PENINSULA LAND LIMITED
ANNUAL REPORT 2011-2012
It is a matter of privilege to present to you the Company`s performance for
financial year 2011-12. During the year, the deteriorating global economy
impacted the real estate sector in India as well. However, even in a
hostile environment, Peninsula Land executed its projects in time and
launched projects in new cities.
The last one year has been tougher than what we expected. The world economy
has gone through a very tough time. It clocked an annualized growth of 3.9%
in 2011 and the fourth quarter last financial year has been pretty bad.
The debt crisis in Spain, Greece and Italy impacted the stronger countries
like Germany, France and UK. Nine Eurozone nations were downgraded by
Standard & Poor (S&P).
Over the last few weeks, there have been some positive developments and the
financial indicators seem to have stabilized, especially in the US. The US
economy has regained some traction but there are concerns about its
sustainability. Even as the prospects for recovery have improved a bit,
significant risk still remains.
Real GDP growth should pick up gradually during 2012-13. It is forecast to
slow to about 3.5% in 2012, from about 3.9% in 2011, and to return to 4% in
2013 as against the 3.6% projected earlier for both years.
During the year, Indian economy grew at a nine-year low of 6.9% in 2011-12,
which can be attributed to external as well as domestic issues.
International crude oil prices have surged and have been consistently over
$100 per barrel for most part of last year. Exports from India to Europe
were also affected due to the financial crises in Europe.
During the year, the Inflation has been a major cause of concern and has
been on the rise. The Reserve Bank of India did intervene and implemented
measures such as increase in interest rates and CRR. Food inflation, after
a seasonal decline, rose again. The growth rate of investment in the
economy is estimated to have registered a significant decline during the
The Indian economy is estimated to have grown by 6.9% per cent during the
financial year 2011-12, after growing at the rate of 8.4% in each of the
two preceding years. Agriculture is estimated to grow at 2.5% for 2011-12,
a little lower than expected.
The International Monetary Fund (IMF) as well as Asian Development Bank
(ADB) has projected only a 6.9% economic growth for India in 2012. This is
below the 7% projected in January this year.
India is the only emerging economy for which growth projection has been
Real Estate Sector in India
Over the last one and a half years, though the real estate sector witnessed
a gradual consolidation, according to reports by rating agency Fitch:
demand for office space is likely to be maintained at 2011 levels. This
momentum in demand will basically be driven by the additional hiring
momentum by IT/ITeS sector which is the major consumer of office space in
Though the real estate sector contributed only 5% of India`s overall GDP in
2011-12 as compared to a contribution of 10.6% in FY 2010-11, according to
ULI-Pricewaterhouse Coopers (PwC) report, India still leads the pack of top
real estate investment markets in Asia.
According to industry experts, the real estate sector in India is being
recognized as an infrastructure service that is driving the economic growth
engine of the country. In fact, foreign direct investment (FDI) in the
sector is expected to increase to US$ 25 billion in the next 10 years, from
present US$ 4 billion, according to a latest industry body report.
Peninsula Land: Way Forward
Peninsula Land has completed and executed 6.4 million sq ft of development
in the residential, commercial and retail space till date.
During the year, having completed Mumbai projects, the company spread its
wings and launched projects outside Mumbai in new cities like Nasik, Pune,
Goa, and Lonavala. With the launch of these projects, the company has
undertaken an additional development close to 3 million sq ft in these
cities. And the value of these projects will be about Rs.1500 crores.
In Goa, Peninsula Land is constructing premium residential development -
Ashok Beleza, which is expected to be completed by the end of 2013. Since
its launch, this project has received a favourable response from customers.
Ashok Astoria, the residential projects at Nasik has already been launched
and part of the project has already been sold. At Lonavala, work has
started at Ashok Nirvaan, a second home project which will have modern
Even as the company is busy breaking ground and launching new projects,
acquiring land had been the focus for the last 18-24 months. Over the last
two years, the company has strengthened its land bank and acquired land
parcels to the tune of Rs.1150 crores. During the year, the company
acquired properties in Mumbai, Pune and Bengaluru.
With all this, Peninsula Land has embarked on the second phase of growth.
And going forward, we will focus on monetizing our land parcels and
executing our projects in time that will further strengthen our financial
position. The company has a surplus of cash and healthy debt-equity ratio.
Let me thank all of you for the immense support and faith reposed in the
company that has helped us to move closer to our goal. I am confident that
this continued support will help us sustain our growth.