It gives me immense pleasure to present the Annual Report of your Company for theFinancial Year 2019-20 an another eventful year of sustained growth profitabilityproductivity and value creation. I am happy to share that your Company has achieved itshighest-ever consolidated revenue and profit after tax of Rs.2734 crore and Rs.633crore respectively during FY 2019-20 driven by growth in key segments of its business.It is a matter of pride that for the past 46 years your Company has successfully handledbusiness of engineering consultancy and related services in India and abroad with greaterzeal hard work and resolve. Your Company is now ranked amongst the Top 500 listedcompanies in the country in terms of market capitalization as well as revenue.
Results & Progress
During FY2019-20 RITES achieved its highest-ever total standalone revenue of Rs.2665crore up by 23.1% over FY2018-19. Similarly the operational revenue excluding otherincome has increased by 21.9% and reached Rs.2401 crore in FY2019-20. Profitbefore tax and profit after tax in FY2019-20 have been Rs.823 crore and Rs.596crore respectively up by 21.6% and 34.1% over FY2018-19.
Key business segments continued to register growth over FY2018-19 with exports incomegoing up by 161.6% leasing up by 16.5% and turnkey revenue up by 18.7%. Consultancyrevenue during the FY2019-20 remained Rs.1066 crore.
On consolidated basis the total revenue was Rs. 2734 crore in FY 2019-20 up by22.1% over FY 2018-19. Profit before tax and profit after tax in FY2019-20 were Rs.874crore and Rs.633 crore respectively up by 19.8% and 29.3% over FY2018-19. Theoperational and financial success has been achieved through strategic expansion of exportof rolling stock focus on execution of projects increase in number of leased locosefficient utilization of manpower and focus on maintaining margins. The strength inconsultancy sectoral diversity and geographical distribution helped your Company inidentifying new business opportunities and maintaining a diversified business portfolio.The audited accounts of the Company for the FY 2019-20 along with the Directors' ReportReport of Auditors and comments of Comptroller and Auditor General of India are part ofthis report.
The unexecuted order book as on March 31 2020 stood at Rs.6223 crore whichgives us strong revenue and margin visibility for the next few years. At the end of thelast financial year your Company has experienced some delays in project initiations andtenders caused by Covid-19 related disruptions. It is expected that normalcy in thisregard would be seen in H2 of FY 21.
Excellent financial results have encouraged your Directors to recommend a finaldividend of Rs.6 per share (Rs.150 crore) for FY 2019-20. This is inaddition to the earlier two interim dividends of Rs.6 per share (Rs.150crore) and Rs.4 per share (Rs.100 crore) which were paid to the esteemedshareholders in January 2020 and February 2020 respectively. This takes the dividendpayout (on an accrual basis) of Company to 67% on the standalone PAT of FY 2019-20.
Transport Infrastructure and RITES
The key infrastructure sectors where your Company is actively pursuing business inIndia and abroad have been experiencing rapid growth with increasing investments from theGovernment and private sector. The increased thrust on transport infrastructuredevelopment offers your Company more opportunities and with wide consultancy expertiseyour Company is fully aligned to tap these possibilities.
Your Company has further strengthened its position in providing comprehensiveconsultancy to the railway sector in India which includes feasibility studies integrateddesign services project management technical support services and quality assurance. TheGovernment of India is undertaking all efforts to improve rail infrastructure increasepassenger trains' speed to 160 kmph and redevelop railway stations. Your Company isassociated with these initiatives by way of providing consultancy and technical supportwherever possible. Also your Company has signed an agreement for acquiring 24 per centstake in Indian Railway Stations Development Corporation (IRSDC) for Rs. 48 crore.
Select Foreign Projects
Your Company has completed supply of six DEMU trainsets (Diesel Electric MultipleUnits) and 10 locomotives to Sri Lanka and based on the quality of the product suppliedyour Company secured a repeat order of two DEMUs from Sri Lanka.
Your Company is also executing PMC for 4-LaneNationalHighwayprojectinBangladeshTridentPort in Mauritius and Construction SupervisionServices for Metro Express project in Mauritius phase-1 of which was operationalizedduring the year. It has also completed the work of Integrated Check Post (ICP) atBiratnagar in Nepal and secured work of ICP at Nepalgunj in Nepal. It has also completedthe detailed project report for Georgetown road project in Guyana (South America).
Further your Company has emerged as successful bidder for supply of 6 locomotives and90 coaches including 5 DEMU trainsets to CFM Mozambique for which negotiations werecompleted during lockdown period and an agreement was signed in June 2020.
Select Domestic Projects
During the year your Company executed many prestigious projects which includeconsultancy for capacity enhancement through SemiHigh speed and High Speed RailwayLines detailed design of alignment for Delhi Ghaziabad Meerut Line for RRTSCorridor. It also worked upon the DPRs for 9 railway tunnels rail-based Mass TransitSystems for Gorakhpur Allahabad Chennai Vijayawada Jammu Srinagar Thane NagpurMumbai Kanpur and Agra rail infrastructure for DVC NTPC CIL and others at differentlocations railway station development project for Ayodhya and Varanasi and road projectsunder Bharatmala scheme in West Bengal Punjab & Haryana. Your Company also completed188kms of Railway electrification and 83kms of track work.
General Consultancy for Metro Rail System of Ahmedabad Nagpur & Pune DetailedDesign Consultancy for Power Supply & Distribution system for Ahmedabad Metro &Bangalore Metro phase-II and Independent Quality Monitoring for Noida Metro RailCorporation Ltd. also progressed well. Further your Company secured new projects ofrailway infrastructure at sites of SJVNL THDC India TSPGCL NUPPL MCL & ECLIndependent Quality Audits for Kerala Infrastructure & Investment Fund Board designconsultancy for 6-lane extra-dosed cable-stayed bridge for WBHDCL feasibility & DPRfor Coimbatore MRTS for CMRL installation of online monitoring system of rolling stockfor DFCCL. Despite competitive environment your Company has continued to providecustomized solutions in its sectors of operation to its clients.
Subsidiary and Joint Ventures of RITES
RITES' subsidiary Company REMCL which has been mandated to handle entire Powerprocurement under open access for Indian Railways besides handling renewable energy andenergy efficiency projects has continued to give good performance and registered arevenue of Rs.81 crore and PAT of Rs.35 crore in FY2019-20. The Company hassuccessfully facilitated procurement of 73% of required traction power for the IndianRailways under Open Access'. In a significant move to add renewable energygeneration the Indian Railways has recently mandated REMCL to manage the entire processfor installation of 3 GW solar plants to be set up on vacant railway land. Out of this400 MW is planned to be added by REMCL on its ownership basis.
This year our wagon manufacturing joint venture SRBWIPL has achieved a profit of Rs.16crore with revenue of Rs.265 crore.
Covid pandemic impact
The pandemic has caused unprecedented uncertainty into the economy and disrupted flowof business and economic activities in general but to the extent possible your Companyhas tried to negate the impact through remote working.
Your Company has successfully concluded a major export deal with CFM Mozambique duringthe lockdown period through video conferencing. Besides your Company has also been ableto execute the 188 RKM Vijaypur-Pachore Road-Maksi section railway electrification projectin Madhya Pradesh and maintain operational continuity at most of the locomotive leasingsites and at Bhilai inspection office during the lockdown period. Prioritizing employees'well-being your Company had carefully planned the normalization of business operationsand services at various locations in India and abroad once the permission to operate fullywas granted. I am sure that our business model and your trust will help us navigatethrough difficulties caused by pandemic.
Company is now striding towards expediting project execution and exports supply toovercome
Covid-induced uncertainties. Our healthy Order Book recent project wins and successfulproject execution strengthen our position as a total transport infrastructure solutionprovider. The repeat order from Sri Lanka for two DEMUs and an order from Mozambique acape gauge country has opened new vistas of export opportunities for us. Your Company isnow exploring possibilities for developing standard gauge products to explore new markets.The opportunities provided by the domestic and international markets the strategy ofdiversification and leveraging consultancy expertise give me confidence that your Companywill emerge stronger and better from these uncertainties.
Your Company consistently endeavors to adopt and maintain the highest standards ofethics in all spheres of business activities. Your Company accords highest importance totransparency accountability and equality in all facets of its operations. Your Company isimplementing the precepts of Corporate Governance in letter and spirit.
Contribution to Govt. of India Initiatives
Your Company has been proactively supporting the Government of India initiatives suchas Skill India Make in India including the promotion of MSMEs Swachh Bharat Missionpromotion of solar ecosystem Startup India and Digital India by formulating its businessor governance objectives in line with the Government plans.
Skill India Mission
In line with the Skill India Mission your Company has provided more than 10000 daysof training to its employees during 2019-20. It has trained 133 apprentices in thenon-technical and non-engineering categories.
During the year your Company procured goods worth Rs.45.92 crore from MicroSmall and Medium Enterprises (MSMEs) including those belonging to SC/ST and womencategories.
Your Company through its subsidiary REMCL is promoting the use of renewableenergy in Indian Railways. Its 26MW windmill plant in Rajasthan is operational. Recentlyit has secured its largest mandate from Indian Railways for managing installation of 3 GWsolar plants to be set up on vacant railway land in 3 packages thereby working towardsthe Railways' obligation to use 20% of electricity from renewable sources. Two packagesaggregating to 2600 MW are being bid out on developer model basis whereas 1 package of 400MW will be taken up by our subsidiary REMCL on investment mode the detailing of whichwill be done in due course.
During the year to catalyse the start-up culture and build a strong and inclusiveecosystem for innovation and entrepreneurship in India your Company has tied up with theIIT-Madras Incubation Centre for the development of Hydrogen Fuel Cells. An amount of Rs.1 crore has already been released and the research project has taken off smoothly.
For transparency & efficiency of our operations reduce paper use andmaintain business continuity and enable remote working especially during theCovid-induced lockdown several key initiatives have been taken by your Company. Duringthe year an e-office file management system was adopted for expeditious and systematicmonitoring of work fostering an economical operational culture coupled with moderatecarbon footprints. Besides SAP-based Enterprise Resource Planning (ERP) e-procurementfor works mobile app for third-party inspection services online grievance handling andEmployee Self Service portal etc. have been made effective.
Corporate Social Responsibility
Your Company understands its responsibility towards society and adopted a"Corporate Social responsibility and Sustainability policy" to show itscommitment towards operating in an economically socially and environmentally sustainablemanner. As a responsible corporate citizen your Company has spent Rs.11.2 crore onvarious CSR activities during the FY 2019-20. Also your Company has contributed Rs.16crore to PM-CARES Fund for the welfare of the society impacted by coronavirus pandemic.
IexpressmygratitudetoouresteemedShareholders my colleagues on the Board of Directorsand to the Chairman Members and Officers of the Railway Board for their valuablesupport advice and co-operation. We are particularly grateful to the Ministries ofRailways Road Transport and Highways Commerce Finance External Affairs UrbanDevelopment Health and other Ministries Regulators and to the Indian Embassies andMissions abroad to the Foreign Mission and Embassies in India and Exim Bank and otherBankers of the Company for their valuable support and guidance to the Company. We lookforward to your continued encouragement and contribution which motivates us to excel inour areas of operation.
I would like to extend my deepest appreciation for RITES team and their valuablecontribution in brining sustainable track record and global reputation to the Company.Powered by the talent of our people and vesting reaffirmed faith in the resilience of ourbusiness model we look forward to overcoming any challenges that may lie ahead.
It is equally important to acknowledge the resolute faith and support of our clientsand all other stakeholders who have been a constant source of inspiration in providingvalue-added services. Their continued support has helped us to consistently improve ourfinancial performance over the years. The proven track record of your Company will be astrength to take up complex infrastructure projects using latest technologies in India andabroad. With your continued trust in this Company I am confident that it will sustaingrowth in all business segments and consolidate its leadership position as TheInfrastructure People'.