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Reliance Infrastructure Ltd.

BSE: 500390 Sector: Infrastructure
NSE: RELINFRA ISIN Code: INE036A01016
BSE 00:00 | 24 May 112.10 -2.25
(-1.97%)
OPEN

116.90

HIGH

116.90

LOW

111.20

NSE 00:00 | 24 May 111.90 -2.55
(-2.23%)
OPEN

116.40

HIGH

116.90

LOW

111.05

OPEN 116.90
PREVIOUS CLOSE 114.35
VOLUME 946508
52-Week high 488.50
52-Week low 96.75
P/E 0.56
Mkt Cap.(Rs cr) 2,948
Buy Price 111.75
Buy Qty 102.00
Sell Price 112.10
Sell Qty 126.00
OPEN 116.90
CLOSE 114.35
VOLUME 946508
52-Week high 488.50
52-Week low 96.75
P/E 0.56
Mkt Cap.(Rs cr) 2,948
Buy Price 111.75
Buy Qty 102.00
Sell Price 112.10
Sell Qty 126.00

Reliance Infrastructure Ltd. (RELINFRA) - Chairman Speech

Company chairman speech

My dear fellow Shareowners

It is with immense pleasure that I share with you the highlights of your Company'sperformance during the financial year 2016-17.

The Company over the past decade has firmly established itself as a well diversifiedcompany with strong presence across major segments of infrastructure businesses such asroads metro rail airports as also engineering procurement and construction (EPC)business by leveraging its core competence in building and managing world-classinfrastructure facilities. The Company is also a fully integrated entity in the entirevalue chain of generation transmission and distribution.

The Company has recently taken a series of strategic initiatives to pursue its visionof actively participating in the manufacture of defence equipment and systems. In thisshort span of time it has entered into several strategic partnerships with leading globaloriginal equipment manufacturers. This will help the Company establish joint ventures fortransfer of niche technologies and develop state-of-the-art equipment weapons and systemsindigenously. The Company is all set to successfully seize the humongous businessopportunities emerging in the defence sector in India with a view to achievingaccelerated growth.

We continue to make progress on monetisation of various assets. The Company completedthe sale of its equity stake in its cement special purpose vehicle (SPV) and is in theprocess of divesting part of transmission business. The Company actively pursues severalproject related disputes which are under various stages of arbitration. The Company haswon favourable arbitration awards relating to Delhi Airport Metro project and two TollRoad projects. The proceeds from the asset monetisation and arbitration awards will resultin significant debt reduction and help in unlocking value for the shareholders.

Performance Review

I wish to share with you the highlights of our financial and operational performance(consolidated) during the year 2016-17.

• Total Income of Rs. 28222 crore (US$ 4.4 billion)

• EBITDA of Rs. 8274 crore (US$ 1.3 billion)

• Net Profit of Rs. 1425 crore (US$ 220 million)

• Earnings per Share (EPS) of Rs. 54.18 (US$ 0.83)

• Cash Earnings per Share of Rs. 118.36 (US$ 1.83)

With a net worth of Rs. 23348 crore (US$ 3.6 billion) Reliance Infrastructure ranksamong the top performing Indian private sector companies in the country.

Power Generation

Our power generation plants with aggregate installed capacity of 941 MW continue todemonstrate significant improvement across major operational environmental and safetyperformance parameters. Our power plants are certified for Integrated Management Systemcovering Quality Environment Occupational Health and Safety Energy ManagementInformation Security Management Social Accountability Management and Asset ManagementSystem.

During 2016-17 Dahanu Thermal Power Station (DTPS) was conferred with the NationalAward by the Confederation of Indian Industry for excellence in energy efficiency IIPAIPower Award – 2016 as the best thermal power generator and Maharashtra EnergyDevelopment Agency (MEDA) award for excellence in energy management.

DTPS has completed the 1st cycle of Perform Achieve and Trade as per EnergyConservation Act 2001 and received 4591 Energy Saving Certificates (ESCerts) which canbe traded on Power Exchanges.

Power Transmission

Our Company being one of the leading private sector players of the country in thetransmission sector owns a project portfolio of over Rs. 4600 crore. The Mumbai PowerTransmission Division caters to the need of evacuation of power from DTPS and state gridto Mumbai utilities. The transmission lines connect Mumbai system at nine points with thestate grid. Our power transmission network has achieved System availability of 99.80 percent in 2016-17 much above the norm set by the regulator resulting in consistent availingof 100 per cent incentive as per regulations.

The Company is in the process of monetizing its transmission projects in Western RegionSystem Strengthening Scheme (WRSSS) and the Parbati Koldam Transmission project. A SharePurchase Agreement (SPA) has already been signed with Adani Transmission Limited for saleof 100 per cent stake in WRSSS Transmission Assets which is in the advanced stage ofclosure. The SPA for sale of our entire 74 per cent stake in Parbati Koldam TransmissionCompany Limited shall be executed upon receipt of approval from appropriate authorities.

Power Distribution

Mumbai Power Distribution Division being a state-of-the-art power utility network hasbeen distributing electricity over 9 decades in the suburbs of Mumbai. The Companyserves nearly 3 million customers using 21000 kms of cable network operatingdistribution network at 99.99 per cent reliability giving our customers one of the mostreliable power distribution networks in the country.

The Division has managed to reduce aggregate technical and commercial (AT&C) lossesto 8.26 per cent one of the lowest in the country.

Committed to deliver reliable and quality power supply and with a quest to introducemodern day technologies in its day to day processes this division is perhaps the onlyutility in the country to have optimized use of an integrated system of network planningand management. This division is also converting conventional grid into smart grid usingcompact communicable substations / receiving Stations while adhering to all statutorycompliances and Public Safety. This division has highest number of substations monitoredand controlled through remote locations.

Contributing to the Government's "Digital India" campaign this divisionoffers all services on customer's finger-tips through Internet Mobile App 24X7 Toll freePower Helpline number and the widest range of Payment Avenues. The division has presenceon social media such as Twitter YouTube Linkedin and has the highest Utility followerson facebook in the world.

The Company's social engagement programme Young Energy Saver (YES) campaign with 2lakh members has sensitized more than 6.5 lakh citizens and created a new landmark entryinto the Guinness Book of World Records.

The Scheme of Arrangement for transfer of the Company's Mumbai Power GenerationTransmission and Distribution Divisions Samalkot Power Station Division Goa PowerStation Division and Windmill Division received the approval of the Bombay High Court onJanuary 19 2017 subject to obtaining the consent of the lenders and regulatoryapprovals.

The EPC Business

The Engineering Procurement and Construction (EPC) Division currently focuses on EPCcontracts from various Infrastructure sectors including power transportation defence andother mega Infra development sectors. Backed by an extraordinarily talented work force andyears of experience in the field we employ state-of-the-art technologies in every facetof our EPC operation delivering superior value in engineering design and projectmanagement.

A Centre of Engineering Excellence has been formed to build Knowledge Capital in orderto enable the execution of large projects at optimum cost while ensuring high standardsof quality and strict adherence to timelines. Our EPC business has an order book ofapproximately Rs. 5960 crore as of March 31 2017. This year our division bagged neworders of Rs. 4386 crore including the prestigious EPC order for setting up two 250 MWlignite based Thermal Power Projects near Bikaner in Rajasthan and four-laning of about66-km stretch of National Highway between Vikkravandi to Pinalur-Sethiyahopu in TamilNadu.

Road Projects

Over the last decade we have emerged as one of the largest road developers on BuildOwn and Transfer basis with a portfolio of eleven projects at an aggregate outlay ofapproximately Rs. 11600 crore. We have urban centric roads in high traffic densitycorridors spread across six states in India and are one of the largest concessionaires ofthe National Highways Authority of India. We have achieved a 10 per cent increase in therevenue despite the impact of demonetisation during the year.

As part of our ongoing asset monetization plans and in line with the Government ofIndia's initiative to promote alternative means for long term financing our Companyformed an Infrastructure Investment Trust i.e. Reliance Infrastructure InvIT Fund (theTrust) to monetize the toll road assets of the Company. The Trust is registered with theSecurities and Exchange Board of India (SEBI) and shall hold assets of completed toll roadprojects. The Company is the Sponsor and Project manager of the Trust and Reliance NipponLife Asset Management Limited is the Investment Manager. The Investment Manager has filedthe draft offer document with SEBI for initial public offer of units representing anundivided beneficial interest in the Trust.

Metro Project

The Mumbai Metro Line 1 project covering Versova-Andheri- Ghatkopar corridor whichcommenced operations in June 2014 has served over 300 million passengers since inception.Since the launch of this Metro line there has been increase of around 16 per cent inaverage ridership. Mumbai Metro has emerged as the eighth densest metro corridor in theworld with an peak ridership of 3.8 lakh commuters per day as it is the fastest mode ofEast West connectivity in Mumbai. Mumbai Metro has adopted the ‘green initiative' ina big way by harnessing solar energy and switching to LED lights. Metro has tied up withPaytm and other mobile wallets to help commuters opt for cashless transactions. MumbaiMetro is the first and only Metro in the country to offer WiFi connectivity at all its 12stations and even inside the trains.

Mumbai Metro Line 1 was awarded the prestigious "Best Metro of the Year 2016"by Indian Merchants Chambers.

Defence Business

The Company is committed to developing a robust defence business contributingsignificantly to the national security and to be self-reliant in defence segment. In ashort span of about a year we could establish ourselves in the Indian defence industrywith several tie-ups with global equipment suppliers. We have joined hands with DassaultAviation of France as the key offset partner with respect to supply of 36 RafaelAircrafts. The offset contract at about Rs. 30000 crore is the largest ever offsetcontract of India. A separate joint venture (JV) company namely Dassault RelianceAerospace Limited – a JV with Dassault Aviation holding 49 per cent equity and theReliance Group holding the balance 51 per cent has already been incorporated for thispurpose. We are also at the advanced stage for a JV with Rafael Advanced Defence Systemsof Israel.

Reliance Defence and Engineering Limited (RDEL) has been selected by the US Navy forrepair and maintenance work of its 7th Fleet. With this milestone RDEL has achieved thedistinction of being the only shipyard in India qualified for complex repair andalteration of US Naval Ships. RDEL won multiple contracts for supply of new vessels to theIndian Coast Guard and maintenance / upgrade of Indian Navy warships.

We have entered into strategic partnerships with LIG Nex1 of South Korea Strata ofUAE DCNS and Thales of France and many other companies across the globe to address marketopportunities worth more than Rs. 100000 crore over the next 5-10 years. Havingestablished ourselves in the Naval and Aerospace domain we would be focusing on LandSystems opportunities in 2017-18.

Corporate Governance

Our Company has always maintained the highest governance standards and practices byadopting as is the norm for all constituent companies of the Group the "RelianceGroup – Corporate Governance Policies and Code of Conduct". These Policies andCode prescribe a set of systems processes and principles which conform to the highestinternational standards and are reviewed periodically to ensure their continuingrelevance effectiveness and responsiveness to the needs of investors both local andglobal and all other stakeholders.

Social Commitments

The Company continued to contribute actively to community welfare activities and tookup several initiatives and measures related to education and healthcare. As a responsiblecorporate the Company continued to undertake several initiatives to make a positiveeconomic social and environmental impact in the neighborhood of our power stations andother business units.

Our Commitment

Our founder the legendary Padma Vibhushan Shri Dhirubhai Ambani always emphasized theentrepreneurial principles of quality with quantity efficiency with equity enterprisewith excellence for improving the quality of life of Indians. We remain committed toupholding his vision and aim at creating even greater value for all our stakeholders.

Anil Dhirubhai Ambani

Chairman