Goldcrest Corporation Ltd Management Discussions

Management?s Discussion and Analysis for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), is presented in a separate section, forming part of the Annual Report. The developments in business operations / performance of the Company and its major subsidiaries consolidated with the Company are as below:

OVERVIEW

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair value, the provisions of the Companies Act, 2013 ("the Act") (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, and relevant amendment rules issued thereafter.

GLOBAL ECONOMIC OVERVIEW

The global economy in FY 2021-22 faced significant headwinds amid new waves of COVID-19 infections, persistent labour market challenges, lingering supply-chain challenges and rising inflationary pressures. Despite many such challenges, global economy expanded by 5.5% in 2021.

This robust growth in global economy in 2021 was driven by strong consumer spending and some uptake in investment, with trade in goods surpassing pre-pandemic levels and even marked the highest growth rate in more than four decades. Despite the momentum for growth, the United States and the European Union slowed considerably by the end of 2021, as the effects of monetary and fiscal stimulus began to recede and major supply chain disruptions emerged. Rising inflationary pressures in many economies are posing additional risks to recovery.

INDIAN ECONOMY

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

Numerous foreign companies are setting up their facilities in India on account of various Government initiatives like Make in India and Digital India. Government of India has launched the Make in India initiative with an aim to boost the country?s manufacturing sector and increase the purchasing power of an average Indian consumer, which would further drive demand and spur development, thus benefiting investors. The Government of India, under its Make in India initiative, is trying to boost the contribution made by the manufacturing sector with an aim to take it to 25% of the GDP from the current 17%. Besides, the Government has also come up with the Digital India initiative, which focuses on three core components: the creation of digital infrastructure, delivering services digitally and increasing digital literacy.

According to data from the Department of Economic Affairs, as of March 31, 2022, foreign exchange reserves in India was US$ 607.3 billion, which is equivalent to 12 months of merchandise imports in FY 2021-22 or 98.8% of outstanding external debt. India?s merchandise exports touched a record $418 billion in FY 2021-22, exceeding the government?s target by about 5% and recording a 40% growth over the previous year.

The gross Goods and Services Tax (GST) revenue collection stood at ?. 1.42 trillion in March 2022. This was higher by 15% over previous year. Total gross GST revenue collection in FY 2021-22 stood at ?. 14.90 trillion.

India?s real estate sector is witnessing a healthy increase in demand in 2022 and this momentum is expected to hold for the rest of the year. From commercial spaces to the residential market, the overall market outlook is a bright one for the real estate industry.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Your Company is currently in the business of maintaining and operating a Tech Park and other ancillary businesses. In the financial year 2021-22, your Company has had a decrease in turnover and profitability as compared to the Financial Year 2020-21.

SEGMENT-WISE PERFORMANCE

Your Company operates in 3 segments, and their respective performances in the financial year 2021-22 is as follows:

The performance of Operations & Maintenance of Software Development Park has seen an increase as compared to the last financial year, the performance of Share Operations & Investments and other operations has decreased as compared to the last financial year.

OUTLOOK

The past two years have shown that we operate in a world which is not always predictable. Consequently, your Company is very positive on robust growth of this sector in the coming financial year. The Management is approaching the financial year 2022-23 with a new vigour and is confident that it will be able to overcome all the challenges that come its way.

OPPORTUNITIES AND THREATS

The management of your Company continues to actively seek viable opportunities that will boost the profitability and long-term financial health of the Company. The Company?s management will work towards this goal in the years to come. Our success as an organisation depends on our ability to identify opportunities and leverage them while mitigating the risks that arise while conducting our business.

In line with the new regulatory requirements, your Company has formally framed a Risk Management Policy to identify and assess the key risk areas, monitor and report compliance and effectiveness of the policy and procedure. Your Company has a proper system in place to oversee the risks and also has in place a risk mitigation plan.

INVESTOR RELATIONSHIP

Your Company believes in transparent communication and building a relationship of mutual understanding and trust. Your Company further ensures that critical information about the Company is available to all the investors by hosting all such information on the Company?s website.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place proper and adequate systems of internal control and the same is being reviewed commensurate with its size and nature of operations. The internal control is intended to increase transparency and accountability in an organization?s process of designing and implementing a system of internal control. M/s. Pankaj P. Sanghavi & Co., the statutory auditors have audited the financial statements included in this annual report and have issued an attestation report on our internal controls over financial reporting (as defined in section 143 of Companies Act 2013).

The Company has entrusted the internal & operational audit to M/s. M. V. Ghelani & Co., a reputed firm of Chartered Accountants. The main thrust of the internal audit process is to test and review controls, conduct an independent appraisal of risks, and benchmark internal controls with best practices.

The Audit Committee of the Board of Directors, Statutory Auditors and Business Heads are periodically apprised of the internal audit findings and corrective actions are taken. Audit plays a key role in providing assurance to the Board of Directors.

FINANCIAL PERFORMANCE WITH OPERATIONAL PERFORMANCE

The turnover of your Company for the year under review is Rs 1850.54 lacs, as against Rs 1981.27 lacs in the previous year, which is significantly less than the turnover of the previous year. Net Profit After Tax stood at Rs 666.85 lacs as against Rs 950.41 lacs in the previous financial year. Your Directors are working to improve the growth rate in turnover and profitability in the current year.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT. INCLUDING NUMBER OF PEOPLE EMPLOYED

The core of our success is our people. We do not view our employees as resources, we consider them our most valuable assets. We believe that engaged and inspired employees are more satisfied with their work, tend to stay longer, and are more productive and committed. Your Company provides a workplace environment that is safe, hygienic, humane and which upholds the dignity of its employees. Your Company creates systems and practices to ensure a harassment free workplace, where employees feel safe and secure in discharging their responsibilities.

There are 9 persons employed with your Company.

RISKS AND CONCERNS

STAYING ONE STEP AHEAD OF RISK

Your Company believes that, periodic review of various risks which have a bearing on the business and operations is vital to proactively manage uncertainty and changes in the internal and external environment so that it can limit negative impact and capitalize on opportunities.

In the event that the Government of India changes its tax policies in a manner that is adverse to us, our tax expense may materially increase, reducing our profitability.

Risk Management has always been an integral part of the corporate strategy which compliments organizational capabilities with business opportunities. A detailed exercise is being carried out to identify, evaluate, manage and monitor both business and nonbusiness risks.

The Company has a vigil mechanism to report concerns about unethical behaviour, actual/suspected frauds and violation of the Company?s Code of Conduct. Protected disclosures can be made by a whistle blower through several channels with the surety that no discrimination will be meted out to any person for a genuinely raised concern.

KEY FINANCIAL RATIOS

Sr. No. Particulars	FY 21-22	FY 20-21	Change(%)	Reason
1 Debtor Turnover (times)	17.64	35.01	(49.62)	Decreased primarily on account of decrease in revenue from operation.
2 Interest Coverage Ratio %	113.08	459.39	(75.38)	Decreased on account of decrease in profit before interest and tax. Finance cost has resulted due to implementation of new IND AS 116 leases with effect from 01.04.2019.
3 Current Ratio (times)	22.53	33.08	(31.87)	Decrease in current ratio is due to increase in current liabilities
4 Debt Equity Ratio %	0.21	0.17	26.09	Increase in lease liabilities & other liabilities
5 Operating Profit Margin %	51.71	61.55	(15.98)	Decreased primarily on account of decrease in revenue and profit during the year.
6 Net Profit Margin %	51.71	61.55	(15.98)	Decreased primarily on account of decrease in revenue and profit during the year.

Note: (a) Inventory Turnover ratio is not applicable as inventory is NIL