Indiabulls Real Estate

The Directors have great pleasure in presenting the 2nd Annual Report
 together with audited statement of accounts for the financial year
 ended March 31,2008.
 
 Financial Results
 
 The highlights of the financial results of the Company for the
 financial year ended March 31, 2008 are as under:
 
                                                       Amount (in Rs.)
 
                                                      For the period
                                   Year Ended    From April 04, 2006
 Particulars                   March 31, 2008      to March 31, 2007
 
 Profit before 
 Depreciation /Amortisation     6,053,703,909            193,581,686
 
 Less: Depreciation / 
 Amortisation                      20,834,704              7,124,539
 
 Profit before Tax              6,032,869,205            186,457,147
 
 Less: Provision for Tax        1,355,878,449             55,314,166
 
 Profit after tax               4,676,990,756            131,142,981
 
 Balance of Profit brought forward 18,079,330                 -
 
 Profit available 
 for appropriation              4,695,070,086            131,142,981
 
 Appropriations
 
 Dividend paid on Preference
 Shares                            71,400,548             61,682,851
 
 Corporate Dividend Tax on 
 Dividend on Preference Shares     12,134,523              8,651,020
 
 Proposed Dividend on 
 Preference Shares                 28,184,427             36,522,740
 
 Corporate Dividend Tax on 
 Proposed Dividend on Preference 
 Shares                             4,789,943              6,207,040
 
 Proposed Dividend on 
 Equity Shares                  3,476,528,721                 - 
 
 Corporate Dividend Tax on 
 Proposed Dividend on Equity
 Shares                           590,836,056                 -
 
 Transfer to General Reserves     467,699,076                 -
 
 Balance carried to 
 Balance Sheet                     43,496,792             18,079,330
 
 
 Review of Operations
 
 The Revenue of the Company for the year increased by over 2298% from
 Rs. 27.06 crores to Rs. 648.88 crores.  The Companys net profit for
 the year was Rs 467.70 crores (last year Rs. 13.11 crores) thereby
 registering an annual growth of 3468%. The consolidated revenues and
 PAT of the Company along with its subsidiaries for the year ended March
 31, 2008 was Rs. 764.65 crores and Rs.  406.70 crores respectively. The
 consolidated revenues and PAT grew by 1581% and 3002% respectively for
 the year ended March 31, 2008. The Earning Per Share (EPS) for the year
 was Rs. 20.72.
 
 Business Highlights
 
 Real Estate (Office): Leading Indian company recently signed up for
 70,000 sq ft office space at Jupiter Mills office complex (One
 Indiabulls Centre) at a monthly lease rental of Rs 325 per sq ft. Going
 forward, the new lease rentals are expected at higher rates than Rs 275
 per sq ft that was given to the anchor tenants last year.
 
 Real Estate (Residential): Pre-sales at Castlewood Luxury Apartments in
 South Delhi were launched during 04 08.
 
 Real Estate (Malls): Launched companion leasing for all 16 malls being
 developed. The company is in early stages of negotiations with some
 leading international single product retailers who wish to establish a
 pan India presence.
 
 Power: The Company, through its subsidiary companies, is in the process
 of developing coal based thermal power and hydro power projects with
 aggregate capacity of 5447MW. It includes 1320 MW Mega thermal pit-head
 power plant at Bhaiyathan, Chhattisgarh acquired through competitive
 bidding route. The project includes development of captive coal mines
 with proven reserves of 349 million tonnes in District Korba of
 Chhattisgarh which is adequate to low cost coal supply to the planned
 power plant as well as an additional similar sized unit. Under terms of
 the contract, 35% of power produced from the Bhaiyathan project is
 available for merchant sale at market rates and the remaining 65% has
 to be sold to CSEB at the quoted levelised tariff. In addition, the
 Company, through its subsidiary, has recently signed a MOUs with
 Jharkhand and MP Governments for setting up of coal fired independent
 Power Projects of 1320 MW and 2640 MW respectively.
 
 Retail: The retail business currently has an operational area of
 5,96,000 sq ft. Indiabulls Megastores measuring 77,000 sq ft at
 Shahdra, New Delhi and 64,000 sq ft at Ahmedabad opened in the last
 quarter of 2007-2008. In addition, 6 new Indiabulls Mart stores each
 measuring approx 5,000 sq ft became operational during last year.
 
 Real Estate Development &i Project Advisory One lndiabulls Centre
 (Jupiter Mills) and Elphinstone Mills:
 
 - Development of 1.43 million sq ft of leasable office space and 0.44
 million sq ft of leasable Mall / Retail space at Jupiter Mills. The
 development work is proceeding as per plan and first office block has
 been delivered for client fit outs.
 
 - Development of 1.54 million sq ft of leasable office space at
 Elphinstone Mills proceeding as per plan and will be available for
 client fit outs in the second half of the current year.
 
 Residential Apartments:
 
 - Pre-sales at Castlewood Luxury Apartments (Tehkhand) in South Delhi
 was launched during the last quarter of 2007-08. The project size is
 estimated at Rs 1,800 crores.
 
 - Residential project at OMR Road in Chennai is expected to be launched
 during the second quarter of the current year.
 
 - Land-bank of approx 1200 acres for future residential projects in
 NCR, Chennai & Mumbai Metropolitan Region.
 
 Mall Development:
 
 - The Company, through its subsidiaries, is in the process of
 developing 16 malls across 16 leading cities with a combined leasable
 area of approx 14 million sq ft. It is anticipated that Indiabulls
 hyper market stores and department stores will be anchor tenants in
 these malts. All the mall sites are at various stages of the
 development process and the Company expects majority of malls to be
 completed and leased out by late 2009. Land for 13 mall sites out of 16
 has been fully paid for and is under possession of the Company.
 
 IT Office Space/SEZs
 
 - Nashik Multi Product SEZ: Received Formal Approval from the Ministry
 of Commerce (Government of India) for development of 3,000 acres of
 Multi Product SEZ in Nashik, Maharashtra located on the Delhi-Mumbai
 industrial corridor, being developed as part of Indo-Japan Economic
 Partnership Agreement.  The land is in possession, making it one of the
 first Multi Product SEZs in the state.  Development work on the SEZ has
 started.
 
 - IT SEZs: Received formal approval for 2 IT SEZs (25 acres each)
 located in the Panvel area of Mumbai Metropolitan Region (MMR). Land
 for both the SEZs is in possession.
 
 - Raigad Multi Product SEZ: In-Principle Approval from the Ministry of
 Commerce (Government of India) for development of 6,000 acres
 multi-product SEZ in Raigad District of the State of Maharashtra. Land
 acquisition is in progress for the project.  However, land acquisition
 is happening at a rather slow pace and would take more time than
 anticipated earlier. Project is in close proximity to Navi Mumbai and
 will benefit from the development of the Nhava Sheva sea link, which
 has already been tendered out.
 
 Pending Large Infrastructure/Development bids
 
 - The Company has been shortlisted as a qualified bidder for the
 Dharavi Redevelopment Plan. The Company has partnered with
 internationally renowned Shea Homes (USA) for this venture. The Company
 owns 90% equity stake in this project.
 
 Power & Energy
 
 The Company, through its subsidiary companies, is in the process of
 developing coal based thermal power and hydro power projects with
 aggregate capacity of 5447 MW. In addition, the Company, through its
 subsidiary, has recently signed MOUs with Jharkhand and MP Governments
 for setting up of coal fired independent Power Projects of 1320 MW and
 2640 MW respectively.
 
 Projects under development:
 
 - Two mega thermal power plants in the state of Maharashtra with an
 aggregate capacity of 3,960 MW. Requisite clearances and approvals for
 the aforesaid projects are at fairly advanced stages.
 
 - 1320 MW Mega thermal pit-head power plant at Bhaiyathan, Chhattisgarh
 acquired through competitive bidding route. The project includes
 development of captive coal mines with proven reserves of 349 million
 tonnes in District Korba of Chhattisgarh which is adequate to low cost
 coal supply to the planned power plant as well as an additional similar
 sized unit.  Under terms of the contract, 35% of power produced from
 the Bhaiyathan project is available for merchant sale at market rates
 and the remaining 65% has to be sold to CSEB at the quoted levelised
 tariff.
 
 - Four mid-sized hydro projects under MOU with state governments.
 
 Retail Business Update:
 
 The retail business currently has an operational area of 5,96,000 sq
 ft.
 
 - The retail business environment remains challenging and the Companys
 subsidiary is making good progress in inducting new talent in the
 business and turning around the erstwhile Piramyd stores, now
 re-branded as Indiabulls Megastore and Indiabulls Mart.
 
 Multiplex Business Update:
 
 - The Company through its subsidiary is setting up state-of-the-art
 multiplexes in major cities across the country and is an anchor tenant
 of various malls being developed by it.
 
 Dividend
 
 The Board of Directors of your Company recommend a dividend of Rs.
 13.50 per share (675% on the face value of Rs. 2 per share), net of
 dividend tax, which, if approved at the ensuing Annual General Meeting,
 will be paid to (i) all those Members whose names appear in the
 Register of Members on book closure dates indicated in the Notice
 convening the AGM, which forms a part of the Annual Report and (ii) all
 those Members whose names appear on that dates as beneficial owner as
 furnished by National Securities Depository Limited and Central
 Depository Services (India) Limited.
 
 In addition to the above, the Company had paid a preference dividend @
 5% upto February 02, 2008 and thereafter 10% aggregating Rs.
 99,584,975/- to Oberon Limited, a foreign entity.
 
 Management Discussion fit Analysis Report
 
 Managements Discussion and Analysis Report for the year under review,
 as stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchanges in India, is presented in a separate section forming part of
 the Annual Report.
 
 Significant Developments
 
 • The Company has acquired 100% of the ordinary shares in Dev Property
 Development Pic. (DPD), an Isle of Man registered company, by issuance
 of its 16,685,580 new ordinary shares represented by Global Depository
 Receipts (GDRs) to DPD shareholders. These GDRs are listed on the
 Luxembourg Stock Exchanges Euro MFT.
 
 - The Companys unlisted 100% subsidiary Sophia Power Company Limited
 (SPCL) has issued its 37.5% Equity to FIM Limited (an FVCI managed by
 Farallon Capital Management LLC and its affiliates) and LNM India
 Internet Ventures Limited (an investment entity on behalf of Mr. L. N.
 Mittaland family) (lnvestors).The Company and Investors have approved
 the merger of Indiabulls Power Services Limited, another unlisted 100%
 subsidiary of the Company into SPCL, in accordance with applicable laws
 and approvals and has filed petition with Honble High Court of Delhi
 for necessary approvals.
 
 - Indiabulls Power Generation Limited (IPGL), a 100% subsidiary of the
 Company, has been awarded the Letter of Intent for a 1320 MW Bhaiyathan
 Thermal Power Project (Bhaiyathan TPP) in Chhattisgarh state by
 Chhattisgarh State Electricity Board (CSEB). The project includes
 development of captive mines containing proven reserves of 349 million
 tonnes of coal.
 
 - Indiabulls Wholesale Services Limited, a 100% subsidiary of the
 Company has acquired 63.92% equity stake in Piramyd Retail Limited (the
 name has since changed to Indiabulls Retail Services Limited), through
 a Share Purchase Agreement and subsequent open offer under the SEBI
 (Substantial Acquisition of Shares and Takeover) Regulations, 1997,
 concluded in the month of April, 2008.
 
 - Indiabulls Infrastructure Limited (IIL), a 100% subsidiary of the
 Company had acquired 100% shareholding of Catherine Builders fit
 Developers Private Limited from DLF Home Developers Limited.
 
 Catherine Builders & Developers Private Limited own 50% shareholding of
 Kenneth Builders & Developers Private Limited. With this ML now owns
 100% stake in Kenneth Builders & Developers Private Limited which had
 earlier won the auction by DDA to develop a residential project on 35.8
 acres of land located at Tehkhand in South Delhi at Delhi.
 
 During the year, on July 10, 2007, the Company had issued 38,759,688
 Global Depository Receipts (GDRs) which were listed at the Luxembourg
 Stock Exchange, at an offer price of US$ 10.32 per GDR equivalent to
 INR 416.76 per share and raised a proceeds of USD 400 Million
 (equivalent to Rupees 16,153,521,977). Each GDR represents one Equity
 Share of face value Rs. 2 each fully paid up of the Company.
 
 During the year, on November 05, 2007, the Company had issued its
 10,000,000 Equity Shares of Rs. 21- each to its promoters upon exercise
 of conversion rights at an exercise price of Rs. 115.13 per share in
 respect of an equal number of warrants, which had earlier been
 allocated to them in the Company, in pursuance of the Scheme of
 Demerger of Indiabulls Financial Services Limited.
 
 During the year, on August 9, 2007, the Company had issued and allotted
 15,000,000 warrants convertible into the equivalent number of Equity
 shares of face value Rs. 2/- each, to its Promoters at a conversion
 price of Rs. 300/- per Equity Share.
 
 During the year, on November 5, 2007, the Company had issued and
 allotted 43,000,000 warrants convertible into the equivalent number of
 Equity Shares of face value Rs. 2/- each, to its Promoters and Joint
 Managing Directors at a conversion price of Rs. 540/- per Equity Share.
 
 Employees Stock Options
 
 Pursuant to shareholders authorization dated March 29, 2008, the
 Company has launched Employees Stock Option Scheme-2008
 (ESOP-2008). The Company had on April 22, 2008, granted 1,500,000
 stock options representing an equal number of equity shares of face
 value Rs. 2 each, to the eligible employees, at an exercise price of
 Rs. 495.70/-.
 
 The Company has allotted 900,000 equity shares to the eligible
 employees pursuant to the first vesting in terms of Employees Stock
 Option Scheme-2006.
 
 Further, with a view to provide greater flexibility to the employees
 for exercising their options, under the said Schemes, it is proposed to
 increase the exercise period to 5 years from the date of vesting as
 against 90 days originally provided under the Schemes.
 
 The disclosures required to be made in the Directors Report in respect
 to the stock options, in terms of the SEBI (Employee Stock Option
 Scheme and Stock Purchase Scheme) Guidelines, 1999, are as per the
 Annexures forming part of the Directors Report.
 
 Subsidiaries
 
 The statement pursuant to Section 212(1 )(e) of the Companies Act, 1956
 relating to subsidiary companies forms a part of the financial
 statements.
 
 In terms of approval granted by the Ministry of Corporate Affairs,
 Government of India vide letter No.  47/285/2008-CL-lll dated May 23,
 2008, under Section 212(8) of the Companies Act, 1956, copies of the
 Balance Sheet, Profit and Loss Account, Reports of the Board of
 Directors and Auditors of the subsidiaries of the Company as of March
 31, 2008 have not been attached with the Balance Sheet of the Company.
 These documents will be made available upon request by any Member of
 the Company interested in obtaining the same. However, as directed by
 the Ministry of Corporate Affairs, the financial data of the
 subsidiaries have been furnished under Details of Subsidiaries
 forming part of the Annual Report. Further, pursuant to Accounting
 Standard AS-21 issued by The Institute of Chartered Accountants of
 India, Consolidated Financial Statements presented by the Company
 includes financial information of its subsidiaries.
 
 Fixed Deposits
 
 The Company has not accepted any fixed deposits from the public during
 the year.
 
 Directors
 
 In accordance with the provisions of Sections 255 and 256 of the
 Companies Act, 1956, Mr. Aishwarya Katoch, Mr.  Karan Singh and Mr.
 Shamsher Singh, Directors, retire by rotation and, being eligible,
 offer themselves for reappointment at the ensuing Annual General
 Meeting.
 
 Brief resume of the Directors proposed to be reappointed, nature of
 their expertise in specific functional areas and names of companies in
 which they hold directorships and memberships/ chairmanships of Board
 Committees, are provided in the Report on Corporate Governance forming
 part of the Annual Report.
 
 Directors Responsibility Statement
 
 As required under Section 217 (2AA) of the Companies Act, 1956, your
 Directors confirm that:
 
 1.  in the preparation of the annual accounts, the applicable
 accounting standards have been followed and that there are no material
 departures from the same;
 
 2.  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 as at 31st March, 2008 and the profit of the Company for
 the year ended on that date;
 
 3.  the Directors have taken proper and sufficient care for maintenance
 of adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting fraud and other irregularities; and
 
 4.  the Directors have prepared the Annual Accounts of the Company on a
 going concern basis.
 
 Auditors ft Auditors Report
 
 M/s. Ajay Sardana Associates, Chartered Accountants, Statutory Auditors
 of the Company, will retire at the conclusion of the ensuing Annual
 General Meeting and, being eligible, offer themselves for
 reappointment.  The Company has received a certificate from the
 Auditors to the effect that their reappointment, if made, would be in
 accordance with the limits specified under Section 224(1 B) of the
 Companies Act, 1956. The Board recommends their re-appointment.
 
 The Notes to the Accounts referred to in the Auditors Report are self-
 explanatory and, therefore, do not call for any further explanation.
 
 Listing with Stock Exchanges
 
 The equity shares of the Company continue to remain listed with the
 Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of
 India Limited (NSE).  The listing fees payable to both the exchanges
 for the financial year 2008-09 have been paid. Global Depository
 Receipts (GDRs) of the Company continue to be listed on Luxembourg
 Stock Exchange.
 
 Corporate Governance Report Pursuant to clause 49 of the Listing
 Agreements with the Stock Exchanges, a detailed report on Corporate
 Governance is included in the Annual Report. A Practising Company
 Secretarys Certificate certifying the Companys compliance with the
 requirements of Corporate Governance stipulated under Clause 49 of the
 Listing Agreement is attached with the Corporate Governance Report.
 
 Information Pursuant to Section 217
 
 (1)(e) and (2A) of The Companies Act, 1956
 
 The information required to be disclosed under Section 217 (1) (e) of
 the Companies Act, 1956, read with the Companies (Disclosure of
 Particulars in the Report of the Board of Directors) Rules, 1988 with
 respect to conservation of Energy, Technology Absorption and Foreign
 Exchange Earnings and Outgo, is given in the Annexure and forms a part
 of this Report.
 
 In terms of the provisions of Section 217 (2A) of the Companies Act,
 1956 read with the Companies (Particulars of Employees) Rules, 1975 as
 amended, the names and other particulars of the employees are required
 to be set out in the Annexure to the Directors Report. However, having
 regard to the provisions of Section 219(1 )(b)(iv) of the said Act read
 with the Clause 32 of the Listing Agreement, the Annual Report
 excluding the aforesaid information is being sent to all the Members of
 the Company and others entitled thereto. Any member who is interested
 in obtaining such particulars may write to the Company Secretary at the
 Registered Office of the Company.
 
 Acknowledgement
 
 Your Directors wish to express their gratitude for the continuous
 assistance and support received from the investors, clients, bankers,
 regulatory and government authorities, during the year. Your Directors
 also wish to place on record their appreciation for the contributions
 made by employees at various levels, to the growth and success of the
 Company.
 
                            For and on behalf of the Board of Directors
 
 New Delhi,                                              Sameer Gehlaut
 30th July, 2008                                               Chairman