Jyothi Infraventures Ltd Management Discussions.
1. Industry Structure & Developments:
The real estate sector in India has come a long way by becoming one of the fastest growing markets in the world. The growth of the industry is attributed mainly to a large population base, rising income level, investment premium and rapid urbanization. The cities and towns in India are expanding and the space requirement for education, healthcare and tourism provides wide-ranging opportunities in the real estate sector. After undergoing corporatization and professionalization, today real estate is recognized as one of the key sector contributing to the countrys economic development after agriculture. In view of the above developing trend in the real estate sector, the Company and management believe to strive for excellence coupled by its positive approach and learned principles
2. Opportunities and Threats: Opportunities
A resurgence in corporate investment will improve demand for commercial office space in the medium term. Residential real estate demand is expected to grow 8-9% and residential capital value at a faster pace in 2013 and 2014, compared with the earlier periods of less than 7%.There is considerable long term business scope for players in the construction business. Your company is also geared to make of this opportunity to get some business.
The construction industry in India was significantly affected by the economic slowdown and increase of cost of finance for the projects.. Apart from this the following threats are facing by the construction industry:
Lack of political willingness and support on promoting new action plans and strategy new and existing projects.
A tightening of the credit market.
3. FUTURE OUTLOOK:
The outlook of the Management is positive and trying to identify new business areas apart from construction business. The construction industry is an integral part of the economy and as an industy the growth of the construction sector having plenty of possibilities for development in the future.
4. RISKS & CONCERNS:
The Company is exposed to certain financial risks, principally interest rate risk, liquidity risk and credit risk, risks associated with the economy, regulations, competition, etc..These risks are managed through risk management policies that are designed to minimize the potential adverse effects of these risks on financial performance of the Company. The Risk Management framework of the Company ensures, that the compliance with the requirements of Clause 49 of the Listing Agreement. The framework establishes risk management across all service areas and functions of the Company, and has in place, the procedures to inform the Board Members about the risk assessment and minimization process. These processes are periodically reviewed to ensure that the management of the Company controls risks through a defined framework.
5. INTERNAL CONTROL SYSTEMS
The Company has adequate internal control systems commensurate with the size and nature of business of the Company.
The internal control system is constantly assessed and strengthened with tighter control procedures. The Internal Contol systems ensure effectively of operations, compliance with internal policies and applicable laws and regulations, protection of resources and assets, and accurate reporting of financial transactions
The Audit Committee periodically reviews the adequacy and efficacy of the said internal control systems. All the issues relating to internal control systems are resolved by the Audit Committee.
6. SHARE CAPITAL
During the year under review, there was no further issue of shares. The Honble High court of Andhra Pradesh has passed order on Scheme of Arrangement on 21-04-2014 and pleased to issue orders on 13-5-2014. As per the Scheme of Arrangement as first step,The Company has restructured the Paid up Share Capital by set off a loss of Rs.3,61,17,170/- (Rupees Three Crores Sixty one Lakhs seventeen thousand one hundred and seventy only) of the Company out of its total accumulated losses of Rs.3,78,97,476/- as on 31-03-2012. After setting off loss of Rs.3,61,17,170/- the Existing Paid up Share Capital of Company shall stand reduced from Rs.5,15,96,000/- divided into 51,59,600 equity shares of Rs.10/- each to Rs.1,54,78,830/- divided into 15,47,883 equity shares of Rs.10/-each. Consequently, every shareholder of the Company shall receive 30 equity shares of Rs.10/-each in lieu of every 100 equity shares of Rs.10/- each held in the company.
7. HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS
The Company currently has adequate manpower and personnel to conduct the business without any complications or hindrances. The Company recognises the importance and contribution of the employees. Human resource is viewed to be as one of the most important factor in the growth process with a view to cross further frontiers in business performance, the Company strives to organise training modules for understanding and improving the core skills of the employees. The overall human and industrial relations have remained peaceful and composed during the year. The Company is currently working on providing much better and comfortable working environment and training regimes to the employed personnel.
8. 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 statutes and other incidental factors.