SRM Contractors Ltd Management Discussions

BUSINESS OVERVIEW

We are an engineering construction and development company engaged primarily in the construction of roads (including bridges), tunnels, slope stabilisation works and other miscellaneous civil construction activities in the Union Territories of Jammu & Kashmir and Ladakh. We undertake construction works both as an EPC contractor and on an item rate basis for infrastructure projects. Our Company also undertakes sub-contracting assignments of infrastructure construction projects. We have a track record of successful execution of road, tunnel and slope stabilization projects in the difficult terrain of Union Territories of Jammu & Kashmir and Ladakh and we, thus, believe that we have developed the expertise and know-how to undertake infrastructure construction projects in difficult terrains. Our Company has emerged as a key player in infrastructure construction industry in the Union Territories of Jammu & Kashmir and Ladakh and has developed technical capabilities to execute projects in hilly / challenging terrain in the region (Source: D&B Report).

We are an ISO 9001:2015 certified company and are also registered as class A contractor with Public Work (R&B) Department, Jammu & Kashmir. We are pre-qualified to bid independently on projects, tendered by departments of governmental authorities and other entities funded by the GoI, of contract value up to 30,000 lakhs and 50,000 lakhs for EPC contracts pertaining to construction of roads (including bridges) and for construction of tunnel respectively. As a result of the growth of our road and tunnel construction business as well as the recent government initiatives and support to develop the infrastructure of union territories of Jammu & Kashmir and Ladakh, we have further forayed into executing other infrastructure projects such as standalone bridges, larger slope stabilisation works and other miscellaneous civil construction activities in order to capitalise on such rising opportunities. Recently, we have also been awared with a contract for slope stabilization work in the state of Uttrakhand.

As an EPC contractor, the scope of our services includes detailed engineering of the project, procurement of construction materials, plant and machinery, construction and execution of the project and its operation and maintenance in accordance with the contractual provisions. Our manpower, resources and fleet of machinery and equipment, together with our engineering capabilities, enables us to execute a large number of projects simultaneously. We believe that our resources, quality of work and project execution skills have enabled us to enhance our relationships with existing clients and helps us to further secure projects from new clients.

We undertake contracts independently or whenever required, through our project-specific joint ventures with other infrastructure and construction entities when a project requires us to meet specific eligibility requirements in relation to certain large projects, including requirements relating to particular types of experience. Our Company also undertakes sub-contracting assignments from third party major infrastructure and construction entities.

Our order book in terms of value of contracts, including subcontracting assignments, was 1,19,931.33 lakhs as on January 31, 2024, 83,469.37 lakhs as on March 31, 2023, 25,788.32 lakhs as on March 31, 2022, and 43,257.33 lakhs as on March 31, 2021. Among the twenty-one (21) infrastructure construction projects that we are currently executing, eleven (11) projects aggregating to a total contract value of 72,056.00 lakhs relates to road construction, five (5) projects of total contract value of 25,821.50 lakhs relates to tunnel construction, 4

(four) projects of total contract value of 20,388.80 lakhs relates to slope stabilisation works and one (1) project of total contract value of 1,665.64 lakhs relates to other construction activity.

SEGMENTAL REVIEW AND ANALYSIS

Your Company was having more than two decades of experience in infrastructure and civil construction work. Your company is mid-size private sector company engaged In the business of Construction of Road projects on Bill of Quantities (BOQ) and EPC basis.

Your Company continues to operate in three business segments only i.e., Road and Highway Construction projects, Trading and Quarry Mining. Road and Highway Construction project plays a major role in the core business of our company. We are proud to say that since last few years we are making more than 100 Kilometer Lane every year.

We are specialised in construction of all type of roads like Four Lane Highway, Two Lane Highway, State Highway, Major District Road. We are also involved in roads for Urban Development Town Planning Schemes and also Resurfacing & Reconstruction of roads in City as well. We have done mining works for various clients at our own Mines at Vadagam, Gujarat. In these mining project the mines are almost 100 ft below ground level and million tons of aggregate has been produced from this project so far.

OUTLOOK

Post pandemic, demand for Black trap, Roads and Bridge Construction and its related products has gone up. Increased penetration of organized retail sector, growing population and rising income levels are likely to drive demand for construction projects.

The rapid deterioration of the global economic outlook following the pandemic and Russia-Ukraine war has severely impacted demand and margins. The major focus of the industry will be on cost cutting measures, improving productivity and quality and reduction in wastage.

RISK AND CONCERN

Construction sector is viewed as a service industry. It generates substantial employment and provides growth impetus to other manufacturing sectors like cement, bitumen, iron and steel, chemicals, bricks, paints, tiles etc. whose combined value is Rs.1, 92,000 crores annually. The construction equipment market is valued at Rs.1, 05,000 crores.

Risk in Construction needless to mention, with huge money, comes the company of big risks. Construction is a high-risk business. Or is it? This is a classic dilemma, which haunts every participant in the business. The Project owner, construction companies, consultants, bankers and financial institutions, vendors & suppliers and even the service providers, each has his own fears of facing risks in the conduct of business. The magnitude of the risks is indeterminate at times. What needs to be determined is:

a. The proportion of real versus perceived risks. b. The monetary quantification of risks. c. The real import and the impact of a type of risk.

Construction, as a large economic activity, has now started drawing attention from several quarters, and work in right earnest has begun on such aspects, which, though vital, remained neglected all this while.

Evolution of techno-commercial grading systems, Institutional Systems for performance surveillance, designing of Insurance/ non-insurance backed products, and several other such services and support systems are being designed and practiced to continuously improve the performance of the Industry as a whole.

		By order of the Board of Directors
	-sd-	-sd-
Place : Jammu	PUNEET PAL SINGH	SANJAY MEHTA
Date : 03/09/2024	WHOLE TIMEDIRECTOR	MANAGING DIRECTOR
	DIN: 09740051	DIN: 02274498