B&B Realty Ltd Management Discussions

INDIAN ECONOMY SCENARIO

The Indian economy continued to exhibit a resilient performance despite global uncertainties. The Reserve Bank of India (RBI) expects the Indian economy to be amongst the fastest growing economies in FY 2023-24 led by improving macroeconomic fundamentals and sustained momentum in domestic economy. The improving economic indicators along with a major capex push by the Indian Government have led to the RBI marginally improving its real GDP forecast to 6.5% for the Fiscal 2023-24. The RBI in its latest Monetary Policy Committee meeting also decided to pause the rate hikes after a cumulative increase of 250 basis points since May 2022. As per IMF reports, the GDP forecast for India has been revised to 6.3% for FY 2023-24 from 6.6% earlier.

The primary reason was attributed to slower consumption growth and challenging external conditions. Indias foreign exchange reserves were placed at $ 578.4 billion as on March 31, 2023. To cushion rupee depreciation, RBI has been intervening in the forex market via both spot and forward positions. Indias GDP growth accelerated to 6.1% in the January to March 2023 quarter, lifting the economys uptick in 2022-23 to 7.2% from the 7% estimated earlier.

Indian real estate sector has witnessed high growth in the recent times with rise in demand for office as well as residential spaces. Government of India along with the governments of respective States has taken several initiatives to encourage development in the sector. The Smart City Project, with a plan to build 100 smart cities, is a prime opportunity for real estate companies. The residential segment exhibited a strong performance and sustained momentum during the last fiscal despite several headwinds. The offices segment exhibited resiliency and has started to witness gradual recovery resulting in improvement in occupancy levels across quality assets.

This recovery was primarily led by the return to normalcy and back-to-office policies for the majority, however, certain occupiers continue to operate on a flexible and hybrid approach. The retail segment delivered robust growth as a result of increase in consumption and footfalls.

The Union Budget 2023 provides a significant boost to the infrastructure sector, which will aid the economys recovery and growth. The governments emphasis on green capital expenditure will aid in meeting the industrys energy requirements. Overall, this budget represents a forward-thinking approach to long-term growth.

The budget proposals emphasise the modernization and development of urban infrastructure and the real estate industry, as urbanisation is expected to be the most important growth driver in the Indian economy. The government will encourage states and cities to implement urban planning reforms and actions that will transform our cities into

"sustainable cities of the future." As a result, transit-oriented development with efficient use of land resources increased availability and affordability of urban land, and opportunities for all will result. More emphasis on urban infrastructure will stimulate growth in Tier 2 and 3 cities, improving peoples overall quality of life

Some of the highlights of the Budget 2023-24 that are likely to impact real estate are:

1) The budget has given infrastructure development yet another boost, with the government proposing a significant increase in capital expenditure for the fiscal year 2023-24. The new allocation of Rs 10 lakh crore, equivalent to 3.3% of GDP, represents a significant increase over the previous years allocation of Rs 7.5 lakh crore.

2) The government has increased the allocation to state governments for 50-year interest-free loans for infrastructure development to Rs 1.3 lakh crore. These policies will have a significant impact on the infrastructure sector, boosting its growth and development. This will also have a positive impact on the overall economy, resulting in job creation and increased private consumption.

3) The governments announcement of incentives and tax breaks in the budget for 2023-2024 is expected to have a significant impact on the infrastructure and real estate industries. This is likely to increase investment and development activity, which will not only create jobs but also boost economic growth.

4) The Union Budget contains several encouraging announcements for the real estate industry, including a 66% increase in allocation for the Pradhan Mantri Awas Yojana (PMAY) to more than Rs 79,000 crore. Given that the beneficiaries of the PMAY scheme are mostly low-income households in the unorganised sector, this move could catalyse growth in the affordable housing segment.

5) To achieve the governments third economic agenda of ‘Infrastructure and Investment, the Finance Minister declared in her address that capital spending would be boosted by 33% to strengthen the countrys infrastructure apparatus and urban town planning.

6) Because the high cost of land is another important restriction that the sector faces, the government has taken significant steps to highlight the relevance of land parcels held by federal agencies / PSUs through partnership agreements with affordable housing developers. A new effort with a significant allocation of Rs 16,000 crores to construct "sustainable cities of tomorrow" could alter several cities in India by increasing their quality of life and delivering integrated infrastructure, mobility, and urban sustainability.

7) The budget has set out INR 3,000 crores for affordable housing, which is encouraging for real estate developers that concentrate on creating projects for low-cost housing. This funding will assist builders in building more affordable homes, boosting the real estate market and assisting with the governments objective of Housing for All.

Regulation 17 of the Listing Regulations requires as a part of Corporate Governance the listed entities to lay down a Code of Conduct for Directors on the Board of an entity and its Senior Management. The Code lays down the standard of conduct which is expected to be followed by the Directors and by the employees in their business dealings and in particular on matters relating to integrity in the workplace, in business practices and in dealing with stakeholders. The term "Senior Management" shall mean personnel of the Company who are members of its core management team excluding the Board of Directors.

The Board of Directors ("the Board") and the Senior Management of B & B Realty Limited (herein after referred as "Company") subscribe to the following Code of Conduct adopted by the Board. The code expects from the Board and the Senior Management of the company and envisages:

1. Use due care and diligence in performing their duties of office and in exercising their powers attached to that office;

2. Act honestly and use their powers of office, in good faith and in the best interests of Company as a whole;

3. Not to make improper use of information nor take improper advantage of their position as a Director/Senior Manager.

4. Not to allow personal interests to conflict with the interests of the Company.

5. Recognize that their primary responsibility is to the Company shareholders as a whole but they should (where appropriate) have regard for the interests of all stakeholders of the Company;

6. Not to engage in conduct likely to bring discredit upon the Company; and

7. Be independent in judgement and actions, and to take all reasonable steps to be satisfied as to the soundness of all decisions taken by the Board of Directors

8. Ensure the confidentiality of information they receive whilst being in office of Directors/ Senior Manager and is only disclosed if authorised by the company, or the person from whom the information is provided, or as required by law.