Delta Corp Ltd

Dear Shareholders,

FY 2023-24 was a challenging year and will be fixed in our memories as a year of situations beyond our control. In these unprecedented times, we managed to resist, we fought with fortitude and grit and embarked on a consolidation and expansion mode within the organisation.

Although the financial year was extremely trying for our company and the industry, our operational projects provided us an ongoing momentum to move ahead with determination and to be resourceful and inventive.

As serious as our challenges remained in FY 2023-24, we faced them and remained determined to increase our pace even further, as our business intelligence gave us enough reason to maintain optimism in all other segments, despite the contingency of the GST impact in both our offline and online skill gaming businesses.

During the year, Net Revenue from Operation declined 4.06% at 925.30 Crores, as against 964.47 Crores during the previous year ended March 2023. The sale of our Nepal Unit (mentioned ahead in detail) and with Deltin JAQK (one of our Casino vessels) being in dry dock for nearly five weeks impacted our revenue this year. Net Profit 244.23 reported at Crores, it declined 6.56%, against 261.37 Crores in the earlier year, despite these setbacks we still feel our business demonstrated the strength and resilience.

The Company clocked reasonable performance against all odds. In the Casino segment – our offshore and land-based casinos, contributed 86.20% to Net Revenue from operations at 797.59 Crores. Online Skill Gaming contributed 8.32% at 77.02 Crores, while Hospitality shared 5.48% in Net Revenue from operations at 50.69 Crores.

The situation in FY 2023-24 was exceptional, but so was our determination. Although it was a difficult year, we considered it as a period of adversity and took the setbacks as challenges for accelerating change. Despite turbulent times, we stayed focussed and withstood the complexities to ensure our presence remains promising. These volatilities did not deter us from pursuing our passion resolutely, and the business went on as usual.

Today, we still remain proud to be India's only listed company engaged in casino gaming, and for having evolved into the diversified segments of Casino and Hospitality. With an early-mover advantage, we have managed to retain and secure a leadership position in India's organised Casino business.

We are not new to challenging situations, we have faced them in the past and have been able to take it in our stride and move forward in the face of adversities. We believe longevity is measured in innovation cycles, and not years. Our company is in the growth and shake-out stage. Our business continues to be resilient, and we hope to bounce back again, and are taking small but sure steps to emerge from these challenges.

Despite a tumultuous period, we reaffirmed the strength of our business model to counter the challenges. We continue to believe in the growth potential of our business, and remain committed to and focussed on the Gaming business, despite short-term regulatory hurdles.

Improving operational efficiencies by advanced technologies remains our key priority, and we remain focussed on cost optimisation to enhance competitiveness and profitability. We streamlined our business processes to improve realisations, and also maintained our focus on consolidating and investing to drive further expansion and execute other business strategies.

Gaming, Online Skill Gaming,

1. CASINO GAMING

Our core businesses of gaming and allied hospitality will continue to be our key priority, with a majority of the capex and investments being made for focussed expansion. We remain convinced and confident on the casino segment.

Today, we command a lion's market share in Goa, with a net capacity of 2,000 gaming positions, owning three of the six offshore gaming licenses issued in Goa; and two land-based casino in Goa. We operate Deltin Royale and Deltin JAQK, among the country's two largest offshore casinos and King's Casino.

We also operate Casino Deltin Denzong at the Denzong Regency Hotel in Gangtok, Sikkim. Deltin Zuri, launched in FY 2022-23, which completed two years of operations, is indeed a landmark achievement, being the only land-based casino in picturesque South Goa. It has consolidated our position as the largest casino operator in Goa.

With an understanding that the next level of revenue growth will come with new capacities, a capex of approx. 350 Crores has been lined up. To strengthen our casino portfolio, we are replacing "Kings Casino" with a new vessel, which will

We also operate Casino Deltin Denzong at the Denzong Regency Hotel in Gangtok, Sikkim. Deltin Zuri, launched in FY 2022-23, which completed two years of operations, is indeed a landmark achievement, being the only land-based casino in picturesque South Goa.

double our gaming positions from 2,000 to 4,000. The new Casino will be the most incredible and an ultimate spectacular gaming destination with state-of-the-art and best gaming facilities, 2,000 gaming stations, restaurants, food court and entertainment, an alluring ambience and world-class gaming experience, hospitality and entertainment.

The new offshore vessel, which is projected to start commercial operations around the last quarter of 2024-25, will hopefully increase revenues and thus expand margins. With the number of tourists surging, and Goa being identified as one of India's "preferred" tourism destinations, we expect the new vessel to become a tourist hot-spot and will significantly enhance our Casino Gaming business.

We offloaded our entire 100% stake in Caravella Entertainment Private Limited, which in turn held a stake in Deltin Nepal Private Limited. This is the operating company of Deltin Casino International, located at Kathmandu Marriott Hotel, Nepal.

The disinvestment of this casino represented an enterprise value of 80 Crores, comprising 18 Crores of parent debt and 62 Crores of equity value on a nominal investment of 1 Lakh equity. The sale was done in the best interest of our shareholders, as it helped us monetise the asset and contribute to our bottom line.

2. ONLINE SKILL GAMING BUSINESS

In the fast-growing online gaming space, we own and operate the online poker site ‘Adda52.com'. Within six months of our operations under the revised GST tariff structure in Online Gaming, we realised and withstood market challenges, and also gained an understanding that to continue making profits, we needed to reach a substantial threshold of customers. This essentially translates into furthering our marketing spends to acquire new customers thereby compromising our margins in the near future.

With this industry being on the verge of consolidation, we expect a shake-out with only a couple of major players remaining. On this note, we are internally strategising to further the business, and have also taken a conscious call to pump in more investments and acquire more customers. In a strategic development, we are planning to on-board a Bollywood star as our Brand Ambassador this year, as a result of which we foresee our revenues expanding and adding value to our business.

While we are waiting to witness the changing landscape over the next 3-6 months, we are also confident of delivering healthy topline growth and profitability significant player in the Online Gaming space.

3. HOSPITALITY BUSINESS

As you all are aware, our Hospitality business has always complimented and supported our Casino operations. We own and operate Deltin Suites, a 106-room, all-suite hotel with a casino in Goa. The Deltin, our 176-room, five-star integrated resort, is spread over more than 10 acres at Daman. The hospitality business is self-sustaining, growing steadily and is positive at the EBITDA level.

To capture the exuberance in the leisure business and to further complement our Casino Gaming business, we are in the process of constructing a 450-room hotel in Goa, with a capital outlay of 450 Crores. This hotel, which will be the largest in Goa, is likely to start operations by the last quarter of FY 2025-26 and will also support the additional capacities created by our new floating casino.

The prime 100-acre land parcel in Dhargalim in Goa, opposite the new airport at Mopa, positions us strategically for future growth. The integrated resort project has received all the clearances and approvals. However, we have kept it on hold until we have further clarity on the GST issue.

We did not limit ourselves to just tightening our belt during the crisis; we also created the right conditions for future success, and left no stone unturned in taking strategic initiatives. To further expand our service portfolio, in a strategic and well-thought-out plan, we forayed into real estate investment during the year, leveraging our earlier experience in real estate, where we not only executed projects, but also exited profitably.

We believe in diversifying beyond the casino gaming business, especially given the opportunities within the growing real estate market. India's real estate sector is poised for growth and presents attractive opportunities to organised players. As regulations increase and demand grows, customers are increasingly seeking established and trusted brands.

Further, in a key development, we are participating in establishing a real estate development platform, in a strategic partnership with Alpha Alternatives Fund Advisors LLP and Peninsula Land. This Real Estate Fund will invest 765 Crores in Residential Redevelopment projects and land parcelling in the Mumbai Metropolitan Region (MMR) and plotted development in and around Mumbai, Alibaug, Khopoli, Karjat and Pune.

Our contribution to the real estate platform is to the tune of 90 Crores or 11.76% of the total proposed amount. Alpha Alternatives will invest the lion's share of 450 Crores, while the rest will be invested by Peninsula Land.

At Delta Corp, we are confident of braving the future with more determination and courage and making ourselves more resilient to economic cycles. Having demonstrated resoluteness in our core business, we are building new growth drivers for improving profitability tough times.

It is our passion that makes all the difference. We are proud of what we have achieved so far and have even bigger goals on how to deliver forthefuture.With a firm the best gaming and hospitality experience, our ambition is to provide our Indian audiences with an experience that only matches renowned international gaming destinations.

A new innings at Delta has begun, which fills us with a zeal to stride towards our goals and ambitions. We are moving steps forward, advancing and making continuous improvement. Through our strategic business initiatives, we are propelling the growth trajectory, embodying the spirit that defines our presence in the Gaming, Hospitality and Real Estate industry.

Going forward, our endeavour is to remain more disciplined and focussed to be able to perform consistently. With this, we intend creating lasting value for our shareholders, partners, workforce and for the society in general.

I thank the Board Members for their guidance, backing and contribution.

I also thank our employees for their unwavering support during these tough times. Their trust meant a lot.

I am grateful to our business partners and the wider communities we operate within.

I thank our customers wholeheartedly for their faith and confidence, and for being a part of

Last but not least, I take this opportunity to thank our esteemed andrevenuesandnavigating shareholders for their constant support of our efforts and their commitment to being a part of our vision.

I reiterate again, that we are committed as ever to growth and value creation. I would also like to take this opportunity to ask you for your continued support, as we follow this arduous path.