Velan Hotels Ltd Directors Report

TO THE MEMBERS

Your Directors are presenting their 36^th Annual Report together with the Audited Accounts of the Company for
the year ended 31^st March 2026.

FINANCIAL HIGHLIGHTS (Rs. in lakhs)

PARTICULARS	2025 - 26	2024 - 25
Profit / (Loss) Before Interest, Depreciation and Tax	(45.93)	(89.03)
Add : Finance Cost	750.47	1138.02
Profit / (Loss) Before Depreciation & Tax	(796.40)	(1227.04)
Add : Depreciation	53.63	53.63
Less : Exceptional Item	-	-
Profit / (Loss) Before Tax [PBT]	(850.03)	(1280.67)
Less : Tax Expenses	-	-
- Current Tax	-	-
- Tax relating to prior years	-	-
- Deferred Tax	-	-
Profit / (Loss) After Tax	(850.03)	(1280.67)
Add : Revaluation Reserve	6.79	6.79
Balance b/f from previous years	(8620.80)	(7346.92)
Balance to be carried over to the Balance sheet	(9464.14)	(8620.80)

OPERATIONAL REVIEW :

The Company suspended all the revenue-generating operations w.e.f. 24 March 2020 due to COVID-19 and has
not carried out any business activities during the year as well, resulting in, the entire year being completely
washed out.

During the year under consideration, the gross receipts of your company stood Rs.3.55 Lacs from Rs.0.18 Lacs
logged in the previous year. Profit / (Loss) before Interest, Depreciation and Taxation was Rs.(45.93) lacs against
Rs. (89.03) Lacs recorded in the previous year. Similarly, the Profit / (Loss) after Tax for the year ended
March 31,2026 stood at (Rs.850.03) lacs as against Profit/Loss of (Rs.1280.67) registered in the previous year.

STATE OF THE COMPANYS AFFAIRS

During the year under review, the Company did not make any progress as the operations at the Company were
halted since March, 2020.

Members may be aware that the Companys account was categorized as NPA by Allahabad Bank and Andhra
Bank during the year 2014. In April, 2017, the said Banks assigned the entire debts of the Company alongwith all
underlying security interest, all rights, title & benefits to M/s.RARE Asset Reconstruction Limited (previously
known as Raytheon Asset Reconstruction Private Limited) under the applicable provisions of the SARFAESI Act.
The Company opted for One-Time Settlement offer with the said ARC and obtained in-principle approval from
them during March, 2021 and also final approval has been received in May 2021.

The Company remitted Rs.100.95 Crore to the said ARC upto 31st March 2026 from the disposal / sale of assets
of the Company, borrowings from the Directors / the Promoter Group Company and the receipt of an advance
amount for sale of hotel property from the purchaser.

During the current financial year, the Company successfully divested its revenue-generating hotel property
located at Tirupur. This strategic decision was made to pay off entire debt burdens of RARE ARC. On 28th April
2026, the Company remitted the entire OTS amount to RARE ARC on receipt of part of sale amount from
M/s.J.P.Associates Asia Pacific Private Limited, the purchaser of the property and the sale process completed on
02nd July 2026 after receiving entire sale consideration.

In line with this ongoing restructuring, the Board intends to sell certain identified non-revenue properties in the
near future to the related parties. The proceeds from these sales are repaying of unsecured loan provided by the
Directors / the Promoter Group Company (the related parties)

Despite the sale of the primary operational asset, the Board has conducted a detailed assessment of the
Companys financial position. The realization of assets and discharge of liabilities will continue in the normal
course of business. The management has prepared these financial statements on a going concern basis, as the
Company has the intention and realistic alternatives to continue its operations in the foreseeable future from other
business opportunity available in main object clause in the Memorandum of Association of the Company.

DIVIDEND:

Given the accumulated losses, your directors have not recommended any dividend on Equity Shares for the
Financial Year 2025-26.

SHARE CAPITAL:

During the year under review, your Companys Authorized Share Capital is Rs. 50,00,00,000 comprising
5,00,00,000 Equity Shares of Rs. 10/- each. The Companys paid-up capital is Rs.31,96,41,190 comprising of
3,19,64,119 Equity Shares of Rs. 10/- each fully paid up.

Further, the Company has not issued:

a. Any shares with differential rights as per provisions of Section 43 (a) (ii) of the Act read with Rule 4 (4) of the
Companies (Share Capital and Debenture) Rules, 2014.

b. Any sweat equity shares as per provisions of Section 54 (1) (d) of the Act read with Rule 8 (13) of the
Companies (Share Capital and Debenture) Rules, 2014.

c. Any equity shares under the Employees Stock Option Scheme as per provisions of Section 62(1)(b) of the
Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014.

TRANSFER OF AMOUNT TO RESERVE:

Given the Loss incurred during the year and due to accumulated losses of earlier years, the Company had not
transferred any amount to the Reserves.

FIXED DEPOSITS:

During the year under review, the Company has not accepted or renewed any amount falling within the purview of
provisions of Section 73 of the Companies Act 2013 ("the Act") read with the Companies (Acceptance of Deposit)

Rules, 2014. Hence, the requirement for furnishing details relating to deposits covered under Chapter V of the Act
or the details of deposits that are not in compliance with Chapter V of the Act is not applicable.

During the financial year under review, the Company borrowed the loans from Director(s) and the respective
directors gave a declaration in writing to the Company to the effect that the amount was not being given out of
funds acquired by them by borrowing or accepting loans or deposits from others as per requirement of proviso of
Rule 2(1)(c)(viii) of Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

During the financial year under review, the Company has not given any loans or guarantees covered under the
provisions of Section 186 of the Companies Act, 2013 and has not made any investments. Hence, the details of
loans and advances that are required to be disclosed in the Annual Report under Regulation 34(3) read with
Schedule V of the SEBI Listing Regulations are not furnished.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its
operations. The scope and authority of the Internal Audit function are defined in the Internal Audit Manual. To
maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit
Committee / the Managing Director.

The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system in the
Company, and its compliance with operating systems, accounting procedures and policies at all locations of the
Company.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

Under Section 135 of the Companies Act, 2013, every company having a net worth of at least Rs 500 crore,
turnover of Rs 1,000 crore or more, or a minimum net profit of Rs.5 crores during the immediately preceding
financial year has to make CSR expenditure. Since the Company does not fall under the criteria as are referred
above, not applicable.

DIVIDEND DISTRIBUTION POLICY:

According to Regulation 43A of the SEBI (Listing Obligations and Disclosures) Regulations 2015 as amended,
only the top 1000 listed companies (based on the market capitalization of every financial year) shall formulate a
Dividend Distribution Policy, which shall be disclosed in their annual reports and on their website as well.

Since your company does not fall under the top 1000 listed companies, no such report is provided in the Annual
Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

Regulation 34(2) of SEBI Listing Regulations, as amended, inter alia, provides that the Annual Report of the top
1000 listed entities based on market capitalization (calculated as on March 31 of every financial year), shall
include a Business Responsibility and Sustainability Report (BRSR) on the environmental, social and
governance disclosures.

Your Company, not being one of such top 1000 listed entities, has not included BRSR, as part of the Annual
Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND
OUTGO:

The Company has no foreign exchange earnings and outgo. The disclosures relating to the details of (i)
Conservation of Energy, (ii) Research & Development and Technology Absorption are to be made under sub-
section (m) of Section 134 of the Companies Act 2013 read with Rule (8)(3) of the Companies (Accounts) Rules,
2014 is not furnished due to the closure of the Hotel Operations during the period under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

a. Cessation / Retirement by rotation :

Under the provisions of Section 152 of the Companies Act, 2013 read with Section 149 of the said Act, at least
2/3rd of the total number of Directors, excluding Independent Directors, shall be liable to retire by rotation and
out of the Directors liable to retire by rotation, at least 1/3rd of the Directors shall retire by rotation at every
Annual General Meeting.

In view of the above, Mr.M.R.Gautham and Mrs.M.Sasikala retiring by rotation and being eligible, offer
themselves for re-appointment, a resolution seeking shareholders approval for their re-appointment forms
part of the Notice.

b. Appointment / Re-appointment

Mr.Nagaraj Saveethkumar (DIN:09130676) : His first term as Independent Director will expire on 30th March
2026. On recommendation of the Nomination and Remuneration Committee and the Board, Mr.Nagaraj
Saveethkumar was re-appointed as an Independent Director for a second and final term of five years w.e.f.
31st March 2026 to 30th March 2031. His re-appointment was approved at the 35th AGM held on 27th
September 2025.

By way of a resolution passed at the 35th AGM held on 27th September 2025, Mr.Muthukumararamalingam
Gautham (M.R.Gautham) was re-appointed as Whole-Time Director designated as Executive Director for a
further period of 1 year.

The Board at its meeting held on 07th August 2026 re-appointed Mr.E.V.Muthukumara Ramalingam as the
Managing Director for a further period of three years and Mr.Muthukumararamalingam Gautham @
M.R.Gautham as an Executive Director for a further period of three years. Resolutions for the both re-
appointments have been placed before the members of the Company for their approval.

c. Status of KMP:

During the year under review, Mr.E.V.Muthukumara Ramalingam, Managing Director, Mr.M.R.Gautham,
Executive Director, Mr.R.Lalitha, Chief Financial Officer and Ms.Garima Maheshwari, Company Secretary
are other KMPs as per the provisions of the Act and were already in the office. Mr.M.Srinivasan, the former
Company Secretary passed away due to ill health during the month of October 2025. None of the KMPs
resigned during the year.

Hotels

d. Declaration by Independent Director:

Under the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that
each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules
framed there-under and Regulation 16(1)(b) of SEBI Listing Regulations. There has been no change in the
circumstances affecting their status as Independent Directors of the Company. In terms of Regulation 25(8)
of SEBI Listing Regulations, they have confirmed that they are not aware of any circumstance or situation,
which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their
duties with an objective independent judgment and without any external influence. The Board of Directors of
the Company has taken on record the declaration and confirmation submitted by the Independent Directors

e. Disqualification of Directors:

None of the directors of the Company are disqualified under the provisions of Section 164 of the Companies
Act, 2013 or debarred or disqualified from being appointed or continuing as directors of companies by the
Securities and Exchange Board of India or Ministry of Corporate Affairs or any such statutory authority. A
certificate from a Practicing Company Secretary in this regard is attached to this report.

f. Woman Director :

In terms of the provisions of Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, your Company has complied with the requirement of having at least one Woman Director
on the Board of Company. Mrs.M.Sasikala is a Non-Independent and Women Director of the Company.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD MEETINGS AND GENERAL MEETINGS

The Company has complied with the Secretarial Standard issued by the Institute of Company Secretaries of India
on Board Meetings and General Meetings.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

To familiarize new Independent Directors with the strategy, operations and functions of our Company, the
Companys presentation, inter alia, on strategy, operations, service offerings, markets, organization structure,

finance, human resources and technology is given at the time of their induction and thereafter during the Board
meetings and/or committees thereof. The details of the familiarization program can be viewed at
https://www.velanhotels.com/FamilirizationProgramme-2026.pdf

CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the nature of business.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators / Courts / Tribunal which would impact the
going concern status of the Company.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and
individual Directors pursuant to the provisions of the Act and SEBI Listing Regulations.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors based on
criteria such as the board composition and structure; degree of fulfilment of key responsibilities towards
stakeholders; effectiveness of board processes, information and functioning, etc.; extent of co-ordination and
cohesiveness between the Board and its Committees; and quality of the relationship between board Members
and the management.

The performance of the Committees was evaluated by the Board after seeking inputs from the Committee
Members based on criteria such as the composition of committees, effectiveness of committee meetings, etc.

In a separate meeting of Independent Directors, the performance of Non-Independent Directors, the Board as a
whole and the Chairman of the Company was evaluated, taking into account the views of Executive Director and
Non-Executive Directors.

The Board and the Nomination and Remuneration Committee (NRC) reviewed the performance of individual
Directors based on criteria such as the contribution of the individual Director to the Board and committee meetings
like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in
meetings, etc.

In the Board Meeting that followed the meeting of the Independent Directors and meeting of NRC, the
performance of the Board, its Committees, and individual Directors was also discussed. Performance evaluation
of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

MEETINGS

During the year, Ten Board Meetings and Five Audit Committee Meetings were convened and held. The details of
which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the
period prescribed under the Companies Act, 2013, as amended.

DIRECTORS RESPONSIBILITY STATEMENT:

In terms of Section 134 (5) of the Companies Act, 2013, the Directors would like to state that :

i) In the preparation of the annual accounts, all the applicable Accounting Standards have been followed along
with proper explanation relating to material departures;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments
and estimates that were 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 loss of the Company for the year under review.

iii) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.

iv) The Directors have prepared the annual accounts on a going concern basis.

v) The Directors had laid down internal financial controls to be followed by the Company and that such internal
financial controls were adequate and were operating effectively.

vi) The Directors had devised a proper system to ensure compliance with the provisions of all applicable laws
and that such a system was adequate and operating effectively.

Hotels

RELATED PARTY TRANSACTIONS:

i) Not all transactions with related parties are construed as related party transactions. Provisions regarding
Related Party Transaction are encapsulated under 188 of the Companies Act, 2013 ("the Act") read with rule
15 of the Companies (Meetings of Board and its Powers) Rules, 2014. All related party transactions that were
entered into during the financial year were on an arms length basis and were in the ordinary course of
business.

ii) Further, in the financial year 2025-26, in the scope of Section 188(1) of the Act, there were no material
transactions with any of its related parties. Therefore, the disclosure of Related Party Transactions as
required under Section 134(3(h) of the Act in Form AOC-2 does not apply to the Company for the financial
year 2025-26 and hence the same is not provided.

iii) Transfer of resources like providing loans, making investments, or offering guarantees, which are not
specifically listed in Section 188 of the Companies Act 2013 but are considered related party
transactions under the provisions of Regulation 2(1)(zc) and 23 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015. Accordingly, the Company has entered the transactions with
related parties, i.e the aggregate value of material transactions exceeded 10% of the annual
consolidated turnover of the Company, as per the last audited financial statements of the Company,
the details of which reported here-under:

(Rs. in lakhs)

Name of the Related Party	Relationship with the Company	Nature of Transaction	Opening Balance 01-04-25	Received by the Company	Repaid by the Company	Closing Balance 31-03-26
Mr. E.V. Muthukumara Ramalingam	Managing Director	Transfer of Resources (Availed / Repayment of Loan)	1026.67	16.06	16.06	1026.67
Mr.M.R.Gautham	Executive Director	Transfer of Resources (Availed / Repayment of Loan)	1020.58	-	60.81	959.77
M/s.Shree Vallee Enterprises Pvt Ltd	Promoter Group Company in which the promoters of the Company are Members / Directors.	Transfer of Resources (Availed / Repayment of Inter-Corporate Deposit.	1565.00			1565.00

Except for the above transactions, there were no materially significant related party transactions made by the
Company with the Promoters, Directors, Key Managerial Personnel, or other designated persons which may
have a potential conflict with the interest of the Company at large.

iv) In line with the requirements of the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, your Company has formulated a Policy on Related Party
Transactions which is also available on the following web-link at chrome-extension://efaidnbmnnnibpcaj
pcglclefindmkaj/https://www.velanhotels.com/Velan%20Hotels%20Limited%20-%20Related%
20Party%20Transaction%20Policy.pdf

The Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all
transactions, if any between the Company and Related Parties.

v) All proposal related party transactions were placed before the Audit Committee for their prior approval in line
with the requirements of the Companies Act, 2013 and Regulation 23 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.

vi) The Company has a proposal to sell vacant land properties to Mr.M.R.Gautham Executive Director and/or
Mr. E.V Muthukumara Ramalingam and/or Shree Vallee Enterprises Private Limited, the related parties, to
repay the unsecured loan provided by Directors / the Promoter Group Company for which special resolutions
have been placed before the members of the Company for their approval at ensuing 36^th AGM under Section
180(1)(a) & 188(1)(a) of the Companies Act, 2013 ("the Act") read with rule 15 of the Companies (Meetings of
Board and its Powers) Rules, 2014 and Regulation 2(1)(zc) and 23 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
WHICH HAVE OCCURRED BETWEEN MARCH 31,2026 AND AUGUST 25, 2026 (DATE OF THE REPORT)

No material changes and commitments were affecting the financial position of the Company between the end of
the financial year and the date of this Annual Report except the information stated in the State of the Companys
affairs. There has been no change in the nature of business of the Company as of the date of this Annual Report.

DEBENTURES

During the financial year 2025-26, the Company has not issued any debentures and no debentures were
outstanding as on March 31,2026.

REPORT ON PERFORMANCE OF SUBSIDIARIES, ASSOCIATIONS AND JOINT VENTURE COMPANIES:

During the year under review, the Company had no Subsidiary (ies), Associate(s) and Joint Venture(s). Hence the
said clause is not applicable.

REMUNERATION / COMMISSION DRAWN FROM HOLDING / SUBSIDIARY COMPANY:

During the year under review, neither the Company is a subsidiary of any Company or body corporate nor the
Company have a subsidiary. Hence the said clause is not applicable.

DISCLOSURE OF LOANS AND ADVANCES IN NATURE OF LOANS TO SUBSIDIARIES AND ASSOCIATES
OF THE COMPANY:

During the year under review, the Company has no Subsidiary(ies) and Associate(s). Hence, the said clause is not
applicable.

CODEOFCONDUCT

The Board of Directors has approved a Code of Conduct which applies to the Members of the Board and senior
management in terms of Regulation 17 and Schedule V of Regulation 34(3) of the Listing Regulations. The full text
of the Code is displayed on Companys website :

https://www.velanhotels.com/pdf/CODE/Code%20of%20Conduct%20for%20Board%20of%20Directors%20in

cluding%20KMP%20&%20SMP.pdf

The Code lays down the standard procedure of business conduct which is expected to be followed by the
Directors and the designated employees in their business dealings and in particular on matters relating to integrity
in the workplace, in business practices and in dealing with stakeholders.

All the Board Members and the Senior Management personnel have confirmed compliance with the Code. In
compliance with Schedule V of Regulation 34(3) of the Listing Regulations a declaration signed by the Managing
Director is attached and forms part of the Annual Report of the Company.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Under the applicable provisions of the Companies Act, 2013, SEBI-LODR Regulations and Regulation 9A(6)
SEBI (PIT) Regulations, 2015 as amended, the Company has a vigil mechanism named "Vigil Mechanism /
Whistle Blower Policy" to deal with instances of fraud and mismanagement, if any. The VM/WB Policy ensures
that strict confidentiality is maintained whilst dealing with concerns and that no discrimination will be met out to any
person for a genuinely raised concern.

The Company has revised the said Whistle-Blower policy to insert "reporting of incidents of a leak or suspected
leak of Unpublished Price Sensitive Information (UPSI)" in terms of SEBI (Prohibition of Insider Trading)
Regulations, 2015, as amended from time to time. The said policy is available on the Companys website at
https://www.velan hotels.com/pdf/Velan%20%20Vigil_ Mechanism_Whistle-blowerPolicy.pdf

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

The Company has formulated Code of Conduct to regulate, monitor and report trading by Insiders ("the Code")
under the SEBI (Prohibition of Insider Trading) Regulations, 2015 (The PIT Regulations) and The Code of
Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI) in compliance
with the PIT Regulations. The Company has also formulated policies for the procedure of inquiry in case of leak of
Unpublished Price Sensitive Information in case of leak of UPSI and Policy for Determination of Legitimate
Purposes as well, as a part of the Code of Practices and Procedures for Fair Disclosure. This Code is displayed on
the Companys website viz :https://www.velanhotels.com/pdf/ Code% 20of% 20Internal %20Procedures % 20
and % 20 Conduct%20for%20Regulating,%20Monitoring%20and%20Reporting%20of%20Trading%
20by%20InsidersPolicy%20for%20Determination%20of%20Materiality%20of%20an%20Event%20or%20Infor
mation.pdf

The Code applies to Promoters, Members of Promoters Group, all Directors and such Designated Employees
who are expected to have access to unpublished price sensitive information relating to the Company. The
Company Secretary is the Compliance Officer for monitoring adherence to the PIT Regulations.

All Board Directors and the designated employees have confirmed compliance with the Code.

UNPAID DIVIDEND & IEPF:

Pursuant to Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules), the amount of dividend remaining
unclaimed or unpaid for a period of seven years from the date of transfer to the Unpaid Dividend Account is
required to be transferred to the IEPF maintained by the Central Government.

Further, all the shares in respect of which dividend has remained unclaimed for seven consecutive years or more
from the date of transfer to unpaid dividend account shall also be transferred to IEPF Authority. The said

requirement does not apply to shares in respect of which there is a specific order of Court, Tribunal or Statutory
Authority, restraining any transfer of the shares.

For the financial year 2025-2026, the Company was not liable to transfer any unpaid / unclaimed dividend and/or
the shares to the Investor Education & Protection Fund (IEPF) and does not have unclaimed dividend which
remains to be transferred to Unpaid Dividend Account.

The Shareholders are entitled to claim their shares including all the corporate benefits accruing on such shares, if
any, from the IEPF Authority by submitting an online application in Form IEPF-5 and sending a physical copy of the
Form IEPF-5 duly signed by all the joint shareholders, if any, along with requisite documents enumerated in the
Form IEPF-5, to the Companys RTA. The Rules and Form IEPF-5, as prescribed, for claiming back the shares,
are available on the website of the IEPF www.iepf.gov.in. It may please be noted that no claim shall lie against the
Company in respect of share(s) transferred to IEPF according to the said Rules.

EXPLANATION OR COMMENTS ON QUALIFICATION, RESERVATIONS OR ADVERSE REMARKS OR
DISCLOSURES MADE BY THE AUDITOR :

A.Response to Qualifications / reservations / adverse remarks / observations on Audit Report :

Sl. Qualification, Reservation No. or Adverse Remarks	Boards explanation
1. Ability of the Company continuing as a going concern	The Company successfully divested its primary revenue-generating hotel property. This strategic transaction significantly strengthens its liquidity, reduces debt burdens, and unlocks trapped capital. To align with our updated long-term vision, the Board has also approved plans to dispose of the remaining non-revenue-generating properties in the near future to settle un-secured loan provided by directors / the promoter group company. Despite the divestment of our core hotel asset, the Board has formally concluded that the Company maintains adequate resources to continue operations for the foreseeable future. Accordingly, the financial statements continue to be prepared on a going concern basis. The proceeds from the recent sale and the anticipated divestments of non-performing assets after surplus amount will be actively redeployed into new business area as per updated main objects in the Memorandum of Association to ensure sustained commercial viability.
2. Delays in remittance of Statutory Dues	During the current financial year , the Company remitted the following amount 1. Entire Damages under Section 14B of the EPF&MP Act,1952 2. Interest on delayed remittance of TDS deducted for prior years. 3. Pending cases in respect of TNGST / VAT will be settled soon.
3. Delays in remittance of Statutory Dues	The Auditors have also made comment on not following the Accounting Standard with respect to the provisions of Gratuity and Earned Leave on actuarial basis.
	All the eligible / permanent employees of the Company except KMPs have voluntarily left the service during the month of March, 2020 and therefore, the Company does not have any staff except KMPs as on 31st March, 2026. Hence, the provision of gratuity / earned leave is not done on the actuarial basis.

DETAILS OF REVISION OF FINANCIAL STATEMENT OR THE REPORT

Your Company has not revised its financial statement or the Report in respect of any of the three preceding
financial years either voluntarily or according to the order of judicial authority.

AUDITORS & SECRETARIAL AUDITOR
0 Statutory Auditors and Auditors Report

At the 32nd AGM held on September 24, 2022, the Members approved the re-appointment of M/s.Krishaan &
Co, Chartered Accountants (Firm Registration No. FRN 001453S) as the Statutory Auditors of the Company
to hold office for a second term of five consecutive years from the conclusion of the 32nd AGM till the
conclusion of the 37th AGM of the Company to audit and examine the books of account of the Company.

The Statutory Auditors confirmed to the effect that they are eligible to continue with their appointment and that
they have not been disqualified in any manner from continuing as Statutory Auditors.

During the period under review, there are audit qualifications or adverse remarks in the Auditors Report.
Management response against each of the qualification, reservation or adverse remark or observation made
in the Auditors Report has been furnished elsewhere in the Directors Report.

0 Internal Auditors

M/s.N.Sathiamoorthy & Associates, Chartered Accountants have been re-appointed as the Internal Auditor
for the financial year 2026-27. The Internal Auditor has been conducting half-yearly audits of all operations of
the Company and their findings have been reviewed regularly by the Audit Committee. Your Directors note
with satisfaction that no material deviations from the prescribed policy and procedures have been observed.

0 Secretarial Auditor and Secretarial Auditors Report

On recommendation of the Audit Committee/the Board, Members of the Company at the 35th Annual
General Meeting ("AGM") approved the appointment of Mrs. Sumathi Rajendran, Company Secretary in
Practice (Membership Number: FCS-11508 and Peer Review Certificate No.4677/2023 as Secretarial
Auditors of the Company for a period of Five (5) consecutive years from commencing from the financial
year 2025 -26 till the financial year 2029-30

The Secretarial Audit Report issued by the Practicing Company Secretary does not have any qualifications /
reservations / adverse remarks / observations.

0 Cost Auditor and Cost Records

According to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost
records and Audit) Rules, 2014 as amended from time to time, the Company is not required to maintain Cost
Records under the said rules.

0 Reporting of Frauds by Auditors

During the year under review, the Statutory Auditors of the Company has not reported any frauds to the Audit
Committee or the Board of Directors under Section 143(12) of the Act, including rules made thereunder.

CREDIT RATING

During the year under review, the Company has not issued any debt instruments or any fixed deposit program or
any scheme or proposal, obtaining credit ratings does not apply to the Company.

LISTING REQUIREMENTS:

Your Companys Equity shares are listed on BSE Limited. The Annual Listing Fees for f.y. 2026-27 has been paid.
Both depositories were paid Annual Custody Fees for the financial year 2026-27.

DETAILS OF PENDING PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31
OF 2016) DURING THE YEAR ALONG-WITH THEIR STATUS AS THE END OF THE FINANCIAL YEAR:

During the year under review, there were no proceedings that were filed by the Company or against the Company,
which are pending under the Insolvency and Bankruptcy Code, 2016 as amended, before National Company Law
Tribunal or other Courts.

THE DETAILS OF THE DIFFERENCE BETWEEN THE AMOUNT OF VALUATION DONE AT THE TIME OF
ONE-TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANK OR
FINANCIAL INSTITUTIONS ALONG WITH THE REASON THEREOF:

During the year under review, there were no instances of one-time settlement with any Banks or Financial
Institutions or ARCs.

AUDIT COMMITTEE

As of date of this report, the Audit Committee consists of the Directors namely Mr. Katpadi Muthukrishnan
Ananthasayanam, Mrs. M. Sasikala, Mr.Pachaimuthu Kumar and Mr. Nagaraj Saveethkumar. Mr. Nagaraj
Saveethkumar is the Chairman of the Committee. The Company Secretary acts as the Secretary to the
Committee.

There is no such incidence where the Board has not accepted the recommendation of the Audit Committee during
the year under review.

NOMINATION AND REMUNERATION COMMITTEE

The Board has, under the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the
policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and
policy relating to remuneration for Directors, Key Managerial Personnel and other employees. The composition of
members and a detailed function of the same are reported elsewhere in the Annual Report.

The Companys policy on directors appointment and remuneration and other matters provided in Section 178(3)
of the Act is available at https://www.velanhotels.com/pdWelan%20Hotels-%20Remuneration%20Policy-on-
Selection-and-Appointment-of-Directors-and-their-Remuneration-2.pdf

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Board has under the Section 178(5) of the Companies Act, 2013 constituted a Stakeholder Relationship
Committee to resolve the grievances of the Stakeholders of the Company. The composition of members and a
detailed function of the same are reported elsewhere in the Annual Report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013 AND MATERNITY BENEFIT ACT 1961.

The Ministry of Corporate Affairs (MCA) has amended the Companies (Accounts) Rules, 2014, to mandate
enhanced disclosures regarding the prevention of sexual harassment and maternity benefit compliance. These
amendments, introduced through the Companies (Accounts) Second Amendment Rules, 2025, came into effect
on July 14, 2025

1. The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
mandates all the workplaces to constitute an Internal Complaints Committee (ICC) for receiving complaints
of sexual harassment of women in all Ministries/Departments of Union as well as State Governments and in
the private sector too.

The Company has shut all the operations since March 2020 and all the employees have resigned during
March 2020. The Company has engaged a few causal staffs, below in 10 numbers, on a temporary basis to
carry out the statutory obligation and safeguard the assets of the Company. There were no female staffs
employed in the company, either on regular or contractual basis.

As the Company has no employees in the Companys payroll, the Company is not required to constitute
Internal Complaints Committee (ICC) as per the requirement of the prevention of sexual harassment Act.
Further, the Company management also has not received any complaints regarding sexual harassment
during the year under review.

2. As there are no eligible employees except KMPs on the payroll of the Company, compliance with the
Maternity Benefit Act is not applicable to the Company as of now.

SECRETARIAL STANDARD

The Company complies with all applicable Secretarial Standards issued by The Institute of Company Secretaries
of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013 for the
financial year ended 31st March 2026.

EXTRACT OF ANNUAL RETURN

As provided under Section 92(3) and 134(3)(a) of the Act read with Rule 12 of Chapter VII Rules of the Companies
(Management and Administration) Amendment Rules, 2020, the draft Annual Return in Form MGT-7 for the
financial year ended March 31,2026 is made available on the website of the Company and can be accessed at:
www.velanhotels.com under the Head Annual Returns in the Investor page.

BUSINESS RISK MANAGEMENT

According to Section 134 (3) (n) of the Companies Act, 2013, the Board is responsible for ensuring that risks, and
also opportunities, are identified on a timely basis and that the Companys objectives and activities are aligned
with the risks and opportunities identified by the Board. The full Board of the Company formally reviews such risks
at least annually. All proposals reviewed by the Board include a consideration of the issues and risks of the
proposal. The Board adopts practices designed to identify significant areas of business risk and to effectively
manage those risks per the Companys risk profile. Risk Management is an integral part of the Companys
business process. In your Company, risks are carefully mapped and a risk management framework is involved.

The salient features of the Risk Management Policy along with the major gist and changes therein are available on
Companys website and can be accessed at the link provided herein below:https: //www. velanhotels.
com/pdf/POLICIES/Policy%20for%20Risk%20Managment.pdf

RISK MANAGEMENT COMMITTEE:

According to the Regulation 21 of SEBI Listing Regulations, the provisions of this regulation shall be applicable to
the top 1000 listed entities as per SEBI (Listing Obligations and Disclosure Requirements), determined based on
Market capitalization, as at the end of the immediate previous financial year.

As the Company does not fall under the top 1000 listed entities, the Risk Management Committee has not been
established.

PARTICULARS OF EMPLOYEES AND DETAILS ABOUT REMUNERATION AND OTHER DETAILS AS
REQUIRED UNDER SECTION 197(12) OF THE ACT READ WITH RULE 5 OF THE COMPANIES
(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

A. The information required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees
of the Company as follows :

I) The ratio of the remuneration of each Director to the median remuneration of the employees of the
Company for the financial year 2025-26:

As the Company has not resumed commercial operations yet, none of the Directors was paid any
remuneration.

ii) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive
Officer, Company Secretary or Manager in the financial year :

None of the Directors was paid any remuneration. There was no increase in remuneration of the CFO
and Company Secretary during the financial year.

iii) The percentage increase in the median remuneration of employees in the financial year : As there were
no permanent employees during the period under review, not applicable.

iv) The number of permanent employees in the roles of the Company:

As of 31st March, 2026, there were no eligible / permanent employees in the Companys payroll except
Managing Director, Executive Director, Company Secretary and Chief Financial Officer.

v) Average percentile increase already made in the salaries of employees other than the managerial
personnel in the past 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:

Not applicable.

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

B. During the year under review, there are no employees drawing remuneration of more than Rs.102 lacs per
annum or drawing remuneration of Rs.8.50 lacs per month if employed for part of the year. Hence, the
statement required under Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules 2014 is not appended to the report.

Adjudication Penalty imposed by RoC, Tamilnadu, Coimbatore & Compliance Status:

The Company and its Officers-in-Default received an Adjudication Order No. PO/ADJ/01-2026/CB/01339 dated
06/01/2026 from the Registrar of Companies (RoC), Tamil Nadu, Coimbatore, under Section 454 of the
Companies Act, 2013. The order was issued regarding a procedural, technical lapse involving a 30-day delay in
filing Form MGT-15 (Report on Annual General Meeting) for the Financial Year 2021-22 under Section 121(1) of
the Act. The RoC imposed the penalty amount of Rs. 115000 on the Company and the Company remitted the
penalty amount within the time limit.

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this
Report, are available elsewhere in this report together with the Certificate from the Company Secretary in Practice
regarding compliance with the requirements of Corporate Governance as stipulated under various regulations of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

CAUTIONARY STATEMENT

Risks, uncertainties or future actions could differ materially from those expressed in the Directors Report and the
Management Discussion and Analysis Report. These statements are relevant on the date of this Report. We have
no obligation to update or revise any statements, whether as a result of new information, future developments or
otherwise. Therefore, undue reliance should not be placed on these statements.

APPRECIATION

Your Company and its Directors wish to extend their sincere thanks to Bankers, M/s.RARE Asset
Reconstruction Ltd, Central /State Governments, Local Bodies, Customers and employees at all levels of their
continuous co-operation and assistance.