1. Real Estate Sector in India
The real estate sector is one of the most globally recognised sectors. In India, real
estate is the second largest employer after agriculture and is slated to grow at 30 per
cent over the next decade.
The Indian real estate market has become one of the most preferred destinations in the
Asia Pacific as overseas funds accounted for more than 50 per cent of all investment
activity in India.
The real estate sector comprises four sub sectors - housing, retail, hospitality, and
commercial. 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 semiurban accommodations.
Indias Tier-I cities moved up to the 36th rank in JLL"s 2016 bi-annual
Global Real Estate Transparency Index. The catalysis factors for this were improvements in
structure reforms and the more liberalized foreign direct investment (FDI) regime.
Increased transparency brings higher investments into such real estate markets.
2. Market Size
The Indian real estate market is expected to touch US$ 180 billion by 2020. The
housing sector alone contributes 5-6 per cent to the countrys Gross Domestic Product
(GDP).
In the period FY08-20, the market size of this sector is expected to increase at a
Compound Annual Growth Rate (CAGR) of 11.2 per cent. Retail, hospitality and commercial
real estate are also growing significantly, providing the much-needed infrastructure for
Indias growing needs.
Private Equity (PE) funds and Non-Banking Financial Companies (NBFCs) in India are seen
increasingly investing jointly in real estate projects, in order to hedge risk and
undertake bigger transactions.
3. Investments
The Indian real estate sector has witnessed high growth in recent times with the rise
in demand for office as well as residential spaces.
Private equity activity looks healthy in 2017- thanks to a strengthening and
modernizing economy, and the growing reputation of India as an attractive investment
destination. India is ranked fourth in developing Asia for FDI inflows as per the world
Investment Report 2016 released by UN Conference for Trade and Development. The Real
Estate saw equity investment on a very visible return journey to India last Year. Indian
Real Estate has attracted $32 Billion in equity so far. The global capital flow into
Indian Real Estate in 2016 stood at $5.7 billon.
4. Government Initiatives
Thanks to change in its regulatory network, India is now way more attractive to both
Global and Indian Investors. Increased consolidation and transparency, through RERA (Real
Estate Regulation Act) and the launch of REIT, (Real Estate Investment Trusts) this year
-will further whet their appetites for getting a piece of Indian real estate pie.
The Goods and Service Tax (GST) and Benami Property Act will also have a major impact
on how many developers run their businesses. Demonetization shook up the older ways of
working, but did not affect self-governing developers with the right products targeted at
the working masses. The rest have realized it is time now to revamp their existing
business models if they want to remain in business at all. Market watchers who had
despaired of the Indian real estate market ever shedding its tainted image have every
reason to perk up now.
5. Road Ahead
Responding to an increasingly well-informed consumer base and, bearing in mind the
aspect of globalisation, Indian real estate developers have shifted gears and accepted
fresh challenges. Real estate developers, in meeting the growing need
for managing multiple projects across cities, are also investing in centralised
processes to source material and organise manpower and hiring qualified professionals in
areas like project management, architecture and engineering.
Affordable housing in India is finally set to get the much-coveted infrastructure
status. One crore houses are to be built in rural India by 2019, and this vital segment
will now see cheaper sources of finance. Re-financing of housing loans by National Housing
Banks (NHBs) can give a further boost to the sector.
A new Credit linked subsidy scheme (CLSS) for the mid-income group with a provision of
Rs.1,000 crore in 2017-18 was announced even before Budget 2017-18. Extension of tenure of
loans under the CLSS of Pradhan Mantri Awas Yojana (PMAY) was increased from 15 to 20
years, and the Budget also increased allocation to PMAY from Rs.15,000 crore to Rs. 23,000
crore in the rural areas.
The qualifying criteria for affordable housing were also revised to 30 sq. m. and 60sq.
m. on Carpet rather than saleable area in the four main metros and non- metros
respectively. This effectively increases the size of affordable housing market across
India. Moreover, the demonetization of high-value currency notes will cause land prices to
ease in the next few years- especially in far-flung areas around Indian metros and the
Tier-II and Tier-III cities. The governments dream of Housing for All by 2022 appears a
lot more attainable now.
6. SWOT- Real Estate Industry Strengths
• Development primarily based on strong realistic demand with limited speculative
activity;
• Among the highest yield in the economy;
• Wide gamut of government initiatives which have helped FDI entry in the sector;
Weakness
• Still largely an unorganized market with dominance of local level developer;
• High transaction cost and need of greater transparency;
Opportunities
• Has strong demand drivers going forward- IT-ITES, tourism, increasing
consumerism, industrial manufacturing outsources etc;
• Affordable housing will be a volume segment in the future and the government of
India has laid appropriate tax reliefs for such projects;
Threats
• No regulatory body to monitor performance;
• Procedure to obtain licenses are time consuming;
• Infrastructure development by local governments is slow thereby affecting the
pace of projects progress;
In MVL, our thrust area is tier II and tier III cities and affordable housing which are
promising business destination and concept in coming years. All land is fully consolidated
without any dispute and litigation and are in confirming zone as per master plan in the
respective area.
7. Financial and operational performance
During the year under review, the company recorded Revenues of Rs. 0.138 Crores with
profit after tax of Rs (1.02) Crores. There is decline in the over all sales Revenues and
profitability during the year. The financial projections of the company including its cash
flows were majorly impacted because of delay in getting approvals for new projects of the
company. Some
of new projects could not be launched within the financial year which further resulted
into fall in Revenues. But the company is sure that during the current financial year,
with the launch of new projects, the top line and bottom line of the company will get
improved.
8. Adequacy of Internal Controls
The company remains committed to maintaining internal controls designed to safeguard
the efficiency of operations and security of our assets. Accounting records are adequate
for preparation of financial statements and related financial information. The adequacy
and effectiveness of internal controls across the various functional levels as well as
compliance with laid down systems and policies are monitored both by companys internal
control systems and the audit committee on a regular basis. Your statutory auditors have
confirmed the adequacy of the internal procedures in their report.
9. Development of Human Resources and relations
The company believes that human resources are vital for giving an edge in its business.
The company strictly follows the philosophy of congenial work environment, performance
oriented work culture, knowledge, skill building, creativity, responsibility and
performance based compensation. There is a constant emphasis in the company for
development of skills through training and workshops.
10. Risks and Concerns
In India the real estate market is largely unorganized and dominated by a large number
of small players with their limited corporate or large names on the national level. The
risks synonymous to the real estate industry includes the global recessionary trend,
economic slowdown, increase in financial charges, non availability of raw materials such
as land, steel, labour coupled with market fluctuations.
MVL is adequately equipped to face and mitigate any such adverse situation. The Company
does not apprehend any inherent risk in the real estate industry in the long run, with the
exception of certain primary concerns that have afflicted the progress of real estate
industry in general like restrictive legislation in government policies, limited
investment from the organized sector, tax burden, rising inflation, high interest rate,
volatile global economic environment etc.
11. Cautionary statement
Statements made in the report and elsewhere as applicable in the Annual Report
including those stated under the caption Management Discussion and Analysis describing the
companys plans, projections and expectations may constitute as forward looking statements
within the meaning of applicable laws and regulations. Actual Results may differ
materially from those either expressed or implied.
By Order of the Board of Directors For MVL Limited
Sd/-
(Prem Adip Rishi)
Managing Director
Registered Office:
1201B, 12th Floor, Hemkunt Chamber,
89 Nehru Place,
New Delhi-110019
Tel: +91-11-41662674
E-mail: coporates@vahoo.com
Website: www.mvl.in
CIN: L45200DL2006PLC154848
Place: New Delhi
Date : 24th August, 2018
+91-9892691696
