gsl nova petrochemicals ltd Management discussions

ECONOMIC REVIEW

Global growth in 2014 was lower than initially expected, continuing a pattern of disappointing outturns over the past several years. At the same time, demand for oil has weakened due to the slowdown in China and the persistent sluggishness of the Euro zone and Japan.

Several major forces are driving the global outlook : Soft commodity prices; persistently low interest rates but increasingly divergent monetary policies across major economies; and weak world trade. In particular, the sharp decline in oil prices since mid-2014 will support global activity and help offset some of the headwinds to growth in oil-importing developing economies like India. However, it will dampen growth prospects for oil-exporting countries, with significant regional repercussions.

Current Status of Business

In view of this and for speedy realisation of the sales proceeds from phase I, your company has dropped the plan of setting up industrial sheds under phase I and now planned to develop plots for Industrial/warehousing purposes on said land.

OPPORTUNITIES & CHALLENGES

Opportunities

As India awaits policy reforms to pick up speed, your Company believes that the demand for Real Estate - Industrial plotting in a country like India should remain moderate in the medium to long term.

Challenges

Real estate sector also find the following challenges : ? Unanticipated delays in project approvals ? Non Availability of accomplished and trained labour force. ? Increase cost of Manpower ? Raising cost of Construction ? Growth in Auxiliary infrastructure facility ? Over regulated environment

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The company has adequate system of internal control procedures commensurate with the size of the company and the nature of its business to keep check on the activities at all levels. The Company had also appointed a firm of Chartered Accountants as an internal auditor to further check the internal control system and to report on any deficiencies to the management.

HUMAN RESOURCES/INDUSTRIAL RELATIONS:

Your company has successful in maintaining the cordial and peaceful relationship with the employees at all level and in reciprocation it has received wholehearted support at all levels of operations from all employees. The cordial and peaceful relationship prevails with all employees.