Saj Hotels Ltd Auditor Reports

STATEMENTS

The Board of Directors

Saj Hotels Limited (formerly known as Saj Hotels Private Limited)

Mahabaleshwar Panchgani Road,

Mahabaleshwar, Satara,

Maharashtra - 412806

Dear Sirs,

1. We have examined the attached Restated Consolidated Financial Statements of Saj Hotels Limited (formerly known as Saj Hotels Private Limited) (the “Company” or the “Holding Company” or the “Issuer”) and its subsidiaries (the Company and its subsidiaries together referred to as “the Group”) and of its associate comprising the Restated Consolidated Statement of Assets and Liabilities as at January 31, 2024, March 31, 2023, March 31, 2022 and March 31 2021, the Restated Consolidated Statement of Profit and Loss, the Restated Consolidated Statement of Cash Flows for the period ended January 31, 2024, and for the years ended March 31, 2023, March 31, 2022 and March 31 2021, and the summary statement of significant accounting policies, and other explanatory information (collectively, the “Restated Consolidated Financial Statements”), as approved by the Board of Directors of the Company at their meeting held on April 30, 2024 for the purpose of inclusion in the Draft Red Herring Prospectus (“DRHP”) prepared by the Company in connection with its proposed Small and Medium Enterprise (“SME”) Initial Public Offer of equity shares of the Company (“IPO”) prepared in terms of the requirements of:

a) Section 26 of Part I of Chapter III of the Companies Act, 2013 (the “Act”);

b) the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (“ICDR Regulations”); and

c) the Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India (“ICAI”), as amended from time to time (the “Guidance Note”).

Managements Responsibility for the Restated Consolidated Financial Statements

2. The Companys Board of Directors is responsible for the preparation of the Restated Consolidated Financial Statements for the purpose of inclusion in the DRHP to be filed with Securities and Exchange Board of India (“SEBI”), relevant Stock Exchange where the Companys Equity Shares are proposed to be listed and Registrar of Companies, Pune in connection with the proposed IPO. The Restated Consolidated Financial Statements have been prepared by the management of the Company on the basis of preparation stated in Annexure - 4 of the Restated Consolidated Financial Statements.

The respective Board of Directors of the companies included in the Group and of its associate are responsible for designing, implementing and maintaining adequate internal control relevant to the preparation and presentation of the Restated Consolidated Financial Statements. The respective Board of Directors are also responsible for identifying and ensuring that the Group and its associate complies with the Act, the ICDR Regulations and the Guidance Note.

Auditors Responsibilities

3. We have examined such Restated Consolidated Financial Statements taking into consideration:

a) The terms of reference and terms of our engagement agreed upon with you in accordance with our engagement letter dated October 3, 2023 in connection with the proposed IPO;

b) The Guidance Note, which also requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI;

c) Concepts of test checks and materiality to obtain reasonable assurance based on verification of evidence supporting the Restated Consolidated Financial Statements; and

d) The requirements of Section 26 of the Act and the ICDR Regulations.

Our work was performed solely to assist you in meeting your responsibilities in relation to your compliance with the Act, the ICDR Regulations and the Guidance Note in connection with the IPO.

Restated Consolidated Financial Statements

4. These Restated Consolidated Financial Statements have been compiled by the management from:

a) Audited Special Purpose Interim Consolidated financial statements of the Company and of its associate as at and for the period ended January 31, 2024 prepared in accordance with recognition and measurement principles under Accounting Standard specified under section 133 of the Act and other accounting principles generally accepted in India (the “Special Purpose Interim Consolidated Financial Statements”) which have been approved by the Board of Directors at their meeting held on April 30, 2024;

b) Audited Special Purpose Consolidated Financial Statements of the Group and of its associate as at and for the year ended March 31, 2023 prepared by the Management in accordance with the Accounting Standards, as prescribed under Section 133 of the Act read with Companies (Accounting Standards) Rules 2021, as amended, and other accounting principles generally accepted in India, which has been approved by the Board of Directors at their meeting held on April 30, 2024;

c)

i. Audited Consolidated Financial Statements of the Group as at and for the year ended March 31, 2022 prepared by the Management in accordance with the Accounting Standards, as prescribed under Section 133 of the Act read with Companies (Accounting Standards) Rules 2021, as amended, and other accounting principles generally accepted in India, which has been approved by the Board of Directors at their meeting held on September 30, 2022;

ii. Audited Financial Statements of subsidiary mentioned in Annexure A(i)(1) as at and for the year ended March 31, 2022 prepared by the respective Management in accordance with the Accounting Standards, as prescribed by ICAI and other accounting principles generally accepted in India;

iii. Audited Financial Statements of the associate mentioned in Annexure A(i)(3) as at and for the year ended March 31, 2022 prepared by the respective Management in accordance with the Accounting Standards, as prescribed under Section 133 of the Act read with Companies (Accounting Standards) Rules 2021, as amended, and other accounting principles generally accepted in India, which has been approved by the Board of Directors at their meeting held on September 30, 2022;

d)

i. Audited Consolidated Financial Statements of the Group as at and for the year ended March 31, 2021 prepared by the Management in accordance with the Accounting Standards, as prescribed under Section 133 of the Act read with Companies (Accounting Standards) Rules 2021, as amended, and other accounting principles generally accepted in India, which has been approved by the Board of Directors at their meeting held on November 23, 2021; and

ii. Audited Financial Statements of subsidiary mentioned in Annexure A(i)(1) as at and for the year ended March 31,

2021 prepared by the respective Management in accordance with the Accounting Standards, as prescribed by ICAI and other accounting principles generally accepted in India.

5. For the purpose of our examination, we have relied on:

a) Auditors report issued by us dated April 30, 2024 on the special purpose interim consolidated financial statements of the Company as at and for the period ended January 31, 2024 as referred in Paragraph 4(a)(i) above;

b) Special Purpose Auditors report issued by us dated April 30, 2024 on the consolidated financial statements of the Company as at and for the year ended March 31, 2023 as referred in Paragraph 4(b)(i) above;

c)

i. Auditors report issued by M/s RGSG & Co. (“the Previous Auditor” or “Other Auditor”) dated September 30, 2022 on the consolidated financial statements of the Group as at and for the year ended March 31, 2022 as referred in Paragraph 4(c)(i) above;

ii. Auditors Report issued by the Previous Auditor dated September 30, 2022 on the financial statements of the subsidiary as at and for the year ended March 31, 2022 as referred in Paragraph 4(c)(ii) above;

iii. Auditors report issued by the Previous Auditor dated September 30, 2022 on the financial statements of the associate as at and for the year ended March 31, 2022 as referred in Paragraph 4(c)(iii) above;

d) i. Auditors report issued by us dated November 23, 2021 on the consolidated financial statements of the Group as at and for the year ended March 31, 2021 as referred in Paragraph 4(d)(i) above;

ii. Auditors Report issued by the us dated November 30, 2021 on the financial statements of the subsidiary as at and for the year ended March 31, 2021 as referred in Paragraph 4(d)(ii) above.

6. As indicated in our audit reports referred to in para 5(a), 5(b) and 5(d)(i) above, we did not audit the financial statements of the subsidiaries included in the Group and the associate, as mentioned in Annexure A(i), for the period / years as mentioned in Annexure A(ii), whose share of total assets, total revenues, net cash inflows / (outflows) and share of loss in respect of the associate included in the Audited Consolidated Financial Statements for the relevant year / period is tabulated below is tabulated below:

(INR Lakhs)

Particulars	As at and for the period ended January 31, 2024	As at and for the year ended March 31, 2023	As at and for the year ended March 31, 2021
In respect of subsidiaries:
Total Assets	-	-	26.11
Total Revenue	-	230.99	89.54
Net Cash inflows / (outflows)	-	1.89	7.72
In respect of associate:
Groups share of net loss in the associate	-	-	-

These financial statements have been audited by other auditor [as mentioned in Annexure A(ii)] and whose reports have been furnished to us by the Companys management. Our opinion on the consolidated financial statements, is not modified in respect of the above matter with respect to our reliance on the work done and the reports of the other auditor.

Further, the financial information of these entities, as above, included in these Restated Consolidated Financial Statements, is based on such financial statements audited by the other auditors and have been restated by the Management of the Issuer Company to comply with the basis of preparation stated in Annexure - 4 to the Restated Consolidated Financial Statements.

7. Based on our examination and according to the information and explanations given to us and also as per the reliance placed on the auditors reports issued by the Previous Auditor, we report that:

a) Restated Consolidated Financial Statements have been prepared after incorporating adjustments for the changes in accounting policies, any material errors and regroupings/ reclassifications retrospectively for all the years / period to reflect the same accounting treatment as per the accounting policies and grouping/classifications followed for the said years / period, wherever applicable.

b) There are no qualifications in the auditors reports which require any adjustments to the Restated Consolidated Financial Statements;

c) Restated Consolidated Financial Statements have been prepared in accordance with the Act, the SEBI ICDR Regulations and the Guidance Note;

8. Our examination as above includes the following Notes to the Restated Consolidated Financial Statements of the company set out in the Annexure - 5, prepared by the management and approved by the Board of Directors for the period ended January 31, 2024 and for the year ended March 31, 2023, March 31, 2022 and March 31, 2021.

Particulars	Annexure
Statement of significant accounting policies and notes to the restated consolidated financial statements	Annexure - 4
Restated statement of share capital	Note - 1 to Annexure - 5
Restated statement of reserves and surplus	Note - 2 to Annexure - 5
Restated statement of long-term borrowings	Note - 3 to Annexure - 5
Restated statement of deferred tax liabilities / assets (net)	Note - 4 to Annexure - 5
Restated statement of other long-term liabilities	Note - 5 to Annexure - 5
Restated statement of long-term provisions	Note - 6 to Annexure - 5
Restated statement of short-term borrowings	Note - 7 to Annexure - 5
Restated statement of trade payables	Note - 8 to Annexure - 5
Restated statement of other current liabilities	Note - 9 to Annexure - 5
Restated statement of short-term provisions	Note - 10 to Annexure - 5
Restated statement of property, plant and equipment & intangible assets - tangible & intangible assets	Note - 11 & 11a to Annexure - 5
Restated statement of property, plant and equipment & intangible assets - capital work in progress	Note - 11b to Annexure - 5
Restated statement of non-current investments	Note - 12 to Annexure - 5
Restated statement of long-term loans and advances	Note - 13 to Annexure - 5
Restated statement of other non-current assets	Note - 14 to Annexure - 5
Restated statement of inventories	Note - 15 to Annexure - 5
Restated statement of trade receivables	Note - 16 to Annexure - 5
Restated statement of cash & cash equivalents	Note - 17 to Annexure - 5
Restated statement of short-term loans and advances	Note - 18 to Annexure - 5
Restated statement of other current assets	Note - 19 to Annexure - 5
Restated statement of revenue from operations	Note - 20 to Annexure - 5
Restated statement of other income	Note - 21 to Annexure - 5
Restated statement of cost of food and beverages consumed	Note - 22 to Annexure - 5
Restated statement of employee benefit expenses	Note - 23 to Annexure - 5
Restated statement of finance cost	Note - 24 to Annexure - 5
Restated statement of depreciation & amortization	Note - 25 to Annexure - 5
Restated statement of other expenses	Note - 26 to Annexure - 5
Restated statement of exceptional items	Note - 27 to Annexure - 5
Restated statement of earnings per share	Note - 28 to Annexure - 5
Restated statement of contingent liabilities	Note - 29 to Annexure - 5
Restated statement of related party disclosures under AS-18	Note - 30 to Annexure - 5
Restated statement of accounting ratios as per Schedule III	Note - 31 to Annexure - 5
Restated statement of capitalization	Note - 32 to Annexure - 5
Restated statement of mandatory accounting ratios	Note - 33 to Annexure - 5
Restated statement of tax shelter	Note - 34 to Annexure - 5

9. We have not audited any financial statements of the Company as of any date or for any period subsequent to January 31, 2024. Accordingly, we express no opinion on the financial position, results of operations and cash flows of the Company as of any date or for any period subsequent to January 31, 2024.

10. We, Dhirubhai Shah & Co LLP, Chartered Accountants have been subjected to the peer review process of the Institute of Chartered Accountants of India (“ICAI”) and hold a valid peer review certificate issued by the “Peer Review Board” of the ICAI.

11. This report should not in any way be construed as a reissuance or re-dating of any of the previous audit reports issued by us or the Previous Auditor or other auditors, nor should this report be construed as a new opinion on any of the financial statements referred to herein.

12. We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.

13. We have no responsibility to update our report for events and circumstances occurring after the date of the report.

Restriction on use

14. Our report is intended solely for use of the Board of Directors for inclusion in the DRHP to be filed with Securities and Exchange Board of India, the Registrar of Companies, Pune and relevant Stock Exchange, as applicable, in connection with the proposed IPO. Our report should not be used, referred to or distributed for any other purpose except with our prior consent in writing. Accordingly, we do not accept or assume any liability or any duty of care for any other purpose or to any other person to whom this report is shown or into whose hands it may come without our prior consent in writing.

For, Dhirubhai Shah & Co. LLP

Chartered A ccountants

Firm Registration No.: 102511W/W100298

Sd/-

Anik Shah Partner

Membership No.: 140594

ICAI UDIN: 24140594BKAJQA8814

Place : Mumbai Date : April 30, 2024

Annexure A

(i) List of Subsidiaries and Associate of Saj Hotels Limited

Sr No.	Name of Entity	Nature of Relation
1	Coast to Coast Hospitality and Lifestyle LLP*	Subsidiary
2	Perhaps Foods Private Limited #	Subsidiary
3	My Own Rooms Dot In Private Limited	Associate Entity

* Upto 10 March 2023

# Upto 30 March 2023

(ii) Details of subsidiaries and associate audited by other auditors for the respective years/period

Particulars	Period ended / Year ended	Name of Auditor
Perhaps Foods Private Limited	31 March 2021	M/s RGSG & Co.
	30 March 2023
My Own Rooms Dot In Private Limited	31 January 2024	M/s RGSG & Co.
	31 March 2023
Coast to Coast Hospitality and Lifestyle LLP	10 March 2023	M/s RGSG & Co.

Independent Auditors Report

To The Board of Directors

Saj Hotels Limited (formerly known as Saj Hotels Private Limited)

Report on Interim Consolidate Financial Statements Opinion

At the request of the Board of Directors of Saj Hotels Limited (the ‘Company), we have audited the accompanying interim consolidated financial statements of the Company and its associate, which comprise the interim consolidated balance sheet as at January 31, 2024 and the related interim consolidated statement of profit and loss and the interim consolidated statement of cash flows for the period then ended, and a summary of significant accounting policies and other explanatory information (collectively, the ‘Interim Consolidated Financial Statements); and the above collectively regarded as “Special Purpose Interim Consolidated Financial Statements”) prepared and presented solely to facilitate the preparation of the consolidated financial statements o f the Company, for inclusion in the Draft Red Herring Prospectus (“DRHP”), and any amendments and supplements thereto (collectively, the “Offer Document”), prepared in connection with the filing of an offer document for a proposed issue of equity shares (the “Equity Shares”) of the Company with the Securities and Exchange Board of India (“SEBI”).

The above Special Purpose Interim Consolidated Financial Statements have been prepared by management of the Company in accordance with recognition and measurement principles laid under Accounting Standards specified under section 133 of the Companies Act, 2013 (the ‘Act), other applicable provisions of the Act and rules made thereunder, other accounting principle s generally accepted in India, each as amended, the Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the ICAI, as amended from time to time (the “Guidance Note”) and the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended (the ‘SEBI ICDR Regulations) to the extent applicable (collectively regarded as ‘the applicable laws and regulations).

In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of the reports of the other auditor on and separate financial statements of the associate, the aforesaid Special Purpose Interim Consolidated Financial Statements give a true and fair view in conformity with the basis of preparation as set out in notes of the Special Purpose Interim Consolidated Financial Statements, of the state of affairs of the as on January 31, 2024, and its profits and cash flow for the period ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SA) issued by the Institute of Chartered Accountants of India (“ICAI”) and in particular SA 800 “Special Considerations Audit of Financial Statements prepared in accordance with Special Purpose Frameworks”. Our responsibilities under those SAs are further described in the Auditors Responsibilities for the Audit of the 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 and have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Management Responsibility for the Interim Consolidated Financial Statements

The Management and Board of Directors of the Company are responsible for the preparation of the Special Purpose Interim Consolidated Financial Statements that give a true and fair view of the state of affairs, profits and cash flows of the Company in accordance with the applicable laws and regulations.

This responsibility also includes maintenance of adequate accounting records for safeguarding 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 interim consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Special Purpose Interim Consolidated Financial Statements, the Management and Board of Directors of the Company and of its associate are responsible for assessing the Companys and associates ability to continue as a going conce rn,

disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The respective Board of Directors is also responsible for overseeing the Companys and associates financial reporting process.

Auditors Responsibility for the Audit of the Interim Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the Special Purpose Interim Consolidated Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors 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 SAs 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 Special Purpose Interim Consolidated Financial Statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Special Purpose Interim Consolidated 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.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control.

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

• Conclude on the appropriateness of managements 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 Companys and its associates ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Special Purpose Interim Consolidated 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 auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Special Purpose Interim Consolidated Financial Statements, including the disclosures, and whether the Special Purpose Interim Consolidated Financial Statements represent the underlying transactions and events in a manner that achieves presentation in accordance with the basis of preparation as set out in Note 1 to the Special Purpose Interim Consolidated Financial Statements.

We communicate with the management 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.

Basis of Accounting and Restriction on Distribution and Use

Without modifying our opinion, we draw attention to Note 1 to the Special Purpose Interim Consolidated Financial Statements, which describes the basis of accounting. The Special Purpose Interim Consolidated Financial Statements are prepared solely to facilitate the preparation of the Restated Consolidated Financial Statements of the Group of which the Company is a part, for inclusion in the Offer Document, prepared in connection with the filing of the offer document with the SEBI for a proposed issue of equity shares by the Company. As a result, the Special Purpose Interim Consolidated Financial Statements may not be suitable for another purpose. Our report is intended solely for the Company and should not be distributed to or used by parties other than the Company.

Other matter

The consolidated financial statements include the Companys share of net profit Rs. 4.32 lakhs for the period ended January 31, 2024 as considered in the consolidated financial statements, in respect of one associate, whose financial statements have been audited by other auditor whose report have been furnished to us by the management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures included in the respect of this associate, and our report in so far as it relates to the aforesaid associate, is based solely on the report of the other auditor.

Without modifying our opinion, we draw attention to Note 1 to the Special Purpose Interim Consolidated Financial Statements, which describes the basis of preparation. These Special Purpose Interim Consolidated Financial Statements do not constitute a set of statutory financial statements in accordance with the local laws in which the Company is incorporated and are prepared for the sole purpose as mentioned above.

For Dhirubhai Shah & Co. LLP

Chartered Accountants

Firms Registration Number: 102511W/W100298 Sd/-

Anik Shah

Partner

Membership No. 140594

ICAI UDIN: 24140594BKAJSW6270

Place: Mumbai Date: April 30, 2024

SAJ HOTELS LIMITED (FORMERLY KNOWN AS SAJ HOTELS PRIVATE LIMITED)

CIN: U55101PN1981PLC023814