trans financial resources ltd Management discussions

<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS</dhhead>

1. OVERALL REVIEW ON INDUSTRY STRUCTURE & DEVELOPMENTS:

The Company is currently engaged in construction and engineering business activity. The company’s approach towards growth has not delivered satisfactory results during the year 2022-23 as the company has not carried out any business activity during the year. The company is expecting more revenue and sure to grow in terms of net profit in the upcoming years. The company will strive to improve its performance in long term prospects based on actual pace of global economy.

 

OPPORTUNITY & THREATS:

Policy Regulations: The government has launched several key policies for the real estate sector. Some of these are Exemption under Income Tax Act for purchase of second house, RERA, Benami Transactions Act, boost to affordable housing construction, interest subsidy to homebuyers, change in arbitration norms. To boost this segment, the government has doled out various tax incentives and other reforms.

Increase in input cost: Real Estate is a capital and labour intensive industry, thus a rise in cost of labour coupled with shortage creates issues in development of the project.

Shortage of skills and technology: Real estate is grappling with shortage of skilled professionals, which many times results in project delay. For, faster completion of projects, it is imperative to invest in skill development and training of primary construction workers.

 

2. SEGMENT WISE OR PRODUCT-WISE PERFORMANCE:

On the basis of the principles for determination of segments given in Indian Accounting Standard 108 “Operating Segments” and in the opinion of management, the Company is primarily engaged in the business of Construction & Engineering. Accordingly segment wise disclosure of performance is not applicable to the Company.

 

3. BUSINESS OUTLOOK:

The Company has achieved higher turnover as compare to the previous financial year and it further expects growth of the company in future. The constant efforts of the Company and Research and Developments will lead the Company to the higher level.

 

4. RISK & CONCERN:

The building, plant and machinery, vehicle and stocks of the company are adequately insured.

 

5. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY:

Considering the size of the company, your company has adequate system of internal control to provide reasonable assurance that assets are safeguarded and protected from unauthorized use or deposition.

 

6. FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Total Revenue for the year ended 31^st March, 2023 was Rs. 5319.69 lakhs. Better working capital management was also one of the emphasis on which proper weightage was laid upon.

 

7. HUMAN RESOURCE DEVELOPMENT:

Your Company treats its “Human Resources” as one of its most significant assets. The Company continues its focus on retention through employee engagement initiatives and provides a holistic environment where employees get opportunities to realize their potential. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. The Company’s Health and Safety Policy commits to provide a healthy and safe work environment to all employees.

 

8. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR, INCLUDING:

Ratio	2022-23	2021-22
Debtors Turnover	1.12	3.89
Inventory Turnover	N.A	N.A
Interest Coverage Ratio	N.A	N.A
Current Ratio	1.42	1.01
Debt Equity Ratio	0.86	1.12
Operating Profit Margin (%)	9.42%	N.A
Net Profit Margin (%)	9.15 %	N.A
Return on Equity Ratio (ROE)	0.50	0.37
Return on Capital Employed	0.61	0.40

 

Current Ratio reason for change: The current liability has reduced as well as current asset has also reduced but reduction in liability is higher than reduction in asset due to which the current ratio has increased.

Return on Equity Ratio reason for change: The profit of the company has increased in the current year and this has resulted in increased internal accruals due to which the net worth of the company has also increased. This has resulted in increase in the return on equity ratio.

Return on Capital Employed reason for change: The EBIT of the company has increased which has resulted in increase in return on capital employed.

 

9. DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF:

Particulars	As at 31/03/2023	As at 31/03/2022
Profit for the year	457.57	170.31
Shareholder’s Equity	1298.34	550.85
Return on Net worth	0.35	0.31
% Change from previous period	12.90%

 

The Return on net worth has increased substantially as the profit in current year has increased in comparison to the previous year.

 

10.BUSINESS ENVIRONMENT:

The Company is working under good business environment.

 

11.CAUTIONARY STATEMENT:

Statements in this report on management Discussion and analysis may be forward looking statements within the meaning of applicable security laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could however, differ materially from those expressed or implied. Important factors that could make a different to the Company’s operations include global and domestic demand supply conditions, finished goods prices, raw material cost and availability and changes in government regulation and tax structure, economic development within India and the countries with which the company has business contacts and other factors such as litigation and industrial relations.

The Company assumes no responsibilities in respect of forward looking statements which may be amended or modified in future on the basis of subsequent developments, information of event.