P B A Infrastructure Ltd Management Discussions

1. Company Overview:

PBA Infrastructure Limited (PBA) (formerly Prakash Building Associates Ltd.) Company was founded by Wadhawan family in 1974. Over the last five decades the Company had established itself as a highly disciplined, professional and quality conscious organization capable of undertaking and successfully completing any major project in all parts of India. The Company specializes in construction of Highways, Bridges, Runways, Heavy RCC Structures and other Infrastructure projects. The Company became a Public Limited Company in

November 2005 and is listed on BSE, Mumbai. The Company has consistently been declaring dividends to its shareholders since IPO, the last being 10% in 2010.

The Company started facing financial crisis from 2010 due to slow down in the infrastructure industry, high level of Working Capital requirements, huge interest cost and Blockage of receivables at government level and forcefully cancelled the work order (awarded and put into operation) at various sites for not obtaining the required land by the Government in those areas resulting all the matters were referred to "Arbitration" for claim for huge amount, which has direct impact on the growth of the Company, consequences of which the Company has to face so many legal issues including the financial crisis. Due to continuous irregularity in operation, our consortium Bankers had stopped to further finance, extension of guarantees, issue of new guarantees, etc. and also declared our account as NPA since 2013.

2. Industry Review Introduction

India now boasts the worlds largest road network at over 6.62 million km (as of December 2024), carrying has gradually increased over the morethan70%offreightand85%ofpassengertraffic. years with improvement in connectivity between cities, towns and villages in the country.

In India, sale of automobiles and movement of freight by roads is growing at a rapid rate.

Market size

The government has established a provisional target of constructing 10,421 km of national highways in FY25, reflecting a 15% decrease from last years achievement due to delays in state clearances caused by the extended election process.

National highway construction in India increased at 9.3% CAGR between FY16-FY24. In FY24 approximately

12,349 km of National Highways have been constructed. Despite pandemic and lockdown, India has constructed 10,457 km of highways in FY22. In FY23, the Ministry of Road Transport and Highways constructed national highways extending 10,331 kms. Under the Union Budget 2024-25, the Government of India has allocated Rs. 2.72 lakh crore (US$ 32.68 billion) to the Ministry of Road Transport and Highways.

National Highways Authority of India (NHAI) spent a record-breaking Rs. 2,07,000 crore (US$ 24.79 billion) on the construction of national highways in the fiscal year 2023-24. This was the highest capital expenditure ever recorded, representing a 20% increase from last year.

National Highway network grown by 60%; rising from 91,287 km in 2014 to 146,195 km

As of March 2025, India has a total of 146,204 kilometres of National Highway and 2,474 National high-speed corridors as of December 2024.

In FY25 approximately 5,614 km of National Highways have been constructed against the target of 5,150 km for the year.

In FY24 approximately 12,300 kilometres of National Highways were constructed.

A total of 202 national highway projects worth Rs. 79,789 crore (US$ 9.59 billion) are at the implementation stage in the country and are 6,270 km in length.

The government has established a provisional target of constructing 10,421 km of national highways in FY25, reflecting a 15% decrease from last years achievement due to delays in state clearances caused by the extended election process.

In FY25 (up to December), the Ministry of Road Transport and National Highways awarded a total length of

3,100 kms.

Ceigall India has been awarded for the development of a 25.24 km, six-lane greenfieldbypass in southern

Ludhiana, a key component of the Ludhiana-Ajmer economic corridor, to be implemented under the hybrid annuity model (HAM) in Punjab.

FDI inflows in construction development stood at Rs. 1,35,823 crore (US$ 27.14 billion) between April

2000-March 2025.

As of June 4, 2025, there were 826 roads projects PPP out of 1029 total projects in India.

Key Investments/Developments

National Highways Authority of India (NHAI) spent a record-breaking Rs. 2,50,000 crore (US$ 29.26 billion)

(provisional) on the construction of national highways in FY25, surpassing its annual target of Rs. 2,40,000 crore (US$ 28.09 billion). This marks a 21% increase over FY24 and a 45% rise compared to FY23. NHAI also exceeded its construction goal, building 5,614 km of highways against the target of 5,150 km. During the year, NHAI raised Rs. 28,724 crore (US$ 3.36 billion)through asset monetization via TOT, InvIT, and toll securitization—its highest-ever single-round InvIT receipt stood at Rs. 17,738 crore (US$ 2.08 billion).

National Highways Infra Trust (NHIT) raised Rs. 16,000 crore (US$ 1.92 billion) in InvIT round- 3, stretches aggregate length of 889 kilometres of national highways, marking the largest transaction by the National

Highways Authority of India (NHAI).

The Union Minister of State for Road, Transport and Highways has stated that the Government aims to boost corporate investment in roads and shipping sector, along with introducing business-friendly strategies, which will balance profitability with effective project execution. According to the data released by Department for Promotion of Industry and InternalTradePolicy(DPIIT),FDIinflowsinInasignificanteffortto enhance infrastructure, the Union government approved eight national high-speed corridor projects, involving the construction of 936 kilometres of highways at a total cost of Rs. 50,655 crore (US$ 6.09 billion). Private investments in the highway sector would likely rise from around Rs. 20,000 crore (US$ 2.40 billion) a year now to nearly Rs. 1 trillion (US$ 12 billion) in the next 6-7 years, Mr. Amit Kumar Ghosh, additional secretary, ministry of road transport and highways, said.

In October 2023, rating agency Crisil said that the assets under management (AUM) for infrastructure investment trusts (InvITs) in Indias road sector will nearly double by March 2025 from the current Rs. 1.4 trillion (US$ 17 billion).

Government Initiatives

Some of the recent Government initiatives are as follows:

The Union Cabinet has approved the Department of Rural Developments proposal to implement

Pradhan Mantri Gram Sadak Yojana-IV (2024–29), with a total outlay of Rs. 70,125 crore (US$ 8.21 billion) for constructing 62,500 km of roads to connect 25,000 unconnected habitations and build or upgrade bridges on these routes.

• Under the Union Budget 2025-26, the government has allocated Rs. 2,87,333.3 crore (US$ 33.07 billion) to the Ministry of Road Transport and Highways, reflecting a modest increase of 2.41% compared to the

FY25.

• In the Union Budget 2025-26, the government proposed to increase allocation for capital expenditure to Rs. 11.21 lakh crore (US$ 129.0 billion), up 10.1% from revised budget estimate of Rs. 10.18 lakh crore (US$ 117.2 billion) in FY25.

In January 2025, Prime Minister Narendra Mr. Narendra Modi took a significantstep to enhance Indias metro network by launching several development projects worth over Rs. 12,200 crore (US$ 1.43 billion) in Delhi.

In a significant effort to enhance infrastructure, the Union government approved speed corridor projects, involving the construction of 936 kilometers of highways at a total cost of Rs. 50,655 crore (US$ 6.09 billion).

• Investment in road connectivity projects including Patna-Purnea expressway, Buxar-Bhagalpur highway and an additional two-lane bridge over the Ganga in Buxar for Rs. 26,000 crore (US$ 3.11 billion) along with a new 2,400 MW power plant at Pirpainti costing Rs. 21,400 crore (US$ 2.56 billion).

• In March 2024, Prime Minister Narendra Modi inaugurated and laid the foundation stone for 112 national highway projects across various states, with a total worth of approximately US$ 12.04 billion (Rs. 1 lakh crore).

• The government has enlisted a consultant to advise on adopting new technologies like GNSS for barrier-free tolling. GNSS-based Electronic Toll Collection will be piloted alongside FAS Tag on select National

Highways.

• Bharat New Car Assessment Program launched for safety rating of passenger cars and empowering consumers to take informed decisions

In August 2023, the National Highways Authority of India (NHAI) made a big step towards improving the highway user experience, with the introduction of ‘Rajmargyatra, a citizen-centric unified mobile application. This user-friendly app provides travellers with in-depth knowledge of Indian National

Highways as well as an effective procedure for filing complaints.

In July 2023, Prime Minister Mr. Narendra Modi dedicated a six-lane greenfield motorway part of the Amritsar-Jamnagar Economic Corridor and the first

Energy Corridor.

• Increasing the pace of development of Uttar Pradesh, the Union Minister for Road, Transport and

Highways, Mr. Nitin Gadkari inaugurated two National Highway projects with an investment of more than Rs. 3,300 crore (US$ 396.8 million) in Lucknow on July 17, 2023.

In June 2023, National Highways Authority of India (NHAI) introduced a ‘Knowledge Sharing platform for sharing of knowledge and innovative best practices. This effort, which is hosted on the NHAI website, will assist the authority in working with specialists and citizens who want to exchange knowledge and views about subjects including road design, construction, road safety, environmental sustainability, and related sectors. The platform will promote the exchange of best practices from all around the world and work to strengthen the nations national highway system.

NHAI will come out with the third and fourth rounds of Infrastructure Investment Trusts (InvITs) to raise over Rs. 20,000 crore (US$ 2.41 billion) in FY24.

NHAI is planning to award 1,000-1,500 km of projects under the BOT model in 2023-24.

As of December 19, 2023, a total of 749,639 km of road length has been constructed under PMGSY.

• Indias Gati Shakti program has consolidated a list of 81 high impact projects, out of which road infrastructure projects were the top priority. The major highway projects include the Delhi-Mumbai expressway (1,350 kilometres), Amritsar-Jamnagar expressway (1,257 kilometres) and Saharanpur-

Dehradun expressway (210 kilometres). The main aim of this program is a faster approval process which can be done through the Gati shakti portal and digitized the approval process completely.

• As of March 2022, the government plans to spend Rs. 10,565 crore (US$ 1.38 billion) on the Trans-

Arunachal Highway and Kaladan Multi-Model Transport Project, as well as other roads development projects such as capital connectivity, district connectivity, connectivity to the international border, and improvement and strengthening of roads in the region of Sikkim.

• The Indian government launched Gati Shakti-National Master Plan, which will help lead a holistic and integrated development of infrastructure generating immense employment opportunities in the country.

Road Ahead

The Government, through a series of initiatives, is working on policies to attract significant investor interest.

A total of 600+ sites are planned to be awarded by 2024-25 of which 144 Wayside Amenities (WSAs) have already been awarded. In the next five years, National Highway Authority of India (NHAI) will be able to generate Rs. 1 lakh crore (US$ 14.30 billion) annually from toll and other sources.

Note: Conversion rate used for April 2025 is Rs. 1 = US$ 0.012

References: Media Reports, Press Releases, Ministry of Road Transport and Highways, NHAI website, Press

Information Bureau (PIB), Union Budget 2025-26

Notes: ^FDI in construction development Includes: Townships, housing, built-up infrastructure and construction-development projects

Robust Demand

As of March 2025, the total length of National Highways in the country was 146,204 km.

*Passenger vehicle sales in India reached an all-time high of 4.3 million units in FY25 compared to 4.2 million units sold in the same period last year.

*Passenger vehicle sales to dealers grew nearly 4% in April, led by demand for utility vehicles (UV

Attractive Opportunities

Union Minister of Road Transport & Highways Mr. Nitin Gadkari has unveiled over 200 projects totaling Rs 1.25 lakh crore (US$ 14.97 billion) earmarked for the next five years under the National Ropeways Development Programme known as "Parvatmala Pariyojana."

*A network of 35 Multimodal Logistics Parks are planned to be developed as part of Bharatmala

Pariyojana, with a total investment of about Rs. 46,000 crore (US$ 5.55 billion), which can handle around 700 MMT of cargo

Higher Investments

• Growing participation of PPP.

• *National Highways Infra Trust (NHIT) has completed its fourth fund-raising round at an enterprise value of Rs. 18,380 crore (US$ 2.15 billion), marking the largest monetization in Indias roads sector; total value across all four rounds now exceeds Rs. 46,000 crore (US$ 5.38 billion).

*Under the Union Budget 2025-26, the government has allocated Rs. 2,87,333.3 crore (US$ 33.07 billion) to the Ministry of Road Transport and Highways, reflecting a modest increase of 2.41% compared to the

FY2

Policy Support

100% Foreign Direct Investment (FDI) is allowed under the automatic route in the road and highways sector.

*As on June 5, 2025, the Bhoomi Rashi Portal had incorporated 3,427 online projects of the National Highways Authority of India (NHAI)

Opportunities and Threats: Opportunities

Basis its strengths and effective Government initiatives towards development of Indian Infrastructure, your Company is realistically optimistic and finds immense opportunity in acquiring new orders with helps Joint

Ventures for construction of roads, bridges

Threats

Political instability, Wars, Terrorism, Multinationalconflicts, fluctuationin prices of Naturaldisasters,Heavy cement and sand

4. Announcements in the 2025-26 Budget Speech

In 2025-26, Rs 1,16,292 crore has been allocated towards roads and bridges. This is 5% higher than the revised estimates for 2024-25. Expenditure under roads and bridges includes: (i) development of NHs, (ii) projects related to expressways, (iii) increasing the number of lanes under various projects, and (iv) development of road connectivity in left-wing extremism affected areas.

5. Discussion on financial performance with respect to operational performance:

This discussion covers the financial results and other developments during April 2023 to March 20243 in respect of the Company. Published result is as prepared on Indian Accounting Standards (IND AS). Highlights below given only for comparison:

Amount in Lakhs)

Particulars	2024-2025	2023-2024	2022-2023
Revenue from Operations	3644.75	6049.46	1115.67
EBITDA	580.26	1758.01	-8850.53
PBT	136.57	163.82	-12828.39
PAT	222.18	245.39	-13447.54

• Revenue from Operations During the year under review, there has been decrease in the Income from

Operations.

• Project – The Companys income has decreased due to the near completion of the Omerga Project at

Solapur, which was entrusted by NHAI to their concessionaire."

• Claims – The Company had gone into arbitration for some projects and had received the awards in their favour. The authorities have appealed in the Courts, and the matters are pending.

• One Time Settlement:

One Time Settlement with consortium Banks, in continuation to the meetings with the Consortium Bankers from time to time, wherein it was suggested by the Consortium Bank to revise the One Time Settlement

(OTS) amount, However, said revise offer was not accepted by the Management.

6. Risks and concerns

Our strategic focus on the Infrastructure sector and the high growth trajectory exposes the Company to a variety of risks. The Company is exposed to different types of risks such as credit risk, market risk (including liquidity risk, interest rate risk and foreign exchange risk), operational risk and legal risk.

The Companys aims is to ensure that we proactively understand measure and monitors the various risks and develop and implement appropriate risk treatment plans to deal with them by establishing a suitable balance between harnessing opportunities and containing risks.

Infrastructure projects are highly capital intensive, and such run the risks of:

Longer development period than planned due to delay in statutory clearances, delayed supply of equipment or non-availability of land, non-availability of skilled manpower, etc.

• Financial and Infrastructural bottlenecks.

• Execution delay and performance risk and

• Cost over-run

• Pandemic Risk

• Competition Risk

• Inadequate/changes in regulatory framework

7. Internal Control Systems & Their Adequacy

PBA has an adequate system of internal control to ensure that the resources of the Company are used efficiently and effectively, all assets are safeguarded and protected against loss from disposition and the transactions are authorized, recorded financialand other data reportedcorrectly, are reliable for preparing financial information and other data and for maintaining accountability of assets.

The internal control is supplemented by extensive programme of internal audits, review by management, documented policies, guidelines and procedures.

8. Material developments in Human Resources / Industrial Relations front, including number of people employed

Your Company will continue to improve HR related processes, practices and systems in sync with the organizational objectives. As on 31st March 2025 there were 46 permanent employees of the Company

9. Outlook

The infrastructure sector is starting to gain heat due to Government support as it is the backbone to economic and social prosperity. Last year the Government extended their support through the announcement of NIP and this year it reinforced confidence in the sector as highlighted in the Union Budget 2025-26 announcement. PBA is committed to face the challenges by virtue of its strengthened business model and opportunities, while adhering to our cherished motivatedpersonnel.We are confident mission, vision and values.

10. Social Commitment

PBA believes that business success is not an end in itself; rather it is means to achieve higher socio-economic goals. The Company is committed to its stakeholders to conduct its business in a responsible manner. Management commitment, work ethics and business processes at Company encourages all its employees and other participants to ensure a positive impact and its commitment towards corporate social responsibility.

11. Details of Key Financial Ratios:

Sr. No.	Ratios	31-Mar-25	31-Mar-24	% Change	Remarks
1	Current Ratio	0.29	0.29	-1.63%	Liquidity remains critically low, showing inability to meet short-term obligations.
2	Debt-Equity Ratio	-3.53	-3.79	1.55%	Negative due to erosion of net worth; marginal improvement but still indicates high financial risk.
3	Debt Service Coverage Ratio	60.93	0.02	-92.11	High ratio due to higher EBITDA vs finance cost, but volatility indicates inconsistency in earnings.
4	Return on Equity Ratio	-1.94	-0.02	-7.70%	Negative returns continue, reflecting losses and erosion of shareholders wealth
5	Inventory Turnover Ratio	8.37	0.66	504.05%	Significant efficient inventory management and faster stock movement.
6	Trade Receivables Turnover Ratio	0.37	0.72	-43.65%	Decline indicates slower collection from debtors, leading to weaker cash flow.
7	Trade Payables Turnover Ratio	0.84	3.55	-61.81%	Substantial fall, showing delayed payments to creditors, which may impact supplier relationships.
8	Net Capital Turnover Ratio	-0.17	0.22	-43.05	Negative ratio reflects inefficient utilization of working capital.
9	Net Profit Ratio	0.003	4.06%	57.49	Marginal improvement, but profitability remains negligible.
10	Return on Capital Employed	-5.06%	-0.03	-1.22%	Negative ROCE indicates poor returns from capital employed.
11	Return on Investment	NA	NA	NA	Not computed due to unavailability of data.

*Previous years Figures have been regrouped / rearranged wherever necessary

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

As on 31st March 2025 the Net Worth of the company stood at Rs.(114.76) Crores as compared Rs.(119) Crores as on 31st March 2024

13. Social Commitment

PBA believes that business success is not an end in itself; rather it is means to achieve higher socio-economic goals. The Company is committed to its stakeholders to conduct its business in a responsible manner. Managements commitment, work ethics and business processes at Company encourages all its employees and other participants to ensure a positive impact and its commitment towards corporate social responsibility.

14. Cautionary Statement:

Statements in this Management Discussion and analysis describing the Companys objectives, projections, estimates and expectations may be ‘forward looking statements within the meaning of applicable laws and regulations. Actual results might differ substantially or materially from those expressed or implied. Important developments that could affect the Companys operations include a downtrend in the infrastructure sector, significant changes in political and economic environment in India, exchange rate litigations, labour relations and interest costs.