2014-15 has been an important year for India for credible reasons.
On the one hand the country elected a majority government at the Centre after nearlythree decades leading to considerable optimism. On the other hand the economicfundamentals of the country began to strengthen with dynamism across all sectors of theeconomy. It is encouraging to note that the government has proactively identifiedinfrastructure creation and up-gradation as the key area of focus to accelerate the paceof India's 2.1 trillion dollar economy.
The year was also significant for the road infrastructure sector. After witnessing asharp decline in the BOT projects awarded for two successive years during the year we sawa gradual momentum in the projects awarded. During FY 2014-15 around 3060 kms of nationalhighways were awarded by NHAI compared to 1435 kms in the year before. The Ministry ofRoad Transport and Highways has announced an ambitious target to increase this rate to 30kms per day in next three years.
To achieve this objective the year saw the Government and the National HighwaysAuthority of India (NHAI) taking a series of steps to revive weakening private sectorinterest in road projects. The Government expanded its total budgetary allocation for thesector by 48% to Rs 42913 Crores. A few initiatives taken by NHAI include theintroduction of hybrid annuity model for awarding new projects re-drafting of the ModelConcession Agreement rescheduling of the premium payable by the concessionaire rebiddingof failed BOT projects and more clarity on the Exit policy for road projects.
We compliment the Government for identifying road infrastructure as a priority sectorand taking these critical steps. We are doing our bit in driving these initiatives to thelevel we can; and continue to extend our footprint to create new pathways of progress thatwill transform India.
During the year we won the project for operation and maintenance of the Mumbai-Puneexpressway Phase II the concession period for which is until December 2023. Morerecently we also received letter of award for a six laning BOT project of Agra-EtawahBypass section of NH-2 in Uttar Pradesh. This has enabled us to extend our footprint tothe eighth Indian state and strengthen our order book to touch around Rs 12631 Crores.Close to Rs 10770 Crores construction order book is to be executed over the next 3-4years which provides good visibility to our construction vertical.
During the year we saw strong surge in our BOT revenues owing to multiple factors.These factors include commencing of toll operations of new projects increase in trafficvolume and revision in the tariff rate for a few of the key projects.
Many of our projects saw tariff revision during the year. Talegaon - Amravati andJaipur - Tonk Deoli projects moved from partial-toll collection to full tariff after asubstantial portion of the projects was completed. Mumbai-Pune project saw strong 29%revenue growth helped by an 18% tariff revision effective from April 2014 and healthytraffic growth.
During the year we achieved financial closure for Solapur - Yedeshi project &Yedeshi - Aurangabad project by securing project finance of Rs 910 Crores and Rs 1756Crores respectively.
With execution picking up speed for Goa
- Kundapur Solapur - Yedeshi Yedeshi
- Aurangabad & Kaithal projects our revenues from construction business are set togrow. Also commensurate with more number of projects getting operational our tollrevenue will also grow.
As per the Company's dividend policy the Company has paid 40% dividend as interimdividends for the year.
During the year we raised Rs 440 Crores by offering around 5.7% shares to QIB. Withincreasing number of our BOT projects getting operational along with improving trafficvolume we expect to see continued growth in our cash flows from operations. This willenable us to sustain our growth momentum.
SEBI has now facilitated formation of Infrastructure Investment Trust under the SEBI(Infrastructure Investment Trusts) Regulations 2014. Your Company intends tosell/transfer its shareholding in its SPVs as may be permitted under SEBI Regulations& Concessioning Authorities' guidelines from time to time to the InfrastructureInvestment Trusts to enable generation of funds commensurate with valuation of itsholdings in the SPVs. This will help the Company to unlock value for growth of itsbusiness.
Before I conclude I would like to thank all our stakeholders for their consistentsupport and encouragement in our journey.
We will continue to seek your participation as we extend our footprint to create newpathways to progress and tap impending strategic investment opportunities.
Virendra D. Mhaiskar
Chairman & Managing Director