1.  CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:-
 
 i) Disputed excise duty liability amountingRs. 1,646,266 (P. Y. Rs.
 11,376,598 )
 
 ii) Corporate guarantee issued by the Company amounting to Rs. NIL (P. Y.
 Rs. 500,000,000) to secure financial assistance being availed by a
 subsidiary company.
 
 iii) Outstanding guarantees given by Banks Rs. 2,769,969 (P. Y Rs.
 2,769,969).
 
 iv) Estimated amount of contracts remaining to be executed on capital
 account and not provided for in the accounts is Rs. 24,081,092 (P. Y Rs.
 129,604,655 ) net of advance paid.
 
 v) Demand notices received for damages / interest on account of arrears
 / late payments of E.S.I.C.  (Rs. 354,903) and Provident Fund dues (Rs.
 2,471,962) aggregating to Rs. 2,826,865 (P. Y Rs. 3,148,254) are disputed
 by the Company. The Company has paid Rs. 1,000,000 and has also furnished
 a Bank Guarantee for Rs. 1,471,165 against P.F. demands to the P.F.
 authorities.
 
 vi) The Income tax assessments of the Company have been completed up to
 Assessment Year 2008-09. The disputed tax demand outstanding upto the
 said Assessment Year is Rs. 8,227,088. The company as well as the Income
 Tax Department are in appeal before the Appellate Authorities against
 the assessments of earlier financial years. The impact thereof, if any,
 on the tax position can be ascertained only after the disposal of the
 above appeals. Accordingly, the accounting entries arising there from
 will be passed in the year of the disposal of the said appeals.
 
 2.  ADDITIONAL INFORMATION:
 
 i) The Company has executed a non disposal undertaking to a lender bank
 stating that it shall not dispose / transfer / pledge / encumber any
 shares owned / held by it in its subsidiary company, Vamona Developers
 Private Limited, until the loan of Rs. 4,750,000,000, taken by Vamona
 Developers Private Limited is fully repaid to the Bank.
 
 ii) The Company has created a charge, by way of mortgage, on 17,853
 square meters of its land for the loan taken by its wholly owned
 subsidiary, Pallazzio Hotels and Leisure Limited (PHLL) from the banks.
 The Company has developed a mixed use retail structure on the said
 land. The Company has transferred the rights of development of 2/3rd
 portion of 17,853 square meters of the said land to PHLL for the
 construction of a hotel, vide a Land Development Agreement. The
 conveyance of the said portion of Land, in favour of PHLL, will be made
 at any time after the completion of the construction of the Hotel but
 not before three years from the date of the agreement with PHLL.
 
 3.  Based on the valuation reports of the Government approved valuers,
 the Company had revalued its assets consisting of land including
 leasehold land and land leased in perpetuity, Buildings and Plants and
 Machinery as on 31st March 1985. Depreciation on revalued land,
 building and plant and machinery has been calculated as per the rates
 specifed by the valuers, which includes an additional charge amounting
 to Rs. 962,748 (P.Y. Rs. 952,660) in comparison to depreciation provided
 under the Companies Act, 1956, and an equivalent amount has been
 withdrawn from Revaluation Reserve and credited to profit and Loss
 account.
 
 4.  The matter of the levy of service tax on renting of immovable
 property is subjudice. The case of Home Solution Retailers of India and
 others v/s. Union of India and others [Delhi], has again challenged the
 constitutional validity of Section 65(105) (zzzz) of the Finance Act,
 1994 as amended by the Finance Act, 2010. Pending the outcome of the
 final decision, the Company has continued to levy the service tax on
 license fees, conducting fees, common area maintenance charges etc.
 billed to licensees, during the Financial Year 2010-11. However, citing
 the reason of the matter being subjudice, many licensees have not paid
 the service tax component billed to them and accordingly in such cases,
 the Company too, has not deposited the service tax with the Government,
 aggregating to Rs. 157,965,195 as at 31st March, 2011. The company does
 not expect the outcome of the matter to have any adverse effect on its
 financial position or results of operations.
 
 The Balances of the sundry debtors are subject to confrmations from the
 respective parties and are pending reconciliations/adjustments arising
 on account of the service tax billed.
 
 5.  The balances in respect of sundry creditors, loans and advances,
 deposits pledged with excise authorities, either debit or credit as
 appearing in the books of accounts are subject to confrmations by the
 respective parties and adjustments/reconciliation arising therefrom, if
 any.
 
 The Company has accounted for its share of loss amounting to Rs. 329,071,
 pertaining to the financial year 2009-2010 in the current year. The
 share of profit/loss for the current financial year will be accounted in
 the books of the Company on the finalisation of the accounts of the frm.
 
 6.  Disclosure as per Accounting Standard 15 (Revised) Employee
 benefits as notifed by the Companies (Accounting Standards) Rules,
 2006.
 
 a) Defned Contribution Plan, recognised as expenses for the year are as
 under : Employer''s Contribution to Provident and Pension Fund Rs.
 1,137,059 (P. Y. 1,341,096).
 
 The Company makes contributions towards provident fund and pension fund
 for qualifying employees to the Regional Provident Fund Commissioner.
 
 b) Defned benefit Plan:
 
 The company provides gratuity benefit to it''s employees which is a
 defned benefit plan. The present value of obligation is determined based
 on actuarial valuation using the Projected Unit Credit Method, which
 recognizes each period of service as giving rise to additional unit of
 employee benefit entitlement and measures each unit separately to build
 up the final obligation. The obligation for leave encashment is
 recognised in the same manner as gratuity.
 
 The company has funded its Gratuity obligation under Group Gratuity
 Policy managed by the Life Insurance Corporation (LIC) Of India. The
 disclosures stated above have been obtained from an independent
 actuary.
 
 The estimates of rate of escalation in salary considered in actuarial
 valuation, take into account inflation, seniority, promotion and other
 relevant factors including supply and demand in the employment market.
 The above information is certifed by the actuary.
 
 7. There are no Micro and Small Enterprises, to whom the Company owes
 dues, which are outstanding for more than 45 days as at March 31, 2011.
 The above information, regarding Micro, Small and Medium enterprises
 has been determined to the extent such parties have been identifed on
 the basis of the information available with the Company. This has been
 relied upon by the Auditors.
 
 8. In view of the Accounting Standard : AS 18 on Related Parties
 Disclosures as notifed by the Companies (Accounting Standards) Rules
 2006 , the disclosure in respect of related party transactions for the
 year ended on 31st March 2011 is as under:
 
 a) RELATIONSHIPS
 
 Category I : Subsidiaries of the Company
 
 Blackwood Developers Private Limited
 
 Bellona Finvest Limited
 
 Big Apple Real Estate Private Limited
 
 Butala Farm Lands Pvt.Ltd. (w.e.f. 29.10.2010)
 
 Gangetic Developers Private Limited
 
 Enhance Holdings Private Limited
 
 (formerly Kalani Holdings Private Limited )
 
 Market City Management Private Limited
 
 Marketcity Resources Private Limited
 
 Palladium Constructions Private Limited
 
 Pallazzio Hotels and Leisure Limited
 
 Pinnacle Real Estate Development Private Limited
 
 Plutocrat Assets and Capital Management Private Limited
 
 Upal Developers Private Limited
 
 Vamona Developers Private Limited
 
 Category II : Associates of the Company
 
 Bartraya Mall Development Company Private Limited
 
 Starboard Hotels Private Limited
 
 (formerly Classic Software Technology Park Developers Private Limited)
 
 Classic Mall Development Company Private Limited
 
 Classic Housing Projects Private Limited
 
 Entertainment World Developers Limited
 
 Escort Developers Private Limited
 
 Galaxy Entertainment Corporation Limited
 
 Galaxy Entertainment (India) Private Limited
 
 Island Star Mall Developers Private Limited
 
 Juniper Developers Private Limited
 
 Offbeat Developers Private Limited
 
 Picasso Developers Private Limited
 
 Ramayana Realtors Private Limited
 
 Category III : Other Related Parties where common control exists
 
 B.R.International
 
 R.R.Hosiery Private Limited
 
 R.R. Hosiery
 
 R.R. Textiles
 
 Phoenix Construction Company
 
 Phoenix Hospitality Company Private Limited
 
 Phoenix Retail Private Limited
 
 Category IV : Key Management Personnel
 
 Ashokkumar R. Ruia ) Chairman & Managing Director
 
 Atul Ruia ) Jt. Managing Director
 
 Kiran B. Gandhi ) Whole-time Director
 
 Shishir Shrivastava ) Group CEO and Jt. Managing Director
 
 Category V : Relatives of Key Management Personnel
 
 Gayatri A Ruia
 
 9.  The Ministry of Corporate Affairs, Government of India, vide
 General Circular No. 2 and 3 dated 8th February 2011 and 21st February
 2011 respectively has granted a general exemption from compliance with
 section 212 of the Companies Act, 1956, subject to fulfllment of
 conditions stipulated in the circular. The Company has satisfed the
 conditions stipulated in the circular and hence is entitled to the
 exemption. Necessary information relating to the subsidiaries has been
 included in the Consolidated Financial Statements.
 
 10.  The previous year''s fgures have been regrouped and / or recast
 wherever necessary so as to conform to the current year''s
 classifcation.