Dear Shareholders Ladies and Gentlemen
At the outset I welcome you all on behalf of Board of Directors the Management and theEmployees of the Company.
Before I begin my speech I would like you all to join me in a moment of silence forMr. Anil Joshi an Independent Director of the Company for 9 years who left for heavenlyabode on 16th November 2015
This is truly a great loss of UNITY and will be profoundly missed by everyone whoselives he touched. May his soul rest in peace.
Its indeed a pleasure to welcome all of you this morning and to apprise you ofyour Companys performance during the year gone by and the prospects for the yearahead. The year 2015 saw the global economy trapped in a low growth trajectory. The IMFprojects global growth to inch up from 3.1% in 2015 to 3.5% in 2017. Growth in theadvanced economies is projected at 1.9% in 2016 with US growth pegged at 2.4% Europe at1.5% and Japan at 0.5%. Growth in the emerging markets in 2016 is projected at 4.1% muchof it coming from China India and the ASIAN region. Consequent to the UKGovernments decision to leave the European Union the IMF sees a near-term risk inglobal economy arising mainly from macro-economic and financial market impact. The directimpact on trade with India would depend on the re-negotiation of bilateral andmultilateral trade agreements between UK and India and by currency competitiveness. Ibelieve the overall impact may not be highly significant in so far as it relates toIndia.
Among all the developing economies globally India was indeed an exception with growthat 6.3%. Given the robust macro-economic indicators decline in commodity prices and athrust on fiscally prudent Government policies India is positioned to weather globalvolatility even with modest growth acceleration. Consumption is expected to rise on manycounts. Firstly the Governments impetus on infrastructure development and alliedsectors.
Second the implementation of the recommendations of 7th Central Pay Commission on payand pension benefits.
Thirdly the prediction of a good monsoon in 2016 should drive growth in theagriculture sector and help revive rural demand. These will spur the investment cycle andbolster economic growth.
A key request of the construction industry for a long time has been a substantivechange to the dispute resolution mechanism seeking payment of awarded amounts oncompletion of an arbitration and appealing against the same only in exceptionalcircumstances rather than as a rule. Another key request has been to ensure that all landis made available before award of projects so that works proceed speedily and disputesrelating to idling are eliminated. Both these requests if actioned will bring about atangible qualitative change in the manner in which projects are executed andinfrastructure is created in India the benefits of which will be seen within the short tomedium term. The ambitious GDP growth and job creation targets set by the presentGovernment will then be a reality. The economies globally are facing their own challengescharacterised by rapidly changing geo-political environment and volatility in currency.With growth in China substantially declining and the European economies barring a fewexceptions yet to come out of the slump the upturn being witnessed in the U.S. economyoffers hope going forward.
Year at a Glance
2015 was another challenging year for EPC companies as also for infrastructuredevelopers owners and operators and your Company was no exception. The Indian economycontinued to face troubled times with the depreciating rupee high inflation and endemicliquidity problems. The falling price of oil in the world markets towards the end of theyear was the only cause for cheer but was limited in its overall impact. Order intakeremains sluggish since many of the stalled projects are yet to be kick-started. Projectsalready awarded are generally progressing slowly due to various continuing problems onground which remain unresolved over the years leading to cost escalations which remainunpaid. All these factors combined have led to a vicious cycle culminating in a pile upof debt or corporate debt restructuring and high consequential costs for the constructionindustry. Your Company is presently under a Corporate Debt Restructuring which wasapproved by lenders in December 2014. However the sanction of CDR Package post thereferral to CDR forum and consequent release of additional exposure under CDR Packagehappened with delay which resulted in further delay in completion of the balance project.The delay in release of working capital facilities had impacted the cash flow generationof the Company. Further the Company is still to get the entire sanctioned of the workingcapital facility During the period under review the Turnover of the Company on astandalone basis stood at Rs. 226.14 Crore as compared to Rs. 771.5 Crore during theprevious year. The Company posted a Net Loss after Tax of Rs. 554.57 Crore during the yearended 31stMarch 2016 as against a Net Loss after Tax of Rs. 340.06 Crore during theprevious year ended 31st March 2015.
On a Consolidated basis the Turnover of Unity Group stood at Rs. 324.84 Crore ascompared to Rs. 1098.07 Crore for the previous year. The Group posted a Net Loss after Taxof Rs. 651.12 Crore during the year ended 31st March 2016 as against a Net Loss afterTax of Rs. 341.71 Crore during the previous year ended 31st March 2015. Our order book inhand is a healthy 1589.13 crore.
We understand that conducting business in a socially responsible manner is paramountand the Group continues to support the sustainable development of our community throughinitiatives aimed at creating a positive impact in the local geographies where we operate.Your company has always followed the best Corporate Governance practices which is the keyfor achieving its long term goals. It believes that the guiding principles of CorporateGovernance framework should be based upon compliance of Law/ regulations in letter andspirit adopting transparent systems safeguarding the interest of its stakeholders andcreating an environment of trust and confidence by means of transparent and timelydisclosure of information. We believe in conducting fair business and respect the needs ofour community and all our stakeholders.
New Ray of Light
A lot of hopes were pinned on the new Government at the Centre to bring about muchneeded policy initiatives and systemic changes which alone would have brought the requiredequilibrium followed by growth trajectory. Regrettably these have not so far been rolledout with the required speed and the problems are festering. For companies already incorporate debt restructuring a turnaround in this situation is extremely challenging andcalls for an urgent re-look of the relevant rules relating to CDR in the interest ofstakeholders.
We greatly value the support of the Government of India State Governments and otherstatutory authorities for their collaborative and enduring relationship.
On behalf of my colleagues on Board I wish to express our sincere thanks to theBanking fraternity and all the stakeholders who stood by us during testing times.
I deeply appreciate all our work force for their resilience and continued support andtrust. I also take this opportunity to thank my Board colleagues for their valuableguidance.
Finally on behalf of the Board of Directors and the entire workforce of your companyI would like to thank YOU our shareholders for your enduring support and patronage. Iconclude here with a special vote of thanks to each one of you and assure you of our verybest efforts always.
|With Best Regards || |
| ||Kishore K Avarsekar |
| ||Chairman and Managing Director |