Driving performance delivering value
It gives me great pleasure to present the 26th Annual Report and annualperformance of the Company for the financial year 2020-21.
Hope you are in good health staying safe and practicing precaution.
Over the past year we have witnessed a pandemic crisis of the kind notseen in generations. Many people have suffered including the loss of loved ones. FromMarch 2020 due to the spread of Covid-19 it lead to nationwide lockdown till June 2020.The restrictions thereafter continued for a fairly long time at various places coupledwith local lockdown and restrictions on travel. These restrictions severely impacted thelife of individuals the economy of the nation and the world as a whole.
Things were looking up and under control in the beginning of calendaryear 2021 returning to normalcy. Yet the second wave of the pandemic struck affectingboth life and the economy - from March till June 2021. Even at the local levelrestrictions continue at various places till now.
During the pandemic your Company took a number of initiatives andefforts to help and support people from underprivileged economic conditions likedaily-wagers and outside labourers.
During the unlock phase of the second wave restrictions and guidelineslaid down by the Government are still in force and things are far from normal. We arecontinuing to witness the new normal and the very concept of normal is getting re-definedevery day.
The Government has taken vaccination at a great pace and it is a matterof appreciation to see the speed at which it is being implemented. Still the challengeremains due to new variants being reported from various places across the globe. We alsohear the challenges faced by many countries worldwide including the developed ones.However we hope that nationwide vaccination will reduce the effectiveness of the virusand hope for early vaccination for children below the age of 18 years.
The Indian economy has been severely impacted in 2020-21. GDP growthwas negative during the year contracting by 7.3%. The first two quarters of the financialyear were extreme with negative GDP growth of 24.4% and 4% respectively. It was only thethird quarter where GDP witnessed a marginal positive growth of 0.4% with the lastquarter growing by 1.6%. Industrial activity also contracted during financial year2020-21.
Last year the Government announced multiple interventions to fuel theeconomy like reduction in corporate tax rates scheme to provide one-time partial creditguarantee recapitalisation of public sector banks relaxation of external commercialborrowing guidelines for affordable housing setting up of a realty fund for stalledhousing projects merger of 10 public sector banks etc.
The Government has also come up with multiple assistance schemes duringthe pandemic across the economic fiscal and compliance segments. Further in the lastbudget and during the recent times the Government has renewed its thrust oninfrastructure and housing. The speed at which various infrastructure works are beingexecuted would have a cascading effect on the economy. The year 2020-21 also witnessed amajor change in the monetary policy and the repo rate which was cut from 4.40% in April2020 to 4% in February 2021 as the economy was expecting a contraction in GDP during2020-21.
In the Union Budget 2021 the Government has given a massive push tothe infrastructure sector by allocating Rs. 233083 crore (US$ 32.02 billion) to enhancetransport infrastructure. The Government also expanded the National InfrastructurePipeline to 7400 projects. Around 217 projects worth Rs. 1.10 lakh crore (US$ 15.09billion) were completed as of 2020-21.
With various initiatives and reforms of the Government and India'sinnate strengths we feel that the economy is expected to make an impressive comeback fromthe next quarter. The IMF has forecasted GDP growth of above 9.5% for 2021-22 and we arealso positive about the future.
Your Company continues to have a strong order book which at the end ofthe financial year 2020-21 stood at Rs. 3113 crore as compared to Rs. 2018 crore in2019-20. The Company has been awarded various new projects in the financial year 2020-21including in joint ventures. However challenges remain including those pertaining toliquidity and execution due to the continued impact and uncertainties created by thepandemic. Fortunately your Company's contracts are from the Government which is thesafest customer and provides business stability even in the most challenging times.Further given the importance laid by the Government on the infrastructure sector owing toit being a catalyst of growth we expect that the Company would also stand to benefiteven as we look forward to a turnaround and improved performance by financial year2021-22.
Your Company reported a mixed set of performance with drop in revenueby 16.99% during 2020-21 and reduced profitability owing to the severe impact caused bylockdowns and mobility restrictions in the first two quarters. However your Companyachieved reasonable performance in the third quarter which further improved in the lastquarter of the financial year. However with a strong order book we are positive aboutthe current financial year though a part of the first and second quarter performance of2021-22 was impacted by the second wave.
The networth of your Company increased to Rs. 267.81 crore as on 31stMarch 2021 as compared to Rs. 236.17 crore as on 31st March 2020. This was also owing toinfusion of capital through preferential allotment.
On standalone basis your Company's total revenue declined to Rs.489.10 crore in 2020-21 vs. Rs. 585.31 crore in 2019-20.
Total cost moderated to Rs. 466.94 crore in 2020-21 as against Rs.550.52 crore in 2019-20. EBITDA for 2020-21 stood at Rs. 47.22 crore as compared to Rs.64.63 crore in 2019-20. Profit after tax stood at Rs. 15.53 crore as compared to Rs.19.30 crore in 2019- 20.
On a consolidated basis revenue stood at Rs. 524.33 crore in 2020-21as compared to Rs. 607.96 crore in 2019-20. Total consolidated expenses stood at Rs.502.21 crore in 2020- 21 as against Rs. 574.31 crore in 201920. Profit after tax stood atRs. 15.50 crore as compared to Rs. 18.16 crore in 2019-20.
Your Company requires long-term resources to meet additional workingcapital requirements. Thus your Company made preferential allotment of Rs. 36 crore inthe last financial year and is proposing to have a rights issue in compliance with SEBIregulations of up to Rs. 48 crore.
Your Board has discussed the prevalent economic situation vis-a-vis theCompany's fund requirements and have decided to conserve resources to meet therequirements and maintain liquidity. Accordingly the Board has decided against therecommendation of dividend for the financial year ending 31st March 2021.
The Company continues to have a diversified presence in highways roadsand bridges and civil construction in water management irrigation and power projects. TheCompany continues to be driven by the strategy of small and mid-sized Government projectswith short tenure and its superior project execution capabilities provide strong revenuevisibility. Further fast turnaround remains to be the core principle of the Company.
The Covid-19 pandemic and its fallout has made it difficult to forecastthe future and timeline for normalcy with any degree of certainty. The second wave in May2021 and new virus variants have created an unstable and cautious approach. However weare hopeful that increase in vaccination and various efforts by the State and CentralGovernment will boost the economy thereby ensuring pick up in economic and businessactivity.
Your Company is positive about 2021-22. The country's GDP is expectedto be around 9.5% for the year as per the estimations of IMF and we believe thevaccination drive will substantially lower the health and economic risks.
Your Company's total revenues in the first quarter of June 2021 was Rs.121.79 crore as compared to Rs. 74.45 crore in the June 2020 quarter. This was in spiteof the second wave. We hope to continue to perform better every quarter and are committedto it.
Further your Company is also hopeful that increased focus of theGovernment on infrastructure along with the Company's robust execution capabilitieslinked to its emphasis on Government projects would yield better results in the comingyears.
In closing I would like to thank all our customers vendors and otherstakeholders for the confidence and trust reposed in the Company. I acknowledge and thankBoard members and employees for their invaluable support. This confidence continues tomotivate us to outperform every year.