Oriental Hotels Ltd Management Discussions

Your Company has been reporting consolidated results taking into account the results of its subsidiaries, joint venture and associates. This discussion, therefore, covers the financial results of your Company from April 2023 to March 2024. Your Company, being part ofthe IHCL Group (Group), this section also includes important developments and initiatives undertaken during the above period at the Group level, which has a bearing on the performance and business of your Company. Some statements in this discussion, describing the projections, estimates, expectations or outlook, may be forward looking. Actual results may, however, differ materially from those stated, on account of various factors such as changes in Government regulations, tax regimes, economic developments within India and the countries with which your Company conducts its business, exchange rates and interest rates fluctuations, impact of competition, demand and supply constraints, etc.

Economic environment and industry insight

GLOBAL ECONOMY: THE YEAR IN REVIEW

The International Monetary Fund (IMF), in its April 2024 “World Economic Outlook, pointed to the surprising resilience of the global economy, which showed steady growth even as inflation receded. Global real Gross Domestic Product (GDP) growth is estimated at 3.2% in CY 2023, and projected to grow at the same rate in CY 2024 and CY 2025. The IMF report attributed the slow pace of growth to several factors such as high borrowing costs, withdrawal of fiscal support, long-term effects of the COVID-19 pandemic, Russias invasion of Ukraine, weak growth in productivity and increasing geoeconomic fragmentation. Global inflation moderated from its peak in the middle of CY 2022 while economic activity continued to grow, thus averting a possible global recession.

IMF expects global headline inflation to fall further from the annual average of 6.8% in 2023 to 5.9% in 2024 and to 4.5% in 2025, with advanced economies returning to their inflation targets sooner than emerging markets and developing economies. Risks to the global outlook for 2024 seem broadly balanced. These risks arise from price spikes stemming from geopolitical tensions and regional conflicts such as those in Gaza, attacks in the Red Sea, and continued war in Ukraine, a slower than expected decline in core inflation and interest rates remaining higher than expected.

On the upside are factors such as a short-term fiscal boost as many countries go to elections in 2024, faster monetary policy easing and increase in productivity from technologies such as artificial intelligence. (Source: IMF - World Economic Outlook, April 2024). The World Banks Global Economic Prospects report of January 2024 was more conservative in its estimates, putting the global real GDP growth at 2.6% for 2023, and growth forecasts at 2.4% and 2.7% for 2024 and 2025, respectively.

Real GDP, Y-O-Y% Change

Particulars	Actuals 2022	Estimate 2023	Projection 2024	Projection 2025
World Output	3.5	3.2	3.2	3.2
Advanced Economies	2.6	1.6	1.7	1.8
United States of America (US)	1.9	2.5	2.7	1.9
United Kingdom (UK)	4.3	0.1	0.5	1.5
Emerging Markets & Developing Economies	4.1	4.3	4.2	4.2
Emerging and Developing Asia	4.4	5.6	5.2	4.9
India	7.0	7.8	6.8	6.5
China	3.0	5.2	4.6	4.1
Emerging and Developing Europe	1.2	3.2	3.1	2.8
Sub Saharan Africa	4.0	3.4	3.8	4.0
Middle East and Central Asia	5.3	2.0	2.8	4.2

Source: IMF World Economic Outlook, April 2024. Year is a calendar year except for India, which is presented on fiscal year basis with FY 2022-23 Shown in the 2022 Column

Among the advanced economies, the US grew by 2.5% in 2023, and is projected to grow by 2.7% in 2024 and at a slower pace of 1.9% in 2025. Growth in the UK is estimated to remain largely flat in 2023, and thereafter increase by 0.5% in 2024 and 1.5% in 2025. The slower pace of growth in the UK is due to the impact of high energy prices and related inflation, which is expected to ease towards 2025. Chinas growth is projected to slow from 5.2% in 2023 to 4.6% in 2024, and 4.1% in 2025, mainly due to the waning of one-off consumption and fiscal stimulus factors post-pandemic and the continuing weakness of the real estate sector. Indias growth rate on the contrary is estimated at 7.8% in 2023 and projected to remain strong at 6.8% in 2024 and 6.5% in 2025, supported by strong domestic demand and a rising working-age population.

Source: IMF - World Economic Outlook, April 2024.

Indian Economy: The Year in Review

India is now the worlds fifth largest economy in terms of nominal GDP and the third largest in terms of Purchasing Power Parity (PPP). The Second Advance Estimates of National Income released by the National Statistical Office (NSO) of the Government of India in February 2024, estimates a GDP growth rate of 7.6% for FY 2023-24 as compared to a growth rate of 7.0% in FY 2022-23. Total consumption, comprising 56% of GDP, grew by 3.0% in FY 2023-24. Exports grew marginally by 1.5% while imports grew by 10.9%. As a consequence of the governments thrust on capex, which has continued to crowd in private investment, Gross Fixed Capital Formation (GFCF) at constant prices, constituting 34% of the GDP, registered a growth of 10.2% in FY 2023-24. On the supply side, agriculture grew by 0.7%, manufacturing grew by 8.5%, construction by 10.7% and services grew by 7.5% in FY 202324. Within services, trade, hotels, transport, communication and broadcasting related services, constituting about a third of overall services, grew by 6.5% after a strong growth of 12.5% in FY 2022-23.

(Source: NSO estimates, February 2024).

India: Real GDP Growth (Annual Percentage Change)

SBI Research and Moodys expects Indias GDP growth for FY 2023-24 to be 8%. Till February 2024, inflation in FY 2023-24 averaged 5.4%, in comparison to 6.8% for the corresponding period in FY 2022-23. During CY 2023, the rate of unemployment declined to 3.1% (2022: 3.6%) and the labour force participation rate expanded to 59.8% (2022: 56.1%)

(Source: Govt. of India - Dept. of Economic Affairs Monthly Economic Review, February 2024). Indias foreign currency reserves stood strong at $645.6 billion as of March 31, 2024, and the Indian currency remained stable during the year.

India is one of the fastest growing large economies in the world. Its economy has been propelled by favourable demographics and a good domestic, consumer-focused economy, with a rising class of affluent Indians increasing spends on premium brands. Indias investments in building a scalable digitised public infrastructure consisting of platforms for verifying the identity of people, digital payments interface and an open e-commerce network to democratise digital commerce, has placed it in a position whereby it can funnel future growth through small and medium sized businesses and the startup ecosystem. Indias service sector has also been demonstrating a consistent, strong growth domestically and through service exports. The S&P Global India Services PMI Business Activity Index at 61.2 for March 2024 was one of the strongest growth rates seen in more than 13 years [Source: S&P Global India Services Purchasing Managers Index (PMI) report, March 2024]. A strong urban demand was also evident from rising passenger vehicle sales, increased house sales, higher domestic air passenger traffic, increased digital payments and improved consumer confidence.

The outlook for FY 2024-25 remains positive. The Reserve Bank of India (RBI) expects manufacturing to maintain its momentum and services to grow above the pre-pandemic trend. Agricultural activities should gain from an expected normal south-west monsoon. Private consumption is likely to gain steam with a pick-up in rural activity; discretionary spending of urban households is expected to increase (as per the RBIs consumer survey) together with improving income levels. Credit growth and private investment are also expected to rise, given optimistic business and consumer sentiments, healthy corporate and bank balance sheets leading to an upturn in the private capex cycle. Core inflation is likely to continue trending downwards, indicating a broad-based moderation in price pressures.

India is poised to benefit in terms of increased Foreign Direct Investments (FDI) from a fragmented global landscape arising from new economic blocs and realignment of supply chains. It is already witnessing increased investments in semiconductors, automobiles, sustainable energy, mobile, telecom, etc. through the Production Linked Incentive (PLI) scheme and other attractive industrial policies, as well as Central and State Government incentives.

7.5%	61.2	10.2%	7.6%
Growth	S&P Global	Growth in	Indias
in the	India Service	gross fixed	estimated
Services	PMI Business	capital	GDP growth
Sector in	Activity	formation	in FY
FY 2023-24	Index for March 2024	(at constant prices) in FY 2023-24	2023-24

However, the RBI has highlighted the risk of headwinds from geopolitical tensions, volatility in international financial markets, geoeconomic fragmentation, rising Red Sea disruptions and extreme weather events. Considering all these factors, the RBI has projected real GDP growth for FY 2024-25 at 7.0%.

(Source: RBI Monetary policy statement, 2024-25).

INDUSTRY INSIGHT

Global Hospitality and Tourism Industry

The global tourism industry demonstrated remarkable resilience and adaptability in 2023. During the year, tourist arrivals internationally were 1,286 million, showing a 34% increase vis-a-vis 2022 and an 88% recovery from the pre pandemic levels of 2019. Europe retained the largest share of global inbound tourism, with 55% share in 2023, growing by 17% over that of 2022, and reaching 94% of the pre-pandemic levels. The APAC region, with a share of 18% of the global tourist arrivals, registered gradual recovery since the start of 2023, growing by 155% over 2022 but the recovery is still 65% of the pre-pandemic levels of 2019. Within this region, tourism in South Asia, with its count of 29.4 million international tourists, was higher by 30% over 2022, which was 87% of the pre-pandemic levels. The Americas, with a share of 15% of global tourist arrivals registered a growth of 27% over 2022, reaching 90% of the pre-pandemic levels. The Middle East, with a relatively smaller global share of 7%, was the only region to overcome the pre-pandemic levels. International tourist arrivals in the region increased 28% over 2022 and 22% above 2019.

Total export revenues from tourism (including passenger transport) are estimated at $1.6 trillion in 2023, which is 94% of the $1.7 trillion recorded in 2019. Preliminary estimates of Tourism Direct Gross Domestic Product (TDGDP) were $3.3 trillion in 2023, which is 3% of the global GDP (Source: UNWTO, Barometer January 2024). STR reported the highest occupancy of 69% in Europe and Australia and Oceania, followed by 67% in the Middle East and 66% in Asia (excluding mainland China).

International Tourist Arrivals by Region

Region	Share %	International Arrivals(million)	Changes % 2023/		% Level Achieved
	2023	2023	2022	2019	2022	2023 vs 2019
World	O O r—1	1,286.0	960.0	1.462.0	34	89
Europe	55	700.4	596.8	742.4	17	94
Asia & the Pacific	18	233.4	91.5	360.1	155	65
Americas	15	198.3	156.6	219.3	27	90
Middle East	7	87.1	67.8	71.3	28	122
Africa	5	66.4	47.5	69.1	40	96

(Source: UNWTO, Barometer January 2024)

Outlook

The United Nations World Tourism Organisation (UNWTO) expects international tourism to fully recover to pre-pandemic levels in 2024, with initial estimates pointing to 2% growth above 2019 levels, led by increased air connectivity, visa facilitation and a stronger recovery of Asian destinations. As many as 67% of the tourism professionals participating in the UNWTO Confidence Index Survey indicated better or much better prospects for 2024 compared to 2023 (Source: UNWTO, Barometer January 2024). The World Travel and Tourism Council (WTTC) predicts 2024 to be a record year in terms of travel and tourism. It estimates global economic contribution of the sector to reach a historically high level of $11.1 trillion compared to $9.9 trillion in 2023.

However, continuing economic headwinds, geopolitical tensions and rising conflicts that are disrupting trade remain the key concerns. Along with high inflation and interest rates, the costs of transport and accommodation could be impacted in 2024. Notwithstanding these risks, international travel is expected to accelerate in 2024 with travellers opting for value for money and intra-regional travel. Europe will likely be the largest beneficiary as it prepares for the Summer Olympics in Paris. The Americas and the APAC region are expected to benefit from inbound travellers and diminishing visa wait- times (Source: UNWTO, Barometer January 2024). According to JLL Global Hotel Investment Outlook 2024, India, which is now the worlds most populous country, is expected to be a major growth market in 2024 as the country grows more economically prosperous and the middle class accumulates wealth.

Indian Hospitality and Tourism Industry

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 5 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.

Foreign tourist arrivals for CY 2023 were 9.23 million in comparison with 6.43 million in 2022, registering a growth of 44%. However, the arrivals, which included G20 related business travel in CY 2023, accounted for only 85% of 2019 figures, when foreign tourist arrivals touched 10.93 million (Source: Government of India, Ministry of Tourism statistics December 2023). Thus, there is a future demand potential arising from a complete revival and growth of the sector.

Outbound tourist departures for CY 2023 were 27.27 million, surpassing the pre-pandemic levels of 2019. Domestic air passenger traffic for 2023 grew 23% at 152 million over 2022, also surpassing the pre-pandemic levels. Demand for accommodation was mainly from domestic leisure travel, weddings, social events, and conferences supported by emerging corporate business travel. Horwath HTLs India Hotel Market Review 2023 pegged the occupancy for CY 2023 at 63.6% in comparison to 59.6% in 2022, higher by 4% points yet lower than the 2019 levels of 64.5%, mainly due to the widening supply in Tier II and Tier III cities, and leisure markets. The average daily rate (ADR) for 2023 was ?7,479, an increase of 22% over 2022 and 32% over 2019. Udaipur topped the charts of market-wide ADR while Mumbai, Goa and Delhi have positively gained in both occupancy and ADR. Revenue per available room (RevPAR) at ?4,757 grew 30% as against ?3,654 and ?3,664 for 2022 and 2019, respectively.

All-India Performance Summary

Year	Occupancy %	ADR (?)	RevPAR (?)
2023	63.6	7,479	4,757
2022	59.6	6,135	3,654
2021	43.1	4,448	1,917
2019	64.5	5,684	3,664

Source: STR and Horwath HTLs India Hotel Market Review 2023

The positive sentiment in the industry was reflected by a growing pipeline. According to Horwath HTLs India Hotel Market Review 2023, 14,000 rooms were added in 2023 across 182 hotels, taking the overall chain-affiliated room supply to approximately 1,83,000 rooms. Over 60% of the supply creation was outside the key markets, with the overall inventory share of such markets now at 40%.

29.4 Million International tourists in South Asia in 2023

$11.1 Trillion Projected global economic contribution of the tourism sector in 2024

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 centres and global capability centres, (iii) recovery of foreign tourist arrivals, additional middle-income households and a clearly visible trend of premiumisation leading to higher demand for leisure destinations. The advent of spiritual tourism, weddings in India, a resurgent M.I.C.E (Meetings, Incentives, Conferences and Exhibitions) tourism surrounding recent and upcoming conventions centres 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.

(Source: Horwath HTL and UBS Global Research).

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.

Review of the Business

Operational Review

The Company has a portfolio of 7 hotels which includes 3 owned properties with the rest being leased and licensed properties.

The strategy and operations of the Company are guided and spearheaded by IHCL, its major promoter shareholder and operator.

The Company continues to be guided by the IHCLs initiatives of Ahvaan 2025 - Re-engineer Margins, Re-imagine Brandscape and Re-strucutre Portfolio. The framework to drive sustainability and social measures - Paathya - with several short and long term goals to be fulfilled by 2030, guided the Company in doing business in a responsible manner. On a persistent adherence to its strategy, the Company has registered RevPAR growth. Revenue from accommodation continues to grow through higher occupancies and improved ARR.

Food and beverages form a significant proportion of total revenue. The Company has many signature restaurants providing authentic cuisines. The drive for excellence in serving guests unique experiences draw individuals both resident within the hotel and those residing or visiting the locality.

Property Upgrades and Renovations

We carry out necessary upgradations to keep our hotels in good condition and to offer better value in terms of great ambience and comfort. In the current financial year, the Company has systematically invested in routine capital expenditure as well as renovation & refurbishment of few of its properties.

Key highlights:

• Gateway Coonoor renovation was completed transforming the property into a fully renovated space.

• Taj Malabar Resort & Spa planned renovation commenced in Q2 of the FY, and Phase - 1 of the hotel is planned to open in Q1 of FY 2024-25.

• Taj Fishermans Cove is undergoing renovation in a phased manner with 32 rooms being refurbished in the current financial year.

• Gateway Madurais renovation continues in a phased manner and is slated to be completed in the next financial year. Current year saw the opening of newly renovated All Day Diner "Vista".

Key Events at your Companys Hotel Units

Our hotels have been the venue of choice for hosting international delegations and conventions. The scenic locales and the ambience they offer have helped them gain due recognition.

Some of the key events involving the hotel units of your Company are:

- The Company had the privilege of catering to the Honble Prime Minister on various occasions like the inauguration ceremonies of Chennai International Airport and Khelo India, as well as during his visit to Coimbatore. The Honble Prime Minister also stayed at the iconic Taj Malabar and The Gateway Hotel Madurai.

- Taj Coromandel, Chennai hosted French, Japanese, Russian & Sri Lankan National Days and also hosted various IPL teams.

- Taj Coromandel provided catering services for the following prestigious events:

• during the Presidents visit to Raj Bhavan, Chennai;

• for the prestigious 2 day event at Tamil Nadu Global Investors Meet catering to around 4500 guests per day at the Chennai Trade Centre.

COMPLIANCE

The Company deploys a robust internal check process to prevent and limit the risk of non-compliance. The Company approaches compliance from a proactive standpoint and believes in responsive intervention. Compliance with laws and regulations is an essential part of its business operations and it adheres to all national and regional laws and regulations in such diverse areas as product safety, product claims, trademark, copyright, patents, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes. Nevertheless, it is focussing on increasing awareness, documentation and supplementing the expertise of internal professionals with that of independent consultants, as may be required from time to time.

INTERNAL CONTROL SYSTEMS AND THEIRADEQUACY

Internal controls provide reasonable assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls, and compliance with applicable laws and regulations.

The internal audit process (Taj Positive Assurance Model), based on the audits of operating units and corporate functions, provide positive assurance. It converges the process framework, risk and control matrix and a scoring matrix, covering all critical and important functions inter alia revenue management, hotel operations, purchase, finance, human resources and safety. A framework for each functional area is identified based on risk assessment and control, while allowing the unit to identify and mitigate high-risk areas. These policies and procedures are updated periodically and monitored by the Group Internal Audit. The Company aligns all its processes and controls with best practices.

Internal controls are reviewed through the annual internal audit process, which is undertaken for every operational unit and all major corporate functions under the direction of the Group Internal Audit. These reviews focus on:

Identification of weaknesses and improvements areas	Compliance with defined policies and processes
Compliance with Applicable Statutes	Safeguarding tangible and intangible assets
Managing risk environment, including operational, financial, social, and regulatory risks	Conformity with the Tata Code of Conduct

The Boards Audit Committee oversees the adequacy of the internal control environment through periodic reviews of audit findings as well as the review of resolution mechanism, for critical audit issues. The Statutory Auditors have opined in their report that there are adequate internal controls over financial reporting at the Company.

INFORMATION TECHNOLOGY

Cyber security and Information governance

To mitigate data security and cyber risks, OHL follows comprehensive IT policies and procedures, including ISO 27001, GDPR, and PCI compliance. Our comprehensive enterprise risk management framework identifies security risks, and the Board and senior management regularly monitor the information security landscape. Third party audits are conducted and recommendations are implemented to ensure policies and processes are secure. Cyber security and Information Governance Advanced technology, such as firewalls, web filtering tools and VPN, protect OHLs hotels and corporate offices. As we embrace digitalisation across more and more of our functions, we acknowledge that the opportunities created are fraught with risk and need vigilant oversight. We are consistently strengthening our IT processes, IT security and governance measures to ensure business continuity is maintained and digitalisation is leveraged fully for business benefit.

Digitalisation

The Company, in conjunction with IHCL is strategically embracing cutting-edge technology and cloud-based solutions to enhance operational excellence. It is focused on not only delivering a superlative customer experience, but also enable its employees towards being effective and efficient.

The following digital initiatives have been launched with an objective to provide seamless, contactless and improved experiences to our customers.

IRA - Chatbot

The IHCL Response Assistant (IRA) is a powerful AI-powered Chatbot that streamlines our operations and improves the experience of our guests. Accessible 24/7 it enables customers to quickly and easily book rooms without having to go through the entire website or contact customer service via telephone.

Tata Neu

Taj InnerCircle programme, one of the most rewarding and awarded loyalty programmes, has migrated into Tata Neu, an exciting platform that brings together multiple Tata brands into one powerful app. We leverage this platforms extensive reach to enhance our digital footprint, cater to evolving customer preferences, and reward our loyal members with exceptional privileges and savings, allowing them to Earn & Redeem across multiple brands.

Our member campaigns are meticulously crafted to engage and delight our NeuPass members, leveraging a multi-channel approach to ensure maximum reach and impact. Through a combination of digital platforms, social media, email marketing and in-app notifications, we deliver compelling loyalty-related campaigns that highlight the exclusive benefits and rewards available to our members.

Celebrating the joy of being a NeuPass member, we have continually enhanced the rewards and benefits offered through the program. Members enjoy an array of exclusive privileges, including priority bookings, special discounts and access to unique events and experiences. These initiatives have significantly strengthened customer loyalty and increased the frequency of their interactions with us, fostering a more connected and committed member base.

Gen AI: Streamlining HR Interactions

Gen AI Virtual Assistant on myTAJ mobile app is more than just technology; its a commitment to human connection and genuine care. Its a pioneering approach to employee engagement and experiences in the digital age. The Virtual Assistant provides instant assistance regarding the policies, benefits, leaves, etc. to employees. It addresses on an average 1,500 queries each month and 18,000 per year, saving HR and employees valuable time, thus allowing HR teams to focus on strategic initiatives.

Qmin

The Qmin brand, IHCLs extensive digital food delivery platform is now a multi-format F&B brand offering seamless food delivery and highest standard of service. The Qmin App allows customers to savour a wide variety of authentic culinary delights from the comfort of their home. Ranging from comfort food, multi-cuisine menus to corporate celebrations, the Qmin App presents a whole bunch of culinary options to its customers.

I-ZEST: Zero-Touch Service Transformation

I-ZEST has been implemented to execute safe operations and ensure the safety of our guests and associates. I-ZESTs digital features include zero-touch check-ins and check-outs, digital invoicing, online payment options and QR codes for digital menus in restaurants. These digital enhancements span guest experiences, from pre-arrival to departure, offering zero-to minimal touch options through innovative facilities.

ENVIRONMENT, HEALTH AND SAFETY

We are committed towards operating in an environmentally responsible manner while catering to the interests of our diverse stakeholders. Over the years, we have consistently endeavoured to save on energy and switch over to green energy sources at all our properties. The Company utilises power from renewable energy sources, which not only helps in reducing the carbon footprint, but also in optimising cost of power. We source renewable energy mainly through Power Purchase Agreements with private power producers operating in the green power sector. During FY 2023- 24, the hotels that utilise renewable energy power together used a total of 5,31,52,949 MJ, which averages to about 85% of their total power consumption. Additionally, we emphasise on reducing our energy consumption wherever possible and are building green energy infrastructure steadily.

We are eliminating single-use plastics, especially in F&B areas, introducing glass water-bottling plants, implementing biodegradable packaging and eco-friendly substitutes. We are also using waste composters across hotels to manage organic waste.

We have adopted several initiatives geared towards eradicating single-use plastic in our hotels. Organic waste is also being managed effectively by switching to glass water bottles, wooden bathroom amenities and eco-friendly items such as paper, wooden key cards and bio-compostable garbage bags.

Waste management is an integral part of managements endeavour. Your Company promotes waste reduction, as well as segregation and recycling. The Hotel units either process waste using onsite waste treatment plants or engages certified vendors to promptly collect the waste for further processing. All biodegradable waste is composted and Initiatives are underway for doing away with single-use plastic disposables. This has prevented 70 tonnes of organic waste from going into landfills.

We manage our water resources and utility in an efficient manner, thereby ensuring there is no water shortage at any time. Water security assessment of hotels in key cities is undertaken regularly to identify water-related risks and strengthen preparedness to manage them. Rainwater harvesting and recycling of greywater by utilising onsite waste water treatment plants are some of the measures adopted for water preservation. During the year, we saved 1,24,240 KL of water through rainwater harvesting and recycling.

The Company prioritises health and safety through a comprehensive programme aligned with the revised Tata Business Excellence Model (TBEM) FY 2022-23 and Tata Group Safety Beliefs. We have implemented vehicle safety guidelines for road safety, and contractor safety standards which are applicable for third-party providers. Both freshers and employees undergo training in our safety training module. A robust health and safety management system exists in all our hotels.

The Fire and Life Safety (FLS) audits, Standard Operating Procedures (SOPs) on safety such as Safe Sewage Treatment Plant Operations, Safe Banqueting Operations, Visitors Access Control, Contractor Safety Management, Permits to Work and Personal Protective Equipment form part of the measures to improve safety

Food Safety, Hygiene and Cleanliness

The Company employs critical control points, pre-requisite programmes and operational pre-requisite programmes to mitigate food safety risks, encompassing everything from raw material reception to final food service. These measures are tailored to each hotels specific operational needs and are complemented by IHCLs enterprise-level controls for high-risk factors. We further ensure food production safety by assigning specific zones to our personnel, mitigating contamination risks. The annual Taj Positive Assurance Model (TPAM) audit, our internal audit process, rigorously assesses food, fire, electrical and security safety, incorporating risk controls and ensuring legal compliance. Adherence to FSSAI Regulations is strict, with updates swiftly communicated across properties to align with the latest Food Safety Standards.

Human capital

The Human Resource Policies and Practices of your Company are aligned with the OHL Group HR Policies and Practices. We recognise the importance of aligning our systems and processes with the scale of our organisations growth. We continuously enhance our people-related processes, ensuring they are calibrated to the organisations vision and effectively support our people imperatives.

Employee Wellbeing

Various education and sensitization workshops are conducted virtually and in-person by experts in the given domain. Mental and Emotional, Physical and Financial wellness are addressed as part of employee wellness programme. These programmes enable more emphasis on individual wellness than just physical wellness of employees.

Talent management

We understand that it is imperative for our people to grow and adapt with the changing times. Our key performance tools were reworked and streamlined with the intention of ensuring that they serve as effective enablers for people development and keep our talent management strategy abreast with the times.

Career Conversations

Through DiLOG, we facilitate structured and targeted conversations with our workforce, integrating constructive feedback to establish development plans. Accessible via the myTAJ web portal and mobile application, DiLOG, establishes a direct channel of communication between managers and their teams.

Talent Programmes

We identify and groom leaders to build a leadership pipeline within each hotel through diverse processes and comprehensive development programmes.

The key processes are:

• Leadership Assessment and Development Centre (LADC) aimed at identifying and developing future General Managers.

• Talent Identification and Development Initiative (TIDI) focused on identifying and nurturing high-potential Heads of Department (HoDs).

Performance evaluation

Our performance management system drives performance through teamwork, integrating both financial and non-financial metrics. Customer satisfaction stands as a cornerstone within the performance scorecard, enabling us to monitor organisational growth factors such as operational excellence, safety, employee experience, diversity and inclusion. Standardised performance targets ensure alignment among hotel executives with common goals, while performance reviews assess if individual leadership behaviours resonate with IHCLs Leadership Code.

Employee recognition

We believe in recognising and appreciating our employees for their relentless efforts and dedication towards our organisation.

The Difference you make is an OHL led program that recognises

• Managers and leaders who demonstrate inspirational leadership, reinforcing our Leadership Code.

• Special Thanks and Recognition Scheme (STARS) is the flagship recognition program which enables hotel employees to earn points through guest compliments, peer appreciation and suggestion implementation. The recently introduced STARS Plus programme helps third party contract employees across all levels gain recognition for their efforts.

Employee learning and development

At the Company, we are committed to fostering a culture of continuous learning and growth for our valued employees. Our people management strategy emphasises continuous learning opportunities for advancement and preparedness towards the future.

To support our expanding organisation, we have streamlined our L&D function for increased efficiency. The Companys strategic priorities determine Training Themes. Our training initiatives are tailored to specific needs that are aligned with the organisations strategy. These also consider stakeholder feedback, competency mapping and data driven training needs assessment. The Corporate and Hotel training calendars are curated to address core identified themes.

The Companys L&D training hubs are spread across the country and cater to each individual areas training needs. The hubs are responsible for implementing the area-level strategic and tactical needs which includes customized, hotel-specific requirements. These trainings run on a quarterly calendar. The sessions are delivered using the hybrid approach of virtual and in-person sessions. The Companys Corporate L&D manages the long-term training strategy implementation which is primarily focussed on building the talent pipeline for future capabilities.

Risk governance and management

The process of risk governance and management involves identification of risks, framing an adequate response to manage and mitigate the risks identified, followed by constant monitoring and review of the risk management process. The Risk Management Committee of the Board is responsible for developing and monitoring the risk management policies and also oversees how management monitors compliance with the Companys risk management policies and procedures. Group Internal Audit Department facilitates identification of risks and mitigants.

Key risks and mitigation measures.

Type of risks	Mitigation measures
Cyber vulnerabilities	• Cyber Risk assessment conducted
	• Vulnerability Assessment & Penetration Testing (VAPT)
Impact of climate change on organisation	• Continuous scanning of the environment
	• Use of renewable / alternate energy
	• Adherence to the various norms and alternate measures to reduce release of pollutants
	• ESG initiatives
Geo-political Risk & Economic Recession	• Awareness & scanning of environment
	• Strategic initiatives
Inflation resulting in increased fuel and commodity pricing	• Development of alternate energy sources, suppliers and equipment
	• Locally sourced raw materials
	• Productivity & efficiency initiatives
Data governance - Quality of data, democratisation of data analytics, etc	• Data Lake in advanced stages of implementation
Business interruption on account of natural calamities	• Learnings from recent pandemic to assist in augmenting performance
	• New initiatives continue
Impact on employee and customer well being	• Employee communication & counselling
	• Customer communication
	• Hygiene & safety audits
Abuse of social media and other media by guest / staff / stakeholders	• Continuous monitoring of comments in social media and timely responses provided
	• All inclusive sustainable business model, involving all stakeholders
Data privacy - GDPR, CCPA, etc - leading to penalties and litigation	• Strengthening of policies and processes
	• Data Processor/Controller agreements with all relevant vendors
	• Internal Audits, Continuous monitoring
Loss of critical / sensitive data due to leakage / loss / hacking	• Encryption, Firewalls, Policies, Endpoint protection, including audits of IT and automated controls, and processes
	• Operation Management Tool in place
	• Backup and Disaster Recovery Site
	• Running 24X7 SOC
	• Creating awareness amongst associates

MANAGEMENT DISCUSSION AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITIONS

The Annual Report contains financial statements of the Company, both on a standalone and consolidated basis. An analysis of the financial affairs is discussed below under summarised headings.

RESULTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2024 Standalone Financial Results:

Particulars	Year ended
	March 31, 2024	March 31, 2023
Income
Revenue from Operations	39,103.47	39,280.71
Other Income	1,797.38	1,515.71
Total Income	40,900.85	40,796.42
Expenditure
Food and Beverages Consumed	3,974.26	3,895.94
Employee benefit expenses and payment to contractors	8,690.86	8,143.27
Depreciation and Amortisation Expense	2,404.24	2,265.13
Other operating and general expenses	16,808.27	16,150.97
Total Expenditure	31,877.63	30,455.31
Profit/(Loss) Before Finance Costs and Tax	9023.22	10,341.11
Finance Costs	1,715.86	2,012.20
Profit/(Loss) Before Tax	7,307.36	8,328.91
Tax Expense/(Benefit)	1,773.48	2,481.58
Profit/(Loss) After Tax	5,533.88	5,847.33

An analysis of major items of financial statements are given below:

a) Income

Summary of total income is provided in the table below:

Particulars	Year Ended		% Change
	March 31, 2024	March 31, 2023
Room Income	19,953.17	20,009.67	-
Food, Beverage & Banqueting Income	16,646.24	16,804.88	(1)
Other Operating Income	2,504.06	2,466.16	2
Non-operating Income	1,797.38	1,515.71	19
Total Income	40,900.85	40,796.42	-
Statistical information
Average rate per room (^)	10,155	9,904	3
Occupancy (%)	71	69	3

i) Room income for the year was marginally lower compared to previous year which is attributed to temporary closure of Taj Malabar Resort & Spa from 1^st Sept 2023 on account of renovations. Room revenue increased by 13% compared to last year excluding Taj Malabar Resorts & Spa which was undergoing renovations. Business increased generally across all customer segments and primarily from corporate customers, transient customers, groups and airlines. Average occupancy stood at 71% with an average rate per room (ARR) of ^10,155.

ii) Food, Beverage and Banqueting income for the year was lower by 1% from the previous year on account of renovation of Taj Malabar Resorts & Spa. Food, Beverage and Banqueting income increased 10% compared to previous year without considering Taj Malabar Resorts & Spa.

iii) Other operating income increased by 2% over the previous year. It primarily comprises income from membership fees, rentals, spa and health club, laundry, transportation, telephone and business centre rents among others. Transportation income, laundry income, spa and health club income increased by 4% over the previous year due to improvement in occupancies.

iv) Non-Operating Income increased to ^1,797.38 lakhs in the current year from ^1,515.71 lakhs in the previous year. Non-Operating Income increased due to dividend income of ^689.44 lakhs including dividend from Subsidiary and Associates (T 444.10 lakhs in the previous year).

b) Expenditure

Total expenses increased to ^31,877.63 lakhs during the current year from ^30,455.31 lakhs in the previous year. Total expenditure increased by 5% mainly due to increase in Employee benefit expenses and other fixed cost including renovation writeoff to upkeep and upgrade our hotels. Variances under each expenditure head are explained below:

i) Food and Beverages Consumed

Particulars	March 31, 2024	March 31, 2023	% Change
Food and beverages consumed	3,974.26	3,895.94	( 2 )
Food and beverages consumed has shown an increase by 2%, which is variable in nature, increased on account of menu upgradation to provide better value and experience to our guests.

Employee Benefit Expenses and Payment to Contractors (T Lakhs)

Particulars	March 31, 2024	March 31, 2023	% Change
Employee benefit expenses and payment to contractors	8,690.86	8,143.27	(7)

Employee benefit expenses and payments to contractors increased by 7% from ^8,143.27 Lakhs in the previous year to ^8,690.86 Lakhs in the current year. The Company continues to remain focussed on multi-skilling, clustering and shared service approaches thereby optimising manpower across its hotels and brands.

iii) Depreciation and Amortisation Expenses

Particulars	March 31, 2024	March 31, 2023	% Change
Depreciation and Amortisation Expenses	2,404.24	2,265.13	(6)
Depreciation and amortisation costs for the year increased by 6%.

iv) Other Expenditure (^ Lakhs)

Particulars	March 31, 2024	March 31, 2023	% Change
Other Operating Expenses	10,784.05	10,730.46	(1)
General expenses	6,024.22	5,420.51	(11)
Total	16,808.27	16,150.97	(4)

Other Expenditure increased by 4% from ^ 16,150.97 Lakhs to ^ 16,808.27 Lakhs in the current year.

Other operating expenses increased from ^ 10,730.46 Lakhs in the previous year to ^ 10,784.05 Lakhs, an increase of ^ 53.59 Lakhs.

General expenses increased from ^ 5,420.51 Lakhs in the previous year to ^ 6,024.22 Lakhs, an increase of ^ 603.71 Lakhs. Primary reasons for such increase is attributed to the upscale in variable license costs linked to turnover of the said properties. The Company also engaged in selectively increasing its advertising and promotion activities from a judicious increase in spends on campaigns relevant to consumer sentiment and emerging and re-imagined products.

v) Finance Costs

Particulars	March 31, 2024	March 31, 2023	% Change
Finance Costs	1,715.86	2,012.20	15

Finance Costs for the current year at ^1,715.86 Lakhs was less than the preceding year by ^ 296.34 Lakhs. Finance cost includes interest cost on lease liabilities of ^280.93 Lakhs in the current financial year in comparison to ^207.75 lakhs in the previous financial year. Interest expense has reduced in line with the repayment of loans.

vi) Tax Expense

Tax expense for the year was ^ 1,773.48 lakhs as against ^ 2,481.58 lakhs in the previous year.

vii) Profit/(Loss) after Tax

During the current year, the Company generated a profit after tax of ^ 5,533.88 lakhs compared to a profit of ^ 5,847.33 lakhs in the previous year.

c) Gross Debt, Net Debt and Liquidity

Particulars	March 31, 2024	March 31, 2023	% Change
Gross Debt	16,973.09	18,315.01	7
Less: Cash and cash equivalents*	427.11	886.23	(52)
Less: Current Investments	0	0	0
Net Debt/(Net Cash)	16,545.98	17,428.78	5

During the year, the Gross Debt decreased by ^ 1,341.92 lakhs. Cash generated from operating activities, liquid funds and fixed deposits were utilised for repayment of debt. The Company met all its interest and principal repayment obligations in a timely manner during the year.

d) Cash Flow

	Year Ended
Particulars	March 31, 2024	March 31, 2023
Net Cash from / (used for) operating activities	8,902.93	10,194.30
Net Cash from / (used for) investing activities	(5,318.88)	(670.14)
Net Cash from / (used for) financing activities	(4,043.17)	(10,467.05)
Net Increase/(Decrease) in cash and cash equivalents	(459.12)	(942.89)

Operating Activities

Net cash generated from operating activities during the year was ^ 8,902.93 Lakhs as compared to net cash generated from operating activities in the previous year of ^ 10,194.30 Lakhs. This is due to increase in General & Operating Expenditure in the current year and due to temporary closure of Malabar unit on account of renovation.

Investing Activities

During the year, net cash used for investing activities amounted to t 5,318.88 lakhs, compared to a net use of t 670.14 lakhs in the previous year. During the year, the Companys outlay on capital expenditure was t 7,541.78 lakhs, which was mainly on account of renovation of Taj Malabar Resort & Spa and Gateway coonoor - IHCL SeleQtions .

Financing Activities

During the year, net cash used for financing activities was t 4,043.17 lakhs as against cash outflow of t10,467.05 lakhs in the previous year. The Company repaid borrowings of t1,352.15 lakhs (net) during the current year.

Key Financial Ratios for Standalone Financials

Key financial ratios and their definitions are given below:

	Year Ended
Particulars	March 31, 2024
Current ratio (in times)	1.01	1.33
Debt - Equity ratio (in times)	0.44	0.57
Trade receivables turnover ratio (in times)	24.32	24.50
Operating profit margin (in %)	24.63	28.23
Net profit margin (in %)	13.53	14.33
Inventory turnover ratio	NA	NA
Return on capital employed (in %)	16.04	19.29
Return on equity (in %)	15.62	20.23
Debt Service Coverage Ratio (in times)	2.55	0.95
Interest Service Coverage Ratio (in times)	7.21	6.95

(a) Inventory turnover ratio has not been presented since the Company holds inventory for consumption in the service of food and beverages and the proportion of such inventory is insignificant to Total assets.

(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 definition of other ratios is given in Note 48 of the Notes to Standalone Financial Statements.

The Companys capital structure is healthier as its ratio of Debt to Equity is 0.44 times as compared to 0.57 times in the previous year. Current ratio declined to 1.01 times due to decrease in Bank balances for paying the long-term loans as well as spent on capital expenditure. Trade Receivables turnover ratio decreased to 24 times in the current year from 25 in the previous year.

Consolidated Financials

The Consolidated Financial Statements comprise the Company and its Subsidiaries (referred collectively as the Group) and the Groups interest in Associates and Joint Ventures prepared in accordance with Ind AS, as applicable to the Company. The Consolidated Statements include the financial position of subsidiaries on a line-by-line basis and for Joint Ventures and Associates by applying equity method of accounting.

Consolidated Results

The following table sets forth the Consolidated Financial results for year ended March 31, 2024.

Particulars	Year Ended
	March 31, 2024	March 31, 2023
Income
Revenue from Operations	39,316.15	39,451.38
Other Income	1,117.86	1,076.61
Total Income	40,434.01	40,527.99
Expenditure
Food and Beverages Consumed	3,974.26	3,895.94
Employee Benefits Expenses	8,690.86	8,143.27
Depreciation and Amortisation Expense	2,404.24	2,265.13
Other Expenditure	16,869.17	16,180.77
Total Expenditure	31,938.52	30,485.11
Profit/(Loss) before Finance Costs and Tax	8,495.49	10,042.88
Finance Costs	1,715.86	2,012.20
Profit/(Loss) before Tax, Exceptional Items and share of profit of equity accounted investees	6,779.62	8,030.68
Exceptional Items	-	-
Profit/Loss) before Tax, before share of profit of equity accounted investees and non-Controlling interests	6,779.62	8,030.68
Tax Expense/(benefit)	1,773.48	2,481.58
Profit/(Loss) after Tax, before share of profit of equity accounted investees and non-Controlling interests	5,006.14	5,549.10
Add: Share of Profit/(Loss) of Associates and Joint Ventures (net of tax)	(40.90)	(122.87)
Profit/(Loss) for the year	4,965.24	5,426.23
Less: Non-Controlling interest in Subsidiaries	-	-
Profit/(Loss) after Tax attributable to Owners of the Company	4,965.24	5,426.23

a) Income

Revenue from operations was marginally lower compared to previous year from t 39,451.38 Lakhs to t 39,316.15 Lakhs.

b) Expenditure

Total Expenditure increased by 4.77% from t 30,485.11 Lakhs to t 31,938.52 lakhs.

c) Finance Costs

Finance Costs for the current year at t 1,715.86 Lakhs was less than the preceding year by t 296.34 Lakhs. Finance cost includes interest cost on lease liabilities of t 280.93 Lakhs in the current financial year in comparison to t 207.75 Lakhs in the previous financial year.

d) Profit/(Loss) after Tax attributable to Owners of the Company

Profit after tax, non-controlling interest and share of profit of equity accounted investees for the year was t 4,965.24 Lakhs as compared to t 5,426.23 Lakhs in the previous year.

e) Consolidated Cash Flow

The following table sets forth selected items from the consolidated cash flow statements:

Particulars	Year Ended
	March 31, 2024	March 31, 2023
Net Cash from/ (used in) operating activities	9,055.37	10,379.52
Net Cash from/(used) in investing activities	(5,683.80)	(1,020.99)
Net Cash from/(used) in financing activities	(4,043.18)	(10,467.05)
Net Increase/(Decrease) in cash and cash equivalents	(671.61)	(1,108.52)

Operating Activities

Net cash generated from operating activities for the current year was t 9,055.37 Lakhs as against t 10,379.52 Lakhs generated in the previous year.

This is due to increase in General & Operating Expenditure in the current year and due to temporary closure of Malabar unit for renovation.

Investing Activities

During the year, net cash used for investing activities amounted to t 5,683.80 Lakhs, compared to a net use of t 1,020.99 Lakhs in the previous year.

Financing Activities

During the year, net cash used for financing activities was t 4,043.18 lakhs as against cash inflow of t 10,467.05 Lakhs in the previous year.

Key Financial Ratios for Consolidated Financials

Key financial ratios for the Consolidated Financial Statements are given below. The definitions of the ratios are the same as given in Note 46 of the Notes to the Standalone Financial Statements.

Particulars	Year Ended
	March 31, 2024	March 31, 2023
Current ratio (in times)	1.06	1.41
Debt - Equity ratio (in times)	0.27	0.34
Trade receivables turnover ratio (in days)	24.14	23.99
Operating profit margin (in %)	24.88	28.47
Net profit margin (in %)	12.38	13.69
Return on capital employed (in %)	10.80	13.63
Return on equity (in %)	8.58	11.09
Debt Service Coverage Ratio (in times)	2.43	0.93
Interest Service Coverage Ratio (in times)	6.87	6.78
Inventory turnover ratio	NA	NA

Inventory turnover ratio has not been presented since the Company holds inventory for consumption in the service of food and beverages and the proportion of such inventory is insignificant to Total assets.