Brigade Enterprises

The Directors have pleasure in presenting the Thirteenth Annual Report
 on business and operations of the Company together with the Audited
 Statement of Accounts for the financial year ended 31st March 2008.
 
 Financial Highlights:
 
                                                     Rupees in Millions
 Particulars                                  2007-08           2006-07
 
 Net Sales and Other income                  4,953.81         4,077.65
 Profit before Interest,
 Depreciation and Tax
 Interest & other Finance charges               35.71            16.02
 Depreciation                                   85.54            87.24
 Profit before Tax                           1,374.05         1,068.44
 Provision for Taxation: Current              (341.61)         (350.64)
 Deferred                                       (1.60)           12.37
 Net Profit after Tax                        1,030.84           730.17
 Add: Prior year (Expenses) /                    1.25            19.82
 Income
 Less: Diminution in Value of                    2.58
 investment
 Profit available for                         1029.59           747 41
 appropriation
 Appropriations:
 Dividend (Includes Tax on                     262.65            61.37
 Dividend)
 Transfer to General Reserve                    77.30            74.80
 Balance carried to Balance                    689.64           611.24
 Sheet
 Earnings per Share                             10.40             7.93
 
 * Basic Earnings per Share is computed by dividing Net Income by the
 weighted average number of common stock outstanding during the period.
 
 Dividend:
 
 The Board of Directors of the Company has recommended a Dividend of Rs
 2/- (Rupees two only) (20%) per Equity Share. The Dividend will be
 declared in the ensuing Annual General Meeting based on approval by the
 Shareholders. The total payment on account of Dividend (including
 Dividend Tax) shall be Rs 262.65 Million. A sum of Rs 77.50 Million has
 been transferred to the General Reserve.
 
 Operational Review & Future:
 
 During the year the Company has completed a good mix of residential,
 commercial and hospitality projects.  Brigade Gateway at Malleswaram in
 Bangalore and Brigade Metropolis at Whitefield in Bangalore are part of
 integrated lifestyle enclaves developed by the Company. The Ministry of
 Commerce, Government of India, New Delhi, have approved the Companys
 Special Economic Zone (SEZ) project focusing on Information Technology
 to come up on a 25-acre plot in Ganjimutt, Mangalore. Apart from these,
 the Company has signed up agreements for development of hospitality
 projects. The revenues from these projects will significantly bolster
 the financials of the Company.
 
 Our pioneering efforts in integrated developments have been well
 received by our clients and in line with our philosophy of providing a
 better quality of life. The Company intends to use its expertise in
 developing such projects at a larger scale in the near future.
 
 Whilst focusing on such integrated developments, the Company adopts a
 diverse mix of projects, including stand alone residential development,
 commercial projects, SEZs and increasing its presence in the
 Hospitality sector.
 
 The Company entered into an agreement with Starwood Hotels for the
 management of a proposed Sheraton Hotel in Mysore.
 
 The Company alongwith / through its subsidiary, Brigade Hospitality
 Services Private Limited, has entered into: (i) a Memorandum of
 Understanding with AAPC Hotels Management Pte Limited, a member of the
 Accor Asia Pacific Group, for management of the Mercure Homestead
 Residences at Koramangala, Bangalore (ii) Hotel Management Agreement
 with Intercontinental Hotels Pvt. Ltd for the management of the
 proposed Holiday Inn Hotel at Devanahalli, Bangalore.  The Company
 believes that Bangalore & South Indian markets are quite vibrant and
 provide a conducive environment for hospitality projects including the
 Serviced Residences.
 
 The Company is carefully monitoring the market situation and the land
 prices, which has increased over the last few years. In the wake of the
 above, the Company is following a cautious but optimistic approach to
 increasing its land bank and its presence in different geographical
 locations.
 
 Conversion into a Pubic Limited Company:
 
 The Company was converted into a Public Limited Company in the Twelfth
 Annual General Meeting held on 20th June 2007. The fresh certificate of
 incorporation consequent upon change of name of the Company on
 conversion into a Public Limited Company was issued by the Registrar of
 Companies, Karnataka on 20th July 2007.
 
 Changes in Capital Structure:
 
 During the year, the following changes happened in the Share capital of
 the Company:
 
 a.  Bonus issue of 67,290,525 (sixty seven million two hundred ninety
 thousand five hundred twenty five only) Equity Shares of the Company in
 the ratio of 5:2 was allotted on 20th June 2007.
 
 b.  The Authorised Share Capital of the company was increased from Rs
 300,000,000/- (Rupees three hundred million only) divided into
 30,000,000 (thirty million only) Equity Shares of Rs 10/- (Rupees ten
 only) each to Rs 1,500,000,000/- (Rupees one thousand five hundred
 million only) divided into 150,000,000 (one hundred fifty million only)
 Equity Shares of Rs 10/- (Rupees ten only) each on 20th June 2007.
 
 c.  Public issue of 16,624,720 (sixteen million six hundred twenty four
 thousand seven hundred twenty only) Equity Shares and Green Shoe Option
 of 1,420,485 (one million four hundred twenty thousand four hundred
 eighty five only) Equity Shares of Rs 10/- (Rupees ten only) each
 allotted on 24th December 2007 & 31st January 2008 respectively, at a
 premium of Rs 380/- (Rupees three hundred eighty only) per Equity
 Share.
 
 The paid-up Equity Share capital of the Company has increased from Rs
 269,162,100/- (Rupees two hundred sixty nine million one hundred sixty
 two thousand one hundred only) to Rs 1,122,519,400/- (Rupees one
 billion one hundred twenty two million five hundred nineteen thousand
 four hundred only) due to the aforesaid allotment of Shares.
 
 Initial Public Offering (IPO):
 
 The financial year 2007-08 is an important landmark in the history of
 the Company. Your Company came out with an Initial Public Offering
 (IPO) during the said financial year.  Proceeds from IPO are intended
 to fund the expansion plans of the Company.
 
 The issue was done through a Book Building process of 19,118,428
 (Nineteen million one hundred eighteen thousand four hundred twenty
 eight only) equity shares of Rs 10/- (Rupees Ten only) each at a
 premium of Rs 380/- (Rupees Three Hundred eighty only) per Equity Share
 including the Green Shoe Option of 2,493,708 (Two million four hundred
 ninety three thousand seven hundred and eight only) offered by Ms Githa
 Shankar, one of the promoters of the Company.
 
 This issue was opened for subscription from 10th December 2007 to 13th
 December 2007. The issue was oversubscribed 10.82 times.
 
 The Equity Shares of the Company are listed on the National Stock
 Exchange of India Limited & Bombay Stock Exchange Limited with effect
 from 31st December 2007.
 
 Utilisation of IPO Proceeds:
 
 The funds raised in the Initial Public Offering and the utilization
 status as on 31st March 2008 is as follows:
                                                     Rupees in Millions
                                                       Amount    
 Particulars                       specified in                  
                                   Utilisation
                                   prospectus
 
 A)  Funds raised*                  7,037.63          7,037.63
 B)  Utilisation :
 i.      Land                         479.69          1,198.77
 ii.     Consultation               5,120.37             48.85
 iii.    General Corporate          1,084.01          1,386.26
         purposes
 iv.     Issue expenses               353.56            367.04
 
 C)     Unutilised amount invested       NIL           4036.71
 in Mutual Funds
 
 * Post the stabilisation period on the Company exercising the Green
 Shoe Option.
 
 Subsidiaries:
 
 Brigade Hospitality Services Private Limited (BHSPL), a company
 incorporated on 1st June 2004 as a 100% Subsidiary of the Company and
 is carrying on the business of running and managing clubs, serviced
 residences, and convention centres. During the financial year 2007-08,
 BHSPL has registered income from operations amounting to Rs 141.21
 Millions. Loss incurred during the period amounts to Rs 14.42 Millions.
 
 Brigade Estates and Projects Private Limited, Tetrarch Holdings Private
 Limited & Brigade Properties Private Limited are wholly owned
 Subsidiaries of the Company with main business in the field of real
 estate development. These Companies are in the process of being fully
 operational.
 
 Consolidated Financial Statements:
 
 The Consolidated Financial Statements have been prepared by the Company
 pursuant to Clause 32 of the Listing Agreement entered with the Stock
 Exchanges. The Consolidated Financial Statement and Auditors Report
 thereon forms part of the Annual Report.
 
 Fixed Deposits:
 
 The Company has neither accepted nor renewed any fixed deposits during
 the year, except for repayment of deposits accepted by the Company in
 the earlier financial years when the Company was a Private Limited
 Company.
 
 Management Discussion & Analysis Report:
 
 The Management Discussion and Analysis is annexed to this report.
 
 Directors
 
 Mr M.R. Jaishankar and Ms Githa Shankar retire by rotation and being
 eligible, offer themselves for re-appointment.
 
 Dr Anumolu Ramakrishna was appointed as Additional director of the
 Company with effect from 25th April 2008.  He holds office till the
 date of the ensuing Annual General Meeting of the Company. The Company
 has received requisite notice together with deposit, as provided under
 section 257 of the Companies Act, 1956, from a shareholder proposing
 the appointment of Dr Anumolu Ramakrishna as a Director, liable to
 retire by rotation.
 
 None of the Directors of the Company are disqualified under Section
 274(1)(g) of the Companies Act, 1956.
 
 Auditors
 
 M/s Narayanan, Patil & Ramesh, Chartered Accountants, the Statutory
 Auditors of the Company, retire at the ensuing Annual General Meeting
 of the Company and being eligible for re-appointment, have offered
 themselves for re- appointment.
 
 M/s Narayanan, Patil & Ramesh, Chartered Accountants have confirmed
 that the appointment, if made, will be in accordance with the limits
 prescribed under Section 224(1 B) of the Companies Act, 1956.
 
 Auditors qualification on Accounts
 
 Auditors Qualification
 
 The Company has accepted deposits from certain Parties (repaid with
 applicable interest before 31st March 2008) and in respect of these
 deposits the provisions of Sections 58A and 58AA or any other relevant
 provisions of the Act and the rules framed thereunder have not been
 complied with by the Company insofar as it pertains to filing of forms,
 Advertisement and Returns to Registrar of Companies.
 
 Directors Response
 
 State Bank of India, Industrial Finance Branch (SBI, IFB) had
 stipulated on the Company to increase its equity base or inject
 additional funds via subordinated unsecured loans from Shareholders and
 / or their relatives as part of the project term loan sanctioned for
 developing the Sheraton Hotel and Orion Mall at Brigade Gateway.
 Consequently, the Company had availed short-term loans from
 shareholders and / or their relatives.
 
 Following the conversion of Brigade Enterprises Pvt. Ltd to a Public
 Limited Company and successful completion of IPO (which led to an
 increase in equity base—an adherence to SBI, IFB covenant), the Company
 repaid the unsecured loans. It was the Companys intention not to
 accept public deposits in any manner whatsoever.
 
 Directors Responsibility Statement:
 
 As per the provisions of Section 217(2AA) of the Companies Act, 1956,
 with respect to the Directors Responsibility Statement, it is hereby
 confirmed that:
 
 i. In the preparation of the Annual Accounts, the applicable Accounting
 Standards have been followed along with proper explanation relating to
 material departures.
 
 ii. The Directors have selected such accounting policies and applied
 them consistently and made judgments and estimates that are reasonable
 and prudent so as to give a true and fair view of the state of affairs
 of the Company at the end of the Financial Year and of the profit and
 loss of the Company for that period.
 
 iii. The Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of this Act for safe- guarding the assets of the Company and
 for preventing and detecting fraud and other irregularities.
 
 iv. The Directors have prepared the accounts on a going concern basis.
 
 Report on Corporate Governance
 
 A detailed report on Corporate Governance has been included as an
 attachment to this Report.
 
 Particulars of Employees:
 
 The details of employees drawing a remuneration aggregating Rs
 2,400,000/- (two million four hundred thousand only) or more per year /
 Rs 200,000/- (two hundred thousand only) or more per month where
 employed for a part of the year pursuant to Section 217(2A) of the
 Companies Act, 1956 is contained In Annexure A to this report.
 
 Conservation of energy, technology absorption, Foreign Exchange
 earnings and outgo:
 
 The Company doesnt have any manufacturing facility due to which the
 provisions of Section 217(1)(e) of the Companies Act, 1956, read with
 Companies (Disclosure of Particulars in the Report of Board of
 Directors) Rules, 1988, the particulars relating to conservation of
 energy, and technology absorption are not applicable to the Company.
 
 However, the Company is committed to energy conservation at every stage
 of its operations. Various steps have been taken to reduce consumption
 of electrical energy by monitoring the use of equipments, machinery
 etc. used in construction.
 
 The Company is in tune with the changing trends of the modern
 technology / machinery to be used in its business.
 
 The details of Foreign Exchange inflow and outflow during the year are
 as follows:
 
                                                     Rupees in Millions
 Particulars                                     2007-08        2006-07
 
 Inflow:
 Advance for Sale of Units, Lease                176.20         163.29
 deposits & Rentals
 Outflow:
 i.      Professional charges                     16.12          14.78
 ii.     Consultation Fees                         0.34           1.79
 iii.    Others (which includes IPO               44.47          29.81
         expenses, Rent Deposits and
         Other expenses)
 
 CIF Value of imports during the year ended March 31 2008 is Rs 25.02
 Millions.
 
 Acknowledgements:
 
 The Board acknowledges and appreciates the co-operation and assistance
 given by Governmental and Non-governmental agencies, Bankers and other
 agencies during the year.
 
 The Board sincerely appreciates the confidence reposed by the
 Shareholders in the Company.
 
 The Board also thanks the Investment Bankers, Bankers to the Issue,
 Legal Counsel, Registrars and Rating Agency for the successful
 completion of the IPO.
 
 The Board appreciates the hard work, dedication & efforts of all staff
 (Brigadiers) for achieving significant business growth in the most
 challenging environment.
 
                                        For and on behalf of the Board
                                       for Brigade Enterprises Limited
 
 Place: Bangalore                   M.R. Jaishankar
 Date : April 25, 2008            Chairman and Managing Director