Newtime Infrastructure Ltd Management Discussions

ABOUT NEWTIME INFRASTRUCTURE LIMITED

The Company commenced operations in India in July 1984 and was earlier into the development of information technology business with the name of Intra Infotech Limited and then it changed its name and main object to infrastructure business, seeing the immense growth in the sector and therefore is now into real estate development with a pan-India presence and operations spanning all key segments of the Indian real estate industry, namely the residential, commercial, and retail sectors. The Company s operations encompass various aspects of real estate development, such as land identification and acquisition, project planning, designing, marketing and execution.

Our Services: l Construction l Real Estate Development l Project Consultancy l Project Planning & Management ECONOMIC OUTLOOK

Global Economic Outlook

The global Infrastructure market accounted forUSD 3.1 Trillion in 2020and is expected to reachUSD 5.9 Trillion by 2028, growing at aCAGR of around 11%between 2021 and 2028.

Infrastructureis the facilities and systems that support the sustainable functionality of households and firms. Increased impetus to develop infrastructure in various country is attracting both domestic and international players. The private sector is emerging as a key player across various infrastructure segments, ranging from roads and communications to power and airports. In order to boost the construction of buildings in India, the Government of India has decided to come up with a single window clearance facility to accord speedy approval of construction projects.

Development of highways would be undertaken, including the development of 2,500 km access control highways, 9,000 km of economic corridors, 2,000 km of coastal and land port roads, and 2,000 km of strategic highways. FASTag mechanism encourages greater commercialization of highways, enabling the NHAI to raise more resources. It was proposed to monetize at least 12 lots of highway bundles of over 6,000 km before 2024.

Indian Economic Outlook

The Indian economy has risen from being 10th to the 5th largest economy globally. The per capita income has doubled and increased to 1.97 lakh in 9 years. Indian economy is expected to grow by 5.9% in FY 2023 24 and by an average rate of 6.1% over the next five years. The economy has been on a recovery path after the impact of the pandemic. US$ 5 trillion. The economy boost is only possible with the infra development at the forefront.

As the world economy finds itself poached by emergence and re-emergence of Covid, war in Ukraine and ensuing energy crisis, India s FY 2023 is all set to set the tone for making its economy self-sufficient and better equipped to bounce off the ill effects of a prospective recession. India has shown to be exceptionally resilient than many other major economies of the world, even if it is not impervious to economic downturns worldwide. With a stable political environment, vaccine and food security, digital ambitions, a strong regulatory structure for the financial sector, and above all a solid domestic consumption-based economy, India has a multitude of leverages at its disposal.

The infrastructure led development as envisioned in the 2023 Union Budget is beneficial not just for the infrastructure sector alone but is rather favourable for the holistic growth of the entire economy. The Indian economy has already risen from tenth to fifth in the world in terms of size and during times of adverse global economic setting. A 33 percent rise in infrastructure investment capital spending, or Rs. 10 lakh crores for 2023-24, or 3.3 per cent of GDP, is unprecedented in India s economic history and will substantially improve the economy.

Initiatives of Government

India is experiencing a blitzkrieg upgrade in its infrastructure, driven by increased government investment and development initiatives. There are significant advancements in India s transportation networks, including roads, railways, aviation, and waterways, and their impact on the country s economic growth. These infrastructure developments aim to enhance connectivity, reduce logistics costs, and position India as a global economic powerhouse. Fuelled by the ambitious PM Gatishakti National Masterplan for multi-modal infrastructure development, the new roads and railways will help India fulfil its ambition to turn into a $5 trillion economy up from $3.74 trillion currently (IMF, 2023). l Make in India Campaign: The main motive behind the campaign was to foster manufacturing within the country. By focusing on bringing worldwide investment for this sector, the campaign has further heralded the development of townships, roads, bridges, hospitals and other infrastructure. l Smart Cities Mission: Again, an influential move of the government to renovate and retro lift the urban cities, the smart cities mission was aimed towards building 100 such cities under the guidance of the Union Ministry of Urban Development, in collaboration with the respective State governments. l Real Estate (Regulation and Development) Act [RERA]: The introduction of RERA in 2016 with an intent to protect the interest of the homebuyers was a great move to help the latter recline a bit.

Nothing short of a game changer for the real estate sector, RERA since its primitive year, helped to revive the buyer s confidence and drive momentum in the real estate market. l Change in Capital Gains Tax Regime: Several amendments were made to the Capital Gains Tax structure which were meant to reduce the tax burden on the property sellers and simplify the movement of immovable assets. This was considered to be one of the greatest reforms to have an impact on the home owner s expenditure while disposing off the property.

BUSINESS OVERVIEW

Global Infrastructure Sector

Theinfrastructure sector in india has become an important metric for the economy, be it in terms of assessing development, generating employment or improving the quality of life for the citizens.

The current Government of India, under the stewardship of Hon. Prime Minister Shri Narendra Modi, has given special emphasis to this sector in recent times and with the existing mandate of the government, the focus will remain unchanged for the near future. With various government-funded infrastructure projects in the pipeline such as the Bharatmala Project, S, Bullet Train Project and the NextGen Airports for Bharat (NABH) Nirman, the paramount focus of the government is clear as it plans to target long term development with a holistic approach.

Indian Infrastructure Sector

The India Infrastructure Sector Market size is expected to grow from USD 186.24 billion in 2023 to USD 294.12 billion by 2028, at a CAGR of 9.57% during the forecast period (2023-2028).

Given the importance of the infrastructure sector for the economic development of a country, reports on cost overruns and delays resulted in disputes in recent years. Nevertheless, the construction industry and infrastructure projects looked towards an economic revival after the coronavirus (COVID-19) pandemic. These expectations were canalized through the National Infrastructure Pipeline (NIP), one of the biggest governmental initiatives in recent years.

The backbone of the Indian economy, the infrastructure sector, is essential to improving the nation s overall development. Other industry sub-segments include telephony, power, roads, ports, etc. India has to enhance its infrastructure to reach its 2025 economic growth target of USD 5 trillion. The National Infrastructure Pipeline (NIP), along with other initiatives like Make in India and the production-linked incentives (PLI) program, was launched by the government to promote the expansion of the infrastructure industry. Historically, more than 80% of the money spent on infrastructure in the country has gone into expenditures related to transportation, electricity, water, and irrigation. Significant infrastructure development requires a substantial inflow of investor funds.

OUTLOOK

Your Company believes that demand conditions in the infrastructure and real estate sector are exhibiting early signs of improvement, and signs of declining interest rates as well as renewed activity in the lending and public capital markets are expected to ease funding pressures. As Newtime Infrastructure continues to build on its core business of real estate development and construction, executing its operations and taking advantage of a potential revival in economic growth and its resultant positive effects on the growth of the company. the country s construction and are showing up investments in India. This is a positive sign and will open new areas of growth and development.

Strengths

Our Company has the following principle competitive strengths: l Positioned strategically to realize opportunities in the sector l Experience and end to end expertise in the Infrastructure Projects l Sustained investment in equipment and fixed assets l Professional Board and Management Team l Recognized industry leader in large civil construction and infrastructure projects l Track record of successfully completing complex projects l Pan India presence l Enduring relationships built on mutual trust and respect with our clients, sub-contractors, financial institutions and shareholders l Large pool of talented and skilled employees with low attrition rate l An inflation hedge is an economic term and it means when the currency of a country starts getting devaluing either because of the macro-economic factors or inflation. Then you invest your capital to protect inflation and investors interests.

This steady growth owes itself to the Company s unerring strategy of leveraging its core competencies and drawing heavily upon past experience. An effective combination of energy, excellence and endurance is evident everywhere, from the construction site to the administrative division. The result, a holistic growth pattern that has seen the company grows into a preferred choice for national projects.

Opportunities

Better Business Opportunities means better growth. In today s era, a lots of Growth opportunities are available to infrastructure, construction industry and the only need is to grab and act on them with perfect vision and mission. After analysis, broadly speaking, the following opportunities are available to the Company to achieve the desired position and goal. l Increasing Income Level

The economic growth in India contributed to increasing income levels. This, combined with trends of higher urbanization, increase in working age population and nuclear families, created greater demand for housing. Much of the demand was backed by easier availability of housing finance that often converted people from living on rent to having their own housing asset. l Rising Foreign Direct Investment Levels

FDI up to 100 percent allowed with the Government permission for development of township and settlements will provide opportunities in the sector. In view of shortage of housing for low income groups in major cities and town, in the union budget there are proposals to set up Credit Guarantee Trust Fund to ensure better flow of institutional credit for housing loans, allowing External Commercial Borrowing (ECB) for low cost affordable housing projects which are positive for the growth of housing sector. The infrastructure of India is also growing day by day so it adds to the better facility to different sectors which boost the real estate projects. l Expansion in organized retail sector

Concept of specialized malls is also gaining popularity with auto malls, jewellery malls, furniture malls, and electronic malls anticipated to be the part of the sector in the future. Several other factors, such as rising incomes, evolving preferences, emergence of nuclear families, tax incentives and home loans at competitive rates have been responsible for the growth in demand for homes and residential construction.

Threats

What needs to be determined is: l The proportion of real versus perceived risks. l The monetary quantification of risks. l The real import and the impact of a type of risk.

Risks, when indeterminate, are worse than assessed risks. The obvious outcome of the situation is that the Banks and Financial Institutions hesitate in lending to the operators of Construction Industry or alternatively lend in absence of authentic and reliable inputs. Either of the situations is detrimental to the overall growth of the industry and thus, the economy.

It is therefore of paramount importance that the present operating systems be substantially strengthened to provide comfort to the financial systems. Mitigation of risks is the all-encompassing requirement. Broadly speaking, Construction Projects face the following type of risks: ? Completion risk: Delays can be catastrophic to the projects as they can shoot up the project cost, expire the validity of the permits and increase the chances of facing environmental and political setbacks.

? Price risk: This is the risk that the price of the project s output might be volatile due to supply-demand factors. If new capacities are coming up or if there is likelihood of fall in demand of the project output, the price risk is high.

? Resource risk: This risk includes the non-availability of raw materials, manpower for the project operation. It also includes the risk that the raw material prices might move adversely.

? Technology risk: This is the risk that the technology used in the project is not sufficiently proven. ? Operating risk: This is a risk that the project operational and maintenance costs would escalate. It also includes the risk that the project will have operational problems.

? Political risk: This risk relates to matters such as increased taxes and royalties, revocations or changes to the concession, exchange controls on proceeds, forced government participation in shares and refusal of import licenses for essential equipment.

? Casualty risk: This is the risk of physical damage to the project equipment. It also includes liabilities to third parties on account of accidents at the project site.

? Environmental risk: Environmental risk can be show up in bad weather, continuous rainfall, landscape and many other. The construction process should be aptly planned to complete the major chunk of the onsite work in amiable environmental conditions.

? Permission risk: This is the risk that official clearances for the project may not be forthcoming or subject to expensive conditions.

? Exchange rate risk: This is the risk that the currency of sale of the project produce would depreciate with reference to the currency of the project loans. Even though the debt being rated might be Rupee denominated, the presence of foreign currency liabilities can decrease the debt service coverage ratio of the bonds in case there is adverse exchange rate movement.

? Project development risk: This is the risk that the project development might not take place in an orderly manner.

Risk Management and Internal Control

Newtime Infrastructure Limited has a defined Risk Management policy applicable to all businesses of the company. This helps in identifying, assessing and mitigating the risk that could impact the Company s performance and achievement of its business objectives. The risks are reviewed on an ongoing basis by respective business heads and functional heads across the organization. Company has Risk Management Committee consisting of Independent Directors and senior managerial personnel. On a quarterly basis, the Risk Management Committee independently reviews all identified major risks & new risks, if any, and assess the status of mitigation measures/plan. The internal financial controls for all the significant processes have been identified based on the risk evaluation in the business process and same have been embedded/ implemented in the business processes. These processes and controls have been documented. Professional internal audit firms review the systems and processes of the Company and provide independent and professional opinion on the internal control systems. The Audit Committee of the Board reviews the internal audit reports, adequacy of internal controls and risk management framework periodically. These systems provide reasonable assurance that our internal financial controls are designed effectively and are operating as intended.

To further strengthen the internal control process, the Risk Management Committee has documented control procedures covering all aspects of key financial and operating functions. The Company s internal control systems provide for: v Adherence to applicable accounting standards and policies v Accurate recording of transactions with internal checks, prompt reporting and timely action v Compliance with applicable statues, policies, listing requirements and Management policies and procedures v Review of capital investments and longer business plans v Periodic review meetings to guide optimum utilization of resources v Effective use of resources and safeguarding of assets The Audit Committee of the company reviews the effectiveness of internal control systems, and also provides timely updates on operating effectiveness and controls to senior management team. A Certificate signed by the Chief Financial Officer of the Company, forming part of the Corporate Governance Report, confirms the existence and effectiveness of internal controls and reiterates their responsibilities store port deficiencies to the Audit Committee and rectify the same.

Our auditors carry out periodic audits as per an agreed internal audit program. They bring to the notice of management, issues which require their attention and also highlight the severity of the issue. Corrective actions are the in place. The internal auditors report is reviewed by the Audit Committee and placed before the Board of Directors for their consideration.

FINANCIAL OVERVIEW

? Shareholder s Fund and Net Worth

There was no change in share capital of the Company during the FY 2022-23. The paid up equity share capital of your Company as on 31st March, 2023 was Rs.17,03,46000 /- (Rupees Seventeen crore three lakhs forty six thousands only) divided into 17,03,46000 Equity shares of the face value of Rs. 1/- (Rupees One only) each. Further, The 10% Non-Cumulative Redeemable Preference Shares of your Company as on 31st March 2023 was 39,45,000 of the face value of Rs. 10/-(Rupees ten only) each and the 1% Non-Cumulative Redeemable Preference Shares of your company as on 31st March 2023 was 20,00,000 of face value of RS.10/-(Rupees ten only) each.

? Discussion on Financial Performance l STANDALONE REVENUES

The Revenue from Operations is 339.19 Lakhs for the financial year 2022-23.

Profit/Loss before Tax: The Profit/Loss before Tax for 2022-23 is (156.27) Lakhs as compared to Loss before Tax of Rs. (2,641.64) Lakhs in 2021-22.

Profits/Loss after Tax: The Profit/Loss before Tax for 2022-23 is (156.27) Lakhs as compared to Loss before Tax of Rs. (2,641.64) Lakhs in 2021-22.

l CONSOLIDATED REVENUES

The Revenue from Operations is 339.19 Lakhs for the financial year 2022-23.

Profit/Loss before Tax: The Profit/Loss before Tax for 2022-23 is (197.56) Lakhs as compared to Loss before Tax of Rs. (2,679.59) Lakhs in 2021-22.

Profits/Loss after Tax: The Profit/Loss before Tax for 2022-23 is (197.56) Lakhs as compared to Loss before Tax of Rs. (2,679.59) Lakhs in 2021-22.

The other disclosures of the Financial Performance are provided in the Annual Report in details.

HUMAN RESOURCE

During the year, the Company delivered value to its customers and investors. This was made possible by the relentless efforts of each and every employee. The Company has developed a robust and diverse talent pipeline which enhances Newtime Infrastructure organizational capabilities for future readiness, further driving greater employee engagement. Our human resource program is focused on attracting the right talent, providing excellent on the job training opportunities, and finally giving them the growth opportunities consistent with their aspirations.

Employees are the key to achieve the Company s objectives and strategies. The Newtime Infrastructure Limited provides to the employees a fair equitable work environment and support from their peers with a view to develop their capabilities leaving them with the freedom to act and to take responsibilities for the tasks assigned. The Company strongly believes that its team of capable and committed manpower, which is its core strength, is the key factor behind its achievements, success and future growth. We are continuously working to create and nurture an organization that is highly motivated, result oriented and adaptable to the changing business environment. The industrial relations remained cordial during the year.

Cautionary Statement Forward Looking Statement

Statements in this Management Discussion and Analysis of financial condition and results of operations of the Company describing the Company s objectives, expectations or predictions may be forward looking within the meaning of applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised.

The Company assumes no responsibility to publicly amend, modify or revise forward-looking statements on the basis of any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company s operations include determination of tariff and such other charges and levies by the regulatory authority, changes in Government regulations, tax laws, economic developments within the country and such other factors globally.

Source: https://www.zionmarketresearch.com/report/infrastructure-market