concrete infra media ltd Management discussions

INDUSTRY STRUCTURE AND DEVELOPMENT

Concrete Infra & Media Limited (CIML) has experience in the engineering and construction business with capabilities in providing integrated Engineering, Procurement and Construction (EPC) services. With engineering experience, trained and qualified manpower, CIML is primarily executing infrastructure projects across India. CIML has been delivering projects in the sectors of Roads, Railways and Metros, Media and related matters, and Buildings & Structures

India is at a decisive point in its journey towards prosperity. The economic crisis sparked by COVID-19 pandemic could spur reforms that return the economy to a high-growth track and create job opportunities for millions of people in coming years. The new reform agenda that could be implemented in the next 12 to 18 months will increase productivity keeping India in the ranks of the global outperforming emerging economies. Over the past three decades, India has outpaced many other global economies, propelling the country into the ranks of just 18 outperforming emerging economies that achieved robust and consistent high growth over that period. Yet Indias economy was already stalling and showing signs of structural weaknesses even before the COVID-19 crisis

The construction industry is considered the least digitalized but with the new development after the COVID-19 outbreak, it is estimated that within the next three to five years there will be a good integration of digital technologies including Internet of Things (IoT), Cloud Computing, BIM, Machine

Learning, 3D Printing and Robotics in its workflows. In todays highly competitive world, companies are increasingly being expected to deliver high quality construction projects on time to their clients and provide world class solutions for the requirement. A large majority of companies in the construction field now recognize how non-digitization of processes is affecting every part of their business. The project tendering in India is becoming more digital with e-tendering for most of the government projects as it ensures contract award process is more transparent and efficient. The added advantage with electronic tendering is that it reduces costs of the entire process while increasing efficiency and saving on time. Government has adopted e-procurement solutions for competitive bidding and awarding bids to the lowest bidder meeting specification.

The government and RBI are working to combat the slowing GDP growth and help the construction sector as it forms the backbone of several other sectors. The EPF contribution by the Government for some segments of workers in the organized sector will help the affected work force to handle the challenges of the lockdown more conveniently. The RBI has come out with more relief measures for distressed businesses including a long-term moratorium on debt repayments and redefinition of non-performing assets for giving an opportunity for distressed businesses across sectors. It is expected that the government and development agencies should increase the spending on infrastructure projects as soon as the situation becomes normal to reinvigorate the industry and regain the momentum of economy. Government of India is likely to announce fresh measures in the coming days, including big-ticket infrastructure projects and policy changes, to make local industry more competitive, as part of efforts to rebuild the economy

OPPURTUNITIES AND THREATS

(a) Opportunities

The global economy is still recovering from the rapid destruction imposed by Covid-19 pandemic but it is expected to improve gradually in the coming financial year under the backdrop of new reforms and macro-economic developments. Such a scenario will give our Company the opportunity to increase our stakeholder values and build an expansive, lasting relationship with them. The Company has already started taking initiatives and implementing strategies to diversify its business into other areas.

(b) Threats

The outbreak of the devastating Covid-19 pandemic followed by the lock-down in the country has adversely affected the business operations of the Company. Due to the rapid spread of the Covid-19 in the Country, the health of the employees and workers of the Company has become priority of the Company over the business operations. This unproductive lockdown is resulting in the financial burden for the Company.

The constant fluctuations in the stock market due to the depressed market conditions and excessive competition from fellow competitors are some of the other hindrances affecting our business.

FINANCIAL PERFORMANCE AND ACCOUNTING TREATMENT

Gross revenues for this financial year stood at Rs 78,37,54,062 as against Rs. 25,87,056 in the previous year. After providing for depreciation and taxation the net profit of the Company for the year under review was placed at Rs. 48,81,424 as compared to Rs. 35,105 in the previous year.

However, the Company is looking forward to grasp the available opportunities and focusing on permitted avenues. The uncertain state of the global economy however remains a cause of concern.

In the preparation of financial statements, provisions of prescribed accounting standards have been followed and financial statements produces true and fair view of the business transactions of the Company.

OUTLOOK, RISK AND CONCERNS

Your Company has been making use of available opportunities in the market for infrastructure projects and spread its business in media businesses too for increasing its profitability and size of business. The Company successfully listed its equity shares with BSE in August 2015 which strengthened the credibility of the company among the stakeholders.

The period of business realignment is expected to take 12 more months, during which period the Company would have to deal with a large degree of uncertainties. However, CIML has the ability to undergo this metamorphosis. It has been a challenging year, and more challenges ahead. The aforementioned strengths are expected to stand CIML in good stead as it endeavours to overcome the setbacks and once again rebuild its business model.

RISKS AND CONCERNS

a) Risk Management:

CIML has an integrated Enterprise Risk Management (ERM) framework in place for identification, assessment, mitigation and reporting of risks. Risk Management Committee / the Audit Committee/ the Board of Directors oversee the function by periodically reviewing the Critical Risks of the Business and its mitigation plans. The critical enterprise level risks of the Company and the mitigation measures being taken.

b) Contractual Risks:

The Company is exposed to several contractual risks with clients, subcontractors, suppliers and lenders in its day-to-day operations. In order to mitigate these risks, the Company has an exclusive Contracts and Claims Department to oversee contract documentation, major claims and arbitrations.

c) Political Risk:

Your Company is operating in multiple Indian States with different political environments and consequently subject to Political risks. Appropriate and adequate mitigation strategies are in place to mitigate these risks. The Company is spreading its operations in all major sectors of Infrastructure and in various States avoiding business concentration in same region.

d) Interest and Leverage Risk

Increase in bank interest rate impacts the profitability of the company because this increase cannot always be passed on to customer. The management tries to contain interest cost by efficient management of inventory and working capital resources.

e) Force Majeure & Act of God

Unforeseen natural or man-made calamities may have a significant financial bearing on the operation of the Company.

ADEQUACY OF INTERNAL CONTROL SYSTEM

The companys internal control system and procedures are commensurate with the size of operation and are adequate to ensure - safeguard its assets and resources against loss, unauthorized use or disposition, - compliance with the statutes and regulatory policies and framework, and - all transactions are authorised, recorded and reported correctly.

The Audit Committee of Directors continually reviews adequacy of internal controls.

HUMAN RESOURCE DEVELOPMENT

The Companys relation with the employees and investors continues to be cordial which are the most valuable resources of our organization.

DISCUSSION ON FINANCIAL AND OPERATIONAL PERFORMANCE

Please refer to paragraph 1 of Directors Report.

CAUTIONERY STATEMENT

This report may contain statements which the Company believes are or may be considered to be

"forward looking statement". Actual result may vary from those expressed or implied. Important developments that could affect the companys operations are significant changes in political and economic environment in India, tax laws, exchange rate fluctuation and other incidental factors.

For Concrete Infra & Media Limited

Sd/-

Ishant Bhardwaj

Managing Director