HB Estate Developers Ltd Management Discussions

During the year under review, the Companys total Revenue was Rs. 11143.82 Lakhs as compared to Rs. 9877.19 Lakhs in the previous year. The Company incurred total expenses amounted to Rs.10410 Lakhs as compared to Rs. 9621.62 Lakhs during the previous year.

The total revenue of the hotel unit of the Company, Taj City Centre Gurugram, for the financial year under review was Rs. 10883.82 Lakhs as compared to Rs. 9586.83 Lakhs during the previous year. During the year under review, the Company reported a cash profit amounting to Rs. 1477.02 Lakhs compared to Rs. 978.44 Lakhs in the previous financial year.

Profit after tax stood at Rs. 388.89 Lakhs as against previous year.

2. INDUSTRY STRUCTURE AND DEVELOPMENTS 2.1 Global Scenario

The global tourism industry demonstrated remarkable resilience and adaptability in 2023. During the year, tourist arrivals internationally were 1,286 million, showing a 34% increase vis-?-vis 2022 and an 88% recovery from the pre-pandemic levels of 2019. Europe retained the largest share of global inbound tourism, with 55% share in 2023, growing by 17% over that of 2022, and reaching 94% of the pre-pandemic levels. The United Nations World Tourism Organisation (UNWTO) expects international tourism to fully recover to pre-pandemic levels in 2024, with initial estimates pointing to 2% growth above 2019 levels, led by increased air connectivity, visa facilitation and a stronger recovery of Asian destinations. As many as 67% of the tourism professionals participating in the UNWTO Confidence Index Survey indicated better or much better prospects for 2024 compared to 2023. The World Travel and Tourism Council (WTTC) predicts 2024 to be a record year in terms of travel and tourism. It estimates global economic contribution of the sector to reach a historically high level of $11.1 trillion compared to $9.9 trillion in 2023.

FY 2023-24 was a year of record results and growth for the industry. Indian tourism is being driven by favorable demographics, increasing employment, higher disposable incomes of a young middle class, robust domestic demand, increased investments and improving infrastructure and connectivity.

The Indian economy saw acceleration in growth during the year. According to the second advance estimate released by the National Statistical Office in February

2024, Indias GDP grew at 7.6% in 2023-24, compared to 7% in the previous year.

3. OPPORTUNITIES AND THREATS

Tourism industry in India is going through a high growth phase. In 2023-24, occupancy of Hotels remained strong and also the domestic air passenger traffic and the average daily room rates scaled new highs. This outlook also benefits from the Governments strong tourism push to make India one of the top five global tourist destinations by 2030.

The aspirational consumer segment in India is increasing at a rapid pace, expanding the opportunities for growth of the business. The Indian hotel industry is expected to register a revenue growth of seven to nine per cent in the next financial year 2024-25, according to a report by credit rating firm ICRA. Further, the sustenance of domestic leisure travel, demand for Meetings, Incentives, Conference and Exhibitions (MICE) are the factors which will drive demand in the next financial year.

4. FUTURE PROSPECTS AND OUTLOOK

The Indian hotel industry is poised for a remarkable growth driven by long-term demand. Notable drivers of this growth are (i) improved connectivity with new airports and national highways across the country, (ii) increase in business travel led by buoyant economic conditions, new convention centres and global capability centres, (iii) recovery of foreign tourist arrivals, additional middle-income households and a clearly visible trend of premiumisation leading to higher demand for leisure destinations.

The advent of spiritual tourism, weddings in India, a resurgent M.I.C.E (Meetings, Incentives, Conferences and Exhibitions) tourism surrounding recent and upcoming conventions centres give rise to new destinations and circuits providing a strong impetus to growth. Continuing infrastructure development projects within the country, growth in air and railway passenger traffic and growth in upcycle for hospitality in India. Growth in demand for branded rooms is expected to outpace growth in supply of those rooms.

5. RISKS AND CONCERNS

Your Company aims to understand measure and monitor the various risks to which it is exposed and to ensure that it adheres, as far as reasonably and practically possible, to the policies and procedures established by it to mitigate these risks. The Company has taken adequate preventive and precautionary measures to overcome all negative factors responsible for low trend to ensure steady growth.

(i) The Senior Management is responsible for identification of new risks, changes to existing risks and retirement of previously identified risks through a formal decision making process.

(ii) To ensure key risks are identified and analysed, the Senior Management: (a) defines risks in the context of the Companys strategy; (b) prepares risk profiles including a description of the material risks, the risk level and action plans used to mitigate the risk; and

(c) regularly reviews and updates the risk profiles

(iii) The Company has implemented a systematic process to assist in the identification, assessment, treatment and monitoring of risks and provides the necessary tools and resources to management and staff to support the effective management of risks. (iv) Risks faced by the Company in its business principally arise from Real Estate and

Tourism industry. This includes macroeconomic risks, investee company specific risks, market wide liquidity risks and execution risks relating to the company/ its intermediaries. The macroeconomic risks, investee company specific risks are covered by investment decisions based on third party research and internal assessment. Market wide risks are assessed and managed by investment timing decisions. The execution risk is managed by dealing with reputed intermediaries and

Loss of Rs.1162.81Lakhsinthe through own back office discipline re accounting and follow up of trades.

(v) The Company assesses the effectiveness of its risk management plan through structured continuous improvement processes to ensure risks and controls are continually monitored and reviewed.

6. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has adequate internal controls commensurate with its size to ensure protection of assets against loss from unauthorized use and all the transactions are authorised, recorded and reported correctly. The internal control is also supplemented by internal audit conducted by an external and independent firm of Chartered Accountants on an ongoing basis. The Internal Audit Reports along with management comments thereon are reviewed by the Audit Committee of the Board. Besides, the Audit Committee reviews the internal controls at periodic intervals in close coordination with the Internal Auditors.

7. FINANCIAL PERFORMANCE

a) Share Capital: The Companys issued and subscribed share capital consists of Equity and Redeemable Preference Share capital. The paid-up share capital of the company as at 31^st March, 2024, stood at Rs. 1244599470/- comprising of

1,94,59,947 Equity Shares of Rs. 10/- each and 1,05,00,000 Redeemable Non-Convertible Non-Cumulative Preference Shares of Rs. 100/- each.

b) Non-Current Assets & Non- Current Liabilities: During the year under review, the Non-Current Assets and Non-Current Liabilities stood at Rs. 45399.79 Lakhs and Rs. 22886.18 Lakhs respectively Rs. 46212.59 Lakhs and Rs. 29749.29 Lakhs respectively in the last year.

c) Current Assets & Current Liabilities: During the year under review, the Current Assets and Current Liabilities stood at Rs. 4019.47 Lakhs and Rs. 11617.88 Lakhs respectively against Rs. 4295.60 Lakhs and Rs. 6227.43 Lakhs respectively in the last year.

8. HUMAN RESOURCES

Your Company has adequate human resources which is commensurate with the current volume of activity and is reviewed by the management periodically and the Company would induct competent personnel on increase / expansion of the activity.

9. CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis, describing the Companys objective, projections, estimates and expectations may be ‘forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include interest rates and changes in the Government Regulations, tax regimes, economic developments and other factors such as litigations etc.