It is indeed a pleasure to report to you at the end of anotherinteresting year. While we continue to maintain steady performance what I am more excitedabout is the interesting developments in the economy and real estate industry. The boldand decisive initiatives undertaken by the government bring in a renewed sense ofoptimism improve the country's investment sentiment and shall in all likelihoodfacilitate it in graduating to the next level of growth.
The year 2016-17 saw the government taking the bold measure ofdemonetisation and passing the crucial Goods and Services Tax (GST) bill. Demonetisationa step initiated to curb black money generation and terrorist funding also facilitated inchannelising idle funds back to the formal sector and improving banks' liquiditystatus. This in turn shall contribute towards reduction in interest rates. In addition tothis the government's strong focus on meeting fiscal targets has also resulted inimproving the macroeconomic fundamentals. Repo rates have declined to its lowest since2014 at 6.25% core CPI inflation remained under 5% for a prolonged period and forexreserves surged over Rs 24 trillion. Besides strong focus on Make in India promotingentrepreneurship and improving infrastructure and agriculture scenario shall lead toholistic development of the country.
GST is another critical initiative that focusses on bringing the entirenation under one taxation regime. This is intended to remove all hurdles related tomultiple taxation structure and at the same time improve logistics movement across thecountry resulting in improved national productivity. Further GST
shall also enhance accountability and prevent tax evasion leading tohigher government revenues necessary for funding infrastructure projects.
Speaking specifically of the real estate I believe the sector isentering its golden era with a series of positive developments. RERA is one such move thatwill completely revitalise the industry. RERA will do the real estate industry what TRAI(Telecom Regulatory Authority of India) did to the telecom industry. Before TRAI theindustry was highly unregulated players charged indiscriminately and there were no lawsto protect customer interest. However with TRAI introducing positive regulations theindustry witnessed a huge surge in subscriber base creating a win-win situation for bothconsumers as well as telecom operators.
A similar turnaround is expected in the real estate sector with RERA.With focus on bringing in more transparency having better regulations and protectingconsumer interests the industry is in for revival. As the investor and buyer confidencein the industry improves it shall attract more investments and enhance buyer base.
Simplification in REITs' regulations and taxation is another movewhich is likely to improve liquidity for cash-strapped players. REIT a type of financialasset enables investors to directly invest in real estate while benefiting the assetholder to monetise cash-generating assets. However non-facilitative norms were preventingREITs to become a reality. With the government undertaking initiatives to make REITsattractive we can soon expect some developments in it.
During the year the Company witnessed steady performance in spite ofseveral headwinds in the form of demonetisation and temporary slump due to change in realestate regulations. The total income during the year increased by 3.82% to Rs 494.60Crores. EBITDA and PAT recorded a stronger growth at 5.13% and 11.13% respectively to Rs169.45 Crores and Rs 77.07 Crores respectively.
Resilience to Rise
With years of perseverance and future-focussed approach we have beenable to develop strong competencies and business model that provides us long-term businesssustainability revenue visibility and the resilience to rise. While in favourableindustry scenario this shall enable us to deliver superior performance in times ofindustry distress it shall protect our bottom-line. Some of our initiatives towards thisinclude: t Consistent investment in land bank to build a portfolio of 1050 acres whichprovides us the option to either monetise for instant cash flows or undertake developmentto generate superior returns over the longer term. Besides with most of the land beingwithin 50 km radius of Delhi it has significant upside potential. These land parcelsacquired by at low costs provide us the advantage of undertaking low-cost housingprojects which otherwise is not possible as land accounts for majority of the projectcost.
Our focus on leasing commercial space hotels IT parks andretail centres has enabled us to build a robust cash flow generating portfolio. Theseportfolio generated Rs 50 Crores rentals in 2016-17 with average rentals of Rs 60/sq ft.Moreover with major infrastructure developments in progress and rising demand forcommercial spaces in the region the rentals are expected to rise over time.
We have acquired land plots at strategic locations that areapproved for building 5-star hotels. However the stringent FSI (floor space index) rulesearlier limited the number of rooms that can be built on such plot discouraginginternational hotel chains to establish presence. With relaxing FSI rules in the past twoyears we shall be able to develop hotels with greater number of rooms making our plotsattractive.
We have steadily invested in building competencies adding newtechnologies and acquiring skilled labour. This has enabled us to undertake alloperations in-house right from project conceptualisation to designing to construction tomarketing.
We have a robust portfolio of commercial space hotels retailoutlets and IT parks that are of grade A' quality and generates steady cashflows are highly attractive targets for REITs.
We are ready for new investment opportunities in stressed assetsin the form of on-going and/or stalled projects available at extremely competitive rates.
These competitive advantages along with our market knowledge of the NCRprovide us significant edge over competitors. We shall leverage these to capitalise on theupcoming growth opportunities.
I take this opportunity to thank all our stakeholders for having shownfaith in us. Your Company is strongly focussed on maximising shareholders' worth andcontinues to undertake strategic decisions towards this.
We stand at a cusp of exciting opportunities. With proven executioncapabilities deep knowledge of the NCR real-estate market fully-paid andready-to-develop land bank and our strong brand equity in NCR we believe we are poisedand prepared for a positive upturn in the years to come as we overcome challenges with astrong
Resilience to Rise.