Surya India Ltd Management Discussions

Annexure- III

A. Global Economy

The global economy is projected to grow by 2.8% in 2025, reflecting a moderation from earlier expectations due to escalating trade tensions, and slowing momentum in several economies across various regions. While private consumption remains resilient in certain markets, overall growth prospects have softened, weighed down by rising tariffs, tighter financial conditions, and persistent services inflation in advanced economies. Inflation continues to moderate globally, aided by softer commodity prices and earlier monetary tightening. The external environment remains fragile, with downside risks arising from geopolitical tensions, financial market volatility, and policy uncertainty. Elevated trade policy frictions, particularly between major economies, are exerting additional pressure on global trade flows and investment sentiment.

India continues to stand out as one of the fastest-growing major economies, with GDP growth forecast at 6.5% in 2025, supported by strong domestic demand, infrastructure-led public investment, and the demographic advantages of a young, digitally connected population. Investor confidence remains strong, underpinned by macroeconomic stability and sustained structural reforms. However, structural challenges such as rural employment generation, income disparity, and enhancing global trade competitiveness will require continued policy attention to ensure inclusive and broad-based growth.

B. Indian Economy

Indias economy is projected to maintain its position as the worlds fastest-growing major economy, with the IMF forecasting a growth rate between 6.2% and 6.5%. The Indian central bank, the Reserve Bank of India (RBI), is also expected to retain its growth forecast of 6.5% for the year 2025. This growth is expected to be driven by various factors, including robust domestic demand, increased investment, and government initiatives aimed at boosting economic activity.

C. Industry Structure and Developments [Real Estate Market (Leasing) Outlook]:

Your Company has rental income from leasing of its properties (which are mainly situated in Malls/ Multiplexes) to renowned food and restaurant outlets chains in India. The Indian Real Estate sector witnessed a strong growth in the past couple of years and is poised for an assuring growth in the future. The outlook is driven by a confluence of multiple factors including increasing urbanization, shifting demographics, aspirational lifestyle and supportive economic growth in the country. Our company, a prominent player in this landscape, operates within the niche of leasing properties, primarily located in bustling malls and multiplexes, to renowned food and outlet chains across the nation. This strategic focus has allowed us to capitalize on the rapid growth of the retail and

entertainment sectors, resulting in a robust stream of rental income. The Indian retail market has demonstrated remarkable resilience and adaptability, navigating through economic fluctuations and even the challenges posed by the global pandemic. As more international and domestic brands continue to expand their footprints, our business has flourished due to the strong demand for prime commercial spaces. Moreover, our expertise in selecting strategic locations and curating a diversified tenant mix has positioned us as a preferred partner for renowned food and outlet chains seeking to establish or expand their presence in India. We remain committed to staying at the forefront of industry trends, embracing technological advancements, and continually enhancing our properties to ensure a mutually beneficial relationship with our esteemed tenants, while maximizing returns for our stakeholders. As we move forward, we anticipate the continuation of favorable market conditions, underpinned by increasing consumer spending, urbanization, and the ever-evolving preferences of the Indian populace.

D. Opportunities and Threats:

Your Company earn primary income from leasing of its properties to renowned food and restaurant outlets chains in India mainly situated in Malls/ Multiplexes and invest/ provide loans to corporates for business expansion purposes in order to generate additional interest income as secondary income. Real Estate is one of the key driving factors behind the growth of the Indian Economy and plays a pivotal role in the nations GDP growth. The Indian food and beverage (F&B) industry is witnessing strong momentum, driven by rising disposable incomes, urbanization, and changing lifestyle preferences that favor dining out and convenience-based consumption. Malls, increasingly positioned as lifestyle destinations, are actively curating tenant mixes with a greater emphasis on food courts, casual dining, and QSR (Quick Service Restaurant) brands to attract consistent footfall. This trend creates a significant opportunity for leasing firms to tap into the growing appetite of national and international food chains looking to expand across metro and tier 2/3 cities. Despite these opportunities, there are notable threats. The competitive nature of the F&B industry means high tenant turnover, especially among smaller or newer food chains that struggle with thin margins, rising input costs, and intense competition. Economic slowdowns or inflationary trends can impact consumer spending on dining out, leading to reduced sales for tenants and potential lease renegotiations or defaults. Moreover, the high dependency on footfall in malls means any disruption-such as mall refurbishments, regulatory curfews, or unforeseen events like health outbreaks-can significantly impact sales for food chains, and in turn, leasing revenues.

E. Segment-Wise Performance

The company primarily operates in 2 segments. The bifurcation of segment wise operating revenue is as per details below: -

The Board of Directors of the Company, which has been identified as being the Chief Operational Decision Maker (CODM), evaluates the companys performance. It is also responsible to allocate the resources based on analysis of various performance indicators. The CODM reviews segmental performance based on revenue only as such other details are not presented.

F. Outlook:

Your Company is exposed to a number of risks such as economic, regulatory, taxation and environmental risks as well as sectoral investment outlook. Some risks that may arise in the normal course of business that could impact its ability to address future developments comprise credit risk, liquidity risk, counterparty risk, regulatory risk, commodity inflation risk and market risk. Your Companys strategy of focusing on key products and geographical segments is exposed to economic and market conditions. Your Company implemented robust risk management policies that set out the tolerance for risk and your Companys general risk management philosophy. Your Company established a framework and process to monitor exposures to implement appropriate measures in a timely and effective manner.

Outlook for the Company is linked to real estate and Capital Market. The Board of Directors of the Company believes that Companys Investments in the equity shares of various companies would reasonably perform in the ensuing years and also rental income from real estate properties will increase.

G. Risk & Concerns:

The Company is subjected to both external risks and internal risks. External risks due to interest rate fluctuation, slowdown in economic growth rate, political instability, market volatility, etc. Internal risk is associated with your Companys business which includes deployment of funds in specific projects, diversification into other business operations, retention of talented personnel, managing effective growth rate, changes in compliance norms and regulations, contingent liabilities and other legal proceedings. Your Company recognizes the importance of risk management and has invested in people, process and technologies to effectively mitigate the above risks. The level and degree of each risk varies depending upon the nature of activity undertaken by them.

The Real Estate Companies recognizes several pertinent risks and concerns associated with its core business of leasing properties, primarily within malls and multiplexes, to well-established food and

outlet chains across India. Foremost among these considerations is the potential impact of economic fluctuations and market dynamics on the overall demand for commercial real estate. The Company remains vigilant to shifts in consumer preferences and spending habits, which could influence the performance of its tenants and, consequently, affect rental income streams. Additionally, the real estate sector is subject to regulatory changes, both at the national and local levels, which may introduce new compliance obligations or alter the operational environment. Geopolitical uncertainties and changes in trade policies could further impact the success and expansion plans of the tenants, consequently influencing their lease agreements and rental obligations. The Company also acknowledges the competitive landscape within the retail and food industry, as emerging technologies and innovative business models might affect tenant viability and the Companys ability to attract and retain high-profile brands. Moreover, the ongoing maintenance and upgradation of properties to meet evolving consumer expectations and industry standards require prudent financial management and capital allocation. While the Company has taken measures to diversify its tenant portfolio and maintain robust lease agreements, these risks and concerns underscore the need for diligent strategic planning and adaptability to safeguard its revenue streams and sustain long-term growth.

Companys performance is also linked, upto some extent, to the Indian Capital Market as the company has investments in both quoted as well as unquoted shares. Any decline in the price of quoted investments may affect its financial position and results of operations. The value of the companys investments may be affected by factors affecting capital markets such as price and volume volatility, interest rates, currency exchange rates, foreign investment, government policy changes, political and economic developments, crude oil prices and economic performance abroad, etc. The Companys success largely depends upon the quality and competence of its management team and key personnel. Attracting and retaining talented professionals is therefore a key element of the companys strategy. The resignation or loss of key management personnel may have an adverse impact on the Companys business, its future financial performance and the result of its operations.

H. Internal control systems and their adequacy

The Company has an adequate internal controls system commensurate with its size and the nature of its business. All the transactions entered into by the Company are duly authorized and recorded correctly. All operating parameters are monitored and controlled. The top management and the Audit Committee of the Board of Directors review the adequacy and effectiveness of internal control systems from time to time.

I. Discussion on financial performance with respect to operational performance

The brief on Financial Performance with respect to operational performance is already provided in the Boards Report of the Company.

J. Material developments in Human Resources / Industrial Relations front, including number of people employed.

The Company believes that its people are a key differentiator, especially in knowledge driven, competitive and global business environment. Adapting work culture to suit the dynamic balancing of people requirements and employee needs is an ongoing process. Our people are the companys greatest assets. Your company focuses on increasing the overall productivity per employee in the challenging market conditions. Men are the only active agent and acts as a catalyst in effective utilization of all other Ms (Material, Machine and Money). The Board of Directors of your company would like to place on record their sincere appreciation for the efforts and contribution made by all the employees of the Company in the challenging environment. Your Directors take this opportunity to thank all employees for rendering impeccable services to every constituent of Company, customers and shareholders. The Company has a well-defined appraisal system to assess and reward the employees appropriately and also to gauge the potentials of the individuals.

For the financial year ended 31st March, 2025, and as at 31st March 2025 the Company had three (3) people (excluding executive directors of the Company) in its employment including Key Managerial Personnel.

K. Key Financial Ratio Analysis

A comparative table showing synopsis of FY 2024-25 versus FY 2023-24 of Key Financial Ratio is provided below:

Note: Debtor Turnover Ratio, Inventory Turnover Ratio, Operating Profit Margin is not applicable on the Company.

L. Cautionary Statement

Investors are cautioned that this discussion contains statements that involve risks and uncertainties. Words like anticipate, believe, estimate, intend, will, expect and other similar expressions are intended to identify "Forward Looking Statements". The company assumes no responsibility to amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events. Actual results could differ materially from those expressed or implied. Important factors that could make the difference to the Companys operations include cyclical demand and pricing in the Companys principal markets, changes in Government Regulations, tax regimes, economic developments within India and other incidental factors.

M. Appreciation

Your Directors would like to express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers and other government agencies during the year under review.

Disclosure of Accounting Treatment:

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the Ind AS) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules 2015, as amended from time to time.

The Company has not followed a different treatment from that prescribed in the Indian Accounting Standards (Ind AS).

For Surya India Limited