Krishna Ventures Ltd Management Discussions.
Industry Structure and Development
The Indian real estate and construction industry is the second largest employer in the nation after agriculture. Its contributions to infrastructure influence significantly the growth and development of other sectors such as information technology, retail, hospitality, healthcare and manufacturing. More generally, its growth acts as a multiplier and generates economic growth in the long term. The demand for quality housing and commercial real estate is likely to be sustained for a number of reasons such as the growth of the organized retail market following the liberalization of foreign direct investment in the multi-brand segment which has attracted mega players like Walmart, Bharti and Reliance Industries Limited.
In particular, the growth of the Indian real estate industry is likely to accelerate on account of the likely resurgence in the private housing sector on account of new government initiatives, an increase in the number of Public Private Partnerships to accelerate the rate of economic growth, the development of logistics and supply chain initiatives on account of an overhaul of distribution networks in the organized retail sector, an increase in the number of renewable energy projects leading to a sustained demand for infrastructure growth and growth of the hospitality sector and the domestic and international tourism industry.
The growth of the Indian real estate sector is not entirely free from constraints which take a number of forms. Some of them include the rising cost of land, price volatility, delay in government approvals, inadequate availability of capital, stricter lending requirements, regulatory risks, underdeveloped infrastructure and non-availability of skilled manpower. More generally, the Indian real estate sector, despite its contributions to the Indian economy, has not been accorded industry status and does not have sufficient representation in the planning of infrastructure and other auxiliary facilities.
Opportunities and Threats:
Continuous private sector housing boom will create more construction opportunities.
Public sector projects through Public Private Partnerships will bring further opportunities.
Developing supply chain through involvement in large projects is likely to enhance the chances in construction.
Renewable energy projects will offer opportunities to develop skills and capacity in new markets.
More flexible training delivery techniques are now available.
Financial supports like loan and insurance and growth in income of people is support of construction and real estate industry.
Government initiatives such as implementation of RERA, GST, Housing for All by 2022, liberalising regulations in FDI, REITs
Infrastructure safety is a challenging task in construction industry.
Inefficient accessibility in planning and concerning the infrastructure.
Reduced business investments.
Increased land cost.
Delay in approvals.
Lack of availability of funds both at buyers and developers levels.
Under developed infrastructure and skilled manpower.
Segment wise or product wise performance:
Your company operates in one segment only viz. builder, developer and consultancy. Currently the management is in the process of identifying suitable properties in Mumbai and nearby places for construction and development.
Risks and Concerns:
1. Environmental liabilities.
3. Stricter lending requirements and credit crunch.
4. Ever - changing nature of the industry.
5. The real estate investment market is still in its infant stage.
6. Regulatory risks.
7. Property market risks.
8. Pricing uncertainties.
9. Economy and market fluctuations.
Company Performance and Outlook
Krishna Ventures Limited is currently engaged in construction and the provision of consultancy services in the Indian real estate sector. Towards these ends, it has identified key properties in Mumbai and adjoining areas to develop projects in the housing and commercial space. It is thus set to exploit opportunities on account of the growth of the Indian real estate sector which is expected to reach US $ 180 billion by 2020. Your company will continue to adapt to evolving market realities while maintaining its proactive stance in project completion and revenue growth.
Internal Control Systems and their adequacy
The company has developed an Internal Control System and procedures to ensure efficient conduct of business and security of its assets. The auditors review the effectiveness and adequacy of the internal control system by reviewing, analysing and testing controls and make recommendations to the management to improve controls wherever necessary.
EBIDTA: The Company incurred loss of Rs. 22.26 Lakh in the financial year 2018-19 as compare to the previous financial year 2017-18 in which the loss was Rs. 46.34 Lakh.
PAT: Net Loss of the Company in the financial year 2018-19 is Rs. 22.26 Lakh as compare to the previous financial year 2017-18 in which the Net loss was Rs. 46.34 Lakh.
Material developments in Management
Mr. Vijay Khetan, the Non-Executive Chairman & Promoter Director and Mrs. Meena Khetan, Non-Executive Promoter Director resigned as the directors of the Company with effect from August 11th, 2018. Further, Mr. Ratish Tagde, who served as the Whole Time Director of the company has resigned w.e.f 17th April, 2019 as KMP of the Company.
Material developments in Human Resources / Industrial Relations front, including number of people employed
Your company is currently engaged in the development of a performance system that incorporates system-of-care principles and scope for continuous professional development.
|For and on behalf of the Board of Director|
|Ratish Tagde||Arun Verma|
|Place: Mumbai||Chairman||Whole Time Director|
|Date: May 25, 2019||DIN: 00024465||DIN: 02546086|