Asian Hotels (East) Ltd Management Discussions

INDUSTRY STRUCTURE, DEVELOPMENT, OPPORTUNITIES AND OUTLOOK

In the financial year ended 31^st March, 2025, the star hotel industry in Kolkata has shown continued strength, with a 3.2% year-on-year growth in occupancy, reaching 74.1% for the period. This growth reflects the robust demand for hotel rooms despite a relatively stable inventory base. Average Daily Rate (ADR) also saw a 1.3% increase, reaching Rs 8,721/-, signaling positive revenue growth.

While the city continues to thrive in terms of occupancy and ADR, the financial year ended 2024-25 revealed some mixed results.

There was a strong gain in occupancy and ADR, but the social and wedding segment, which had boomed post-pandemic, showed a softer pipeline compared to the earlier periods. This may be indicative of a return to pre-pandemic levels of demand or a shift in consumer preferences as markets adjust.

Tourism sector in Kolkata in the financial year ended 2024-25 has continued its growth trajectory, benefiting from the citys rich cultural heritage, diverse ecology, and natural beauty. The leisure tourism segment has remained strong, particularly as domestic and international travelers are increasingly drawn to Kolkatas historical sites, festivals, and growing reputation as a cultural hub.

The broader Indian tourism sector has witnessed remarkable growth during the financial year ended 2024-25, with tourist arrivals increasing by 34% compared to the previous year. Factors such as rising disposable incomes, a growing middle class, improving infrastructure, and enhanced connectivity have driven domestic and international demand for Indian travel experiences. The governments continued focus on boosting tourism through various initiatives has also supported this growth.

These developments are likely to continue to support the positive momentum in Kolkatas tourism sector. However, the relatively soft performance in the social and wedding tourism market during the latter part of the year points to the need for diversification of offerings, especially in the face of changing consumer behavior.

RISkS, cONcERNS ANd thREAtS

In the financial year ended 2024-25, the star hotel industry in Kolkata has experienced strong growth, driven primarily by MICE and business group segments. However, the industry faces a number of risks, concerns, and threats that could potentially hinder long-term sustainability and competitiveness.

Reliance on MICE and group bookings has been advantageous but it also exposes the industry to fluctuate in demand based on corporate and event schedules. Any disruption in the MICE calendar or a shift in corporate travel trends could significantly affect occupancy and revenue.

One of the major concerns for the star hotel industry in Kolkata is the high attrition rate and scarcity of skilled talent. The star hotel industry is struggling to attract and retain the right professionals due to the uncertain job market and evolving career preferences. This issue is expected to persist for the next couple of years, which could disrupt service quality and operational efficiency.

The entry of newer hotels and the renovation of existing properties present a growing threat to the established hotels in Kolkata. Newly renovated properties and new hotel openings are often equipped with the latest amenities and facilities, making them highly competitive in attracting both business travellers and leisure visitors.

The growing presence of international hotel chains in the eastern part of India, including Kolkata, is another emerging threat. These chains are expanding rapidly in the region at various price points and locations, intensifying competition across multiple segments. This expansion of global brands poses a challenge to local hotels that are competing for both business and leisure travellers.

EFFIcIENt INtERNAL cONtROL SYStEM ANd thEIR AdEQuAcY

For the financial year ended 2024-25, your Company has maintained an adequate internal control system ensuring the efficiency of operations, safeguarding assets, and reliability of financial reporting. The system provides reasonable assurance regarding compliance with relevant laws and regulations.

Your Company has implemented documented procedures and policies covering all critical corporate functions and hotel operating units. These policies address essential areas such as revenue management, hotel operations, purchasing, finance, human resources, and safety. To ensure that these controls remain effective, they are regularly updated to reflect changes in operational needs and evolving regulatory requirements.

The internal audit function plays a pivotal role in monitoring the effectiveness of these internal controls. The audit process is conducted for every operational unit as well as major corporate functions, ensuring that all policies and procedures are followed diligently. The Audit Committee of the Board plays a crucial role in reviewing the adequacy and effectiveness of the internal control system. It regularly reviews the findings from internal audits and monitors the implementation of recommendations provided by the auditors The internal control system is designed not only to safeguard the Companys assets but also to ensure the reliability of financial controls and guarantee compliance with applicable laws and regulations. Given the dynamic nature of the star hotel industry, particularly in Kolkata, where market conditions can shift rapidly, these controls are crucial for maintaining operational consistency and financial integrity.

DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Human Resource Development (HRD) refers to the companys efforts to help employees develop their abilities, skills, and knowledge. A key aspect of HRD is industrial relations, which plays a major role in maintaining positive relations between the company, its employees, and business partners.

The Companys focus is always on ensuring that selected candidates either possess the required competencies or can be developed through training to fit into the organization. Interviewers assess candidates based on their personality traits during the interview process, aligning with the overall mission of providing authentic hospitality. The Company values individuals who are proactive, possess strong communication skills, and can work effectively within a team. Rather than focusing solely on specific

Company emphasizes the overall personality of candidates. The Company has an extensive training and development program to teach employees standard operations, conducted through task-specific training modules and hands-on sessions.

As of 31^st March, 2025, the number of people employed on-roll by the hotel was 280. The Company continues to maintain a cordial and healthy relationship with its workforce, prioritizing the overall wellbeing of team members.

To ensure employee happiness and engagement, the Company organized various team-building exercises and festive celebrations during the year. These included events like Townhall meetings, rewards and recognition programs, Gratitude Day, Christmas celebrations, Day outings, Housekeeping Week, inter-hotel cricket matches, and even Sound Healing Therapy.

DETAILS OF SIGNIFICANT CHANGES IN FINANCIAL RATIOS:

In accordance with the SEBI (Listing Obligations and Disclosure Requirements 2018) (Amendment) Regulations, 2018, the Company is required to givedetailsofsignificantchanges (change of 25% or moreascomparedtotheimmediatelyprecedingfinancialyear) in key sector-specific financial ratios.

The Company has identified the following ratios as key financial ratios:

	Financial Year
Particulars	2024-25	2023-24
Debtors Turnover Ratio	17.41:1	17.80:1
Inventory Turnover Ratio	10.13:1	12.23:1
Current Ratio	7.80:1	8.63:1
Debt Equity Ratio	0.80:1	0.92:1
Operating Profit Margin %	48.44%	48.28%
Net Profit Margin %	22.47%	26.49%
Debt Service Coverage Ratio	2.83	3.13

Net worth of Asian Hotels (East) Limited

Particulars	31st March 2025 (Rs.)	31st March 2024 (Rs.)	Changes (Rs.)
Net worth	1,87,33,04,671/-	1,66,18,34,829/-	21,14,69,842/-

Net worth is increased due to the following reason during the financial year ended 2024-25:

Particulars	Amount (Rs.)	Reason/Remarks
Assets	21,14,69,842/-	Due to increase in Assets
Increase in Net Worth	21,14,69,842/-

CAUTIONARY STATEMENT

Statements made in the Management Discussion and Analysis Report may be forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.

	For and on behalf of the Board of Directors
	Shourya Sengupta	umesh Saraf	Swati Singhania
Kolkata	Director	Jt. Managing Director	Director
30th May, 2025	(DIN: 09216561)	(DIN: 00017985)	(DIN:03610903)