Company Overview
Being a Leading Consultancy provider in the field of Architectural & Engineering
services to Government departments and Public and Private sector undertakings, the
Companys vision is to deliver cost-effective innovative and sustainable infrastructure
solutions for a greener future.
Our strategic objective is to deliver world class consultancy services to its valuable
Clients at affordable cost in align with the firms core values- Client Value, Honesty,
Integrity and Transparency.
We have successfully offered consultancy services for the development of various
infrastructure facilities which involve development of various types of buildings along
the shore. The projects include: large span warehouses, various Technical Buildings,
Office Buildings, Process Design and Bridges. We also offer Principal Engineering
Consultancy Services for the marine structures like wharfs, jetties. We have rich
experience in designing facilities like explosive storage buildings, blast resistant
structures, tunnels, underground storage facilities etcetera.
(a) Industry Structure and Developments
Introduction
This COVID-19 pandemic has impacted the entire Indian economy and SSIDC is no exception
to this. The COVID-19 virus pandemic has given unanticipated and extraordinary challenges
to the global economy and to the people. The Government has taken steps for containing the
spread of COVID-19. Research on vaccination, medicinal cure and preventive methods are
being undertaken, the success of whom would bring the economic activity to normalcy soon.
SSIDC has well adapted Work from Home model. Increased focus on remote operations and
paperless transactions is being given. Digital platforms are being utilized for Meetings /
Reviews /Approvals. With the lifting up of restrictions regarding the lockdown, partial as
well as work from home has been efficiently adapted in the company. The additional
measures on financial and economy of the country by RBI and Government of India would
provide energy to the construction industry and public spending to come out of the impact
of this pandemic.
In the year 2020, All orders received for the Consultancy comprising of major
contributions in inflows which include orders from Government of India, Ministry of
Defence for preparation of DPRs, Medical college and Hospital project at Amalapuram for
state government of Andhra Pradesh, NDT and Rehabilitation measures for the AP school
buildings, Establishment of new factory at Ibrahimpatnam for Bharat Electronics Limited
Hyderabad in Telangana, and other industry expansion projects in around Hyderabad.
We are confident that we will emerge out stronger and continue to remain one of the
best consultants in engineering and architectural consultancy segment and would continue
to contribute positively in the growth of the nation.
APPROACH TO ENGINEERING & CONSULTANCY SERVICE INDUSTRY ANALYSIS
Analysis of Engineering & Consultancy Service Industry needs to be approached at
both macro and micro levels, whether for domestic or global markets. Engineering &
Consultancy Service Industry forms part of Consultancy Service Sector at a macro level.
Hence, broad picture of Service Sector should be at preface while analysing the
Engineering & Consultancy Service Industry.
Market Size
Even before the pandemic, India had been heading towards an economic slowdown owing to
demand contraction. GDP growth in FY 2019-20 has sequentially fallen from 5.8% in Q4 FY
2018-19 to 5% in Q1 2019-20, 4.5% in Q2 2019-20, 4.7% in Q3 2019-20 and further to 4.2% in
Q4 2019- 20. In an effort to stem this slowdown, government announced a slew of
interventions last year, the most important of them being a substantial cut in corporate
tax rate from 30% to 22% announced in September 2019. This reform has positioned India as
a more attractive destination, with tax rates being aligned with its Asian peers.
Indias FDI inflows in FY 2019-20 have remained strong at around USD 68 billion, which
is up by 10% YoY. Further, the country has continued its upward journey on the World
Banks Ease of Doing Business rankings, and jumped 14 positions to be at 63rd position
from 77th position previous year, primarily on account of more efficient building permit
processes and the process for insolvency resolution. The higher ranking acknowledges the
focused efforts put in by the government and improves perception about doing business in
India. Further, on a bright note, after more than a decade Indias current account turned
surplus by 0.1% of GDP in Q4 2019-20 as compared to a current account deficit of 0.7% GDP
for the same period last year, mainly fuelled by software services income, inward
remittances and lower oil prices. The year 2019-20 also witnessed a major change in
monetary policy stance from neutral to accommodative guided mainly by low inflation and
low GDP growth. During the year, repo rate was cut from 6.25% in April 2019 to 4.40% in
March 2020. On Insolvency and Bankruptcy code (IBC), of the total 3,774 cases filed since
IBC came into force, 43% have been resolved till date. However, in line with the fall in
GDP, industrial activity did contract during 2019-20. Index of Industrial Production (IIP)
registered a fall of 0.8% as compared to a rise of 3.8% in 2018-19. IIP for
Infrastructure/ Construction goods also fell 4% during the year as compared to a 7.3% rise
during the previous year. On the positive side, National highway construction registered
an increase of 20% over previous year. Additionally, while Indian Railways witnessed
strong revenue growth, the power generation capacity also rose at a healthy pace with
significant addition of renewable energy capacity.
On the COVID-19 front, India being one of the most populous countries in the world may
find itself in a vulnerable spot. Given the negative impact of COVID-19 on the countrys
economic activities, IMF has forecasted a GDP contraction of 4.5% for FY 2020-21. The
pandemic has aggravated an already weak demand scenario. This is inspite of several policy
reforms undertaken by the government. Infrastructure Initiatives announced For India,
investments in infrastructure equal to 1% of GDP will result in GDP growth of atleast 2%
due to multiplier effect on growth across other sectors (S&P Global Ratings, 2016).
Recognising the role of infrastructure in driving the growth of the economy, starting with
the Union budget February 2020, the Government launched the National Infrastructure Policy
(NIP) for 2020-25. Under the policy, INR 100 Lakh crore of investment in infrastructure
was envisaged. The scheme is expected to be funded by Central and State governments (39%
allocation each) and remaining 22% by the private sector. Areas to be covered under NIP
include housing, logistics, modern railways, airports, clean energy, safe drinking water,
etc. Under the policy, 100 more airports shall be added under the UDAN scheme. Further, in
a major relief to Indian Inc., the government abolished dividend distribution tax.
(B) OPPORTUNITIES AND THREATS:
Our Strengths include expertise in infrastructural designing consulting services,
Vintage with the Defence and other organizations, High Value Order Book, Experienced
Management Team, Promoters and Board of Directors.
The threats posing for us are: Problem of out-dated Technology, Working capital crunch
may affect the profitability of the company, and Changes in Government Policies.
(C) SEGMENT-WISE OR PRODUCT WISE PERFORMANCE
The Company has single segment. The performance of the company can be analyzed on the
basis of the Audited Financial Statements for the financial year 2019-20 annexed with this
report.
(D) OUTLOOK
Indias requirements on defence are catered largely by imports. The opening of the
Defence sector for private sector participation will help foreign Original Equipment
Manufacturers (OEMs) to enter into strategic partnerships with Indian companies. This will
enable them to leverage the domestic markets as well as aim at global markets. Besides
helping in building domestic capabilities, it will also bolster exports in the long term.
Favourable government policy which promotes self-reliance, indigenisation, and
technology upgradation. The policies also aim at achieving economies of scale, including
the development of capabilities, for exports in the defence sector.
(E) RISKS AND CONCERNS
This section lists forward-looking statements that involve risks and uncertainties. Our
actual results could differ materially from those anticipated in these statements as a
result of certain factors. Our risks and concerns are as follows:
Economic slowdown or other factors may affect the economic health of the government and
industries where our revenues are concentrated. A large part of our revenues is dependent
on our top clients, and the loss of any one of our major clients could significantly
impact our business.
Intense competition in the market for detailed engineering services could affect our
win rates and pricing, which could reduce our share of business from clients and decrease
our revenues and / or our profits.
Our success depends largely upon our highly-skilled technical professionals and our
ability to hire, attract, motivate, retain and train these personnel. Our success depends
in large part upon our management team and key personnel and our ability to attract and
retain them.
Our failure to complete fixed-price and fixed-timeframe contracts, or transaction-based
pricing contracts, within budget and on time, may negatively affect our profitability. Our
work with governmental agencies may expose us to additional risks.
Our reputation could be at risk and we may be liable to our clients or to regulators
for damages caused by inadvertent disclosure of confidential information and sensitive
data.
(F) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate and efficient internal control systems that provide protection
of all the assets against losses from unauthorized use and for appropriate reporting of
transactions. The Company has implemented proper controls which are reviewed at regular
intervals to ensure that the authenticity of the transactions.
(G) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
FINANCIAL PERFORMANCE:
Capital Structure:
The Paid-up Share Capital of the Company as on 31st March 2020 is Rs. 14, 17, 03,500
divided into 141, 70,350 Equity Shares of Rs.10/- each fully paid up.
Other Equity:
The Reserves and Surplus of the company as on 31st March 2020 stand at Rs.
36,02,10,785/- as compared to Rs. 33,55,69,670/- in the previous year.
Sundry Debtors:
Sundry debtors increased to Rs. 27, 98, 19,406/- as on 31st March 2020. These debtors
are considered good and realizable.
Loans and Advances:
Long Term Loans and Advances is Rs. 1, 03, 35,131 as against Rs. 80, 91,470/- in the
previous year. Short Term Loans and Advances is Rs. 7, 04, 98,935/- as against Rs.5, 95,
45,531 /- in the previous year.
Current Liabilities:
Current Liabilities as on 31st March 2019 is Rs.8, 56, 32,415/- as against Rs. 7, 41,
95,889/- in the previous Year.
OPERATIONAL RESULTS:
Turnover:
During the financial year 2019-20, the turnover of the Company was Rs.25,23,22,230/- as
against Rs.28,05,18,955/- in the previous year and income from other sources as on 31st
March 2020 was Rs.20,59,318 /- as against Rs. 39,39,241/- in the previous year.
Depreciation:
The Company has provided Rs.1, 35, 39,170/- for depreciation during the financial year
2019-20 as against Rs. 117,05,570/- in the previous year.
Provision for Tax:
The Company has provided for tax Rs.1, 37, 03, 802/- in the financial year 2019-20 as
against Rs. 237, 36,587 /-in the previous financial year.
Earnings per Share:
The Earnings per Share of the Company as on 31st March, 2020 is Rs. 2.13 per share for
Face Value of Rs. 10 as against Rs. 4.41 /- per share for Face Value of Rs.10 in the
previous year.
(H) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT INCLUDING
NUMBER OF PEOPLE EMPLOYED
The Company believes that the Companys growth and future success depend largely on the
skills of the Companys workforce, including executives and officers, as well as the
designers and engineers and the attraction of critical skills. The Companys focus is on
identifying gaps in its employees competencies and preparing employees for changes in
competitive environments, as well as to meet organizational challenges.
Our culture and reputation as a leader in architectural and engineering consultancy
services and project management services for the last three decades with goodwill from
both government and private sectors enables us to attract and retain some of the best
talent.
Human capital
Our employees are our most important assets. We believe that the quality and level of
service that our professionals deliver are among the highest in the architectural and
engineering infrastructure services industry. We are committed to remaining among the
industrys leading employers.
The Company has a mix of both experienced with 20 plus years in the industry as well as
others with 10 plus and some with 2 to 3 plus years experience which gives us fresh lease
and extra edge to the competitors. As on 31st March, 2020 we had 97 employees in total.
The key aspects of our HR practice include recruitment, training and development, and
compensation.
(I) DETAILS OF SIGNIFICANT CHANGES (KEY RATIOS)
| DESCRIPTION |
FY 2019 |
FY 2020 |
CHANGE |
| Debtors turnover |
1.24 |
0.91 |
-27% |
A |
| Interest Coverage |
4.71 |
7.08 |
50% |
F |
| Current Ratio |
5.73 |
4.34 |
-24% |
A |
| Debt Equity Ratio |
0.08 |
0.09 |
13% |
A |
| Operating Profit Margin |
30% |
18% |
-40% |
A |
| Net Profit Margin |
22% |
11% |
-50% |
A |
| Return on Net Worth |
13.09% |
0.06% |
-100% |
A |
| A - Adverse |
F - Favourable |
Reasons for significant changes:
• Due to increase in Short term Borrowings, there has been significant change in
the Debt Equity ratio and Interest coverage when compared to F.Y 2019.
• Debtors Turnover has declined due to the limited flow of revenue from government
clients due to the prevailing Covid-19 Pandemic.
• Profit has declined by 50% since invoicing for March is delayed which has
impacted on returns.
|
For and on behalf of the Board of Directors |
|
S.S. Infrastructure Development Consultants Limited |
|
Sd/- |
|
Satyanarayana Sundara |
| Date: 26.11.2020 |
Chairman & Managing Director |
| Place: Hyderabad |
DIN 02062896 |
+91-9892691696
