MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT FORWARD-LOOKING STATEMENTS The report contains forward-looking statements, identified by words like 'plans', 'expects', 'will' and so on. All statements that address expectations or projections about the future are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realized. The Company's actual results, performance or achievements could thus differ from those projected in any forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events. INDUSTRY STRUCTURE AND DEVELOPMENTS In past few years Indian Economy witnessed slowdown across various sectors. Both the domestic and global economic situations have been very volatile and challenging. To survive in these times of uncertainty an organization has to adapt and adopt new ways to manage business. The government has provided signals of moving along development agenda that will push for reforms that were so far left on the back burner and are much needed to revitalize the economy. Excel Realty N Infra Limited (Formerly Known as Excel Infoways Limited) (Excel) has been continuously striving to achieve success in operating in the two business operates i.e. Infra & Construction Real Estate activities and BPO / IT enabled services and Company has included Infra, Real Estate, and Construction Activities in its main objects and thus have changed the name from Excel Infoways Limited to Excel Realty N Infra Limited. The challenges faced by real estate sector are mainly due to poor macroeconomics, slow income growth, continuing high borrowing cost, both for industry and consumer. The construction, infra and real estate segment is dependent on domestic business climate. This year the Indian real estate sector would benefit from positive market sentiment as there are lot of positive changes in the field of infrastructure, the Company is expected to do well in this business segment and to grow at a faster rate. SEGMENT-WISE PERFORMANCE • Infrastructure/ Real Estate The Company was engaged in infrastructure activities such as construction of roads and highways, mining etc. The Company did exceedingly well in this segment of operation. This segment registered a stupendous growth in the current year and our revenue grew more than 2.6 times that of the brvious year. It generated a net revenue of Rs. 2061.62 lacs as compared to brvious year's Rs. 768.91 lacs. • IT/ BPO In the IT and BPO segment the Company is engaged in the business of providing customer care services and handling the business relations of clients on their behalf by maintaining relation with their consumers and also providing them service by assisting them in managing their work flow and updating their records. We provide inbound and outbound services to our clients. As the growth of exports from BPO / IT services declined due to economic challenges, the net revenue generated under this segment is Rs. 229.94 lacs as compared to brvious year Rs. 527.92 lacs. OUTLOOK The Company believes that demand conditions in the real estate sector are exhibiting early signs of improvement and the Management is positive that the Company will be able to achieve better growth than brvious year by executing its real estate development and other operations and taking advantage of potential revival in economic growth and its resultant positive effects on the real estate sector over the medium term. The Company shall continue to strive to acquire new projects to increase sales and profit of the Company. OPPORTUNITIES AND THREATS The Company's long term view on the Infra and Real Estate Segment is positive due to increasing urbanization, favorable demographics, and growth of the service sector and rising income are still intact. The Company continuously endeavored to sharpen training & processes for specific domains enabling us to achieve domain specialization resulting in delivering quality solutions to each of our customers. At Excel, we strive to build long term relationships with our clients. The focus on winning fresh clients across geographies where we can serve on the strength of our core competencies and on the basis of our track record of delivery and positive client references is ongoing. THREATS • Economic conditions Excel executes infrastructure projects and hence is exposed to risks regarding the completion of projects in time as unforeseeable conditions may sometimes delay projects at hand. In addition to this, there are risks associated to operating in different geographies in terms of terrain, sociopolitical and engineering factors. In a competitive market environment like the one that brvails today, in order to secure projects and generate profits one needs to strike a very fine balance between returns and risks. • Attrition Excel is in an industry where attrition is one of the major areas of concern. One of the major challenge we face is high attrition. Our constant endeavor is to continue adding new values and services to our clients, stakeholders, etc and thereby contribute to the overall growth. • Foreign currency risk Substantial revenues of the Company are denominated in foreign currency and most of our expenses are incurred and paid in Indian rupees. The exchange rates between the Indian rupee, and other major currencies are volatile and subject to many economic conditions. Our financial position and operating results may be adversely affected by fluctuations in the currency exchange rates. • Cost of people The principal component of our cost is the wages of our employees. Human resource costs in India has risen a lot in the past and may also increase in future due to competitive brssures, we may experience a greater increase in our human resource cost. As we are a specialized industry we have to nurture human resource which is a challenge and high rate of attrition increases our overall costs. The changes in human resource cost during the execution of the services may increase cost of services and alter profitability on contracts, which may not be covered by escalation provisions. • Regulatory environment Our operations are exposed to uncertain political, legal and economic environment, government instability and complex legal systems and laws and regulations in India and abroad. Our ability to manage, evolve and improve our operational, financial and internal controls across the organization and to integrate our widesbrad operations and derive benefits from our operations is key to our growth strategy and results of operations. • Collection of receivables from our clients There are usually no delays associated with the collection of receivables from our clients. Our operations involve significant working capital requirements and prompt collection of receivables affect favorably to our liquidity and results of operations. However, there can be no assurance that any such development would not adversely affect our business. DISCUSSION ON OPERATIONAL PERFORMANCE This year our revenue from infrastructure segment has increased to Rs. 2061.62 lacs as compared to brvious years of Rs. 768.91 lacs and the Company did exceedingly well in this segment. The profit from this segment also registered a rise in profits from Rs. 23.24 lacs (brvious year) to Rs. 97.52 lacs (current year). This year we are hopeful that as the business climate has turned positive we will benefit from it and acquire new clients and will be able to acquire more business During the year under review, the Company's income from BPO/IT activity was of Rs. 229.94 lacs (brvious year Rs. 527.92 lacs). This year we had seen a decline in our growth in our export of BPO services due to policy changes outsourcing of their services to other countries. Our profits from this segment declined to Rs. 10.07 lacs (brvious year Rs. 156.79 lacs). Our income from other sources comprises of interest income from bank and other non-operating income. RISK MANAGEMENT The real estate is poised to turn around significantly in due course but factors like inflation and high interest rate is undermining the turn around. Proper identification and management of risks go a long way in achieving the objectives of the company. Risk management is an inherent and integral part of operations, which governs the execution of each individual project. The Company operates in highly fragmented and competitive Industry. The Competition varies from depending upon size, nature and complexity of the project to be executed. Fluctuating in operating cost can often lead to spiraling costs and overshooting budgets The Company makes efforts to minimize the risk associated with each and every project we undertake so as to increase the profitability of the Company. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has adequate systems of internal control, to ensure that all assets are safeguarded and protected against loss from unauthorized use and procedures commensurate with the size and nature of business. The Company continuously upgrades its systems in line with the best availability practices. These systems are supported by periodical reviews by the management and standard policies and guidelines to ensure that financial and other records are brpared accurately. HUMAN RESOURCES AND INDUSTRIAL RELATIONS Manpower is biggest strength in any Sector. The Company maintains its focus on its human resources as it believes that a motivated and empowered workforce is the key to sustained competitive advantage. The Company has maintained excellent relations with its employees across all levels of the organization during the period under review. All efforts were made to ensure a high employee satisfaction. Adequate measures were undertaken to enhance the skill sets of the employees. Human resource continues to be core strength and always endeavors to work towards having sound and progressive Hr strategies so as to align with Company's objectives and employee aspiration For and on behalf of the Board of Directors sd/- Lakhmendra Khurana Chairman and Managing Director DIN: 00623015 Place: Mumbai Date: May 29, 2015 |
