Auditor Report of ITC Hotels Ltd.

Mar 31, 2025

We have audited the accompanying standalone Ind AS
financial statements of ITC Hotels Limited (“the Company”),
which comprise the Balance sheet as at March 31 2025,
the Statement of Profit and Loss, including the statement
of Other Comprehensive Income, the Cash Flow Statement
and the Statement of Changes in Equity for the year then
ended, and notes to the standalone Ind AS financial
statements, including a summary of material 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 Ind AS financial statements give the information
required by the Companies Act, 2013, as amended (“the
Act”) 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 31,2025, its profit including other comprehensive
income, its cash flows and the changes in equity for the
year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial
statements in accordance with the Standards on Auditing
(SAs), as specified under section 143(10) of the Act.
Our responsibilities under those Standards are further
described in the ‘Auditor’s Responsibilities for the Audit
of the Standalone Ind AS 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 Act 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 audit opinion on the standalone Ind AS
financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the
standalone Ind AS financial statements for the financial year
ended March 31,2025. These matters were addressed in
the context of our audit of the standalone Ind AS 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.

We have determined the matters described below to be
the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the
Auditor’s responsibilities for the audit of the standalone Ind
AS financial statements section of our report, including in
relation to these matters. Accordingly, our audit included
the performance of procedures designed to respond to our
assessment of the risks of material misstatement of the
standalone Ind AS financial statements. The results of our
audit procedures, including the procedures performed to
address the matters below, provide the basis for our audit
opinion on the accompanying standalone Ind AS financial
statements.

Key audit matters	How our audit addressed the key audit matter
Accounting for demerger of hotel business from ITC Limited into the Company (as described in Note 29(i) of the financial statements)
During the current year, the Hotels division of ITC Limited (“Demerged undertaking”) has been demerged into the Company from ITC Limited (“Demerged Company”) pursuant to the Scheme of Arrangement (“the Scheme”) approved by the Hon’ble National Company Law Tribunal (“NCLT”), Kolkata Bench, vide its Order dated October 04, 2024 and the Scheme has been given effect on the Effective Date, i.e. January 1, 2025 after fulfilling all conditions specified in the Scheme including filing of the aforesaid Order with the Registrar of Companies. As per the Scheme, Company shall issue its equity shares at fair value as consideration for the Demerged undertaking to the shareholders of ITC Limited.	Our audit procedures included the following, we have: • Read the sanctioned Scheme of arrangement and final order passed by the NCLT and submission to the Registrar of Companies (ROC) to understand the key terms and conditions. • Evaluated the design and tested the operating effectiveness of key controls over the accounting for business combinations. • Assessed whether the accounting treatment in the financial statements is in accordance with the Scheme and Ind AS 103 “Business Combinations” including restatement of previous period financial statements.

Key audit matters

How our audit addressed the key audit matter

The Company has recorded the net assets acquired at their respective carrying values and has given effect to the demerger transaction from the date of its incorporation and accordingly has restated the comparative figures for the period July 28, 2023 to March 31,2024 in accordance with the requirement of accounting treatment prescribed in the Scheme and Ind-AS 103, Business Combinations. The acquisition of demerged undertaking has been considered as key audit matter considering the: - magnitude involved and this event being a material non-routine transaction - determination of fair values of assets and liabilities for the purposes of issue of shares involves significant judgments and estimates which are sensitive to underlying assumptions (forecast of future cash flows, growth rate, weighted average cost of capital and discount rates etc.). These judgements/ estimates could have an impact on the recognition of the amount of securities premium and capital reserve.

• Obtained the management’s working of financial information of Demerged undertaking as extracted from the underlying financial statements of Demerged Company and agreed to the entries recorded and disclosures in the financial statements. • Obtained the report of the management’s expert for determination of fair value of assets and liabilities acquired. Evaluated the competence and objectivity of the management’s expert. • Obtained and evaluated the management’s projections by performing sensitivity analysis. • Involved our valuation specialist to evaluate the methodology and key assumptions considered by management in arriving at fair value. • Evaluated the adequacy of disclosures as per the applicable accounting standards and Schedule III to the Companies Act, 2013.

Information Other than the Financial Statements and
Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the
other information. The other information comprises the
information included in the Annual report, but does not
include the standalone Ind AS financial statements and our
auditor’s report thereon.

Our opinion on the standalone Ind AS 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 standalone Ind AS
financial statements, our responsibility is to read the other
information and, in doing so, consider whether such 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 have 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.

Responsibilities of Management for the Standalone
Ind AS Financial Statements

The Company’s Board of Directors is responsible for
the matters stated in section 134(5) of the Act with
respect to the preparation of these standalone Ind AS
financial statements that give a true and fair view of the
financial position, financial performance including other
comprehensive income, cash flows and changes in
equity of the Company in accordance with the accounting
principles generally accepted in India, including the
Indian Accounting Standards (Ind AS) specified under
section 133 of the Act read with the Companies (Indian
Accounting Standards) Rules, 2015, as amended. 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 the 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 standalone Ind AS financial statements
that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

In preparing the standalone Ind AS 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 realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing
the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the
Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about
whether the standalone Ind AS 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 or error and are considered material if, individually

or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the
basis of these standalone Ind AS financial statements.

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

• Identify and assess the risks of material misstatement
of the standalone Ind AS financial statements,
whether due to fraud or error, design and perform
audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. 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 with reference to financial
statements 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 management.

• Conclude on the appropriateness of 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 to continue as a 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 a going concern.

• Evaluate the overall presentation, structure and
content of the standalone Ind AS financial statements,
including the disclosures, and whether the standalone
Ind AS 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 our audit.

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 standalone Ind AS financial
statements for the financial year ended March 31, 2025
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

1. 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 Act, we give in the “Annexure 1” a statement on
the matters specified in paragraphs 3 and 4 of the
Order.

2. As required by Section 143(3) of the Act, we report, to
the extent applicable, 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 our audit;

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 including the Statement of Other
Comprehensive Income, the Cash Flow

Statement and Statement of Changes in Equity
dealt with by this Report are in agreement with
the books of account;

(d) In our opinion, the aforesaid standalone Ind AS
financial statements comply with the Accounting
Standards specified under Section 133 of the
Act, read with Companies (Indian Accounting
Standards) Rules, 2015, as amended;

(e) On the basis of the written representations
received from the directors as on March 31,2025
taken on record by the Board of Directors, none
of the directors is disqualified as on March 31,
2025 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 with reference to these
standalone Ind AS financial statements and the
operating effectiveness of such controls, refer

to our separate Report in “Annexure 2” to this
report;

(g) In our opinion, the managerial remuneration for
the year ended March 31, 2025 has been paid/
provided by the Company to its directors in
accordance with the provisions of section 197
read with Schedule V to the Act;

(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, as amended 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 standalone Ind AS financial statements -
Refer Note 29(iv)(a) to the standalone Ind AS
financial statements;

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

iii. There were no amounts which were required
to be transferred to the Investor Education
and Protection Fund by the Company.

iv. a) The management has represented

that, to the best of its 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;

b) The management has represented
that, to the best of its 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

c) 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 under sub¬
clause (a) and (b) contain any material
misstatement.

v. No dividend has been declared or paid
during the year by the Company.

vi. The Company has used accounting software
for maintaining its books of account which
has a feature of recording audit trail (edit log)
facility and the same has operated throughout
the year for all relevant transactions recorded
in the software. Further, there are no
instance of audit trail feature being tampered
with. Additionally, the audit trail has been
preserved as per the statutory requirements
for record retention.

For S.R. Batliboi & Co. LLP

Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005

per Sanjay Vij

Partner

Membership Number: 095169
UDIN: 25095169BMLOCH1936

Place of Signature: New Delhi
Date: May 15, 2025