Royal Orchid Hotels Ltd Directors Report.

To the Members of Royal Orchid Hotels Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of Royal Orchid Hotels Limited (‘the Company?), which comprise the Balance Sheet as at 31 March 2022, the Statement of Profit and Loss (including

Other Comprehensive Loss), the Statement of Cash Flow, the Statement of Changes in Equity for the year then ended and a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (‘the Act?) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (‘Ind AS?) specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2022, its loss (including other comprehensive loss), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the

Act. Our responsibilities under those standards are further described in the Auditor?s Responsibilities for the

Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (‘ICAI?) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter - Impact of Covid-19

4. We draw attention to Note 59 to the accompanying standalone financial statements, which describes the effects of uncertainties relating to the effects of COVID-19 pandemic and management?s evaluation of its impact on the business operations of the Company and accompanying standalone financial statements as at reporting date, the extent of which is significantly dependent on future developments, as they evolve. Our opinion is not modified in respect of this matter.

Key Audit Matters

5. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

6. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matters How our audit addressed the key audit matters
Impairment assessment of investments and loans in subsidiary and associate companies. Our audit procedures included, but were not limited to, the following:
As disclosed in Notes 7, 8, 9, 11, 13, 17, 19 and 40, the standalone financial statements of the Company as at 31 March 2022 includes Investments of 15,733.82 lakhs (net of impairment of 1,097.20 lakhs), Assets held for sale of 342.77 lakhs (net of impairment of 397.83 lakhs), Loans (including interest accrued thereon) of 2,580.32 lakhs and Other current / non-current financial assets of 1,356.34 lakhs invested in / recoverable from its subsidiaries and associate. 1. Obtained an understanding of the management process for identification of possible impairment indicators and process performed by the management for impairment testing.
In the year ended 31 March 2022, on account of losses reported by certain subsidiaries and associate and impact of COVID-19 pandemic on the operations of such companies, the management has identified that indicators exist that requires the management to test the carrying value of such investments and receivables for possible impairment in accordance with the requirements of Ind AS 36, Impairment of Assets (‘Ind AS 36?). 2. Evaluated the design and implementation of relevant controls and tested the operating effectiveness of such internal controls which inter-alia include controls around the reasonableness of input data considered and assumptions made in determining the recoverable value of investments.
Management?s assessment of the recoverable amount of investments in and loans given to these subsidiary and associate companies requires estimation and judgement around assumptions used in the Discounted Cash Flow valuation model adopted by the Company for the purpose, primarily around expected revival of business from the pandemic, estimated growth in the operations in the form of occupancy rate and room rates to assess ability to generate cash profits in the future, and the discount rates applied in the model and fair value of immovable properties. Changes to such assumptions could lead to material changes in estimated recoverable amounts, resulting in impairment of the investment in subsidiary and associate companies. 3. Obtained the impairment assessment prepared by the management for the investments and performed the following procedures:
Considering the significance of the amounts involved and auditor attention required to test the appropriateness of accounting estimate that involves high estimation uncertainty and significant management judgement, this matter has been determined to be a key audit matter for the current year audit. ? Held discussions with the Company/Subsidiaries? and Associate?s personnel to identify additional factors, if any, which, in our professional judgement, should have been considered in determination of recoverable value.
? Assessed the competence, independence and objectivity of the management?s experts involved in determining recoverable value of the investments, as applicable.
? Involved our internal valuation specialists to assess the appropriateness of the methodology applied in determining the recoverable amount and test the key valuation assumptions considered by the Management in such models.
? Tested the mathematical accuracy of the management computations of cash flows and sensitivity analysis.
? Reconciled the cash flows to the business plans approved by the respective Board of Directors of the identified investee companies.
? Evaluated key assumptions in management?s valuation models used to determine recoverable amount including assumptions of projected adjusted EBITDA, growth rate and assessed the forecasts considering our understanding of the business and industry based on internal and external sources of information, including the impact of COVID-19 on such assumptions.
? Performed independent sensitivity analysis of aforesaid key assumptions to assess the effect of reasonably possible variations on the current estimated recoverable amount for respective subsidiaries and associate to evaluate sufficiency of headroom between recoverable value and carrying amounts.
4. Evaluated the appropriateness and adequacy of the disclosures made in the standalone financial statements in respect of aforesaid matter in accordance with the requirements of the accounting standards.
Evaluation of Management?s assessment of appropriateness of going concern assumption. Our audit procedures included, but were not limited to, the following:
As disclosed in Note 59 to the standalone financial statements, the COVID-19 pandemic has severely impacted the operations of the Company leading to low occupancies and shutdown of some of the hotels of the Company across India for certain periods of time during the year to comply with the restriction guidelines issued by the Central/State governments in this respect. 1. Obtained an understanding of the process followed by the management to identify all the factors that impact the going concern evaluation which includes preparation of cash flow projections and liquidity analysis, etc.
On account of aforesaid impact of the pandemic, the Company has incurred a total comprehensive loss of 85.03 lakhs during the current year as at 31 March 2022. Such events and conditions require the management to do a detailed assessment of the Company?s ability to continue as a going concern for the foreseeable future as per the requirements of Ind AS 1, Presentation of Financial Statements. 2. Evaluated the design and implementation of relevant controls, and tested the operating effectiveness of such controls relating to above process which inter-alia includes controls around reasonableness of the input data and assumptions used in preparing the cash flow projections for the foreseeable future.
The assessment of appropriateness of use of going concern basis of accounting for preparation of the standalone financial statements by the management, as mentioned above, involves significant judgement in terms of expected revival of the business and estimation of key input variables such as average occupancy rate, average room rate, future business plans and expected sources of funding to meet the fixed costs of maintaining such establishments in running conditions, amongst other estimates. 3. Obtained the cash flow projections prepared by the management and performed the following procedures:
The management, based on their assessment of expected availability of cash flows and future business plans, has concluded that use of going concern basis of accounting for preparation of accompanying standalone financial statements is appropriate and no material uncertainty exists in this respect basis the mitigating factors as explained in the said note. ? Traced such cash flow projections to the future business plans approved by the Board of Directors of the Company.
The auditing standard, SA 570, Going Concern, also casts a responsibility on the auditors to assess the aforesaid assessment made by the management and to verify whether the disclosures made by the management in the standalone financial statements in this respect meet the requirements of applicable financial reporting framework. ? Tested the appropriateness and reasonableness of inputs and assumptions used in the cash flow projections with reference to historical performance, internal and external sources of information about the hospitality industry and the Company?s strategy including various measures undertaken by the Company under the prevalent conditions of the COVID-19 pandemic.
Considering the significant judgements and estimates with high estimation uncertainty involved as above, and the pervasive impact of the matter on the financial statements, we have considered the assessment of management?s evaluation of going concern basis of accounting for preparation of the accompanying standalone financial statements, as a key audit matter in the current year audit since this matter required significant efforts and attention from us during the audit. ? Performed sensitivity analysis on the key input variables used in cash flow projections to assess the impact of change on the overall cash flows to identify the estimation uncertainty involved in relation to such estimates.
? Tested the arithmetical accuracy of the calculations including those related to sensitivity analysis performed by the management.
4. Evaluated the appropriateness and adequacy of the disclosures made in the standalone financial statements in respect of going concern as required under the applicable accounting standards.

Information other than the Standalone Financial Statements and Auditor?s Report thereon

7. The Company?s Board of Directors are responsible for the other information. The other information comprises the information included in the Annual Report but does not include the standalone financial statements and our auditor?s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

8. The accompanying standalone financial statements have been approved by the Company?s Board of Directors. The Company?s Board of Directors are responsible for the matters stated in Section 134(5) of the

Act with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS specified under Section 133 of the Act and other accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

9. In preparing the standalone financial statements, the Board of Directors are responsible for assessing the

Company?s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intend to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

10. Those Board of Directors are also responsible for overseeing the Company?s financial reporting process.

Auditor?s Responsibilities for the Audit of the Standalone Financial Statements

11. Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor?s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

12. As part of an audit in accordance with Standards on Auditing, specified under Section 143(10) of the Act we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

a. Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

b. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to standalone financial statements in place and the operating effectiveness of such controls;

c. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

d. Conclude on the appropriateness of Board of Directors? use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company?s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor?s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor?s report. However, future events or conditions may cause the Company to cease to continue as a going concern; and

e. Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

13. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

14. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

15. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor?s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

16. As required by Section 197(16) of the Act based on our audit, we report that the Company has paid remuneration to its directors during the year in accordance with the provisions of and limits laid down under Section 197 read with Schedule V to the Act.

17. As required by the Companies (Auditor?s Report) Order, 2020 (‘the Order?) issued by the Central Government of India in terms of Section 143(11) of the Act we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

18. Further to our comments in Annexure I, as required by Section 143(3) of the Act based on our audit, we report, to the extent applicable, that:

a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the accompanying standalone financial statements;

b. in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c. the standalone financial statements dealt with by this report are in agreement with the books of account; d. in our opinion, the aforesaid standalone financial statements comply with Ind AS specified under

Section 133 of the Act; e. on the basis of the written representations received from the directors and taken on record by the

Board of Directors, none of the directors is disqualified as on 31 March 2022 from being appointed as a director in terms of Section 164(2) of the Act;

f. with respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company as on 31 March 2022 and the operating effectiveness of such controls, refer to our separate Report in Annexure II wherein we have expressed an unmodified opinion; and

g. with respect to the other matters to be included in the Auditor?s Report in accordance with Rule

11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. the Company, as detailed in Note 52 to the standalone financial statements, has disclosed the impact of pending litigations on its financial position as at 31 March 2022;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses as at 31 March 2022;

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended 31 March 2022;

iv. the management has represented that, to the best of its knowledge and belief, as

a. disclosed in Note 58 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or securities premium or any other sources or kind of funds) by the Company to or in any person(s) or entity(ies), including foreign entities (‘the intermediaries?), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries?) or provide any guarantee, security or the like on behalf the Ultimate Beneficiaries;

b. the management has represented that, to the best of its knowledge and belief, as disclosed in Note 58 to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities

(‘the Funding Parties?), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the

Funding Party (‘Ultimate Beneficiaries?) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

c. based on such audit procedures performed as considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the management representations under sub-clauses (a) and (b) above contain any material misstatement; and

v. The Company has not declared or paid any dividend during the year ended 31 March 2022.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm?s Registration No.: 001076N/N500013
Aasheesh Arjun Singh
Partner
Membership No.: 210122
UDIN: 22210122AJWJTI7200
Bengaluru
30 May 2022

Annexure I referred to in Paragraph 17 of the Independent Auditor?s Report of even date to the members of

Royal Orchid Hotels Limited on the standalone financial statements for the year ended 31 March 2022

In terms of the information and explanations sought by us and given by the Company and the books of account and records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:

i. a.

A. The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment and right of use assets.

B. The Company has maintained proper records showing full particulars of intangible assets.

b. The Company has a regular program of physical verification of its property, plant and equipment and right of use assets under which the assets are physically verified in a phased manner over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this program, certain property, plant and equipment and right of use assets were verified during the year and no material discrepancies were noticed on such verification.

c. The title deeds of all the immovable properties held by the Company (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the lessee) are held in the name of the Company.

d. The Company has not revalued its Property, Plant and Equipment and Right of Use assets or intangible assets during the year.

e. No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Accordingly, reporting under clause 3(i)(e) of the Order is not applicable to the Company.

ii. a. The management has conducted physical verification of inventory at reasonable intervals during the year. In our opinion, the coverage and procedure of such verification by the management is appropriate and no discrepancies of 10% or more in the aggregate for each class of inventory were noticed on physical verification of such inventory. b. The Company has not been sanctioned working capital limits by banks or financial institutions on the basis of security of current assets during any point of time of the year. Accordingly, reporting under clause 3(ii)(b) of the Order is not applicable to the Company. iii. a. The Company has provided loans or advances in the nature of loans, or guarantee, or security to

Subsidiaries during the year as per details given below:

Particulars Guaran tees Security Loans Advances in nature of loans
Aggregate amount provided/granted during the year - - 22.14 -
Subsidiaries
Balance outstanding as at balance sheet date in respect of above cases: - - 1,126.32 -
Subsidiaries

b. In our opinion, and according to the information and explanations given to us, the investments made, guarantees provided, security given and terms and conditions of the grant of all loans and advances in the nature of loans and guarantees provided are, prima facie, not prejudicial to the interest of the Company.

c. In respect of loans and advances in the nature of loans granted by the Company, the schedule of repayment of principal and the payment of the interest has not been stipulated and accordingly, we are unable to comment as to whether the repayments/receipts of principal interest are regular. d. In the absence of stipulated schedule of repayment of principal and payment of interest, we are unable to comment as to whether there is any amount which is overdue for more than 90 days. Reasonable steps have been taken by the Company for recovery of such principal amounts and interest. e. In respect of loans and advances in the nature of loans granted by the Company, the schedule of repayment of principal has not been stipulated. Further, no interest is receivable on such loans and advances in the nature of loans. According to the information and explanation given to us, such loans have not been demanded for repayment as on date. f. The Company has granted loans or advances in the nature of loans, which are repayable on demand or without specifying any terms or period of repayment, as per details below:

Particulars All Parties Promoters Other Related Parties
Aggregate of loans/advances in nature of loan
- Repayable on demand (A) - - -
- Agreement does not specify any terms or period of repayment (B) 2,812.32 - 2,580.32
Total (A+B) 2,812.32 - 2,580.32
Percentage of loans/advances in nature of loan to the total loans
- Repayable on demand (A)
- Agreement does not specify any terms or period 0% NA 0%
of repayment (B) 100% NA 100%

iv. The Company has not entered into any transaction covered under Sections 185 and 186 of the Act.

Accordingly, reporting under clause 3(iv) of the Order is not applicable to the Company.

v. In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits or there is no amount which has been considered as deemed deposit within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, reporting under clause 3(v) of the Order is not applicable to the Company.

vi. The Central Government has not specified maintenance of cost records under sub-section (1) of section 148 of the Act, in respect of Company?s business activity. Accordingly, reporting under clause 3(vi) of the Order is not applicable.

vii. (a) In our opinion, and according to the information and explanations given to us, undisputed statutory dues including goods and services tax, provident fund, employees? state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though tax deducted at source have not generally been regularly deposited with the appropriate authorities and there have been significant delays in a large number of cases. Undisputed amounts payables in respect thereof, which were outstanding at the year-end for a period of more than six months from the date they became payable are as follows:

Statement of arrears of statutory dues outstanding for more than six months:

Name of the statute Nature of the dues Amount Period to which the amount relates Due Date Date of Payment
Income Tax Tax deducted 128.84 AY 2019-20 to Various Not paid
Act, 1961 at source AY 2022-23 dates until date

(b) According to the information and explanations given to us, there are no statutory dues referred in subclause (a) which have not been deposited with the appropriate authorities on account of any dispute except for the following:

Name of the statute Nature of dues Gross Amount Amount paid under Protest Period to which the amount relates Forum where dispute is pending
Income Income 227.46 - AY 2009-10 Income Tax Appellate Tribunal
Tax Act, Taxes 198.74 - AY 2011-12 Income Tax Appellate Tribunal
1961 78.79 - AY 2018-19 Commissioner of Income Tax
(Appeals)

Annexure I referred to in Paragraph 17 of the Independent Auditor?s Report of even date to the members of Royal Orchid Hotels Limited on the standalone financial statements for the year ended 31 March 2022 (cont?d)

viii. According to the information and explanations given to us, no transactions were surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961) which have not been recorded in the books of accounts. ix. a. According to the information and explanations given to us, the Company has not defaulted in repayment of its loans or borrowings or in the payment of interest thereon to any lender.

b. According to the information and explanations given to us including representation received from the management of the Company, and on the basis of our audit procedures, we report that the Company has not been declared a willful defaulter by any bank or financial institution or other lender.

c. In our opinion and according to the information and explanations given to us, money raised by way of term loans were applied for the purposes for which these were obtained.

d. In our opinion and according to the information and explanations given to us, the Company has not raised any funds on short term basis during the year or in any previous year. Accordingly, reporting under clause 3(ix)(d) of the Order is not applicable to the Company

e. According to the information and explanations given to us and on an overall examination of the standalone financial statements of the Company, the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries or associate

f. According to the information and explanations given to us, the Company has not raised any loans during the year on the pledge of securities held in its subsidiaries or associate. x. a. The Company has not raised any money by way of initial public offer or further public offer

(including debt instruments), during the year. Accordingly, reporting under clause 3(x)(a) of the Order is not applicable to the Company. b. According to the information and explanations given to us, the Company has not made any preferential allotment or private placement of shares or (fully, partially or optionally) convertible debentures during the year. Accordingly, reporting under clause 3(x)(b) of the Order is not applicable to the Company. xi. a. To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or on the Company has been noticed or reported during the period covered by our audit. b. No report under Section 143(12) of the Act has been filed with the Central Government for the period covered by our audit. c. According to the information and explanations given to us including the representation made to us by the management of the Company, there are no whistle-blower complaints received by the Company during the year.

xii. The Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it. Accordingly, reporting under clause 3(xii) of the Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us, all transactions entered into by the Company with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable. Further, the details of such related party transactions have been disclosed in the standalone financial statements, as required Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified in Companies (Indian Accounting Standards) Rules 2015 as prescribed under Section 133 of the Act. xiv. a. In our opinion and according to the information and explanations given to us, the Company has an internal audit system as required under Section 138 of the Act which is commensurate with the size and nature of its business.

b. We have considered the reports issued by the Internal Auditors of the Company till date for the period under audit.

Annexure I referred to in Paragraph 17 of the Independent Auditor?s Report of even date to the members of Royal Orchid Hotels Limited on the standalone financial statements for the year ended 31 March 2022 (cont?d)

xv. According to the information and explanation given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with them and accordingly, provisions of Section 192 of the Act are not applicable to the Company. xvi. a. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act,

1934. Accordingly, reporting under clause 3(xvi) (a), (b) and (c) of the Order are not applicable to the Company.

b. Based on the information and explanations given to us and as represented by the management of the

Company, the Group (as defined in Core Investment Companies (Reserve Bank) Directions, 2016) does not have any CIC.

xvii. The Company has not ind cash losses in the current financial year but had incurred cash losses amounting to 564.76 lakhs in the immediately preceding financial year.

xviii. There has been no resignation of the statutory auditors during the year. Accordingly, reporting under clause 3 of the Order is not applicable to the Company.

xix. According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the standalone financial statements, our knowledge of the plans of the Board of Directors and management and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. According to the information and explanations given to us, the Company does not have any unspent amount in respect of any ongoing or other than ongoing project as at the expiry of the financial year. Accordingly, reporting under clause 3(xx) of the Order is not applicable to the Company.

xxi. The reporting under clause 3(xxi) of the Order is not applicable in respect of audit of standalone financial statements of the Company. Accordingly, no comment has been included in respect of said clause under this report.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm?s Registration No.: 001076N/N500013
Aasheesh Arjun Singh
Partner
Membership No.: 210122
UDIN: 22210122AJWJTI7200
Bengaluru
30 May 2022

Annexure II to the Independent Auditor?s Report of even date to the members of Royal Orchid Hotels Limited on the standalone financial statements for the year ended 31 March 2022

Independent Auditor?s Report on the internal financial controls with reference to the standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act?)

1. In conjunction with our audit of the standalone financial statements of Royal Orchid Hotels Limited (‘the Company?) as at and for the year ended 31 March 2022, we have audited the internal financial controls with reference to standalone financial statements of the Company as at that date.

Responsibilities of Management and Those Charged with Governance for Internal Financial Controls

2. The Company?s Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the Company?s business, including adherence to the Company?s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor?s Responsibility for the Audit of the Internal Financial Controls with Reference to Standalone Financial Statements

3. Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India (‘ICAI?) prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls with reference to standalone financial statements, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (‘the Guidance Note?) issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements includes obtaining an understanding of such internal financial controls, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor?s judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company?s internal financial controls with reference to standalone financial statements.

Meaning of Internal Financial Controls with Reference to Standalone Financial Statements

6. A companys internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls with reference to standalone financial statements include those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with Reference to Standalone Financial Statements

7. Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial controls with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Annexure II to the Independent Auditor?s Report of even date to the members of Royal Orchid Hotels Limited on the standalone financial statements for the year ended 31 March 2022 (cont?d)

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls with reference to standalone financial statements and such controls were operating effectively as at 31 March 2022, based on the internal financial controls with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm?s Registration No.: 001076N/N500013
Aasheesh Arjun Singh
Partner
Membership No.: 210122
UDIN: 22210122AJWJTI7200
Bengaluru
30 May 2022