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From the Chairman’s Desk


Mr. Sanjay Sahay, Chairman

 

Dear Shareholders

As we look at the fiscal year 2019, we can see, our total revenues grew by 17% to reach Rs. 168.19 Crores, as against Rs. 143.64 Crores in the last fiscal year. Company has achieved highest ever profit Rs. 50.96 Crore.

The Indian economy advanced 5.8 percent year-on-year in the first quarter of 2019, slowing from a 6.6 percent expansion in the previous period and missing market expectations of 6.3 percent. Still, the silver lining in the clouds is contribution of travel and tourism to India’s GDP increased to US$247.30 billion in 2018 from US$234.03 billion in 2017. The contribution is further forecasted to increase to US$492.21billion by 2028. This is the ray of hope in the aviation sector in India which largely depends on the tourism industry thereby contributing to the overall increase in GDP.

During the fiscal year, passenger traffic in India stood at 344.70 million as against the passenger traffic during the previous fiscal year which was around 280.24 million.The domestic passenger traffic stood at 275.22 million while international traffic stood at 69.48 million during April 2018 till March 2019.

Delhi International Airport Limited deserves special mention for its share of achievement in this progress. Delhi International Airport Limited, often said to be India’s busiest airport has registered total passenger traffic of 63.75 million itself between April 2018-Feburary 2019, total cargo traffic of 952.52 thousand tons between that period. DIAL is adjudged as the best airport in the world in the large airports category.

To cater to the rising air traffic, the Government of India has been working towards increasing the number of airports. As of March 2019, India has 103 operational airports. India has envisaged increasing the number of operational airports to 190-200 by FY40.

Here are some major initiatives undertaken by the government:

  • In February 2019, the Government of India sanctioned the development of a new greenfield airport in Hirasar, Gujarat, with an estimated investment of Rs 1,405 crore (US$ 194.73 million).
  • In January 2019, the Government of India released the National Air Cargo Policy Outline 2019 which envisages making Indian air cargo and logistics the most efficient, seamless and cost and time effective globally by the end of the next decade.
  • In June 2018, India has signed an open sky agreement with Australia allowing airlines on either side to offer unlimited seats to six Indian metro cities and various Australian cities.

Overall, plethora of opportunities are laying ahead since policy supports and demand growth are unlocking large investment potential. The success of PPP formats will raise investment in existing and greenfield airports. Private sector participation in 6 existing airports operated by AAI is likely to increase investment opportunities for airport sector. Again, Government of India has launched NABH-Nirman Scheme which is aimed at increasing India’s airports’ capacity.

 

The government has envisaged making India a global MRO hub, handling nearly 90 per cent of the MRO needs of Indian operators and obtaining around 20 per cent of the MRO revenue from foreign-registered aircraft. This will avert the huge expenditure borne by Indian airline companies which is second highest cost component after fuel.

 

In spite of several challenges e.g. stiff competition, high operational costs, high cost of aviation turbine fuel, high foreign exchange rate, congestion at airports, your company has always thrived for betterment. On one hand, closure of Jet Airways has affected the revenue of your company, similarly on the other hand introduction of new international carriers like Air Italy, Wow Air, Jazeera Airways, Nokscoot have added to the revenue growth of the Company.

 

Your company continued to play a vital role in ensuring uninterrupted flow of Aviation Turbine Fuel at the Indira Gandhi International Airport, New Delhi with the support of Maharatna Companies, Indian Oil Corporation Limited and Bharat Petroleum Corporation Limited, both the parent companies and other oil companies, as well. With a goal to meet the highest environmental, safety and operational standards, your Company has embarked on a Modernization project of the Fuel Farm. Further the modernization of Terminal 1 along with laying of Aviation Fuel Hydrant System (AFHS) has started on its due course.

Further, Airport Economic Regulatory Authority (AERA) has determined the Infrastructure Fueling Charges (IFC) for the second control period at Rs. 609 per KL as against Rs. 755 per KL of first control period, which may adversely affect the profitability of Company in coming years. The same is under consideration at the appellate tribunal TDSAT. However, every cloud has silver lining - TDSAT has issued interim stay order against tariff order of AERA.

Being a socially responsible Company managed by professionals, Company has spent an amount of Rs. 149.72 Lacson various projects aligned with the Company’s CSR policy which is being applauded by stakeholders and the society at large.

Project Utthanis now the primary CSR project of the Company with a focus on empowering the unemployed youths and making them independent. Under the project, DAFFPL Learning & Skill Development Centre has been established at various locality in Delhi & NCR with experienced implementing agencies in respective fields. At present seven skill development centres are run by your company with the help of implementing agencies, e.g. basic computer course and welding training (career) are imparted at Shahbad Mohammad Pur, basic knowledge of computer (non-career) is imparted at Mehram Nagar and DAFFPL Tailoring Centre with a motive of empowering women at Rangpuri Pahari, all are implemented by GMR Varalakshmi Foundation (GMRVF), the CSR arm of GMR Group, the lead partner of DIAL. DAFFPL Computer Centres at Mahipal Pur, Palam and Najafgarhare established in collaboration with NIIT Foundation. DAFFPL Centre of Excellence has been established at Mahipal Pur in collaboration with SEED CSR where courses on housekeeping and industrial fitter are being imparted. Over 1800 students have already been benefitted from this project in FY 2018-19. Amongst them, more than 900 students have already been placed at different companies, vocations etc.

With a view to promote health, Company collaborated with Wockhardt Foundation and set up Mobile Medical Van touching 12 localities in and around airport and arranged eye camp for senior citizens under Project Arogya, thereby benefitting more than 20000 people.

Under Project Shiksha, company has distributed woolen garments to the students of 5 MCD schools and provide support to the blind students of Human Care International, another non-governmental organization.

The opportunities ahead are huge. By staying true to its mission and its values, your Company is riding an upwardly growth graph which will continue for years to come.

On behalf of the Board of Directors and Management of DAFFPL, I want to thank you for your continued trust, confidence and support.

Let’s fly high together!

 

Verysincerely,

Sanjay Sahay

(Chairman)