Saj Hotels Ltd Management Discussions

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT INDUSTRY STRUCTURE AND DEVELOPMENTS BUSINESS OVERVIEW

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.

GLOBAL SCENARIO

The global economy entered CY 2025 amid a mix of ongoing challenges and emerging opportunities, while growth has moderated compared to CY 2024. As per the April World Economic Outlook (WEO) by the International Monetary Fund (IMF), global GDP growth is now projected at 2.8%. This marks a downward revision from the 3.6% forecast made in January. This revision stems primarily from escalating trade tensions, led by sweeping US tariffs and retaliatory responses by major trade partners.

Recent global developments have led to a complex operating environment, marked by rising tariff barriers, currency volatility, and uneven capital flows. These factors have had a broad-based impact on economic activity. According to the IMF, global growth in CY 2025 could have reached 3.2% in the absence of new tariff measures. For CY 2026, the IMF projects a modest recovery with global growth estimated at 3.0%, though the outlook remains subject to downside risks.

Growth in advanced economies is expected to reach 1.4% in CY 2025. The US is projected to grow at 1.8%, while the Euro area may manage just 0.8%. In contrast, emerging market and developing economies (EMDEs) are projected to soften to 3.7% in CY 2025, with a mild rebound to 3.9% in CY 2026. Economies hit hardest by the trade measures, like China, are seeing substantial downgrades.

While growth moderates, global headline inflation is set to ease. It is forecast at 4.3% in CY 2025, dipping further to 3.6% in CY 2026. These estimates reflect higher inflation projections for advanced economies and minor downward adjustments for emerging and developing markets, largely influenced by the inflationary impact of tariffs and ongoing supply-side pressures.

Financial markets have responded with a decline in the Dollar index, widespread equity sell-offs, and a fall in bond yields and crude oil prices. (Source: IMF World Economic Outlook - April 2025)

Indian Economy & Hotel Industry

India is set to retain its position as the fastest-growing major economy, reaffirming its rising influence in the global economic order. According to the IMFs April 2025 WEO, the Indian economy is expected to grow by 6.5% in 2025. This contrasts sharply with the global projections of 2.8% for 2025 and 3.0% for 2026, highlighting Indias continued strength amid a subdued international climate

The Union Budget 2025-26 reiterated the governments focus on fiscal consolidation and infrastructure expansion. It earmarked 11.21 lakh crore for capital expenditure, while also advancing ease of doing business reforms. These moves have boosted investor confidence and reinforced Indias long-term growth path.

Monetary policy also turned accommodative as inflation eased. In a notable shift, the Reserve Bank of India (RBI) cut the repo rate by 25 basis points to 6.25% in February 2025, marking its first rate cut in five years. This was followed by a further reduction to 6.00% in April 2025, aimed at stimulating economic activity amid external uncertainties.

The services sector continues to anchor Indias economy, contributing around 55% to the Gross Value Added (GVA) at current prices in FY 2025, up from 50.6% in FY 2014. Barring the pandemic-hit FY 2021, services GVA growth has consistently exceeded 6% year-on-year (YoY) for the past decade. The sector also employs nearly 30% of the workforce, while playing a catalytic role in manufacturing through the growing trend of servicification, the increasing integration of services in production, and post-production processes

OUTLOOK

Despite persistent global volatility and uncertainty, from geopolitical tensions to commodity market fluctuations, the Indian economy is expected to maintain its resilience and measured optimism through the remainder of FY 2025 and beyond.

OPPORTUNITIES AND THREATS

OPPORTUNITIES

Diverse attractions - India is geographically diverse and offers a variety of cultures that come with its own experiences, making it one of the leading countries in terms of international tourism expenditure. According to WTTC, the contribution of Indias travel and tourism sector to Indias economy was worth Rs. 15.9 trillion (US$ 191.25 billion) in 2022. According to WTTC, over the next decade, Indias Travel & Tourisms GDP is expected to grow at an average of 7.8% annually. The countrys big coastline is dotted with attractive beaches.

Robust demand - The Medical Tourism sector was projected to reach US$ 13 billion in 2022 from US$ 5-6 million in 2019. The travel market in India is projected to reach US$ 125 billion by FY27 from an estimated US$ 75 billion in FY20. The International tourist arrivals are expected to reach

30.5 million by 2028.

Attractive opportunities India offers geographical diversity, world heritage sites and niche tourism products like cruises, adventure, medical, ecotourism, etc. Incredible India has spurred growth in tourist arrivals and employment. In 2021, the Government of India announced 40,000

e-tourist visas out of 500,000 free regular visas to the tourist, to ensure a geographical spread of the incentive to important source markets globally.

Policy support US$ 2.1 billion is allocated to the Ministry of Tourism in budget 2023-24 as the sector holds huge opportunities for jobs and entrepreneurship for youth. Under the Union Budget 2023-24, an outlay of US$ 170.85 million has been allocated for the Swadesh Darshan Scheme. 68 destinations/sites have been identified in 30 States/UTs for development under the PRASHAD Scheme as on March 31, 2022.The government has proposed developing 100 food streets in 100 districts across India, with the financial help of US$ 122,271.30 (Rs. 1 crore) per food street/district.

THREATS

The hospitality industry remains under pressure, grappling with both long-standing structural issues and a wave of emerging disruptions. Adapting to this evolving landscape demands constant agility, investment, and innovation.

Key threats include:

?‚? Fragmented and complex regulatory frameworks across states slow expansion and raise compliance costs.

?‚? Licensing, permitting, and safety norms vary widely, leading to procedural delays.

?‚? A critical shortage of skilled labor hampers service standards and operational efficiency. This talent gap stems from weak training infrastructure and perceptions of poor work-life balance and low wages. Geopolitical unrest in regions like Eastern Europe and the Middle East disrupts travel flows and dampens confidence.

?‚? Shifting seasonal patterns and climate-driven events make demand forecasting less reliable.

?‚? The surge of alternative lodging platforms heightens competition and forces constant reinvention.

?‚? Frequent changes in tax regimes and property values complicate financial planning.

?‚? Guest expectations now lean heavily towards sustainable practices and hyper-personalized service, requiring ongoing investment in talent and technology

OPERATIONS/STATUS OF COMPANYS AFFAIRS

During the year company got listed in NSE SME platform offering enhanced visibility and credibility. Cmpany also announced a strategic marketing and distribution arrangement via a franchise agreement with Lemon Tree Hotels Limited (LTHL). Under this arrangement, the Companys property, Saj by the Lake, Malshej Ghat, Maharashtra, will be operated and marketed under the Keys Prima by Lemon Tree Hotels brand. This partnership represents an important milestone in Saj Hotels journey. By aligning with Lemon Tree Hotels, it not only strengthens the brand presence but also gain access to a larger customer base that already trusts Lemon Trees service standards. This collaboration will enhance guest experiences at Saj by the Lake and reinforce Sajs commitment to delivering exceptional hospitality

FUTURE STRATEGY RISK AND CONCERN

While risk is an inherent aspect of any business, the company is conscious of the need to have an effective monitoring mechanism and has put in place appropriate measures for its mitigation including business portfolio, financial, legal & internal process risk.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Companys internal financial control systems are commensurate with the nature of its business and the size and complexities of its operations. These systems are designed to ensure that all the assets of the Company are safeguarded and protected against any loss and protected against loss and that all transactions are properly authorized, recorded and reported. The company is always trying to improve on the internal controls to further safeguard any leakages.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

It is your Companys belief that people are at the heart of corporate purpose and constitute the primary source of sustainable competitive advantage. Your Companys belief in trust, transparency and teamwork improved employee productivity at all levels. The Company continues to lay emphasis on developing and facilitating optimum human performance. Recruitment process has been strengthened to ensure higher competence levels. Company has total 47 employees as on March 31 st, 2025 to meet the need of business. From time to time Company introduced new employees and conduct programs to develop the skills of the employees.

DISCLOSURES

During the year the company has not entered into any transaction of material nature with its promoters, the directors or the management, their subsidiaries or relatives etc, which may have potential conflict with the interest of the Company at large. All the details of transaction covered under related party transaction are given in the notes to accounts.

CAUTIONARY STATEMENT

Certain statements in the Management Discussion and Analysis and Directors Report describing the Companys Objectives, Strategies, projections, outlook, expectations, estimates and others may constitute forward ?€” looking statements and progressive within the meaning of applicable laws and regulations. Actual results may vary from those expressed or implied, depending upon economic conditions, Government Policies and other incidental factors. Readers are cautioned not to place undue reliance on the forward looking statements.

For And on Behalf of the Board of Directors SAJ HOTELS Limited

Karna Kartik Timbadia Kartik M Timbadia

Managing Directo Director

(DIN No. 01753308) (DIN: 00473057)

Date: 29.11.2025

Place: Mumbai