Your Directors submit their Report for the financial year ended 31st March, 2018.

BUSINESS ENVIRONMENT

As per latest IMF estimates, World GDP grew by 3.8% in 2017 representing a marked improvement over 2016, which at 3.2% was the weakest year of growth since the global financial crisis of 2009. The growth momentum is likely to sustain going forward resulting in a further pick-up in global economic growth to 3.9% in 2018. However, the increasing trend of protectionist policies in the developed world, faster pace of increase in US interest rates and progressive tapering of quantitative easing in the EU could impact capital flows and weigh on the nascent recovery in commodity-exporting emerging economies.

The Indian economy witnessed another challenging year, with Real GDP growth slowing down sharply to 6.6% compared to 7.1% in 2016-17, reflecting the short-term disruptions caused by GST implementation, residual impact of cash crunch and deceleration in net Exports. Inflation is largely within the comfort zone of the RBI and foreign capital flows into the country remained robust leading to stability in the Indian Rupee and sustained buoyancy in the capital markets.

India remains the fastest growing major economy in the world and as per median estimates, based on the Survey of Professional Forecasters conducted by the RBI, GDP is likely to grow by 7.3% in 2018-19 on the back of improvement in the net Exports position and normalisation of private consumption growth levels, partly aided by a favourable base effect despite limited scope for further reduction in interest rates on account of rising crude oil prices, anticipation of commodity prices firming up in the ensuing year and steady rise in Core CPI.

The operating environment in the hospitality sector showed signs of improvement with foreign tourist arrivals crossing the 10 million mark in 2017. With growing domestic tourism and airline passenger traffic, coupled with muted growth in supply of new Hotels, the performance of the Hotel Industry is expected to improve in the coming years.

FINANCIAL PERFORMANCE

During the year under review, your Company earned license fees of Rs.330.98 lakhs (previous year Rs.325.12 lakhs). The other income at 171.19 lakhs decreased over the last year and resultantly pre and post-tax profits declined to Rs.453.13 lakhs and Rs.336.90 lakhs respectively.

Your Directors are pleased to recommend a dividend of Rs.3.50 per Equity Share of Rs.10/- each for the year ended 31st March, 2018, thereby maintaining last year’s dividend and involving a cash outflow of Rs.160 lakhs including Dividend Distribution Tax of Rs.27 lakhs.

PROFITS, DIVIDEND AND SURPLUS

The financial results of your Company, summarised, are as under:

WHISTLEBLOWER POLICY

The Company’s Whistleblower Policy encourages Directors and employees to bring to the Company’s attention instances of unethical behaviour, actual or suspected incidents of fraud or violation of the GHL Code of Conduct that could adversely impact the Company’s operations, business performance and / or reputation. The Policy provides that the Company investigates such incidents, when reported, in an impartial manner and takes appropriate action to ensure that the requisite standards of professional and ethical conduct are always upheld. It is the Company’s Policy to ensure that no employee is victimised or harassed for bringing such incidents to the attention of the Company.

The practice of the Whistleblower Policy is overseen by the Audit Committee and no employee has been denied access to the Committee. The Whistleblower Policy is available on the Company’s website at http://www.gujarathotelsltd.in/ CorporateGovernance.html.

DEPOSITS

Your Company has not accepted any deposit from the public / members under Section 73 of the Companies Act, 2013 (‘the Act’) read with the Companies (Acceptance of Deposits) Rules, 2014 during the year.

DIRECTORS

Changes in Directors and Key Managerial Personnel

During the period under review, there was no change in the composition of the Board of Directors and Key Managerial Personnel of your Company.

Retirement by Rotation

In accordance with the provisions of Section 152 of the Act read with Article 147 of the Articles of Association of the Company, Ms. Devkanya Roy Choudhury will retire by rotation at the ensuing Annual General Meeting (‘AGM’) of your Company and being eligible, offers herself for re-election. Your Board recommends her re-election.

Number of Board Meetings

During the year ended 31st March, 2018, four meetings of the Board were held.

Attributes, Qualifications & Independence of Directors and their Appointment

As reported last year, the Nominations and Remuneration Committee of the Board had approved the criteria for determining qualifications, positive attributes and independence of Directors in terms of the Act and the Rules thereunder, both in respect of Independent Directors and other Directors as applicable. The criteria, inter alia, requires that Directors shall possess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration or other disciplines related to the Company’s business.

The Board Diversity Policy of the Company requires the Board to have a balance of skills, experience and diversity of perspectives appropriate to the Company. The Articles of Association of the Company provide that the strength of the Board shall not be fewer than three nor more than twelve.

Directors are appointed / re-appointed with the approval of the Members. All Directors, other than Independent Directors, are liable to retire by rotation, unless otherwise approved by the Members. One-third of the Directors who are liable to retire by rotation, retire every year and are eligible for re-election.

The Independent Directors of your Company have confirmed that they meet the criteria of independence as prescribed under Section 149 of the Act and Regulation 16 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’).

The Company’s Policy on remuneration of Directors, Key Managerial Personnel and other employees is provided under the section ‘Report on Corporate Governance’ in the Report and Accounts.

Board Evaluation

The Nominations and Remuneration Committee has approved the Policy on Board Evaluation, Evaluation of Board Committees’ functioning and individual Director Evaluation. Board performance is assessed against the role and responsibilities of the Board as provided in the Act and the Listing Regulations. The parameters for Board performance evaluation have been derived from the Board’s core role of trusteeship to protect and enhance shareholder value as well as fulfill expectations of other stakeholders through strategic supervision of the Company. Evaluation of functioning of Board Committees is based on discussions amongst Committee members and shared by respective Committee Chairman with the Board. Individual Directors are evaluated in the context of the role played by each Director as a member of the Board at its meetings and in assisting the Board in realising its role of strategic supervision of the functioning of the Company in pursuit of its purpose and goals.

While the Board evaluated its performance against the parameters laid down by the Nominations and Remuneration Committee, the evaluation of individual Directors was carried out anonymously in order to ensure objectivity. The Board was briefed on functioning of Board Committees by the respective Committee Chairmen.

AUDIT COMMITTEE & AUDITORS

The composition of the Audit Committee is provided under the section ‘Board of Directors & Committees’ in the Report and Accounts.

Statutory Auditors

The Auditors, Messrs. K C Mehta & Co., Chartered Accountants, (KCM), were appointed with your approval at the Thirty Fifth AGM to hold such office till the conclusion of the Fortieth AGM.

On the recommendation of the Audit Committee, the Board recommended for the ratification of the Members, the appointment of KCM from the conclusion of the ensuing AGM till the conclusion of the Thirty Seventh AGM. On the recommendation of the Audit Committee, the Board also recommended for the approval of the Members, the remuneration of KCM for the financial year 2018-19. Appropriate resolution for this purpose forms part of the Notice convening the ensuing AGM of the Company.

Secretarial Auditors

Your Board appointed Messrs. PB & Associates, Company Secretaries, to conduct the secretarial audit of the Company for the financial year ended 31st March, 2018. Their report is provided in the Annexure forming part of this Report, in terms of Section 204 of the Act.

RELATED PARTY TRANSACTIONS

All contracts or arrangements entered into by the Company with its related parties during the financial year were in accordance with the provisions of the Act and the Listing Regulations, were on arm’s length basis and in the ordinary course of business, and all such contracts or arrangements have been approved by the Audit Committee. Further, the prescribed details of related party transactions of the Company in Form No. AOC-2, in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is given in the Annexure to this Report. Your Company’s Policy on Related Party Transactions, as adopted by your Board, can be accessed on the website at http:// www.gujarathotelsltd.in/policies Policy_on_Related_Party_ Transactions.pdf.

DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 134 of the Act, your Directors confirm having:

a) followed in the preparation of the Annual Accounts, the applicable Accounting Standards with proper explanation relating to material departures, if any;

b) selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of your Company for that period;

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

d) prepared the Annual Accounts on a going concern basis;

e) laid down internal financial controls to be followed by your Company and that such internal financial controls were adequate and operating effectively; and

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

OTHER INFORMATION Compliance with the conditions of Corporate Governance

The certificate from your Company’s Auditors, Messrs. K C Mehta & Co., Chartered Accountants, confirming compliance with the conditions of Corporate Governance as stipulated under the Listing Regulations is annexed.

Compliance with Secretarial Standards

The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act.

Going Concern Status

There is no significant or material order passed during the year by any regulator, court or tribunal impacting the going concern status of the Company or its future operations.

Extract of Annual Return

The information required under Section 134 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is provided in the Annexure forming part of this Report.

Particulars of Loans, Guarantees or Investments

During the year ended 31st March, 2018, the Company has neither given any loan or guarantee nor has it made any investment under the provisions of Section 186 of the Act.

Particulars relating to Conservation of Energy and Tech nology Absorption

Particulars as required under Section 134 of the Act relating to Conservation of Energy and Technology Absorption are provided below:-

Conservation of Energy:

Steps taken on conservation of energy and impact thereof:

Steps taken by the Company for utilising alternate sources of energy: NIL

Capital investment on energy conservation equipment: NIL Tech nology Absorption:

i) Efforts, in brief, made towards technology absorption and benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc.:

ii) In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year), following information may be furnished:

A) Details of technology imported - NIL

B) Year of import - NIL

C) Whether the technology has been fully absorbed -NIL

D) If not fully absorbed, areas where absorption has not taken place, and the reasons therefor - NIL

iii) Expenditure incurred on research and development -NIL

FOREIGN EXCHANGE EARNINGS AND OUTGO

During the financial year 2017-18, foreign exchange earnings of the Hotel aggregated Rs.958.87 lakhs (previous year Rs.989.80 lakhs), while expenditure in foreign currency aggregated Rs.32.30 lakhs (previous year Rs.22 lakhs).

EMPLOYEES

The total number of employees of the Company as on 31st March, 2018 stood at 187.

There were no employees, who were employed throughout the year and were in receipt of remuneration aggregating Rs.1.02 crores or more or were employed for part of the year and were in receipt of remuneration aggregating Rs.8.50 lakhs per month or more during the financial year ended 31st March, 2018.

The details of top ten employees of the Company in terms of remuneration drawn, as required under Section 197(12) of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of this Report.

FORWARD-LOOKING STATEMENTS

This Report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words ‘anticipate’, ‘believe’, ‘estimate’, ‘expect’, ‘intend’, ‘will’ and other similar expressions as they relate to the Company and / or its Businesses are intended to identify such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

CONCLUSION

Your Directors and employees look forward to the future with confidence and stand committed to creating an even brighter future for all stakeholders.

On behalf of the Board

Place : New Delhi D R Choudhury J Singh

Date : 17th April, 2018 Director Director