our Company arealso provided in the management discussion and analysis report forming part of this AnnualReport.

CAPITAL STRUCTURE

Authorised Share Capital

The Authorised Share Capital of the Company is ` 10028900000divided into 1001440000 Equity Shares of ` 10 each and 145000 5% CumulativeRedeemable Preference Shares of ` 100 each.

Paid-up Share Capital

During the financial year under review the Issued and Paid up ShareCapital of the Company was remained at ` 7922464640/- divided into 792246464equity shares of face value of ` 10/-.

OPERATIONAL HOTELS AND UPCOMING PROJECTS

The Company is engaged in hotel business and there has been no changein the nature of its business during the year under review.

The details of operational hotels and upcoming projects are given inthe "Corporate Overview" Section of the Annual Report 2020-21.

AWARDS AND RECOGNITION

During the year under review the Company has received following keyawards and recognition as detailed herein below:

- Awarded GO-MMT Traveller's Choice Award

- 62 out of 80 hotels awarded Traveller's Choice Award byTripAdvisor o Lemon Tree Premier 10 Hotels o Lemon Tree Hotels -31 Hotels o Red Fox Hotels9 Hotels o Keys Prima 1 Hotel o Keys Select 10 Hotels

o Keys Lite 1 Hotel

BOARD OF DIRECTOR'S & KEY MANAGERIAL PERSONNEL (KMP'S)

The details of the Director's & KMP's [as per CompaniesAct 2013 ("Act")] of the Company are given herein below

S. No. Name of Directors/KMP's Designation
1 Mr. Patanjali Govind Keswani Chairman & Managing Director
2 Mr. Rattan Keswani Deputy Managing Director
3 Mr. Anish Kumar Saraf* Director
4 Mr. Willem Albertus Hazeleger Director
5 Mr. Ravi Kant Jaipuria** Director
6 Mr. Aditya Madhav Keswani Director
7 Mr. Ashish Kumar Guha Independent Director
8 Mr. Arvind Singhania Independent Director
9 Mr. Paramartha Saikia Independent Director
10 Ms. Freyan Jamshed Desai Independent Director
11 Mr. Pradeep Mathur Independent Director
12 Dr. Arindam Kumar Bhattacharya Independent Director
13 Mr. Niten Malhan*** Independent Director
14 Mr. Kapil Sharma Chief Financial Officer
15 Mr. Nikhil Sethi Group Company Secretary & GM Legal

*Mr. Anish Kumar Saraf non-executive Director resigned from the Boardof Directors w.e.f May 29 2020

** Mr. Ravi Kant Jaipuria non-executive Director resigned from theBoard of Directors w.e.f March 23 2021

*** Mr. Niten Malhan was appointed as an Additional IndependentDirector w.e.f November 6 2020

CHANGES IN BOARD OF DIRECTORS/KMPs

Appointments

During the Financial Year under review Mr. Niten Malhan has beenappointed as Additional Director in the capacity of Non- Executive Independent Directorw.e.f. November 6 2020 and in opinion of the Board he is a person of intergrityexpertise and experience which would help the Company in future growth and he is proposedto be appointed as an Independent Director in the ensuing Annual General Meeting. YourCompany has also received declaration from Mr. Niten Malhan that he meets the criteria ofIndependence as prescribed under subsection (6) of Section 149 of the Act along with adeclaration of compliance of sub-rule (1) and sub-rule (2) of Rule 6 of Companies(Appointment and Qualification of Directors) Rules 2014 and under the Securities ExchangeBoard of India (Listing Obligations & Disclosure Requirements) Regulations 2015(hereinafter referred to as "SEBI (LODR) Regulations"). He further affirmed thathe is not debarred from holding the office of an Independent Director by virtue of anySEBI Order or any other such Authority.

Mr. Niten Malhan being eligible is proposed to be appointed as anIndependent Director for a term of up to 5 (Five) years w.e.f. November 6 2020. TheNomination and remuneration committee of the Company and the Board of Directors haverecommended his appointment. A notice has been received from a Member of the Companyproposing his candidature for being appointed as an Independent Director of the Company.

In accordance with the Act and the Articles of Association of theCompany 1 (one) of your Directors viz. Mr. Rattan Keswani retires by rotation and beingeligible offers himself for reappointment.

Your approval for their appointment/re-appointment as Directors isbeing sought in the Notice convening the Annual General Meeting of the Company.

Resignations/Retirement/Cessation

During the Financial Year under review the following directors haveresigned from the Board of the Company:

- Mr. Anish Kumar Saraf Non-executive Director w.e.f May 29 2020

- Mr. Ravi Kant Jaipuria Non-executive Director w.e.f March 23 2021

The Board wishes to place on record their sincere appreciation for thecontributions made by the outgoing directors during their tenure on the Board.

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors have given necessary declarations interms of Section 149 (7) of the Act and SEBI (LODR) Regulations that they meet thecriteria of independence as laid down under Section 149 (6) of the Act along with adeclaration of compliance of sub-rule (1) and sub-rule (2) of Rule 6 of Companies(Appointment and Qualification of Directors) Rules 2014 and SEBI (LODR) Regulations.

COMMITTEES OF THE BOARD

As on March 31 2021 your Board has following mandatory

Committees:

- Audit Committee;

- Nomination and Remuneration Committee;

- Corporate Social Responsibility Committee;

- Stakeholder's Relationship Committee; and

- Risk Management Committee

The details of the compositions meetings held during the year andattendance of the Members and terms of reference of the above committees of the Board areprovided in the Corporate Governance Report attached as ‘Annexure-5' tothis Report. Apart from the above-mentioned Committees the details of the compositionsmeetings held during the year and attendance of the Members of following non-mandatorycommittees are given in ‘Annexure-1' to this Report:

(a) Finance Committee;

(b) Share Allotment Committee;

(c) General Management Committee

BOARD MEETINGS HELD DURING THE YEAR

During the Financial Year under review your Board met 5 (Five) timesand the details of the Board Meetings held indicating number of meetings attended by eachDirector is provided in the Corporate Governance Report attached as ‘Annexure-5'to this Report.

ANNUAL BOARD EVALUATION

To comply with the provisions of Section 134(3)(p) of the Act and rulesmade thereunder Regulation 17(10) of SEBI (LODR) Regulations. The Board of Directors hascarried out an annual evaluation of its own performance including its committees (whereinthe concerned director being evaluated did not participate). The performance of the Boardwas evaluated by the Board after seeking inputs from the Directors on the basis of thecriteria such as strategy performance management risk management core governance &compliance organization's health and talent management.

Further to comply with the Regulation 25(4) of SEBI (LODR)Regulations Independent Directors also evaluated the performance of Non-IndependentDirectors Chairman and Board as a body at a separate meeting of Independent Directors.

The evaluation of all the Directors and the Board as a whole wasconducted based on the criteria and framework adopted by the Board. On the basis of theranking filled questionnaire and discussion of the Board the performance of the Board andits committees and Individual Directors (including Independent Directors) has beenassessed as satisfactory.

POLICIES UNDER COMPANIES ACT 2013/SEBI (LODR) REGULATIONS

Code of Conduct and Vigil Mechanism/Whistle Blower Policy

The Company has in place a mechanism for employees for reportinggenuine concerns from reprisal and victimization.

The policy is available in the ‘Investor Relations' sectionat the Company's website www.lemontreehotels.com. During the year under review noconcerns have been received by the Company from any of the Directors Officers Employeesand Associates pertaining to the Code and Vigil Mechanism.

Risk Management Policy

The Company has in place Risk Management Policy formulated inaccordance with the provisions of Section 134(3)(n) of the Act which is available in the‘Investor Relations' section at the Company's websitewww.lemontreehotels.com. There has been no change in the policy during the Financial Yearunder review. The Company has a system in place for identification of elements of riskwhich are associated with the accomplishment of objectives operations developmentrevenue and regulations and appropriate measures are taken wherever required to mitigatesuch risks beforehand.

The Statutory Auditors and the Internal Auditors report to the AuditCommittee during their audit and highlight risk(s) if any associated with organizationand also suggest the appropriate measures in consultation with the management and theAudit Committee which can be taken by the company in this regard.

The Statutory Auditors also report to the Audit Committee of anyinstance of non-adherence to the procedures and manual which may increase the risk offrauds in the organization.

Nomination and Remuneration Policy

The Company has in place the Nomination & Remuneration Policy whichlays down the criteria for appointment evaluation of performance of Directors andremuneration of Directors Key Managerial Personnel Senior Management Personnel and otheremployees and there has been no change in the policy during the Financial Year. TheNomination & Remuneration Policy is attached as ‘Annexure-2' to thisReport.

During the year under review the Company has taken necessaryapproval/recommendation with respect to appointment/ reappointment of Directors/KMPswherever required from Nomination and Remuneration Committee in terms of the policy.

Corporate Social Responsibility ("CSR") Policy

The Company has in place CSR policy formulated in terms of provisionsof Section 135(4) of the Act read with Rule 6 of the Companies (Corporate SocialResponsibility Policy) Rules 2014. The said policy has been amended by the Board ofDirectors in their meeting held on June 15 2021 to align the same with Statutoryamendment. The policy is available in the ‘Investor Relations' section at theCompany's website www. intheevaluation lemontreehotels.com.

Annual Report on CSR Activities for the Financial Year 2020-21 asrequired under Section 134 and 135 of the Act read with Rule 8 of the Companies (CorporateSocial Responsibility Policy) Rules 2014 read with Rule 9 of the Companies (Accounts)Rules 2014 is attached as ‘Annexure-3' to this Report.

Dividend Distribution Policy

The Company has in place a Policy on Distribution of Dividend to complywith the Regulation 43A of SEBI (LODR) Regulations. The policy is available in the‘Investor Relations' section at the Company's websitewww.lemontreehotels.com.

Policy on Rotation of Auditors

The Board of Directors in their meeting held on March 30 2021 hasapproved the policy on appointment and rotation of Auditors in compliance with theprovisions of Section 139 of Companies Act 2013 read with Companies (Audit and Auditors)Rules 2014. The policy is available in the ‘Investor Relations' section at theCompany's website www.lemontreehotels.com.

SUBSIDIARY ASSOCIATES AND JOINT VENTURE COMPANIES

As on March 31 2021 your Company has 14 (fourteen) direct subsidiarycompanies and 9 (nine) indirect subsidiary companies and 3 (three) associate Companies asunder:

Direct Subsidiary Companies

Canary Hotels Pvt. Ltd. Dandelion Hotels Pvt. Ltd. Lemon Tree HotelCompany Pvt. Ltd. Oriole Dr. Fresh Hotels Pvt. Ltd. PSK Resorts & Hotels Pvt. Ltd.Red Fox Hotel Company Pvt. Ltd. Sukhsagar Complexes Pvt. Ltd Fleur Hotels Pvt. Ltd.Carnation Hotels Pvt. Ltd. Grey Fox Project Management Company Pvt. Ltd. Madder StaysPrivate Limited Jessamine Stays Private Limited and Poplar Homestead Holdings PrivateLimited. During the year under review the Company has acquired the shareholding ofHamstede Living Private Limited from Magnolia Grove Investment Ltd and it has become asubsidiary of the Company w.e.f March 31 2021.

During the year under review Begonia Hotels Private Limited andNightingale Hotels Private Limited subsidiaries of the Company has been merged into FleurHotels Private Limited material subsidiary of the Company w.e.f March 31 2021 throughorder passed by National Company Law Tribunal New Delhi.

Indirect Subsidiary Companies

Berggruen Hotels Private Limited Bandhav Resorts Pvt. Ltd. CelsiaHotels Pvt. Ltd. Inovoa Hotels and Resorts Ltd. Iora Hotels Pvt. Ltd. Ophrys HotelsPvt. Ltd. Hyacinth Hotels Pvt. Ltd. Manakin Resorts Pvt. Ltd. and Valerian ManagementServices Pvt. Ltd.

Our Associate Companies

Further as on March 31 2021 your Company has three AssociateCompanies i.e Mind Leaders Learning India Pvt. Ltd Pelican Facilities Management Pvt.Ltd. and Glendale Marketing Services Private Limited (formerly known as Vulture ManagementService Private Limited).

Further our Subsidiaries Fleur Hotels Pvt. Ltd and Celsia Hotels Pvt.Ltd. are partners of a limited liability partnership Mezereon Hotels LLP("Mezereon")

In accordance with Section 129(3) of the Act read with Rule 8(1) ofCompanies (Accounts) Rules 2014 the consolidated financial statements of the Company andall its subsidiaries associates and joint ventures have been prepared by the Company anda report on the performance and financial position of each of the subsidiaries associatesand joint venture companies included in the consolidated financial statement is attachedas Annexure-4' ‘ to this Report.

In terms of provisions of Section 136 of the Act separate auditedaccounts of the subsidiary companies shall be available in the ‘InvestorRelations' section at the Company's website www.lemontreehotels.com. The Companywill make available physical copies of these documents upon request by any shareholder ofthe Company interested in obtaining the same.

MANAGEMENT REPORTS

Management Discussion and Analysis Report

The management discussion and analysis report on Company'sperformance-industry trend and other material changes with respect to the Company and itssubsidiaries associates wherever applicable has been given separately and forms part ofthis Annual Report.

Business Responsibility Report

Pursuant to the provisions of Regulation 34(2)(f) of SEBI (LODR)Regulations the Business Responsibility Report is attached as ‘Annexure-10 'to this Report.

The Company's first Sustainability / ESG Report for the financialyear ended March 31 2021 prepared in accordance with GRI Standards will be availableshortly at our website at www.lemontreehotels.com.

CORPORATE GOVERNANCE

Your company has adopted good governance practices and committed tomaintain high standards of the Corporate ethics professionalism and transparency. TheCompany has adopted polices in line with the governance requirements including Policy onRelated Party Transactions Policy on Material Subsidiary Policy for Material Informationand Events Corporate Social Responsibility Policy Dividend Distribution Policy andWhistle Blower Policy. These policies are available in the ‘Investor Relations'section at the Company's website www. lemontreehotels.com.

In compliance with the provisions of Regulations 34(3) of the SEBI(LODR) Regulations a separate report on Corporate Governance together with a certificateAuditors of the Company regarding compliance of conditions of Corporate Governance asstipulated under the SEBI (LODR) Regulations is attached as ‘Annexure-5'to this Report.

DEPOSITS

The Company has not accepted any public deposits and as such no amounton account of principal or interest on public deposits was outstanding as on the date ofthe Balance Sheet.

BORROWINGS FROM BANKS/ FINANCIAL INSTITUTIONS

The Company's total long term borrowings from banks/ financialinstitutions increased from ` 30099.46 Lakhs in the previous year to ` 35886.55 Lakhs inthe current year.

EMPLOYEES STOCK OPTION SCHEME

During the year under review the Company has an Employee Stock OptionScheme 2006 (‘ESOP Scheme') in line with the provisions of Securities andExchange Board of India (Share Based Employee Benefits) Regulations 2014 A certificatefrom the Statutory that the scheme has been implemented in accordance with Securities andExchange Board of India (Share Based Employee Benefits) Regulations 2014 will be placedat the ensuing Annual General Meeting for inspection by Members of the Company.

Further during the Financial Year under review 107000 shares havebeen exercised by the employees of the Company through Krizm Hotels Private LimitedEmployee Welfare Trust. The applicable disclosures as stipulated under Rule 12 ofCompanies (Share Capital and Debentures) Rules 2014 with regard to Employees Stock OptionPlan of the Company is given hereinbelow and the information required under SEBI (ShareBased Employee Benefits) Regulations 2014 is available at the Company's websiteat:https://www.lemontreehotels.com/factsheet/otherdisclosures/Stock_Options_March_31_2021.pdf.

S. No. Description ESOP Scheme
a) Options Granted Nil
b) Options vested 146100
c) Options Exercised* -
d) Total Number of Shares arising as a result of exercise of option -
e) Options lapsed* N.A
f) The exercise price (On weighted average basis)** -
g) Variation of terms of options N.A
h) Money realized by exercise of options (if scheme is implemented directly by the Company) N.A
i) Total number of options in force -
j) Employee wise details for options granted to:-
(i) Key managerial Personnel:
a) Mr. Rattan Keswani (Deputy Managing Director) N.A
b) Mr. Kapil Sharma (Chief Financial Officer) N.A
c) Mr. Nikhil Sethi (Group Company Secretary and GM Legal) N.A
(ii) any other employee who received a grant of options in any one year of option amounting to five percent of more of options granted during that year
(iii) identifiedemployees who were granted option during any one year equal to or exceeding one percent of the issued capital(Excluding outstanding warrants and conversions) of the Company at the time of grant N.A

* All the options have been exercised by Krizm Hotels Private LimitedEmployee Welfare Trust in previous years.

Auditors

** Options granted prior to the listing of the Company's shares ofthe Company were based on the valuation done by an Independent Charted Accountant fromtime to time.

REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL AND PARTICULARS OFEMPLOYEES

The statement including the details of employees as required to befurnished in accordance with the provisions of Section 197(12) of the Act read with Rule5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are set out in ‘Annexure-6' to this Report.

Disclosures pertaining to the 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 are provided in ‘Annexure-7'to this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(C) read with Section 134(5) of the Act theDirectors to the best of their knowledge and ability hereby confirm that:

(i) in the preparation of the annual accounts the applicableaccounting standards had been followed with proper explanation relating to materialdepartures;

(ii) they have selected such accounting policies in consultationwithStatutory Auditors and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of thecompany at the end of the Financial Year March 31 2021 and of the profit the company forthe Financial Year;

(iii) theyhavetakenproperandsufficient care to the best of theirknowledge and ability for the maintenance of adequate accounting records in accordancewith the provisions of the Companies Act 2013 for safe guarding the assets of the Companyand for preventing and detecting frauds and other irregularities;

(iv) the annual accounts of the Company have been prepared on a goingconcern basis.

(v) the directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperatingeffectively.

(vi) they had devised proper systems to ensure compliance with theprovisions of all applicable laws and that suchsystems were adequate and operatingeffectively.

AUDITORS AND AUDITOR'S REPORT

Statutory Auditors

M/s Deloitte Haskins & Sells LLP (LLP No. AAB-7837) CharteredAccountants have been appointed as Statutory Auditors of the Company in the Annual GeneralMeeting held on September 29 2017 for a period of 5 years up to conclusion of 6thconsecutive Annual General Meeting of the Company.

The reports given by the Statutory Auditors' on the StandaloneFinancial Statements of the Company and the Consolidated Financial Statements of theCompany and its Subsidiaries & Associates for the Financial Year ended March 31 2021forms part of this Annual Report. There have been no qualifications reservation oradverse remarks made by the Statutory Auditors in their reports. The Statutory Auditorshave not reported any frauds under Section 143(12) of the Act.

Secretarial Auditor Report of the Company and its material subsidiaryCompanies

The Board of Directors of the Company have appointed M/s SanjayGrover & Associates Practicing Company Secretaries to conduct the Secretarial Auditfor the Financial Year under review in accordance with Section 204 of the Act.

The Secretarial Auditors have submitted their report which is annexedas ‘Annexure-8' to this Report. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.

As per Regulation 24A of SEBI (LODR) Regulations the Secretarial Auditof the material subsidiaries has been conducted for the financial year 2020-21 byPracticing Company Secretaries. None of the said Audit Reports contain any qualificationreservation or adverse remark or disclaimer. The Secretarial Audit Reports of materialsubsidiaries for the financial year ended March 31 2021 are annexed herewith and markedas ‘Annexure - 9' to this Report.

Further the Board of Directors of the Company has reappointed M/sSanjay Grover and Associates Practicing Company Secretaries to conduct the SecretarialAudit of the Company for the Financial Year 2021-22 in accordance with Section 204 of theCompanies Act 2013.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant or material orders regulators courts ortribunals having an impact on the future operations of the Company or its going concernstatus.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company being engaged in the hotel business is classified asproviding infrastructure facilities in terms of the Schedule VI to the Act and is exemptedfrom the compliance for loans made guarantees given security provided in terms ofSection186 (11) of the Act however the details of loans guarantees and investmentsmade by the Company forms part of the notes to the Financial Statements.

Further the details required in terms of Regulation 34(3) of SEBI(LODR) Regulations with respect to loan given by the Company to its subsidiaries is givenhereunder. For details regarding investments and guarantees please refer to the notes tothe financial statements.

(Rs. in Lakhs)

Name of the Company Maximum Loans outstanding during the year 2021 As at March 31 2021 Maximum Loans outstanding during the year 2020 As at March 31 2020
Carnation Hotels Private Limited 2.72 2.72 257.72 2.72
Canary Hotels Private Limited 588.50 16.50 146.00 146.00
Oriole Dr. Fresh Hotels Private Limited 68.00 68.00 - -
Sukhsagar Complexes Private Limited 641.28 12.00 542.00 542.00
Red Fox Hotel Company Private Limited 0.11 0.11 0.11 0.11
Grey Fox Project Management Company Private Limited 12.00 12.00 82.00 12.00
Meringue Hotels Private Limited (merged with Fleur Hotels Private Limited) 2788.00 - 4652.00 2788.00
Pelican Facilities Management Private Limited - - 1.00 1.00
Dandelion Hotels Private Limited 9.00 9.00 7.00 7.00

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERREDTO IN SECTION 188 OF THE COMPANIES ACT 2013

In line with the requirements of the Act and the SEBI (LODR)Regulations your Company has formulated a policy on dealing with Related PartyTransactions (RPTs) which has been amended on June 15 2021. The policy can be accessed inthe ‘Investor Relations' section at the Company's website www.lemontreehotels.com. The Policy intends to ensure that proper reporting approval anddisclosure processes are in place for all material transactions between the Company andRelated Parties. All contracts / arrangements / transactions entered by the Company duringthe financial year with related parties were in the ordinary course of business and on anarm's length basis.

During the year the Company had not entered into any contract /arrangement / transaction with related parties which could be considered material. In viewof the above the requirement of giving particulars of contracts / arrangements/transactions made with related parties in Form AOC-2 are not applicable for the yearunder review. Further you may refer to other Related Party transactions in Note No. 33 ofthe Standalone Financial Statements.

ANNUAL RETURN

In terms of provisions of Section 92 134(3)(a) of the Act read withRule 12 of Companies (Management and Administration) Rules 2014 and amendments theretothe Annual Return of the Company is available at the website of the Company atwww.lemontreehotels.com.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY

There have been no material changes and commitments if any affectingthe financial position of the Company which have occurred between the end of the FinancialYear of the Company to which the Financial Statements relate and the date of this Report.

PARTICULARS REGARDING CONSERVATION OF ENERGY ETC. UNDER SECTION134(3)(m) OF THE COMPANIES ACT 2013 AND RULES MADE THEREIN

As per the provisions of Section 134(3)(m) of the Act read withCompanies (Accounts) Rules 2013 the measures taken during the year under review forconservation of energy and technology absorption by the Company in operation of its hotelsare as follows:

A. Conservation of Energy:

Lemon Tree Hotels is committed to maintain ecofriendly & energyconservation practices all across its Hotel properties. We strongly believe inconservation and accordingly have implemented many eco-friendly processes for energy andwater preservation waste management disposal measures to control water noise andenvironmental pollution. Our existing and upcoming hotels are designed and constructed toqualify for the L.E.E.D Gold Standard.

Further the details of steps taken for conservation of energy areprovided in Business Responsibility Report (BRR) which forms part of this Annual Report.

Steps taken by the Company for utilizing alternate source of energy:

The Company has utilized alternative source of energy viz. renewableEnergy in the form of Solar Photovoltaic systems which is being utilized by our hotels. Weare also using solar hot water systems in our hotels to reduce heating load for hot watersystems.

The Capital investment on energy conservation requirements:

The Company has made the capital investment on installation andcommissioning of Solar Photovoltaic systems at our Hotels to capture free Solar Energy forreducing the Energy requirement and also on installation of Heat Recovery ventilation andHeat Recovery wheel systems.

B. Technology Absorption Research & Development (R&D):Technology absorption:

The Company is in the service industry and operates and manages itshotels across India. However no knowhow and technology has been imported during the year.However efforts have been made to imbibe various new technologies like Green Buildingrain water harvesting use of plumbing faucets sewage treatment plants.

Research & Development:

The Company during the Financial Year 2020-21 has not carried out anyactivity which can be construed as Research & Development. Therefore there is nothingto report under this section.

C. Foreign exchange earnings and outgo:

The information regarding Foreign Exchange earnings and outgo for theperiod under review is mentioned here under:

(Rs. in Lakhs)

S. No. Particulars Year Ended March 31 2021 Year Ended March 31 2020
1. Earning in Foreign Currency 181.19 1574.03
2. Outgo in Foreign Currency
- Value of Capital Goods Imported on CIF basis - -
- Commission/ Advertisement and business promotion 52.86 303.11

DIVIDEND ON EQUITY SHARES

Your Directors do not propose any dividend on the shares of the Companyfor the Financial Year ended March 31 2021.

TRANSFER TO RESERVES

No transfers to reserves were made as no appropriations were requiredto be made during the Financial Year under review.

ADEQUACY OF INTERNAL CONTROLS

The Company's internal control systems are commensurate with thenature of its business and the size and complexity of its operations. The Statutory andthe Internal Auditors routinely conduct system checks and give their report afterevaluation of the efficacy and adequacy of internal control systems including controlswith respect to the financial statements its compliance with operating systemsaccounting procedures and policies in the Company. Based on the report of Internal Auditthe departments undertake corrective action in their respective areas and therebystrengthen the controls. The significant audit observations and follow up actions thereonare reported to the Audit Committee as well and further corrective action taken as per theinputs received from the committee members and the auditors.

COST RECORDS AND COST AUDIT

Maintenance of cost records and requirement of cost audit as prescribedunder the provisions of Section 148(1) of the Act are not applicable for the businessactivities carried out by the Company.

SECRETARIAL STANDARDS

During the year under review the Company has complied with SecretarialStandards on Board and General meetings issued by Institute of Company Secretaries ofIndia.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti Sexual Harassment Policy in line withthe requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013. During the year under review no compliant wasreceived by the Corporate Ethics Committee (CEC) formed in this regard.

Further Internal Complaints Committee is also in place at all hotellocations & no complaint has been received during the year under review.

GREEN INITIATIVE

Pursuant to Section 101 and 136 of the Act read with Companies(Management and Administration) Rules 2014 and Companies (Accounts) Rules 2014 theCompany can send Notice of Annual General Meeting financial statements and othercommunications in electronic form.

Your Company shall be sending the Annual Report including the Notice ofAnnual General Meeting Audited Financial Statements Board's Report along withannexures etc. for the Financial Year 2020-2021 in the electronic mode to the shareholderswho have registered their email ids with the Company and/or their respective Depositoryparticipants (DPs).

Shareholders who have not registered their e-mail addresses so far arerequested to register their e-mail addresses.

Those holding shares in demat form can register their e-mail addresseswith their concerned DPs. Shareholders who hold shares in physical form are requested toregister their e-mail addresses with the Company by sending a letter duly signed by thefirst/sole holder quoting details of their Folio No.

APPRECIATION

Your Directors place on record their appreciation for the valuablesupport and cooperation of the Company's Bankers Government Agencies CustomersSuppliers Shareholders Employees and other statutory authorities who have reposed theircontinued trust and confidence in the Company.

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