Popular Estate Management Ltd Management Discussions

A. BUSINESS HIGHLIGHTS :

Turnover:

Popular Estate Management Limited has no turnover in financial year 2023-24 against no turnover in the previous year 2022-23.

Employee Benefit Expenses:

Employees emoluments (other than managerial remuneration) are Rs. 12.16 lakh during the year as against Rs. 11.66 Lakh during the previous year.

Administrative and Other Expenses:

Major components of administrative and other expenses includes printing and stationary, electricity charges, audit fees, advertisement expenses, postage and stamps, listing and ROC filing fees, insurance premium etc. Administrative and other expenses for the year amounted to Rs. 37.61 Lakh as against Rs. 49.78 Lakh during the previous year.

Interest and Finance Charges:

Interest and finance charges / bank charges during the year amounted to nil as against Rs. 2.08 Lakh during the previous year.

Depreciation:

Depreciation charge for the current year came to Rs. 18.27 Lakh as against Rs. 26.22 Lakh of the previous year.

Provision for Tax:

The Company has made loss so there is no provision for tax. As there is no dividend payable this year, the company has not provided any amount for dividend distribution tax.

Profit/Loss after Tax:

The Company has made loss in the current year of Rs. 68.04 Lakh as against loss of Rs. 89.75 Lakh during the previous year.

Earnings per Share:

Basic and diluted earnings per share for the current year worked out to Rs. (0.49) as against Rs. (0.64) during the previous year.

Financial Condition: Non Current Liabilities:

The companys Non Current Liabilities includes Long Term borrowings Rs. 797.89 Lakh as against Long Term Borrowings of Rs. 759.99 Lakh in the previous year.

Current Liabilities:

The companys Current Liabilities includes Trade payables and other financial Liabilities amounting to Rs. 46.62 Lakh as at 31^st March 2024 against Rs. 35.45 Lakh of the previous year.

Fixed Assets:

Net block of the fixed assets at the end of the year is Rs. 77.33 Lakh as against Rs. 95.53 Lakh in the previous year.

Non Current Investments:

Non-current investments of the company are Rs. 82.87 Lakh as at 31^st March 2024 against Rs. 82.87 Lakh of the previous year.

Current Assets:

During the year, the company has current assets of Rs. 4898.12 Lakh as against Rs. 4898.81 Lakh of the previous year.

B. SEGMENT WISE PERFORMANCE :

The company is operating in only one segment i.e. Infrastructure / Construction. Though, the infrastructure/construction/real estate sector is very bearish since last many years, our company has performed well as compared to the previous year.

C. AN INDUSTRY OVERVIEW :

In India, the real estate sector is the second-highest employment generator, after the agriculture sector. Real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021. By 2025, it will contribute 13% to countrys GDP. Emergence of nuclear families, rapid urbanization and rising household income are likely to remain the key drivers for growth in all spheres of real estate, including residential, commercial, and retail. Rapid urbanization in the country is pushing the growth of real estate. More than 70-75% of

Indias GDP will be contributed by urban areas by 2030.

Around 40 million square feet were delivered in India in 2021. It is expected that the country will have a 40% market share in the next 2-3 years. India is expected to deliver 60 million square feet in 2025-26.

Indias real estate sector saw over 1,700 acres of land deals in the top 7 cities in 1 year. Foreign investments in the commercial real estate sector were at US$ 10.3 billion between the years 2017 to 2021. As of February 2022, Developers expect demand for office spaces in SEZs to shoot up after the replacement of the existing SEZs act.

According to Savills India, real estate demand for data centers is expected to increase by 15-18 million sq. ft. by 2025.

According to the Economic Times Housing Finance Summit, about 3 houses are built per 1,000 people per year compared with the required construction rate of 5 houses per 1,000 population. The current shortage of housing in urban areas is estimated to be ~10 million units. An additional 25 million units of affordable housing are required by 2030 to meet the growth in the countrys urban population.

The Government of India has been supportive towards the real estate sector. The Government has also raised FDI (Foreign Direct Investment) limits for townships and settlements development projects to 100%. Real estate projects within Special Economic Zones (SEZ) are also permitted for 100% FDI. Construction is the third-largest sector in terms of FDI inflow. Indian real estate is expected to attract a substantial amount of FDI in the next two years with US$ 8 billion capital infusion by F.Y. 2022. As of June 30, 2021, India formally approved 427 SEZs.

Government of Indias Housing for All initiative is expected to bring US$ 1.3 trillion investments in the housing sector by 2025. As of December 2019, under Pradhan Mantri Awas Yojana (Urban) [PMAY (U)], 1.12 crores houses were sanctioned in urban areas, with a potential to create 1.20 crores jobs. The scheme is expected to push affordable housing and construction in the country and give a boost to the real estate sector.

The low home loan interest rates regime is expected to drive the housing demand and increase sales by 35-40% in the festive season in 2023.

The Ministry of Housing and Urban Affairs has recommended all the states to consider reducing stamp duty of property transactions in a bid to push real estate activity, generate more revenue and aid economic growth.

Strength:

? Management depth and ability to manage client / customer relationships ? Enhanced presence in the market

Opportunities and Threats:

The infrastructure industry is subject to tough competition amongst various segments within and outside the country. The threat of competition is comparatively less in the area in which your company is operating. The increase in demand from business sector will provide opportunity to your company to increase more market share. Moreover, Indian infrastructure industry witnessing changes in business dynamics.

D. RISKS AND CONCERNS :

Your company is mainly focusing on real estate and infrastructure. Apart from the risk on account of interest rate and regulatory changes, business of the company are exposed to certain operating business risks, which is mitigated by regular monitoring and corrective actions. The company has taken necessary measures to safe guard its assets and interest etc. The risk of changes in the governmental policies is also there.

E. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY :

The company has proper and adequate system of internal controls commensurate with its size and nature of operations to provide reasonable assurance that all assets are safeguarded, transactions are authorized, recorded and reported properly and to monitor internal business process, financial reporting and compliance with applicable laws.

The internal control system has been designed so as to ensure that the financial and other records are reliable and reflects a true and fair view of the state of the Companys business. A qualified and independent committee of the Board of Directors actively reviews the adequacy and effectiveness of internal control systems and suggests improvements for strengthening them.

F. HUMAN RESOURCE MANAGEMENT :

The Company believes that human resource is the most important assets of the organization. It is not shown in the corporate balance sheet, but influences appreciably the growth, progress, profits and the shareholders values. During the year your company continued its efforts aimed at improving the HR policies and processes to enhance its performance. The vision and mission of the company is to create culture and value system and behavioral skills to insure achievement of its short and long term objectives.

Cautionary Statement:

Statement made in the Management Discussion and Analysis Report 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 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 markets in which the company operates changes in the government regulations, tax laws & other statutes and other incidental factors.