Marg Projects & Infrastructure Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENT:

Infrastructure development in India has been going through a very difficult phase over the last Eight years. While the Government of Indias planning process clearly laid down the requirement for massive development in physical infrastructure to sustain economic growth, this has not translated to on-ground implementation. The slippages have been significant with the nodal agencies and departments responsible for developing the various infrastructure projects. Consequently, players in the construction space, especially those in business of building large infrastructure for the state and central governments, have had to face severe financial, operational and regulatory challenges, such as very tight liquidity conditions, serious stress on cash flows, problems in land acquisition, as well as sundry issues brought up in the ambit of environment and social displacement.

The Indian economy had been suffering from lower growth and various structural weaknesses since 2013-14 and these continued throughout the fiscal year. The slowdown in growth over the last Decade has contributed to low business confidence which, in turn, has put a dampener on private sector investment in infrastructure projects. Moreover, the economy has been under serious fiscal pressure.

FINANCIAL PERFORMANCE

MARG Projects and Infrastructure Limited Company (‘MPIL or‘the Company) is focusing primarily on obtaining large scale projects. It has always looked to adopt class operational processes and trying to promote responsibility in infrastructure development. This is the reason, the Company is yet to find projects resulting in Nil turnover of the Company similar to previous year.

OPPORTUNITY, THREATS, RISKS AND CONCERNS

India is the worlds 12th largest exporter and 9th largest importer. To maintain Indias growth momentum, the provision of adequate infrastructural facilities is critical. Unreliable services or a disruption in infrastructure facilities may restrict output or hinder investments in productive capital. Government of India is attempting to improve the countrys infrastructure as a top policy priority and has come out with measures to revive the activities in the road infrastructure sector.

The infrastructure and construction market in India is particularly affected in an atmosphere of lack of complete inertia in new project development and execution. Issues like environment clearances and financial difficulties for large developers have led to very little new opportunities in terms of infrastructure related development.

Raw materials, such as bitumen, stone aggregates, cement and steel, need to be supplied continuously to complete projects. There is also a risk of cost escalation or raw material shortage. The Company is operating in a highly competitive environment. However, during the year, the Company has observed that competition has diminished to larger extent. Hence, we will continue to bid for projects with financial, operational and execution viability.

A tough monetary policy adopted by Reserve bank of India (RBI) to tackle inflation. The lack of reforms and drop in growth in India in the last decade has led to an increase in its sovereign risk ratings and global capital flows into the country have also dried up. This gradual increase in the cost of servicing debt is a risk affecting the Company. Easing, inflation continues to be at a fairly high level. This results in increase in operating costs for the Company particularly in terms of input material and wage costs to meet this inflationary environment.

OUTLOOK

Engineering and Construction is the Companys core business of executing construction work on contract basis. The Company has started the year 2022-23 with a not so healthy Order Book mainly because of lack of orders in the previous years. However, the order book position during this year is expected to be reasonably good particularly in the second half of the FY 2022-23 on account of likely thrust by the new government in the Infrastructure and power Sector. Further, the Company is mainly focusing on sectors in terms of transportation, power, water supply and industrial construction projects. The business has been extended to include complete engineering, procurement and construction (EPC) services.

SEGMENT WISE / PRODUCT WISE PERFORMANCE

Your Company was operating only in one segment both in terms of business and geographical operations in the year 2022-23. Accordingly, segmental reporting in terms of Accounting Standard 17 is not applicable to the Company.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

In terms of performance, FY 2022-23 has not been a reasonable year. Company is focused on the task on hand in terms of better reliability of operations and more focused market efforts. Our revenue from operations is Nil during the year. During the FY 2022-23, Company has net loss of Rs. 4,10,843/-. Cash and cash equivalents at the end of year stood at Rs.1,44,316.

DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR, INCLUDING:

s. No Ratio Analysis	FY 2022- 23	FY 2021- 22	Variance	Variance%	Remarks
1. Debtors Turnover	0	0	0	0	NA
2. Inventory Turnover	0	0	0	0	NA
3. Interest Coverage Ratio	0	0	0	0	NA
4. Current Ratio	0.81	0.84	-0.03	-99.16%	No Major Variance
5. Debt Equity Ratio	0	0	0	0	NA
6. Operating Profit Margin (%)	0	0	0	0	NA
7. Net Profit Margin (%)	0	0	0	0	NA

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof.

Return on Net Worth (Profit after tax/ Total Equity) %	FY 2022-2023	FY 2021-2022	Variance
	0	0	0

INTERNAL CONTROL SYSTEM AND ADEQUACY

The Company has adequate system of internal control in place. This is to ensure that assets are safeguarded and all transactions are authorized, recorded and correctly reported. The internal audit function is empowered to examine the adequacy, relevance and effective control system, compliance with policies, plans and statutory requirements.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATION

During the year there was no increase in manpower due to the adverse market condition and slowdown in companys business.

CAUTIONARY STATEMENT

The statements in report of the Board of Directors and the Management Discussion and Analysis Report describe the Companys outlook, estimates, performance or predictions with a forward perspective considering the applicable business and economic regulations affecting the industry. Actual results could differ from those expressed or implied, since the Companys operations are influenced by many external and internal factors beyond the control of the Management. The Management takes no responsibility for keeping the members updated on changes in these factors stated above apart from those, which may statutorily be required to be reported from time to time.