Saj Hotels Ltd Management Discussions

RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our restated financial statements including the schedules, notes and significant accounting policies thereto for the Financial Years ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021. The restated financial statements have been derived from audited financial statements and restated in accordance with SEBI (ICDR) Regulations and Guidance Notes issued by ICAI in this respect, as described in the Examination Report of auditors dated August 28, 2024, which is included under the chapter titled "Financial Information" beginning on page 196 of this Prospectus.

This discussion contains forward-looking statements and reflects our current views with respect to future events and financial performance. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in "Forward-Looking Statements" and "Risk Factors" beginning on pages 15 and 22 respectively, of this Prospectus.

COMPANY OVERVIEW

Our Company was originally incorporated as a private limited company under the provisions of the Companies Act, 1956 pursuant to Certificate of Incorporation issued by Registrar of Companies, Maharashtra at Bombay dated February 4, 1981 with the name ‘Saj Hotels Private Limited bearing Corporate Identity Number U55101MH1981PTC023814. Our Company is in hospitality sector since the date of incorporation.

Our Company was converted from a private limited company to Public Limited Company pursuant to Special Resolution passed at the Extra-ordinary General Meeting by the shareholders of the Company on October 5, 2023 and the name of our Company was changed to ‘Saj Hotels Limited. A fresh certificate of incorporation consequent to conversion was issued on November 3, 2023 by the Registrar of Companies, Pune bearing Corporate Identity Number U55101PN1981PLC023814.

Our company is engaged in Hospitality industry. We provide a diverse portfolio of Business-to-Business (B2B), Business-to-Business-to-Customer (B2B2C) and Business-to-Customer (B2C) hospitality offerings, spanning from traditional resort accommodation to villa rentals and restaurant and bar properties. We focus on providing comprehensive services to guests, including food and beverage options, recreational facilities and event hosting capabilities, reflecting a commitment to ensuring a memorable experience for our visitors.

We offer a range of accommodation options across various destinations, each tailored to provide comfort and convenience. Our resorts have well-appointed rooms and suites, complemented by a variety of dining venues including restaurants, bars and in-room dining services. Our dedicated team provides personalized concierge assistance, access to rejuvenating spa facilities, and a host of recreational activities to ensure a memorable stay for every visitor.

Our resorts serve as versatile event venues, equipped to host a wide array of gatherings including conferences, weddings, and social events. With comprehensive event planning and management services, we ensure seamless execution and unforgettable experiences for our clients and their guests.

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST AUDITED PERIOD

The Directors of our Company confirm that:

Since the date of the last audited period i.e., March 31, 2024, as disclosed in this Prospectus, there are no circumstances that materially or adversely affect or are likely to affect the trading or profitability of our Company, the value of its assets or its ability to pay its material liabilities, within the next twelve months, except as follows:

1. The Board of the Company has approved to raise funds through Initial Public Offering in the board meeting held on April 9, 2024.

2. The members of the Company approved proposal of Board of Directors to raise funds through initial public offering in the EGM held on May 2, 2024.

3. The Board of Directors of the company in accordance with the provision of companies act 2013, has constituted Audit

Committee, Nomination and Remuneration committee, Stakeholders Relationship Committee at the Board Meeting held on November 23, 2023, further, pursuant to resignation of Mayoor Natubhai Amin, Independent Director of the Company, the Audit Committee and Nomination and Remuneration committee has been re-constituted at the Board Meeting held on April 9, 2024.

Data as certified by Statutory Auditor, Dhirubhai Shah & Co LLP, Chartered Accountants, by way of their certificate dated September 12, 2024 UDIN 24140594BKAKHA4536.

FACTORS AFFECTING THE RESULTS OF OUR OPERATIONS

Our business is subject to various risks and uncertainties.

The results of operations and financial condition are affected by a number of important factors including:

Competition from new and existing players

Seasonality and cyclicality of business

Changes in consumer demand

Changes in laws, government regulations and policies

Competition from new and existing players

We operate in a highly competitive industry and our success is dependent on our ability to compete on various factors such as attractiveness and quality of our offerings, quality of accommodation, food and beverage, location, service levels, and amenities, together with the brand reputation of our brand licensors. We may also have to compete with any new resort properties that commence operation in the markets in which we operate or intend to commence operations. In addition, our ability to capture the expected growth in tourism and the hotel industry, and respond to the consequent competition in the hotel industry, will be critical to our results of operations in the future.

Seasonality and cyclicality of business

The hospitality industry is seasonal in nature. The periods during which our properties experience higher revenues vary from property to property, depending principally upon location and the guest base served. Our revenues are higher during the monsoon and winter seasons. Seasonality affects leisure travel and the MICE segment (meetings, incentives, conferences and events); however, business travel is generally more consistent throughout the year. Seasonality can be expected to cause quarterly fluctuations in our revenue, profit margins and earnings.

The hospitality industry is cyclical and demand generally follows, on a lagged basis, key macroeconomic indicators. There is a history of increase and decrease in demand for hotel rooms, in occupancy levels and in room rates realized by hotels through economic cycles. The combination of changes in economic conditions and in the supply of available rooms can result in significant volatility in results of resort properties. The costs of running a property tend to be more fixed than variable. These expenses include employee costs, utilities and insurance. When demand for our rooms decrease, due to high operating leverage, the resulting decline in our revenues can have an adverse effect on our net cash flow, margins and profits. This effect can be especially pronounced during periods of economic contraction or slow economic growth. Similarly in conditions of economic upturns, when the demand for hotel rooms increases, due to high operating leverage, our net cash flow, margins and profits may increase disproportionately to the increase in revenues.

For risk associated with competition, refer risk factor number 62 on page 44 of this Prospectus.

Changes in consumer demand

Economic growth drives business and leisure travel as well as conferences, banquets and events which impact the success of our operations. In addition, the hotel industry and the demand for rooms is also affected by travel advisories, worldwide health concerns, geo-political developments, natural disasters in the region and inflation. Declines in consumer demand due to adverse general economic conditions, risks affecting or reducing travel patterns, lower consumer confidence and adverse political conditions can lower the revenues and profitability of our resorts. Further, adverse general economic conditions may negatively impact the demand for, and occupancies in, our commercial and retail projects. As a result, changes in consumer demand can subject and have subjected our revenues to significant volatility.

Changes in laws, government regulations and policies

Our business is subject to significant governmental regulation, particularly in relation to safety, health, environment, real estate and excise and labour laws. In connection with our ownership of resorts and development of properties, we are also subject to a variety of national, state and local laws and regulations relating to environmental laws. Under some of these laws, a current or former owner or operator of real estate property may be held liable for the costs of investigating or remediating hazardous or toxic substances or wastes on, under or in such real property, as well as third-party sites where the owner or operator sent wastes for disposal. The costs of investigating or remediating contamination, at our properties or at properties where we sent substances or wastes for disposal, may be substantial. We are also subject to laws and regulations governing relationships with employees in such areas as minimum wages and maximum working hours, overtime, working conditions, hiring and termination of employees, contract labour and work permits and maintenance of regulatory/ statutory records. For instance, the Government of India has introduced (i) the Code on Wages, 2019, (ii) the Code on Social Security, 2020, (iii) the Occupational Safety, Health and Working Conditions Code, 2020, and (iv) Industrial Relations Code, 2020 (collectively, the "Codes"). The aim of the Codes is to consolidate, subsume and replace various existing central labour legislation. We are also subject to regulations relating to the sale and service of food, alcoholic and non-alcoholic beverages and hosting of events and weddings at our resort properties. These regulations and policies can be extensive and amended periodically. The extensive regulatory structure within which we operate may constrain our flexibility to respond to market conditions, competition or changes in our cost structure, which could have an adverse effect on our business and prospects.

For risk associated with obtaining and renewing registrations, licenses and permits, refer risk factor number 12 on page 28 of this Prospectus.

Other factors affecting our business are as follows:

1. General economic and business conditions in the markets in which we operate and in the local, regional, national, and international economies;

2. Failure to successfully upgrade our product portfolio, from time to time;

3. Any change in government policies resulting in increases in taxes payable by us;

4. Our ability to retain our key managements persons and other employees;

5. Changes in laws and regulations that apply to the industries in which we operate.

6. Our failure to keep pace with rapid changes in technology;

7. Our ability to grow our business;

8. Our ability to make interest and principal payments on our existing debt obligations and satisfy the other covenants contained in our existing debt agreements;

9. General economic, political, and other risks that are out of our control;

10. Inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices;

11. Companys ability to successfully implement its growth strategy and expansion plans;

12. Failure to comply with regulations prescribed by authorities of the jurisdictions in which we operate;

13. Inability to successfully obtain registrations in a timely manner or at all;

14. Occurrence of Environmental Problems and Uninsured Losses;

15. Conflicts of interest with affiliated companies, the promoter group, group Companies and other related parties;

16. Any adverse outcome in the legal proceedings in which we are involved; and

17. Concentration of ownership among our Promoter.

18. The performance of the financial markets in India and globally.

See also "Risk Factors External Risk Factors" beginning on page 44 of this Prospectus.

SIGNIFICANT ACCOUNTING POLICIES

For significant accounting policies, please refer significant accounting policies to the Restated Financial Statements, under Section titled "Financial Information" beginning on page 196 of this Prospectus.

MAJOR ITEMS OF INCOME AND EXPENDITURE INCOME Revenue from operations

The Revenue from operations consist of revenue from Hotel Business including resorts managed by us and rental income from properties managed by third parties. It consists of Sales of services in the form of Room Revenue, Food and beverage revenue and Other Services and Other Operating Revenue in the form of Property management space rental, Management fees and License Income.

Room Revenue, Food and beverage revenue and Other Services are recognised at transaction price that is allocated to performance obligation. Room revenue is recognised once the room is occupied and food and beverages Revenue is recognised once the food and beverage are sold as per contract with customers.

Property Management Space Rental constitutes the lease rentals earned from resort properties given on lease. Management fee and License Income is realised as per the agreement entered into with parties for the same.

Other Income

Other Income comprises of Interest Income, Interest on Income Tax Refund and Other Indirect Income like losses and damages recovered, profit on sale of assets, miscellaneous income and sundry balances written back.

EXPENSES

Cost of food and beverages consumed

Cost of food and beverages consumed consists of consumption of food and beverages and consumption of stores and supplies.

Employee Benefit Expenses

Employee Benefit expenses include Salaries, Bonus and Allowances, Directors Remuneration, Gratuity, Contribution to Provident Fund and Other Funds, Staff Medical Expenses and Staff Welfare Expenses.

Finance costs

Finance costs consist of interest expenses and other borrowing costs.

Depreciation and Amortization expenses

Depreciation and Amortization includes Depreciation on Tangible assets such as Hotel Building, Furniture and Fixtures, Motor Vehicles, Computers, Plant and Machinery and Leasehold Improvements.

Other Expenses

Other Expenses include expenses on account of Power and Fuel, Electricity, Up-keeping and service, Guest Entertainment, Repairs and Maintenance, Advertisement and Business Promotion Expenses, Commission and Discount, Insurance, Office, Communication, Traveling, Rent, Rates and taxes, Legal and professional services, Audit fee, Printing & Stationery, Donation, Diminution in Investment, Services charges, Royalty, Miscellaneous Expenses, Transportation, Sundry balances written off and Spa Expenses.

Exceptional Items

Exceptional items include gain/ (loss) on disposal of investment in subsidiaries.

Tax Expenses

Current tax

Current tax is the amount of income tax payable on the taxable profits for the year as determined in accordance with provisions of Income Tax Act, 1961.

Deferred tax

Deferred tax is recognised based on timing difference between tax calculated as per applicable tax rate on taxable income as per Income Tax Act, 1961 and book profits.

SUMMARY OF RESULTS OF OUR OPERATION

The following table sets forth financial data from restated profit and loss accounts for the financial year ended on March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 and the components of which are also expressed as a percentage of Total Income for such periods:

(Amount in Lakhs)

Particulars			For the year ended March 31,
		% of		% of		% of		% of
	2024	Total	2023	Total	2022	Total	2021	Total
		Income		Income		Income		Income
Revenue from operations	1,425.77	97.96	1,271.37	99.16	1,283.25	99.64	805.50	99.18
Other income	29.72	2.04	10.82	0.84	4.65	0.36	6.64	0.82
Total Income	1,455.49	100.00	1,282.19	100.00	1,287.90	100.00	812.14	100.00
Expenses
Cost of Food and beverages consumed	119.27	8.19	180.08	14.04	217.80	16.91	148.27	18.26
Employee benefit expenses	294.66	20.24	316.96	24.72	316.97	24.61	220.94	27.21
Finance expenses	9.21	0.63	21.99	1.72	60.24	4.68	148.38	18.27
Depreciation and Amortization	216.61	14.88	232.26	18.11	145.83	11.32	150.80	18.57
Other expenses	359.27	24.68	451.90	35.24	336.23	26.11	257.32	31.68
Total expenses	999.02	68.64	1,203.19	93.84	1,077.07	83.63	925.71	113.98
Profit / (Loss) before exceptional items, Taxes and share
	456.47	31.36	79.00	6.16	210.83	16.37	(113.57)	(13.98)
in Profit / (Loss) of Associate concern
Exceptional items	-	-	370.00	28.86	-	-	-	-
Profit before tax	456.47	31.36	449.00	35.02	210.83	16.37	(113.57)	(13.98)
Tax expense
i. Current tax	118.31	8.13	86.00	6.71	60.00	4.66	-	-
ii. Deferred tax	(8.57)	(0.59)	9.11	0.71	6.58	0.51	6.26	0.77
iii. (Excess) / Short provision of tax relating to earlier years	2.05	0.14	(1.87)	(0.15)	-	-	-	-
iv. Reversal of MAT credit	-	-	-	-	-	-	0.35	0.04
Total tax	111.79	7.68	93.24	7.27	66.58	5.17	6.61	0.81
Profit / (Loss) for the period / year before share in profit
	344.68	23.68	355.76	27.75	144.25	11.20	(120.18)	(14.80)
/ (loss) of Associate concern
Share in Profit / (Loss) of Associate Concern	0.72	0.05	(7.77)	(0.61)	(12.23)	(0.95)	-	-
Total Profit / (Loss) for the period / year attributable to
	345.40	23.73	347.99	27.14	132.02	10.25	(120.18)	(14.80)
Owners of the Company
Total Profit / (Loss) for the period / year attributable to
	-	-	-	-	-	-	-	-
Minority Interest

For details regarding Key performance indicators, kindly refer the chapter titled "Basis for Issue Price" beginning on page 97 of this Prospectus.

COMPARISON OF FINANCIAL YEAR ENDED MARCH 31, 2024 WITH FINANCIAL YEAR ENDED MARCH 31, 2023

REVENUE

Revenue from operations

The Revenue from operations consist of revenue from resorts managed by us and rental income from properties managed by third parties. It consists of Sales of services in the form of Room Revenue, Food and beverage revenue, service charges from restaurants and other services and Other Operating Revenue i.e. property management space rental.

Revenue from operations has increased by 12.14% from 1,271.37 Lakhs in financial year ended March 31, 2023 to 1,425.77 Lakhs in financial year ended March 31, 2024. The bifurcation of our revenue from operations under different heads is as follows:

Particulars	For the year ended on March 31, 2024		For the year ended on March 31, 2023
	Amount in Lakhs	% of Total Revenue from operations	Amount in Lakhs	% of Total Revenue from operations
Revenue from Operations
Sale of Services
Room Revenue	604.07	42.37	433.24	34.08
Food and Beverage Revenue	273.01	19.15	293.14	23.06
Other Services	20.05	1.41	31.09	2.45
Total Sales of Services	897.13	62.92	757.47	59.58
Other Operating Revenue
Property Management Space Rental	504.00	35.35	503.50	39.60
Management fees	14.24	1.00	10.40	0.82
License income	10.40	0.73	-	-
Total Revenue from operations	1,425.77	100.00	1,271.37	100.00

As evident from the above table, our revenue from sales of services consists of Room Revenue, Food and Beverage sales in the restaurants and other Services revenue. The revenue from sale of services amounts to 897.13 Lakhs i.e. 62.92% of the total revenue from operations. The property management space rental received from leasing our property also consists of

504.00 Lakhs comprising 35.35% of the total revenue from operations.

The entire revenue is generated from domestic sale of services from the states of Maharashtra and Madhya Pradesh.

The bifurcation of our Revenue from operations from each resort property as on March 31, 2024 is as follows:

Particulars		Amount in Lakhs
	Sale of services	Other operating Revenue	Total Revenue from operations	% of Total Revenue from operations
Saj on the Mountain, Mahabaleshwar	-	504.00	504.00	35.35
Saj by the Lake, Malshej	713.62	-	713.62	50.05
Saj in the Forest, Pench	183.50	-	183.50	12.87
Others	-	24.64	24.64	1.73
Total	897.13	528.64	1,425.77	100.00

As evident form the above table, a significant portion of our revenue is derived from our properties located in Maharashtra. Further, Saj in the Forest, Pench has recently commenced operation.

Other Income

Other Income comprises of Interest Income, Interest on Income Tax Refund, Dividend Income and Other Indirect Income like losses and damages recovered, profit on sale of assets, miscellaneous income and sundry balances written back.

Other Income amounts to 29.72 Lakhs i.e. 2.04% of total income and 10.82 Lakhs i.e. 0.84% of total income for the financial years ended March 31, 2024 and March 31, 2023 respectively.

EXPENSES

Cost of Food and Beverages Consumed

Cost of food and beverages consumed consists of consumption of food and beverages and consumption of stores and supplies. This includes purchases done during the year adjusted for opening and closing inventory of food and beverages and stores and supplies.

Cost of food and beverages consumed as a percentage of Total income was 8.19% for the period ended March 31, 2024 and 14.04% for the period ended March 31, 2023, showing a decrease of 33.76% in the financial year 2024 as compared to the financial year 2023. This decrease is majorly attributed by the decrease in purchases done during the year.

Employee Benefit Expenses

Employee Benefit expenses include Salaries, Bonus and Allowances, Directors Remuneration, Gratuity, Contribution to

Provident Fund and Other Funds, Staff Medical Expenses and Staff Welfare Expenses.

Employee Benefit Expenses as a percentage of Total income was 20.24% for the period ended March 31, 2024 and 24.72% for the period ended March 31, 2023. While, in absolute terms it remained the same in both the financial years.

Finance Costs

Finance costs consist of interest expenses and other borrowing costs.

Finance costs as a percentage of Total Income was 0.63% for the period ended March 31, 2024 and 1.72% for the period ended March 31, 2023, resulting in a decrease of 58.12% in the financial year 2024 as compared to the financial year 2023 due to decrease in total borrowings.

Depreciation and Amortization

Depreciation and Amortization includes Depreciation on Tangible assets such as hotel building, furniture and fixture, motor vehicles, computers, plant and machinery and leasehold improvements.

Depreciation and amortization as a percentage of Total Income was 14.88% for the period ended March 31, 2024 and 18.11% for the period ended March 31, 2023. While, in absolute terms it remained the same in both the financial years.

Other Expenses

Other Expenses includes expenses on account of Power and Fuel, Electricity, Up-keeping and service, Guest Entertainment, Repairs and Maintenance, Advertisement and Business Promotion Expenses, Commission and Discount, Insurance, Office, Communication, Traveling, Rent, Rates and taxes, Legal and professional services, Audit fee, Printing & Stationery, Donation, Diminution in Investment, Services charges, Royalty, Miscellaneous Expenses, Transportation, Sundry balances written off and spa expenses.

Other Expenses as a percentage of Total Income was 24.68% for the period ended March 31, 2024 and 35.24% for the period ended March 31, 2023, showing a decrease of 20.49% in the financial year 2024 as compared to the financial year 2023.

Profit before Tax

Profit before Tax amounts to 456.59 Lakhs and 449.02 Lakhs i.e. 31.37% and 35.02% as a percentage of Total Income for the period ended March 31, 2024 and March 31, 2023 respectively. Showing an increase of 1.69% in the financial year 2024 as compared to the financial year 2023.

Tax Expenses

Current tax

Current tax is the amount of income tax payable on the taxable profits for the year as determined in accordance with provisions of Income Tax Act, 1961.

Current tax as a percentage of Total Income was 8.13% for the year ended March 31, 2024 as compared with 6.71% for the year ended March 31, 2023.

Deferred tax

Deferred tax is recognised based on timing difference between tax calculated as per applicable tax rate on taxable income as per Income Tax Act, 1961 and book profits.

Deferred tax as a percentage of Total Income was (0.59%) for the period ended March 31, 2024 as compared with 0.71% for the period ended March 31, 2023.

Profit after Tax

Profit after Tax as a percentage of Total Income was 23.69% for the period ended March 31, 2024 and 27.75% for the period ended March 31, 2023, a decrease of 3.09% in the financial year 2024 as compared to the financial year 2023. The gain on disposal of investment in subsidiary led to an increase in the profit before tax which in turn increased the profit after tax in the financial year 2023.

COMPARISON OF FINANCIAL YEAR ENDED MARCH 31, 2023 WITH FINANCIAL YEAR ENDED MARCH 31, 2022

REVENUE

Revenue from operations

Revenue from operations has decreased by 0.94% from 1,283.25 Lakhs in financial year ended March 31, 2022 to 1271.37 Lakhs in financial year ended March 31, 2023. The bifurcation of our revenue from operations under different heads is as follows:

	For the year ended on March		For the year ended on March
	31, 2023		31, 2022
Particulars	Amount in Lakhs	% of Total Revenue from operations	Amount in Lakhs	% of Total Revenue from operations
Revenue from Operations
Sale of Services
Room Revenue	433.24	34.08	411.54	32.07
Food and Beverage Revenue	293.14	23.06	407.24	31.74
Other Services	31.09	2.45	38.10	2.97
Total Sales of Services	757.47	59.58	856.88	66.78
Other Operating Revenue
Property Management Space Rental	503.50	39.60	413.99	32.26
Management fees	10.40	0.82	12.38	0.96
License income	-	-	-	-
Total Revenue from operations	1,271.37	100.00	1,283.25	100.00

Other Income

Other Income comprises of Interest Income, Interest on Income Tax Refund and Other Indirect Income like losses and damages recovered, profit on sale of assets, miscellaneous income and sundry balances written back.

Other Income amounts to 10.82 Lakhs i.e. 0.84% of total Income and 4.65 Lakhs i.e. 0.36% of total Income for the financial years ended March 31, 2023 and March 31, 2022 respectively.

EXPENSES

Cost of Food and Beverages Consumed

Cost of food and beverages consumed consists of consumption of food and beverages and consumption of stores and supplies.

Cost of food and beverages consumed as a percentage of Total Income was 14.04% for the period ended March 31, 2023 and 16.91% for the period ended March 31, 2022, showing a decrease of 17.33% in the financial year 2023 as compared to the financial year 2022.

Employee Benefit Expenses

Employee Benefit expenses include Salaries, Bonus and Allowances, Directors Remuneration, Gratuity, Contribution to

Provident Fund and Other Funds, Staff Mediclaim Expenses and Staff Welfare Expenses.

Employee Benefit Expenses as a percentage of Total Income was 24.72% for the period ended March 31, 2023 and 24.61% for the period ended March 31, 2022. While, in absolute terms it remained the same in both the financial years.

Finance Costs

Finance costs consist of interest expenses and other borrowing costs.

Finance costs as a percentage of Total Income was 1.72% for the period ended March 31, 2023 and 4.68% for the period ended March 31, 2022, resulting in a decrease of 63.50% in the financial year 2023 as compared to the financial year 2022.

Depreciation and Amortization

Depreciation and Amortization includes Depreciation on Tangible assets such as hotel building, furniture and fixture, motor vehicles, computers, plant and machinery and leasehold improvements.

Depreciation and amortization as a percentage of Total Income was 18.11% for the period ended March 31, 2023 and 11.32% for the period ended March 31, 2022, an increase of 59.27% in the financial year 2023 as compared to the financial year 2022.

Other Expenses

Other Expenses includes expenses on account of Power and Fuel, Electricity, Upkeeping and service, Guest Entertainment, Repairs and Maintenance, Advertisement and Business Promotion Expenses, Commission and Discount, Insurance, Office, Communication, Traveling, Rent, Rates and taxes, Legal and professional services, Audit fee, Printing & Stationery, Donation, Diminution in Investment, Services charges, Royalty, Miscellaneous Expenses, Transportation and Sundry balances written off.

Other Expenses as a percentage of Total Income was 35.24% for the period ended March 31, 2023 and 26.11% for the period ended March 31, 2022, showing an increase of 34.39% in the financial year 2023 as compared to the financial year 2022.

Exception Items

Exceptional Items include Gain / (Loss) on disposal of investment in subsidiaries.

Exceptional Items as a percentage of Total Income was 28.86% for the period ended March 31, 2023 as compared to NIL for the period ended March 31, 2022.

Profit before Tax

Profit before Tax amounts to 449.00 Lakhs and 210.83 Lakhs i.e. 35.02% and 16.37% as a percentage of Total Income for the period ended March 31, 2023 and March 31, 2022 respectively. This signifies an increase of 113% in the financial year 2023 as compared to the financial year 2022. The gain on disposal of investment in subsidiaries led to an increase in the profit before tax figure. Although, if the exceptional item would not have been considered, the profit before tax would have decreased in the financial year 2023 as compared to the financial year 2022.

Tax Expenses

Current tax

Current tax is the amount of income tax payable on the taxable profits for the year as determined in accordance with provisions of Income Tax Act, 1961.

Current tax as a percentage of Total Income was 6.71% for the period ended March 31, 2023 as compared with 4.66% for the period ended March 31, 2022.

Deferred tax

Deferred tax is recognised based on timing difference between tax calculated as per applicable tax rate on taxable income as per Income Tax Act, 1961 and book profits.

258

Deferred tax as a percentage of Total Income was 0.71% for the period ended March 31, 2023 as compared with 0.51% for the period ended March 31, 2022.

Profit after Tax

Profit after Tax as a percentage of Total Income was 27.75% for the period ended March 31, 2023 and 11.20% for the period ended March 31, 2022, an increase of 146.68% in the financial year 2023 as compared to the financial year 2022. The gain on disposal of investment in subsidiary led to an increase in the profit before tax which in turn increased the profit after tax in the financial year 2023.

COMPARISON OF FINANCIAL YEAR ENDED MARCH 31, 2022 WITH FINANCIAL YEAR ENDED MARCH 31, 2021

REVENUE

Revenue from operations

The Revenue from operations consist of revenue from resorts managed by us and rental income from properties managed by third parties. It consists of Sales of services in the form of Room Revenue, Food and beverage revenue (including liquor sales), service charges from restaurants and other services and Other Operating Revenue i.e. property management space rental.

Revenue from operations has increased by 59.32% from 805.50 Lakhs in financial year ended March 31, 2021 to 1,283.25 Lakhs in financial year ended March 31, 2022. The bifurcation of our revenue from operations under different heads is as follows:

	For the year ended on March		For the year ended on March
	31, 2022		31, 2021
Particulars	Amount in Lakhs	% of Total Revenue from operations	Amount in Lakhs	% of Total Revenue from operations
Revenue from Operations
Sale of Services
Room Revenue	411.54	32.07	208.45	25.88
Food and Beverage Revenue	407.24	31.74	319.94	39.72
Other Services	38.10	2.97	22.46	2.79
Total Sales of Services	856.88	66.78	550.85	68.39
Other Operating Revenue
Property Management Space Rental	413.99	32.26	247.99	30.79
Management fees	12.38	0.96	6.66	0.82
License Fee	-	-	-	-
Total Revenue from operations	1,283.25	100.00	805.50	100.00

Other Income

Other Income comprises of Interest Income, Interest on Income Tax Refund and Other Indirect Income like losses and damages recovered, profit on sale of assets, miscellaneous income and sundry balances written back.

Other Income as a percentage of Total Income was 0.36% for the period ended March 31, 2022 as compared to 0.82% for the period ended March 31, 2021.

EXPENSES

Cost of Food and Beverages Consumed

Cost of food and beverages consumed consists of consumption of food and beverages and consumption of stores and supplies.

Cost of food and beverages consumed as a percentage of Total Income was 16.91% for the period ended March 31, 2022 as compared to 18.26% for the period ended March 31, 2021.

Employee Benefit Expenses

Employee Benefit expenses include Salaries, Bonus and Allowances, Directors Remuneration, Gratuity, Contribution to

Provident Fund and Other Funds, Staff Mediclaim Expenses and Staff Welfare Expenses.

Employee Benefit Expenses as a percentage of Total Income was 24.61% for the period ended March 31, 2022 as compared to 27.21% for the period ended March 31, 2021.

Finance Costs

Finance costs consist of interest expenses and other borrowing costs.

Finance costs as a percentage of Total Income was 4.68% for the period ended March 31, 2022 as compared to 18.27% for the period ended March 31, 2021.

Depreciation and Amortization

Depreciation and Amortization includes Depreciation on Tangible assets such as hotel building, furniture and fixture, motor vehicles, computers, plant and machinery and leasehold improvements.

Depreciation and amortization as a percentage of Total Income are 11.32% for the period ended March 31, 2022 as compared to 18.57% for the period ended March 31, 2021.

Other Expenses

Other Expenses includes expenses on account of Power and Fuel, Electricity, Upkeeping and service, Guest Entertainment, Repairs and Maintenance, Advertisement and Business Promotion Expenses, Commission and Discount, Insurance, Office, Communication, Traveling, Rent, Rates and taxes, Legal and professional services, Audit fee, Printing & Stationery, Donation, Diminution in Investment, Services charges, Royalty, Miscellaneous Expenses, Transportation and Sundry balances written off.

Other Expenses as a percentage of Total Income was 26.11% for the period ended March 31, 2022 as compared to 31.68% for the period ended March 31, 2021.

Profit before Tax

Profit/(Loss) before Tax amounts to 210.83 Lakhs and (113.57) Lakhs i.e. 16.37% and (13.98%) as a percentage of Total

Income for the period ended March 31, 2022 and March 31, 2021 respectively. This signifies an increase of 285.62% in the financial year 2022 as compared to the financial year 2021. An increase in the occupancy rate of our properties led to an increase in profit after tax in the financial year 2022.

Tax Expenses

Current tax

Current tax is the amount of income tax payable on the taxable profits for the year as determined in accordance with provisions of Income Tax Act, 1961.

Current tax as a percentage of Total Income was 4.66% for the period ended March 31, 2022 as compared to NIL for the period ended March 31, 2021.

Deferred tax

Deferred tax is recognised based on timing difference between tax calculated as per applicable tax rate on taxable income as per Income Tax Act, 1961 and book profits.

Deferred tax as a percentage of Total Income was 0.51% for the period ended March 31, 2022 as compared to 0.77% for the period ended March 31, 2021.

Profit after Tax

Profit/(Loss) after Tax amounts to 132.02 Lakhs and (120.18) Lakhs i.e. 10.25% and (14.80%) as a percentage of Total Income for the period ended March 31, 2022 and March 31, 2021 respectively. This signifies an increase of 209.85% in the financial year 2022 as compared to the financial year 2021. An increase in the occupancy rate of our properties led to an increase in profit after tax in the financial year 2022.

RELATED PARTY TRANSACTIONS

For information regarding Related Party Transactions, refer chapter titled "Related Party transactions" beginning on page 246 of this Prospectus.

CONTINGENT LIABILTITES

For information regarding Contingent liabilities of our company, refer relevant chapter in chapter titled "Restated Financial Statement" beginning on page 196 of this Prospectus.

DISCUSSION OF THE STATEMENT OF CASH FLOWS

The table below summaries our cash flows from our Restated Consolidated Financial Information for the financial years ended March 31, 2024, March 31, 2023, March 31, 2022 and March 31, 2021 (Amount in Lakhs)

	Year ended	Year ended	Year ended	Year ended
Particulars	March 31,	March 31,	March 31,	March 31,
	2024	2023	2022	2021
Net Cash (used in)/ generated from Operating activities	474.91	767.15	332.47	474.26
Net Cash (used in)/ generated from Investing activities	(92.67)	(598.14)	(440.68)	(95.37)
Net Cash (used in)/ generated from Finance activities	(331.83)	(174.70)	54.79	(320.14)
Net Increase/(Decrease) in Cash and Cash	50.41	(16.72)	(53.42)	58.75
Equivalents

CASH FLOW FROM OPERATING ACTIVITIES

For the financial year ended March 31, 2024

The Net cash (used in)/ Generated from operating activities is 474.91 Lakhs which consists of profit before tax of 456.47 Lakhs as adjusted primarily for:

Depreciation and Amortization expenses amounting to 216.61 Lakhs.

Interest expense, bank commission and charges amounting to 9.21 Lakhs.

Adjustment on account of disposal of subsidiaries in earlier years amounting to 1.12 Lakhs.

Interest Income amounting to 18.12 Lakhs and sundry balances written back amounting to 9.88 Lakhs

Working capital changes primarily due to increase in Inventories amounting to 5.94 Lakhs, increase in Trade

Receivables amounting to 8.96 Lakhs, increase in other assets amounting to 19.86 Lakhs, decrease in loans and advances amounting to 66.43 Lakhs, decrease in Trade Payables amounting to 7.70 Lakhs, decrease in Other Current

Liability amounting to 102.72 Lakhs, Increase in Provisions such as provisions for employee benefits amounting to

14.02 Lakhs.

Direct taxed paid (net of refund) amounting to 115.78 Lakhs.

For the financial year ended March 31, 2023

The Net cash (used in)/ Generated from operating activities is 767.15 Lakhs which consists profit before tax of 449.00 Lakhs as adjusted primarily for:

Depreciation and amortization expenses amounting to 232.26 Lakhs.

Interest expense, bank commission and charges amounting to 21.99 Lakhs.

Interest Income amounting to 0.17 Lakhs, net gain on disposal of property, plant and equipment amounting to 2.05 Lakhs, sundry balances written back amounting to 0.62 Lakhs and net gain on disposal of subsidiary amounting to 118.50 Lakhs.

Working Capital changes primarily due to increase in Inventories amounting to 8.54 Lakhs, decrease in Trade

Receivables amounting to 3.06 Lakhs, increase in other assets amounting to 160.19 Lakhs, increase in loans and advances amounting to 25.06 Lakhs, increase in Trade Payables amounting to 52.84 Lakhs, increase in Other Current

Liability amounting to 373.91 Lakhs, Increase in Provisions such as provisions for employee benefits amounting to

7.82 Lakhs and other long term liabilities amounting to 8.64 Lakhs.

Direct taxed paid (net of refund) amounting to 67.23 Lakhs.

For the financial year ended March 31, 2022

The Net cash (used in)/ Generated from operating activities is 332.46 lakhs which consists of profit before tax of 210.81 lakhs as adjusted primarily for:

Depreciation and Amortization expenses amounting to 145.83 lakhs.

Interest expense, bank commission and charges amounting to 60.24 Lakhs.

Interest Income amounting to 0.92 Lakhs and sundry balances written back amounting to 0.41 Lakhs

Working Capital changes primarily due to decrease in inventory amounting to 6.74 lakhs, decrease in trade receivables amounting to 4.47 lakhs, increase in other assets amounting to 20.20 lakhs, increase in loans and advances amounting to 23.85 lakhs, increase in trade payables amounting to 1.29 lakhs, decrease in other current liabilities amounting to 13.67 lakhs, increase in provision amounting to 7.55 lakhs and increase in other long term liabilities of 2 lakhs.

Direct taxed paid (net of refund) amounting to 47.42 Lakhs.

For the financial year ended March 31, 2021

The Net cash (used in)/ Generated from operating activities is 508.29 lakhs which consists of profit before tax of (113.57) lakhs as adjusted primarily for:

Depreciation and Amortization expenses amounting to 150.80 lakhs.

Sundry balances written off (net) amounting to 13.10 lakhs.

Interest expense, bank commission and charges amounting to 148.38 Lakhs.

Other provisions amounting to 3.27 Lakhs.

Interest Income amounting to 0.57 Lakhs.

Working Capital changes primarily due to increase in inventory amounting to 4.67 lakhs, decrease in trade receivables amounting to 2.03 lakhs, decrease in other assets amounting to 58.79 lakhs, decrease in loans and advances amounting to 164.76 lakhs, decrease in trade payables amounting to 15.49 lakhs, increase in other current liabilities amounting to 91.60 lakhs, increase in provision amounting to 9.41 lakhs and increase in other long term liabilities of 0.45 lakhs.

Direct taxed paid (net of refund) amounting to 34.03 Lakhs.

CASH FLOW FROM INVESTING ACTIVITIES

For the financial year ended March 31, 2024

The Net cash outflow from Investing Activities is 92.67 Lakhs primarily due to

Purchase of Property, Plant and Equipment and other intangible assets (including capital work-in-progress) amounting to 110.79 Lakhs.

Interest received amounting to 18.12 Lakhs.

For the financial year ended March 31, 2023

The Net cash outflow from Investing Activities is 598.14 Lakhs primarily due to

Purchase of Property, Plant and Equipment and other intangible assets (including capital work-in-progress) amounting to 652.80 Lakhs.

Proceeds from sale of property, plant and equipment amounting to 3.49 Lakhs.

Proceeds from sale of subsidiary amounting to 51.00 Lakhs.

Interest received amounting to 0.17 Lakhs.

For the financial year ended March 31, 2022

The Net cash outflow from Investing Activities is 440.68 Lakhs primarily due to

Purchase of Property, Plant and Equipment and other intangible assets (including capital work-in-progress) amounting to 421.60 Lakhs.

Purchase of non-current investments amounting to 20.00 Lakhs.

Interest received amounting to 0.92 Lakhs.

For the financial year ended March 31, 2021

The Net cash outflow from Investing Activities is 95.37 Lakhs primarily due to

Purchase of Property, Plant and Equipment and other intangible assets (including capital work-in-progress) amounting to 94.94 Lakhs.

Purchase of non-current investments amounting to 1.00 Lakhs.

Interest received amounting to 0.57 Lakhs.

CASH FLOW FROM FINANCING ACTIVITIES

For the financial year ended March 31, 2024

The Net cash outflow from Financing Activities is 331.83 Lakhs primarily due to

Repayment of non-current borrowings amounting to 1,992.12 Lakhs.

Proceeds from borrowings amounting to 1,669.50 Lakhs.

Interest paid amounting to 9.21 Lakhs.

For the financial year ended March 31, 2023

The Net cash outflow from Financing Activities is 174.70 Lakhs primarily due to

Repayment of non-current borrowings amounting to 2,494.37 Lakhs.

Proceeds from borrowings amounting to 2,341.66 Lakhs.

Interest paid amounting to 21.99 Lakhs.

For the financial year ended March 31, 2022

The Net cash inflow from Financing Activities is 54.79 Lakhs primarily due to

Repayment of non-current borrowings amounting to 2,165.51 Lakhs.

Proceeds from borrowings amounting to 2,280.54 Lakhs.

Interest paid amounting to 60.24 Lakhs.

For the financial year ended March 31, 2021

The Net cash outflow from Financing Activities is 320.14 Lakhs primarily due to

Repayment of non-current borrowings amounting to 1,013.53 Lakhs.

Proceeds from borrowings amounting to 841.77 Lakhs.

Interest paid amounting to 148.38 Lakhs.

For risk associated with negative working capital, refer risk factor number 2 on page 22 of this Prospectus.

CAPITAL EXPENDITURE IN THE LAST THREE YEARS

For details and ageing of Capital Expenditure and Capital Work-in-progress, refer chapter titled "Restated Financial Statements" beginning on page 196 of this Prospectus.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK QUALITATIVE DISCLOSURE ABOUT MARKET RISK Financial market Risk

Market risk is the risk of loss related to adverse changes in market prices, including interest rate risk. We are exposed to interest rate risk, inflation and credit risk in the normal course of our business.

Interest rate Risk

Our financial results are subject to changes in interest rates, which may affect our debt service obligations and our access to funds.

Liquidity Risk

Liquidity risk is the risk that we will encounter difficulties in meeting the obligations associated with our financial liabilities that are settled by delivering cash or another financial asset. Our approach to managing liquidity is to ensure, to the extent possible, that we will have sufficient liquidity to meet our liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to our reputation. We manage liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

Effect of Inflation

We are affected by inflation as it has an impact on the raw material cost, wages, etc. In line with changing inflation rates, we rework our margins so as to absorb the inflationary impact.

Credit Risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. Majority of the clients of the company are Government entities, with no history of defaults. Hence, credit risk on the trade receivables are negligible. The company takes adequate precaution in terms of evaluation of the creditworthiness of its direct clients. The track record of collection of Trade Receivables has been very healthy. The company also has a practice of obtaining confirmation on service provided from most of its clients before invoicing, and hence risk of subsequent non-collection is negligible.

OTHER FACTORS

Information required as per Item 11 (II) (C) (iv) of Part A of Schedule VI to the SEBI (ICDR) Regulation:

1. Unusual or infrequent events or transactions

There has not been any unusual trend on account of our business activity.

2. Significant economic changes that materially affected or are likely to affect income from continuing operations.

Our business has been subject, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in "Factors Affecting our Results of Operations" and the uncertainties described in the section entitled "Risk Factors" beginning on page 22 of this Prospectus. To our knowledge, except as we have described in this Prospectus, there are no known factors which we expect to bring about significant economic changes.

3. Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.

Apart from the risks as disclosed under Section titled "Risk Factors" beginning on page 22 of the Prospectus, in our opinion, there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. Future changes in relationship between costs and revenues

Other than as described in the section titled "Risk Factors" and chapters titled "Our Business" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 22, 139 and 249 of this Prospectus respectively, to our knowledge, no future relationship between expenditure and income is expected to have a material adverse impact on our operations and finances.

5. Material increase in net sales or revenue due to increased sales volume, introduction of new products and services and increased sales price

We have commenced operations in one of our resort properties i.e. Saj in the Forest, Pench recently and that has contributed to increase in revenue from operations.

6. Turnover of each industry segment

The company is in the business of providing services relating to hospitality industry and has various resorts and other properties through which it generates revenue.

7. Status of any publicly announced New Products or Business Segment

Except as disclosed in the chapter titled "Our Business" beginning on page 139 of this Prospectus, our Company has not announced any new product or service. Further, there is no publicly announced new products or business segment.

8. Seasonality of business

The hospitality industry in India is subject to seasonal variations. The periods during which our resorts experience higher revenues vary from property to property, depending principally upon location and the guests served. Our revenues are generally higher during the monsoons and winters. Seasonality affects leisure travel, including weddings, as well as inbound foreign leisure travel However, business travel is generally more consistent throughout the year. Seasonality can be expected to cause quarterly fluctuations in our revenue, profit margins and earnings. See also "Significant Factors Affecting Our Results of Operations Seasonality and cyclicality of business" above.

9. Competitive conditions

The hospitality industry in India is highly competitive. There is competition from various organised and unorganised players around the globe. See also "Significant Factors Affecting Our Results of Operations Competition from new and existing players" above.