Sinclairs Hotels Ltd Management Discussions

Global Development and Industry Structure

The hospitality market in India is experiencing growth due to the countrys rich culture and diversity, attracting global guests. The service sector, has seen a rise in domestic travel, driven by growing middle class and increased disposable income. The hotel industry is expanding with new projects from international chains, driven by increased travel and government efforts to boost tourism.

Indias hospitality sector has undergone significant transformation driven by favorable government policies and infrastructure development initiatives. The government has implemented several measures to boost investments, including allowing 100% FDI through the automatic route and offering tax holidays for hotels located around UNESCO World Heritage sites.The Ministry has established the Hospitality Development and Promotion Board to streamline hotel project clearances and approvals. Additionally, the government has allocated INR 2 billion for developing tourist circuits at pilgrimage sites across the country, demonstrating its commitment to enhancing tourism infra structure. These initiatives have positioned India among the top 100 countries globally for ease of doing business, particularly in the hospitality sector.

The industry is witnessing a fundamental shift in ownership and operational models, with franchise and lease arrangements gaining prominence over traditional owned-hotel structures. Hotel chains are increasingly adopting asset-light strategies, focusing on management contracts rather than property ownership to drive revenue growth. This transformation is particularly evident in the organized hotel sector.

Outlook

As per ICRAs Press Release dated January 07, 2025 the revenues of the Indian hospitality Industry is expected to-grow by 7-9% in FY2025 and 6-8% YoY in FY2026, over the high base of FY2024. Sustained domestic leisure travel, demand from meetings, incentives, conferences and exhibitions (MICE), including weddings and business travel (despite a temporary lull during the General Elections) have driven demand in FY2025. Domestic tourism has been the prime demand driver in FY2025 and is likely to remain so in the near term. Foreign tourist arrivals (FTA) are yet to recover to pre-Covid levels and the improvement would depend on the global macroeconomic environment.

Risk and Concern

Weather condition at different tourist destinations is one of the important determinants for tourist arrivals to India. The rise in inflation rate makes consumers to take different choices when they travel.

A slowdown in Indas economic growth can also hurt the hospitality business affecting both operational and financial performance. Indias GDP has grown at a good pace in the past quarters and may find it difficult to sustain the same growth owing to international slowdown and geo-political risks. An increase in power and fuel costs poses a huge threat to the hospitality industry. Similarly a high taxation regime is a major deterrent.

Risk Mitigation

The Company understands that managing risk(s) effectively is critical for execution of its strategic objectives. During the financial year the Companys margins were healthy ascompared to industry standards.The multi-skilling of the teams at unit level, dynamic pricing structure, cost controls and minimizing of wastage are factors that contribute to the Companys operational efficiency. Optimising use of natural resources such as energy and water and managing waste efficiently are some of our priority focus areas. We are committed towards operating in an environmentally responsible manner while catering to the interests of our diverse stakeholders.

Social content creators and influencers are bringing a major change in the way travellers discover and get inspired with travel experiences. Both business and leisure travel is on a high trajectory.The result of these market

developments ensures continued growth for the Company and the sector as a whole.

Internal Control System and their adequacy

Your Company has in place an adequate system of internal controls, with documented procedures covering all corporate functions and hotel operating units. Systems of internal controls are designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, the adequacy of safeguards for assets, the reliability of financial controls, and compliance with applicable laws and regulations. Adequate internal control measures in the form of various policies and procedures of the Company covers all critical and important activities of the Company. These systems and processes are subject to audit and review to ensure that such systems are reinforced on an ongoing basis. Further, the Statutory Auditor have opined in their report that the Company has adequate internal controls over financial reporting.

Material developments in Human Resources

The Companys employees are its most valuable asset, who enable the Company to deliver high quality of service. Value based policies have been laid down to attract, train, retain and motivate employees. We continually strive to make our operations more efficient, while creating a respectful work environment for each member of our team. As on March 31, 2025, there were 427 permanent employees in the Company.

Financial and Operating Performance

Sinclairs is now a well-established and renowned home grown brand in the hospitality sector, known for high quality of service, excellent food, clean and hygienic operations, and very fair and transparent dealings.

In FY 2024-25, our Company posted a total revenue of ? 5961.36 lakh (? 6512.59 lakh) and EBIDTA of ? 2451.10 lakh (? 3134.16 lakh).

As on March 31,2025, Sinclairs Hotels has a presence across nine destinations within the country and the Company is in the process of further expansion. The Company has taken on lease a 56 rooms property Sinclairs Udaipur and commenced operations from 31st October, 2024.TheCompany has cancelled its lease agreement in respect of 17 room property Sinclairs Yangang effective 11 th November, 2024 in view of infrastructural constraints.The Company is actively looking at acquiring more properties on lease to ensure faster growth with lower capital investment.

Disclosure of Accounting Treatment

The Financial Statements for the year ended March 31,2025, have been prepared in accordance with Ind AS notifed under the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time, read with Section 133 and other applicable provisions of the Companies Act. 2013.

Details of Significant Key Finanaal Ratios are as below:
Particulars	2024-25	2023-24
Debtor Turnover	43.82	45.23
Inventory Turnover	22.83	24.17
Current Ratio	10.75	8.73
Net Profit Ratio	26.20%	36.76%
Return on Capital Employed	14.55%	19.54%

Debt-Equity ratio is not applicable since there are no BorrowingsThe details of key financial ratios with explanation is provided in Note 36 of financial statement.

	For and on behalf of the Board
147 Block G New Alipore	Navin Suchanti
Kolkata 700053	Chairman
May 20,2025	DIN: 00273663