Phoenix Township Ltd Management Discussions

This Management Discussion and Analysis Report (MDAR), presents an overview of the operational and financial performance of the Company during 2022-2023. It also highlights our strategy, and discusses important initiatives taken by itto achieve its growth and performance objectives.

GLOBAL ECONOMY OVERVIEW:

The global economy witnessed a recovery in 2022 following two years of a pandemic-inflicted environment. The International Monetary Fund (IMF) in their report of April 2023 estimates growth in global Real Gross Domestic Product (GDP) for 2022 to increase by 3.4% on the back of a 6.3% increase in 2021. A higher-than-usual growth in 2021 was due to a low- base effect of 2020 as a result of the global pandemic during which GDP contracted by 2.8%.2022 saw inflationary trends across the globe, particularly in developed economies of United States of America (US),United Kingdom (UK) and Europe, which resulted in tightermonetary interventions by central banks which in tumstifled growth. Continuing invasion of Ukraine by the Russian Federation disrupted supply chains causing an increase infood, commodity and energy prices. Finally, a resurgence of COVID-19 in China weighed on the global economy in2022.

IMF forecasts global growth for 2023 to decelerate to2.8% from 3.4% in 2022 before rising to 3.0% in 2024. This forecast is lower than expected growth rates a year ago. The economic slowdown in 2023 is concentrated in advance deconomies especially the Euro Area and UK where growth isexpected to fall to 0.8% and -0.3% in 2023. A lower growth in 2023 is attributable to prevailing tight monetary and financial conditions, recent signs of stress in the banking system, rising

debt levels in certain countries including lower andmiddle- income countries, rising geoeconomic fragmentation, stickier than expected inflation and no signs of truce in the Russia- Ukraine war. In contrast, emerging and developing economies are showing stronger economic prospects than advanced economies. In the medium-term, the IMF forecasts global inflation to fall to 7.0% in 2023 and to 4.9% in 2024on the back of gradual softening of interest rates, unwindingsupply chain disruptions and a fully reopened Chinese economy putting the global economy back on the growth track. (Source: IMF - World Economic Outlook Update, April 2023). The World Banks Global Economic Prospects report of January 2023 was more conservative in its estimates byfore casting global economic output to decelerate sharply tol .7% in 2023 and there after grow by 2.7% in2024.

Among the advanced economies, US grew by 2.1% in2022 and is estimated to grow at a slower pace by 1.6% in 2023 and 1.1 % in 2024. The UK grew by 4.0% in 2022 but is estimated to contract by 0.3% in 2023 and there after growby 1% in 2024. UKs contraction is mainly due to tighterfiscal and monetary policies, financial conditions and high energy prices. The Chinese economy grew by 3.0% in 2022 and is estimated to grow by 5.2% in 2023 and 4.5% in 2024.Chinas economy has been opening up since the withdrawal of its zero-tolerance policy on Covid-19. It reported a good first quarter growth of 4.5% backed by growth in exports, infrastructure investment as well as are bound in retail consumption and property prices. Indias growth rate was6.8% in 2022 and is estimated to grow by 5.9% in 2023 and 6.3% in 2024 supported by resilient domestic demand. The economies of Maldives and South Africa grew by 12.3% and 2.0% respectively while Sri Lanka contracted by 8.7% in 2022. In 2023 Maldives and South Africa are estimated to grow by 7.2% and 0.1% respectively while Sri Lanka is projected to contract by 3.0%. (Source: IMF - WorldEconomic Outlook, April2023).

INDIAN ECONOMY OVERVIEW:

India is now the fastest growing, major economy in the world. The First Advance Estimates of National Income released by the National Statistical Office (NSO) of the Government of India in January 2023 estimates Indias GDP to have grown by 7.0% in FY 2022-23 following a growth of 8.7% in FY 2021-22. Total Consumption grew by 7.0% in FY 2022-23 mainly due to private consumption. Growth in exports for FY 2022-23 seems to have plateaued at 12.5% while Imports grew by 20.9% in FY 2022-23. By sectors, agriculture grew by 3.5% during FY 2022-23 after a growth of 3.0% in FY 2021-22. Mining grew by 2.4%, manufacturing by 1.6% and construction by 9.1% while electricitv, gaswater sutrolv and other utilities services grew bv

9.0% in FY 2022-23. Services sector exhibited the strongest growth in FY 2022-23 at 9.1%. Within services, trade, hotels, transport, communication and broad casting related services constituting about a third of overall services, grew by 13.7%. Indias service export shave nearly doubled in a decade to USS 322.72 billion for FY2022-23 according to provisional data of the Ministry of Commerce. Indias foreign currency reserves stood at USS 578.45 billion as of March 31, 2023 covering approximately 9 months of imports due to timely interventions of the Reserve Bank of India (RBI). The consensus of GDP growth for FY 2022-23 was in the range of 6.5% to 7.0%. (Source: India Economic Survey 2022-23 January 2023 and National Statistical Office estimates)

Indias economic recovery from the pandemic exhibited a K- Shaped recovery where certain sectors like information technology, e-Commerce and financial services registered healthy recoveries while other sectors such as retail trade and consumer discretionary were highly impacted. Travel and hospitality remained beneficiaries of such recovery. Indias service exports have risen at a staggering pace since the prepandemic period. Service exports have increased by more than US$60 billion per year as India gains global market share. Exports are not only of Information Technology services but also professional management and consultancy, research and development and expanding Global Capability Centres.

This growth is expected to bring in higher employment, higher disposable income and thus a higher propensity to spend by white-collar people working in such sectors. This is an important factor in making economic growth broad based and inclusive. HSBCs Economic Research believes that there is a growth relay at play. It reported - "The formal sector drove growth from the pandemic lows and is now passing the baton to the informal sector, which was weak for several years but has started to grow across the rural and urban sectors. As a result, for now, overall growth remainsstable." (HSBCs Global Economic Research, March and April 2023)The outlook for FY 2023-24 is optimistic. Retail inflationebbed out to 5.6% in March 2023 from a peak of 7.79% in April 2022 and is expected to moderate to 5.2%. Coreinflation which remained above 6% for the year eased t5.8% in March 2023. Among the high frequency indicators, direct and indirect tax collection has shown strong momentum, bank balance sheets are strong, adequately capitalised and credit off take during the year was high estsince FY 2011-12. RBI paused increase in interest rates in April, 2023 after a 250 basis points increase during FY 2022-23 citing reasons of resilient economic activity and expected moderation in inflation. The Indian Rupee is stable, the Current Account

Deficit is expected to remain moderate andconsumer sentiment is high. (Source: RBI Monetary Policy, April 2023, Revised Estimates-Ministry of Finance, April2023).

Service exports are burgeoning. Indias investments in digital are now beginning to show results. Events such as Indias G20 Presidency are adding to its visibility on the global stage. After factoring the downside risks of domestic inflation, slowing global growth and geopolitical situation, India is expected to grow at the fastest pace among large economies at a rate ranging between 6.0% to 6.5% in FY2023-24.

INDUSTRY OVERVIEW:

GLOBAL INDUSTRYO VERVIE W:

Global tourism is steadily improving towards pre- pandemiclevels consequent to the relaxation of travel restriction sacross countries and increase in demand for travel. Tourist arrivals internationally for 2022 were 917 million, double that of

2021 but recovering to 63% of pre-pandemic levels of 2019, according to data from the United Nations World Tourism Organization (UNWTO). Europe with the largest share of global inbound tourism registered a 92% increase over 2021 to reach nearly 80% of pre-pandemic levels. The Middle East had the strongest relative increase among all regions due to large international events such as Expo 2020 Dubai and the FIFA World Cup in Qatar. Even with a 241% increase in tourist arrivals in

2022 over 2021, Asia and the Pacific remained the weakest in terms reaching prepandemic levels. However, within the region, international tourist arrivals in South Asia at 25.5 million, were higher byl58% over 2021 and achieved 76% of pre-pandemic levels (Source: UNWTO, Barometer January 2023). According to the S&P Global Sector Purchasing Managers Index, the Tourism and Recreation sector led a pick-up in global business activity amongst all sectors recording its sharpestpace since May, 2022. Transportation recorded the third fastest growth behind software services (Source: S&P Global Sector PMI April 2023).

INDIAN IN D U ST R YO V F RVIF W:

FY 2022-23 continued to be a year of strong recovery in the Indian travel and tourism industry. Restrictions on flights were relaxed in most countries into and from India. Travel restrictions, documentation and certifications were also progressively relaxed for travel within India. Consequently, demand for accommodation grew significantly, mainlyarising from domestic leisure travel, weddings, social events, conferences and resumption of business travel within the country. Foreign tourist

arrivals were 6.19 million for the calendar year 2022 incomparison with 1.52 millionin2021.

COMPANY OVERVIEW:

The Company believes that there is a significant potential for growth of hospitability business in India. During the year, it has taken several measures to tap this opportunity. As most of its addressable market is very active online, the Company has made a conscious effort to focus on digital, both as a channel for future growth and to build its brand. As a result, response times to customer leads, queries or online mentions are being cut drastically. The Companys results of operations are primarily affected by room revenue and food and beverage revenue in its hotel. Room revenue is dependent upon the number of hotel rooms occupied by guests and the rate at which such guests can be charged.

The Company and its hotels have taken various initiatives to protect the health and safety of guests and employees. They have been implementing and adhered to all precautions and guidelines issued by the World Health Organization (WHO).

DISCUSSION ON OPERATIONAL PERFORMANCE & FINANCE HIGHLIGHTS:

Companys performance recovery resumed early in 2022, but April seemed to be the turning point with the country outpacing pre-pandemic comparable in occupancy and average daily rate. Leisure markets have continued to lead recovery, but business travel is also back in the country post-Omicron. The operations of the company were likely affected due to the global pandemic crisis Covid-19 in financial year 2022-2023 there will be a gradual improvement in business conditions and the foreign tourists.

During the year under consideration Your Company recorded a turnover of Rs. 2623.35/- Lacs as against Rs.1608.21 Lacs in previous financial year. The Company registered profit before tax (PBT) of Rs. 99.25/- Lacs for the financial year ended 31 st March, 2023 against a profit before tax (PBT) of Rs. 56.59/- Lacs in the previous financial year and the profit after tax (PAT) for the current Financial year is Rs. 76.13/- Lacs as compared to Rs. 29.781 Lacs profit earned in the previous financial year.?

The Management is expecting growth in this sector due to remarkable recovery of the Indian hotel sector in previous year.

The hoteliers persist to adapt and innovate and take advantage of the opportunities available to them.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

Debtors Turnover: Increased by 81.17%

Inventory Turnover: Decreased by 66.12%

Interest Coverage Ratio:Decreased by 6.27%.

Current Ratio: Increased by 66.88%

Debt Equity Ratio: Increased by 23.69%

Operating Profit Margin (%): Increased by 26..28%

Net Profit Margin (%): Decreased by 98.43%

DETAILS OF CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:

There has been an increase in Net Worth by 3.22 percent for the FY23 as compared to 1.26 percent for the FY22, due to increase in return to profit of Rs. 76.13 /- Lacs for FY23 from the profit ofRs. 29.78/- Lacs for FY22.

RESORT OPERATIONS:

Efficient resort operations are central to delivering a holiday experience that meets the expectations of our customers. This encompasses three key areas: infrastructure and facilities, holiday activities, and food and beverage (F & B). The Company continued its initiative on institutionalizing post-holiday feedback as the chief mechanism to measure its success in delivering quality holiday experience to its customers and addressing their concerns. We are happy to report that the feedback scores have consistently improved during the year. Efforts are in progress to further improve the coverage of the feedback, both in terms of processes and resort location.

Previous year, our hotel operations at all the locations has been quite encouraging and done remarkable, therefore the management of the Company is expected better outcome in upcoming years.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has a proper and adequate internal control system to ensure that all the assets are safe-guarded and protected against the loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly.

The internal control is supplemented by an extensive internal audit, periodical review by the management and documented policies, guidelines and procedures. The internal control is designed to ensure that the financial and other records are reliable for preparing financial statements and other data and for maintaining accountability of assets.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES:

The Company continues to lay emphasis on developing and facilitating optimum human performance. Performance of management was the key word for the Company this year. Recruitment process has been strengthened to ensure higher competence levels. During the year, the Company successfully inducted people to meet the needs of the growing business, both from outside as well as through talent management and capability development initiatives aimed at development of existing employees. The employee strength is 156 as on 31" March, 2023.

CAUTIONARY STATEMENT

Certain statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include poor macroeconomic growth and consumer confidence, inability to add resorts and increase the inventory of room, cyclical demand and pricing in the Companys principal markets, changes in tastes and preferences, government regulations, tax regimes, economic development within India and other incidental factors.