MANAGEMENT DISCUSSION AND ANALYSIS A. Business Overview, Industry Structure and Development While there have been positive signals from the new Government in power, the macro economic recovery is yet to kick in. Real estate sector has been under economic slowdown for the past year or two that has also had an adverse impact on the sale of plots. As the economy and the real estate business recovers, your company expects the sales to speed up as well. In second tier cities the real estate business is not as organized as in the metros providing many opportunities to both direct and develop the market by providing value added products. The demand for housing from upper and middle strata of society in such cities is expanding and your Company expects to capitalize on the same by building group housing apartments as planned in the second stage of the Shervani Legacy project. B. Outlook on Opportunities, Threats, Risks and Concern Growing urbanization is lifting the demand in housing sector specially in tier two cities. The high standards of construction adhered to in the brvious project has infused trust and had a positive impact on the current development which is reflected in enquiries from the public for the current Shervani Legacy project. Continuous upward trend in input cost and instability in international money market is a matter of concern for Indian public including real estate industry. Completion of Project in optimal time and according to schedule is key to building strong reputation and maximizing profits. Delays increase the input costs and have adverse impact on project. A significant factor leading to delays both in terms of time, risk and cost is over land acquisition and related legal documentation. In the current project the ready availibility of land off sets the risks and concern factor to a great extent. C. Subsidiary Company M/s Farco Foods Pvt Limited, the wholly owned subsidiary of your Company has maintained its productivity by manufacturing 5139 MT biscuits of Priyagold Brand on job work basis. We are hopeful that in coming financial year the plant will be upgraded to gas plant which will help to improve the quality of finished product. D. Internal Financial Controls The Company has an adequate system of internal control to ensure compliance with policies and procedures. The internal audit is done by an independent firm of Chartered Accountants. The internal audit reports alongwith recommendations contained therein are reviewed by the Audit Committee of the Board. E. Development in Human Resource and Industrial Relation The Company maintains a very cordial relationship with its employees. They whole heartedly support the management in all activities and endeavors. F. Research and Development In view of the nature of business activities of the Company there is little scope for research and development work. The company is making all efforts to reduce costs by maintaining the standards for the benefit of consumers. |