AJR Infra & Tolling Ltd Management Discussions

Global Economic Overview

The global economy in 2025 is confronting a renewed wave of uncertainty, with growth momentum slowing sharply in the face of rising trade tensions and persistent policy unpredictability. According to the World Banks Global Economic Prospects report, global growth is forecast to moderate to 2.3% in 2025, marking the weakest expansion since 2008 outside of recession years. This downward revision reflects widespread deceleration across both advanced and developing economies, primarily driven by escalating trade barriers, subdued investment, and volatility in financial markets.

Advanced economies are expected to grow at a modest 1.2%, a decline from the 1.7% registered in 2024. The United States is projected to expand by 1.4%, impacted by softening domestic demand and heightened uncertainty. Growth in the Euro Area is expected at 0.7%, while Japan is likely to register a subdued 0.7% as well, both facing pressures from weak investment and supply-side disruptions.

Emerging markets and developing economies (EMDEs), though relatively more dynamic, are not immune to global headwinds. Their collective growth is projected to slow to 3.8%, down from 4.2% in 2024. Within this group, Chinas growth is forecast at 4.5%, moderating from prior levels as fiscal stimulus fades and structural challenges persist. India, however, remains a bright spot, with expected growth of 6.3% in FY2025–26, supported by resilient domestic demand and improving macro fundamentals.

Trade remains a key vulnerability. Global trade growth is expected to slow significantly to 1.8% in 2025 from 3.4% in 2024, with tariff increases and heightened policy uncertainty weighing heavily on export-oriented economies. Commodity markets have also weakened, with oil prices projected to average $66 per barrel, reflecting both supply expansions by OPEC+ and softening global demand.

Inflation, while moderating, remains elevated. Global consumer inflation is forecast to average 2.9% in 2025, slightly above central bank targets, with core inflation pressures persisting in several large economies due to services and wage costs.

The broader outlook is subject to multiple downside risks. These include the potential for further trade escalations, geopolitical fragmentation, extreme climate events, and financial market disruptions. On the upside, the resolution of major trade disputes and improved global cooperation could offer some reprieve.

With global output projected to remain materially below earlier expectations, the report underscores the importance of coordinated multilateral action. For EMDEs, the path forward involves not only managing short-term shocks but also addressing structural impediments through reforms that boost private investment, enhance fiscal resilience, and generate employment for growing working-age populations.

Overview of the Indian Economy

Indias economic landscape in early 2025 continues to be shaped by strong domestic demand, improving investment activity, and a stable macroeconomic environment. The latest indicators, as outlined by the Ministry of Finance, present a cautiously optimistic picture, highlighting sustained growth momentum despite global headwinds. The Indian economy remains one of the fastest-growing among major economies, with resilience underpinned by robust public investment, expanding private consumption, and healthy financial markets.

GDP Performance and Growth Drivers

Indias real GDP registered a growth rate of 7.4% in Q4 FY2024–25 (October–December 2024), higher than the previous three quarters. This strong performance was broad-based, with both investment demand and government final consumption expenditure

Strong investment demand and higher public spending lifted Indias GDP by 7.4% in Q4 FY2024-25, with manufacturing and services driving broad-based recovery.

contributing substantially. Notably, investment (Gross Fixed Capital Formation) grew at 10.6%, underlining the impact of public capex and the revival in private sector investment. On the supply side, growth was driven by a robust services sector, particularly financial, real estate, and professional services, which saw an 8.1% expansion. Manufacturing also rebounded with a growth rate of 8.5%, supported by easing input cost pressures, improved capacity utilisation, and increased production.

The Reserve Bank of India has projected real GDP growth at 6.5% for 2025–26, maintaining the same pace as estimated for 2024–25, following a robust expansion of 9.2% in the previous year. The quarterly growth estimates are 6.5% for Q1, 6.7% for Q2, 6.6% for Q3, and 6.3% for Q4. This represents a downward revision of 20 basis points from the February forecast, mainly due to increased global volatility. On the domestic front, agriculture remains strong, supported by adequate reservoir levels and solid crop yields, which are expected to bolster rural demand. The manufacturing sector is showing early signs of recovery amid improving business confidence, while the services sector continues to perform resiliently.

Inflation Trends

Headline inflation eased in January and February 2025, primarily due to a significant drop in food prices. With uncertainties surrounding the rabi harvest largely resolved and second advance estimates pointing to record wheat production and increased pulse output compared to last year, food inflation is expected to moderate further. This positive outlook is reinforced by strong kharif crop arrivals and a notable decline in inflation expectations over both the next three and twelve months, as indicated by recent surveys A further drop in crude oil prices has added momentum to the disinflationary trend. As a result, Consumer Price Index (CPI) inflation for 2025–26 is projected at 4.0%, with quarterly forecasts at 3.6% in Q1, 3.9% in Q2, 3.8% in Q3, and 4.4% in Q4.

Fiscal Position and Government Spending

The Union Governments fiscal performance has remained strong. As of April 2025, gross tax revenue grew by 11.8% YoY, driven by buoyant direct taxes and stable indirect tax collections. The Centres capital expenditure rose by 27.6% YoY, in line with the Union Budgets focus on infrastructure creation. This sustained capex thrust is critical in crowding in private investment and building medium-term growth potential.

The government continues to adhere to fiscal prudence, aiming to consolidate the fiscal deficit while maintaining essential public spending. The fiscal deficit target for FY2025–26 remains at 5.1% of GDP, reflecting the administrations commitment to fiscal sustainability.

External Sector and Trade Dynamics

Indias external sector showed signs of resilience amidst global uncertainty. Merchandise exports in April 2025 grew by 1.1% YoY, while imports declined marginally by –0.5%, leading to a narrowing of the trade deficit. Services exports remained a strong pillar, registering 4.7% YoY growth, driven by IT and consulting services.

As a result, India posted a current account surplus of 1.2% of GDP in Q3 FY2024–25, marking the first surplus in ten quarters. This improvement has been supported by robust remittance inflows, resilient services trade and contained import demand. Foreign exchange reserves remain comfortable, providing a buffer against external shocks and enhancing investor confidence.

Stronger services exports and resilient remittances turned Indias current account into a 1.2% surplus of GDP in Q3 FY2024–25, boosting investor confidence.

Sustained government capex and stronger private sentiment placed GDP growth at 6.5% in FY2025–26, providing India a firm footing for medium-term expansion.

Financial and Capital Markets

Indias financial markets have remained robust. The equity markets posted substantial gains in May 2025, with the Nifty 50 index rising by 2.8% during the month, reflecting positive domestic sentiment and stable macro indicators. Net foreign portfolio investment (FPI) inflows remained positive, supported by Indias inclusion in global bond indices and sustained investor interest.

Credit growth has continued to support the recovery, with non-food bank credit expanding by 14.5% YoY in April 2025, led by strong growth in personal loans and lending to services and infrastructure sectors. Bank balance sheets remain healthy, with declining NPAs and adequate capital buffers.

Outlook

With GDP growth for FY2025–26 pegged at 6.5%, the Indian economy is on a firm footing. The foundation laid by sustained government capex, improving private sector sentiment, and financial sector resilience is expected to support continued expansion. Key risks include volatile global commodity prices, climate-related uncertainties impacting agriculture, and geopolitical developments that could influence trade and investment flows.

Nevertheless, Indias macroeconomic stability, prudent policymaking, and structural reform momentum provide a strong base to achieve medium-term growth targets. The coming quarters will be crucial in sustaining investment momentum, revitalising exports, and ensuring inclusive growth through employment generation and social sector investments.

Infrastructure Development in India

Over the past decade, India has witnessed a paradigm shift in infrastructure development, one that combines scale with speed, and ambition with execution. From highways to high-speed rails, from regional air connectivity to smart urban infrastructure, the Government of India has pushed forward a vision that places infrastructure at the Centre of economic transformation. Aided by programmes like PM Gati Shakti and the National Logistics Policy, this infrastructural push has become more integrated, data-driven, and outcome-oriented.

Expansion of Indian Roadways

In the realm of road infrastructure, Indias national highway network has expanded to 1,46,145 kilometres by 2024, up from just over 65,000 kilometres in 2004 and 91,000 in 2014. The number of four-lane or wider highways more than doubled to over 48,000 kilometres

A six-fold rise in capital expenditure accelerated highway construction, lifting the pace from 12.1 km to 33.8 km per day by FY2023–24.

during the same period. This expansion was not just a matter of increased length but also improved quality and speed of execution. The average pace of highway construction surged from 12.1 km per day in FY2014–15 to 33.8 km per day in FY2023–24, marking nearly a threefold increase. Financially, this was matched by an equally impressive rise in capital expenditure, from _53,000 crore in FY2013–14 to a record _3.01 lakh crore in FY2023–24, a nearly six-fold jump.

Major flagship programmes such as the Bharatmala Pariyojana have accelerated this momentum further. Under Bharatmala, which focuses on connecting economic corridors and freight routes, around 18,926 kilometres of roads had been completed as of November 2024. A critical element of this programme is the development of 35 multimodal logistics parks at a total investment of _46,000 crore. These parks are expected to manage an estimated 700 million metric tonnes of cargo annually, improving the countrys freight efficiency and reducing logistics costs.

The emphasis on rural connectivity has been equally profound. The Pradhan Mantri Gram Sadak Yojana (PMGSY), launched in 2000, saw accelerated implementation in the last decade. While the programme had achieved 1.07 lakh kilometres of roads by 2006–07 and 4.19 lakh kilometres by 2014–15, the figure now stands at a massive 7.72 lakh kilometres as of 2024–25. This growth in rural roads was accompanied by a rise in expenditure from _10,769 crore to _3.32 lakh crore during the same span, reflecting the governments resolve to bridge the rural-urban infrastructure gap.

Transformation of Indian Railways

The Indian Railways has undergone an unprecedented transformation. On a single day, November 4 2024, it carried more than three crore passengers, demonstrating its continued role as the countrys transport lifeline. Electrification of tracks expanded significantly, with 25,871 route kilometres added between 2014 and 2023. Coach production was modernised, with exclusive manufacturing of LHB (Linke Hofmann Busch) coaches post-2018, and cumulative production rose from 2,209 coaches in the eight years preceding 2014 to nearly 32,000 in the subsequent decade. Safety measures also improved, as seen in the increase in railway stations covered by CCTV cameras from just 123 before 2014 to over 1,050 by the end of 2024. Moreover, the government achieved a milestone by connecting the states of Meghalaya, Arunachal Pradesh, Manipur, and Mizoram by rail for the first time, thus enhancing regional integration.

Electrification of 25,871 route kilometres and modernised coach production enabled Indian Railways to carry over three crore passengers in a single day.

Ports and Airports in India

In the maritime sector, Indias port capacity has doubled in the last decade. From a handling capacity of 800.5 million tonnes per annum (MTPA) in 2014, major ports now boast 1,630 MTPA as of 2024. Turnaround time, a critical indicator of port efficiency, dropped sharply from 94 hours in FY2013–14 to 48 hours in FY2023–24. The output per ship berth per day improved by 52 per cent, and the number of vessels increased from 1,250 to over 1,500 during the same period. Indias improved ranking in the international shipment indicator, moving from 44th in 2014 to 22nd in 2024, is a testament to the growing efficiency and global competitiveness of Indian ports.

Urban infrastructure, particularly through the Smart Cities Mission and AMRUT schemes, has also made significant progress. Out of 8,076 sanctioned smart city projects worth _1.66 lakh crore, over 7,400 have been completed, bringing visible changes to urban living through technology, sustainable design, and public service delivery. Metro rail systems, once limited to five cities, now operate in 23 urban centres. The operational metro rail network has expanded from 248 kilometres in 2014 to 993 kilometres in 2024, with daily ridership increasing fourfold to over one crore passengers.

Source: PIB

Civil aviation, another fast-growing segment of Indias infrastructure story, now positions India as the third-largest domestic aviation market in the world. The number of operational airports more than doubled, from 74 in 2014 to 157 by September 2024. The total aircraft fleet grew from 400 to over 720 in this period, and India now leads globally with over 15% of its pilot workforce being women. The UDAN scheme, launched in 2016, has enabled nearly 1.5 crore passengers to access air travel through 2.93 lakh regional flights across 619 routes. Importantly, these routes now connect 88 airports, 13 heliports, and two water aerodromes, ensuring connectivity to the remotest corners of the country.

Indias infrastructure story is thus a reflection of scale, integration, and long-term planning. The progress made is not only quantitative but also structurally focused on connectivity, logistics efficiency, digital integration, and inclusivity. With the continued momentum of capital investment and the institutional strength of Gati Shakti, India is poised to meet the aspirations of a growing economy and an empowered citizenry

Doubling port capacity and cutting turnaround time from 94 to 48 hours lifted Indias global shipment ranking from 44th in 2014 to 22nd in 2024.

Indian Power Sector

Indias power sector plays a pivotal role in supporting the countrys economic development and social well-being. With a strong focus on ensuring universal access to affordable and sustainable electricity, the sector has undergone a remarkable transformation, from chronic shortages to a surplus energy scenario. This shift has been enabled through the creation of a unified national grid, widespread household electrification, and a strengthened distribution network. As one of the most diversified power sectors globally, India draws energy from both conventional and renewable sources. With rising electricity demand, the country continues to expand its generation capacity. It remains among the global leaders in wind, solar, and overall renewable energy installations, progressing steadily towards its climate commitments under the Paris Agreement.

As of August 2025, Indias total installed power capacity stands at 486,018.82 MW.

India is the third-largest producer and consumer of electricity worldwide. As of August 2025, Indias total installed power capacity stands at 486,018.82 MW, with thermal power contributing the most at 242,989.63 MW or 50% of the total. Renewable energy sources play a significant role as well: solar power contributes 1,16,247.83 MW (23.92%), wind power provides 51,674.85 MW (10.63%), and hydro power adds 49,628.16 MW (10.21%). Additionally, bio power and small hydro power contribute 11,596.31 MW (2.39%) and 5,102.05 MW (1.05%) respectively, while nuclear power adds 8,780.00 MW (1.81%). This diversified energy portfolio underscores Indias effort to balance between traditional and renewable energy sources to meet its growing power demands.

Thermal Energy: Coal

Thermal energy remains the predominant power source in India, representing 50.00% of the total installed capacity as of August 2025. This underscores the heavy dependence on coal-based thermal power plants for the nations energy needs. These plants offer a stable and reliable energy source, crucial for maintaining grid stability and meeting the growing demands of industries, households, and commercial sectors. Although there is a push towards renewable energy, the current high capacity and efficiency of coal-based power plants make them a vital component of Indias power generation infrastructure, ensuring a dependable and affordable electricity supply to support the countrys economic development.

India has achieved a landmark climate target five years ahead of schedule, with non-fossil fuel sources now accounting for 50.1% of the countrys total installed electricity capacity as of June 2025. The government plans to add approximately 90 gigawatts of coal-fired capacity by 2032. Despite this shift in installed capacity, thermal still generates over 70% of actual electricity output, due to the intermittent nature of renewables like solar and wind.

The current coal stock position as of July 29, 2024, indicates a significant disparity in compliance. A considerable number of non-pithead stations are meeting or exceeding the required reserves, with 48 stations holding more than 26 days worth. However, a notable number of plants still fall short of these norms, particularly in the 0–5 days category for non-pithead stations, highlighting ongoing challenges in achieving consistent coal stock levels across all thermal power plants

Renewable Energy: Hydro

Hydropower has long played a vital role in Indias energy ecosystem, offering a clean, renewable, and flexible source of electricity. As the country works towards meeting its growing energy demands while addressing climate concerns, hydroelectric power stands out as a crucial enabler of sustainable development. With abundant water resources across its diverse terrain, India possesses substantial untapped potential for hydro-based generation. According to NITI Aayog, the total hydropower potential in the country is estimated at 133,410 MW, based on the latest available data. Realising this potential will be key to enhancing grid stability, meeting peaking power needs, and achieving the countrys broader energy transition goals.

133,410 MW – Indias total hydropower potential, as per NITI Aayogs latest data.

Approximately 10.21% of Indias installed power capacity comes from hydroelectric sources. The growth of hydro capacity has been substantial, starting from 508 MW in 1947 to reaching 46,928 MW by 2024. This steady increase reflects Indias commitment to harnessing its abundant water resources for sustainable energy production. Despite significant early growth, recent years have seen a stabilisation in capacity addition, indicating a mature stage in the hydroelectric sector. At the same time, the focus shifts towards integrating more renewable energy sources like solar and wind to meet future energy demands

GROWTH OF INSTALLED CAPACITY (HYDRO)

Recent strategic developments further underscore Indias renewed focus on hydropower. Arunachal Pradesh is fast emerging as the hydropower capital of India, with the state aiming to harness its vast riverine potential through numerous upcoming projects. At the national level, major initiatives like the revival of the 1,856 MW Sawalkote Hydroelectric Project in Jammu & Kashmir, Indias largest proposed hydro project, signal a significant push to strengthen energy infrastructure in sensitive border regions. This revival also reflects Indias strategic intent post the pause on the Indus Waters Treaty, with enhanced efforts to utilise its share of river waters more effectively. These developments, along with a supportive policy framework and technological advancements, position hydropower as a crucial pillar in Indias quest for sustainable, secure, and self-reliant energy growth.

Roadmap to Net Zero

According to Moodys Ratings, Indias journey towards achieving its 2070 net-zero target will require substantial and sustained investment, particularly in the power sector, which currently contributes around 37% of the nations carbon emissions. The report estimates that the industry will need annual investments equivalent to 2% of Indias GDP over the next decade, tapering slightly to 1.5%-2% of GDP in the following 25 years. Cumulatively, this translates to an investment requirement of _4.5–6.4 trillion (US$53–76 billion) until FY2034–35, with further annual funding needs of _6–9 trillion through FY2051. This massive capital outlay will be shared between public and private stakeholders, drawing on both domestic and international funding sources. As Indias economy is projected to grow at an average annual rate of 6.5% over the next decade, driving a parallel rise in electricity demand, installed power capacity is expected to double by FY2034–35. While solar and wind will spearhead new capacity additions, coal-based power generation is also expected to expand by around 35% to meet the countrys growing needs. The share of non-fossil fuel-based power is forecast to rise to 45–50% of total output by FY2034–35. In this evolving landscape, Moodys underscores that timely access to long-term, low-cost capital and robust foreign investment will be critical enablers of Indias energy transition.

Company Overview:

AJR Infra and Tolling Limited, formerly known as Gammon Infrastructure Projects Limited, is an infrastructure firm mainly involved in projects developed under the Governments Public Private Participation (PPP) model. The Company executes projects through methods such as Build Operate and Transfer (BOT) and Build, Own, Operate, and Transfer (BOOT). It has established a separate Special Purpose Vehicle (SPV) for each infrastructure project it develops under the PPP framework. As a nationwide infrastructure development company, it boasts a varied portfolio spanning the road, power, and port sectors. Its strength comes from over twenty years of experience across multiple segments in the infrastructure industry.

AJRINFRA - Project Portfolio – 2025

Projects	Sidhi Singrauli Road Project Limited	Duburi Chandikhole
Location	Madhya Pradesh	Odisha
Client	MPRDC	NHAI
Project Length/Capacity	105.587 Kms	39.4 Kms
Annual Annuity ( in Crores)	NA	NA
Concession Period	30 years	2 ? years (construction)
Project Cost	Rs. 1,159.72 Crores	Rs. 577 Crores
Project Stage	Terminated	Under Construction
Revenue Model	Toll	EPC

 

Projects	Vizag Seaport Private Limited	Indira Container Terminal Private Limited	Pravara Renewable Energy Limited	Sikkim Hydro Power Ventures Limited
Location Client	Andhra Pradesh Visakhapatnam Port Trust	Maharashtra Mumbai Port Trust	Maharashtra Padamshree Dr. Vithalrao Vikhe Patil Sahakari Sakhar Karkhana	Sikkim Energy & Power Department of Government of Sikkim
Capacity	9 MMTPA	1.2 million TEUs	30 MW	66 MW
Concession Period	30 years	30 years	25 years post COD	35 years post COD
Project Cost	Rs. 349 Crores	Rs. 1,233 Crores	Rs. 274 Crores	Rs. 496 Crores
Project Stage	Operational	Alternate Interim RORO and steel operations	Operational	Under Construction
Revenue Share	17.11%	Revenue Share RORO/ Steel 55%/72% Container 35.064%	Sale of power, steam to the client; surplus power to MSEDCL	IPP

Operational Projects

Vizag Seaport Private Limited (VSPL)

Vizag Seaport Pvt Limited (VSPL) Terminal is located in the inner-harbour of Visakhapatnam Port (EQ .8 & EQ .9 berths of Visakhapatnam Port. VSPL is fully compatible and equipped to handle Geared Supramax, Gearless Panamax & Baby Cape vessels having LOA up to 255.00, Beam up to 43.00 Mtrs and Draft up to 14.50 Mtrs.

VSPL is the only BOT operator for handling multiple bulk cargoes in Indias largest major port at Visakhapatnam to date. VSPL has developed the berths and terminal as a fully mechanised integrated handling system, incorporating state-of-the-art technologies capable of handling cargo up to 9 MTPA.

The commercial operations commenced in July 2004, and the Company has handled 6.90 million tons of cargo during April 2024 to March 2025, earning a revenue of Rs. 25,177.78 Lakhs (Previous year Rs. 27,776.44 lakhs)

Indira Container Terminal Private Limited

Indira Container Terminal Private Limited (‘ICTPL) is a Special Purpose Vehicle promoted as a Joint Venture by Gammon India Limited (‘GIL), AJR Infra And Tolling Ltd (‘AJR), and Noatum Ports Sociedad Limitada Unipersonal SLU (‘NPSL), formerly known as Dragados Servicos Portuarios Y Logisticos SL.

ICTPL and the Board of Trustees of the Port of Mumbai, since renamed as Mumbai Port Authority (‘MbPA) entered into a License Agreement (‘LA) dated 3rd December 2007 for the construction, development operation, and maintenance of an Offshore Container Terminal on Build, Operate and Transfer basis in the Mumbai Harbor (‘OCT Project), to handle container cargo operations for a period of 27 years.

ICTPL had constructed the two offshore berths and a connecting link between the offshore berths and the mainland, a Y-shaped trestle.

With MbPA delaying its obligations, ICTPL had requested that MbPA allow the berths and trestle to be used for handling Roll-On-Roll-Off (‘RORO) vessels and Steel cargo vessels, which was granted by MbPA from July 21, 2015, on an interim basis. Revenue Share to be paid to MbPA for these interim operations ranges between 55% to 72%.

ICTPL had invoked the Dispute Resolution clause under the LA, and the arbitral process is underway. During the year 2019–20, MbPA had raised a claim of Rs. 2400 Crores on the company on account of the companys events of defaults arising as per the license agreement, which was revised to Rs. 5,120.60 Crores in the current year. The Company has also made a claim on MbPA on account of non-performance or delayed performance of promises by the MbPA, amounting to

Rs. 2,967.36 Crores, which was revised to

Rs. 7,856.96 Crores during the current year.

In addition to the arbitration matter mentioned above, the Submission of One-Time Settlement (OTS) proposal to the consortium of Lenders from the Promoters/Investors was accepted by all lenders after a Swiss challenge, during which no bids were received. An OTS agreement was subsequently executed between the Company / Promoter / Investors and the Consortium of Lenders on 18th December 2024. Following this, a withdrawal application under Sec 12A of the Insolvency and Bankruptcy Code was filed and allowed by the Honble NCLT. Following the execution of the OTS agreement with the Lenders, the companys financial viability has improved.

The settlement has been facilitated through strategic and financial support received from new investors. As agreed with the new investors, part of the shareholding of the existing promoters was divested in favour of the new investors to the extent permitted under the License agreement.

During the Financial Year 2024–25, ICTPL handled 88 RORO vessels, 92 Steel vessels, and No Passenger vessels, with 91,684 vehicle units and 1.20 million metric tonnes of Steel cargo, earning revenue of Rs. 67.41 Crores. (Previous year Rs. 59.78 Crores).

Pravara Renewable Energy Limited (‘PREL)

Pravara Renewable Energy Limited (‘PREL) is an SPV formed by the Company to set up a 30 MW cogeneration power project on a Built, Own, Operate and Transfer (BOOT) basis in Pravara Nagar, Tal. Rahata, Dist. Ahmednagar in Maharashtra for the concession period of 25 years (‘PREL Plant) with Padmashri Dr. Vitthalrao Vikhe Patil Sahakari Karkhana Limited (‘Karkhana). The Karkhana is a co-operative sugar factory registered under the provisions of the Maharashtra Co-operative Societies Act, 1960. A Power Purchase Agreement has been executed between PREL and Maharashtra State Electricity Distribution Company Limited. PREL commenced operations and started generating commercial power on 06.11.2015.

Karkhana has taken illegal/unauthorised possession of the Plant and has been running the plant without the authorisation/consent of the Company. The SPV has invoked the arbitration process, which is ongoing to date. PREL challenges the illegal possession of the Plant by Karkhana in various legal forums.

Projects Under Development

Duburi – Chandikhole (EPC Project):

The Company, in joint venture with Gammon Engineers and Contractors Private Limited (‘GECPL), has been awarded the contract for Rehabilitation and Up gradation of a 2-lane road to a 4-lane highway from Duburi to Chandikhole Section of NH 200 (New NH 53) by National Highways Authority of India on EPC Mode (Pkg- III). The JV has commenced the EPC works at the site and has achieved the first three milestones within the scheduled timeframe, progressing well according to plan to reach the 4th and final milestone. The Company has completed about 85% of its financial progress as of 31st March 2025.

The company receives its share of Profit from the JV regularly, which helps in defraying the operational expenses.

Sikkim Hydro Power Ventures Limited:

Sikkim Hydro Power Ventures Limited (‘SHPVL), a wholly-owned subsidiary of the Company is an SPV engaged in developing a 66 MW Rangit II Hydro Electric Power Project on River Rimbi, a tributary of River Rangit in West Sikkim on BOOT basis, which consist a 40m high Concrete Gravity Dam, 4745m long Head Race Tunnel, 65.5m Surge Shaft, 2500m Pressure Shaft and Surface Power House.

The Concession period for the SHPVL Project is 35 years from the Commercial Operations Date (COD). The financial closure for the SHPVL Project was achieved in January 2014, which requires revalidation. The Project cost is estimated to be _ 49,644 lakhs.

The company has been in discussions with prospective buyers regarding the sale or dilution of its investment in the SPV. Additionally, it has obtained in-principle approval, as per a special resolution passed at the EGM on 12th August 2022. Subsequently, the Company had entered into a Share Purchase agreement with Prospective buyers. There were some conditions precedent which are yet to be fulfilled as of this date. Although the company has been actively pursuing the matter, delays in completing some conditions precedent to the agreement with the prospective buyer have led to the termination of the captioned Share Purchase Agreement. Public invitation was given in newspapers for the expression of interest in the sale of the majority of the stake in SHVPL by the Company.

SHPVL is also taking steps to revive the project and is accordingly issuing/engaging consultants for key approvals related to "Environment Clearance".

Tidong Hydro Power Limited (‘THPL)

Tidong Hydro Power Limited (‘THPL), a Special Purpose Vehicle formed by the Company, has signed an agreement with the Government of Himachal Pradesh (‘GoHP) for developing a 60 MW Tidong–II hydroelectric project in Himachal Pradesh. The prefeasibility report for the project has been prepared and submitted to the GoHP, which has since been approved. The concession period of the Project is 40 years, post commencement of commercial operations.

THPL initiated Geo-Technical Studies, a Detailed Project Report, and Environmental Impact Assessment Studies in 2014–15. However, these efforts were delayed due to local villagers disputes, inadequate site access, road blockages, and unfavourable weather conditions at high altitude, all of which were beyond THPLs control. In the meantime, one of the JV partners, Torrent Power Limited, desired to exit from the JV, and accordingly, THPL had requested GoHP for an equity change and submitted details for its approval. Subsequently, GoHP requested THPL to submit a fresh proposal for equity change in terms of the GoHP Policy.

Termination of Project / One-time

Settlement with the Lenders and Authority:

Sidhi Singrauli Road Project Limited (SSRPL):

Sidhi Singrauli Road Project Limited (‘SSRPL) is a SPV incorporated by the Company for design, construction, finance and maintenance of a 102.6 km long, four-lane dual carriageway on NH-75E, which includes the construction of new bypasses in the state of Madhya Pradesh (‘SSRPL Project). Ministry of Road Transport and Highways (‘MoRTH), which intended to develop this Project under Design Build Finance Operate and Transfer (‘DBFOT), authorised Madhya Pradesh Road Development Corporation (‘MPRDC) to execute the Project on its behalf.

The Project was scheduled to commence commercial operations on 19th September 2015. However, delays on account of MPRDC in providing the required clearances and the Right of Way (ROW) have resulted in the extension of the Commercial Operations Date (COD). These delays have also increased project costs, primarily due to the increase in interest during the construction period resulting from time overruns. Consequently, the credit facility with a consortium of banks/ lenders was classified as a Non-Performing Asset (NPA).

The SPV had received notice of intention to terminate the Project vide letter dated July 17, 2020, from MPRDC followed by a Termination Notice dated August 13, 2020, and advised the SPV vide their letter dated August 24, 2020 to comply with the divestment rights and interest under the provisions of the Concession Agreement and handover the Project to MPRDC.

Pursuant to the Termination Notice issued by MPRDC, SPV has contested the Termination Notice and approached MPRDC and the Ministry of Road Transport and Highways (MoRTH) to find an amicable resolution under the circular dated March 09, 2020, on stuck BOT projects issued by MoRTH in the interest of all the stakeholders.

The Company is exploring options to find an amicable resolution for the Project. Meanwhile, the company had also invoked the Arbitration process vide letter dated 22nd February,2021, and a 3-member Arbitration Tribunal had been constituted. The SPV had submitted its Statement of claims to the Arbitral Tribunal, and the respondents have also filed their Statement of defence.

The company had also given its written consent to MPRDC / MORTH for the settlement of disputes through conciliation. The conciliation process, as agreed between the parties, was ongoing simultaneously, involving the lenders of the SPV. The Company successfully negotiated for an

Through conciliation, we secured an amicable settlement, with MoRTH paying Rs.275 Crores to lenders and Rs.310 Crores to contractors as full and final dues.

amicable settlement of the disputes through a Conciliation process, based on which MoRTH paid Rs. 275 Crores to the Lenders towards a One Time Full and Final Settlement of the Loan availed by SSRPL and Rs. 310 Crores to the contractor towards One Time Full and Final Settlement of their dues.

Identification and Mitigation of Risks:

Project Opportunity Risk	Incorrect appraisal of project opportunities due to insufficient or erroneous information	Implement a ‘Two Tier approach with comprehensive technical and financial reviews to evaluate project feasibility.
Bidding Risk	Incorrect assumptions during financial bid calculations	Adopt a risk-specific bid/project risk assessment approach to identify and address significant risks in bids
Financing Risk	Failure to achieve financial closure or obtain financing at a higher-than-expected cost	Conduct thorough evaluations before financial commitments and enhance standard operating procedures.
Ownership and Maintenance Risk	Various risks encountered during project operations and maintenance phases	Perform continuous risk assessments and develop comprehensive mitigation plans for ongoing project management.
Regulatory Risk	Changes in the regulatory framework affecting project operations	Utilise early warning systems and business intelligence to anticipate regulatory changes and adapt strategies accordingly
Interest Risk	Fluctuations in interest rates impact project debt value	Maintain a deep understanding of capital markets and develop strategies to navigate interest rate fluctuations
Competition Risk	Increased competition from existing competitors and new entrants	Focus on robust client, partner, vendor, and contract management strategies to maintain a competitive edge

Internal Control Systems

Given the scale and complexity of AJRINFRAs operations, our internal control framework is robust and effective in safeguarding against losses, unauthorised use, or disposal of assets. Internal financial controls are well-established and undergo periodic evaluations by the Audit Committee of the Board, in compliance with relevant regulations and rules at all levels, including Special Purpose Vehicles (SPVs). The Company maintains its books of accounts with diligence, ensuring that applicable accounting standards are followed in preparing financial statements. All transactions are authorised, recorded, and reported accurately to management.

To enhance the efficiency of our internal controls, we continuously update our processes to adapt to evolving industry standards and regulatory requirements. This includes integrating advanced financial management systems and conducting regular internal audits to identify and mitigate potential risks. Our commitment to transparency and accountability is reflected in our stringent adherence to these practices, which are designed to provide reliable financial information and uphold the integrity of our financial reporting.

Additionally, our internal control systems are supported by a comprehensive risk management strategy. This strategy includes detailed risk assessments, monitoring, and mitigation plans to address any financial or operational risks that may arise. By fostering a proactive risk management culture, we ensure that our internal controls are not only reactive but also preventative, anticipating potential issues before they materialise.

By strengthening audits and risk assessments, we improved our internal controls, ensuring accurate reporting, reliable financial information, and enhanced protection of company assets.

Safety Measures

At AJRINFRA, safety is prioritised at every stage of project development, from design and construction to commissioning, operations, and maintenance. Our commitment to safety is reflected in our continuous evaluation and enhancement of security protocols. The primary objectives of our safety management efforts are to protect the environment, our employees, and the public.

We implement comprehensive safety management systems to ensure all project sites comply with stringent safety standards. Our HR department plays a crucial role in providing a safe working environment for both corporate staff and workers at project sites. This includes regular safety training, risk assessments, and the implementation of preventive measures to minimise workplace hazards.

Our safety protocols are designed to anticipate and mitigate potential risks, ensuring that all operations are conducted safely and securely. This proactive approach not only protects our workforce but also provides the smooth execution of projects, thereby maintaining our commitment to operational excellence and sustainable development.

AJRINFRA is dedicated to fostering a culture of safety across the organisation, continually investing in safety training and infrastructure to uphold the highest standards of workplace safety. By prioritising safety, we ensure the well-being of our employees, the integrity of our operations, and the trust of our stakeholders.

Cautionary Statement

The Management Discussion and Analysis section includes statements that may be considered "forward-looking statements" according to relevant securities laws and regulations. It should be noted that your Company cannot guarantee the accuracy of these forward-looking statements or assure their realisation, as they are based on assumptions and predictions of future events beyond your Companys control. Actual results may vary significantly from those stated or implied. A range of factors could dramatically impact your Companys operations, including domestic and global economic conditions that affect supply, demand, and price conditions, as well as changes in Governmental rules, tax policies, and other laws.