Art Nirman Ltd Management Discussions

GLOBAL OVERVIEW:

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

Global headline inflation, after moderating steadily in recent years, is projected to tick up to 4.4% in CY 2026, reflecting the impact of the Middle East conflict, which has pushed up energy commodity prices and disrupted global supply chains. However, assuming the conflict remains limited in duration and scope, inflation is expected to resume its downward trajectory in CY 2027, easing to 3.7%, led by the expectation that energy prices will normalise as hostilities subside and the lagged effects of prior monetary policy tightening continue to anchor inflation expectations.

INDIAN ECONOMY:

India remained a key driver of global growth and demonstrated strong economic resilience, The RBI projects Indias GDP growth for FY 2026-27 at 6.6%. Domestic demand remained strong, supported by stable private consumption and increased capital investments. The RBI projects CPI (Consumer Price Index) inflation to average 5.1% for FY 2026-27. The currency movement contributed to volatility in financial markets and influenced interest rate expectations and corporate margins across sectors dependent on imported inputs. Despite these challenges, Indias strong domestic deman d, resilient foreign exchange reserves, and continued policy support helped maintain overall macroeconomic stability.

The growing frequency and intensity of climaterelated disruptions underscore the importance of resilience planning, sustainable resource management, and adaptive business strategies to mitigate long-term environmental and economic risks.

REAL ESTATE SECTOR:

Indias real estate sector has entered a phase of sustained structural growth, underpinned by robust macro fundamentals, a supportive policy environment, and an inspirational, urbanizing population. The sector is valued at approximately US$ 650 billion in 2025 and is projected to reach US$ 1 trillion by 2030 and expand to US$ 5.8 trillion by 2047, with its contribution to GDP expected to grow from 7% to 15.5% by 2047.

Policy and Capital: An Enabling Environment:

• National Real Estate Policy 2025: Introduced a unified single-window clearance system targeting a 40% reduction in project approval timelines, and incentives green-certified developments with tax benefits and subsidies.

• Land digitisation: The governments drive towards 100% land record digitization by December 2025 is reducing title risks and boosting institutional investor confidence.

Residential Real Estate Market:

Indias residential real estate market delivered a resilient performance in CY 2025, with a total of 348,207 housing units sold across the eight major cities, reflecting a broadly stable performance and registering a marginal 1% dip YoY, according to Knight Franks India Real Estate H2 2025 report. New supplies, at 362,148 units launched across the eight major cities, grew marginally by 2.89% YoY and yet represented the second- highest annual launch volume since 2014.

Climate Change, ESG and Real Estate:

A Rapidly Shifting Investment Paradigm Climate risk has moved from the periphery to the centre of real estate investment decision-making in India. The Q1 2026 data from CBRE points to a decisive and accelerating shift: 83% of all GCC leasing in Q1 2026 was in green-certified tech parks, 79% of total office leasing occurred in greencertified assets, and 78% of transactions were in buildings less than 10 years old. These figures are not incidental — they represent a structural recalibration of occupier priorities, with ESG alignment, energy efficiency, and employee wellbeing now functioning as baseline requirements rather than aspirational attributes.

OPPORTUNITY AND THREATS:

0 Opportunity:

a) Affordable Housing:

• While private market dynamics have shifted decidedly towards premium housing, the affordable segment presents a significant policy-driven opportunity.

• Knight Frank estimates Indias urban affordable housing deficit at 9.4 million units currently and projected to widen to nearly 30 million units by 2030.

• PMAY-U 2.0, SWAMIH 2.0, and the Urban Challenge Fund collectively create a framework within which private developers can partner with government on well-structured, government-supported affordable housing delivery, a model that can generate stable, long-term returns while addressing one of Indias most pressing social infrastructure challenges.

b) Premium and Luxury Housing Demand

• The structural shift towards premium and luxury housing represents one of the most durable opportunities in the Indian residential market. With homes above ^1 crore now accounting for 50% of total annual sales, up from a negligible share just five years ago, and high-net-worth individuals, dualincome households, and returning NRIs driving demand, developers with strong brand equity and the ability to deliver quality products in prime locations are wellpositioned to capture sustained value

creation.

• The RBIs rate cut to 5.25% further enhances the economics of premium homeownership.

c) GCC and Flex Expansion in the Office Space

• Indias emergence as the global destination of choice for GCC expansion is creating a multi -year runway for office market growth.

• A strong deal pipeline is expected to drive annual office absorption towards the 100 million sq. ft. milestone within the next two years. With GCCs already accounting for 44% of Q1 2026 office absorption, the structural demand driver is intact and accelerating.

0 Threats:

a) Regulatory and Approval Delays:

• Despite significant improvements post-RERA, regulatory complexity remains a persistent challenge. Delays in land use approvals, construction permits, and retrospective policy changes continue to introduce cost and timeline risks into project execution. As the market shifts towards larger-scale, premium developments, the stakes associated with approval delays have risen commensurately, making regulatory navigation a critical competency for developers.

b) Affordability Compression and Demand :

• Bifurcation The sustained price escalation across major markets, led by NCR at 19% YoY, Hyderabad at 13%, and Bengaluru at 12% in CY 2025, is increasingly compressing affordability in the mid-income and affordable segments. The 17% decline in sub-^50 lakh home sales and the 8% drop in the ^50 lakh to ^1 crore bracket in CY 2025 signal that a significant segment of potential buyers is being priced out of the formal market. Without continued government support through PMAY-U 2.0 and interest subvention schemes, this bifurcation risks deepening, with implications for both long-term market health and social equity.

c) Financing Costs and Developer Leverage:

• While the RBIs rate cut trajectory is broadly supportive, smaller and mid-sized developers continue to face challenges in accessing competitively priced capital. The divergence between large, well- capitalised developers, who benefit from strong brand equity and diversified funding sources, and more leveraged regional players remains pronounced. Rising construction material costs, higher land acquisition prices, and the continued shift towards premium products have collectively increased capital requirements for competitive development, creating structural barriers for smaller participants.

d) Human Resources and Technology Transition:

• Indias real estate sector continues to grapple with skilled labour shortages that disrupt onstruction timelines and inflate project costs. The imperative to reduce dependence on manual labour through the adoption of modern construction methods, including pre-fabrication, modular construction, and

digital project management tools, is pressing. At the same time, the rapid integration of AI, data analytics, and PropTech into sales, asset management, and facility operations requires developers to invest in technology capabilities, with those who fail to adapt at risk of losing competitive ground to digitally native platforms and tech-forward developers.

SEGMENT / PRODUCT WISE PERFORMANCE:

Company operates into single segment of construction of various Residential and Commercial schemes.

0 Company has also got works contract from Art Club Private Limited for Club Babylon , by this contract company will enter in new division of construction segment apart from housesandshops.Howevertheclubisnotownedbythecompanybutexperienceofclub construction will provide immense future opportunity for the company and also will add noted recognition to the company inindustry. The club is now fully operational with full luxurious facility for the members and guest. This year till the date company gave 200 rooms for the use to the club.

0 Company revised the development agreement with Vishnudhara Developers Llp and also revise the planpass and now the project is to construct 83 commercial + 6 flat with the name Shree Vishnudhara Ashiyana . 90% work of the whole project is completed till the date.

0 Company has entered into work contract for the development of Shree Vishnudhara Essence for construc ti on of 160 residen ti al flat which is situated at Thaltej, Ahmedabad. Almost 90% work is completed.

0 Company has entered into work contract for the development of Omkar Enclave for construction of 160 residential flat which is situated at Ranip, Ahmedabad. Almost 99% work is completed till the date. will get BU till the September, 2026.

0 Company has entered redevelopment contract for the project name Shree Vishnudhara Nandi which is part of 100 HIG and covered 70 residential 4 BHK luxurious Apartment. Till the date 35% work is completed. Company also applied for the BU. The company is also received RERA for the said project.

Following Projects are on starting phase:

0 Company has entered into redevelopment contract for the project name Shree Vishnudhara Residancy , Ahmedabad. 100 HIG covered 236 unit of 3 BHK Luxurious Apartments and 63 shops. Out of the total units, FSC 136 unit of 3 BHK Luxurious Apartments and 3 unit of shops. Till the date 10% work completed.

OUTLOOK:

FY 2025-26 will be known for its resilience. Post-pandemic, there has been a notable shift in the operational landscape of developers, emphasizing responsiveness to end-user demand and embracing innovation and digital transformation. We anticipate that FY2026-27 will sustain this positive sales momentum, underpinned by a robust structural framework, consistent demand, and housing loan rates that, while somewhat elevated, remain relatively affordable.

RISKS AND CONCERNS

The Real estate market is inherently a cyclical market and is affected by macroeconomic conditions, changes in applicable government schemes, project cost, consumer financing and liquidity etc. Your Company has taken sufficient care to maintain quality of the construction which differentiates company products from market. However any economic downturn in the years to come, may adversely impact the business.

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company has in place adequate internal financial controls with reference to financial statements. The Board has inter alia reviewed the adequacy and effectiveness of the Companys internal financial controls relating to its financial statements.

DISCUSSION ON FINANCIAL PERFORMANCE WITH REFERENCE TO OPERATIONAL PERFORMANCE :

Your Company has achieved total revenue of INR 3323.59 Lakh/- The aggregate revenue of the Company decreased compared to PY 2025-26.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT ETC

There is no major development in the Human Resources Employed by the Company. DISCLOSURE OF ACCOUNTING TREATMENT

During the year, the Company has not adopted any accounting treatment which different from that prescribed in an Accounting Standards.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPAREDTO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL

RATIOS.ALONG WITH DETAILED EXPLANATION		S THEREFOR, INCLUDING:
Ratio Name	Formula	F.Y. 2025 -26	F.Y. 2024 -25
Current ratio (In times)	= Total Current Assets	4.483	5.572
	Total Current Liabilities
Debt-Equity Ratio (In times)	Short Term Debt + Long Term Debt + Other Fixed Payment	1.959	0.484
	Shareholders Equity
Debt Service Coverage* Ratio (In times)	= Net Operating Income	1.417	5.948
	Total Debt Payment
Return on Equity Ratio (in %)	= Net Income * 100	1.396	5.343
	Shareholders Equity
Net Profit Ratio (in %)	= Net Profit * 100	1.564	7.275
	Net Sales
Trade Receivable Turnover Ratio (In times)	= Net Credit Sales	3.043	9.413
	Net Account Receivable 1
Trade Payable Turnover Ratio (In times)	= Credit Purchase	0.915	3.152
	Net Account Payable 2s
Net Capital turnover Ratio (in times)	= Net Sales	0.311	0.524
	Average Working Capital
Return on Capital Employed (in %)	= EBIT * 100	12.985	8.291
	Capital Employed
Return on Investment (in %)	= Net Profit * 100	1.396	5.343
	Shareholders Equity

Shri Vishnudhara Residency

Shri Vishnudhara Nidhi

Shri Vishnudhara Essence

Shri Vishnudhara Aashiyana

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