Trescon Ltd Management Discussions

GLOBAL ECONOMY

World economic outlook is uncertain as growth slows, inflationary pressures persist and trade policies cloud outlook. Global growth slowing to 3.1% in 2025 and 3.0% in 2026, with important differences across countries and regions. The global economy has shown some real resilience, with growth remaining steady and inflation moving downwards. However, some signs of weakness have emerged, driven by heightened policy uncertainty, increasing trade restrictions will contribute to higher costs both for production and consumption. This highlights a range of risks, starting with the concern that further trade fragmentation could harm global growth prospects. It remains essential to ensure a well-functioning, rules-based international trading system and to keep markets open.

An unexpected downturn, policy change or deviation from the projected disinflation path could trigger market corrections, significant capital outflows and exchange rate fluctuations, particularly in emerging markets. High public debt levels and elevated asset valuations further heighten these risks.

In an era marked by escalating global trade tensions and persistent geopolitical uncertainties, the Indian economy has demonstrated remarkable resilience and robust growth. Despite global economic headwinds, Indias growth remains stable at 6.5%, supported by strong domestic demand. Inflation is under control, though core inflation remains sticky, necessitating careful monetary management. Trade challenges persist due to weak global demand, but a narrowing trade deficit offers some relief. While foreign investor outflows pose risks, robust domestic investment provides resilience. The RBIs proactive policies have played a crucial role in stabilizing liquidity and inflation expectations. Overall, Indias economy is well-positioned for growth, but uncertainties in global markets, financial volatility and trade disruptions remain key risks. Sustained policy support and domestic resilience will be essential in maintaining economic momentum.

The RBI and the IMF have projected that Indias consumer price inflation will progressively align towards the inflation target in FY 2025-26. In December 2024, RBIs Monetary Policy Committee report revised its inflation projection from 4.5% to 4.8% in FY 2024-25. Assuming a normal monsoon and no further external or policy shocks, the RBI expects headline inflation to be 4.2% in FY 2025-26. IMF has projected an inflation rate of 4.4% in FY 2024-25 and 4.1% in FY 2025- 26 for India.

In brief, there are many upsides to domestic investment, output growth and disinflation in FY 2025-26. There are equally strong, prominently extraneous, downsides too.

In India, the real estate sector is the second-highest employment generator, after the agriculture sector. The real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021. The emergence of nuclear families, rapid urbanisation and rising household income are likely to remain the key drivers for growth in all spheres of real estate, including residential, commercial and retail. Rapid urbanisation in the country is pushing the growth of real estate.

During the year FY 2024-25, your Company launched residential and commercial project, "Triveni Pearl" at Kalyan, Thane.

• Housing Demand

• Sector Consolidation

• Affordable Housing

• Digital Real Estate Sales

• Monetary Easing

• Regulatory Hurdles

• Monetary Tightening and Funding Issues

• Shortage of Manpower and Technology

• Unanticipated delays in project approvals

• Availability of trained labour force

• Increased cost of manpower

• Rising cost of construction

Your Company continues to capitalize on the market opportunities by leveraging its key strengths. These include:

• Strong cash flows: Has built a business model that ensures continuous cash flows from their investment and development properties ensuring a steady cash flow even during the adverse business cycles.

• Significant leveraging opportunity: Follows conservative debt practice coupled with enough cash balance which provides a significant leveraging opportunity for further expansions.

• Outsourcing: Operates an outsourcing model of appointing globally renowned architects / contractors that allows scalability and emphasizes contemporary design and quality construction - a key factor of success.

• Transparency: Follows a strong culture of corporate governance and ensures transparency and high levels of business ethics.

• Highly qualified execution team: Employs experienced, capable and highly qualified design and project management teams who oversee and execute all aspects of project development.

Employees are at the heart of your Company and the biggest differentiators. Its their inexorable commitment that helps your Company to create spaces that enhance quality of life. Keeping the spirits high at workplace needs a sound mental and physical fitness and deep-rooted culture which promotes work life balance.

Your Company is always committed to the health and safety of its employees. Your Company provides a clean, hygienic and conducive work environment to all employees and doubled these efforts during the pandemic. While your Company has eased the covid restriction at work, your Company is still very cautious and follows social distancing norms, encourage virtual meetings and have place sanitizers at various locations. All employees and their family members are covered under the Companys group medical insurance policy to support hospitalization needs. Special medical leave and flexibility in working hours are provided on case-to-case basis.

Your Company continues to explore development opportunities in and around Mumbai and also explore hubs in the nearby regions on a case by case basis.

Your company has in place an adequate system of internal controls commensurate with its size & nature of operations, along with well-defined organisation structure & documented policy guidelines & procedures, predefined delegation of authority covering all corporate functions and all operating units. These internal controls are designed to provide reasonable assurance regarding the effectiveness and efficiency of operations, the adequacy of protecting your companys assets from unauthorized use or losses, the reliability of financial controls and compliance with applicable laws and regulations.

The Company has also focused on upgrading the IT infrastructure - both in terms of hardware and software. In addition to the existing ERP platform, the Company is presently reviewing the process documentation to ensure effectiveness of the controls in all the critical functional areas of the Company.

This report contains statements that may be forward looking including, but without limitation, statements relating to the implementation of strategic initiatives and other statements relating to Companys future business developments and economic performance. While these forward-looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macroeconomic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments and other key factors that could affect our business and financial performance. The Company undertakes no obligation to publicly revise any forwardlooking statements to reflect future/likely events or circumstances.