Vas Infrastructure Ltd Management Discussions

VAS INFRASTRUCTURE LTD. (VIL) continues to uphold the principles of sound Corporate Governance. The Company believes that transparent, ethical, and accountable governance practices are essential to create long-term value for all stakeholders.

VIL is committed to adhering to the highest standards of governance, ensuring fairness, full disclosure, integrity, and compliance with all applicable laws and regulations.

INDIAN ECONOMY OUTLOOK

India remains one of the fastest-growing major economies in the world. Despite global challenges including geopolitical tensions, supply chain disruptions, and tightening financial conditions, the Indian economy is projected to grow at a robust 6.5% to 7% in FY 2024 25, as per RBI and IMF estimates.

This growth is expected to be driven by:

? Sustained domestic consumption ? Government infrastructure investments ? Revival in private sector capital expenditure ? Lower inflation compared to FY 2022 24

The governments continued emphasis on the "Make in India" initiative, Production Linked

Incentive (PLI) schemes, and focus on affordable housing and infrastructure are expected to further support economic activity.

SECTOR OUTLOOK REAL ESTATE

The Indian Real Estate sector has shown strong signs of recovery in FY 2023 24 and continues to gain momentum in FY 2024 25. Residential demand is witnessing steady growth, especially in Tier I and Tier II cities, supported by:

? Rapid urbanisation

? Stable interest rates on home loans ? Improved buyer sentiment ? Rising disposable incomes

COMMERCIAL REAL ESTATE is also seeing renewed interest due to return-to-office trends and demand from IT, co-working, and manufacturing sectors. The implementation of RERA, digitization of land records, and transparent legal frameworks have enhanced investor confidence.

Despite higher input costs and regulatory challenges, the sector is projected to grow at 8 9% CAGR in the medium term. Government support through infrastructure development, PMAY housing schemes, and tax reliefs continues to fuel momentum.

INTERNAL CONTROL SYSTEMS

The Company has in place adequate internal control systems commensurate with its size and nature of operations. These systems are regularly tested and reviewed through internal audits. The Audit Committee and Management review key findings and ensure timely implementation of corrective measures.

The Statutory Auditors have confirmed the adequacy and effectiveness of the internal financial control systems.

BUSINESS PERFORMANCE & CIRP STATUS

During FY 2024 25, the Company continued to remain under the Corporate Insolvency Resolution Process (CIRP) pursuant to the Insolvency and Bankruptcy Code, 2016. All operations have been suspended during the resolution process.

Any future business activity, project implementation, or investments will depend on the successful completion of CIRP and approval of the resolution plan by the Honble NCLT.

THREATS AND RISK MANAGEMENT

Despite the economic recovery, the Company faces external and internal risks, including:

? Inflationary pressures affecting construction costs

? Land acquisition delays

? Regulatory compliance complexities

? Volatility in interest rates and funding availability ? Contractor shortages and skilled labour gaps

The Company has a structured Risk Management Framework to identify, evaluate, and mitigate potential risks. However, until CIRP concludes, implementation remains on hold.

OPPORTUNITIES

Post-CIRP, the Company expects to explore new business avenues in real estate and infrastructure development, in alignment with emerging trends like:

? Green and sustainable buildings ? Affordable housing projects ? Redevelopment of urban spaces ? Smart city infrastructure

Favorable demographics, government push on housing and infrastructure, and a growing middle class position the Company to benefit from long-term sectoral trends.

INDUSTRY SCENARIO & REGULATORY ENVIRONMENT

The regulatory framework for the real estate sector has evolved significantly, focusing on transparency, accountability, and consumer protection. Implementation of RERA, GST, digitisation of approvals, and faster clearance mechanisms have improved ease of doing business.

VAS Infrastructure Ltd. continues to remain committed to full compliance with applicable statutory and regulatory requirements. The Company will ensure adherence to evolving legal frameworks post-CIRP as it charts a new strategic path forward.

NEW PROJECTS

The Company shall initiate new projects only after the successful completion of the Corporate Insolvency Resolution Process. Project selection will be aligned with future demand trends and guided by financial and operational prudence.