BSEL INFRASTRUCTURE REALTY LIMITED
ANNUAL REPORT 2009-2010
CHAIRMAN'S REPORT
Dear Shareholders,
In the very first place, I wholeheartedly acknowledge your ceaseless and
stubborn support, which upheld the Company to pass through the dramatic
situation placed before by this year. The year 2009-10 can be surely
described as'The Economy-A Big Hurt'.'BSEL's domain, infrastructure and
realty, has not shown a pretty picture at all. If we have a little
retrospection, it can be noted that, the residential real estate business
started slowing in 2006 and then really fell out of bed in 2007. But
commercial real estate continued chugging along for a while. That's all
changing - and 2009 has been even worse for landlords and investors in
commercials, warehousing, office, retail property and related spheres.
After more than a year spent in suspended animation of already faded up
housing markets, the commercial real estate industry really hit a bottom in
2010.
With the collapse of Lehman Brothers and other Wall Street icons, there was
cataclysmic recession which substantially affected the year 2008-09. As the
world economy just started taking a breath after absorbing these shocks,
UAE debt crisis hit the economy. And once again, the Infrastructure and
realty industry is put on a blow.
As Infrastructure and Real Estate is core functional sphere of BSEL and the
Company has sizable portion of its project investments in UAE, there was an
enforced holiday for BSEL. Even in this state of affairs, management of the
Company succeeded in saving the Company from getting into the liquidity
crunch. The Company strategically exited from a quite adversely leveraged
six projects in Nagpur and one project in Goa and also packed up one of its
subsidiaries, in Singapore. Though for a short term, the consequence of
this is a downturn in profitability of the Company, which can be attributed
to exceptional heavy losses out of exit from joint venture projects and
closure of subsidiary. During the year under consideration, Company's
consolidated total income is Rs. 3,290 lacs and the consolidated profit
stood at Rs.86.87 lacs .The BSEL - India suffered a loss in this year, as
real estate developers is one of the worst victims of global melt down and
UAE collapse.
Here... all these facts are quite disappointing... but I would like to put
a saying of George Patton..'Success is how high you bounce when you hit
bottom'.
I believe that there is a sure opportunity in any state of affairs. This
downtrend caused by global meltdown and UAE debt crisis led to a
considerable correction of prices across locations, including some
established as well as under developed locations. The debt markets are in a
severely compromised position due to the cautious approach of banks and
financial institutions with a view of avoiding further debt stress. In this
classic timing play, investors and developers with cash should be poised to
take advantage of highly attractive buying opportunities. And here, BSEL is
in propitious position, as it is a Zero Debt Company having optimum
liquidity.
I am confident that, BSEL is devised enough and poised to grab each and
every opportunity in this sphere. Your support along with sincere
contributions of investors, customers, associates and employees of the
Company is a constructive stimulus for BSEL, resting on this I see BSEL as
one of the leading real estate developers in India as well as abroad in a
very near future.
Kirit R. Kanakiya
Chairman