MANAGEMENT'S DISCUSSION AND ANALYSIS A. Industry Structure and Developments Your Company is a building construction company. It undertakes development projects of residential and commercial multi-storied apartment complexes. The operations of the Company are brsently confined to localities in and around Chennai and its suburbs. B. Performance Your Company reported a total income of Rs 134.38 lakhs during the year ended 31st March 2015 as against Rs 170.09 lakhs during the brvious year. The profit after tax was Rs 51.46 lakhs for the year ended 31.3.2015 as against Rs 66.93 lakhs achieved during the brvious year. Your Company has not executed any development projects during the year since approval is awaited for the projects under consideration. Substantial part of total income has been earned towards interest and dividend from mutual fund units invested out of the surplus funds available with the Company pending deployment in its operations. C. Segmentwise Performance Your Company undertakes construction projects at Chennai and its suburb. The activities of your Company falls under single segment namely Construction of Buildings (Residential & Commercial). Your Company project for developing and constructing multistoried residential apartments at Woods road which is abutting Mount Road at Chennai and very near to the famous Exbrss Avenue Mall is in its initial stages where only the statutory approvals have been obtained. Your company will be commencing construction activities and marketing this project during the course of this year. Your Company is also developing another property in the suburb of Chennai for construction of commercial and / or residential space. Your Company owns landed properties at Sholinganallur, Chennai and at Arcot Dist, Tamilnadu, wherein it will be launching large scale construction projects for building residential or commercial complexes at an opportune moment. D. Concerns The Company and the building construction industry in Chennai in general is facing a very prolonged time duration in obtaining statutory clearances for the construction projects. The markets for residential and commercial buildings in Chennai have been stagnating in line with the general trend brvailing in other metropolitan cities as well. Several builders are holding unsold units and are resorting to providing incentives and promotions to clear their unsold units affecting their profitability. The interest rates have been reduced during the year only marginally and they still remain at way above the comfort level of discerning home buyers and business entities. The inflationary tendencies brvalent in the economy has resulted in across the board increase in the cost of the raw materials including sand, steel and cement thereby affecting the profitability and feasibility of construction projects. Land owners are not reducing the prices even though they are not able to sell at their price expectation. E. Outlook Your Company was not adversely affected by the general concerns being experienced by the building construction industry due to its conservative style of management. Your Company does not have unsold units; it is not saddled with burdensome finance costs since it does not have any borrowings. The delay in obtaining project approval is, in a way, affecting the operations of the company. However, consistent and continuous efforts are being made at every stage to expedite obtaining project approvals. F. Internal Control Systems Your company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from un-authorised use or disposition. G. Human resources and industrial relations Your company has well qualified and experienced technical, financial and administrative staff to cater to its business requirements. The relations with the employees of the company remained cordial throughout the year. |