Nirlon Ltd Management Discussions

1. Overview:

A total of approx. 47.63 lakh sq.ft. of construction has been completed in NKP comprising Phases 1-5.

During the Year under review, the Company continued to successfully license and manage all five phases of Nirlon

Knowledge Park (NKP), which corresponds to approx. 30.80 lakh sq. ft. of licensable area.

License Fees from all fivephases are recognized in the Profit & Loss Account for the entire year

During the Year under review, on the strength of consistently strong demand for well located and well managed Grade A Commercial Real Estate in established Indian metros, the Company has been successful in ensuring that during FY 2024-25, chargeable area in Phases 1 - 5 of NKP achieved 99.5% occupancy, and was licensed to well regarded, predominantly institutional occupants. Accordingly, license fees for all five phases are being regularly received by the Company.

A large occupant in NKP has surrendered approximately 4,50,000 sq. ft. and has moved out of NKP in F.Y. 2024-2025 and F.Y. 2025-2026 in a phased manner. This 4,50,000 sq. ft. has been relicensed to a combination of existing and new licensees at commercially competitive rates.

Escalations of license fees (approx. 15% every three years) took effect substantially as contracted during the Year under review. Renewals of expiring licenses with existing Licensees, as well as fresh licenses were also successfully executed during the year. These renewals / fresh licenses / escalations ensured the Companys financial performance continued to be strong. As on June 30, 2025 approx. 99.5% of NKP was successfully committed or licensed.

The Company has availed a loan of 1,230.00 Crore (a Green Loan) including a sub - limit of 80.00 crore by way of an Overdraft limit from The Hongkong and Shanghai Banking Corporation Limited ("HSBC"). Outstanding loan amounts as on March 31, 2025 aggregated to 1,150.00 Crore (as per IGAAP).

The Company executed and registered a Mortgage Deed by creating a first and exclusive charge in favour of HSBC by mortgaging the Companys immovable property, i.e. land, buildings and structures standing on the Land, situate at Goregaon (East), Mumbai 400 063, as per the facility documents executed by and between the Company and HSBC. by This Loan facility is rated and re-affirmed Crisil Rating as AA+/Stable as on the date of this Report.

The Year under review saw stable occupancy, as well an increase in Gross Income and Profitability. The increase in Gross Income and Profitability was driven by License Fee escalations and renewals (for the most part at improved terms) during the F.Y. 2024-2025.

The Companys profit before tax during the Year under review increased from 301.53 Crore to 338.41 Crore when compared to the previous year (as per Ind AS).

The Company continued to generate strong and improved free cash flows during the Year under review after accounting for all expenses including payment of interest to its lender.

In the context of the available free cash flows, improved profitability and close to full occupancy levels, after suitable deliberation, the Board of Directors have recommended for shareholders consideration a final dividend of 11.00 per share (@110%) for the Year under review, in addition to the interim dividend of 15.00 per share (@150%) already paid during the Year under review. d. Priorities

Key priorities for the Company during the F.Y. 2025 26 are as follows:

i. To ensure the new licensees are able to occupy and commence their operations as contracted.

ii. To make every effort to renew other licenses due for renewal in the normal course at competitive rates at the earliest;

iii. To ensure the continued satisfaction of its licensees by maintaining and operating NKP to the highest possible standards, such that all 5 phases remain asfully occupied as possible;

iv. To ensure the ongoing scheduled servicing of its loans;

v. To continue to work on making its ESG initiatives as meaningful as possible;

vi. To continue to work on reducing its carbon footprint, increasing the share of its electrical power sourced from renewables and further improving the efficiencies in its water consumption;

vii. To continue to proactively identify and evaluate the emerging trends/paradigms in the commercial office space market and the IT/ Financial Services / Banking / GCC sectors, in so far as the same could have an impact on the Companys business, and to implement mitigation strategies for the same; and

2. Business Climate Summary: Opportunities, Risks and Concerns: Macro-Economic Environment i. Global:

Geopolitics and the global economic environment increasingly continue to have a bearing on real estate demand in India, and consequently Mumbai. The quantum of investments into India, and specifically Indian real estate are, inter alia, driven by economic conditions and, on a more micro level, by changing business trends for commercial real estate in the developed world. Since the last election in the United States, new paradigms (tariffs, protectionism and increasingly bilateral trade and diplomacy etc.) are evolving. Accordingly, the economic implications of this developing ‘new order are currently, uncertain and appear likely to remain so for some time to come. The apprehension of a tariff driven reemergence of inflation, coupled with a weakening jobs market and lower demand/consumption leading to global recessionary pressures remains real. This uncertainty continues to weigh on economic policy and investment decision making. Under these circumstances, while the US Federal Reserve continues to remain cautious, considering the overall macro stability of the Indian Economy, the RBI has taken a more growth oriented approach and has reduced benchmark rates during the course of the year.

The potential effects of tariffs in the short term and medium term will need to be evaluated and monitored carefully.

The year under review continued to see increasingly strong demand for commercial real estate in India from institutional investors as well as end users. For institutional investors, this has increasingly been driven by the desire and imperative to be part of a market that has shown strength and resilience amid global uncertainty, and offers the possibility for sustained growth over the medium to long term. Additionally, for investors from developed economies, the combination of Indias enormous domestic potential for growth, continuing efficiencies of cost as compared to their home markets and availability of the required talent pool continue to be significant attractions.

As mentioned during earlier years in this analysis, continued demand for commercial real estate in Mumbai is dependent on the City continuing to be an investment destination of choice for Indian as well as multinational corporates. Over the past approx. two decades, other metros in India have also established themselves as vibrant and attractive destinations for commercial real estate by offering a business / investment friendly climate, with lower living costs for employees, and competitive salary costs and real estate prices for employers.

In this context, successive and continuing State Government initiatives to simplify the regulatory and ease of doing business frame work in Maharashtra and Mumbai are welcome and much needed. The successful implementation of these initiatives and the improving transport and allied infrastructure, should help Mumbai in retaining its pre-eminent position as a preferred business / investment destination in India.

The traditional strengths of Mumbai, including its Financial Services Industry, business ethos and a large, cosmopolitan and educated work force remain very relevant, and should also continue to enhance the Citys desirability as a dynamic and competitive international investment destination.

At the Central Government level too, investors and entrepreneurs look forward to the continuance of stable, pro investment and business supportive policies, which incrementally build on existing legislation and / or introduce fresh initiatives targeted to accelerate investment, infrastructure, job creation and economic growth.

From a real estate perspective, the increasing emergence of, and investor response to Indian Real Estate Investment Trusts (REITs) are welcome, and should continue to lead to the broadening and deepening of the real estate capital markets in India.

With the help of a supportive regulatory framework for SM-REITs, fractional ownership of commercial real estate is on the rise, thereby increasing the attractiveness of the real estate sector as an alternate investment vehicle.

Demand for commercial real estate in suburban Mumbai continues to be driven by the Information Technology (IT), the multinational Banking and Financial Services Industries (BFSI) and, to some extent, corporate offices sectors. The demand from multinationals, especially in the GCC sector, has been increasing over the past years. With the cost arbitrage available Changes (i.e. change ofin India as compared to developed economies, this trend is likely to continue for the foreseeable future. However, it may be mentioned that the increasingly inward looking and ‘onshoring economic policies and trends in the

United States, can lead to a change in the present mutually beneficial relationship, and needs to be carefully analysed, and, to the extent possible, anticipated.

Though demand is strong, the, business model for these sectors continues to be based on relatively inexpensive commercial real estate, in suburbs beyond Borivali in the West, Mulund in the East, in satellite cities like Navi Mumbai, and in other cities in India like Pune, Hyderabad and Bangalore. These markets could keep commercial rates under pressure in the Companys micro market.

However, the demand for high quality, well planned ESG conscious and professionally managed commercial developments like NKP in your Companys micro market is estimated to remain steady. The micro market, and specifically NKP itself, is advantageously located on the Western Express

Highway and is in close proximity to the commuter rail network, the Mumbai Metro and the airport. The creation of the Metro Line in Mumbai with a Metro station approx. 300 metres South East of NKP is a tremendous additional connectivity advantage to NKP. In addition, emergence of the recently opened Coastal Road which connects the suburbs of Bandra directly to South Mumbai via the Bandra-Worli Sea Link has greatly enhanced intra-city connectivity. The entire coastal road, when complete, will significantly improve connectivity from/to the northern part of Mumbai, where NKP is located. These infrastructure developments further enhance Mumbais position as a preferred destination of Grade A Licensees such as International Banks and Financial Services Companies.

3. Material developments in Human Resources / Industrial Relations, including number of people employed by the Company

As per statutory requirements, during the F.Y.2024-25, there were 3 (three) employees and all were Key Managerial Personnel i.e. the Executive Director & Chief

Executive Officer, the Company Secretary and the Chief Financial Officer.

4. Details of Significant or more as compared to the immediately previous financial year) in the following key Financial Ratios: a. Current Ratio: Increased by 203.97% on account of increase in cash & cash equivalents. b. Net Capital Turnover ratio: Increased by 81.35% on account of increase in revenue and reduction in net average working capital.

5. Disclosure of Accounting Treatment & Internal Financial Controls:

In the preparation of the annual Financial Statements for the F.Y. ended March 31, 2025, the applicable Accounting Standards have been followed along with proper explanations relating to material departures, if any.

The Directors have laid down proper internal financial controls to be followed by the Company, and such financial controls are adequate and have been operating effectively.

Statements in the Annual Report including the Directors Report and its annexures describing the Companys objectives, projections, estimates, expectations, etc. may contain forward looking statements based on currently held beliefs and assumptions of the Management of the Company, which are expressed in good faith, and are, in their opinion, reasonable. Such statements involve uncertainties and other factors which may cause the actual results, financial condition, performance or achievements of the Company or industry results, to differ materially from the results, financial condition, performance or achievements expressed or implied by such statements. By their nature, forward-looking statements inherently involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Such statements are not guarantees of future performance and actual results may differ from those specified in such statements as a result of various such factors and assumptions. No assurance is being provided that the assumptions underlying such forward looking statements are free from errors.