sayaji hotels ltd Directors report

TO,

THE MEMBERS

SAYAJI HOTELS LIMITED

The Board of Directors of your Company, with extensive gratification is presenting the 40^th Annual Report of your Company for the year ended 31^st March, 2023.

FINANCIAL HIGHLIGHTS

The financial performance on the basis of Standalone & Consolidated Financial Statements for the year ended 31^st March, 2023 is summarized as below:

	Standalone		Consolidated
	(Rs. In Lakhs)		(Rs. In Lakhs)
Particulars	Current Financial Year	Previous Financial Year	Current Financial Year	Previous Financial Year
	31.03.2023	31.03.2022	31.03.2023	31.03.2022
Revenue from Operations	26345.80	16106.44	26628.05	16314.92
Other Income	2927.63	2830.25	485.44	885.00
Total income	29273.43	18936.69	27113.49	17199.92
Total Operating Expenditure	18685.22	11377.92	18827.93	11580.50
Profit/(loss) before Depreciation,
Finance costs, Exceptional items and tax expense	10588.21	7558.77	8285.56	5619.42
Less:	2017.44	2340.03	2017.49	2411.31
Depreciation/Amortization/Impairment
Profit/(Loss) before Finance cost, Exceptional items and Tax Expense	8570.77	5218.74	6268.07	3208.11
Less: Finance Costs	1151.47	1849.47	1169.89	1959.04
Profit/(loss) before Exceptional items and Tax Expense	7419.30	3369.27	5098.18	1249.07
Add/(less): Exceptional items	-	-	-	4361.24
Profit /(Loss) before Tax Expense and Share of Profit/(Loss) of the Associates	7419.30	3369.27	5098.18	5610.31
Share of Profit/(Loss) of the Associates	-	-	506.55	(989.15)
Profit /(Loss) before Tax Expense	7419.30	3369.27	5604.73	4621.16
Less: Tax Expense - Current & Deferred	1910.15	723.15	2095.24	1315.88
Profit/ (loss) for the year (1)	5509.15	2646.12	3509.49	3305.28
Other Comprehensive Income/(loss)(2)	(26.34)	114.53	(46.22)	60.24
Total (1+2)	5482.81	2760.65	3463.27	3365.52

PERFORMANCE

The annexed Management Discussion and Analysis Report forms part of this report and covers, amongst other matters, the performance of the Company during the Financial Year 2022-23 as well as the future outlook.

DIVIDEND

During the year under review, the Board of Directors of the Company have decided to recommend and declare, subject to the approval of the shareholders, the dividend on 10% fully paid-up Cumulative Redeemable Preference Shares of the Company of Rs. 100/- each and the same shall be paid to all the preference shareholders whose names appear in the Register of Members as on the record date i.e. 20^th day of October, 2023.

TRANSFER TO RESERVES

During the year under review, the Board of Directors have decided to distribute dividend on 10% Cumulative Redeemable Preference Shares of the Company and then to partly redeem the same from the net profit of the Company instead of transferring it to the reserves.

CAPITAL STRUCTURE

As on the financial year ended 31^st March, 2023, the:

• Authorized Share Capital

The authorized share capital of the Company is Rs. 40,00,00,000/- divided into 3,00,00,000 (Three Crores) Equity Shares of Rs.10/- each and 10,00,000 (Ten Lakhs) Preference shares of Rs. 100/- each.

• Paid Up Share Capital

The Paid-up equity share capital of the Company is Rs. 27,51,80,000 comprising of 1,75,18,000 Equity shares of 10/- each and 10,00,000 Preference shares of Rs. 100/- each.

During the year under review, the Company has not issued shares with differential voting right neither granted stock option nor sweat equity. Further the Company not issued any debenture bonds and any non-convertible securities.

The Companys equity shares are listed with the Bombay Stock Exchange Limited.

REDEMPTION OF 10% CUMULATIVE REDEEMABLE PREFERENCE SHARES

The Board of Directors of the company had approved the redemption of its 10% fully paid-up Cumulative Redeemable Preference Shares of Rs. 100/- each pursuant to the provisions of Section 55 of the Companies Act, 2013 read with Rule 9 of the Companies (Share Capital and Debentures) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

DEPOSITS FROM PUBLIC

During the year, your Company did not accept any public deposits as provided under Chapter V of the Companies Act, 2013 ("Act") read with the rules made thereunder as such and no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

LOAN FROM DIRECTORS

During the year under review the Company has not received any amount as loan from director of the Company.

REVISION IN FINANCIAL STATEMENTS OR BOARDS REPORT UNDER SECTION 131 (1) OF THE COMPANIES ACT, 2013

In terms of Section 131 of the Act, the Financial Statements and Boards Report are in compliance with the provisions of Section 129 or Section 134 of the Act and that no revision has been made during any of the three preceding financial years.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Provisions of Section 186 of the Act for loans given, investments made or guarantees or security provided is not applicable on your Company, being in exempt list for providing infrastructural facilities in terms of Schedule VI of the Act.

UPGRADATION AND ADDITIONS:

M/s Sayaji Hotels Management Limited ("SHML"), a Wholly Owned Subsidiary of the Company, has signed and entered into 13 (Thirteen) Management Agreement for the expansion of its Brand by having new properties in Amravati, Pithampur, Sanwer road Indore, Aurangabad, Gwalior, Harda, Hoshangabad, Lonavala, Rewa, Sangli, Sasan Gir, Satara, Tadoba.

This expansion plan will lead to an addition of around 650 new rooms and an overall increase of 1000 rooms into the portfolio by the fiscal 2022-23. It aims at strengthening and increasing presence on PAN India basis.

COMPOSITE SCHEME OF AMALGAMATION AND ARRANGEMENT

The Composite Scheme of Amalgamation and Arrangement (‘the Scheme) provides for:

i. The amalgamation of Ahilya Hotels Limited (Transferor Company 1) into Sayaji Hotels Limited on a going concern basis and reduction and cancellation of Share Capital of Sayaji Hotels Limited in the manner set out in the Scheme. ii. Demerger, transfer and vesting of the Demerged Undertakings from Sayaji Hotels Limited to

Sayaji Hotels (Indore) Limited [Formerly known as Sayaji Hotels (Vadodara) Limited)] (Resulting Company 1) and Sayaji Hotels (Pune) Limited (Resulting Company 2) collectively referred to as Resulting Companies and reduction of share capital thereof. iii. The amalgamation of Sayaji Hotels Management Limited (Transferor Company 2) into Sayaji

Hotels Limited on a going concern basis.

The Honble National Company Law Tribunal, Chennai Bench ("NCLT") vide its order dated 11^th July, 2023 has sanctioned the scheme and the same was filed with the Registrar of Companies on 1^st August, 2023 ("Effective date").

Pursuant to the Scheme, the Transferor Company 1 & 2 is dissolved without winding up and the Resulting Company 1 & 2 stands demerged from Sayaji Hotels Limited. The shares of the Resulting Company 1 & 2 are going to be listed on the Designated Stock Exchange. As consideration of the Amalgamation, the Company has allotted 24,54,977 (Twenty-Four Lakh Fifty-Four Thousand Nine Hundred Seventy-Seven only) Equity Shares of Rs. 10/- each to the shareholders of Transferor Company 1, as on record date i.e. 28^th July, 2023 and the cross holding of the Company has been cancelled.

The Company had also obtained the listing approval as well as trading approval vide BSE intimation letter dated 9^th August, 2023 and 23^rd August, 2023 respectively. Since Transferor Company 2 was a wholly owned subsidiary of the Company, there were no issue of shares as consideration for the amalgamation of Transferor Company 2 with the Company in terms of the Scheme.

The Resulting Company 1 and 2 had allotted 30,46,605 (Thirty Lakhs Forty-Six Thousand Six Hundred Five) equity shares and 8 (Eight) preference shares each to the shareholders of Sayaji Hotels Limited as per the approved scheme as on record date i.e. 5^th September, 2023 and filed the application to BSE Limited for obtaining approval for listing of its securities at the stock exchange. As on the date of this report, the approval from stock exchange for admission of its securities is awaited.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has a policy and framework for employees to report sexual harassment cases at workplace and our process ensures complete anonymity and confidentiality of information. The said policy can be accessible through https://sayajihotels.com/images/pdf/policies/policy-on-sexual-harassment.pdf

The Company has zero tolerance towards sexual harassment at the workplace and towards this end, has adopted a policy in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. All employees (permanent, contractual, temporary, trainees) are covered under the said policy. Internal Complaints Committees has also been set up to redress complaints received on sexual harassment.

During the year under review, the Company has not received any complaint of sexual harassment from the women employees of the Company and no complaint was pending at the end of the year.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

As on 31^st March, 2023, your Company has 4 (four) wholly owned Subsidiaries and 1(One) Associate Company which are here as under:

Wholly Owned Subsidiary Companies	Associate Company
Sayaji Hotels Management Limited	Barbeque Nations Hospitality Limited
Sayaji Hotels (Pune) Limited
Sayaji Hotels (Indore) Limited*
Sayaji Housekeeping Services Limited

* Formerly Known as Sayaji Hotels (Vadodara) Limited

During the year under review, Intellistay Hotels Private Limited ceased to be the Associate Company as the entire amount of investment of Sayaji Hotels Management Limited has been written-off against loss on impairment of investment.

In accordance with Section 129(3) of the Act read with Rule 8(1) of Companies (Accounts) Rules, 2014, the consolidated financial statements of the Company and all its subsidiaries and associates have been prepared by the Company and a separate statement containing the salient features of the financial statement of its subsidiaries and associate company in form AOC-1 is attached as ‘Annexure-1 to this Annual Report.

In terms of provisions of Section 136 of the Act, separate audited accounts of the subsidiary companies shall be available on Companys website https://sayajihotels.com/investors/. The Company will make available physical copies of these documents upon request by any shareholder of the Company interested in obtaining the same and are available for inspection by any Member of the Company at the Registered Office of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

The Board of Directors formulated a Corporate Social Responsibility (CSR) Policy for your Company pursuant to the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), on the recommendations of the CSR Committee. The policy encompasses the Companys philosophy for delineating its responsibility as a corporate citizen and lays down the guidelines and mechanism for undertaking socially useful programs for welfare & sustainable development of the community at large. CSR Policy is placed on the Companys website at https://sayajihotels.com/images/pdf/policies/Corporate_Social_Responsibility_Policy.pdf and as the average net profit of the Company for last 3 years does not fall under the defined limits of the Act, hence there is no liability on the Company to incur expenditure on CSR activities as prescribed u/s 135 and Schedule VII of the Companies Act, 2013 hence is not required to provide particulars of CSR during the Financial Year 2022-23.

PROHIBITION OF INSIDER TRADING

The Company had in place a mechanism to avoid Insider Trading and abusive self-dealing in the securities of the Company by the Directors of the Company and other designated persons.

For the above mentioned purpose, the Company has established systems and procedures to prohibit insider trading activity and has framed a Code of Conduct to Regulate, Monitor and Report trading by insiders and Code of Fair Practices and Procedures for disclosure of Unpublished Price Sensitive Information (UPSI) ("Code of Conduct") as per the requirements of SEBI (Prohibition of Insider

Trading) Regulations, 2015 (PIT Regulations), which prohibits the Directors of the Company and other designated persons to deal in the securities of the Company on the basis of any UPSI, available to them by virtue of their position in the Company. The objective of this Code of Conduct is to prevent misuse of any UPSI and prohibit any insider trading activity, in order to protect the interest of the shareholders at large.

A report on compliance of Minimum Standards for Code of Conduct and details of violation are placed before the Board on annual basis.

The Code of conduct are available on the website of the Company at https://sayajihotels.com/images/pdf/Annexure_1_Code_of_Conduct.pdf,https://sayajihotels.com/images /pdf/Annexure_2_Code_of_Fair_Disclosure.pdf

BOARD OF DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL

As at 31^st March, 2023, the composition of the Board of Directors was in accordance with the provisions of Section 149 of the Act and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, with an optimum combination of Executive, Non-Executive and Independent Directors.

As on the date of this Annual Report, the Board of Directors of the Company consists of 6 members. The Board consists of Managing Director, Whole time Director and 4 Independent Directors and Key Managerial personnel as under:

Sr. No.	Name	Designation
1.	Mr. Thottappully Narayanan Unni	Independent Director, Chairman
2.	Mr. Raoof Razak Dhanani	Managing Director
3.	Mrs. Suchitra Dhanani	Whole Time Director
4.	Mrs. Isha Garg	Independent Director
5.	Mr. Saquib Salim Agboatwala	Independent Director
6.	Mr. Abhay Chintaman Chaudhari	Independent Director
7.	Mr. Sandesh Khandelwal	Chief Financial Officer
8.	Mr. Ankur Bindal	Company Secretary and Compliance Officer

CHANGES IN THE COMPOSITION OF BOARD OF DIRECTORS

During the year under review, no changes were made in the Composition of Board of Directors.

STATEMENT ON DECLARATION BY INDEPENDENT DIRECTORS

Pursuant to the provisions of Section 149 of the Act, all the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In terms of Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, they have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. Also pursuant to Rule 6(3) of Companies (Appointment and Qualification of Directors) Rules, 2014. they declared that the provisions of Sub-Rule (1) and Sub-Rule (2) of Rule 6 of the said rules has been complied with.

The Board of Directors, after considering 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 SEBI (Listing Obligations and Disclosure Requirements), was of the opinion that all the Independent Directors meet the criteria of independence and have adequate expertise, integrity, proficiency and experience for discharging their duties.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTOR

Your Company believes that a Board which is well familiarized with the Company and its affairs, can contribute significantly to effectively discharge its role of trusteeship in a manner that fulfils stakeholders aspirations and societal expectations. In pursuit of this, the Directors of the Company are updated on changes/developments in the domestic/global corporate and industry scenario including those pertaining to statutes/legislations & economic environment and on matters significantly affecting the Company, to understand their roles and responsibilities, nature of the industry in which the Company operates, business model of the Company which enable them to take well informed and timely decisions.

All Independent Directors are taken through a detailed induction and familiarization programme when they join the Board of your Company and are provided with induction kits which, inter alia, include the

Companys Memorandum and Articles of Association, Code of Conduct of Board of Directors, Code of Conduct for Prevention of Insider Trading and other relevant documents. Updates on relevant statutory changes are briefed? to the Directors at their meeting.

Apart from the above, the Directors are also given an update on the environmental and social impact of the business, corporate governance, regulatory developments and investor relations matters.

Further, during the year, presentations were also made from time to time at the Board and its committee meetings, on regular intervals, covering the business and financial performance of the Company, business outlook and budget, expansion plans, succession plans etc. The details of familiarization programme attended by Independent Directors is available on the website at https://sayajihotels.com/images/pdf/policies/Familiarization_programme_for_Independent_directorspdf. pdf

SEPARATE MEETING OF INDEPENDENT DIRECTORS AND PERFORMANCE EVALUATION OF BOARD BY THEM

During the year under review, a separate meeting of Independent Directors was held on 14^th February, 2023 without the presence of non-independent directors and members of the management pursuant to Schedule V of the Act and Regulation 25(3) and (4) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, details of which is present in the Corporate Governance Report forming part of this Annual Report.

RETIREMENT BY ROTATION

Mrs. Suchitra Dhanani, Whole time Director will retire by rotation at the ensuing Annual General Meeting (‘AGM) of your Company and being eligible, offers herself for re-appointment in accordance with the provisions of Section 152 (6) of the Act read with Articles of Association of the Company.

The disclosure pertaining to the director being re-appointed as required pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standards 2 is given in the explanatory statement to the Notice convening the AGM, forming part of this Annual Report.

MEETINGS OF THE BOARD AND ITS EFFECTIVENESS

During the financial year under review, your Board has met Eight (8) times and details of the composition of the Board and its Committees and of the meetings held and attendance of the Directors at such meetings are provided in the Corporate Governance Report.

Further, the Company for effectiveness of Board process has adopted the Governance Guidelines which inter alia, cover aspects related to composition and role of the Board, Chairman and Directors, Board diversity, definition of independence, Directors term, retirement age and Committees of the Board. It also covers aspects relating to nomination, appointment, induction and development of Directors, Directors remuneration, Code of Conduct, Board Effectiveness Review and mandates of Board Committees

COMMITEES OF THE BOARD OF DIRECTORS

During the year under review, the Company has 5 (five) Committees as mentioned below and details with respect to the composition, charters and meeting held are given in detail in the Corporate Governance Report forming part of this Annual Report: • Audit Committee • Borrowing and Investment Committee • Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Scheme Implementation Committee

The details of Composition of the above-mentioned Committees are also available on the Companys website https://sayajihotels.com/images/pdf/composition-various-committees/Composition_of_Committee_Meetings.pdf

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

In accordance with Section 178 of the Act with Rule 6 of Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted a Nomination and Remuneration Committee ("NRC"), details of which has been disclosed in the Corporate Governance Report forming part of this Annual Report and your Company has also formulated a Nomination and Remuneration Policy ("NRC Policy") in accordance with Section 178(3) of the Companies Act, 2013 for appointment and remuneration of Directors, Key Managerial Personnel (KMP) and senior management personnel, salient features of which are hereunder:

• NRC shall identify potential candidates who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down in the NRC Policy and to recommend the Board for their appointment and removal; • NRC shall formulate the criteria for determining qualifications, positive attributes and independence of a Director and recommend to the Board a NRC Policy, relating to the remuneration for the directors, key managerial personnel and other senior management person; • NRC shall carry out an annual evaluation process of the Board performance and its Committees; • NRC Policy contains provisions regarding retirement and the Board shall have the discretion in retain the Director, KMP, Senior Management Personnel in the same position/remuneration or otherwise even after attaining the retirement age, upon the recommendation of the NRC for the benefit of the Company; • NRC policy ensures that the level and composition of remuneration is reasonable and sufficient to attract, retain, motivate and promote talent to run the Company successfully and ensures long term sustainability of talented managerial persons and create competitive advantage; • NRC policy ensures relationship of remuneration to performance is clear and shall directly linked to their effort, performance, dedication and achievement relating to the Companys operations;

• NRC shall recommend remuneration for KMP (except WTD/MD) and Senior Management Personnel on the basis of the role and position of the individual employee, including professional experience, responsibility, job complexity and market conditions.

As per Section 134(3) and 178(4) of the Act, the web link of Nomination and Remuneration Policy of the Company is https://sayajihotels.com/images/pdf/policies/Nomination_and_Remuneration_Policy.pdf

AFFIRMATION ON COMPLIANCE WITH CODE OF CONDUCT OF THE COMPANY

Pursuant to Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has adopted a Code of Conduct for its employees including the Managing Director and Executive Directors and Senior Management. In addition, the Company has also adopted a Code of Conduct for its Non-Executive Directors and Independent Directors. These Codes are available on the Companys website at https://sayajihotels.com/images/pdf/code-of-conduct/Code_of_Conduct_for_Board_and_Senior_Management_2.pdf

All Directors and members of Senior Management have as on 31^st March 2023, affirmed their compliance with:

• Code of Conduct for Board of Directors and Senior Management • Code for Independent Directors, as applicable.

The Company has obtained a Certificate from the Managing Director regarding compliances of the codes as stipulated above. The Certificate is appended as "Annexure 2" to this Annual Report.

ANNUAL EVALUATION OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of your Company has carried out a formal annual evaluation of the performance of the Board as a whole, its Committees and of individual directors through a structured questionnaire, prepared after taking into consideration the guidance note issued by SEBI and

ICSI on Board evaluation, covering various aspects of the Boards functioning, Committee effectiveness, directors efficiency on individual basis etc.

RISK MANAGEMENT

The Company has an effective system in place for identification of elements of risk which are associated with the accomplishment of objectives, operations, development, revenue and regulations in relation to the Company and appropriate measures are taken, wherever required, to mitigate such risks beforehand.

The Company has specifically identified following risks and also preparing mitigation plans for each risk identified:

• Risk of business slowdown, inadequate growth and negative returns; • Risk related to cyber security; • Risk of deterioration of financial health and business interruption; • Risk of inadequate compliance; • Risk of Guest and Staff behavior; and • Risk of impact on reputation and fraud.

Along with this Statutory as well as Internal Auditors report to the Audit Committee during their audit and highlight risks, if any, associated with organization and also suggest the appropriate measures, in consultation with the management and the Audit Committee, which can be taken by the Company in this regard. The Statutory Auditors also report to the Audit Committee of any instance of non-adherence to the procedures and manual which may increase the risk of frauds in the organization.

The Company has in place Risk Management Policy formulated in accordance with the provisions of Section 134(3)(n) of the Act, which is available at https://sayajihotels.com/images/pdf/policies/Risk_Management_Policy.pdf. There has been no change in the policy during the year under review.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCE AND REMUNERATION OF EMPLOYEES

Your Company firmly believes that a well-planned HRM program that is tailored to your organization and staff can actually improve your businesss bottom line.

Our teams are integral to our business. We have embraced a culture of excellence and meritocracy to nurture our people. We believe in selecting the right talent, training them and instilling in them the spirit of Sayajiians. We focus on developing the most superior workforce so that the organization and individual employees can accomplish their work goals in service to customers. We aim also at achieving advance flexibility, innovation, competitive advantage and improved business performance.

Sayaji follows a performance measuring tool like Balance Score Card (BSC) and Key Performance Indicators (KPI), applicable depending on their position in the organization, by which periodical evaluation of the employees performance is done based on their area of working. This also encourage them to work hard and efficiently at all levels of work.

The Company has total number of permanent employees on roll as at 31^st March, 2023 was 1433 across all its hotel units. The information required under section 197(12) of the Act, read with rule 5 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is furnished in the ‘Annexure

3 to this Annual report.

Further, none of the employee in the Company falls under the provision of Section 197 (12) of the Companies Act, 2013 and Rule 5 (2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

ADEQUACY OF INTERNAL FINANCIAL CONTROL SYSTEMS

The Company has established an adequate system of internal controls, with documented procedures covering all corporate functions and hotel operating units. Internal controls provide:

• reasonable assurance regarding the effectiveness and efficiency of operations; • the adequacy of safeguards for assets; • assurance regarding reliability of financial statements;

• the reliability of financial controls and compliance with applicable laws and regulations.

The internal audit process provides a positive assurance to the Company about the internal financial control, it converges process framework, risk and control matrix and a scoring matrix, covering all critical and important functions inter-alia revenue management, hotel operations, purchase, finance, human resources and safety. It ensures that all the transactions are authorized, recorded and reported correctly and assets are safeguarded and protected against loss from unauthorized use or disposition.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the Internal, Statutory and Secretarial Auditors and external consultants and the reviews performed by management and the relevant Board Committees, including the

Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during Financial Year 2022-23.

POLICIES

The Company has adopted various policies under the Companies Act, 2013, SEBI (Prohibition of Insider Trading) Regulations, 2015, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and other applicable laws, which are given here below:

• Corporate Social Responsibility Policy

• Familiarization Programme for Independent directors • Material Subsidiary Policy • Related Party Transaction Policy • Risk Management Policy • Nomination and Remuneration Policy

• Policy for determination of materiality • Policy for Preservation of the Documents and Archival of Documents • Business Responsibility Policy

• Policy for Procedure of Inquiry in Case of Leak of Unpublished Price Sensitive Information ("UPSI")

• Whistle Blower & Vigil Mechanism Policy • Policy on Sexual Harassment

All the policies are amended as required from time to time and are available at the Companys website under Investors head which can be accessed through link: https://sayajihotels.com/investors/.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Directors of your Company, to the best of their knowledge and ability and based upon representations from the Management, hereby confirm that:

• in the preparation of the annual financial statements for the year ended 31^st March, 2023, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;

• they have selected such accounting policies in consultation with Statutory Auditors and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs and loss of the company at the end of the Financial Year 2022-23;

• they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

• they have prepared annual financial statements for year ended 31^st March, 2023 on a going concern basis;

• they have laid down internal financial controls for your Company, which are adequate and operating effectively; and

• they have been devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

A statement to the effect is annexed here to as ‘Annexure-4 forming part of this Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All the contracts, arrangements or transactions entered into during the year under review by the Company with related parties were in ordinary course of business and on an arms length basis. Prior omnibus approval is obtained for related party transactions (RPTs) which are of a repetitive nature and entered in the Ordinary Course of Business and are at Arms Length. A statement on RPTs specifying the details of the transactions, pursuant to each omnibus approval granted, has been placed on quarterly basis for review by the Audit Committee.

Since all the Related Party Transactions that were entered into during the financial year were on arms length basis and in ordinary course of business. Therefore, the provisions of Section 188 of the Act are not applicable. Thus, the disclosure in Form AOC-2 is not required. Further, there are no materially significant Related Party Transactions during the year under review made by the Company with its Promoters, Directors, Key Managerial Personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.

As per the requirements of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has framed a policy on dealing with RPTs which can be accessed on the Companys website under the link: https://sayajihotels.com/images/pdf/Annexure_4_RPT_Policy.pdf. This Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions with the Related Parties.

AUDITORS

STATUTORY AUDITOR

M/s K.L. Vyas & Co., Chartered Accountants were re-appointed as Statutory Auditors of your Company at the 35^th Annual General Meeting held on 28^th September, 2018, for a term of five consecutive years till the financial year 2022-23. They have completed 10 years as Statutory Auditors of the Company. The provisions regarding rotation of auditors, as prescribed under the Act, are applicable to the Company. Hence, it is proposed to appoint M/s Manish Joshi and Associates, Chartered Accountants (Firm Registration No.: 011631C) as Statutory Auditors of the Company for a period of 5 consecutive years commencing from this Annual General Meeting till the Annual General Meeting of the Company to be held in 2028 to the members for their approval.

The Report given by the Auditors on the financial statements of the Company is part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their report. During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Companies Act, 2013.

SECRETARIAL AUDITOR

The Board of Directors had appointed M/s Neelesh Gupta & Co., Practicing Company Secretaries (COP No. 6846) in accordance with provisions of Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to conduct Secretarial Audit and Annual Secretarial Compliance Report for the financial year 2022-23 whose report is attached separately to this report as "Annexure 5" of this Report.

The Company has undertaken an audit for the year ended 31^st March, 2023, pursuant to Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for all applicable compliances as per the said Regulations. The Annual Secretarial Compliance Report duly signed by Mr. Neelesh Gupta, Practising Company Secretary is available on the website of the Company at https://sayajihotels.com/investors/.

COST AUDITOR

The Company is not required to maintain cost records and conduct cost audit in accordance with Section 148(1) of the Act read with Rule 3 of the Companies (Cost Record and Audit) Rules, 2014 as the services of the Company are not covered under the said rules and limits.

CORPORATE GOVERNANCE

Your Company has been practicing the principles of good corporate governance and is committed to maintain high standards of the corporate ethics and professionalism. The tenets of inclusiveness and transparency are integral part of our corporate governance practices.

In compliance with the provisions of Regulations 34(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a report on Corporate Governance is available as a separate section in this Annual Report.

A certificate pursuant to Para E Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, from M/s K. L Vyas and Company, Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached as ‘Annexure - 6 to this Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, as part of vigil mechanism and has revised the Whistle Blower policy in the meeting of Board in confirmation with Section 177(9) of the Act and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to provide Directors and employees an avenue to lodge Complaints, in line with the commitment of Company to the highest possible standards of ethical, moral and legal business conduct and its commitment to open communication and to provide necessary safeguards for protection of employees from reprisals or victimization, for whistle-blowing in good faith.

The purpose of this policy is to provide a framework to protect employees wishing to raise a concern about serious irregularities within the Company. It is affirmed that no personnel of the Company have been denied to access to the Chairman of Audit Committee.

The details of the policy have been disclosed in the Corporate Governance Report, which forms a part of the Annual Report and is also available on https://sayajihotels.com/images/pdf/whistle-blower-vigil-mechanism/Whistle_Blower___Vigil_Mechanism_Policy.pdf

MANAGEMENT DISCUSSION & ANALYSIS

Pursuant to the provisions of Regulation 34(2)(e) read with Para B Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Managements Discussion and Analysis Report on Companys performance industry trends and other material changes with respect to the Company and its subsidiaries, wherever applicable, forms part of this Annual Report.

MD & CFO CERTIFICATION

In terms of Regulation 17(8) read with Part B of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Managing Director and Chief Financial Officer of the Company have issued a certificate authenticating Financial Statements for the Financial Year 2022-23 which provides a true and fair view of the affairs of the Company and the said certificate dated 29^th May, 2023 was placed before the Board in its meeting held on 29^th May, 2023 and was reviewed and taken on record by the Board. The said Certificate is attached as "Annexure - 7" to this Annual Report. Since theres no CEO in the Company, therefore certificate is taken from MD and CFO of the Company.

CONSOLIDATED FINANCIAL STATEMENTS

Section 129(3) of the Companies Act, 2013, requires preparation of consolidated financial statements of the Company and of all the subsidiaries including associate company and joint venture businesses in the same form and manner as that of its own. In conformity with the above section and Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 the Company has prepared Consolidated Financial Statements which are forming part of this Annual Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGOES

Your Company is continuously striving towards conservation of energy across all its units and has also earned foreign currency in Financial Year 2022-23, complete details with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo in accordance with the provisions of Section 134 (3)(m) of the Companies Act 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014 has been disclosed in "Annexure 8" to this Annual Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, the Company has complied with Secretarial Standards on Board meeting and General meeting, as applicable on the Company, issued by Institute of Company Secretaries of India.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF FINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments, affecting the financial position of the Company which occurred between the end of the financial year 2022-23 to which the financial statements relate and the date of this report except the approval of scheme of amalgamation and demerger as specified above in this report and approved by Honble NCLT, Chennai Bench. Pursuant to the Scheme, the entire Indore business of the Company will be segregated and be run by the Sayaji Hotels (Indore) Limited ("Resulting Company 1") and entire Baroda and Pune Business of the Company will now be run by Sayaji Hotels (Pune) Limited ("Resulting Company 2).

DEMATERIALIZATION OF SHARES AND LIQUIDITY

The Companys shares are compulsorily traded in dematerialized form on BSE. The Company have connectivity with the depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL), as prescribed by the Securities and Exchange Board of India. Equity shares of the Company representing 91.76% of the Companys equity share capital are dematerialized as on 31^st March, 2023. Under the Depository System, the International Securities

Identification Number (ISIN) allotted to the Companys shares is INE318C01014.

Further your Company has also availed the demat facility for the Preference Shareholders from NSDL and 75% of Preference Shares are held in dematerialized form.

PAYMENT OF LISTING FEE AND CUSTODIAL FEE

Your Company has paid both Annual Listing Fee and Annual Custodial Fee for the Financial Year 2023-24 to the BSE Limited and to the depositorys i.e. National Securities and Depositories Limited (NSDL) and Central Depository Services (India) Limited (CDSL) respectively.

CERTIFICATE FROM PRACTISING COMPANY SECRETARY OF NON-DISQUALIFICATION OF DIRECTORS

The Company has obtained a certificate dated 14^th September, 2023 from M/s Neelesh Gupta & Co., Practicing Company Secretaries, under Regulation 34(3) and Schedule V Para C Clause (10) (i) of LODR Regulations, 2015 confirming that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of Company by the Securities and Exchange Board of India (SEBI) and Ministry of Corporate Affairs (MCA) or any such statutory authority and the same is annexed hereto as ‘Annexure 9.

WEB ADDRESS OF ANNUAL RETURN

Pursuant to Section 92(3) and Section 134 (3) (a), web address of the annual return as on 31^st March, 2023 in form MGT-7 is https://sayajihotels.com/images/Form_MGT_7_SHL_2022-23_website.pdf

ACKNOWLEDGEMENT AND APPRECIATION

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain a fighter during this unfavorable time.

The Board places on record its appreciation for the support and co-operation your Company has been receiving from its suppliers, distributors, retailers, vendors and others associates. Your Company looks upon them as partners in its progress, it will be your Companys endeavor to build and nurture strong links with them based on mutuality of benefits, respect for and co-operation with each other, consistent with consumer interests.

Your Directors also take this opportunity to thank all Shareholders, Clients, Vendors, Banks, Government and Regulatory Authorities and Stock Exchanges for their continued support.