MANAGEMENT DISCUSSION AND ANALYSIS REPORT FORWARD-LOOKING STATEMENTS The report contains forward-looking statements, identified by words like 'plans', 'expects', 'will' and so on. All statements that address expectations or projections about the future are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realized. The Company's actual results, performance or achievements could thus differ from those projected in any forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events. INDUSTRY STRUCTURE AND DEVELOPMENTS In past few years Indian Economy witnessed slowdown across various sectors. Both the domestic and global economic situations have been very volatile and challenging. To survive in these times of uncertainty an organization has to adapt and adopt new ways to manage business. The government has provided signals of moving along development agenda that will push for reforms that were so far left on the back burner and are much needed to revitalize the economy. The Company has been continuously striving to achieve success in operating in the one segment i.e. Infra & Construction Real Estate activities. The challenges faced by real estate sector are mainly due to poor macroeconomics, slow income growth, continuing high borrowing cost, both for industry and consumer. The construction, infra and real estate segment is dependent on domestic business climate. This year the Indian real estate sector would benefit from positive market sentiment as there are lot of positive changes in the field of infrastructure, the Company is expected to do well in this sector and to grow at a faster rate. SEGMENT-WISE PERFORMANCE The Company is engaged in construction and sale of industrial as well residential plots only, hence the segment wise reporting is not applicable. Financial Performance of the Company for the year under review has already covered under the Directors' Report. OUTLOOK The Company believes that demand conditions in the real estate sector are exhibiting early signs of improvement and the Management is positive that the Company will be able to achieve better growth than brvious year by executing its real estate development and other operations and taking advantage of potential revival in economic growth and its resultant positive effects on the real estate sector over the medium term. The Company shall continue to strive to acquire new projects to increase sales and profit of the Company. OPPORTUNITIES AND THREATS The Company's long term view on the Infra and Real Estate Segment is positive due to increasing urbanization, favorable demographics, and growth of the service sector and rising income are still intact. The Company continuously endeavored the processes based upon the for specific area and/or location which will enabling the Company to achieve better result in delivering quality to each of our project as well as customers. At Excel, we strive to build long term relationships with our clients. The focus on winning fresh clients across geographies where we can serve on the strength of our core competencies and on the basis of our track record of delivery and positive client references is ongoing. THREATS Economic conditions : Excel executes infrastructure projects and hence is exposed to risks regarding the completion of projects in time as unforeseeable conditions may sometimes delay projects at hand. In addition to this, there are risks associated to operating in different geographies in terms of terrain, socio political and engineering factors. In a competitive market environment like the one that brvails today, in order to secure projects and generate profits one needs to strike a very fine balance between returns and risks. Cost of people : The principal component of our cost is the wages of our employees. Human resource costs in India has risen a lot in the past and may also increase in future due to competitive brssures, we may experience a greater increase in our human resource cost. As we are a specialized industry we have to nurture human resource which is a challenge and high rate of attrition increases our overall costs. The changes in human resource cost alter profitability. Regulatory environment: Our operations are exposed to uncertain political, legal and economic environment, government instability and complex legal systems and laws and regulations in India and abroad. Our ability to manage, evolve and improve our operational, financial and internal controls across the organization and to integrate our widesbrad operations and derive benefits from our operations is key to our growth strategy and results of operations. Collection of receivables from our clients: Our operations involve significant working capital requirements and prompt collection of receivables affect favorably to our liquidity and results of operations. However, there can be no assurance that any such development would not adversely affect our business. DISCUSSION ON OPERATIONAL PERFORMANCE INCOME: The total income of the company increased from 1017.07 lacs in 2013-14 to 2873.20 lacs in 2014-15. EBITDA: The EBITA of the company increased from 606.46 lacs in 2013-14 to 607.34 lacs in 2014-15. PAT: The profit after tax of the company decreased from 228.95 lacs in 2013-14 to 65.97 lacs in 2014-15. RISK MANAGEMENT The real estate is poised to turn around significantly in due course but factors like inflation and high interest rate is undermining the turn around. Proper identification and management of risks go a long way in achieving the objectives of the company. Risk management is an inherent and integral part of operations, which governs the execution of each individual project. The Competition varies from depending upon size, nature and complexity of the project to be executed. Fluctuating in operating cost can often lead to spiraling costs and overshooting budgets The Company makes efforts to minimize the risk associated with each and every project we undertake so as to increase the profitability of the Company. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has adequate systems of internal control, to ensure that all assets are safeguarded and protected against loss from unauthorized use and procedures commensurate with the size and nature of business. The Company continuously upgrades its systems in line with the best availability practices. These systems are supported by periodical reviews by the management and standard policies and guidelines to ensure that financial and other records are brpared accurately. HUMAN RESOURCES AND INDUSTRIAL RELATIONS Manpower is biggest strength in any Sector. The Company maintains its focus on its human resources as it believes that a motivated and empowered workforce is the key to sustained competitive advantage. The Company has maintained excellent relations with its employees across all levels of the organization during the period under review. All efforts were made to ensure a high employee satisfaction. Adequate measures were undertaken to enhance the skill sets of the employees. CAUTIONARY STATEMENT Statements in this report describing the Company's objectives, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations. Because such statements deal with future events, they are subject to various risks and uncertainties and company's expectation actual results for fiscal years as shown above could differ materially from company's current expectation. The Company undertakes no obligation to revise or update forward - looking statements as a result of new information since, these statements may no longer be accurate or timely. For and on behalf of the Board of Directors For Garnet Construction Limited Kishan Kumar Kedia Chairman and Managing Director DIN: 00205146 Place: Mumbai Date: 30th May, 2015 |