Binny Ltd - own property in the heart of Chennai at 1/10th the cost!

(anand) #246

This face book post from the builder claims that 1 million sq. ft has already been sold.

(anand) #247

In this announcement dated 11th Feb 2017, the management seems to indicate that they will report income upon the registration of the “Sale Agreement” (as opposed to the registration of UDS which could take years).

For the management to start reporting JV revenue shouldn’t take several years, rather it should take only a couple of quarters. Any views?

Link to the old announcement…

(anand) #248

See this link for official construction updates on the township

(anand) #250

A few words from the management… See attached annual report for details
Joint Development Agreement (JDA) With M/s.SPR Construction Pvt. Ltd.
You are aware that the Company is embarked upon development of a World-class Integrated Township on Joint
Development Model, in its main land area of 63.89 acres (previously used for CFS operations) at Perambur. For the same,
the Company has entered into a Joint Development Agreement (JDA) on 26.6.2015 on revenue sharing model with M/s.
SPR Construction Private Limited., Chennai.
The mixed use development is the first-of-its-kind township located in a prime location and is based on the concept of
building a destination “Where Business Meets Life”. Planned around combining professional workspaces and living spaces
into one gated arena, it includes a separate residential development, an organized wholesale center, along with a Retail
Mall, School, Convention Center and Entertainment Area. The joint venture between Binny Ltd. and SPR Group believes
it can utilize the opportunity presented by the current physical and social infrastructure bottlenecks faced in Sowcarpet
(South India’s largest wholesale market) located at just 3 kms from the Project Site. The Site has easy road access on all four
sides, and is the only private land of this scale in close proximity to the city’s wholesale markets. The development of the
wholesale center on the site will prove to be an extension/ alternative to the Sowcarpet market and is expected to become
a trading hub not only for the Chennai city, but also the entire South India, given its proximity to Chennai Port.
The Project has already received great levels of expression of interest from all quarters. Its residential phase and wholesale
market development has already received all the requisite approvals and RERA registration, with other developments
expected to obtain the same in the next few months. The Project shall be developed over a period of 7-9 years in a
phased manner. Work on the first phase has already begun and is proceeding at a steady pace. Recently, the launch of
the project’s residential towers was met with overwhelming response from the Chennai community and was successful
in selling a record number of units in a short span.

Binny Limited - Annual Report 2017-18.pdf (479.1 KB)

(anand) #251

Looks like income in books is still far away.
Registration of UDS and Registration of the sale agreement for UDS seem to be two different things. Management has used both phrases in their announcements. The former may take years whereas the latter could mean be a few quarters. Pls. correct me if I’m wrong on this.

Relevant excerpt from the annual report.
Reasons for inadequate profits:
… Revenue from JDA
will be recognized upon transfer of all significant risk and rewards of ownership and title by way of registering
Undivided Share of Land (UDS) in favour of buyers. Money received under project is kept as long term liability
pending recognition of revenue as above

(tkkabdulla) #252

Notable changes in my viewpoint

1- Company has now taken fresh loan 130 crore at the cost of 18%. Company might have used this to pay tax (In my opinion 18% interest is very high. Surprising why minority shareholders (including LIC) are not raising any voice. Need to note company cash(nearly 200 crore) is lying with promoters(MBDL) currently)

2 - Preference share has now represented as Borrowing (213 crore). An ddition of 21 crore as interest yearly. Initial amount seems to be 117 crore

3- Advance to others is 265 crore. No idea what advance this is for?

(tkkabdulla) #253

Some doubt on the accuracy of Annual Report disclosed figures – If anybody can help whether this is a valid doubt on the figures

As per related party transaction in Page 77

Mohan Breweries & Distelleries Ltd (for Purchase of 12.43 Acres of Land) Interest Income 4,712.36 lakh (where note 39.10 shows the income 18 crore and P&L Note 26 shows 13 crore)

Mohan Breweries & Distelleries Ltd (for Purchase of Windmill) Interest Income 68.79 lakh

Interest expense on liability component of convertible preference shares Interest on Preference shares 2,131.61

This contradicting with

39.10. The Company has advanced a sum of Rs. 18335.13 lakhs for purchase of 12.43 acres of land from a related party. The shareholders have not approved the resolution for the same. (Only public shareholders excluding promoters have participated in the voting). Pending recovery, the Company has charged interest of Rs. 1871.69 lakhs during the financial year.

39.11. The company has cancelled the contract for the Windmill purchase and has recalled the advance paid of Rs.6000 lakhs from the related party. Pending recovery, the company has charged interest of Rs.76.43 lakhs during the financial year.

Interest on Preference Shares 2,131.61 (This from P&L Note 29 is matching with related party transaction)

Interest income on other financial assets carried at amortised cost as per P&L Note 26 is 1,387.00 (this match with 39.10 , but differ from related party transaction figure of 4712.36 lakh)

(anand) #254