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Supreme Infrastructure India

BSE: 532904|NSE: SUPREMEINF|ISIN: INE550H01011|SECTOR: Construction & Contracting - Civil
Dec 05, 16:00
Dec 09, 15:57
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VOLUME 9,090
Mar 14
Chairman's Speech (Supreme Infrastructure India) Year : Mar '15
Dear Shareholders,
 FY2015 was a year in which we braved various challenges and have come
 out stronger and wiser. We are determined as ever to deliver consistent
 and sustained value for our shareholders. As India''s infrastructure
 sector continues to be at a crossroads, we too have faced our fair
 share of angst. During the year, we rose to the occasion and came up
 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 a successful QIP through strong
 investor support, we are poised to emerge as a strong EPC and BOT
 New wave of Optimism
 With a new Government assuming office, we felt a renewed wave of
 optimism within the Industry. The Government expressed a keen desire to
 unblock the infrastructure pipeline through the public funding of
 stalled infrastructure projects.  Moreover, the Fiscal Budget included
 US Billion in increased commitments through Private Sector
 Enterprises for infrastructure investment. In addition to this, a new
 fiscal framework for the division of taxes between the Central and
 State Governments was designed to empower the States to provide much
 needed additional funding for infrastructure development. The Planning
 Commission of India has proposed an investment of around US$ 1 trillion
 in the Twelfth five-year plan (2012-2017) for the infrastructure
 sector, which is double the allocation made in the Eleventh five-year
 plan. Continuing partnership between the various levels of Government
 in India continues to be an encouraging sign for the infrastructure
 sector in the 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 across India. Our focus to expand
 and build on our current capabilities has enabled us to expand and grow
 even during tough times.
 In the BOT business, we have an impressive portfolio of 11 BOT
 projects. Out of this,4 BOT projects were made operational during 
 FY2015. These include the Kopargaon Ahmednagar Tollways Pvt.
 Ltd.; the Patiala Nabha Maler Kotla project; Manor Wada Bhiwandi and
 the Vasai Bhiwandi. Barring the Jaipur Ring Road Project, all the other
 under-construction BOT projects are projected to attain completion by
 June 2016, taking the total number of operational assets to 10. Once
 all the 10 BOT projects get operational, our estimated toll revenue
 will rise to approximately Rs. 13.0 Million per day. This will further
 rise to around 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 line significantly.
 Rising to the Challenge
 Our mission continues to be to complete each project before time by
 optimally utilising our technological strengths and domain expertise.
 We make the most of our capital expenditure by reusing it over multiple
 projects through our backward integrated model. This model helps us
 deliver improved margins and gain better control over projects and
 their execution, without having to depend on external sources. Our
 cluster-led approach enables us to emerge as the lowest bidder in
 projects that are in close proximity to each other.
 With the marketplace posing multiple challenges, we recalibrated our
 key business strategies. For FY2016, we are placing focus on
 liquidating certain BOT assets and use the additional cash flows for
 our on-going assets. We aim to continuously pursue financial
 engineering 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 obligations, fulfill our equity commitments and
 tap newer opportunities.
 Our performance has been particularly commendable in the context of a
 challenging domestic environment.
 We have optimally stretched available resources, trimmed overheads and
 improved our operational efficiencies. Our confidence stems from a
 diversified mix of assets across infrastructure segments and healthy
 operational cash flows. We are performing today, while transforming for
 Financial Performance
 We have already de-risked our business model by executing the EPC
 portion of our BOT projects. All of our BOT projects are in a near
 completion phase and we soon expect to earn revenues from the
 Toll collections. We have successfully restructured our debt under
 Joint Lenders Forum (JLF) - Key Features of the package include 2-Year
 Moratorium on Debt Repayment on existing loan of Rs. 4.2 Billion, so the
 payback period for this loan will be 8 years (resulting in door-to-door
 tenor of 10 years). We are focused on encashing the intrinsic value of
 some of our projects will help us meet our funding requirements.  This
 will ensure smooth flow of capital within the business. We
 simultaneously aim to expand our project profile through a diversified
 geographic presence in existing and new sectors and acquire more EPC
 orders, particularly in water and power segments. Fresh working capital
 lines of Rs. 750 Million for fund-based and Rs. 1.75 Billion for non-fund
 based facilities 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 remain poised to face the
 future by securitising our assets or monetising them to de-leverage,
 fulfil our equity commitments and tap newer opportunities. This
 pragmatic approach gives us the confidence that when market conditions
 rebound, our solid foundation will see us advantageously into the
 We will continue to leverage our inherent strengths and expand our
 horizons to capture a larger share of the infrastructure opportunity
 and be seen as a preferred infrastructure partner. Our passion,
 professionalism and perseverance gives us an exceptional future
 outlook. Our objective is to drive innovation across each aspect of our
 business and make that an integral part of a sustainable approach.
 I take this opportunity to thank our highly committed employees for
 delivering operational excellence even during difficult conditions. Our
 Board thanks all the shareholders for their co-operation, continued
 support and strong faith in us.
                                                       Warm Regards,
                                       Mr. Bhawanishankar H. Sharma
                                                 Executive Chairman
Source : Dion Global Solutions Limited
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