Univastu India Ltd Management Discussions.

1. OPERATIONS OF THE COMPANY AND BUSINESS OVERVIEW:

The Company is an ISO 9001, 18001 & 14001 certified Construction Company with PWD class 1A unlimited, CIDCO Class 1A unlimited certificate. It provides integrated engineering, procurement, and construction services (EPC) for civil & structural construction and infrastructure sector project. The Company was incorporated on 29 April, 2009 and started construction activities in the same year. Head office of the Company is located in Pune and currently project sites are located in state of Maharashtra and Goa.

Currently construction activities being undertaken by us include civil & structural construction and infrastructure projects, which are awarded by various government and private agencies and departments.

The Company is also engaged in trading of construction materials. Our trading products majorly include steel, cement and electrical material.

Our main focus area includes:

• Civil construction projects, which include structures such as Metro Stations, Sports Complex project (indoor and outdoor sport stadiums), Hospital, multipurpose hall, commercial structures, Hospitals, Cold Storages, Educational Institutions, mass housing projects.

• Water supply and drainage project.

• Road and Bridge projects.

The Company also subcontracts specific construction and execution work related to projects to third party contractors. Sometimes the Company executes the project throughout third party vendor contractor to whom we subcontract construction and other execution work related to project. In last few years the dependence on third party contractor is reducing continuously as the Company has been continuously developing and strengthening its own execution capabilities and working continuously to strengthen its infrastructure, enhance its presence and building the capabilities to execute end-to-end project on our own.

2. Company Performance:

During the year under review, your Company earned revenue of Rs. 5150.06 Lacs (previous year Rs. 10260.70 Lacs) and the Profit before Tax is at Rs. 1295.55 Lacs (previous year Rs. 552.68 Lacs) and Profit after Tax is at Rs. 949.38 Lacs (previous year Rs. 414.54 Lacs).

During the year; the Company followed effective cost management in COVID-19; which resulted the Company to save sensibly on resources; also, the work in progress in respect of Metro Project in Mumbai was realized and certain long pending claims as per the contract were not acknowledged till then were raised in March 2021 with the Principal Contractor, after the Government guidelines to help contractors due to COVID-19 disaster which resulted in increase in profitability of the Company.

3. BUSINESS STRENGTHS AND STRATEGIES:

The Company has developed strong credentials for undertaking projects of various sizes in all the areas of its business operations. The Company is a becoming a renowned brand in building, industrial and infrastructure sector, with a capability to capitalize on opportunities. With its deep expertise and knowledge, the Company is able to compete in challenging and complex projects.

Univastu has a strong clientele ranging various government departments. The business provides civil construction, mechanical, electrical and firefighting engineering services for all major industries and project types. The Company has accumulated human capital, establishing a committed and competent team.

Continuous focus on building professional and skilled employees enabled the Company to create an efficient and extremely valuable workforce. The Company is committed to the welfare of its workmen, providing up skilling and other training to the workmen, besides enhancing the living conditions at the project sites in order to attract and retain skilled workmen.

Engineering excellence is a core area and the company is committed to value engineering and innovative solutions in a collaborative approach with its Clients. Procurement excellence is another core area and the company is committed to a robust vendor relationship management practice to maximize the value proposition. Zero fatality approach in Safety is practiced through near miss incident reporting, transparency and behaviour based safety.

4. INFRASTRUCTURE SECTOR IN INDIA:

The outbreak of COVID-19 had brought the construction industry to a standstill from the beginning of FY 2020-21, owing to a strict lockdown imposed by the government. With the reverse migration of labour, workforce shortages severely affected projects.

The prolonged lockdown not only hampered economic activity but also affected consumer sentiment. The construction industry suffered due to labor shortage at project sites, liquidity crisis, rising project costs and dwindling demand. Despite being adversely impacted by the COVID-19 pandemic and severe supply chain issues, deep fiscal strains and limited public-private partnerships, the infrastructure industry remains bedrock of opportunities for the Indian economy.

The construction industry is a key driver of economic growth and is pivotal for shaping the future of a country. It is a diverse sector consisting of roads, highways, irrigation, water supply, sanitation, railways, ports, airports, smart cities and construction. The sector is anticipated to play a crucial role in fulfilling Government of Indias vision of Aatmanirbhar Bharat. The government is therefore encouraging various schemes and policies such as the National Infrastructure Plan and has announced the Affordable Rental Housing Complex (ARHC) scheme along with other investments in the sector. It is expected to open up new and exciting opportunities to players in the Infrastructure and construction space.

The construction industry in India is expected to record a CAGR of 15.9%. Further, the government has allowed 100% FDI under automatic route in completed projects for operations and management of business constructions. This is anticipated to provide much needed impetus to the sector.

5. MANAGEMENT SYSTEM:

The Company continues to focus on efficiencies in project execution in terms of lower costs, optimized overheads, on time schedule and higher turnover per person, while maintaining a strong focus on managing working capital in a tight cash environment without compromising in Quality of the Project. It has an on standards stipulated by ISO 9001:2015 for Quality.

The Company got the latest certification ISO 9001:2015 and ISO 14001:2015 for Environment standard and BS OHSAS 18001:2007 for Occupational Health and Safety. The Company strongly believes in delivering quality products to its customers and has established Quadra (ERP) module at all sites for monitoring quality delivery of project and functioning of company.

The Company has put in place an effective monitoring process to fulfill its commitment to significantly reduce impact on the environment during project execution. Customer feedback is sought every quarter on the companys performance on various parameters of project delivery.

6. INDIAN ECONOMY:

The Indian economy contracted in FY 2020-21, due to the cascading effect of the pandemic on a weak economy burdened by a sluggish demand and poor financial sector.

The high frequency economic indicators slipped into red in FY 2020-21, primarily due to lockdown induced restricted mobility and social distancing protocols. Barring few essential services, economic activity across the country remained suspended and it disrupted the regional production network.

Economic activity resumed gradually amidst a phase wise unlocking and continued threat of the virus. The GDP reached its inflection point in the subsequent quarter, riding on the back of pent-up demand and slew of policy actions by the Government and the central bank.

As a direct consequence of the economic slump, job losses, high unemployment and stressed household income, private consumption and investment declined. To boost consumer sentiments and private investment, the incumbent government deviated from its fiscal consolidation path to increase consumption which has a multiplier effect on the economy.

With the rollout of a large-scale vaccination programme and revival of major economic indicators, the Indian economy is anticipated to grow by 9.3% in FY 2021-22 and stabilize at 6.9% in FY2022-23. However, the recent surge in covid-19 cases and the resulting lockdowns cast a dark shadow over economic recovery.

7. MANAGEMENT SYSTEM:

The Company continues to focus on efficiencies in project execution in terms of lower costs, optimized overheads, on time schedule and higher turnover per person, while maintaining a strong focus on managing working capital in a tight cash environment without compromising in Quality of the Project. It has an on standards stipulated by ISO 9001 for Quality, 45001 for Occupational Health and safety management system and 14001 for Environment Management System.

The Company got the latest certification ISO 9001:2015 and ISO 14001:2015 for Environment standard and BS OHSAS 45001:2018 for Occupational Health and Safety. The Company strongly believes in delivering quality products to its customers and has established Quadra (ERP) module at all sites for monitoring quality delivery of project and functioning of company.

The Company has put in place an effective monitoring process to fulfill its commitment to significantly reduce impact on the environment during project execution. Customer feedback is sought every quarter on the companys performance on various parameters of project delivery.

8. COVID-19 OUTBREAK AND PROSPECTS OF THE COMPANY:

As members are aware, since March 2020, the World has been seeing the impact due to COVID-19 Pandemic which has in turn affected economic activities in the Country. The Central and State Governments have taken various significant measures including national and local lock downs besides various other regulatory strictures to contain the virus.

impact on the performance of the company due to outbreak of covid-19:

The Company earned lower revenue during the Financial Year 2020-21, due to the COVID-19 impact. The recommended protocols and guidelines issued by the Central and State Governments as well as Regulatory bodies are being completely adhered to.

To ensure safety and wellbeing of the employees, the Company continues to follow precautions against COVID-19 which include work from home policy, regular communication with employees, online meetings, travel restrictions and health advisories.

The Construction sites and the Head office are operational and following measures are taken to comply with government guidelines on COVID 19:

• Thermal screening at entry points;

• Heightened cleaning and sanitizing the premises and desktops and publicly touchable areas on regular basis and availability of sanitization materials at entry point;

• Maintenance of social distancing and restriction on outsiders/visitors to enter the office premises;

• Enforcing wearing of masks for employees and visitors;

• Ban on all but critical travel;

Against all these backdrops, the Company is collaborating with our clients on delivering out commitments. Most of our projects sites are active post lockdown with due precaution and safety measures. The business operations have recommenced on a limited scale post relaxation of lock down.

The company has taken a series of measures to mitigate these crises including safety and security of all staff and labors at project sites by providing work from home policy, online meetings, travel restrictions, health advisory; also controlling overheads at all operation levels, controlling working capital requirement with cash flow planning and measured project execution.

The Company will continue to monitor any material change to the future economic conditions and consequential impact on the financial results.

In the short term, the Company is reducing discretionary expenditure and reallocating resources. As part of these mitigation measures, the Company is stopping or deferring various expenditures that will not be effective in the current environment.

9. CONCERNS AND THREATS:

The Company bids for Government infrastructure projects and most of government expenditure on infrastructure are tender based. Most of the tenders have two bids technical and financial bids. The bids are normally awarded to those who qualify the technical bid and bid lowest amount. Thus, the business of Company and financials are dependent on the ability to secure tenders on profitable basis. However, the Company has expertise in the infrastructure field, strengthening its understanding of project bidding. Also an increase in net worth has enabled it to qualify for larger projects.

The major raw materials are cement and steel. Many of the Companys contracts are to be completed in more than 12 months. The long duration of such contracts exposes the Company to the changes in the price of key raw material. The increase in prices of these raw materials increases our expenditure hence our profitability to the authority for non-full filing our commitment.

The Company requires skilled and technical staff for all projects. The Company takes up various projects based on availability of right mix of manpower. Thus, our growth is likely to be affected by the ability to attract and retain skill and technical manpower.

There is always a risk of not able to complete a project within the established time frame. For the purpose, the Company opts for selective bidding. The interplay of knowledge and hands-on commitment has accelerated workflow. The company enjoys an attractive record in timely project completion.

Sometimes, people constraints may affect operational robustness, for that the Company has an effective control system along with performance-driven HR metrics and a dynamic organizational structure to enhance people retention and competent project delivery.

One more factor is inability to manage working capital which can affect the Companys reputation. In order to avoid that, the Company selects to bid for projects with central and multi-lateral funding that ensures that projects are sustained, in turn protecting the companys cash flows.

Also, prolonged realization can affect the revenue generation of the company. Here, the Company aims for bottom-line growth, enhancing margins and business sustainability. The Company has selected to bid for projects with an attractive hurdle rate, strengthening viability.

Our company is regulated by the Companies act and some of its activities are subject to supervision and regulation by statutory and regulatory authorities. It is therefore subject to change in Indian law, as well as to changes in regulation and government policies and accounting principles.

At the current scenario of COVID-19 pandemic, risk of spread of virus and infection to the staff on site, office and labor. However, strong control measures are put in place with the strict follow of government instructions regarding safety precautions as described in point above as well as vaccination of all the employees was actively done.

10. OPPORTUNITIES AND CHALLENGES:

infrastructural spending: Infrastructure is one of the major contributors of economic development. The Government of India has increased infrastructural spending in the past few years and investment in this segment is likely to increase. This is anticipated to directly complement growth of the construction sector.

Technological advancements: Advanced technology has improved supervision and maintenance of ongoing projects. Constant innovations and state of-the-art technology is expected to further benefit the industry in future.

Government initiatives: National Infrastructure Pipeline (NIP) To develop world class infrastructure in India and achieve the target of becoming a US$5 trillion economy by 2025, the central government has envisioned the ambitious NIP which aims to bring about significant changes to the countrys infrastructure.

atmanirbhar Bharat: The government aims to offer impetus to indigenous products and services and is striving to make India a self-reliant country in the coming years. The country is still recovering from the impact of the global pandemic and several challenges continue to impair the Indian construction sector.

Shortage of labour: The lockdown compelled labourers to move out of cities and head back home. Despite the easing of restrictions and gradual recovery of economic activity, many havent resumed work and labourers continue to be apprehensive about moving back to cities. It is likely to cause labour scarcity in the construction sector.

Rising Material Costs: The price of raw material has increased significantly due to massive supply chain disruptions during the pandemic.

11. INTERNAL CONTROLS SYSTEM AND THEIR ADEQUACY:

The Company has adequate internal controls system to ensure operational efficiency, accuracy and promptness in financial reporting and compliance of various laws and regulations. The internal controls system is supported by the internal audit process. An Internal Auditor has been appointed for this purpose. The Audit Committee of the Board reviews the Internal Audit Report and the adequacy and effectiveness of internal controls periodically.

12. subsidiary company and consolidated financial statements:

As on 31 March 2021, the Company has one subsidiary, i.e. Univastu HVAC India Private Limited.

The Consolidated Financial Statements of the Company and its subsidiary, prepared in accordance with generally accepted accounting principles (GAAP) and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 2013. The significant Accounting Policies which are applied have been set out in Notes in the Financial Statement.

A statement containing the salient features of the Financial Statement of the subsidiary company is attached to the Financial Statements of the Company in Form AOC-1.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the Financial Statements along with relevant documents of the Company and its subsidiary, are available on the Companys website, viz., www.univastu.com.

The Financial Statements of the subsidiary and related detailed information will be kept for inspection by any member at the Registered Office of the Company and will also be made available to the members on demand, at any point of time.

BRIEF HIGHLIGHTS of BUSINESS of SUBSIDIARY COMPANY:

Univastu HVAC India Private Limited ("Subsidiary Company") incorporated on 11 October 2018 with paid up capital of Rs. 1,00,000. The Subsidiary Company is in the business as construction contractors, Project contractors, Project executors, contractors, traders, dealers, distributors, agents, designers, supervisors, consultants, advisors, surveyors and administrators of all types heating, ventilation, and air conditioning (HVAC).

During the year under review, Univastu HVAC India Private Limited earned an income of Rs. 67.94 Lacs (previous year Rs. 743.01 Lacs) and the Profit before Tax is at Rs. 17.72 Lacs (previous year Rs. 31.76 Lacs) and Profit after Tax is at Rs.11.85 Lacs (previous year Rs. 24.51 Lacs). Performance was subsidiary was affected due to COVID-19.

13. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS:

Key Financial Ratio : Pursuant to Schedule V(B) to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015], the details of changes in key financial ratio i.e change of 25% or more, as compared to previous year are stated below:

Key Financial Ratio 2020-21 2019-20 % change as compared to PY
Debtors Turnover (refer note 1) 0.77 0.19 296.09%
Interest Coverage Ratio (refer note 2) 3.42 2.30 49.02%
Net Profit Margin (%)(refer note 3) 0.19 0.04 384.18%

Note:

1. Debtors turnover has increased from primarily account of increase in receivables due to revenue booking in the last month of the FY i.e March 2021.

2. Interest coverage ratio has improved on account of higher profits margin and lower interest.

3. Net Profit Margin ratio increased on account of higher profit and effective cost management.

14. RETURN ON NET WORTH:

Details of change in Return on Net Worth as compared to the immediately previous Financial Year as follows:

Particulars Ratio as on 31 March 2021 Ratio as on 31 March 2020 % of Change Explanations
Net worth (Total income/Equity share capital 28.76 17.62 Refer Note No. 1

Note:

1. Return on Net worth has increased from 17.62 to 28.76 on account of increased margin during the year

15. SEBI REGULATIONS AND LISTING FEES:

The annual listing fees for the year under review have been paid to National Stock Exchange of India Limited, where your Companys shares are listed.

16. human resource

On a note of adapting deliberate and productive execution, HR at the Company is dealing with various business angles that ultimately help in successfully managing personnel and increasing workforce value. It is an eminent role of Human resources to inculcate organizations core values within and get the inner and outer force driven with zeal and passion. The team is consistently focused towards excellent and qualitative output, and is trained for the required technical and soft skills.

After completion of almost a decade plus year the company believes to hire the best force to make an outstanding Technical Team, moreover the organization has hired the skills and talents, considering competencies at its stem. The employee turnover has witnessed middling change, with an addition of team-players, giving an average highest count of 100 employees during the year. This year the Company has focused more to make our human resource more Smart and Digital

for and on behalf of the Board of Directors
Sd/- Sd/-
Mr. Pradeep Khandagale Mrs. Rajashri Khandagale
Chairman and Managing Director Non-executive Director
Place: Pune
Date: 24 June 2021