MANAGEMENT DISCUSSION AND ANALYSIS
Overview of Infrastructure sectors in India during FY 21-22:
Infrastructure is the back bone for any economy. The extent and quality of infrastructure determines the ability of the country to utilize its comparative advantage and enables cost competitiveness. Given the strong backward and forward linkages and the positive externalities that infrastructure generates, it can be a vehicle for social and economic transformation.
With a remarkable ‘V profiled economic recovery during Apr 2002 Mar 2021, India plans to spend US$ 1.4 trillion on infrastructure through ‘National Infrastructure Pipeline in the next five years. In order to meet Indias aim of reaching a US$ 5 trillion economy by 2025, infrastructure development is the need of the hour. The government has launched the National Infrastructure Pipeline (NIP) combined with other initiatives such as ‘Make in India and the production-linked incentives (PLI) scheme to augment the growth of infrastructure sector. Historically, more than 80% of the countrys infrastructure spending has gone toward funding for transportation, electricity, and water& irrigation. While these sectors still remain the key focus, the government has also started to focus on other sectors (and sub sectors) as Indias environment and demographics are evolving. There is a compelling need for enhanced and improved delivery across the whole infrastructure spectrum, from housing to water and sanitation services, to digital and transportation demands, which will assure economic growth, increase quality of life, and boost sectoral competitiveness while reducing carbon intensity to 3% by 2030.
In FY21, infrastructure activities accounted for 13% share of the total FDI inflows of US$ 81.72 billion. India being a developing nation is set to take full advantage of the opportunity for the expansion of the infrastructure sector, and it is reasonable to conclude that Indias infrastructure has a bright future ahead of it.
The fatal health hazard due to COVID-19 Pandemic has forced the migrant workforce at the Projects to undergo volatile and hasty return to their homes. The subsequent lockdowns and various types of restrictions to constrict the spread of the Pandemic have severely affected the progress in the project works. Even after relaxations in the lockdown and restrictions, the workers have seldom reached the project sites in apprehension of resurgence of pandemic and in the absence of life saving medications. There have been no splendid achievements during the financial year to have an elaborative write-up on Vertical-wise Performance.
IVRCL TECHNICAL SERVICES & SOLUTIONS
The Company being under Liquidation as going concern during the fiscal 2021-22, there has been no new contract during the period. Efforts are afoot for effective performance in completing the Projects on-hand and O & M Business so as to maintain the Companys Pre-qualifications and retaining the talented Technical Manpower.
Soon after resuscitation of the Company, IVRCL shall endeavour to compete in the emerging market opportunities of Services & Solution across the Industry and Country.
RISKS & CONCERNS
In view of the delayed process of sale of the Company as going concern, and in wake of severe cash crunch, the projects in hand are being executed with enhanced & minutely monitoring team from Head Office.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
IVRCL has been maintaining effective system of internal control for facilitating accurate, reliable and speedy compilation of financial information, safeguarding the assets and interests of the company and ensuring compliance with all laws and regulations, keeping the Certification of Integrated Management Systems (IMS) intact.
OPPORTUNITIES & THREATS
Await the opportunities to participate in bidding of new projects where IVRCL has acquired exceptional skill and pre-qualifications across several sectors in the EPC domain, in collaboration with the financial qualifications of the successful bidder in the prevailing sale process of IVRCL through Liquidation as going concern.
There is a threat of lapse of most of the pre-qualifications during the prolonged Liquidation as going concern processes and due to non-addition of new orders during the said periods.
HUMAN RESOURCE MANAGEMENT
With the lasting repute IVRCL could retain and kept the faith of a good number of government clients and long-serving employees with key area of expertise and thereby keeping the on-hand orders valid, even when the company is passing through Liquidation as going concern.
The company has a prolonged period of Liquidation as going concern process and looking forward for successful completion of the sale process and new management taking over the reins fully.
With the Governments target investment of over Rs. 100 Lac Crore in Infrastructure Industry by 2025, the environment for Civil & Contracting companies has been looking up to be more prospective and encouraging.