Welspun Enterprises Ltd Management Discussions.

The Management Discussion and Analysis (MD&A) should be read in conjunction with the Audited Consolidated Financial Statements of Welspun Enterprises Ltd (“Welspun” or “WEL” or the “Company”), and the notes thereto for the year ended March 31, 2018. This MD&A covers Welspuns financial position and operations for the year ended March 31, 2018. Amounts are stated in Indian Rupees unless otherwise indicated. The numbers for the year ending March 31, 2018 as well as for the previous year are regrouped and reclassified wherever necessary.

Forward-Looking Statements

This report contains forward-looking statements, which may be identified by their use of words like plans, expects, will, anticipates, believes, intends, projects, estimates or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

Business Overview

Welspun Enterprises Limited (WEL), formerly known as Welspun Projects Ltd., is a part of the USD 2.3 billion Welspun Group.

The Company operates in the infrastructure space with investments in oil & gas. The Company, in its current form, was created by the merger of the erstwhile Welspun Enterprises Ltd., Welspun Infratech Limited, Welspun Plastics Private Limited and Welspun Infra Projects Private Limited with Welspun Projects, which was renamed as Welspun Enterprises Ltd. In the infrastructure space, WEL is focussed on Hybrid Annuity Model (HAM) projects as a developer.

WEL currently has a portfolio of six HAM projects (including L-1 in one project). The total portfolio size stands at Rs. 70+ billion and 235+ kms. For the five awarded projects, the Company has completed one, started construction on two and achieved financial closure for the remaining two projects. WEL is awaiting the Letter of Award on the project in the sixth project.

Macro-Economic Overview

In CY17, the global economy recorded growth of 3.8% in 2017 which was the fastest since 2011. With financial conditions still being supportive, global growth is expected to tick up to 3.9% in both 2018 and 2019. Advanced economies are expected to grow faster than in 2018 and 2019 vs. 2017. Euro area economies are set to narrow excess capacity with support from accommodative monetary policy, and expansionary fiscal policy is expected to drive the US economy above full employment. Aggregate growth in emerging market and developing economies is projected to firm further, with continued strong growth in emerging Asia and Europe and a modest upswing in commodity exporters after three years of weak performance.

The Indian economy on the other hand, emerged as the fastest growing major economy in the world. The Indian economy recorded growth of 6.7% in FY2018. With Gross Domestic Product (GDP) growth averaging 7.3% between 2014-15 and 2017-18, India was among the best performing economies in the world.

During FY2018, the country saw several structural reforms by the government to fuel the economic development of the country. These reforms were majorly targeted towards financial inclusion, banking sector and the organized market. The push on the Jan Dhan Yojana and Aadhar improved the financial inclusion in the country as more than 300 million banks accounts were opened under the scheme. In order to improve the efficiency in the banking sector, new NPA disclosure rules and Insolvency and Bankruptcy Code (IBC) were introduced. The IBC provided a one-stop solution for resolving insolvencies. With a target to improve the tax compliance and promote organized market, the government introduced GST in July 2017. It was with the aim to consolidate all other indirect tax laws and to also bring a harmonized tax structure and uniform compliance practices both by regulators and businesses. With increased compliances for unorganized players, in the medium to long term, GST will provide level playing field for the organized players to compete with the unorganized players in the country. Introduction of GST is expected to be a potential game changer that would unite the country into a common market by dismantling inter-state tariff barriers. As a result of the reforms, India has improved its ease of doing business and has become one of the most competitive countries in in South Asia, being ranked number 40 in the global competitiveness ranking of 137 countries by the World Economic Forum (WEF).

Outlook for the Indian economy continues to be positive. As per the International Monetary Fund (IMF) World Economic Outlook, Indian economy is expected to grow by 7.8 per cent in 2019, which will make the country the worlds fastest-growing economy in 2018 and 2019. The economic growth is expected to be lifted by strong private consumption as well as fading transitory effects of the currency exchange initiative and implementation of the GST. The reform measures undertaken in 2017-18 are expected to strengthen further in 2018-19 and reinforce growth momentum.


Infrastructure is an important sector that propels overall development of any economy and India is no exception. As per the World Economic Forums Global Competitiveness Report 2017-18, Indias overall infrastructure rank is 66 out of 137 economies, 2 places up from last year. Despite this improvement, India still lacks behind most of the BRIC countries reflecting huge potential in the infrastructure sector in India.

The under-investment in infrastructure sector in the period 2010-2014 was on account of collapse of Public Private Partnership (PPP) especially in power and telecom projects; stressed balance sheet of private companies; and issues related to land as well as forest clearances. However, with the various reforms introduced by the Government, there has been a pickup in the infrastructure investment across the country in recent years.

As per Global Infrastructure Outlook, rising income levels and economic prosperity is likely to further drive demand for infrastructure investment in India over the next 25 years. India will require about $4.5 trillion investment in infrastructure by 2040 to improve economic growth and community well-being. Given this context, the Indian government has ambitious plans for its new integrated infrastructure programme which involves building of roads, railways, waterways and airports.

Road Infrastructure

Road transport is the dominant mode of transport in India, both in terms of traffic share and in terms of contribution to the national economy. Apart from facilitating the movement of goods and passengers, road transport plays a key role in promoting equitable socioeconomic development across regions of the country. Easy accessibility, flexibility of operation, door-to-door service and reliability have earned road transport a greater significance in both passenger and freight traffic vis-a-vis other modes of transport. India has one of the largest road networks in the world, of over 5.6 million km comprising National Highways, Expressways, State Highways, Major District Roads, Other District Roads and Village Roads. This road network is used to transport over 60% of total goods and 85% of total passenger traffic. This shows the importance of the road infrastructure for the country and justifies the undivided focus of government on the sector.

The Ministry of Road Transport and Highways (MoRTH) has fixed a target of awarding works for around 20,000 kilometres of national highways during the current year 2018-19. This is about 25 per cent more than the FY18 figure. The highway construction target for 2018-19 has been pegged at 16,420 km, and per day construction target has been fixed at 45 km.

Considering the importance of the road infrastructure, the government has come up with Bharatmala Pariyojana, a new umbrella program for the highways sector that focuses on optimizing efficiency of freight and passenger movement across the country by bridging critical infrastructure gaps through effective interventions like development of Economic Corridors, Inter Corridors and Feeder Routes, National Corridor Efficiency Improvement, Border and International connectivity roads, Coastal and Port connectivity roads and Green-field expressways. A total of around 24,800 kms are proposed to be constructed in Phase I. In addition, Phase I also includes 10,000 km of balance road works under NHDP. Estimated outlay for Phase I is Rs. 5,35,000 crore. The objective of the program is to achieve optimal resource allocation for a holistic highway development/improvement initiative.

In order to facilitate implementation of projects under the ambitious future plans, the government has been taking initiatives to revive interest of private players in the road sector. Towards this objective, an innovative model of project development - Hybrid-annuity model (HAM) was introduced in January 2016. HAM targets to overcome the issues of earlier models including land acquisition, change of scope, traffic changes, tolling risk and difficulty in debt financing of projects. HAM model is advantageous for both the developer and the concessioning authority From the point of developer, 40% of the project cost in HAM contracts is provided by the authority (such as NHAI) as construction support, thus reducing equity requirement for the developer to a minimal level of 12-15%. Since fund disbursement from the government is on time and happens during the construction phase itself, projects do not get stuck because of financing reasons. The authority also ensures necessary clearances and 80% of the land before the appointed date. During the operational period, the developer bears no toll collection risk and its O&M gets covered by separate payments from the authority. While for the authority, capital expenditure is deferred under HAM and requires lesser amount of funds during construction years in comparison to projects on EPC mode. By following HAM, the authority would able to finance 2.5 times of what it could achieve on EPC mode. In addition to this, the authority retains the right to collect toll revenue from these roads, which partly or fully funds the annuity payments to the concessionaire. The authority also need not take the onus of maintenance of the road during the entire concession period (typically 15 years) as the responsibility is on the concessionaire.

To make HAM projects even more attractive for developers to bid and banks to finance, some governments have started to tweak the HAM model itself. Maharashtra, for example, provides 60% of the funds in the first two years instead of the earlier 40%, and the payment tenure for the remaining amount has been cut from 15 years to 10 years.

The attractiveness of the HAM model can be seen from the fact that, of the total length awarded by the NHAI in financial year 2018, almost half was through the hybrid annuity model (HAM). Engineering, procurement and construction (EPC) mode was around 51 per cent and the remaining through build-operate-transfer (BOT) toll mode. (refer fig.)

Both the ministry and NHAI plan to increase the portion of HAM projects even further in the award list for 2018-19 considering the heightened interest level from developers and banks.

Other initiatives such as introduction of Infrastructure Investment Trusts (InvITs) have also been taken to make financing easier for the developers. In order to raise funds for its contribution, the government has worked on monetization of operational projects through the Toll-Operate-Transfer (TOT) model.

Water Infrastructure

India represents 16 percent of the world population and 15 percent of livestock, whereas it has only 4 percent of the water resources of the world. India ranks 133rd out of 180 nations for its water availability and 120th out of 122 nations for its water quality.

Government has launched several programs to improve the water infrastructure of the country. The National Water Development Agency (NWDA) has also identified 30 links for inter linking projects for transferring water from water surplus basin to water deficit basins. Under the Union Budget 2018-19, government has allocated an outlay for Rs. 2,000 crore for irrigation infrastructure. The ministry is implementing key projects such Namami Gange, Pradhan Mantri Krishi Sinchayi Yojana and river inter-linking.

According to Assocham estimates, Indias water sector requires annual investment worth US$13 billion. In order to bridge the gap between the current situation and the requirement, the government is making efforts to promote private participation in water infrastructure. On the similar lines of HAM road infrastructure model, the government is working on the HAM model for water infrastructure as well where the capital investment (up to 40%) will be paid by the government through construction-linked milestones and the balance through an annuity over the contract duration.

Oil And Gas

The world economy is expected to almost double over the next 20 years; much of this expected growth will be contributed by the emerging economies, with India and China leading the deck. This economic growth will require energy and thus the energy demand is expected to grow by 30% in next 20 years. During this period, Indias energy demand is expected to grow by 165%, nearly three times the overall non-OECD growth of 61%, also outpacing each of the BRIC countries: China (+41%), Brazil (+60%), and Russia (+6%). India is already the 3rd largest consumer of crude oil and petroleum products in the world; however, the countrys share in global primary energy consumption is projected to increase significantly from 5% in 2017 to 11% in 2040.

Rapid economic growth is leading to greater outputs, which in turn is increasing the demand of oil for production and transportation in the country. In addition, with rising income levels demand for automobile is also estimated to rise, in turn leading to augmented demand for oil and gas. Due to this strong growth in demand, Indias dependency on oil imports has increased rapidly and is expected to increase further. In the next 20 years, oil imports are expected to rise by 175% while the gas imports are expected to increase by 291%.

In order to reduce this dependence on imports, government is taking several steps to increase oil and gas output of the country. The Cabinet approved a revised exploration policy, named Hydrocarbon Exploration and Licensing Policy (HELP), last year. HELP replaces New Exploration Licensing Policy (NELP) that governed Indias oil and gas sector for two decades but didnt help produce much oil or gas. In FY18, the oil ministry has put in place all components needed to operationalise the latest policy, including a model revenue sharing contract and open acreage licensing policy. The Oil ministry has also launched the National Data Repository containing exploration and production data of all Indian sedimentary basins. The repository gives potential investors access to necessary geological data that will help companies carve out exploration blocks.

WEL - Business Strategy And Highlights

Welspun Enterprise Limited (WEL) is one of the three key companies under the Welspun Group. The company operates in the infrastructure sector (Road and water infra) with investment in oil and gas space. WEL is unique in the Indian infrastructure space with its focus only on HAM, significant cash balance and asset-light model.

WEL is focused only on HAM projects as a developer it does not undertake any new EPC projects or BOT projects. The focus is on differentiated projects where the competition is lower. At the pre-bidding stage, each bid is evaluated by an independent bid committee and is approved for bidding, only if it meets the Companys return criteria. The Company has a cash balance of Rs. 7.1 billion, unlike most other companies in the infra space that are burdened with high amount of debt. This cash gives the company ample capital for growth and supports the equity required for the HAM projects. The strong balance sheet and robust credit rating helps the Company to arrange debt for the projects at very competitive costs. While many weaker players are finding it difficult to achieve financial closure, WEL has achieved quick financial closure of all 5 awarded projects, thanks to its balance sheet.

The Company follows a unique asset-light model, with no investment in construction plant and machinery. The entire construction is outsourced/sub-contracted to the best-suited sub-contractor and WEL only focuses on the high value-add activity - Project Management Consultancy (PMC), ensuring quality, safety and timely completion of the projects in its portfolio. The outsourcing of construction also gives WEL flexibility to take up projects in any part of the country. The rigorous project monitoring and supervision by WEL, during the construction phase, helps in achieving early completion and reducing operations and maintenance during the O&M period. It also helps improve returns by earning the early completion bonus.

With focus only on HAM, working capital requirements are also minimal. Under HAM, the risks are significantly reduced once the construction is over. WEL will look to unlock value from these projects at this stage, by divesting the projects to investors with lower cost of capital.

Infrastructure Project Portfolio

In FY18, the Company followed a cautious bid/buy strategy to strengthen its HAM portfolio. The Company started the financial year with one HAM project and added 5 more HAM projects (including L-1 bidder status in one project) to its portfolio taking the total HAM portfolio size to Rs. 70+ billion and 235+ kms. The EPC order book at the end of the year was Rs. 60 billion.

By March 31st 2018, the Company had substantially completed Indias first HAM project -Delhi-Meerut Expressway Package 1 (Delhi Section), demonstrating operational excellence by remaining well ahead of the scheduled construction. The Company started construction on two more HAM projects during the financial year while two other projects have achieved financial closure and are awaiting appointed date. The Company holds the L-1 bidder status in its most recent project addition and is awaiting formal communication (“Letter of Award”) from NHAI.

The details of the HAM projects and their status is given below:

Delhi - Meerut Expressway Package 1 Project Description: 14 Lane expressway: Six-laning of Delhi Meerut Expressway & four-laning either side from 0th km to existing km 8.4 of NH-24 in Delhi. Project Status: WEL started construction on the countrys first 14-lane expressway and one of the first projects under the Hybrid Annuity Model (HAM), in November 2016. While the construction schedule was 30 months, the Company has completed the project and applied for provisional completion certificate within 18 months. This demonstrates the operational excellence and superior project management by WEL, with its outstanding performance being appreciated by the NHAI as well. The extraordinary speed of completion also entitles WEL to an early completion bonus from the authority.

Gagalheri - Saharanpur Yamunanagar (GSY) Project Description: 4-Laning of Gagalheri-Saharanpur Yamunanagar section of NH-73 in UP / Haryana. Project Status: WEL acquired a stake in this project from the MBL group and become the project sponsor in January 2018. NHAI declared the Appointed Date for the Project as 26th January 2018. Execution is in full swing in this project.

Chutmalpur-Ganeshpur & Roorkee-Chutmalpur-Gagalheri (CGRG) Project Description: 4-Laning of Chutmalpur-Ganeshpur section of NH-72A & Roorkee-Chutmalpur-Gagalheri section of NH-73 in UP & Uttarakhand. Project Status: WEL acquired a stake in this project from the MBL group and become the project sponsor in January 2018. NHAI declared the Appointed Date for the Project as 28th February 2018. Execution is in full swing in this project.

Aunta - Simaria (Ganga Bridge with Approach Roads) Project Description: Six- Laning from Aunta-Simaria (Ganga Bridge with Approach Roads) Section from km 197.9 to km 206.1 of NH-31 in Bihar. Project Status: The Company was awarded the project in August 2017 by NHAI. WEL has achieved the financial closure and is awaiting the appointed date for starting construction. In the meantime, the Company has mobilized the site and started developmental work.

Chikhali-Tarsod (Package-IIA)

Project Description: 4-laning of Chikhali Tarsod (Package-IIA) section of NH-6 from km. 360.0 to km.422.7 in Maharashtra. Project Status: WEL acquired a stake in this project from the Vishvaraj group and become the project sponsor in January 2018. WEL has achieved the financial closure and is awaiting the appointed date for starting construction. In the meantime, the Company has mobilized the site and started developmental work.

Sattanathapuram Nagapattinam Project Description: 4 laning of Sattanathapuram to Nagapattinam (Design Ch Km 123.8 to Km 179.6) section of NH-45A (New NH -332) in Tamil Nadu Project Status: WEL has been declared the lowest bidder (L1) in May 2018; the Letter of Award (LoA) is awaited from NHAI.

Apart from the HAM projects, the Company also has a small portfolio of legacy BOT projects. The Company currently operates three BOT projects - two in road and one in water. The projects are:

Himmatnagar bypass in Gujarat: Rs. 15.7 million toll collection in the year

Raisen-Rahatgarh road project in Madhya Pradesh: Rs. 21 million toll collection in FY18

Dewas water project in Madhya Pradesh: This project, which involves supply of treated water of up to 23 MLD to industrial customers in Dewas, has been modified under the Madhya Pradesh Swiss Challenge Guidelines. Construction of the modified project, with project cost of Rs. 1,463 million (including subsumed debt of old project), started in May 2018 and is expected to be completed in 12 months.

During the period Feb-April 2018, the Company handed back two road projects - Hoshangabad- Khandwa and Kim-Mandvi back to the respective authorities. Apart from these, the Company owns 13% equity stake in the road project - Dewas Bhopal

Corridor Limited, which it plans to divest, subject to approval from relevant authorities.


WEL has a strong unexecuted EPC order book of Rs. 60 billion which sets a strong foundation for future growth of the Company. The order book is more than 6 times the Companys revenue in FY18 and provides revenue growth visibility of 100% p.a. for the next 2 years. The significant increase in revenue is also expected to translate to better operating margins as operating leverage comes into play.

The Company intends to continue its approach of prudent bid/buy strategy to build its HAM project portfolio. For bidding, WEL will target projects where the Company can differentiate itself from other routine players. As part of building its HAM portfolio, WEL will also look at acquiring distressed HAM projects, which are available at reasonable valuations and can be value-accretive to shareholders.

Apart from road infrastructure projects, the Company also sees huge potential in the water sector in the country. WEL is building a team for its water vertical and intends to participate in future bids in this sector, especially which are awarded under the HAM model.

The Company will continue to work on an asset-light model with focus on Return on Capital Employed (RoCE), free cash flow and risk management.

Oil And Gas

The Company is invested in the oil and gas sector through a Joint Venture Company - Adani Welspun Exploration Ltd. (AWEL), where it owns 35% stake. Under the existing portfolio, the Company has five relevant blocks:

Kutch-1 or GK-OSN-2009/1- AWEL has 25% stake in this block. This field has already been declared as a potential commercial discovery by the operator - ONGC. Appraisal studies are underway to determine the commercial viability of the block.

Kutch-2 or GK-OSN-2009/2 - AWEL has 30% stake in this block. This field has also been declared as a potential commercial discovery by the operator - ONGC. Appraisal studies are underway to determine the commercial viability of the block.

Mumbai Block or MB-OSN-2005/2 - AWEL currently holds 100% ownership interest in Phase I. AWEL has decided to execute Phase II of the exploration.

Palej or CB-ONN-2005/4 WEL and Adani Group directly hold 35% and 55% respectively in this block. The consortium had stuck oil in the block but termination notice was served by MoPNG due to default of Naftogaz India holding 10% stake; non-defaulting partners Adani Group and WEL have requested for transfer of this 10% stake to Adani/AWEL. The request is pending for approval by DGH/MoPNG.

B-9 Cluster (DSF) AWEL was awarded this block in Mumbai High under the Discovered Small Field bidding process (DSF 2016) in March 2017. The block is in close proximity to AWELs prospective exploratory block (MB/OSN/2005/2) and ONGCs B-12 area, which is under advanced stage of development. At present, the development plan is being drawn for B9 Cluster. The anticipated capital cost is USD 110 million at the AWEL level.

WEL believes that these blocks have considerable hydrocarbon potential, which would be quantifiable post the appraisal stage/during the development stage of each of these blocks. The Company intends to unlock value from these blocks at the right time.

Corporate Social Responsibilty

Welspuns social commitment includes sustainability and inclusive growth. While creating world class infrastructure, the Company has always targeted to work with the local communities through diverse social interventions to secure stable & sustainable futures. In areas nearby its Delhi-Meerut Expressway package-1 site, the Company has taken initiatives for:

Community Healthcare

- Weekly health check-up camps being organised

- Regular fogging

- Impact: Cases of illness have reduced 90% over a span of 6 months, Malaria/ Dengue/ Chikungunya cases completely eliminated

Potable Water Supply

- Distribution of Potable Water every alternate day at slums

- Provided clean & hygienic water bottles for storage

- Impact: Condition have changed from unavailability of water to doorstep water distribution; 250+ beneficiaries

Promoting Education

- Providing basic education at a young age

- Distribution of school kits and books for children

- Impact: Programme started with 20 children, now increased to 60; 15 students admitted in govt. school post preliminary education at classes

The Company has been able to build the Delhi-Meerut Expressway Package-1 in a unique and sustainable way by developing vertical gardens along the entire bridge and electrification through solar power. Several beautification initiatives have also been undertaken along the expressway, including wall arts on pillars and replicas of famous monuments.

Human Resources Policy

Human resource is the biggest asset of the Company and it remains one of the core focus areas of the Company. The Management of the Company lays special emphasis on the welfare of its employees and training, welfare and safety measures are undertaken on a regular basis. The Company has a well qualified and experienced team of professionals with a dedicated human resource department, which is competent to deliver when needed. The Company aims to provide a congenial work environment that respects individuals and encourages professional growth, innovation and superior performance. The headcount in the Company as on 31st March 2018 was 448.

Internal Control System And Their Adequacy

Management of the Company maintains adequate internal control system which is designed to provide reasonable assurance that assets are safeguarded and transactions are rightly executed and recorded in accordance with management authorization and accounting policies.

All the records are adequately maintained for preparation of financial statements and other financial information. Apart from internal controls, the Company also audits the efficiency and security of its operations, its information technologies and data, in accordance with the global standards. The Audit Committee reviews internal audit reports as well as the internal control systems and financial disclosures.

Discussion Of Financial Performance FY18

Note: This section discusses the financial performance on a comparable basis. The numbers might differ from the reported numbers.

The standalone financials are as shown below:

(Rs. Million)

Income Statement Snapshot FY18 FY17 YoY Growth
Total Income* 10,928 3,894 181%
EBITDA 1,660 678 145%
EBITDA margin 15.2% 17.4%
PBT 1,385 427 225%
Exceptional 142 107 33%
Reported PBT 1,527 534 186%
PAT 1,097 433 154%
PAT margin 10.0% 11.1%
Cash PAT 1,062 539 97%

Note: Cash PAT = PBDT (before exceptional items) Current tax

* Other income (part of Total income) includes treasury income of Rs.172 million for Q4FY18 and Rs.750 million for FY18.

(Rs. Million)

Balance Sheet Snapshot March 31, 2018 March 31, 2017
Net Worth 14,573 13,524
Gross Debt 664 801
7,135 10,663
Cash & Cash Equivalents
Net Debt /(Cash) (6,471) (9,862)
Other Long Term Liabilities 303 287
Total Net Fixed Assets (Incl. CWIP) 87 818
Net Current Assets (Excl. Cash & Cash Equivalents) 1,053 (1,409)
Other Long Term Investments and Assets 7,263 4,540

Note: Cash & Cash Equivalents includes liquid Investments & ICDs

Total Income

Total income up 181% to Rs. 10,928 million from Rs. 3,894 million, primarily contributed by progress on the Delhi- Meerut road project.


Profit before tax (before exceptional) more than tripled to Rs. 1,385 million in FY18 from Rs. 427 million in FY17. Profit after tax more than doubled to Rs. 1,097 million in FY18 from Rs. 433 million in FY17.


Networth was at Rs. 14,573 million in FY18 as compared to Rs. 13,524 million in FY17.


The company gross debt stands at Rs. 664 million in FY18 compared to Rs. 801 million in FY17. Taking into consideration, cash and cash equivalents of Rs. 7,135 million, the Net Debt/(cash) stood at Rs. (6,471) million in FY18 as compared to Rs. (9,862) million in FY17. The reduction in cash was primarily on account of investments in SPV for under construction HAM projects.

Credit Ratings

As a result of the Companys consolidation efforts, the credit ratings of the Company have also been upgraded by CARE. The rating has been revised to “AA-” from “A+” in respect of long-term facilities. On the short-term facilities, the Company is aated as “A1+” (highest possible rating).