Chairman's Message

 

Dear Members and Shareholders,

I  have  immense  pleasure  in  presenting  the  Thirty  Fifth Annual  Report  for  the  year  ended  31st  March  2012  of  our Company.

During  the  year  gone  by,  the  global  economy  has  seen tremendous pressure and significant delay in the recovery process  with  possible  economic  tensions  spreading  to  the core  of  Europe  and  US.  The  Indian  economy  witnessed  a sharp  drop  in  the  investment  activities  coupled  with  RBI resorting  to  aggressive  monetary  policy  tightening  to control  inflation.  Surge of prices prevailed in almost all sectors resulting in high input costs. This was compounded by the banks increasing their lending rates.

Your  company  has  been  passing  through  the  financial turbulence  being  part  of  the  overall  sluggishness  in  the sector and the increase in the interest rates by banks has resulted in erosion of the profitability.

Your Company has also been hit by the sharp slowdown in the Indian economy and in particular the infrastructure sector. Key challenges are:

• Poor order inflows from new projects

• Slow pace of execution on existing projects due to several regulatory and environmental issues.

• Delays in decisions from various clients on contracts and variations, as well as delays on payments.

• Resultant elongation in working capital cycles and sharp increase in debt.

• Ballooning financial costs with liquidity drying up for various funding sources.

I am hopeful that the Government will take several steps in  the  coming  fiscal  year  to  correct  the  situation  and stimulate  the  recovery  process  for  the  sector,  and  the broader  economy.  However,  as  many  of  these  steps  will take  time  to  yield  results,  I  expect  that  the  coming  year will also be an extremely tough year for the industry.

It's a moment of great pleasure to inform you that Soma has commissioned its first solar power project of 1 MW capacity in Ropar, Punjab.  This  is  our  first  step  towards  green energy  and  a  stepping  stone  towards  many  more  such ecologically responsible projects that contribute towards a greener tomorrow. We are also glad to inform that this is our first power sector project to start generating revenue.

In our endeavour to complete challenging projects with the highest quality on time, we have added one more laurel by achieving completion of RCC works across Vaitarna River in record time. This is also the 9th fastest dam constructed in the world.

I have always believed that people driving the organization are far more important than anything else and I am a firm believer that developing future leaders with efficiency is in itself an accomplishment.  As  we  have  made  progress  in restructuring  the  organisation  into  specialist  divisions,  I expect that the organisation will rise to the challenge, and evolve strong leaders who will lead these divisions and your Company into the future.

As  part  of  our  corporate  social  responsibility  initiative, Swarna  Bharat-Soma  Institute  of  Technical  Training, developed by your Company in association with the Swarna Bharat Trust continues to provide basic training in various skill  trades  with  a  view  to  create  better  employment avenues  to  the  rural  youth  and  poorer  sections  of  the society  by  offering  free  training  besides  free  lodging &boarding for the duration of the training period.

I  express  my  sincere  gratitude  to  our  Shareholders,  Joint Venture  Partners,  Lenders,  Banks,  Financial  Institutions, our  Clients,  the  Central  and  State  Governments  and  other Regulatory Authorities/Agencies for their continuous support. I wish to express my appreciation to my colleagues on the board  and  our  employees  for  their  leadership,  dedication and relentless commitment.