Shaival Reality Ltd Management Discussions

A. BUSINESS OVERVIEW:

Shaival Reality Limited (hereinafter referred as ‘SRL) is a reputed Gujarat based company having its presence in the construction industry and transportation sector since many decades. SRL was incorporated as Shaival Reality Private Limited Company under the provisions of the Companies Act, 1956 on April 10, 1996 and is converted into a Public Limited Company w.e.f. February 04, 2015, listed on the SME Emerge Platform of the National Stock Exchange.

BUSINESS HIGHLIGHTS:

Turnover/Total Revenue (Amount in Rs):

During the year 2025-26, the Company has generated total revenue of Rs. 6,80,24,241.83 on standalone basis and Rs. 6,80,24,241.83 on consolidated basis as compared to Rs. 1,20,05,499.80 on standalone basis and Rs. 1,49,01,323.04 on consolidated basis of the previous year 2024-25.

Employee Benefit Expenses (Amount in Rs):

As per Standalone basis, Employees Benefit Expenses is Rs. 10,39,940.00 during the year as against Rs. 11,02,255.00 during the previous year and as per consolidated accounts, Employees Benefit Expenses is Rs. 10,40,007.50 as against Rs. 1,103,065.00 during the year as against during the previous year.

Finance Cost (Amount in Rs):

As per Standalone and consolidated basis, the finance cost of the Company is Nil in both current and previous year.

Depreciation (Amount in Rs):

As per Standalone basis, depreciation and amortization expenses is Rs. 75,876.00 as against Rs. 87,755.00 during the previous year. According to consolidated audit report, depreciation and amortization expense is Rs. 80,214.00 as against Rs. 1,23,333.94 during the previous year.

Provision for Tax (Amount in Rs):

The Company has not made any provision towards current tax for the financial year 2025-26. However, it has provided for the deferred tax of Rs.7,10,761.00 and Short Provision of Income Tax (Earlier Years) of Rs. Nil for the year 2025-26 and Rs. 840,812.00 in the previous year on standalone as well as consolidated basis.

Profit/Loss after Tax (Amount in Rs):

As per Standalone and Consolidated basis, the company has earned a profit of Rs.5,80,73,479.95 during the year as against Profit of Rs. 1,973,604.67 during the previous year.

Earnings per Share:

Basic and diluted earnings per share as per standalone and consolidated basis for the current year worked out to Rs. 5.02 as against Rs. 0.17 during the previous year.

FINANCIAL CONDITION (Amount in Rs): Non-Current Liabilities:

The Companys Non-Current Liabilities are nil as at 31st March 2026 as against Rs. 2,50,000 Long Term liabilities as at 31st March 2025 on Standalone basis and on consolidated basis, the Companys Non-Current Liabilities are nil as at 31st March, 2026 and in previous year, it includes long term borrowings Rs. 2,072,115.00 and other long-term liabilities of Rs. 2,50,000.00 as at 31st March 2025.

Current Liabilities:

Companys Current Liabilities includes Other Current Liabilities of Rs. 1,11,20,863.48 and trade payable Rs. Nil aggregating to Rs. 1,11,20,863.48 as at 31st March 2026 as against Rs. 18,35,500.70 during the previous year (On Standalone basis).

Companys Current Liabilities includes Trade Payables of Rs. Nil and Other Current Liabilities of Rs. 1,11,20,863.48 aggregating to Rs. 1,11,20,863.48 as at 31st March 2026 as against Rs. 27,84,724.67 during the previous year (On Consolidated basis).

Non-current Assets:

Non-Current assets at the end of the year are Rs. 4,43,92,986.46 as against Rs. 134,229,526.34 during the previous year on the standalone basis whereas non-current assets amounted to Rs. 4,43,92,986.46 in current year as against Rs. 136,664,772.76 in the previous year on a consolidated basis.

Current Assets:

During the year, the Company has current assets of Rs.18,44,45,077.47 in current year as against Rs. 27,499,694.86 during the previous year on the standalone basis whereas current assets amounted to Rs.18,44,45,077.47 in current year as against Rs. 28,085,777.20 during the previous year on the consolidated basis.

B. INDUSTRY STRUCTURES, DEVELOPMENT, OPPURTUNITIES & OUTLOOK:

INDUSTRY STRUCTURE:

The Indian real estate sector is one of the key contributors to the countrys economic development and has significant linkages with various allied industries, including cement, steel, construction materials, financial services and infrastructure. The sector broadly comprises residential, commercial, retail, hospitality, industrial and logistics real estate. Rapid 42rganized42na, increasing household incomes, demographic changes and infrastructure development continue to shape the overall structure and growth trajectory of the industry.

The industry has undergone significant transformation in recent years, moving towards greater transparency, regulatory compliance and 42organized 42nalization. The implementation of the Real Estate (Regulation and Development) Act, 2016 ("RERA"), the Goods and Services Tax ("GST"), increased adoption of digital technologies and participation of organized developers have contributed to improving governance and customer confidence in the sector.

INDUSTRY DEVELOPMENT:

The Indian real estate industry continues to demonstrate resilience and sustained development, supported by robust demand for residential and commercial properties. Urban expansion, infrastructure development, improved connectivity and growing preference for organized and quality developments have positively influenced the sector.

The residential segment has witnessed increasing demand for well-planned housing projects offering modern amenities, better connectivity and sustainable living environments. At the same time, commercial real estate continues to benefit from the expansion of the services sector, growth of Global Capability Centres ("GCCs"), flexible workspaces and increasing demand for Grade-A office infrastructure.

Industrial and logistics real estate has also emerged as a growing segment, supported by the expansion of e-commerce, manufacturing activities, organised retail and supply-chain modernisation. Government initiatives focusing on infrastructure development, affordable housing, smart cities and urban redevelopment are expected to further strengthen the industrys development.

Technology is increasingly playing an important role across the real estate value chain. Digital marketing, virtual property tours, data-driven decision-making, construction technologies and integrated project management systems are enabling developers to improve operational efficiency and enhance customer engagement.

OPPORTUNITIES: The long-term fundamentals of the Indian real estate sector remain favourable and provide significant growth opportunities. Indias growing urban population and increasing housing requirements are expected to create sustained demand for residential development. Expansion of metropolitan cities and rapid development of Tier-II and Tier-III cities provide opportunities for developers to explore emerging markets and new customer segments.

Large-scale investments in roads, metro rail networks, airports, industrial corridors and urban infrastructure are expected to unlock new real estate development zones and improve connectivity to existing markets. Transit-oriented development and redevelopment of urban areas may also provide substantial opportunities for organised real estate companies.

The increasing preference of customers for reputed and compliant developers is expected to accelerate consolidation within the industry. Developers with strong execution capabilities, sound financial management, transparent business practices and established market presence are likely to benefit from this transition.

Growing awareness regarding environmental sustainability also presents opportunities for green buildings, energy-efficient developments and environmentally responsible construction practices. Demand for integrated townships, premium housing, plotted developments, warehousing and specialised commercial spaces is expected to create diversified growth opportunities for industry participants.

OUTLOOK:

The outlook for the Indian real estate sector remains positive, supported by favourable demographics, continued urbanisation, infrastructure investment and evolving consumer aspirations. Demand is expected to remain increasingly focused on quality construction, timely project delivery, modern amenities, strategic locations and regulatory-compliant developments.

The industry is expected to witness greater consolidation and increased participation by organised developers. Companies maintaining prudent financial discipline, efficient capital allocation and strong project execution capabilities are expected to be better positioned to capitalise on emerging opportunities.

While factors such as fluctuations in construction costs, availability of skilled manpower, interest rate movements, regulatory developments and broader economic conditions may influence short-term performance, the medium- to long-term growth prospects of the Indian real estate industry remain encouraging.

The Company remains focused on identifying sustainable growth opportunities, strengthening operational efficiencies and adopting customer-centric and responsible development practices. With a disciplined approach towards project execution, financial management and regulatory compliance, the Company aims to effectively navigate evolving industry dynamics and create long-term value for its stakeholders.

Inclusive Development

The Pradhan Mantri Awas Yojana (PMAY) progressed significantly toward its goal of 3 crore rural houses, with a commitment to build 2 crore more houses over the next five years.

The total allocation to PMAY stood at Rs. 80,671 crore, with Rs. 54,500 crore specifically earmarked for the rural component.

The PM-SVANidhi scheme continued supporting 78 lakh street vendors by facilitating access to credit and formal housing support.

These efforts align with the governments ‘Viksit Bharat by 2047 vision for comprehensive and inclusive urban-rural development.

Urban Housing and Middle-Class Support

The budget announced a new housing scheme for urban middle-class families living in rented homes, chawls, slums, or unauthorized colonies, helping them buy or build their own homes with affordable financing support.

The rooftop solarization scheme was launched for 1 crore urban households, offering up to 300 units of free electricity per month, promoting green energy adoption and reduced energy bills.

C. SEGMENTWISE FINANCIAL & OPERATIONAL PERFORMANCE:

SRL operates mainly in two segments of revenue – Construction & Renting. The details on financial performance of the same forms the part of the Financial Statements and is been time to time disclosed to the Stock Exchange.

D. SWOT ANALYSIS:

The Company is nowhere ignorant about the risks and threats encounter in these highly competitive and volatile sectors and even cant deny the speculation rose due to the frequent changes in the legal, economic and fiscal policies by the Government among the consumers, investors and stakeholders.

a) RISK AND CHALLENGES ARE: In Construction Segment:

• Regulatory Hurdles- The real estate industry is subject to extensive regulation, and any negative adjustments in governmental policies or the regulatory framework can negatively influence the sectors performance. Significant delays in procedures related to acquiring land, determining land use, initiating projects, and obtaining construction approvals are common. Changes in policy applied retrospectively, along with regulatory obstacles, could affect profitability and diminish the appeal of both the sector and the companies active within it.

• Monetary Tightening and Funding Issues- The budding economic revival, coupled with potential increases in interest rates, may pose challenges for the real estate sector shortly.

• Higher housing loan costs and an escalation in financing costs for developers, who are already contending with margin pressures due to the rising prices of commodities, could have implications.

• Shortage of Manpower & Technology- As the countrys second-largest employment provider, the real estate sector relies significantly on manual labor. The pandemic severely impacted this sector due to labor shortages, disrupting project completion schedules. Consequently, theres a pressing need for the adoption of alternative construction methods that are less dependent on manual labor and more on technology.

• Climate Change-Due to physical climate change the infrastructure gets damaged at construction sites, disruptions to logistics routes, and decreased workforce efficiency due to heat waves.

• On the other hand, transitional risks emerge from the transition towards a low-carbon economy, manifesting across four key categories: reputational, market, technology, and policy.

In Rent Segment:

Vacation of properties by the current tenants with intent to have owned estate.

Economic Downturn due to changes in fiscal policies

Massive Competition mainly regarding the supply of space/properties.

Inaccurate Scrutiny of the roots of the tenants, etc.

B) STRENGTH:

SRL is very much optimistic about its growth, expansion and strong hold in years to come. The basic strength which drives the organizational potential are:

1. Experienced board members & active team

2. Collaborative relationship with the stakeholders & investors

3. Curiosity, Innovation and inclination towards technological advancement

4. Calculative Risk taking approach.

5. Customer centricity

E. HUMAN RESOURCES MANGEMENT:

Management is successfully indulge in building experienced team and nurtures them to be leaders. The HR Department is specifically monitored by our Senior Management with an aim to build trust, integrity, teamwork, innovation, performance and partnership. Various Departments are headed by Professional Qualified Personal, helping our business to remain competitive, achieve greater success and newer milestone.

F. RISKS AND CONCERNS:

Your company is mainly focusing on manpower and the intelligence. Apart from the risk on account of governmental policies and regulatory changes, business of the company are exposed to certain operating business risks, which is mitigated by regular monitoring and corrective actions. The company has taken necessary measures to safe guard its assets and interest etc.

G. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

As per the provision of Section 138 of the Companies Act, 2013, the Company has devised a proper system to check the internal controls and functioning of the activities and recommend ways of improvement. Internal Audit is carried out on timely and the report is placed in the Audit Committee Meeting and Board meeting for consideration and directions. The internal financial controls with reference to financial statements as designed and implemented by the Company. During the year under review, no material or serious observation is received from the Internal auditor of the Company for inefficiency and inadequacy of such controls.

FORWARD-LOOKING STATEMENT:

The report contains forward-looking statements, identified by words like ‘plans, ‘expects, ‘will, ‘anticipates, ‘believes, ‘intends, ‘projects, ‘estimates and so on. All statements that address expectations or projections about the future, but not limited to the Companys strategy for growth, market position, expenditures and financial results, are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realized. The Companys actual results, performance or achievements could thus differ from those projected in any forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events. The Company disclaims any obligation to update these forward-looking statements, except as may be required by law.