Coral India Finance & Housing Ltd Management Discussions

Overall Business Environment and Economy

The year 2022 proved to be a tumultuous period for the global economy. Since the beginning of the year, there were a lot of growing voices about the deteriorating situation in Ukraine, but the beginning of the conflict took all by surprise. While the loss of human life and the sufferings it induced is undeniably unfathomable, its impact on the overall global economy was also profound.

The surge in inflation witnessed across commodities in the aftermath of the conflict, added to the already elevated inflationary concerns across economies grappling with the fractured supply chain networks resulting from the COVID fallout. This led to unprecedented, synchronized increases in policy rates across all major economies which not just resulted in monetary policy tightening across the emerging economies but also led to significant forex reserve challenges in many economies, ultimately impacting the business conditions across many markets.

The Indian economy, too, encountered headwinds during the year. Following the sharp rebound in domestic economic activity during the previous financial year, FY 2022-23 was a year of normalization with demand in many sectors gradually moderated, yet remaining robust. Simultaneously, the Reserve Bank of India tightened the monetary policy to counteract the sticky inflation in the economy. Consequently, the Indian economic growth was expected to be lower - at about 6.8% to 7% mark for FY 2022-23, as compared to 9% registered for the previous fiscal year. However, in a year which saw growth decelerating across the world with recessionary expectations building up, the Indian economy still exhibited resilience, underpinned by robust domestic consumption demand and well supported by the Governments push on infrastructure buildup in various parts of the economy.

Outlook

The year 2023 has continued to see bouts of uncertainty that have tested the growth conditions across the world. Headline inflation continues to remain elevated, exceeding the comfort zone of the monetary authorities and it would result in continued uncertainties in the financial markets and a carry-on impact on the economic conditions.

While the turmoil appears to be contained for now, risk indicators continue to remain a matter of concern. Multilateral agencies have already cautioned about the slowdown in global growth with geopolitical tensions adding another layer of ambiguity to the existing uncertainties. Amidst these uncertainties, the Indian economy is expected to be an oasis of stability, offering continued growth momentum. While this momentum may not be entirely impervious to global developments, domestic anchors are firmly in place to propel the economy forward. Businesses, across geographies, would need to be vigilant and exhibit flexibility, working with dynamic operating models to adapt to the evolving conditions while simultaneously building resiliency in their business models to ensure sustained performance.

Business Segment Review

Industry Structure and Developments & Company?s Performance

The Company?s business is divided into two reportable segments viz, Construction and Investments. Despite of the strain on the economic scenario and slowdown market condition, the Company have achieved well as compare to previous year?s figures. Your Directors are trying their best to maximize the profits of the Company and the stakeholders as a whole.

Construction Segment

The Country?s real estate sector witnessed a healthy growth in demand during FY23. The commercial and the residential market saw a healthy demand despite the post pandemic effects, as the sector continued to display steady growth and resilience throughout the fiscal. The residential real estate market in India had astounding progress in 2022, setting new sales records of 68% YoY, further demonstrating the industry?s prominence as one of India?s fastest-growing industries. After two years affected by COVID, the real estate market has set unprecedented benchmarks which continued its growth momentum from 2021 amid the global slowdown.

Currently, real estate companies are contributing approximately 7-8% to the Indian GDP, which is estimated to increase by 3-4% by 2025. Indian real estate is one of the leading sectors impacting the GDP and generating enormous employment opportunities. Changing market realities and property purchase behaviour in the post- COVID era have undeniably impacted the real estate sector.

The performance of this segment has an upward trend during the year. During the year under review, the income from the Construction activity is ^ 1692.95 Lakhs compared to ^ 720.63 Lakhs in the previous year, showing a growth rate of 134.93 % as compared to previous year.

Investment Segment

The Financial year 2022-2023 was not a great year for the Indian equity market. The Nifty 50 index declined by 3% during this period, while the broader Nifty 500 index contracted by 4.1%, as of March 24, 2023. This is in contrast to the sharp gains the indices achieved in the past two financial years.

Consequently, various categories of equity mutual funds also recorded muted returns. Elevated inflation levels triggered by the Russia-Ukraine war was the biggest negative catalyst for the equity market. Moreover, the COVID-19 lockdown in China caused supply chain constraints globally, which impacted economic activities in certain sectors. To tame the elevated inflation levels, central banks across the globe, including RBI, hiked interest rates. The higher prices and borrowing costs have raised recession fears in the U.S. and other major economies. This, in turn, has darkened the outlook for global growth as it could have a spillover effect on the Indian economy and other parts of the world.

During the year under review, income from Investment activities is t 1372.46 Lakhs as compared to t 2012.15 Lakhs in the previous year, showing a decline of 31.80 % as compared to previous year.

Opportunities, Threats, Risks and Concerns (OTRC)

The OTRC have the various bench marks and keep changing on the various domestic global business outlooks.

Opportunities

1. Have positional to expand on our own, lower dependency of others.

2. Debt free Company.

Risks, Threats and Concerns

1. External factors and government policies.

2. Vague thinking of major strong nations. This has maximum impact on emerging market.

3. Slowdown economy and volatile market conditions.

Internal control systems and their adequacy:

The Company?s defined organizational structure, documented policy guidelines and adequate internal controls ensure efficiency of operations, compliance with internal policies, applicable laws and regulations, protection of resources and assets and accurate reporting of financial transactions. The Company continuously upgrades these systems in line with best available practices.

Discussion on financial performance with respect to operational performance: (t in Lakhs except eps)

Particulars	STANDALONE		YoY growth
	2022-23	2021-22	(%)
Net Revenue from Operations including Other Income	3065.41	2732.78	12.17
Profit before Interest, Depreciation and Taxes	2240.91	2208.83	1.45
Less:
a. Finance Cost	0.20	2.04	(90.20)
b. Depreciation	8.87	9.82
c. Provision for Taxation (including Deferred Tax)	399.83	459.87
Net Profit for the Year (I)	1832.01	1737.10	5.46
Total Comprehensive Income/Loss (II)	876.77	1692.68
Balance Profits for the earlier years	10909.59	9373.98
Less: Dividend paid on Equity Shares	(120.91)	(201.51)
Balance carried forward	12620.70	10909.59
Earnings Per Share (EPS) [Face Value of t 2/- each)	4.55	4.31	5.57

Note: Previous year?s figures have been regrouped / reclassified wherever necessary in conformity with Indian Accounting Standards (Ind AS) to correspond with the current year?s classification / disclosure and may not be comparable with the figures reported earlier.

Companys Performance Overview

During the financial year 2022-23:

• During the financial year 2022-23, revenue from operations increased to t 2,955.03 Lakhs as against t 2,749.80 Lakhs in the previous year - a growth of 7.46%.

• Employee cost as a percentage to revenue from operations increased to 9.76% (t 97.92 Lakhs) as against 3.24% (t89.21 Lakhs) in the previous year.

• Other expense as a percentage to revenue from operations increased to 11.19% (t 246.70 Lakhs) as against 8.07% (t 221.87 Lakhs) in the previous year.

• Total Profit after tax for the current year has been increased to t 1,832.01 Lakhs against t 1,737.10 Lakhs in the previous financial year - a growth of 5.46%.

• Total Earning per share for the current year is t 4.55 against t 4.31 in the previous financial year - a growth of 5.57%.

Material developments in Human Resources / Industrial: Your Company considers Human Resource as key drivers to the growth of the Company. With a rapid changing in the environment, the management put the whole efforts for the betterment of the employees to face the challenges with the training and development at frequent intervals.

Ratios where there has been significant change (i.e. change of 25% or more as compared to the immediately previous financial year) from FY 202223 to FY 2021-22:

Debtors Turnover (in times)
2022-23	22.83
2021-22	8.27
Improvement:	175.98

Reason: Improvement in Collection has resulted into favorable Ratio.

Inventory Turnover Ratio (in times)
2022-23	39.16
2021-22	57.74
Improvement:	(32.17)

Reason: Increase in sales has improved Inventory Turnover Ratio.

Current Ratio:
2022-23	20.21
2021-22	19.39
Improvement:	4.27 %
Return on Net worth
2022-23	227.28
2021-22	215.51
Improvement:	5.46%

Operating Profit Margin
2022-23	56.59
2021-22	35.78
Improvement:	58.17%

Reason : Increase in Profit from operation has improved operating profit margin.

Net Profit Margin:
2022-23	59.76
2021-22	63.57
Reduction:	(5.98)%

Interest Coverage Ratio: Not Applicable Debt Equity Ratio: Not Applicable

Cautionary Statement

Statements on the Management Discussion and Analysis and current year?s outlook are Managements perception at the time of drawing this report. Actual results may be materially different from those expressed in the statement. Important factors that could influence the Company?s operations include demand and supply conditions, availability of inputs and their prices both domestic and global, changes in Government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.