Quantum Build-Tech Ltd Management Discussions

Industry Structure and Developments:

Construction Industry plays a major role in the economic growth of a nation and occupies a pivotal position in the nations development plans. It includes all types of construction activities such as residential, commercial, and infrastructure construction. The construction industry is highly interlinked with other industries; hence it plays a crucial role in stimulating economic activity. However, the construction industry is highly susceptible to economic fluctuations and is majoriy impacted during economic downturns and recessions. In addition, during economic downturns and recession, there is significant economic decline, which is often characterized by reduced economic activity, falling GDP, and high unemployment rates.

Indias construction industry employs a work force of nearly 32 million and its market size is worth about Rs. 2,48,000 crores. It is the second largest contributor to the GDP after tire agricultural sector. Indian Construction Industry is segmented by Sector (Commercial Construction, Residential Construction, Industrial Construction, Infrastructure (Transportation) Construction, and Energy and Utility Construction).

Despite growing global vulnerabilities, better demand conditions, settled GST implementation, expansion from growing investments in infrastructure, continuing positive effects of reform policies and improved credit off take especially in the service sector the of take off real estate industry has been steep in Hyderabad and has galloped ahead of other major cities in India.

Indian and Hyderabad Real Estate Sector

Indias real estate sector has traditionally been a significant contributor to the countrys G DP, accounting for 6%-8? o of the total GDP during 2014- 2017. Going forward, it is expected to double to 13% by 2025-26, making it one of the major drivers of the countrys economic growth.

In fiscal year 2024-25, Indias construction and real estate sector saw several major regulatory changes alongwith some new and exciting policies. These updates aim to promote sustainability, improve efficiency and boost the overall growth. While some of them might create challenges, but these updates surely open up many new opportunities.

Union Budget 2025-26: Key Highlights for Construction and Real Estate

It introduced some major measures to boost the sector

Infrastmcture Investment: ? 11.21 trillion is allocated for the large-scale projects like smart cities, highways & urban transit. This investment will drive demand for construction materials and services, creating new opportunities for companies.

Reduced GST and Tax Incentives: GST rates on cement have been reduced from 28% to 18%. And on steel from 18% to 12%. Developers can also claim higher input tax credits. Hence it reduces overall construction costs and supports the goal of affordable housing.

SWAMIH Fund Expansion: The govemmenthas infused around ? 15,000 crores into the SWAMIH fund to complete the stalled housing projects. This offers relief to homebuyers and reviving market confidence.

Enhanced Credit Access for Contractors: The Credit Guarantee Scheme has been expanded and it offers up to? 10 crore to mid-sized contractors and ? 5 crore to MSMEswith reduced interest rates and collateral requirements.

Urban Challenge Fund: A ? 1 lakh crore fund supports the urban development and city growth. Construction companies can now benefit from participating in the infrastructure projects under this initiative.

Streamlined Approvals: A single-window digital system is being implemented for land acquisition, environmental clearances and municipal permits. Faster approvals will reduce the project delays and also cut down the total operational costs.

Skilling Initiatives: Over 5 lakh construction workers will receive training in A1-based project management, green construction and automation, all thanks to the fund of ^ 5,000 crores allocated for the skill development. This upskilling will improve the workforce productivity as well as overall project quality.

These regulatory updates and budgetary measures show the governments commitment towards a sustainable, efficient and growth-oriented construction and real estate sector. Industry stakeholders can now capitalize on all the new opportunities and contribute to the nations development goals by staying informed and adapting to all these changes.

1 Iyderabads real estate sector has shown remarkable stability, even during nationwide slowdowns. According to recent industry reports, property prices in the city rose by an average of 7-10% year-on-year in 2024, and that momentum continues into 2025-26.

Hyderabads commercial real estate sector is undergoing rapid expansion, with total Grade A office stock reaching 151.1 million square feet and 82.9 million square feet currently under construction," saidjagannath Rao Bandari, General Secretary of CREDAI I Iyderabad.

Opportunities:

The Real Estate Regulatory Act (RERA) was aimed at ensuring accountability and infusing transparency and uniformity in practices prevalent in the real estate sector and has been very widely adopted by Governments and Corporates alike, which is bringing more credibility to the sector.

On the other hand, incentives for affordable housing coupled with lower GST rate has increased demand for underconstruction segment, a trend which is expected in continue in 2025-26 as well. In terms of city, Hyderabad (West 1 Iyderabad — Madhapur, Gachibowli, areas adjoining ORR) along with other cities like Bangalore, Chennai, Mumbai are expected to dnve demand in present and next year as more Work From I Iome options will leave spendable/ investible income in hands of working class.

Outlook:

The first half of 2025 was more disrupted and less predictable than anyone anticipated despite our expectations of heightened uncertainty at the start of the year. Changes to U.S. trade and tariff policy hive dominated the global economic and geopolitical narrative, while regulatory, fiscal and tax policies have also shifted rapidly. Additionally, there remain ongoing and potential conflicts around the world. Despite this, real estate markets have proved resilient, albeit with a diverse range of impacts and effects across geographies, markets and asset types.

The outlook for the real estate sector is encouraging. With increasing urbanisation, the housing industry is poised for a significant transformation," the survey document said The Economic Survey has projected a positive outlook for the real estate sector with housing demand set to rise on rapid urbanisation, but described legacy stalled projects as a "challenge".

1 Iyderabads real estate market is poised for continued growth, driven by its strong IT sector, infrastructure development, and proactive government policies. While some areas are seeing a dip in sales, the overall market outlook remains positive, with a focus on premium and affordable housing segments. Areas like Tellapur and Somajiguda are attracting both residential and commercial projects, making them attractive investment hotspots.

The Company believes that demand conditions in the real estate sector are exhibiting clear signs of improvement and the Management is positive that the Company will be able to strike some small or medium sized housing projects in near future and be able to take advantage of potential revival in economic growth and its resultant positive effects on the real estate sector over the medium term. The Company shall continue to strive to acquire new projects to increase sales and profitability. However, the Company has not carried on any business activity during the Financial year under review.

Risks and Concerns:

The Company works in an environment which is affected by various factors, some of which are controllable while some are outside the control of the Company. Owing to the nature of the industry in, it is exposed to a variety of risk factors. These risks include waning support for multilateral approaches; the escalation of trade policy disputes; financial instabilities linked to elevated levels of debt, and rising climate risk, as the world experiences and increasing number of extreme weather events. The Company has developed a robust risk management framework consisting of identification, assessment, mitigation, monitoring of risks, which, in turn reduces the volatility due to unfavorable internal and external events and facilitates risk. The Management identifies the following risks:

Economic risk: Economic downturns, fluctuations in interest rates, and industry-specific risks can affect property values and rental income. To mitigate these risks, investors should conduct comprehensive market research, stay informed about economic trends, and diversify their investments across various sectors.

Execution Risk: The real estate investments involve various regulations and legal complexities. To navigate these challenges effectively, investors should seek legal advice, conduct thorough due diligence, and stay updated on local regulations. The Real Estate and construction projects are subject to various execution risks like regulatory hurdles, delay in receipt of approvals, availability of labour and raw material, etc Any such delay may result in cost overruns and impact the Companys operations unfavorably.

Liquidity Risk: The primodal approach of Bankers and financial institutions towards mid sized Real estate companies has not undergone any suitable change and has slowed disbursals to the real estate sector, banks becoming more cautious, developers are finding it a challenge to raise funds for the projects and are being forced to other financial routes, which in turn is increasing their cost of capital, inadequate funding resources may have an impact on the liquidity position of the Company. Also there is a large mismatch between the supply and actual demand in terms of unit and ticket size.

Rising Input Cost: The real estate industry is a capital and work focused sector, accordingly, an ascent in the cost of work makes issues in the development of tire project in focus. Besides, uncalled for routine with regards to specific segments of merchants and concrete industry by raising the cost, makes issues in tire completion of the project a highly unprofitable

The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and all transactions are authorized, recorded and reported correctly. The systems are updated and monitored on a continuous basis. The Companys internal control systems are further supplemented by Internal Audit conducted by competent finance executives and periodic review by Management. The

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INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

Company has clearly laid down policies, guidelines and procedures which form part of its internal control system.

The Audit Committee of the Company consists of Independent Directors who possess expert knowledge and vast experience. They periodically review accounting records and various Accounts/statements prepared by die accounting department. They advise die senior management of die Company for any precautionary steps to be taken, as required from time to time. During die year under review, four meetings of Audit Committee were held to review, inter alia, the internal audit/controls alongwith management comments and initiated follow-up actions thereon.

SHARE CAPITAL

The Paid-up Shire Capital of your Company as on 31" March 2025, is Rs. 25,06,56,300/- divided into 2,50,65,630 Equity⁷ Shares of Rs. 10/- each with Voting Rights.

SECURED LOANS

The Company has no secured loans at die end of the Financial year 2024-25.

FIXED ASSETS

The Fixed Asset (Net Block) as on 31" March 2025 amounts to Rs. 1,83,000/-.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Manpower is biggest strength in any Sector. The Company has maintained cordial relations with its employees across all levels of the organization during the period under review. Human resource continues to be core strength and always endeavors to work towards hiving satisfied workforce. The key HR objective is to ensure that our employees are aware of the role they are expected to play in the organization to be able to drive organizational momentum. Going ahead, the Company will continue to invest in its people to strengthen its delivery model.

As on 31" March, 2025, the manpower strength of the Companywas 5 members which comprises professionals from diverse backgrounds like engineering, finance, taxation, secretarial, legal, management, business, supervisors, skilled and semi-skilled workers.

Disclaimer

Ilie above Management Discussion and Analysis contains certain forward looking statements within the meaning of applicable security laws and regulations. These pertain to die Companys future business prospects and business profitibility, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to manage growth, competition, economic growth in India, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, government policies and actions widi respect to investments, fiscal deficits, regulation, etc. The shareholders and readers are cautioned drat in the case of data and information external to the Company, no representation is made on its accuracy or comprehensiveness diougb die same are based on sources thought to be reliable. The Company does notundertake to make any announcement in case any of diese forward-looking statements become materially incorrect in future or update any forward looking statements made from time to time on behalf of die Company.