A. Industry structure and developments
The Real Estate sector is among one of the most globally recognized sectors. It
comprises of four sub-sectors - housing, retail, hospitality, and commercial. 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 accommodation. The construction
industry ranks third among the 14 major sectors in terms of direct, indirect, and induced
effects in all sectors of the economy.
In India, the real estate sector is the second-highest employment generator, after the
agriculture sector. It is also expected that this sector will incur more non-resident
Indian (NRI) investment, both in the short term and the long term. This sector is a major
wealth creator for both developers and investors. The consequent increase in business
opportunities and migration of the labour force has, in turn, increased the demand for
commercial and housing space, especially rental housing. About 250 ancillary industries
such as cement, steel, bricks, timber, and building materials are dependent on the real
estate industry.
The Year 2022 proved to be a year of a new high for the Indian real estate market. Both
new launches and home sales saw a significant improvement last year and is expected to
maintain the same momentum in the year 2023 as well. The real estate market in India has
been tried and tested, widely thought to be immune to the volatility in the market.
Interestingly, the real estate market has stayed true to the expectations of real estate
investors despite the number of ups and downs in the last couple of years. Fortunately,
positive expectations and a rise in the momentum of growth have demonstrated the markets
ability to persist and will continue to do so in 2023 and the upcoming years as well.
The real estate market in India offers something for every type of investor out there.
Considering 2023, the general Indian economy shows encouraging indicators, including a
rebound from the current stock market fall, a predicted increase in the creation of new
employment opportunities, and overall growth. These indicators will ultimately lead to a
rise in the demand for housing societies in the country as more and more individuals step
into the housing market.
In FY23, Indias residential property market witnessed the value of home sales reaching
an all-time high of Rs. 3.47 lakh crore marking a robust 48% year-on-year increase. The
volume of sales also exhibited a strong growth trajectory, with a 36% rise to 379,095
units sold.
CONCLUSION
Real estate investment in India has never been an easy choice. With sales in various
locations increasing significantly, it will make people understand the importance of
owning their own real estate assets. With 2022 picking up some real estate trends, it is
likely that these trends will continue in 2023 as well, along with any new real estate
trends and forecasts that the market might see.
B. Opportunities and Threats
a) Opportunities:
Your management has committed to turn around the Company and make it profitable at an
early date by their sincere efforts, business acumen, experience and resources on emerging
opportunities in the current scenario of the real estate industry. Demand for quality
housing is immense in India and long-term structural drivers of consolidated supply and
growing demand with moderate price growth are in place. The current consolidation and
long-term drivers both present significant growth opportunities for our Company in the
near to medium term.
Your Company is undergoing following two re-development projects during the FY 2022-23:
•Dwarka Co-operative Housing Society Limited, a Society registered under the
Maharashtra Co-operative Societies Act, 1960, bearing Registration No. W-S-W / HSG / TC
3875 and having its office at Saraswati Road, Off Linking Road, Santacruz (West) Mumbai -
400054, Maharashtra, India. The Company has entered into a Memorandum of Understanding
with Dwarka Co-operative Housing Society Limited on 21st January 2022.
• Ambadevi Co-operative Housing Society Limited, a Co-operative Housing Society
registered under the provisions of the Maharashtra Co- operative Societies Act, 1960,
bearing Registration Number: BOM/HSG-627 of 1964 and having its office at Saraswati Road,
Off Linking Road, Santacruz (West) Mumbai - 400054, Maharashtra, India. The Company has
entered into a Memorandum of Understanding with Ambadevi Co-operative Housing Society
Limited on 16th February 2022. The redevelopment project of Ambadevi
Co-operative Housing Society Limited has been assigned to Arunis Edifice Private Limited,
an Associate company.
b) Threats:
1. Fluctuations of interest rates have firm impact on residential real estate
markets;
2. Increased bargaining power of suppliers of construction materials;
3. Entrants of new players with better and sound IT knowledge and improved
technology;
4. Changing test of clients/consumers.
C. SEGMENT WISE OR PRODUCT-WISE PERFORMANCE
Revenue generated by the Company is from single segment only. Hence
segment/product-wise performance is not applicable.
D. OUTLOOK
Real Estate plays a vital role in the economic development of the Country. It is
estimated that the overall employment generation in the economy due to additional
investment in the housing/construction sector leads to approximately 8 (eight) times
employment through backward and forward linkages. The sector is also among the largest
receivers of foreign direct investment (FDI), while supporting more than 350 industries in
the Country. The residential real estate market in India is predicted to rise positively
in 2023, with a capital value increase of more than 6%. The Indian residential market is
expected to sustain its growth momentum in 2023 while dealing with global headwinds and
higher interest rates. Meanwhile, some concerns exist regarding the supply-demand gap, a
flight to quality will ensure that superior-grade commercial assets are given priority
Additionally, the luxury housing market is poised to touch new heights in the coming
years.
The real estate sector comprises four sub-sectors - housing, retail, hospitality, and
commercial. The growth of this sector is well complemented by the growth of the corporate
environment and the demand for office space as well as urban and semi-urban accommodation.
E. RISKS AND CONCERNS
The objective of risk management systems is to measure and monitor the various risks
the Company is subject to and to implement policies and procedures to address these. The
Company continues to improve its operating processes and risk management systems that will
further enhance its ability to manage these risks.
F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company believes that strong internal control system and processes plays a critical
role in the functioning of the Company. Regular internal audits and checks ensure that
responsibilities are discharged effectively. Your Company keeps on updating the IT
infrastructure both hardware and software. The internal control system is designed to
ensure that every aspect of the Companys activity is properly monitored.
G. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
The total income of the Company for the financial year under review was 369.36 Lakh as
compared to 180.40 Lakh in the previous financial year and Net Profit (after tax) was
17.90 Lakh as against 18.08 Lakh in the previous financial year and earning per shares was
0.60 as against 0.60 in the previous financial year.
H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING
NUMBER OF
PEOPLE EMPLOYED
Employees are the key to achieving the Companys objectives and strategies. Your
Company provides the employees a fair and equitable work environment and support from
their peers with a view to develop their capabilities leaving them with the freedom to act
and to take responsibility for the tasks assigned. Your Company strongly believes that its
team of capable and committed manpower, which is its core strength, is the key factor
behind its achievements, success, and future growth. Industrial relations remained cordial
during the year. Our constant endeavor is to work towards making an organization that is
simple, diverse, and agile which will move fast and innovate better. As on 31st
March 2023, 4 people were employed in the Company.
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
Key Financial Ratios |
Standalone |
Consolidated |
|
2022-23 |
2021-22 |
% Change |
2022-23 |
2021-22 |
Debtors Turnover |
2.67 |
- |
- |
2.67 |
- |
Inventory Turnover |
- |
- |
- |
- |
- |
Interest Coverage |
2.31 |
20.58 |
88% |
2.31 |
19.77 |
Current Ratio |
1.47 |
2.18 |
32% |
1.48 |
2.21 |
Debt Equity |
0.57 |
0.29 |
99% |
0.57 |
0.29 |
Operating Profit Margin (%) |
11.24 |
14.14 |
21% |
11.21 |
13.58 |
Net Profit Margin (%) |
5.20 |
11.76 |
56% |
5.00 |
11.14 |
Note: Previous years ratios have been regrouped wherever necessary to conform to
current years classification.
a) The Interest Coverage Ratio was 2.31 in the financial year 2022-23 as against 20.58
in the previous financial year on account of the increase in Borrowings made during the
financial year.
b) The Current Ratio declined to 1.47 in the financial year 2022-23 as against 2.18 in
the previous financial year due to a substantial increase in current liabilities;
c) The Debt Equity Ratio was 0.57 in the financial year 2022-23 as against 0.29 in the
previous financial year due to Fresh Borrowings made during the financial year.
d) Operating Profit Margin declined to 11.24% in the financial year 2022-23 as against
14.14% in the previous financial year due to fair valuation loss on investments; and
e) Net Profit Margin declined to 2.9% in the financial year 2022-23 as against 5.20% in
the previous financial year due to fair valuation loss on investments.
J. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS
FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF
Standalone: Return on Net Worth in the financial year 2022-23 was 2.98% as against
3.10% in the financial year 2021-22. During the financial year under review, return on Net
Worth decreased by 4% as compared to immediate previous financial year due to fair
valuation loss on investments.
Consolidated: Return on Net Worth in the financial year 2022-23 was 2.87% as against
2.94% in the Financial Year 2021-22. During the financial year under review, return on Net
Worth decreased by 2% as compared to immediate previous financial year due to fair
valuation loss on investments.
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