HLV Ltd Management Discussions

1. Overview of Industry

Globally, 2024 has been an eventful year. The year witnessed unprecedented electoral activity on the political front, with more than half of the global population voting in major elections across countries. Meanwhile, adverse developments like the Russia- Ukraine conflict and the Israel-Hamas conflict increased regional instability. These events impacted energy and food security, leading to higher prices and rising inflation. Cyberattacks also became more frequent and severe, with growing human and financial consequences due to the increasing digitisation of critical infrastructure. Geopolitical tensions, have reshaped global trade. Geopolitical risks and policy uncertainty, especially around trade policies, have also contributed to increased volatility in global financial markets. The global economy exhibited steady yet uneven growth across regions in 2024. A notable trend was the slowdown in global manufacturing, especially in Europe and parts of Asia, due to supply chain disruptions and weak external demand. In contrast, the services sector performed better, supporting growth in many economies. Inflationary pressures eased in most economies. However, services inflation has remained persistent. Although commodity prices have stabilised, the risk of synchronised price increases persists. With growth varying across economies and last-mile disinflation proving sticky, central banks may chart varying paths of monetary easing. Nonetheless, global economic growth has remained fairly moderate. The global economy grew by 3.3 per cent in 2023. The International Monetary Fund (IMF) has projected growth of

3.2 per cent and 3.3 per cent for 2024 and 2025, respectively. Over the next five years, global growth is expected to average around 3.2 per cent, which is modest by historical standards. While the overall global outlook remains steady, growth varies across different regions. (Economic Survey 2024-25, Department of Economic Affairs, Ministry of Finance).

In this global context, India displayed steady economic growth. As per the first advance estimates of national accounts, Indias real GDP is estimated to grow by 6.4 per cent in FY25. Growth in the first half of FY25 was supported by agriculture and services, with rural demand improving on the back of record Kharif production and favourable agricultural conditions. The manufacturing sector faced pressures due to weak global demand and domestic seasonal conditions. Private consumption remained stable, reflecting steady domestic demand. Fiscal discipline and strong external balance supported by a services trade surplus and healthy remittance growth contributed to macroeconomic stability. Together, these factors provided a solid foundation for sustained growth amid external uncertainties. The services sector continues to perform well in FY25. A notable growth in Q1 and Q2 resulted in 7.1 per cent growth in H1 FY25. Across sub-categories, all the sub-sectors have performed well. The robust performance of the services sector is also reflected in high-frequency indicators

(HFIs). PMI services have been in an expansionary zone during H1 FY25, supported by growth in new orders, rise in output, improvement in sales and enhanced employment generation. The hospitality sector performed well, with hotel occupancy rates in H1 FY25 similar to the previous year. Average daily rates and revenue per room increased due to higher corporate and leisure travel. Air cargo activity grew in double digits, while port traffic remained stable. Information Technology (IT) companies also performed better than the previous quarter. (Economic Survey 2024-25, Department of Economic Affairs, Ministry of Finance)

The global tourism industry continued its strong resurgence in 2024, nearly achieving full recovery from the pandemics impact. As per UNWTO Barometer January 2025, international tourist arrivals are estimated to have reached 1.4 billion in 2024, marking an 11% growth over 2023 and 99% of pre-pandemic levels. Europe remained the most visited region with a 52% share, surpassing 747 million international arrivals, a 5% increase visa-vis 2023, and slightly exceeding its 2019 benchmark, while the Americas registered 214 million travellers, a 7% increase vis-avis 2023, and reached 97% of pre-pandemic levels. The Middle East registered 1% growth over the previous year, however, surpassing 2019 arrivals by 32%, while Africa also outperformed pre-pandemic levels by 7% and 12% had a increase vis-a-vis 2023. The Asia-Pacific (APAC) region made significant strides toward recovery, recording 316 million international arrivals with an overall share increase to 22% in 2024 as against 18% in 2023. While still lagging behind 2019 numbers at 87% recovery, the regions growth on y-o-y basis was steepest at 33% accelerated by a revival in key markets. Total export revenues from tourism (including passenger transport) are estimated at a record USD 1.9 trillion in 2024, about 3% higher than before the pandemic and 4% more than in 2019 (real terms). According to the United Nations World Tourism Organisation (UNWTO), international tourist arrivals are projected to increase by 3% to 5% compared to 2024, indicating a normalisation of growth following the sharp post-pandemic rebound. Confidence within the industry remains high — UNWTOs January 2025 Confidence Index reports that 64% of surveyed travel professionals anticipate stronger performance this year than in 2024. This optimism is underpinned by key enablers such as enhanced air connectivity and the simplification of visa processes, both of which are expected to further support the sectors expansion (Source: UNWTO, World Tourism Barometer, January 2025). The World Travel & Tourism Council (WTTC) forecasts that 2025 will be a landmark year for the industry. The sectors global economic contribution is expected to reach a record breaking $11.7 trillion — up from $10.9 trillion in 2023 and $10.3 trillion in 2019. This represents a 6.7% increase over the previous year and a 13% rise compared to pre-pandemic levels. However, the industry continues to face external risks, including trade tensions and geopolitical instability, which may influence traveller behaviour and discretionary spend potentials.

Travellers are expected to prioritise value driven options and intraregional trips. According to CBREs 2025 Global Hotel Outlook, the Asia-Pacific region is set to experience modest revenue per available room (RevPAR) growth, fuelled by rising wealth and demand that is outpacing relatively slow new supply.

FY 2024-25 marked another landmark year for Indian tourism, driven by strong fundamentals such as a youthful population, rising employment, growing disposable incomes, and solid domestic demand. Improved infrastructure, greater connectivity, and increased investments have further accelerated the sectors momentum. The Union Budget 2025-26 allocated Rs. 2,541 crore ($ 291 million) for the tourism sector, with a focus on infrastructure upgrades, skill development, and easing travel. Key initiatives include the development of 50 leading tourist destinations, improved transport connectivity, and expanding the e-visa programme. As of December 2024, e-visas were available to citizens from 167 countries under 9 categories — making travel to India simpler and more accessible. The Ministry of Tourism advanced its flagship schemes such as Swadesh Darshan, PRASHAD, UDAN, and Dekho Apna Desh, encouraging regional and cultural tourism. Foreign tourist arrivals reached 9.7 million in 2024 as against 9.23 million in 2023. This years arrival denoted a recovery of 88% of the 2019 high of 10.9 million, signalling steady progress toward full recovery. According to the India Hotel Market Review 2024 by Horwath HTL, national occupancy stood at 63.9% for 2024 as compared to 62.1% in 2023. While the occupancy is still marginally below the 2019 level of 64.5%, Revenue per day was 82% higher than 2019 indicating market growth both in terms of capacity and size. The average daily rate (ADR) rose to Rs. 7,951, marking a 7.5% y-o-y increase and revenue per available room (RevPAR) rose to Rs. 5,078, marking 10.7% year on year increase.

2. Outlook

The Indian hotel industry enters 2025 on a strong footing, supported by sustained domestic travel, infrastructure upgrades, and rising interest from international markets. Continued economic growth, rising disposable incomes, and evolving travel aspirations especially among millennials and Gen Z are fuelling demand for both leisure and business stays. The continued advent of spiritual tourism, weddings in India, and strong M.I.C.E activity (Meetings, Incentives, Conferences and Exhibitions) surrounding large state of the art conventions centres are providing a strong impetus to growth. According to industry estimates, demand for branded hotel rooms in India is expected to continue outpacing supply growth which remains moderate. Indias hospitality industry presents a significant potential for market penetration with just 0.1 branded room inventory per 1,000 people.

While heightened trade tensions and global geopolitical risks weigh strongly on the economy, the governments continued support through tourism-friendly policies, infrastructure spending, and ease-of-travel initiatives are expected to keep the sector on a stable growth trajectory. Backed by robust fundamentals, favourable supply-demand dynamics, and a maturing hospitality ecosystem, the Indian hotel industry is well-positioned for a strong and sustainable performance in 2025 and beyond.

3. Business Review

During the FY 2024-25 occupancy levels at the Companys Hotel were at 74 % as against 76% in the previous year. On an average, 298 rooms were sold per day. Average room rate was Rs. 11,105 in the FY 2024-25 as against Rs. 10,193 in the FY 2023-24. During the FY 2024-25 RevPAR has improved upto Rs. 8,255 against Rs. 7,846 in the FY 2023-24.

4. Awards and Accolades

The Leela Mumbai has received the following award and accolades during the FY 2024-25:

“Le Cirque” accorded with the Wine Spectator Award of Excellence for housing one of the most outstanding wine lists - Wine Spectator Award of Excellence 2024

“Le Cirque Signature” recognized as Best European - Premium Dining (Mumbai Suburbs) - Times Food & Nightlife Awards 2025

5. A. Sales & Marketing alliances

The Company continues to enjoy the following marketing arrangement through Brookfield for which the Company pays a fee to Brookfield based on the marketing expenses:

a. Global Hotel Alliance

Global Hotel Alliance is today the worlds largest alliance of independent luxury hotel brands. Based on the airline alliance model, the alliance currently has more than 30 member brands, all with their own unique character, encompassing over 550 upscale and luxury hotels, spread across 75 countries. GHA uses a shared technology platform to operate an award winning, multi- brand loyalty program, DISCOVERY Currently the total DISCOVERY membership base has crossed 14 million worldwide members. DISCOVERY is about making your stay and travel unforgettable. Discovery program believes that rewarding members with authentic, memorable experiences is much more valuable than collecting points. With this in mind, DISCOVERY instead rewards travelers with Local Experiences. Designed by our local experts, these specially curated experiences offer members the access to a large selection of exclusive activities which are not easily available to the general public.

b. Preferred Hotels & Resorts

The Preferred Hotels & Resorts represents over 850 independent and distinctive hotels, resorts & residences across 85 countries. Through its five global collections - Legend, LVX, Lifestyle, Connect, and Preferred Residences- Preferred Hotels & Resorts connects discerning travelers to the singular luxury hospitality experience that meets their needs and life and style preferences for each occasion. Preferred Hotels & Resorts brings strategic advantage through its Global Sales team comprising of 80 sales associates covering Corporate, Group & Leisure segments in 30 global offices.

B. Sales, Marketing and PR Representations

The Company continues to avail the services of Sales representation companies across key geographies in the world through Preferred Hotels & Resorts. This company is assigned the responsibility to engage with the major tour operators and retail agencies in their respective source markets.

6. Opportunities, Threats, Risks and Concerns

The hotel business is dependent on global and domestic economic conditions. Further, your Company has the risk of heavy dependence on only one Hotel at Mumbai. There is also the risk of dependence mainly on higher luxury segment. However, the Companys hotel enjoys premium over many other competitors due to its location and service reputation.

7. Risk Management-Leveraging our experience

Risk management is an integral part of the Companys business process. The Company has a robust risk management framework to identify, assess, and mitigate potential threats. Risks are continuously monitored and effectively controlled through ongoing efforts to conceive and implement mitigation strategies.

Pertinent policies and methods are being reviewed and modified to mitigate such risks.

The Company has taken several measures to protect the safety and security of its customers. In addition to the physical security measures, the Company has also taken sufficient insurance cover to meet the financial obligations which may arise from any untoward incidents.

To counter the risk of competition, your Company focuses on providing exceptional services consistently.

The deal with litigation matters of the Company which are crucial in nature more particularly described in Para 7 of Directors Report, the Company has engaged reputed legal practitioners on behalf of the Company.

8. Efficient Internal Control systems

The Company has a well-structured internal audit function. Under the guidance and supervision of an independent Audit Committee, independent and reputed firm of Chartered Accountants conduct regular audits and review adherence to control systems and procedures.

The effectiveness of internal controls is reviewed through the internal audit process.

The focus of these reviews is as follows:

- Identification of weaknesses and areas of improvement

- Compliance with defined policies and processes

- Safeguarding of tangible and intangible assets

- Management of business and operational risks

- Compliance with applicable statutes

The Audit Committee of the Board oversees the adequacy of the internal control environment through regular reviews of the audit findings and monitoring implementation of internal audit recommendations.

9. Human resources and industrial relations

A focused attention on attracting the best talent available in the market, which could help the Company to drive a culture oriented towards high performance and excellence. The Company has implemented an effective customer feedback system which is yielding good results. This platform helps the team to align all its efforts in delivering relevant high-quality services to the guests whilst seeking to constantly improve on standards. Industrial relations throughout the year were cordial. As on 31st March, 2025, the total manpower was 829 (including contract labour and fixed term contractors).

10. Corporate Social Responsibility and Environmental Initiatives

Your Company recognizes the need to minimise the adverse impact of its operations, on the environment. The Company maintains large gardens in and around its hotel. The Company has made substantial investments for improving energy efficiencies and fresh and waste water management.

11. Health and Safety Management System

Health and Safety Management System in the Company aims to reduce, eliminate or control workplace hazards and associated risks of illness or injuries to the employees, customers and contractors who might be affected by the Companys activities.

Your Company is committed to ensure healthy and safe working environment for all concerned and to improve the Health and Safety parameters. Under a well-designed program, the Company:

a. complies with the requirements of all relevant statutory, regulatory and other provisions.

b. Provides and maintains safe & healthy work place through operational procedures, safe systems and methods of work.

c. Provides sufficient information, instruction, training and supervision to enable all employees to identify, minimize and manage hazards and to contribute positively to safety at work.

d. Organizes audits and mock drills on site to ensure that operations are in compliance with health and safety management requirements and for emergency preparedness.

e. ensures that appropriate resources are available to fully implement health and safety policy and continuously review the policys relevance with respect to legal and business development.

f. seeks continuous occupational health and safety improvements through the establishment of safety management objectives, targets and programs.

12. Expansion / upgradation Plans

A proposal for setting up a new luxury resort and hotel at Vellimon (Asthamudi Lake) near Kollam, Kerala had been approved by the Board of the Company on 12th February, 2024. The new resort and hotel will be constructed on land admeasuring approximately 12.92 acres equivalent to 52,285.39 sq. mts. taken on lease for a period of 30 years from Rockfort Estate Developers Private Limited, a promoter Group Company at Vellimon (Asthamudi Lake) near Kollam, Kerala. Preliminary work is going on like boundary wall construction and Panchayat approval etc.

13. Analysis / highlights of operating performance, financial results and Balance Sheet

The financial statements for the year ended 31st March, 2025 have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 as amended from time to time.

The financial statement of your Company forms part of this annual report and the analysis / highlights are given below:

At present, the Company operates only one hotel “The Leela, Mumbai” with 394 guest rooms.

Revenue:

The revenue from operations was Rs. 20,331.09 lakhs in FY 2024-25 against Rs. 19,909.45 lakhs in FY 2023-24.

Revenue from Food & Beverages increased by 5.05 %.

Room Revenue increased by 5.65 % mainly due to increase in room rates.

Other income was Rs. 1,509.19 lakhs in FY 2024-25 as compared to Rs. 980.20 lakhs in FY 2023-24.

Total revenue was Rs. 21,840.28 lakhs in FY 2024-25 against Rs. 20,889.65 lakhs in FY 2023-24.

Operating Expenses:

Food & Beverages consumption increased by 2.64 % as compared to last year.

Employee Benefit expenses, including contract employee cost increased by 8.69 % as compared to last year.

Finance costs and interest liability:

Finance cost was Rs. 222.62 lakhs as compared to Rs. 240.15 lakhs in the previous year.

Depreciation and Amortization:

Depreciation and amortization expenses for the year was Rs. 1,564.42 lakhs as against Rs. 1,436.23 lakhs in previous year.

Other expenses:

Other expenses for the year amounted to Rs. 10,090.55 lakhs as against Rs. 9,835.56 lakhs in the previous year.

Profit/ (Loss) after Tax:

The Company earned a profit of Rs. 2,612.49 lakhs during the FY 2024-25 as against a profit of Rs. 2,380.29 lakhs during the previous year.

Property, Plant and Equipment (PPE):

The net Property, Plant, Equipment, capital work in progress, intangible assets, investment property and assets held for sale as on 31st March, 2025 was Rs. 30,646.08 lakhs as against Rs. 29,537.79 lakhs as on the last day of the previous year.

Secured and Unsecured Loans:

The details of the Companys debts (in Rs. lakhs) are as follows:

Particulars	31.3.2025	31.3.2024
Secured Loans:
Long Term Debt	499.99	143.86
Short Term Debt including current maturities of Long Term Debt	1,318.89	1,015.56
Interest accrued on borrowings	0.93	0.96
Total	1,819.81	1,160.38

Share Capital:

The share capital of the Company as at 31st March, 2025 was Rs. 131,85,19,798/- divided into 65,92,59,899 Equity Shares of the face value Rs. 2/- each, same as in the previous year.

Reserves:

In view of previous years losses, Company has decided to retain the earnings to adjust with the previous years losses, therefore, the Company decided not to transfer any amount to the Reserves for the year under review.

Dividend:

In view of previous years losses and Companys liabilities towards disputes with Airport Authority of India, Company decided to retain the earnings to adjust with the previous years losses, hence do not recommend any dividend for the FY 2024-25.

Net worth:

The details of Companys net worth (in Rs. lakhs) are as follows:

Particulars	31-Mar-25	31-Mar-24
Share Capital	13,185.20	13,185.20
Free Reserves	13,195.39	13,195.39
Securities Premium Account	67,772.08	67,772.08
Total	94,152.67	94,152.67
Less:
Accumulated Loss	65,159.72	68,054.02
Intangible Assets / Intangible Assets under development	23.04	21.18
Total	65,182.76	68,075.20
Net worth	28,969.91	26,077.47

Financial Ratios and Return on Net-worth:

Key financial ratios and their definitions are given below:

Sr. No. Particulars	Year ended 31st March, 2025	Year ended 31st March, 2024
1 Current Ratio (in times)	1.78	1.8
2 Debt-Equity Ratio (in times)	0.088	0.074
3 Debt Service Coverage Ratio (in times)	16.58	15.31
4 Return on Equity Ratio (in %)	5.73%	5.52%
5 Inventory turnover ratio (a)	3.66	4.36
6 Trade Receivables turnover ratio (in days)	14.87	14.11
7 Trade payables turnover ratio (in days)	1.32	1.51
8 Net capital turnover ratio (in times)	2.01	2.27
9 Net profit ratio (in %)	11.96%	11.39%
10 Return on Capital employed (in %)	6.06%	5.91%
11 Return on investment (in %)	0.00%	0.00%
12 Interest Service Coverage Ratio (in times)	177.45	109.43
13 Operating profit margin (in %)	13.64%	14.42%

a) Interest Service Coverage Ratio equals to Profit before tax added by interest on borrowings, Provision for impairment of assets and Depreciation and Amortization expenses divided by Interest on borrowings.

b) Operating profit margin equals Profit / (Loss) before depreciation and amortisation expenses, Interest, Tax and Exceptional items less Other Income divided by Revenue from operations.

c) The definitions of other ratios are given in Note 37.14 of the Notes to Financial Statements.

14. Cautionary Statement

Statements made in the Managements Discussion and Analysis Report describing the Companys objectives, projections, estimates, predictions and expectations may be ‘forward-looking statements, within the meaning of applicable securities laws and regulations. As “forward-looking statements” are based on certain assumptions and expectations of future events over which the Company exercises no control, the Company cannot guarantee their accuracy nor can it warrant that the same will be realized by the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments or events or for any loss any investor may incur based on the “forward-looking statements”.