Country Club Hospitality & Holidays Ltd Management Discussions

ECONOMIC ENVIRONMENT AND INDUSTRY INSIGHT:

GLOBAL ECONOMY: THE YEAR IN REVIEW:

The global economy demonstrated resilience during 2025 despite elevated geopolitical tensions, trade fragmentation risks, and episodic commodity price volatility. Global GDP is expected to grow by 3.4% in 2025 (2024: 3.3%), reflecting steady momentum across major emerging markets and continued, albeit moderating, expansion in advanced economies.

Global growth was supported by a gradual easing in inflation (expected at 4.1% in 2025 vs. 5.8% in 2024) and the prospect of lower interest rates, alongside a broadening set of structural tailwinds; this created greater room for central banks to pivot toward policy easing.

Emerging markets and developing economies remained the principal drivers of global growth. India and select Asian economies sustained strong domestic demand and investment momentum, while Chinas economy stabilized amid targeted policy support and structural rebalancing.

Capital expenditure linked to artificial intelligence, digital infrastructure, and data centers continued to scale up, providing a meaningful investment-led impetus globally. The green-energy transition also gathered pace as declining solar and battery costs improved competitiveness and encouraged private investment. Household consumption remained firmer than anticipated, with notable resilience in the United States and key emerging markets, particularly India.

Global trade flows continued to adjust to US–China frictions, with "connector" economies such as Vietnam, Indonesia and Cambodia strengthening their position as manufacturing and logistics hubs.

As per IMFs World Economic Outlook of April 25, the global economy is expected to grow at a slower pace of 2.8% in 2025. Advanced Economies are now projected to grow at a lower rate of 1.4% and Emerging Markets and Developing Economies are estimated to grow at 3.7% in 2025. Global headline inflation is expected to decline to 4.3% in 2025 from 5.7% in 2024.

Rising geopolitical tensions, geoeconomic developments and extreme weather events have resulted in heightened uncertainty and volatility in the operating environment. Timely conclusion of trade agreements between the US and its key trading partners, monetary policy stance of central banks and evolving geopolitical dynamics remain some of the key monitorable in the near term.

World economic outlook reports are slowing global growth and renewed inflationary pressures. Policies need to be agile, carefully manage the trade-offs involved in ramping up defense spending, and lay the foundation for a sustained recovery.

Global growth is projected at 3.3% for 2026 and 3.2% for 2027, facing a slowdown driven by geopolitical instability, particularly in the Middle East, and high energy prices. While inflation is expected to gradually decline, persistent risks include conflict escalation, fragmented trade, and high debt servicing costs, with India and emerging economies providing relative growth resilience.

Technology investment, fiscal and monetary support, accommodative financial conditions, and private sector adaptability offset trade policy shifts. Global inflation is expected to fall, but US inflation will return to target more gradually.

Key downside risks are re-evaluation of technology expectations and escalation of geopolitical tensions. Policymakers should restore fiscal buffers, preserve price and financial stability, reduce uncertainty, and implement structural reforms.

The global economy in CY 2025 saw a year defined by the recalibration of trade relationships, persistent geopolitical uncertainty, and a gradual normalisation of monetary policy. World output is estimated to have expanded at around 3.4%, broadly in line with CY 2024 stabilisation efforts, but the underlying texture of growth was distinctly uneven.

Economic activity remained resilient, supported by easing inflation, gradual normalisation of monetary policy, steady domestic demand across several large economies, and sustained investment in technology, particularly in Artificial Intelligence (AI) and digital infrastructure. These structural factors helped offset persistent challenges arising from trade fragmentation, elevated tariffs, and ongoing geopolitical uncertainty.

Global growth is expected to remain at 3.1% in CY 2026, below the IMFs pre-pandemic long-term average of 3.7%, declining from last year amidst prolonged geopolitical tensions and trade-related uncertainties. AI-related investments and still accommodative financial conditions are supporting economic activity, even as bouts of heightened asset price volatility reflect shifting market sentiment. Recent energy price increases due to the West Asia conflict have heightened upside inflation risks and clouded the global growth outlook.

The outlook is highly contingent on the evolving situation in West Asia: an early resolution would likely limit the damage, whereas further escalation and a protracted conflict could have a more severe impact on the global economy. At the same time, the ongoing trade and policy uncertainty is reinforcing concerns about the outlook.

Advanced economies are forecast to grow by 1.8% during the year, marginally less than last year, while Emerging Markets and Developing Economies (EMDEs) are expected to grow at 3.9% over the same period, 50 bps lower than last year. The strengthening of the US dollar after the outbreak of the West Asia conflict on safe-haven demand has had a direct impact on emerging economies. Global headline inflation, after moderating steadily in recent years, is projected to tick up to 4.4% in CY 2026, reflecting the impact of the Middle East conflict, which has pushed up energy commodity prices and disrupted global supply chains. However, assuming the conflict remains limited in duration and scope, inflation is expected to resume its downward trajectory in CY 2027, easing to 3.7%, led by the expectation that energy prices will normalise as hostilities subside and the lagged effects of prior monetary policy tightening continue to anchor inflation expectations.

Rising geopolitical tensions, particularly in Eastern Europe and the Middle East, added further uncertainty, disrupting global trade, investment flows, and financial markets. These factors continued to cast a shadow over business confidence and long-term investment decisions. The growth rate of these economies, which stood at 1.7% in CY 2024, is anticipated to remain sluggish over the next two years due to policy tightening, financial sector turmoil, high inflation, the ongoing conflict between Russia & Ukraine and Israel & Gaza and America & Iran.

Inflation rates are declining more rapidly than anticipated across most regions, supported by tight monetary policies. Combined with a modest uptick in economic activity, this sets the stage for a softer-than-expected economic slowdown.

The risks to global economic growth are balanced, with potential upside from quicker disinflation, slower withdrawal of fiscal support measures, robust economic expansion in China, and advancements in supply-side reforms. Conversely, downside risks include spikes in commodity prices due to geopolitical or weather-related disruptions, ongoing core inflation necessitating tighter monetary policies, potential slowdowns in Chinese growth, and potential disruptions from abrupt fiscal consolidations.

OUTLOOK FOR THE YEAR AHEAD

The Organisation for Economic Cooperation and Development (OECD) projects global growth to moderate to 2.9% in 2026 from ~3.2% in 2025 as higher energy prices and the uncertain trajectory of the evolving West Asia conflict are expected to raise costs and soften demand, offsetting the tailwinds from sustained technology-led investment and production, lower effective tariff rates and the carry-forward momentum from 2025.

World merchandise trade volume growth, as projected by the World Trade Organisation (WTO), in March 2026, is expected to moderate to 1.9% in 2026 from 4.6% in 2025, before improving to 2.6% in 2027. Services trade volume is expected to ease to 4.8% in 2026 from 5.3% in 2025, before recovering to 5.1% in 2027.

Amid evolving geopolitical tensions in West Asia, global growth faces heightened downside risks, while inflation remains exposed to upside pressures arising from elevated uncertainty, market volatility, persistent supply-chain disruptions, and episodic inflationary shocks that could prompt earlier-than expected monetary policy tightening. Disruptions to energy flows and damage to critical infrastructure have generated spillover effects across global supply chains and related commodities, contributing to increased financial market volatility, particularly in energy-dependent Asian economies. The extent to which productivity gains and rising investments in technology, including artificial intelligence, can offset these headwinds remains uncertain, placing the resilience of the global economy under close watch.

Overall, the global outlook has shifted from the relatively steady conditions seen at the start of 2026 to a more cautious environment. Moving forward, the duration, intensity and geographical spread of the conflict in West Asia will remain a significant factor influencing global growth, inflation trends and financial stability.

INDIAN ECONOMY:

The Indian economy remains a bright spot amidst global slowdown and is expected to sustain its position as the fastest growing large economy. As per the provisional estimates released by Ministry of Statistics and Program Implementation (MoSPI), Indias real GDP is projected to have grown by 6.5% in FY 2024-25. Going forward, while real GDP is expected to grow at a similar pace in FY 2025-26, Private Consumption Expenditure is expected to pick up a result of disposable incomes accruing from easing of inflation, interest rates cuts and liquidity support from RBI and tax cuts announced in the recent union budget.

Fundamentals of the Indian economy continue to remain healthy across sectors. The positive outlook is anchored on rising urbanization, favourable demographics and sustained growth of the services sector, which are all expected to continue driving expansion of the economy.

As per IMF, over the next 5 years, Indias per capita nominal GDP is expected to grow at a CAGR of 9.2%. Sustenance of economic growth momentum amidst global slowdown and heightened uncertainty caused by geopolitical events and broad-based increase in infrastructural capex are some of the key monitorable going forward.

India remained the fastest-growing major economy in 2025, with a nominal GDP estimated at $4.2 trillion. The economy remained resilient amid an evolving global environment marked by uneven growth, tight monetary conditions in advanced economies, commodity price volatility, and geopolitical developments. Against this backdrop, domestic economic activity was supported by policy continuity, stable demand, and sustained public capital expenditure.

Indias GDP growth in FY 2025-26 stood at 7.6% (FY 2024-25: 7.1%), supported by government capital expenditure, private consumption, and steady performance across manufacturing and services. Inflation moderated during the year, with CPI inflation remaining broadly within the RBIs tolerance band (~4% ? 2%), aided by easing food prices. The Current Account Deficit (CAD) is expected to remain around ~0.8-1.0% of GDP in FY2025-26 (FY2024-25 ~0.6%) with some estimates indicating a possible widening amid trade tariff pressures and the prevailing geopolitical environment.

(Source: Ministry of Finance, PIB - February 1, 2026; IMF World Economic Outlook report, April 2026)

Indias debt-to-GDP ratio for FY2025-26 stood at 56.1%. Foreign exchange reserves increased to $697.1 billion as of April 3, 2026 (March 2025: $668 billion), sufficient to cover ~11 months of imports and ~94% of external debt, providing a comfortable liquidity buffer.

(Source: Government of India, Ministry of Finance, PIB January 29, 2026 & February 1, 2026; Reuters; RBI)

The overall unemployment rate was estimated at 4.9% in February 2026, marginally lower than the 5.0% recorded in January 2026. The labour force participation rate (LFPR) for persons aged 15 years and above remained steady at 55.9% in February 2026, unchanged from January.

(Source: Government of India, Ministry of Statistics & Programme Implementation, PIB – March 16, 2026)

Climate risks continued to pose challenges to economic activity during the year. Irregular rainfall patterns, heatwaves, floods, cyclones, and other extreme weather conditions impacted agricultural output, supply chains, logistics, and energy demand across regions. Such events also contributed to volatility in commodity prices and inflationary pressures, while increasing operational and infrastructure risks for businesses. The growing frequency and intensity of climate related disruptions underscore the importance of resilience planning, sustainable resource management, and adaptive business strategies to mitigate long-term environmental and economic risks.

Inflation, while moderating compared to previous highs, remained a key area of focus, with monetary authorities maintaining a calibrated stance to balance growth and price stability. The banking sector stayed well-capitalized, ensuring adequate liquidity and credit flow to productive sectors, including real estate.

Amid global uncertainties, Indias economic fundamentals remain firmly anchored. Infrastructure expansion, robust real estate activity, and rapid digitalisation have continued to act as key growth multipliers across sectors. Strong agricultural output, rising household incomes, and government-backed initiatives in financial inclusion and affordable housing have provided further impetus to consumption.

Support will come from other areas. Household consumption is expected to improve as continued disinflation will prop up the purchasing power of consumers. Secondly, healthy rabi sowing and good kharif output assuming a normal monsoon will support agricultural income. Thirdly, prospects of fixed investment remain bright owing to an upturn in the private capex cycle, improved business sentiments, healthy balance sheets of corporates and banks as well as the governments continued thrust on capital expenditure. A sustained economic growth will lead India to become the 3rd largest and an upper middle-income economy in years to come.

Although the short-term outlook appears challenging due to rising interest rates, external supply shocks, and geopolitical tensions, we believe the government is taking appropriate measures to ensure a sustainable growth trajectory for the country. The union budget presented this year strongly supports the long-term growth of Indias real estate sector through its focus on urban infrastructure and the digital economy. The governments significantly expanded capital expenditure target for the year is expected to generate job opportunities and stimulate higher economic activity.

SECTOR PERFORMANCE

Services remained the primary driver of economic growth, expanding by 8.7% in FY 2025-26 (FY2024-25: 7.8%) and contributing ~55-60% of GVA, reflecting the increasing importance of modern, tradable, and digitally enabled services. Financial, real estate, and professional services recorded growth by 9.9%, while trade, hotels, transport, and communication services expanded by around 10.1%.

Manufacturing is estimated to have grown by 11.5% (FY 2024-25: 9.3%), supported by policy initiatives, supply chain diversification, and steady domestic demand. Construction grew at 7.1% (FY 2024-25: 7.3%), supported by sustained infrastructure spending. Agriculture grew by 2.4% (FY 2024-25: 4.2%), aided by an above-normal monsoon and strong rabi and kharif output, which helped lower food inflation and supported rural incomes.

(Source: RBI Monetary Policy Report, April 2026)

Government Initiatives and Policy Actions

During FY2025-26, the government implemented a range of structural and policy measures to support economic activity, broadening the tax base and strengthening Indias position in global trade.

From April 2025 onwards India navigated heightened global trade uncertainty following changes in US trade policy, including the imposition of new tariffs. These developments posed risks for exports and reinforced the focus on export diversification, competitiveness, and domestic manufacturing.

The Union Budget 2025-26 introduced the Income Tax Act, 2025, including revisions to personal income taxation aimed at supporting disposable incomes. This was complemented by GST rate rationalisation in September 2025, intended to support demand while maintaining revenue buoyancy. During the year, India signed free trade agreements (FTAs) with the UK and the European Union, while discussions on a trade agreement with the US progressed to an advanced stage. These measures are expected to support domestic consumption and export competitiveness, while increasing competitive intensity in select sectors.

The Reserve Bank of India (‘RBI) implemented cumulative policy rate cuts of 125 bps and reduced the cash reserve ratio (‘CRR) from 4% to 3%, injecting approximately Rs 2.5 lakh crores of liquidity into the system. Additional support was provided through open market operations and forex swaps. Together, these measures supported the transmission of lower lending rates, credit growth, and investment activity.

Despite disruptions during the second half of FY 2025-26, Indias financial position remained broadly stable. Tax collections were largely in line with expectations, the financial deficit remained within the glide path, and rating agencies acknowledged financial discipline through upgrades.

Macroeconomic Outlook for the Year Ahead

Indias economic outlook for FY 2026-27 remains strong, with real GDP growth projected at approximately 6.9% and CPI inflation at around 4.6% (RBI), although the inflation outlook remains sensitive to movements in food and energy prices. Growth is expected to be driven by strong domestic demand, sustained government capital expenditure, and ongoing structural reforms.

(Source: RBI Monetary Policy Report, April 2026)

On the sectoral front, services are expected to remain the principal growth engine, particularly across financial services and hospitality. Manufacturing is gaining momentum under initiatives such as production-linked incentives (PLI), with continued expansion in sectors including electronics, automotive, and pharmaceuticals.

Financial policy is expected to progress along the consolidation path while retaining a strong emphasis on capital expenditure. Monetary policy is likely to remain calibrated and data-dependent, with an ongoing focus on maintaining price stability.

External sector conditions will be influenced by global growth and trade developments and by crude oil prices, which could influence the current account balance and imported inflation. Services exports are expected to provide a partial offset to these pressures.

Global trade growth is expected to witness a slowdown during 2026 compared with 2025, owing to persistent tariff-related uncertainties, the ongoing West Asia conflict, and elevated energy prices. These factors could weigh on private sector investment sentiment. The possible emergence of El Ni?o conditions may also pose a risk to growth and inflation dynamics.

While external risks persist, Indias relative insulation from global shocks, along with its continued focus on infrastructure and digital transformation, provides a solid foundation for sustained economic expansion.

INDUSTRY INSIGHT:

GLOBAL HOSPITALITY AND TOURISM INDUSTRY:

The global tourism industry reached a new post-pandemic peak in 2025, fully surpassing pre-COVID levels. According to the UNWTO Barometer (January 2026), international tourist arrivals are estimated to have reached 1.52 billion in 2025, representing a 4% increase over 2024 and reaffirming a return to long-term growth trends. Growth was supported by strong demand from large source markets, expanded air connectivity, and continued visa facilitation initiatives across destinations.

Europe remained the most visited region, accounting for about 52% of global international arrivals, with 794 million visitors. International arrivals in Europe grew by 4% Y-o-Y and marginally exceeded pre-pandemic levels.

The Americas recorded approximately 218 million international arrivals, reflecting ~1% growth over 2024 and reaching 99% of 2019 levels.

The Middle East continued to outperform pre-pandemic benchmarks, with international tourist arrivals exceeding 2019 levels by 39%, although growth over the previous year remained modest at 3%. Africa also surpassed pre-pandemic performance, registering a 17% increase over 2019 and an 8% Yo-Y growth in arrivals during 2025.

The Asia-Pacific (APAC) region made significant progress in its recovery, recording 331 million international arrivals in 2025. The regions share of global arrivals increased to ~22%, while overall arrivals recovered to 91% of pre-pandemic levels.

In revenue terms, total export earnings from tourism, including passenger transport, are estimated to have reached a record USD 2.2 trillion in 2025, representing an approximately 5% increase from 2024. International tourism receipts also recorded extraordinary growth during the year, with several destinations reporting higher growth in receipts than in arrivals.

OUTLOOK

Resilient Growth amid Uncertainty

Whilst the global hospitality and tourism sector entered 2026 from a position of strength, having completed its post-pandemic recovery, the outlook for the year ahead remains characterized by measured optimism amidst persistent uncertainties.

Geopolitical tensions in West Asia have impacted tourism activity across the region, driven primarily by heightened uncertainty and operational disruptions. These developments have weighed on traveller confidence and influenced destination preferences, resulting in some moderation in international travel flows. Given the regions importance within global travel networks, the impact has extended beyond immediate markets, with spillover effects on broader tourism and hospitality demand.

Although geopolitical risks and economic conditions in certain markets continue to present near-term uncertainties, the broader environment remains supportive of the industry. The sector has repeatedly demonstrated resilience, rebounding strongly from far more severe disruptions in the past. The global hospitality and tourism industry remains well poised for long-term growth, supported by stable employment markets, a healthy level of business activity and resilient leisure demand.

The travel and tourism sector also continues to benefit from favourable structural drivers, supported by sustained demand for both business and leisure travel. Rising disposable incomes and the expansion of the middle class across emerging markets remain key demand catalysts. Travel demonstrated resilience as a discretionary spending category, while business travel demands remain strong.

The hospitality sector is expected to remain stable in FY2026-27, supported by domestic leisure travel and MICE demand, with room rates likely to remain firm. According to ICRA, industry revenues are projected to grow by ~7–9% Yo-Y in FY2026-27, with occupancy and ARR continuing to improve. Near-term performance, however, may be affected by geopolitical developments in West Asia and related aviation disruptions, which could temporarily impact select international and corporate travel corridors while keeping fuel, logistics and utility costs elevated.

Over the medium to long term, structural drivers, including rising discretionary spending, an expanding middle class and continued business travel, are expected to support industry growth. Indias rising prominence in the global economy is also expected to contribute to sectoral growth by attracting higher inflows of foreign visitors, including heads of states and senior business executives.

Country Clubs strong domestic presence, balanced portfolio of owned, leased and managed properties; diversified brand architecture across geographies and segments; and stable stream of fee-based income provide a strong platform for sustained growth. These strengths enhance the Companys ability to navigate evolving economic conditions with agility, reinforce resilience, and capitalize on emerging opportunities over the medium to long run.

INDIAN HOSPITALITY AND TOURISM INDUSTRY

Upcycle Intact for the Year Under Review

The Indian travel and tourism industry remained on a positive trajectory in FY2025-26, led by strong domestic leisure demand and improving corporate travel. Inbound travel also continued its gradual recovery, supported by better connectivity and visa facilitation. As per World Travel & Tourism Council (WTTC) Economic India Impact Report 2025, the tourism sector accounted for an estimated 9.4% of total employment in India during FY2023-24 and contributed 6.6% to Indias GDP, underlining its significant role in supporting economic growth and employment generation.

During calendar year 2025, India recorded 9.02 million foreign tourist arrivals and foreign exchange earnings of Rs 27,363.8 crores. Domestic tourist visits stood at 4,132.8 million during the same period. A facilitative visa regime remains a key enabler for inbound tourism. As of December 2025, Indias e-visa facility covered nationals of 172 countries, with entry permitted through 33 international airports, 16 seaports, and 2 land ports.

Resilient leisure demand and improving corporate travel supported occupancy levels during the year, while continued supply discipline helped sustain pricing momentum across ADR and RevPAR. The sector extended the upcycle witnessed between FY2023-24 and FY2025-26, with occupancy, ADR and RevPAR remaining at or above pre COVID levels. As per Horwath HTL, national occupancy stood at 64% in 2025 (2024: 63.0%), while ADR increased to Rs 8,624 (+8.5% Y-o-Y) and RevPAR rose to Rs 5,522 (+8.7% Y-o-Y). Looking ahead, a structural demand–supply imbalance across key markets, coupled with improving infrastructure may support sustained occupancy levels and healthy pricing, including in select Tier 2 and 3 markets, subject to macroeconomic conditions and any event-related disruptions.

(Source: Horwath HTL India Hotel Market Review 2025 report published in February 2026)

In FY 2025-26, Indian Hospitality industry sustained its strong growth momentum, establishing new benchmarks. Growth continued to be driven by economic stability, favorable demographics, robust domestic demand outpacing supply and the governments thrust on improving infrastructure and connectivity in the country.

Indias tourism sector, rich in heritage, culture, and diversity, is emerging as a key driver of economic growth playing a vital role in the Indian economy. As per WTTC, the direct economic contribution of the Travel & Tourism sector to the Indian GDP in 2024 was ‘20.9 trillion (growth of 19.9% over 2019), contributing 6.6% to the overall GDP of the country. Additionally, the sector has contributed appx. 9.1% (46.3 million jobs) of total jobs in 2024, exhibiting a healthy 16.3% growth over 2019.

During the year, the sector witnessed robust growth, with domestic air (pre-pandemic) levels by 12%. Foreign tourist arrivals, while growing over the previous year by 1.5%, remained below randamic levels indicating significant headroom for growth. The Government of India reinforced its strong commitment in positioning India as a global leader in tourism by enhancing its thrust on infrastructure creation, boosting employment and promoting diverse tourism segments, including spiritual, medical and heritage tourism. Tourism sectors large economic multiplier effect is expected to contribute towards Indias transition into one of the worlds leading developed nations by 2047.

According to industry estimates, demand for branded hotel rooms in India is expected to continue outpacing supply growth which remains moderate. As per Horwath HTL, the industry has a pipeline of 1,05,000 branded rooms expected by 2029 subject to some slippages. This trend reflects a positive outlook for the industry, fuelled by rising tourism, business travel, and infrastructure improvements. Indias hospitality industry presents a significant potential for market penetration with just 0.1 branded room inventory per 1,000 people.

The upsides working in favour of the hospitality industry in India are good macroeconomic environment evidenced by 6%+ GDP growth, superior performance by the services sector of the Indian economy.

The Indian hotel industry is poised for a remarkable growth driven by long-term demand. Notable drivers of this growth are (i) improved connectivity with new airports and national highways across the country, (ii) increase in business travel led by buoyant economic conditions, new convention centres and global capability centres, (iii) recovery of foreign tourist arrivals, additional middle-income households and a clearly visible trend of premiumisation leading to higher demand for leisure destinations. The advent of spiritual tourism, weddings in India, a resurgent M.I.C.E (Meetings, Incentives, Conferences and Exhibitions) tourism surrounding recent and upcoming conventions centres and growing wildlife tourism give rise to new destinations and circuits providing a strong impetus to growth. Continuing infrastructure development projects within the country, growth in air and railway passenger traffic and growth in demand are expected to provide a long and sustainable upcycle for hospitality in India. Growth in demand for branded rooms is expected to outpace growth in supply of those rooms. A report from Horwath HTL estimates growth in all India demand at 10.6% till 2027, with growth in key leisure markets at 13.3%. Supply, on the other hand, is estimated to grow at 8% with 60% of the supply outside the top 10 destinations.

A balanced portfolio of owned, leased and managed properties; iconic brands; and a robust, well-diversified topline gives Country Club the competitive advantage to lead markets and expand its business. A strong balance sheet and free cash flow strengthen its financial position, while a focus on productivity enhances its profitability. Its framework to drive sustainability and social measures with several short- and long-term goals to be fulfilled by 2030, guides the Company in doing business in a responsible manner. Collectively, all these factors enable the Company to achieve its strategic targets.

REVIEW OF THE COUNTRY CLUBS BUSINESS

REVENUE OPPORTUNITIES

Country Clubs brands enjoy the tremendous trust of its patrons, guests as well as the neighbourhoods in which it operates its hotels. Given the limitations that the prevailing situation has imposed on existing business models, Country Club has explored multiple alternative revenue opportunities to ensure business continuity. These include a Hospitality at Home programme by which hotels supply bakery, confectionery and wellness services to homes. The Company is also exploring digital channels to make more products and services available to guests. Certain Corporates have been using hotels as part of their Business Continuity Programme to maintain their operations. Long-stay guests have continued to put up at the hotels.

All the hotels at Country Club have become operational in a phased manner after the lockdown is lifted and the confidence of travellers is restored. However, it expects demand for its services to pick up at a slow pace. Business recovery is likely to be driven by domestic leisure tourism, staycations, domestic business travel and limited international travel. The trust that the Companys brands enjoy and its emphasis on the health and safety of guests and employees will help it gain market share as and when the economy revives.

COST ACTIONS

Country Club has instituted a robust spend optimisation programme to reduce fixed costs and rationalise resources. While variable costs have reduced with lower business volume, the Companys focus has shifted to fixed costs. It has taken the following initiatives with regard to this:

- Maximising selling down of non-operational clubs, resorts and hotels across the nation by clearing its debts and reducing the secured loans of the Company;

- Renegotiating F&B ingredient contracts and exploring alternative sources of procurement;

- Optimising consumption of power and fuel by rationalising open floors or wings at operating hotels;

- Reducing corporate overheads viz. professional contracts, marketing spends, renegotiating annual maintenance contracts, leased-line costs, reducing support staff of inbound and outbound call centres, travel expenses, etc.

- Accessing government support where available. In certain states of India, it has taken benefit of waivers or defers in minimum demand electricity charges, etc.

CONSERVATION OF CASH

The Company has taken immediate measures to control cash flows during the year and maintain liquidity during the period. These include deferral of capital expenditure and renovations, unless absolutely required. Capital expenditure is planned to be incurred for essential hotel maintenance.

COMPLIANCE

Country Club deploys a robust internal check process to prevent and limit the risk of non-compliance. The Company approaches compliance from a proactive standpoint and believes in responsive intervention. Compliance with laws and regulations is an essential part of its business operations and it adheres to all national and regional laws and regulations in such diverse areas as product safety, product claims, trademark, copyright, patents, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes. Nevertheless, it is focusing on increasing awareness, documentation and supplementing the expertise of internal professionals with that of independent consultants, as may be required from time to time.

HEALTH AND SAFETY

Country Club continues to remain committed to making the Company a safe and secure place for all stakeholders. Safety is part of the integral agenda for all Executive Committee and Board Meetings. Routinely identifying safety risks associated with operations helps the Company implement appropriate and effective mitigation plans and ensures overall safety compliance.

Country Club carries out unannounced Fire and Life Safety (FLS) audits at its resorts & hotels and in its corporate office with a focus on identifying and eliminating risks in areas pertaining to Leadership & Governance, Risk Management, Electrical Safety, Fire Safety, General Safety, Personal Protective Equipment, Contractor Management, Work Permit System, Sewage Treatment Plant and Road Safety.

The Company continues to drive awareness on safety across its resorts & hotels. Common safety hazards and their safeguards have been highlighted in specially designed animated safety videos, and case studies based on true incidents continue to be shared with the resorts and hotels as a learning tool. As a result of this focus on safety and learnings from incidences, Country Club has reported no fatality for the year.

FOOD SAFETY, HYGIENE AND CLEANLINESS

The Company is committed to continually improving the Food Safety Management System by training and optimising the capacities of people, processes and technologies within the system and ensuring implementation of all applicable internal and external standards. Food Safety, Hygiene and Cleanliness audits were conducted by an external audit partner ensuring implementation of FSSAI guidelines and standards. Internal Food Safety workshops were organised to discuss the way forward for the implementation of food safety, hygiene and cleanliness at the hotels and resorts.

OPPORTUNITIES, THREATS, RISKS AND CONCERNS:

OPPORTUNITIES:

Demand–supply Considerations

ICRA projects demand growth of 8–10% CAGR compared with supply growth of 5–6% during FY2025–FY2028. Supply additions are expected to remain measured due to higher land and construction costs, longer approval timelines and talent availability, which may continue to support occupancy and ADR levels.

Policy Environment

Ongoing initiatives under Swadesh Darshan 2.0 and PRASHAD, destination development across select iconic sites, connectivity enhancement measures and community-based tourism initiatives such as homestays are expected to improve destination readiness over time. Skilling program, including Capacity Building for Service Providers (CBSP), Paryatan Mitra and Paryatan Didi, may further support service quality and employability, although execution and uptake will remain important.

RCS-UDAN has also been introduced to strengthen regional air connectivity through affordability measures and viability support, with 53 tourism routes operational to improve access to key and iconic tourist destinations.

Effective September 22, 2025, the GST rate on hotel rooms priced up to Rs 7,500 per day was reduced to 5% (without input tax credit), improving affordability, simplifying taxation, and supporting demand in the mid-scale and budget segments, despite the trade-off arising from the loss of input tax credit for businesses.

Key factors impacting the industry are:

(i) the trajectory of domestic discretionary spending;

(ii) the pace of inbound travel recovery and expansion in air connectivity;

(iii) incremental room supply and conversion activity;

(iv) trends in corporate travel and MICE; and

(v) the geopolitical environment, weather-related events or other external environment.

As India awaits policy reforms to pick up speed, your Company firmly believes that the demand for Hotel and Hospitality sector in a country like India should remain strong in the medium to long term. Your Companys well accepted brand with the name "COUNTRY CLUB", contemporary architectural designs Resorts, well designed Hotels in Holiday destined locations like Goa, Shimla, Jim Corbett, Bandipur, etc., strong balance sheet and stable financial performance even in testing times make it a preferred choice for customers and shareholders. Your Company is ideally placed to further strengthen its development potential by acquiring new resorts and hotels in future.

THREATS, RISKS & CONCERNS:

Country Clubs risk management framework consists of identification of risks, assessment of their nature, severity and potential impact, and measures to mitigate them. This framework is in place for adequate and timely reporting and monitoring. Risks are reviewed periodically and updated to reflect the business environment and change in the size and scope of the Companys operations. Though the Risk Management Committee is not applicable to the Company, however, the Company has framed the Risk Management Policy and the said Risk Management Policy is available on the Companys website at https://countryclubindia.net/files/policies/6.pdf.

MACROECONOMIC RISKS

Global inflation remains persistently high even as major central banks acted in sync to tighten monetary policies. The global economic environment remains fragile, with growth slowing down considerably in advanced economies and risks to their banking systems. India has fared much better, but things can change if there is a full-blown global financial crisis or further decline in outlook for global trade and output. This can adversely impact Indias growth prospects and also the Companys performance.

Country Club recognises these risks. The Company also believes that its focus on customer acquisition through referrals, alliances and digital leads will help it to mitigate risks from economic downturns. Other initiatives to generate robust performance include a complete product portfolio across all life-stage segments, a differentiated product proposition and initiatives to augment member spends at resorts. That it is an aspirational brand and the market leader augurs well for it in tough times.

OPERATIONAL RISKS

Operational risks mainly relate to meeting customer expectations in terms of quality of service and maintaining a balance between the inventory of resorts and growth of customers. These assume significance given the long service duration of key products. As there are multiple choices of locations and seasons, there could be occasions where the first choice of holiday requested by the customers may not be available, which may result in dissatisfaction. Another operational risk is in the ability to consistently attract, retain and motivate managerial talent and other skilled personnel, especially in a high growth industry with unique characteristics. Further, some of the Companys resorts are in remote areas and natural calamities such as earthquake, flood, landslide etc. may affect the accessibility of the resort to members.

The Company has invested significant resources in systems and processes to mitigate these risks. Customer satisfaction continues to be favourable and on an upward trend. Regarding room inventory, the Company will continue to be judicious in the use of different options – greenfield projects, acquisitions, expanding inventory at existing locations, long term leases and inventory arrangements — to meet the expectations of its customers and at the same time maintain a balance between demand and supply. Regarding talent management and retention, management believes that its HR practices enhance employee engagement and satisfaction to effectively mitigate this risk.

FINANCIAL RISKS

The Companys business operations involve significant investments in building resorts. These expose it to risks in terms of timely and adequate availability of funds at competitive rates to finance its growth. Besides, it offers its customers schemes to finance the purchase of the vacation ownership and similar products, which exposes it to credit risks. The Company is, therefore, exposed to potential risk of non-payment or delayed payment of membership instalments and/or the annual subscription fee by members resulting in higher outstanding receivables. Rising inflation could potentially increase the cost of resort operations as well as its project and renovation related costs. The Company is also exposed to foreign exchange risks due to its overseas subsidiary companies at Middle East and Srilanka.

The Companys focus on improving quality of sales by increasing down payments and lowering EMI tenures have been very effective in bringing down credit and repayment risks. Even so, it undertakes comprehensive assessment of the profile of its customers and carefully monitors its exposure to credit risk. Several improvements have also been implemented in the receivables management and collections to reduce such risks. Regarding inflation, the Company has a strong process to mitigate these risks through a combination of cost savings measures such as centralised procurement of consumables and inputs for its projects. Suitable price increases have also been passed to the consumers in the form of F&B charges as well as membership fees.

REGULATORY AND LEGAL RISKS

Country Club is exposed to regulatory and legal risks. These include cumbersome processes and risks relating to land acquisition, conversion of land for commercial usage and development of properties, environmental clearances, approvals and activities related to development of new resorts. There are also other regulatory and legal risks pertaining to tax proceedings, legal proceedings on properties, customer complaints, non-compliance of regulations including environmental regulations and those pertaining to the hospitality sector. Further, as the Company has investments and operations in different countries, it is also exposed to political and regulatory risks that emanate from its international presence.

Country Club has adequate systems and controls in place to reasonably mitigate these risks and minimise instances of non-compliance. The Company also believes that its proactive stance on sustainability will hold it in good stead for future development and growth.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has in place adequate internal financial controls with reference to financial statements. In addition, the Company has also Re-appointed M/s. B. N & Company, Chartered Accountants as the Internal Auditors of the Company to conduct the regular Internal Audit and place its Report before the Audit Committee. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. During the year under review, no material or serious observation has been received from the Statutory Auditors and the Internal Auditors of the Company on the inefficiency or inadequacy of such controls.

The internal controls over financial reporting have been identified by the management and are checked for effectiveness across all locations and functions by the management and tested by the Auditors on sample basis. The controls are reviewed by the management periodically and deviations, if any, are reported to the Audit Committee periodically.

Adequate internal control systems commensurate with the nature of the Companys business, size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations. Internal control systems are designed to ensure that all assets and resources are acquired economically, used efficiently and adequately protected.

SEGMENT WISE PERPORMANCE:

The Company is presently carrying on two segments namely, the first segment is Clubbing, Tourism, Hotel & Hospitality Services in India, Sri Lanka and UAE and the second segment is Real Estate Services only in India. Format for Reporting Segment wise Revenue, Results and Capital Employed along with the Company results:

S.No.	Particulars	STANDALONE		CONSOLIDATED
		Year ended 31.03.2026	Year ended 31.03.2025	Year ended 31.03.2026	Year ended 31.03.2025
1	Segment Revenue:
	Hotel & Membership	7712.17	6851.07	7712.17	733.16
	Real Estate	3910.53	0	3910.53	0
	Less: Intersegment Revenue	0	0	0	0
	Total	11622.70	6851.07	11622.70	733.16
2	Segment Results (PBT):
	Hotel & Membership	(935.62)	(106.93)	(2742.00)	479.29
	Real Estate	1733.70	0	1733.70	0
	Unallocated Income / Expenditure	(774.00)	0	(774.00)	0
	Total	24.08	(106.93)	(1782.30)	479.29
3	Segment Assets:
	Hotel & Membership	37636.25	63366.96	31655.77	59567.66
	Real Estate	20291.07	0	20291.07	0
	Add: Unallocated	0	0	0	0
	Total	57927.32	63366.96	51946.84	59567.66
4	Segment Liability:
	Hotel & Membership	19821.18	26454.04	20984.07	27965.07
	Real Estate	1138.70	0	1138.70	0
	Add: Unallocated	0	0	0	0
	Total	20959.88	26454.04	22122.77	27965.07

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE OF THE COMPANY:

During this year under review, the Consolidated Turnover of the Company was Rs 11622.70 Lakhs as compared to Rs 7330.15 Lakhs for the Previous Year and the Standalone Turnover of the Company was Rs 11622.69 Lakhs as compared to Rs 6851.05 Lakhs for the Previous Year.

Your Company had a Consolidated Net Loss (After deducting Finance Cost and Depreciation and Tax Expenses) of Rs1763.40 Lakhs as compared to Net Profit of Rs 437.93 Lakhs for the Previous Year. The Standalone Net Profit of Rs 42.96 Lakhs as compared to Net Loss of Rs 169.91 Lakhs for the Previous Year.

Financial performance overview

Analysis of financial statements for FY 2025-26 is provided below:

Key Financial Ratio Analysis:

In accordance with SEBI (Listing Obligations and Disclosure Requirements 2018) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (Change of 25% or more as compared to the immediately previous financial year) in key sector specific financial ratios.

A comparative table showing synopsis of FY 2025-26 versus FY 2024-25 of Key Financial Ratio is provided below:

(Rs In Lakhs)

S.No.	Particulars	Numerator	Denominator	As at 31-03-2026	As at 31-03-2025	Variance (in %)	Reason for variance
1	Current ratio	Current assets	Current liabilities	0.832	0.670	24.111	Improved due to increase in current assets relative to current liabilities.
2	Debt-equity Ratio	Total Debt (1)	Share holders funds	0.01	0.010	-29.51	Improved due to reduction in borrowings during the year.
3	Debt-service coverage Ratio	Earnings Available for debt service	Debt Service	1.80	0.33	444.33	Improved due to higher earnings available for debt servicing and reduction in debt obligations.
4	Return on equity	Net profit after taxes	Average shareholder funds	0.001	-0.005	-116.88	Improved due to better profitability during the year as compared to the previous year.
5	Trade receivables turnover ratio	Sales	Trade receivables	13.54	9.238	46.56	Improved due to higher revenue and better realisation of trade receivables.
6	Inventory turnover Ratio	Sales	Average inventory	2.47	1.39	77.598	Improved due to higher sales and faster movement of inventory during the year.
7	Trade payables turnover ratio	Sales	Trade payables	146.41	112.627	29.997	Increased due to faster settlement of trade payables and lower average credit period.
8	Net capital turnover Ratio	Sales	Working capital	-8.17	-1.47	454.222	Variance is primarily attributable to changes in negative working capital during the year.
9	Net profit ratio	Net profit after tax	Sales	0.005	-0.037	-114.84	Improved due to better operating performance and profitability during the year.
10	Return on capital employed	Earnings before interest and taxes	Capital employed (2)	0.002	0.002	-9.92	No material variation.
11	Return on investment	Income generated from investments	Time weighted average investments	N/A	N/A	N/A	No investment income generated during the year, hence ratio not applicable
12	Operating Profit ratio	Earnings before Interest, Tax and Amortization	Net Operating Income	2.94	-6.15	-147.85	Improved due to better operating performance during the year as compared to the previous year.
13	Return on Net worth	Net Operating Income	Shareholders equity	0.1322	-0.0656	-301.36	Improved due to positive operating results during the year as compared to losses in the previous year.
14	Interest Coverage Ratio	Earnings before Interest and Tax	Interest Expenses	1.46	0.91	60.35	Improved due to higher earnings available for servicing finance costs.

(1) Total debt comprise of long term debt, current maturities of long term debt and short term borrowings

(2) Capital employed comprise of Networth, total debt and Deferred tax liability

CAUTIONARY STATEMENT:

This Management Discussion and Analysis contain forward looking statements within the meaning of applicable security laws and regulations that reflects your Companys current views with respect to future events and financial performance. The actual results may differ materially from those anticipated in the forward-looking statements as a result of many factors. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to manage growth, competition, economic growth in India, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, government policies and actions with respect to investments, fiscal deficits, regulation etc. In accordance with the Code of Corporate Governance approved by the Securities and Exchange Board of India, shareholders and readers are cautioned that in the case of data and information external to the Company, no representation is made on its accuracy or comprehensiveness though the same are based on sources thought to be reliable. The Company does not undertake to make any announcement in case any of these forward-looking statements become materially incorrect in future or update any forward-looking statements made from time to time on behalf of the Company.

For and on behalf of the Board of Directors of

COUNTRY CLUB HOSPITALITY & HOLIDAYS LIMITED

PLACE: HYDERABAD

DATE : 08-09-2026

Y. SIDDHARTH REDDY

VICE-CHAIRMAN, JMD & CEO

DIN: 00815456

Y. VARUN REDDY

VICE-CHAIRMAN, JMD & COO

DIN: 01905757