We have audited the standalone financial statements of Velan Hotels Limited (“the Company”), which comprise
the Balance Sheet as at March 31, 2024, and the Statement of Profit and Loss, the Statement of Changes in
Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies and other explanatory information.

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 theAct in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the
Company as at March 31,2024, and Loss, Changes in Equity and its Cash Flows for the year ended on that date,
subject to the notes given below with regard to Going Concern and other Key Audit Matters.

Basis for Qualified Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of
the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's
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 together
with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the
Companies Act, 2013 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.

Going Concern

We draw attention to Note No. 36 of the Financial Statement for the year ended 31st March 2024. The Company's
borrowings were taken over by M/s. RARE Asset Reconstruction Company Limited (“ARC”) commencing from
April 1, 2017 and out of the final One-time settlement amount of Rs. 97.32 crores agreed with the ARC, the
Company has made a payment of Rs. 59.48 cr upto 31st March 2023 and during the year, the company has repaid
a further sum of Rs.75 lacs from the refund of security deposit held with M/s. Avenue Supermarts Limited on Sale
of Mall and part of multiplex Properties. The Company intends to repay the balance to the ARC from the sale of
other assets of the Company.

Further, we draw attention to Note No. 35, the Company having suspended all business operations and with no
revenue being generated, the ability of the Company to repay its debts depends on the quantum of realisation
from the sale of Assets, there exists a concern on the ability of the Company continuing as a Going Concern. In
view of the above, ouropinion is Qualified.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
Financial Statements for the financial year ended March 31,2024. These matters were addressed in the context
of our audit of the Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. For each matter below, our description of how our audit addressed the matter
is provided in that context.

Key audit matters identified in ourauditaresummarized asfollows:

? The ability of the Company Continuing as a Going Concern

? Confirmation of balanceof Outstanding Debt

? ImpairmentofAssets

? Delays in remittanceofstatutorydues

? Gratuityand Leave Encashment accounted for on an estimated basis

Information Other than the Financial Statements and Auditor's Report Thereon:

The Company's Board of Directors is responsible for other information. The other information comprises the
information included in the financial highlights, board's report but does not include the financial statements and
ourauditor's report thereon.

Our opinion on the 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 financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we
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.

Management's Responsibilityforthe Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act,
2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair
view of the financial position, financial performance, changes in equity and cash flows of the Company in
accordance with the accounting principles generally accepted in India, including the Accounting Standards
specified under section 133 of the Act. 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 financial statement
that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is 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 management either intends to liquidate the Company or to cease operations, or has no
realisticalternativebuttodoso.

Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 SAs will always detect a material misstatement when it exists. Misstatements can arise from
fraud orerrorand 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 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 misstatements, 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 error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.

• Obtain an understanding of internal financial controls 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 in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of the management’s 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 continue as 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 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 going concern.

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

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 ouraudit.

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.

From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the 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

As required by the Companies (Auditor's Report) Order, 2020 (“the Order”), issued by the Central Government of
India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure-’A’, a
statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable. As required by
Section 143(3) of the Act, we report 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 purposes of ouraudit.

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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this
Report are in agreementwith the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on 31st March, 2024 taken on
record by the Board of Directors, none of the directors is disqualified as on 31st March, 2024 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 over financial reporting of the Company
and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.

g) With respect to the other matters to be included in the Auditor's Report in accordance with the
requirements of section 197 (16) of the Act, as amended, in our opinion and to the best of our information
and according to the explanations given to us, No remuneration is paid by the Company to its directors
during the year; and

h) 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, in our opinion and to the best of our information and
according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial
statements - Refer Note 37 to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there
were any material foreseeable losses.

Hi. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company.

iv. (i) The management has represented that, to the best of it's knowledge and belief, no funds have

been advanced or loaned or invested (either from borrowed funds or share premium or any
other sources or kind of funds) by the company to or in any other person(s) or entity(ies),
including foreign entities (“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
(“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries;

(ii) The management has represented, that, to the best of it's knowledge and belief, no funds have
been received by the company from any person(s) or entity(ies), including foreign entities
(“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; and

(iii) Based on such audit procedures performed that have been considered reasonable and
appropriate in the circumstances, nothing has come to our notice that has caused us to believe
that the representations undersub-clause(i)and (ii) contain any material misstatement.

v. No dividend is declared during the year and therefore compliance with Section 123 of the act is not
applicable forthe company

vi. Based on our examination which included test checks, the Company has used accounting
softwares for maintaining its books of account for the financial year ended March 31,2024 which
have a feature of recording audit trail (edit log) facility and the same has operated throughout the
year for all relevant transactions recorded in the respective software. Further, during the course of
our audit we did not come across any instance of the audit trial feature being tampered with.

As proviso to Rule 3(1) of the Companies (Accounts) Rule, 2014 is applicable from 1 April 2023,
reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of
audit trail as per the statutory requirements for record retention is not applicable for the financial
year ended March 31,2024.

KRISHAAN & CO

Chartered Accountants
FRN : 001453S

i

_Dl _. (K. SUNDARRAJAN)

Place : Tirupur ' '

Partner

Dated : 29.05.2024 (Membership No. :208431)

UDIN : 24208431BKAJNA3534