Aruna Hotels Ltd Directors Report

To the Members,

Your Companys Directors have pleasure in presenting before you the 63rd Annual Report of the Company together with the Audited Financial Statements for the Financial Year (FY) ended 31st March, 2025.

FINANCIAL SUMMARY

Standalone Financial Performance for the year ended March 31, 2025 is summarized below:

Particulars	Rs. in lakhs	Rs. in lakhs
	Financial year ended March 31, 2025	Financial year ended March 31, 2024
Revenue from Operations	2367.12	1731.94
Other Income (net)	1336.35	1228.21
Total Income	3703.47	2960.15
Less:Cost of Materials consumed	448.35	(318.79)
Less: Operating Expenditure (Employee benefit expenses)	313.22	(109.07)
Less: Finance costs	1423.65	(1437.35)
Less: Depreciation & amortization expense	281.45	(340.31)
Less: Other expenses (net)	1220.63	(1128.44)
Profit/ (Loss) before exceptional and Extraordinary items and tax	16.18	(373.81)
Exceptional Items	-	-
Profit/ (Loss) before Extraordinary items and tax	16.18	(373.81)
Extraordinary Items	-	-
Profit / (Loss) before tax	16.18	(373.81)
Tax expenses	-87.23	76
Profit / (Loss) after tax	103.41	(449.81)
Other Comprehensive (Income)/Loss	6.40	-3.82
Total Comprehensive Income for the period (Comprising profit/loss from ordinary activities after tax and other comprehensive income for the period)	97.00	(445.99)

DISCLOSURE UNDER COMPANIES ACT 2013:

Pursuant to the Section 134 of Companies Act, 2013 read with Companies (Accounts Rules), 2014, the Company has complied with requirements and the details of which are as disclosed here under:

(i) Annual Return

As provided under Section 92(3) and 134(3)(a) of Companies Act, 2013, the Annual Return in form MGT-7 for the financial year 2024-2025 is available on the website of the Company at www.arunahotels.com

(ii) Number of meetings of the Board

The Board of Directors met 6 (Six) times during the financial year 2024-2025. The details of the Board meetings and the attendance of the Directors are given in the Corporate Governance Report, which forms part of this Annual Report.

(iii) Directors Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, Board of Directors confirms that:

a) in the preparation of the annual accounts for the financial year ended 31st March, 2025, the applicable accounting standards have been followed and that no material departures have been made from the same;

b) they have selected such accounting policies 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 of the Company at the end of the financial year and of the profits and loss of the Company for that period;

c) they had 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;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and ensured that such Internal financial controls are adequate and were operating effectively; and

(iv) Details in respect of frauds reported by the auditors:

During the year under review, the Auditors have not reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boards report.

(v) A statement on declaration given by Independent Directors:

The Company has received necessary declarations from every Independent Director under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

(vi) Companys policy on Directors appointment and Remuneration:

Companys policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes and independence of a director and other matters as per Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which forms part of the Boards Report and also is disclosed on Companys website www.arunahotels.com

(vii) Explanation of Board on qualification of Statutory Auditors and Secretarial Auditors, if any

The Auditors Report for the financial year 2024-2025 does not contain any qualification, reservation or adverse remark. The Report is enclosed with the financial statements in this Annual Report.

As required by the Listing Regulations, the Practicing Company Secretarys certificate on Corporate Governance for the financial year 2024-2025 is enclosed as Annexure to this Annual report. The certificate does not contain any qualification, reservation or adverse remark, except that of few observations.

The Secretarial Auditors Report for the financial year 2024-2025 does not contain any qualification, reservation or adverse remarks, except that of few observations. The Secretarial Auditors Report is enclosed as Annexure to this Annual report.

(viii) Particulars of loans, guarantees or investments given or made by the Company

During the year under review, Company has not given any loan, guarantee or provided any security and made any investments pursuant to section 186 of the Companies Act, 2013. Also, the Company is engaged in the business of providing ‘Infrastructural facilities(under Schedule VI of Companies Act, 2013), the provisions of Section 186 of the Companies Act, 2013 pertaining to provision of Loans, Guarantees or Investments shall not be applicable to the Company.

(ix) Related Party Transactions

In line with the requirements of the Act and the SEBI Listing Regulations, as amended, the Company has formulated a policy on Related Party Transactions for identifying, reviewing, approving and monitoring of Related Party Transactions and the same can be accessed on the Companys website at www.arunahotels.com.

The related party transactions entered into with related parties during the year under review were in the ordinary course of business and at arms length basis and in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All transactions entered into with the related parties were approved by the Audit Committee.

None of the transactions with related parties are material in nature or fall under the scope of Section 188 (1) of the Companies Act, 2013. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, as amended, in Form AOC-2 is not applicable to the Company for the financial year 2024-2025 and hence the same is not provided.

(x) State of Affairs Operations

The company has been successfully operating its hospitality business under the brand name “Pharos Hotels,” a unit of Aruna Hotels Limited. This marks a significant milestone in the Companys revival journey and positions it strategically in the competitive hospitality sector.

The initial phase of operations was focused on establishing essential services and facilities, streamlining processes, and laying a strong foundation for future scalability. Efforts were directed toward enhancing guest experiences, implementing operational efficiencies, and aligning resources with business objectives.

Financial Performance

The financial results reflect a significant turnaround in performance. For the year ended, the Company reported a profit before tax of Rs. 16.18 lakhs, compared to a loss of Rs. (373.81) lakhs in the previous year and a loss of Rs. (1166.79) lakhs in the year prior to that.

This notable improvement in performance is attributable to the following:

Streamlining of operations and process efficiencies, Optimization of costs across functions, and Initial traction from revenue streams generated by the launch of hotel operations.

The improvement demonstrates the effectiveness of management initiatives in reducing losses and steering the Company toward profitability.

Future Outlook

While the Company is still in the process of stabilizing its operations, the early success achieved provides confidence in the sustainability of its business model. The management has undertaken targeted marketing campaigns, strengthened digital presence, and optimized cost structures to enhance operating performance.

Looking ahead, the Company will continue to focus on:

Improving occupancy levels and average room revenues through dynamic pricing and sales strategies, Strengthening brand presence via strategic marketing initiatives, Enhancing operational efficiency through cost control and process improvements, and Delivering superior guest experiences to build customer loyalty and repeat business.

The Board is confident that these measures will further strengthen the Companys position in the hospitality market, improve profitability, and create sustainable long-term value for shareholders

(xi) Transfer to Reserves

The Company has not transferred or proposed to transfer any amount to the Reserves for the year under review.

(xii) Dividend

Your Company has not declared any Dividend for the year ended 31st March 2025

(xiii) Material changes and commitments, if any, affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of the report

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year i.e., 31st March, 2025 and the date of this report.

(xiv) Conservation Of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

1. Conservation of Energy

Considering the nature of activities in which the Company operates, energy consumption is in accordance to the normal business practices and does not require any specific installations. In its regular course of business, the Company is always vigilant to conserve the resources and continuously implements measures required to save energy.

2. Technology Absorption

The business activities of the Company are not specific to any technology requirements. Hence disclosures pertaining to conservation of energy and technology absorption are not applicable to your Company during the year under review.

3. Foreign Exchange Earning and Outgo

There were no foreign exchange inflows or outflow during the year under review.

(xv) Risk Management Policy

Internal compliance and control policies and procedures of the Company and policies for monitoring and evaluation of risk management systems to assess the effectiveness of those systems in minimizing risks that may impact adversely on the business objectives of the Company were established.At present, the Company has not identified any element of risk which may threaten the existence of the Company. However, the Constitution of a Risk Management Committee as per Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is not applicable to the Company.

(xvi) Corporate Social Responsibility (CSR):

During the year under review, the provisions of Section 135 of the Companies Act, 2013 pertaining to the Corporate Social Responsibility are not applicable to the Company.

(xvii) Board Evaluation

Your Company has a structured framework for evaluation of the Individual Directors, Chairperson and Board as a whole and its Committees. The Independent Directors at their Meeting held on 14.02.2025 evaluated the performance of Non-Independent Directors, Board as a whole, Chairperson and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

The Board of Directors at their Meeting held on 14.11.2024 evaluated the performance of all Independent Directors and the Board as a whole and its Committees and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board through circulation of questionnaires, to assess the performance on select parameters relating to roles, responsibilities and obligations of the Board and functioning of the Committees.

The evaluation criteria were based on the participation, contribution and guidance offered and understanding of the areas etc., which are relevant to the Directors in their capacity as Members of the Board/Committees.

xix) Change in the nature of Business:

There is no change in the nature of Business during the year under review.

(xx) Directors and Key Managerial Personnel:

Directors:

The Board of Directors of Aruna Hotels Limited currently comprises of 6 (Six) Directors with a balanced combination of a. Executive, b. Non-Executive (Non-Independent) and c. Independent Directors.

Name of Directors	Designation
Mr. Suyambu Narayanan	Chairperson (Non-Executive - Independent Director)
Mr. Radhaswamy Venkateswaran	Executive Director
Mr. Muralidharan Ramasamy	Non-Executive - Non Independent Director
Mr. R Rajkumar	Non-Executive - Non Independent Director
Ms. Freeda Gnanaselvam Kanagiah	Non-Executive - Independent Director
Ms.Vijayalakshmi	Additional Director -Independent Director (W.e.f 12.08.2025)

In accordance with provisions of Section 152 (6) of the Companies Act, 2013 and the Articles of Association of the Company, Mr.Rajkumar (DIN:09702403) of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-election.

Appointment of Independent Director

The Board of Directors at its meeting held on August 12,2025 based on the recommendation of Nomination and Remuneration Committee, approved the appointment of Mrs. R.Vijayalakshmi (DIN: 11060612) as an Additional Director designated Non-Executive Women Independent Director for a period of five years with effect from August 12, 2025 subject to approval of shareholders. Accordingly matter with respect to appointment is proposed in the Notice of 63rd Annual General Meeting.

Key Managerial Personnel:

During the year, Ms.K.Lakshmi, Company Secretary and compliance officer has resigned from the Company w.e.f. May 31, 2024.

During the year , Ms.N.Sornalatha has been appointed as a company secretary and compliance officer of the company w.e.f July 11,2024.

Pursuant to the provisions of Section 203 of the Companies Act, the Key Managerial Personnel of the Company as on March 31, 2025 are:

a. Mr. Nagaraj P, Chief Financial Officer (CFO)

b. Ms.N.Sornalatha , Company Secretary (CS)

Declaration of Independent Director

All the Independent Directors have furnished necessary declaration under Section 149(7) of the Act and under Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. As per the said declarations, they meet the criteria of Independence as provided in Section149 (6) of the Act and the SEBI Listing Regulations. All of them have confirmed that they have registered themselves with the Indian Institute of Corporate Affairs under Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014 as amended.

(xxi. Statement regarding opinion of the Board with regard to integrity, expertise and experience of the

Independent Directors appointed during the year

During the year under review, no Independent Directors were appointed

(xviii) Subsidiary, Associates and Joint Ventures

Your Company has no subsidiary during the year or at any time after the closure of the year and till the date of this report. Hence, a statement containing the salient features of financial statements of the Companys subsidiaries in Form AOC-1 is not applicable.

Associates and Joint Ventures

Your Company has no Associates or Joint Ventures during the year or at any time after the closure of the year and till the date of this report.

(xxii) Deposits

The Company has not invited or accepted any deposits during the year under review and there are no deposits covered under Chapter V of the Companies Act, 2013 during the year 2024-2025, the details of which are required to be furnished.

(xxiii) Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future:

During the year under review and as on date of the Report, No material orders passed by the Regulators and fine(s) that was/were imposed on the Company. No impact on the going concern status and companys operations in future.

(xxiv) Internal Financial Control

The Company has a proper and adequate internal control system to ensure that all the assets of the Company are safeguarded, to prevent and detect frauds and any other irregularities, proper application of appropriate accounting policies and procedures to ensure completeness of the accounting records, compliance with policies, rules and regulations, timely preparation of reliable financial information and prevention or timely detection of unauthorized acquisition, use or disposition of the Companys assets that could have material effect on the financial statements

The Company has engaged a firm of external consultants for the internal audit function to continuously monitor the effectiveness of internal controls.

(xxv) Maintenance of Cost Records

Maintenance of cost records and the requirement of Cost Audit under the provisions of Section 148 (1) of the Companies Act, 2013 are not applicable to the Company.

(xxvi) Internal Complaints Committee

The Company has constituted an Internal Complaints Committee to prevent and prohibit any form of sexual harassment at workplace and provide redressal for woman employees as required under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, there was no event affecting any of the women employees on account of any sexual harassment at the work place.

(xxvii) Proceedings under Insolvency and Bankruptcy Code, 2016

As on date of this report, The following are pending before the National Company Law Appellate Tribunal (NCLAT) National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code 2016.

Comp App (AT) (CH) (Ins) No. 52/2023, 63/2023, 64/2023 & 68/2023 pending before NCLAT,Chennai.

(xxviii) the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof - Not applicable

(xxviii) Capital Structure

During the financial year 2024-2025, there was no change in the Authorised Share Capital of the Company and stood at Rs. 75 Crores divided into 6,70,00,000 (Six crores seventy lakhs) equity shares of face value of Rs.10/- each and 8,00,000 (Eight lakhs) Preference shares of Rs.100/- each constituting Redeemable Preference share capital of the Company.

Paid Up Share Capital

During the financial year under review 2024-2025, the paid-up share capital of the Company is Rs. 36,94,00,000 (Rupees Thirty Six Crores Ninety Four Lakhs Only) comprising of 3,39,00,000 equity shares of Rs.10/- each and 2,83, 00,000 Redeemable Preference Shares of Rs.100/- each.

During the year under review, the Company has transferred a sum of Rs. 16,00,000/- (Rupees Sixteen Lakhs), being redemption amount of preference shares that remained unclaimed to the Investor Education and Protection Fund (IEPF) Account. The Redemption amount of preference shares remaining unpaid or unclaimed from parties will be transferred to Investor Education and Protection Fund under section 205 of Companies Act, 2013.

During the year under review, the Company has neither issued any shares with differential voting rights nor issued any sweat equity shares.

(xxix) Meetings of the Board

During the financial year under review, 6 (six) Board Meetings were held and the gap between two meetings did not exceed one hundred and twenty days. The said meetings were held on 24.05.2024, 11.07.2024, 13.08.2024, 14.11.2024, 22.01.2025 and 14.02.2025. Necessary quorum was present for all the meetings. Other details including the composition of the Board and the Committee Meetings thereof held during the year under review (FY 20242025) are given in the Corporate Governance Report forming part of this Report.

Meeting of the Independent Directors:

During the year, one Meeting of Independent Directors was held on 14.02.2025. All the Independent Directors were present.

Committees of the Board

A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report section which forms part of this Annual Report.

(xxx) Familiarization Programs for Independent Directors

In accordance with the requirements of Listing Regulations, 2015 and Schedule IV of the Act, as amended, the Company has a programme to familiarize the Independent Directors of the Company including in relation to the nature of industry in which the Company operates and the roles, rights and responsibilities of the Independent Directors.

The Programme aim at enabling the Independent Directors to understand and keep them updated on an ongoing basis about the significant changes which occur in the industry. Due to this familiarization programs, it was concluded that the Board is able to take active participation in the decision-making process and is equally involved in the affairs of the Company.

Remuneration ratio of the directors / Key Managerial Personnel (KMP) / Employees

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished hereunder:

S.No Particulars	Ratio
1. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year (i) Mr. Radhaswamy Venkateswaran	0.6:1
2. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary, or Manager, if any, in the financial year	6.4%
3. The percentage increase in the median remuneration of employees in the financial year	0.64
4. The number of permanent employees on the rolls of the company	14 employees
5. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration	Nil

*The ratio of the remuneration of Mr. Radhaswamy Venkateswaran, Managing Director to the median remuneration of the employees calculated for a period of 12 months during the FY 2024-2025

It is affirmed that the Remuneration is as per the Remuneration policy for the Directors, Key Managerial Personnel and other employees adopted by the Company.

(xxxi) Policy on Vigil Mechanism (Whistleblower Policy)

The Company has formulated and established the necessary Vigil Mechanism (Whistleblower Policy) for employees including Directors of the Company in confirmation with Section 177(9) of the Act and Regulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to report genuine concerns about unethical behaviour. The details of the policy have been disclosed in the Corporate Governance Report, which is a part of this report and is also available on the website at www.arunahotels.com

(xxxii) Auditors:

(a) Statutory Auditors:

At the 58thAGM held on 21st day of September, 2020, the members approved appointment of M/s Bala & Co., Chartered Accountants, Chennai (Firm Registration No.: 000318S) as Statutory Auditors of the Company to hold office for a term of five years from the conclusion of 58th AGM till the conclusion of 63 rd AGM (AGM 2025). The Statutory Auditors Report for the financial year 2024-2025 on the financial statement of the Company, forms part of this Annual Report.

The Statutory Auditors Report on the financial statements of the Company for the financial year 2024-2025 does not contain any qualifications, reservations or adverse remarks or disclaimer.

During the year under review, the Statutory Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013

(b) Internal Auditors:

In accordance with the provisions of Section 138 of the Companies Act, 2013 M/s. GSPU & Associates, chartered Accountants (FRN :011266S), were appointed as the Internal Auditors of the company for the financial year 20242025.

(c) Secretarial Auditors:

In accordance with the provisions of Section 204 of Act read with rules made thereunder and Regulation 24A of the SEBI Listing Regulations, the Board has approved the appointment of Mr.B.Prabhakar, Practicing Company Secretaries (CP.No.7870), as Secretarial Auditor of the Company, for a period of 5 consecutive financial years and fix their remuneration, subject to approval of the Shareholders of the Company in the ensuing 63rd Annual General Meeting of the Company. Accordingly matter with respect to appointment is proposed in the Notice of 63rd Annual General Meeting.

In terms of Section 204 of the Companies Act, 2013 to conduct the Secretarial Audit of records and documents of the Company for financial year 2024-2025. The Secretarial Audit Report in form no. MR-3 issued by the Secretarial Auditor for the financial year 2024-2025 is annexed hereunder.

For the financial year 2024-2025, the Company does not have any material unlisted Indian subsidiaries. As such the requirement to attach secretarial audit reports of material unlisted Indian subsidiaries pursuant to Regulation 24A (1) of SEBI Listing Regulations is not applicable to the Company.

(xxxiii) Compliance with Secretarial Standards:

The Company has devised proper systems to ensure compliance with the provisions of all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) and that such systems are adequate and operating effectively.

(xxxiv) Listing Requirements:

Your Companys Equity shares are listed on the BSE Limited, Mumbai. Listing fees have been paid to this Stock Exchange for the financial year 2024-2025.

(xxxv) Dematerialization of Shares

The Companys shares are compulsorily traded in dematerialized form on the BSE Stock Exchange. Equity Shares of the Company representing 91.58% of the Companys equity share capital are dematerialized as on March 31, 2025. Under the Depository system, the International Securities Identification Number (ISIN) allotted to the Companys shares is INE957C01019.

(xxxvi) Corporate Governance

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Corporate Governance Report with Auditors Certificate thereon and Management Discussion and Analysis Report are attached, which form part of this report.

(xxxvii) Management Discussion & Analysis Report

Management Discussion & Analysis Report for the year under review, as stipulated under Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed as annexure to this report.

Acknowledgement

Your Directors take this opportunity to express their gratitude to Companys Bankers, Suppliers, Government Departments and other business associates for their unstinted support extended to the Company. Your Directors wish to place on record, their appreciation of the efficient and dedicated services rendered by the employees at all levels across the Company. We are sincerely grateful to all the shareholders for their confidence, faith and support in the endeavours of the Company.

Date: 12.08.2025	On behalf of the Board of Directors
Place: Chennai	Sd/-	Sd/-
	R Venkateswaran	Suyambu Narayanan
	Managing Director	Director
	DIN: 09532159	DIN: 07718798