AMJ Land Holdin. Management Discussions


The Real Estate business, for quite some time, has been going through recessionary trends. Inspite of such a scenario, last of the 6 buildings of residential apartments and Amenity Building of offices had received good response and project currently is left with negligible inventory of offices only. The current business scenario post-lockdown has further worsened and it may take quite some time even before the old recessionary trends returns. The Company is, therefore, in no hurry to launch 7th building of residential apartments although necessary Transferable Development Rights (TDRs) have been purchased therefor and building is in advanced stage of receiving approval. Depending upon the business sentiments, the Company would decide about the time frame of the launch of the building for prospective customers.

The Leave & License Agreement entered into with Pudumjee Paper Products Limited pursuant to the order of the High Court dated 08.01.2016 for demerger (in terms of which, about 29 acres of land is under their occupation) and some other land is proposed to be extended for another 5 years by mutual agreement on revised terms. In view of uncertainty about the applicability of the repealed Urban Land Ceiling Act to the land held by the Company, as also the prevailing business sentiments for development of 12 acres of land, the Memorandum of Understanding with G:Corp Dwellings Pvt. Ltd. has been terminated with mutual agreement. The three Wind Mills generate and supply power under Open Access arrangement to a Hospital and Pudumjee Paper Products Limited. The power supply is subject to levy of Cross Subsidy Surcharge (CSS) and Additional Surcharge (ASC) but the electrical duty is exempt for a period of 10 years from the date of respective plants were set up. In view of frequently changing regulatory policy and steep levy of CSS and ASC, the Company is looking for ways and means as to how the profitability of these plants can be improved.

The Companys accounts indicate segment-wise financial performance.

COVID-19

The pandemic Covid-19 has significantly and adversely affected the business sentiments and economy in general.

After easing of the lockdown, the real estate business of the Company has resumed its activities and is now awaiting approval of the 7th residential building as also improved business sentiments before the building launch can be announced.

The power generated during the period of lockdown and the delay in of 7th building are immediate adverse impact the Company has to bear. The operations of the real estate business were totally standstill so also the wind power generated was not allowed to be banked by the regulatory authorities with an impact on amount receivable for such wind power.

In view of the prevailing uncertainty about the exit of Covid-19, it is not possible to estimate the future impact on the operation and profitability of the Company especially when activity of the Company is located in Maharashtra which is witnessing a sizable number of cases under Covid-19 and is therefore subject to strict monitoring and supervision of regulatory authorities.

The Company does not have any debt to service. In view of adequate capital and financial resources as also liquidity, the Company does not visualize any difficulty in injecting necessary funds into the partnership arrangement to service debt availed by/sanctioned to the firm.

The Companys assets continued to be protected before and during lockdown period.

The Internal Financial Reporting and Controls are appropriate to the nature and size of the business of the Company and have not suffered in any respect during the Covid-19 so far.