Eco Hotels and Resorts Ltd Management Discussions

Regulations 34 and Schedule V of the SEBI (LODR) Regulations, 2015

INDUSTRY STRUCTURE AND DEVELOPMENTS

Eco Hotels and Resorts Limited (Formerly known as Sharad Fibers and Yarn Processors Limited was incorporated in the state of Maharashtra on 2nd July, 1987. The Company is engaged in Business of Hotels and motels.

OPPORTUNITIES AND THREATS

FY 2023-24 was a year of record results and growth for the industry. Indian tourism is being driven by favourable demographics, increasing employment, higher disposable incomes of a young middle class, robust domestic demand, increased investments and improving infrastructure and connectivity. The Ministry of Tourism of the Government of India initiated several schemes such as ‘Swadesh Darshan, PRASHAD, UDAN and ‘Dekho Apna Desh to promote travel.

As many as 50 tourist destinations are in the pipeline for being developed to provide a wholesome tourism experience under the ‘Swadesh Darshan scheme.

Similarly, the PRASHAD scheme aims at the development of select pilgrimage destinations in the country. Additionally, several states of India have also undertaken initiatives and investments to promote local tourism. The governments electronic visa facility now covers practically all the countries of the world, including foreign nationals of 166 countries, and is valid for entry at 28 designated airports and five designated seaports of India. Indias remarkable economic growth, coupled with transformative changes, has had a positive impact on the tourism and hospitality sectors, ushering in a golden era ‘Amrit Kaal.

SEGMENT WISE PERFORMANCE

The Company has not started any operations as on 2023-24.

QUALITY & FUTURE 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 centers and global capability centers, (iii) recovery of foreign tourist arrivals, additional middle-income households and a clearly visible trend of premiumization leading to higher demand for leisure destinations. The advent of spiritual tourism, weddings in India, a upcoming conventions centers and growing wildlife tourism 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 demand are expected to provide a long and sustainable upcycle for hospitality in India. Growth in demand for branded rooms is expected to outpace growth in supply of those rooms. A report from Horwath HTL estimates growth in all India demand at 10.6% till 2027, with growth in key leisure markets at 13.3%. Supply, on the other hand, is estimated to grow at 8% with 60% of the supply outside the top 10 destinations.

While challenges such as inflation and geopolitical tensions persist, proactive government support and policies, alongside a renewed focus on sustainability are likely to bolster the sectors resilience and foster sustainable growth in the coming fiscal year. Growth in Indias services sector and higher disposable income of people working in it, referred to as ‘Affluent India, are also expected to increase demand for holidays.

THREATS & CONCERNS

We have an active risk management policy in place where we identify potential risks, create mitigation strategies and monitor the occurrence of risk.

The risks that may affect us include, but are not limited to:

Economic Conditions.

Inflation pressures and other factors affecting demand for our products. Increasing cost of Raw Material, transport and storage. Supplier and distributor relationships and retention of distribution channels. Competitive market conditions and new entrants to the market. Labour shortages and attrition of Key Staff. Compliance and regulatory pressure including changes to tax laws.

ADEQUACY OF INTERNAL CONTROL SYSTEMS:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined by the Audit Committee. To maintain its objectivity and independence, the Internal Audit function reports to the Chairperson of the Audit Committee & to the Chairperson of the Board.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company.

Based on the report of internal audit function, the Company undertakes corrective action in their respective areas and thereby strengthens the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board.

OPERATIONAL PERFORMANCE PARAMETERS

In order to avoid duplication between the Directors Report and Management Discussion & Analysis, your Directors give a composite summary of the financial performance in the Directors Report.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

Your Company has focused on identifying internal talent and nurture them through the culture of continuous learning and development, thereby building capabilities for creating future leaders. The Board of Directors wishes to place on record its appreciation for the contribution made by all the employees during the year.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS OF THE COMPANY:

j. details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.:

The net worth has become positive during the year.