ACI Infocom Ltd Management Discussions

The Indian real estate sector continues to be a key driver of economic growth and employment. Over the past year, the sector witnessed a steady recovery supported by robust demand in the residential segment, favorable government policies, low interest rates, and increased infrastructure spending. The demand for mid-income and affordable housing remained resilient, especially in Tier I and Tier II cities.

The redevelopment and SRA segments have gained momentum due to renewed focus from local and state authorities to improve urban infrastructure and living conditions, especially in metropolitan areas such as Mumbai. Increased regulatory clarity and digitalization of land records have also helped reduce project execution timelines.

Despite challenges arising from inflationary pressures, supply chain disruptions, and global uncertainties, the Indian industry remains robust, offering significant opportunities for companies with strong fundamentals and adaptive strategies.

ACI Infocom Ltd is all set to target the rising demand of affordable housing and commercial space in small- medium cities of India where the size of project in terms of capital investment are relatively low as compared to medium - big cities/ metros. This will give a steady and safe growth to the company. The company is also focusing on redevelopment projects, construction contracts and development projects.

The Company is having excellent team and network of contractors to support and achieve its vision. OPPORTUNITIES AND THREATS:

The Government of India remains steadfast in its commitment to fostering the healthy growth of the capital market, recognizing it as a key driver of economic development. Policy reforms and proactive measures by regulatory bodies continue to enhance transparency, strengthen governance standards, and restore investor confidence. This evolving ecosystem presents significant opportunities for businesses with strong fundamentals to expand, innovate, and deliver sustainable value.

At the same time, the business environment is not without challenges. Your Company remains vigilant to potential threats arising from intensifying competition, dynamic industry trends, Competition from large organized players in certain geographies, rising cost of construction materials and labor shortages, and evolving regulatory frameworks. By adopting a proactive approach, leveraging operational efficiencies, and aligning strategies with market realities, the Company continues to safeguard its competitive position while preparing itself to capture emerging opportunities in the sector.

The business operations of the Company are primarily classified into two segments: Real Estate

The Real Estate segment continues to be the core focus of the Companys activities. Supported by favorable government policies, increasing urbanization, and rising demand for residential as well as commercial spaces, the sector offers significant opportunities for sustainable growth. The Company has been strategically investing in quality projects with a focus on timely execution, customer satisfaction, and value creation. By aligning its operations with evolving market trends and regulatory requirements, the Company has been able to strengthen its market presence while mitigating risks associated with cyclical fluctuations.

ACI Infocom Ltd has successfully navigated past challenges and continues to focus on its core business in the real estate sector. The Company is engaged in activities such as:

1. Real estate development, contracting, and building

2. Strategic land acquisition

3. Strengthening in-house construction capabilities

4. Embracing digital marketing and sales technologies

5. Leveraging government redevelopment and SRA policies

The Company remains committed to strengthening its presence in the real estate sector. With strategic planning and operational efficiency, there are strong grounds to believe that Yogi Limited will deliver even better results in FY 2025.

Operating in the real estate sector, especially in urban redevelopment and SRA projects, presents a wide array of risks that could impact the Companys performance, profitability, and long-term sustainability. While the Company has implemented several mitigation strategies, it remains exposed to the following key risks:

1. Regulatory and Policy Risk: The real estate sector in India is heavily regulated. Frequent changes in policies, procedures, and compliance requirements at the central, state, and municipal levels can affect project timelines and viability.

• Risk Impact: Delays in approvals (e.g., commencement certificates, environmental clearances, occupancy certificates) can lead to cost overruns and delay in revenue recognition.

• SRA-specific Risk: SRA projects involve approvals from multiple stakeholders (government authorities, slum dwellers), which are often time-consuming and complex.

• Mitigation: The Company maintains strong legal and compliance teams and engages consultants to ensure timely and accurate adherence to changing regulations.

2. Execution and Project Delivery Risk: Timely execution of real estate projects is critical to profitability and brand reputation. Given the involvement of multiple contractors, vendors, and external agencies, execution delays are a significant concern.

3. Financial and Liquidity Risk: Real estate development is capital-intensive, and the Company depends on a mix of internal accruals, customer advances, and external funding.

4. Market Demand and Price Volatility Risk: Real estate demand is influenced by macroeconomic conditions, interest rates, employment levels, and consumer confidence.

5. Environmental and Social Risk: Real estate development, especially in densely populated areas, is subject to environmental regulations and social impact.

The Company adopts a robust risk management framework that emphasizes early identification, continuous monitoring, and timely mitigation of risks. Strategic measures include prudent financial planning, diversification of business operations, maintaining strong relationships with financial institutions, and ensuring regulatory compliance. By adopting a proactive and resilient approach, the Company seeks to minimize potential adverse impacts while safeguarding the interests of its stakeholders and strengthening long-term sustainability.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has established a comprehensive system of internal controls designed to ensure the accuracy and reliability of financial reporting, compliance with applicable laws and regulations, protection of assets, and the efficiency and effectiveness of operations.

Given the complex nature of real estate operations—ranging from land acquisition, approvals, construction management, customer handling, to post-sales support—the need for strong internal control mechanisms is paramount. Our internal control framework is continuously reviewed and strengthened to align with the scale and complexity of operations.

The internal audit is an independent and objective function, reporting directly to the Audit Committee of the Board. Key responsibilities include:

• Reviewing internal processes and controls across departments

• Identifying gaps, inefficiencies, and risks

• Recommending improvements and following up on corrective actions

• Verifying compliance with statutory and internal policies

The Audit Committee of the Board plays a pivotal role in ensuring the adequacy and effectiveness of internal controls. It meets periodically to:

• Review audit reports and risk observations

• Discuss significant findings with management and auditors

• Monitor implementation of audit recommendations

• Assess internal control adequacy based on management and auditor feedback

The Board is of the opinion that the Companys internal control framework is adequate, commensurate with its business size and nature of operations, and provides a reasonable assurance regarding the achievement of its objectives relating to operational efficiency, compliance, and reliability of financial and management reporting.

The Company firmly believes that its people are its most valuable asset and that a motivated, skilled, and engaged workforce is central to achieving sustainable growth. Accordingly, the Company continues to prioritize initiatives for training, upskilling, and professional development aimed at building a pool of qualified and competent professionals capable of handling diverse and complex projects with efficiency and innovation.

During the year under review, focused efforts were made to enhance employee capabilities through structured training programs, mentoring, and exposure to new technologies and best practices. Emphasis was laid on cultivating a culture of performance, accountability, and continuous learning, while also fostering teamwork and cross-functional collaboration.

Our people are our most important asset and we value their talent, integrity and dedication. Our responsibilities towards our people, who are instrumental to our success with their devotion and relentless support covers a quantum part of the company strategy. We believe that training is essential to build skill sets in growing organization. The focus has been to create an environment where performance is rewarded, individuals are respected and associates get opportunities to realize their potential. As in the past, industrial relations continued to remain cordial in the Company. There was no strike or labour unrest during the period under review.

Industrial relations during the year remained cordial, with mutual trust and cooperation between management and employees, contributing to a productive and harmonious workplace environment.