MANAGEMENTS DISCUSSION & ANALYSIS GLOBAL AND INDIAN ECONOMY- OVERVIEW The global economy continued to expand during 2014 at a moderate and uneven pace, as the prolonged recovery process from the global financial crisis was still saddled with unfinished post-crisis adjustments. Global recovery was also hampered by some new challenges, including a number of unexpected shocks, such as the heightened geopolitical conflicts in various areas of the world. A salient feature for major developed countries during 2014 has been the erratic movements in their quarterly GDP growth rates. Indian Economy has become world's fastest growing major economy from last quarter of 2014-2015 replacing China. Expected to grow at 7.5 percent in 2015-16, India, may become a major emerging economy of growth. India's Government has announced an ambitious development agenda supported by a three-pronged strategy - promoting fast and durable economic growth, especially in manufacturing, together with a stable macroeconomic environment; involving states as active development partners; and improving the delivery of social benefits and extending social safety to the elderly and the underprivileged. States are set to receive more resources and spending power, and the government has reiterated its resolve to implement the GST by April, 2016, a move that is widely expected to meaningfully increase India's tax to GDP ratio. The improvement in India's economic fundamentals has accelerated in FY2015 with the combined impact of a strong Government mandate, RBI's inflation focus supported by benign global commodity prices. The government's initial estimates for Fiscal Year 2014 (ending the 31st March, 2015) show that economic growth accelerated to 7.4%. INDIA'S REAL ESTATE SECTOR The Indian real estate sector has been a beneficiary of the economic growth since the year 2000. The growth in the sector, supported by series of reforms, has not only resulted in significant residential and commercial real estate, but also complemented the development of physical and social infrastructure of the country. India's real estate market is expected to increase seven times by 2028 to reach US$ 853 billion by 2028 from US$ 121 billion in 2013. It is currently the fourth-largest sector in the country in terms of foreign direct investment (FDI) inflows. FDI in the sector is estimated to grow to US$ 25 billion in 10 years. Real estate contribution to India's gross domestic product (GDP) is estimated to increase to about 13 per cent by 2028, on the back of increasing industrial activity, improving income level and urbanization. The entry of major private players in the education sector has created vast opportunities for the real estate sector. Emergence of nuclear families and growing urbanisation have given rise to several townships that are developed to take care of the elderly. Growth in the number of tourists has resulted in demand for service apartments. This demand is likely to be on the uptrend and brsents opportunities for the unorganised sector. Real estate in India is being recognized to drive the economic growth engine of the Country. The Sector, if channelized properly, could catapult the growth of several other sectors in India through its backward and forward linkages. HOUSING The housing industry of India is one of the growing sectors. A large population base, rising income level and rapid urbanization leads to growth in this sector. In the Indian Constitutional structure the matters pertaining to the housing and urban development have been assigned to the State Governments. However, the Union Government is responsible for formulation and implementation of social housing schemes. Housing has always been an important agenda for the Government of India over the years. It is a visible output where the development can be seen. Moreover it is a vital sector of the national economy creating jobs and generating taxes and wages that positively influence the quality of life. Presently, affordable housing is basically targeting the economically weaker class and low-income groups and constitutes majority of the Indian housing industry, both in terms of value and volume. Besides, luxury housing is also expected to witness significant growth in the coming years as this market segment is comparatively very small and possesses huge potential for further developments. At brsent your Company's projects are under various stages of implementation across residential, commercial, retail and others. It focuses on mixed use development, particularly in residential projects, and, has a leading position in the housing segment, particularly in key cities in northern India. Your Company continues to follow the strategy of developing integrated townships in key cities in North India. TOWNSHIP DEVELOPMENT Townships are the next big such segment in the Indian real estate development industry; it seems, with a quiet growth in the number of township development projects that merge in a lot of things to make grand realty projects successful and sustainable. The township development in India has emerged into a growing trend. A trend that has played an essential role in opening the gates for the development of integrated townships across the Country that offers their residents the quality lifestyle tailored to suit every budget. India is proposing to set up separate investment regions complete with integrated townships for the planned growth of the knowledge industry because the booming IT sector in major cities is straining current infrastructure and adding to inflationary brssure. Your Company/Group is also developing and promoting fully Hi- tech, integrated and other townships, "Sushant Golf City" in Lucknow, the "Sushant Megapolis" in Greater Noida, "Esencia" in Gurgaon etc.- Your Company till March, 2015 has developed and delivered over 250 million square feet out of which ~ 64 million square feet is out of the current land reserves. OTHER SECTORS Commercial Your Company's commercial real estate business includes developing and constructing high rise office blocks and IT/ITES parks. Commercial space offerings are a mix of "built to suit" offices, customized facilities and pure multi-tenanted facilities. Retail Your Company's retail business model includes both the leasing and sale of retail developments. It has developed number of modern shopping malls and other retail spaces under the "Ansal Plaza" brand name such as Ansal Plaza in Palam Vihar, Greater Noida, Jalandhar, Ludhiana, Jodhpur, Ajmer, Gurgaon, Sonepat and also in the process of developing number of shopping malls in Panipat, Lucknow, Meerut and Ghaziabad, characterized by better design, high quality infrastructure as well as leisure and entertainment amenities such as multiplexes, food courts and restaurants. Hospitality Built on the foundations of its image in real estate; your Company through its associate has forayed into the hospitality segment elevating luxury standards to high levels which could be very well illustrated by the Country Inn & Suites at Ajmer. The Maple Town & Country Club is now on its way to becoming one of the desirable destinations in townships. Presently the group has four operational clubs in Gurgaon, Ajmer, Jaipur & Lucknow. The work on the clubs in Mohali & Panipat has started and these clubs are expected to open soon. Facilities Management Facilities Management (FM) is about managing commercial complexes, malls, hospitals, residential developments etc. Optimum achieves FM best value for money by balancing between user needs and business needs to achieve organisational effectiveness. The role of Facility Management in an Real Estate organization becomes more challenging and complementary to the core function of developing the real estate assets in a way so as to provide the best Post Sale Service to the allottees/occupants and thus to keep the asset value on ever increasing curve. Your Company provides/facilitates adequate facilities management for properties developed by it. INDIAN REAL ESTATE: OPPORTUNITIES AND CHALLENGES/ THREATS/STRATEGIES Opportunities ? Budget 2015-16 is expected to have a positive impact on real estate sector such as : ^ Goods and Services Tax (GST) is anticipated to put in place a state of art indirect tax system by April 1, 2016 in a well targeted cashless manner. ^ By 2022, Government aims to provide a roof for each family in India. Roof for each family in India by 2022 will require 2 crore houses in urban area and 4 crore houses in rural area. ^ Public debt management agency to bring external borrowing and domestic debt under an umbrella. ^ Direct tax transfer of subsidies to be expanded to Rs 1.1 crore. ^ Government to do away with distinction between foreign portfolio investments (FPIs) and foreign direct investment (FDI). ^ Proposal to allow Foreign Investment in alternative investment funds. ? The demand for Housing Sector is anticipated to apbrciate at Compound Annual Growth Rate (CAGR) of 22% from 2013 to 2018, with metropolitan cities expected to contribute 50 percent out of the entire amount. The real estate market in India is projected to touch US$ 160 billion by the year 2020. ? Growth of Service Sector and organized retail increasing urbanization, rising income levels, contracting household sizes and the easy availability of home loans are the key growth drivers of the Industry. ? Better infrastructure developments in the growing Indian economy in its Sectors. Government Initiatives The Government of India along with the governments of the respective states have taken several initiatives to encourage the development in the sector. Some of them are as follows: • UPA's (JNNURM) Jawaharlal Nehru National Urban Renewal Mission renamed as AMRUT 'Atal Mission for Rejuvenation and Urban Transformation. The Govt. has sanctioned Rs. 50000 Cr. for constructing 2 Crore houses in all the 40411 statutory towns and cities .It will provide basic infrastructure like water & electricity supply, sewerage, transport and green space park . • Govt. has planned to invest Rs.48000 crore for 100 Smart cities which will going to choose through 'City Challenge Competition' followed by 'Intra State' and 'Inter State' Competition. 20 cities that meet the criteria will be going to fund for the first year of implementation, followed by 40 each over the next two years. • Under the Sardar Patel Urban Housing Mission, 30 million houses will be built by 2022, mostly for the economically weaker sections and low-income groups, through public-private-partnership (PPP), interest subsidy and increased flow of resources to housing sector. • The Government of India has relaxed the norms to allow foreign direct investment (FDI) in the construction development sector. This move should boost affordable housing projects and smart cities across the country. 2015 will definitely be a good year for the real estate sector on three counts:- ^ Economic activity is gradually picking up, and the Central Bank anticipates GDP growth to reach 6.5 per cent y/y in the next financial year (FY2015-16), this means a rise in jobs and incomes, which in turn is very favourable for both residential and commercial real estate. ^ The threat of inflation has been submerging and borrowing rates are sure to go down from the current levels. This will encourage potential buyers planning to avail of home loans to finally take the plunge. Also, with property prices staying stable and good deals being offered by developers in order to clear their inventory, fence-sitting buyers are further encouraged to brss the 'buy' button. ^ The market has witnessed a re-orientation and developers are now largely focusing on affordable homes. This will go a long way, though definitely not all the way, in bridging the existing wide gap between demand and supply of affordable homes. CHALLENGES/THREATS The real estate sector is a critical sector of the economy. It has a huge multiplier effect and therefore, is a big driver of economic growth. It is the second-largest employment-generating sector after agriculture. Not only does it generate a high level of direct employment, but it also stimulates the demand in over 250 ancillary industries such as cement, steel, paint, brick, building materials, consumer durables and so on. The Indian real estate sector has been on a roller coaster ride since 2005. Consequent to the government's policy to allow Foreign Direct Investment (FDI) in this sector, there was a boom in investment and developmental activities. FDI inflow into real estate dropped significantly and what had emerged as one of the most promising markets for foreign investments experienced a downturn. Growth in 2015-16 is expected to remain more on the lower side due to following challenges and threats: ? Any adverse change in interest rates or policy guidelines by RBI could create a shortage of Credit for the Company/ Industry, thereby affecting growth prospects of the Company. ? The business is subject to extensive statutory or governmental (state/central) regulations. Any adverse change in the policies of the Government could affect the future prospects. ? Projects of the Company are subject to many approvals/licenses. Obtaining formal clearances and approvals from Government authorities is slow and time consuming and may cause delays/ interruption in project execution or even rework/ modifications. ? Indebtedness of Company and the Covenants with institutional lenders and other contractual commitments imposed by the lenders could restrict for expansion which may hurt the business and results of operations and financial condition. ? Inability to anticipate and meet customer requirements may result in fall in customer satisfaction which may impact the brand image of the Company. ? Real estate business of the Company is dependent on many factors inter-alia the political situation of the State/ Country. Fluctuations in market conditions and any adverse political scenario or climate may affect the industry as a whole and thus affecting the Company. ? The ability to sell the Company's products will be adversely affected by the availability of finances at reasonable cost to potential customers, especially buyers of residential properties. ? The Company may not be able to raise adequate funds at competitive rates to fuel its development plans. The growth of the Company requires further capital, which may not be available on terms acceptable to it. ? Projects in Real Estate business involve purchasing small parcels of contiguous lands within a large area and failure to purchase any contiguous/strategically located parcels may lead to delay of the launch of the proposed project. ? The Company is reliant on its directors and senior management team and loss of key members or failure to attract skilled personnel may adversely affect the business. ? Potential limitations on the supply of land could reduce revenues of the Company or negatively impact the results of its operations. ? Rising demand for health care from more aging Baby Boomers and new requirements of the Affordable Care Act should create opportunities to fulfill the real estate needs of health care providers, but rising health care costs may affect housing affordability and demand. ? Unbrdictable global events, such as terrorist attacks or economic crises, impact every industry, but especially real estate as companies often respond to the uncertainty created by such events by holding off on capital projects and expansions. ? Weather-related catastrophes have a similar stifling effect on the real estate market to global crises. Road Ahead Responding to an increasingly well-informed consumer and keeping in mind the globalization of the Indian business outlook, real estate developers have also shifted gears and accepted fresh challenges. The most marked change has been the shift from family owned businesses to professionally managed ones. Real Estate Developers, in meeting the growing need for managing multiple projects across cities, are investing in centralized processes to source material and organize manpower and hiring qualified professionals in areas like project management, architecture and engineering. The growing flow of FDI into Indian real estate is encouraging increased transparency. Developers, in order to attract funding, have revamped their accounting and management systems to meet due diligence standards. The winds of change are now blowing more perceptibly. Inflation, including the house price component, has been reduced. Property buyers are coming back in most cities as enquiries have started and developers are gradually evolving the kind of supply that is relevant to demand. Multinationals that were hesitant to foray into the Indian market because of the uninspiring political environment are now dusting off their plans for India and getting their entry vehicles back in gear. Going by the recent reports of recruitment agencies, many more jobs will be created in 2015 - especially in the IT/ITES, manufacturing and services sectors - and the demand for homes will increase visibly. Also, REITs are hitting the market at long last, and only a few details need to be sorted out before they get the funding wheels spinning. Strategies The Company's strategy for long-term growth is based on continuing to scale, strengthen core business and grow in new areas of business. The key elements of your Company's business strategy are as follows: ? The Company is focusing on high growth markets in NCR as well as in other states of Northern India by expanding its existing townships to increase returns through economies of scale as well as entering into collaboration for new projects in order to conserve capital deployment in land aggregation and to achieve better realizations. ? Accelerating its cash flows by monetizing its assets from finished stock sales, to consider sale /exit from non-core assets /slow moving investments if fetching better value and to reduce the debt. ? The Company is focusing on the Northern India Territory for township development and has accelerated the development and sales efforts in all the townships that were launched in the past few quarters. ? The Company is giving priority in completing and delivering the projects of good quality on time and building further saleable area(s) in these states by expanding the existing townships. ? The Company is improving its financial parameters through better performance and ensures timely repayment of principal and interest amount, to attract more funds. ? The Company is reducing the interest cost burden by bringing in proper mixture of funding from Banks/ others. In addition, your Company will endeavor to seek more private equity participation to increase execution and further mitigate its risk. PERFORMANCE You are already aware that, your Company has significant brsence in North Indian States i.e. Uttar Pradesh, Haryana, Rajasthan and Punjab. Your Company along with its associate and subsidiary companies have range of real estate business verticals such as Hi -Tech and Integrated Townships, Condominiums/ Group Housings, Malls/ Shopping Complex, Hotel, and Clubs Your Company has Net land reserve of over ~ 8000 acres (post projects delivered as on the 31st March, 2015) out of which about ~40% is in NCR. The Company intends to take advantage of India's increasing urbanization by investing in the development of townships on the peripheries of cities throughout Northern India, and searching for opportunities to expand existing townships by purchasing and developing or by acquiring under joint development arrangements adjacent land on the existing infrastructure. Some of the projects in the process of various stages of development are as follows:- ? Projects in the State of Uttar Pradesh Housing Sushant Golf City (Hi-Tech City), Lucknow, Sushant Megapolis (Hi-Tech City) Dadri, Adjoining Greater Noida, Sushant Taj City, Agra, Sushant Aquapolis, Ghaziabad, Sushant City, Meerut , Sushant Serene Residency- ETA -II, Greater Noida. Commercial Felix Square, Lucknow, Shopping Square, Lucknow, Ansal Shopping Arcade, Lucknow, Ansal Zenith Towers, Lucknow, Shopping Square 3A, Megapolis, Local Shopping Complex, Ghaziabad, Local Shopping Complex, Meerut. Retail/ Industrial Park / Other Ansal Plaza, Ghaziabad, Ansal Plaza l, Greater Noida, IT Park, Greater Noida (The Campus), Corporate Park - Sector 142, Noida, Ansal Plaza Mall, Meerut, Ansal Plaza, Lucknow. ? Projects in the State of Haryana Housing Esencia, Sector - 67, Gurgaon, Versalia, Sector - 67A, Gurgaon, Sushant City, Kundli, Sunshine County, Kundli, Havanna Heights, Kundli, Europa Residency, Kundli, Sushant City, Panipat, Elite Floors, Panipat, Sushant City, Kurukshetra, Sushant City, Yamuna Nagar -I, Sushant City, Yamuna Nagar -II, Group Housing (IVY-I), Gurgaon, Green Escape, Sonepat, The Fernhill, Gurgaon. Commercial Spanish Court, Gurgaon (Palam Vihar), Palam Corporate Plaza, Gurgaon (Palam Vihar), Palam Triangle, Gurgaon (Palam Vihar), Galaxy Court, Panipat , Roman Court, Kundli. Retail/ Industrial Park / Other Ansal Highway Plaza, Sonepat, Ansal Plaza-Palam Vihar, Gurgaon , Pioneer Agro SEZ, Murthal, Sonepat, The Palms, Gurgaon (Entertainment / Hospitality), Pioneer Industrial Park, Pathredi. ? Projects in the State of Punjab Housing Golf Links-I, Golf Links-II, Orchard County, Mohali Commercial/Retail/ Industrial Park / Other Ansal Plaza Ludhiana, The Boulevard Ludhiana, Ansal Plaza Uptown Jalandhar Aerodrome Amritsar, Ansal Grand Plaza Ludhiana, City Centre, Celebrity Suites, Palm Grove, Court Yard. ? Projects in the State of Rajasthan Housing/Townships Sushant City, Ajmer, Sushant City-I, Jaipur, Sushant City-II, Jaipur, Sushant City, Jodhpur, Sushant Lok, Jodhpur, Anand Lok. Jodhpur, Anand Lok, Jaipur, Anand Lok Extn., Jaipur Commercial/Retail Sushant Plaza, Jaipur, Ansal Royal Plaza, Jodhpur, Ansal Courtyard, Ajmer, Sushant Haat, Jodhpur, Sushant Haat, Ajmer, Sushant Plaza, Ajmer PROSPECT & OUTLOOK The Company's strategy to focus on smaller cities or better known as Tier 2 cities, has proved to be correct. In its attempt to provide the residents of these cities with world class real estate solutions, your Company has already undertaken / is under the process of launching, on its own/ through joint ventures / associates, the projects in various States like Rajasthan, Haryana, Uttar Pradesh, Punjab, NCR regions. It is in the process of developing many Hi- Tech and Integrated Townships. The Company is committed to take on more and more challenging tasks in its areas of operations with increased focus and dedication in the coming years. Customer satisfaction being the most emphatic priority of your Company, all efforts is being made to use the best of construction, architectuture and allied inputs, both from highly reputed national and international Companies to provide quality products to customers at all the times. Sensing the need for the focus on quality and timely delivery, the Company has tied up with highly reputed construction contractors and other expert service providers. Your Company is always looking forward to new opportunities. It continues to emphasize and build upon its well acknowledged brand image of "Ansal Plaza" and Sushant City". It has successfully launched various Townships and commercial Projects under the Brand Name of Sushant City and Ansal Plaza, respectively. The said Projects and the following Townships are expected to yield high visibility, status and effectiveness to your Company:- ? SUSHANT GOLF CITY - one of Asia's largest Hi-Tech Townships- Lucknow The development of your Company's brmier Hi-Tech Residential Township, Sushant Golf City in Lucknow, Uttar Pradesh sprawling across 6465 acres of land is at full swing. It is well known that this ultra modern township offers wide range of residential/commercial properties with world class facilities. Located along the exbrssway within few minutes drive from Lucknow International Airport, Sushant Golf City has already become a brferred destination to live in Lucknow in Eco-friendly environment with various other world class amenities and offers opportunities for employment, trade and commerce. It has about 393.45 acres of land dedicated only to greenery with a world class 18 hole Golf Course designed by Dr. Martin Hawtree, U.K and hence this mega Township makes life on the greens a reality. The construction work is in progress. Possession has been taken for plots, built-ups and group housings. The Golf Habitat villas are state-of-the-art designer villas and have features which not only match with the international class but also redefine luxury in the true sense of the word. Your Company through its associate, has already launched its established brand "The Palms Golf Club & Resorts" at Lucknow and the development work at the site is at full swing. Some reputed institutions and business centres have already started operating such as Ansal Institute Of Technology and Management, G D Goenka Public School, S J International School along with some upcoming schools like Jaipuria School, Kunskapkollon School-A Swedish School, and GEMS-International Chain of Schools in the Township. The retail giant, Walmart, bulk market place is also operational in the township. "Medanta, The Medicity" has shown interest to establish, a 800-900 bedded, multi-super specialty hospital in your Company's Complex by entering into an agreement with your Company, which itself will not only upgrade the stature of Sushant Golf City but will provide quality healthcare to the residents of Lucknow city. Iskcon Spiritual Centre at your Company's complex at Lucknow has become a famous spot that attracts devotees from far flung areas. Sushant Golf City has been accepted by the people in Lucknow and in the State of Uttar Pradesh as "New Lucknow" as it provides quality housing, employment and opportunities to make profitable investments in the Real Estate sector. Ansal Institute of Technology has already gained fame and it is rendering service to train the talented work force which has given momentum to the reputation of your Company. Out of nine ambitious projects initiated under the Hi-Tech Township policy within the State of Uttar Pradesh your Company is the unquestioned leader and today the Company's Sushant Golf City at Lucknow is known as one of the best and largest township being developed by any real estate company. ? SUSHANT MEGAPOLIS - Green Hi-Tech Township, Adjoining Greater Noida Sushant Megapolis is a green {Environment friendly} Hi-Tech Residential township being developed by Ansal HiTech Townships Limited ( A Subsidiary Company) on an area admeasuring 2504 acres under the brand "SUSHANT MEGAPOLIS" having saleable area of about 77 million square feet as per the current norms. This Township is well connected with Delhi and other vital commercial centers via Noida- Greater Noida Exbrssway to Greater Noida, Eastern Peripheral Exbrssway and NH-91. With the canal network and vast greens, this township is coming up as self sustaining urban development in the vicinity of Greater Noida, an area of excellence. Sushant Megapolis offers a wide range of commercial and residential properties. Sports and recreational facilities being planned there equal the International standards. An 18-hole golf course, an exclusive golf club, world class equestrian club and polo ground are all coming up in the township. The township also offers facilities for academics at its advanced educational campus, comprising schools & colleges. The Townships shall have state-of-the-art business and technology hubs including commercial business districts to promote walk to work culture and retail centers cum mall for convenience of the residents. It has various group housing projects like Fairway Apartments, Cascade Green, Aastha Pride and Paradise Crystals. Sushant Megapolis is NCR's principal self-contained integrated township by its size. Being one of the biggest townships within NCR undertaken by your Company, Sushant Megapolis has been accepted at the national level. ? ESENCIA - Green Township of Tomorrow in GURGAON Your Company is all set to achieve one more first with the launch of the 'Esencia' Township Project. The objective is to build and sustain a "self reliant community". Every aspect of the Township is designed to conserve natural resources and have minimal adverse impact on the environment. The emphasis is on protection, use and recycling of natural resources. Esencia offers well-designed homes with the best amenities. Strategically located at Sector 67/67A, Golf Course Extension Road, Gurgaon, ESENCIA is sbrad over an area of approx. 250 acres. The Esencia Township has been registered as the pilot project for rating under GRIHA* (Green Rating for Integrated Habitat Assessment), in India. ADARSH (Association for Development and Research of Sustainable Habitats), an independent, registered society ,constituted by the MNRE (Ministry of New and Renewable Energy) and TERI (The Energy & Resources Institute), is helping your Company in this endeavor. Esencia has been envisaged and designed to create a balance between modern and environmentally conscious living. This Township will offer many leisure and recreational activities like medical centre, high school, primary and secondary schools, clubs, sports complex and convenience stores. The Township is fast approaching completion. It has eight fully developed parks with automatic sprinkler system, jogging tracks and landscaped surroundings. Flora in these parks will not only give a visual treat but will have indigenous species which will balance the eco-system. ? Green Escape Green Escape is being developed on an area admeasuring 30 acres and strategically located at 8-lane Kundli-Maneswar-Palwal exbrssway at Sonepat (Haryana). It has been created with a vision of an awe-inspiring city-within city that will delight residents with its cosmopolitan, free-spirited atmosphere and unique, invigorating lifestyle. It offers an opportunity to escape from the humdrum and fierce harshness of the urban concrete jungle into the soft, flowing natural lushness of nature. This Project has world class facilities. It is in close vicinity of India's largest proposed Educational City 'Rajeev Gandhi Education City'. ? Golf Link I and II - Integrated Townships in Mohali Your Company is developing two integrated townships in Mohali, {Punjab}. First Township is Golf Links I, sbrad in 240 acres and situated in Sector 114, Mohali where in the Company has handed over possession of plots, independent floors, and commercial. Army Welfare Housing Organization which had purchased FSI from your Company is building Group Housing of 1000 high rise units which are expected to be handed over by this year end. The second Township is 'Golf Links II', sbrad over 106 acres and situated in Sector 116 where the development work is complete and the Company is in the process of handing over possession of residential plots, and, the Company also expects to hand over possession of independent floors. In the coming months, your Company proposes to launch Premium Group Housing project at the entrance to Golf Links I, this Project will be crowning jewel of the Sector and will make the area a destination point. ? Orchard County This project is being developed on an area admeasuring 11.87 acres and strategically located on the main city road (Kharar-Landran Road), Mohali. This Project is being made to luxurious specifications. It offers well designed homes with best amenities. The Company has handed over possession of 240 apartments and is in the process of handing over possession of further 200 apartments. ? Other Integrated Townships Your Company's other integrated townships are Sushant City, Ajmer, Sushant City, Jaipur, Sushant City, Jodhpur, Sushant City, Agra, Sushant City, Meerut and others. The facilities in these townships include health centres, shopping complexes, schools, parks, community centres, and underground parking systems. In the last few years, the education sector of India has witnessed a number of dramatic changes which resulted in substantial increase in the market share of the education industry. With availability of enhanced technology, it was extremely essential to expand the Indian education sector in order to maintain stable economic growth in the Country. Education is also designed to be an important business driver for the future and your Company, through its associates/ Trust, has ushered in the field of education and has built eminent institutes like Sushant School of Architecture and Sushant School of Design. The Institutes run under the Ansal brand name has in recent times acquired the status of a University and is now called "Ansal University" under the Haryana Private Universities Act, 2006. Your Company's strategy is to focus on high growth markets in NCR as well as in other states of Northern India by expanding its existing townships to increase returns through economies of scale as well as entering into collaboration for new projects in order to conserve capital deployment in land aggregation and to achieve better realizations. In line with its motto of improving the lifestyle standards of people and the quality of life through creating state-of-the -art realty and infrastructure facilities and projects, your Company is committed to take on more and more challenging tasks in its area of operations with increase focus and dedication in the coming years. RISKS & CONCERNS Risks need to be continuously monitored and timely mitigated. The management of risk and opportunities is the inherent responsibility of your Company. Many of the risks comprise uncertainties or emerging risks, difficult to quantify or control. Nonetheless, it is important that these are identified so that the Company can have options to deal with them. Your Company is already implementing the Enterprise Risk Management {ERM} within the organization. Through systematic studies, identification of Key Performance Indicators (KPI) by each business head, then taking responses by measuring the KPI's with the processes laid down for timely mitigation, your Company has so far been able to mitigate and manage the risks. ERM reports are being reviewed by the Audit Committee and Board of Directors of your Company on a quarterly basis. A Committee of Independent Directors has been constituted to do the following acts, deeds and things {including its roles, responsibilities and powers} as provided under the Clause 49 of the Listing Agreement and/ or other provisions as may be applicable from time to time :- a) To identify the elements of risk, if any, from time to time, that in the opinion of the Board may threaten the existence of the Company. b) To monitor and review the existing risk management plan and such other functions as it may deem fit. c) To lay down the procedures to inform the Board members about the risk assessment and minimization procedures. Enterprise Risk Management Framework had been implemented within the organization with an overall objective to measure Company's progress in risk mitigation through quantifiable means. Risk Management policy had been finalized and approved by the Risk Management Committee and Board for implementation and compliance. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY Internal controls and systems serve multiple needs in organisation. Well designed Internal control systems lay down the framework for day-to-day operations, and also provide guidelines for employees and, most importantly, provide a certain level of security against a variety of risks such as fraud and misappropriation. Your Company's control system and procedures are regularly reviewed for relevance and effectiveness and changed as per the need of business environment. The primary responsibility for the development and maintenance of internal control rests with an organization's management. Internal control evaluation involves everything management does to control the organization in the effort to achieve its objectives. The Company has an Audit Committee consisting of Independent Directors, the details of which have been provided in the Corporate Governance Report. Independent Chartered Accountant firm has been appointed as Internal Auditors and effectiveness of internal control mechanism is reviewed by Internal Auditors at regular intervals. The Audit Committee reviews audit reports submitted by the Internal Auditors on a regular basis. Suggestions for improvement considered by the Audit Committee are followed by the Management through implementation of the corrective actions and improvements in business processes. The Committee also meets the Company's Statutory Auditors to ascertain, inter-alia, their views on the adequacy of internal control systems in the Company and keeps the Board of Directors informed of its major observations from time to time. During the year under review, 6 {Six}meetings of the Audit Committee were held to review, inter-alia, the internal audit reports along with management comments and the follow up actions taken thereon. Operating Results of the Company Overview The Financial Statements have been brpared in compliance with the requirements of the Companies Act, 2013, guidelines issued by Securities and Exchange Board of India (SEBI) and Generally Accepted Accounting Principles (GAAP) in India. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis, so that the financial statements reflect in a true and fair manner the form and substance of transactions and reasonably brsent your Company's state of affairs, profits and cash flows for the year. > Net Profit The Company's net profit for the Financial Year ended 2014-15 stood at 20.44 crores on a consolidated basis, compared to Rs. 5.95 crores of Financial Year 2013-14. The total income in Financial Year 2014-15 stood at Rs.1109.99 crores on a consolidated basis, as against Rs. 1418.26 crores in Financial Year 2013-14. Net Profit for the Financial Year 2014-15, on standalone basis, increased by Rs 8.42 crores to Rs. 21.95 crores from Rs. 13.53 crores in the brvious Financial Year 2013-14. This rebrsents 2.58% and 1.46% of the total income for the Financial Year 2014-15 and 2013-14, respectively. > Earning Per Share (EPS) Basic Earning Per Share {EPS}, on a consolidated basis, of your Company has increased by Rs. 0.92 during the Financial Year 2014-15 to Rs. 1.30 per share from Rs. 0.38 per share in the brvious Financial Year 2013-14. The outstanding shares used in computing the basic EPS is 15,74,04,876 for the year ended on the 31st March, 2015. Financial Performance {Standalone} (1st April, 2014 to 31st March, 2015) Share Capital: At brsent, there is only one class of Equity shares of Rs. 5/- each. The Authorised Share Capital of the Company is Rs. 15000 lacs divided in to 2400 lacs Equity shares of Rs. 5/- each and 30 lacs Preference shares of Rs. 100/- each. The Issued, Subscribed and Paid up Equity Share Capital of your Company, as on the 31st March, 2015 stood at Rs. 7870.24 lacs (i.e. 15,74,04,876 Equity shares of Rs. 5/- each, fully paid up). Reserve & Surplus (R&S): The total balance of R&S stood at Rs.157827.87 lacs as on the 31st March, 2015 as compared to Rs. 155684.18 lacs as on the 31st March, 2014. Loans: During the Financial Year 2014-15, the Company has put its efforts not to increase the debt to meet the fund requirements for its expansion plans. Therefore, the loan has been increased only by Rs. 1727.30 lacs i.e. from Rs.70949.14 lacs in the brvious Financial Year 2013-14, to Rs. 72676.44 lacs in 2014-15. Current Assets: ^ Inventories: During the Financial Year 2014-15, Inventory level has increased by Rs.3403.36 lacs i.e. from Rs.251857.50 lacs to Rs.255260.86 lacs as compared to brvious Financial Year 2013-14. ^ Sundry Debtors: Sundry Debtors stood at Rs.58557.05 lacs as on the 31st March, 2015 as compared to Rs.50438.43 lacs as on the 31st March, 2014. Accordingly, there is increase of Rs. 8118.62 lacs. These debts are considered good and realizable. ^ Loans & Advances : During the Financial Year 2014-15 , the loans and advances have been decreased by Rs.13977.08 lacs i.e. from Rs.135276.20 lacs to Rs. 121299.12 lacs as on the 31st March, 2015. ^ C urrent Liabilities & Trade Payable: Current Liabilities for the Financial Year 2014-15 stood at Rs.337165.11 lacs as compared to Rs.339981.12 lacs in the brvious Financial year 2013-14. Net Current Assets: During the Financial Year 2014-15, the net current assets of the Company have been increased by Rs. 11871.50 lacs i.e. from Rs.75137.28 lacs to Rs. 87008.78 lacs as on the 31st March, 2015. Finance Cost: Due to the reduction in debt funds the interest amount paid by the Company's finance cost has been reduced by Rs.1012.16 lacs i.e. from Rs.3808.63 lacs in the brvious Financial Year to Rs. 2796.47 lacs as on the 31st March, 2015. Staff Expenses: During the Financial Year 2014-15, the staff cost of the Company stood at Rs. 4180.18 lacs as compared to Rs. 4225.40 lacs in the brvious Financial Year 2013-14. Debrciation: The Company has provided an amount of Rs.724.79 lacs for debrciation for Financial Year 2014-15 as compared to Rs. 1008.00 lacs in the brvious Financial Year 2013-14. HUMAN RESOURCES Human Resource of your Company continue to maintain cordial relations with the internal as well as external environment for smooth running of the organization, and, plays a significant role in achieving sustainable competitive advantage and excellence in value creation through engaging and involving its workforce. The Human Resource function endeavors to create congenial work environment and synchronizes the working of all departments of an organization to accomplish their objectives. This in turn helps the organization to build and achieve its vision, mission and goals & strategy. As part of continuous learning and development process, your Company ensures its employees are exposed to important behavioural / technical training interventions, from time to time. During the Financial Year 2014-15, your Company has focused on consolidation, improvement and reorganisation to meet the existing challenges. While there was an emphasis on the cost side, talent acquisition initiatives were also carried out to fill up specific senior positions, which were functional necessities arising out of the new business orientation. Initiatives undertaken earlier to improve the human resources effectiveness, continued. The strength at brsent stands at about 750 employees on the rolls of the Company and about 1200 persons at group level. They are working in a harmonious and affable atmosphere. * Cautionary Statement Statements in this Report on Management's Discussion and Analysis describing the Company's objectives, projections, estimates and expectations may be termed as forward looking statements within the meaning of applicable laws and regulations. Actual results /outcome may differ substantially or materially from those exbrssed or implied. Important developments that could affect your Company's operations include, apart from any force majeure situation, significant changes in political and economic environment in India or tax laws, litigation, labour relations, interest and other costs. |