You are here » Home » Companies » Company Overview » Rites Ltd

Rites Ltd.

BSE: 541556 Sector: Engineering
NSE: RITES ISIN Code: INE320J01015
BSE 00:00 | 27 May 248.40 1.50
(0.61%)
OPEN

253.00

HIGH

253.00

LOW

248.00

NSE 00:00 | 27 May 248.80 1.70
(0.69%)
OPEN

249.00

HIGH

250.60

LOW

247.90

OPEN 253.00
PREVIOUS CLOSE 246.90
VOLUME 5014
52-Week high 318.00
52-Week low 239.00
P/E 12.01
Mkt Cap.(Rs cr) 5,969
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 253.00
CLOSE 246.90
VOLUME 5014
52-Week high 318.00
52-Week low 239.00
P/E 12.01
Mkt Cap.(Rs cr) 5,969
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rites Ltd. (RITES) - Chairman Speech

Company chairman speech

Our responsibility towards stakeholders has never been greater and weare earnestly taking these responsibilities.

Dear Shareholders

I am proud of the way your company has responded to the pandemic; ithas been a testament to its resilience as an organization and as a family. Ourresponsibility to our clients shareholders employees and society has never been greaterin last 47 years and we are taking these responsibilities earnestly.

During the Financial Year 2020-21 we overcame pandemic-relatedimpediments to keep our business running and as a results we were able to achieve aconsolidated revenue and profit after tax of Rs.2005 crore and Rs.444 crore respectivelywhile sustaining our profit margins at 22.2%. RITES achieved total standalone revenue ofRs.1947 crore and the operational revenue excluding other income of Rs.1797 crore.Nevertheless the pandemic did impact our profit before tax and profit after tax inFY2020-21 which stood at Rs.562 crore and Rs.424 crore respectively down by 31.6% and28.8% over FY2019-20.

The decrease in revenue is mainly attributable to pandemic-induceddisruptions and supply chain restrictions. Key business segments continued to sustainmargins due to timely cost-control measures. Sectoral diversity geographical distributionand digitalisation helped your Company in identifying new business opportunitiesconsolidating order book and maintaining a diversified business portfolio.

The audited accounts of the Company for the FY 2020-21 along with theDirectors' Report Report of Auditors and comments of Comptroller and Auditor General ofIndia are part of this report.

ORDER BOOK

The unexecuted order book as on March 31 2021 stood at Rs.6277 crorewhich gives us strong revenue and margin visibility for the next 2-3 years. During thelast financial year your Company has experienced delays in project initiations andtendering activities caused by Covid-19 related disruptions. However your Company stillmanaged to consolidate its order book.

DIVIDEND & BUYBACK

The Board of Directors has recommended a final dividend of Rs.4 pershare (Rs.96.12 crore) for FY 2020-21. This is in addition to the earlier two interimdividends of Rs.5 per share and Rs.4 per share which were paid to the esteemedshareholders in January 2021 and March 2021 respectively. This takes the dividend payout(on an accrual basis) of the Company to 73.6% on the standalone PAT of FY 2020-21.

Also your Company returned Rs.257 crore to its shareholders in itsmaiden buyback.

TRANSPORT INFRASTRUCTURE AND RITES

The key infrastructure sectors where your Company is actively pursuingbusiness in India and abroad may have taken a hit during this year but as therestrictions are easing out they are experiencing a rebound in growth with increasinginvestments from the Government and private sector. The multiplier effect ofinfrastructure development in generating more jobs and entrepreneurial opportunities isundoubted.

The National Infrastructure Pipeline (NIP) the National Rail Plan-2030and various reforms in the transport infrastructure sector define a path for providingworld-class infrastructure across India. Driving the change the Indian Railways is makingholistic improvements across areas such as high-speed travel electrification safetytrack modernization (building double track railway lines switching from one track gaugeto another and new lines) signalling systems capacity increase and use of renewableenergy.

Your Company has continued to strengthen its position in providingcomprehensive consultancy to the rail road port airport metro sector and institutionalbuildings in India. In the international business sphere export & leasing of rollingstock and engineering consultancy are the key domains and your Company is uniquelypositioned to capture business opportunities in Africa Middle East and South East Asiawherein railway and road infrastructure is in urgent need for upgrade andinter-connectivity.

SELECT PROJECTS

During this year your Company prioritized the health and safety of itsemployees while maintaining business continuity & keeping essential services runningunder difficult circumstances and pitched in to help communities battle the pandemic. Amidcompetitive and Covid-hit scenario it has continued to provide customized solutions inits sectors of operation to its clients.

FOREIGN

During the year your Company not only signed (post negotiationsthrough video-conferencing) the contract for supplying 06 Cape Gauge AC-AC Traction DieselElectric Locomotives and 90 Cape Gauge Passenger Coaches including 05 sets of DEMUs toCFM Mozambique but was able to supply 2 locomotives despite supply chain disruptions.Export to Sri Lanka of 160 main line passenger coaches and 2 sets of fully air conditionedDMUs has also started with the first lot of 10 coaches shipped however 30 coaches wereat port as on 31st March 2021 ready to be shipped.

Besides export of rolling stock your Company consolidated its positionabroad in consultancy projects by taking up projects such as Project ManagementConsultancy (PMC) for 4-Lane National Highway project in Bangladesh and ConstructionSupervision Services for Metro Express project in Mauritius Design & PMC services forDevelopment of Infrastructure at airport in Mauritius Design and PMC for development ofIntegrated Check Post at Nepalgunj in Nepal and Consultancy for old runway rehabilitationat Gautam Buddha International Airport Nepal.

DOMESTIC

Your company remained a key contributor towards the infrastructureprojects in India. On the turnkey front your Company completed the electrification worksbetween Sawai Madhopur - Jaipur - Ringas Section (188 km) and Vijaypur - Maksi section(188 km) and further secured work for electrification of around 489 RKM. Doubling andthird line works are substantially in a completion stage.

A few of the projects where your company provided PMC for RailInfrastructure for DVC NTPC CIL and others PMC for construction of Western DedicatedFreight Corridor construction supervision for Srinagar (J&K) airport IndependentEngineer Services for Paradip Port Trust General Consultancy for Metro Rail System ofAhmedabad Nagpur Pune and Delhi redevelopment work for Ayodhya and Varanasi railwaystations are on track.

Your Company also provided services for Detailed Project Reports (DPRs)for railway tunnels for East Coast Railway 3 highway tunnels for NHIDCL establishment ofthe CORE Network for Mumbai- Ahmedabad and final alignment design for Delhi- AhmedabadHigh Speed Rail Corridors and National Rail Plan for Ministry of Railways.

SUBSIDIARIES & JOINT VENTURES

RITES' subsidiary Company REMC Ltd formerly known as Railway EnergyManagement Company Limited which has been mandated to handle the entire power procurementunder open access for Indian Railways besides handling renewable energy and energyefficiency projects has registered a revenue of Rs.69 crore and PAT of Rs.24 crore inFY2020-21.

This year SRBWIPL our wagon manufacturing joint venture with 438 newBOXNHL wagons and 251 rehabilitated BOXNR wagons achieved revenue and profit of '161crore and '2.5 crore respectively against Rs.265 crore and '15.5 crore respectively inprevious year.

Besides your Company has acquired 24% stake in Indian Railway StationsDevelopment Corporation a nodal agency for redeveloping stations in the country.

COVID IMPACT

The financial year 2020-21 was started on uncertain note with theglobal health crisis effecting difficult but necessary changes. As it spread to theravaging second wave in India our priority was to safeguard the health and well-being ofour employees while maintaining business continuity. The lockdowns and otherpandemic-induced disruptions tested the agility resilience and adaptability of ourdelivery model. And the business continuity plans we have implemented have made us astronger and better organisation.

The Covid-19 outbreak has significantly impacted overall infrastructuredevelopment in financial year 2020-21 especially in H1. However during the first wave ofpandemic to the extent possible your Company tried to negate the impact through remoteworking including remote inspection at foreign locations through accredited third partiesand as and wherever travel restrictions were removed and permission given to open officeswe quickly moved our resources and started operations at those sites.

The impact was felt on all segments of the business consultancy andquality assurance got impacted due to travel restrictions. However consultancy businessreached the pre-Covid levels by the fourth quarter of FY21. Leasing business fall in H1due to work getting stopped at various sites of operations only to reach the pre-Covidlevels in H2. Due to supply chain disruptions exports revenue spilled over to FY22.Turnkey business revenue also softened due to restrictions of movement of manpower andmaterials. Disruptions caused by the pandemic also delayed the tendering activities whichhave started to pick by the end of the Financial Year.

OUTLOOK

Your Company is now striding towards expediting project execution andexports supply to overcome Covid-induced uncertainties. Our healthy order book recentproject wins and successful project execution strengthen our position as a total transportinfrastructure solution provider.

The market forecast for large infrastructure projects is promisingcourtesy the expected economic stimulus packages and an investment backlog within theinfrastructure sector. Thus your Company has positioned itself for securing meaningfulconsultancy role for complex diverse critical and mega infrastructure projects in Indiaand abroad. RITES is enhancing its expertise and profile by forming consortiums/JVs forsuch projects. Your Company's focus on customisation of meter and broad-gauge rollingstock and product diversification to cape and standard gauge rolling stock market createslarge potential for exports. Several countries in Africa and Asia are looking at theRailways with renewed interest which makes times ahead promising for us.

CORPORATE GOVERNANCE

Your Company consistently endeavours to adopt and maintain the higheststandards of ethics in all spheres of business activities. It accords highest importanceto transparency accountability and equality in all facets of its operations. Your Companyis implementing the precepts of Corporate Governance in letter and spirit.

CONTRIBUTION TO GOVT. OF INDIA INITIATIVES

Your Company has been proactively pursuing the Government of Indiainitiatives such as Skill India Make in India including the promotion of MSMEs SwachhBharat Mission promotion of solar ecosystem Startup India and Digital India byformulating its business or governance objectives in line with the Government plans.

SKILL INDIA MISSION

In line with the Skill India Mission your Company has provided morethan 10000 days of training to its employees during 2020-21. It has trained 96apprentices in the non-technical and nonengineering categories.

PROMOTING MSMEs

During the year your Company procured goods worth Rs.42.66 crore fromMicro Small and Medium Enterprises (MSMEs) including those belonging to SC/ST and womencategories.

Start-Up India

To catalyse the start-up culture and build a strong and inclusiveecosystem for innovation and entrepreneurship in India your Company has provided adequatesupport to one such venture working on fuel energy storage technology.

Digital India

For transparency & efficiency of our operations reduce paper useand maintain business continuity and enable remote working especially during theCovid-induced lockdown several key initiatives have been taken by your Company. E-officeSAP-based Enterprise Resource Planning (ERP) e-procurement for works mobile app forthird-party inspection inspection through video-conferencing online grievance handlingand Employee Self Service portal etc. have been made effective.

CORPORATE SOCIAL RESPONSIBILITY

Your Company understands its responsibility towards society and adopteda 'Corporate Social responsibility and Sustainability policy' to show its commitmenttowards operating in an economically socially and environmentally sustainable manner. Asa responsible corporate citizen your Company has spent Rs.13.41 crore on various CSRactivities during the FY 2020-21.

ACKNOWLEDGMENT

I express my gratitude to our esteemed Shareholders my colleagues onthe Board of Directors and to the CEO and Chairman Members and Officials of the RailwayBoard for their valuable support advice and co-operation. We are particularly gratefulto the Ministries of Railways Road Transport and Highways Commerce Finance ExternalAffairs Housing and Urban Affairs Health and others; departments including DIPAMregulators Indian Embassies & Missions abroad Foreign Mission & Embassies inIndia and Exim Bank & other bankers of the Company for their valuable support andguidance. We look forward to your continued encouragement and contribution.

I have never felt as great a sense of purpose and pride in theorganisation as I do today. Your Company is strong with deep relationships with clients& stakeholders and I count on their continued support. Also I would like to thank'Team RITES' for their untiring efforts and unflinching commitment to achieve the loftygoals it has set for itself.

Given its demonstrated ability to execute on its strategy your Companyis well poised to take advantage of growth opportunities acquire new capabilities andrebound on to its growth and transformation journey.

.