Schloss Bangalore Ltd Management Discussions

(2) Eight airport cities, namely Bengaluru, New Delhi, Chennai, Jaipur, Udaipur, Mumbai, Cochin and Ahmedabad, cater to the 10 key Indian business and leisure destinations covering 80% of international air traffic and 59% of the domestic air traffic in India in Financial Year 2025. Our number and percentage of luxury keys in these destinations, as of December 31, 2024, are: (a) 638 keys and 17.9% luxury market share in Bengaluru, (b) 734 keys and 22.7% luxury market share in New Delhi, (c) 325 keys and 15.7% luxury market share in Chennai, (d) 200 keys and 14.5% luxury market share in Jaipur, (e) 83 keys and 9.8% luxury market share in Udaipur, (f) 398 keys and 6.7% luxury market share in Mumbai, (g) 281 keys and 28.7% luxury market share in Kerala, and (h) 318 keys and 30.8% luxury market share in Gandhinagar Tricity (Source: HVS Report). For details, including number of keys and market share of other competitors in these destinations, see "Industry Overview" on page 166.

In addition to our Owned Portfolio, our Portfolio also includes seven operational luxury hotels and resorts managed under hotel management agreements with third-party owners and one operational luxury hotel which is owned and operated by a third-party owner under a franchise arrangement, as of March 31, 2025. These properties offer us an asset-light business model with minimal capital investment and enhance our total income and our brands reach. The hotels in our Managed Portfolio are strategically located in key urban centers seeking to cater to high-demand group business, retail and corporate business, while the resorts in our Managed Portfolio are in leisure destinations. Our ability to deliver The Leela experience and our operational expertise has allowed us to command higher RevPAR compared to comparable hotels across the respective micro-markets (Source: HVS Report). For example, for the Financial Year 2025, the ARR and RevPAR of our Managed Portfolio, in comparison to comparable hotels across their micro-markets, was 1.3 times and 1.2 times respectively (Source: HVS Report). Further, our Managed Portfolio generated performance-based incentive fees for us (except for a managed hotel which was rebranded in the Financial Year 2025) and had an average NPS of 83.60 for the Financial Year 2025, demonstrating robust performance and underscoring our commitment to guest satisfaction and brand reputation. We believe this operational excellence and ethos of Indian hospitality positions us as an attractive choice for future owners and developers of luxury hotels, resorts and other hospitality properties.

Further, we plan to expand our Portfolio with seven new hotels, aggregating approximately 678 keys or 19.08% of existing keys through 2028 that will be either developed, owned or managed by us. These are currently in various stages of acquisition and development. Our growth pipeline comprises of modern palaces, hotels and resorts including expansion in new segments such as wildlife, spiritual and heritage tourism, diversifying our geographical footprint across additional cities and tourist destinations. This includes a modern palace hotels in Agra (Uttar Pradesh) and Srinagar (Union Territory of Jammu and Kashmir), resorts in Ranthambore (Rajasthan) and Bandhavgarh (Madhya Pradesh) and serviced apartments in Mumbais (Maharashtra) international airport district. Going forward, we intend to continue to strategically undertake future expansion across the luxury hospitality sector within India and internationally. We intend to pursue this by developing our existing land assets, pursuing accretive asset acquisition opportunities, hotel management agreements with third-party hotel owners, and optimization of under-utilized space in our operating hotels. We will also pursue selective partnerships, acquisitions and development of brands that complement our Portfolio.

We seek to capitalize on the strength of our well recognized luxury brand through complementary business extensions. We currently manage a residential club in one of Mumbais luxury residential buildings and are looking to further expand this business. We are also looking to expand into The Leela-branded residential offerings for sale adjacent to The Leela branded hotels that we will develop in the future. Further, we aim to launch exclusive

‘members only clubs across select hotels in our Owned Portfolio, further diversifying our hospitality offerings.

Our strategic initiatives and expansion plans are greatly enhanced by the support of our Promoters, that are advised and managed by affiliates of Brookfield, a global alternative asset manager with over US$1 trillion of assets under management, operations in over 30 countries and approximately 250,000 operating employees as of March 31, 2025. As of March 31, 2025, Brookfield manages US$272 billion of real estate assets, and has a strong global track record in hospitality, with a global portfolio comprising around 44,000 keys across 181 owned hotels and significant experience in owning and managing luxury hospitality assets. Brookfield also has significant experience in acquiring, operating and managing assets in India, with US$30 billion of assets under management, experience of developing large scale mixed-use real estate projects of more than 10 msf (comprising 9.93 msf of office developments and 0.28 msf of retail developments, which are located across Gurugram, Noida, Kolkata, Mumbai, Bengaluru and Pune), and a longstanding presence in India for around 16 years (as Brookfield Advisors India Private Limited was incorporated under the Companies Act, 1956 on May 19, 2009), as of March 31, 2025. This is demonstrated by our growth pipeline which includes our collaboration with affiliates of Brookfield in relation to a serviced apartments project in Mumbai. In order to further accelerate our growth and leverage

Brookfields expertise, we have entered into a right of first offer agreement, dated September 17, 2024, with an affiliate of Brookfield (namely BSREP III India Ballet Holdings (DIFC) Limited, which is a promoter of our Promoters), granting us the right of first offer to acquire hospitality assets from them thereby providing us with the first opportunity to negotiate and potentially secure acquisition of hospitality assets from them before such offer is made to third parties.

Since acquiring our brand, hotel portfolio and hotel management business in October 2019, Brookfield has leveraged its global experience in asset management to focus on improving our revenue and profitability, enhancing guest satisfaction and increasing commitment to environmental sustainability. Since the completion of the acquisition in October 2019, several experienced members have joined our management team, including Anuraag Bhatnagar, our Whole-time Director and Chief Executive Officer, and Ravi Shankar, our Head of Asset Management and Chief Financial Officer. Set forth below are some notable achievements since October 2019 that have reinforced our brands legacy and our position as a leader in luxury hospitality:

ranked as the worlds best hospitality brand in 2020 and 2021, and among the worlds top three hospitality brands in 2023 and 2024 by Travel + Leisure Worlds Best Awards Surveys. We have also been awarded the best hotel group in India by Travel + Leisure for 2020-2024. For details in relation to the ranking methodology, see "Our Business Description of Our Business Awards and Accreditations Travel + Leisure Ranking Methodology" on page 270;

increased the number of keys across our portfolio by 42.40% from 2,495 keys as of March 31, 2019 to 3,553 keys as of March 31, 2025;

increased the number of hotels in our Portfolio and diversified our geographic presence, from eight operating hotels in seven cities as of March 31, 2019 to 13 operating hotels in 11 cities as of March 31, 2025;

improved the EBITDA, and EBITDA Margin from 4,236.29 million and 46.90% for the Financial Year 2023 to 7,001.68 million and 49.78% for the Financial Year 2025, respectively;

achieved RevPAR and ARR growth across our Owned Portfolio at a CAGR of 11.8% and 10.8%, respectively, between the Financial Years 2019 and 2024, as compared to the overall luxury hotel segment CAGR of 8.6% and 8.4%, respectively, over the same period (Source: HVS Report);

undertook significant hotel enhancement initiatives (some of which are ongoing) at all of our Owned Portfolio by repurposing space and/or investing in new facilities in an effort to grow our occupancy and

ARR, with a capital expenditure plan totaling 6,545.84 million since April 1, 2021, 65.37% of which has been incurred as of March 31, 2025; and

invested in sustainability to increase the contribution generated from renewable sources across our Owned Portfolio to 51.08% of total electricity utilized for the Financial Year 2024. Each of the hotels in our Owned Portfolio has received several certifications and accolades, including (i) the National Energy Management Award from the Society of Energy Engineers and Managers, (ii) the IGBC Green (Existing Building) Certification, Platinum Rating and (iii) the IGBC Net Zero Waste to Landfill Certification, Platinum Rating.

We have generated robust growth between the Financial Year 2023 and the Financial Year 2025, including in terms of revenue from operations, ARR, RevPAR and TRevPAR, driven by the strength of our brands reputation, our focus on guest satisfaction and operational excellence, the expansion of our Portfolio and strong macroeconomic factors. Further, our EBITDA margin for the Financial Year 2024 amounted to 48.92%, which, according to the HVS Report, was better than the EBITDA margin of our listed peers which ranged from 33.66% to 45.60%. Our EBITDA margin for the Financial Year 2025 amounted to 49.78%. In addition, the RevPAR of our Owned Portfolio, was approximately 2.9 times of the overall hospitality industry in India and 1.4 times of the luxury hospitality segment in India for the Financial Year 2025 (Source: HVS Report).

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

Our results of operations are impacted by macroeconomic conditions that affect the hospitality industry, and by evolving customer preferences. The Indian economy is presently the fifth largest globally with GDP of US$3.6 trillion in 2023 (Source: HVS Report), which provides robust support for hospitality demand. With GDP estimated to grow to US$5.1 trillion by the Financial Year 2027 and to US$6.8 trillion by the end of the current decade (Source: HVS Report), it provides strong fundamentals for the continued growth of the hospitality sector. Rising income levels combined with a strong macroeconomic environment are resulting in an evolution of consumer spending patterns, enabling Indias rise as a potential market for luxury goods and services (Source: HVS Report).

Indias high-income and upper middle-income categories comprise 24% of total households in 2018 and are expected to grow to 56% by 2030 (Source: HVS Report). These factors are also expected to positively impact the luxury hospitality industry, and, consequently, our business and results of operations.

Domestic tourism is a key driver for the Indian hospitality sector, with domestic tourist visits expected to double to 6.0 billion in 2030 from 2.8 billion in 2024, representing a CAGR of 13.4% (Source: HVS Report). In addition to domestic guests, we experience a high share of international guests, and accordingly our business depends upon trends that drive international travel to India. Foreign tourist arrivals are expected to grow at an expected CAGR of 7.1% over 2024 to 2030 to approximately 14.6 million (Source: HVS Report). Demand for luxury tourism globally is expected to grow at a CAGR of 6.6% from the Financial Year 2023 to the Financial Year 2028, driven mainly by growth of high-net-worth individuals and ultra-high net worth individuals population, particularly in Asian countries, with India being a key driver (Source: HVS Report). The demand-supply outlook for luxury hospitality segment continues to be favorable in India, with total demand for luxury rooms estimated to grow at a CAGR of 10.6% over Financial Year 2024 to Financial Year 2028 against supply growth of only 5.9% over the same period (Source: HVS Report).

Tourism is also expected to grow in particular niches, such as leisure travel, MICE tourism, wedding tourism, heritage tourism, wildlife tourism, and wellness and spiritual tourism (Source: HVS Report).

In addition to the above factors, the hospitality industry is also affected by travel advisories, worldwide health concerns, geo-political developments, political elections, natural disasters and adverse weather conditions (including heatwaves) in the region, and inflation. Declines in consumer demand due to adverse general economic conditions, lower consumer confidence, risks affecting or reducing travel patterns, or political instability in the regions where the hotels in our Portfolio are located can lower the revenues and profitability of our Portfolio. Further, as we focus exclusively on the luxury segment, any adverse development or economic downturn which restricts luxury discretionary spending by our customers, may adversely affect our business.The hospitality industry in India was severely affected by the outbreak of the COVID-19 pandemic in 2020 and 2021 due to reduced traveler traffic and government-mandated restrictions on movement. Restrictions on domestic and overseas travel, including airport closures and lockdowns in urban areas in such years, resulted in significantly lower demand for and occupancy rates of rooms at the hotels in our Portfolio. With the subsequent easing of COVID-19 related restrictions and recovery of travel activities, our average occupancy, ARR and RevPAR across our Portfolio improved during the last three Financial Years. For instance, our ARR increased by 7.86% to 16,409 for the Financial Year 2025 from 15,213 for the Financial Year 2024; RevPAR increased by 11.51% to 10,696 for the Financial Year 2025 from 9,592 for the Financial Year 2024; and average occupancy increased by 2% to 65% during the Financial Year 2025, from 63% during the Financial Year 2024. Further, our ARR increased by 18.67% to 15,213 for the Financial Year 2024 from 12,820 for the Financial Year 2023; RevPAR increased by 22.54% to 9,592 for the Financial Year 2024 from 7,828 for the Financial Year 2023; and average occupancy increased by 2% to 63% during the Financial Year 2024, from 61% during the Financial Year 2023.

As of March 31, 2025, our Portfolio comprises 5 hotels in our Owned Portfolio, 7 hotels in our Managed Portfolio, and 1 hotel in Mumbai (Maharashtra) for which we have licensed the use of our brand to a third-party hotel owner and operator. The revenues from our Owned Portfolio are consolidated in our results of operations. In contrast, under our hotel management agreements, in consideration for our services as the hotel operator, we are generally entitled to a basic management fee which is calculated as a fixed percentage of the gross operating revenue of the hotel and an incentive fee linked to the gross operating profit of the hotel. Under some of the hotel management agreements, we may also receive a sales and marketing fee which is calculated as a fixed percentage of the room revenue of the hotel. As fees from our hotel management agreements are linked to achieving certain financial and performance criteria, our ability to meet these financial and performance criteria is subject to, among other things, risks common to the overall hotel sector, some of which may be outside our control. Further, under the franchise arrangement for the Leela Mumbai, we receive a fee which is linked to the costs incurred in providing certain centralized services, such as access to our reservations system, sales and marketing programs and guest loyalty programs.

The following table sets forth the breakdown of our total income by operating structure, in absolute terms and as a percentage of total income, for the years indicated:

Our third-party hotel management agreements generally have initial terms ranging from 10 to 30 years, and typically provide for extensions for up to 10 years subject to mutual agreement of terms and conditions. In the event our relationships with the hotel owners deteriorate and our agreements with them are terminated, or if we are unable to enter into hotel management agreements for new hotels, our results of operations may be adversely affected.

For our Owned Portfolio, we incur upfront capital expenditures and all expenses on operating and managing the hotels. For our Managed Portfolio and the franchisee hotel, capital expenditure as well as operating expenses are typically borne by the hotel owners, except that in some cases, certain costs such as business promotion and payroll expenses are incurred by us and reimbursed by the hotel owners subsequently.

Accordingly, the mix of our Owned Portfolio and Managed Portfolio affects our revenues and costs.

The income that we generate from our Portfolio comprises diverse revenue streams, including room revenue and non-room revenue, and management and operating fees from our Managed Portfolio. Our ability to diversify revenue sources from our Owned Portfolio as well as management and operating fees from our Managed Portfolio has had a significant impact on our results of operations. Set forth below is a component-wise breakdown of our revenue from operations for the Financial Years indicated in absolute terms and as a percentage of our total revenue from operations:

( in million except percentages)

(1) Revenue from food and beverages comprises revenues generated from the sale of food and beverages at our Owned Portfolio, from both outlets and banquets.

(2) Management and other operating fees (including reimbursements of costs incurred by us) relate to management fees earned from our Managed Portfolio. (3) Other allied services include, among other things, laundry income, health club income, and airport transfers and membership, among others.

(4) Manpower services consist of income related to supply of skilled manpower.

Our diversified Portfolio of 13 hotels strategically located across 11 key Indian business and leisure destinations as of March 31, 2025, and our strong brand positioning have enabled us to grow our total revenue from operations to 13,005.73 million in the Financial Year 2025 from 11,714.53 million in the Financial Year 2024 and

8,600.58 million in the Financial Year 2023. The average occupancy for our Owned Portfolio increased to 68% for the Financial Year 2025 from 67% for the Financial Years 2024 and 2023 and the ARR for our Owned Portfolio increased to 22,545 in the Financial Year 2025 from 20,966 in the Financial Year 2024 and 17,248 in the Financial Year 2023. Further, our direct sales channels contributed 65.36% of our room income as of Financial Year 2025, which also further reflects our premium market positioning and brand strength in luxury hospitality.

Our room income is complemented by income generated from varied food and beverage options and curated experiences. Our hotels also serve as venues for corporate and other events that further complement our room revenue and revenue from food and beverages. By keeping-up with changing consumer trends, we expect to continue to increase our revenue from food and beverages and allied service offerings, and consequently, continue to diversify our sources of revenue. Revenue from food and beverages as a percentage of our total revenue from operations was 36.77% for the Financial Year 2025.

At each of the hotels in our Portfolio, we aim to create a luxury ‘ecosystem for our guests comprising luxurious accommodations, curated experiences, and wellness programs and award-winning food and beverage options. This ecosystem caters to the evolving travel preferences of consumers towards differentiated experiential and immersive journeys, which allows us to drive superior revenue per available room. For the Financial Year 2025, the TRevPAR of our Owned Portfolio of 29,575 was 1.4 times of the luxury hospitality segment (Source: HVS Report). Food and beverages revenue supplements room revenue and forms a significant source of income for hotels in India (Source: HVS Report). Food and beverages revenue per occupied room for the luxury hospitality segment in India is over 1.9 times of the overall industry in 2023 (Source: HVS Report).

Further, we also seek to capitalize on the strength of our well recognized luxury brand through complementary business extensions. We currently manage a residential club in one of Mumbais luxury residential buildings and are looking to further expand this business. We are also looking to expand into The Leela-branded residential offerings for sale adjacent to The Leela branded hotels that we will develop in the future. Further, we aim to launch exclusive ‘members only clubs across select hotels in our Owned Portfolio, further diversifying our hospitality offerings. These initiatives are aimed at diversifying our revenue from operations.

We continue to grow our Portfolio through acquisitions and developments of new hotels and by entering into new hotel management agreements. We have grown our Portfolio from 2,495 keys at eight hotels as of March 31, 2019 to 3,553 keys at 13 hotels as of March 31, 2025. We continue to evaluate potential acquisitions, developments and hotel management agreements.

Our recent growth has been driven, in part, by additions to our Portfolio, in particular, The Leela Palace Jaipur. We began managing The Leela Palace Jaipur in September 2020 (pursuant to a hotel management agreement) and acquired 50.00% of the outstanding ownership interest in TPRPL, the company holding The Leela Palace Jaipur on May 3, 2021. Subsequent to the acquisition of this stake, we then refurbished and rebranded the hotel, and on May 27, 2023, acquired the remaining 50.00% of the outstanding ownership interest in TPRPL. Further, we plan to expand our Portfolio with seven new hotels aggregating approximately 678 keys or 19.08% of existing keys through 2028 that will be either developed, owned or managed by us. These are currently in various stages of acquisition and development. For additional details, please see "Our Business Hotel Pipeline and Development Process Hotels under development" on page 263.

Subsequent to the acquisition of a hotel or the entry into a new hotel management agreement, we plan our renovation in a phased manner and rebrand it. After renovation and rebranding, the hotels in our Portfolio generally experience an increase in ARR in the long-term, which leads to improved results of operations. We endeavor to renovate the hotels in our Portfolio in phases in order to continue to generate income from room rentals from parts of the hotels and sale of food and beverages during renovation. As we add, renovate or rebrand our Portfolio, an initial ramp-up period of sub-optimal performance is observed during which the occupancy rate of the hotel gradually increases and the operating expenses, which are relatively fixed, exceed the hotel revenue, which increases with the increase in occupancy rates. As these hotels mature, we seek to break-even and achieve profitability. Therefore, for any given period, the composition of mature and ramp-up assets in our Portfolio may affect our profitability.

The impact of hotel acquisitions, developments and management agreements, and renovations and rebranding on our results of operations and financial condition depends on various factors, including the size of each hotels business and operations, its location and demand-supply dynamics in the region, the terms of the acquisition or management agreement, our ability to consummate transactions on acceptable terms and within anticipated timelines, and the amount of required capital and access to capital on acceptable terms (including terms of availability of indebtedness) for the acquisition, development and renovation of hotels. Further, construction or renovation timelines and development delays, renovation and construction cost overruns, time required to obtain necessary approvals and permits, time taken for ramp-up and stabilizing the hotel operations post opening and our ability to realize the anticipated growth opportunities and synergies may have an impact on our results of operations and financial condition. The timing of opening of new hotels and acquisitions may cause our revenues and profitability to fluctuate quarter to quarter.

We have been, and continue to be, focused on improving same-store growth of the hotels in our Portfolio. To achieve this objective, we intend to undertake several measures firstly, enhance existing properties, secondly, undertake targeted marketing initiatives, and, thirdly, improve cost efficiencies. These initiatives are aimed at driving growth in RevPAR and market share for our Owned Portfolio and Managed Portfolio, improving their profitability and, in turn, our ownership earnings and management fee revenues.

Since April 1, 2021, we have undertaken significant property improvement initiatives with a total capital expenditure of 6,545.84 million, of which 65.37% has been incurred as of March 31, 2025. The remaining enhancements are ongoing and are being targeted to be completed over the next 12 to 18 months (for additional details, please see "Our Business Our Strategies Improve same-store growth and profit margins through proactive asset management" on page 228). To the extent possible, practicable and permissible under local municipal and other regulations, we will continue to seek to expand our existing properties through densification of under-utilized space, identifying sub-optimal and ancillary areas which can be repurposed, re-modelled or retrofitted or through acquisitions of adjacent land parcels. These initiatives will allow us to enhance our offerings to attract a wider customer base and improve the overall guest experience, in turn resulting in higher occupancy and revenues.

Further, we also focus on revenue enhancement initiatives. We are upgrading our digital infrastructure to enhance customer engagement and operational efficiency. This encompasses implementing advanced property management systems, leveraging data analytics for personalized services, launching The Leela App, and enhancing our websites booking capabilities including virtual reality tours. We are also implementing a targeted approach to improving occupancy and ARR through an array of marketing initiatives and expansion of our global digital distribution partnerships.

In addition, we also expect to continue to enhance the performance of our hotels by improving operating efficiencies and optimizing costs. This includes driving staff productivity and efficiency through comprehensive training programs and introduction of energy saving and solar power generation initiatives that are both cost-efficient and environmentally friendly.

See also "Risk Factors We are exposed to risks associated with the renovation and refurbishment of existing hotels. Delays in the renovation and refurbishment of existing hotels in our Portfolio may have an adverse effect on our business, financial condition and results of operations" on page 45.

The hospitality industry in India and overseas is competitive and varies country to country and region to region. The hotels in our Portfolio compete with large multi-national and Indian brands in the geographies in which we operate. We tend to experience competition from hotel brands in the luxury segment. Our success is dependent on our ability to compete on a number of factors such as room rates, quality of accommodation, location of the hotels in our Portfolio, guest service standards, food and beverage options and brand recognition, among others.

We may also have to compete with new hotels that commence operations in the areas in which we operate. The supply of new hotel rooms in a particular location significantly affects our ability to increase rates charged to customers at our Portfolio. Supply in the luxury hospitality segment remains limited given high barriers to entry which include limited availability of suitable land parcels, securing requisite land use permissions and end-use restrictions, regulatory approvals and licenses and substantial capital and time investment needed to build a well-recognized and respected luxury brand, as well as to develop luxury hotels (Source: HVS Report). The demand-supply outlook for luxury hospitality segment continues to be favorable in India, with total demand for luxury rooms estimated to grow at a CAGR of 10.6% over Financial Year 2024 to Financial Year 2028 against supply growth of only 5.9% over the same period (Source: HVS Report).

The hospitality industry is cyclical, and demand generally follows, on a lagged basis, key macroeconomic indicators. Demand for hotel rooms, occupancy levels and ARRs experience increases and decreases through macroeconomic cycles. For example, in periods of increased economic activity, there is an increase in business travel, which has a direct positive impact on the demand for hotel rooms.

The combination of changes in economic conditions and in the supply of hotel rooms can result in significant volatility in the results of hotels. The costs of running a hotel, such as power, fuel and water costs, employee costs, and rental and real estate taxes, tend to be more fixed than variable. Due to high operating leverage, when demand for the hotels in our Portfolio decreases, the resulting decline in our revenues can have an adverse effect on our profits, net cash flows and margins. This effect can be especially pronounced during periods of economic contraction or slow economic growth. Similarly in times of economic upturns, when the demand for hotel rooms increases, due to high operating leverage, our profits and margins may increase disproportionately to the increase in revenues.

Further, consumer demand for the hotels in our Portfolio can subject our revenues and profits to significant volatility, and are largely affected by seasonal variations across the hospitality industry. While the specific periods during which the hotels in our Portfolio experience higher revenues vary from property to property, depending principally upon location, purpose of travel and the guests served, we generally experience higher revenues in the second half of the Financial Year in comparison to the first half of the Financial Year due to greater demand for domestic and international leisure travel during this period. Seasonality affects leisure travel, including weddings, as well as inbound foreign leisure travel, such that demand is relatively stronger during the October to March period. During this period, we typically see an increase in ARR and average occupancy rates. Our revenues are generally higher during the second half of each Financial Year due to greater demand for domestic and international leisure travel during this period. Business travel is generally more consistent throughout the year. As a result, our revenues are generally higher during the second half of each Financial Year and seasonality can be expected to cause quarterly fluctuations in our revenues and profits especially for leisure travel destinations such as Jaipur (Rajasthan) and Udaipur (Rajasthan).

Our business is subject to significant governmental regulation, particularly in relation to with respect to, among others, safety, health, environmental, real estate, food, excise, property tax and labor laws. In connection with our ownership of hotels and development of hotels, 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 labor and work permits and maintenance of regulatory/statutory records. 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 the hotels in our Portfolio. These regulations and policies can be extensive and amended periodically. Any delay in complying with such reporting requirements within the prescribed timelines could expose us to potential litigation and penal action. Similarly, we are required to seek music licenses for playing music which is subject to copyright at the hotels in our Portfolio. Failure to seek such licenses could result in litigation.

Historically, we were not subject to current tax on the account of our net tax losses. Going forward, on account of our corporate restructuring, our accumulated tax losses will lapse, and tax would be applicable on taxable profits.

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. See also "Risk Factors We are subject to extensive government regulation with respect to safety, health, environmental, real estate, food, excise, tax and labor laws. Any non-compliance with, or changes in, regulations applicable to us may adversely affect our business, reputation, results of operations and financial condition" on page 78 and "Key Regulations and Policies in India" on page 273.

We use various financial and operational parameters to monitor the financial condition and operating performance of our Portfolio. Certain statistical and comparative data that is commonly used within the hospitality industry to evaluate a hotels financial and operating performance include:

Average Occupancy: Average occupancy represents the total number of room nights sold expressed as a percentage of the total number of room nights available in a given year. Occupancy measures the utilization of our Portfolios available capacity. We use occupancy to gauge demand at our Portfolio in a given period. Occupancy levels also help us determine achievable ARR levels as demand for hotel rooms increase or decrease.

Average Room Rate: ARR represents room revenue divided by total number of room nights sold in a given year. ARR does not include Revenue from food and beverages and other allied services. ARR measures the average room price attained by a hotel and ARR trends provide meaningful information relating to pricing policies and the nature of the guest base of a hotel.

Revenue Per Available Room: RevPAR represents the room revenue generated per available room calculated by multiplying the ARR charged and the average occupancy achieved in a given year. RevPAR is a meaningful indicator of our performance as it provides a metric correlated to two primary and key drivers of operations at a hotel, i.e., Average Occupancy and ARR.

Total Revenue Per Available Room: TRevPAR represent total revenue from our owned hotels portfolio during a given year divided by the total available room nights in that year. It includes data for The Leela Palace Jaipur for all the 3 fiscal years.

Functional and presentation currency Our functional currency is Indian Rupee. Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in Restated Consolidated Statement of Profit and Loss. They are deferred in equity if they relate to qualifying cash flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation. A monetary item for which settlement is neither planned nor likely to occur in the foreseeable future is considered as a part of the entitys net investment in that foreign operation. All other foreign exchange gains and losses are presented in the Restated Consolidated Statement of Profit and Loss on a net basis within other gains/(losses).

Subsequent measurement

Foreign currency transactions subsequently are accounted using the exchange rates as at that date and difference, if any, between the exchange rates as at the subsequent date and the date of the balance sheet is recognized as income or expense in the Restated Consolidated Statement of Profit and Loss.

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the Restated Consolidated Statement of Assets and Liabilities.

Basic earnings per share is computed by dividing the profit or loss after tax by the weighted average number of equity shares outstanding during the year adjusting the bonus element for all the reported period arising on account of issue of equity shares on rights and including potential equity shares on compulsory convertible debentures. Diluted earnings per share is computed by dividing the profit/(loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share adjusted for the effects of all dilutive potential equity shares. Ordinary shares that will be issued upon the conversion of a mandatorily convertible instrument are included in the calculation of basic earnings per share from the date the contract is entered into.

Revenue is recognized at an amount that reflects the consideration to which we expect to be entitled in exchange for transferring the goods or services to a customer, i.e., on transfer of control of the goods or service to the customer. Revenue from sales of goods or rendering of services is net of indirect taxes, returns and discounts.

Rooms, food and beverage and banquets: Revenue is recognized at the transaction price that is allocated to the performance obligation. Revenue includes room revenue, food and beverage sale and banquet services which is recognized once the rooms are occupied, food and beverages are sold and banquet services have been provided as per the contract with the customer.

Management and other operating fees: Management fees earned from hotels managed by us are usually under long-term contracts with the hotel owner. Under the contract, our performance obligation is to provide hotel management services and a license to use our brand name and other intellectual property. As compensation for such services, we are generally entitled to receive:

- Base fees: which are a percentage of the revenue of properties;

- Incentive fees: which are generally based on a measure of hotel profitability; and

- Marketing fees: which are generally based on room revenue of the properties.

Entire consideration (i.e., base fees, incentive fees and marketing fees) is a variable consideration, as the transaction price is based on a percentage of revenue or profit, as defined in each contract. We recognize all fees on a monthly basis over the term of the agreement as those amounts become payable, as long as we do not expect a significant reversal due to projected future hotel performance or cash flows in future periods.

Cost recoverable: Under the management agreements, we are entitled to be reimbursed for certain costs that we incur on behalf of the managed properties. These costs primarily consist of business promotion, payroll, travelling and related expenses at managed properties where we are employer of the employees at the properties and include certain operational and administrative costs as provided for in our contracts with the owners. We are entitled to reimbursement in the period it incur the related reimbursable costs, which we recognize within the "Management and other operating fees" under revenue from operations caption of our Restated Consolidated Statements of Profit and Loss.

Membership fees: Membership fee income primarily consists of membership fees received from club and spa services. In respect of performance obligations satisfied over a period of time, revenue is recognized at the allocated transaction price on a time-proportion basis.

Manpower services: Manpower services consists of income related to supply of skilled manpower. The performance obligation for manpower services is satisfied over the period of time. Revenue is recognized by applying as invoiced practical expedient.

Other allied services: In relation to laundry income, communication income, health club income, airport transfers income and other allied services, the revenue has been recognized with reference to the time of service rendered.

Some contracts include multiple performance obligations, such as sale of food and beverages and room revenue. These are considered as separate performance obligations as, the customer can benefit from the good or service on our own and the good or services are distinct within the context of the contract. Where the contracts include multiple performance obligations, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices.

Contract balances: A contract asset, i.e., unbilled revenue is recognized in respect of those performance obligations where the control of the goods has been transferred to the buyer or services are provided to the customer, and only the act of invoicing is pending.

A contract liability is the obligation to transfer services to a customer for which we have received consideration from the customer. If a customer pays consideration before we transfer goods or services to the customer, a contract liability is recognized when the payment is made. Contract liabilities are recognized as revenue when we perform under the contract.

Interest income: Interest income is recognized on a time proportion basis taking into account amount outstanding and using effective interest rate method.

Space and shop rentals: Rentals consist of rental revenue earned from letting of spaces for retail and office at the properties. Revenue is recognized over the tenure of the lease/service agreement on a straight line basis over the term of the lease, except where the rentals are structured to increase in line with expected general inflation, and except where there is uncertainty of ultimate collection.

Government grants: Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and we will comply with all attached conditions.

Property, plant and equipment are stated at cost which includes capitalized borrowing costs, less accumulated depreciation (other than freehold land) and accumulated impairment losses, if any.

All property, plant and equipment are initially recorded at cost. Cost includes the acquisition cost or the cost of construction, including duties and non-refundable taxes, expenses directly related to bringing the asset to the location and condition necessary for making them operational for their intended use. Initial estimate of costs of dismantling and removing the item and restoring the site on which it is located is also included if there is an obligation to restore it.

Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to us and the cost of the item can be measured reliably.

An assets carrying amount is written down immediately to our recoverable amount if the assets carrying amount is greater than our estimated recoverable amount.

Depreciation is charged to the statement of profit and loss so as to expense the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight line method, as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets had been re-assessed as under based on technical evaluation, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, among others.

The useful lives have been determined as per the useful life prescribed in Schedule II to the Companies Act, 2013 or as per technical assessment. The residual values are not more than 5% of the original cost of the asset.

Based on the above, the estimated useful lives of the property, plant and equipment are as follows:

Freehold land is not depreciated. The assets useful lives and residual values are reviewed at the balance sheet date and the effect of any changes in estimates are accounted for on a prospective basis. An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the statement of profit and loss.

On transition to Ind AS, we have elected to fair value our property, plant and equipment recognized as of April 1, 2022 (transition date) in the entities where the Ind AS was implemented for the first time and used that fair value as the deemed cost of the property, plant and equipment.

Capital work-in-progress represents projects under which the property, plant and equipment are not yet ready for their intended use and are carried at cost determined as aforesaid.

Investment properties, principally office buildings, are held for long-term rental yields and are not occupied by us. They are carried at cost. Investment properties are depreciated using the straight-line method to allocate the cost of assets over their estimated useful lives. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any. Investment properties generally have useful lives of 60 years for building and land is not depreciated. The useful lives have been taken as per schedule II. Investment property is measured initially at its cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized only when future economic benefits associated with the expenditure will flow to us and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized. Investment properties under construction are carried individually at cost less impairment, if any. Impairment of investment properties is determined in accordance with policy stated for impairment of assets.

Intangible assets include cost of acquired software and designs, cost incurred for development of our website, certain contract acquisition costs, brand and goodwill. Intangible assets are initially measured at acquisition cost including any directly attributable costs of preparing the asset for our intended use and are carried at cost less accumulated amortization and accumulated impairment losses. Expenditure on projects which are not yet ready for intended use are carried as intangible assets under development. Intangible assets with finite lives are amortized over their estimated useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. Intangible assets with indefinite useful lives are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Intangible assets are amortized on a straight-line basis over the period in which economic benefits will be derived from their use. The amortization period and the amortization method are reviewed at least each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly.

Goodwill on acquisitions of business is included in intangible assets note. Goodwill is not amortized but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose.

On transition to Ind AS, we have elected to use previous GAAP carrying value as deemed cost for intangible assets as of April 1, 2022 (transition date) in the entities where the Ind AS was implemented for the first time.

Based on the above, the estimated useful lives of the intangible assets are as follows:

Assets that are subject to depreciation and amortization are reviewed for impairment periodically including whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the assets carrying amount exceeds our recoverable amount. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. Where the asset does not generate cash flows that are independent from other assets, we estimate the recoverable amount of the cash generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than our carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to our recoverable amount. An impairment loss is recognized immediately in the statement of profit and loss. When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the revised estimate of our recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss for non-financial assets other than goodwill is recognized immediately in the Statement of Profit and Loss to the extent that it eliminates the impairment loss which has been recognized for the asset in prior years.

Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred tax are recognized in the Statement of Profit and Loss, except when they relate to items that are recognized in Other Comprehensive Income or directly in equity, in which case, the current and deferred tax are also recognized in Other Comprehensive Income or directly in equity, respectively.

Current tax

Current tax expenses are accounted in the same period to which the revenue and expenses relate. Provision for current income tax is made for the tax liability payable on taxable income after considering tax allowances, deductions and exemptions determined in accordance with the applicable tax rates and the prevailing tax laws.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognized amounts and there is an intention to settle the asset and the liability on a net basis.

Deferred tax

Deferred tax is recognized using the balance sheet approach. Deferred tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in the Restated Consolidated Financial Information, except when the deferred tax arises from the initial recognition of goodwill, temporary differences related to investments in subsidiaries to the extent that we are able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profits or loss and does not give rise to equal taxable and deductible temporary differences at the time of the transaction. Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profit will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognize a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on our business plans of. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized, such reductions are reversed when the probability of future taxable profits improves. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantially enacted by the end of the reporting period. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and we intend to settle our current tax assets and liabilities on a net basis.

Short term employee benefits

All employee benefits that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service are classified as short-term employee benefits. These benefits include salary, wages and bonus, short term compensated absences such as paid annual leave and sickness leave. The undiscounted amount of short-term employee benefits (including compensated absences) expected to be paid in exchange for the services rendered by employees is recognized as an expense during the period of rendering of service by the employee.

The obligations are presented as current liabilities in the balance sheet if we do not have an unconditional right to defer the settlement for at least twelve months after the reporting date.

Long term employee benefits

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Our contribution to provident fund and employee state insurance scheme are considered as defined contribution plans and are recognized as an expense when employees have rendered service entitling them to the contributions.

Our gratuity scheme is a defined benefit plan. Our net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods, that benefit is discounted to determine our present value and the fair value of any plan assets are deducted.

The present value of the obligation under such defined benefit plan is determined based on actuarial valuation by an independent actuary using the projected unit credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on government securities as at the balance sheet date. When the calculation results in a potential asset for us, the recognized asset is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan (the "asset ceiling").

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in statement of profit and loss as past service cost.

Other long-term employee benefits

The employees can carry forward a portion of the unutilized accrued compensated absences beyond twelve months and utilize it in future service periods or received cash compensation on termination of employment. We records obligation for compensated absences in the period in which the employee renders services that increase this entitlement. The obligation is measured on the basis of independent actuarial valuation using the projected unit credit method. The discount rates used for determining the present value of the liability is based on the market yields on Government securities as at the balance sheet date. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognized in the statement of profit and loss.

Stock of food and beverages and stores and operating supplies are carried at the lower of cost (computed on a weighted average basis) or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Cost includes the fair value of consideration paid including duties and taxes (other than those refundable), inward freight and other expenditure directly attributable to the purchase. Trade discounts and rebates are deducted in determining the cost of purchase.

Provisions are recognized when we have a binding present obligation. This may be either legal because it derives from a contract, legislation or other operation of law, or constructive because we created valid expectations on the part of third parties by accepting certain responsibilities. To record such an obligation it must be probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made for the amount of the obligation. The amount recognized as a provision and the indicated time range of the outflow of economic benefits are the best estimate (most probable outcome) of the expenditure required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. Non-current provisions are discounted for giving the effect of time value of money.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within our control or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.

A contingent asset is not recognized but disclosed in the Restated Consolidated Financial Information where an inflow of economic benefit is probable.

Provisions, contingent assets and contingent liabilities are reviewed at each balance sheet date.

Classification

We classify the financial assets in the following measurement categories

those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and

those to be measured at amortized cost.

The classification depends on the entitys business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income.

Recognition

Regular way purchases and sales of financial assets are recognized on trade-date, being the date on which we commits to purchase or sale the financial asset.

Measurement

At initial recognition, we measure a financial asset at our fair value (trade receivables is measured at transaction price) plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in statement of profit and loss.

Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

Subsequent measurement of debt instruments depends on our business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which we classify our debt instruments:

Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in other income using the effective interest rate method. Any gain or loss arising on derecognition is recognized directly in statement of profit and loss and presented in other gains/(losses). Impairment losses are presented as separate line item in the Restated Consolidated Statement of Profit and Loss.

Fair value through other comprehensive income ("FVOCI"): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognized in statement of profit and loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss and recognized in other gains/(losses). Interest income from these financial assets is included in other income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in statement of profit and loss.

Fair value through profit or loss: Assets that do not meet the criteria for amortized cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through statement of profit and loss is recognized in statement of profit and loss and presented net within other gains/(losses) in the period in which it arises. Interest income from these financial assets is included in other income.

We subsequently measure all equity investments at fair value. Where our management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments are recognized in Restated Consolidated Statement of Profit and Loss as other income when our right to receive payments is established.

Changes in the fair value of financial assets at fair value through profit or loss are recognized in other gain/(losses) in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.

Compound financial instruments issued by us comprises convertible debentures and compulsorily convertible preference shares denominated in Rupees. The liability component of compound financial instruments is initially recognized at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognized at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not remeasured subsequently. Interest related to the financial liability is recognized in statement of profit and loss (unless it qualified for inclusion in the cost of an asset). On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognized.

Trade receivables are measured at their transaction price unless it contains a significant financing component in accordance with Ind AS 115 or pricing adjustments embedded in the contract. They are subsequently measured at amortized cost using the effective interest method, less loss allowance.

Other receivables are recognized initially at fair value plus or minus transaction costs and subsequently measured at amortized cost using the effective interest method, less loss allowance.

Trade and other payables

Trade payables are initially measured at fair value, and are subsequently measured at amortized cost, using the effective interest rate method. If payment is expected in one year or less, they are classified as current liabilities. If not, they are presented as non-current liabilities.

Borrowings

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the Restated Consolidated Statement of Profit and Loss over the period of the borrowings using the effective interest rate method.

Borrowings are classified as non-current liabilities if we have an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date. If not, they are presented under current borrowings.

Derecognition of financial asset & financial liabilities

A financial asset (or, a part of a financial asset) is primarily derecognized when:

(i) The contractual right to receive cash flows from the financial assets expire, or

(ii) We transfer the financial assets or our right to receive cash flow from the financial assets and substantially all the risks and rewards of ownership of the asset to another party.

A financial liability (or, a part of financial liability) is derecognized when the obligation specified in the contract is discharged or cancelled or expires.

Gain or loss on derecognition

Gain or loss on derecognition of a financial asset or liability measured at amortized cost is recognized in the statement of comprehensive income at the time of derecognition. Derecognition gain/loss on financial assets other than equity instruments measured at FVOCI is recycled to profit or loss. Gain or loss on derecognition of equity instruments measured at FVOCI is never recycled to profit or loss.

Impairment of financial assets

We assess on a forward-looking basis the expected credit losses associated with our debt instruments carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, we apply the simplified approach permitted by Ind AS 109, which requires expected lifetime losses to be recognized from initial recognition of the receivables. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in a provision matrix. For other financial assets (not being equity instruments or debt instruments measured subsequently at FVTPL) the expected credit losses are measured at the 12 month expected credit losses or an amount equal to the lifetime expected credit losses if there has been a significant increase in credit risk since initial recognition.

Offsetting of financial asset and liabilities

Financial assets and liabilities are offset and the net amount reported in the balance sheet where we currently have a legally enforceable right to offset the recognized amounts, and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

As a lessee

On inception of a contract, we assess whether it contains a lease. A contract contains a lease when it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The right to use the asset and the obligation under the lease to make payments are recognized in our statement of financial position as a right-of-use asset and a lease liability.

The right-of- use asset recognized at lease commencement includes the amount of lease liability recognized, initial direct costs incurred, and lease payments made at or before the commencement date, less any lease incentives received. Right-of-use assets are depreciated over the shorter of the assets estimated useful life and the lease term. Right-of-use assets are also adjusted for any re-measurement of lease liabilities and are subject to impairment testing. Residual value is reassessed annually.

The lease liability is initially measured at the present value of the lease payments to be made over the lease term.

The lease payments include fixed payments (including ‘in-substance fixed payments) and variable lease payments that depend on an index or a rate, less any lease incentives receivable, lease payments in an optional renewal period if we are reasonably certain to exercise an extension option and payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease. ‘In-substance fixed payments are payments that may, in form, contain variability but that, in substance, are unavoidable. In calculating the present value of lease payments, we uses our incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable.

The lease term includes periods subject to extension options which we are reasonably certain to exercise and excludes the effect of early termination options where we are reasonably certain that it will not exercise the option. Minimum lease payments include exercise price and a purchase option if we are reasonably certain it will purchase the underlying asset after the lease term.

After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the ‘in-substance fixed lease payments or as a result of a rent review or change in the relevant index or rate.

Variable lease payments that do not depend on an index or a rate are recognized as an expense in the period over which the event or condition that triggers the payment occurs.

We have opted not to apply the lease accounting model to leases of low-value assets or leases which have a lease term of 12 months or less and do not contain any purchase option. Costs associated with such leases are recognized as an expense on a straight-line basis over the lease term.

We present right-of-use assets that do not meet the definition of investment property and property, plant and equipment separately in the balance sheet and lease liabilities separately in the balance sheet within financial liabilities.

As a lessor

Leases for which our Group is a lessor are classified as a finance or operating lease. For operating leases, rental income is recognized on a straight-line basis over the term of the relevant lease.

Classification of lease

To classify each lease, we as lessor make an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease, if not, it is an operating lease. As part of this assessment, we consider certain indicators such as whether the lease is for the major part of the economic life of the asset.

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for our intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. Other borrowing costs are expensed in the period in which they are incurred.

The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The acquisition date is the date on which control is transferred to the acquirer. Judgement is applied in determining the acquisition date and determining whether control is transferred from one party to another.

The excess of the consideration transferred over the fair value of the net identifiable assets acquired is recorded as goodwill. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition.

Goodwill is not amortized but it is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses.

Common control business combination refers to a business combination involving companies in which all the combining companies are ultimately controlled by the same party or parties both before and after the business combination, and that control is not transitory. Business combinations involving companies or businesses under common control have been accounted for using the pooling of interest method. The assets, liabilities and reserves of the combining companies are reflected at their carrying amounts. No adjustments have been made to reflect fair values, or to recognize any new assets or liabilities.

The financial information in the Restated Consolidated Financial Information in respect of prior periods have been restated as if the business combination had occurred from the beginning of the earliest period presented in these Restated Consolidated Financial Information, irrespective of the actual date of the combination. However, if business combination had occurred after that date, the prior period information has been restated only from that date.

The difference, if any, between the purchase consideration paid either in the form of share capital or cash or other assets and the amount of share capital of the entities acquired is transferred to capital reserve in case of credit balance and common control adjustment deficit account in case of debit balance and presented separately from other reserves within equity.

Non-controlling interest in the net assets of the consolidated subsidiaries consists of :

a) The amount of equity attributable to non-controlling shareholders at the date on which the investments in the subsidiary companies were made; and

b) The non-controlling share of movements in equity since the date the Parent-Subsidiary relationship comes into existence.

The total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interest having deficit balance.

Cash flows from operating activities are reported using the indirect method, whereby profit/(loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments.

Where events occurring after the balance sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted in the Restated Consolidated Financial Information. Otherwise, events after the balance sheet date of material size or nature are only disclosed.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The management assesses the financial performance and position of the group and makes strategic decisions. The chief operating decision maker is our board of directors. Refer to Note 36 of the Restated Consolidated Financial Information for segment information presented.

The following descriptions set forth information with respect to the key components of our statement of profit and loss.

Total income consists of revenue from operations and other income.

Revenue from operations. Revenue from operations comprises revenue from sale of products and services at the hotels in our Portfolio.

Revenue from sale of products comprises revenues from sale of food and beverages.

Revenue from sale of services comprises (i) room income, which is income received from occupied rooms and suites at our owned hotels, (ii) manpower services, which comprises reimbursement of employee costs at The Leela Gandhinagar for the employees deployed at such hotel, (iii) management and other operating fees, which comprises income from hotel management agreements with third-party hotel owners who have provided their hotel assets to us to manage, reimbursements of expenses and other charges from managed and franchised hotels and (iv) other allied services, which is income from laundry services, spa and health club usage income, airport transport income and membership fee income, among others.

Other income. The primary components of other income include (i) interest income from deposits with banks and other sources, (ii) income from rental and related services, which comprises income from rental of shops and other spaces primarily at The Leela Palace Bengaluru, (iii) income from Government grant in connection with The Leela Palace Jaipur, and (iv) miscellaneous income.

Expenses consist of cost of food and beverages consumed, employee benefits expense, finance costs and depreciation and amortization expenses and other expenses.

Cost of food and beverages consumed. Cost of food and beverages consumed comprises costs from consumption of all food and beverage items (including alcoholic and non-alcoholic beverages), groceries and food staples at the hotels in our Portfolio (at restaurants and banquets and within room service).

Employee benefits expense. Employee benefits expense comprises salaries, wages and bonus, contribution to provident fund and other funds, staff welfare expenses, gratuity and compensated absences.

Finance costs. Finance costs comprises interest expense on rupee term loan, non-convertible bonds, working capital term loans, liability component of compound financial instruments, lease liabilities, bank overdraft, unwinding of provision and liability, security deposit and others.

Depreciation and amortization expense. Depreciation and amortization expense comprises depreciation of property, plant and equipment, depreciation of right-of-use assets (such as leases), depreciation on investment property and amortization of other intangible assets (such as software and licenses).

Other expenses. The primary components of other expenses include expenses for consumption of stores and other supplies, power and fuel, repair and maintenance of buildings, plant and machinery and others, sales and credit card commission, business promotion (i.e., marketing and branding expenses), rates and taxes, legal and professional fees, net impairment losses on financial assets, travelling and conveyance, guest transport, corporate and social responsibility expenses, insurance, communication, printing and stationary and miscellaneous expenses.

Tax expense primarily consists of current tax and deferred tax expenses.

The following table sets forth select financial data from our Restated Consolidated Statement of Profit and Loss for the Financial Years 2025, 2024 and 2023, the components of which are also expressed as a percentage of total income for such years:

* Employee benefit expenses includes employee costs pertaining to (a) our Owned Portfolio (b) Schloss Gandhinagar (where employees are under our direct payroll and we bill the hotel owner expenses) and (c) Schloss HMA (our corporate employees). Notes:

1. We acquired 50.00% of the equity of TPRPL, the company holding The Leela Palace Jaipur, on May 3, 2021, and the remaining 50.00% on May 27, 2023. Hence, such companys financial statements have been consolidated as a wholly-owned subsidiary from May 27, 2023.

2. The financial statements of Schloss Tadoba and MPPL were consolidated with effect from June 2, 2022 and June 7, 2022, respectively.

Our results of operations for the Financial Year 2025 as compared to the Financial Year 2024 were particularly affected by (i) improved average occupancy for our Owned Portfolio to 68% for the Financial Year 2025 from

67% for the Financial Year 2024, (ii) improved ARR for our Owned Portfolio to 22,545 for the Financial Year 2025 from 20,966 for the Financial Year 2024, as well as (iii) the effect of consolidation of 100% of the outstanding equity interest in the company holding The Leela Palace Jaipur from May 27, 2023 ("The Leela Palace Jaipur Acquisition"), which led to the consolidation of The Leela Palace Jaipur for the full Financial Year 2025, compared to only a portion of the Financial Year 2024. Further, RevPAR for our Owned Portfolio increased by 9.09% to 15,306 for the Financial Year 2025 from 14,030 for the Financial Year 2024.

Total income. Total income increased by 14.68% to 14,065.56 million for the Financial Year 2025 from 12,265.00 million for the Financial Year 2024, due to increase in revenue from operations and other income. The revenue from our Owned Portfolio accounted for 93.46% of our total income in the Financial Year 2025.

Revenue from operations. Revenue from operations increased by 11.02% to 13,005.73 million for the Financial Year 2025 from 11,714.53 million for the Financial Year 2024, primarily due to increases in:

1. room income to 6,800.17 million for the Financial Year 2025 from 6,150.58 million for the Financial Year 2024, primarily due to the effect of The Leela Palace Jaipur Acquisition and a 0.97% increase in the occupancy and 7.53% increase in our ARR for our Owned Portfolio resulting in an increase in room income for the Financial Year 2025 as compared to the Financial Year 2024;

2. revenue from food and beverages to 4,781.73 million for the Financial Year 2025 from 4,317.12 million for the Financial Year 2024, primarily due to higher average revenues per cover, the effect of The Leela Palace Jaipur Acquisition, promotions, events and experiences offered by our restaurants and bars and the increase in consumers driven by our digital marketing campaigns;

3. other allied services to 538.58 million for the Financial Year 2025 from 488.49 million for the Financial Year 2024, primarily due to the effect of The Leela Palace Jaipur Acquisition, the increase in average occupancy levels and in line with growth of revenues;

4. management and other operating fee to 698.20 million for the Financial Year 2025 from 594.97 million for the Financial Year 2024, primarily due increases in our revenue from operations mentioned above; and

5. manpower services to 187.05 million for the Financial Year 2025 from 163.37 million for the Financial Year 2024, in line with growth of revenues recognized by The Leela Gandhinagar.

Other income. Other income increased by 92.53% to 1,059.83 million for the Financial Year 2025 from 550.47 million for the Financial Year 2024, primarily due to (i) an increase in interest income on deposits with banks to

559.29 million for the Financial Year 2025 from 201.06 million for the Financial Year 2024, which was primarily driven by the increase in average amount of deposits placed with banks, (ii) an increase in payment of a grant by the Government of Rajasthan to 129.13 million for the Financial Year 2025 from 64.50 million for the Financial Year 2024 under the Rajasthan Investment Promotion Scheme, 2014, (iii) the increase of miscellaneous income to 83.61 million for the Financial Year 2025, from 62.16 million for the Financial Year 2024; and (iv) the increase in reversal of liabilities no longer required amounting to 40.52 million for the Financial Year 2025.

Expenses. Our total expenses increased by 8.05% to 13,042.95 million for the Financial Year 2025 from

12,070.71 million for the Financial Year 2024, primarily due to an increase in cost of food and beverages consumed, employee benefits expense and operating leverage.

Cost of food and beverages consumed. Cost of food and beverages consumed increased by 11.49% to 947.46 million for the Financial Year 2025 from 849.80 million for the Financial Year 2024 as a result of the increase in consumption of food and beverages partially offset by improvements in procurement of food and beverages by us. Further, our cost of food and beverages consumed as a percentage of our revenues from sale of food and beverages increased marginally to 19.81% for the Financial Year 2025, compared to 19.68% for the Financial Year 2024.

Employee benefits expense. Employee benefits expense increased by 16.63% to 2,732.42 million for the Financial Year 2025 from 2,342.86 million for the Financial Year 2024, primarily due to increases in salaries, wages and bonus to 2,374.53 million for the Financial Year 2025 from 2,022.25 million for the Financial Year 2024. The increase in employee benefits expense was primarily due to the effect of The Leela Palace Jaipur Acquisition, annual increments given to employees as well as an increase in our total number of employees. Our employee benefits expense as a percentage of total income increased to 19.43% for the Financial Year 2025 from 19.10% for the Financial Year 2024. We had 2,657 permanent employees as of March 31, 2025 as compared to 2,583 permanent employees as of March 31, 2024.

Finance costs. Finance costs increased by 5.90% to 4,581.67 million for the Financial Year 2025 from 4,326.21 million for the Financial Year 2024, primarily due to increases in (i) interest expense on non-convertible bonds to

645.50 million for the Financial Year 2025 from 444.12 million for the Financial Year 2024, relating to non-convertible bonds issued by Moonburg Power Private Limited (merged with TPRPL), which as of March 31, 2025 had a principal amount of 4,750.00 million, in relation to The Leela Palace Jaipur Acquisition, and (ii) interest expense on compulsory convertible debentures and compulsory convertible preference shares issued by the Company to 588.13 million for the Financial Year 2025 from 484.31 million for the Financial Year 2024.

Depreciation and amortization expense. Depreciation and amortization expense decreased by 5.44% to 1,399.29 million for the Financial Year 2025 from 1,479.76 million for the Financial Year 2024.

Other expenses. Other expenses increased by 10.09% to 3,382.11 million for the Financial Year 2025 from

3,072.08 million for the Financial Year 2024, primarily due to the effect of The Leela Palace Jaipur Acquisition and the overall growth of our business. Specifically, the increase in other expenses was primarily due to increases in (i) business promotion expenses to 645.41 million for the Financial Year 2025 from 530.25 million for the Financial Year 2024, primarily due to additional marketing events such as overseas marketing, digital marketing and events, promotions and brand ambassador signups conducted, (ii) sales and credit card commission to 438.71 million for the Financial Year 2025 from 358.47 million for the Financial Year 2024 driven by an increase in revenues from online travel agencies, (iii) power and fuel costs to 445.20 million for the Financial Year 2025 from 431.17 million the Financial Year 2024 in line with increase in our operating levels, (iv) repairs and maintenance to 431.64 million for the Financial Year 2025 from 417.49 million for the Financial Year 2024, in each case primarily on account of consolidation of our ownership interest in the company holding The Leela Palace Jaipur, and (v) miscellaneous expenses to 376.91 million for the Financial Year 2025 from 284.49 million for the Financial Year 2024.

Tax expenses. Total tax expense increased significantly to 544.14 million for the Financial Year 2025 from

215.56 million for the Financial Year 2024, primarily due to higher deferred tax expense for the Financial Year 2025.

Restated profit/(loss) for the year. As a result of the foregoing, our restated profit/(loss) for the year increased to

476.58 million for the Financial Year 2025 from (21.27) million for the Financial Year 2024.

Our results of operations for the Financial Year 2024 as compared to the Financial Year 2023 were particularly affected by improved performance in the ARR for our Owned Portfolio by 21.56% to 20,966 for the Financial Year 2024 from 17,248 for the Financial Year 2023, the RevPAR of our Owned Portfolio by 22.27% to 14,030 for the Financial Year 2024 from 11,475 for the Financial Year 2023 as well as the effect of The Leela Palace

Jaipur Acquisition in May 2023.

Total income. Total income increased by 35.78% to 12,265.00 million for the Financial Year 2024 from 9,032.67 million for the Financial Year 2023, due to increases in revenue from operations and other income. The revenue from our Owned Portfolio accounted for 93.77% of our total income in the Financial Year 2024.

Revenue from operations. Revenue from operations increased by 36.21% to 11,714.53 million for the Financial Year 2024 from 8,600.58 million for the Financial Year 2023, primarily due to increases in:

1. room income to 6,150.58 million for the Financial Year 2024 from 4,117.86 million for the Financial

Year 2023, primarily due to the effect of The Leela Palace Jaipur Acquisition and a 21.56% increase in our ARR for the Financial Year 2024 for our Owned Portfolio as compared to the Financial Year 2023 resulting in an increase in room income. The material contributors to the increase in our ARR were The Leela Palace hotels in New Delhi (Delhi), Bengaluru (Karnataka) and Chennai (Tamil Nadu);

2. revenue from food and beverages to 4,317.12 million for the Financial Year 2024 from 3,305.98 million for the Financial Year 2023, primarily due to higher average revenues per cover, the effect of The Leela Palace Jaipur Acquisition, promotions, events and experiences offered by our restaurants and bars and the increase in consumers driven by our digital marketing campaigns;

3. other allied services to 488.49 million for the Financial Year 2024 from 387.28 million for the

Financial Year 2023, primarily due to the effect of The Leela Palace Jaipur Acquisition, the increase in average occupancy levels and in line with growth of revenues; and

4. manpower services to 163.37 million for the Financial Year 2024 from 123.99 million for the

Financial Year 2023, in line with growth of revenues recognized by The Leela Gandhinagar.

Further, management and other operating fees across six of our managed hotels (excluding The Leela Palace Jaipur, which we fully acquired in May 2023), including reimbursement of expenses and other charges from our managed and franchised hotels increased from 528.4 million to 592.1 million. We recognized only two months of management fees for The Leela Palace Jaipur during the Financial Year 2024 as compared to twelve months of such fees during the Financial Year 2023 (as a result of the effect of The Leela Palace Jaipur Acquisition). Additionally, the management agreement for The Leela Goa was terminated in October 2022. As a result, our consolidated management and other operating fees decreased to 594.97 million for the Financial Year 2024 from 665.47 million for the Financial Year 2023, which partially offsets the increases in our revenue from operations mentioned above.

Other income. Other income increased by 27.40% to 550.47 million for the Financial Year 2024 from 432.09 million for the Financial Year 2023, primarily due to (i) an increase in interest income on deposits with banks to

201.06 million for the Financial Year 2024 from 131.02 million for the Financial Year 2023, which was driven by the effect of The Leela Palace Jaipur Acquisition and the increase in average amount of deposits placed with banks, (ii) the payment of a grant by the Government of Rajasthan of 64.50 million under the Rajasthan Investment Promotion Scheme, 2014, and (iii) a gain on cancellation of leases amounting to 8.58 million in the Financial Year 2024, due to termination of certain leases in the Galleria at The Leela Palace Bengaluru in order to renovate the space. Income from rental and related services amounted to 217.89 million in Financial Year 2024 and 228.61 million in Financial Year 2023.

Expenses. Our total expenses increased by 25.24% to 12,070.71 million for the Financial Year 2024 from 9,638.26 million for the Financial Year 2023, comparatively less than the 35.78% increase in our total income during the same years, primarily on account of operating leverage.

Cost of food and beverages consumed. Cost of food and beverages consumed increased by 26.97% to 849.80 million for the Financial Year 2024 from 669.31 million for the Financial Year 2023 as a result of the increase in consumption of food and beverages partially offset by improvements in procurement of food and beverages by us. The increase in our cost of food and beverages consumed is comparatively less than the 30.59% increase in our revenue from food and beverages over the same years. Further, our cost of food and beverages consumed as a percentage of our revenues from sale of food and beverages reduced to 19.68% for the Financial Year 2024, compared to 20.25% for the Financial Year 2023, driven by value-driven premium menu pricing and effective procurement.

Employee benefits expense. Employee benefits expense increased by 35.29% to 2,342.86 million for the Financial Year 2024 from 1,731.73 million for the Financial Year 2023, primarily due to increases in salaries, wages and bonus to 2,022.25 million for the Financial Year 2024 from 1,518.02 million for the Financial Year 2023, and staff welfare expenses to 182.41 million for the Financial Year 2024 from 123.79 million for the Financial Year 2023. The increase in employee benefits expense was primarily due to the effect of The Leela Palace Jaipur Acquisition, annual increments given to employees as well as an increase in our total number of employees. As a percentage of our total income, our employee benefits expense marginally reduced to 19.10% for the Financial Year 2024 from 19.17% for the Financial Year 2023. We had 2,583 permanent employees as of March 31, 2024 (including employees at The Leela Palace Jaipur) as compared to 1,989 permanent employees as of March 31, 2023 (excluding employees at The Leela Palace Jaipur).

Finance costs. Finance costs increased by 20.46% to 4,326.21 million for the Financial Year 2024 from 3,591.43 million for the Financial Year 2023, primarily due to (i) interest expense on non-convertible bonds of 444.12 million for the Financial Year 2024 from nil for the Financial Year 2023, relating to non-convertible bonds issued by Moonburg Power Private Limited (merged with TPRPL), which as of March 31, 2024 had outstanding amount of 4,622.92 million, in relation to The Leela Palace Jaipur Acquisition, (ii) an increase in interest expense on Rupee term loan to 3,151.12 million in the Financial Year 2024 from 2,954.56 million in the Financial Year 2023 mainly attributable to the effect of The Leela Palace Jaipur Acquisition, and (iii) interest expense on bank overdraft facilities for working capital purposes of 22.39 million for the Financial Year 2024 from nil for the

Financial Year 2023 since we utilized a new overdraft facility in the Financial Year 2024.

Depreciation and amortization expense. Depreciation and amortization expense increased by 18.34% to 1,479.76 million for the Financial Year 2024 from 1,250.45 million for the Financial Year 2023, primarily due to the effect of The Leela Palace Jaipur Acquisition.

Other expenses. Other expenses increased by 28.25% to 3,072.08 million for the Financial Year 2024 from 2,395.34 million for the Financial Year 2023, primarily due to the effect of The Leela Palace Jaipur Acquisition and the overall growth of our business. Specifically, the increase in other expenses was primarily due to increases in (i) business promotion expenses to 530.25 million for the Financial Year 2024 from 346.91 million for the

Financial Year 2023, primarily due to additional marketing events such as overseas marketing, digital marketing and events, promotions and brand ambassador signups conducted in the Financial Year 2024, (ii) sales and credit card commission to 358.47 million for the Financial Year 2024 from 233.27 million for the Financial Year 2023 driven by an increase in revenues from online travel agencies, (iii) consumption of stores and operating supplies to 321.54 million for the Financial Year 2024 from 217.88 million for the Financial Year 2023, (iv) power and fuel costs to 431.17 million for the Financial Year 2024 from 364.01 million for the Financial Year 2023 in line with increase in our operating levels, (v) repairs and maintenance others expenses to 162.50 million for the Financial Year 2024 from 105.88 million for the Financial Year 2023 and repairs and maintenance building expenses to 145.08 million for the Financial Year 2024 from 124.81 million for the Financial Year 2023, in each case primarily on account of consolidation of our ownership interest in the company holding The Leela

Palace Jaipur, (vi) bank charges to 32.62 million for the Financial Year 2024 from 7.07 million for the Financial Year 2023, (vii) travelling and conveyance costs to 72.21 million for the Financial Year 2024 from 50.49 million for the Financial Year 2023, and (viii) miscellaneous expenses to 284.49 million for the Financial Year 2024 from 206.26 million for the Financial Year 2023.

Tax expenses. Total tax expenses increased significantly to 215.56 million for the Financial Year 2024 from 11.20 million for the Financial Year 2023, primarily due to higher current tax and deferred tax during the

Financial Year 2024. The increase in current tax was on account of the consolidation of our ownership interest in the company holding The Leela Palace Jaipur, which records a higher profit before tax than our other hotels.

Restated loss for the year. As a result of the foregoing, our restated loss for the year decreased significantly to

21.27 million for the Financial Year 2024 from 616.79 million for the Financial Year 2023.

Goodwill. Our goodwill remained the same at 4,670.56 million as at March 31, 2025 from 4,670.56 million as at March 31, 2024.

Other intangible assets. Our other intangible assets decreased to 445.39 million as at March 31, 2025 from

676.31 million as at March 31, 2024, primarily on account of amortization of 232.18 million for the Financial Year 2025.

Fixed deposits with remaining maturity of more than 12 months. Fixed deposits with remaining maturity of more than 12 months increased to 10,833.11 million as at March 31, 2025 from 921.35 million as at March 31, 2024, primarily on account of the creation of long-term fixed deposits from the proceeds received on issuance of compulsory convertible preference shares during the Financial Year 2025.

Fixed deposits with banks with original maturity more than three months but less than twelve months. Fixed deposits with banks with original maturity more than three months but less than twelve months decreased to

1,575.99 million as at March 31, 2025 from 3,039.70 million as at March 31, 2024, primarily on account of reclassification of fixed deposits as other financial assets as on maturity, and creation of fixed deposits with remaining maturity of more than twelve months upon maturity of shorter-term fixed deposits.

Our Net Worth as of March 31, 2025 was 36,049.88 million. Further, our net worth as of March 31, 2024 and 2023 was (28,257.23) million and (25,119.63) million, respectively. Net Worth is computed as the sum of equity share capital, other equity and non-controlling interests, as per the Restated Consolidated Financial Information. Other equity primarily comprises equity component of compounded financial instruments and reserves and surplus. As our reserves and surplus was negative as of March 31, 2024 and 2023, it led to our Net Worth being negative as of these dates. Reserves and surplus were negative as of March 31, 2024 and 2023 primarily on account of an adjustment for common control adjustment deficit account (amounting to (32,256.49) million and (29,051.98) million as of March 31, 2024 and 2023, respectively). The common control adjustment deficit account was created as part of the acquisition of our Subsidiaries undertaken in May 2024, as a result of which our Company acquired control over our Subsidiaries from our Promoters. The negative balance in this account arises because the purchase consideration paid by our Company for the acquisitions exceeded the sum of (i) the actual share capital of the Subsidiaries; (ii) the face value of the compulsorily convertible debentures issued by these Subsidiaries; and (iii) fair value adjustments for TPRPL. As a result, our net worth as of March 31, 2024 and 2023 was negative. For details on the computation of common control adjustment deficit account, please see

"Restated Consolidated Financial Information - Annexure V Business Combinations I. Business combination under common control" on page 421.

However, after adjusting our Net Worth to eliminate the effect of purchase consideration payable on account of acquisition under common control and interest payable on compulsory convertible debentures which was settled in July 2024, our Adjusted Net Worth aggregated to 21,355.87 million and 17,332.43 million as of March 31, 2024 and 2023, respectively. For a detailed computation of Net Worth and Adjusted Net Worth, see "Other Financial Information Reconciliation of Non-GAAP Measures" on page 437.

Our principal sources of liquidity include cash generated from operations, equity and preference capital raised from our shareholders and cash from borrowings, including term loans, issuance of debentures and working capital facilities. We invest our cash in fixed deposits with banks and financial institutions. Our financing requirements are primarily for working capital and investments in our business such as capital expenditures to expand and upgrade the hotels in our Portfolio. Our total borrowings amounted to 39,087.46 million, 42,421.81 million and 36,961.82 million as of March 31, 2025, 2024 and 2023, respectively. The borrowings were utilized towards funding the acquisitions of the Owned Hotels, capital expenditure at our Owned Hotels and working capital requirements. We expect that our cash flows from operations and borrowings, together with the net proceeds from the Fresh Issue, will be sufficient to fund our currently expected capital expenditures, operating expenses and cash requirements for the next 12 months.

The following table summarizes our cash flows for the Financial Years 2025, 2024 and 2023:

Net cash generated from operating activities was 5,528.79 million for the Financial Year 2025. We had restated profit before tax of 1,020.72 million for the Financial Year 2025, which was primarily adjusted for depreciation and amortization expense of 1,399.29 million and finance costs of 4,581.67 million. This was further adjusted for working capital changes, which primarily consisted of decrease in inventories of 38.33 million and trade receivables of 36.60 million, increase in other financial assets and other current assets of 182.05 million and

547.78 million respectively, increase in trade payables of 83.22 million and decrease in other current liabilities of 38.81 million. We also paid income tax of 105.06 million.

Net cash generated from operating activities was 5,387.84 million for the Financial Year 2024. We had restated profit before tax of 194.29 million for the Financial Year 2024, which was primarily adjusted for depreciation and amortization expense of 1,479.76 million, finance costs of 4,326.21 million and interest income of 205.09 million. This was further adjusted for working capital changes, which primarily consisted of increase in trade receivables of 90.75 million. We also paid income tax of 293.19 million.

Net cash generated from operating activities was 3,183.16 million in the Financial Year 2023. We had restated loss before tax of 605.59 million for the Financial Year 2023, which was primarily adjusted for depreciation and amortization of 1,250.45 million, finance costs of 3,591.43 million, net impairment losses on financial assets of 110.07 million and interest income of 137.17 million. This was further adjusted for working capital changes, which primarily consisted of increase in other current assets of 739.59 million, increase in trade receivables of 300.16 million, increase in other current liabilities of 113.83 million and increase in inventories of 67.52 million. We also paid income tax of 109.13 million.

Net cash used in investing activities was 57,297.32 million in the Financial Year 2025. This was primarily due to acquisition of property, plant and equipment amounting to 2,077.01 million, payment for acquisition of subsidiaries (comprising Schloss Chanakya Private Limited, Schloss Chennai Private Limited, Schloss Gandhinagar Private Limited, Schloss HMA Private Limited, Leela Palaces and Resorts Limited, Schloss Tadoba Private Limited and Inside India Resorts Private Limited) amounting to 46,893.55 million, payments towards investment in properties under construction of 296.11 million, investment in joint venture of 143.20 million as well as towards creating bank deposits amounting to 41,593.40 million during the year which was partially offset by maturity of bank deposits amounting to 33,255.55 million and interest income received on such deposits amounting to 448.92 million.

Net cash used in investing activities was 7,860.10 million in the Financial Year 2024. This was primarily due to payment, net of cash, for the acquisition of the balance 50% of the outstanding equity ownership in the company holding The Leela Palace Jaipur, of 4,245.83 million, bank deposits placed of 3,768.08 million and payments for purchase of property, plant and equipment of 1,208.82 million, partially offset by bank deposits matured of 1,213.46 million and interest received of 139.03 million.

Net cash used in investing activities was 846.71 million in the Financial Year 2023. This was primarily due to bank deposits placed of 7,315.19 million and payments for purchase of property, plant and equipment of 851.59 million, partially offset by bank deposits matured of 7,248.04 million and interest received of 71.76 million.

Net cash generated from financing activities was 52,358.85 million in the Financial Year 2025. This was primarily due to proceeds from issuance of compulsorily convertible preference shares of 62,210.74 million and proceeds from borrowings amounting to 1,343.20 million, partially offset by finance costs paid other than on lease liabilities of 4,166.47 million, repayments of borrowings of 3,176.04 million, finance costs paid towards lease liabilities of 140.94 million and interest paid on CCD Conversion (conversion of compulsorily convertible debentures) amounting to 3,726.91 million.

Net cash generated from financing activities was 1,469.94 million in the Financial Year 2024. This was primarily due to proceeds from borrowings including non-convertible bonds and compulsorily convertible debentures of

6,156.58 million, partially offset by finance costs paid other than on lease liabilities of 3,403.43 million, repayments of borrowings of 1,125.61 million and finance costs paid towards lease liabilities of 129.23 million.

Net cash used in financing activities was 3,177.70 million in the Financial Year 2023. This was primarily due to finance costs paid other than on lease liabilities of 3,298.20 million, repayments of borrowings of 717.79 million and finance costs paid towards lease liabilities of 107.94 million, partially offset by proceeds from borrowings including non-convertible bonds and compulsorily convertible debentures of 967.35 million.

Our historical capital expenditures for the respective years as stated in the table below primarily pertains to additions to property, plant and equipment and intangible assets, including from the renovation and construction of hotels.

Set forth below are details of our additions to property, plant and equipment and intangible assets for the Financial Years 2025, 2024 and 2023:

As of March 31, 2025, we expect to incur 2,266.82 million under our capital expenditure plan over the next 12 to 18 months for our Owned Portfolio. For details, see "Our Business Our Growth Strategies Improve same-store growth and profit margins through proactive asset management" on page 228. We also raise debt for the purposes of funding capital expenditure, including for developing new hotels and for working capital. With respect to the expected capital expenditure for our under development properties see "Our Business Our Growth Strategies Expansion of our Portfolio through acquisitions and developments, including through identified assets" on page 232.

As of March 31, 2025, we had outstanding borrowings (comprising current and non-current borrowings, current portion of non-current borrowings as well as interest accrued on borrowings) of 39,087.46 million on a consolidated basis, which primarily consists of term loans and working capital term loans, non-convertible bonds and outstanding amounts under short-term line of credit and overdraft facilities. Of such amount, fixed rate borrowings (including interest accrued on borrowings) comprised 4,283.67 million as of March 31, 2025. For further details on our indebtedness, see "Financial Indebtedness" beginning on page 474. See also "Risk Factors

We have substantial indebtedness which requires significant cash flows to service and limits our ability to operate freely. As of March 31, 2025, we had outstanding borrowings of 39,087.46 million on a restated and consolidated basis. Further, our finance costs as a percentage of total income for the Financial Year 2025 amounted to 32.57%. In addition, we may require additional financing in the future in order to continue to grow our business, which may not be available on acceptable terms, or at all" on page 43.

The following table sets forth a summary of our commitments as at March 31, 2025:

The following table sets forth a summary of the maturity profile of our contractual obligations:

The following table sets forth a breakdown of our contingent liabilities as at March 31, 2025:

For further details on our contingent liabilities, see "Risk Factors We have contingent liabilities and our financial condition could be adversely affected if any of these contingent liabilities materialize." on page 50.

As of the date of this Red Herring Prospectus, we do not have any off-balance sheet arrangements, derivative instruments, swap transactions or relationships with affiliates or other unconsolidated entities or financial partnerships that would have been established for the purpose of facilitating off-balance sheet arrangements.

We have engaged in the past, and may engage in the future, in transactions with related parties. For details of our related party transactions, see "Restated Consolidated Financial Information Note 42 Related Party Transactions" on page 413.

Our business activities expose us to market risk, liquidity risk and credit risk. We develop and monitor our risk management policies. Our risk management policies are established to identify and analyze the risks faced by us, to set appropriate risk limits and to control and monitor risks and adherence to limits.

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Credit risk arises from trade receivables, cash and cash equivalents, bank balance, fixed deposits with banks, security deposits and other financial assets.

We are exposed to credit risk on our financial assets, which comprise cash and cash equivalents, bank deposits, trade receivables, security deposits and other receivables. The exposure to credit risks arises from the potential failure of counterparties to meet their obligations. The maximum exposure to credit risk at the reporting date is the carrying amount of the financial instruments.

With respect to other financial assets namely security deposits and other receivables, the maximum exposure to credit risk is the carrying amount of these classes of financial assets presented in the balance sheet. These are actively monitored and confirmed by us. Currently, the credit risk arising from such security deposits and other receivables is evaluated to be not material for us.

Credit risk on cash and cash equivalents, deposits with the banks/financial institutions is generally low as deposits have been made with the banks/financial institutions, who have been assigned high credit rating by international and domestic rating agencies.

Our exposure to credit risk is influenced mainly by the individual characteristics of each customer and the geography in which it operates. Credit risk is managed through credit approvals and continuously monitoring the creditworthiness of customers to which we grant credit terms in the normal course of business. We currently operate only in one geographical location, i.e., in India. Considering the industry in which we are operating, there is no major long outstanding receivables.

Liquidity risk is the risk that we may not be able to meet our present and future cash and collateral obligations without incurring unacceptable losses. Our objective is to, at all times maintain optimum levels of liquidity to meet our cash and collateral requirements. In addition, processes and policies related to such risks are overseen by senior management.

We believe that our working capital is sufficient to meet our current requirements. 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. Accordingly, liquidity risk perceived for us is not material.

See also, "Restated Consolidated Financial Information Note 2.3 Going Concern" and "Restated Consolidated Financial Information Note 46 Subsequent events" on pages 358 and 436.

Foreign currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign currency rates. We make payments internationally and are exposed to foreign exchange risk arising from foreign currency purchases, primarily with respect to USD and GBP. Foreign exchange risk arises from recognized assets and liabilities denominated in a currency that is not our functional currency (i.e., " ") at the year end. We have purchased forward contracts to hedge our foreign currency risk. We have not formally designated these forward contracts against foreign currency payables. We do not have any unhedged foreign currency exposure as of March 31, 2025.

Interest rate risk is the risk that changes in market interest rates will lead to changes in fair value of financial instruments or changes in interest income, expenses and cash flows.

Except as described in this Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.

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 " Significant Factors Affecting Our Results of Operations" and the uncertainties described in "Risk Factors" beginning on pages 444 and 35, respectively. Except as disclosed in this Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse effect on our revenue or income.

Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect income from continuing operations. See "Risk Factors" and " Significant Factors Affecting our Results of Operations" on pages 35 and 444, respectively.

Other than as described in "Risk Factors", "Our Business" and above in " Significant Factors Affecting Our Results of Operations" beginning on pages 35, 218 and 444, respectively, to our knowledge there are no known factors that may adversely affect our business prospects, results of operations and financial condition.

Except as disclosed in this Red Herring Prospectus, including as described in "Our Business" on page 218, there are no new products or business segments that have or are expected to have a material effect on our business prospects, results of operations or financial condition.

We do not have any material dependence on a single or few suppliers. We have a wide customer base and do not have any material dependence on any particular customer.

We operate in a highly competitive industry and we expect competition from existing and new competitors to intensify. For details, please refer to the discussions of our industry and competition in the sections "Risk Factors", "Our Business" and "Industry Overview" and on pages 35, 218 and 166, respectively.

The hospitality industry in India is subject to seasonal variations. The periods during which the hotels in our Portfolio experience higher revenues vary from property to property, depending principally upon location and the guests served. Our revenues are generally higher during the second half of each Financial Year. Seasonality affects leisure travel, including weddings, as well as inbound foreign leisure travel, such that demand is relatively stronger during the October to March period. However, business travel is generally more consistent throughout the year. Seasonality can be expected to cause quarterly fluctuations in our revenues, profitability and margins. See also " Cyclicality and seasonality in the hospitality industry" above on page 448.

As of the date of this Red Herring Prospectus, there are no recent accounting pronouncements, which would have a material effect on our results of operations or financial condition.

Except as disclosed below and in this Red Herring Prospectus, no circumstances have arisen since March 31, 2025, the date of the last financial statements included in this Red Herring Prospectus, which materially affect or are likely to affect our operations or profitability, or the value of our assets or our ability to pay our liabilities within the next 12 months:

Pursuant to a deed of conveyance registered on April 9, 2025, our Subsidiary, Schloss Udaipur Private Limited purchased a parcel of land measuring an aggregate of 77,008 sq. ft., located adjacent to The

Leela Palace Udaipur, for 400 million. This parcel of land is intended to be used for the expansion and future development of The Leela Palace Udaipur.

Pursuant to a share subscription agreement dated April 7, 2025, our Company and our Subsidiary, Schloss Chanakya Private Limited, subscribed to 5,000 equity shares of our Subsidiary, Leela BKC Holdings Private Limited (formerly known as Transition Cleantech Services Private Limited) for 0.05 million and another shareholder, Arliga Ecospace Business Parks Private Limited, an affiliate of Brookfield, subscribed to 15,000 equity shares in Leela BKC Holdings Private Limited (formerly known as Transition Cleantech Services Private Limited) for 0.15 million, consequently reducing the stake of our Company in Leela BKC Holdings Private Limited (formerly known as Transition Cleantech Services Private Limited) to 50%. These shares were allotted to respective subscribers on April 18, 2025. Accordingly, Leela BKC Holdings Private Limited (formerly known as Transition Cleantech Services Four Private Limited) ceased to be a subsidiary of our Company as on April 18, 2025, and is now a Joint Venture of our Company as on the date of this Red Herring Prospectus.

Pursuant to an invitation for the tender of the lease of commercial plots by the Mumbai Metropolitan Region Development Authority ("MMRDA"), our Company, as the lead member of a consortium, along with Schloss Chanakya Private Limited, our Subsidiary, and Arliga Ecospace Business Parks Private Limited, an affiliate of Brookfield, submitted a binding bid to lease a plot of land (i.e., plot number C80 at ‘G Block of Bandra-Kurla Complex, Mumbai) measuring 8,411.88 sq. m. for a duration of 80 years. We are the highest bidder for this lease based on the evaluation of the financial bid conducted by MMRDA on April 4, 2025. We currently intend to develop a mixed-use project, including a 250 key luxury hotel, on this plot.

For further details, see "Restated Consolidated Financial Information Note 46 - Subsequent events" on page 436.