FUTURE INDIABULLS REAL ESTATE Directors Report

Dear Shareholders,


The Directors have pleasure in presenting the Eleventh Annual Report together with the audited statement of accounts of the Company for the financial year ended March 31, 2017.


Financial Results


The highlights of the standalone financial results of the Company, for the financial year 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



1,825.40



7,522.21



Less: Depreciation / Amortisation



134.45



294.35



Profit before Tax



1,690.95



7,227.86



Less: Provision for Tax



(44.12)



672.67



Profit after Tax



1,735.07



6,555.19



The highlights of the consolidated financial results of the Company, for the financial year 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



60,851.89



53,379.48



Less: Depreciation / Amortisation



7,143.09



6.948.08



Profit before Tax



53,708.80



46,431.40



Less: Provision for Tax



18,261.51



14,184.07



Profit after Tax before share of Profit / (Loss) from associates and Non controlling interest



35,447.29



32,247.33



Share of Profit / (Loss) from associates



220.07



(114.09)



Non controlling interest



(4,021.77)



2,526.85



Net Profit for the year



39,689.13



29,606.39



REVIEW OF OPERATIONS & BUSINESS UPDATE:


Key Financial Highlights (consolidated):


- Increase of around 13.0% in EBITDA -


Total EBITDA in FY ‘17 increased to Rs.1,169.3 crores as against the EBITDA of Rs.1,034.9 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 PBT of 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.396.9 crores 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.7.26 in FY ‘16.


CREDIT RATING:


The Company has maintained its long term credit rating of AA-, amongst the highest rated listed companies in the Indian real estate industry peer group. The Company has also retained A1 rating for its short-term debt, which is the highest rating that can be assigned for short-term debt. With this the Company enjoys ease and most favorable terms on the loans/facilities being availed from the Banks/Financial Institutions. The ratings are the manifestation of the Company’s strong fundamentals, low gearing and execution track record and mirror its long term growth prospects.


BUSINESS OVERVIEW (consolidated)


Indiabulls Real Estate Limited is one of the largest real estate companies in India with Net worth of Rs.5,480 crores, with a well-diversified presence in both commercial and residential real estate development and has projects across the price spectrum, from mid-income, premium to the super luxury space. Geographically, the Company’s strategic focus is in key markets of Mumbai Metropolitan Region (MMR), National Capital Region (NCR) in India. In addition, all our projects benefit from surrounding infrastructure developments like the Mumbai Metros, Dwarka Expressway, Trans-harbour sea link, Navi Mumbai International Airport, etc.


RENTAL PROPERTY PORTFOLIO HIGHLIGHTS


- One of the largest city-centre commercial portfolio in the financial capital of India aggregating to 4.89 million sq. ft.


- Unique tenant base with 200 marquee tenants generating Rs.692 Cr Annuity revenue.


- Substantial embedded growth through:


- Other 4 office developments currently under progress reaching to Rs.1,357 Cr Annuity 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



1,357



Residential Property Portfolio Highlights


- 15 ongoing projects with total Saleable area of 33.91 million sq. ft. with Gross Development Value Rs.32,189 Cr.


- 53.7% of the Inventory aggregating to Rs.15,479 Cr sold.


- Handover started for 4 projects, and additional 5 projects to start within the next 4 to 5 quarters.












































































































Project



Location



Area (Mn. sq. ft.)



Gross Development Value (Rs. Cr)



Blu Estate & Club, Worli



Mumbai



1.37



5,866



Indiabulls Greens, Panvel



Mumbai



8.73



4,423



Indiabulls Golf City, Savroli



Mumbai



5.39



3,229



Centrum Park, Gurugram



NCR



2.16



909



Enigma, Gurugram



NCR



1.76



1,116



Indiabulls Greens, Chennai



Chennai



2.07



819



Indiabulls City, Sonepat



NCR



1.76



252



One Indiabulls, Gurugram



NCR



4.68



3,744



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



1,616



Sky Forest



Mumbai



1.63



3,827



Hanover Bond, Mayfair



London



0.14



4,805



Total



33.91



32,189



Impetus to Gurugram Projects - NHAI has recently granted a National Highway Status to the Northern Peripheral Road (Dwarka Expressway). It is a major growth impetus for projects along the arterial road. It will serve as a major alternate route between Delhi and Gurugram.


For almost entire portfolio of under construction projects, key approvals (including municipal and land development) are already in place and all residential projects are RERA registered and compliant.


Land Bank - key to future profitability


The company has fully paid land bank of 1,046 acres in key cities across India, of which 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 proposed development over the next 5-7 years. In addition to the said land bank of 1,046 acres, the Company also possesses 2,588 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 listed business 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 indirect wholly-owned subsidiary of the Company.


Joint Development Agreement


The Company, through one of its subsidiary, had entered into a Joint Development Agreement with ‘Oricon Properties Pvt. Ltd’, a subsidiary of Oricon Enterprises Limited, for development of 7,810 sq. mtrs. plot situated at Dr. E. Moses Road, Worli, Mumbai - 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 it Board authorization and applicable SEBI Regulations, had bought back an aggregate 3,40,46,000 equity shares, from the Exchanges, for an aggregate value of Rs.272.05 Cr (against the maximum buy-back size of Rs.540 Cr) at an average price of Rs.79.91 per equity share (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 Indiabulls Infrastructure Limited (IIL)


The Company acquired FIM’s entire stake of approx. 74% in IIL, for Rs.382 crores, making IIL a wholly owned subsidiary of the Company. Kenneth Builders & Developers Pvt Ltd, a wholly owned subsidiary of IIL,was refunded Rs.701 crores, net of TDS, (being the auction price, along with interest, of the land situated at Village Tehkhand, New Delhi, earlier 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, acquired the entire stake in India Land and Properties Limited (“ILPL”), for an aggregate consideration of Rs.685 crores, making ILPL a wholly owned subsidiary of the Company.


ILPL owns a commercial complex of 3 towers with a total constructed area of 2.67 million Sq. ft. and leasable area of 1.94 million Sq. ft., spread over a total land area of over 8.84 acres situated at No. 14, 3rd Main Road, Ambattur Industrial Estate, Ambattur, Chennai. Some of the lessees of these towers are Royal Bank of Scotland, Yes Bank, Kone, Ajuba, Covenant, MSC service centre, HGS, Access Healthcare and others. The said complex has been designed in compliance to the National Building Codes by the internationally 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 Infraestate Limited (IIL), a majority owned material subsidiary of the Company, from ILFS Fund entities, namely IIRF India Realty XXI Limited, Little Fairy Limited and Vistra ITCL (India) Limited, its minority investors, at an aggregate cash consideration of Rs.358.44 Cr, including interest of Rs.94.85 Cr., thereby making IIL a wholly owned subsidiary of the Company. IIL is developing a premium integrated marque residential project named ‘Indiabulls Blu’ in Worli, Mumbai, comprising of 4 residential towers and additionally 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 by IBREL IBL Scheme Trust, of which the Company is the sole beneficiary. The proceeds are to be utilized for meeting Company’s funding requirements for its ongoing businesses and general corporate purposes.


DIVIDEND


In view of the requirements of funds for ongoing projects and other corporate business requirements of the Company, the Board of Directors of the Company has not recommended any dividend 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 Company is 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 the Memorandum and Articles of Association of the Company, Mr. Gurbans Singh (DIN: 06667127) and Mr. Vishal Gaurishankar Damani (DIN: 00358082), director(s) designated as Joint Managing Director(s), retire by rotation at the ensuing Annual General Meeting of the Company, and being eligible offer themselves for reappointment. Mr. Ashok Brijmohan Kacker (DIN:01647408), nonexecutive director of the Company, has, in view of his other pre-occupations, opted not to propose his candidature for re-appointment as director on the Board, at ensuing Annual General Meeting of the Company.


During the financial year 2016-17, the two year term of Justice (Retd.) Surinder Singh Nijjar and Mrs. Rama Das, as Independent Directors of the Company, came to an end on September 28, 2016. The Board places on record its appreciation for the contributions made by Justice Nijjar and Mrs. Das, during their tenure as Independent Directors of the Company.


Members of the Company at their 10th Annual General Meeting appointed Justice Mrs. Gyan Sudha Misra (Retd. Justice Supreme Court of India) (DIN: 07577265) as an Independent Director 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 the criteria 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 Directors retiring by rotation, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships/ chairmanships of Board Committees, are provided in the Report on Corporate Governance forming part of this Annual Report.


SHARE CAPITAL / STOCK OPTIONS


The paid-up share capital of the Company as of March 31, 2017, was Rs.95,68,28,678/- comprising of 47,84,14,339 equity shares of Rs.2/- each.


During the current year, consequent to the extinguishment of 57,96,000 equity shares on 14th April 2017, bought back by the Company under its Buy-back offer, the paid-up equity share capital of the Company, reduced to Rs.94,52,36,678/- divided into 47,26,18,339 equity shares of face value Rs.2/- each.


Subsequently, consequent to the allotment of an aggregate 20,55,800 equity shares of face value Rs.2/- each on May 8, 2017, against exercise of stock options under various ESOP Schemes of the Company, the paid up equity share capital of the Company stands increased to Rs.94,93,48,278/- divided into 47,46,74,139 equity shares of Rs.2/- each. The disclosures required to be made in compliance with the applicable regulations are set out in the Annexure-B to this Report and have been placed on the website of the Company http://www.indiabullsrealestate.com/.


PUBLIC DEPOSITS


During the year under review, the Company has not accepted any deposits from the public, 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 listed at BSE Limited and National Stock Exchange of India Limited. The listing fees payable to both the exchanges for the financial year 2017-18 have been paid. The GDRs issued by the Company continue to remain listed on Luxembourg Stock Exchange.


AUDITORS


(a) Statutory Auditors


M/s Walker Chandiok & Co. LLP (Firm Regn. No. 001076N/N500013), a member of Grant Thornton International, the statutory auditors of the Company were appointed by the members in their Eighth Annual General Meeting, held on 29th September 2014, for a period of five years i.e. until the conclusion of the thirteenth Annual General Meeting of the Company. The Company has received a certificate from the Auditors to the effect, that their continuation as such from the conclusion of this Annual General Meeting until the conclusion of twelfth annual general meeting, is in accordance with the provisions of Section 141(3)(g) of the Companies Act, 2013. The Board recommends the ratification of the appointment of M/s Walker Chandiok & Co. LLP, as statutory auditors of the Company till the conclusion of twelfth annual general meeting of the Company.


The Auditors’ Report is self - explanatory and therefore do not call for any further explanation.


(b) Secretarial Auditors & Secretarial Audit Report


Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the rules made thereunder, the Company had appointed M/s S. Khandelwal & Co., a firm of Company Secretaries in practice as its Secretarial Auditors, to conduct the secretarial audit of the Company, for the Financial Year 2016-17. The Company has provided all assistance, facilities, documents, records and clarifications etc. to the Secretarial Auditors for conducting their audit. The Report of Secretarial Auditors for the Financial Year 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 further explanation.


CORPORATE SOCIAL RESPONSIBILITY


As part of its initiatives under “Corporate Social Responsibility (CSR)”, the Company 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 details are contained in the Annual Report on CSR Activities given in Annexure 2, forming part of this Report. These projects are in accordance with Schedule VII of the Companies Act, 2013, read with the relevant Rules.


MANAGEMENT DISCUSSION AND ANALYSIS REPORT


Pursuant to Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (“SEBI LODR Regulations”) with the Stock Exchanges, Management’s Discussion and Analysis Report, for the year under review, is presented in a separate section forming part of this Annual Report.


CORPORATE GOVERNANCE REPORT


Pursuant to Regulation 24 of the SEBI LODR Regulations with the Stock Exchanges, a separate section on Corporate Governance Practices followed by the Company, together with a certificate from a practicing Company Secretary confirming compliance, is presented in a separate section forming part of this Annual Report.


BUSINESS RESPONSIBILITY REPORT


Pursuant to Regulation 34 of the SEBI LODR Regulations mandates inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for top 500 listed entities based on market capitalization. In compliance with the regulation, we have provided the BRR as part of this Annual Report.


DIRECTORS’ RESPONSIBILITY STATEMENT


To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134 of the Companies Act, 2013:


a) that in the preparation of the annual financial statements for the year ended March 31, 2017, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;


b) that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company, as at March 31, 2017 and the profit and loss of the company for the year ended on that date;


c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;


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 financial controls were adequate and were operating effectively; and


f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.


INFORMATION PURSUANT TO SECTION 134 AND SECTION 197 OF THE COMPANIES ACT, 2013 READ WITH THE RELEVANT RULES AND SEBI LODR REGULATIONS


The information required to be disclosed pursuant to Section 134 and Section 197 of the Companies Act, 2013, read with the relevant Rules (to the extent applicable) and SEBI LODR Regulations, not elsewhere mentioned in this Report, are given in ‘Annexure -A’ forming part of this Report.


GREEN INITIATIVES


Electronic copies of the Annual Report 2017 and Notice of the 11th AGM are being 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 or have submitted requests with the Company, physical copies of the Annual Report 2017 and Notice 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 their votes electronically on all resolutions set forth in the Notice of the 11th AGM. This is pursuant to section 108 of the Companies Act, 2013,read with applicable Rules and in accordance with the SEBI LODR Regulations. The instructions for e-voting are provided in the AGM Notice.


ACKNOWLEDGEMENT


Your Company has been able to operate efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all functional areas and 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 and committed services rendered by the employees of the Company at various levels. Your Directors also wish to express their gratitude for the continuous assistance and support received from the investors, clients, bankers, regulatory and government authorities, during the year.



For and on behalf of the Board of Directors


Gurbans Singh Vishal Gaurishankar Damani


Joint Managing Director Joint Managing Director


(DIN: 06667127) (DIN: 00358082)


Place: Mumbai


Date: July 24, 2017

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