Oberoi Realty Ltd Management Discussions.

ECONOMIC REVIEW Global economy

The global growth momentum has been sustained in 2018, buoyed by a strong fiscal expansion in the United States of America, which has largely offset slower growth in some other large economies. The review of global economic indicators suggests that global economic growth has remained steady, exceeding 3% in annualised terms, over the first 6-9 months of 2018.

Risks to global growth tilt to the downside. An escalation of trade tensions remains a key source of risk to the outlook. Financial conditions have already tightened since the last quarter of 2018. A range of triggers beyond escalating trade tensions could spark a further deterioration in risk sentiment with adverse growth implications, especially given the high levels of public and private debt. These potential triggers include a "no-deal" withdrawal of the United Kingdom from the European Union and a greater-than-envisaged slowdown in China.

Indian economy

Indian economy is expected to grow at 7.2% in 201819, a tad higher from 6.7% in the previous fiscal, mainly due to improvement in the performance of agriculture and manufacturing sectors.

The Central Statistics Office (CSO) estimate is, however, a bit lower than 7.4% growth projected by the Reserve Bank for the current fiscal.

India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers of the world over the next 10-15 years, backed by its strong democracy and partnerships.

India has retained its position as the third largest startup base in the world with over 4,750 technology startups, with about 1,400 new start-ups being founded in 2016, according to a report by NASSCOM.

Indias labour force is expected to touch 160-170 million by 2020, based on rate of population growth, increased labour force participation, and higher education enrolment, among other factors, according to a study by ASSOCHAM and Thought Arbitrage Research Institute.

Indias foreign exchange reserves were US$ 411.905 billion in the week up to March 29, 2019, according to data from the RBI.

With the improvement in the economic scenario, there have been various investments in various sectors of the economy. Some of the important recent developments in Indian economy are as follows:

• Indias exports are projected to reach an all-time high of US$ 325-330 billion in 2018-19.

• Mergers and Acquisitions (M&A) activity in the country has reached US$ 129 billion in 2018.

• Income tax collection in 2018-19 in the country reached at records level of र:10.03 lakh crore.

• Companies in India have raised around र:31,731 crore through Initial Public Offers (IPO) in 2018.

• Indias Foreign Direct Investment (FDI) equity inflows reached US$ 33.49 billion between April 2018 and December 2018, with maximum contribution from services, computer software and hardware, telecommunications, construction, trading and automobiles.

• Consumer Price Index (CPI) inflation rose moderated to 2.86% in March 2019.

• India has improved its ranking in the World Banks Doing Business Report by 23 spots over its 2017 ranking and is ranked 77 among 190 countries in 2019 edition of the report.

• The World Bank has stated that private investments in India is expected to grow by 8.8% in FY 2018-19 to overtake private consumption growth of 7.4%, and thereby drive the growth in Indias gross domestic product (GDP) in FY 2018-19.

• India is expected to retain its position as the worlds leading recipient of remittances in 2018, with total remittances touching US$ 80 billion, according to World Banks Migration and Development Brief.


The real estate sector is one of the most globally recognised sectors. 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 semi-urban accommodations. The construction industry ranks third among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.

Real estate sector in India is expected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 and contribute 13% of the countrys GDP by 2025. Retail, hospitality and commercial real estate are also growing significantly, providing the much-needed infrastructure for Indias growing needs. Increasing share of real estate in the GDP would be supported by increasing industrial activity, improving income level and urbanisation. Mumbai and Bengaluru have been rated as the top real investment destinations in Asia. The government also launched key policies for real estate sector, namely: Real Estate Regulatory Act, Benami Transactions Act, boost to affordable housing construction, Interest subsidy to home buyers, change in arbitration norms, service tax exemption, Dividend Distribution Tax (DDT) exemption, Goods and Services Tax and Demonetisation.

The regulatory reforms witnessed in Indias real-estate sector has brought drastic change in buying patterns amongst home and commercial property buyers. The sector has grown nearly 8% during FY 2019 even as financial pressures and fast changing dynamics of the industry have created turmoil in the real estate market. Post parliamentary elections there is an expected rise in demand and that will infuse more interest amongst buyers and have its positive impact on the overall real estate market in the country.

Though there are a lot of discussions around how well real estate will perform and create value, the strong foot-hold that the sector has created over many decades will continue to ensure its niche and the goodwill it brings with it. While demand for housing and commercial properties in some markets may have been subdued, properties those are good and at prime locations are worthy and of great value to buyers.

Your Company is favourably positioned to benefit from recent regulatory changes affecting the Indian real estate industry, such as the introduction of the Real Estate (Regulation and Development) Act, 2016 ("RERA"), the implementation of a comprehensive national Goods and Service Tax ("GST") regime, currency demonetisation and the enactment of the Insolvency and Bankruptcy Code, 2016.

These reforms will create a level playing field in the real estate industry and benefit well-organised real estate developers, such as your Company, with established compliance processes and disciplined financial management. Your Companys core strengths, including customer-centric approach, established brands, commitment to transparency and strong corporate governance and internal compliance processes, together with focus on strategic land acquisitions, strong balance sheet and outsourced execution strategy position your Company favorably to benefit from the changing regulatory environment. In addition, as real estate developers with weaker processes and systems exit the industry due to the higher cost of doing business, there will be strategic acquisition opportunities in the industry for your Company.

Sectors such as IT and ITeS, retail, consulting and e-commerce have registered high demand for office space in recent times. Commercial office stock in India is expected to cross 600 million square feet by 2018 end while office space leasing in the top eight cities is expected to cross 100 million square feet during 2018-19. Gross office absorption in top Indian cities has increased 26% year-on-year to 36.4 million square feet between January-September 2018. Co-working space across top seven cities has increased sharply in 2018 (up to September), reaching 3.44 million square feet, compared to 1.11 million square feet for the same period in 2017.

Government Initiatives

The Government of India along with the governments of the respective states has taken several initiatives to encourage the development in the sector. The Smart City Project, where there is a plan to build 100 smart cities, is a prime opportunity for the real estate companies. Below are some of the other major Government Initiatives:

• Under the Pradhan Mantri Awas Yojana (PMAY) Urban, more than 6.85 million houses have been sanctioned up to December 2018.

• In February 2018, creation of National Urban Housing Fund was approved with an outlay of र:60,000 crore.


The following reasons can be attributed to the continued demand for real estate in the city:

• Temporary lifting of the construction ban in Brihanmumbai Municipal Corporation (BMC) region;

• Low base effect created by the disturbances of demonetisation;

• Real Estate (Regulation and Development) Act, 2016 (RERA);

• GoodsandServicesTax(GST);

• Developers launching smaller units with lower ticket size to cater to market demand; and

• Large-scale affordable housing projects being undertaken in the peripheral suburbs.


As India awaits policy reforms to pick up speed, your Company firmly believes that the demand for Real Estate in a country like India should remain strong in the medium to long term. Your Companys well accepted brand, contemporary architecture, well designed projects in strategic locations, strong balance sheet and stable financial performance even in testing times make it a preferred choice for customers and shareholders. Your company is ideally placed to further strengthen its development potential by acquiring new land parcels.


While the management of your Company is confident of creating and exploiting the opportunities, it also finds the following challenges:

• Unanticipated delays in project approvals;

• Availability of accomplished and trained labour force;

• Increased cost of manpower;

• Risingcostofconstruction;

• Growth in auxiliary infrastructure facilities; and

• Over regulated environment.


Your Company continues to capitalise on the market

opportunities by leveraging its key strengths.

These include:

1. Brand Reputation: Enjoys higher recall and influences the buying decision of the customer. Strong customer connects further results in higher premium realisations.

2. Execution: Possesses a successful track record of quality execution of projects with contemporary architecture.

3. Strong cash flows: Has built a business model that ensures continuous cash flows from their investment and development properties ensuring a steady cash flow even during the adverse business cycles.

4. Significant leveraging opportunity: Follows conservative debt practice coupled with enough cash balance which provides a significant leveraging opportunity for further expansions.

5. Outsourcing: Operates an outsourcing model of appointing globally renowned architects / contractors that allows scalability and emphasises contemporary design and quality construction - a key factor of success.

6. Transparency: Follows a strong culture of corporate governance and ensures transparency and high levels of business ethics.

7. Highly qualified execution team: Employs experienced, capable and highly qualified design and project management teams who oversee and execute all aspects of project development.


During the year FY 2019, the following projects were delivered:

• Esquire at Goregaon East, Mumbai.

• PrismaatJVLR,Mumbai.

• Oberoi International School atJVLR, Mumbai.


Despite the subdued performance of overall sector, your

Company was able to sell nearly 5,13,285 sq.ft. RERA carpet

area in FY 2019 as compared to approx. 3,22,563 sq.ft. of

RERA carpet area in FY 2018.

A brief description of the update across each project is given


1. Oberoi Garden City (Goregaon)

Oberoi Garden City is the flagship mixed-use development of your Company. It is an integrated development on approximately 83 acres of land in Goregaon (East), in the western suburbs of Mumbai, adjacent to the arterial Western Express Highway and overlooking Aarey Milk Colony. The development is approximately eight kilometers from Mumbais domestic airport and approximately five kilometres from the international airport.



Revenues Occupancy Revenues Occupancy
र:15,079.93 lakh 96.93% र:4,163.36 lakh 77.83%
(र:11,046.23 lakh in FY 2018) (99.13% in FY 2018) (र:4,533.58 lakh in FY 2018) (83.71% in FY 2018)



Revenues Occupancy Revenues Occupancy
र:8,343.71 lakh 66.23% र:13,705.24 lakh 82.44%
(र:4,808.94 lakh in FY 2018) (44.89% in FY 2018) (र:12,867.53 lakh in FY 2018) (80.78% in FY 2018)



Cumulative units sold Total sales value Cumulative units sold Total sales value
780 units र:2,35,114.35 lakh, 100% of which has been recognised as revenue till FY 2019 662 units र:2,55,415.69 lakh, 100% of which has been recognised as revenue till FY 2019

2. Mulund (West)

Your Company is developing two land parcels (adjacent to each other) of approximately 9 acres each situated at Mulund (West), Central suburbs, Mumbai.

The project comprises of two premium high storey residential towers namely, Eternia and Enigma. The project site is situated on LBS Marg, overlooking Yeoor Hills and Borivali national park to the west and Eastern Express Highway to the east. The project is your Companys first development in the eastern suburbs of Mumbai and it offers configurations in various sizes of 3 BHK and 4 BHK. The pricing sets the target audience to include Upper Middle class and NRIs.



Cumulative units sold Total sales value Cumulative units sold Total sales value
371 units र:87,174.31 lakh, of which र:36,915.41 lakh has been recognised as revenue till FY2019 155 units र:60,179.22 lakh, of which र:13,317.22 lakh has been recognised as revenue till FY2019

3. Sky City (Borivali - East)

Your company is developing 25 acre land parcel at Borivali East with an estimated total carpet area of about 3.4 million sq.ft. The project site is situated at Borivali East, Off Western Express Highway overlooking Borivali National Park to the east. The surrounding infrastructure allows the site to be well connected to the rest of Mumbai.


Cumulative units sold Total sales value
1,079 units र:2,56,036.31 lakh, of which र:1,22,214.02 lakh has been recognised as revenue till FY 2019

4. Prisma

Your Company has developed Prisma, a residential building with an estimated RERA carpet area of about 1,78,395 sq.ft., which is a part of the ongoing projects within the Oberoi Splendor Complex. Prisma is conveniently located on the arterial Jogeshwari Vikhroli Link Road in the Western suburbs of Mumbai and overlooking Aarey Milk Colony.


Cumulative units sold Total sales value
78 units र:40,770.67 lakh, 100% of which has been recognised as revenue till FY 2019

5. Three Sixty West (Worli)

Three Sixty West is being developed by a joint venture entity carrying out development of a mix use project in Worli, located on the arterial Annie Besant Road, consisting of two high-rise towers; The Ritz-Carlton, Mumbai and a residential tower, by the name Three Sixty West, to be managed by The Ritz-Carlton. This development which aims to be a global icon for Mumbai will mark the entry of The Ritz-Carlton into Indias financial capital. Strategically located in Worli, less than a kilometer from the prominent Bandra-Worli sea link, the development has been designed to be a luxury landmark adorning the Arabian Sea.


Cumulative units sold Total sales value
59 units र:2,24,075.75 lakh, of which र:36,916.56 lakh has been recognised as revenue till FY 2019

Financial performance overview

Analysis of consolidated financial statements for FY 2019 is provided below:

1. Key Financial Ratio Analysis

A comparative table showing synopsis of FY 2019 versus FY 2018 of Key Financial Ratio is provided below:

(र: in Lakh)

Debtors Turnover Net Sales 17.71 8.76 Higher Sales on similar debtors
Average Debtors
Inventory Turnover Sales/COGS 0.57 0.25 Higher Sales on similar Inventory levels
Inventory/Avg. Inventory
Interest Coverage Ratio EBIT 8.52 4.93 Higher ratio indicates better coverage ratio
Interest Expense
Current Ratio Current Assets 3.03 1.95 Higher ratio indicates better liquidity position
Current Liabilities
Debt Equity Ratio Total Liabilities 0.59 0.73 Growth in Debt is slower as compared to growth in Equity
Total Shareholders Equity
Operating Profit Margin (%) EBITDA 46.37% 54.32% Lower EBITDA is due to change in sales mix
Total Revenue
PBT Margin (%) Profit Before Tax 44.25% 50.27% Lower PBT Margin is due to change in sales mix
Total Revenue
Net Profit Margin (%) Profit After Tax 30.70% 35.51% Lower PAT Margin is due to change in sales mix
Total Revenue
Return on Net Worth Net Income (PAT) 10.17% 7.53% Due to higher PAT growth
Total Shareholders Equity
Cash and Bank Balances / Net Worth Cash & Bank Balance 5.30% 1.92% On account of QIP proceeds.
Total Shareholders Equity

2. Balance Sheet Analysis

A comparative table showing synopsis of FY 2019 versus FY 2018 of Balance Sheet is provided below:

Consolidated Balance Sheet as at March 31, 2019 2018 INCREASE/ (DECREASE) % INCREASE / (DECREASE)
Non-current assets 4,14,281.91 3,79,158.18 35,123.73 9.26%
Current assets 6,98,571.71 6,43,314.52 55,257.19 8.59%
Total 11,12,853.62 10,22,472.70 90,380.92 8.84%
Equity 8,02,917.05 6,09,237.37 1,93,679.68 31.79%
Non-current liabilities 79,300.22 83,095.62 (3,795.40) (4.57%)
Current liabilities 2,30,636.35 3,30,139.71 (99,503.36) (30.14%)
Total 11,12,853.62 10,22,472.70 90,380.92 8.84%

2.1 Non-Current Assets

Particulars 2019 2018 INCREASE / (DECREASE) % INCREASE / (DECREASE)
Property, plant and equipments 19,522.10 20,623.87 (1,101.77) (5.34%)
Capital work in progress 12,512.52 11,244.63 1,267.89 11.28%
Investment properties 86,472.37 76,773.46 9,698.91 12.63%
Intangible assets 164.64 236.97 (72.33) (30.52%)
Intangible assets under development 93.36 18.79 74.57 396.86%
Financial assets 2,60,399.35 2,41,066.31 19,333.04 8.02%
Deferred tax assets (net) 13,477.65 14,578.54 (1,100.89) (7.55%)
Other non-current assets 21,639.92 14,615.61 7,024.31 48.06%
Total 4,14,281.91 3,79,158.18 35,123.73 9.26%
2.2 Current Assets (र: in Lakh)
Particulars 2019 2018 INCREASE / (DECREASE) % INCREASE / (DECREASE)
Inventories 4,16,547.45 4,24,673.38 (8,125.93) (1.91%)
Financial assets
i) Investments
a) Investments in mutual fund 33,702.84 1,170.05 32,532.79 2,780.46%
b) Investments - Others 180.74 179.00 1.74 0.97%
ii) Cash and Bank balances 42,530.82 11,672.31 30,858.51 264.37%
iii) Trade receivables 10,940.35 18,116.57 (7,176.22) (39.61%)
iv) Loans 26,620.69 15,733.63 10,887.06 69.20%
v) Other financial assets 315.17 232.60 82.57 35.50%
Current tax assets (net) 1,238.73 1,863.84 (625.11) (33.54%)
Other current assets 1,66,494.92 1,69,673.14 (3,178.22) (1.87%)
Total 6,98,571.71 6,43,314.52 55,257.19 8.59%

2.3 Non-Current Liabilities

Particulars 2019 2018 INCREASE/ (DECREASE) % INCREASE / (DECREASE)
i) Borrowings 58,851.45 67,864.18 (9,012.73) (13.28%)
ii) Trade Payables 2,390.04 1,463.53 926.51 63.31%
iii) Others 11,684.99 8,451.03 3,233.96 38.27%
Provisions 196.77 165.97 30.80 1 8.56%
Deferred tax liabilities (net) 3,082.85 3,705.16 (622.31) (1 6.80%)
Other non-current liabilities 3,094.12 1,445.75 1,648.37 114.01%
Total 79,300.22 83,095.62 (3,795.40) (4.57%)

2.4 Current Liabilities

Particulars 2019 2018 INCREASE/ (DECREASE) % INCREASE / (DECREASE)
i) Borrowings 24,755.88 26,585.76 (1,829.88) (6.88%)
ii) Trade Payables 20,839.93 13,079.89 7,760.04 59.33%
iii) Others 1,01,727.69 97,589.44 4,138.25 4.24%
Other current liabilities
i) Advance from customers 2,638.56 3,690.43 (1,051.87) (28.50%)
ii) Others 79,480.76 1,88,769.92 (1,09,289.16) (57.90%)
Provisions 82.93 42.56 40.37 94.85%
Current tax liabilities (net) 1,110.60 381.71 728.89 190.95%
Total 2,30,636.35 3,30,139.71 (99,503.36) (30.14%)

3. Profit and Loss Analysis

A comparative table showing synopsis of FY 2019 versus FY 2018 of statement of Profit and Loss is provided below:

(र: in Lakh)



Revenue From Operations 2,58,249.93 1,26,542.90 1,31,707.03 104.08%
Other Income 7,874.76 2,657.80 5,216.96 196.29%
Total Revenue 2,66,124.69 1,29,200.70 1,36,923.99 105.98%
Expenses 1,42,711.86 59,016.91 83,694.95 141.82%
Depreciation and amortisation 4,403.81 4,906.76 (502.95) (10.25%)
Interest and finance charges 1,936.19 686.44 1,249.75 182.06%
Profit before share of Profit / (Loss) of joint ventures (net) 1,17,072.83 64,590.59 52,482.24 81.25%
Share of Profit / (Loss) of joint venture (net) 689.60 361.97 327.63 90.51%
Profit Before Tax 1,17,762.43 64,952.56 52,809.87 81.31%
Profit After Tax 81,693.35 45,880.32 35,813.03 78.06%
Basic and diluted EPS (?) 22.80 13.51 9.29 68.76%

3.1 Revenue from Operations

Particulars 2019 2018 INCREASE/ (DECREASE) % INCREASE / (DECREASE)
Revenue from projects 2,06,911.28 85,353.40 1,21,557.88 142.42%
Revenue from hospitality 13,513.51 12,781.53 731.98 5.73%
Rental and other related revenues 32,337.30 23,383.05 8,954.25 38.29%
Property management revenues 4,594.40 4,204.42 389.98 9.28%
Other operating revenue 893.44 820.50 72.94 8.89%
Total 2,58,249.93 1,26,542.90 1,31,707.03 104.08%

3.2 Expenses

Particulars 2019 2018 INCREASE/ (DECREASE) % INCREASE / (DECREASE)
Operating costs 1,24,718.74 46,781.71 77,937.03 166.60%
Employee benefits expense 7,335.43 6,715.33 620.10 9.23%
Other expenses 10,657.69 5,519.87 5,137.82 93.08%
Total 1,42,711.86 59,016.91 83,694.95 141.82%

4. Cash Flow Analysis

A comparative table of FY 2019 versus FY 2018 of Cash Flows is provided below:

Consolidated Cash Flow


2019 2018
Opening Cash & Cash Equivalents 9,276.07 23,583.89
Net Cash Inflow / (Outflow) from operating activities 14,556.16 (20,220.69)
Net Cash Inflow / (Outflow) from investing activities (64,577.14) (59,186.99)
Net Cash Inflow / (Outflow) from financing activities 83,894.76 65,099.86
Closing Cash & Cash Equivalents 43,149.85 9,276.07
Closing Cash & Cash Equivalents including Fixed Deposits having remaining maturity of less than twelve months 42,530.82 11,672.31
Closing Cash & Cash Equivalents including Fixed Deposits having remaining maturity of more than twelve months classified under Non Current Financial Assets 507.87 410.99


Employees are at the heart of your Company and the biggest differentiators. Its their inexorable commitment that helps your Company to create spaces that enhance quality of life. Keeping the spirits high at workplace needs a sound mental and physical fitness and deep-rooted culture which promotes work life balance.

In this ever evolving and fast changing environment, skill and capability landscape expand and gets richer instantaneously. A well thought through competencies development program focusing on both technical and behavioural competencies, not limiting to classroom trainings but by way of exposure and opportunities.

Competitive compensation, an ethical company and career development opportunities are the corner stones and the pull factors for aspiring candidates. The candidates are put through a detailed and balanced hiring process to equally assess the technical and behavioural skills. Globally renowned psychometric test has been deployed this year for certain critical roles. In the endeavour of creating a high-performance team, your Companys emphasis on Internal Career opportunities, Career Development, Work Life Balance, Health & Wellness have paid rich dividends.

Development through Engagement:

As the organisation grows and the war for talent intensifies, it is increasingly important that learning and development

programs are not only competitive but are supporting the organisation on its defined strategic path. Keeping business goals in focus, your Company has conducted 1,154 learning man-days. Trainings have been conducted covering technical, behavioral and social topics. Training methodology included external, internal, e-learning and on the job trainings. With an idea to build a strong learning and knowledge sharing culture, your Company identified employees who are subject matter experts in their respective fields to impart training sessions. Learning sessions were conducted throughout the year wherein many employees benefited and gained knowledge on the subject.

Internal Career Opportunities:

Promoting internal mobility: With upward mobility, employees also search for internal opportunity which is a dynamic process for moving potential talent from role to role. Distance from home, career aspiration, higher and broader roles and attitude are some of the key aspect considered during internal movement. When an employee feels supported in the workplace, they become more engaged and productive.

In the current year, more than 100 such employees benefited from the opportunity of lateral or/and upward growth. With a philosophy of grooming young talent as a leadership pipeline, a fast track career path has been designed for the employees recruited from premium campus. Detailed orientation program has been charted and implemented to ensure they are imparted with the best on the job training.

Performance Management System:

Your Company aims to build a high-performance culture. Rewarding and recognizing consistent superior performance is essential to build a stronger foundation and create a talent pipeline. In order to align the business vision and individual objectives, an external coach was appointed to help support cascading of the department-wise thrust areas.

Employee Welfare and Wellness:

Organisation who manage a good blend of productive hours and leisure at workplace observe higher engagement and less burnout. Your Company creates platform with ample opportunities for employees to get together and celebrate the spirit of oneness on festive occasions. Indoor sports are great stress buster and builds camaraderie amongst all. Apart from celebration, your Company also focuses on the health and wellbeing of its employees. A healthy employee would be more productive. Your Company continues to encourage the employees to engage in the specially designed health program including various health focused initiatives that vary from health score cards, healthy eating habits, getting fitter with Zumba sessions, regular doctor visits and many such other initiatives. 80% of your Companys employees took advantage of this initiative to lead a better informed healthy lifestyle.


Market price fluctuation

The performance of your Company may be affected by the sales and rental realisations of its projects. These prices are driven by prevailing market conditions, the nature and location of the projects, and other factors such as brand and reputation and the design of the projects. Your company follows a prudent business model and tries to ensure steady cash flow even during adverse pricing scenario.

Sales volume

The volume of bookings depends on the ability to design projects that will meet customer preferences, getting various approvals in time, general market factors, project launch and customer trust in entering into sale agreements well in advance of receiving possession of the projects. Your Company sells its projects in phases from the time it launches the project, based on the type and scale of the project and depending on market conditions.


Execution depends on several factors which include labour availability, raw material prices, receipt of approvals and regulatory clearances, access to utilities such as electricity and water, weather conditions and the absence of contingencies such as litigation. Your Company manages the adversities with cautious approach, meticulous planning and by engaging established and reputed contractors. As your Company imports various materials, at times execution is also dependent upon timely shipment and clearance of the material.

Rental realisations

The rental realisations on the space leased depends upon the project location, design, tenant mix (this is relevant in the case of shopping malls), prevailing economic conditions and competition. Your Company has set up its retail property in prime location and maintains a fresh ambience resulting in crowd pull and attracting first time kind of retailers. As far as the office space rentals are concerned, the same depends on demand and supply, general economic conditions, business confidence and competition.

Land / Development rights - costs and availability

The cost of land forms a substantial part of the project cost, particularly in Mumbai. It includes amounts paid for freehold rights, leasehold rights, fungible FSI, construction cost of area given to landlords in consideration for development rights, registration and stamp duty. Your Company acquires land / land development rights from the government and private parties. It ensures that the consideration paid for the land is as per the prevailing market conditions, reasonable and market timed. Your Company also enters into MOUs and makes advances for the land / land development rights prior to entering into definitive agreements. The ensuing negotiations may result in either a transaction for the acquisition of the land / land development rights or the Company getting a refund of the moneys advanced.

Financing costs

The acquisition of land and development rights needs substantial capital outflow. Inadequate funding resources and high interest costs may impact regular business and operations. Your Company has always tried to build sufficient reserves resulting out of operating cash flows to take advantage of any land acquisition or development opportunity.


Post implementation of The Real Estate (Regulation and Development) Act, 2016 (RERA), developers are focusing firmly on selling their existing ready inventory and finishing their near completion projects rather than launching new projects. Further, with recent crisis with some NBFCs and liquidity crisis, several smaller realty developers are finding it difficult to survive, considering most of their projects do not have proper financial closure.

Firm and tight regulation and financial discipline required in the current Real Estate market is a big opportunity for organised and financially prudent company like your Company to grow faster as compared to the competition.

Overall, the Real Estate sector is showing growth as compared to last year. Consequently, we believe that the Indian real estate sector will emerge stronger, healthier and capable of long periods of sustained growth, provided adequate policy/ regulatory support.

Focus on Mumbai and beyond

Your Company continue to explore development opportunities in and around Mumbai and also explore hubs in the nearby regions on a case by case basis.

Strengthen relationships with key service providers and develop multiple vendors.

In order to continue delivering landmark offerings to our customer, your Company shall further strengthen its relationship with its key service providers, i.e. architects, designer and contractors. Your Company is also working on strategy to develop more and more vendors who can deliver product and services in line with Companys philosophy and product offerings.

Internal Control Systems

The Company has also focused on upgrading the IT infrastructure - both in terms of hardware and software. In addition to the existing ERP platform, the Company is presently reviewing the process documentation to ensure effectiveness of the controls in all the critical functional areas of the Company.


This management discussion and analysis contain forward looking statements that reflects your Companys current views with respect to future events and financial performance. The actual results may differ materially from those anticipated in the forward looking statements as a result of many factors.