FY2015 was a year in which we braved various challenges and have come out stronger andwiser. We are determined as ever to deliver consistent and sustained value for ourshareholders. As Indias infrastructure sector continues to be at a crossroads wetoo have faced our fair share of angst. During the year we rose to the occasion and cameup with effective solutions for bolstering our balance sheet and improving our cash flows.With an efficient restructuring of our debt under the Joint Lenders Forum (JLF) mode and asuccessful QIP through strong investor support we are poised to emerge as a strong EPCand BOT company.
New wave of Optimism
With a new Government assuming office we felt a renewed wave of optimism within theIndustry. The Government expressed a keen desire to unblock the infrastructure pipelinethrough the public funding of stalled infrastructure projects. Moreover the Fiscal Budgetincluded US$11 Billion in increased commitments through Private Sector Enterprises forinfrastructure investment. In addition to this a new fiscal framework for the division oftaxes between the Central and State Governments was designed to empower the States toprovide much needed additional funding for infrastructure development. The PlanningCommission of India has proposed an investment of around US$ 1 trillion in the Twelfthfive-year plan (2012-2017) for the infrastructure sector which is double the allocationmade in the Eleventh five-year plan. Continuing partnership between the various levels ofGovernment in India continues to be an encouraging sign for the infrastructure sector inthe future.
Our BOt capabilities
We have achieved diverse execution capabilities through our EPC presence in 6 segments(Roads Bridges Buildings Railways Power and Water Infrastructure) and 13 states acrossIndia. Our focus to expand and build on our current capabilities has enabled us to expandand grow even during tough times.
In the BOT business we have an impressive portfolio of 11 BOT projects. Out of this 4BOT projects were made operational during FY2015. These include the Kopargaon AhmednagarTollways Pvt. Ltd.; the Patiala Nabha Maler Kotla project; Manor Wada Bhiwandi and theVasai Bhiwandi. Barring the Jaipur Ring Road Project all the other under-construction BOTprojects are projected to attain completion by June 2016 taking the total number ofoperational assets to 10. Once all the 10 BOT projects get operational our estimated tollrevenue will rise to approximately Rs. 13.0 Million per day. This will further rise toaround Rs. 17.0 Million per day once the 11th BOT asset becomes operational.These assets will imminently give us revenue growth and add to our bottom linesignificantly.
Rising to the challenge
Our mission continues to be to complete each project before time by optimally utilisingour technological strengths and domain expertise. We make the most of our capitalexpenditure by reusing it over multiple projects through our backward integrated model.This model helps us deliver improved margins and gain better control over projects andtheir execution without having to depend on external sources. Our cluster-led approachenables us to emerge as the lowest bidder in projects that are in close proximity to eachother.
With the marketplace posing multiple challenges we recalibrated our key businessstrategies. For FY2016 we are placing focus on liquidating certain BOT assets and use theadditional cash flows for our on-going assets. We aim to continuously pursue financialengineering to attain stable cash flows healthy margins and assured sources of revenue.Our target is to securitise our assets or monetise them to repay our debt obligationsfulfill our equity commitments and tap newer opportunities.
Our performance has been particularly commendable in the context of a challengingdomestic environment. We have optimally stretched available resources trimmed overheadsand improved our operational efficiencies. Our confidence stems from a diversifued mix ofassets across infrastructure segments and healthy operational cash flows. We areperforming today while transforming for tomorrow.
We have already de-risked our business model by executing the EPC portion of our BOTprojects. All of our BOT projects are in a near completion phase and we soon expect toearn revenues from the Toll collections. We have successfully restructured our debt underJoint Lenders Forum (JLF) - Key Features of the package include 2-Year Moratorium on DebtRepayment on existing loan of Rs. 4.2 Billion so the payback period for this loan will be8 years (resulting in door-to-door tenor of 10 years). We are focused on encashing theintrinsic value of some of our projects will help us meet our funding requirements. Thiswill ensure smooth flow of capital within the business. We simultaneously aim to expandour project profile through a diversifued geographic presence in existing and new sectorsand acquire more EPC orders particularly in water and power segments. Fresh workingcapital lines of Rs. 750 Million for fund-based and Rs. 1.75 Billion for non-fund basedfacilities have been sanctioned with interest cost being lowered to 11% from 12.5% - 13%earlier. This is expected to generate significant cash flows for the future. We remainpoised to face the future by securitising our assets or monetising them to de-leveragefulfil our equity commitments and tap newer opportunities. This pragmatic approach givesus the confidence that when market conditions rebound our solid foundation will see usadvantageously into the future.
We will continue to leverage our inherent strengths and expand our horizons to capturea larger share of the infrastructure opportunity and be seen as a preferred infrastructurepartner. Our passion professionalism and perseverance gives us an exceptional futureoutlook. Our objective is to drive innovation across each aspect of our business and makethat an integral part of a sustainable approach.
I take this opportunity to thank our highly committed employees for deliveringoperational excellence even during di_cult conditions. Our Board thanks all theshareholders for their co-operation continued support and strong faith in us.
Mr. Bhawanishankar H. Sharma