Victoria Enterprises Ltd Management Discussions

1. GLOBAL ECONOMY

The global economy continued to demonstrate resilience amid a challenging macroeconomic environment marked by persistent inflationary pressures, elevated interest rates, geopolitical uncertainties and disruptions in global supply chains. While the pace of global growth moderated compared with the previous year, economic activity in several major economies remained supported by domestic consumption, government spending and private-sector investments.

The United States and certain emerging market economies demonstrated relatively stronger economic activity, supported by resilient domestic demand and improving business conditions. In contrast, growth in parts of the Eurozone remained subdued due to weak consumer sentiment, higher financing costs and continued pressure on interest-rate-sensitive sectors.

The global economic outlook remains cautiously optimistic, with growth expected to remain supported by moderating inflation, improving supply conditions and gradual normalization of monetary policies. However, geopolitical developments, commodity-price volatility, interest-rate movements and global financial-market conditions continue to remain key factors that could influence economic activity and investment decisions.

For the real estate sector, global economic conditions have a direct bearing on capital availability, construction costs, interest rates, investor sentiment and demand for residential, commercial and other real estate assets.

2. INDIAN ECONOMY

India continues to remain among the fastest-growing major economies, supported by strong domestic consumption, infrastructure development, rising investment activity and structural economic reforms.

The Indian economy has demonstrated resilience despite global economic uncertainties, supported by robust domestic demand, improving infrastructure, increasing formalization of the economy and continued government focus on capital expenditure. Growth in manufacturing, services, digital infrastructure and urban development is expected to create additional employment and income opportunities.

Indias favourable demographics, increasing urbanization, rising household incomes and expanding middle class continue to provide a strong foundation for long-term economic growth. Government initiatives relating to infrastructure development, transportation, housing, urban renewal and ease of doing business are also expected to support investment and economic activity.

From a real estate perspective, sustained economic growth, increasing urban migration, improving connectivity and rising purchasing power are expected to support demand for quality residential, commercial and mixed-use developments over the medium to long term.

3. INDIAN REAL ESTATE SECTOR

The Indian real estate sector continues to be an important contributor to economic growth, employment generation and infrastructure development. The sector has undergone significant structural transformation in recent years, supported by regulatory reforms, increasing institutional participation, improved transparency and greater adoption of technology.

Residential Real Estate

Residential real estate continues to be one of the key drivers of the Indian property market. Demand is being supported by urbanization, rising household incomes, changing lifestyle preferences and the increasing aspiration for better-quality housing.

Homebuyers are increasingly seeking projects offering improved amenities, connectivity, security, open spaces and integrated lifestyle solutions. Demand for larger and better-designed homes has also remained relevant, particularly in established urban markets.

The Mumbai Metropolitan Region and other major urban centres continue to offer attractive long-term opportunities due to limited availability of developable land, significant infrastructure investments, strong employment centres and sustained housing demand.

Commercial Real Estate

The commercial real estate segment has continued to benefit from the expansion of the services sector, including IT/ITES, financial services, professional services and other knowledge-based industries.

Improving business activity, demand for quality office spaces and the gradual evolution of hybrid working models are supporting the recovery and development of commercial real estate. Well-connected commercial properties with modern amenities and efficient building infrastructure are expected to remain in demand.

Retail and Mixed-Use Developments

Organized retail and consumption-led development continue to create opportunities for developers with strategically located properties. Increasing consumer spending, urbanization and changing lifestyle preferences are supporting demand for high-quality retail and mixed-use developments.

Integrated developments combining residential, commercial, retail and lifestyle components can provide developers with opportunities to create diversified revenue streams while enhancing the overall value proposition of projects.

Tier II and Tier III Cities

Growing infrastructure connectivity, improving employment opportunities, increasing disposable incomes and rising aspirations are creating new real estate opportunities beyond the major metropolitan markets.

Tier II and Tier III cities are increasingly attracting developers and investors as affordability remains relatively favourable and urban infrastructure continues to improve.

Overall, the long-term outlook for Indian real estate remains positive, supported by structural demand drivers and increasing formalization of the sector.

4. INDUSTRY STRUCTURE AND DEVELOPMENT

The Indian real estate industry has witnessed considerable transformation following the implementation of regulatory and policy measures such as the Real Estate (Regulation and Development) Act, 2016 (RERA), Goods and Services Tax (GST), reforms relating to affordable housing and various measures aimed at improving transparency and accountability.

These developments have contributed towards greater discipline in the sector, increased consumer confidence and improved transparency in project execution and disclosures.

The industry is gradually moving towards more organized and professionally managed development models. Institutional capital, private equity participation and structured financing are also playing an increasingly important role in the development of large-scale projects.

Technology adoption is emerging as another important area of transformation. Developers are increasingly using digital tools for project planning, customer engagement, construction monitoring, property management and data-driven decision-making.

Against this backdrop, developers with established market knowledge, disciplined project execution, prudent financial management and a strong focus on quality and compliance are better positioned to benefit from the long-term growth potential of the sector.

5. COMPANY OVERVIEW AND BUSINESS OPERATIONS

Victoria Enterprises Limited is engaged in the business of real estate development, with a focus on residential and commercial projects.

The Company continues to focus on the development and progress of its ongoing projects, including Pittie Chambers and Pittie Paradise, while evaluating opportunities for expansion through suitable development and acquisition opportunities in Mumbai and other strategically attractive locations.

The Companys approach remains focused on identifying projects with sound development potential, suitable location advantages and sustainable long-term value creation opportunities.

The Company continues to monitor market conditions, customer preferences, regulatory developments, construction costs and funding requirements while evaluating new business opportunities.

6. BUSINESS STRATEGY AND KEY FOCUS AREAS

The Companys strategy is focused on sustainable growth in the real estate sector through disciplined project execution and prudent identification of development opportunities.

Key focus areas include:

• Progressing ongoing real estate projects in accordance with applicable approvals and regulatory requirements.

• Evaluating attractive development and acquisition opportunities in Mumbai and other markets.

• Maintaining a strong focus on project quality, customer expectations and timely execution.

• Optimizing the utilization of available resources and development potential.

• Strengthening financial discipline and maintaining prudent capital allocation.

• Leveraging technology to improve project monitoring, customer engagement and operational efficiency.

• Maintaining compliance with applicable laws, regulations and real estate-related requirements.

• Creating sustainable long-term value for shareholders and other stakeholders.

7. OUTLOOK AND OPPORTUNITIES

The Companys long-term growth prospects are supported by several structural opportunities within the Indian real estate sector.

Urbanization and Housing Demand

Continued urbanization and migration towards employment centres are expected to support sustained demand for residential properties. Rising incomes and changing consumer preferences are also creating demand for higher-quality housing and improved lifestyle amenities.

Infrastructure Development

Investment in roads, metro rail, highways, airports and other urban infrastructure is expected to improve connectivity and enhance the development potential of surrounding areas.

For developers operating in and around major urban centres, infrastructure-led development can create opportunities for redevelopment, residential development and mixed-use projects.

Premium and Quality Housing

Increasing purchasing power and changing consumer preferences are contributing to greater demand for well- located and professionally developed residential projects offering quality construction, amenities and improved living standards.

Commercial and Mixed-Use Development

The expansion of service-sector industries and changing workplace requirements are expected to support demand for quality commercial properties. Mixed-use developments combining residential, commercial and retail components may provide additional opportunities for diversification.

Redevelopment Opportunities

In established urban markets, particularly Mumbai, limited availability of vacant land creates opportunities in redevelopment and urban renewal projects. Redevelopment can unlock value from underutilized properties while addressing the increasing demand for modern housing and commercial spaces.

Technology Adoption

Technology-driven construction management, digital sales platforms, customer relationship management and data analytics provide opportunities to improve operational efficiency, transparency and customer experience.

8. THREATS, RISKS AND CHALLENGES

The real estate industry remains subject to various external and operational risks that may affect project execution, profitability and cash flows.

Regulatory and Approval Risks

Real estate development is subject to multiple approvals, permissions and regulatory requirements. Delays in obtaining approvals, changes in regulations, land-related matters or compliance requirements may affect project timelines and costs.

Construction Cost Inflation

Volatility in the prices of cement, steel, labour and other construction materials may adversely affect project costs and margins. The Company continues to monitor input costs and project economics to manage these risks.

Interest Rate and Financing Risks

Changes in interest rates and availability of financing may affect both the cost of capital for developers and affordability for customers. Tightening of credit conditions may also impact the pace of project development and sales.

Market and Demand Risk

Real estate demand is influenced by economic growth, employment conditions, consumer confidence, interest rates and property prices. Any significant deterioration in these factors could adversely affect sales velocity and project cash flows.

Land Acquisition and Project Execution

Availability of suitable land, title-related matters, acquisition costs and the complexity of development permissions may influence project viability. Construction delays or contractor-related challenges may also affect project schedules.

Liquidity and Cash Flow Risk

Real estate development typically requires significant upfront investment, while project revenues are realized over an extended period. Effective working-capital management and prudent financial planning therefore remain critical.

Competition

The Company operates in a competitive market with established developers and new entrants. Competition may arise in relation to land acquisition, project locations, pricing, financing, construction capabilities and customer offerings.

Macroeconomic and Geopolitical Risks

Changes in economic conditions, inflation, commodity prices, government policies, geopolitical developments and financial-market conditions may influence the real estate sector and customer sentiment.

9. SEGMENT-WISE PERFORMANCE

The Company operates in two business segments, namely

Real Estate Development and Entertainment.

The Entertainment segment has remained inactive for the last five financial years and, accordingly, the Companys principal operating focus continues to be on its real estate activities.

The Real Estate Development segment represents the Companys core business activity and includes development-related activities associated with its ongoing and prospective real estate projects.

The relevant segment information has been disclosed in the financial statements in accordance with the applicable Accounting Standards.

The Companys operations are currently concentrated within India and, accordingly, there is no reportable geographical segment requiring separate disclosure.

10. FINANCIAL AND OPERATIONAL PERFORMANCE

The Companys financial and operational performance for the year under review should be read in conjunction with the audited financial statements and the accompanying notes forming part of the Annual Report.

The financial performance reflects the nature and stage of the Companys real estate development activities. Real estate projects typically involve significant development cycles, and revenue recognition and profitability may vary depending upon project completion, regulatory approvals, construction progress, customer collections and applicable accounting requirements.

Details of the Companys financial performance, including revenue, profitability, assets, liabilities and other relevant financial indicators, are provided separately in the Directors Report and Audited Financial Statements.

Management continues to focus on improving operational efficiency, monitoring project-level economics, optimizing resources and maintaining financial discipline.

11. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established internal control systems commensurate with the size, scale and nature of its operations.

The internal control framework is designed to ensure:

• Reliability and integrity of financial and operational information;

• Safeguarding of assets;

• Compliance with applicable laws, regulations and internal policies;

• Effective utilization of resources;

• Appropriate authorization and approval mechanisms;

• Monitoring of project-related expenditures and commitments; and

• Timely identification and mitigation of operational and financial risks.

The Companys internal audit activities are carried out by an independent firm of Chartered Accountants.

The observations and findings arising from internal audit reviews are placed before the Audit Committee for review and appropriate action.

Management believes that the Companys internal control systems are adequate and are periodically reviewed to ensure that they remain appropriate for the evolving scale and nature of its operations.

12. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Human resources remain an important component of the Companys ability to execute its business objectives effectively.

The Company seeks to foster a professional and performance-oriented work environment that encourages accountability, teamwork, innovation and continuous improvement.

Training and development initiatives are undertaken, wherever appropriate, to enhance employee capabilities and align individual performance with organizational objectives.

The Company also recognizes the importance of maintaining a positive workplace culture and effective communication across its workforce.

Industrial relations remained cordial during the year under review.

13. ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

The Company recognizes that sustainable business practices and responsible corporate conduct are increasingly important in the real estate industry.

Real estate development has a significant impact on the environment and surrounding communities. Accordingly, responsible development practices, regulatory compliance, efficient utilization of resources and appropriate consideration of environmental and social factors remain important areas of management focus.

The Company aims to progressively incorporate appropriate sustainability practices, resource efficiency measures and technology-driven solutions into its business operations, subject to the nature and scale of its projects.

The Company also remains committed to maintaining appropriate standards of corporate governance, transparency, accountability and ethical business conduct.

14. CAUTIONARY STATEMENT

Certain statements contained in this Management Discussion and Analysis may constitute "forward-looking statements” within the meaning of applicable laws and regulations. These statements reflect the Companys current expectations, assumptions and assessments regarding future events, business prospects and performance.

Actual results may differ materially from those expressed or implied in such statements due to various factors, including changes in economic conditions, real estate market conditions, interest rates, inflation, government policies, regulatory requirements, availability and cost of financing, construction costs, project approvals, customer demand, competition, geopolitical developments and other risks and uncertainties.

The Company does not undertake any obligation to publicly update, modify or revise any forward-looking statements as a result of subsequent developments, information, events or otherwise, except as may be required under applicable laws and regulations.