We have pleasure in submitting hereunder the Management Discussion & Analysis
Report on business of the Company. We have attempted to include discussions on the matters
to the extent relevant.
OVERVIEW - INDIAN ECONOMY, REAL ESTATE AND AFTER EFFECTS OF COVID-19
The Indian economy continues to show strong resilience to external shocks,
“Notwithstanding external pressures, Indias service exports have continued to
increase, and the current account deficit is narrowing”. The real estate sector is
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. Global risks have got accentuated with unprecedented climate
change, geo-political tensions and severe economic stress caused by inflation and
supply-side disruptions. Worsening food and energy in security together with growing
in-equities, develop throughout the world. In such a volatile global environment, India
demonstrated admirable resilience and achieved robust recovery driven by the Governments
proactive policy measures. Notwithstanding the global headwinds, the promise of the India
story is still intact and the economy is poised to remain one of the fastest growing in
the world, it is indeed, commendable that Government, while quickly addressing the
near-term challenges, has continued to focus on path breaking reforms and policy
interventions to enhance competitiveness 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. Bengaluru is expected
to be the most favoured property investment destination for NRIs, followed by Ahmedabad,
Pune, Chennai, Goa, Delhi and Dehradun. The demand for new houses with better ambience,
has been on the rise and is expected to grow more in the coming months. The latest
projections have forecasted the growth in double digits in the real estate sector.
Something which is reflected in the latest trends.
There has been emphasis on “Sustainable cities of tomorrow which reinforces the
governments seriousness about the implementation of urban planning reforms and thereby,
elevating the condition of Indian cities. With this, a multitude of cities and towns will
be transformed by advancing and refining the quality of life, infrastructure, mobility and
sustainability, which would ultimately lead to value addition in properties in the
transformed cities.
Real estate has played a significant role in the Indian economy. Now that India has the
worlds largest population, it has become ever more important to invest in, and develop
real estate, which also bears responsibility for the environment and sustainability. The
Union Budget 2023 encourages optimism in real estate as a reliable ally for long term
growth.
Presently, homebuyers are reluctant to book in under-construction projects and
preferring ready-to-move- in flats, since it minimizes risks. Public at large, is hoping
for affordable low budget housing.
At a time when Indias economy has expanded to become the fifth largest in the world,
surpassing prestigious nations like the UK, it is encouraging to note that the efforts
outlined in the Budget have the potential to strengthen the real estate sector both
directly and indirectly. The Budget would play a key role in enhancing market liquidity
and encouraging economic development through reforms to the tax code, increased
infrastructure spending, and a focus on affordable housing.
PERFORMANCE (2022-23)
Year 2022-23 was a challenging year and despite the business disruptions during the
pandemic the real estate sector witnessed a strong rebound. With the steady performance
and quick revival, the sector regained the buyers and investors trust and Indias realty
sector has shown signs of healthy growth in the Year - 2022-23. Supported by the strong
economic growth the real estate sector quickly picked up the momentum. Favorable trends
like low-interest rates, affordability and other factors led to realty growth in Tier-2
and Tier-3 Cities. This too is likely to continue in the coming years. New asset classes
like High- street and multipurpose commercial properties found favour with investors and
shoppers. Similarly, in residential, township projects, large-sized homes emerged as a
preferred choice and will continue to drive real estate growth in the years ahead. The
housing sector in India is also quickly adapting itself to digitalization and innovation
with buyers looking for best-in-class amenities.
With strong demand, evolving trends and new emerging markets leading the sectors
growth, the coming year is likely to be an impactful year for the real estate sector. Real
estate prices are seeing an upswing due to the rise in the cost of raw materials, which
has also been affected due to the ongoing war and crisis in Europe. Reforms like RERA and
GST are helping to enhance transparency & faith in real estate market.
Commercial complex-“Boom Plaza” Situated in Sushant Lok-III, Sector-57 is now
well established with well known brands opening outlets here. Being very near to new
developing sectors of south Gurugram, business has considerably picked up and Investors
are satisfied with the good returns on their Investments as rental values have also moved
up. Many have tied up with well known brands and some have even started their own ventures
in the commercial complex.
“Club Florence” the branded name in Hospitality Sector situated in Sushant
Lok-II, Sector - 56 is also running well with more Social, Community and banqueting
activities after the earlier slowdown due to the Covid Pandemic. Participation from
corporate houses is also on the rise and our new customers particularly who have recently
moved to this part of Gurugram are eager to be part of this prestigious Club. Members are
actively participating in the Sports, Swimming and other recreational & social
activities being regularly initiated here.
Carrying forward from last year, this year too the focus has been on completing and
handing over projects in advanced stage of construction. Construction of Premium Floors,
which are high-end four Bed Room independent floors have been completed and Clients are
taking possession now. Handing over process is already on for these premium floors.
Group Housing residential Project namely “Florence Heights” in Ansal City,
Puthiyakavu, Kochi has been completed and possession given to most of the clients who are
enjoying the serene atmosphere of Ansal City Complex. Development works in Area Beyond
Thodu (rivulet) at the rear side of the main Township Project have been initiated, where
we are planning to have Plotted Development. Plots are being Carved out in the five Acre
land area for which the Layout has been prepared and is being submitted for necessary
approvals. Construction work in second phase of “City Homes” Project is also
nearing completion. Construction is also going ahead at a fast speed on the plots where
many clients have started constructing their own Houses & Villas. Sale of balance
unsold plots has also picked up after certain restrictions and regulations with respect to
building plans & change in data bank were cleared with the concerned authorities.
Building permit has been received for the Construction of the Club House in Ansal City,
Kochi. The proposed Club Building in Ansal City, Kochi is situated at the entrance with
easy access for members.
For the existing Club facilities at “Ansal Riverdale, Eroor, Kochi” we are
proposing to augment it with some sports and recreational facilities which will definitely
help to upgrade the club and help in increasing the Social gatherings and overall
membership/foot fall in our Riverdale Club.
Development works in Project titled “Ansal City, GT Road, Amritsar”, Punjab
which is spread over an area of about 64 acres has been completed. Individual plot owners
have also started constructing houses on their respective plots. Families who recently
moved in also celebrated Lohri festival with great pomp & show. This fully developed
integrated Township which has lush green landscaping and large open spaces is an ideal
destination for serene living in the City of Amritsar. After the re-launch the overall
response from the market is overwhelming, where the end users as well as the investors are
happy with the appreciation. For the Independent residential Royal Villas in Ansal City,
Amritsar construction has been completed.
For residential project namely “Florence Estate” in Amritsar, construction of
Site office and Sample flat has already been completed. This project, which is spread over
an area of 17 Acres (Approx.) is expected to commence soon.
In “Florence City” Project Pathankot, Construction of two Sample villas have
been completed. External public health services, construction of bridge and approach roads
is in full swing and the project is expected to be launched soon.
In “Florence Town” Project in Jaipur, Rajasthan, which has a total site area
of approximately one hundred fifty (1 50) acres, Agreement with M/s Sanjeevni Group has
been executed for marketing of the plots in the township. The sale is happening at a good
pace.
“Ansal Crown Heights”, a Joint Venture Group Housing residential Project in
Sec-80, Faridabad with M/s Crown Group, Faridabad which was taken overby our Company, is
now under NCLT proceedings.
“Ansal Basera City”, Jhansi, UP is a Township project spread over an area of
Approximately 80 acres of land for which development works are going on at site and
revised scheme for External Electrification with enhanced electrical load has been submitted
to Authorities.
“Ansal Basera Estate”, Jhansi, UP, which is another Row Housing project on
Gwalior road for which we have constructed high-end Villas. Completion Certificates of the
project has already been obtained and the colony handed over to the Resident Welfare
Association (RWA).
A Collaboration project namely “Ansal Aditya Aryan Vatika”, Gwalior had been
planned for development of Farm Houses and is spread over an area of approx. 150 acres.
Work is still on hold due to certain pending approvals. A Group Housing residential
project in SADA, Gwalior, MP had been allotted to Ansal Buildwell Ltd. through competitive
bidding however the matter is subjudice.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company is putting in place standard operating procedures specific to the various
processes of business. The effectiveness of internal control mechanism is reviewed by
independent Internal Auditors at regular intervals.
The Company has formulated a Policy framework on internal control for identifying and
rectifying internal control weaknesses and to monitor the same and report to corporate
management. The Company has Audit Committee consisting of independent directors having
expert knowledge and vast experience in the field of their area of operations. They do
periodic review accounting records and various statements /Accounts prepared by the
accounting department. They advise time to time to the senior management of the Company
and interact with them.
During the year under review, four meetings of Audit Committee were held to review,
inter alia, the internal audit/controls along with management comments and follow up
actions thereon.
It reviewed, inter-alia the adequacy and effectiveness of the internal control systems
and monitored implementation of Internal Audit recommendations.
Your Company has in place adequate Internal Control systems and procedures commensurate
with the size and nature ofbusiness. These procedures are designed to ensure that:
• Effective & Adequate Internal Control environment is maintained across the
Company.
• All assets and resources are acquired economically, used efficiently and are
adequately protected.
• Significant financial, managerial and operating information is accurate,
reliable and is provided timely; and
• All internal policies and statutory guidelines are complied with.
The Company has a proper and adequate system of internal controls to ensure that all
assets are safeguarded and protected against loss from unauthorised use or disposition and
that transactions are authorised, recorded and reported correctly.
The Board of Directors had appointed M/s Shailender K. Bajaj & Co., Chartered
Accountants, 2E/45, Connaught Place, New Delhi-110 001 represented by Mr. Shailender Bajaj
as internal auditors of the Company to effective internal control/audit to cover various
risks as they will identify in the process of internal audit, monitor and advise Audit
Committee/Board of Directors from time to time to take strategic steps to control them.
The Companys internal control systems are further supplemented by an extensive
programme of internal audit by an independent department of competent executives and
periodic review by Management.
The Company has clearly laid down policies, guidelines and procedures which form part
of its internal control system.
PROSPECTS & FUTURE OUTLOOK
The real estate market in Delhi-NCR has witnessed several trends in recent years.
Delhi-NCR is the largest urban agglomeration in India, comprising Delhi and its
neighbouring cities, including Noida, Gurugram, Ghaziabad, Bahadurgarh, Manesar, Faridabad
and Greater Noida. The region is one of the fastest growing areas in the country and home
to several multinational companies, making it a hub of economic activity. Over the years
after the Pandemic the real estate market in Delhi-NCR has witnessed significant growth
and experts predict that 2023 will be a year of significant growth for the sector. The
trend suggests rise of co-working spaces in and around the entire region of NCR. Having
another International airport nearby, expansion of metro rail and construction of
extensive network of highways connecting major cities are some of the significant drivers
for the same in this region. Demand for housing and commercial properties is increasing
and the governments push towards urban development through initiatives like the Smart
Cities Mission and the Atal Mission for Rejuvenation and Urban Transformation (AMRUT) has
also contributed to the growth of the real estate sector. As we all know NRI community is
also showing deep interest in Investments in India, which is further leading to the growth
of the real estate and economy of our country particularly in the northern and western
region of our country.
To summarise it, improvements in connectivity have made it easier for people to commute
to work and access other parts of the region, making NCR an attractive destination for
investment and a destination for a high standard living too. We are optimistic and
positive for being part of the revival of the real estate industry, which shall continue
its trend for upward trajectory in 2023.
OPPORTUNITIES AND THREATS
The long term view on the Indian Real Estate Industry is positive, as fundamental
demand drivers such as increasing urbanization, favourable demographics, growth of the
service sector, and rising incomes are still intact.
Demand-supply gap in affordable housing exists, with demand fuelled by tax incentive
and growing middle class with higher savings. Increasing demand for commercial and office
space especially from the rapidly growing Retail, IT and Hospitality Sectors etc. also
exists.
Real estate business of the Company is dependent on the performance of the real estate
market in India. Fluctuations in market conditions may affect capacity of the Company to
sell projects at expected prices, which could unfavorably effect our revenues and
earnings.
The Company may not be able to increase the prices of its products in order to pass
costs on to its customers in the background of inflation, and its profits might decline.
Potential limitations on the supply of land could reduce revenues of the Company or
negatively impact the results of its operations
The business is subject to extensive statutory or governmental regulations. Change in
the business policies of the Government, may have effect on the prospects of the business.
Work stoppages and other labour problems could adversely affect the business.
Sanctioning process through the authorities is slow and time consuming. Fluctuations in
market conditions may affect our ability to sell our projects at expected prices, which
could adversely affect our revenue and earnings. Potential limitations on the supply of
land could reduce our revenue or negatively impact the results of Companys operations.
RISK AND CONCERNS
A big risk which the developers are facing is price risk. Real estate price cycles have
the maximum impact on the margins of the developers, because land costs account for a
large portion of the constructed property. The other risk to which the developers are
exposed is demand risk which indicates the ability to sell properties based on location,
brand, track record, quality and timelines of completion. Most real estate developers try
to address this risk by undertaking market surveys in order to assess the demand for their
properties. There is Finance Risk also. Low availability of funds is also a major risk for
real estate industry. Uncertain interest rates lead to uncertainty in the real estate
market. Demonetisation may dampen the growth rate of demand for housing units. Change in
Government Policies including change in Tax structure will also affect the Progress of the
Real Estate Industry.
During the year under review, the Company had faced the risk of partial COVID-19
pandemics and after effects of partial lockdown. The above factors affected the demand of
the real estate sector of the economy.
The impact of the Real Estate (Regulation and Development) Act, 2016 is very uncertain.
It is very difficult to say how the Real Estate Market and consumers will react upon it.
Although major initiatives in the infrastructure of road and transportation have been
made, yet the availability of Power still needs the attention of policy makers.
The lack of uniformity in the regulatory environment concerning the real estate, as
also the availability of quality manpower, and reliable databases on industry, are
concerns that need to be addressed for attracting FDI inflows in the industry.
CAUTIONARY STATEMENT
Statements in this report on Managements Discussion & Analysis are based on
certain assumptions and expectations of future events. Some statements may be consistent
and repetition of the earlier years as there was no change in the circumstantial
positions. Actual results could, however, differ materially from those expressed or
implied. Important factors that could make a difference to the Companys operations
include global as well as domestic demand-supply conditions, raw material cost &
availability, changes in Government regulations and tax structure, economic development
within India and world-wide and other relevant factors.
| Registered Office: |
For & on behalf of the Board |
| 118, Upper First Floor, Prakashdeep Building 7, Tolstoy Marg, New
Delhi-110 001 |
ANSAL BUILDWELL LIMITED |
| Dated: 29/05/2023 |
SUBHASH VERMA |
| Place: New Delhi |
CHAIRMAN |
+91-9892691696
