funworld tourism development ltd Management discussions

The Company is engaged in a single segment namely, Amusement Parks.

1. INDUSTRY STRUCTURE AND DEVELOPMENT

The Indian amusement park sector is growing at a CAGR of 10.16% during 2017 to 2021. Currently for a population of 1.15 billion in the country, there are only 120 amusement parks and 45 Family Entertainment Centers.

The sector presently is on a verge of transition in India, with various large investments proposed in the theme park sector both on Public Private Partnership (PPP) basis and by private players. A total of approximately INR297 billion is proposed to be invested in the Indian amusement park sector in the near future. Industry experts believe that majority of the proposed investments are expected to follow the PPP model which would allow the private players the required support from the government in terms of land acquisition, incentives, taxes etc. for development of such large capital intensive projects. The sector is making significant investments in technology as well to develop products/themes that significantly enhance customer experience and participation. For instance, augmented reality (AR) and virtual reality (VR) have become areas of significant interest and investment in the recent times.

2. OPPORTUNITIES& THREATS

Whilst there are some strong enablers such as rising income levels leading to increased discretionary spending power, increasing domestic and international tourism, rising urbanization and demographic advantage (higher percentage of working age group), the sector is estimated to register a Compounded Annual Growth Rate (CAGR) of 19 per cent over the next five years to reach at INR60 billion by 2020, thereby offering immense opportunities in this sector

However, the sector is facing numerous challenges in the present day scenario with inadequate government support being the primary challenge. With no incentive towards tax breaks, the biggest challenge lies with the double taxation of this sector with entertainment tax and GST. Other challenges such as inadequate basic infrastructure (power and water), seasonality, lack of awareness about safety, land acquisition issues with unavailability of contiguous land parcels at affordable rates are the major deterrents towards the development in this sector.

3. OUTLOOK RISKS& CONCERNS

With the imposition of a 28 per cent tax rate on amusement parks under the Goods and Services Tax (GST) regime, there exists an underlying threat as it will not only hamper the industry but would also pose to be a deterrent to new entrants in this industry.

India is a price sensitive markets and ticket prices are going to remain low in the future, therefore to promote investments, government incentives shall be required in the form of tax holidays and subsidies.

4. INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The company has proper & adequate system of their internal controls proportionate to its size and business. The internal control systems of the company are designed to ensure that the financial and other records are reliable for preparing financial statements and other data.

5. DISCUSSION OF FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Company delivered an impressive performance during the year ended March 31, 2017. Some of the highlights are:

		(Rs. in Lakhs)
Particulars	2016-17	2015-16
Total Income	163.49	345.06
Loss after Tax	2.36	12.50

6. SIGNIFICANT DEVELOPMENT IN HUMAN RESOURCES

There is no material development in human resource and industrial relations are cordial. The Company has employed 15 people.

7. CAUTIONARY STATEMENT

The Management Discussion & Analysis Report may contain certain statement that might be considered forward looking within the meaning of applicable securities, laws and regulations. These statements are subject to certain risks and uncertainties. Actual results may differmaterially from those expressed in the statements as important factors could influence the Companys operations such as Government policies, tax laws, political and economic development.

Date: 01/08/2017	For and on behalf of Board
Place: Rajkot	Shri H. S. Jadeja
	Whole Time Director
	DIN:00183473