A. FORWAD LOOKING STATEMENTS:
The report contains forward looking statements, identified by words like
"plans", "expects", "will", and so on. All Statements that
address expectations or projections about the future, but not limited to the Companys
strategy for growth, product development, market position, expenditures and financial
results, are forward looking statements. Since these are based on certain assumptions and
expectations of future events, the Company cannot guarantee that these are accurate or
will be realized. The Companys actual results, performance or achievements could thus
differ from those projected in any forward looking statements. The Company assumes no
responsibility to publicly amend, modify or revise any such Statements on the basis of
subsequent developments, information or events.
B. SECTOR OVERVIEW:
Several factors still continue to act as strong drivers for long term sustainable real
estate demand like Latent demand for homes, Continued economic growth, Trend towards
nuclear families, Young working population, Rising disposable incomes, Increased
urbanization, Inherent desire to own a home etc.
Inflation, Higher interest rates, High risk weight-age for loans to companies operating
in the sector, Non- availability of low cost working capital, Employment growth, Time lag
during the approval process while launching a project, Higher statutory levies, Non
availability of skilled manpower, Uncertainty of title continue to remain as challenges
being faced by the Sector as a whole.
The employment generated in the construction and real estate sector is immense and it
is, in fact, the second largest employer in the country. The development of the real
estate and construction industry can also be directly linked to the development of
approximately 256 different industries like cement, steel, building materials etc. It is,
therefore, imperative that impetus should be provided to the construction and real estate
sector so that overall economic development can be achieved.
Infrastructure investment has traditionally been associated with public sector
monopolies largely due to high cost of implementation. However, the sector is experiencing
an exemplary shift, as the government is taking measures to encourage private investment
on PPP (Public Private Partnership) model. This should make the infrastructure sector
economically vibrant and Competitive
The positive sentiments prevailing post new government are motivating the economy to
perform better and push the limits but it may take a few months before the growth in the
real estate industry is actually visible. As long as the governments action plans focus
on a progressive economy, we believe that the industry operations will revive in the
coming few quarters. We hope that the government will focus on policies that will reduce
the burden on Real estate builders by accelerating the approval process, reducing the
interest costs and taxes levied and controlling the trending inflationary pressures.
As per the 12th FYP midterm appraisal, the overall private sector investment share is
likely to be 36% during the Plan period. Further, according to the 12th FYP midterm
appraisal, infrastructure investment is likely to close to 8% of the GDP which is
consistently below the original target of 9% which is requirement to sustain 8-9% GDP
growth.
Though the housing shortage continues to be high in the country and especially in rural
areas, it is expected that the demand for housing and home loans in urban areas will
continue to rise faster as a result of the increased urbanization in the country. Not only
have the metro cities witnessed rising population but even Tier I and Tier II cities have
been experiencing similar trends of increasing population and demand for housing. With
investments flowing into urban infrastructure, this trend can only intensify in the times
to come. The demand for housing will therefore continue to grow in the medium to long
term.
C. STRENGTHS & OPPORTUNITIES:
Housing Demand
The gap between the demand and supply of housing continues to be of great opportunity
for Infrastructure companies. Investment in housing is a prioritized item on the national
agenda as it
Contributes in the countrys GDP growth, directly and indirectly.
The average age of a new homeowner is now 32 years compared with 45 years a decade ago.
Your Company expects demand from the mid income residential segment to remain strong as
we believe there is significant demand in this category across the country. Increasing
disposable incomes, rapid urbanization and strong demographics are some of the trends
favoring the mid-income residential.
Monetary Easing
The real estate sector performance is directly bound by the countrys economic
fundamentals and monetary policies. In the financial year 2018-19, the RBI decreased repo
rates to 6% impacting the cost of borrowings and the interest rates on home loans.
Monetary easing initiatives will provide an impetus to housing demand. Even a nominal
roll-back in rates can positively impact sentiments and encourage home buyers and real
estate developers. The Company can leverage on land bank which has favorable time cost
capable of generating positive cash flow which will propel the growth.
Real Estate Reforms
In order to realize the long-term growth potential of the sector, there is a growing
need to introduce reforms. Year 2018-2019 has witnessed various measures initiated by the
Indian Government to revive growth in the real estate sector, which if executed correctly,
will encourage transparency, corporate governance and investment and improve the
industries long-term prospects. It is our hope that various regulations also incorporate
provisions to address challenges the sector currently faces in terms of receiving project
Approvals.
D. THREATS:
There are, however, a number of factors that can spoil the party. Land costs, which are
a major Constituent of housing costs in metros; have risen much faster than property
prices.
Listing out the challenges for the real estate market in India, a report by Price
Waterhouse Coopers said that the Indian governments tax policy was not in tandem with the
liberalization initiatives being undertaken in the sector. According to it, "There
are no substantial tax incentives for real estate development except in the limited
circumstances. Even in these situations, the tax incentive windows have a short life left.
E. RISKS
Infrastructure projects in emerging economies like India are perceived as vulnerable to
risks and efforts must be made to introduce greater clarity in policy to reassure
investors. Infrastructure projects in developing countries like India are perceived as
highly vulnerable to risks which constrains financing. The aim of the policy makers should
be to reduce perceived risks by introducing greater policy clarity and, at the same time,
providing an environment that will reassure investors. Some of the notable risks that need
to be reckoned with arise during the period of construction, leading to time and cost
over-runs. They also included operational risks and market risks besides interest rate,
foreign exchange, payment, regulatory and political risks. The Planning Commission has
pegged investment of USD 1 trillion in the infrastructure sector during the 12th Five Year
Plan period that will commence from April, of which half is targeted to come from private
sector. The Government of India along with RBI, the Central Bank of India are taking
number of steps to promote funding in the infrastructure sector. Funding is the major
problem for infrastructure financing and there are other issues which aggravate the
problems of raising funds. These include legal disputes regarding land acquisition, delay
in getting other clearances (leading to time and cost overruns) and linkages (coal, power,
water) among others.
F. INTERNAL CONTROL SYSTEM & THEIR ADEQUACY:
A comprehensive system of internal controls exist in the company to safeguard the
assets against loss from any unauthorized use or disposition and to ensure proper
authorization of transactions are recorded and reported suitably. The Company maintains a
system of internal control designed to provide a high degree of effectiveness and
efficiency of operations, accuracy and promptness of financial reporting and observance
with laws and regulations.
G. HUMAN RESOURCES:
As the construction industry is expanding rapidly, the demand for talented and
experienced manpower is also going up rapidly. Our Company has well qualified and
experienced staff. There was no industrial arrest during the year.
H. STATUTORY COMPLIANCE:
The Company has complied with all the statutory requirements. A declaration regarding
compliance of the provisions of the various statutes is also made by the Managing Director
at each Board Meeting. The Company ensures compliance of the ROC, SEBI Regulations and
provisions of the Listing Agreement.
J. CAUTIONARY STATEMENT:
This management discussion and analysis contains forward looking statements that
reflects our current views with respect to future events and financial performance. Our
actual results may differ materially from those anticipated in the forward looking
statements as a result of many factors.
COST AUDIT
The Cost Audit is not applicable to the company.
VIGIL MECHANISM
As per Section 177(9) and (10) of the Companies Act, 2013, and as per the Clause 49 of
the Listing Agreement, the company has established Vigil Mechanism for directors and
employees to report genuine concerns and made provisions for direct access to the
chairperson of the Audit Committee. Company has formulated the present policy for
establishing the vigil mechanism/ Whistle Blower Policy to safeguard the interest of its
stakeholders, Directors and employees, to freely communicate and address to the Company
their genuine concerns inrelation to any illegal or unethical practice being carried out
in the Company. The details of the Vigil Committee are annexed herewith for your kind
perusal and information.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSEL) ACT, 2013:
The Company has in place an Anti-Sexual Harassment Policy in line with the requirements
of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition &
Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress
complaints received regarding sexual harassment. All employees (Permanent, contractual,
temporary, trainees) are covered under this policy.
DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your company has established adequate internal financial control systems to ensure
reliable financial Reporting and compliance with laws and regulations.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The management discussion and analysis report as required under clause 49 of the
listing agreement has been attached and forms part of this report.
ACKNOWLEDGEMENT
Your Directors wish to express their grateful appreciation to the continued
co-operation received from the Banks, Government Authorities, Customers, Vendors and
Shareholders during the year under review. Your Directors also wish to place on record
their deep sense of appreciation for the committed service of the Executives, staff and
Workers of the Company.
Date: 15/09/2023 |
BY ORDER OF THE BOARD |
Place: Ahmedabad |
For, Ishaan Infrastructures and Shelters Limited |
|
Kalpen Shah |
|
Chairman & Managing |
|
Director |
|
(DIN: 01294110) |
+91-9892691696
