nimbus projects ltd Management discussions

Real estate market in India is booming at an exponential rate, which is why it is no surprise that everyone is keen on the future. The advent of trends like sustainable developments, gated communities, improved amenities, low mortgage rates, and government aid for low-income residents helped boost the market last year. After the slowdown for two consecutive years caused by the global Covid-19 outbreak, the sector is making a phenomenal comeback - registering unprecedented growth. Currently, real estate is one of Indias most prominent industries in terms of generating revenue and employment opportunities. Industry experts view 202324 as a boom year for Indias property market. Now the question is what this year has in store for the housing sector in India - from changing trends to different regulations and developments taking place in major cities.

Real estate - one of the ever-booming sectors in India. The reasons are manifold - the rising middle class, the affluent upper- middle class. Indias emergence as an economic superpower, rapid urbanisation, increased employment opportunities in cities... Together, all these contribute to the phenomenal growth of the sector in India. In fact, India has one of the fastest growing property markets in the world.

THE RESURGENCE OF INDIAS PROPERTY MARKET

Despite a two-year long slump due to Covid-19, the property market in India saw an incredible comeback in 2022, setting new sales records of 68% year-on-year. It further establishes real estate as one of the fastest growing industries in the country. As per industry reports, the first half of the financial year 2022-23 saw seven prime residential markets in the country registering the highest sales in the last 10 years. According to industry veterans, in 2023, the property market will see robust growth with renewed interest among NRIs and millennials to invest in real estate.

REAL ESTATE MARKET IN INDIA AT A GLANCE

According to a report, Indias real estate market is expected to exhibit a growth rate (CAGR) of 9.2% during 2023-2028. Therefore, FY23-24 will see a strong foundation as there will be more buyers, and home loan rates will be lower. Multiple rating agencies have calculated that the Indian economy is estimated to grow by 8-9%, which will ultimately drive the growth in the real estate market. This growth can be attributed to increasing business activity, improved job markets, and higher income levels, all of which will inevitably lead to a rise in real estate demand.

Along with important policy initiatives such as “Housing for All” and the “Pradhan MantriAwasYojana”, the government has been developing and constructing infrastructure mega-projects like highways, new airports, metros, etc. These factors will stimulate both the quantitative and qualitative growth of real estate holdings. Intriguingly, real estate in Tier 2 and Tier 3 markets will also grow rapidly, generating substantial returns for investors.

MARKET SIZE OF REAL ESTATE OVER THE YEARS

Over the years, the property market in the country has scaled new heights, generating more revenue, thus making it one of the most important sectors in the country. Here is a glimpse of the growth story.

Year	Market size Billion dollars	Market size INR, 1000 crores
2008	50	410
2017	120	984
2020	180	1,476
2025	650	5,330
2030	1000	8,200

Source: https://www.statista.com/statistics/955598/india-real-estate-industry-market-size

POLICY REFORMS CAUSES SPURRED IN THE GROWTH OF REAL ESTATE SECTOR

As we have already seen, the Indian property market is expanding rapidly. While an increase in the earning potential of the middle class and a growing aspiration among the customers can be partially attributed to the growth of the sector in India, it is also spurred by governmental policies and regulations. Lets take a look at some of the reforms and regulations that have been pivotal in the growth of the real estate industry in the country.

REAL ESTATE (REGULATION AND DEVELOPMENT) ACT (RERA)

With the introduction of the Real Estate (Regulation and Development) Act (RERA), which came into existence in March 2016. Intended to provide transparency and accountability in the sector, RERA protects the interest of all the stakeholders involved and ensures speedy resolution in case of disputes. Naturally, homebuyers are more confident investing their money in the market.

AMENDMENT TO THE BENAMI TRANSACTIONS ACT

Benami transactions were common in the real estate sector. However, an amendment to the existing Benami Transactions Act gave teeth to the act, making it more stringent. The act further enhanced Indias status as an investment destination by instilling professionalism, accountability, and greater transparency in transactions.

FOREIGN DIRECT INVESTMENT (FDI) IN REAL ESTATE

For long, real estate has been one of the most protected industries in India. But the decision of the government to allow Foreign Direct Investment in the sector under the automatic route is bringing a massive change to the countrys property market , the sector has been witnessing a significant inflow of investments. Of late, it has been touching new heights. For instance, in the period between 2017 and 2022 there has been a three-fold increase in foreign institutional inflows, attracting USD 26.6 billion. This amounts to 81% of the total investments in the sector during the period.

INFRASTRUCTURE STATUS TO AFFORDABLE HOUSING

The government of Indias decision to grant infrastructure status to affordable housing has given a fillip to the sector. As a result, such projects can avail low borrowing rates, tax concessions, and increased capital inflow - private as well as foreign.

100% DEDUCTION IN PROFITS FOR AFFORDABLE HOUSING CONSTRUCTION

Housing costs in the cities, especially major cities such as Mumbai, Delhi, Bangalore, etc., have been skyrocketing, making it beyond the reach of people who come under low-income brackets. Applicable to flats up to 30 square metre in metro cities and 60 square metre in non-metro cities, this proposition will encourage developers to create affordable housing.

EMERGING TRENDS AND SHIFTS IN REAL ESTATE

Like other verticals, the real estate sector is also undergoing massive change. With the rise of technology, consumers are no longer looking for just luxury; smart homes are high on demand. On the other hand, property technologies such as PropTech are changing the way individuals and organisations research, buy, sell, and manage real estate.

Yet another significant change in residential properties is the shift towards sustainable homes. Be it in terms of the materials used, providing provisions for sustainable living, or ensuring that the resources are judiciously used, sustainable homes are gaining widespread popularity, prompting leading developers to embrace the change.

One of the lasting effects of Covid-19 can be seen in the way organisations work. While the pandemic forced companies to stay shut, resulting in the emergence of the work-from-home culture, post Covid-19, work from home has been seen making way for the hybrid work culture. As a result, the demand for co-working spaces and flexible office solutions are hitting a new high. Major companies, including IT/ITeS organisations and start-ups are opting for flexible office spaces. As per a report by property consultant, Anarock, in the first quarter of2023, of the total 8.2 million square feet office space across the top seven cities in India, the share of co-working space has been 27%, which, unequivocally reiterates the growing demand.

The growing e-commerce sector is rapidly changing the retail landscape as we know it. Consequently, there is a higher demand for commercial real estate. Factors that contribute to the growth of commercial properties, owing to the growth of the e-commerce industry include increased demand for warehouses and distribution centres, need for smaller retail spaces and pop-up shops, etc.

INDIAN REAL ESTATE SECTOR: INVESTMENT OPPORTUNITIES AND MARKET OUTLOOK

Leading experts in the Indian property market is viewing 2023-24 as a booming year for the industry. According to them, in the next nine months, there will be 10-15% hike in sales collectively in residential, commercial, and retail segments. With the demand for housing on the rise, its a sure bet to invest in residential real estate. Likewise, both commercial and retail segments are rapidly expanding, thanks to the immense growth in the respective sectors. Obviously, for investors, it is the right time to add real estate in their portfolio.

Besides the four metros and Bangalore, a range of new destinations have emerged as destinations for investing in properties in India. They are Gurugram, Noida, Pune, Hyderabad, Faridabad, Lucknow, Chandigarh, and Ahmedabad. The emergence of these cities as new real estate investment destinations can be attributed to a plethora of reasons such as increased connectivity, growing opportunities, and well-planned infrastructure.

As we have already seen, the property market in India is poised to grow immensely in 2023-24 as well as in the years to come. According to reports, the period between 2023 and 2028, the sector will register a compound annual growth rate of 9.2%. Since work-from-home and hybrid models have already gained popularity, there is a growing tendency among customers to move away from the city and opt for larger homes in the suburbs. Yet another trend is the integration of living spaces and office spaces. Developers now offer dedicated office spaces in the clubhouse or as a separate space. In addition to this, they also offer provisions for home offices in individual units.

INDIAS PROPERTY MARKET: CHALLENGES AND RISKS

Though property market in India is one of the most booming sectors, it is not devoid of challenges and risks. Lets take a look at them. One of the biggest challenges faced by the sector is the high dependency on workforce. As per reports, in 2023, there was a 15-25% shortage of workforce in the construction sector. The shortage can be risky as it may cause delays in delivering the project on time, in which case it will further lead to legal complications. Other challenges include increased price of construction materials, unavailability of land, as well as the complex procedure to acquire land.

Ever since the introduction of RERA, developers have been required to adhere to the regulatory compliance and provide accurate and timely information to customers regarding the status of the project, its progress, and completion date.

With banks setting stringent norms for real estate lending, it is difficult for developers to finance their projects. Yet another concern is liquidity, if the asset is not being sold within the set time frame, it will result in loss for the developer.

Finally, with growing awareness about the need for sustainability practices to protect the environment, property developers are finding ways to be compliant, resulting in increased cost, and time.

INDIAN REAL ESTATE SECTOR: THE WAY FORWARD

As we are about to conclude, lets look at the main points once again. Real estate sector in India is poised to grow immensely. Also, the way consumers look at their homes have changed over the years. While luxury was quite attractive earlier, the new-age consumers opt for luxury smart homes as well as sustainable luxury homes. From the investors point of view, the time is just perfect to invest in properties. However, it can be challenging, navigating through the rapidly changing property market, which includes residential, commercial, and retail sectors.

FINANCIAL REVIEW OF COMPANY

a) Standalone Results of operation: During the financial year under review, your Companys standalone revenue from operations is Rs. 226.67 Lakh as compared to revenue of Rs. 386.21 Lakh in the last year. The standalone profit of your Company is Rs. 2208.22 Lakh as compared to the Profit of Rs. 868.11 Lakh in the last year.

b) Consolidated Results of operation: During the financial year under review, your Company has consolidated its Financial Statement w.r.t. to its Associate Companies viz M/s. Capital Infraprojects Private Limited and M/s. Golden Palm Facility Management Private Limited.

The Companys consolidated revenue from operations is Rs. 226.67 Lakh as compared to revenue of Rs. 386.21 Lakh in the last year, a decrease of 41.31%. The consolidated profit of your Company is Rs. 2,207.93 Lakh as compared to the profit of Rs. 1,424.05 Lakh in last year registering an increase of55.05% over the last year. The individual performance of these Associate Companies has been discussed under the relevant head of this report.

RATIO:

	Standalone		Consolidated
	For the year ended 31st March 2023	For the year ended 31st March 2022	For the year ended 31st March 2023	For the year ended 31st March 2022
Debtors Turnover Ratio	3.74	8.21	5.73	8.21
Inventory Turnover Ratio	0.14	0.23	0.21	0.23
Interest Coverage Ratio	8.64	2.00	8.70	2.82
Current Ratio	17.52	5.26	19.02	5.26
Debt Equit Ratio	(-) 8.46	(-) 3.56	(-) 8.56	(-) 3.56
Operating Profit Margin (%)	48.48	92.44	48.48	92.44
Net Profit Margin (%)	0.62	0.33	0.62	0.54

Note:Explanation for variance in the ratio exceeding 25% have been mentioned in the Note no. 28 of Financial Statements.

BUSINESS OVERVIEW OF THE COMPANY

The Company is engaged in construction of residential flats through Special Purpose Vehicles (SPVs) and these SPVs have been allotted plots of land on long term lease, under Builders Residential Scheme (BRS) of the New Okhala Industrial Development Authority (NOIDA), Greater Noida Industrial Development Authority (GNIDA) and Yamuna Expressway Authority (YEA). The total lease hold area allotted to the Company along with SPVs is around 2,65, 000 square meters and the projects are under various stages of construction.

PROJECTS DEVELOPED BY THE COMPANY

a) EXPRESS PARK VIEW- I

The Company is pleased to deliver its very first project namely “Express Park View” situated at Plot 10B, Sector CHI V, Greater Noida. Flats are being delivered to the allottees and the process of execution of Sub-Lease Deed in favour of the allottees is in progress. Till March 31, 2023 the Company has executed 324 Sub-Lease Deeds in favour of the respective allottees. This Project consists of332 flats in totality, out of which the Company has sold out 331 flats as on March 31,2023.

b) THE HYDE PARK

In collaboration with IITL Projects Limited, the Company has jointly developed the project “The Hyde Park”. The Hyde Park, Noida, offers a prime location with convenient access to a metro station, an expressway, shopping complexes, an educational hub, and a hospital. It is surrounded by a large cluster of upscale housing projects on one side and green areas on the other. Spanning across an area of approximately 60,348.53 square meters in Sector 78, Noida, this project comprises a total of 2,092 flats. The construction of the entire project is finished, and the completion certificate has been obtained for the 23 residential towers and a commercial complex. The possession of flats and commercial shops is currently underway with 2,090 flats & 58 shops already sold out and out of which 2086 flat owners and 58 shop owners have taken physical possession. As of March 31, 2023, the firm has executed 1,811 Sub-Lease Deeds in favor of the allottees.

Additionally, the maintenance of common areas and facilities has been entrusted to the Resident Welfare Association, established in accordance with the provisions of the Societies Registration Act, 1860.

c) THE GOLDEN PALMS

The Golden Palms, located in Noida, boosts several major highlights including its proximity to the IT corridor, malls, and a golf course. Living at Golden Palms offers a luxurious lifestyle with a wide range of amenities, surrounded by 80% greenery adorned with various palms, flowers, hedges, and ground cover. The project occupies a leasehold area of approximately 39,999.76 square meters and is situated at Plot No - GH - 01/E, Sector 168, Noida. It comprises approximately 1,403 flats & 52 commercial shops of various sizes including studio apartments.

The construction of the entire project is completed, and the necessary completion certificate has been obtained for the 13 residential towers, which also include a commercial area. The possession of flats and commercial shops is currently in full swing. As of March 31,2023, the Company has sold 1,375 flats and 47 shops and out ofwhich 1361 flat owners and 44 shop owners have taken physical possession of their flats & shops. Furthermore, as of March 31, 2023, the Company has executed 1,041 Sub-Lease Deeds in favor of the allottees.

d) THE EXPRESS PARK VIEW II

In collaboration with IITL Projects Limited, the Company has jointly developed the project “The Express Park View-II”. In this project, a total of 10 towers have been constructed by the firm, out of which 7 towers (I, J, K, L, L1, M & M1) has been completed and Completion Certificate has been duly received from Competent Authority. For the remaining three towers i.e. I1, J1 & K1, Firm has already applied for Completion Certificate. The project comprises of total no. of 1320 flats out of which 1199 flats has been sold out. Till March 31, 2023 and 854 allottees in Tower I,J,K,L,L1,M& M1 have taken possession of flats till March 31, 2023. As on March 31,2023 firm has executed 674 Sub-Lease Deeds in favour of the allottees.

Commercial Area in the project in the name of “The Park Street” consists of 39 Commercial Shops which are 100% sold out till March 31, 2023. The Commercial area is separately registered as independent project under Real Estate (Regulation & Development) Act, 2016. The registration no. of the project is UPRERAPRG180127. Firm has already applied for completion certificate for the same with the GNIDA.

Firm has on March 31, 2021 launched the Low Rise Apartments in the Project. It is separately registered as independent project under Real Estate (Regulation & Development) Act, 2016. The registration no. of the project is UPRERAPRG555694. The date of Completion of the Project is January 23, 2024. The projects consist of 16 Low rise Towers (G+4) having 310 Low rise apartments. Firm has already booked 70 flats in the project till March 31,2023.

e) THE PALM VILLAGE -AEROCITY

In collaboration with IITL Projects Limited, the Company is jointly developing the project “The Palm Village -Aerocity”. On November 30, 2021, a surrender deed was executed between Yamuna Expressway Industrial Development Authority (YEIDA) and M/s IITL-Nimbus The Palm Village, which involved surrendering a land area of 47,347.70 square meters. This land area originally allotted to the Firm through a lease deed dated July 05, 2012, between YEIDA and M/s IITL-Nimbus The Palm Village was 102995.70 square meters. Furthermore, due to wrong calculation on the part ofYEIDA, an additional area of land measuring 7,375.48 square meters of land was surrendered by executing a surrender cum correction deed on November 17, 2022, with YEIDA in addition to the previously surrendered area of 47,843.70 square meters. Now the firm is left with 47776.52 square meters of land for development. Following the execution of the surrender deed, YEIDA has now handed over the remaining physical possession of the plot.

Firm has freezed the designs of new layout plans of the project and has filed the same for approval with the (YEIDA). Once the layout plans are approved and necessary permissions are obtained from the concerned department(s) the firm shall then apply with Real Estate Regulation Authority (RERA), Lucknow for registration and the project shall be launched for sale in market.

SWOT ANALYSIS

? STRENGTHS

o Market Knowledge o Sphere of Influence o Marketing Expertise o Community Connections

o Positive Online Reviews and Testimonials o Leverage-able Assets o Industry Reputation or Leadership Positions o Positive Brand Identity and Local Reputation o Significant connections in the local business community

? WEAKNESS

o Loss of connections in the local business community o Less experienced team members moving into leadership o Loss of a Valued Team Member o Asset Losses o Negative Online Reviews o Inefficiency, High Overhead, or Cost Overruns o Tough Competition among local developers

4 OPPORTUNITIES

o Influx of new residents o Investment opportunities o New markets opening up o New transportation initiatives o New home buyer incentives o New investment incentives o Demographic Shifts o Lower Interest Rates o Technological Innovations o Rebranding opportunity under new team lead o New rental markets opening up

o High inventory for home sales resulting in investment opportunities o Large number of renters to keep investment properties filled o Become the go-to team for investors, renters, and first-time homebuyers

+ THREATS

o High dependency /shortage of workforce.

o Lack of investors confidence in the Sector due to delay in delivering the projects on time.

o Increase prices of construction materials, unavailability of land as well as complex procedure to acquire the land.

OUR VISION

Our vision revolves around our motto “ENDLESS EFFORTS. TO MAKE LIFE BETTER.”

WE STRIVE TO:

• Design and construct the most magnificent landmarks and edifices;

• Contribute tangibly to regional and national development by way of key infrastructure projects;

• Protect and preserve the environment we live in.

OUR MISSION:

• To build a better world;

• To set standards and improve our environment;

• To offer a wide portfolio of international quality;

• To offer products that cater to different markets and segments;

• To evolve contemporary benchmarks in construction and marketing practices.

OUR GROWTH DRIVERS:

• Excellent track record;

• Diversified Business Model with clear focus;

• Highly professional and proficient team of Engineers at site;

• Strong project execution capabilities;

• Long term relationship with vendors for streamlined raw material supply.

HUMAN RESOURCES

The Company has a dynamic team of highly qualified professionals and proficient employees and as on March 31, 2023, the Company has 8(Eight) employees on its payroll.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The Internal Auditors of the company checks and verifies the internal control and monitors them in accordance with policy adopted by the company. The Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business.

CAUTIONARY STATEMENT

The above Management Discussion and Analysis contains certain forward looking statements within the meaning of applicable security laws and regulations. These pertain to the Companys future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. In accordance with the Code of Corporate Governance approved by the Securities and Exchange Board of India, shareholders and readers are cautioned that in case of data and information external to the Company, no representation is made on its accuracy or comprehensiveness though the same are based on sources thought to be reliable.

For and on behalf of Board of Directors Nimbus Projects Limited

Date: August 10, 2023 Place: New Delhi

Bipin Agarwal

Chairman & Managing Director DIN: 00001276