Dear Fellow Stakeholders
It gives me great pleasure to welcome you all to the 17th Annual GeneralMeeting of your Company. It''s always a pleasure to speak with you to reflect on theperformance of your Company in the year and share with you our aspiration for the future.
Infrastructure sector is a key driver for the Indian economy. The sector is highlyresponsible for propelling India's overall development and enjoys intense focus fromGovernment for initiating policies that would ensure time-bound creation of world classinfrastructure in the country. Infrastructure sector includes power bridges dams roadsand urban infrastructure development. The construction industry is the second largestindustry of the country after agriculture. It makes a significant contribution to thenational economy and provides employment to large number of people. With the urbanizationwave that is sweeping the nation and a plethora of initiatives unveiled by the Governmentto boost infrastructure development and series of measures to boost investment easepolicy norms relax FDI regulations build new age affordable housing and generally createan environment favorable for the enhancement of urban life. The outlook of theconstruction industry which is directly linked to growth in infrastructure is positive.After a period of de-growth resulting from policy paralysis and slow rate of projectapproval things are finally beginning to look up on the construction front. In its pathof advancement the industry has to overcome a number of challenges including housingdisaster resistant construction water management and mass transportation. And as aleading integrated construction player ARSS stands at the helm of this change ready totake on the multitude of opportunities thrown up by the transforming industry and businessenvironment. With a view of the Indian economy the Indian economy advanced 6.1 percentyear-on-year in the first quarter of 2017 slowing sharply from a 7 percent expansion inthe previous period and well below market expectations of 7.1 percent. According to theIMF India's growth is expected to rebound to 7.2% in the 201718 fiscal and 7.7% in201819.
It is the lowest growth rate since the last quarter of 2014 due to a slowdown inconsumer spending and a drop in investment following the demonetization program startedin November of 2016 that removed 86 percent of India's currency in circulation. Inaddition the government changed the GDP base year for 2011-2012 from 2004-2005. The samechange was made earlier for industrial production and wholesale prices indexes withadjustments in the weights of the different industries. The construction sector shrank3.7% in the March quarter compared with a 3.4% growth in the preceding quarter. Theannouncement that a real estate regulator will be appointed to ensure higheraccountability in the sector may have also contributed to the slowdown. Your Company is apioneer in infrastructure development and operations. However for such ambitiousinfrastructure development of the Country cost effective and long term financing is thelifeline. I am glad that the Government and RBI has been working to resolve financingissues of the infrastructure sector by launching various schemes and policies as follows:
- Strategic Debt Restructuring (SDR)
- Scheme for Sustainable Structuring of Stressed Assets (S4A)
- Investment Trust Guidelines by SEBI
- Masala Bonds
- Continuation of past schemes like JLR and 5/25
- Liberalized ECB approach
I believe that the Government and RBI are further formulating new mechanisms to raiselong term cheaper finance in order to fuel the growth of infrastructure sector.
Let me move now to the performance of your Company. The standalone results for 2016-17which reflect construction business have been encouraging and reflect efforts atstreamlining operations optimizing efficiencies of on-going projects and pursuing pendingdues at every level.
- Turnover of Rs. 850.00 crores.
- EBITDA is Rs. (221.48) crores.
- PAT (loss) is Rs. (330.63) crores.
- EPS (basic) in the FY 2016-17 is Rs. (222.75) as against Rs. 3.38 in the previousyear.
As I wrote in my message in the Annual Report I view the maintenance of the highestlevels of corporate governance as the core focus of the Chairman's role. I believe thatthe current make-up of the Board with the addition of Melanie as a further independentDirector will ensure we maintain those high standards. Our Board processes from theactivities of the board committee's right through to the regular functioning of the Boarditself were externally reviewed during the year and I am confident that they deliver thehighest levels of corporate governance. Though there are opportunities galore we need tobe very cautious of the present volatile and uncertain environment and need to make verycautious decisions which add value to all the stakeholders. I would like to place onrecord my sincere gratitude to you our valued shareholders for having given me thisprivilege. I would also like to place on record my deepest appreciation of the tirelessefforts of all my colleagues past and present who have travelled with me in this journeylending their shoulder to build this great organization. I draw solace that with team ofprofessionals in our group our shared aspiration is surely within reach. Here I wouldlike to express my special gratitude to all the employees I am really thankful for theircooperation and support.
Before I conclude I would like to extend my thanks to Customers vendors andsuppliers Central and State Governments Regulatory Authorities investors bankers andfinancial institutions for their continued faith and trust without whom our continuedgrowth momentum would not have been possible. I would also like to thank my fellow Boardmembers for their unstinted support and encouragement and helping me in creating goodgovernance culture across the organization and fulfilling the responsibilities of Board. Iwould like to place on record the sincerity hard work commitment and dedication of theentire Team of ARSS. I seek your continued support in making the Company more sustainableand resilient to external challenges.
With warm and very best regards