It gives me immense pleasure to write to you at the end of another landmark year forBigbloc Construction Limited.
I am pleased to inform you that your company has completed successfully financial year2016-17 with Net profit after Tax for the year recorded S. 292.61 Lakhs.
The Board of Directors of the company has proposed a final dividend of S.0.25 perequity share of face value of S. 10 each. The board has planned to expand itsmanufacturing capacity at various geographic region.
We witnesses the rollout of India's groundbreaking fiscal reform i.e. GST which willtransform India into single marketplace. This is good news for organized players like us.The Government in its efforts to preserve the environment has taxed AAC (AutoclavedAerated Concrete) at 12% which is significantly lower than the earlier tax regime.Traditional bricks which were earlier not taxable are now taxed at 5%. This shall greatlybenefit us in the coming future.
Let me brief you the growth outlook of Real Estate/Infrastructure Sector:
Contribution of Real Estate to India's GDP is estimated to increase to about 13% by2028. Increasing share of real estate in the GDP would be supported by increasingindustrial activity improving income level and urbanization. Mumbai and Bengaluru havebeen rated as the top real investment destination in Asia.
With the implementation of the RERA 2016 the interest of the consumers is going to beprotected. RERA is going to make home buying process simpler and easier as well astransparent for the buyers. One can expect an increase in the demand due to this but thatwill take some time. It all depends on when the government constitutes the RERA."
As of now 90 smart cities have been added to the Centre's programme. Thirty new citieswere added to the Centre's Smart Cities Mission and total investment of S. 57393 crorewas announced by Union Urban Development Minister M. Venkaiah Naidu taking the totalnumber of smart cities to 90.
Housing price are likely to fall by up to 5% following the implementation of Goods andServices Tax (GST) after the Centre and states decided to peg the levy at 12% on finishedhouses or apartments. For a normal houses (up to S. 6000 per sq ft) 12% GST on afinished house or an apartment will be effectively reduced to near zero as the developerwill take the credit for taxes he paid on inputs. At the same time the buyer will nothave to pay the service tax 4.5% of the price of the house.
Also with the government having focus on infrastructure Development and Housing forAll we expect the demand for AAC Blocks to increase multi-fold in the future.
Looking at all the above factors I am quite sure that the Company's future is verybright. We look forward to continuing along our successful path together with you.
I would like to thank all our consumer employees Suppliers who are directly orindirectly associated with the company for their support and commitment which helped usto reach where we are now.
I would like to thank our shareholders for their trust and encouragement and assure toserve strong Profitable and Sustainable Growth.
With Warms regards Mr. Narayan Sitaram Saboo
Chairman Bigbloc Construction Limited