HB Estate Developers Ltd Management Discussions.

1. OPERATING RESULTS

In the last two years the business of the CompanysHotel Unit was severally impacted due to the outbreak of COVID-19 pandemic in March, 2020. However, due to high pace of vaccination, easing of covid restrictions and pent-up demand resulted in recovery of business in the second and third quarter of FY 2021-22.

During the year under review, the Companystotal Revenue was 5200609.65 Hundreds as compared to 2521657.48 Hundreds in the previous year. The Company incurred total expenses amounted to 7400104.09 Hundreds as compared to 6627747.02 Hundreds 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 4987117.41 Hundreds as compared to 2392567.52 Hundreds during the previous year. During the year under review, the Company incurred a cash loss amounting to 1404071.49 Hundreds compared to cash loss amounting to 2596107.60 Hundreds incurred in the previous financial year.

Loss after tax stood at 1567253.60 Hundreds as against 3036962.38 Hundreds in the previous year.

2. INDUSTRY STRUCTURE AND DEVELOPMENTS

2.1 Global Scenario

As the pandemic is no longer acute, the global travel and tourist market is expected to recover and reach pre-pandemic levels in 2023. As per the World Travel & Tourism Council (“WTTC”), the continuation of the ongoing vaccine and booster rollout, and easing of restrictions in international travel, could result in speedy recovery in travel and hotel trade.

2.2 Indian Scenario

The rich and varied culture of India makes it a major travel destination for many international tourists. The year 2021 turned out to be a recovery year for the Indian travel and hospitality sector post the 2020 pandemic.

The Tourism and Hospitality industry is one of the largest service industries in India. For the past decade, the tourism sector accounted for about 7% of Indias GDP. In FY2021, the Industry accounted for 39 million jobs, which is projected to increase to 53 million jobs by 2027.

While the earlier part of Q4 started to witness an impact due to the Omicron wave, the quarter was the best performing period of the year bolstered by long weekends, festivals and social gatherings. The sector witnessed a doubling of Revenue Per Available Room (RevPAR).

3. OPPORTUNITIES AND THREATS

The 100% FDI in the hotel and tourism sector will lead to more investments in the country through the automatic route. Announcements around PM Gati Shakti for multi modal transport, 400 new Vande Bharat trains, integrated connectivity between railway stations and PMRs.s Development Initiatives for North-East, etc will have medium to long term growth implications for tourism in India. The Ministry of Tourism has been allocated INR 2,400 Crores in the Union Budget which is 18.42% higher than the allocation for FY21- 22. The Swadesh Darshan Scheme and the PRASHAD Scheme are among the major initiatives taken by the government.

The GovernmentRs.s Incredible India campaign, extension of e-tourist visa facility to 171 countries, increasing medical tourism and coastal tourism through promotion of intraregional trade among Indian Ocean Rim countries are expected to drive global tourists to India.

4. FUTURE PROSPECTS AND OUTLOOK

Wide spread vaccinations have resulted in a quicker V-shapers. recovery of economic activity and mobility with comparatively lower disruption in livelihoods. This was also strengthened by low-fatality-quick recovery rate of the Omicron variant and better healthcare preparedness in the country. These factors have resulted in higher consumer confidence which is expected to improve the prospects for travel and tourism within the country. While various State Governments have eased regional travel restrictions, the Government of India recently ended its COVID-19 containment measures under the Disaster Management Act and resumed regular international flights, thus paving the way for greater inflow of international tourist arrivals to India.

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.

Risk Management Policy

(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 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 unauthorised 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 Companysissued and subscribed share capital consists of Equity and Redeemable Preference Share capital. The paid-up share capital of the company as at 31st March, 2022, 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. 48334843.08 Hundreds and Rs. 32109104.20 Hundreds respectively Rs. 48074259.98 Hundreds and Rs.30382970.88 Hundreds respectively in the last year.

c) Current Assets & Current Liabilities: During the year under review, the Current Assets and Current Liabilities stood at Rs. 4620946.69 Hundreds and Rs. 5074293.79 Hundreds respectively against Rs. 4852765.55 Hundreds and Rs. 5203341.25 Hundreds respectively in the last year.

d) Key Financial Ratio (Standalone):

Particulars

Year Ended

% change over previous year

Reason for change of more than 25%
31st March, 2022 31st March, 2021
1. Trade Receivable Ratio 18.22 14.02 29.95 Improvement in Ratio due to lower receivables and increase in turnover
2. Inventory Turnover Ratio 0.45 0.24 88.31 Improvement in Ratio due to increase in earnings on account of overall business growth
3. Debt Service Coverage Ratio 0.21 -0.13 -2.36 NA
4. Current Ratio 0.91 0.93 -2.36 NA
5. Debt Equity Ratio 2.20 1.89 16.41 NA
6. Operating Profit Margin (%) 3.90 -73.76 105.28 Improvement in Ratio due to increase in earnings on account of overall business growth.
7. Net Profit Margin (%) -31.08 -124.46 75.03 Improvement in Ratio due to increase in earnings on account of overall business growth.
8. Return on Net Worth (%) 0.40 -3.71 110.82 Improvement in Ratio due to increase in Fair Market Value of Investment.

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 Companysobjective, projections, estimates and expectations may be Rs.forward looking statementsRs. 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 Companysoperations include interest rates and changes in the Government Regulations, tax regimes, economic developments and other factors such as litigations etc.