I write to you at the end of yet another successful year at Era Infra
Engineering. Let me take you through some of the key events that
transpired during the year under review. After a short dip in growth
rates, the Indian economy bounced back to robust growth rates in the
year 2010-11.The GDP of the country grew at the rate of 8.6%, revealing
the resilience and the sustainability of the Indian economic growth
story. Sustaining this high growth will call for an enhanced
infrastructure, new economic initiatives and a more liberalised
economic regime.Today, we stand poised in front of an unprecedented
opportunity to join the ranks of developed countries in a few decades
and at the same time we are plagued by a dismal infrastructure, bottle
necks in the economy and a flawed economic landscape.
Making this transition will require conscious efforts in redrawing the
economic landscape, removing infrastructural bottlenecks and further
liberalising the economy. Thus, the Government has identified
infrastructure as one of the leading engines of growth and development.
Against this backdrop, your Company and its subsidiaries as an
integrated infrastructure development organisation would work
synergistically to build physical assets that will pave the way for the
future. Our business activities are organised around three divisions-
EPC, Design & Engineering, Equipment Management Divisions coupled with
two subsidiaries Era Infrastructure and EraT&D.
It is with immense pleasure and satisfaction to report the robust
growth achieved by your Company. With our focused efforts the year
2010-11 concluded with sales revenue of Rs.3828.90 crores and net profit
of Rs.246.83 crores. Fresh order inflows and the quantum of the Order
Book always determine your Company''s ability to thrive and grow.
Results on both these counts have been significant as your Company
achieved an impressive growth in order inflows for FY11. Consequently,
the order book position stood at an impressive Rs.10,422 crores. This
gives the Company clear revenue visibility over the next couple of
years. Margins have, yet again, registered an improvement and your
Company is hopeful of sustaining margins at a level close to this,
despite volatile commodity prices and competition.
Engineering Procurement & Construction
Today, with the Government''s cumulative spending of Rs.2,14,000 crore in
the infrastructure development domain, there is a palpable sense of
optimism in the industry. This optimism is reflected in our increasing
EPC order book position which includes orders across diverse sectors
such as power, roads/highways, aviation, railways, metro, refinery,
social infrastructure and industrial construction.
Now we seek more projects from the metro line development, large scale
housing projects, power transmission and distribution projects. In the
year under review, apart from procuring several big ticket orders your
Company bagged its biggest order. Valued at Rs.1723 crores, it is an EPC
contract for 4 laning of Bareilly-Sitapur section in Uttar Pradesh
under the DBFOT pattern.
Looking forward, we seek to expand our EPC contract to foreign shores
and are actively scouting projects in Middle East and Africa. Apart
from our traditional emphasis and presence in the power, urban
infrastructure, commercial complex, housing and industrial as well as
institutional sectors, we have laid emphasis on expanding our presence
in the domains of steel, healthcare ad oil and natural gas, each of
which are vital to India''s future development.
Design & Engineering Division
Design & Engineering is an integral aspect of everything that we do in
our business. Our Design & Engineering division acts as a central pool
that handles the entire Group''s work in these areas. It is staffed by
senior, experienced and exceptionally talented top management, and
supported by a dedicated team of middle management and engineers. The
division will not only provide state-of-the-art solutions to all the
engineering challenges within the Group but at the same time will
function as an independent profit centre, by providing solutions to
clients across the globe. Pre-engineered buildings, heavy steel
structures, highways & bridges, power plants, metro projects, RCC
structures & multi-storied real estate projects would form the key
focus areas for this division.
Equipment Management Division
The increase in the infrastructure development automatically triggers a
demand for construction equipment both in the internal as well as the
external context. Builders and construction companies are constantly
seeking to expand their capabilities, and leasing equipment for a build
project is a lucrative option as compared to investing in capital
expenditure. For companies with a large equipment bank like ours, this
is an ideal way to encash idle machine time and earn revenues. The
equipment leasing business of your Company has been a robust revenue
earner and would continue to do so in the years to come.
The division has been able to encash on the burgeoning demand for
equipment from the North and the East of the Country and it has entered
into several long term tie-ups with companies such as Shapoorjee
Pallonji & Co., L&T EEC Division, McNally Bharat Alpine, Samsung and
ACC to name a few.
Looking forward, your Company seeks to make significant investments in
this division with a perspective to capture accelerated growth.
Subsidiary Review Era Infrastructure
As India''s infrastructure related ambitions grow, the Government finds
it increasingly difficult to fund the slew of projects that are
required. Current thinking is in favor of BOT projects that are done in
the nature of a Public Private Partnership. This leverages the power of
the private sector to raise funding and handle large projects. Your
Company''s BOT subsidiary is a dedicated unit that was set up to handle
these kinds of projects.
With an increased thrust on the power generation sector, there is a
need for Transmission and Distribution network to grow simultaneously
to deliver more power to the people. Era T&D undertakes turnkey
projects that help lay power lines which will prove to be the lifelines
for future development.
Proactive in service of our stakeholders
We seek to proactively manage our relationships with our stake holder
communities to mutual benefit. To our shareholders, we are committed to
deliver ever increasing valuations and returns, to our employees we
offer enhanced career building opportunities, to the communities we
deliver infrastructure for a better tomorrow and to the industry and
business in the geographic areas we operate in we offer the possibility
of a bright future.
I end this note by reiterating our whole hearted commitment to this
vision and would take this opportunity to thank our Board of Directors
for the advice, guidance and mentoring they have provided us in our
attempt to build the lifeline for tomorrow.
Chairman & Managing Director