Jayant Infratech Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENT:

India has been making significant strides in the development of its railway infrastructure, particularly in the area of overhead electrification. Overhead electrification involves the use of overhead wires to supply electric power to locomotives, which can significantly reduce emissions and improve efficiency compared to diesel-powered trains. In recent years, the Indian government has made a concerted effort to modernize the countrys railway infrastructure and increase the percentage of electrified tracks. In 2021-22, a record 6,015 km of railway track was electrified, bringing the total electrified track in the country to over 45,000 km. The Indian Railways has set a target of achieving 100% electrification of its broad-gauge tracks by 2023, which will require the electrification of an additional 19,000 km of track. To achieve this goal, the government has also been exploring the use of renewable energy sources such as solar and wind power to supply electricity to the railways. In the Union Budget for 2023-24, a record Rs. 2.4 lakh crore has been allocated for the railways, which includes funding for the electrification of additional tracks. This funding is expected to further accelerate the pace of electrification in the country and help the Indian Railways achieve its goal of 100% electrification. In addition to the focus on electrification, the Indian Railways has also been working on a number of other initiatives to modernize its infrastructure and improve efficiency. These include the adoption of new technologies such as high-speed rail and the implementation of measures to improve safety and security on trains. Overall, the Indian governments focus on the modernization and electrification of the countrys railway infrastructure is expected to have significant benefits in terms of reducing emissions, improving efficiency, and boosting economic growth.

2. OVERVIEW OF BUSINESS

Incorporated in the year 2003, we are engaged in the field of Railway Infrastructure Development involving design, drawing, supply, Erection and Commissioning of 25KV, 50Hz Single Phase Traction Overhead Equipment. The key clients of the Company include various zones of the Indian Railways like Eastern Railway, South-Eastern Railway, South-East Central Railway, Northern Railway, East Coast Railway, North Frontier Railway, East Central Railway, Central Organisation for Railway Electrification (CORE) as well as large Public and Private Sector. Our major work encompasses electrification of new & existing Railway tracks helping nation to reduce dependability of fossil fuels thereby reducing the carbon print foot. Our services include the concept to commissioning of Railway Infrastructure right from design to energization. We have completed hundreds of Kms of electrification & erected several traction substations in a span of 20 years. Our Company is based in Chhattisgarh, and this gives us an opportunity to offer our services to coal mines. Usually, coal mines in Chhattisgarh have to develop a siding which is used to load and transport coals from mines to its respective customers. A siding, in rail terminology, is a low-speed track section distinct from a running line or through route such as a main line, branch line, or spur. It may connect to through track or to other sidings at either end. Sidings often have lighter rails, meant for lower speed or less heavy traffic, and few, if any, signals. We have over the years developed many siding in the state to facilitate coal mines. The Company has kept its focus on the Electrification sector of the Railways keeping in view the vast scope of work in the existing and the untapped areas. As a result, the Company has been able to build its resources capable of executing large, medium, and small electrification projects in the most efficient and timely manner. The Company first made forays into a highly technical field, overhead electrification of the Indian Railways and through series of events over the successive years made rapid and spectacular progress in its chosen field of work and with dedication, teamwork, commitment, discipline and astute planning and strategy, scaled newer heights of progress and glory.

3. OPPORTUNITIES AND OUTLOOK

The Indian overhead electrification sector presents significant opportunities for companies operating in this space, as the government focuses on modernizing and electrifying the countrys railway infrastructure. With the governments ambitious goal of achieving 100% electrification of the railway network, the sector is poised for significant growth in the coming years. There are several factors driving the growth of the overhead electrification sector in India, including the need to reduce dependence on fossil fuels and improve the efficiency and reliability of the railway network. Additionally, with the increasing focus on reducing carbon emissions, electrification of the railway network is a key priority for the government. In terms of opportunities for companies in the overhead electrification sector, there are several large-scale projects currently underway, including the construction of dedicated freight corridors in the eastern and western regions of the country. These corridors are expected to significantly improve the movement of goods across the country, and the electrification of these corridors presents a significant opportunity for companies in this space. Other opportunities for companies in the overhead electrification sector include the electrification of existing railway lines and the construction of new high-speed rail routes, which are expected to be a key focus for the government in the coming years. Overall, the outlook for the Indian overhead electrification sector is positive, with significant opportunities for growth in the coming years. Companies operating in this space are likely to play a key role in the electrification of the railway network and are well-positioned to benefit from the governments focus on modernizing and electrifying the countrys railway infrastructure.

4. SWOT ANALYSIS

A) Strengths:

1. Reduces dependence on fossil fuels: Overhead electrification systems are powered by electricity, which can be generated from renewable sources like solar and wind, reducing the countrys dependence on fossil fuels.

2. Lower operating costs: Overhead electrification systems have lower operating costs compared to diesel or petrol-powered systems.

3. Reduced emissions: Electric trains produce fewer emissions than diesel or petrol trains, leading to a reduction in air pollution.

4. Improved speed and reliability: Overhead electrification systems enable trains to run faster and more reliably due to increased power and improved traction.

B) Weaknesses:

1. High initial cost: The installation of overhead electrification systems requires significant capital investment, which can be a challenge for cash-strapped railway organizations.

2. Requires reliable power supply: Overhead electrification systems require a reliable power supply to operate effectively. Any disruption to the power supply can result in delays and cancellations.

3. Maintenance costs: Overhead electrification systems require regular maintenance to ensure they are functioning correctly. The cost of maintaining the system can be high.

4. Limited infrastructure: Currently, the overhead electrification system infrastructure in India is limited and requires expansion to be able to cater to more trains.

C) Opportunities:

1. Increased investment: The Indian government has announced plans to invest significantly in railway infrastructure, including overhead electrification systems, presenting an opportunity for the sector to grow.

2. Reduced carbon emissions: The Indian governments focus on reducing carbon emissions presents an opportunity for the adoption of overhead electrification systems, as they are a clean energy solution.

3. Reduced fuel costs: Overhead electrification systems can help reduce fuel costs, which can help railway organizations reduce their operating costs.

D) Threats:

1. Political and regulatory environment: Changes in the political and regulatory environment can impact on the adoption of overhead electrification systems, making it difficult for the sector to grow.

2. Limited availability of trained professionals: The installation and maintenance of overhead electrification systems require specialized skills and expertise. The limited availability of trained professionals can impact on the sectors growth.

3. Maintenance challenges: Overhead electrification systems require regular maintenance, and any disruption in the maintenance schedule can impact the systems performance, resulting in delays and cancellations.

5. MITIGATION OF RISK /RISK MANAGEMENT

The Board identifies and categorizes risks in the areas of operations, finance, marketing, regulatory compliances, and corporate matter. Confirmations of compliance with appropriate statutory requirements are obtained from the respective units/divisions. The Internal Auditor expresses his opinion on the level of risks during the audit of a particular area and reports to the Audit Committee. The Company is also taking necessary short term and long-term steps, expanding customer base, forward integration and energy management etc. The Company has already taken effective steps for raw material security in the long-term.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an effective and reliable internal control system commensurate with the size of its operations. At the same time, it adheres to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The efficacy of the internal checks and control systems is validated by self-audits and internal as well as statutory auditors.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Share Capital:

During the financial year 2022-2023, the company experienced significant developments in its share capital structure. Through an Initial Public Offer (IPO), the company successfully raised Rs. 6,19,08,000 by issuing 9,24,000 Equity Shares with a face value of Rs. 10/- each, at a price of Rs. 67/- per share, including a premium of Rs. 57/- per share. The equity shares were listed on BSE-SME Board on July 13, 2022. In addition to this, the Authorised Share Capital of the Company was raised from Rs. 50,00,000/- to Rs. 10,00,00,000/- divided into 1,00,00,000 Equity Shares of Rs. 10/- each, approved through an Ordinary resolution at the Extra-Ordinary General Meeting held on 20th February 2023. Moreover, during the year 2022-2023, the company issued 64,71,124 bonus shares to its shareholders, leading to an increase in its paid-up share capital from Rs. 3,23,55,630 to Rs. 9,70,66,860. The distribution of bonus shares was completed on March 10, 2023. As of March 31, 2023, the paid-up Equity Share Capital of the company stood at Rs. 9,70,66,860, comprising of 97,06,686 Equity Shares with a face value of Rs. 10 each, reflecting the impact of the increased Authorised share capital and the issuance of bonus shares.

Reserves and Surplus:

The Reserve and Surplus of Company is Rs. 1678.26 lacs as on period ended on March 31, 2023.

Total Income:

The Company has earned total Income Rs. 4,357.53 lacs as on period ended on March 31, 2023.

8. CORPORATE GOVERNANCE

In addition to the applicable provisions of the Companies Act, 2013 with respect to Corporate Governance, provisions of the SEBI (LODR) Regulation, 2015 will also be complied with the extent applicable to our Company immediately upon the listing of the Equity Shares on the Stock Exchange. Our Company stands committed to good Corporate Governance practices based on the principles such as accountability, transparency in dealings with our stakeholders, emphasis on communication and transparent reporting. We have complied with the requirements of the applicable regulations, in respect of corporate governance including constitution of the Board and Committees thereof.

The Corporate governance framework is based on an effective Independent Board, the Boards

Supervisory role from the executive management team and constitution of the Board Committees, as required under law. The Board functions either as a full board or through the various committees constituted to oversee specific operational areas. As on the date, there are Five Directors on our Board out of which one third are Independent Director. Our Company is in compliance with the corporate governance norms prescribed under the Companies Act, 2013, particularly, in relation to appointment of Independent Directors to our Board and constitution of Board-level committees. Our Company undertakes to take all necessary steps to continue to comply with all the requirements of the SEBI(LODR) Regulation, 2015 and the Companies Act, 2013.

9. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

Your Company follows a policy of building strong teams of talented professionals. People remain the most valuable asset of your Company. The Company recognizes people as its most valuable asset and the Company has kept a sharp focus on Employee Engagement. The Companys

Human Resources is commensurate with the size, nature, and operations of the Company.

10. CAUTIONARY STATEMENT:

This report contains forward- looking statements based on the perceptions of the Company and the data and information available with the company. The company does not and cannot guarantee the accuracy of various assumptions underlying such statements and they reflect

Companys current views of the future events and are subject to risks and uncertainties. Many factors like change in general economic conditions, amongst others, could cause actual results to be materially different.