ANNEXURE - C
Infrastructure sector is a key driver for the Indian economy. The sector is highly
responsible for propelling Indias overall development and enjoys intense focus from
Government for initiating policies that would ensure time-bound creation of world class
infrastructure in the country. Infrastructure sector includes power, bridges, dams, roads,
and urban infrastructure development.
MARKET SIZE
India plans to spend US$ 1.4 trillion on infrastructure through ‘National
Infrastructure Pipeline in the next five years. In FY21, infrastructure activities
accounted for 13% share of the total FDI inflows of US$ 81.72 billion. India will need to
construct 43,000 houses every day until 2022 to achieve the vision of Housing for All by
2022.
Hundreds of new cities need to be developed over the next decade. Over the next 10
years, demand for urban freight is predicted to increase by 140%. Final-mile freight
transit in Indian cities accounts for 50% of the total logistics expenditures in the
countrys increasing e- commerce supply chains. India is expected to become the
third-largest construction market globally by 2022. Indian logistics market is estimated
to touch US$ 320 billion by 2025.
GOVERNMENT INITIATIVE AND INVESTMENT
Some of the recent government initiatives and investments in the infrastructure sector
are as follows:
In Union Budget 2022-23:
• The government has given a massive push to the infrastructure sector by
allocating Rs. 10 lakh crore (US$ 130.57 billion) to enhance the infrastructure sector.
• The government allocated Rs. 134,015 crore (US$ 17.24 billion) to National
Highways Authority of India (NHAI).
• The government announced an outlay of Rs. 60,000 crore (US$ 7.72 billion) for
the Ministry of Road Transport and Highways.
• The government announced Rs. 76,549 crore (US$ 9.85 billion) to the Ministry of
Housing and Urban Affairs.
• The government allocated Rs. 84,587 crore (US$ 10.87 billion) to the Department
of Telecommunications to create and augment telecom infrastructure in the country.
• The total revenue expenditure by Railways is projected to be Rs. 234,640 crore
(US$ 30.48 billion)
• 100 PM-Gati Shakti Cargo Terminals for multimodal logistics facilities will be
developed over next three years.
• Focus was on the PM Gati Shakti - National Master Plan for multimodal
connectivity to economic zones. Everything, from roads to trains, from aviation to
agriculture, as well as many ministries and departments, will be integrated under the PM
Gati Shakti National Master Plan.
• In June 2022 Mr. Nitin Gadkari, Minister of Road Transport and Highways
inaugurated 15 National Highway projects in Patna and Hajipur in Bihar worth Rs. 13,585
crore (US$ 1.75 billion) • According to the Department for Promotion of Industry and
Internal Trade (DPIIT), FDIs in the construction development sector (townships, housing,
built up infrastructure and construction development projects) and construction
(infrastructure) activities stood at US$ 26.20 billion and US$ 27.92 billion,
respectively, between April 2000 - March 2022.
• In March 2022, Mr. Nitin Gadkari, Minister of Road Transport and Highway
inaugurated 19 National Highway projects in Haryana and Rajasthan totaling Rs. 1,407 crore
(US$ 183.9 million).
• The government expanded the ‘National Infrastructure Pipeline (NIP) to
9,335 projects. 217 projects worth Rs. 1.10 lakh crore (US$ 15.09 billion) were completed
as of 2020.
• In November 2021, the Asian Development Bank (ADB) has approved a US$
250-million loan to support development of the National Industrial Corridor Development
Programme (NICDP). This is a part of the US$ 500-million loan to build 11 industrial
corridors bridging 17 states.
• In November 2021, India, the US, Israel and the UAE established a new
quadrilateral economic forum to focus on infrastructure development projects in the region
and strengthen bilateral co-operation.
• The initiative ‘Infrastructure for Resilient Island States (launched in
November 2021) will give India a huge opportunity to contribute to the betterment of other
vulnerable countries in the world.
• In October 2021, the Union Cabinet of India approved the PM Gati Shakti National
Master Plan including implementation, monitoring and support mechanism for providing
multi-modal connectivity.
• In October 2021, the Dubai government and India, inked an agreement to develop
infrastructure such as industrial parks, IT towers, multipurpose towers, logistics
centres, a medical college and a specialised hospital in Jammu & Kashmir.
• In FY22, government initiatives such the National Infrastructure Pipeline,
National Monetisation Pipeline, BharatmalaPariyojana, changes in the Hybrid Annuity Model
(HAM) and fast pace of asset monetization to boost road construction.
• As of October 2021, the Ministry of Road Transport and Highways constructed
national highways extending 4,450 kms compared with 4,956 kms, as of October 2020.
• To encourage rooftop solar (RTS) throughout the country, notably in rural
regions, the Ministry of New and Renewable Energy is undertaking Rooftop Solar Programme
Phase II, which aims to install RTS capacity of 4,000 MW in the residential sector by 2022
with a provision of subsidy.
• In May 2021, Minister for Road Transport & Highways and Micro, Small and
Medium Enterprises, Mr. Nitin Gadkari stated that the government is giving utmost priority
to infrastructure development and has set a target of road construction of worth Rs.15
lakh crore (US$ 206 billion) in the next two years.
• The Ministry of Railways plans to monetise assets including Eastern and Western
Dedicated Freight Corridors after commissioning, induction of 150 modern rakes through
PPP, station redevelopment through PPP, railway land parcels, multifunctional complexes
(MFC), railway colonies, hill railways and stadiums.
• Mega Investment Textiles Parks (MITRA) scheme was launched to establish
world-class infrastructure in the textile sector and establish seven textile parks over
three years.
• The government announced Rs. 305,984 crore (US$ 42 billion) over the next five
years for a revamped, reforms-based and result-linked new power distribution sector
scheme.
INDUSTRY STRUCTURE:
The construction industry makes up for a major part of Indias GDP. Being a significant
contributor to the GDP of India, the industry acts as a gateway for more opportunities.
Investment in the construction industry in India, therefore, directly leads to the
countrys economic development. The Construction industry in India consists of the real
estate as well as the urban development segment. The Real estate segment covers
residential, office, retail, hotels and leisure parks, among others, while urban
development segment broadly consists of sub-segments such as Water supply, Sanitation,
Urban transport, Schools, and Healthcare.
By 2025, Construction market in the country is expected to emerge as the 3rd largest
globally and the construction output is expected to grow on an average of 7.1% each year.
An enhancement in the construction industry will directly have a positive effect on other
industries like cement, technology, steel, etc. The development of a nation is recognized
through its infrastructure. FDI in the construction department in North India will bring
with it new possibilities to uplift the construction industry.
100% FDI in construction development sector under automatic route is permitted in
completed projects for operations and management of townships, malls/shopping complexes,
and business constructions.
100% FDI in real estate in India is allowed under the automatic route for urban
infrastructures such as urban transport, water supply and sewerage and sewage treatment.
OPPORTUNITIES:
The word "potential" is a much over used phrase when looking at India. As we
have seen earlier the infrastructure statistics are of such mind boggling proportions that
it could be said that there is a massive potential for the growth of ready mixed concrete
industry. However, realizing that potential will take a considerable time as companies
come to terms with the unique obstacles presented in the Indian market.
The infrastructure sector has become the biggest focus area for the Government of
India. India plans to spend US$ 1.4 trillion on infrastructure during 2019-23 to have a
sustainable development of the country. The Government has suggested investment of Rs.
5,000,000 crore (US$ 750 billion) for railways infrastructure from 2018-30. Favorable
valuations make the sector an attractive opportunity. Only 24% of the National Highway
network in India is four lanes. Therefore, presents an immense scope for improvement. The
regional connectivity scheme (RCS) gives opportunity for development of airports.
India and Japan have joined hands for infrastructure development in Indias Northeast
states and are also setting up an India-Japan Coordination Forum for Development of
Northeast to undertake strategic infrastructure projects for the region.
Our vision is to achieve leadership position in India and explore the opportunities out
of India. We committed to building long term relationships based on integrity, performance
and value, as well as client satisfaction. To be one of the premier infrastructure
companies in India by 2022 executing various vertical of construction activities with the
help of its in-house raw material production.
CHALLENGES RISKS & CONCERNS:
Industry/ policy risk:
The Companys business is highly dependent on road and bridge projects in India
undertaken or awarded by governmental authorities and other entities funded by
governments. Any change in government policies resulting in a decrease in the amount of
road and bridge projects undertaken or a decrease in private sector participation in road
and bridge projects adversely affects our business and results of operations. Our business
may be affected by changes in interest rates, changes in Government policy, taxation,
exchange rates and controls, social and civil unrest and political, economic or other
developments in or affecting India.
Project risk:
Infrastructure projects involve agreements that are long-term in nature (as much as
three years in EPC contracts and around 25 years in Design, Build, Finance, Operate and
Transfer (DBFOT) road projects). All long-term projects have inherent risks associated
with them and involve variables that may not necessarily be within our control. These
include inflation, interest rates movements, liquidity, commodity and oil prices,
governance, construction delays, material shortages, unanticipated cost increases, cost
overruns, inability to negotiate satisfactory arrangements with joint venture partners,
and disagreements with our joint venture partners.
We are increasingly bidding for large-scale infrastructure projects. There are various
risks associated with the execution of large-scale projects. Managing large-scale
integrated projects may also increase the potential relative size of cost overruns and
negatively affect our operating margins. In addition, we may need to execute large-scale
projects through joint ventures with other companies, which expose us to the risk of
default by our Joint Venture Partners.
Adherence To Safety & Quality Norms
Sustainable & Continual Growth
Teamwork And Healthy Competition
Concern Towards The Stakeholders
Deliver Best Service.
Strong Willingness to Learn.
Adherence To Values & Ethics
Companys Diversified Activities
Drainage Work:
Company has been awarded by Gujarat Urban Development Corporation (GUDC) for Drainage
Work at Anand Town amounting to Rs. 90 Cr which is completed satisfactorily.
Company has been awarded by Gujarat Urban Development Corporation (GUDC) for Drainage
Work at Borsad Town amounting to Rs. 23 Cr. which is completed satisfactorily.
Company has been awarded by Gujarat Water Sewerage & Supply Board (GWSSB) for
Drainage Work at Kapadwanj Town amounting to Rs. 24 Cr. which is running satisfactorily.
Company has been recently awarded an order of Rs. 211.00 Cr by Bhopal Municipal
Corporation for Sewage Treatment Project at Kolar Town & outside upper and lower lake
catchment area south & south east zone in the name of Joint Venture.
We have equipped ourselves with all the resources required to venture into the new
field.
Manpower:
We have recruited best talent available in the market for executing this new project
viz. Project Management, Project Execution, Finance, HR, Legal, IT.
Money:
We are financially self-sustained however capable of raising funds easily due to our
reputation and contacts with the Banks like Union Bank, HDFC, Axis etc.
Method:
We have developed the best SOPs so that the project taken is completed well within time
/ before time without compromising quality of work.
Material:
We preserve an extensive database for local vendors and others so that no work delays
due to material unavailability.
Management:
We are a professionally managed company wherein we follow the best solutions to our
business aspects in the most strategic way.
As mentioned,
• We are professionally managed company.
• We are financially self-reliant and enjoy very robust relationship with Banks.
• Our core strength lies in Infrastructural Development. • We are equipped with
the best machines / resources. • Our Project Team is highly qualified and carries
rich experience. • We believe in sustainable growth without compromising Quality
& Safety.
FUTURE OUTLOOK:
With the concern over liquidity there has been a general slowdown in both real estate
and infrastructure projects. Many of the high-end residential projects, especially in
metro cities, have been delayed.
India is in fast-forward mode and time is of essence. Players like BPOs often want to
start operations straight away and have no time to wait. All this is tipping the scales in
favor of infrastructure project, and mechanized construction equipment at sites. So, we
conclude that the coming years will be moving from the recession to the boom in such a way
that infrastructure industry will get booster without compromise.
SEGMENT WISE PERFORMANCE:
The Company is operating only in one sector i.e. Infrastructure Project Activity
therefore the segment reporting and performance standard is not applicable to the Company.
QUALITY CONTROL:
The Management and the Employees of Navkar Builders Ltd. are committed to operate every
aspect of the Construction adhering to the standards that offers quality service to all
clients by adopting and implementing effecting Quality Management System & Procedures.
FINANCIAL PERFORMANCE:
The Company has diversified its business activities and at the verge of achieving
better financial performance. The Company has successfully implemented various operational
excellence programs designed with the help of external consultants so as to optimize on
cost and delivery commitments. The Companys cash flow position as at the yearend
continues to remain strong. Increased liquidity has strengthened the Companys confidence
for launching new growth initiatives for the existing and emerging businesses of
construction.
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 thereof, including:
| Sr. No. |
Financial Ratio |
Year ended |
|
|
31.03.2023 |
31.03.2022 |
| 1. |
Debtors Turnover |
0.57 |
0.84 |
| 2. |
Inventory Turnover |
0.31 |
1.07 |
| 3. |
Interest Coverage Ratio |
12.51 |
1.73 |
| 4. |
Current Ratio |
3.27 |
3.65 |
| 5. |
Debt Equity Ratio |
11.51 |
0.59 |
| 6. |
Operating Profit Margin (%) |
0.12 |
0.21 |
| 7. |
Net Profit Margin (%) |
11.00 |
6.72 |
Notes:
1. Debtors Turnover is decrease due to bifurcation of Trade Receivables and
Advance received from customers.
2. Inventory Turnover ratio is decreased Due to change in Purchase during the
year.
3. Interest Coverage Ratio increase Due to repayment of loan in F.Y 2021-22
4. Current Ratio is increased due to change in Loans and advances in the current
financial year
5. Debt equity ratio increase due to repayment of loan in F.Y 2021-22
6. Operating Profit Margin (%) is decrease due to increase in purchase /
expenses in Current Financial year.
7. Net Profit Margin (%) is increase Due to Proportionate change in Expense to
Income.
INTERNAL CONTROL SYSTEM:
The Companys employees and projects have been and are exposed to risks and threats to
life, liberty, and property while operating in risky geographical areas. The Company
however takes pride in executing prestigious works in the nation building task. The
Company has taken measures with the help of the Government to provide adequate security,
facilities, and also insurance coverage in such places. The Company has a formal
Enterprise Risk Management framework in place which will be reviewed periodically.
| Date: 07/07/2023 |
By Order of the Board of Directors |
| Place: Ahmedabad |
For Navkar Urbanstructure Limited |
|
(Formerly Known as Navkar Builders Limited) |
| Sd/- |
Sd/- |
Sd/- |
| Harsh Shah |
Pinki Sagar |
Ami Kankaria |
| Managing Director |
Director& CFO |
Company Secretary |
| DIN: 01662085 |
DIN: 08113318 |
|
+91-9892691696
