jay mahesh infraventures ltd Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1. Industry Structure and Developments:

The Indian economy recovered in the second quarter (Q2) of 2013-14 recording a growth of 4.8 per cent. This follows a growth rate of 4.4 per cent in the first quarter (Q1) of the current financial year 2014-2015 the lowest in 16 quarters. Particularly encouraging is the fact that the recovery in Q2 is noticed on the face of significant fiscal consolidation by the Government and tighter liquidity conditions to moderate aggregate demand. The economy went through challenging times since the crisis in the Euro area in 2011-12 with a cyclical down turn with growth slowdown, elevated current account deficit, persistent inflation, and the need to restore fiscal policy to a sustainable path. While the Government delivered on the announced fiscal targets in 2012-13, current account deficit (CAD) continued to remain elevated in Q1 of 2013-14 and in tandem with market misperception of an imminence of the rollback of quantitative easing in US, assumed a serious dimension with the sharp depreciation of the rupee.

2. Financial Performance:

	(Rupees in Lakhs)
Particulars	2013-14
Gross Income	48.52
Profit before Depreciation	1.42
Depreciation	0.04
Profit before Tax	1.38
Provision for Taxation	0
Profit after Taxes	1.38

3. Opportunities:

The Indian construction and real estate sector continues to be a favoured destination for global investors. Several large global investors, including a number of sovereign funds, have taken the first move by partnering with successful local investors and developers for investing in the Indian real estate market. This is expected to result in high transaction activity, especially in income yielding commercial office assets during 2014.

The residential asset class looks to have great potential for growth. As corporates look to expand businesses, India is expected to witness major demand for office space in 2014. Office space absorption across the countrys seven major cities – Delhi-NCR, Mumbai, Bengaluru, Chennai,

Pune, Hyderabad and Kolkata – is likely to increase seven per cent this year to 29 million square feet (sq ft), according to global real estate consultant DTZ.

New supply of retail space in shopping malls in Indias top seven cities is expected to more than double to 11.7 million sq ft in 2014. This will take up the mall stock across Indias metropolitan cities to 87.7 million sq ft by the end of the year.

Further, demand for space from sectors such as education and healthcare has opened up ample opportunities in the real estate sector. The country still needs to add three million hospital beds to meet the global average of three for every 1,000 people.

4. Internal control system and their adequacy:

The Company has a proper and adequate internal control system commensurate with its size and nature of business to meet the following objectives:

a) Providing assurance regarding the effectiveness and efficiency of operations;

b) Effecient use and safeguarding of resources;

c) Compliance with policies, procedures and applicable laws and regulations; and

d) These systems are IT enabled which facilitate effective checks and light monitoring of all parameters and control on continuous basis.

e) The Audit Committee actively reviews the adequacy and effectiveness of internal control systems and suggests improvements for strengthening them time to time.

f) Risk assessment reports received from various departments are reviewed periodically and steps are initiated for elimination whenever needed.

5. Challenges, Risks , Concerns:

The company has managed to sail through challenges in the past year, thanks to the unstinted support of its employees. With the worst of the economic crisis behind us we are poised for new challenges, increased productivity and profitability. Competition from the existing and emerging local and international players continues to pose challenges to the domestic markets. The company has to reckon with aggressive strategies from the new entrants in the market.

6. Human Resource Development:

The Company has a group of able and experienced employees. The Company believes that the quality of its employees is the key to its success in the long run. The Company continues to have cordial relations with its employees and provides personal development opportunities for all round exposure to them.

Further, we also encourage individual and team awards to sustain and institutionalize the various workforce practices. This helped in giving lots of encouragement to the workforce who have been striving hard to achieve various goals.

7. Cautionary Statement:

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and international markets in which the Company operates, changes in the Government regulations, tax laws and other statues and other incidental factor.