Your Directors have pleasure in presenting the Eleventh Annual Report together with theaudited statement of accounts of the Company for the financial year ended March 31 2017.
The highlights of the standalone financial results of the Company for the financialyear ended March 31 2017 are as under:
| || ||Amount ( Rs in Lakhs) |
|Particulars ||Year ended March 31 2017 ||Year ended March 31 2016 |
|Profit before Depreciation / Amortisation ||1825.40 ||7522.21 |
|Less: Depreciation / Amortisation ||134.45 ||294.35 |
|Profit before Tax ||1690.95 ||7227.86 |
|Less: Provision for Tax ||(44.12) ||672.67 |
|Profit after Tax ||1735.07 ||6555.19 |
The highlights of the consolidated financial results of the Company for the financialyear ended March 31 2017 are as under:
| || ||Amount ( Rs in Lakhs) |
|Particulars ||Year ended March 31 2017 ||Year ended March 31 2016 |
|Profit before Depreciation / Amortisation ||60851.89 ||53379.48 |
|Less: Depreciation / Amortisation ||7143.09 ||6.948.08 |
|Profit before Tax ||53708.80 ||46431.40 |
|Less: Provision for Tax ||18261.51 ||14184.07 |
|Profit after Tax before share of Profit / (Loss) from associates and Non controlling interest ||35447.29 ||32247.33 |
|Share of Profit / (Loss) from associates ||220.07 ||(114.09) |
|Non controlling interest ||(4021.77) ||2526.85 |
|Net Profit for the year ||39689.13 ||29606.39 |
REVIEW OF OPERATIONS & BUSINESS UPDATE:
Key Financial Highlights (consolidated):
Increase of around 13.0% in EBITDA -
Total EBITDA in FY '17 increased to Rs 1169.3 crores as against the EBITDA of Rs1034.9 crores in FY '16.
Increase of around 15.7% in PBT -
Total Profit Before Tax (PBT) in FY '17 increased to Rs 537.1 crores as against the PBTof Rs 464.3 crores in FY '16.
Increase of around 34.1% in PAT after minority interest -
Total Profit After Tax and minority interest (PAT) in FY '17 increased to Rs 396.9crores as against the PAT of Rs 296.1 crores in FY '16
Increase of around 19.3% in EPS
Earnings per share (EPS) in FY '17 increased to Rs 8.66 as against the EPS of Rs 7.26in FY '16.
The Company has maintained its long term credit rating of AA- amongst the highestrated listed companies in the Indian real estate industry peer group. The Company has alsoretained A1+ rating for its short-term debt which is the highest rating that can beassigned for short-term debt. With this the Company enjoys ease and most favorable termson the loans/facilities being availed from the Banks/Financial Institutions. The ratingsare the manifestation of the Company's strong fundamentals low gearing and executiontrack record and mirror its long term growth prospects.
BUSINESS OVERVIEW (consolidated)
Indiabulls Real Estate Limited is one of the largest real estate companies in Indiawith Net worth of Rs 5480 crores with a well-diversified presence in both commercial andresidential real estate development and has projects across the price spectrum frommid-income premium to the super luxury space. Geographically the Company's strategicfocus is in key markets of Mumbai Metropolitan Region (MMR) National Capital Region (NCR)in India. In addition all our projects benefit from surrounding infrastructuredevelopments like the Mumbai Metros Dwarka Expressway Trans-harbour sea link NaviMumbai International Airport etc.
RENTAL PROPERTY PORTFOLIO HIGHLIGHTS
One of the largest city-centre commercial portfolio in the financial capital ofIndia aggregating to 4.89 million sq. ft.
Unique tenant base with 200+ marquee tenants generating Rs 692 Cr Annuityrevenue.
Substantial embedded growth through:
Other 4 office developments currently under progress reaching to Rs 1357 CrAnnuity revenue.
Meaningful rent reversions given a sizeable area are currently under-rented.
Standard contractual escalations.
|Property ||Leasable Area (Mn. sq. ft.) ||Projected Annuity Revenue in FY 20-21 ( Rs cr) |
|Completed Properties || || |
|Indiabulls Finance Centre and One Indiabulls Centre Mumbai ||3.3 ||690 |
|One Indiabulls Park Chennai ||1.9 ||91 |
|Total ||5.2 ||781 |
|Properties under construction & in Planning/Approval Process || || |
|Indiabulls commercial development at Indiabulls || || |
|Finance Centre site at Mumbai ||0.79 ||159 |
|Indiabulls commercial development at Blu site at Mumbai ||0.80 ||258 |
|Indiabulls Mint Sector 104 Gurugram ||0.40 ||41 |
|Indiabulls commercial development at Sector 106 Gurugram ||1.16 ||118 |
|Total ||3.15 ||576 |
|Grand Total ||8.35 ||1357 |
Residential Property Portfolio Highlights
15 ongoing projects with total Saleable area of 33.91 million sq. ft. with GrossDevelopment Value Rs 32189 Cr.
53.7% of the Inventory aggregating to Rs 15479 Cr sold.
Handover started for 4 projects and additional 5 projects to start within thenext 4 to 5 quarters.
|Project ||Location ||Area (Mn. sq. ft.) ||Gross Development Value ( Rs Cr) |
|Blu Estate & Club Worli ||Mumbai ||1.37 ||5866 |
|Indiabulls Greens Panvel ||Mumbai ||8.73 ||4423 |
|Indiabulls Golf City Savroli ||Mumbai ||5.39 ||3229 |
|Centrum Park Gurugram ||NCR ||2.16 ||909 |
|Enigma Gurugram ||NCR ||1.76 ||1116 |
|Indiabulls Greens Chennai ||Chennai ||2.07 ||819 |
|Indiabulls City Sonepat ||NCR ||1.76 ||252 |
|One Indiabulls Gurugram ||NCR ||4.68 ||3744 |
|One Indiabulls Vadodara ||Vadodara ||0.23 ||83 |
|Indiabulls One 09 ||Gurugram ||1.10 ||872 |
|Mega Mall Jodhpur ||Jodhpur ||0.65 ||363 |
|Indiabulls Seirra Vizag ||Vizag ||0.84 ||265 |
|One Indiabulls Thane ||Mumbai ||1.40 ||1616 |
|Sky Forest ||Mumbai ||1.63 ||3827 |
|Hanover Bond Mayfair ||London ||0.14 ||4805 |
|Total || ||33.91 ||32189 |
Impetus to Gurugram Projects - NHAI has recently granted a National Highway Statusto the Northern Peripheral Road (Dwarka Expressway). It is a major growth impetus forprojects along the arterial road. It will serve as a major alternate route between Delhiand Gurugram.
For almost entire portfolio of under construction projects key approvals (includingmunicipal and land development) are already in place and all residential projects are RERAregistered and compliant.
Land Bank key to future profitability
The company has fully paid land bank of 1046 acres in key cities across India ofwhich more than 95% of the Land Bank is in high value super-metro cities Mumbai(MMR) National Capital Region (NCR) and Chennai and which is sufficient for proposeddevelopment over the next 5-7 years. In addition to the said land bank of 1046 acres theCompany also possesses 2588 acres of SEZ land in Nashik Maharashtra.
SIGNIFICANT EVENTS DURING FINANCIAL YEAR 2016-17
Acquisition of units of Indiabulls Properties Investment Trust a SGX-ST listedbusiness trust ("IPIT")
Company's holding (through its subsidiaries) in IPIT has increased from 47.51%to 54.95% pursuant to acquisition of additional units by Grapene Limited an indirectwholly-owned subsidiary of the Company.
Joint Development Agreement
The Company through one of its subsidiary had entered into a Joint DevelopmentAgreement with Oricon Properties Pvt. Ltd' a subsidiary of Oricon EnterprisesLimited for development of 7810 sq. mtrs. plot situated at Dr. E. Moses Road WorliMumbai 400018 adjoining to its marque project "BLU".
Buy-back of equity shares of the Company
During the period from December 14 2016 to April 10 2017 the Company pursuant to itBoard authorization and applicable SEBI Regulations had bought back an aggregate34046000 equity shares from the Exchanges for an aggregate value of Rs 272.05 Cr (againstthe maximum buy-back size of Rs 540 Cr) at an average price of Rs 79.91 per equityshare (against the maximum buy-back price of Rs 90 per equity share).
Receipt of refund from DDA and acquisition of entire stake of JV partner in IndiabullsInfrastructure Limited (IIL)
The Company acquired FIM's entire stake of approx. 74% in IIL for Rs 382 croresmaking IIL a wholly owned subsidiary of the Company. Kenneth Builders & Developers PvtLtd a wholly owned subsidiary of IILwas refunded Rs 701 crores net of TDS (being theauction price along with interest of the land situated at Village Tehkhand New Delhiearlier allotted by DDA for development of residential project).
Acquisition of India Land and Properties Limited
Indiabulls Infrastructure Limited a wholly owned subsidiary of the Company acquiredthe entire stake in India Land and Properties Limited ("ILPL") for anaggregate consideration of Rs 685 crores making ILPL a wholly owned subsidiary of theCompany.
ILPL owns a commercial complex of 3 towers with a total constructed area of 2.67million Sq. ft. and leasable area of 1.94 million Sq. ft. spread over a total land areaof over 8.84 acres situated at No. 14 3rd Main Road Ambattur Industrial EstateAmbattur Chennai. Some of the lessees of these towers are Royal Bank of Scotland YesBank Kone Ajuba Covenant MSC service centre HGS Access Healthcare and others. Thesaid complex has been designed in compliance to the National Building Codes by theinternationally acclaimed Ms. ZAHA HADID UK "Laureate Pritzker" Prize Winner(2004) and its a GOLD rated GREEN Building.
MATERIAL EVENTS AND CHANGES SUBSEQUENT TO FINANCIAL YEAR 2016-17
Acquisition of minority stake in Indiabulls Infraestate Limited
The Company acquired the entire minority stake of 10.08% in Indiabulls InfraestateLimited (IIL) a majority owned material subsidiary of the Company from ILFS Fundentities namely IIRF India Realty XXI Limited Little Fairy Limited and Vistra ITCL(India) Limited its minority investors at an aggregate cash consideration of Rs 358.44Cr including interest of Rs 94.85 Cr. thereby making IIL a wholly owned subsidiary ofthe Company. IIL is developing a premium integrated marque residential project namedIndiabulls Blu' in Worli Mumbai comprising of 4 residential towers andadditionally 2 office towers in the non-residential area.
Sale of treasury shares by IBREL IBL Scheme Trust
The Company had realized Rs 662.83 Cr through sale of its 3.3 Cr equity shares held byIBREL IBL Scheme Trust of which the Company is the sole beneficiary. The proceeds are tobe utilized for meeting Company's funding requirements for its ongoing businesses andgeneral corporate purposes.
In view of the requirements of funds for ongoing projects and other corporate businessrequirements of the Company the Board of Directors of the Company has not recommended anydividend for financial year 2016-17.
In compliance with requirements stipulated vide SEBI notification no. SEBI/LAD-NRO/GN/2016-17/008 dated July 8 2016 the Dividend Distribution Policy of the Companyis available on the website of the Company i.e. www.indiabullsrealestate.com.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Companies Act 2013 and in terms of theMemorandum and Articles of Association of the Company Mr. Gurbans Singh (DIN: 06667127)and Mr. Vishal Gaurishankar Damani (DIN: 00358082) director(s) designated as JointManaging Director(s) retire by rotation at the ensuing Annual General Meeting of theCompany and being eligible offer themselves for reappointment. Mr. Ashok Brijmohan Kacker(DIN:01647408) non-executive director of the Company has in view of his otherpre-occupations opted not to propose his candidature for re-appointment as director onthe Board at ensuing Annual General Meeting of the Company.
During the financial year 2016-17 the two year term of Justice (Retd.) Surinder SinghNijjar and Mrs. Rama Das as Independent Directors of the Company came to an end onSeptember 28 2016. The Board places on record its appreciation for the contributions madeby Justice Nijjar and Mrs. Das during their tenure as Independent Directors of theCompany.
Members of the Company at their 10th Annual General Meeting appointed Justice Mrs. GyanSudha Misra (Retd. Justice Supreme Court of India) (DIN: 07577265) as an IndependentDirector of the Company for a period of 2 (two) years w.e.f. September 29 2016.
All the Independent Directors of the Company have given confirmation that they meet thecriteria of independence laid down under Section 149(6) of the Companies Act 2013.
The present composition of the Board along with the brief resume of the Directorsretiring by rotation nature of their expertise in specific functional areas and names ofcompanies in which they hold directorships and memberships/ chairmanships of BoardCommittees are provided in the Report on Corporate Governance forming part of this AnnualReport.
SHARE CAPITAL / STOCK OPTIONS
The paid-up share capital of the Company as of March 31 2017 was Rs 956828678/-comprising of 478414339 equity shares of Rs 2/- each.
During the current year consequent to the extinguishment of 5796000 equity shares on14th April 2017 bought back by the Company under its Buy-back offer thepaid-up equity share capital of the Company reduced to Rs 945236678/- divided into472618339 equity shares of face value Rs 2/- each.
Subsequently consequent to the allotment of an aggregate 2055800 equity shares offace value Rs 2/- each on May 8 2017 against exercise of stock options under variousESOP Schemes of the Company the paid up equity share capital of the Company standsincreased to Rs 949348278/- divided into 474674139 equity shares of Rs 2/- each. Thedisclosures required to be made in compliance with the applicable regulations are set outin the Annexure-B to this Report and have been placed on the website of the Companyhttp://www.indiabullsrealestate.com/.
During the year under review the Company has not accepted any deposits from thepublic falling within the ambit of Chapter V of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014.
LISTING WITH STOCK EXCHANGES
The Equity Shares (ISIN No.: INE 069 I01010) of the Company continue to remain listedat BSE Limited and National Stock Exchange of India Limited. The listing fees payable toboth the exchanges for the financial year 2017-18 have been paid. The GDRs issued by theCompany continue to remain listed on Luxembourg Stock Exchange.
(a) Statutory Auditors
M/s Walker Chandiok & Co. LLP (Firm Regn. No. 001076N/N500013) a member of GrantThornton International the statutory auditors of the Company were appointed by themembers in their Eighth Annual General Meeting held on 29th September 2014for a period of five years i.e. until the conclusion of the thirteenth Annual GeneralMeeting of the Company. The Company has received a certificate from the Auditors to theeffect that their continuation as such from the conclusion of this Annual General Meetinguntil the conclusion of twelfth annual general meeting is in accordance with theprovisions of Section 141(3)(g) of the Companies Act 2013. The Board recommends theratification of the appointment of M/s Walker Chandiok & Co. LLP as statutoryauditors of the Company till the conclusion of twelfth annual general meeting of theCompany.
The Auditors' Report is self explanatory and therefore do not call for anyfurther explanation.
(b) Secretarial Auditors & Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with therules made thereunder the Company had appointed M/s S. Khandelwal & Co. a firm ofCompany Secretaries in practice as its Secretarial Auditors to conduct the secretarialaudit of the Company for the Financial Year 2016-17. The Company has provided allassistance facilities documents records and clarifications etc. to the SecretarialAuditors for conducting their audit. The Report of Secretarial Auditors for the FinancialYear 2016-17 is annexed as Annexure 1 and forms part of this Report.
The Report is self explanatory and therefore do not call for any furtherexplanation.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)" theCompany has undertaken projects in the areas of Sanitation as per its CSR Policy(available on your Company's website http://www.indiabullsrealestate.com) and the detailsare contained in the Annual Report on CSR Activities given in Annexure 2 forming part ofthis Report. These projects are in accordance with Schedule VII of the Companies Act2013 read with the relevant Rules.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 as amended ("SEBI LODRRegulations") with the Stock Exchanges Management's Discussion and Analysis Reportfor the year under review is presented in a separate section forming part of this AnnualReport.
CORPORATE GOVERNANCE REPORT
Pursuant to Regulation 24 of the SEBI LODR Regulations with the Stock Exchanges aseparate section on Corporate Governance Practices followed by the Company together witha certificate from a practicing Company Secretary confirming compliance is presented in aseparate section forming part of this Annual Report.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34 of the SEBI LODR Regulations mandates inclusion of theBusiness Responsibility Report (BRR) as part of the Annual Report for top 500 listedentities based on market capitalization. In compliance with the regulation we haveprovided the BRR as part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134 of the Companies Act 2013:
a) that in the preparation of the annual financial statements for the year ended March31 2017 the applicable accounting standards had been followed along with properexplanation relating to material departures if any;
b) that such accounting policies as mentioned in the Notes to the Financial Statementshave been selected and applied consistently and judgments and estimates have been madethat are reasonable and prudent so as to give a true and fair view of the state of affairsof the Company as at March 31 2017 and the profit and loss of the company for the yearended on that date;
c) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
d) that the annual financial statements have been prepared on a going concern basis;
e) that proper internal financial controls were in place and that such financialcontrols were adequate and were operating effectively; and
f) that systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
INFORMATION PURSUANT TO SECTION 134 AND SECTION 197 OF THE COMPANIES ACT 2013 READWITH THE RELEVANT RULES AND SEBI LODR REGULATIONS
The information required to be disclosed pursuant to Section 134 and Section 197 of theCompanies Act 2013 read with the relevant Rules (to the extent applicable) and SEBI LODRRegulations not elsewhere mentioned in this Report are given in Annexure -A'forming part of this Report.
Electronic copies of the Annual Report 2017 and Notice of the 11th AGM arebeing sent to all the members whose email addresses are registered with the Company /Depository Participant(s). For members who have not registered their email addresses orhave submitted requests with the Company physical copies of the Annual Report 2017 andNotice of the 11th AGM are being sent in the permitted mode.
The Company is providing e-voting facility to all members to enable them to cast theirvotes electronically on all resolutions set forth in the Notice of the 11thAGM. This is pursuant to section 108 of the Companies Act 2013read with applicable Rulesand in accordance with the SEBI LODR Regulations. The instructions for e-voting areprovided in the AGM Notice.
Your Company has been able to operate efficiently because of the culture ofprofessionalism creativity integrity and continuous improvement in all functional areasand the efficient utilization of all its resources for sustainable and profitable growth.Your Directors wish to place on record their appreciation of the contributions made andcommitted services rendered by the employees of the Company at various levels. YourDirectors also wish to express their gratitude for the continuous assistance and supportreceived from the investors clients bankers regulatory and government authoritiesduring the year.
| ||For and on behalf of the Board of Directors |
| ||Gurbans Singh ||Vishal Gaurishankar Damani |
|Place: Mumbai ||Joint Managing Director ||Joint Managing Director |
|Date: July 24 2017 ||(DIN: 06667127) ||(DIN: 00358082) |