MANAGEMENT DISCUSSION AND ANALYSIS The Real Economy Due to change in the Indian Scenario in the constituency the new government has came with the new scenario for the development of the Indian society. The Gross Domestic Product (GDP) in India expanded 7.50 percent in the first quarter of 2015 quarter of 2015 over the same quarter of the brvious year. Better quality of physical infrastructure is a brrogative for the Indian economy to continue to grow at the high rates established over the last decade. However it is very unfortunate, that the last two and a half years of infrastructure development story in India has been much of promise but missed opportunities. It is very evident that the Indian economy is slowing down. Today the Infrastructure sector faces issues like delays in land acquisition, municipal permission, supply of materials, award of work and operational failures continued to drag down implementation of projects. Performance Highlights - 2014-2015 Your Company focused on effective execution of all its continuing Projects. The financial highlights of PBA's performance on a standalone basis in 2014-15 are: • Revenue from operations is at Rs. 17056.61 Lakhs in 2014-15 v/s Rs. 29255.02 Lakhs in 2013-14 • EBIDTA (before profits from JV, Exceptional item and other income) is at Rs. 2374 Lakhs in 2014-15 v/s Rs. 3860 Lakhs in 2013-2014 Management of Risk & Concerns Our strategic focus on the Infrastructure sector and the high growth trajectory exposes the Company to a variety of risks. The Company is exposed to different types of risks such as credit risk, market risk (including liquidity risk, interest rate risk and foreign exchange risk), operational risk and legal risk. The Company's aim is to ensure that we proactively understand, measure and monitor the various risks and develop and implement appropriate risk treatment plans to deal with them by establishing a suitable balance between harnessing opportunities and containing risks. Infrastructure projects are highly capital intensive, and such run the risks of : • Longer development period than planned due to delay in statutory clearances, delayed supply of equipment or non-availability of land, non availability of skilled manpower, etc. • Financial and Infrastructural bottlenecks • Execution delay and performance risk and • Cost over-run Internal Control Systems & Their Adequacy The Company has deployed an internal control system, commensurate to its size & business. It provides reasonable assurance of recording the transactions of its operations in all material aspects & of providing protection against misuse or loss of company's assets. The Audit Committee consists of Independent Directors and is headed by experienced professionals. The Committee meets periodically to review the Internal Auditors' reports & their observations and makes recommendations for adequacy, effectiveness of internal controls & required remedial action, if any, to the Board of Directors for its implementation. Outlook PBA is committed to undertake new responsibilities and challenges nationally and internationally by virtue of its strengthened business model and motivated personnel. We are confident of leveraging global opportunities, while adhering to our cherished mission, vision and values. Social Commitment PBA believes that business success is not an end in itself; rather it is means to achieve higher socio-economic goals. The Company is committed to its stakeholders to conduct its business in a responsible manner. Management's commitment, work ethics and business processes at Company encourages all its employees and other participants to ensure a positive impact and its commitment towards corporate social responsibility. Cautionary Statement Statements in this Management Discussion and Analysis describing the Company's objectives, projections, estimates and expectations may be 'forward looking statements' within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those exbrssed or implied. Important developments that could affect the Company's operations include a downtrend in the infrastructure sector, significant changes in political and economic environment in India, exchange rate fluctuations, tax laws, litigations, labor relations and interest costs. |