Prestige Estates Projects Limited

Prestige Estates Projects Limited is one of the most respected and highly
regarded names in Indian real estate. With a highly diversified portfolio of developments
spread across asset classes, Prestige has one of the strongest foundations in the
industry that provides a springboard for sustained growth and profitability. Today,
Prestige has stamped its presence across south Indias major cities including Chennai,
Hyderabad, Kochi, Mangalore, Goa and Mysore besides Bangalore, with its signature
residential and commercial developments.Over the last two-and-a-half decades,
Prestige has completed and delivered 171 developments aggregating to over 52.39
million square feet and today has 63 developments aggregating to 59.47 million square
feet under execution.
During the last year, company launched a total of 15.67 million square feet of
developable area, an increase of 51% over the previous year. At the same time, we
completed a total of 3.18 million square feet of space during the year including 1.16
million square feet of retail space, 1.36 million square feet of office space and 0.66
million square feet of hospitality space.
The union budget presented on the 10 th of July seems to bear this out with
measures being announced to bring in more FDI, boost infrastructure and create more
jobs, which certainly bodes well for the overall economic climate. With specific reference
to our industry, the decision to introduce Real Estate Investment Trusts and allow FDI in
urban construction projects is a welcome one. This will considerably enhance the
availability of capital, whichis critical considering the increasing cost of funding land
acquisition. With the Government increasing both personal income tax limits and the
limit to claim rebates on housing loans, there should be renewed buying interest,
specially in the mid-segment.

Availability of Funds, Land and Raw Material: Real estate is a capital intensive business
requiring investment in

working capital and land on which property will be developed besides continuous
and cost effective availability of raw material.Mitigation: With its unique strategy of jointly
developing the properties with co-ownership of land, reducing capital requirement, leads
to more cash liquidity otherwise invested in land. Prestige has significantly low debt-toequity ratio of 0.77 times at consolidated and 0.46 times at standalone level implying
low finance cost and headroom to raise funds when critically required for growth
Finance costs
Our net finance costs increased by INR 801.3 million, or 53.8 per cent., from INR
1,489.1 million for Fiscal Year 2013 to INR 2,290.4 million for Fiscal Year 2014 primarily
due to increased borrowings. The gross interest cost component increased by INR
896.1 million, or 30.7 per cent., from INR 2,918.7 million to INR 3,814.8 million, primarily
due to a net increase in borrowings for various projects of INR 6,152.7 million.

a) The real estate development projects undertaken by the Company generally run over
a period ranging up to 5 years. Operating assets and liabilities relating to such projects
are classified as current based on an operating cycle of 5 years. Borrowings in
connection with such projects are classified as short-term (i.e current) since they are
payable over the term of the respective projects.
b) Assets and liabilities, other than those discussed in paragraph (a) above, are
classified as current to the extent they are expected to be realized / are contractually
repayable within 12 months from the Balance sheet date and as non-current, in other
cases. The Company has only one class of equity shares with voting rights having par
value of Rs. 10 each. The rights,preferences and restrictions attached to such equity
shares is in accordance with the terms of issue of equity shares under the Companies

Act, 1956, the Articles of Association of the Company and relevant provisions of the
listingagreement.
c) On September 23, 2009 the company issued 20 bonus shares for every share
outstanding then. Accordingly, 2,500 Lakhs equity shares of Rs. 10 each fully paid for
each share held by the shareholders were issued by capitalization of balance in General
Reserve and Surplus in statement of profit & loss during the year ended March 31,
2010.
d) During the year ended March 31, 2013, the Company successfully completed an
Institutional Private Placement under Chapter VIII-A of Securities and Exchange Board
of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, as
amended, which opened on January 23, 2013 and closed on the same date. Pursuant
to this 21,926,230 equity shares of Rs. 10 each at a premium of Rs. 156 per share were
allotted on January 29, 2013. Issue expenses amounting to Rs. 953 Lakhs has been
charged to the securities premium account.

Prestige Estates Projects Limited

Capital structure (As at 31.3.2014):

Lakhs
Capital Structure as at
31.3.2014
Equity
Preference Share Capital
Debentures and bonds
Term loan
Total

Amou
nt
35000
0
0
26214
61214

%
57.18
0.00
0.00
42.82
100%

Cost Dv
App
13.14

Cost CAPM

8.78

8.78

20.304

Weighted Average Cost of Capital:

Weighted Average Cost of

Capital
Equity
Preference Shares
Debentures
Term loans
Weighted Average Cost of

Structure
35000
0.00
0.00
26214
61214

Dv
CAPM
%
App
method
57.18
7.51
11.61
0.00
0.00
0.00
0.00
0.00
0.00
42.82
3.76
3.76
100.00 11.27
15.37

Capital

During the Financial Year 2013-14, there has been no change in the capital structure of the Company.

SOBHA Real Estate

SOBHA remains one of the most respected and trusted Real Estate brands in
India. Our residential projects include luxury and super luxury apartments, villas, row
houses, presidential apartments and plotted development. Our superior execution
capability is our core strength. Since inception, SOBHA has completed 92 real estate
projects and 247 contractual projects covering about 62.93 million square feet of area.
The Company currently has 48 ongoing residential projects aggregating to 30.61 million
square feet of developable area and 21.98 million square feet of saleable area, and 31
ongoing contractual projects aggregating to 9.67 million square feet under various
stages of construction. SOBHA has a footprint in 24 cities and 13 states across India.
The Company has a real estate presence in nine Indian cities, viz. Bangalore, Gurgaon,
Chennai, Pune, Coimbatore, Thrissur, Calicut, Cochin and Mysore.
Dividend The Board of Directors has, subject to the approval of the shareholders in the
Annual General Meeting, recommended a dividend of ` 7 per equity share of ` 10 each.
Completed Projects During the year under review, the Company has executed and
handed over 7 residential projects covering an area of 2.34 million square feet and 19
contractual projects covering an area of 4.34 million square feet resulting in an
aggregate development of 6.68 million square feet. The Company has completed 92
residential projects in 5 cities and 247 contractual projects in 21 cities covering about
62.93 million square feet of area since inception.
Ongoing Projects The Company currently has 48 ongoing residential projects located
in 9 cities aggregating to 30.61 million square feet of developable area. It has 31
ongoing contractual projects located in 11 cities aggregating to 9.67 million square feet
under various stages of construction. The Company has a geographic presence in 24
cities and 13 states across India.
Sobha Developers Limited is a public limited Company with its equity shares
listed on National Stock Exchange of India Limited and the Bombay Stock Exchange
Limited. The issued, subscribed and paid-up capital of the Company is ` 980,638,680

(Rupees Ninety Eight Crores Six Lakhs Thirty Eight Thousand Six Hundred and Eighty
only) divided into 98,063,868 (Nine Crores Eighty Lakhs Sixty Three Thousand Eight
Hundred and Sixty Eight only) equity shares of ` 10 each. During the year under review,
there was no change in the capital structure of the Company.
Recommendation of Dividend and Dividend Payment Date The Board of Directors
has recommended a dividend of ` 7 for each equity share of ` 10 which is subject to the
approval of the members in the ensuing Annual General Meeting.

Debt Since the economic downturn of 2008-09, the Company has successfully
brought down its net debt levels from ` 19,107.58 million in the year 2008-09 to ` 12,342
million at the close of FY14. The reduction of debt is mainly on account of increase in
operating cash flows through higher volume of execution and improved sales coupled
with various proactive measures taken by the Company in the form of managing its
working capital and monetization of land wherever possible. While leverage is important
to achieve growth, the Company is committed to peg its debt-equity ratio in the range of
0.50-0.60.

SOBHA Real Estate

Capital structure (As at 31.3.2014):

Crores
Capital Structure as at
31.3.2014
Equity
Preference Share Capital
Debentures and bonds
Term loan
Total

Amou
nt
98.06
0
0
64.90
1
162.9
65

%
60.17
0.00
0.00

Cost Dv
App
21.74

Cost CAPM

8.38

8.38

15.6

39.83
100%

Weighted Average Cost of Capital:

Weighted Average Cost of

Capital
Equity
Preference Shares
Debentures
Term loans
Weighted Average Cost of
Capital

Structure
98.06
0.00
0.00
64.901
162.965

Dv
CAPM
%
App
method
60.17
13.08
9,39
0.00
0.00
0.00
0.00
0.00
0.00
39.83
3.34
3.34
100.00

16.42

12.73

During the Financial Year 2013-14, there has been no change in the capital structure of the Company

Consolidated
Company

Cr

Capita
l

EQTY
%

Ke

PRE SH
%

Kp

Deb
%

Kd

TER LN
%

Kb

WT
Av
Cost
of
cap

Prestige
Estates Projects
Limited
SOBHA Real Estate

612.14

57.18

20.3
04

42.82

8.7
8

15.37

162.96
5

60.17

15.1
6

39.83

8.3
8

12.73