Roopshri Resorts Ltd Management Discussions

Global Economic Overview:

Calendar year 2025 was a landmark year for global tourism. According to the UN Tourism (UNWTO) World Tourism Barometer of January 2026, international tourist arrivals worldwide grew by 4% in 2025 to an estimated 1.52 billion, nearly 60 million more than in 2024, marking a new record for the post-pandemic era and a return to the long-term average growth trend of around 5% per annum witnessed between 2009 and 2019. Growth was underpinned by resilient travel demand, robust performance from major source markets and the continuing recovery of destinations across Asia and the Pacific, notwithstanding persistent inflation in travel services and geopolitical headwinds during the year.

Europe retained its position as the worlds largest and most-visited region, recording around 793 million international arrivals in 2025 (a 4% increase over 2024 and 6% above 2019 levels), while Africa and the Middle East continued to outperform their pre-pandemic benchmarks by wide margins. Momentum has carried into 2026, with UN Tourism reporting approximately 307 million international arrivals in the first quarter of the year, although the agency has trimmed its full-year 2026 growth forecast to a range of 1-3% (from an initial 3-4%) on account of the impact of the conflict in the Middle East on regional travel patterns.

The World Travel & Tourism Council (WTTC) estimates that the global Travel & Tourism sectors direct and indirect contribution to world GDP crossed the US$ 11 trillion mark in 2025, supporting in excess of 370 million jobs worldwide both figures ahead of pre-pandemic (2019) levels. International tourism receipts are estimated by UN Tourism at approximately US$ 1.9 trillion for 2025, a 5-6% real-terms increase over 2024, with earnings growing faster than arrivals in many destinations, reflecting continued strength in average traveller spend.

Indian Tourism & Hospitality Sector:

Indias macro-economic backdrop remained resilient through FY 2025-26. Following a series of upward revisions through the year on the back of strong private consumption, GST rationalisation and robust services-sector activity, the Reserve Bank of India (RBI) placed real GDP growth for FY 2025-26 at approximately 7.4%, with subsequent readings during the year (including 8.2% growth in the September 2025 quarter) pointing to an even stronger full- year outtum. The RBI has projected a moderation to approximately 6.6-6.9% for FY 2026-27, reflecting normalisation from an exceptionally strong base rather than any underlying weakness in domestic demand.

On the tourism front, domestic travel remained the primary engine of growth for the Indian hospitality sector, with the Ministry of Tourism recording over 303 crore domestic tourist visits in the period up to August 2025 alone. Foreign Tourist Armrivals (FTAs), however, moderated to approximately 9.15 million in calendar year 2025 from 9.95 million in 2024, largely on account of a reduction in arrivals from certain neighbouring source markets, even as arrivals from established and emerging long-haul markets such as the United States, United Kingdom and Australia continued to grow. The Ministry of Tourisms India Tourism Data Compendium 2025 estimates that tourism contributes 5.22% to Indias GDP on a total-impact basis (2.72% directly) and supports 13.34% of total employment in the country. Rising contribution to Indias GDP:

? The Governments Vision @2047 targets 100 million inbound tourists by 2047; the World Travel & Tourism Council estimates the sectors direct contribution to Indias GDP could rise from around US$ 256 billion in CY2024 to approximately USS$ 523 billion by CY2034, supporting close to 63 million jobs.

* WTTC projects Indias Travel & Tourism sector to contribute over Rs. 22,00,000 crore (~US$ 257 billion) in 2025, with sectoral employment expected to exceed 48 million. ? International visitor spend in India reached a record Rs. 3,10,000 crore (~US$ 36 billion) in 2024, underscoring the sectors role as a major foreign-exchange earner for the country.

? During FY 2025-26, the Ministry of Tourism continued to expand infrastructure support through the Swadesh Darshan 2.0 scheme and sanctioned further infrastructure projects (including 117 projects worth approximately US$ 612 million announced in July 2026) to strengthen destination readiness across the country.

Macro Review and Company Overview:

Tourism remains one of the most powerful engines of inclusive economic growth, capable of generating large-scale employment across the entire spectrum of skill levels while contributing meaningfully to foreign exchange earnings. For the hospitality industry specifically, the central management challenge continues to be the consistent delivery of high-quality guest service amid rapid technological change, evolving guest expectations and intensifying competition all while managing operations, marketing and human resources efficiently. Roopshri Resorts Limited currently operates “Hotel Alexander” in Matheran, one of Maharashtras best-known hill stations and a popular vehicle-free destination for both leisure and heritage tourism. Hotel Alexander is among the oldest hospitality properties in Matheran, having operated under this brand for over three decades. Set on a secluded hillside, the property is positioned around a distinctive “heritage living with nature” experience that does not depend on high-cost, state-of-the-art interiors, making it a genuine value-for-money proposition for guests seeking an authentic hill-station stay. The Company has provided management and operating services to the property for several years and subsequently took it over on a leave-and-license basis from its owner, against a substantial refundable security deposit. The hotel comprises 13 private cottage rooms and 12 executive rooms. As previously communicated to shareholders, the Company embarked during the year under review on a structured renovation and capacity-expansion programme for the property, with the objective of progressively reinstating full lodging and boarding services to guests, consistent with the plan outlined in the previous years MD&A Report. This renovation and expansion programme is reflected directly in the Companys FY 2025-26 balance sheet, where the net block of fixed assets increased substantially during the year (see Exhibit 6), evidencing significant capitalisation of civil, interior and infrastructure work at the property during the year. Consistent with the gestation period typical of hospitality capex cycles, the near-term financial impact of this investment is discussed further in the Financial and Operating Performance section of this Report.

Roopshri Resorts Limited is primarily engaged in the business of hoteliering, which the management identifies as its sole business segment. The company operates undera unified approach, focusing all its resources and strategies on delivering exceptional hospitality services. This single-segment focus allows the company to streamline its operations, ensuring consistent quality and efficiency across all its properties. By concentrating on the hotel and resort sector, Roopshri Resorts Limited is able to leverage its expertise in hospitality management, optimize its service offerings, and maintain a strong brand presence in the market. This concentrated approach has enabled the company to effectively cater to the evolving needs of its guests, ensuring a high level of customer satisfaction and loyalty. As the company continues to enhance its properties and expand its offerings, this segment-wise focus remains central to driving growth and sustaining competitive advantage in the hospitality industry.

Roopshri Resorts Limited operates within a dynamic and competitive hospitality industry, where the ability to identify, assess and mitigate risk in a timely manner is critical to the Companys growth and strategic objectives. The Companys risk management framework is reviewed periodically by the Board and the Audit Committee to reflect the evolving business environment and the changing scale of operations, particularly as the Company executes its ongoing renovation and expansion programme.

A primary challenge for the hospitality industry generally, and for the Company as it scales its operations, is the constant need to meet and exceed guest service expectations while balancing available room inventory against demand; failure to do so can adversely affect guest satisfaction, reputation and revenue. Attracting, training and retaining skilled hospitality personnel particularly at the managerial and supervisory level remains a significant risk in a competitive labour market, and is especially relevant as the Company ramps up staffing to support its expanded room inventory.

The Companys performance also remains sensitive to macro-economic conditions, including fluctuations in discretionary consumer spending on travel, changes in governmental regulation affecting wages and operating costs, and movements in construction costs, interest rates and real estate taxes that could affect the cost and pace of the Companys expansion plans. The increase in the Companys borrowings and finance costs during FY 2025-26, undertaken to bridge-fund capital expenditure, is itself a risk factor that the Company continues to actively manage, including through timely repayment from internal accruals, as reflected in the reduction of the Companys outstanding borrowings by the close of the financial year.

The Companys proactive, Board-supervised approach to risk management including continuous monitoring, periodic review by the Audit Committee, and prompt implementation of corrective measures is intended to help the Company navigate these challenges as it executes its expansion strategy.

(A) OPPORTUNITIES

1. Tourism growth

The sustained global and domestic rise in travel and tourism, together with rising disposable incomes and a growing middle class, is driving demand across both luxury and value-for-money accommodation categories the segment in which Hotel Alexander is positioned.

2. Government support

Central and state government initiatives including Vision @2047, Swadesh Darshan 2.0 and continued infrastructure sanctions are creating a more conducive policy and connectivity environment for hill-station and heritage destinations such as Matheran.

3. Technology adoption

Integration of digital booking, guest-experience and revenue-management technologies can enhance guest experience, streamline operations and optimise pricing as the Company scales its expanded room inventory.

4. Sustainability trends

Rising traveller preference for eco-friendly, low-intervention stays plays directly to Hotel Alexanders “heritage living with nature” positioning, which requires comparatively limited investment in high-cost modem interiors.

5. Experiential travel

Growing guest demand for authentic, curated and culturally immersive experiences supports the Companys heritage-hillside positioning and its plans to reinstate full boarding facilities.

6. Domestic travel resilience

‘With over 303 crore domestic tourist visits recorded up to August 2025 alone, continued strength in domestic leisure travel provides a large addressable base for a Maharashtra hill-station property within reach of the Mumbai-Pune conurbation.

(B) THREATS

1. Intense competition

The hospitality industry in and around Matheran and other hill destinations has become increasingly competitive, with numerous small and unorganised players, as well as online travel agencies (OTAs) and alternative accommodation platforms, exerting pricing pressure.

2. Economic uncertainty

Global and domestic macro-economic volatility, including inflation and interest-rate movements, can affect discretionary consumer spending on travel and accommodation.

3. Changing consumer preferences

Evolving guest expectations around flexible booking, digital service and hygiene standards require continuous adaptation; failure to do so may result in loss of market share.

4. Operational and cost pressures

Labour availability, rising operating costs and construction-material cost inflation can affect both day-to-day service delivery and the cost/timeline of the Companys ongoing renovation programme.

5. Regulatory risk

The industry remains subject to evolving regulation on health and safety, labour and environmental compliance; non-compliance could result in fines, legal exposure or reputational damage.

6. Environmental and climate risk

Hill-station properties such as Hotel Alexander are inherently exposed to monsoon-related weather risk, landslides and other climate-related disruptions that can affect both operations and guest access to the property.

The hotel and hospitality industry continues to navigate a period of structural change, with increasing convergence between hospitality operations and real estate value creation properties are increasingly viewed not merely as service-delivery platforms but as long-term real estate assets in their own right. This shift is directly relevant to Roopshri Resorts Limiteds strategy at Hotel Alexander, where the current phase of renovation and capacity expansion is intended to enhance both the operating potential and the underlying asset value of the property.

During FY 2025-26, the Company continued to progress the renovation and expansion of Hotel Alexander that was outlined in the previous years MD&A Report, capitalising Rs. 503.93 lakhs of additions to property, plant and equipment during the year, principally on buildings (Rs. 326.55 lakhs) together with a vehicle (Rs. 104.24 lakhs) to support guest and logistics transport to and from the property given Matherans status as a vehicle-restricted hill station, and further additions to equipment, furniture and fixtures. Revenue from operations grew strongly during the year, reflecting the initial benefits of capacity enhancement and continued guest demand for the propertys distinctive hillside, heritage-living positioning, even as the Company continued to invest in bringing the balance of its room inventory into operational readiness and in reinstating full lodging and boarding services. As travellers increasingly seek personalised, experience-led stays, the Companys continued focus on enhancing its physical infrastructure while preserving Hotel Alexanders heritage character is intended to keep the property relevant and competitively positioned within the value-for-money hill-station segment as the expansion programme is completed.

The following discussion is based on the Companys audited standalone financial results for the year ended March 31, 2026, as approved by the Board of Directors on May 22, 2026.

The Total Income of the Company stood at Rs. 325.00 lakhs for the year ended March 31, 2026, as against Rs. 206.38 lakhs in the previous year, an increase of approximately 57.5%, driven primarily by strong growth in revenue from operations. The Company reported a net profit (after tax) of Rs. 9.97 lakhs for the year ended March 31, 2026, as compared to a net profit of Rs. 45.13 lakhs in the previous year, a decline of approximately 77.9%.

Revenue from operations increased to Rs. 266.99 lakhs in FY 2025-26 from Rs. 145.83 lakhs in FY 2024-25, an increase of approximately 83.1%, aided by improved occupancy and the phased addition of room inventory as the

Companys renovation programme progressed. Other income was broadly stable at Rs. 58.01 lakhs (previous year: Rs. 60.55 lakhs), comprising substantially interest income on bank deposits.

On the expenses side, total expenses increased to Rs. 308.59 lakhs from Rs. 145.29 lakhs, reflecting higher purchases (Rs. 66.69 lakhs vs. Rs. 11.77 lakhs) and other expenses (Rs. 122.48 lakhs vs. Rs. 55.71 lakhs) commensurate with the scale-up of operations, together with a step-up in finance costs (Rs. 27.64 lakhs vs. Rs. 0.26 lakhs) and depreciation and amortisation (Rs. 28.07 lakhs vs. Rs. 11.27 lakhs). Employee benefit expenses were broadly stable at Rs. 65.21 lakhs (previous year: Rs. 65.90 lakhs). Profit before tax was Rs. 16.41 lakhs (previous year: Rs. 61.09 lakhs), and after a tax charge of Rs. 6.44 lakhs (previous year: Rs. 15.96 lakhs), net profit for the year was Rs. 9.97 lakhs (previous year: Rs. 45.13 lakhs). Basic and diluted earnings per share were Rs. 0.14 for FY 2025-26, as against Rs. 0.63 in the previous year. Notwithstanding the strong top-line growth, net profit declined year-on-year. This decline is directly attributable to the Companys renovation and expansion investment: as per the Note on Property, Plant & Equipment forming part of the audited financial statements, the Company capitalised additions of Rs. 503.93 lakhs during the year comprising Rs. 326.55 lakhs on buildings, Rs. 104.24 lakhs on a vehicle, Rs. 42.10 lakhs on equipment and accessories, Rs. 30.41 lakhs on furniture and fixtures, and Rs. 0.62 lakhs on computers taking net block of property, plant and equipment to Rs. 654.61 lakhs as at March 31, 2026 from Rs. 178.69 lakhs a year earlier.

The corresponding increase in depreciation and finance costs together compressed operating and net margins during the year, in line with the gestation period typical of hospitality capital expenditure cycles. The finance cost increase reflects short-term borrowings (bank overdraft) drawn during the year to bridge-fund capital expenditure; the Company repaid Rs. 92.37 lakhs of such borrowings during the year, reducing outstanding short-term borrowings to Rs. 5.47 lakhs as at March 31, 2026 (previous year: Rs. 97.84 lakhs, comprising the bank overdraft and an unsecured loan from a director). The Companys balance sheet remains conservatively capitalised, with a net worth (share capital plus reserves and surplus) of Rs. 1,561.09 lakhs as at March 31, 2026 (previous year: Rs. 1,557.47 lakhs) and total assets of Rs. 1,601.93 lakhs (previous year: Rs. 1,684.77 lakhs), the reduction in total assets reflecting the redeployment of a portion of the Companys liquid surplus into the capitalised fixed assets referred to above. As at March 31, 2026, the Company continued to carry a refundable security deposit of Rs. 550.00 lakhs in respect of the leave-and-license arrangement for Hotel Alexander, unchanged from the previous year. Cash generated from operating activities during the year, before direct taxes paid, was Rs. 130.23 lakhs (previous year: Rs. 368.00 lakhs); net cash from operating activities after direct taxes of Rs. 8.01 lakhs was Rs. 122.22 lakhs (previous year: Rs. 356.87 lakhs, after direct taxes of Rs. 11.12 lakhs). Cash used in investing activities was Rs. 562.40 lakhs (previous year: net cash generated of Rs. 30.78 lakhs), substantially comprising purchase of property, plant and equipment of Rs. 504.39 lakhs. Cash used in financing activities was Rs. 119.99 lakhs (previous year: Rs. 0.26 lakhs), comprising repayment of borrowings of Rs. 92.37 lakhs and interest paid of Rs. 27.64 lakhs.

Consequently, cash and cash equivalents declined to Rs. 374.34 lakhs as at March 31, 2026 from Rs. 934.51 lakhs at the start of the year, reflecting the funding of the years capital expenditure programme substantially from the Companys existing liquid resources.

The Company has institutionalised an adequate system of internal controls, with documented procedures covering all corporate functions and hotel operating units, including specific controls introduced during the year to monitor the progress, cost and capitalisation of the ongoing renovation and expansion programme. These internal controls are designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, the safeguarding of assets, the reliability of financial reporting, and compliance with applicable laws and regulations. The Companys internal controls are structured to ensure reasonable assurance with regard to recording and reporting reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorised use or loss, executing transactions with proper authorisation, and ensuring compliance with corporate policies, laws and accounting standards, including in respect of capital expenditure incurred and capitalised during the year.

The Companys Audit Committee, details of which are provided in the Corporate Governance Report forming part of the Annual Report, reviews the existing audit procedures and internal control systems on an ongoing basis, having regard to the organisations requirements, growth prospects and evolving business environment including the increased scale and complexity of operations following the current expansion programme. The Audit Committee also reviews internal audit findings and recommendations, and follows up on the implementation of corrective measures.

Roopshri Resorts Limited is committed to achieving and sustaining leadership in the hospitality industry by delivering exceptional value to its guests, with a continued focus on rewarding and recognising quality guest care driven by both individual and team performance. The Company regards its employees as its greatest asset and provides opportunities for continuous learning and development, fostering a work environment grounded in faimess towards its employees, the local community and the environment. Given the current scale of operations at Hotel Alexander, and the phase of renovation and capacity expansion under way during the year, the property continues to be operated through a lean, dedicated on-site team, supplemented as required by contractual and outsourced support for housekeeping, food & beverage and engineering functions during the construction phase. The Company has initiated regular staff meetings and ongoing training programmes to build a culture of trust and transparency, keep employees briefed on the Companys plans, and prepare the workforce for the higher occupancy and expanded guest-service requirements expected as the renovated capacity comes online. The Company maintained cordial industrial relations throughout the year, with no material disputes reported.

As global and domestic travel continue on a growth trajectory international arrivals having reached a record 1.52 billion in 2025 and Indias economy remaining among the fastest-growing major economies globally demand for diverse, high-quality hospitality experiences is expected to remain robust. Roopshri Resorts Limited is well- positioned to participate in this trend as it moves towards completion of the current renovation and expansion programme at Hotel Alexander, with the objective of reinstating full lodging and boarding services and bringing its complete room inventory into operational use.

The Company expects the substantial capital expenditure undertaken in FY 2025-26 to translate progressively into higher operating capacity, occupancy and revenue in the coming financial years, which management expects, over time, to improve operating leverage and profitability metrics including Return on Capital Employed and Return on Net Worth from their FY 2025-26 levels. The Company will also continue to evaluate the selective integration of technology to improve guest experience and operating efficiency, and to embed sustainable, low-intervention practices consistent with Hotel Alexanders heritage positioning.

The industry, and the Company, must nonetheless continue to navigate potential headwinds, including macro- economic fluctuations, regulatory change, construction and input cost inflation, and evolving consumer preferences. Roopshri Resorts Limited remains committed to a flexible and resilient business model, prudent financial management including the timely repayment of borrowings undertaken for capital expenditure, as demonstrated during the year and continued investment in talent, as it works towards delivering consistent growth and long- term value for its stakeholders.

In accordance with Schedule V, Part B, read with Regulation 34(2)(e) of the SEBI LODR Regulations, the following are the key financial ratios (and their components) as disclosed in Note 24 (Ratio Analysis) forming part of the Companys audited financial statements for the year ended March 31, 2026, together with the Companys explanations for changes of 25% or more as compared to the immediately previous financial year.

Current Ratio (times)	14.32	7.86	82.3%
Debt-Equity Ratio (times)	0.03	0.06	(58.36)%
Debt Service Coverage Ratio (times)	0.60	281.84	(99.79)%
Inventory Turmover Ratio (times)	190.05	172.10	10.43%
Return on Equity Ratio (%)	0.64%	2.90%	(77.92)%
Trade Receivable Turnover Ratio	NA.	NA.	NA.
Trade Payable Turnover Ratio (times)	30.71	31.01	(0.96)%
Net Capital Turnover Ratio (times)	0.72	0.18	311.94%
Net Profit Ratio (%)	3.74%	30.95%	(87.93)%
Return on Capital Employed (%)	2.81%	3.71%	(24.13)%
Return on Investment (%)	16.27%	7.04%	131.09%

REASONS FOR MORE THAN 25% VARIANCE

Current Ratio	Due to the reduction in current liabilities, driven by the repayment of short- term borrowings during the period.
Current ratio	Due to the reduction in current liabilities, driven by the repayment of short- term borrowings during the period.
Debt-Equity Ratio	Improvement due to increase in equity (reserves and surplus) and repayment of borrowing.
Debt Service Coverage Ratio	Due to repayment of borrowing.
Return on Equity Ratio	Due to contraction in net profit compared to last year.
Net Capital Turnover Ratio	Improved due to Working capital reduced.
Net Profit Ratio	Due to contraction in net profit compared to last year.
Return on Investment	Due to reduction of investment in deposits with bank.

The Companys Return on Net Worth (Return on Equity) declined to 0.64% for FY 2025-26 from 2.90% in FY 2024-25, a decrease of approximately 78%. As explained above, this decline is primarily attributable to a significant increase in depreciation and finance costs consequent to the capitalisation of the Companys renovation and expansion capital expenditure during the year, which compressed net profit notwithstanding an approximately 83% increase in revenue from operations. The Board and management view this as a transitional impact associated with the current investment cycle at Hotel Alexander, and expect Return on Net Worth to improve progressively as the expanded capacity is fully commissioned and ramps up towards optimal occupancy in the coming financial years.

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may constitute “forward-looking statements” within the meaning of applicable securities laws and regulations. Such forward-looking statements are based on certain assumptions and expectations of future events over which the Company has no control, and the Company cannot guarantee their accuracy, nor can it warrant that they will be realised. The Company assumes no responsibility to publicly amend, modify or revise any forward- looking statements on the basis of any subsequent development, and shall not be liable for any loss that any investor or reader may incur by relying on, or investing in the shares of the Company on the basis of, such forward-looking statements. This Report should be read in conjunction with the Companys audited financial statements and the other sections of the Annual Report for FY 2025-26.