EIH Associated Hotels Ltd Directors Report.

The Board presents the Thirty-seventh Annual Report together with the Audited Financial Statement and the Auditors Report for the Financial Year ended on 31st March 2020.

Financial Highlights

The financial highlights are set out below:

Rupees in Million
2019-20 2018-19
Total Revenue 2580.68 2737.00
Earnings Before Interest, Depreciation, Taxes and Amortisations (EBIDTA) 594.19 730.41
Interest and Finance Charges 4.46 4.34
Depreciation and Amortisation Expenses 159.72 142.62
Profit before Tax 430.01 583.45
Tax including Deferred Tax 50.37 204.07
Profit after Tax 379.64 379.38
Other Comprehensive Income/(Loss), net of tax (2.20) (1.14)
Total Comprehensive Income 377.44 378.24
Balance brought forward 1120.02 907.07
Dividend on Equity Shares 137.11 137.11
Dividend Distribution Tax 28.18 28.18
Impact on adoption of Ind AS 116 3.80 -
Balance carried forward in Retained Earnings 1335.97 1120.02

Directors Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 ("the Act") and based upon representations from the Management, the Board states that:

a) in preparing the Annual Accounts, applicable accounting standards have been followed and there are no material departures;

b) the Directors have selected accounting policies, applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year;

c) the Directors have taken proper and sufficient care in maintaining adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the Annual Accounts of the Company on a "going concern" basis;

e) the Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively; and

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

Performance

The annexed Management Discussion and Analysis forms part of this report and covers, amongst other matters, the performance of the Company during the Financial Year 2019-20 as well as the future outlook.

Business Responsibility Report

As stipulated under Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Business Responsibility Report describing the initiatives taken by the Company from the environmental, social and governance perspective is attached and forms part of this Report.

Corporate Governance Report

In accordance with Regulation 34(3) read with Schedule V(C) of the Listing Regulations, the report on Corporate Governance along with the certificate from Practicing Company Secretary is attached and forms part of this Report.

Dividend

In view of the prolonged lockdown and consequent travel restrictions to avoid spread of COVID-19 pandemic imposed by the Government of India as well other countries globally almost all business segments i.e. Corporate, Leisure, MICE and Direct business were severely impacted. In these unforeseen and uncertain times, it is difficult to predict when business conditions will normalise. Therefore, in order to conserve cash and ensure liquidity for the operations for the Financial Year 2020-21, the Board of Directors decided not to recommend any dividend to the shareholders for the Financial Year 2019-20.

Board Meetings

During the year, four Board Meetings were held i.e. on 28th May 2019, 30th July 2019, 4th November 2019 and 23rd January 2020.

Directors

The Shareholders, at the 36th Annual General Meeting held on 30th July 2019 approved by Special Resolutions, the re-appointment of Mr. L. Ganesh (DIN: 00012583) and Mr. Sudipto Sarkar (DIN: 00048279) as Non-executive Independent Directors on the Board of the Company, not liable to retire by rotation, for a second term of 5 (five) consecutive years effective 8th August 2019, the date of expiry of their first term of office as Non-executive Independent Directors.

The tenure of Mr. Vikram Oberoi, Managing Director, expired at close of business on 22nd June 2020. The Nomination and Remuneration Committee and the Board at their respective meetings on 5th May 2020 recommended renewal of his appointment as Managing Director for a further period of five years effective 23rd June 2020. Mr. Vikram Oberoi will not receive any remuneration. The re-appointment requires approval of the Shareholders for which a Resolution was included in the Notice for Postal Ballot dated 5th May 2020. As per the Scrutinizers Report on Postal Ballot and e-Voting dated 22nd June 2020, the Resolution was passed by almost 100% votes cast in favour of the said re-appointment.

Ms. Radhika Haribhakti (DIN: 02409519), Non-executive Independent Directors first term of 5 (five) years expired on 21st May 2020. The Nomination and Remuneration Committee and the Board of Directors at their respective meetings on 5th May 2020, noted that Ms. Radhika Haribhakti is a highly renowned professional in her field of expertise. The Company and the Board have immensely benefitted from her vast experience, knowledge and strategic insights on various matters relating to Companys business. Considering the contribution of Ms. Haribhakti to the functioning and performance of the Company, the Board is of the unanimous view that it will be in the interest of the Company to re-appoint Ms. Haribhakti as Non-executive Independent Director, not liable to retire by rotation, for a second term of 5 (five) consecutive years effective 22nd May 2020. The re-appointment requires approval of the Shareholders for which a Special Resolution was included in the Notice for Postal Ballot dated 5th May 2020. As per the Scrutinizers Report on Postal Ballot and e-Voting dated 22nd June 2020, the Special Resolution was passed with 99.99% votes cast in favour of the said re-appointment.

At the first meeting of the Board of Directors for the Financial Year 2020-21 held on 5th May 2020, the Independent Directors have confirmed, as required under sub section (7) of Section 149 of the Act read with Regulation 25(8) of the Listing Regulations, that they meet the criteria of independence required under sub-section (6) of Section 149 of the Act and clause (b) of sub-regulation (1) of Regulation 16 of the Listing Regulations. The Board, after undertaking due assessment of the veracity of the declaration submitted by the Independent Directors under sub section (6) of Section 149 of the Act read with sub-regulation (9) of Regulation 25 of the Listing Regulations, was of the opinion that the Independent Directors meet the criteria of independence.

Mr. Akshay Raheja (DIN: 00288397) retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Directors recommend re-appointment of Mr. Akshay Raheja as a Director on the Board.

Corporate Social Responsibility

The Companys Corporate Social Responsibility (CSR) Policy formulated in accordance with Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 can be accessed on the Companys website www.eihassociatedhotels.in.

The Annual Report on Corporate Social Responsibility activities for the Financial Year 2019-20 is given in Annexure 1, which forms a part of this Report. The Annexure also gives the composition of the CSR Committee.

In addition to the mandatory CSR spend in accordance with the Act, during the year, the Companys Hotels have also taken the following CSR initiatives:

a. The Oberoi Rajvilas, Jaipur supports Bhawani Child Development Center, a school for dyslexic children, by giving donation to the organization. The hotel donated INR 35,000/- in the year 2019-20. The Oberoi Rajvilas had organized Blood Donation Camp in the Hotel through Suman Blood Bank and in total had donated 50 units of blood. The Oberoi Rajvilas organizes Annual Fete every year. The Fete is for the charity purpose. The money collected from the Fete is utilized to buy items for SOS Village children.

b. Trident Jaipur supports Bhavani Child Development Center (Bhavani CDC), a school for children with learning disabilities. The school is involved in providing intensive early intervention for children showing signs of developmental delay and exposed to the risk of learning disability. Trident Jaipur has sponsored education of two children in the past. Every year the hotel sponsors their Art Work Competition. Trident Jaipur also participates in sports day, festival celebration and calendar release events at Bhavani CDC. On 10th May 2019, the Hotel team attended Abhivyakti "3rd Rising Day" and Cultural event.

Manna in the Desert is an orphanage in Jaipur. It feeds, shelters, provide clothes and education to orphans. Trident Jaipur encourages team members to donate utility items, clothes, toys, books etc to the children on different occasions. The hotel also invites the children on Republic Day and Independence Day for fun activities, flag hoisting and serves them special brunch. On 5th June 2019, World Environment Day, Manna Orphanage Children participated in poster making competition and tree plantation at the hotel. Brunch was served to the children at the hotel.

Youth Career Initiative (YCI) offers young people who are particularly vulnerable, the opportunity to gain the skills and experience they need to take the first step in their career. The three-month programme starts with classroom training in basic hospitality and English language skills. Then, through their unique partnership with world-leading hotel companies, they offer hands-on experience (6 months) within the hotel industry. Trident Jaipur, through YCI, supports young people aged 18-24 years, who have faced a wide range of barriers, including people from low income families, those living without parental care, survivors of human trafficking, refugees and people with disabilities. YCI creates an opportunity for both professional and personal development, equipping graduates with the practical skills and self-belief to reach for greater goals. Trident Jaipur provides six months practical training to YCI candidates and encourages their enrolment as an Apprentice through ITI after completion of their six months training.

c. Trident Bhubaneswar religiously follows the mantra Say No to Plastic as our guests and employees are aware of the damage caused by use of plastic. The hotel promotes the slogan by different means such as poster making competition among the department, cleaning the area in and around to get rid of any plastic material and also to ensure that the hotel premises are eco-friendly and plastic free. On 5th October 2019, Trident Bhubaneswar carried out various eco-friendly activities to uphold the slogan and create environmental awareness among its guests and employees.

d. Trident Udaipur extends assistance to local chapters of Mother Teresas Missionaries of Charity. On 15th October 2019, Team members and Executives of Trident Udaipur visited Mother Teresa Ashram and interacted with children. Food packets and other items were distributed as part of the hotels yearly activity towards to the society. On Childrens Day, 14th November 2019, Trident Udaipur team voluntarily collected a fund for distribution of woolen clothes to the children of the Theosophical Societys School. The children at Theosophical Societys school are destitute; they are either differently abled or orphaned. The CSR team had decided to collect a fund from an activity during one of their teams event. For this, they had also visited the school to know their requirements. On Childrens Day, the volunteers from Trident Udaipur celebrated the day with children at the Theosophical Society and also distributed woolen clothes to 50 children.

e. Trident Agra - On 19th July 2019, the employees along with the Human Resources team of Trident Agra visited a slum area with around 35 school-going children. The education of these children is sponsored by an NGO - Aarambh. Along with Aarambh, the team distributed tiffin boxes, hampers, and steel platters. This initiative with the people at the slum area left smiling faces. Trident Agra also extended assistance to NGO Divya Prabha which supports the education of 27 underprivileged children.

f. Trident Cochin in association with the other hotels and business organizations in its locality distributes school supplies to the Government School on Willingdon Island. This is an yearly event in which the hotel participates and is appreciated and supported by the local community. On 11th June 2019, team Trident Cochin participated in this yearly event.

g. Trident Chennai commemorated World Environment Day on 5th June 2019 by holding placards outside the hotel on Environmental themes in order to create awareness among the general public. The hotel also distributed saplings to guests, team members and general public. This is an annual activity the hotel carries out.

Audit Committee

The composition of the Audit Committee is as under:

• Ms. Radhika Haribhakti - Independent Director & Chairperson
• Mr. Anil Nehru - Independent Director
• Mr. L. Ganesh - Independent Director
• Mr. Sudipto Sarkar - Independent Director
• Mr. Akshay Raheja - Non-executive Non-Independent Director
• Mr. S.S. Mukherji - Non-executive Non-Independent Director

For other details relating to the Audit Committee, please refer page nos. 49 and 50.

Companys Policy on Directors Appointment and Remuneration and Senior Management Personnel Appointment and Remuneration.

The Companys Policy on Directors Appointment and Remuneration Policy (revised) 2019 ("Directors Appointment Policy") and Senior Management Appointment and Remuneration Policy ("Senior Management Policy") formulated in accordance with Section 178 of the Act read with Regulation 19(4) of the Listing Regulations can be accessed on the Companys website www.eihassociatedhotels.in

The salient features of the Directors Appointment Policy are as under:

• The Policy aims to engage Directors (including non-executive and independent nonexecutive directors) who are highly skilled, competent and experienced persons within one or more fields of business, finance, accounting, law, management, sales, marketing, administration, corporate governance, technical operations or other disciplines related to the business of the Company. The Directors shall be able to positively carry out their supervisory role on the management and the general affairs of the Company;

• assessing the individual against a range of criteria including but not limited to industry experience, background, and other qualities required to operate successfully in the position with due regard to the benefits of diversity of the Board;

• the extent to which the individual is likely to contribute to the overall effectiveness on the Board and work constructively with existing Directors;

• the skills and experience the individual brings to the role and how these will enhance the skill sets and experience of the Board as a whole;

• the nature of positions held by the individual including directorships or other relationships and the impact they may have on the Directors ability to exercise independent judgment;

• the time commitment required from a Director to actively discharge his or her duties to the Company.

The salient features of the "Senior Management Policy" are as under:

• The objective of this Policy is to provide a framework and set standards for the appointment, remuneration and termination of Key Managerial Personnel (KMP) and the Core Management Team (within the Senior Management Personnel) who have the capacity and responsibility to lead the Company towards achieving its long term objectives, development and growth;

• Appointment & Remuneration of Key Managerial Personnel and Core Management Team are aligned with the interests of the Company and its Shareholders within an appropriate governance framework;

• Remuneration is structured to align with the Companys interests, taking into account the Companys strategies and risks;

• Remuneration is linked to individual and Company performance, which, in turn, impacts the quantum of variable pay;

• Remuneration is designed to be competitive within the hospitality industry or other industries in general for applicable roles;

• Executives performing similar complexity of jobs are paid similar compensation.

The remuneration paid to Senior Management Personnel is categorised under the following major heads:

Fixed Salary: This includes basic salary, other allowances, perquisites and retirement benefits;

Variable Salary: This includes variable pay linked to Company and Individual performance.

Energy Conservation Measures

During the year, energy conservation measures taken by the Company include:

• replacement of conventional lamps with energy efficient LED lamps;

• installation of waste heat recovery equipment;

• replacement of old pumps with energy efficient pumps;

• installation of heat pumps in place of conventional fuel based water heaters;

• carrying out overhauling works for heat exchangers;

• installation of water flow optimizers in wash basin taps and installation of water efficient eco washers based WCs.

Furthermore, conservation measures in form of tight operational control of lighting and other equipment, regulation of air conditioning set points according to ambient temperatures, taking guest floors out of order during low occupancy, optimization of laundry and boiler operation were continued. Energy audit of plant and machinery along with thermography of electrical panels were carried out for identifying additional measures of saving energy.

Operational measures include setting of benchmarks w.r.t the current year with targets for increased savings, initiatives by energy conservation committees comprising of cross functional groups, close monitoring & performance evaluation of plant and machinery by conducting regular self-audit and up gradation of plant room equipment. With various energy conservation measures taken in the financial year 2019-20, we were able to reduce our overall energy consumption by about 1.5 million kWh which resulted in a reduction of our carbon dioxide emissions by about 0.6 million kg in comparison to the last financial year.

Actions planned for next year include:

• replacement of remaining conventional lamps with energy efficient LED lamps;

• upgradation of sewage treatment plants, installation of new energy efficient pumps;

• replacement of old chillers with more energy efficient chillers;

• installation of heat pumps in place of conventional fuel based water heaters;

• replacement of cooling towers with more efficient cooling towers;

• replacement of old blowers with energy efficient blowers;

• installation of additional water efficient eco washers based water closets and water flow optimizers in water taps.

Foreign Exchange earnings & outgo

During the Financial Year 2019-20, the foreign exchange earnings of the Company amounted to 744.26 Million as against 810.55 Million in the previous year. The expenditure in foreign exchange during the Financial Year 2019-20 was 85.66 Million compared to 88.30 Million in the previous year.

Auditor and Auditors Report

At the 34th Annual General Meeting of the Company held in the year 2017, the Shareholders had approved the appointment of M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, (FRN 117366 W/W-100018) ("Deloitte") as the Statutory Auditors of the Company to hold office for 5 (five) consecutive years.

The Report of Auditors does not contain any qualification, reservation or adverse remark.

Secretarial Auditors

In accordance with the provisions of Section 204 of the Act, M/s JUS & Associates were appointed as the Secretarial Auditors of the Company for the Financial Year ended 31st March 2020. The Secretarial Audit Report submitted by the Secretarial Auditors does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report is annexed and forms part of the Annual Report.

The Secretarial Compliance Report for the year ended 31st March 2020 and Certificate of Non-disqualification of Directors as at 31st March 2020, as required under Listing Regulations, is also annexed and forms part of the Annual Report.

Secretarial Standards

During the year, the Company has complied with the applicable Secretarial Standards.

Related Party Transactions

The contracts, arrangements and transactions entered into by the Company during the Financial Year with related parties were in the ordinary course of business and are on an arms length basis. During the year, the Company has not entered into any contract, arrangement or transaction with Related Parties which could be considered material in accordance with the Related Party Transaction Policy of the Company.

The Policy on Related Party Transactions approved by the Board can be accessed on the Companys website www.eihassociatedhotels.in

The details of Related Party Transactions are set out in Note no 39 to the Financial Statement.

Extract of Annual Return

The Extract of Annual Return for the Financial Year ended 31st March 2020 in Form MGT-9 is annexed as Annexure 2.

Loans, Guarantees or Investments

During the year 2019-20, the Company has not given any loan or made any investment or provided any guarantee in terms of Section 185 of the Companies Act, 2013.

Deposits

During the year, the Company did not accept any deposits from the public.

Vigil Mechanism/ Whistle blower Policy

In accordance with the Section 177(9) of the Act and rules framed thereunder read with Regulation 22 of the Listing Regulations, the Company has a Whistle blower Policy in place for its Directors and Employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct, "The Oberoi Dharma". The Policy provides for protected disclosures for the Whistle blower. Disclosures can be made through e-mail or letter to the Whistle Officer or to the Chairperson of the Audit Committee. The Whistle blower Policy can be accessed on the Companys website www.eihassociatedhotels.in . During the year ended 31st March 2020 the Company did not receive any complaint under the scheme.

Prevention of Sexual Harassment at Workplace

The Company has a policy for prevention of sexual harassment at the workplace. In accordance with the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act") and rules made thereunder, the Company has constituted an Internal Complaints Committee (ICC) in all its hotels.

During the year, the ICC received four complaints. All the four complaints have been disposed of within the statutory time period prescribed under the POSH Act. The Company has also filed necessary returns as required to be filed under the POSH Act.

Subsidiaries, Associates and Joint Ventures

The Company has no subsidiaries, associates or joint ventures.

Directors/Key Managerial Personnel ("KMP") Remuneration

All the Directors of the Company are Non-executive Directors, except Mr. Vikram Oberoi, who is the Managing Director.

Mr. Vikram Oberoi does not draw any remuneration from the Company:

a) The percentage increase in remuneration of each director, CFO,CEO,CS or Manager, if any, in the Financial Year:

Sl No Name Total

Remuneration

2019-20

(Rs. Million)

Total Remuneration 2018-19 (Rs. Million) Percentage

Increase

1 Chief Financial Officer 7.83 7.80 0.38
2 Company Secretary 4.69 4.26 10.09

b) the percentage increase in the median remuneration of the employees in the Financial Year is 8.68%;

c) the number of permanent employees on the rolls of the Company at the end of the Financial Year are 666;

d) the average percentile increase in remuneration of the employees in the Financial Year 2019-20 was 6.9%;

It is hereby affirmed that the remuneration of Directors and Key Managerial Personnel are as per the Remuneration Policy of the Company.

Internal Financial Control Systems and Risk Management Systems

Compliance of the Internal Financial Controls and Risk Management Systems are given in the Management Discussion & Analysis report.

Board Evaluation

In accordance with the provisions of the Act and Regulation 17(10) of the Listing Regulations, a Board Evaluation Policy is in place. A structured questionnaire by an independent external agency covering various aspects of the Boards functioning, Board culture, performance of specific duties by Directors and contribution to the Board proceedings was circulated to the members of the Board for the Financial Year 2019-20. Based on the responses received, the Board as a whole, the Committees, the Chairperson and individual Directors were separately evaluated in the Meeting of the Independent Directors and at the Meeting of the Board of Directors.

The process of review of Non-Independent Directors, the Board as a whole and also its Committees were undertaken in a separate meeting of Independent Directors held on 22nd May 2020, without the attendance of Non-Independent Directors and members of the Management. At the Meeting, the performance of the Chairman of the Company was reviewed taking into account the views of the Executive Director, Non-Executive Directors and Independent Directors. The Meeting also assessed the quality, quantity and timeliness of information required for the Board to perform its duties properly.

The entire Board, excluding the Director being evaluated, evaluated the performance of each Independent Director.

The Directors have expressed their satisfaction with the evaluation process conducted by the independent external agency.

Based on the findings from the evaluation process, the Board will continue to review its procedures, processes and effectiveness of Boards functioning, individual Directors effectiveness and contribution to the Boards functioning in the Financial Year 2020-21 as well with a view to practice the highest standards of Corporate Governance.

Cost Records

The Company is not required to maintain cost records in accordance with Section 148 of the Act read with Rule 3 of the Companies (Cost Records and Audit) Rules, 2014 as the services of the Company are not covered under the said rules.

Significant and Material orders, if any

During the Financial Year, there were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys operation in future.

Particulars of Employees

The information required under Section 197 of the Companies Act, 2013 read with sub- rule(2) of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed and forms part of this Report.

Cautionary Statement

Risks, uncertainties or future actions could differ materially from those expressed in the Directors Report and the Management Discussion and Analysis. These statements are relevant on the date of this report. We have no obligation to update or revise these statements, whether as a result of new information, future developments or otherwise. Therefore, undue reliance should not be placed on these statements.

Acknowledgement

The Board takes this opportunity to thank all employees for their commitment, dedication and co-operation.

For and on behalf of the Board
Vikram Oberoi Radhika Haribhakti
Managing Director Chairperson, Audit Committee
New Delhi Mumbai
23rd June 2020 23rd June 2020