Ridings Consulting Engineers India Ltd Management Discussions

Global Economic Outlook

The COVID-19 pandemic continues to have significant implications on the global economy. Industry estimates suggest that the global economy contracted by more than 3% in 2020 but is expected to see a growth of more than 5% this year. Despite this, the growth projections are far short of pre-pandemic levels. However, this growth depends heavily on how rapidly countries can manage further waves of the pandemic through wide scale vaccination programs and continued adherence to COVID-19 guidelines. Nations worldwide were forced to inject significant stimulus packages, including favorable fiscal policies, to keep their economies afloat. If nations fall short on the promise to curb the pandemic by vaccinating large portions of their population or contain waves and slow down COVID-19 transmission, the impact on the economy could be severe with increased financial stress and much slower growth.

Due to the Covid-19 pandemic the world is going through its toughest phase, in terms of peoples safety and economic challenges which is not expected to end soon. The world is under unpredictable crisis and looking at the ways to recover. Most of the nations are going through recession and collapse of their economic structure. The crisis is likely to have a major impact on globalization and global value chains. The Covid-19 pandemic has delivered an economic shock of a magnitude to be seen since the end of Second World War. The World Bank report forecast predicts a 5.2% contraction in the global GDP. This will be the deepest global recession in eight decades, despite the unprecedented policy support. The recession would be deeper if brining the pandemic under control takes longer than predicted, or the financial stress triggered cascading defaults. Global trade could also fall by 13% to 32%, depending on the depth and extent of the global economic downturn. The advanced economies are expected to contract by 7% in 2020 as wide spread social distancing measures, a sharp tightening of financial conditions and a collapse in external demand depress activity. The emerging market and developing economies will be impacted by shrinking per capita incomes tipping many millions back into poverty. The Engineering Services industry is also expected to be impacted by the Covid-19 pandemic, which will experience downward pressures in the short term with 2%-8% decline across the industry. However, the growth is expected to rebound faster than GDP recovery with 80% spend expected to come back in two years. The impact across the various industries will vary with some industries impacted severely in the short term to some which will see minimal impact.

The Geospatial industry is expected to have minimal impact in the medium term due to shutdowns, lower demand and delayed investments. The Covid-19 pandemic has increased the need for GIS enabled decision making to map changing supply chain structures and understand the spread. However, the long term outlook continues to remain strong as growing use of GIS solutions in the transportation sector and smart cities investments are likely to boost in the near future. Along with this, geospatial analytics and earth observation are expected to hold a larger market share in the future.

While the industry continues to struggle through the Covid-19 pandemic, we expect to witness a short term decline in revenues across the industries. We will focus on streamlining our operations that are impacted by the lockdown and continue to focus on meeting our clients changing needs in the short term. From a long term perspective, our focus will be on strengthening our digital capabilities across the industries and strengthening our business model to serve our clients better.

Opportunities and threats

The recent shift of paradigm towards development of smart cities throughout the developing countries across the world has sprung open a wide array of opportunities for the GIS industry. The opportunities have multiplied a lot and the Company is looking forward to cater to as many opportunities within its ambit to grow itself and in turn provide value to its stakeholders. With the opening of new opportunities in the industry like the smart cities and AMRUT cities projects, the crown jewel of Prime Minister Mr. Narendra Modi development plan for India, the competition has also grown. The COVID impact has made organization conserve cash which has reduced the number of opportunities and has led to reduction of funds towards the projects allocation, which may hamper the flow of new projects in the near future. The impact of the pandemic on the international projects will be measureable once the travel resumes.

Product wise performance

The services offered by companies are diverse however together they form a complete solution towards creation of a smart network. The Company provides a variety of services/surveys like Topographical survey, Base map creation, Consumer Indexing, Property survey, Underground utility survey, Point of Interest (POI) collection, ABD (As-Built drawing), Building Footprint Digitization. The performance of each product during a financial year depends on the stage of project the Company is entering or executing irrespective of the ongoing projects the management and its core team works towards acquiring as much projects as they can.

Outlook

There is a lot of potential for growth in the turnover of the Company because of the rising demand of the services provided by the Company and the demand will be increasing many folds in the coming time. The government has shifted its focus to vocal for local which has opened different avenues for the Company to bag orders which were earlier not accessible. The private sector along with the government sector has started floating tenders for the indigenous companies which the company is hopeful to bag given its credentials.

Risks and concern

Your Company continuously ascertains risk and concerns in the Geospatial industry affecting its present operations, future performances and business environment. In order to overcome such risk and concerns your Company adopts preventive measures as considered expedient and necessary. The current geospatial market in the country derives its revenue from the government and regulatory bodies and at times the payment of the projects gets delayed which impacts the ongoing projects. Management has come out with different options to reduce such impacts and maintain a good cash flow for each project.

Internal control systems and their adequacy

The Company has adequate internal control system, commensurate with the size of its operations. Adequate records and documents are maintained as required by laws. The Audit committee reviews adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations. The Audit Committee gives valuable suggestions from time to time for improvement of the Companys business processes, systems and internal controls. All efforts are being made to make the internal control systems more effective.

Discussion on financial performance with respect to operational performance

The Financial performance of the Company has been satisfactory despite some delay in payments and your Company is doing well on fulfilling its objectives of growth, profitability and maximization of shareholders wealth.

Material development in Human Resources / Industrial Relations front, including number of people employed

The Company always believes that its growth is closely linked with the growth and overall development of its employees. The Company is committed to upgrade the skill of its employees and to create an environment where excellence is recognized and rewarded. The target is to place right people at right position and to enhance the working efficiency, speed, competency and time management skill of its employees. The Companys endeavor is to create an environment where people can use all of their capabilities in promoting the business of the Company. Number of people employed by the Company as on March 31, 2022 are 60.