MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT
INDUSTRY STRUCTURE AND DEVELOPMENT
The financial crisis precipitated in September, 2008 brought the world to a standstilland pushed most of the developed economies in to recession. The financial year 2009-10began on a positive note with the economies world over showing signs of recovery from theserious recessionary effects. The Indian economy stabilized in the first quarter of thefinancial year 2009-10 itself, when it clocked a GDP growth of 6.1% as against 5.8% in thefourth quarter of the preceding year. It registered a strong rebound in the secondquarter, when the growth rate rose to 7.9%.
In the year 2008-09 financial crisis had impact on the Indian Real Estate Sectoraffecting projects worldwide due to fall in global commodity prices. Leaving the worstfinancial crisis behind, the Real Estate Sector remained optimistic registering thepotential demand for the pipe sector.
With the global economy returning to sustained growth, the Real Estate Sector isexpected to accelerate. This recovery is encouraging for it has come about despite aslackened economic growth.
With the improvement in economic scenario, better liquidity environment, recent pickupin growth rate in Real Estate Sector, the business is expected to grow. With potential forgrowth, coupled with various management strategies, management is optimistic about thegrowth of the Company in the coming years.
RISKS AND CONCERNS
The nature of Company's business is such that various risks have to be confronted whichnot only exist in the said business but even grow at a respectable pace. However, theserisks are no different than the ones faced by the Real Estate Sector as a whole. Acomprehensive and integrated risk management framework forms the basis of all the effortsof the Company. Formal reporting and control mechanisms ensure timely informationavailability and facilitate proactive risk management. These mechanisms are designed tocascade down to the level of the line managers so that risks at the transactional levelare identified and steps are taken towards mitigation in a decentralized fashion.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The company has an audit process comprising both internal and external audits to ensureadequacy and effectiveness of controls. The internal controls are formulated andimplemented by the management with an objective to achieve efficiency in operations,optimum utilization of resources and effective monitoring and compliance with applicablelaws. The experienced and independent Audit Committee of the Board of Directors regularlyreviews plans, significant audit findings, compliance with accounting standards and otherlegal requirements relating to financial statements.
FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The financial statements have been prepared in accordance with the requirements of theCompanies Act, 1956 and the applicable accounting standards issued by the ICAI .Themanagement of East Buildtech Limited accepts the integrity and objectivity of thesefinancial statements as well as the various estimates and judgments used therein.
Certain Statements made in this report relating to Company's objectives, outlook,future plans etc. may constitute "forward looking statement" within the meaningof applicable laws and regulations. Actual performance may differ from such estimates,whether express or implied. Important factors that could make a difference to theCompany's operations; include Government Regulations, Tax regimes, Economic developmentsand other allied factors.