Modern India Ltd

Turnover to be Rs 220 crore, PBT of Rs 18-20 crore and PAT of Rs 14.5 crore in FY’10

• For the quarter ended June 2008 Modern India reported 181% increase in its revenues at Rs 51.03 crore compared to corresponding previous year period. The operating margins of the company improved 70 bps to 4.9% leading 230% growth in operating profits at Rs 2.51 crore. Other income of the company fell 11% to Rs 1.05 crore while interest cost jumped to Rs 1.58 crore compared to Rs 0.25 crore during June 2007 quarter. Depreciation fell 8% to Rs 0.24 crore leading 22% growth in PBT at Rs 1.74 crore. The bottomline of the company improved 23% to Rs 1.39 crore.

• For year ended March 2008 Modern India reported 127% increase in its revenues at Rs 222.82 crore on a consolidated basis compared to corresponding previous year period. The operating margins of the company fell 110 bps to 2.1% leading a 54% growth in operating profits at Rs 4.79 crore. Other income of the company increased 22% to Rs 4.03 crore while interest cost jumped to Rs 7.59 crore compared to Rs 2.08 crore during June 2007 quarter. Depreciation fell 4% to Rs 1.29 crore leading loss of Rs 6 lakh compared to profit of Rs 3 crore in corresponding previous quarter. The company made a loss of Rs 2.55 crore compared to profit of Rs 1.81 crore.

• The company has acquired 37 acres in Khopoli for development of SEZ for Electronic Hardware, IT/ITES and is in further process of acquiring 6 acres of land. The total cost of the project is Rs 800 crore with land cost being inclusive of Rs 100 crore. The gross leasable area out of this project will be 4 million sqft. The project is expected to start off by January 2009 and shall take approximately 3 years to complete. The project is expected to generate revenue of Rs 150 crore per annum upon its completion.-

• The company is also setting up a Free Trade Warehousing Zone (FTWZ) spread over 300 acres in Panvel at a cost of Rs 450 crore. The company has so far acquired 55 acres of land. Formal approval and notification for SEZ will be issued only after acquisition of 100 acres. FTWZ will be set up through a SPV i.e. Modern India Free Trade Warehousing Pvt. Ltd., where the company will have 51% stake. The company expects to get all approvals and complete concretizing part of the land for staking containers and other structures by Jun ’09 resulting in flow of revenue from that date. The project shall take around 18 months to complete. The FTWZ is expected to generate revenue of Rs 35 to 40 crore in first year of operations.

• The company is doing a redevelopment project at Mahalaxmi with a FSI of 9, 00,000 sq ft to be done in phases. The project shall take a minimum of 1 year to start the project and 3 years to complete the project. The construction cost shall be around Rs 150 crore to be financed through internal accruals and loans. The project shall command annual rentals of around Rs 200 crore per annum on completion of the project.

• The average expected realisation in Khopoli is around Rs 30-35 sq. ft per month, Rs 200 per sq ft per month in South Mumbai and Rs 15 per sq. ft. per month for Panvel project. EBITDA margin of Khopoli and Panvel projects expected to be in excess of 40-45%.

• The company has current debt of Rs 90 crore as on 30^th June 2008. The average cost of debt is around 12.50-13.00%.

• The company expects tax rate for FY’09 to be around 20%.

• The company plans to focus more on FTWZ in future.

• The company expects a turnover of Rs 200 crore in FY’09 with PBT of Rs 15 crore and PAT of Rs 12.5 crore. For FY’10 the company expects turnover to be Rs 220 crore, PBT of Rs 18-20 crore and PAT of Rs 14.5 crore.

• The company had appointed an independent valuer valuing Mumbai land bank at Rs 1600 crore and Khopoli project at Rs 210-230 crore during May-June 2008.

• The FTWZ and SEZ project has ten year tax holiday which the company can choose for 10 consecutive years out of 15 years from start of operation.

• The company is also present in other segments too viz. Jewellery Mfg. Education, and Commodity trading. The company has entered into field of professional education by collaborating with California Institute of Jewellery training and launched the Indian Institute of Jewellery as its promoter. In textiles trading segment MIL has set up an overseas subsidiary 'Modern International Asia' (MIAL) which has its base in Hong Kong. MIAL out-sources its requirements from The Peoples Republic of China and Hong Kong. This is purely a B2B segment activity, where MIAL delivers fully customized solutions as per the needs of their clients.

• Modern’s overseas division MIAL also delivers customized solutions for other products. MIAL has forayed into the trade of lights, luggage, paper, chemicals, textiles, rubber tyres and steel. The aim for MIAL is to become a completely integrated trading firm covering all aspects related to trade, right from placing the order to delivery of goods to client’s doorstep.

• Modern Derivatives and Commodities is a company of Modern India Enterprises which offers customized commodities trading on Multi Commodity Exchange as well as on National Commodity & Derivatives Exchanges providing value added services to the clients and associates.

• The company plans to build a hotel in Udaipur is still on negotiation stage.

• The company’s plan to build a township In Jaipur has been suspended due to some land title problem.