BUSINESS ENVIRONMENT

Global economic growth for the year remained at 3.4% during the year (previous year 3.3%) amid heightened uncertainty and volatility in the macroeconomic environment. Advanced Economies grew at 1.9% (previous year 1.8%) while growth in the Developing Economies moderated slightly to 4.4% (previous year 4.5%). The rise of geopolitical tensions in West Asia in March 2026 led to global macroeconomic uncertainty.

As per estimates of International Monetary Fund (IMF), global growth is projected to moderate to 3.1% in 2026, with a modest recovery to 3.2% in 2027.Emerging market and developing economies are expected to grow at 3.9%, alongside risks from elevated inflation, geopolitical developments and persistent trade frictions. Global inflation is estimated to rise to 4.4% in 2026, from 4.1% in 2025, primarily driven by higher energy and food prices.

The Indian Economy reaffirmed its status as the fastest growing major economy with 7.6%¹ growth in Real GDP, up from 7.1% in FY 2024-25 and 7.2% in FY 2023-24. Domestic demand continued to anchor growth on the back of supportive fiscal and monetary policies, reduced income tax rates, rate rationalization across sectors and favorable inflation levels. Both services and manufacturing sectors delivered robust growth of 9% and 11.5% respectively over the previous year.

Since March 2026, the West Asia conflict has emerged as a significant source of uncertainty. The resultant supply-side disruption and elevated energy prices, raises risk of inflationary pressures in the near-term, while also weighing on private consumption and investor sentiment. Despite nearterm pressures, the Indian economy continues to demonstrate resilience and is expected to grow at an estimated 6.5% in FY 2026-27. With ongoing structural reforms across sectors, supported by a large domestic market and investment-led expansion, the economy is relatively well placed to maintain its growth momentum over the medium-to-long term.

The Indian Hospitality Industry delivered steady growth during the year amid a challenging operating environment, with demand affected intermittently by external developments. After a strong start to the financial year, travel activity was impacted by geopolitical tensions, aviation-related disruptions, adverse weather events and the West Asian conflict, which resulted in deferment of travel decisions and softer travel momentum. Domestic air passenger traffic grew Y-o-Y modestly during the year while foreign tourist arrivals (excluding Bangladesh) grew by 4.2% Y-o-Y, marginally above pre-pandemic levels. India's increasing prominence as a destination for large-format conferences, diplomatic engagements and cultural events

PROFITS, DIVIDEND AND RETAINED EARNINGS

(? in Lakhs)

Your Directors are pleased to recommend Final Dividend of ? 3.00 per Equity Share of ? 10/- each (previous year ? 3.00 per Equity Share) for the financial year ended 31st March, 2026. Total cash outflow on account of Final Dividend will be ? 113.63 lakhs (previous year ? 113.63 lakhs).

Details of changes in Key Financial Ratio and Return on Net Worth

Pursuant to Schedule V (B) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), there has been significant change (25% or more) in below stated key financial ratio(s) along with the Change in Return on Net Worth of your Company as summarized below:

HOTEL OPERATIONS

Your Company's Hotel, Welcomhotel Vadodara, licensed to ITCHL recorded an income of ? 3099.98 lakhs during the year as compared to ? 2,753.20 lakhs in the previous year.

The Food & Beverage segment of your Company's Hotel continues to be a major strength. The Peshawri restaurant & the Welcomcafe Cambay are leaders in premium dining segment.

As reported earlier, your Company has filed a writ petition in the Gujarat High Court seeking that the Gujarat State Government be directed to take action on your Company's application to have the leasehold land of the Hotel converted to freehold and transferred to your Company as per the existing government policy in this regard. The Hon'ble High Court passed an Order on 24th December, 2014 restraining the State Government from disturbing the peaceful and actual possession of the Company over the hotel property in any manner including construction thereon. The writ petition is pending.

Your Company is also making all efforts for expeditious conversion of land from leasehold to freehold or in the alternative, extension of the Lease. For further details, please refer to Note No. 20A to the Financial Statements.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company does not have any subsidiary, associate or joint venture.

INTERNAL FINANCIAL CONTROLS

Your Company is managed by the Board of Directors ('the Board') and the Executive Management with clearly defined roles, responsibilities and authorities. The Executive Management is responsible for the day-to-day conduct of the affairs of the Company, within the overall framework approved by the Board. GHL Code of Conduct requires the Management to conform to the financial and accounting policies, systems and processes, conduct business ethically and ensure strict compliance with all applicable laws and regulations. The Code of Conduct has been widely communicated at all levels and provide the foundation for Internal Financial Controls with reference to your Company's Financial Statements.

Your Company's Financial Statements are prepared on the basis of the Material Accounting Policies that are carefully selected by the Management and approved by the Audit Committee and the Board. These Policies are reviewed and updated from time to time and audited by the Internal Auditor whose findings and recommendations are reviewed by the Audit Committee and tracked through till implementation.

Your Company has in place adequate internal financial controls with reference to Financial Statements. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial information; complying with applicable statutes; and ensuring that transactions are

carried out with proper authorisation. Such controls have been assessed during the year taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on the results of this assessment carried out by the Management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed. Nonetheless, your Company recognises that any internal financial control framework, no matter how well designed, has inherent limitations and accordingly, regular audit and review processes are undertaken to ensure that such systems are reinforced on an ongoing basis.

RISK MANAGEMENT

Your Company continues to focus on a system-based approach to manage its business risks. Backed by strong internal control systems, the current Risk Management Framework consists of the following key elements:

• The Board has clearly laid down the roles and

responsibilities of the Executive Management in relation to risk management covering a range of responsibilities, from strategic to operational. These role definitions,

inter-alia, provide the foundation for appropriate risk

management procedures, their effective implementation and independent monitoring and reporting by Internal Auditor.

• A combination of policies and procedures, bring robustness to the process of ensuring that business risks are effectively addressed.

• Appropriate structures are in place to proactively monitor and manage the inherent risks in business with unique / relatively high-risk profiles.

• Internal Audit, an independent and external function

carries out risk focused audits, enabling identification of areas where risk management processes may need to be further strengthened. These audits are conducted by M/s Shah & Talati, Chartered Accountants who are the Internal Auditor of the Company. The Audit Committee of the Board reviews Internal Audit findings and provides strategic guidance on internal controls. The Audit Committee closely monitors the internal control environment within your Company, including implementation of action plans emerging out of internal audit findings.

• A robust and comprehensive framework of strategic planning and performance management ensures realisation of business objectives based on effective strategy implementation. The annual planning exercise requires identification of top risks and sets out a mitigation plan with agreed timelines and accountabilities. Significant risks are periodically reviewed by the Chief Executive Officer who confirms that all relevant risks have been identified, assessed, evaluated and that appropriate mitigation systems have been implemented.

A combination of policies and processes adequately addresses the various risks associated with your Company's business. The risk management practices of your Company and Internal Audit processes, have been found to be relevant and commensurate with the size and complexity of its operations.

AUDIT AND SYSTEMS

Your Company believes that strong internal controls that are commensurate with the size and scale of your Company's operations are concomitant to the principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances.

Your Company remains committed to ensuring a mature and effective internal control environment that, inter-alia provides assurance on orderly and efficient conduct of operations, security of assets, prevention and detection of frauds / errors, accuracy and completeness of accounting records, timely preparation of reliable financial information, adherence with relevant statutes and compliance with related party transactions.

Your Company's independent and robust Internal Audit processes provide assurance on the adequacy and effectiveness of internal controls, compliance with operating systems, internal policies and regulatory requirements.

M/s Shah & Talati, the Internal Auditor, have assured the Company that they are adequately skilled and resourced to deliver high standards of audit assurances.

The Audit Committee of your Board met four times during the year. The Terms of Reference of the Audit Committee, inter alia, include reviewing the adequacy and effectiveness of the internal control environment, monitoring implementation of the action plans emerging out of review of significant Internal Audit findings including those relating to strengthening of your Company's risk management systems and discharging of statutory mandates.

The Statutory Auditor of your Company have not reported any fraud to the Audit Committee or the Board under Section 143 (12) of the Companies Act, 2013 ('the Act') including Rules made thereunder.

HUMAN RESOURCE DEVELOPMENT

Your Company firmly believes that its employees are its core strength and accordingly development of people and providing a favorable work environment is the key priority to drive business objectives and goals.

As part of your Company's commitment to create a place where people can be successful both professionally and personally, efforts are made to create wholistic employee experience with equal importance on growth, engagement, and well-being. Endeavor is also made to provide specially crafted programs and practices to enable employees to perform at their full potential and set them up to succeed.

Ms. Sungita Sharma ceased to be an Independent Director with effect from close of work on 31^st August, 2025. Your Directors place on record their appreciation for the contribution made by Ms. S. Sharma during her tenure with your Company.

• Retirement by Rotation

In accordance with the provisions of Section 152 of the Act read with Article 147 of the Articles of Association of your Company, Mr. Arif Musa Patel (DIN: 10051869) Director, will retire by rotation at the ensuing AGM and being eligible, offers himself for re-election. Your Board has recommended his re-election.

• Number of Board Meetings

Five meetings of the Board were held during the year under review.

• Attributes, Qualifications & Independence of Directors and their Appointment

The Nominations and Remuneration Committee has laid down the criteria for determining qualifications, positive attributes and independence of Directors (including Independent Directors). The criteria, inter alia, requires that Non-Executive Directors, be drawn from amongst eminent professionals with experience in business / finance / law / public administration and enterprises.

In case of appointment / re-appointment of Independent Directors, the Nominations and Remuneration Committee evaluates the balance of skills, knowledge and experience on the Board, and also the role and capabilities required for appointment as an Independent Director of your Company.

The Board Diversity Policy of the Company requires the Board to have a balance of skills, competencies, experience and diversity of perspectives appropriate to your Company. The skills, expertise and competencies of the Directors as identified by the Board, along with those available in the present mix of the Directors of your Company, are provided in the 'Report on Corporate Governance', forming part of the Report and Accounts.

The Articles of Association of the Company provides that the strength of the Board shall not be fewer than three nor more than twelve. Directors are appointed / re-appointed with the approval of the Members. All Directors, other than Independent Directors, are liable to retire by rotation, unless otherwise approved by the Members. One-third of the Directors who are liable to retire by rotation, retire every year and are eligible for re-election.

The Independent Directors of your Company have confirmed that (a) they meet the criteria of Independence as prescribed under Section 149 of the Act and Regulation 16 of the Listing Regulations, (b) they are independent from

the management of your Company, and (c) they are not aware of any circumstance or situation which could impair or impact their ability to discharge duties with an objective, independent judgment and without any external influence. In the opinion of the Board, the Independent Directors fulfil the conditions prescribed under the Act and the Listing Regulations, and are independent of the management of your Company.

• Evaluation of Board, Board Committees and Individual Directors

The Nominations and Remuneration Committee, formulated the Policy on Board evaluation, evaluation of Board Committees' functioning and individual Director evaluation, and also specified that such evaluation will be done by the Board.

Your Company believes that it is the collective effectiveness of the Board that impacts Company's performance, the primary evaluation platform is that of collective performance of the Board as a whole. Board performance is assessed, inter alia, against the roles and responsibilities of the Board as provided in the Act and the Listing Regulations. The parameters for Board performance evaluation have been derived from the Board's core role of trusteeship to protect and enhance shareholder value as well as fulfil expectations of other stakeholders through strategic supervision of your Company. Evaluation of functioning of Board Committees is based on discussions amongst Committee members and are shared by the Chairperson of respective Committee with the Board. Individual Directors are evaluated in the context of the role played by each Director as a member of the Board at its meetings and in assisting the Board in realising its role of strategic supervision of the functioning of your Company in pursuit of its purpose and goals. The peer group ratings of the individual Directors are collated and made available to the Chairman of your Company.

While the Board evaluated its performance against the parameters laid down by the Nominations and Remuneration Committee, the evaluation of individual Directors was carried out against the laid down parameters in order to ensure objectivity. Reports on functioning of the Committees were placed before the Board. The Independent Directors of the Board also reviewed the performance of the Chairman, other non-Independent Directors and the Board, pursuant to Schedule IV of the Act and Regulation 25 of the Listing Regulations.

REMUNERATION POLICY

Details of the Company's Policy on remuneration of Directors,

Key Managerial Personnel and other employees are provided

in the 'Report on Corporate Governance' forming part of the

Report and Accounts.

KEY MANAGERIAL PERSONNEL

During the year there was no change in the Key Managerial Personnel.

AUDIT COMMITTEE & AUDITORS

The composition of the Audit Committee is provided under the section 'Board of Directors & Committees' in the Report and Accounts.

• Statutory Auditors

Messrs. K C Mehta & Co LLP, ('KCM') Chartered Accountants (Registration No. 106237W/W100829), were re-appointed with your approval as the Auditors of your Company for a period of five years till the conclusion of the Forty Fifth AGM. The Board, on the recommendation of the Audit Committee, has recommended for the approval of the Members, the remuneration of KCM for the financial year 2026-27. Appropriate resolution seeking your approval to the remuneration of KCM is appearing in the Notice convening the 44th AGM of your Company.

• Secretarial Auditors

Messrs. Mehta & Mehta, Company Secretaries, were appointed with your approval as the Secretarial Auditors of your Company to conduct secretarial audit for a period of five consecutive years commencing from FY 2025-26.

The Report of the Secretarial Auditors, pursuant to Section 204 of the Act, is provided in the Annexure forming part of this Report. The Secretarial Auditors have confirmed that the Company has complied with the applicable laws and that there are adequate systems and processes in the Company commensurate with its size and scale of operations to monitor and ensure compliance with the applicable laws.

• Cost Auditors

Considering the nature of business, the Company is neither required to maintain cost records nor appoint Cost Auditors in terms of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014.

INVESTOR RELATIONS

Messrs. MCS Share Transfer Agent Limited are the Registrar and Share Transfer Agent ('RTA') of your Company. The details of the RTA and their grievance redressal system are provided in the 'Shareholders Information' section of the Report and Accounts.

The 'Investor Relations' section on your Company's website www.gujarathotelsltd.in serves as a user-friendly reference providing up-to-date information and guidance on share-related matters.

RELATED PARTY TRANSACTIONS

During the year under review, all contracts or arrangements entered into by your Company with its related parties were in accordance with the provisions of the Act and the Listing Regulations. All such contracts or arrangements were approved by the Audit Committee and were in the ordinary course of business and on arm's length basis.

Disclosure on transactions entered with Related Parties during the financial year 2025-26 are also covered in the Notes to Financial Statements.

The details of related party transactions of the Company in prescribed Form AOC-2, in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, are provided in Annexure to this Report. Your Company's Policy on Related Party Transactions, as adopted by your Board, can be accessed on the Company's website at https://gujarathotelsltd.in/policies/2025/POLICY-ON-RELATED-PARTY-TRANSACTIONS-GHL.pdf .

DIRECTORS' RESPONSIBILITY STATEMENT

As required under Section 134 of the Act, your Directors confirm having:

a) followed in the preparation of the Annual Accounts, the applicable Accounting Standards with proper explanation relating to material departures, if any;

b) selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of your Company for that period;

c) taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

d) prepared the Annual Accounts on a going concern basis;

e) laid down internal financial controls to be followed by your Company and that such internal financial controls were adequate and operating effectively; and

f) devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

OTHER INFORMATION

• Compliance with the conditions of Corporate Governance

The certificate from Mehta & Mehta, Company Secretaries, Secretarial Auditors of the Company, confirming compliance with the conditions of Corporate Governance as stipulated under the Listing Regulations, is annexed.

• Going Concern Status

There was no significant or material order passed during the year by any regulator, court or tribunal impacting the going concern status of your Company or its future operations.

• Annual Return

The Annual Return of the Company is available on its website at

https://www.gujarathotelsltd.in/Annual_Return.html .

• Particulars of Loans, Guarantees or Investments

The Company has neither given any loan or guarantee nor made any investment under the provisions of Section 186 of the Act during the year.

• Particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange

Particulars as required under Section 134 of the Act relating to Conservation of Energy, Technology Absorption and Foreign Exchange are provided below:

0 Conservation of Energy:

a) Steps taken or impact on conservation of energy:

Your Company's hotel is committed to adopt eco-friendly and energy conservation practices at its hotel and has accordingly, initiated several eco-friendly processes for energy and water conservation, waste management and measures to control water, noise and environmental pollution. Routine maintenance is performed to keep all equipment in the most efficient state of operations.

As a result of the aforesaid measures, optimum utilization of energy is being achieved in electrical units, PNG and water consumption.

b) Steps taken for utilising alternate sources of energy: NIL

c) Capital investment on energy conservation equipment: NIL

0 Technology Absorption:

a) Efforts made towards technology absorption and benefits derived: NIL

b) Expenditure incurred on research and development: NIL

0 Foreign exchange earnings and outgo:

The Hotel being a licensed property, the foreign exchange earnings and expenditure belongs to the licensee.

• Compliance with Secretarial Standards

The Company is in compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Act.

• Compliance with Maternity Benefit Act, 1961

Your Company is in compliance with the applicable provisions of the Maternity Benefit Act, 1961 (now forming part of the Code on Social Security, 2020).

• Employees

The total number of employees as on 31^st March, 2026 stood at 145 (including employees on deputation from ITC Hotels Limited).

The information required under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in Annexure forming part of this Report.

The statement containing particulars of employees as required under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forming part of this Report, may be accessed on the Company's website www.gujarathotelsltd.in .

FORWARD-LOOKING STATEMENTS

This Report contains forward-looking statements that involve risks and uncertainties. When used in this Report, the words 'anticipate', 'believe', 'estimate', 'expect', 'intend', 'will' and other similar expressions as they relate to the Company are intended to identify such forward-looking statements. Your Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their dates. This Report should be read in conjunction with the financial statements included herein and the notes thereto.

CONCLUSION

Your Company continues to monitor and respond with agility to the evolving situation while managing the uncertainties in the business environment. Your Directors and employees look forward to the future with optimism and stand committed to deliver their best to create a better future for all stakeholders.