Indiabulls Real Estate Limited (The Company), for the Financial Year 2017-18
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September 29, 2018 Scrip Code - 532832 IBREALEST/EQ BSE Limited National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, “Exchange Plaza”, Bandra-Kurla Complex, Dalal Street, Bandra (East), MUMBAI – 400 001 MUMBAI – 400 051 Sub: Submission of Annual Report of Indiabulls Real Estate Limited (the Company), for the financial year 2017-18 Ref: Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended (Listing Regulations) Dear Sir/Madam, We wish to inform you that the 12th Annual General Meeting (AGM) of the Members of the Company was held today i.e. September 29, 2018 at 4:00 P.M. at Mapple Emerald, Rajokri, NH- 8, New Delhi-110038. The Members present at the AGM transacted the business mentioned in the Notice dated August 30, 2018. Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we submit herewith Annual Report of the Company for the financial year 2017-18. We request you to take the above information on record. Thanking you, Yours faithfully, For Indiabulls Real Estate Limited Ravi Telkar Company Secretary Encl.: a/a CC: Luxembourg Stock Exchange, Luxembourg Indiabulls Real Estate Limited CIN: L45101DL2006PLC148314 Corporate Office: Indiabulls Finance Centre, Tower 1, 14th Floor, Senapati Bapat Marg, Elphinstone Road, Mumbai - 400013 Tel.: (022) 61891200 Fax: (022) 61891421 Registered Office: M-62 & 63, First Floor, Connaught Place, New Delhi - 110001. Tel.: (011) 30252900, Fax: (011) 30252901 Email: [email protected] Website: http://www.indiabullsrealestate.com/ Contents Company Overview 01 Company Information 02 Chairman’s Message Board and Management Reports 05 Directors’ Report 52 Management Discussion and Analysis Report 60 Business Responsibility Report 67 Corporate Governance Report Financial Statements 83 Consolidated Financials 173 Standalone Financials 235 Statement pursuant to Section 129(3) of the Companies Act, 2013 Forward-looking statement In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and other statements - written and oral - that we periodically make, contain forward-looking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’ and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in assumptions. The achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward looking statements, whether as a result of new information, future events or otherwise. Company’s land bank and Company’s project means the consolidated land bank and project of the Company as consolidated entity alongwith all its subsidiaries. INDIABULLS REAL ESTATE LIMITED Annual Report 2017-18 Company Informa�on BOARD OF DIRECTORS REGISTERED OFFICE M - 62 & 63, First Floor, Connaught Place, Mr. Sameer Gehlaut (DIN: 00060783) New Delhi - 110 001, INDIA Chairman & Non-Execu�ve Promoter Director Website: h�ps://www.indiabullsrealestate.com/ Mr. Narendra Gehlaut (DIN: 01246303) Tel: 0124-6681199, Fax: 0124-6681240 Vice-Chairman & Execu�ve Director Email: [email protected] Mr. Gurbans Singh (DIN: 06667127) CIN: L45101DL2006PLC148314 Joint Managing Director CORPORATE OFFICES Mr. Vishal Gaurishankar Damani (DIN: 00358082) (i) Indiabulls House, Indiabulls Finance Centre, Joint Managing Director Senapa� Bapat Marg, Elphinstone Road, Mumbai - 400 013 (Retd.) (DIN: 06949954) Jus�ce Mr. Bisheshwar Prasad Singh Maharashtra Independent Director (ii) Indiabulls House, 448-451, Jus�ce Mrs. Gyan Sudha Misra (Retd.) (DIN: 07577265) Udyog Vihar, Phase V, Independent Director Gurugram - 122 016, Haryana Mr. Shamsher Singh Ahlawat (DIN: 00017480) REGISTRAR AND SHARE TRANSFER AGENT Independent Director Karvy Computershare Private Limited Brig. Labh Singh Sitara (Retd.) (DIN: 01724648) Karvy Selenium, Tower B, Plot No.31-32, Gachibowli, Independent Director Financial District, Nanakramguda, Hyderabad - 500 032 COMPANY SECRETARY Mr. Ravi Telkar BANKERS Andhra Bank CHIEF FINANCIAL OFFICER Axis Bank Limited Mr. Anil Mi�al Bank of Baroda Bank of India STATUTORY AUDITORS Bank of Maharashtra M/s Walker Chandiok & Co. LLP Central Bank of India Chartered Accountants HDFC Bank Limited (Member firm of global accoun�ng firm Grant Thornton) IDBI Bank Limited IndusInd Bank Limited INTERNAL AUDITORS Laxmi Vilas Bank M/s MRKS & Associates Oriental Bank of Commerce Chartered Accountants RBL Bank Limited State Bank of India SECRETARIAL AUDITORS Syndicate Bank M/s S. Khandelwal & Co. Yes Bank Limited Company Secretaries 1 INDIABULLS REAL ESTATE LIMITED Annual Report 2017-18 CHAIRMAN’S MESSAGE Dear Shareholders, As we complete another successful year, the Company has been able to sustain its growth in its endeavor to enhance shareholders’ wealth. The Company has kept its focus on catering to the customers as per their requirements and has, thus, undertaken several projects in various parts of the country. The growing demand for office space and the increase in the income of middle income group (MIG) has facilitated the growth in the real estate sector. Factoring in the demand for houses for residential purposes as well as rise in number of customers with office space requirement, the Company has a well-diversified presence in both commercial and residential real estate development. Your Company has projects across the price spectrum, from mid-income, premium to the super luxury space. Fresh Fund Infusion At the outset, I am pleased to apprise you of a seminal initiative we have taken. Your Company has entered into a joint venture with Blackstone Group L.P., globally renowned real estate private equity investor; and monetized 50% stake Mr. Sameer Gehlaut in our two marquee commercial assets in Mumbai, namely Indiabulls Property Founder & Chairman Pvt Ltd (One Indiabulls Centre, ‘Sky Forest’ and ‘Sky’) and Indiabulls Real Estate Company Pvt Ltd (Indiabulls Finance Centre) at an Enterprise Value of Rs. 9,500 crores. The deal, achieved in a record time, was momentous and one of the largest Real Estate Private Equity Investments in India. Moreover, in July 2018, the Company executed definitive transaction documents with the entities controlled by Blackstone Group L.P., by which the Company will divest 100% stake in the non-core commercial assets in Chennai. Possibilities are being explored to make the most of the opportunities offered by the commercial real estate. Other Key developments during the year Partnership with Mandarin Oriental Hotel Group (Hanover Bond, London) – Your Company has partnered with Mandarin Oriental Hotel Group for its integrated development, Hanover Bond. This is not only the first Mandarin Oriental hotel and residences in Mayfair, but also the first truly integrated hotel and residences to be delivered in central London. Exit from non-core areas l Sale of residential assets at Chennai to a third party investor, for an aggregate consideration of Rs. 285 Crores. l Executed definitive transaction document(s) with the entities controlled by Blackstone Group L.P., by which Company will divest 100% stake in the non-core commercial asset in Chennai. The graphic below depicts the key growth drivers and the portfolio mix of the business: Indiabulls Real Estate Limited 100% 100% 50% Development Portfolio Office Rental Portfolio JV Portfolio with Blackstone (Associate Company) Area Sales Area Annuity Rental Area Annuity (Mn. Value (Mn. Revenue (Mn. Revenue sq. ft.) (` Cr.) sq. ft.) (` Cr.) sq. ft.) (` Cr.) Under construction 28.5 30,130 Completed & owned* 1.9 85 Completed & owned* 3.3 670 Under construction# 3.3 566 Under construction# 0.8 172 Development Area Sales (Mn. Value sq. ft.) (` Cr.) Under construction 1.6 3,839 * As at 30-Jun-2018. # Annualized Annuity Revenue by FY22 on basis of 95% occupancy. Our completed properties have 95% occupancy as on date. 2 INDIABULLS REAL ESTATE LIMITED Annual Report 2017-18 CHAIRMAN’S MESSAGE (Contd..) Economic overview The economic scenario in the country has been favorable with India registering a GDP growth rate of 6.7% and, thus being one of the fastest growing economies in the world. The year 2017-18 marked with economic recovery from the impact of demonetization, from the slowing of growth in the first quarter of the year. Also, the year saw the implementation of a historic reform ‘Goods and Service Tax (GST)‘. Riding on these major changes, the economy has managed to beat the growth estimates, ensuring a favorable economic scenario for the real estate sector particularly. In India, real estate is the second largest employer after agriculture and is slated to grow at 30% over the next decade. The growth of this sector is well complemented by the growth of the corporate environment and the demand for office space as well as urban and semi-urban accommodations. Housing sector is expected to contribute around 11% to India’s GDP by 2020.