It is a matter of privilege to present to you the Company’s performance for 2012-13. Food, clothing & housing
are basic needs of people. In our country, we all grew up with an ambition to own a house. Your Company,
Peninsula Land, recognizes this and has developed projects in several locations in the country to suit every
desire and pocket.We have performed reasonably well in spite of the difficult economic conditions in India and
globally. Our valued customers and stake holders have continued to support us and our projects have been
As you are aware the world economy slowed down in 2012. As
per IMF, the global growth reduced from 4% in 2011 to 3.2% in
2012 and is projected to grow to 3.3% in 2013. The slowdown
was more apparent in southern European nations like Portugal,
Italy, Spain and Greece. As a result of this, international trade
slowed, companies went sluggish on their expansion plans and
even curtailed expenses. Global investment funds reduced their
exposure to developing markets and preferred investing in risk free
treasury bonds. This has affected growth of some sectors like real
estate. However, your Company had anticipated this slowdown in
the industrial and services sector and prepared well for it. During
the year under review, we successfully completed sales of a
substantial portion of Peninsula Business Park.
In 2013, the world economy is expected to grow at 3.3%. Most
economies have used the difficult times of 2012 to get their
economies in order. The transition to stability should hopefully be
completed in 2013. The economy is expected to expand in 2014 at
4% and in 2015 at 3.3%.
Your Company has been using this period of global uncertainty
to continue to build a robust pipeline of projects and be ready
for the next wave of growth. We shall closely monitor the global
developments and its impact on the Indian economy in general and
the real estate sector in particular.
The year gone by was a very challenging year for all the sectors in
India. GDP, which was projected to grow at 6.7% ended up at 5.0%.
High inflation resulted in high interest costs, low investments, high
fiscal deficit and a very weak rupee.
The government is taking steps to combat inflation and implement
policy changes that are conducive for industrial growth. These
measures should eventually yield results and improve the situation
towards the end of the financial year and the RBI should lower
interest rates and enable investments by corporate houses.
The situation improved towards the end of the financial year.
Inflation slowed to its lowest in more than three years in March
2013. Wholesale price inflation cooled to 5.96 % in March, lower
than 6.84 % in February 2013.
With elections round the corner, India’s performance and economic
growth will be largely determined by the reforms adopted by the
government. Towards this, the RBI, in its mid-quarter monetary
policy review, reduced the repo rate by 25 basis points from 7.75
The World Bank sees India’s economic growth rising to 5.7 per
cent in 2013-14, buoyed by gradual strengthening of external
demand. Growth is projected to accelerate to 6.5 per cent in 2014-
15 and 6.7 per cent in 2015-16.
THE REAL ESTATE SECTOR
Real estate is a cyclical and long-term business. The performance
of a real estate company is best evaluated in long-term. 2012 was
a year of upheaval for the sector.
One of the long pending demands of the sector of conferring
“infrastructure status” was not announced in the budget. However,
residential housing got a boost, wherein first time home buyers
were allowed a one-time benefit of interest deduction up to
1, 00,000 on a home loan.
Due to difficult market conditions, overall office space absorption
remained lower as compared to 2011 though residential demand
improved. Project launches declined by as much as 30% in 2012
as compared to 7% decline in the previous year.
Home and commercial buyers are now more cautious while
entering real estate deals and the government has proposed new
regulations on the sector. This is a good move and would bode well
for reputed developers like your Company. Our strong corporate
governance practices have ensured that our projects are well
received, notwithstanding the market conditions.
Inspite of the difficult macro-economic conditions, India ranked
20th among the top real estate investment markets globally. FDI
inflow in the sector has tapered off over the past couple of years
and was estimated at USD 1.26 billion between April-February
2012-13 by Department of Industrial Policy and Promotion (DIPP).
According to a report by Jones Lang LaSalle, a global real estate
consultancy, the sector is set for robust inflows of USD 4-5 billion
from overseas investors in the next couple of years, with Bengaluru,
Delhi and Mumbai emerging as the favourites.
2012 was a year of upheaval for the real estate sector. Despite
that, during the year, Peninsula Land performed well and generated
healthy revenue from projects outside Mumbai as well, by being
able to complete its projects on time.
In addition to this, the first phase at Ashok Astoria at Nasik has
been completed and possession has started for the first 100 units.
Construction work is progressing as planned at Ashok Beleza at
Goa, Ashok Astoria at Nasik, Ashok Nirvaan at Lonavala and Ashok
Meadows at Pune. Work has also started on three residential
projects in Mumbai and one at Bengaluru.
While your Company concentrated on timely execution of projects,
it continued with its strategy to expand and invest in Western
and Southern India. During the year, Peninsula Land deployed
approximately 100 crore towards land acquisition. This is in
addition to the over 500 acres of land that we already have.
We have built a solid foundation for the future in all aspects - land
bank, internal processes, people and last and most important,
strong governance practices.
Our vision is to touch the lives of at least one in five people on the
globe, thereby creating enormous value for all our stakeholders. We
have started on this exciting journey and made a good beginning.
As mentioned earlier, we have over the past year refined and
strengthened our systems, created a strong leadership pipeline and
increased our engagement with stake holders. The ground work is
done. Now we step on the road to a brighter future.
I am confident that going forward, Peninsula Land will continue to
deliver good performances. I thank all of you for the support and
confidence you have reposed in us and look forward to the same
in our march forward.