Dear Shareholders and friends
Financial year 2016-17 was remarkable for India Inc. Structural reforms such asdemonetisation new indirect tax system (Goods and Services Tax) and Real Estate(Regulation and Development) Act (RERA) paved a new way for Indian corporates. Real Estateindustry which was known for its lack of transparency saw the implementation of RERA:the single most positive reform the industry has seen since its inception. Anotherimportant regulatory initiative by the government Real Estate Investment Trust (REIT) isall set to launch this year. It will provide incentive for commercial asset development bysolving fund-raising issue for developers.
As per our commitment to shift from a heavy residential base to commercial developmentwe have 4 commercial projects in the pipeline with an area of more than 1 million sq. ft.As Bangalore witnesses the lowest vacancy rate in commercial space among all cities weexpect the new supply of office spaces will strongly contribute to our top line. We arealso looking for new lines of businesses and waiting for right opportunities to embarkupon.
Our Pune mall has crossed occupancy level of 73% and is expected to be fully leased bythe end of current fiscal. Ritz-Carlton has set the benchmark of being an internationallyrecognized luxury hotel in India. Its occupancy touched 82% in February.
Although sales in our residential segment have slowed down due to macroeconomic shocksand impacted our top line it is expected to pick up by the 2nd quarter of FY 2018. We arecommitted to timely delivery of on-going projects to our customers.
We have reduced our cost of debt by 140 basis points in the financial year. In this newera of low interest rate we expect our cost of capital to go down further that would helpus in better management of our cash flows.
In terms of our most valuable resource employees we refined the appraisal system bylinking it with the Annual Operating Plan that helps us in creating a balanced score cardand hence a better way to review the performance. We strive to make your company the bestplace to work in terms of learning challenges and growth.
As uncertainties in real estate sector fade away we expect regulatory approvals to beeasier than before reducing the time and cost for developers. Customer-friendly regimewould definitely bring back the consumer confidence and hence our revenue and profits willtake an upturn.
I would like to thank our board members customers employees and business partners forall the support over the years and look forward to meeting you at our Annual GeneralMeeting (AGM).
|Best wishes |
|NITESH SHETTY |
|Chairman and Managing Director |