Shree Ram Urban Infrastructure Ltd Management Discussions

INDUSTRY DEVELOPMENTS

The Real Estate Industry continues to reel under the recessionary period which has been underway for over 4 years now. The resultant financial crunch has led to very high interest costs and non availability of adequate funding. However, since the past few months, the Government has been focusing on "affordable housing" with the motive of providing housing for all by 2022. This is expected to give a big fillip to the sector. However, it is to be seen how much time it will take for the sector to achieve a turn around.

RERA has been made applicable from May 2017 and this will usher in wide ranging changes in the way business is conducted in Real Estate. The level of transparency will go up and working will become more stream-lined. This augurs very well for your company since it will boost the corporate culture in the Real estate sector.

OPPORTUNITIES AND THREATS

OPPORTUNITIES:

The Government has laid down the target of providing housing for all by 2022. Financing at cheaper and subsidized rates are also being made available for this initiative. This will give a significant boost to the entire sector, and as effects start trickling down, all projects will pick up and several new opportunities will present themselves to "corporate entities".

THREATS:

Other than affordable housing, the cost of capital for the sector continues to be extra-ordinarily high and this is a big deterrent to the success of the real estate projects. This cost is unlikely tocome down in the nearfuture.

ENVIRONMENTAL IMPACT

The Companys maiden project Palais Royale was the first tall building in the country to get a pre certified LEEDS platinum rating reflecting the high level of commitment of the company to maintaining the environment. In time to come, the company will bring to bear this knowledge and experience to have a positive environmental impact on the projects it takes up in future.

RESEARCH & DEVELOPMENT

The Company is doing R&D to bring about cost reductions in affordable housing and this could give it an edge in the field as and when it takes up.

RISKS & CONCERNS

Its is expected that with the advent of RERA, the arbitrary and inconsistent approach on the part of authorities to make changes in regulations will reduce substantially. This will eliminate a major risk and source of concern. High cost of capital to be a very high area of concern for the sector.

INTERNAL CONTROL SYSTEM

The Company has well defined organization structure, documented policy guidelines, pre-defined authority levels, and an extensive system of internal controls to ensure optimal utilization and protection of resources, IT security, accurate reporting of financial transactions and compliance of applicable laws and regulations. The internal control is supplemented by an extensive programme of internal and external audits and periodic review by the management. The system is designed to adequately ensure that financial and other records are reliable for presenting financial information and other data and maintaining accountability of assets.

HUMAN RESOURCES

Your Company firmly believes that success of the Company comes from good human resources. Employees are considered as important assets and key to its success. The Company has been constantly reviewing its HR policies and practices to keep abreast with the market changes and has embarked upon several initiatives to focus on creating a positive work environment that provides employees with ample growth and development opportunities as well as ensuring higher level of motivation and engagement.

CONSERVATION OF ENERGY

The Company has been taking steps to conserve energy and to promote the use of non-conventional energy in its ongoing project. It has installed trial windmill as well as solar heating equipment in this direction.

FINANCIAL PERFORMANCE:

FINANCIAL RESULTS:

This is summarized as follows:

		(Rs. In Crores)
Particulars	Financial Year ended 31.03.2017	Financial Year ended 31.03.2016	Change
Turnover	75.24	104.30	(29.06)
Profit/(loss) before interest, tax and depreciation	(48.77)	(23.47)	(25.3)
Net profit/(loss)	(49.74)	(24.69)	(25.05)

INFORMATION TECHNOLOGY

The Company is using latest information technology including 3D technology in its engineering as well as project implementation systems.

CAUTIONARY STATEMENT

Some of the statements in this Report on the Companys objectives, projections, estimate and expectations may be forward looking statements. Actual results might differ substantially or materially from those expressed or implied. Much will be dependent on downtrend or upward trend in industry, significant changes in political and economic environment in India and abroad, tax laws, import duties, litigation and labour relations.