JMC Projects (India) Ltd Management Discussions.

Global Economic Overview

The global economy posted a growth of 3.6% in 2018 on account of several favourable policies and significant progress in some large economies and emerging markets which were able to set off the major headwinds facing the global economy. The global economy is projected to moderate to 3.3% in 2019 before rising back to 3.6% in 2020. Global economic growth is expected to moderate in 2019 mostly due to softer dynamics among developed economies, Brexit-related uncertainties and trade tensions between the

US and China. Nevertheless, the global economy is seen benefiting from tight labor markets, robust domestic demand and investment boosted by infrastructure projects in South Asia, accommodative monetary and policy stimulus in some countries like China. Beyond 2020, global growth is set to grow by about 3.6% over the medium term, sustained by the increase in the relative size of economies, such as those of China and India, which are projected to have robust growth by comparison to slower-growing advanced market economies.

Indian Economic Overview

India continues to be one of the fastest growing major economies in the world and is expected India is forecast to overtake the UK to become the worlds fifth largest economy in 2019. Indias GDP grew at 6.8% in 2018-19, remaining the fastest growing economy in the world.

Investment is growing steadily, driven by the gradual increase in capacity utilisation, large infrastructure programmes and recent structural reforms which are supporting investors confidence, in particular the new Insolvency and Bankruptcy Code and public bank recapitalisation. Private consumption remains strong, in particular in rural areas where incomes are benefitting from the good monsoon and steady government spending on rural roads, housing and employment programs. India has recorded a jump of 23 positions against its rank of 100 in 2017 to be placed at 77th rank among 190 countries assessed by the World Bank in 2018. Indias leap of 23 ranks in the Ease of Doing Business ranking is significant considering that last year India had improved its rank by 30 places, a rare feat for any large and diverse country of the size of India. Because of continued efforts by the Government, India has improved its rank by 53 positions in last two years and 65 positions in last four years.

Industry Overview

1. Construction Industry

Construction industry in India is one of the fastest growing industry and is said to be second largest industry in India after agriculture. The sector also makes significant contribution to the national economy, around 11% of GDP, along with providing employment to the large number of people. The construction industry is broadly categorised into three segments Infrastructure (Roads, Railways, Irrigation etc.), Industrial (Refineries, Power Plants, Factories etc.) and Real Estate (Residential, Commercial, Institutional etc.). The Indian construction industry regained its growth momentum in 2018-19, helped by positive developments in economic conditions, improvement in investor confidence and investments in transport infrastructure, energy and housing projects. As infrastructure is highly responsible for propelling growth of other sectors and Indias overall development, Government of India is giving huge impetus for development of infrastructure and construction services through focused policies such as open FDI norms, large budget allocation to infrastructure sector, housing for all, smart cities mission etc. India has become a large market for infrastructure and construction activities.

Real Estate

The real estate markets are slowly witnessing a revival, post the slowdown in 2017. This has been on account of the uncertainty regarding implications of policies, including the Real Estate (Regulation and Development) Act, 2016 (RERA) and the Goods & Services Tax (GST) gradually settling. The governments policy push to affordable housing is helping this segment gain traction and developers across the country are showing a keen interest in participating in this sectors growth story. The Indian real estate segment appears to be on a recovery path as the residential realty sales grew by 6% in 2018 compared to the previous year, according to a report by Knight Frank. The total sales of residential units across the country were estimated to be close to 242,328 in 2018. In the residential space, the total number of new units launched in the year 2018 was estimated to be 182,207 higher by 75% when compared to 2017. During 2018, the office space leasing reached a historical high of 46.8 Million square feet in the commercial segment.

The real estate sector holds considerable significance in India and is expected to contribute about 13% by 2025. By 2030, the Indian real estate industry is expected to touch USD1 trillion, becoming the third largest globally.

Growth Drivers of Real Estate

The key factors driving the real estate sector are as follows:

Affordable Housing & Housing for All: The housing shortage in India stood at 63 Million units in 2012. While the overall demand continues to swell, affordable housing has emerged as a trigger for the sectors overall growth driven by the Central Government. The government has taken an aggressive stance to promote affordable housing in the country. It launched an initiative, Housing for All by 2022, or Pradhan Mantri Awas Yojana (PMAY, Urban and Grameen) with a goal of building 20 Million affordable houses by 31 March 2022 for urban poor through financial assistance of र 2 trillion (USD29 billion). As part of the initiative, the government granted infrastructure status to enable affordable projects to avail benefits such as lower borrowing rates, tax concessions (100% tax immunity for developers) and increased private investment.

Residential Demand in Metros: Rising population and urbanisation provides impetus to urban housing. As per the 2011 census, over 30% of Indias population lives in urban areas and by 2030, this number is expected to grow to 40% of the countrys population. The Ministry of Housing estimated a housing shortage of 18.78 mn houses during the 12th plan period. The countrys total urban housing shortage is projected to be about 30 mn by 2022.

Commercial Real Estate: Indian office markets have shown considerable vibrancy over the past few years and total investments in the asset class have shown an improving trend since 2013. Sectors such as IT and ITeS, retail, consulting and e-commerce have registered high demand for office space in recent times. Commercial office stock in India is expected to cross 600 Million square feet by 2018 end while office space leasing in the top eight cities is expected to cross 100 Million square feet during 2018-20. Co-working space across top seven cities has increased sharply in 2018 (up to September), reaching 3.44 Million square feet, compared to 1.11 Million square feet for the same period in 2017. Indias office market is one of the well-organised office markets in the Asia-Pacific region and the upcoming Real Estate Investment Trust (REITs) structure is likely to help the sector become even more efficient.

Office absorption is likely to rise steadily in the medium-term on the back of strong economic fundamentals and positive occupier and investor sentiment.

Government Projects: Shortage of houses for government employees remains a major issue for the government. To address this, central and state governments have undertaken various schemes to provide accommodation to government employees. Also, government has increased capital outlay for development of new institutions like AIIMS, IIT, IIMs, Exhibition centres, Railway Station redevelopment etc. In all, opportunities for civil construction players in the real estate field are increasing at a fast pace. The business environment for real estate also observed rapid changes with a series of reforms in the form of implementation of Real Estate (Regulation & Development) Act, 2016, the Goods & Services Tax (GST), Benami Properties (Prevention) Act and the Insolvency & Bankruptcy Code. While the implementation of GST and RERA led to some initial challenges for developers, most of the issues have been addressed and the industry as a whole is aligned. Additionally, RERA mandates disclosures on project standards, completion timelines and it mandates deposit of sales receipts in escrow accounts for all new projects launches. This significantly enhances clarity on project execution timelines and certainty on timely payments for civil contractors. Also, implementation of RERA is driving shift towards large organised civil contractors given the adherence to timely completion and quality deliverables.

2. Infrastructure Industry

India continue to be the fastest growing major economy second time in a row in 2018-19. The 6th largest economy in the world by nominal GDP and 3rd largest economy globally by Purchase Power Parity (PPP). With large share in world FDI inflows and Trade, demand of strong Infrastructure is essential. The infrastructure sector has been the governments biggest focus area for several years now. Investment worth र 50 trillion (US$ 777.73 billion) is required in infrastructure by 2022 to have sustainable development in the country. The increased impetus for accelerating infrastructure development will open up vast opportunities for construction players. Sectors such as roads, railways, airports, power and ports are likely to witness greater construction activities.

Union Budget 2019-20 highlights:

Going with the momentum created over the last five years, the government apportioned a budgetary support of approximately र 4.56 Lakhs Crores under the union budget for the infrastructure sector for financial year 2019-20. This includes roadways, railways, shipping and aviation.

Roads: India has emerged as the fastest road developer in the world with 27 km of highways being built each day. र 83,000 Crores has been allocated to the highway sector. Under the

Pradhan Mantri Gram Sadak Yojana (PMGSY), construction of rural roads has tripled. Out of 17.8 Lakhs habitations, 15.8 Lakhs have been connected with pucca roads and the remaining will be connected soon. र 19,000 Crores has been allocated to PMGSY in Budget 2019-20 as compared to र 15,500 Crores in Budget 2018-19. However, only 24,610 km of rural roads were built as compared to a target of 58,000 km.

Airports: The finance ministry allocated4500 Crores for 2019-20 as compared to9700 Crores last year. The Ministry of Aviation plans to revive Air India and support UDAN, the regional connectivity scheme. The third phase of this scheme which was launched recently also proposes to start flights to international destinations from regional hubs. There are 100 operational airports in India and the domestic air passenger traffic has doubled. Pakyong Airport in Sikkim was the 100th airport to be commissioned.

Ports & Water Ways: As part of Sagarmala Programme, more than 400 projects have been identified for implementation, during 2015-2035, across the areas of port modernisation and new port development, port connectivity enhancement, port-linked industrialisation and coastal community development. Out of these, 199 focus projects are phased out up to 2019. Centre has proposed to allocate a total budgetary support of र 550 Crores towards Sagarmala for 2019-20. This is up by 44% against last years budgetary support of र 381.08 Crores.

Railway: Budget 2018-19 had set a capital expenditure for the Ministry of Railways at र 1.58 lakh Crores, which is highest ever. The budget has allocated र 7,255 Crores for construction of new lines, र 2,200 Crores for gauge conversion, र 700 Crores for doubling of tracks, र 6,114.82 Crores for rolling stock and र 1,750 Crores for signalling and telecom.

Urban Infrastructure

Nearly 30% of Indias population today live in Urban agglomerations. The fast-paced urbanisation in the country, which is closely associated with the overall economic progress, has led the cities to encounter some grave challenges on the socio-economic front such as unemployment as well as excess load on existing infrastructure in cities like housing, sanitation, transportation, health, education, utilities etc. In order to upgrade the quality of life of people, especially the urban poor, the Ministry of Housing and Urban Development has been actively introducing new schemes and reinventing the existing schemes which deal with these specific issues.

Progress of Existing Schemes:

Smart Cities Mission: Smart Cities Mission is a flagship scheme under the Ministry of Housing and Urban Affairs. The mission involves as many as 3,183 projects worth र 1,45,245 Crores. Work has been finished only in projects worth र 4,960 Crores, amounting to only 5% of total projects. The target of completion of the projects was extended from 2019-20 to 2022-23 for execution of projects in cities selected in round four. Funds worth र 500 Crores will be released for the top 15 cities as per data released by Ministry of Urban Development.

Pradhan Mantri Awas Yojana (Urban) - Housing For All: This initiative aimed at providing 20 Million affordable homes for the urban poor including slum dwellers by March 2022. As per recent data by the union ministry, 51 Lakhs houses against the required 1 Crores are approved in last 3 years of implementation, over 28 Lakhs houses are in various stages of construction and 8 Lakhs houses have been completed with 100% occupancy by the beneficiaries.

Swachh Bharat Mission – The Swachh Bharat Mission is the governments nationwide flagship programme with the objective of universal sanitation coverage in urban areas with a budget allocation of र 41,765 Crores for 2018-19. As per the recent data, 52 Lakhs individual household toilets and 3.2 Lakhs public toilets have already been built. The Housing and Urban Affairs Minister, recently announced that the government will meet the target of building 72 Lakhs toilets one year ahead of its scheduled time.

AMRUT (Atal Mission for Rejuvenation and Urban Transformation): The emphasis of the AMRUT scheme was on infrastructure creation that has a direct link to provision of better services to the citizens. The allocated budget under the scheme was around र 50,000 Crores for the period 2016 – 2021. As per the recent updates, work on the projects is underway across 20 cities and towns.

Mero Rail: Government of India has taken various steps for standardization and growth of metro rail in India. The Metro Rail Policy 2017 of Govt. of India enables rapid and sustainable growth of metro rail in the country. Out of the 585 km of operational metro lines as on 10 February 2019, 326 km have been made operational after May 2014. Currently there is about 600 km of sanctioned metro lines under construction which will be operational in next five years. There are about 1000 km of metro line proposals under planning.

Metro footprint in India

According to the new Metro rail policy, the central government will approve and aid Metro rail projects only if they have private participation. Table shows costs of the under-construction Metro rail projects in India.

Roads & Highways

With the governments increased focus on expanding the road network, the road sector has become one of the top contributors to the construction industry. Mega projects such as Bharatmala, Setu Bharatam and Char Dham connectivity will be the biggest investment drivers in the sector. Phase I of the Bharatmala Pariyojana alone offers an investment opportunity of र 5.35 trillion. Assuming a construction intensity of around 60%, the sector offers construction opportunities of about र 3.21 trillion.

Further, although the launch of new innovative implementation models, such as the hybrid annuity model (र AM) and the toll-operate-transfer (TOT) model have attracted substantial interest from industry players, the engineering, procurement and construction (EPC) model is likely to remain the dominant mode in the near to medium term. The Ministry of Road Transport and Highways (MoRTH) has set a construction target of about 12,000 km and an award target of around 20,000 km for 2018-19. Meanwhile, major policy initiatives, such as a bonus of 10% of the project cost to the contractor upon completing highway projects before the deadline, single-window clearance facility to accord speedy approvals etc., are likely to attract players into the sector.

In addition, the government is planning to develop nearly 2,00,000 km of national highways by 2022. It has plans to invest around र 1.45 trillion in road infrastructure in the north east region between 2018 and 2020. As per India Infrastructure Research, a pipeline of around 352 projects at the state level spanning a length of over 19,160 km at an estimated cost of over र 2 trillion presents vast opportunities for construction players. Based on these estimates and the strong pipeline, opportunities worth over र 1.2 trillion are expected to be available for the construction segment.


Water & Irrigation

The Water and Irrigation infrastructure has undergone massive improvement over the years. In the water and sanitation sector, an investment of over र 320.55 billion is expected in the 118 upcoming projects (as of August 2018). With a construction component of 62.5%, the sector offers a construction opportunity of around र 208.36 billion. Further, the central government has launched a number of programmes/ schemes for augmenting sewage treatment and garbage collection infrastructure in the country. These include the Smart Cities Mission, the Atal Mission for Rejuvenation and Urban Transformation, the Namami Gange Mission, the Swachh Bharat Mission and the National Rural Drinking Water Programme.

Overall, the sector has a positive outlook and offers huge opportunities, both in the medium and long term. Expansion and uptake of various water supply and sanitation projects will offer multiple business opportunities across different segments and continuous efforts for rapid growth in the sector will result in elimination of major impediments. With various flagship government schemes such as the Pradhan Mantri Krishi Sinchai Yojana, the policy thrust is likely to enable continued growth of the irrigation sector as well.

3. Manufacturing, Industrial & Power

Indias manufacturing sector has observed robust growth over the past few years. During April-September 2018, GVA from manufacturing at current prices grew 14.8% YOY to र 1,38.99 trillion (US$198.05 billion). The manufacturing sector of India has the potential to reach US$ 1 trillion by 2025 and India is expected to rank amongst the top three growth economies and manufacturing destination of the world by the year 2020. Under the Make in India initiative, the Government of India aims to increase the contribution of the manufacturing sector to the gross domestic product (GDP) to 25% by 2022, from 16% and to create 100 Million new jobs by 2022.

Challenges faced by the Indian Construction Sector

The key challenges faced by the construction industry in India can be summed up as under:

Increased Material Costs: Over the past few years, increase in material costs have led to increase in labour cost and unavailability of concrete products such as aggregates and cement. Material costs have risen by 10-12% over the past year and future costs are likely to rise even more.

Lack of Skilled Workforce: At the end of 2018, there were roughly 2,90,000 open construction industry jobs, reflecting the dearth of qualified workers in the industry. Due to smaller and less qualified workforce, projects are coming in over budget because of change orders resulting from failure to properly assess and perform the project.

This also results in increased labour cost and delay in completion of projects.

Technology Adoption: Technology has been a major differentiator in the Indian construction industry. Technologically efficient builders are attracting collaborations in the higher end and businesses that follow traditional means are lagging behind. Elements like Virtual Reality, Artificial Intelligence (AI) and Building Information Modelling (BIM) are transforming the market trends today both in commercial and housing sector. It is essential for the competitors to get technologically efficient to avoid certain technological challenges.

Project Complexity: Modern construction projects becoming advanced, both in terms of design and functionality. Availability of skilled labour and latest technology further adds to the challenge.

Natural Hazards: Being a tropical nation, India is prone to natural disasters, especially floods. Big cities like Mumbai and Chennai have witnessed natural calamities in the past years and this has become a huge constraint for the Indian construction industry.

Company Overview

JMC Projects is a renowned construction Company and is engaged in construction of residential complexes and townships, hospitals, hotels and commercial complexes. JMC also focuses on construction of landmark edifices such as highways, bridges, flyovers, hospitals, industrial units, power plants etc. across the country. With a strength of 3,781 employees JMC carries out operations not only in India but also in Africa and SAARC countries. It is certified under ISO 9001:2015 (Quality Management), ISO 14001:2015 (Environment Management) and BS OHSAS 18001:2007 (Occupational Health & Safety).

Results of Operations

Operational Highlights and Achievements

During the year under review, the Company has received new contracts of approximately र 5,629 Crores. As of March 31, 2019, the aggregate value of orders on hand stands at र 9,962 Crores. The details of some of the major/ prestigious contracts received during the year are as follows: a) Construction of township for NMDC in Dhanpunji, Jagdalpur, Bastar Dist., Chhattisgarh. b) Execution of Pipe water supply project for Rural Water Supply & Sanitation in Koraput Dist., Odisha. c) Execution of Narmada- Jhabua-Petalwad - Thandala - Sardarpur Micro Irrigation Scheme on turnkey basis for Narmada Valley Development Authority, Madhya Pradesh. d) Four laning of Madurai-Chettikulam Section of NH 785 for NHAI in Tamilnadu. e) Construction of Flyover in Sakoli town on NH53 for NHAI in Maharashtra. f) Construction of Flyover in Lakhani town on NH53 for NHAI in Maharashtra. g) Execution of Nagalwadi Micro Irrigation Scheme on turnkey basis for Narmada Valley Development Authority, Madhya Pradesh. h) Civil works for VIT University in Amravati, Andhra Pradesh. i) Civil works for TSL plant for TATA Steel at Kalinganagar, Odisha. j) Piped Water Supply & O&M for 337 villages of Bolagarh and Begunla Block of Khordal Dist. & 9 GPs of Sadar block in Dhenkanal Dist. of Odisha for Rural Water Supply & Sanitation, Odisha. k) Contract for Design & Build MTB5 Building Ascendas ITPB SEZ for Information Technology Park Ltd. at Bengaluru, Karnataka. l) Construction of commercial development Zentech Business Park for Purvankara at Bengaluru, Karnataka. m) Construction of Residential Buildings of Nalanda University campus for Nalanda University in Nalanda Dist., Bihar. n) Construction of mixed use Residential development Brigade Cornerstone Utopia at Varthur Hobli, Bengaluru, Karnataka.


The income from Operations for the Company has increased by 18% to र 3,252.86 Crores in 2018-19 from2,755.64 Crores in 2017-18.

Other Income

Other Income increased to र 24.79 Crores for 2018-19 from र 17.62 Crores for 2017-18.

Operating Margin

EBIDTA (including other income) for 2018-19 was र 361.71 Crores as compared to र 302.39 Crores for 2017-18. In terms of percentage, EBIDTA remains stable at 11% for 2018 -19 and for 2017-18. The operating margins remained constant even after increase in prices of major materials and labour rate due to better margins in new jobs, process improvements and operating efficiencies.

Costs & Expenses

Employee Costs

Manpower cost for 2018-19 was र 302.55 Crores increased from र 266.39 Crores. In terms of percentage of Turnover, it decreased to 9.3% as compared to 9.7% in the previous year. The decrease is mainly due to increase in turnover for current year.

Financial Status

Other Expenses

Other Expenses as a percentage of turnover has decreased to 3.3% in 2018-19 as compared to 5.5% in 2017-18. Other expenses have decreased mainly because of reduction in rates and taxes and ECL provision. Other Expenses mainly include general and administrative expenses such as travelling and conveyance, communications, security, insurance, information technology expenses, sundry expenses, rates and taxes, professional and legal charges etc.

Interest Expenses

Interest expenses for the year 2018-19 increased to95.06 Crores from र 85.78 Crores in 2017-18. In terms of percentage of Turnover it has decreased to 2.9% for 2018-19 from 3.1% for 2017-18.


Depreciation cost as a percentage of turnover has marginally decreased to 2.4% in 2018-19 to 2.6% in 2017-18.

Taxes on Income and Deferred Tax Provision

The Companys Deferred Tax Asset (net) has increased from र 35.17 Crores in 2017-18 to र 36.26 Crores in 2018-19. The Company has made current Tax provision of र 46.91 Crores and deferred Tax provision of र (0.52) Crores. Hence total Tax expenses works out to र 46.39 Crores.

Ratio Standalone Consolidated
2018-19 2017-18 2018-19 2017-18
Debtors Turnover (No. of Days) 96 96 92 93
Inventory Turnover (No. of Days) 25 25 24 24
Interest Coverage Ratio 3.80 3.53 1.98 1.67
Current Ratio 1.27 1.27 1.21 1.21
Debt Equity Ratio 0.83 0.93 2.94 3.37
Operating Profit Margin (%) 11.12 10.97 13.40 12.97
Net Profit Margin (%) 4.53 3.82 2.40 0.90

Further, the Return on Net worth ratio (Standalone) during 2018-19 was 22% as compared to 19.6% during 2017-18 which improved by 2 bps on account of higher profitability. Further the Return on Net worth ratio (Consolidated) during 19 was 21.5% as compared to 10.3% during 2017-18 which improved by 11.2 bps on account of higher profitability both in EPC business as well as in Developmental projects.

Net Worth

The net worth of the Company has increased from788.99 Crores as on March 31, 2018 to र 923.27 Crores as on March 31, 2019. The increase in amount of net worth is on account of internal accruals.


The total standalone borrowing has increased from736.6 Crores as on March 31, 2018 to र 765.6 Crores as on March 31, 2019. The Debt-Equity Ratio is at 0.83 as on March 31, 2019, which was 0.93 as on March 31, 2018. The Company maintains healthy A1+ and A+ credit rating respectively for its short term and long term borrowings from CARE.

Cash and Bank Balance.

Cash and Bank balance decreased from र 145.89 Crores as of March 2018 to र 76.92 Crores as of March 2019.


Total Investment of the Company remains stable to416.38 Crores as on March 31, 2018 and as on March 31, 2019.

Capital Expenditure

During 2018-19, the Company has capitalized additional fixed assets of र 150.44 Crores. Major funding of the capital expenditure was made from the proceeds of term loan taken from Banks /financial institutions and from internal accruals.

Current Assets & Liabilities

The Companys current assets primarily consist of debtors, inventories, cash and bank balances and loans and advances. Total current assets as on March 31, 2019 were र 2,930.17 Crores as against र 2,479.28 Crores as on March 31, 2018.

The Companys current liabilities primarily consist of short term borrowings, trade payables, short term provisions and other current liabilities. Total current liabilities as on March 31, 2019 was र 2,049.88 Crores as against र 1,726.52 Crores as on March 31, 2018.

Current Ratio

The current ratio has remained constant at 1.43 as at March 31, 2019 and as on March 31, 2018.

Risk Mitigation Strategies

Key Risk and Description Potential Impact Mitigation measures Stakeholder affected
Cross-border transactions: Exchange rate risk and local market conditions. • Strengthening of foreign currencies could result in reduced returns. • Yield guarantees and price adjustments. • Shareholders
• Increased cost of borrowing and hedging. • Interest rate swaps and hedging.
• Financing transactions in foreign currencies at lower interest rates.
Capital and interestrate risk: Rising cost of capital and liquidity. • Deteriorating strength of acquisition currency. • Maintaining relationships and communication with investors and lenders. • Shareholders
• Inability to act on opportunities. • Debt funding policy and framework.
• Decline in property valuation. • Diversified equity and debt funding structures.
Execution of Investment Strategy: Increased complexity of the Groups business. • Non-alignment of strategy execution. • Governance structures and authority limits. • Shareholders
• Poor risk management and decision-making. • Regular Management meetings. • Employee
• Gaps in processes and procedures. • Internal audits.
• Inaccurate financial reporting. • Developing an integrated IT platform and business intelligence tool.
• Loss of focus.
Key Risk and Description Potential Impact Mitigation measures Stakeholder
Property market conditions: Dependency on electricity and municipal services. • Disruption of service • and supply resulting in weakening of property • performance. Measuring energy consumption. Expense management and benchmarking. Energy-savings initiatives. Monitoring cost recovery ratios. • Shareholders
• Service Providers
• Employees
• Increase in operating • expenses. • • Customers
• Increased capital expenditure for alternative energy supply and savings initiatives.
Human Resources: Loss of key personnel and skills shortage. • Reputational damage • resulting in a negative • impact on the share price. • • Negative impact on Remuneration policy. Long-term incentive scheme. Business and personal scorecards. • Shareholders • Employees
distributions. • Employee training such
• Loss of knowledge, capabilities and network contacts. as SAP-Module Specific Training, High Impact Manager, Personal
• Disruptions to operations. • Effectiveness, SAKSHAM etc. Innovative employee retention strategy.
Technology and Information: IT systems failure. • Loss of information. • Cloud-based applications. • Shareholders
• Missed reporting deadlines. • Backups and disaster recovery. • Employees
• Unstable network.
• Cyber attacks. • IT and media usage policy for staff.
Developing an integrated IT platform and business intelligence tool.

Environment, Health and Safety Management System (EHS)

We consistently drive the safety values and encouraging employees to translate our EHS policy in to practice and motivate them to lead with safety ownership into all functions of construction with the aim to achieve the organizational goal of ZERO harm, integrate safety amongst actions of front-runners and line management to attain and maintain business excellence. We are committed to promote a safe working environment by incorporating Environment, Health and Safety into the daily operations, resulting in the prevention of injuries and illness of the employees, contractors and visitors, promotion of best practices as well as compliance with Corporate, State and local obligations governing our business.

We inculcate safety drive and delegation of safety ownership amongst line management, employees and contractors for prevention and mitigation of incidents with focused approach on the following areas during the last fiscal year:

Process Driven Approach

• Effective and Constant Daily Safety reporting from all sites.

• Integration of EHS in planning and designing stage - IFC checklist.

• Effective implementation of 3-Layered EHS audit systems.

• RED/YELLOW/GREEN flagging given for EHS performance grading under three layered EHS audits program apart from OHSAS/ EMS system based periodical audits.

• Substantial increase in near-miss reporting compared to past three years.

• EHS Dashboard to reflect and monitor EHS performance of each project closely at the site level.

• Robust incident investigation process through Six Sigma technique.

• Visible improvements on rectifying unsafe conditions in work equipment & vehicle safety continued with good pace to tackle the critical risk identified in plant and machinery.

• PONC tracker tool is used to analyse the loss of cost incurred as a part of safety in business excellence.

• Effective Safety walk through by Project Manager along with team leaders and site EHS committee on weekly basis.

• Every site has the provision of conceptually designed Safety Park for enhancing the EHS awareness and adopting safe work culture.

Robust EHS Review Mechanism

• Formation of EHS steering committees at corporate, business units (BU) and site levels for robust EHS review.

• Business units Project Performance Review (PPR) starts with EHS performance review.

• Fortnightly Teleconferencing/VC with BU EHS Head.

• Review of scaffold management across the project sites pan India.

• Rolled Out EHS Rapid Assessment to evaluate the EHS requirements of each Project site.

More Focus on Training

• Training and Certification for Scaffolding Inspector has been accomplished at I&P, NIO, WIO region by NSC and OHSAS approved agency.

• The journey towards positive and sustainable culture-Behavioural Based Safety and EHS workshop for EHS excellence towards culture transformation across the organization.

• Full-fledged implementation of EHS Passport for Job specific training.

• OHSAS and EMS Internal auditor training conducted for employees from execution, planning, quality and EHS department.

Effective Communication

• Site personnel are encouraged to report any incidents using safety toll-free number, instantly.

• Monthly EHS meeting with Business Unit EHS heads through on specific EHS agenda.

• Daily toolbox talk status through WhatsApp.

• Reporting of Incidents to RO/Corporate through Fast track incident communication/reporting and Investigation of incident by Why-Why Analysis which helps to drive actual root causes for incidents.

• Incident sharing and analysis of case study through safety alerts.

• Feedback on EHS from Clients/Customer to understand their expectations on safety.

• EHS online reporting system is under development.

Safety Walkthrough / Audit Mechanism

• Involvement of line management in audit process through three layer EHS audit.

• Inclusion of three layer audit as mandatory KPI in KRAs.

• Quantitative rating tool to measure EHS performance of each project.

• Periodic OHSAS EMS Audit and close tracking of conformance on NCर

• Executive from regional office or head office visiting site give their EHS feedback thru SCOUT report as a part of involving people in EHS.

With all the above EHS initiatives, accident prevention tools with rigorous safety drives, the Company bagged 3 International RoSPA Gold awards, 3 British Safety Council merit awards, 12 CIDC Vishwakarma awards, 12 Safety Awards from Ministry of labour and employment, 9 NSC awards, 1 Gold Trophy award from Pune construction engineering research foundation and various client appreciation for achieving safety milestones and splendid EHS performances in 2018-19.

Internal Controls and their adequacy

Your Company has a proper and adequate system of Internal Controls, to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposal and that transactions are authorized, recorded and reported correctly.

We have presence across multiple countries and a large number of employees, suppliers and other partners collaborate to provide solutions to our customer needs. Robust internal controls and scalable processes are imperative to manage the global scale of operations. Management has laid down internal financial controls to be followed by the Company. We have adopted policies and procedures for ensuring the orderly and efficient conduct of the business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures. Your Companys Corporate Audit and Assurance Department issues well documented operating procedures and authorities with adequate built-in controls at the beginning of any activity and revised procedures, if there is any major change. The internal control is supplemented by an extensive programme of internal, external audits and periodic review by the management. The system is designed to adequately ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets. Corporate Audit & Assurance Department during the year, facilitated a review of your Companys risk management programme.

The risks and mitigation measures were reviewed by your Companys Risk Management Committee and corrective measures initiated. During the year, the Corporate Audit & Assurance Department carried out various reviews and provided assurance on compliances to lay down policies, processes and internal controls.

The Board has laid down Internal Financial Controls within the meaning of the explanation to section 134 (5) (e) ("IFC") of the Companies Act, 2013. The Board believes the Company has sound IFC commensurate with the nature and size of its business. Business is however dynamic. The Board is seized of the fact that IFC are not static and will evolve over time as the business, technology and possibly even fraud environment changes in response to competition, industry practices, legislation, regulation and current economic conditions. There might therefore be gaps in the IFC as Business evolves. The Company has a process in place to continuously identify such gaps and implement newer and/or improved controls wherever the effect of such gaps might have a material effect on the Companys operations.

Human Resource Management

The HR Mantra for this year was digital transformation for people centricity. JMC has embarked on the journey of digitalization of HR service by launching of "Human Tree" (SAP Success Factor HR Services Platform). This is a big leap in achieving employee connect across all Business Unit and achieving openness & promptness in HR Processes. Talent infusion and augmentation in the respective Business is a major focus area and was managed effectively in a highly competitive talent acquisition scenario. We have an able and visionary leadership team helping organization to propel on the sustainable growth journey.

JMC is thoughtful about its organization development and training initiatives and there has been relentless efforts on this front. Some of the key initiatives are as follows:

• Competency based trainings focused on building behavioural competency and functional capability. 10,000 + Man-days of training completed.

• Empowering employees for anytime, anywhere learning by launching of "Learning Square" (E learning Platform).

• Skill building of labours by involving trainers from PMKVY. Thereby providing skilled labour to project sites which in turn contributes to the quality of delivery.

• Executive Shaper Program which focuses on personal productivity, driving positive change and achieving excellence.

• Driving performance centric culture through robust performance management system called PRIDE.

• To ensure right fit for right job, we have a scientific recruitment process involving psychometric assessment and multi-level competency based interviewing process.

• To understand a pulse of overall culture prevailing in the organization we have undertaken a unique initiative called Culturometric a survey about JMC culture. This in turn will help us to assess the best culture fit for the organization.

The focus of human resource function is not only to improve employee productivity, skill sets and knowledge but also to improve employee empowerment and welfare. All the process and policies of Human Resources function are tuned to support the overall business needs, people strategy and organization goals.

Information Technology

SAP HANA with CPM module implemented last year has given lot of visibility to the transactions and improved collaboration amongst the various departments. The Company this year, extended the SAP functionality by implementing BI Dashboards to visualize the presentation of data to senior management. The Companys auditors successfully completed IT general controls (ITGC) audit and found that our implemented controls at various levels are satisfactory. The Company implemented SAP Success Factors human resource management system to help HR team efficiently acquire and manage the human capital. The modules gone live are Employee Connect and Performance Management System. HR achieved 100% rollout of Performance Management System for 2018-19. With this adoption HR is planning to rollout recruitment and training modules to integrate talent acquisition and talent development management processes to further improve the employee productivity.

The Companys data security efforts are in continuous review and appropriate and necessary actions are initiated proactively to further improve and to adopt new technologies, the Company is including BISO (Business Information Security Officer) in to the IT Team to dedicatedly monitor and protect the Companys digital assets from unwanted data threats.

As the industry is heading for 4.0 with lot of young and start-up organizations bringing in new technologies like Robotic Process Automation (RPA), Chatbots, IoT devices to connect with various equipment at fields to gather data for further optimization and improve the utilization, LiDAR and Drones for aerial surveys to improve the land survey and construction monitoring of the linear projects, evaluations and Proof of Concept (PoC) of some of those technologies were completed and IT is engaging with business units to find opportunities for phased wise rollout.

The Company is planning to implement project life cycle monitoring systems to improve execution and collaboration between various stake holders, gather the data from source location using mobiles/smart phones to build the near live information system dashboards. To improve the co-ordination of engineering process, introducing integrated Design/Estimate/Plan process using 3D/4D/5D tools to help the project teams to execute the projects without any hindrances with respect to drawings. Reviewing of drawings and providing comments using mobile devices at site using Jobsite view mobile apps further improve co-ordination between project execution team, purchase team and Engineering team.

One of the prime objective is to setup a command control centre at HO to remotely monitor the project visually and with key data parameters using project dashboards. A bi-monthly review with all Business & Functional heads on IT system adoptions is the plan to further refine the system.

Cautionary Statement

Statements in Management Discussion and Analysis describing the Companys objectives, expectations or predictions may be forward-looking within the meaning of applicable securities law and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include stiff competition leading to price-cuts, high volatility in prices of major inputs such as steel, cement, building materials, petroleum products, change in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.