Company Overview
Velan Hotels Limited (Scrip Code: 526755) filed its 36th Annual Report for FY26 and Notice of AGM scheduled for September 30, 2026. The company has suspended all revenue-generating operations since March 2020 due to COVID-19 impacts, with minimal income of ₹3.55 lakhs during FY26.
Financial Performance
For FY 2025-26, the company reported a net loss of ₹8.50 crore (₹850.03 lakhs), showing improvement from the previous year's loss of ₹12.81 crore (₹1,280.67 lakhs). Finance costs reduced to ₹750.47 lakhs from ₹1,138.02 lakhs. Accumulated losses stood at ₹8,480.54 lakhs carried to balance sheet, with no dividend declared.
Debt Resolution & Asset Sales
The company successfully completed its one-time settlement with RARE Asset Reconstruction Limited, having repaid ₹100.95 crore total as of March 31, 2026 through disposal of assets and borrowings from directors/promoter group. This included the divestment of the revenue-generating hotel property at Tirupur. The company obtained a No Due Certificate from RARE ARC after full repayment.
Critical AGM Resolutions
Shareholders will vote on several key matters including the sale of three vacant land properties in Tirupur (totaling 103,972 sq.ft) to related parties for not less than ₹45 crores. The proceeds will settle outstanding unsecured loans of ₹35.51 crore owed to promoters/directors. Additional resolutions include re-appointment of Mr. M.R. Gautham and Mrs. M. Sasikala as directors, and approval of related party transactions for FY26-28 involving loans/transfers up to ₹70 crores.
Capital Structure & Ownership
The authorized capital remains ₹50 crores with paid-up capital of ₹31.96 crores. Promoter holding stood stable at 74.99% (66.15% individuals + 8.84% corporate), with key shareholders E.V. Muthukumara Ramalingam (34.52%) and M.R. Gautham (20.09%). Property, plant and equipment stood at ₹8.10 crore, primarily comprising land (₹2.96 crore) and buildings (₹3.25 crore).
Regulatory Compliance & Contingencies
The company faced a ₹1,95,000 penalty from RoC, Tamilnadu for delayed filing of Form MGT-15 for FY 2021-22. Pending litigations include labour court matters for ₹5.99 lakh and rectification filings for outstanding Income Tax demands. The company has delayed meeting statutory obligations relating to GST, VAT, and Service Tax, though it paid ₹54.10 lakh in statutory dues during the year.
Operational Status & Outlook
The entire year was completely washed out with no business activities. Financial statements were prepared on a going concern basis despite accumulated losses. The board composition includes 6 directors (3 Independent, 3 Non-Independent) with key management personnel continuing in their roles without remuneration for the upcoming term.