shri krishna prasadam ltd Management discussions

OVERVIEW

Your company is actively involved in trading in agriculture, natural resources and deals in agro goods and has successfully completed 7 years in its agro based businesses. Your company is in the process of diversifying and expanding its business activities into newer areas to attain better profits during this year which shall be beneficial for the growth of the company and its members.

INDUSTRY STRUCTURE AND DEVELOPMENTS REAL ESTATE

The construction industry contributes significantly to the national economy. The Government of India along with the governments of the respective states has taken several initiatives to encourage the development in the sector. The Smart City Project, where there is a plan to build 100 smart cities, is a prime opportunity for the real estate companies.

The expected growth in the Indian economy is amongst the highest in the world and can be attributed to the various initiatives taken by the government, especially with renewed focus on public infrastructure. Apart from the Smart Cities project, the Governments mission ‘Housing for all by 2022 will be a major game changer for the industry. Increased impetus to the creation of affordable housing, along with quicker approvals and other supportive policy changes will result in an increased construction activity

AGRICULTURE

The Indian market offers a huge potential for the food processing industry - more so because of the fact that it promotes two main growing factors of our Indian Economy - Industry & Agriculture. During the last one decade, India moved from a position of scarcity to surplus in Food. Given the trade in production of food commodities, the Food Processing Industry in India is on an assured track of growth and profitability. It is expected to attract phenomenal investment in capital, human, technological and financial areas. A reason why the Food Processing Industry sector in India has been accorded high priority by the Government of India, with a number of fiscal relief and incentives, to encourage commercialization and value addition. As per the 3rd Advance Estimates, Indias food grain production has increased marginally to 252.23 million tonnes (MT) in the 2015-16 crop year. Production of pulses is estimated at 17.06 million tonnes.

OPPORTUNITIES AND THREATS

OPPORTUNITIES

REAL ESTATE

> The Government of India along with the State Governments has taken several initiatives to encourage the development in the construction/real estate sector. Foreign Direct Investment (FDI) in the construction development sector, passing of Real Estate Bill etc. are the prime opportunities available in the years to come.

> The real estate sector performance is directly bound by the countrys economic fundamentals and monetary policies. The Reserve Bank of India cut its benchmark repo rate by 25 bps to 6.5 percent during the meeting held in April 2016. It is the first reduction since September 2015 and the lowest rate since January 2011. These initiatives of the government will play a positive role to encourage home buyers and real estate developers.

AGRICULTURE

> The agriculture sector in India is expected to generate better momentum in the next few years due to increased investments in agricultural infrastructure such as irrigation facilities, warehousing and cold storage.

> The growing use of genetically modified crops will likely improve the yield for Indian farmers. Hence Company shall make Investments into Organic farming activities which include: Contract farming, Dairy farming, R&D in the field of Agriculture, Export of Agro-goods, Retailing of Agro- products & such other agro related areas

THREATS

REAL ESTAE

Unfavorable changes in government policies and the regulatory environment can adversely impact the performance of the sector.

> Substantial procedural delays with regards to land acquisition, land use, approvals. Retrospective policy changes and regulatory bottlenecks may impact attractiveness of the sector and companies operating within the sector.

> Real estate industry is capital intensive sector which require high capital and in present scenario it is challenge in front of management to arrange for the funds requirement.

AGRICULTURE

> Due to growing population, fast changing food basket of Indian as well as global consumer, shrinking farmland, is a major concern.

> Scarcity of water unseasonal rains uncertain climatic condition, storage capacity and mounting pressure on improving farm productivity are some of the major risk involved.

Further, the sources of risk in agriculture are numerous and diverse, ranging from events related to climate and weather conditions to animal diseases, from changes in agriculture etc.

REVIEW OF OPERATIONS AND FUTURE PROSPECTS

During the year under review, your Company has not generated the revenue from operations. However, your Company has registered some income from other Source. Your Directors are strongly believes that in the coming financial year, your Company will be able to do profitable business and will resort for better financial results.

OUTLOOK

The budget 2016-17 has pointed out preference to the real estate segment, which is in accordance with the ‘Housing for All Scheme, which was started in 9 states across India. This is likely to boost the supply of affordable homes which accounts for 90% demand of all the housing demands across the country. This upsurge will give the sector a much needed breather.

The company is expanding its business activities and putting continuous efforts to attain further efficiencies. Further the company is confident that in spite of possible recessionary conditions in the industry it will perform better in view of the strong fundamentals of the company and hope to improve its revenue.

RISK AND CONCERN

The risks faced by the Company are categorized into strategic, financial, operational and compliance risks. In view of the changing business environment, the Company has Risk Management Policy to protect the abovementioned risk. Some of the risks that may arise its normal course of its business and impact its ability for future developments inter alia include credit risk, liquidity risk, market risk etc.

Your Company has established a framework and process to monitor the exposures to implement appropriate measures in a timely and effective manner.

INTERNAL CONTROLS AND THEIR ADEQUACY

The Companys internal audit systems are geared towards ensuring adequate internal controls commensurate with the size and needs of the business, with the objective of efficient conduct of operations through adherence to the Companys policies, identifying areas of improvement, evaluating the reliability of Financial Statements, ensuring compliances with applicable law sand regulations and safeguarding of assets from unauthorized use. Moreover, the Company has appointed Mr. Gaurav Bansal, Chartered Accountants (Membership No. 529325), Delhi, as its Internal Auditors and he periodically test the efficacy of the prevailing internal control systems submitted their report to the Audit Committee.

HUMAN RESOURCES

Your Company firmly believes that a motivated and empowered employee is the key to competitive advantage. At present your company has adequate human resources which is commensurate with the current volume of Business activity and is reviewed by the management periodically and the company would induct competent personnel on increase/ expansion of the Business activity. There can be no substitute for the work-force of the Company, which has been the main reason for achieving the performance of these levels Your Companys employee value proposition is based on a strong focus on employee development, an exciting work culture, performance and empowerment. Processes such as performance improvement, talent management and competency management are platforms for individual development.

During the year under review, industrial relations have generally remained healthy, cordial and harmonious.