Aventus Buildcon Ltd Management Discussions.

Annexure C

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENTS

Infrastructure drives growth in an economy and is critical for the effective functioning of the economy. Growth in physical infrastructure has a direct impact on sustainability of overall growth and development of an economy. In recent years, India has made significant progress in physical infrastructure such as electricity, railways, roads, ports, airports, irrigation and urban and rural water supply and sanitation with the governments focus on infrastructure development and increased investments in the sector. Power is most important element of infrastructure that is required for sustained growth of any economy. India has a huge potential for the development of power from coal, nuclear power and renewable sources of energy such as wind, solar, hydro, biogases etc. However, these resources have not been tapped properly and country continues to deal with power deficits in many of its states. The demand for electricity is expected to grow in coming years and to meet this increasing requirement of electricity, massive addition of generating capacity in the country is required. India is witnessing significant interest from international investors in the infrastructure space. The Indian Government is taking every possible initiative to boost the infrastructure sector.

OPPORTUNITIES

A better business opportunity means better growth. In todays era, a lots of Growth opportunities are available to infrastructure industry and the only need is to grab and act on them with perfect vision and mission.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company deals in only one segment i.e. Building & Constructions. Therefore, it is not required to give segment wise performance.

OUTLOOK

Your Company is continuously doing efforts for seeking to concentrate on certain key geographic markets, and to achieve a suitable product and price combination in these markets. Your Company is also investing in the development of supporting urban infrastructure in certain select, strategic locations to ensure the high quality of developments. Your Companys current strategy is aimed at developing its core business, rationalizing its costs and reducing its levels of indebtedness. However, as your Company seeks to focus on its core business, it faces several challenges, including an uncertain economic, regulatory and taxation environment. Your Company believes that demand conditions in the real estate sector are exhibiting early signs of improvement, and signs of declining interest rates as well as renewed activity in the lending and public capital markets are expected to ease funding pressures. As your Company continues to build on its core business of real estate development and leasing, your Company believes that it is well placed to achieve its targets of reducing its overall indebtedness, executing its real estate development and leasing operations and taking advantage of a potential revival in economic growth and its resultant positive effects on the real estate sector. Expansions are required to be made in developing Shopping Complexes. Foreign institutional Investors have also shown confidence in the countrys construction and are showing up investments in India. This is a positive sign and will open new areas of growth and development.

RISK

What needs to be determined is:

a. The proportion of real versus perceived risks.

b. The monetary quantification of risks.

c. The real import and the impact of a type of risk.

Risks, when indeterminate, are worse than assessed risks. The obvious outcome of the situation is that the Banks and Financial Institutions hesitate in lending to the operators of Construction Industry or alternatively lend in absence of authentic and reliable inputs. Either of the situations is detrimental to the overall growth of the industry and thus, the economy. It is therefore of paramount importance that the present operating systems be substantially strengthened to provide comfort to the financial systems. Mitigation of risks is the all en-compassing requirement.

THREAT

Interest rates continue to be the key issue. Any increase in the interest rate will have negative impact on the profitability of the Company. Slowdown in Infrastructure activity due to financial constraints. Any increase in taxes and change in Government policies may have negative impact on the Company.

Normal competition from other competitors.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

As a part of the effort to evaluate the effectiveness of the internal control systems, your Companys internal audit system reviews all the control measures on a periodic basis and recommends improvements, wherever appropriate. The Company has in place adequate internal control systems and procedures commensurate with the size and nature of its business. These systems and procedures provide reasonable assurance of maintenance of proper accounting records, reliability of financial information, protection of resources and safeguarding of assets against unauthorized use. The management regularly reviews the internal control systems and procedures.

DISCUSSIONS ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The income of the Company for the current year is Rs. 5,876,334/- as against Rs. 7,096,177/- during the previous year. The Company has earned a net profit after tax of Rs. 2,302,075/- during the current year as against Rs. 1,252,779 /- in the previous year.

HUMAN RESOURCE DEVELOPMENT

Your companys human resource policy provides an environment that motivates its employees to realize their full potential. Your Company respects each employee, motivates them and try to offer opportunities based on their skill sets and, in this process, builds mutually benefiting relations between the Company and its employees. Your company has put in place a policy that not only increase productivity but also increases job satisfaction of its employees.

Your company has placed a recruitment system in the organization wherein right candidate with right skills is recruited for the position. Your company has established systems, which aims to provide training to employees at every level of the organization that leads to quality work output in their assigned work in turn helping in improving the bottom-line of your company.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis Report describing the Companys Objectives, projections, estimates and expectations, may be forward looking statements within the meaning of applicable laws and Regulations and the actual results might differ from those expressed or implied herein.

The Company is not under any obligation to publicly amend, modify or revise any such forward looking statements on the basis of any subsequent developments, information or events.