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Company director report

ANAND CREDIT LIMITED ANNUAL REPORT 2011-2012 DIRECTOR'S REPORT To, THE MEMBERS OF THE COMPANY Your Directors have pleasure in presenting the Nineteenth Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2012. FINANCIAL RESULTS: The summary of financial results for the year under review along with the figures for previous year are as follows:- (Rs. in Lacs) Particulars 2011-2012 2010-2011 1. Net Sales/Income from Operations 5.70 20.94 2. Total Expenditure 24.03 50.64 3. Operating Profit/(Loss) before Finance Cost, Depreciation & Taxation (1-2) (18.33) (29.70) 4. Finance Cost 0.05 0.02 5. Depreciation 2.40 1.98 6. Profit before Tax (3-4-5) (20.78) (31.70) 7. Provision for taxation 0.00 0.00 8. Profit/(loss) after Tax (6-7) (20.78) (31.70) 9. Balance of Profit & Loss Account brought forward from P.Y. 13.77 45.47 10. Amount available for appropriation (8-9) (7.01) 13.77 11. Balance carried to Balance sheet (7.01) 13.77 DIVIDEND: Your Directors have not recommended any dividend on equity shares for the year under review. PUBLIC DEPOSITS: The company has not accepted any deposits from the public. During the year under review. MANAGEMENT DISCUSSION AND ANALYSIS: A report on Management and Discussion and Analysis as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange forms parts of the Annual Report. DIRECTORS: In accordance with the provisions of the Companies Act, 1956 and Article 150 of the Articles of Association, Shri Ramesh Shah, Director of the Company retire by rotation at this annual general meeting and being eligible, offer himself for reappointment. The Board recommends his reappointment. Shri Gunvant M. Acharya was appointed as Director on 30th September, 2011 and has resigned on 7th November, 2011. INSURANCE: All the properties and assets of the Company are adequately insured. AUDITORS: M/s A. L. Thakkar & Co., Auditors of the Company retires at the conclusion of forthcoming Annual General Meeting and being eligible to offer themselves for reappointment. AUDITORS REPORT: The Auditors report is self-explanatory and so far, there is no negative remark by the Auditors. DIRECTORS' RESPONSIBILITY STATEMENT: In accordance with the provisions of section 217(2AA) of the Companies (amendment) Act, 2000 the Directors confirm that :- 1. In the preparation of accounts, the applicable accounting standards have been followed. 2. Accounting policies selected were applied consistently. Reasonable and prudent Judgments and estimates were made so as to give a true and fair view of the state of affairs of the Company as at the end of 31st March, 2012 and the profit of the Company for the year ended on that date. 3. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities. 4. The Annual Accounts of the company have been prepared on a going concern basis. CORPORATE GOVERNANCE: Your Company is committed to maintain the highest standard of Corporate Governance. Your Directors adhere to the stipulations set out in the Listing Agreement with the Stock Exchanges. As per Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance together with a certificate from the Company's Auditors confirming compliance there to is set out in the Annexure forming part of this report. LISTING OF SHARES: The equity shares of the Company are listed at the Bombay Stock Exchange Limited (BSE). The Company has paid the applicable listing fees up to the date. The Company's shares are also traded in dematerialised segment and the Company had entered into agreements with CDSL and NSDL for custodian services. PARTICULARS OF THE EMPLOYEES: The Company has no employee to whom the provision of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 apply and hence forth not applicable to the company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Conservation of energy and technology absorption information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are not applicable. There is no Foreign Exchange Earning and Outgo during the year. ACKNOWLEDGMENT: Your Director0 wish to place on record their appreciation and sincere thanks to the state government, government agencies, banks, customers, financial institutions, shareholders, vendors and other related organizations, who through their continued support and co-operation, have helped, as partners, in your company's progress. Your Directors also acknowledge the hard work, dedication and commitment of the employees. Date : August 13, 2012 For and on behalf of the Board Place: Ahmedabad Ramesh L. Shah Chairman and Managing Director MANAGEMENT DISCUSSION AND ANALYSIS REPORT Global and Indian economy and realty sector in India in FY 2011-12 The infrastructure development story in India has been plagued with issues of implementation. As a result, the pace of growth has simply been much slower than the needs of an economy intending to maintain a sustained growth rate of close to 9%. And in 2011-12, there has been a considerable slowdown in development in the infrastructure sector. The Planning Commission's XIth Five-Year Plan (2007-2012) had already identified that inadequate infrastructure was a major constraint on the country's rapid growth. The Plan had, therefore, emphasized the need for massive expansion in investment in infrastructure based on a combination of public and private investment, the latter through various forms of public- private partnerships (PPP). In the last few years, substantial progress has been made in this respect. The total investment in infrastructure, which includes roads, railways, ports, airports, electricity, telecommunications, oil gas pipelines and irrigation, is estimated to have increased from 5.7% of GDP in 2007 to around 8.0% by 2012. The real estate market in India witnessed a stupendous growth over the past few years, with average residential capital values more than doubling between 2005 and the first half of 2009. In the Union Budget 2011-12, the Government has also presented various initiatives for real estate sector. These factors coupled with a favorable political environment are likely to boost the economy as well as the real estate sector in the coming years. Your company has sustained growsth and aspires to do so in the coming years. (A) Review of Annual Operations: During the year 2011-12 the total income of the Company was Rs. 569,632 as compared to total income Rs. 2,093,527 during the year 2010-11. Capital Structure: During the year under review, there is no change in the Capital Structure of the Company. Reserve and Surplus: In 2011-12, the reserve stands at Rs. 426,863 against Rs. 2,505,346 in 2010-11. (B) Opportunities and Threats: Opportunities: Urbanisation has emerged as a key policy and governance challenge in India in recent years. Cities and towns contribute to more than 60 percent of GDP. Urbanisation is concomitant to economic growth. The strong correlation between urbanization and economic development is well-known. While urbanization can be an engine of economic development and inclusion, unless managed properly, it can create serious socio-economic consequences and disastrous outcomes which would be difficult or impossible to fix. With the rapid growth of urban population, expected to occur as the structural transformation of the Indian economy matures and as India moves to double- digit growth, the backlog, current and growth needs of urbanization need to be addressed comprehensively. We have to not only arrest the deteriorating conditions in cities, but also take advance action for commodating urbanisation in a planned manner as India moves from a level of 31 percent to more than 50 percent urbanisation in the next few decades. Projections suggest that India will have more than 700 million urban populations by the 2040s. There is an urgent need to address the lack of consistent and coherent urban development policy, faulty and improper urban planning, coupled with poor implementation and regulation overload in India's cities. These factors have transformed many of our cities into chaotic entities that are unlikely to be able to meet the demands of Indian's vision of development in the 21st century. Since faster, sustainable and more inclusive growth is the major objective of 12th plan, a well planned urban development can be a key vehicle for achieving this objective in a more inclusive manner. The Management is confident of achieving good business in the current year by enhancing the strengths in the areas of core-competency. Threats: Continuing to harden interest rates by RBI could have a short-term dampening impact on the Real Estate Sector. The reason behind this hike is the financial measures applied by RBI to hold and tame inflation. The increased prices of the essential Raw Material like Cement, Bricks and Steel and increase in labour cost led to the rise of the overall construction cost. The hike in interest rates may have a ripple effect on the Real Estate Sector with construction cost going up. Due to significant increase in Land and Construction cost it become difficult for the Builder and Developers to reduce the prices of finished products to absorb the impact of the increased EMI as a result of rise in the rate of interest. One more difficulty that the developers may face can be delay in getting approvals from the State and Central Government and various other authorities. Fluctuations in operating costs can often lead to spiraling costs and overshooting budgets. This can lead to delays in the completion of Projects. Remedy: Accordingly, the Company has well defined, rigorous policies and processes designed to identify, mitigate and control risks. The regulatory framework particularly in the real estate space is evolving. The recent years have seen the sector exhibiting a trend towards greater organization and transparency through various regulatory reforms, giving an overall positive boost to the industry. The Management continues to remain optimistic about the future regulatory and policy framework. (C) Internal Control Systems: 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 disposal and commercial transactions are authorised, recorded and reported correctly. (D) Outlook: There exists a huge demand for housing and infrastructure in the Indian scene. The gap between demand and supply for urban housing is growing. This is has due to the high population growth, especially in urban areas. Studies reveal that the population in the five most populous cities of India, namely Mumbai, Kolkata, New Delhi, Chennai & Hyderabad is set to increase at a scorching pace of more than 100% between 2010 and 2025. The huge demand-supply gap for residential housing, favorable demographics, rising affordability levels, availability of financing options as well as fiscal benefits available on availing of home loan are the key drivers which will continue to fuel the growth in the residential market. Apart from the huge demand, India also scores on the construction front. A Mckinsey report reveals that the average profit from construction in India is 18% which is double the profitability for a construction project undertaken in the US. The importance of the Real Estate sector, as an engine of the nation's growth, can be gauged from the fact that it is the second largest employer next only to agriculture and its size is close to US $ 12 billion and grows at about 30% per annum. 5% of the country's GDP is contributed by the housing sector. In the next three, four or five years this contribution to the GDP is expected to rise to 6%. Given the various stimulation measures and economic revival, India's real estate and construction sector is beginning to improve. An economic revival and strong demand for budget housing are driving the upturn in the residential segment. Transaction volumes in housing have picked up as developers launched projects at prices which are lower than market value. The response to recent mid-income housing launches, too, has been positive. There is also a strong revival of interest among corporate for commercial space. Moreover, as developers have delayed projects, the vacancy levels have reduced, thus reducing the demand-supply gap. The Management believes that the Company's prominent and highly respected presence in the real estate space in Ahmedabad will enable it to develop strategies to respond effectively to the challenges and opportunities ahead. The performance of the Company is expected to remain encouraging and the company looks for the better future. (D) Environmental Issues: As the company is not in the field of manufacture, the matter relating to produce any harmful gases and the liquid effluents are not applicable. (E) Cautionary Statement: The report contains forward looking statements containing words such as, 'expects', 'anticipates', 'estimates', 'believes', 'plans', 'intends', 'will' 'projects' 'seen to be' and so on. All statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these are accurate and will materialise in the said order or manner or realised. The Company's performance and results or achievements could thus differ from those projected in any forward looking statements. The Company assumes no responsibility to publicly amend modify or revise such statements based on subsequent events or developments. Date : August 13, 2012 For and on behalf of the Board Place: Ahmedabad Ramesh L. Shah Chairman and Managing Director