Geecee Ventures Ltd Management Discussions.

GeeCee Ventures Limited has created a reputation for itself for delivering an array of highly successful projects and establishing industry benchmarks in sustainable development. GeeCee Ventures Limited is engaged in the development of residential housing cum commercial projects. Company has into 3 Business Segments viz. (i) Real Estate (ii) Investments /Financing and (iii) Wind Power Generation.

? OVERVIEW Global Economy

The global economies are facing a synchronized slowdown, resulting from a variety of factors affecting the world. The outbreak of coronavirus 2019 (COVID19) has globally disrupted peoples lives, interrupted businesses and jeopardized decades of development progress. The decline in growth is the outcome of rising trade tensions between large economies, rising uncertainty surrounding trade and geopolitical issues. The pandemic is having a noticeable impact on global economic growth. Estimates so far indicate the virus could trim global economic growth by as much as 2.0% per month if current conditions persist and raise the risks of a severe global economic recession. Global trade could also fall by 13% to 32%, depending on the depth and extent of the global economic downturn.

Global growth outlook has changed since the outbreak of COVID-19. There has been coordinated global monetary policy easing and fiscal support from governments. These policy support measures would act as cushions offsetting weakness in growth to some extent. However, global economic activity is likely to contract in 2020 and global growth environment will remain challenging in the short term. The economic activity in U.S. and Eurozone economies is expected to fall sharply as these economies undertake measures to contain the outbreak.

Indian Economy

Outbreak of COVID-19 would make growth environment challenging in first half of FY 2020-21 but liquidity measures announced by the government should help provide support. Numerous foreign companies are setting up their facilities in India on account of various government initiatives like Make in India and Digital India. Make in India initiative was launched with an aim to boost the manufacturing sector of Indian economy, to increase the purchasing power of an average Indian consumer, which would further boost demand, and hence spur development, in addition to benefiting investors.

India is also focusing on renewable sources to generate energy. It is planning to achieve 40% of its energy from non-fossil sources by 2030 which is currently 30% and has also plans to increase its renewable energy capacity from 57 GW to 175 GW by 2022.

The countrys exports of goods and services are expected to improve once the global economies recover from the shocks of the pandemic. While the long term outlook looks robust for the country, a prolonged COVID19 pandemic would push the global economy into deep recession and further slow Indian growth.

? INDUSTRY STRUCTURE & DEVELOPMENTS :

The real estate sector is one of the most globally recognized sectors. In India, real estate is the second largest employer after agriculture and is expected to grow at 30% over the next decade. The Indian real estate sector has been trying to get back on its feet and come to terms with multiple reforms and changes brought in by demonetization, Real Estate (Regulation and Development) Act, 2016 (RERA), Goods and Services Tax Act (GST), Insolvency and Bankruptcy Code, 2016 (IBC), NBFC crisis and the subvention scheme ban. While it was a tough task for the sector to align itself with these new regulations, the measures have been instrumental to bring transparency, accountability and fiscal discipline over the last few years.

While the sector was on a growth trajectory since the last few years and was likely to emerge stronger than before, the current coronavirus lockdown has surely put brakes on its growth momentum.

Unfavorable changes in regulatory environment and government policies can adversely impact the performance of the sector. Retrospective changes in policies, procedural delays with regards to land acquisition, land use, project launches and construction approvals may impact the profitability of the company and significant downturn investment climate may adversely impact business.

COVID-19 IMPACT ON REAL ESTATE

While the pandemic outbreak could temporarily disrupt the sector, there are certain positives in this adverse situation. The recent liquidity crisis has worsened the situation for smaller players which were anyway finding it difficult to adhere to new norms laid by RERA leading to a new wave of consolidation. Industry consolidation is likely to get accelerated further with the COVID19 outbreak and many weak players may cease to exist. Established and organized players with strong Cash Flow are expected to gain market share. Also, the current situation is expected to open up a lot of business development opportunities for well capitalized developers.

Amidst the current COVID-19 outbreak, the sector is likely to witness major disruptions due to construction delays and financing issues. Also, many prospective customers could consider postponing their decisions either to stay away from the project sites or in the expectations of a price correction.

? Highlights of Budget 2020

Central Budget announcements do not have much for real estate sector except for affordable housing, the government has extended the time limit for availing tax deduction by one year and concession in real estate transactions. It had no measures to boost the demand in non-affordable housing category. Following are some of the key points of budget 2020:

1. New income tax regime for taxpayers The Government introduced an alternative tax regime and in case an individual moves to the new tax regime, the tax exemption including deduction repayment of principal (for INR 1.50 lakh) and deduction on interest payable on housing loan has to be forgone, which is potentially negative for the sector

2. To simplify the tax system and lower tax rates, around 70 of more than 100 income tax deductions and exemptions have been removed.

? OPPORTUNITIES AND THREATS :

With NBFCs restraining their lending to cash strapped in the industry and the overall developers, there exists a huge opportunity for organized developers with strong balance sheets and execution track records to partner smaller developers at attractive valuations. This should also allow organized developers to increase their portfolio strength, improve market share and inspire confidence in the minds of skeptical buyers. The ongoing shake up in real estate sector is expected to accelerate further amidst COVID19 and established, well capitalized players stand to gain further market share. The government announced a big boost for affordable housing, which is expected to be the next big growth area. The middle income and low income buyers will benefit with the availability of low interest rate home loans and low GST rate. In Budget 2020, the government announced several measures to boost affordable housing. In its attempt to boost the affordable housing demand, the government has proposed to extend additional tax benefit of INR 1.5 lakh on interest paid on affordable housing loans by one year till March 2021. Also, in order to encourage developers to focus on affordable housing projects, the Government has extended the date of approval for these projects for availing tax holiday on profit earned by developers by one year till March 2021.

In the Investing/Financing business while there has been considerable improvement in macro variables, the same has not yet favourably impacted the corporate earnings owing to lower rural demand, currency headwinds and delay in the revival of investment cycle. It is expected to have picked on corporate earnings with full transmission of interest rate and impact of lower commodity prices translates to lower input costs for corporate. Medium term risk in the form of global growth slowdown and slow movement of critical reforms to push through may continue to weigh on market sentiments. Nevertheless, we continue to remain positive on equities as an asset class with expectations of improvement in corporate balance sheet and revival of investment cycle.

Investments are never risk free and are prone to various global and local issues which may at any time turn a profitable investment to loss making investment.

Investments in Equity, Debt, and Mutual Fund are all asset class whose performance depends on the various factors which are not controllable. Other risks which affect financial services in India are expected recovery of macro-economy, domestically as well as globally, or inability of Government to push through major economic reforms can delay the return of growth. The total transmission of rate cuts would reduce the long term returns on interest bearing investment and financing instruments.

Liquidity crisis in the NBFC sector has adversely impacted the availability of funds for the developers which have resulted in slowdown in the real estate segment. With the NBFC funding becoming scarce and costly, the established developers with good track record who have strong balance sheets and have access to alternative sources of funding will have edge over the other players in the segment and the pace of consolidation in the sector will further accelerate.

? ?SEGMENT-WISE/FINANCIAL & OPERATIONAL PERFORMANCE :

The Company has completed and handed over its first project "Cloud 36" to society. The Company has received

Occupancy Certificate is in the process of handing over flats to the Buyers. The construction activity at Karjat- "The Mist" - Phase II and "GeeCee Aspira 206" at, New Panvel East, Navi Mumbai, is progressing as per schedule before the Covid-19 Pandemic. Though the activities are started again, the activities is much lower than pre-Covid pandemic which will result in delay in completion of the project. Company has got a new land parcel at Chembur. Company is in the process of getting all the permissions from various authorities to start with the construction activities at Chembur. The Company has large pool of liquid assets and there exists an opportunity to invest it very efficiently.

The Company sees good opportunities to invest its funds in risk free Inter-Corporate Deposits and interest bearing financial instruments. The Company endeavors to maximize its return on surplus funds, within the parameters of prudent investment norms giving highest regard to the quality of credit risk to its investment/ financing portfolio.

The Wind Power Division of GeeCee Ventures Limited commissioned its operation in 2010 by setting up

5.35 MW Wind Turbine Generators in Jodhpur District, Rajasthan. The entire power generated from these wind than turbines is supplied to the power deficit state of

Rajasthan.

On Segmental basis, Your Company has booked revenue from real estate in the current financial year as per the

Ind AS 115 "Revenue from contracts with customer" issued by MCA, effective from April 01, 2019. The revenue from the real estate segment has decreased from Rs. 10012.22 Lakh in FY 2018-19 to Rs. 2358.87 Lakh in F.Y. 2019-20. The revenue from investments / financing has decreased from 4393.69 Lakh in FY 2018-

19 to Rs. 1625.60 Lakh in F.Y. 2019-20. Revenue from wind power energy segment has decreased from 293.09 Lakh in FY 2018-19 to Rs. 282.32 Lakh in F.Y. 2019-20.

On Segmental basis, Your Company has earned profit in Investment / Financing from Rs 953.83 Lakh in FY 2018-19 to Rs. 1283.73 Lakh in FY 2019-20. The Company has earned revenue of Rs. 4350.35 Lakh as compared to previous year revenue of Rs. 15296.40 Lakh.

Net Profit after tax has decrease fromRs. 3509.83 Lakh to Rs. 1518.75 Lakh in the current year.

(OC) for "The Mist" Phase I and

? ?OUTLOOK, RISK AND CONCERNS:

The real estate sector in India is heavily regulated by the central, state and local governments. Real estate developers are required to comply with a number of laws and regulations, including policies and procedures established and implemented by local authorities in relation to land acquisition, transfer of property, registration and use of land. These laws often vary from state to state.

Outlook

The ongoing Covid19 outbreak and its impact on economy have pushed sentiment in real estate to its all-time lowest level in the quarter ended March. Both residential and commercial real estate sectors are expected to be hit in term of launches, sales and prices. As the real estate sector continues to tackle the existing issues created by the aftershocks of the liquidity crisis and resulting disruption of COVID19, we see an opportunity for well established players in the industry. The start of FY2021 may be muted due to the lockdown and subsequent impact on economy, but we believe our strong project pipeline and healthy balance sheet will help maintain operational performance going ahead. The pace of consolidation in the sector is also expected to accelerate further and we expect to gain market share.

Company has a strong balance sheet and has been able to raise capital at competitive terms even during the challenging times. Company still continues to be a Debt Free Company for the F.Y. 2019-2020. Our Company has a proven track record in residential developments. In the last few years, it has expanded its presence in the residential segment with a superior delivery model and a successful foray into affordable housing.

The Company has a well-structured and robust risk management mechanism which continuously evaluates risk mitigation on an on-going basis. The risk management system is working smoothly and will be evaluated for stress test or modification upon change in size or nature of business. The Risk Management System is reviewed periodically and necessary changes are made, if required. The Company faces risks in real estate sector business mainly on account of following factors:

a) Market price fluctuation: The performance of your Company may be affected by the sales realizations of its projects. These prices are driven by prevailing market conditions, the nature and location of the projects, and the design of the projects.

b) Sales: The volume of bookings depends on the ability to design projects that will meet customer preferences, getting various approvals in time, general market factors, project launch and customer trust in entering into sale agreements well in advance of receiving possession of the projects.

c) Execution: Execution depends on several factors which include labour availability, raw material prices, receipt of approvals and regulatory clearances, access to utilities such as electricity and water, weather conditions and the absence of contingencies such as litigation. Your Company manages the adversities with cautious approach, meticulous planning and by engaging established and reputed contractors.

d) Land / Development rights –Availability: The cost of land forms a substantial part of the project cost, particularly in Mumbai. Your Company acquires land / land development rights from the government and/or private parties. Delay in acquisition of Land Development Rights at reasonable cost, could affect the growth of the business.

e) Policy and Regulatory Risks:

The real estate industry is easily affected by changes in government policies and regulations. There are considerable procedural delays with respect to approvals related to acquisition and use of land. Unfavorable changes in government policies and the regulatory environment may adversely impact the performance of the Company. The Company attempts to mitigate these risks through its approach towards acquisition of land based on the through due diligence and its transparent processes in developing the project. Besides, its focus on environment friendly and sustainable practices also helps in mitigating risks associated with environmental regulations.

f) Economic Risks:

GDP growth rate decelerated marginally during the year. Although there are signs of a turnaround, there are still downside risks. Lending rates for business and home loans continue to be high and there are risks associated with increase in policy rates if inflation rises. These can have a direct impact on a real estate sector and the Company. Besides, even as global economic growth witnessed a significant outlays in Indian businesses, especially those in export-oriented industries, is yet to benefit from emerging trends. GeeCee Ventures Limited is conscious of these risks and is taking measures to mitigate them. For instance, Companys focus on residential sector has been significant during periods of slow economic performance. The Company addresses these risks through a well-structured framework which identifies desired controls and assigns ownership to monitor and mitigate these risks. It also has a Code of Conduct for all Board members and senior management personnel. The Companys corporate governance policies ensure transparency in operations, timely disclosures and adherence to regulatory compliance.

? INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control systems commensurate with the size and nature of its business. Well documented policies, guidelines and procedures to monitor business and operational performance, all of which are aimed at ensuring issues outstanding or remaining businessintegrityandpromotingoperational

All assets are safeguarded and protected against loss from unauthorized use or disposition and the transactions are authorized, recorded and reported correctly, financial and other data are reliable for preparing financial information and other data and for maintaining accountability of assets. The internal control is supplemented by extensive programme of internal audits and review by management. The system has been designed to ensure that financial and other records are reliable for preparing financial information and for maintaining accountability of assets. All financial and audit control systems are also reviewed by the Audit Committee of the Board of Directors of the Company. The Audit Committee of the Board reviews the adequacy and effectiveness of the internal control systems and suggests improvements, if any for strengthening them. change of An independent internal audit firm appointed by the Company conducts periodical audits to ensure adequacy of internal control systems, adherence to management policies and compliance with the laws and regulations of the country. Their scope of work also includesinternalcontrolsonaccounting,efficiencyand economy of operations.

? HUMAN RESOURCES

Your Companys closing headcount for F.Y. 2019-20 was 46, as against 48 in financial year 2018-19. GeeCee

Ventures Limited recognizes that its people are key to the success of the organization. Your Company continued to make substantial investments in human capital to meet its growth targets. The Companys business is managed by a team of competent and passionate leaders capable of enhancing your Companys standing in the competitive market. The Companys focus is on unlocking the people potential and further developing their functional, operational and behavioral competencies. The relations with all employees of the Company remained cordial and there were no significant unresolved during the year. The Board of Directors and the Management wishes to place on record their appreciation of the efforts put in by all the employees. The ultimate aim of the management is to create a dependable work force that will play a key role in assisting the Company to achieve its goals in the various new business opportunities the Company is pursuing. To achieve the highest levels of organizational performance, Company has a well exercised approach to organizational and personal learning that includes sharing knowledge via systematic processes. In this process, the Company has appointed an external agency to secure protection of and safeguard the women employees against sexual harassment at workplace. Organizational learning includes both continuous improvement of existing approaches and innovation leading to new goals significant and approaches.

We believe that our continued success will depend on ability to attract and retain key personnel with relevant skills and performance.

? KEY FINANCIAL RATIOS

In accordance with SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations,

2018, the details of significant changes (i.e. Change of 25% or more as compared to the immediately previous financial year) in key financial ratios are given below:

Ratios F.Y. 2018-19 F.Y. 2019-20 Formulae Explanation
Debtors Turnover 2.67 2.25 Net Credit Sales/ Average Trade Receivables Increase in Debtors turnover ratio is majorly on account of higher revenue recognized in real estate business during current year as compared to previous year.
Inventory Turnover 0.51 0.07 Cost of Goods sold/ Average Inventory
Interest Coverage Ratio 1716.06 5238.14 Earning before interest, taxes, depreciation and amortization expenses/ Interest expenses
Current Ratio 16.87 13.00 Current Assets/ Current Liabilities Increase in Current Ratio is majorly on account of decline in advance received from customers on account of higher revenue recognized in real estate business in current year.
Debt Equity Ratio 0.00 0.00 Debt/ Equity
Operating Profit Margin (%) 28.83 43.35 Earning before interest, taxes, depreciation and amortization expenses/ Total Revenue Increase in operating profit margin is majorly on account of higher revenue recognized in real estate business during the current year.
Net Profit Margin (%) 22.95 34.91 Net Profit after tax/ Total Revenue Increase in Net Profit Margin is majorly on account of higher revenue recognized in real estate business during the current year.
Return on Net Worth 8.02 3.67 Net Profit after Tax/ S h a r e h o l d e r s F u n d (Equity)

? Cautionary Statements

Statements in the Management Discussion and Analysis describing the Companys objectives, expectations or predictions may be forward looking within the meaning of applicable securities, laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that would influence the Companys operations include cost of raw materials, tax laws, interest and power cost and economic developments and such other factors within the country and the international economic and financial developments.

The Company assumes no responsibility nor is under any obligation to publicly amend, modify or revise any forward looking statements on the basis of any subsequent developments, information or events.