A B N Intercorp Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

India, with its vast geographical expanse of 3,287,263 sq. km, ranging from the snow-capped Himalayan peaks to the tropical rainforests in the south, boasts a rich cultural and historical heritage. Its diverse ecology, terrains, and natural beauty present immense opportunities for leveraging the tourism sectors potential.

The tourism and hospitality industry, encompassing travel services, hotels, and restaurants, is widely recognized as a driver of socioeconomic growth and a significant contributor to foreign exchange earnings. Indias vibrant history, culture, and diversity are showcased through tourism, which also delivers substantial economic benefits. The concerted efforts of central and state governments have enabled the sector to recover from the COVID-19 pandemic and return to pre-pandemic levels of operation.

Projections indicate that Indias travel market will grow from an estimated USD 75 billion in FY20 to USD 125 billion by FY27. The airline travel market, valued at approximately USD 20 billion in FY20, is expected to double by FY27 due to enhanced airport infrastructure and increased passport accessibility. Similarly, the Indian hotel market comprising domestic, inbound, and outbound segments was valued at USD 32 billion in FY20 and is projected to reach USD 52 billion by FY27, driven by growing traveler demand and proactive efforts by travel agents.

Currently, segment-wise performance reporting does not apply to the company as it operates without multiple business segments.

STRENGTHS:

1. Safe Accommodation: The hotel industry provides secure lodging options for travelers worldwide with millions of well-maintained rooms.

2. Economic Contribution: Hotels significantly contribute to local economies by encouraging consumption of local goods and services.

WEAKNESSES:

1. High Costs: Elevated setup costs result in high hotel rates that are often unaffordable for average households, leading to customer attrition.

2. Tax Burden: Unfavorable tax structures increase operational costs for hotels compared to other sub-industries like bed-and-breakfast establishments.

The company has implemented a comprehensive risk management framework that identifies risks, assesses their severity, and develops mitigation strategies. Risks are periodically reviewed to align with changes in the business environment.

Key measures include:

- A pull-based strategy for customer acquisition through referrals and targeted digital marketing. - Expanding international marketing networks to enhance sales contributions. - Launching innovative products like "Xperience Breaks" to attract younger customers hesitant about long-term commitments.

The company also emphasizes sustainability initiatives as part of its long-term growth strategy.

The company anticipates technology will play a transformative role in hospitality operations and guest interactions in 2024 2025. Trends like the sharing economy are expected to mature further during this period.

OPPORTUNITIES:

- Millennial Travelers: Millennial preference for travel, technology integration, sustainability, and green tourism creates new opportunities for the hospitality sector.

- Spillover Effects: Increased millennial travel generates demand across related sectors.

- Political Instability: Political unrest poses risks to tourism-dependent businesses.

- Economic Challenges: Global economic recessions reduce disposable incomes, adversely affecting hotel occupancy rates.

The company has established robust internal control systems tailored to its operational scale. Key features include: - Comprehensive documentation of policies and guidelines. - Annual budgeting across all functions. - Risk-based internal audits conducted by qualified professionals. - Online compliance monitoring systems. - Delegated authority limits for revenue and capital expenditure approvals. - Periodic reviews by external experts for process improvements.

- Regular audit committee evaluations of internal controls and risk management policies.

Attracting and retaining skilled talent is central to the companys success strategy given its specialized operations across multiple locations. Regular audits ensure continuous improvement in human resource policies while fostering employee development aligned with business goals.

1. The total Income of the Company during the previous year was INR 31,518.40 (hundreds)/- .However, during the current year, total Income of the Company INR 23,018.81 (hundreds)/-.

2. The Net Profit of the Company during the previous year was INR 6384.85/-

(hundreds).However, during the current year, the loss incurred by company amounted to INR 20,526.31/- (hundreds).

The Company has an adequate internal control system, commensurate with the size and nature of its business. The system is supported by documented policies, guidelines and procedures to monitor business and operational performance which are aimed at ensuring business integrity and promoting operational efficiency.

Any problems requiring policy decisions are being intimated to Audit Committee for redressed or amendments in the policy and procedure. The progress reports are being regularly on monthly basis intimated to the Audit committee through the Financial Officers of the company who in turn put the same to Audit Committee. All the Investors grievances officer or share department related queries are addressed to the compliance officer who in turn put the same before the investors Grievances Committee.

INFORMATION SYSTEM BETWEEN COMMITTEE AND THE BOARD:

Both Audit committee and Investors Grievances Committees receive periodical regular information from the concerned function heads, and after resolution of all the problems re-communicate the same to functional heads for further communications and implementation of any suggestions. The progress report and minutes of all meetings held of both the committees are being placed before the Board for information and taking the same on records.

INFORMATION SYSTEM BETWEEN THE COMPANY AND INVESTORS:

The Company is regularly taking on record the unaudited financial results on half yearly basis as - English and Hindi News Papers in time. The Audited Financial Balance Sheet is being dispatched to every shareholder in time at their registered addresses in Compliance with the Companies Act, 1 956 and ensures to maintain the same policy with the Companies Act, 201 3.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

There are following significant changes in the key financial ratios of the company

CAUTIONARY STATEMENT:

Statements in this Management Discussion and Analysis describing the companys objectives, projections, estimates and expectations may be forward looking statement within the meaning of applicable laws and regulations. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realized. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events.