MIRA
INFORM REPORT
|
Report Date : |
27.12.2011 |
IDENTIFICATION DETAILS
|
Name : |
PHOENIX MILLS LIMITED |
|
|
|
|
Registered
Office : |
462, Senapati Bapat Marg, Lower Parel, Mumbai – 400013, Maharashtra |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as
on) : |
31.03.2011 |
|
|
|
|
Date of
Incorporation : |
27.01.1905 |
|
|
|
|
Com. Reg. No.: |
11-000200 |
|
|
|
|
Capital
Investment / Paid-up Capital : |
Rs.289.691 Millions |
|
|
|
|
CIN No.: [Company Identification
No.] |
L17100MH1905PLC000200 |
|
|
|
|
TAN No.: [Tax Deduction &
Collection Account No.] |
MUMT09705D |
|
|
|
|
PAN No.: [Permanent Account No.] |
AAACP3325J |
|
|
|
|
Legal Form : |
A Public Limited Liability Company. The Company’s Shares are Listed on
the Stock Exchange. |
|
|
|
|
Line of Business
: |
Manufacturer of Cotton Textile Goods. |
|
|
|
|
No. of Employees
: |
Not Available |
RATING & COMMENTS
|
MIRA’s Rating : |
A (69) |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular |
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject is an old and well established company having fine track.
Financial position of the company appears to be sound. Directors are reported
as experienced and respectable businessmen. Trade relations are reported as
fair. Business is active. Payments are reported to be regular and as per
commitments. However, it would be advisable to take adequate securities while
dealing with the subject. |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – September 30, 2011
|
Country Name |
Previous Rating (30.06.2011) |
Current Rating (30.09.2011) |
|
|
A1 |
A1 |
|
|
|
|
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low |
A2 |
|
Moderate |
B1 |
|
High |
B2 |
|
Very High |
C1 |
|
Restricted |
C2 |
|
Off-credit |
D |
LOCATIONS
|
Registered Office : |
462, Senapati Bapat Marg, Lower Parel, Mumbai – 400013, Maharashtra,
India |
|
Tel. No.: |
91- 24964307 /8 /9 |
|
Fax No.: |
91- 24938388 |
|
E-Mail : |
|
|
Website : |
|
|
|
|
|
Corporate/ Administrative Office : |
R R Hosiery Building, Laxmi Woolen Mills Compound, E Moses road, Mahalaxmi,
Mumbai – 400011, Maharashtra, India |
|
Tel. No.: |
91-22-30016730/ 30016600 |
|
Fax No.: |
91-22-30016818/ 30016601 |
|
E-Mail : |
DIRECTORS
(AS ON 31.03.2011)
|
Name : |
Mr. Ashokkumar Ruia |
|
Designation : |
Chairman and Managing Director |
|
|
|
|
Name : |
Mr. Atul Ruia |
|
Designation : |
Joint Managing Director |
|
|
|
|
Name : |
Mr. Kiran Gandhi |
|
Designation : |
Whole Time Director |
|
|
|
|
Name : |
Mr. Shishir Shrivastava |
|
Designation : |
Group CEO and Joint Managing Director |
|
|
|
|
Name : |
Mr. Pradumna Kanodia |
|
Designation : |
Executive Director – Finance |
|
|
|
|
Name : |
Mr. Amitkumar Dabriwala |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr.
Amit Dalal |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Sivaramakrishnan Iyer |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Shribhanu Patki |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Suhail Nathani |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name : |
Mr. Pradumna Kanodia |
|
Designation : |
Group CFO |
|
|
|
|
Name : |
Ms. Minal Bhate – Dandekar |
|
Designation : |
Company Secretary |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
(AS ON 30.09.2011)
|
Category of Shareholders |
No. of Shares |
Percentage of
Holding |
|
|
|
|
|
(A) Shareholding
of Promoter and Promoter Group |
|
|
|
|
|
|
|
|
9,931,781 |
6.86 |
|
|
85,544,882 |
59.06 |
|
|
95,476,663 |
65.92 |
|
|
|
|
|
|
|
|
|
Total
shareholding of Promoter and Promoter Group (A) |
95,476,663 |
65.92 |
|
|
|
|
|
(B) Public
Shareholding |
|
|
|
|
|
|
|
|
7,684,314 |
5.31 |
|
|
76,750 |
0.05 |
|
|
31,265,901 |
21.59 |
|
|
1,500,000 |
1.04 |
|
|
975 |
- |
|
|
975 |
- |
|
|
40,527,940 |
27.98 |
|
|
|
|
|
|
|
|
|
|
1,397,389 |
0.96 |
|
|
|
|
|
|
6,032,537 |
4.16 |
|
|
1,112,328 |
0.77 |
|
|
|
|
|
|
298,588 |
0.21 |
|
|
3,700 |
- |
|
|
158,237 |
0.11 |
|
|
136,651 |
0.09 |
|
|
8,840,842 |
6.10 |
|
|
|
|
|
Total Public
shareholding (B) |
49,368,782 |
34.08 |
|
|
|
|
|
Total (A)+(B) |
144,845,445 |
100.00 |
|
|
|
|
|
(C) Shares held
by Custodians and against which Depository Receipts have been issued |
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
- |
- |
|
|
|
|
|
Total
(A)+(B)+(C) |
144,845,445 |
100.00 |
(1) Indian
Individuals / Hindu Undivided Family
TrustsBUSINESS DETAILS
|
Line of Business : |
Manufacturer of Cotton Textile Goods. |
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|
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|
Products : |
|
GENERAL INFORMATION
|
No. of Employees : |
Not Available |
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Bankers : |
·
Corporation Bank |
|||||||||||||||||||||||||||
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|
|
|||||||||||||||||||||||||||
|
Facilities : |
|
|||||||||||||||||||||||||||
|
|
|
|
Banking
Relations : |
-- |
|
|
|
|
Auditors : |
|
|
Name : |
· A. M. Ghelani and Company Chartered Accountant · Chaturvedi and Shah Chartered Accountant |
|
|
|
|
Associates : |
· Bartraya Mall Development Company Private Limited · Starboard Hotels Private Limited (formerly Classic Software Technology Park Developers Private Limited) · Classic Mall Development Company Private Limited · Classic Housing Projects Private Limited · Entertainment World Developers Limited · Escort Developers Private Limited · Galaxy Entertainment Corporation Limited · Galaxy Entertainment (India) Private Limited · Island Star Mall Developers Private Limited · Juniper Developers Private Limited · Offbeat Developers Private Limited · Picasso Developers Private Limited · Ramayana Realtors Private Limited |
|
|
|
|
Subsidiaries : |
·
Blackwood
Developers Private Limited ·
Bellona
Finvest Limited ·
Big
Apple Real Estate Private Limited ·
Butala
Farm Lands Private Limited. (w.e.f. 29.10.2010) ·
Gangetic
Developers Private Limited ·
Enhance
Holdings Private Limited (formerly Kalani Holdings Private Limited) ·
Market
City Management Private Limited ·
Marketcity
Resources Private Limited ·
Palladium
Constructions Private Limited ·
Pallazzio
Hotels and Leisure Limited ·
Pinnacle
Real Estate Development Private Limited ·
Plutocrat
Assets and Capital Management Private Limited ·
Upal
Developers Private Limited ·
Vamona
Developers Private Limited |
|
|
|
|
Other Related
Parties where common control exists : |
· B.R. International · R.R. Hosiery Private Limited · R.R. Hosiery · R.R. Textiles · Phoenix Construction Company · Phoenix Hospitality Company Private Limited · Phoenix Retail Private Limited |
CAPITAL STRUCTURE
(AS ON 31.03.2011)
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
150000000 |
Equity Share |
Rs.2/- each |
Rs.300.000 Millions |
|
|
|
|
|
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
144845445 |
Equity Share |
Rs.2/- each |
Rs.289.691
Millions |
|
|
|
|
|
NOTE:
Of the above:
54,600,000 Equity shares of Rs.2 each have
been allotted as fully paid up Bonus Shares by capitalisation of Reserves.
40,000,000 Equity Shares of Rs.2 each were
allotted to the share holders of Ashok Ruia Enterprise Private Limited as per the
scheme of amalgamation without payments being received in cash.
9,166,665 Equity Shares of Rs.2 each were
allotted to the share holders of Ruia Real Estate Development Company Private
Limited as per the scheme of amalgamation without payments being received in
cash.
3,390,000 Equity Shares have been reserved for
allotment under The Phoenix Mills Employees’ Stock Option Plan 2007.
650,000 Options have been granted under ‘The
Phoenix Mills Employees’ Stock Option Plan 2007’ of which 250,000 Options have
been lapsed and are available for regrant.
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
|
SOURCES OF FUNDS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
289.691 |
289.691 |
289.691 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
15715.448 |
15102.913 |
14708.301 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
16005.139 |
15392.604 |
14997.992 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
399.972 |
1421.623 |
1651.584 |
|
|
2] Unsecured Loans |
0.000 |
0.000 |
0.000 |
|
|
TOTAL BORROWING |
399.972 |
1421.623 |
1651.584 |
|
|
DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
16405.111 |
16814.227 |
16649.576 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
4371.724 |
4454.149 |
1550.704 |
|
|
Capital work-in-progress |
817.465 |
882.042 |
3160.986 |
|
|
|
|
|
|
|
|
INVESTMENT |
5176.668 |
5874.533 |
5329.995 |
|
|
DEFERREX TAX ASSETS |
12.644 |
22.519 |
12.561 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
0.000
|
3.053
|
3.298 |
|
|
Sundry Debtors |
875.036
|
360.781
|
332.351 |
|
|
Cash & Bank Balances |
77.767
|
203.949
|
1543.988 |
|
|
Other Current Assets |
0.000
|
0.000
|
0.000 |
|
|
Loans & Advances |
6927.253
|
6295.911
|
5849.335 |
|
Total
Current Assets |
7880.056
|
6863.694
|
7728.972 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditor |
639.292 |
260.742 |
256.412 |
|
|
Other Current Liabilities |
870.816
|
786.702
|
653.456 |
|
|
Provisions |
343.338
|
235.266
|
223.774 |
|
Total
Current Liabilities |
1853.446
|
1282.710
|
1133.642 |
|
|
Net Current Assets |
6026.610
|
5580.984
|
6595.330 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
16405.111 |
16814.227 |
16649.576 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
1765.192 |
1157.717 |
901.495 |
|
|
|
Other Income |
323.263 |
240.240 |
498.840 |
|
|
|
TOTAL (A) |
2088.455 |
1397.957 |
1400.335 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Purchases for resale and variation in Inventory |
9.354 |
5.906 |
6.103 |
|
|
|
Employees Costs |
56.163 |
39.460 |
43.037 |
|
|
|
Operating and Other Expenses |
446.276 |
366.128 |
250.297 |
|
|
|
TOTAL (B) |
511.793 |
411.494 |
299.437 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C) |
1576.662 |
986.463 |
1100.898 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
85.516 |
85.529 |
49.479 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1491.146 |
900.934 |
1051.419 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
277.256 |
160.473 |
83.715 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE TAX
(E-F) (G) |
1213.890 |
740.461 |
967.704 |
|
|
|
|
|
|
|
|
|
Less |
TAX (H) |
297.375 |
141.542 |
185.539 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-H) (I) |
916.515 |
598.919 |
782.165 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
3025.645 |
2830.081 |
2517.377 |
|
|
|
|
|
|
|
|
|
Less |
APPROPRIATIONS |
|
|
|
|
|
|
|
Transfer to General Reserve |
200.000 |
200.000 |
300.000 |
|
|
|
Proposed Dividend |
260.722 |
173.815 |
144.845 |
|
|
|
Tax on Proposed Dividend |
42.296 |
29.540 |
24.616 |
|
|
BALANCE CARRIED
TO THE B/S |
3439.142 |
3025.645 |
2830.081 |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
6.33 |
4.13 |
5.52 |
|
QUARTERLY RESULTS
|
PARTICULARS |
|
30.06.2011 |
30.09.2011 |
|
Type |
|
1st
Quarter |
2nd
Quarter |
|
Net Sales |
|
470.510 |
474.080 |
|
Total Expenditure |
|
139.900 |
140.620 |
|
PBIDT (Excl OI) |
|
330.610 |
333.460 |
|
Other Income |
|
109.660 |
88.750 |
|
Operating Profit |
|
440.270 |
422.210 |
|
Interest |
|
10.210 |
30.520 |
|
Exceptional Items |
|
0.000 |
0.000 |
|
PBDT |
|
430.060 |
391.690 |
|
Depreciation |
|
66.900 |
68.890 |
|
Profit Before Tax |
|
363.160 |
322.800 |
|
Tax |
|
90.900 |
83.860 |
|
Provisions and contingencies |
|
0.000 |
0.000 |
|
Profit After Tax |
|
272.260 |
238.940 |
|
Extraordinary Items |
|
0.000 |
0.000 |
|
Prior Period Expenses |
|
0.000 |
0.000 |
|
Other Adjustments |
|
0.000 |
0.000 |
|
Net Profit |
|
272.260 |
238.940 |
KEY RATIOS
|
PARTICULARS |
|
31.03.2011 |
31.03.2010 |
31.03.2009 |
|
PAT / Total Income |
(%) |
43.88
|
42.84
|
55.86 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
68.77
|
63.96
|
107.34 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
9.91
|
6.51
|
10.43 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.08
|
0.05
|
0.06 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.14
|
0.18
|
0.19 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
4.25
|
5.19
|
6.82 |
LOCAL AGENCY FURTHER INFORMATION
PROJECTED FINANCIAL STATEMENT
(RS.
IN MILLIONS)
|
Particulars |
2011-12 |
2012-13 |
2013-14 |
|
|
|
|
|
|
Total Revenue |
2285.000 |
2518.000 |
2738.000 |
|
License Fees |
1407.000 |
1549.000 |
1675.000 |
|
Revenue Shares |
137.000 |
211.000 |
287.000 |
|
Casual Leasing (Kiosks) |
19.000 |
21.000 |
24.000 |
|
Recoveries from Licensee |
525.000 |
535.000 |
545.000 |
|
Other Income |
197.000 |
201.000 |
206.000 |
|
|
|
|
|
|
Expenses |
667.000 |
689.000 |
712.000 |
|
CAM Expenses |
614.000 |
630.000 |
647.000 |
|
Non CAM Expenses |
54.000 |
59.000 |
65.000 |
|
|
|
|
|
|
EBIDTA |
1618.000 |
1829.000 |
2026.000 |
|
|
|
|
|
|
EBITDA Margin % |
71% |
73% |
74% |
|
- Less: Interests on LRD/ Loan |
386.000 |
385.000 |
385.000 |
|
- Depreciation |
267.000 |
279.000 |
292.000 |
|
|
|
|
|
|
PBT |
964.000 |
1165.000 |
1349.000 |
|
|
|
|
|
|
Tax |
212.000 |
256.000 |
297.000 |
|
|
|
|
|
|
PAT |
752.000 |
908.000 |
1052.000 |
------------------------------------------------------------------------------------------------------------------------------
PROJECTED
BALANCE SHEET
(RS.
IN MILLIONS)
|
Particulars |
2011-12 |
2012-13 |
2013-14 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Share Capital |
290.000 |
290.000 |
290.000 |
|
Reserve and Surplus |
16456.000 |
17364.000 |
18416.000 |
|
Total Equity |
16745.000 |
17654.000 |
18706.000 |
|
|
|
|
|
|
LRD/ Loan |
3899.000 |
3899.000 |
3899.000 |
|
Total Debts |
3899.000 |
3899.000 |
3899.000 |
|
|
|
|
|
|
Sundry Creditors |
83.000 |
86.000 |
89.000 |
|
Lease Deposits |
703.000 |
775.000 |
838.000 |
|
Unpaid/ Proposed Dividend |
217.000 |
290.000 |
362.000 |
|
Other Liabilities |
72.000 |
84.000 |
97.000 |
|
Provisions |
285.000 |
285.000 |
285.000 |
|
Total Current
Liabilities |
1361.000 |
1520.000 |
1671.000 |
|
|
|
|
|
|
TOTAL
LIABILITIES |
22006.000 |
23073.000 |
24276.000 |
|
|
|||
|
ASSETS |
|
|
|
|
Gross Block |
5340.000 |
5590.000 |
5840.000 |
|
Less: Depreciation |
1140.000 |
1420.000 |
1712.000 |
|
Net Block |
4199.000 |
4170.000 |
4128.000 |
|
|
|
|
|
|
CWIP |
983.000 |
983.000 |
983.000 |
|
|
|
|
|
|
Investment |
5256.000 |
5256.000 |
5256.000 |
|
Current Assets |
-- |
-- |
-- |
|
Cash and Cash Equivalent |
1395.000 |
2704.000 |
4812.000 |
|
Loans and Advances |
9798.000 |
9548.000 |
8648.000 |
|
Sundry Debtors |
348.000 |
386.000 |
422.000 |
|
Inventories |
3.000 |
3.000 |
3.000 |
|
|
|
|
|
|
Total Current
Assets |
11545.000 |
12641.000 |
13886 |
|
|
|
|
|
|
Deferred Tax
Assets (Net) |
23.000 |
23.000 |
23.000 |
|
|
|
|
|
|
TOTAL ASSETS |
22006.000 |
23073.000 |
24276.000 |
------------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
The highlight of
the year in terms of operations has been exceptional performance of High Street
Phoenix and Palladium, both in terms of footfalls and trade conducted at the
property. Parrallelly, the Company progressed towards finishing the retail and
commercial space under Phase I at Phoenix Marketcity Pune, to the extent that
the mall was able to start operations in June 2011. The Company also made
satisfactory progress with the marketing and construction of all its other
Marketcity projects, of which Bangalore and Kurla, Mumbai are expected to be
launched in September’ 11 and by Q3 FY2012 respectively, while Chennai is
expected to become operational by Q4 FY2012. The Company also progressed with
its other projects at various stages of their developments. The report on
Management Discussion and Analysis (MDA), which forms part of this report,
inter-alia, deals comprehensively with the operations and also current and
future outlook of the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
THE INDIAN ECONOMY
According to the
Ministry of Statistics and Programme Implementation (MOSPI) estimates, the Indian
economy registered a growth of 8.5% in FY2011 driven by the agriculture,
manufacturing sector, government and consumer spending. Financial, insurance,
real estate and business services retained their growth momentum at around 10%
in FY2011. Strong industrial output and growing consumer confidence have been
increasingly attracting foreign investors into the country. According to the
United Nations Conference on Trade and Development (UNCTAD), India ranked
second among global Foreign Direct Investment (FDI) destinations in 2010 and
will continue to remain among the top five most attractive destinations for
international investors during 2011-12.
With respect to
India’s real estate sector, the industry market size is expected to reach US$
180 billion by 2020. This is also one of the highest FDI attracting sectors in
India, having recorded inflows in excess of US$ 9.5 billion during April 2000 -
January 2011. However, the FDI coming into the real estate sector fell by more
than 60% in the first 10 months of 2010- 11 to US$ 1 billion as compared to US$
2.6 billion in corresponding period of previous year. Despite this temporary
slowdown, the FDI flow into India’s real estate sector is expected to witness
an addition of US$ 21 billion over the next 10 years. The current contribution
of the real estate sector to India’s GDP is approximately 5%, which is also
expected to grow in line with a minimum GDP growth rate of 8%+ in the coming
years.
The Indian Economy
is currently gripped by a combination of rising inflation, high interest rate,
liquidity crunch and slowdown in industrial output. In an effort to curb the
rising inflation, the Reserve Bank of India (RBI) hiked both the repo rate and
the reverse repo rate by 50 basis points (half of one percent) to 8.0% and 7.0%
respectively in July 2011. The RBI has raised key policy rates for the eleventh
time since March 2010, leading all financial institutions to hike their lending
rates. While this might be an appropriate measure to bring inflation under
control, it is likely to impact the profitability of many sectors, real estate
being one among them.
Since most banks
have already reduced their exposure to the real estate sector with developers
owing more than Rs.250 billion debt, this series of increase in lending rates
comes as a serious challenge to the sector. Developers have to turn to the
private sector for financing construction, which inevitably comes at a higher
price. This, in turn, would increase the cost of construction in the near term.
The demand for commercial spaces and malls have been
witnessing an upturn recently due to a shortage of quality retail space in
metro cities such as Mumbai, Chennai and Bangalore. The leasing activity in
these areas has increased, as retailers are confident that the pentup demand
for consumer spending is not about to slow down anytime soon. Besides retail,
the market is witnessing a strong rebound in demand for office spaces by
Banking, Financial Service and Insurance (BFSI) sector, aviation, consulting
and IT/ITES services. Despite economic and liquidity challenges in the short
term, the Indian real estate industry is set on a path of steady long term
growth with intermittent corrections.
The
primary reason for this is the strength of India’s age demographics in which a
high proportion of English comprehending young working professionals is growing
in number, and a massive increase in the number of households with
discretionary spending power, leading to retail and domestic demand becoming a
key impetus to the economy. With approximately 55% of India’s workforce earning
their livelihood and producing around 19% of India’s GDP, it continues to be a
key part in the Indian economy.
With
quantum rise in lndia’s overall infrastructure investment and bolstered by an
increasing affluent populace with rising consumption and dwelling development,
PML is well positioned to benefit from the robust domestic consumption story.
THE RETAIL SECTOR
Cushman
and Wakefield Research computes India’s retail market size at approximately US$
600 billion in 2010; while the organised retail market accounts for US$ 50
billion. The retail market in India is expected to witness a surge in demand on
account of the country’s economic environment showing steady growth, coupled
with improvement in employment and consumption expenditure levels.
The
demand for retail space in malls across India is expected to reach
approximately 55.26 million sq. ft. by 2014. Presently, there are over 200
malls across India with total retail space of approximately 56 million sq. ft.
of these, NCR itself accounts for approximately 30% of the mall supply in the
country. Besides malls, main streets accounts for a significant share of retail
space in the country. The top seven cities are expected to witness about 53% of
the total demand for retail space in malls across India. NCR, Mumbai and
Bangalore are expected to account for about 37% of the total demand. Bangalore
is likely to witness the highest cumulative demand for mall space at
approximately 7.7 million sq. ft by 2014, closely followed by Mumbai with
demand anticipated at 6.5 million sq. ft.
The retail market
is picking up its pace by evolving as a more organised sector. Developers’ bid
to take advantage of the rapid growth in the retail sector prior to the
economic slowdown, without proper studies, led to an oversupply situation in
many micro markets and today a number of mall developments are under different
stages of construction all across the country.
To a great extent,
the supply has overshot the growth in demand, primarily across the top seven
cities of India. However, by 2013, the situation is likely to stabilise with a
more assessed supply likely to enter the market while the demand also steadily
increases over a period of time. As an example, in Kolkata, Mumbai and
Bangalore, the demand-supply dynamics has played itself out better and may
probably balance out in the long-term.
THE HOSPITALITY
SECTOR
One of the key
reasons for the growth of the Indian Hospitality sector has been the steady
growth in the overall economy and substantial growth in sectors including
information technology, telecom, banking and finance, insurance, construction,
retail and real estate. According to Cushman and Wakefield, India is fast
becoming one of the most preferred destinations among international tourists.
Moreover, given the growing number of foreign tourists, the hospitality sector
in India is expected to rise to US$ 275 billion in the next 10 years. The
sector is also expected to see investments of over US$ 11 billion in the next
two to three years. By CY2011, about 40 international brands are expected to be
present in India.
However, the
sector has witnessed a dip in tariffs and occupancy lately, primarily on
account of the economic slowdown, coupled with terrorism incidents and also new
supply entering the market. While the average occupancy rates in NCR, Mumbai,
Bangalore and Chennai are expected to drop to a low of 56%, 58%, 52% and 53%,
respectively, it is likely that the drivers of demand remain strong and are
likely to facilitate the market revival relatively quickly. The chart above
illustrates the positioning of each market in perspective of the marketwide
occupancy in 2010, with the population size as per the 2001 census and the
quantum of supply in each market in 2010 (as illustrated by the size of each
sphere).
All eight markets
are expected to witness above 10% growth in demand year-on-year over the next
five years, with NCR leading at 18%, followed by Hyderabad, Bangalore, Chennai,
Ahmedabad, Pune and Mumbai. This compares to Chennai and Ahmedabad leading the
eight cities with the highest average growth of 19%, respectively, in rooms
supply over the next five years, followed by NCR (18%), Kolkata (17%),
Bangalore (15%), Hyderabad (15%), Pune (14%) and Mumbai (11%).
RESIDENTIAL
DEVELOPMENT
The demand-supply
scenario in India’s residential real estate sector is dependent on factors viz.
urbanization, disposable income levels, access to finance and the trend towards
nuclear families. Non Resident Indians (NRIs) and High Net worth Individuals
(HNIs), too are key potential buyers in the high end and premium residential
categories in India. Growing at a Compounded Annual Growth Rate (CAGR) of 15%
by 2014, the pan-India cumulative residential demand is estimated to stand at
approximately 4.25 million units. About 60% of total estimated demand by 2014
is spread across India’s top seven cities, with Tier I metropolitan cities such
as the NCR and Mumbai expected to account for approximately 40% of total
demand. Mumbai is likely to witness the highest cumulative demand growth of
23%, followed by NCR, which is likely to witness a growth of about 20%.
While the housing
sector has recorded healthy demand over the last few quarters, supply largely
remains constrained owing to the slow pace of construction activity during
2009-10. As a result of which, demand across the top seven cities is estimated
by Cushman and Wakefield to be three times higher than supply during 2010–14.
However, this ratio differs within the segments where this gap is higher for
affordable and mid segment when compared to high end and luxury segment. Across
the major seven cities, while mid range housing segment is expected to witness
about three times higher demand than upcoming supply, high end segment is
expected to witness a demand supply gap of approximately 1.5 times.
COMMERCIAL
DEVELOPMENT AND LEASING
The Pan-India
office space demand over the next five years (2010–14) is estimated to be approximately
240.7 million sq. ft., of which the top three cities comprise of 46% of the
total demand. Cities such as Kolkata and Chennai are, however, likely to
generate demand at a faster pace at a CAGR of approximately 22% and 17%,
respectively. Bangalore is expected to witness the highest cumulative demand of
42.1 million sq. ft. during the period, followed by Mumbai, owing to the
increasing interest from corporate firms and renewed growth from the IT/ITeS
sector. The demand, which was initially led by telecom and pharmaceutical
industries in 2009, has now been strengthened further by improving conditions
in BFSI and IT/ITES sectors.
On the supply
side, Mumbai is likely to witness the highest addition to stock during the
period, with 39.7 million sq. ft. of office space likely to get operational by
2012. The growth in demand during the same period is expected to be in line
with the supply over the years, which will most likely sustain the values at
current levels. Bangalore will be the only major Indian city where demand
exceeds new supply each year. Although, demand appears to exceed new supply
consecutively during 2011-13, it may not imply a considerable strengthening of
license fees from current levels, as they have been firm in the recent years
vis-ŕ-vis other cities where license fees have declined.
OPERATIONS REVIEW
A key pillar
supporting the Company’s growth momentum is its ability to also establish
customized and innovative commercial arrangements with its licensees. Depending
on various business factors, they include a judicious combination of basic
Minimum Guarantees (MG) and Revenue Share that offer retailers attractive terms
and company the opportunity to act as a stakeholder in the retailer’s business.
As each retail centre matures into high traffic malls with strong sales, PML
expects to keep improving the ratio of its shared revenue income, giving the
Company an upside on its revenue earning potential.
PML Group boasts
of “The Largest Retail Led Mixed Use Developments” of around 15+ million sq.
ft. within the country, comprising of Malls, Hospitality, Commercial and
Residential developments, with many of its projects expected to be completed
between FY2011 and FY2013. PML has one of the largest leasing teams in the
country with over 50 professionals. The leasing team has been able to close
main anchor commitments for all the PML projects – Pune, Bangalore, Kurla and
Chennai. It has created long-term symbiotic relationships with leading domestic
and international brand houses. For several brands, company has become a single
window platform to launch them on a pan India basis through the organised
retail market. Going forward, the Company is receiving avid interest from
leading international brands that are looking to step into the Indian market
through the most appropriate environments that complement their brands and that
give them access to the right kind of aspirational consumers. Phoenix
Marketcities are fast becoming an indispensible beachhead for many of these
global luxury brands looking to enter India.
OUTLOOK
Despite the
current soft economic conditions on the global and domestic front, the outlook
for subject’s business remains bright. Consumption in Tier I urban markets
continue to be strong and retailers present at High Street Phoenix and
Palladium malls continue to experience record footfalls and revenues. As of
June 2011, Phoenix Marketcity, Pune, has commenced operations and is
experiencing excellent response from the marketplace. Going forward, the
Company also plans to launch three other Marketcity projects (Bangalore, Mumbai
and Chennai) in close succession during FY2012, adding further strength to the
Group’s growth momentum. Over the medium term, the Company will have several
residential and commercial projects constructed and available for sale across
the four key Tier I cities, adding further cash flows to its revenue streams.
Going forward, the continued active management of all its operational assets
should hold the Company in good stead.
------------------------------------------------------------------------------------------------------------------------------
CONTINGENT
LIABILITIES NOT PROVIDED FOR IN RESPECT OF:-
i) Disputed excise duty liability amounting Rs.1.646 Millions (P.Y.
Rs.11.377 Millions)
ii) Corporate guarantee issued by the Company amounting to Rs. NIL (P.Y.
Rs.500.000 Millions) to secure financial assistance being availed by a
subsidiary company.
iii) Outstanding guarantees given by Banks Rs.2.770 Millions (P.Y.
Rs.2.770).
iv) Estimated amount of contracts remaining to be executed on capital
account and not provided for in the accounts is Rs.24.081 Millions (P.Y.
Rs.129.605 Millions) net of advance paid.
v) Demand notices received for damages / interest on account of arrears
/ late payments of E.S.I.C. ( Rs.0.355 Million) and Provident Fund dues
(Rs.2.472 Million) aggregating to Rs.2.827 Millions (P.Y. Rs.3.148 Millions)
are disputed by the Company. The Company has paid ` 1,000,000 and has also
furnished a Bank Guarantee for Rs.1.471 Millions against P.F. demands to the
P.F. authorities.
vi) The Income tax
assessments of the Company have been completed up to Assessment Year 2008-09.
The disputed tax demand outstanding upto the said Assessment Year is Rs.8.227
Millions. The company as well as the income Tax department are in appeal before
the Appellate Authorities against the assessments of earlier financial years.
The impact thereof, if any, on the tax position can be ascertained only after
the disposal of the above appeals. Accordingly, the accounting entries arising
there from will be passed in the year of the disposal of the said appeals.
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------
UNAUDITED
FINANCIAL RESULTS (PROVISIONAL) FOR THE QUARTER ENDED 30TH JUNE,
2011
(RS. IN MILLIONS)
|
Particulars |
Three months
ended on |
|
|
|
30.06.2011 Unaudited |
30.06.2011 Unaudited |
|
|
|
|
|
Net Sales/
Income from Operations |
470.513 |
404.326 |
|
|
|
|
|
Total Income |
470.513 |
404.326 |
|
|
|
|
|
Expenditure |
|
|
|
a) (Increase) / Decrease in stock in trade and work in
progress |
-- |
(0.322) |
|
b) Purchase of Cloth |
-- |
2.085 |
|
c) Staff Cost |
14.541 |
13.984 |
|
d) Legal and Professional Charge |
21.814 |
9.891 |
|
e) Advertisement Sales Promotion |
20.203 |
14.852 |
|
f) Depreciation |
66.898 |
68.506 |
|
g) Other expenditure |
83.341 |
70.186 |
|
Total
Expenditure |
206.797 |
179.182 |
|
|
|
|
|
Profit from operations before other income, interest and
exceptional Items |
263.716 |
225.144 |
|
|
|
|
|
Other income |
109.660 |
43.582 |
|
|
|
|
|
Profit before interest and exceptional Items |
373.376 |
268.726 |
|
|
|
|
|
Interest |
10.213 |
34.537 |
|
|
|
|
|
Profit
from Ordinary Activities before Tax |
363.163 |
234.189 |
|
|
|
|
|
Provision for Tax |
|
|
|
-
Current Income tax |
92.000 |
47.000 |
|
-
Deferred Tax |
(1.100) |
4.564 |
|
-
|
|
|
|
Net
Profit after tax |
272.263 |
182.625 |
|
|
|
|
|
Paid up equity share capital |
289.691 |
289.691 |
|
|
|
|
|
Reserves excluding revaluation reserves as per balance
sheet of previous accounting year |
-- |
-- |
|
Earnings per share (EPS) |
|
|
|
Basic
and diluted EPS (not to be annualised) |
1.88 |
1.26 |
|
|
|
|
|
Public
shareholding |
|
|
|
Number of
shares |
49368782 |
49368782 |
|
Percentage
of shareholding |
34.08 |
34.08 |
|
|
|
|
|
Promoters
and Promoters group Shareholding- |
|
|
|
a) Pledged /Encumbered |
|
|
|
Number of shares |
1000000 |
1000000 |
|
Percentage of shares (as a % of total shareholding of the
promoter and promoter group) |
1.05 |
1.05 |
|
Percentage of shares (as a % of total share capital of the
company) |
0.69 |
0.69 |
|
|
|
|
|
b) Non Encumbered |
|
|
|
Number of shares |
94476663 |
94476663 |
|
Percentage of shares (as a % of total shareholding of the
promoter and promoter group) |
98.95 |
98.95 |
|
Percentage of shares (as a % of total share capital of the
company) |
65.23 |
65.23 |
NOTE:
· The above results as reviewed by the audit committee have been approved and taken on record by the Board of Directors at their meeting held on 30th July, 2011.
· The auditors of the company have carried out a limited review of the financial results for the quarter ended 30.060.2011 in accordance with clause 41 of listing agreement with the stock exchange.
· There were no investor complaints pending at the beginning and at the end of the quarter, 95 investor complaints were received during the quarter and were duly resolved.
· During the quarter, the company has operated only in segment i.e. property and related services.
· Figured for the previous period/ year have been regrouped and / or reclassified wherever necessary so as to facilities the comparison with those of the current period / year.
------------------------------------------------------------------------------------------------------------------------------
INTRODUCTION
COMPANY BRIEF
Subject is a publicly listed company (BSE Code: 503100) that develops, owns, operates and maintains large retail and entertainment chain and commercial office spaces in city-centric locations across India. Company currently, has its operations into three broad business verticals namely:
· Retail mall/commercial space development
· Hospitality
· Leisure and Entertainment
Subject began its journey in these verticals with High Street Phoenix. Located at Lower Parel in the heart of Mumbai, High Street Phoenix has emerged amongst the most frequented destinations in Mumbai. From luxury retail stores in Palladium Mall to monthly household shopping at Big Bazaar, High Street Phoenix, leased out to a number of reputed tenants.
Subject with extensive experience in developing and owning hospitality projects across India. Company are the promoters of the High Street Phoenix-Mumbai’s most frequented retail and entertainment destination located in Lower Parel. From luxury retail stores in Palladium Mall to monthly household shopping at Big Bazaar, High Street Phoenix has a wide range of options for retail buyers, thereby ensuring significant footfalls for its tenants. It covers 3.15 million square feet of space that has been leased out to a number of nationally and internationally reputed brands as tenants.
Subject has under its execution more than 30 million square feet of retail and hospitality developments spread across 18 cities including Mumbai (Kurla), Chennai, Pune and Agra, Bangalore. With a strong management and execution team in place, the promoters are confident of successfully being able to deliver the project in time and within the cost estimates.
The company is currently setting-up a 5 star luxury hotel at Lower Parel, Mumbai, catering to the high end business as well as leisure travelers. The Hotel will be operated, managed and marketed by Hong Kong-based Shangri-La Hotels and Resorts (Shangri La). Shangri-La is Asia Pacifics luxury hotel group and regarded as one of the world’s finest hotel ownership and management companies. Shangri- La has been carefully chosen out of a number of international operators to manage this prestigious property due to its sterling reputation for delivering a premium luxury hospitality experience.
------------------------------------------------------------------------------------------------------------------------------
PROFILE OF DIRECTORS
Mr. Ashokkumar Ruia
Mr. Ashokkumar Ruia, aged 65, is a graduate from Cambridge and has
pursued an active career in both business and sports. He has the unique distinction
of representing the country in two sports, Bridge and Golf, demonstrating an
inimitable desire to excel in whatever he undertakes.
He joined the Board of the company in 1963. He has vast experience in
managing the Company’s affairs over the years and has contributed significantly
to its growth. He has also played an ardent and active role in the textile
industry serving as a member of the Committee of the Mill Owners’ Association,
Bombay for several years. He is now actively involved in mentoring the
leadership team and in various aspects of the Company’s expansion plans through
its various projects.
Mr. Atul Ruia
Mr. Atul Ruia is a graduate in Chemical Engineering from the University
of Pennsylvania and holds a degree in Business Management from The Wharton
School of Finance. He joined the Board of the company in 1996 and is the key
visionary, pioneer and force behind the development of High Street Phoenix,
Mumbai’s first retailed mixed use destination. He is responsible for
strategizing and overseeing the expansion plans of the Company which has
embarked upon a pan India asset creation strategy under the flagship brand
‘Phoenix Marketcities’.
.
Mr. Kiran Gandhi
Mr. Kiran Gandhi, joined the company in 1970. He holds a B. Com degree
and is a qualified Chartered Accountant. He has over 30 years of experience
with Phoenix Group and at present acts as a guide for the finance, accounts and
tax teams of the Company. He plays an impartment role in maintaining banking
and investors relationship. He also plays an advisory role in the areas of
internal audit and income tax. He is also involved in various philanthrophic
activities and is an active member of Lions Club International.
Mr. Shishir
Shrivastava
Mr. Shishir Shrivastava graduated from IHM Bangalore and has served the
Phoenix Group entities for past 12 years in various capacities. While he was
instrumental in shaping HSP to its current reputation, he also laid the
foundations of the service and advisory vertical. Since 2008, he has endeavored
towards the successful culmination of the Shangri-La Hotel and the four Phoenix
Marketcity projects which are now being launched in phases. He has been
elevated to the position of Group CEO and Jt. Managing Director and continues
to oversee several critical functions of the Company including corporate
strategy, debt and private equity fund raising, investor relations, legal,
business development, operations and the Group’s Hospitality Portfolio.
Mr. Pradumna Kanodia
Mr. Pradumna Kanodia is a qualified Chartered Accountant and company
secretary. He has over 20 years of experience in corporate management, finance
and commercial matters, fiscal and strategic planning, budgeting and cash flow
management. He heads the finance and accounts teams and plays a key role in
fund raising, liaisoning with banks for debt funding, etc. Mr. Kanodia joined
the Phoenix Group as Group - CFO in March 2010. He has been elevated to the
position of Director - Finance on April 28, 2011.
Mr. Sivaramkrishnan
Iyer
Mr. Sivaramakrishnan Iyer is a qualified Chartered Accountant based in
Mumbai. He is a partner of Patel Rajeev Siva and Associates which specialises
in corporate finance and advises companies on debt and equity fund raising,
mergers and amalgamations and capital structuring for new expansion projects.
The firm also carries out due diligence work for various companies.
Mr. Suhail. A Nathani
Mr. Suhail Nathani graduated from Mumbai University with a degree in
Commerce and holds a masters degree in law from Cambridge University and an
L.L.M. from Duke University in the United States. Mr. Nathani is also admitted
to the New York State Bar and the U.S. Court of International Trade. He is a
founding partner of Economic Laws Practice, a law firm in Mumbai. He practises
in the areas of Private Equity, Competition, International Trade and general
corporate matters.
Mr. Amit Dalal
Mr. Amit N. Dalal has been Managing Director of Amit Nalin Securities
Private Limited, since October 1997 and also serves as its Director of
Research. Mr. Dalal has been Executive Director of Investments at Tata
Investment Corporation Ltd since January 1, 2010. Mr. Dalal has experience as
Investment Analyst in USA for 2 years. He completed Postgraduate Diploma in
Business Management from the University of Massachusetts. He obtained a
Bachelor Degree in Commerce from the University of Mumbai and a Masters Degree
in Business Administration from the University of Massachusetts, USA.
Mr. Shribhanu
Patki
Mr. Shribhanu Patki has vast experience in the architectural field. He
is one of Mumbai’s renowned architects with a number of prestigious projects to
his design credit. He is currently the Managing Director of M/s P G Patki
Architects Private Limited, a reputed architectural firm for over four decades.
He has graduated from J. J. School of Arts with honours. He is an associate of
the Royal Institute of British Architects and a fellow of Indian Institute of
Architects and has lectured at design colleges in Europe and US.
Mr. Amitkumar
Dabriwala
Mr. Amitkumar Dabriwala graduated from the Calcutta University. As a
Promoter Director of United Credit Securities Limited (UCSL), a member of the
National Stock Exchange, Mr. Dabriwala has been associated with the capital markets
since 1996. He was also responsible for setting up the Mumbai branch of UCSL.
In 2004 he promoted JNR Securities Broking Private Limited which is a member of
The Bombay Stock Exchange. Through United Credit group companies he is also
involved in real estate development, leasing and hire purchase.
MANAGEMENT
TEAM
Mr. Dipesh Gandhi
Dipesh has over 14 years of experience in business development, market
research, planning and organization set-up. At Phoenix, he holds the position of
Group Head for the Residential and Commercial business. He is involved in
driving the business plan, positioning, design briefs with architects,
budgeting, execution, launch, marketing and sales/leasing of the respective
projects. Over the past four years he has been handling the role of business
development and liaisoning for the Phoenix Group projects across India.
Mr. Haresh Morajkar
Haresh has over 20 years of experience with strong business management
skills and profound experience in the field of Human Resource Management and
General Management. He currently heads the HR, Admin and IT functions of the
Group, playing a key role in strategic HR planning, organizational development,
training and performance management.
Mr. Harjeet Singh Deep
Harjeet has over 15 years of experience working in diverse fields and
focusing on construction management. He is the VP Projects and oversees the
Hotel projects of the group and his current responsibilities include budgeting,
design coordination, planning, contracts and procurement for the hotel
projects.
Mr. Mayank Ruia
Mayank is handling the role of Development Director at Phoenix, for the
Residential and Commercial business. Prior to company, he was associated as
Vice President with Everstone Capital Advisors. He was involved into
international assignments with UBS Investment Bank, Sagent Advisors and
American Capital Strategies, New York.
Mr. P. Vidya Sagar
Vidya has over 21 years of experience across various industries in the areas
of Corporate Laws, M&A, Legal, Compliance and Corporate Governance. He
heads the Corporate and Legal functions of the Group and his responsibilities
include managing the Group’s secretarial, corporate and legal affairs.
Mr. Rajendra Kalkar
Rajendra has over 20 years of experience across various field with
expertise in property management. He is the Senior Centre Director for High
Street Phoenix and is responsible for Operations, Leasing, Retailer Mix, Legal,
Customer relationship, Commercial and Marketing functions and bottom line
profitability of the centre. He also oversees the operations of the Pune mall.
Mr. Rajesh Kulkarni
Rajesh has over 20 years of experience in driving the development,
planning and implementation of the project from an architectural perspective.
He is the Director of Project Delivery vertical and receives a steadfast
support from a team of experienced architects, engineers and other technical
personnel in the design, project co-ordination and delivery for all the prestigious
projects of the Phoenix Group.
Ms. Sangeeta Vernekar
Sangeeta has over 22 years of experience and has been a key member of
some of India’s award winning and successful shopping centers. At company she
heads the “Retail Excellence” initiative, supported by a team of retail
specialist professionals. Her role is to service clients on mall design,
architecture, signage, lighting and retail.
Mr. Shashie Kumar
Shashie has over 18 years of experience in the field of Retail, Real
Estate/Infrastructure Management, Market Research and Marketing Services. He is
currently handling the role of Centre Director for Phoenix Marketcity,
Banglore. His key role is to ensure the successful implementation of pre launch
activities, such as marketing, public relations and retailer transition. He
will also be responsible for managing the operations of the property and for
achieving the bottom line profitability of the centre.
Mr. Shreesh Misra
Shreesh has over 20 years of experience in diversified fields of
Hospitality, Retail, Real Estate and Mall Management. He is currently the
Centre Director for Phoenix Marketcity, Kurla. His key role is to ensure the
successful implementation of pre launch activities, such as marketing, public
relations and retailer transition. He will also be responsible for managing the
operations of the property and for achieving the bottom line profitability of
the centre.
Mr. Sundar Rajan
Sundar has over 23 years of experience in executing various infra, retail,
hospitality and commercial projects in India and abroad. He is the Dy. Head
Projects (West) of the group and his current responsibilities include project
management, cost planning, design co-ordination and execution of projects
within time, cost and quality parameters.
Mr. Surender Pal
Surender joined the Phoenix Group in 2005 as General Manager –
Operations (HSP) and has over 20 years of experience in operations and leasing
After running the centre successfully for more than four years he was promoted
to head the corporate leasing as Director- Leasing. Recently, in July 2011, he
was promoted again as Chief Operating Officer - Malls, whereby he is
responsible for developing and implementing the right retailer mix and retail
leasing plans for all Phoenix Marketcity projects. He works closely with the
Marketcity Centre Directors to ensure smooth operations of the malls.
------------------------------------------------------------------------------------------------------------------------------
HIGH STREET PHOENIX
INTRODUCTION
Subject has a long history, dating back to 1905 when it began operations as a textile manufacturing company on 17.3 acres land in Lower Parel, Mumbai which housed the Phoenix Textile Mills. The mill closed down over a decade ago and a defunct industrial area has now been transformed into High Street Phoenix, a successful shopping complex, with many brands, such as Big Bazaar, Lifestyle, Pantaloon, and Marks and Spencer’s to name a few. The place is also popular for its entertainment, bowling alleys, and restaurants.
Company started the process of converting its existing mill land into a modern, multi-use property in 1987, and thereby starting a new phenomenon of mill-land redevelopment in Mumbai and a new chapter in its own business operations. Located at Lower Parel in the heart of Mumbai, High Street Phoenix has emerged as the most frequented destination in Mumbai. From luxury retail stores in Palladium Mall to monthly household shopping at Big Bazaar, High Street Phoenix has a wide range of options for retail buyers, thereby ensuring significant footfalls for its tenants. It covers 3.15 million square feet of space that has been leased out to a number of reputed tenants.
HSP’s portfolio offers over 250 licenses covering 3.0 million sq. ft. of mixed use development consisting of retail, entertainment, commercial, parking and residential complexes and provides subject a solid platform from which to operate. Increased footfall, high occupancy, strong retailer demand and stable income show the resilience and attractiveness of HSP as a retail and commercial destination.
The concentration of a number of famous and highly revered brands at the Lower Parel facility has given the HSP location stronger USPs in gaining the attention of the Mumbai consumption market. A recorded footfall of around 12 million for FY 2010 and solid income from operations of Rs.1,158 mn, confirmed the direction of their strategy towards infrastructure enhancements, space expansion, higher quality and new contemporary global brands.
KEY PROJECTS UNDER
IMPLEMENTATION
Phoenix Market City-
Kurla Mumbai
Located in the north central part of the Mumbai, the is a mixed use asset covering 21.1 acres of land with a total projected built up area of approximately 3.2 million sq. ft. The Company and its partners have invested Rs. 3.1 billion in equity and it is estimated that the total project cost would be around Rs.11.7 billion. In July 2010, the Company also launched the commercial offices in Phase I branded as “15 LBS”. The response to the product has been excellent and the entire area is expected to be booked in the near future. Company holds 24.3% stake in the project.
Phoenix Market City,
Pune
The project is a mixed use development consisting of a premium hotel, a budget hotel community space, 0.35 million square feet office area and 1.45 million square feet of retail malls. The project is part of a 16.7 acre land parcel and the land acquisition has been completed. The estimated project cost is Rs. 6515.000 Millions and financial closure has been achieved for the project. PML holds 58.59% stake in the project.
The hotel will be a combination of 5 Star business hotel and 3 star economy hotel having 250 keys and 150+ keys respectively. The hotel will have a built up area of 0.30 million square feet area. The estimated project cost for the hotel is Rs 2600.000 Millions. Company’s beneficial interest in the hotel is 41.25 %. Initial approvals for the hotel are in place.
Phoenix Market City,
Bangalore (East)
The project consists of 0.6 million square feet of residential space, a 0.9 million square feet retail mall area and a hotel. The project is part of a 14.8 acre land parcel. The Company and its partners have invested Rs. 1.7 billion in equity and it is estimated that the total project cost would be around Rs. 5.3 billion. Company holds 2l.4l% stake in the project. Approvals for phase 1 of the project are in place.
Phoenix Market City,
Chennai
The project consists of 0.3 million square feet of residential space, and 1 million square feet of retail area, in addition to a hotel in Chennai city. The project is part of a 16.5 acre land parcel and the land acquisition has been completed. The estimated project cost is Rs. 4300.000 Millions and financial closure has been achieved for the project. Company holds 29.20% stake in the project. Approvals for phase 1 of the project are in place.
The hotel will be a 5 Star Business hotel having 235+ keys with a built up area of 0.35 million square feet. The estimated project cost for the hotel is Rs 2000.000 Millions. Company’s beneficial interest in the hotel is 37.50%.
Phoenix Market City,
Bangalore (West)
The project consists of 1.2 million square feet of residential space, and 0.6 million square feet of retail area. The project is part of a 17 acre land parcel and the land acquisition has been completed. Company holds 70% stake in the project. Approvals for phase 1 of the project are in place.
Phoenix - Agra
The project is a 4 Star Upscale Hotel with 160+ keys to be operated under Courtyard brand by Marriot. The hotel will have a built up area of 0.20 million square feet. The land for the project has been acquired and’ the construction has commenced. The estimated project cost for the hotel is 103 crores. Company’s beneficial interest in the hotel is 37.50%.
Shangri-La Hotel
The project consist of 5-Star luxury Hotel with ‘‘ 410 rooms and 23 serviced apartments at Phoenix Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai, under management by Shangri-La International Hotel Management Pte. Limited, Singapore. Shangri-La is Asia Pacific’s luxury hotel group and regarded as one of the world’s finest hotel ownership and management companies.
INDUSTRY OUTLOOK
RETAIL SECTOR
The Retail revolution in India has been driven by a growth of consumerism, which has been helped by a consistent expansion of the economy, rapid urbanization levels and favourable demographics. The expanding middle class has also experienced rising income levels, a brand consciousness and the increasing focus towards organised retail.
In 2010, India witnessed the addition of more than 5 million sq ft of organized retail mall space across various primary and secondary locations. This was concentrated largely in NCR, Mumbai, Bangalore and Chennai and was a consequence of the positive sentiments amongst retailers on spatial expansion and enhancing their footprints across the country.
While 2009 can be termed as a ‘lost year’ for value retailing; consumer confidence enhanced spending levels in 2010. This encouraged sales in large format hypermarket chains, which became the prime anchor tenant for mall developers looking forward to reduced vacancy pressures in their properties.
Retailer expansion also led to pre-commitments in under construction properties in prime locations. With their mall developments in advanced stages of construction, developers had to ward off vacancy pressures by providing flexible revenue sharing terms with retailers. This approach helped in easing vacancy pressures in various malls, thereby providing floor earnings to developers. In all the seven cities presented in this review, the retail real estate market appears to be promising with an appreciable increase in enquiries being witnessed from retailers.
Moving ahead, transaction activity and size are expected to increase on the back of increase in consumer spending and expanding mid income purchasing power. However, despite this incremental demand, retail mall supply pipeline is huge, especially in leading cities such as NCR, Mumbai, Bangalore, Pune and Chennai.
This would ensure that pressures remain on developers to offer rental discounts and transaction flexibility to avoid higher vacancy levels in a longer term. While the prime destinations will continue to be high in demand and also witness an upward rental movement on account of developer expectations, it would largely be the secondary locations in these cities which will bear the brunt of large supply influx in the next two years.
Despite all the transaction activity and surging consumer expenditure, a major legislation that can propel India’s nascent organised retail industry into the big league would be the legislation permitting 100% FDI in organised multi-brand retail. This would allow big organised retail chains to set up presence in India’s booming mid income towns and cities. Indian economy faces serious supply-side constraints, particularly in the food-related retail chains. The argument against opening of the retail sector has been that once foreign retailers open up their stores in India, it would amount to unfair competition to small domestic players.
However, the sector should be allowed to grow and consolidate by opening it to foreign investors. Indian government is likely to allow FDI in multi-brand retailing in the near term, albeit in a slow and guarded manner to ensure domestic retailers do not face stiff competition. The initiative is a positive step towards bringing the much needed capital to the industry and might witness significant growth of organised retailing in the country.
COMMERCIAL
DEVELOPMENT AND LEASING
With India’s economic recovery well under way, its commercial real estate market is beginning to stabilize. While the landscape will remain favorable for tenants in 2010, landlords will have greater influence starting in 2011.
The spell cast by the global meltdown in 2008-09 is finally wearing off, as both office and retail space are back in demand. As the global business environment becomes competitive, new generations of companies are being forced to consider off shoring for the first time. Sustained demand upswing from occupiers have led to perceptible strengthening in absorption of commercial office space across Indian cities.
The demand, which was initially led by the sunshine sectors like telecom and pharmaceutical industries in 2009, has now been strengthened further by improving conditions in BFSI (Banking, Financial Services and Insurance) and IT/ITES sectors. However, most of the development in 2010 is expected to happen in Tier-I cities of NCR, Mumbai, Bangalore and Chennai, thanks to a new generation of companies that are considering off shoring for the first time in these destinations. IT has been the main contributor of commercial space absorption in south India, followed by the telecom and banking and financial institutions.
According to global real-estate consultant, Jones Lang LaSalle Meghraj (JLLM) about 60.9 million square feet (sq ft) of office space is expected to become operational in seven Indian cities - including NCR, Mumbai, Pune, Chennai, Kolkata, Bangalore and Hyderabad, during 2010. The Tier-I cities of NCR, Mumbai, Bangalore and Chennai are expected to contribute around 74% to this supply. The vacancy in Grade A office space (aggregated for seven Indian cities - NCR, Mumbai, Pune, Chennai, Kolkata, Bangalore and Hyderabad) stood at 18.1% in March 2010 which is much lower than those that existed last year.
With the forecasted growth of net completions expected to outpace that of net absorption, a significant supply overhang is expected to remain over the next one year. This will lead vacancy level across India, which was at 17.2% at end-2009 to rise to mid 20% by end-2010. Location advantage and tenant mix will serve as key differentiators as landlords struggle to lease unoccupied space. The decline in rental values has stopped or slowed significantly in all Indian metros with the exception of NCR-Delhi and Mumbai. While these two cities are currently feeling the effects of a large supply pipeline in the short term, they are also expected to the rebound in the property cycle, followed by Bangalore, Chennai, Pune, Hyderabad and Kolkata.
------------------------------------------------------------------------------------------------------------------------------
FIXED ASSETS
· Leasehold Land
· Building
· Plant and Machinery
· Vehicles
· Office Furniture and Equipments
------------------------------------------------------------------------------------------------------------------------------
NEWS:
Q1-FY2012 Income from
Operations at Rs.471 mn - up 16% y-o-y.
Q1-FY2012 EBITDA increased
by 13%, while 01 -FY 2012 PAT increased by 49% as compared to Q1 -FY2011
Mumbai, 30 July 2011
The Phoenix Mills Limited, India’s premier retail-led mixed-use asset development company, today announced its Unaudited financial results for the quarter ended 30th June 2011, and consolidated audited financials for the year ended 31st March 2011.
Key High lights of
the Quarter
High Street Phoenix
· HSP has demonstrated one more quarter of strong performance with footfalls averaging over 1 .4 million per month. As trendsetters in this dynamic industry, our strategy of introducing newer brands and a strong focus on re-alignment of the brand mix is paying off.
· New stores such as Wrangler, Lee, Foodhall, Hidesign, Mobile Store, Seven East opened in the last quarter.
Other Projects of the
Group
Phoenix Marketcity Pune was soft-launched
on June 28, 2011.
· At around 1 .2 million sq. ft. of leasable area, it is one of the largest retail developments in the country
· Currently over 80 retailers have commenced operations, with several others currently in various stages of fitout and are expected to be operational soon.
· Retailers such as Swarovski, Jealous 21, The Body Shop, Jack and Jones, Vero Moda, Pantaloons, Reliance Footprint, Marks and Spencer, US Polo Assn. etc. are operational.
Other Projects:
· With over 100 stores at final stages of fitout, Phoenix Marketcity Bangalore is expected to be launched in September 2011.
· Phoenix Marketcity Kurla, Mumbai has witnessed a substantial upswing in retailer fitouts and it is expected to witness a soft-launch in early Q3-FY2012.
· The Shangri-La operations team is expected to start commissioning systems for the hotel in a gradual manner over the next couple of months and a soft-launch by December 2011 is envisaged.
· Work at Phoenix Marketcity Chennai is also progressing well. The residential development at the project has seen a soft-launch and the initial response from customers is encouraging.
Other Highlights
· In the last quarter, PML has concluded the agreement for increasing its stake in Phoenix Marketcity Bangalore from 37.8% to 46.4%.
· For the financial year ended March 31, 2011, the Board of Directors has announced a dividend of Rs. 1.80 per share. This would result in an outflow of Rs.304 mn including dividend distribution tax.
Commenting on the
Company’s performance, Shishir Shrivastava, Jt. Managing Director, The Phoenix
Mills Limited said:
“The launch of Phoenix Marketcity, Pune was an important milestone for our Company and is the first of several milestones to come as our other projects commence operations. We are extremely thrilled by reviews from customers for Phoenix Marketcity Pune. The successful launch of Pune reinforces our faith that a quality product always succeeds and becomes a model for competition to emulate.
All we had, a few years ago, was a concept in mind. We embarked on our journey in trying to translate our imagination into realty. Today, we proudly say that we have successfully implemented and realized what we set out to do. Our team has the bandwidth and the capabilities to concurrently deliver multiple large projects in different locations. It gives us confidence to take on the next phase of these projects and also to evaluate newer opportunities to grow. I can confidently say that we’re looking at exciting times for the Company and all our stakeholders.”
About The Phoenix
Mills Limited
The Phoenix Mills was incorporated in 1905 as a textile mill. As the mythical phoenix bird, it is once again regenerating new and iconic assets across India. With over 20 million sq. ft. of prime spaces across India at various stages of execution, PML and its investee companies are embarking on an exciting journey of creating India’s premier retail-led mixed-use asset development company that can produce quantum growth and long-term value creation. Today, PML is one of the most up-and-coming listed property companies in India.
Details to the
Announcement
Standalone Financial
Overview
|
(Rs. In Millions) |
Q1 FY 2012 |
Q1 FY2011 |
% Change |
Q4 FY 2011 |
% Change |
FY 2011 (Audited) |
|
|
|
|
|
|
|
|
|
Income from Operations |
471 |
404 |
16% |
468 |
1% |
1,765 |
|
EBITDA |
331 |
294 |
13% |
321 |
3% |
1,253 |
|
EBITDA Margins |
70% |
73% |
-- |
69% |
-- |
71% |
|
Other Income |
110 |
44 |
152% |
141 |
(22%) |
323 |
|
Depreciation |
67 |
69 |
(2%) |
70 |
(4%) |
277 |
|
Interests |
10 |
35 |
(70%) |
3 |
260% |
86 |
|
Profit Before Tax |
363 |
234 |
55% |
389 |
(7%) |
1,214 |
|
Profit After Tax |
272 |
183 |
49% |
272 |
0% |
917 |
|
EPS (Rs.) |
1.88 |
1.26 |
-- |
1.88 |
|
6.33 |
· Income from operations increased by 16%, from Rs. 404 mn in Q1-FY2O11 to Rs. 471 mn in Q1-FY2012. The Company was able to deliver healthy revenue growth this quarter on account of increased consumption at the centre and new stores having opened during the year.
· EBITDA was higher by 13% from Rs. 294mn in 01-FY2O11 to Rs.331 mn in Q1- FY2O1 2.
· Depreciation was marginally lower in Q1-FY2012 as compared to Q1-FY2O11 and 04- FY2O11.
· Interest expense has decreased in 01 -FY2O1 2 v/s 01 -FY2O1 1 due to repayment of loans during the year.
· PBT has increased from Rs. 234 mn in Q1-FY2O11 to Rs.363 mn in Q1-FY2012, an increase of 55% due to higher other income, lower depreciation and lower interest expense.
· PAT was higher at Rs. 272 mn in Q1 -FY2012 as compared to Rs.183 mn in Q1 -FY2O1 1, an increase of 49%.
------------------------------------------------------------------------------------------------------------------------------
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No available
information exist that suggest that subject or any of its principals have been
formally charged or convicted by a competent governmental authority for any
financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.52.82 |
|
|
1 |
Rs.82.47 |
|
Euro |
1 |
Rs.68.93 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
6 |
|
OPERATING SCALE |
1~10 |
7 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
8 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
-- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
69 |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit transaction.
It has above average (strong) capability for payment of interest and
principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
- |
NB |
New Business |
- |
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.