Dear Shareholders,
The legendary Winston Churchill had once commented, 'To improve is to change; To be
perfect is to change often.' The world needs people who have the ability to change. In the
context of organizations too, the prudent blend of knowledge and transformative success is
the key for any business to grow in a sustainable way. In FY2015, ARIHANT will enter its
22nd year of operations. From a business perspective, we have learnt to focus on creating
more sustainable business strategies with the inherent experience of dealing with crests
and troughs of economic cycles.
The year 2014 was another year that our business had to face different problems and
obstacles from economic, social, and political environments.
During the Financial Year 2014, the Indian economy grew by a paltry 4.9%. In fact, for
the last 8 quarters beginning with Q1, FY2013, India has now grown by less than 5%.
Naturally, this has affected real estate businesses. However, Your Company was able to
achieve 10% growth in revenue over this period.
During the year, Your Company has entered into a one time settlement scheme with the
HUDCO and made a full and final settlement for the long pending claim filed against the
Company by HUDCO before the Debt Recovery Tribunal (DRT). Your Company has successfully
settled a claim pending against it since 2004. However, this has significantly brought
down the profits of the Company for the year under review.
During the year under review, your Company has completed and handed over our projects
"ARIHANT PANACHE" comprising of 1,14,000 sq.ft. situated at Arumbakkam, Chennai,
"Arihant Jashn" comprising of 36,381 sq.ft. situated at Egmore, Chennai and
"VILLA VIVIANA - Phase 1" comprising of 3,05,382 sq.ft. situated at GST Road,
Chennai during the year. A major highlight among these was the Company's project
"ARIHANT PANACHE", which stands as a landmark of Arumbakkam and gained strong
acceptance in the city of Chennai among the customers.
During the year our associate Company M/s. Escapade Real Estate Private Limited has
entered into a Development Agreement, on revenue sharing basis with M/s. Ashiana Housing
Limited, a Delhi based Real Estate Company for development of 'Senior Living Project' as
well as 'Regular Group Housing Project', on 20 acres (approx.) of land with saleable area
of 9.70 Lakhs sq.ft. at Sengundaram Village, Maraimalai Nagar, Off GST road, Chennai.
Going forward there are only better things to look ahead to. Consumer confidence is
increasing. For the first time in 30 years, we have a stable government with a clear
majority and mandate to provide good governance. The union budget presented on the 10th 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.
Residential real estate, for one, has been growing steadily in most markets in India.
Between 2008 and 2012, despite the downturn in the markets due to the 2008 financial
crisis, real estate in India remained stable, with 11 out of 15 Residex cities giving
positive returns in that time frame. As for market direction in 2015, it is forecasted
that the trend will be better than in 2014. This is due to clearer governmental policy and
the stimulation of budget approval. All these represent good opportunity for the real
estate business.
Today, India stands on the threshold of a new era, a new form of governance and values
that inspire a 'country-first' approach. There is also a deep hope that an understanding
of the country's economic levers will soon restore the economic momentum. Given the
dynamic business environment in our country over the years, ARIHANT has been exposed to
several micro and macro challenges. Regardless of this, we continued to build our business
and achieve milestones rooted in ethics, transparency and the highest standards of
corporate governance, with financial prudence and 'aggression with caution' being our
philosophy.
Today, we truly believe that we are prepared for an active tomorrow as the aid by the
tailwinds of a national governance framework resonates with our broader business model and
keeps us committed to enhance long-term value for our stakeholders.
I would like to take this opportunity to express my sincere gratitude to our bankers,
financial institutions, Chennai Metropolitan Development Authority and Corporation of
Chennai and related departments of Govt. of Tamil Nadu for having supported us on all our
efforts and endeavors and all those who work for or are associated with Arihant. We look
forward to your continued support in the years ahead and wish you the very best.
Thank You
(Kamal Luffawath)
Chairman and Managing Director