gothi plascon india ltd Management discussions

We the Board of Directors, present its analysis covering performance of the Company for the year 2021 - 2022 and the business outlook for the future. The business outlook performance is based on the current business environment and do not include any economic variation.

(a) Industry structure and developments

In India, the real estate sector is the second-highest employment generator, after the agriculture sector. Real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021. By 2025, it will contribute 13% to countrys GDP. It is also expected that this sector will incur more non-resident Indian (NRI) investment, both in the short term and the long term.Retail, hospitality, and commercial real estate are also growing significantly, providing the much-needed infrastructure for Indias growing needs.The growth of this sector is well complemented by the growth in the corporate environment and the demand for office space as well as urban and semi-urban accommodations.

The last couple of years, with Covid-19 induced lockdowns gave a window to catch a glimpse of how the future may look like. Many of the new trends adopted will continue and some adoption may get pushed to the future. However, one thing is certain that the Covid-19 period has changed the world and way of doing businesses forever. The company continued following COVID-19 protocols.

Real estate is a land area with buildings and natural resources on it. It is an immovable property with monetary value vested in it. .The Government of India, together with the governments of individual states, have taken many initiatives to encourage development within the sector.

Emergence of nuclear families, rapid urbanisation and rising household income are likely to remain the key drivers for growth in all spheres of real estate, including residential, commercial, and retail. Rapid urbanisation in the country is pushing the growth of real estate.

(b) Opportunities and Threats

The real estate industry globally, nationally as well locally is increasing in terms of job prospects and other opportunities; the industry is also filled with diverse professions working towards achieving ultimate goal of implementing real estate project. The sector no doubt features strengths, weaknesses, opportunities, and threats (SWOT), which entrants must get familiar with before one can fully explore and succeed.The SWOT analysis of the real estate business would help us to see things from different angles like strengths, weaknesses, opportunities, and threats that this industry has to face.

Some of the threats that the real estate business could use to its advantage are economic recession,price falls due to less demand, etc.

(c) Segment -wise or product -wise performance :

During the financial year ended March 31, 2022 the Company operated only in one segment of business viz, real estate and other related services.

(d) Outlook

Indias real estate sector is witnessing a healthy increase in demand in 2022 and this momentum is expected to hold for the rest of the year. From commercial spaces to the residential market, the overall market outlook is a bright one for the real estate industry. Certain projections state that the sales momentum is expected to increase in 2022 as prospective homebuyers will continue to prefer bigger homes, better amenities and attractive pricing will keep them interested in sealing the deals. Meanwhile, as work resumes in offices, the recovery in the commercial sector and flight-to-quality trend is expected to keep rents stable to increase in 2022.

(e) Risks And Concerns

In the real estate sector, a company is exposed to risks at various levels some of which are within its control while many of them are not. Hence, a company must have a risk mitigation and management policy in place.

The Company is exposed to a number of risks such as economic, regulatory, taxation and environmental risks as well as sectoral investment outlook. In the course of its business the Company is exposed to stiff competition from other established developers in the market. In addition, it is exposed to certain market related risks, such as increase in interest rates and foreign currency rates, customer risks, changes in the government policies and other related risk i.ecredit risk, liquidity risk, counterparty risk, regulatory risk, commodity inflation risk and market risk.

Uncertainties in the national or global economic scenario, a changing demographic profile of the country, and inflation also have a bearing on the functioning of a company operating in the real estate sector.

(f) Internal control systems and their adequacy

The Company has a proper and adequate system of internal controls commensurate with the size of the Company and the nature of its business to ensure that all the assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly and adequately.

The system has been designed to ensure that financial and other records are reliable for preparing financial information and for maintaining accountability of assets. All financial and audit control systems are also reviewed by the Audit Committee of the Board of Directors of the Company

(g) Discussion on financial performance with respect to operational performance :

The company had a profit of Rs.182.40 lacs as compared to the previous year of Rs.162.12 lacs.

(h) Material developments in Human Resources / Industrial Relations front, including number of people employed. : There is no material development in human resources and industrial relations are cordial.

The total employees as at the year end were 25 and the employer-employee relations have been cordial throughout the year.

(i) details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor,including:

Particulars	2021-2022	2020-2021	Variation in %	Reason for variance
Debtors Turnover(Days)	1.18	0.96	22.9	-
Inventory Turnover (Days)	1046.41	685.76	52.60	Variance is on account of decrease in sales. This represents companys secondary business, which represents only 0.06% of the revenue.
Interest Coverage Ratio	911.90	0	100	Interest Coverage ratio was NIL in FY 2020-21 as the company had no debt obligations however, the company had availed term loan in the current financial year resulting in variation.
Current Ratio	22.09	16.09	37.2	The variance is on account of decrease in tax liability and increase in short term advances.
Debt Equity Ratio	0.03	0.0	100	Debt-Equity ratio increased due to availment of term loan.
Operating Profit Margin (%)	62	61	2.2	-
Net Profit Margin (%)	46	45	2.3	-

(j) details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:The return on net worth for the financial year is 15% as compared to 14 % in the previous yearas a result of increase in revenue and thus profitability.

2. Accounting Treatment in preparation of Financial Statements

The Company has prepared the Financial Statements in accordance with the Indian Accounting Standards (Ind AS) to comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the relevant provisions of the Act, as applicable.