Country Club Hospitality & Holidays Ltd Management Discussions

ECONOMIC ENVIRONMENT AND INDUSTRY INSIGHT:

GLOBAL ECONOMY: THE YEAR IN REVIEW:

In CY2024, the global economy displayed notable resilience despite uneven momentum across regions and sectors and grew at 3.3% as per International Monetary Funds (IMF) World Economic Outlook. Headline inflation moderated to 5.8% in CY2024 towards central bank targets, prompting the first wave of policy rate cuts in major economies. Labour markets, though slightly softened, remained tight, with unemployment near historical lows. Strong nominal wage growth, combined with easing price pressures, improved real household incomes. However, private consumption remained subdued, reflecting weak consumer sentiment and elevated uncertainty.

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 1.6% in CY 2024, is anticipated to remain sluggish at 1.7% to 1.8% over the next two years due to policy tightening, financial sector turmoil, high inflation, the ongoing conflict between Russia & Ukraine and Israel and Gaza.

The slow growth rate persists amidst a cost-of-living crisis triggered by disruptions in energy and food markets due to Russias conflict in Ukraine, coupled with global monetary tightening to address inflationary pressures and reduced fiscal support. However, the resilience seen in the United States and several significant emerging market economies, along with continued fiscal support in China, will bolster global growth.

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.

Global inflation is projected to decrease from an estimated 5.9% in CY 2024 to 4.5% in CY 2025, primarily due to accelerated disinflation in advanced economies. Declining inflationary pressures vary by country but generally stem from reduced core inflation, influenced by ongoing tight monetary policies, softened labor markets, and impacts from lower energy prices. The IMF forecasts a 2.3% decline in oil prices in CY 2025, while non-fuel commodity prices are expected to drop by 0.9%. Heightened tensions in the Gaza-Israel region, which accounts for approximately 35% of global oil exports, could lead to supply shocks if the conflict escalates. Continued trade distortions and geopolitical fragmentation are anticipated to persist, exerting pressure on global trade levels.

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.

Diverging regional growth patterns

United States expanded by 2.8%, supported by resilient consumption, strong public spending, and stable exports.

Eurozone posted modest growth of 0.9%, weighed down by weak investment in Germany and declining external demand.

China faced headwinds from sluggish consumption and continued stress in its property sector, with knock-on effects across Asia and Europe.

India stood out as a bright spot, maintaining robust growth and reinforcing its position as a key engine of global expansion.

Outlook for CY2025 and beyond

The global economy enters CY2025 at a delicate inflection point. While inflation has eased, escalating tariff measures,

particularly between the US and its trading partners, have raised effective tariff levels to a century-high, delivering a significant shock to global trade.

Inflation and policy dynamics

Global headline inflation is projected to average 4.3% in CY2025, easing to 3.6% in CY2026. While inflation estimates have been revised upwards for advanced economies, emerging markets are expected to benefit from more stable price conditions. In this environment, central banks may need to maintain a cautious stance, balancing support for growth with the need to anchor inflation expectations.

Going forward, policymakers will need to strike a careful balance between fostering growth and maintaining inflation discipline. While easing inflation could create room for monetary loosening, trade-related disruptions and climate-linked shocks remain key risks. Structural reforms, shifting demographics, and the transition to a low-carbon economy will significantly influence growth paths, with regional dynamics and policy frameworks playing an increasingly pivotal role in shaping emerging opportunities

INDIAN ECONOMY: THE YEAR IN REVIEW:

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.

In FY 24-25, India recorded a growth rate of 6.5% , underpinned by a recovery in rural demand, sustained Government investments in infrastructure and the continued buoyancy in the services sector. As per the world bank, India will remain resilient and grow at 6.3% in FY 25-26 led by strong domestic demand, a dynamic service sector, and a gradual revival in private sector investment. The macroeconomic environment remained stable, supported by a contained retail inflation rate of 4.6% - the lowest since FY 18-19, narrowing fiscal deficit and manageable current account, and healthy foreign exchange reserves, bolstering investor confidence

The Reserve Bank of Indias calibrated monetary policy, which included two repo rate reductions of 25 basis points each in February and April 2025, signalled a pro-growth orientation while maintaining inflation discipline.

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 3 rd largest and an upper middle-income economy in years to come.

The Government has also been promoting schemes such as the Urban Infrastructure Development Fund (UIDF). This underscores the Indian governments focus on bolstering the infrastructure sector, which, in turn, will be a multiplier for the economic growth. Additionally, by rolling out housing schemes such as the PM Awas Yojana, the Government of India is assisting its citizens with affordable housing facilities. In FY 2025, the construction sector has clocked a growth rate of 10.7%. This expansion is likely to positively impact other allied sectors and further fuel the growth of the domestic economy.

Despite of war in Ukraine and the staggering inflation, the Indian equity market had a comparatively stellar year. The governments focus on infrastructure development with initiatives like the National Infrastructure Pipeline and Atmanirbhar Bharat Abhiyan are expected to create opportunities. However, the effects of geo-political tension rising around the world pose a threat to the economic growth of the Country and clouds of uncertainty are still hovering around World economic growth.

Under PM GatiShakti Master Plan, the National Highway Network will develop 25,000 Kilometers of new highways network which will be worth Rs 20,000 Crore (US$ 2.67 billion). Increased government expenditure is expected to attract

private investments, with a production-linked incentive scheme providing excellent opportunities. Consistently proactive, graded and measured policy support is anticipated to boost the Indian economy.

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.

FY 2024-25 has been a year of very strong recovery in the Indian travel and tourism industry. All Travels including international travel, demand was largely from pent-up domestic leisure travel, extended stays, wedding, social events and a partial resumption of business travel in the country.

INDUSTRY INSIGHT:

GLOBAL HOSPITALITY AND TOURISM INDUSTRY:

The global tourism industry continued its strong resurgence in 2024, nearly achieving full recovery from the pandemics impact. Results were driven by strong post-pandemic demand, robust performance from large source markets and the ongoing recovery of destinations in Asia and the Pacific. As per UNWTO Barometer January 2025, international tourist arrivals are estimated to have reached 1.4 billion in 2024, marking an 11% growth over 2023 and 99% of pre-pandemic levels. Europe remained the most visited region with a 52% share, surpassing 747 million international arrivals, a 5% increase vis-a-vis 2023, and slightly exceeding its 2019 benchmark, while the Americas registered 214 million travellers, a 7% increase vis-a-vis 2023, and reached 97% of pre-pandemic levels. The Middle East registered 1% growth over the previous year, however, surpassing 2019 arrivals by 32%, while Africa also outperformed pre-pandemic levels by 7% and 12% had a increase vis-a-vis 2023.

The Asia-Pacific (APAC) region made significant strides toward recovery, recording 316 million international arrivals with an overall share increase to 22% in 2024 as against 18% in 2023. While still lagging behind 2019 numbers at 87% recovery, the regions growth on y-o-y basis was steepest at 33% accelerated by a revival in key markets.

Total export revenues from tourism (including passenger transport) are estimated at a record USD 1.9 trillion in 2025, about 3% higher than before the pandemic and 4% more than in 2019 (real terms).

According to Horwath HTLs India Hotel Market Review 2024, around 14,400 rooms across 169 hotels were added in 2024, taking the total supply of branded hotel rooms to approximately 2,00,000. Notably, over two-thirds of these additions were in emerging destinations beyond the top 10 markets, indicating growing depth and diversification in Indias hospitality landscape.

OUTLOOK

The Indian economy is projected to grow by more than 6% in FY25 as per various institutional estimates, making it one of the fastest-growing economies. Indias growth journey could be the result of a culmination of favourable tailwinds like consistent agricultural performance, increase in government spending, reforms and an efficient roll-out of the vaccine, among others.

Indias economic outlook for FY 2025 ?€“26 remains optimistic, underpinned by strong domestic fundamentals and supportive policy frameworks. The Reserve Bank of India (RBI), in its April 2025 Monetary Policy Statement, projects real GDP growth at 6.5% for FY 2025?€“26. Manufacturing activity is expected to retain its momentum, bolstered by global demand recovery, the Production-linked Incentive (PLI) schemes, and a conducive investment environment. Services are expected to grow above trend, supported by sustained demand in contact-intensive segments and digital services exports.

A normal monsoon forecast is likely to aid agriculture and rural consumption. Urban consumption is expected to benefit from improving disposable incomes and stable inflation. Bank credit growth, which expanded by over 11% y-o-y as of March 2025, is expected to remain healthy, supported by sound bank balance sheets and rising investment appetite.

The governments continued focus on infrastructure, clean energy transition and digital public infrastructure is poised to drive medium-term growth. However, risks remain from global trade owing to rising protectionist measures, persistent geopolitical tensions, rising supply chain pressures, and volatile global financial conditions.

The global tourism and hospitality sector is poised for continued growth in 2025, following a full recovery from the pandemic in the previous year. According to the United Nations World Tourism Organisation (UNWTO), international tourist arrivals are projected to increase by 3% to 5% compared to 2024, indicating a normalisation of growth following the sharp post-pandemic rebound. Confidence within the industry remains high ?€” UNWTOs January 2025 Confidence Index reports that 64% of surveyed travel professionals anticipate stronger performance this year than in 2024. This optimism is underpinned by key enablers such as enhanced air connectivity and the simplification of visa processes, both of which are

expected to further support the sectors expansion (Source: UNWTO, World Tourism Barometer, January 2025).

The World Travel & Tourism Council (WTTC) forecasts that 2025 will be a landmark year for the industry. The sectors global economic contribution is expected to reach a record breaking $11.7 trillion ?€” up from $10.9 trillion in 2023 and

$10.3 trillion in 2019. This represents a 6.7% increase over the previous year and a 13% rise compared to pre-pandemic levels. Moreover, travel and tourism are set to support 371 million jobs globally in 2025, surpassing employment levels seen before the pandemic.

However the industry continues to face external risks, including trade tensions and geopolitical instability, which may influence traveller behaviour and discretionary spend potentials. Travellers are expected to prioritise value driven options and intra-regional trips. According to CBREs 2025 Global Hotel Outlook, the Asia-Pacific region is set to experience modest revenue per available room (RevPAR) growth, fuelled by rising wealth and demand that is outpacing relatively slow new supply.

INDIAN HOSPITALITY AND TOURISM INDUSTRY

FY 2024-25: A New Milestone for Indian Tourism

FY 2024-25 marked another landmark year for Indian tourism, driven by strong fundamentals such as a youthful population, rising employment, growing disposable incomes, and solid domestic demand. Improved infrastructure, greater connectivity, and increased investments have further accelerated the sectors momentum. The Union Budget 2025?€“26 allocated ¹ 2,541 crore ($291 million) for the tourism sector, with a focus on infrastructure upgrades, skill development, and easing travel. Key initiatives include the development of 50 leading tourist destinations, improved transport connectivity, and expanding the e-visa programme. As of December 2024, e-visas are available to citizens from 167 countries under 9 categories ?€” making travel to India simpler and more accessible.

The Ministry of Tourism advanced its flagship schemes such as Swadesh Darshan, PRASHAD, UDAN, and Dekho Apna Desh, encouraging regional and cultural tourism. Under PRASHAD, 27 new sites across 18 states and UTs were selected for development, with a continued emphasis on spiritual and heritage tourism. States have also introduced their own policies and incentives to promote local travel and boost their tourism economies.

This year also saw major strides in airport infrastructure, with 10 new greenfield airports becoming operational bringing the total count to 159 by the end of December 2024. Largescale projects at Noida (Jewar) and Navi Mumbai are nearing completion and are set to open in 2025.

Foreign tourist arrivals reached 9.7 million in 2024 as against 9.23 million in 2023. This years arrival denoted a recovery of 88% of the 2019 high of 10.9 million, signalling steady progress toward full recovery. Outbound travel, on the other hand, surged ahead, with 30.2 million Indians travelling abroad in 2024 ?€” 12% above pre-COVID levels. Domestic air travel remained strong, growing by 6% to 161 million passengers and surpassing 2019 figures by 12%. Key demand drivers included leisure travel, weddings, business events, and corporate travel.

According to the India Hotel Market Review 2024 by Horwath HTL, national occupancy stood at 63.9% for 2024 as compared to 62.1% in 2023. While the occupancy is still marginally below the 2019 level of 64.5%, Revenue per day was 82% higher than 2019 indicating market growth both in terms of capacity and size. The average daily rate (ADR) rose

to Rs 7,951, marking a 7.5% y-o-y increase and revenue per available room (RevPAR) rose to Rs 5,078, marking 10.7% year on year increase. Udaipur reported highest ADR followed by Mumbai and then by Goa and New Delhi highlighting the continued demand for premium destinations.

OUTLOOK

The Indian hotel industry enters 2025 on a strong footing, supported by sustained domestic travel, infrastructure upgrades, and rising interest from international markets. Continued economic growth, rising disposable incomes, and evolving travel aspirations especially among millennials and Gen Z are fuelling demand for both leisure and business stays. The sector is witnessing increased traction in tier-2 and tier-3 cities, driven by improved air connectivity, the rise of hybrid work models, and state-level initiatives promoting tourism circuits. The continued advent of spiritual tourism, weddings in India, and strong M.I.C.E activity (Meetings, Incentives, Conferences and Exhibitions) surrounding large state of the art conventions centres are providing a strong impetus to growth.

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.

Finally, large scale development of infrastructure by the Government, including roads, railways, metro-railways, airports and ports will aid long term growth of tourism and hospitality sector in India. These investments, coupled with coordinated efforts of Government ministries along with the industry should provide major stimulus for growth of Indian travel and tourism going forward.

While heightened trade tensions and global geopolitical risks weigh strongly on the economy, the governments continued support through tourism-friendly policies, infrastructure spending, and ease-of-travel initiatives are expected to keep the sector on a stable growth trajectory. Backed by robust fundamentals, favourable supply-demand dynamics, and a maturing hospitality ecosystem, the Indian hotel industry is well-positioned for a strong and sustainable performance in 2025 and beyond.

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.

INDUSTRY MEGATRENDS

The hospitality industry has been undergoing changes and disruptions over the last decades. The key trends that are reshaping the industry are listed here:

Virtual communities across social networks like TripAdvisor and Google, among others influence tourists and lead to more transparency

Online Travel Agents (OTAs) have altered distribution channels, facilitated a shift towards large brands and have built enduring relations with travelers

Digitalised guest experiences through apps are increasingly helping hoteliers manage many aspects of the guest cycle and experience

Booming global tourism, owing to enablers like low-cost carriers and healthy GDP growth in emerging markets.

Rising trend of experience economy wherein customers request extreme personalization, unique experiences, and so on.

Diverse attractions

India offers tourists a vast geographical diversity, attractive beaches, a chance to see 37 World Heritage Sites and 10 bio geographical zones. In July, 2021, UNESCO has declared the Famous Ramappa Temple at Parkal as World Heritage Site, which is just 200 Kms away from the Registered Office of the Company, i.e., Hyderabad. With this India has 39 such sites, and Archaeological Survey of India (ASI) is now the custodian of 23 world heritage site.

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;

Rationalising human resource costs through strategies; voluntary pay cuts taken by senior management and slowdown of fresh recruitments;

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 deferrals 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:

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 destinated 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.

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic global powers in the world over the next 5 years, backed by its robust democracy and strong partnerships

and strong Government Policies. Despite the geopolitical tensions due to the Russia-Ukraine War, the economic growth of India was ensured by the government through various financial stimulus packages, announced by the Government of India and the focus on tourism development and implementation of various new tourist destinations whether it is religious destinations, holidays destinations and adventurous destinations to make India self-reliant in Tourism and Holidays. The financial stimulus measures and reforms initiated by the Government of India and liquidity measures by the RBI are expected to support industrial activity and demand. The movement of various high frequency indicators in recent months, points towards broad based resurgence of economic activity.

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 .

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 an adequate internal control system, corresponding with the size and nature of its business. The system of internal control is supported by documented policies, guidelines and procedures to monitor business and operational performance which are aimed at ensuring business integrity and promoting operational efficiency.

The Company has an Internal Auditor who oversees the entire internal audit function. However, given the size of its operations in terms of nature of its business, it also uses services of independent audit firms to conduct periodic internal audits in line with an audit plan that is drawn at the beginning of the year. This audit plan, prepared by the Internal Auditor, is approved by the Audit Committee and the Board of Directors.

Internal audit reports are placed periodically before the Audit Committee of the Board of Directors, which reviews the adequacy and effectiveness of the internal control systems and suggests improvements for strengthening them.

SEGMENT WISE PERFOMANCE:

The Company is primarily engaged in the business of sale of Vacation Ownership and other related services in India. As such, the Company operates in a single segment and there are no separate business and geographic reportable segments for the purpose of Indian Accounting Standard 108 on Segment Reporting.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE OF THE COMPANY:

During this year under review, the Consolidated Turnover of the Company was Rs 7330.15 Lakhs as compared to

Rs 6862.93 Lakhs for the Previous Year and the Standalone Turnover of the Company was Rs 6851.05 Lakhs as compared to Rs 6853.24 Lakhs for the Previous Year.

Your Company had a Consolidated Profit (After deducting Finance Cost and Depreciation and Tax Expenses) of

Rs 437.93 as compared to Net Loss of Rs 485.87 Lakhs for the Previous Year. The Standalone Net Loss of Rs 169.91 Lakhs as compared to Rs 121.72 Lakhs for the Previous Year.

Financial performance overview

Analysis of financial statements for FY 2024-25 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 2024-25 versus FY 2023-24 of Key Financial Ratio is provided below:

( Rs In Lakhs)

S.No. Particulars	Numerator	Denominator	As at 31-03-2025	As at 31-03-2024	Variance (in %)	Reason for variance
1 Current ratio	Current assests	Current liabilities	0.670	0.500	34.001	Improved due to higher current assets/liability management
2 Debt-equity Ratio	Total Debt (1)	Share holders funds	0.010	0.115	-90.91	Declined as borrowings reduced.
3 Debt-service coverage Ratio	Earnings Available for debt service	Debt Service	0.33	0.354	-8.18	Lower earnings for debt servicing.
4 Return on equity	Net profit after taxes	Average shareholder funds	-0.005	-0.003	40.14	Negative returns persisted, but marginal improvement due to reduction in losses relative to average shareholders\u2019 funds
5 Trade receivables turnover ratio	Sales	Trade receivables	9.238	7.716	19.73	Improved collections
6 Inventory turnover Ratio	Sales	Average inventory	1.39	2.699	-48.410	Sharp decline owing to higher average inventory levels vis--vis sales, indicating slower movement of stock
7 Trade payables turnover ratio	Sales	Trade payables	112.627	53.784	109.404	Increase due to faster settlement of dues to creditors and reduced credit period availed.
8 Net capital turnover Ratio	Sales	Working capital	-1.47	-0.919	60.418	Impact of negative working capital.
9 Net profit ratio	Net profit after tax	Sales	-0.037	-0.023	58.98	Losses continued, but proportion of loss to sales reduced due to cost controls and marginally better operating performance
10 Return on capital employed	Earnings before interest and taxes	Capital employed (2)	0.002	0.007	-74.40	Declined due to lower EBIT

11 Return on investment	Income generated from investments	Time weighted average investments	N/A	N/A	N/A	N/A
12 Operating Profit ratio	Earnings before Interest, Tax and Amortization	Net Operating Incom	e	280.06	-102.20	Significant fall attributable to operating losses in FY25 compared to positive margin in FY24
13 Return on Net worth	Net Operating Income	Shareholders\u2019 equity	-0.0656	0.0018	-3,746.14	Sharp deterioration due to losses wiping out shareholders\u2019 equity, leading to highly negative return
14 Interest Coverage Ratio	Earnings before Interest and Tax	Interest Expenses	0.91	0.95	-3.66	Slightly weaker due to reduced EBIT

(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 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.

For and on behalf of the Board of Directors of COUNTRY CLUB HOSPITALITY & HOLIDAYS LIMITED

PLACE: HYDERABAD DATE : 08-09-2025	Y. SIDDHARTH REDDY VICE-CHAIRMAN, JMD & CEO	Y. VARUN REDDY VICE-CHAIRMAN, JMD & COO
	DIN: 00815456	DIN: 01905757