EFC I Ltd Management Discussions

GLOBAL ECONOMIC OVERVIEW

With stable Global Economic growth of 3.4% in CY 2025, it is projected to moderating to 3.1 3.2% through CY 2026 27, amid ongoing geopolitical disruptions including the Russia Ukraine conflict and escalating Middle East tensions. Inflation is expected to ease gradually from 4.4% in CY 2026 to 3.7% in CY 2027, driven by softer demand and lower energy prices, though the pace will vary by region.

Advanced economies are forecast to grow modestly at 1.7 1.9%, with the US outperforming peers on the back of fiscal support and easing financial conditions, while the Euro Area and Japan remain subdued. EMDEs continue to lead growth, driven by domestic consumption and infrastructure investment, though elevated debt and geopolitical risks persist. The Middle East conflict escalation in early 2026 poses additional headwinds, particularly for commodity-importing and economically vulnerable nations.

Source: World Economic Outlook, April 2026, IMF, E - Estimated; P - Projected https://www.imf.org/en/publications/weo/issues/2026/04/14/world-economic-outlook-april-2026

Outlook

FY 2026-27 opens amid elevated global uncertainty, with West Asia hostilities disrupting trade routes and energy supply. Even if tensions ease, energy prices are expected to stay elevated, transmitting stress to India through four key channels. Inflation faces dual pressure from higher energy costs and input price pass-through, compounded by El Nino-driven food price risks -keeping inflation above earlier projections and warranting continued monetary caution. Fiscally, rising subsidy burdens, potential excise cuts, and softer revenues will test the governments ability to meet near-term demands while staying on its consolidation path. Externally, a wider current account deficit is likely as the energy import bill rises and remittances face headwinds. Capital flows will remain volatile near-term, though Indias macro fundamentals should continue attracting medium-term FDI.

Growth is expected to moderate, though resilient domestic demand should sustain relatively healthy expansion despite rising headwinds. The global risk picture is skewed firmly to the downside. IMF adverse scenarios range from global growth slowing to 2.5% under a sustained energy shock, to near 2% if energy infrastructure is directly damaged with emerging markets bearing nearly double the impact of advanced economies. Trade disputes, critical mineral friction, stretched fiscal positions, and a potential AI valuation reassessment add further vulnerability. Upside risks AI productivity gains, reform momentum, and trade de-escalation exist but remain contingent.

https://www.spglobal.com/market-intelligence/en/news-insights/research/2026/03/global-economic-outlook-march-2026 https://www.imf.org/en/publications/weo/issues/2026/04/14/world-economic-outlook-april-2026

INDIAN ECONOMIC OVERVIEW

The Indian economy delivered a strong FY 2025-26, reaffirming its position among the worlds fastest-growing major economies. Real GDP grew 7.6%, driven by robust private consumption (PFCE up 7.6% vs. 5.6% prior year), accelerated infrastructure spending, and sustained services momentum. A favourable monsoon supported agricultural output and rural demand, with manufacturing and construction adding further tailwinds.

Inflation surprised sharply to the downside headline averaging a historic low of 1.7% and CPI at 4.6%, comfortably within the RBIs target band. The RBI maintained the repo rate at 5.25%, balancing growth support with financial stability. Three sovereign rating upgrades through the year further affirmed confidence in Indias macro framework.

Fiscally, the government stayed on its consolidation path with capex at the centre of expenditure strategy. State transfers under the Finance Commission are budgeted at RS. 1 6.56 lakh crore for BE 2026-27. Structurally, Make in India and PLI schemes continue channelling investment into productive manufacturing capacity, laying the foundation for the Viksit Bharat vision.

https://www.mospi.gov.in/uploads/latetReleases/latest_release_1772189865181_f040336d-bc57-4aed-b80f-586d9ccb279e_Press_Note_on_New_Series_of_GDP_Estimates_ with_Base_Year_2022-23_27022026.pdf#::text=Real%20GDP%20 or%20GDP%20at%20Constant%20Prices,as%20compared%20 to%207.1%20%25%20in%202024%2D25 h t t p s : // w w w . p i b . g o v . i n / P r e s s R e l e a s e P a g e . aspxRsPRID=2221389®=3&lang=2 h t t p s : / / w w w . p i b . g o v . i n / P r e s s N o t e D e t a i l s . aspxRsid=157124&NoteId=157124&ModuleId=3®=37&lang=1

Outlook

Indias economic outlook remains robust, with the World Bank projecting GDP growth of around 6.6% in FY 2026-27, sustaining its position among the fastest-growing major economies. Although growth may moderate from the strong 7.6% estimated for FY 2025-26, it continues to be supported by resilient domestic demand and steady export performance. External headwinds including elevated energy prices, geopolitical tensions, and supply chain disruptions pose risks to inflation and investment, but do not materially alter the underlying growth momentum.

Indias recent shift to the sixth-largest global economy, from earlier expectations of reaching fourth, reflects currency movements and statistical revisions rather than any structural slowdown. Rupee depreciation and changes in GDP measurement have impacted dollar-based rankings, even as core economic fundamentals remain strong. Looking ahead, sustained reforms, domestic consumption, and investment momentum are expected

The Indian economy delivered a strong FY 2025-26, reaffirming its position among the worlds fastest-growing major economies. Real GDP grew 7.6%, driven by robust private consumption (PFCE up 7.6% vs. 5.6% prior year), accelerated infrastructure spending, and sustained services momentum. to support Indias progression toward becoming the third-largest economy over the next decade, reaffirming its long-term growth trajectory. https://timesofindia.indiatimes.com/business/india-business/ explained-on-way-to-4 th -largest-how-india-slipped-to-6 th -rank-what-it-means-for-3 rd -largest-economy-dream/ articleshow/130356662.cms h t t p s : // w w w . w o r l d b a n k . o r g / e n / n e w s / p r e s s -release/2026/04/09/india-remains-among-the-fastest-growing-economies

Leasing Industry Overview and Outlook

Indias commercial office leasing market is in the most structurally favourable phase of its cycle since the 2005-08 BPO-led boom, now powered by a fundamentally different and more durable demand base. The market recorded approximately 77 million square feet (msf) of gross leasing in CY24 and reached an all-time high of approximately 80 msf in CY25. Global Capability Centres (GCCs) have emerged as the dominant demand driver, accounting for 31% of CY24 leasing and India now hosts over 1,790 GCCs generating approximately USD 72 billion in revenue in FY 2024-25, employing over 1.9 million people. These numbers are projected to grow to 2,500+ GCCs, USD 110 billion in revenue, and 2.8 million employees by FY 2029-30. Indias nominal GDP, projected to cross USD 4 trillion in FY 2025-26, combined with urbanisation reaching 37% in CY25 and heading towards 43% by 2035, provides a powerful structural tailwind for commercial real estate demand across the top seven cities and emerging Tier-2 clusters.

Source: India Office Ecosystem Industry Report (CBRE, JLL, Cushman & Wakefield, Colliers, Knight Frank, Savills, McKinsey, BCG, Bain, Deloitte, EY, KPMG, PwC)

Trends in leasing by flex operators

Managed Workspaces & Co-working Industry

Overview

Indias managed office and coworking sector has undergone a fundamental transformation evolving from a startup-led, ancillary format into a mainstream, enterprise-driven real-estate category. Flex office stock crossed approximately 85 msf across the top seven cities in Q1 CY26, up from 70 msf in CY24, reflecting a five-year CAGR of approximately 24% nearly double the global flex CAGR of 13%. India is now the single-largest flex office market in the Asia Pacific region The flex formats share of gross Grade-A office leasing has climbed sharply from 5% in 2018 to 22% in Q1 CY26, with enterprise tenants (over 500 seats) now constituting approximately 65% of total flex demand up from just 25% in 2019. Average deal sizes have grown from 85 seats in CY22 to 320 seats in Q1 CY26, reflecting the increasing dominance of large corporate and GCC mandates.

The sectors revenue pool is estimated at approximately RS. 1 5,500 crore in CY25, growing at a CAGR of 16%, with flex stock projected to reach 115 125 msf by CY27 and 165 180 msf by CY30. Operators offering integrated solutions combining coworking, design-build, managed furniture, and IT/AV services are winning enterprise . mandates 1.8 times more often than single-product peers, with 200 400 basis points higher per-seat realisations.

Source: India Co-working Space Industry Report (CBRE, JLL, Cushman & Wakefield, Colliers, Knight Frank, Savills, McKinsey, BCG, Bain, Deloitte, EY, KPMG, PwC)

Design & Build Industry Overview and Outlook

The Design & Build market is the most under-appreciated value pool in Indias office ecosystem. The sector is highly fragmented, growing in double-digits, and is being structurally re-rated by the shift to integrated turnkey contracts that combine design, project management, fit-out execution, MEP, and FF&E into a single accountable scope.

Indias Design & Build (D&B) services market is the fastest-compounding value pool within the countrys commercial real-estate ecosystem, estimated at USD 5.4 6.0 billion in CY25 (approximately RS. 4 6,000 51,000 crore) and growing at 13 15% CAGR. Every square foot of enterprise or flex office leased in India generates RS. 3 ,200 4,500 of fit-out spend a figure that has risen 18% over the past 24 months, driven by IGBC/LEED Platinum specifications, smart building technology integration, and premium furniture, fixtures and equipment requirements. Total D&B spend through CY30 is projected to exceed RS. 4 lakh crore. The market is highly fragmented, with the top ten players accounting for only approximately 28% of the market, leaving significant headroom for organised players to scale. Three structural forces are reshaping the industry: the shift to integrated turnkey contracts that combine design, project management, fit-out execution, MEP, and FF&E under a single accountable scope; consolidation by international property consultants (IPCs); and the internalisation of the D&B layer by flex operators. Specialised D&B firms focussed on data-centre fit-outs and lab/R&D environments are growing at 18 22% well ahead of the market aggregate and represent the most defensible independent play as generic D&B becomes increasingly commoditised. The D&B market is projected to reach USD 10 11.5 billion by CY30.

Source: India Design & Build Services Industry Report (CBRE, JLL, Cushman & Wakefield, Colliers, Knight Frank, Savills, McKinsey, BCG, Bain, Deloitte, EY, KPMG, PwC)

Furniture Industry Overview and Outlook Indias commercial office furniture market is estimated at USD 2.6 billion (approximately RS. 2 2,000 crore) in CY25, accounting for roughly one-third of the broader Indian furniture market, and is projected to reach USD 4.5 5.0 billion by CY30 growing at 10 12% CAGR, which is 2 2.4 times the global market growth rate of approximately 5%. Despite its scale and growth, the market remains approximately 70% unorganised by value -a characteristic that presents a significant and durable consolidation opportunity for organised, branded players. Organised share has steadily climbed from 24% in CY20 to 30% in CY25, driven by enterprise procurement standardisation, GCC fit-out requirements, bulk orders from flex operators, and a consumer shift towards warranty-backed, ergonomic products. Organised players are growing their share at 150 200 basis points per year, translating into a 15 16% CAGR for organised-segment revenue over the next five years well ahead of the overall market. Workstations and desking systems represent the largest segment at approximately 36% of market value. Average furniture spend per seat in a Grade-A fit-out ranges from RS. 3 5,000 to RS. 6 0,000, and premium ergonomic seating and workstation systems are the highest-margin sub-segments. An emerging export opportunity of over USD 1.2 billion targeting the Middle East, Southeast Asia, and Africa -provides an additional growth lever for well-capitalised organised players.

Source: India Commercial Office Furniture Industry Report (CBRE, JLL, Cushman & Wakefield, Colliers, Knight Frank, Savills, McKinsey, BCG, Bain, Deloitte, EY, KPMG, PwC)

COMPANY OVERVIEW

EFC (I) Limited is Indias leading Real Estate-as-a-Service (REaaS) company, headquartered in Pune, Maharashtra. Incorporated in 1984 and publicly listed, EFC has evolved from a managed workspace operator into a fully integrated real estate solutions platform comprising three synergistic business verticals: Leasing (Managed Workspaces), Design & Build (Interior Fit-Outs), and Furniture Manufacturing.

The Companys core thesis is built on creating a unified, end-to-end office infrastructure ecosystem that delivers value across the entire workspace lifecycle - from property identification, leasing, and interior design execution to bespoke furniture supply. This integrated model drives superior margin capture, reduces customer acquisition costs, accelerates project turnaround times, and fosters deep, long-term client relationships.

EFC operates through a distinctive multi-brand portfolio that serves enterprise clients, SMEs, startups, and institutional entities alike, across 25 cities with over 78,000+ seats under management. As a Real Estate as a Service company, EFC enables its clients to shift from capital-intensive real estate ownership to flexible, professionally managed OpEx-based workspace solutions, thereby allowing them to focus on their core business objectives.

Indias commercial office furniture market is estimated at

USD 2.6 billion (approximately D 22,000 crore) in CY25, accounting for roughly one-third of the broader Indian furniture market, and is projected to reach USD 4.5 5.0 billion by CY30 growing at 10 12% CAGR, which is 2 2.4 times the global market growth rate of approximately 5%.

Brand Ecosystem

EFCs multi-brand strategy is designed to address diverse client segments within the commercial real estate space:

Brand	Description
EFC	Innovative, scalable office solutions for entrepreneurs, SMEs, and enterprise clients
BIGBOX	Premium managed workspaces tailored for enterprises and startups
SPRINT	Affordable, fully-managed
WHITEHILLS	Premium commercial interior design and build services
Ek Design	Design and manufacture of high-quality furniture products across
	India and overseas

Business Verticals

Leasing

EFCs leasing vertical sits at the heart of its real estate-as-a-service model, delivering enterprise-grade workspace solutions across three distinct formats Enterprise Offices, Managed Offices, and Customised Offices each designed to meet businesses where they are. With 117 centres spread across 25 cities, over 3.88 mn sq. ft. under management, and 78,000+ seats serving 750+ clients, the scale speaks for itself. What sets EFC apart isnt just the footprint, its the philosophy. Spaces are crafted to inspire collaboration, billing is fully transparent with no hidden charges, and locations are chosen for maximum accessibility. The numbers back the model too: 90%+ average occupancy, a 51-month average enterprise client tenure, and 61% of revenue coming from enterprise clients signal that this isnt just a flex-space play, its a long-term relationship business. With revenue to rent ratio of 45% EFC has built a leasing engine that balances scale with sustainability.

EFCs leasing vertical sits at the heart of its real estate-as-a-service model, delivering enterprise-grade workspace solutions across three distinct formats Enterprise Offices, Managed Offices, and Customised Offices each designed to meet businesses where they are.

Design and Build

EFCs design and build arm, Whitehills, is well-positioned to capture this expanding opportunity by offering end-to-end interior solutions spanning concept development, architecture, master planning, furniture design, branding, signage, and exhibition all anchored around a proprietary Brand Experience Concept methodology. Having designed over 5.5 million square feet across sectors including Real Estate, IT/ITeS, Pharmaceuticals, Education, and Energy, Whitehills brings a multi-disciplinary capability set supported by a team of 80+ designers and engineers operating across 15+ locations. With over 45+ clients served, the business is well-placed to capitalise on Indias commercial fit-out upcycle, leveraging its integrated delivery model to drive cross-selling synergies within the broader EFC ecosystem.

Furniture

EFCs furniture manufacturing arm, EK Design, is strategically positioned to benefit from this structural demand upcycle through its world-class manufacturing facility offering capabilities across modular furniture, metal fabrication, woodworking, CNC processing, soft seating, and office chair assembly. With a total manufacturing capacity of RS. 2 ,750 - 3,000 million in value, over 60K+ units delivered, a product portfolio of 1,500+ SKUs, EK Design serves clients across Real Estate, Co-living, Hospitality, IT, ITeS, and Education sectors. The business is underpinned by three core competitive strengths abundant raw material supply, access to a highly skilled labour pool, and surging end-market demand enabling it to deliver margin-accretive backward integration for EFCs broader design and build operations while meeting the growing appetite for high-quality, customised commercial furniture solutions.

Asset-Under-Management (AUM) Growth Strategy

EFC is actively pursuing an Asset-Under-Management growth strategy that encompasses three primary AUM-building mechanisms: Direct property acquisition on the EFC balance sheet New stream of stable, recurring AUM-based management fees

Enhances creditability with institutional and retail capital for fund structures De-risks leasing model through structured ownership The Companies low financial obligation and strong operating cash flows from the leasing vertical provide substantial headroom for accelerated AUM growth. Lease Rental Discounting (LRD) products available from financial institutions offer cost-effective financing for property acquisitions.

Technology

EFC (I) Limited has steadily embedded technology across its operational and governance framework, reinforcing efficiency and transparency at every level. The companys Design & Build vertical operates through tech-enabled systems supported by in-house technical teams and large-scale procurement capabilities, enabling faster project turnaround times and improved margin delivery. On the manufacturing side, Ek Design Industries has secured multiple certifications from TUV NORD, a globally recognised quality standards body, validating its process rigour and global compliance-readiness. The company has also launched a dedicated digital ESG reporting platform to automate disclosures and align with international reporting standards, while embedding ISO-certified systems - ISO 9001, 14001, and 45001 - across verticals to strengthen risk management, governance, and operational adaptability.

Marketing and Market Reach

EFC (I) Limited has built a formidable market presence across 25 cities, operating 117 centres managing over 3.88 mn sq. ft., serving 750 + clients with an average enterprise client tenure of approximately 51 months. The companys multi-brand portfolio comprising EFC, BIGBOX, SPRINT, and WHITEHILLS enables it to address a broad spectrum of client segments, from startups to large enterprise mandates, while maintaining a blended occupancy consistently above 90%. Enterprise clients contribute approximately 61% of leasing revenue, reflecting the companys deliberate focus on long-term, high-value relationships over transactional engagements. Ek Designs TUV NORD certification and an active export order to Saudi Arabia underscore EFCs growing credibility beyond domestic markets. The companys November 2025 foray into premium retail leasing further expands its addressable market, leveraging existing domain expertise and its pan-India infrastructure to partner with established retail chains seeking capex-light expansion solutions.

Financial Performance

Consolidated Profit & Loss Statement

( in million)

Particulars	FY 2026	FY 2025	% change
Revenue from Operations	10,366.8	6,567.4	58%
Cost of Services/Material Consumed	4,087.2	2,351.2	-
Purchases of stock-in-trade	381.7	-	-
Changes in Inventories and Finished goods	-329.1	-18.0	-
Employee Expenses	603.4	312.8	-
Other Expenses	940.6	644.6	-
EBITDA	4,683.2	3,276.8	43%
EBITDA Margin (%)	45.2%	49.9%	-
Other Income	171.1	175.2	-
Depreciation & Amortisation	1,202.5	996.7	-
EBIT	3,651.8	2,455.3	49%
Finance Cost	562.1	456.8	-
Profit Before Tax	3,089.7	1,998.4	55%
Tax	742.6	590.7	-
Profit After Tax	2,347.1	1,407.8	67%
PAT Margin (%)	22.6%	21.4%	-

Financial Performance

Consolidated Profit & Loss Statement

Ratios	Ratios for FY 2025-26	Ratios for FY 2024-25	Ratios for FY 2023-24	Remark for change of 25% or more as compared to previous year
Trade receivables turnover ratio	6.05	5.90	6.04	NA
Trade payables turnover ratio	4.83	3.75	3.71	Increase in the ratio is due to increase in Trade payable
Inventory Turnover Ratio	1.65	1.14	NA	Increase in the ratio is due to increase in the sales conversion of inventory
Interest Coverage Ratio	6.50	5.37	3.29	NA
Current Ratio	1.16	1.46	2.90	NA
Return on Equity	0.34	0.28	0.25	NA
Return on Capital	0.33	0.30	0.21	NA
Employed (ROCE)
Debt to Equity Ratio	0.38	0.40	0.27	Increase in the ratio is due to increase in net debts during the year
Net Profit Ratio	0.23	0.21	0.15	NA
EBITDA Margin	0.45	0.50	0.44	NA

The Return on Net Worth for FY 2025-26 stood at 0.29, reflecting an improvement over the previous year of 0.24. The increase was driven by efficient deployment of capital, supported by growth in revenue and disciplined cost management during the year.

Operational Performance

The Company delivered a strong and well-rounded operational performance during FY 2025-26, driven by the scalability of its integrated business model and consistent execution across all verticals.

At the core of operations, the Leasing vertical continued to demonstrate stability and scale. The Company operated over 117 centres across 25 cities, managing more than 3.88 million sq. ft. and 78,000+ seats, with occupancy levels maintained above 90%. A diversified client base of 750+ clients, with a significant share from enterprise customers, supported stable demand and recurring revenue visibility. The average Enterprise Client Tenure of approximately 51 months reflects strong retention and long-term engagement, reinforcing the annuity nature of the business. Seat capacity expansion, supported by ongoing development and inventory pipeline, further strengthens growth visibility.

The Design & Build (D&B) vertical emerged as a key growth accelerator, reflecting strong execution capabilities and cross-selling benefits within the ecosystem. The segment recorded robust momentum with over RS. 1 60 crore order book and 5.5 million sq. ft. of designed space delivered across 45+ clients. Growth in this vertical is driven by increasing demand from existing leasing clients, new enterprise mandates, and diversified sector exposure. The integration with leasing operations has enhanced client stickiness and expanded revenue opportunities, positioning D&B as a major contributor to overall growth.

The Furniture manufacturing vertical (Ek Design) is steadily evolving as a margin-enhancing lever through backward integration. The business has delivered 60,000+ units across 1,500+ SKUs, supported by a growing order pipeline and improved capacity utilisation. With current utilisation at around 35 40%, the Company expects a significant ramp-up in the near term, which is likely to drive operating efficiencies, cost optimisation, and margin expansion. Strategic certifications and in-house manufacturing capabilities further strengthen execution reliability and competitive positioning.

A key highlight of the Companys operational performance is the synergistic integration of its three verticals leasing, design & build, and furniture. This ecosystem approach enables seamless transition from client acquisition to execution and delivery, reducing customer acquisition costs, improving turnaround time, and enhancing overall margins. The model also supports strong cross-selling opportunities and drives operating leverage as scale increases.

Overall, the Companys operational performance reflects strong capacity expansion, high occupancy, robust execution pipeline, and improving integration benefits, positioning it well for sustained growth. The continued focus on scaling operations while maintaining efficiency and discipline provides clear visibility into future performance and profitability.

Vertical	FY 2024 Share	FY 2025 Share	FY 2026 Share
Leasing	62%	57%	52%
Design & Build	27%	40%	42%
Furniture	11%	3%	6%

Opportunities

Managed Workspace Structural Growth

Enterprise Demand Shift

Large enterprises are rapidly adopting hub-and-spoke flexible models, moving real estate from CapEx heavy balance sheets to OpEx sustaining long-term demand for professionally managed office infrastructure and enabling faster, scalable expansion.

GCC & Workspace-as-a-

Service Tailwinds Indias GCC boom projected to reach 2,400 centres by 2030 is a significant demand catalyst for premium-managed office solutions. The Workspace-as-a-Service model further deepens this opportunity by raising switching costs and strengthening customer-stickiness.

Market Size & Growth

Trajectory Indias coworking and managed office market is estimated at USD 4.53 billion in 2026, growing at a 13.9% CAGR to USD 8.7 billion by 2031. Asia Pacific remains the fastest-growing regional market globally, with a projected CAGR of 15.4% between 2025 and 2030.

Commercial Interior Fit-Out Hyper-Growth Phase

Market Growth & Scale Indias commercial fit-out market is in a high-growth phase, expanding from RS. 2 77 billion in 2023 to an estimated RS. 8 05 billion by 2030 at a 16.5% CAGR nearly double the global growth rate of

9%, reflecting the scale of domestic opportunity.

Demand Drivers & Emerging

Trends Rising office leasing volumes and evolving workplace expectations are reshaping fit-out demand. Key trends include hybrid workspace design, biophilic and wellness-focussed environments, technology integration, sustainability, and increasing customisation collectively raising the complexity and value of fit-out mandates.

EFCs Competitive Positioning

EFC is well-placed to capture fit-out growth across both its managed workspace portfolio and standalone commercial mandates, leveraging its integrated capabilities to serve clients across the full fit-out value chain.

Office Furniture Structural Domestic Opportunity

Market Size & Growth

Trajectory Indias office furniture market is projected to grow from USD 5.21 billion in 2026 to USD 7.73 billion by 2031 at an 8.23% CAGR, accounting for approximately 15% of global office furniture sales underscoring its rising significance in global supply chains.

Import Substitution & Domestic Opportunity Organised domestic manufacturers are increasingly displacing imports, driven by rising workplace standards and expanding commercial real estate supply. This structural shift disproportionately benefits quality-led, certified players with established distribution networks.

EFCs Positioning via Ek Design

EFCs Ek Design vertical is well-placed to capture an outsized share of this growth backed by TUV NORD certifications, superior product quality, and a growing multi-channel distribution strategy that spans both institutional and retail segments.

Threats

Turnkey interior fit-out projects remain susceptible to execution risk supply chain disruptions, labour constraints, or unforeseen site conditions can trigger delays, cost overruns, and client dissatisfaction Rising input costs across utilities, maintenance, and personnel continue to exert pressure on managed office margins, with sustained inflation posing a structural headwind to profitability Any deterioration in commercial real estate demand driven by economic slowdowns or market cyclicality -could adversely impact occupancy rates and lease realisations across the Companys managed office portfolio Competition from unorganised players, coupled with raw material price volatility, supply-chain disruptions, changing consumer preferences, may put pressure on Ek Designs market penetration, and growth

Disclosure of Accounting Treatment in preparation of

Financial Statements

The financial statements have been prepared in accordance with Indian Accounting Standards (IndAS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended and notified under section 133 of the Act and other relevant provisions of the Act.

Human Resources

At EFC (I) Limited, our people remain the cornerstone of our growth and are integral to the successful execution of our business strategy. The Companys workforce comprises professionals and skilled personnel across multiple functions supporting its three integrated verticals Leasing, Design & Build, and Furniture Manufacturing. The Company continues to build and strengthen its talent pool across business functions and geographies, with a focus on developing capabilities that support its evolving business requirements and growth plans.

The Companys Design & Build vertical, operated under the Whitehills brand, is supported by a specialised team of designers, engineers and other professionals who enable the delivery of end-to-end interior solutions across its expanding network of locations. Across its business verticals, the Company remains focussed on attracting, retaining and developing talent with the requisite skills and expertise to support operational excellence and long-term growth.

On the ESG front, the Company continued to strengthen its people-centric practices through employee awareness and training initiatives. During the year, ESG-related training was undertaken covering key areas including Anti-Bribery and Anti-Corruption, Whistleblower and Ethics policies. Workplace safety remained a key priority, with regular mock drills, emergency preparedness initiatives, PPE compliance programmes and safety focussed training being undertaken. These initiatives were further supported by statutory fire-safety audits and periodic safety drills across associated entities.

The Company has also obtained advanced Integrated Management System (IMS) certifications ISO 9001, ISO 14001 and ISO 45001 reflecting its commitment to quality, environmental management, occupational health and safety, standardised processes and continuous improvement.

The Design & Build vertical, operated under the Whitehills brand, is supported by a dedicated team of over 80 designers and engineers who enable the Company to deliver end-to-end interior solutions across 15+ locations.

As the organisation continues to scale across business verticals and geographies, strengthening its talent pool, enhancing employee capabilities and fostering a safe, inclusive and ethical workplace remain key strategic priorities. These initiatives are intended to support the Companys operational resilience and its long-term vision of becoming Indias leading Real Estate-as-a-Service platform.

Capability Development

Learning and Development remained central to capability building. Continuous learning is viewed as a strategic enabler of both individual and organisational growth. L&D initiatives in FY 2025-26 targeted technical capabilities, leadership acumen, and behavioural competencies. Key programmes included: A structured on boarding programme to accelerate new-hire integration Role-based learning modules covering business communication, customer centricity, and leadership-readiness Empower Connect sessions fostering cross-functional collaboration Self-paced learning through Access to Learning courses Leadership networking events and industry workshops

Employee Engagement

EFC (I) Limited recognises that an engaged workforce underpins a high-performance culture. Across FY 2025 26, employee experience initiatives were designed to strengthen belonging, collaboration, and recognition. These included: Wellness programmes supporting physical, mental, and financial well-being Festive and cultural events to strengthen team cohesion

Recognition programmes reinforcing excellence and positive behaviour

Strengthening People, Policies and Performance

A structured Performance Management System (PMS), deployed on a digital platform with clearly-defined goal sheets, embedded a culture of accountability, transparency, and outcome-driven performance. Progressive HR policies reinforced inclusivity, well-being, and governance. Key focus areas included strengthening the Diversity, Equity & Inclusion (DEI) framework, heightening awareness on Prevention of Sexual Harassment (POSH), and establishing structured grievance redressal mechanisms. Employees continued to benefit from comprehensive rewards -spanning compensation, insurance, statutory retirement benefits, and development opportunities reinforcing retention and engagement.

Culture Development

Culture remains a strategic differentiator for EFC (I) Limited. The organisation nurtures a values-driven culture anchored in customer centricity, humility, trustworthiness, efficiency, and accountability. Continuous listening mechanisms including pulse surveys (Your Voice Matters), open forums, and one-on-one connects -enable employees to share perspectives and shape workplace practices. Through these initiatives, the Company remained committed to cultivating a high-performance, purpose-driven, and inclusive culture empowering its workforce to deliver exceptional value to customers while advancing long-term business outcomes.

Risk Management

Given the Companys operations across multiple industries, it faces a wide range of risks. On the financial side, changes in real estate valuations and interest rates may affect the Companys financing costs, asset values and financial performance. Operationally, the Company may encounter project delays, budget overruns, and quality control challenges. Furthermore, navigating the regulatory landscape across both real estate and manufacturing sectors presents its own compliance challenges. To address these exposures, the Company has put in place a comprehensive risk management framework that guides daily operations and supports the systematic identification, assessment, and mitigation of risks. The Risk Management Committee conducts regular reviews of this framework to verify that the relevant policies and procedures remain effective.

A thorough breakdown of identified risks and the strategies used to manage them can be found in the BRSR Report, included as part of the Integrated Annual Report.

Risk Category	Nature of Risk	Mitigation
Occupancy Risk	Decline in demand for managed offices could impact leasing revenue	The Company maintains 90%+ average occupancy across its managed workspace portfolio, supported by an enterprise- centric client base with an average tenure of 51 months.
Concentration Risk	Geographic concentration (70% capacity in the West)	Geographic expansion is actively underway, with a growing presence across North, South, and East India.
Project Execution Risk Interest Rate Risk	Delays in D&B projects could impact revenue recognition Rising interest rates increase finance costs	Operations are backed by in-house technical teams, tech- enabled systems, and a team of 80+ designers and engineers. The Companys long-term enterprise contracts provide stable cash flow visibility, partially cushioning the impact of elevated finance costs. Ownership of select properties further reduces lease-related interest exposure over time.
Competition	Intensifying competition in co-working and managed office spaces	A differentiated multi-brand portfolio, long-term enterprise contracts, and ownership of select properties strengthen the Companys competitive positioning.
Macro / Regulatory	Policy changes impacting real estate or GCC investments	A diversified sectoral client base, combined with ongoing compliance excellence, further underpins operational resilience.

Internal Controls and Their Effectiveness

Material business processes have been assessed for risk, financial controls have been established andappropriate and formally documented accordingly. The Boards Audit Committee regularly reviews internal audit findings, the adequacy of existing controls, and the overall risk management approach. These measures provide a reasonable level of confidence that the Companys internal financial controls are both well-designed and functioning as intended.

Cautionary Note

Certain statements in this section may constitute forward-looking statements under applicable securities laws, reflecting the Companys goals, projections, and expectations about future performance. Such statements rest on assumptions about future conditions that may not materialise as anticipated. Actual outcomes could differ significantly due to external factors outside Companys control, and the Company does not undertake any obligation to update or revise these statements in light of new developments.

Material business processes have been assessed for risk, and appropriate financial controls have been established and formally documented accordingly. The Boards Audit Committee regularly reviews internal audit findings, the adequacy of existing controls, and the overall risk management approach.