Dear valued shareholders
On behalf of the Board of Tantia
Constructions Limited it is my pleasure to present the 51st annual report and auditedfinancial statements for the year ended 31st March 2016.
India economic overview
The progressive policies of the central government that are focused on driving somefar-reaching policy-driven structural reforms are bound to evolve Indias economicgrowth prospects into the next trajectory. The countryreported ear a GDP growth of 7.6% in2015-16 the fastest growing among large global economies. Rightly so the country iswidely perceived to be an island of hope remaining relatively insulated from the adverseimpacts of the global economic crisis. With the policy-makers clear on a pro-growthbusiness stance through the well-articulated maximum governance minimumgovernment model coupled with the possible implementation of the revolutionary goodsand services tax (GST) paired with the prediction of above-average monsoons during thecurrent season the Indian economy is widely expected to report a GDP growthof7.7-7.8%duringthecurrentfiscal of 2016-17.
Infrastructure brightening horizons
It is without doubt that India is at an attractive inflection point with regards to itsinfrastructure sector that is clearly one of the few large opportunities availableglobally. Since infrastructure development is critical to Indias economic growth andprogress the countrys Honble Finance Minister recently mentioned that thenation needs over US$ 1.5 trillion in investments in the next decade. Earlier manyoperational financial and socio-political bottlenecks had resulted in intransigence incontract negotiations protracted dispute resolutions and stiff and long-drawn challengesin land acquisition and procuring environmental and other regulatory clearances. Howeverthe central government-constituted Kelkar Committee which was established torecommend an agenda for rejuvenating the public-private partnership (PPP) programme hasprovided encouraging suggestions to transform the Indian construction industry and is astep in the right direction. With a view to ensure liquidity for a sector that istypically capital-intensive the Government has provided for a planned outlay of US$ 15billion in the 2016 Union Budget for the Indian roads sector alone. Particularly thehybrid annuity model (HAM) of road development has sought to enable the developer tomanage risks better and is a bold step to also meet the governments ambitious targetof developing 30-km of roads per day. The government has also proposed setting-up theNational Investment and Infrastructure Fund with an initial outlay of C200 billionwherein a 49% stake would be contributed by the government. It is clear that the newgovernment has done well to start the process of laying a solid foundation forinfrastructure-driven economic growth.
Pressing industry requirements to help serve the nation better
Since long the construction industry has made a request for effecting a structural andsubstantive change to the dispute resolution mechanism seeking payment of awarded amountson closure of arbitration and making it mandatory that an appeal against the same wouldonly be permitted under exceptional circumstances. Another key reform-oriented request hasbeen to ensure that the full land parcel is made available before project award so thatwork could proceed on schedule and disputes relating to idling are eliminated from thesystem. I am confident that both these requests if actioned will bring about a tangiblequalitative change in the manner in which projects are executed and infrastructure iscreated in India the benefits of which will be visibly seen within the short tomedium-term. To me the ambitious GDP growth and job creation targets set by theGovernment will then be a reality.
Tantia Constructions focused on emerging stronger
On a standalone basis the Companys turnover stood at C40554 lakhs as comparedwith C52330 lakhs reported in the previous year. The Companys net loss declined toC3036 lakhs for the year under review against a net loss of C6111 lakhs recorded in theprevious year. The decline in the losses was mainly a result of our focus on implementinga progressive turnaround in profitability. Towards this extent even in a challengingbusiness landscape we embraced several proactive steps that included an aggressive focuson claims realisations cost optimization monetization of assets and cautious andselective bidding for new projects that would ultimately enhance the quality of ourexecution pipeline. We also focused on streamlining the organisation and reinforcing oursystems and processes with an emphasis on leveraging the Companys core competencies.As on 31 March 2016 our order book stood at C398103 lakhs providing good revenuevisibility into the future.
Way forward towards a better future
Going into 2016-17 we will continue to strive to set higher benchmarks of performanceand strengthen our engagement with our stakeholders.
We will focus on building our physical capacities as well as human resourcecapabilities and seek to diversify our geographic presence as well as de-risk ourportfolio by tapping into attractively evolving segments of the construction sector thatare supported by win-win operational models and are secure in their funding.
At Tantia Constructions I am proud of our depth of talent. Our Companysleadership team including Board of Directors and senior management function as a unifiedteam aligned with our overarching purpose of creating infrastructure that enhanceseconomic progress and helps create a better quality of life for its citizens. Weunambiguously believe that our people are our key assets. We have a team of deeplycommitted motivated energetic and knowledgeable human resources that reinforces ourfunctional capabilities.
I am grateful to our entire stakeholder family company colleagues business partnerscustomers and others for reposing their faith in us our members on the Board for theirwisdom and continuous support our employees for their resolve and unstinted devotion andyou our shareholder for reposing your trust and faith in us. Thank you for your supportfor the past 51 years of our journey and we hope you continue your association with uswell into the future too.
In closing I must tell you that as an enterprise we will do everything we can toemerge stronger.
Chairman and Managing Director