darjeeling ropeway company ltd share price Management discussions

A. Industry structure and developments

The size of India Construction market is around USD 639 billion in the current year and is anticipated to register a CAGR of over 6% during the forecast period. The cyclical slowdown that set in the Indian economy before the outbreak of the pandemic got exacerbated on the back of cliff effects and scarring generated bythe pandemic. The planning & design service segment is anticipated to witness the fastest growth with a CAGR of 6.2% over the forecast period owing to the presence of multiple well-established global civil engineering companies in the market. Planning & design is an essential part of any construction project, which ensures the proper integration of the design and construction process. The government customers segment led the market and accounted for more than 41.2% of the global civil engineering industry share in 2022

Asia Pacific region accounted for a market share of 33.1% in the global civil engineering demand in 2022. The region is likewise expected to observe the most extreme development rate over the conjecture time frame. While greater parts of the organizations are situated in the US, the Asia-Pacific region has seen a mind-boggling expansion in the interest of the civil engineering industry sector. Organizations based out of the U.S. are currently setting up activities in countries like India & China, which offer tax breaks and decreased assembling costs.

The infrastructure segment is estimated to register the fastest growth at a CAGR of 6.5% over the forecast period. Increasing public and private investments in infrastructure projects development including railways, roads, airports, waterways, and others are projected to drive segment growth over the forecast period. In addition, a rising inclination towards the design and development of flexible infrastructure is expected to propel the segments growth.

B. Opportunities and Threats

Opportunities:

The infrastructure and construction market in India is particularly affected in an atmosphere of lack of complete inertia in new project development and execution. Issues like environment clearances and financial difficulties for large developers have led to very little new opportunities in terms of infrastructure related development. As India awaits policy reforms to pick up speed, your Company firmly believes that the demand for Real Estate in a country like India should remain strong in the medium to long term. Your Company continues to capitalize on the market opportunities by leveraging its key strengths like Brand Reputation, Transparency, outsourcing, significant leveraging opportunity.

Threats:

There are substantial procedural delays with regards to land acquisition, land use, project launches and construction approvals. Retrospective policy changes and regulatory bottlenecks may impact profitability and affect the attractiveness of the sector and companies operating within the sector. Unfavorable changes in government policies and the regulatory environment can adversely impact the performance of the sector.

C. Segment-wise or Product-wise performance

The Company operates in single Segment i.e. Real estate activities on a works contract basis.

D. Outlook

The new supply in these micro markets is estimated at 7% of the total 155 M office space supply in India during 2022-24, which is lower than the current share of the micro-markets at 13%. The CRE market is linked to the economic development of the nation. With the Indian economy headed for a strong growth in the coming years, it is likely to remain buoyant. As per CW Research, the micro markets of Gurugram, Noida, Mumbai and Kolkata are likely to witness a scenario of demand outstripping supply over the next three years, thus providing occupancy gains to players. Average net absorptions in these micro markets during 2022-2024 is estimated at 4.3 M sf per year, surpassing the pre-COVID absorption

E. Risks and concerns

The business paradigm is continuously shifting owing to changes in customer expectations, regulatory updates, and volatility in the economic environment. Our ability to create sustainable value in this environment is dependent on recognizing and effectively addressing key risks that impact the business. To facilitate this, a comprehensive risk management policy and framework has been established to identity and analyze the key business risks. The Companys risk management plan created through appropriate scenario analysis for a resilient business model is periodically reviewed and approved by the Audit Committee and acts as a supplement to the Internal Control Mechanism and Internal Audit function.

F. Internal control system and their adequacy

The Company has adequate and efficient internal and external control system, which provides protection to all its assets against loss from unauthorized use and ensures correct reporting of transactions. The internal control systems are further supplemented by internal audits carried out by the respective Internal Auditors of the Company and Periodical review by the management. The Company has putin place proper controls, which are reviewed at regular intervals to ensure that transactions are properly authorized, correctly reported and assets are safeguarded. The Audit Committee of the Board addresses issue raised by both the Internal and Statutory Auditors, tokeep constant check on cost structure and to provide adequate financial and accounting controls and implement accounting standards.

In addition to the above, the Company has formulated a Vigil Mechanism (Whistle Blower Policy) for its Directors and Employees forreporting genuine concerns about unethical practices and suspected malpractices.

G. Discussion on financial performance with respect to operational performance

The financial performance of the Company for the Financial Year 2022-23 is described in the report of the Board of Directors of the Company.

H. Material developments in Human Resources/Industrial Relations front, including number of people employed

The cordial employer - employee relationship also continued during the year under the review. The Company has continued to give special attention to human resources.

Registered Office:
104, Floor-1, Shreeji Darshan, Tata Road No. 2,
Roxy Cinema Opera House, Girgaon, Mumbai
400 004
Date: 5th September, 2023
Place: Mumbai
	By the Order of the Board
	Darjeeling Ropeway Company Limited
Sd/-	Sd/-
Himanshu Shah	Bhargavi Patel
Managing Director	Director
DIN: 08198016	DIN:08357929