Shradha Infraprojects Ltd Management Discussions.

Managements Discussion and Analysis ("MD&A") is intended to provide the reader with a greater understanding of the Companys business, the Companys business strategy and performance and how it manages risks and capital resources. However, the Company undertakes no obligation to publicly update or revise any of the opinions or forward- looking statements expressed in this report, consequent to any new information, future events or otherwise. Hereby, we at Shradha Infraprojects Limited [Formerly known as Shradha Infraprojects (Nagpur) Limited] ("SHRADHA") present our report for the financial year 2018-19.

• GLOBAL ECONOMIC SCENARIO

As the global financial crisis slows down, the world economy has strengthened. The improved global economic situation provides an opportunity for countries to focus policies towards longer term issues such as low carbon economic growth, reducing inequalities, economic diversification and eliminating deep rooted barriers that hinder development. International markets have witnessed noticeable volatility, triggered by geo-political events, significant movements in currency and commodities, protectionist policies including tariff barriers.

• INDIAN ECONOMIC SCENARIO

While the global economy is battling with strong headwinds, Indias economy is witnessing a solid development and is on its way to emerging as one of the worlds fastest growing economies and is anticipated to be one of the worlds three economic powers over the next 10-15 years, supported by its strong democracy and alliances. The Indian Government focus on elevating the rural economy and infrastructure creation and improving the quality of education of the country. Mr. Narendra Modi, Prime Minister of India, has launched the "MAKE IN INDIA" campaign to facilitate investment, promote innovation, enhance skill development, safeguard intellectual property & build best in class manufacturing infrastructure.

with an aim to boost the entrepreneurship in India, not only in manufacturing sector, but also in other sectors of the Indian economy, to increase the purchasing power of an average Indian consumer, thus further boosting demand, and thus stimulating growth, in addition to benefiting investors.

Numerous foreign companies are setting up their facilities in India on account of various government initiatives like "Make in India and Digital India."

1) INDUSTRY STRUCTURE AND DEVELOPMENTS :

Infrastructure sector is a key driver for the Indian economy and is considered as the second largest sector after agriculture and is slated to grow at 30% over the next decade.

This sector is highly responsible for driving overall growth and development of a nation, especially in an emerging one like India. Creation of infrastructure is vital for Indias economic development as well as in generating enormous employment opportunities in the country for future growth; impetus to several sub-sectors of manufacturing. Indias infrastructure spending is estimated to be Rs. 50 lakh crore in the next four years in order to improve its economic growth; connect and integrate the nation with a network of roads, airports, railways, ports and inland waterways; and to provide good quality services. The Government in its budget for FY 2019 has estimated budgetary expenditure on infrastructure of Rs. 5.97 trillion.

The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. However, the progress of infrastructure development in India has been very challenging in the past two years. The customer base of the business showed a clear shift towards Government clients, as the private sector deferred their investment plans due to uncertainties caused by various economic developments. The decline in infrastructure spending can be attributed to the high cost of capital, high level of stressed assets leading to slowdown in funding from financial institutions, issues in land acquisition and economic slowdown. To turn Indias infrastructure dream into reality, several challenges need to be tackled efficiently. Some of the key issues faced by the sector in the past few years relate to:-

• funding,

• financial situation of developers and

• inflation pressures.

2) OPPORTUNITIES AND THREATS :

Opportunities :-

The recent developments in the Indian Economy reflect growth and positive indicators for industrial development which are encouraging. In the given environment of India being fairly poised towards growth, your Company stands in a strong position to grow rapidly due to its presence basically in the infrastructure sector, which is the backbone of countrys overall growth & development. Focus on infrastructure development leads your company to emerge great opportunities by expanding its operations in allied fields, branding on social media, adding a new division and leveraging existing operations which can leave in a position for more work.

Upgraded Infrastructure & Technologies in India will help it to meet growing demand for energy, transport, health, education, communication, consumption and better quality of life among its citizens. These targets for infrastructure development, means great opportunities to your Company.

• Strengths :-

SHRADHA has a strong reputation which enhances customer relationships that further results in higher premium realisations. It firmly believes in strong culture of corporate governance and ensures transparency and high levels of business ethics. Your Company possesses a Diversified business portfolio and strong order book with a successful track record of quality execution of well- designed projects in strategic locations, continuous cash flows, strong balance sheet and stable financial performance even in testing times make it a preferred choice for customers and shareholders. Your Companys focus on strengthening execution and operational efficiency, better asset utilisation, judicious use of working capital, business portfolio rationalisation and higher shareholder payouts are enabling the company to perform well on key parameters leading to improved Returns on Equity and increase in profitability while reducing costs to the extent possible which in return will lead to long term profitable growth.

Threats :

In spite of the Company, confident of creating and exploiting the opportunities, it also finds the following threats:

• Increasing competition from new entrants;

• Unanticipated delays in project approvals;

• Availability of accomplished and trained labour force;

• Increased cost of manpower;

• Rising cost of construction;

• Growth in auxiliary infrastructure facilities; and

• Over regulated environment.

These threats are offset by long term reforms in Policy, Plans and Regulatory regime to a large extent which are now taken by the Government and showing results.

3) OUTLOOK :

The outlook appears bright, as this sector enjoys intense focus from Government for initiating policies that would ensure time bound creation of world class infrastructure in the country. The Government of India along with the governments of the respective states has taken several initiatives to encourage development in the sector. The Smart City Project, where there is a plan to build 100 smart cities, is a prime opportunity for the real estate companies. The government has been successful in handling some critical aspects such as identifying and formulating long-term and visionary infrastructure development initiatives. However, more effort is required to overcome the challenges of project funding and the financial constraints faced by the developers.

The Indian real estate sector will surely emerge stronger, healthier and capable of long periods of sustained growth with the progressive steps made by the government in the Union Budget such as undertaking policy reforms expecting to lead to higher investments in the sector though this will be constrained by fiscal deficit targets and other increased expenditures on account of pay revisions, etc.

Hence, the revival of public private partnership is crucial for improving the pace of infrastructure development. Renewed government focus on infrastructure, coupled with a rising demand for commercial and retail properties, will prove to be a solid foundation for fostering growth.

4) RISKS & CONCERNS :

Owing to the nature of the industry the Company operates in, it is exposed to a variety of risk factors which are broadly categorized into financial, technical, construction, policy and political, market and legal. Your Company has Enterprise Risk Management process in place, which is a holistic, integrated and structured approach to manage risk with the objective of maximizing shareholders value.

The risk management process at SHRADHA broadly consists of identification, assessment, mitigation, prioritization and monitoring of risks. To mitigate the anticipated risks, your Company proactively identifies each significant change and attempts to adapt to it with foresight. It is also enhancing its system of reviews and reporting to ensure that risks are spotted early and steps are taken to control losses, if any.

The Management of Company has identified risks in two categories i.e. (1) Internal and Business Risk and (2) External Risk.

5) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY :

An internal control for business processes across departments is required to ensure compliance with internal policies, applicable laws and regulations and efficiently handling of all the business operations. We at SHRADHA, maintains adequate internal control systems according to the size, scale and complexity of its business which provides reasonable assurance of recording the transactions of its operations in all material aspects which are further recorded and reported to the management. This system also protects against unauthorised use or disposition of Companys assets, prevention and detection of fraud and errors if any, accuracy and completeness of the accounting and timely preparation of financial information. Your company duly reviews from time to time that all internal financial controls are adequate and operates effectively.

6) FINANCIAL PERFORMANCE :

• Standalone
(a) Income Analysis: - The Companys total revenues from Operations for the current year stood at Rs. 17,500,000 as against Rs. 79,186,000/- in the previous year.
(b) Expense Analysis: - Depreciation, Interest and Finance cost

Depreciation during 2018-19 amounted to Rs. 1,374,366/- as against Rs. 1,448,809/- recorded in 2017-18.

Finance cost decreased to Rs. 7,352/- in 2018-19 as compared to Rs. 78,294 in 2017-18.
(c) Profit Analysis: - EBT during 2018-19 was Rs. 32,615,619/- as against Rs. 43,013,686 during 2017-18. Profit after tax for 2018-19 was Rs. 24,277,208/- as compared to Rs. 34,591,580/- during 2017-18.
(d) Net Worth: - The company saw a rise in the Net worth from Rs. 482,455,677/- in 2017-18 to Rs. 506,732,885/- in 2018-19.

• On Consolidated basis

The Companys total revenues from Operations stood at Rs. 102,098,000/- for the year ended 31st March, 2019 as compared to Rs. 106,712,626/- in the previous year, Other income is Rs. 40,996,956/- for the year ended 31st March, 2019 as against Rs. 28,341,369/- in the previous financial year ended 31st March, 2018. The Profit after tax (PAT) for the financial year ended 31st March 2019 is Rs. 32,313,843/- as against Profit of Rs. 38,294,318/- in the previous financial year ended 31st March 2018.

7) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES :

Shradha Infraprojects Limited [Formerly known as Shradha Infraprojects (Nagpur) Limited] constructs routes that connect the nation, but what construct your Company is its people. Your Company firmly believes that people are its greatest asset, and has adopted various policies and initiatives in order to sustain healthy employee relations, growth and development as well as work satisfaction. HR function at SHRADHA has been playing a significant role in Planning, Recruiting, Deploying, Training, Managing and Retaining the Human Resources in accordance with the Organizational Objectives. SHRADHA seeks employees to follow the values of Openness & Trust, Integrity & Reliability, Team Work & Collaboration, Commitment and Creativity to create and establish an ideal work culture at the workplace. SHRADHA also bears the responsibility of Safety Measures which is a matter of continuous evaluation and utmost priority therby providing them with many social amenities including Medical Expense, Provident Fund, Gratuity, and Leave Travel Allowance. A value driven work environment with satisfaction and appreciation as well as professionalism has led us build an excellent team.

8) CAUTIONARY STATEMENT :

This Management Discussion and Analysis Report contains certain forward-looking statements based on the currently held beliefs and assumptions of the management of SHRADHA, which are expressed in good faith, and in its opinion and judgment, are fairly reasonable. As "forward looking statements" are based on certain assumptions and expectations of future events over which the Company exercises no control, the Company cannot guarantee their accuracy nor can it warrant that the same will be realized by the Company. Actual results could differ materially from those expressed or implied. The Company undertakes no obligation to publicly update or revise any of the opinions or forward- looking statements expressed in this report, consequent to any new information, future events or otherwise.

On behalf of the Board

For SHRADHA INFRAPROJECTS LIMITED

[Formerly Known as Shradha Infraprojects (Nagpur) Limited]

SD/- SD/-
Sunil Raisoni Mragna Gupta
Managing Director Director
Date : 31 August 2019
Place : Nagpur