Asia Pack Ltd Management Discussions

Global Economy:

The global economy remained resilient during FY 2025-26 despite heightened geopolitical tensions, evolving trade dynamics and volatility in commodity and energy prices. Inflationary pressures moderated across several major economies, resulting in gradual adjustments in monetary policies. However, global growth remained uneven amid relatively subdued industrial activity, trade-related uncertainties and volatility in financial markets. The year also witnessed continued focus on supply chain diversification, energy transition and sustainability-led investments across industries.

According to the International Monetary Fund ("IMF"), in its April 2026 World Economic Outlook, global growth is projected at 3.1% in CY 2026. Growth in advanced economies is projected to moderate from 1.9% in CY 2025 to 1.8% in CY 2026, while growth in emerging market and developing economies is projected to moderate from 4.4% in CY 2025 to 3.9% in CY 2026. The United States is projected to grow by 2.3% in CY 2026, compared with 2.1% in CY 2025, while Chinas growth is projected at 4.4% in CY 2026, compared with 5.0% in CY 2025.

While the global economy continues to demonstrate resilience, the outlook remains subject to risks arising from geopolitical developments, trade-related uncertainties, fluctuations in commodity and energy prices, financial market volatility and potential disruptions to global supply chains.

Indian Economy:

India remained one of the fastest-growing major economies during FY 2025-26 and continued to demonstrate resilience amidst global economic uncertainties. Economic growth was supported by robust domestic demand, sustained investment activity, continued Government focus on infrastructure development and capital expenditure, improving rural demand and continued momentum across the manufacturing and services sectors.

According to the Provisional Estimates released by the National Statistical Office ("NSO"), Indias real GDP is estimated to have grown by 7.7% during FY 2025-26, compared with a growth of 7.1% during FY 2024-25. The growth momentum was supported by private consumption, sustained investment activity and broad-based economic activity across key sectors.

Indias expanding domestic market, continued infrastructure development, investment activity and ongoing structural reforms are expected to support the countrys long-term growth prospects. The economic outlook, however, remains subject to external risks, including geopolitical tensions, volatility in global energy and commodity prices, potential supply chain disruptions, trade-related uncertainties and volatility in global financial markets. Inflationary pressures arising from food, fuel and other supply-side factors may also influence the domestic economic environment.

The IMF, in its April 2026 World Economic Outlook, has projected Indias real GDP growth at 6.5% for CY 2026, reflecting the continued strength and resilience of the Indian economy despite global uncertainties.

Industry structure and developments:

The Indian real estate sector continues to play an important role in the countrys economic development and comprises residential, commercial, retail and hospitality segments. The sector is supported by factors such as economic growth, urbanisation, infrastructure development, changing demographics, rising income levels and evolving consumer and business preferences.

Demand for quality residential and commercial spaces continues to be influenced by economic activity, employment trends, infrastructure development, affordability, availability of financing and changing lifestyle and workplace requirements. Increasing urbanisation and development of infrastructure are also expected to support long-term demand for real estate across various segments.

The real estate sector has significant linkages with several other sectors, including banking and financial services, construction, infrastructure and other allied industries. Accordingly, the performance of the sector is influenced by overall economic conditions, interest rates, availability of financing, regulatory developments and demand-supply dynamics.

Going forward, continued urbanisation, infrastructure development, rising income levels and evolving consumer preferences are expected to support the long-term growth of the real estate sector. However, market conditions may vary across locations and property segments. Sustainable development, efficient utilisation of resources and changing market preferences are also expected to play an increasingly important role in shaping the future of the industry.

Opportunities:

The Company operates in the real estate sector and derives rental income from its wholly owned commercial and residential properties. Ownership of these properties provides the Company with an opportunity to generate recurring rental income and optimise returns through efficient asset management and improved utilisation of its existing portfolio.

The Company may benefit from opportunities arising from improved occupancy levels, retention of existing tenants, timely renewal of lease arrangements and periodic rental escalations, subject to the terms and conditions of the respective lease arrangements. Demand for quality commercial and residential spaces in suitable locations may also provide opportunities to improve rental realisation and enhance the overall utilisation of the Companys properties.

The Company also continues to evaluate suitable opportunities for expansion, acquisition, development or other investments in the real estate sector, subject to prevailing market conditions, availability of suitable opportunities and the Companys financial and strategic considerations.

Threats:

The Companys operations and financial performance may be affected by changes in demand for commercial and residential spaces, fluctuations in occupancy levels, tenant retention and prevailing rental rates. An increase in the supply of competing properties, changes in tenant preferences and prolonged vacancy periods may adversely impact rental income and returns from the Companys properties.

Further, changes in overall economic conditions, interest rates, regulatory requirements and applicable laws may impact the real estate sector and the Companys operations. An increase in property maintenance, operating and other related costs may also adversely affect profitability.

The Company seeks to address these challenges through prudent asset management, efficient utilisation of its properties, timely renewal of lease arrangements, cost discipline, compliance with applicable requirements and continuous evaluation of market conditions and available opportunities.

Segment - wise or product - wise performance:

The Company operates in a single business segment, namely Real Estate, and is primarily engaged in the business of leasing and renting its wholly owned commercial and residential properties. Accordingly, the operational and financial performance of the Company is primarily influenced by the utilisation of its properties, occupancy levels, tenant retention, timely renewal of lease arrangements and prevailing rental rates.

During the year under review, the Company continued to derive rental income from its commercial and residential properties. The operational performance of the Company was influenced by factors such as occupancy and utilisation of the properties, lease terms, tenant retention and prevailing market conditions.

The Companys operations are primarily carried out within India. Further details regarding the Companys segment reporting are provided in Point VI of Note 20: Additional and Other Information forming part of the Financial Statements.

Outlook:

The real estate sector continues to evolve in response to changing economic conditions, regulatory developments and shifting demand patterns across commercial and residential segments. The Companys future performance will depend, among other factors, on occupancy levels, tenant retention, timely renewal of lease arrangements, prevailing rental rates, demand for quality real estate spaces and overall market conditions.

The Company remains focused on optimising the utilisation and returns from its existing portfolio of wholly owned properties through efficient asset management and prudent cost management. The Company will also continue to evaluate suitable opportunities for growth and expansion, subject to market conditions and its financial and strategic considerations.

While uncertainties and market-related challenges may continue to persist, the Company will continue to focus on strengthening its operational performance, improving asset utilisation and creating sustainable long-term value for its stakeholders through prudent management of its real estate assets.

Risks and concerns:

The Company is exposed to risks associated with the commercial and residential real estate market, including changes in market demand, occupancy levels, tenant retention, rental rates and increased supply of competing properties. Prolonged vacancy periods or changes in prevailing market conditions may adversely impact the Companys rental income and financial performance.

The Companys operations may also be affected by changes in applicable laws and regulations, interest rates, economic conditions and increases in property maintenance and operating costs. Changes in tenant requirements and market preferences may also influence the demand for the Companys properties.

The Company seeks to mitigate these risks through efficient asset management, optimal utilisation of its properties, timely renewal of lease arrangements, prudent cost management, regulatory compliance and continuous monitoring of market conditions and available opportunities.

Internal Control Systems and their adequacy:

The Company has in place adequate internal control systems commensurate with the nature, size and complexity of its operations. The internal control framework is designed to provide reasonable assurance regarding the safeguarding of assets, reliability of financial and operational information, compliance with applicable laws and regulations and effectiveness and efficiency of business operations.

The Companys internal financial controls are designed to ensure the orderly and efficient conduct of its business, adherence to the Companys policies and procedures, accuracy and completeness of accounting records and timely preparation of reliable financial information. The management periodically reviews the adequacy and effectiveness of the internal control systems and takes appropriate measures for strengthening the same, wherever required.

The Statutory Auditors have also reported on the adequacy and operating effectiveness of the Companys internal financial controls with reference to the financial statements, as required under the applicable provisions of the Companies Act, 2013.

Discussion on Financial Performance with respect to Operational Performance:

The Companys financial performance is directly linked to the operational efficiency and utilization of its owned assets. During the year under review, all rental income was derived from properties wholly owned by the Company, which include commercial and/or residential spaces leased to various tenants.

The Company reported total rental income of Rs. 16,26,206/- for the current financial year, as compared to Rs. 20,11,625/- in the previous year, reflecting a decrease of 19.16%. The EBITDA for the year 2025-26 is Rs. 49,66,712/- as against Rs. 42,74,131/- in the previous financial year, reflecting an increase in EBITDA of 16.20%. Total Income during the year was Rs. 97,09,691/- as compared to Rs. 1,08,38,088/- in the previous year, reflecting a decrease of 10.41%. Expenses incurred during the year remained stable and were lower as compared to the previous year. However, due to higher deferred tax, Profit After Tax decreased to Rs. 23,28,456/- as compared to Rs. 40,77,194/- in the previous year.

Although the Companys profitability during the year was impacted by the higher deferred tax charge, the Company expects better profitability in the upcoming years through improved utilization of its existing assets and exploration of new opportunities in the market. The operational performance of the Company was primarily driven by factors such as occupancy levels across its owned properties, annual rent escalations, timely renewal of lease arrangements, minimization of vacancy periods and improved asset utilization. As all rental income arises from properties owned by the Company, the Company continues to have visibility and predictability in its cash flows, subject to occupancy levels, tenant retention and prevailing market conditions.

Material developments in Human Resources / Industrial Relations front, including number of people employed:

We believe and understand the importance of investing in the growth and development of employees which is crucial not only for their personal success, but also for the overall success of the organization. Hence, the Company is empowering the employees vide providing them suitable work culture and many other benefits such as annual appraisals. Number of people employed during the reporting financial year is 04, However Company is expecting towards creating more employment opportunities in upcoming years.

Ratios:

The details of significant changes, being changes of 25% or more as compared to the immediately preceding financial year, in the key financial ratios, along with the explanations therefor, are provided in Note 20 (XIII) (xix): Details of Ratios as per Schedule III, forming part of the Financial Statements.