Velan Hotels Ltd Directors Report

TO THE MEMBERS

Your Directors are presenting their 33rd Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2023.

FINANCIAL HIGHLIGHTS

		(Rs. in lakhs)
PARTICULARS	2022-23	2021-22
Profit / (Loss) Before Interest, Depreciation and Tax	(450.72)	(149.55)
Add : Finance Cost	0.65	0.06
Profit / (Loss) Before Depreciation & Tax	(457.24)	(149.62)
Add : Depreciation	219.78	123.67
Less : Exceptional Item	(1579.94)	1211.02
Profit / (Loss) Before Tax [PBT]	(1845.44)	937.72
Less : Tax Expenses	3.73	-
- Current Tax	-	-
- Tax relating to prior years	-	-
- Deferred Tax	-	122.63
Profit / (Loss) After Tax	(1849.17)	937.72
Add : Revaluation Reserve	6.79	6.79
Balance b/f from previous years	(4418.67)	(5363.18)
Balance to be carried over to the Balance sheet	(6261.05)	(4418.67)

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.2.30 Lacs from Rs.Nil logged in the previous year. Profit / (Loss) before Interest, Depreciation and Taxation was Rs.(450.72) lacs against Rs. (149.55) Lacs recorded in the previous year. Similarly, the Profit / (Loss) after Tax for the year ended March 31,2023 stood at (Rs.1849.17) lacs as against profit of Rs.937.72 lacs 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.

As part of the OTS offer, RARE ARC gave its Letter of NoC on 28/10/2021 wherein they conveyed their approbation / no objection for the release of Plant & Machinery from the hypothecation, lying at Biomass based Renewable energy plant situated at Tirupur, Tamilnadu on the payment of the realization amount not less than Rs.4.50 Crores. The Company, however, has realized and scrapped the plant and machinery for the value of Rs.3.00 Crore only against the approbatory value of Rs.4.50 Crore due to the negative trend in demand for scrap that was supported by the decline in global steel production. This has resulted in a total realization loss of Rs.1404.55 lakhs incurred by the Company from such scrap sales. These entire sale proceeds were remitted / paid to RARE ARC towards settlement, per OTS offer.

In June, 2022, the Company sold / disposed of the land area of the said energy plant for a total consideration of Rs.7.30 Crore. From such a sale, the Company incurred a realization loss of Rs.175.38 lakhs. To comply with obligations under the OTS offer, the Company has availed of a loan of Rs.11.30 crore from the Managing Director of the Company. Out of both the sale consideration and unsecured loan amounting to Rs.18.60 Crore, a sum of Rs.16.30 Crore was paid / remitted to RARE ARC and the balance amount of Rs.2.30 Crore was used for repayment of part of the dues to sundry creditors and statutory dues as well. Upon remittance / payment of part of the dues to RARE ARC, they released the mortgage on the Multiplex Area Land (part), Convention Centre properties which had been in mortgage with RARE ARC. On releasing the mortgage, the said properties are freehold now and free from any encumbrance. Only the Hotel property and the Maintenance area land situated at Tirupur have been in mortgage with RARE ARC.

As part of ongoing negotiations and forming part of the "OTS offer" with RARE ARC, the Company is obliged to settle its dues to the said RARE ARC; the Company has placed the following resolutions before members of the Company for their approval:

a. For alteration of the object clause of the Memorandum of Association by replacing it with a new object which will cover an expanded scope of activities to be pursued by the Company to actively monetize its idle assets to generate stable revenue.

b. The proposed sale of assets / undertaking of the Company to prospective buyer(s) including the related parties.

DIVIDEND:

Given the accumulated losses, your directors have not recommended any dividend on Equity Shares for the Financial Year 2022-23.

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 incured 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 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 subsection (m) of Section 134 of the Companies Act 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 is not furnished given the closure of the Hotel Operations during the period under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

a. 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 / Cessation:

Mr.Muralidharan Subramanyam (DIN:03552399) was appointed by the Board of Directors of the Company at their meeting held on 14th August, 2023 as an Additional Director in the capacity of a Non-Executive- Independent Director under the Articles of Association and Sections 149(6), 161 and Schedule IV to the Companies Act, 2013 and Regulation 16(1)(b) and other applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

A resolution seeking shareholders approval for his appointment forms part of the Notice.

None of the Directors resigned during the year.

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 Mr.M.Srinivasan, Company Secretary are other KMPs as per the provisions of the Act and were already in the office. None of the KMPs resigned during the year.

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 Section 149 of the Companies Act, 2013 and 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 NonIndependent 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/FamilirisationProgram2023.pdf

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the Company.

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 except pending Appeal / Petitions / Application filed by the Company with DRT, Coimbatore and DRAT, Chennai.

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.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India (SEBI) on January 5, 2017.

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, 10 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.

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 2022-23, 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 2022-23 and hence the same is not provided.

Under the provisions of Regulation 2(1)(zc) and 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, 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:

Name of the Related Party	Relationship with the Company	Nature of Transaction	Opening Balance 01-04-22	Received by the Company	Repaid by the Company	Closing Balance 31-03-23
Mr. E.V. Muthukumara Ramalingam	Managing Director	Transfer of Resources (Availed of Loan)	122.12	1130.00	(225.45)	1026.67
Mr.M.R.Gautham	Executive Director	Transfer of Resources (Availed of Loan)	453.14	25.01	(88.54)	389.62

Except for the above related party 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 https://www.velanhotels.com/pdf/Related- Party-Transactions-Policy%20-%20Velan%20Hotels%20Ltd.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 related party transactions were placed before the Audit Committee for their approval in line with the requirements of the Companies Act, 2013 and Regulation 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 31,2023 AND AUGUST 23, 2023 (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.

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 duding%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

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) can be viewed at https://www.velanhotels.com/pdf/Velan% 20Hotels%20-Code-of-Conduct-for-prevention-of-Insider- Trading.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.

The Company has also formulated 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/Velan%20-Code%20of%20Conduct%20&%20Procedure%20of% 20Fair%20Diclosure.pdf

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

UNPAID DIVIDEND & IEPF:

For the financial year 2022-2023, 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 AND COMPANY SECRETARY IN PRACTICE :

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

Sl. No. Qualification, Reservation or Adverse Remarks	Boards explanation
1. Ability of the Company continuing as a going concern	The Company, per One-Time Settlement (OTS) offer with M/s.RARE ARC, remitted / paid a sum of Rs.59.30 crores in total so far including a sum of Rs.17.12 Crores paid during the year against the OTS offer amount of Rs.97.20 Crores. The Company is liable to pay the dues of Rs.37.73 Crores only. The Company disposed of Shopping Mall and part of the Multiplex properties to M/s.Avenue Supermarts Limited for a total consideration of Rs. 35.44 Crores of which Rs.30.00 Crores was remitted and balance consideration of Rs.5.44 crore will be remitted by M/s.Avenue Supermarts Limited to the Company after fulfilling the obligations under the terms of the sale deed executed between the parties. Besides, the Company will repay the balance to the said RARE ARC from the sale of other assets of the Company except Hotel Property. In anticipation of the proposals as referred are materialized, the management is exploring possibilities of leasing its Hotel property situated at Tirupur to generate stable revenue.
	The Promoters-Directors have infused funds amounting to Rs.1416.17 lakhs during the financial year 2022-2023 to meet the fixed expenses to keep the Companys assets in good.
	In view of all the actions that are currently underway, the financial statements for the financial year ended 2022-23 have been prepared on the basis that your Company is a going concern.
2. Confirmation of balance of outstanding debt	With final approval of the OTS offer provided by the RARE ARC and accepted by the Company, such communication has been considered for the confirmation of the Outstanding Debt.
3 Impairment of Assets :	The company had suspended all the revenue-generating operations w.e.f 24 March 2020. The Company is exploring options of selling part assets to settle all liabilities. Given the above, the Companys ability to continue as a Going concern is dependent on the value that can be generated by the sale of assets and the surplus, if any, available after the settlement of all liabilities. Given the uncertainty on the realizable values, the impairment to the value of assets is not ascertainable at this juncture; therefore, no loss is recognized on account of potential impairment.
4 Delays in remittance of Statutory Dues	The Company is mobilizing necessary resources to meet the pending overdue payments in the coming months through monetizing the assets of the Company.
5 Gratuity and Earned Leave accounted on estimated basis	The Auditors have also commented on not following the accounting standard to the provisions of Gratuity and Earned Leave on an actuarial basis.
	All the eligible / permanent employees of the Company except KMPs have voluntarily left the service during March, 2020 and therefore, the Company does not have any staff except KMPs as of 31st March, 2023. Hence, the provision of gratuity / earned leave is not done on an actuarial basis.

B. Response to comments on Secretarial Audit Report :

Sl. No. Qualification, Reservation or Adverse Remarks	Boards explanation
1 Non - compliance of Minimum Public Share-holding	The Company and the promoters are in the process taking action to comply with the regulations of Securities and Exchange Board of India relating to Minimum Public Shareholding (MPS) to increase the public shareholding to 25% in terms of Regulation 38 of SEBI (LODR) Regulations, 2015.

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

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

The Board has re-appointed Mr. S. Ganesh Viswanathan, Company Secretary in Practice to conduct the Secretarial Audit of the Company under the provisions of Section 204 of the Companies Act, 2013, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the SEBI (LODR) Regulations, 2015, as amended. The Report of Secretarial Auditor is appended to this Report as "Annexure A". The management response against the qualification or observation made in the Secretarial Audit Report has been furnished elsewhere in the Directors Report.

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 or Secretarial Auditor of the Company have 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 Listing fees have been paid to this Stock Exchange for the financial year 2022-2023. Both depositories were paid Annual Custody Fees for the financial year 2022-23.

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 Sri. P. Ganesan, Mrs. M. Sasikala, Sri. S.P. Sivanandam and Sri. Nagaraj Saveethkumar. Sri.P. Ganesan 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/pdf/Velan%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

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 in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 and the Rules framed thereunder. All employees, permanent and contractual are covered under this policy.

The Company has shut all the operations since March 2020 and 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 regular or contractual.

As the Company has less than ten employees, 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.

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 2023.

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 for the Financial Year ended March 31,2023 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 2022-23:

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, 2023, 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.

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.

	For and on behalf of the Board
	E. V. Muthukumara Ramalingam
	Managing Director
	(DIN : 00046166)
	M. R. Gautham
Place : TIRUPUR	Executive Director
Date : 23.08.2023	(DIN : 00046187)