Greetings to all of you. It is my pleasure to present to you the Annual Report of yourCompany for FY 2019-20 and share the key highlights and the strategic roadmap goingforward. The ongoing hardship of the Company due to the prolong depressed power sector hasbeen further aggravated due to the widespread outbreak of Covid-19 pandemic which hasimposed a global economic recession.
Stringent restrictions imposed to curtail the spread of the virus and the subsequentnationwide lockdown have disrupted livelihoods supply chains and overall economicactivity in the country. The crisis has dimmed the growth outlook for the global economyfor the coming year including for India. SUPPORT MEASURES
A stimulus package of Rs. 20 lakh crores has been announced under the AtmanirbharBharat Abhiyan' to help the economy tide over the crisis. It focusses on making India selfreliant and special emphasis has been given on medium and small businesses agriculturelabourers urban and rural poor. Along with this the Reserve Bank of India (RBI) has alsoannounced a couple of measures including rate cuts loan repayment moratorium additionalliquidity support etc. to maintain financial stability. INDUSTRY REVIEW
Power is one of the most critical components of infrastructure crucial for the economicgrowth and welfare of nations. As the lockdown has severely reduced the industrial andcommercial activities in the country these segments would have seen a considerabledecline in demand for electricity. Power distribution companies (discoms) buy power fromgeneration companies and supply it to consumers. One of the key concerns in the Indianpower sector has been the poor financial health of its discoms. The discoms have had highlevels of debt and have been running losses. Due to the lockdown and its further impact inthe near term the financial situation of discoms is likely to be aggravated.
Part of the package announced by the Finance Minister Smt. Nirmala Sitharaman Rs.90000 crores was allocated to power distribution companies (or discoms) in order to cleartheir dues with gencos (or electricity generation companies) who in turn can clear theiroutstanding dues with suppliers.Your Company can get the overdue outstanding from one ofthe Electric generation Company under this scheme.
PERFORMANCE REVIEW FOR THEYEAR
In FY 2019-20 there is a downturn in the total revenue of the Company from Rs. 5204.59Lakhs in FY 2018-19 to Rs. 2222.00 Lakhs in FY 2019-20. The Company has struggled to bagnew orders due to the continuous adverse market conditions in the power sector especiallythermal power.
However the Company has abled to bag an order worth Rs. 1350 Lakhs on 01 May 2019 forConstruction of Circulating Water System works
for 2x800 MW APJL Project Godda from HTG Engineering Private limited for Adani Power(Jharkhand) Limited.
Under the wholly owned subsidiary Company Xlerate Driveline India Limited a revenueof Rs. 4331.89 lakhs has been registered against the previous year's revenue of Rs.4678.46 lakhs in FY 2018-19. This is mainly due to enhancement in the market share in thesubdued auto market in the aftermarket business. Further maintaining the existing levelsin the OES segment.
Your Company has been trying to diversify itself by entering into water distributionsegment for which your Company is exploring many ways and means to bid for the projectsunder partnership and in collaboration with the Companies which are already into thissegment. Due to prolong depressed market your Company had been trying to raise funds bydiluting its stake in Xlerate Driveline India Limited (XDIL) which has not beenmaterialised. However the Company's Board has approved the fresh proposal subject to theshareholders' approval for diluting the stake in XDIL for raising funds for EPC Businessand discharging the financial liabilities. Simultaneously the Company is focused toeffectively complete the current projects under execution within time.
Though the short-term economic outlook may appear gloomier in the wake of the pandemicgovernment stimulus package and gradual resumption of economic activities are expected torevive consumer sentiment. Sustained spending on infrastructure and thrust on domesticmanufacturing will lead to a rise in business activity. Measures such as reduced tax ratesfor individuals and greater allocations to agriculture and allied sectors will invigorateconsumption and boost the rural economy. With our sustained track record of timelyexecution and engineering capabilities we are focusing on the water distribution systemas this sector holds ample potential in a country like India wherein the government's mainthrust is to provide better connectivity of water resources under their key projects forirrigation drinking and interlinking the rivers. The said scope have led to increase theorders in pipeline and your Company can be benefited out of it.
I would like to extend my sincerest gratitude to our employees customers partnersbusiness associates and our stakeholders for their undying faith and support. Each one hasbeen a part of our exciting and enriching journey. We continue to seek value creation forour stakeholders and persevere in building a sustainable business. Here is hoping for abrighter and stronger future together.