simplex infrastructures ltd Management discussions

ECONOMIC OVERVIEW

India is set to be the second-fastest growing economy in the G20 in FY 2022-23, despite decelerating global demand and the tightening of monetary policy to manage in_ationary pressures. GDP growth will slow to 5.7% in FY 2023-24, as exports and domestic demand growth moderate. International Monetary Fund (IMF), in its _agship World Economic Outlook report has projected that India would be the fastest-growing economy in the world. Recovering from pandemic-induced contraction, Russian-Ukraine con_ict and in_ation, the Indian economy is staging a broad-based recovery across sectors, positioning to ascend to the pre-pandemic growth path in FY23.The Indian economy is projected to be around 6.0% to 6.8% in 2023-24 depending on the trajectory of economic and political developments globally.

India has become a key player in the global economy. Over the years, the Indian government has introduced many initiatives to strengthen the nations economy. The Indian government has been e_ective in developing policies and programmes that are not only bene_cial for citizens to improve their _nancial stability but also for the overall growth of the economy. Besides this, a number of the governments _agship programmes, including Make in India, Start-up India, Digital India, the Smart City Mission, and the Atal Mission for Rejuvenation and Urban Transformation, are aimed at creating immense opportunities in India. Over recent decades, Indias rapid economic growth has led to a substantial increase in its demand for exports. In the medium run, increased capital spending on infrastructure and asset building projects is set to increase growth multipliers, and with the revival in monsoon and the Kharif sowing, agriculture is also picking up momentum. India has emerged as the fastest-growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships.

INDUSTRY OVERVIEW

India stood 10th worldwide with respect to overall quality infrastructure environment in the country. Indias high growth imperative in 2023 and beyond will signi_cantly be driven by major strides in key sectors with infrastructure development being a critical force aiding the progress. Infrastructure is a key enabler in helping India become a US$ 26 trillion economy. Investments in building and upgrading physical infrastructure, especially in synergy with the ease of doing business initiatives, remain pivotal to increase e_ciency and costs. Infrastructure is a crucial pillar to ensure good governance across sectors.

The governments focus on building infrastructure of the future has been evident given the slew of initiatives launched recently. The US$ 1.3 trillion national master plan for infrastructure, Gati Shakti, has been a forerunner to bring about systemic and e_ective reforms in the sector, and has already shown a signi_cant headway. Infrastructure support to nations manufacturers also remains one of the top agendas as it will signi_cantly transform goods and exports movement making freight delivery e_ective and economical.

India is yet to enhance its infrastructure to reach its 2025 economic growth target of US$ 5 trillion. The population growth and economic development requires improved transport infrastructure, including through investments in roads, railways, and aviation, shipping and inland waterways. Development of infrastructure has a multiplier e_ect on demand and e_ciency of transport and increases commercial and entrepreneurship opportunities. In June 2022, Minister of Road Transport and Highways, opened 15 national highway projects worth H13,585 crore (US$1.7 billion). Budget 2023-24 is complemented with continuation of the 50-year interest free loan to state governments for one more year to spur investment in infrastructure and to incentivize them for complementary policy actions, with a signi_cantly enhanced outlay of H1.3 lakh crore (US$ 16

billion). Under the National Infrastructure Pipeline (NIP), projects worth H108 trillion (US$ 1.3 trillion) are currently at di_erent stages of implementation. In November 2022, National Investment and Infrastructure Fund (NIIF) is set up as a collaborative investment platform between Government of India, global investors, multilateral development banks (MDB) and domestic _nancial institutions to facilitate investment across multiple sectors in India through an India Japan Fund. Also, Infrastructure Finance Secretariat is being established to enhance opportunities for private investment in infrastructure that will assist all stakeholders for more private investment in infrastructure, including railways, roads, urban infrastructure and power. There is a compelling need for enhanced and improved delivery across the whole infrastructure spectrum, from housing provision to water and sanitation services to digital and transportation demands, which will assure economic growth, increase quality of life, and boost sectoral competitiveness.

BUSINESS REVIEW

Simplex Infrastructures Ltd. is a civil engineering and construction contracting company. It o_ers designing, engineering and construction for various projects such as transportation, power, energy and utilities, buildings, marine, etc. It is one of the construction leaders in India for nearly 90 years having executed over 2600 completed projects spanning almost all the gamut of construction industry. The Company has been closely associated with the countrys infrastructure building and remains versatile in wide range of construction and infrastructure activity and enjoys expertise in project execution with consistent quality assurance, cost control and adherence to milestones in a safe environment as per customer requirements. The operations of your company have su_ered in last few years mainly due to general economic slowdown as well as actions and inactions by various Government bodies/authorities, including policy paralysis and various other factors beyond control of the Company or its management. The major clients/ customers of your Company are government bodies wherein the monies of the company are stuck since long and for which the claims of the Company are pending. The Company is under _nancial stress and defaulted in servicing its payment obligations including towards the banks and _nancial institutions (the "Lenders") who have extended various credit facilities to the Company. The Company could not come out of _nancial stress and the mismatch in the cash _ows was further widened with the non-release of sanctioned working capital credit facilities including Bank Guarantee limits. Due to the mismatch in the cash _ows, the Company has not been able to service its debts or meet the payment obligations to the Lenders. The Company is in need of funds to continue its operations as a going concern. The Lenders are in discussion for implementation of resolution plan for resolution of debt of the Company. If the resolution plan progresses, implementation of the same together with positive future growth outlook and expected realization of various contingent assets in the form of arbitration awards and claims, the management is con_dent of improving the overall _nancials of the Company.

Some of the key projects of the company during the year include:

A few of the projects secured during the year

Maintenance work for Udali to Hatikhali Section- 86.25 Km, Assam for NHAI

Civil Construction Package for Reheating Furnace Project and Rail Forging Plant Project, Raigarh Civil & Finishing Work for Cluster -G In "Shukhobristi", Newtown, Kolkata Piling, Civil Structural, underground piping and electrical works at Panipat for Indian Oil Corporation Ltd Construction of Rob and its approaches in Lieu of Level Crossing for Govt. of West Bengal, Bhimgarh

A few of the Projects completed during FY 2022-2023

Turnkey project for development of an international ship repair facility for Cochin Shipyard, Kerela Pumping Main for conveyance of treated water to di_erent blocks for Govt Of West Bengal, Directorate of Public Engineering, Falta, West Bengal Tirunelveli Sewerage Project -Phase III, Tamil Nadu Construction of Elevated Viaduct for Chennai Metro Rail Project, Tamil Nadu Four-laning of Dolabari to Jamuguri Section at Tezpur,Assam for NHAI

Charter Hire-Drilling rig, OIL India Ltd., Assam

OPPORTUNITIES

India is at the growth rudder with the infrastructure sector playing a signi_cant role in economic advancement of the country. The Government of India (GoI) has been focusing on initiating policies to ensure the creation of world-class infrastructure in a timely manner. The sector acts as a catalyst for economic growth as it also promotes the growth of related sectors such as townships, housing, construction, and building development projects. The infrastructure sector in India is predicted to grow at a CAGR of 8.2% by 2027. Signifying the need for robust enhancement of the sector, the Government has also allocated H10 Lakh crore in the Union Budget 2022-23. Indias goal of achieving a $5 trillion economy by 2025 can be met by promoting quality and time-bound development plans. GoI has launched the National Infrastructure Pipeline (NIP) along with other initiatives such as the Make in India and Production-Linked Incentives (PLI) schemes to boost the growth of the infrastructure sector. India plans to spend US$ 1.4 trillion on infrastructure through ‘National Infrastructure Pipeline in the next _ve years. A large focus of infrastructure investment has been on transportation, power, water, irrigation, all contributing to more than 80% of overall spending. With rapid urbanization, India has witnessed tectonic changes in its environment and demographics character, bringing the focus of the government on other sectors, viz. industrial, social, etc. There is a need for robust service delivery to ensure rapid economic growth, improved quality of life and enhanced industrial competitiveness, which o_ers immense opportunities for infrastructure companies. Indias Industrial Development Program at the National level is the most ambitious infrastructure program aimed at developing future industrial sustainable cities that can compete with the worlds top manufacturing and investment hubs. This will facilitate investment, foster innovation, create job opportunities, and build best-in-class infrastructure, leading to overall socioeconomic development to meet the larger national program of "Make-In-India". The program will contribute to accelerating economic development by stimulating employment and skill development and thereby increasing the sectors contribution to GDP.

Urban Infrastructures

Urbanization is an integral part of the process of economic growth. As in most countries, Indias towns and cities make a major contribution to the countrys economy. With less than 1/3 of Indias people, its urban areas generate over 2/3 of the countrys GDP and account for 90% of government revenues.

Urbanization in India has expanded rapidly as increasing numbers of people migrate to towns and cities in search of economic opportunity. Slums now account for 1/4 of all urban housing. The Smart Cities Mission is a major urban renewal program launched by the Government to develop and upgrade living conditions and infrastructure in selected 100 cities all over the country. Objective of the programme is to modernize cities by providing core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment and application of ‘Smart Solutions.

Urban infrastructure consists of drinking water, sanitation, sewage systems, electricity and gas distribution, urban transport, primary health services, and environmental regulation. Many of these services are in the nature of ‘local public goods with the bene_ts from improved urban infrastructure in a given city limited to the citizens living in that city. Today, India is on the move. The economic reform has unleashed a vast segment of investment and growth which is o_ering its citizens rich opportunities. All of this accounts for the fact that urban India is the engine of productivity and growth in the country. Fortunately, the Indian Government has recognized this fact and has been working towards the advancement of this propeller of growth.

The contribution from this sector has been 25.70 percent in terms of revenue during FY 2023 and the share in order book from this sector is 9.30 percent.

Building & Housing

The real estate sector is one of the most globally recognized sectors. It comprises of four sub-sectors - housing, retail, hospitality, and commercial. The growth of this sector is well complemented by the growth in the corporate environment and the demand for o_ce space as well as urban and semi-urban accommodation. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced e_ects in all sectors of the economy. In India, the real estate sector is the second-highest employment generator, after the agriculture sector. It is also expected that this sector will incur more non-resident Indian (NRI) investment, both in the short term and the long term. By 2040, real estate market will grow to H65,000 crore (US$ 9.30 billion) from H12,000 crore (US$ 1.72 billion) in 2019. Real estate sector in India is expected to reach US$ 1 trillion in market size by 2030, up from US$ 200 billion in 2021 and contribute 13% to the countrys GDP by 2025. Retail, hospitality, and commercial real estate are also growing signi_cantly, providing the much-needed infrastructure for Indias growing needs.

Simplex has been involved in this sector since 1950. The Company is engaged in the design and construction of high-rise infrastructure, comprising - multi-storeyed residential towers, institutional/IT Buildings, hotels, hospitals and mass housing projects. Simplex also forayed into construction of hotels. Simplex undertook cumulative construction projects across 20mn sq. ft. for some of the biggest developers in India. The Company expects to leverage its expertise in real estate development.

The contribution from this sector has been 25.90 percent in terms of revenue during FY 2023 and the share in order book from this sector is 33.80 percent.

Power – Transmission

Indias power sector is one of the most diversi_ed in the world. Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power, to viable non-conventional sources such as wind, solar, agricultural and domestic waste. Electricity demand in the country has increased rapidly and is expected to rise further in the years to come. In order to meet the increasing demand for electricity in the country, massive addition to the installed generating capacity is required. India is the third-largest producer and consumer of electricity worldwide, with an installed power capacity of 411.64 GW as of January 31, 2023.The Government of India has identi_ed the power sector as a key sector of focus to promote sustained industrial growth. In the Union Budget 2022-23, the government allocated US$ 885 million (H7,327 crore) for the solar power sector including grid, o_-grid, and PM-KUSUM projects, announced the issuance of sovereign green bonds, as well as conferring infrastructure status to energy storage systems, including grid-scale battery systems.The government plans to establish renewable energy capacity of 500 GW by 2030. Simplex constructed its _rst thermal power plant in 1960. And today Simplex has impressive credential in erecting all types of power infrastructures like thermal, hydel and nuclear as well as Ultra Mega Power Projects (UMPP).

The contribution from this sector has been 21.10 percent in terms of revenue during FY 2023 and the share in order book from this sector is also 19.00 percent.

Industrial Structures

Indias vision of a USD 5 Trillion Economy will signi_cantly depend on the growth of the Industrial sector. There are eight industrial sectors that are considered the core in India. The core sector makes up 40% of the Index of Industrial Production (IIP), making it a lead indicator of industrial activity. The core sector reported 8% growth in June 2022 from the Covid level, with a healthy performance from all the sectors, except steel and crude oil. With Industry 4.0 fast approaching, it is important to acknowledge the hurdles that exist in Indias industrial development, especially the core sector, since demand is exceeding the supply. One of the primary forces behind industrialization has been the use of metals. Steel has traditionally occupied a top spot among metals. Steel production and consumption are frequently seen as measures of a countrys economic development because it is both a raw material and an intermediary product. Therefore, it would not be an exaggeration to argue that the steel sector has always been at the forefront of industrial progress and that it is the foundation of any economy. Industrial structures such as steel and power plants have their own unique challenges. Simplex has helped to build Indias modern steel framework for SAIL, Tata, Jindal, Essar etc. Green_eld and modernization projects for cement, aluminum, copper, engineering, automobiles, petrochemicals, fertilizers, paper textiles, pharmaceuticals, chemicals and other industrial plants are also part of the companys portfolio.

The contribution from this sector has been 4.40 percent in terms of revenue during FY 2023 and the share in order book from this sector is 4.10 percent.

Roads & Bridges

National highways account for 2% of the total road network and carry over 40% of total tra_c. Highway construction in India increased at 17.00% CAGR between FY16-FY21. Despite the pandemic and lockdown, India has constructed 13,298 km of highways in FY21. In FY21, 13,298 km of the highway was constructed across India. The market for roads and highways is projected to exhibit a CAGR of 36.16% during 2016-2025. Almost 40% (824) of the 1,824 PPP projects awarded in India until December 2019 were related to roads. India has the second-largest road network in the world, spanning a total of 6.3 million kilometres (kms). This road network transports 64.5% of all goods in the country and 90% of Indias total passenger tra_c uses road network to commute. Road transportation has gradually increased over the 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.

The highways sector in India has been at the forefront of performance and innovation. The government has successfully rolled out over 60 projects worth over US$ 10 billion based on the Hybrid Annuity Model (HAM). HAM has balanced risk appropriately between private and public partners and boosted PPP activity in the sector.

The contribution from this sector has been 18.20 percent in terms of revenue during FY 2023 and the share in order book from this sector is also 30.70 percent.

Railways

The Indian railway system is regarded as the foundation and lifeblood of the economy. Indian railways span over thousands of kilometres practically covering the entire nation, making it the fourth largest in the world after the US, China and Russia. The Railways Board, which has a monopoly over the provision of rail services in India, is in charge of overseeing the whole infrastructure. Due to its low cost and e_ective operations, railways continues to be the most popular means of transportation for the majority of Indians when travelling long distances.

Indias railway network is recognized as one of the largest railway systems in the world under single management. The railway network is also ideal for long-distance travel and movement of bulk commodities, apart from being an energy e_cient and economic mode of conveyance and transport. Indian Railways is the preferred carrier of automobiles in the country. Government of India has focused on investing in railway infrastructure by making investor-friendly policies. It has moved quickly to enable Foreign Direct Investment (FDI) in railways to improve infrastructure for freight and high-speed trains. At present, several domestic and foreign companies are also looking to invest in Indian rail projects. Indian Railways is developing and creating technology in areas such as signalling and telecommunication with 15,000 kms being converted into automatic signalling and 37,000 kms to be _tted with ‘KAVACH, the domestically developed Train Collision Avoidance System.

Simplex partners the Indian Railways building rail infrastructure – rail tracks, station buildings, bridges and culverts across the country. Among its several strengths, it is the pioneer in automatic track-laying for high speed tracks. The company has recently completed 200km Gooty-Pullampet section. It has also been privileged to play a role in setting up almost all metro and light railway projects in major cities i.e. Mumbai, Delhi, Kolkata and Bangalore. It has recently completed 6 elevated stations for Kolkata Metros East West Corridor.

The contribution from this sector for FY 2023, both, in terms of revenue and share in order book is insigni_cant.

Marine

India comprises a signi_cant size maritime sector with 12 Major and 200+ Non-Major Ports situated along its 7500 km long coastline and a vast network of navigable waterways. The total cargo handling capacity of Indian ports is about 2400 mn tonnes per annum (MTPA). Ports in India handle approximately 95% (by volume) and 68% (by value) of Indias external trade. India is one of the worlds top 5 ship recycling countries and holds a 30% share in the global ship recycling market. The Ministry of Shipping strives to increase the overall port capacity to 3300+ mn tonnes per annum (MTPA) to cater to projected tra_c of 2500 MTPA by 2025. India has a merchant _eet of 1491 seagoing ships with total capacity of 13 Mn GT. The Indian ports and shipping industry play a vital role in sustaining growth in the countrys trade and commerce. The Indian Government plays an important role in supporting the ports sector. It has allowed Foreign Direct Investment (FDI) of up to 100% under the automatic route for port and harbour construction and maintenance projects. In FY22, all key ports in India handled 650.52 million tonnes (MT) of cargo tra_c. In Union Budget 2022-23, the total allocation for the Ministry of Shipping was H1,709.50 crore (US$ 223.31 million).

Marine structures are among the most challenging in construction engineering. Simplex is among the few companies with expertise in underwater piling including steel piling under adverse sea conditions.Since 1968, the company has been associated with building many of Indias major ports – Goa, Haldia, Vizag, Kochi, Mundra, Mumbai, Paradip, Adani and Dahej. It also has wide experience in building bridges across major rivers in Delhi, Madurai and Bhubaneshwar. Simplex has also marked another technical triumph of completing piling job for the 240 Meter high transmission tower in the turbulent waters of the river Hooghly at Raichak.

The contribution from this sector for FY 2023, both, in terms of revenue and share in order book is insigni_cant.

THREATS, RISKS AND CONCERNS

Construction business owners face serious risks on a daily basis. Each project is unique and individualized, with its challenges and outcomes. Risk can appear in any form and at any stage of the construction process. Lack of risk mitigation can result in threats of budget, pro_tability, e_ciency, and project schedules. The construction industry faces a skilled labour shortage, an aging workforce, and an in_ow of more inexperienced workers that are increasing injuries and accidents on job sites. Some of the common risks in construction projects are cost overrun, delay in completion, incompetent contractors, subcontractor default, environment risks, design error, socio political changes, safety hazards, unknown construction site conditions, poor project management, etc.

Therefore risk management in construction is very much about predicting the future and controlling risk in line with how a site develops. In most cases, risk on a construction site falls into these categories: Health & Safety – falls, trips, struck by vehicles or falling materials, handling materials Security – site access, theft of equipment, materials or documentation Public liability – injuries to passers-by and managing how the site is left overnight and at weekends Sub-contractors – consistency in training, documentation and procedures Acts of God – how these can damage or change the structure of a site Every construction project requires risk management in order to comply with basic health & safety requirements and for regulatory obligations. However, mitigating or reducing risk is often the most di_cult and therefore the weakest element of a risk management system. Construction projects can be complex, fast-moving and consequently high risk, and a lot of the complexity in terms of risk management comes in the number of people, equipment and changes that are involved.Identifying, analyzing, and managing risks are essential for the feasibility of a project. There are procedures in place that helps the Company to identify risk early.The major identi_ed risk areas for Simplex are tendering, project execution, and procurement of materials, _nance-liquidity related issues, foreign exchange transactions, market, interest rate & credit risk, personnel and IT. The Company also has a risk management Committee which evaluates the risks of the Company on a regular basis and corrective actions are taken as per the requirement. Simplex has a strong risk mitigation strategy which prepares the Company in case of an unforeseen circumstance. The Company adheres to a strict set of criteria when bidding on projects and entering into contractual agreements. This includes calculating margins based on the clients special demands, entering contracts with a close attention to detail, understanding owner objectives and validating every construction phase—from design through completion. The Company bids for projects in various verticals and geographies to keep its portfolio diversi_ed so as to minimize the risk which may evolve from any one sector, hires experienced professionals, updates technology, imparts regular training to employees how to work safely, factors in the escalation, contingency planning, before bidding which helps in keeping the risks at bay. Risks are inherent in construction industry and not all risks can be mitigated, however knowing how to deal with risks when it is encountered is critical to ensure that the construction phase of a project goes smoothly.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Internal controls are accounting and auditing processes used in a companys _nance department that ensure the integrity of _nancial reporting and regulatory compliance. Internal controls help companies to comply with laws and regulations, and prevent fraud. They also can help improve operational e_ciency by ensuring that budgets are adhered to, policies are followed, capital shortages are identi_ed, and accurate reports are generated for leadership. The performance of the system of internal control is assessed through ongoing monitoring activities, separate evaluations such as internal audit, or a combination of the two. Although monitoring procedures are part of the overall system of control, such procedures are largely independent of the elements they are checking. While e_ective monitoring throughout the organisation is an essential component of a sound system of internal control, the board cannot rely solely on embedded monitoring processes to discharge its responsibilities. The Company has an adequate system of internal control to ensure that the resources of the Company are used e_ciently and e_ectively; that all assets are safeguarded and protected against loss from unauthorized use or disposition; that all signi_cant transactions are authorized, recorded and reported correctly; that _nancial and other data are reliable for preparing _nancial information; and that other data are appropriate for maintaining accountability of assets. The internal control is supplemented by extensive programme of internal audits, review by management, documented policies, guidelines and procedures. Internal control is a material part of the Companys administration and management. The purpose of internal control is to ensure the reliability of the Groups _nancial reporting, e_ciency and pro_tability of operations and compliance with legislation and other regulations. Tools of internal control include policies and principles, guidelines, manual and IT system-based automatic controls, follow-up reports and inspections or audits.

HUMAN RESOURCE DEVELOPMENT

In construction, human resource is primarily concerned with ensuring that a project has su_cient human resources, with the correct skill-sets and experience, for the project to be successfully completed. The construction industry is one of the most complex sectors within which to manage people owing to transient workforce that may be made up of di_erent contractors and subcontractors. There is an increasing tendency for construction industry organisations to appoint sub-consultants and sub-contractors with skills suitable for particular projects, rather than making internal permanent appointments. This gives greater _exibility but can make training and long-term planning more di_cult. Sta_ turnover tends to be quite high on construction projects, personnel change as projects progress and di_erent skills and experience are required. HR managers have to be able to identify and document project roles and responsibilities and develop a plan describing the end-to-end processes that will be required on a project (or series of projects) in order to determine its human resource requirements.

The Company has in place a proper system for advancement of personal and professional skills, knowledge and abilities of employees and imparts training at all levels. The main target of human resource department is on fostering the workforce so that the company as well as employees can achieve their work goals and objective to maximum satisfaction. The company implements a planned development of human resources needed for the company to grow and actively support their employees in the voluntary development of their skills with the aim of achieving growth for both the company and our employees. Equipping employees with technical skills that are required to perform speci_c tasks with soft skills such as leadership, communication, time management and others actually enhances the performances of these individuals and ultimately bene_ts the organization in the long run. Manpower is the most important factor for Simplex and culture of training and manpower development within the organization con_rms within the minds of sta_ that they are worthy part of the construction company. Simplex enjoys a very low attrition rate as the employees have been associated with the Company for an average of 15 years. As on 31st March 2023, the Company has 1468 employees in its payroll which includes contractual, regular, trainees and job appointees. The Company takes adequate measures of safety at sites as well as its o_ces. E_ective HR in construction ensures the safe and timely completion of projects.

FINANCIAL PERFORMANCE FINANCIAL RATIOS

In accordance with SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to give details of signi_cant changes (change of 25% or more as compared to the immediately previous _nancial year) in key sector–speci_c _nancial ratios. There have been signi_cant changes in following key sector –speci_c _nancial ratios.

Particulars	Standalone			Consolidated
	2023	2022	Change in %	2023	2022	Change in %
Net Debt-
	20.75	6.84	203.36	19.63	7.10	176.48
Equity Ratio
Debt service
coverage	(0.06)	(0.09)	(33.33)	(0.02)	(0.12)	(83.33)
ratio (DSCR)
Return on
	(0.96)	(0.51)	88.24	(0.89)	(0.52)	71.15
equity ratio
Net Capital
Turnover	(1.66)	(7.31)	(77.29)	(2.10)	(7.58)	(72.30)
Ratio

The reason for such variance is as follows:

(i) Net-Debt Equity Ratio: decrease in Equity arising in account of increase in loss and increase in borrowings during the year (ii) Debt service coverage ratio (DSCR): increase in earnings before interest, exceptional item and tax available for servicing interest.

(iii) Return on equity ratio: increase in net loss and decrease in average equity during the year.

(iv) Net Capital Turnover Ratio: decrease in revenue from operations and average working capital

FUTURE OUTLOOK

The roadmap to Indias infrastructure is exciting and the new decade seems to be promising. More and more green and clean initiatives are happening across government bodies in major countries, especially, the Indian government has given the much-needed push to the infrastructure sector in the recent 2023 budget. India is looking at a US$ 5 trillion economy dream.India is now at a juncture where a huge investment in R&D for energy-e_cient and green fuel is much-needed. The Indian economy is well placed to grow faster in the coming decade once the global shocks of the pandemic and the spike in commodity prices fades away. With improved and healthier balance sheets of the banking, non-banking and corporate sectors, a fresh credit cycle has already begun, evident from the double-digit growth in bank credit over the past months. Indias growth outlook seems better than in the pre-pandemic years and the Indian economy is prepared to grow at its potential in the medium term.

Technological trends are shaping the future of construction. Every construction company today is convinced that technology is poised to impact the construction industry like never before. From cloud-based collaboration to robots and arti_cial intelligence – an incredible array of developments are helping or poised to help and improve the way buildings and infrastructure development happens in India. Facts indicate that by 2025 the countrys construction sector will be the third-largest in the world, behind China and America, with an overall value of $1 trillion, with construction output expected to grow on average by 7.1% each year. In this years budget, the government increased its expenditure towards infrastructure development by 20.9% from H4.9 trillion (US$75.9 billion) in its _nancial year.

The construction industry locally is fast embracing a centrally managed construction process – bringing design, manufacturing, material sourcing, and construction together into one streamlined system – thus making it possible to build high-quality, amazing building structures on time and more cost-e_ciently. The next few years are going to be the moment of reckoning for the construction industry to demonstrate its managerial, _nancial, and technical prowess to establish new benchmarks in construction management, construction quality, and imparting value addition to its products and services.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis report concerning our future growth prospects are forward looking statements, which are subject to a number of risks, uncertainties and assumptions that could cause actual results to di_er materially from those contemplated in such forward-looking statements. Neither our company, nor our Directors, nor any of their respective a_liates have any obligation to update or otherwise revise any statements re_ecting circumstances arising after this date or to re_ect the occurrence of underlying events even if the underlying assumptions do not come to fruit.