Fiscal 2017 was an eventful year a transitional phase for the real estatesector. We witnessed the sudden demonetization of high value currency notes; policy thatprovide a greater impetus for affordable housing; lowering of interest rates; passing ofthe Real estate (Regulation and Development) Act 2016 (RERA) and the
Goods and Services Tax (GST) during this year. The government has set the tone forchange with this wave of positive reforms and we believe this will steer the realtysector toward a more transparent accountable and compliant era. With a greater focus toprotect consumer interests andshoringupconfidencethis should surely result in attractingmore demand and investment into the realty sector in India. We are quite confident thatthe post-reform era is one that creates a level playing field and for SOBHA we believe itis an opportune time since we were always future ready.
More than two decades ago SOBHA began with a clear vision to transform the way peopleperceive quality and to develop the highest level of excellence in every aspect of projectdevelopment. Starting from design to construction quality timeliness or safety andenvironmental standards every aspect was important to us and even today there is a greatamount of focus on evolving and improving. Our backward integrated model is the outcome ofthat quest for perfection where we gradually started building in-house capabilities tocontrol every aspect in the project lifecycle. Whether it was to ensure we have the mostfunctional and aesthetic design; safe and optimized engineering; the right quality ofmaterials within the stipulated time; or the best trained technicians to constructworld-class quality we believed it was best to get it done ourselves.
SOBHA is driven by pure passion for perfection. In parallel doing business with thehighest levels of integrity and transparency was deeply ingrained in our value system. Wesincerely believed in ensuring our people processes and systems supported this beliefand every decision we made always had our customers' interests as our top priority. Wealso ensure that our disclosure policies and corporate governance standards are the bestin the industry.
During the last fiscal we registered revenues of Rs. 22.85 billion which is 15% higherthan the previous year.
Out of this the real estate business contributed Rs. 14.88 billion and the contractsand manufacturing business contributed Rs. 7.58 billion. Our EBITDA stood at Rs. 4.58billion and the profit after tax was Rs. 2.45 billion. Further the debt equity ratio hasbeen brought down to 0.78 and the average cost of borrowing is also reduced to 10.42%(March 2017) from 11.83% (March 2016). In addition we have received reaffirmation of ourcredit rating at "A" (Stable) by ICRA.
Our new launches for the last year include SOBHA Palm Court at Bangalore and Marina Oneat Kochi. We completed and handed over 7 real estate projects and 10 contractual projectstotaling about 5.09 million sq. feet of developable area during 2016-17. At present weare working on 39 real estate projects and 30 contractual projects in 9 different citiesmeasuring about 51 million sq. feet of developable area. If we look at our delivery trackrecord since inception we have already completed 406 projects with 86.73 million sq. feetacross 26 cities in 13 states as on 31st March 2017.
Having consistently delivered for the past 22 years our stakeholders have developed adeep sense of reliability trust and admiration for SOBHA. We are truly prepared andlooking forward to play an important role in the RERA regime which calls for building astrong real estate sector where there will be transparency adherence to the rulesandhighconsumerconfidence.In addition the GST too will augur well for the real estatesector in India for it will bring more transparency abolish multiple taxation and willmake the system more streamlined. GST will help the real estate with an audit trail forbetter control and monitoring. With RERA and GST the much needed structural change inreal estate will take place and will help spur real estate demand.
With the granting of infrastructure status to the affordable segment and giving taxincentives to make it more attractive the government has certainly taken a positive stepin the right direction. The Credit Linked
Subsidy Scheme (CLSS) under Pradhan Mantri Awas Yojana (PMAY) has been extended toinclude the middle income groups as well. SOBHA is preparedtoplay in the changed scenario.We believe in informing and educating our customers and so that they can promptly benefit
For instance at our SOBHA Dream Acres Project we have customers who have alreadyapplied into these schemes. We are poised to take lead in this new regime and gainimmensely.
Keeping the future requirements and the changing demands of our customers in mind werecently introduced a customer centric outreach program called SOBHA Connect all acrossour completed properties. This was primarily a listening exercise which has enabled us tounderstand our customers better and plan our future strategies. This has helped us evolveand engage at a deeper level with our customers. The insights that we have gained havebeen used as valuable feedback to strengthen the process further.
What is perhaps the biggest testimony of our core values are the awards andrecognitions that have come our way. It is a matter of great pride for us that our founderMr. PNC Menon has been honoured with the Lifetime Achievement Award for his contributionsto the sector by two well-respected organizations Deepika the largest circulatedbusiness daily in Kerala and the K.P.S. Menon Memorial Award by the Sri Chettur Sankaran
Nair Memorial Cultural (CSN) Trust. There were other recognitions as well in thisfinancial year. SOBHA has achieved a rare hat-trick by being recognized as the TopNational Realty Brand across Asset Class in India for the past three consecutive years ina row in Brand X report by Track2Realty an independent and credible think-tank on realestate in India. We are the first real estate company in the country to have achieved thisexceptional recognition in brand leadership. Additionally SOBHA has also retained its topposition in the pan-
India Consumer Confidence Survey for the fourth consecutive year. Further the reportgives top scores to SOBHA in its NRI Confidence survey and for its CSR initiatives.
Furthermore SOBHA has been recognized as the top Indian real estate player for havingthe best business practices pan-India. These perception surveys have been carried out in20 different cities in the country with large sample sizes and emphasizes on factors suchas developers' commitment towards transparency and fair trade practices leading toconsumer satisfaction. Further CIDC has honoured SOBHA for being the best professionallymanaged company in more than Rs. 1000 crore turnover category. While Construction
Times has recognized SOBHA with the "Best Developer of the Year" award 2016.NDTV has also recognized SOBHA City Mall Thrissur with the "Mall of theYear" award. These recognitions and honours are truly humbling and encourage us tocontinue delivering our vision with unwavering focus.
In the early part of last year we rolled out SOBHA Advantage - an employee salesreferral program which saw considerable participation and contribution from all quartersof the company. Our employees are always our greatest brand ambassadors and through thisprogram have also showcased their salesmanship. In addition we continue to have ouremployees provide innovative ideas through SOBHA Genesis an internal platform forsharing ideas that would become best practices for our organization. I would like to thankall Sobhaites who exemplify our philosophy "Passion at Work" everyday and aretruly the core strength that enable us to reach new milestones and be recognized asindustry leaders.
We are confident about our future growth and expect SOBHA once again will continue tobe a role model under the new RERA regime. It augurs well for players who have alwaysadhered to all the right principles and have the best corporate governance standards. Weare looking forward to an era where the real estate sector will be the new benchmark fortransparency and credibility.
I would like to thank all my colleagues on the board for their tremendous supportvaluable insight and guidance which keeps us aiming higher and continually improve ourbusiness. And on behalf of all employees of SOBHA and our customers I would like toextend my sincere gratitude to you for all your support during the year. I look forward tomeeting you at our annual shareholders' meeting.
Ravi PNC Menon