Accelerating shared prosperity and value creation
Greetings! We live in interesting times. India continues to be one ofthe world's fastest growing economies. We are expected to become the world'sfifth largest nation by the end of this year. Our country is expected to see an investmentof a trillion dollars in infrastructure split evenly between public and private sectorresources and is on its way to become a five-trillion-dollar economy over the next fiveyears.
India at an inflection point
In the recent elections the mandate received by the Government is anindication that the citizens of our country have voted for stability in support of avision that addresses large segments of the society in a fashion and scale that willradically change India's development trajectory. In an analysis published earlierthis year the World Economic Forum predicted that India would have lifted 2.5 crore morehouseholds out of poverty over the next decade thereby reducing the share to householdsbelow the poverty line to 5%. For a size of our country these are staggering statisticsand a harbinger of hope and optimism for the entire nation. Undoubtedly there will bechallenges and not all programmes may get executed to perfection but there cannot be anydenying the fact that the ambitions of our nation are taking shape in a fashion that istransformative and exciting and India is at an inflection point.
The transformation of the Adani Group
For the Adani Group FY19 has also been a year of inflection. Each oneof our six publicly traded Group companies delivered record financial fivyears. It tookAPSEZ over performance and made tangible progress in further consolidating theirindividual positions as industry leaders in every segment we operate in. In this contextit would be appropriate to mention the importance of the Central Electricity RegulatoryCommission's landmark decision to approve Adani Power's Mundra powerplant's petition for higher Tariff. This was the largest challenge we had to overcomeand is a reflection as much of the Group's tenacity to pursue what it believes isjustified as much a reflection of the fairness of the Indian court systems. Every one ofthe Group companies are now growth platforms that while mutually independent can drawupon the management and leadership synergies that exist within the Group.
APSEZ leading from the front
APSEZ had a record year on multiple fronts. It became the first Indianports company to handle 200 MMT of cargo and made its foray into a distinguished league ofthe top five fastest growing port operators in the world. The most remarkable part of thisnarrative has been the acceleration witnessed over thelast a decade to go from 50 MMT to100
MMT in FY14 and then just five years to yet again double the capacity.This is the best validation of APSEZ's ability to execute on its strategic objectivesand a reflection of the strong leadership team that APSEZ has built. As promised we havealso made significant progress in continuing to build out the logistics infrastructurerequired to augment APSEZ's growth strategy. According to the Strategy for NewIndia@75 from Niti Aayog by 2023 the Government has set an objective to reduce thelogistics cost to less than 10% of GDP from the current level of 14%. Every 10% decline inindirect logistics cost has the potential to increase exports by 5-8% and APSEZ is wellpositioned to leverage this advantage. Our investments in multi-modal logistics parkinland waterways coastal shipping air cargo terminals and trucking services will caterto the fast-developing demands from the logistics sector. We are best placed to diverttraffic with our inland network of spokes comprising warehouses and logistic parksconnected through road rail and water. Our objective of becoming an end-to-end logisticsplayer will further accelerate as India continues to become the trading hub for Asia theMiddle East Africa and Europe. APSEZ has always strived to maximise shareholder valueand has demonstrated sustained growth in value creation. To further this commitment wehave recently announced a buyback of shares at a price not exceeding र 500 a shareoffering an 18% premium to the market price. APSEZ has already undertaken the majority ofits large capex investments and most of these assets have now started yielding healthymargins. The share buyback will further help us support our loyal shareholders thatcontinue to believe in our vision.
Environment social responsibility & governance
Along with our focus on the financial and operational performance weare equally committed to continue to strengthen our corporate governance practices. Inline with this we have implemented a strict policy for related party transactions. Toensure transparency that all transactions are arms length we will include assessments byinternal business teams review through an external agency and a due diligence by anExecutive Committee consisting of Board of Directors. These steps are in addition to theexisting regulatory requirements.
Adani Foundation continues to go about its business of making adifference to the lives of the various communities the Group touches. Our foundationinitiatives now reaches across 18 states and 2250 villages and towns touching over500000 families. Along with the growth of the business it is this goodness that makesour efforts meaningful.
Growth with Goodness
In closing I thank all our stakeholders for their continued supportand conviction in our philosophy of Growth with Goodness. We are committed to continue ourexciting journey of growth with the support and guidance of our customers employeesshareholders bankers governments and the Board. We shall continue to remain an activecontributor to nation-building adding value to our product portfolio and exploring newopportunities that contribute to the growth of our business and the nation.