We have pleasure in presenting the Sixteenth Annual Report on the
 business and operations of the Company together with the audited
 results for the financial year ended March 31, 2011.
 
 FINANCIAL HIGHLIGHTS
 
                                                       (Rs. in Million)
 
                    Stand Alone Results           Consolidated Results
 
 Particulars       2010-11        2009-10        2010-11        2009-10
 
 Net sales and 
 other income     14,643.15     11,192.83      14,813.32      11,337.23
 
 Profit before 
 interest, 
 depreciation 
 and tax           3,143.03      2,424.63       3,235.42       2,501.85
 
 Finance charges     429.33        498.82         443.51         520.84
 
 Depreciation        277.73        323.10         277.73         323.10
 
 Profit before Tax 2,435.97      1,602.71       2,514.18       1,657.91
 
 Provision for Tax
 - Current           629.53        261.00         686.73         299.69
 
 - Deferred tax
 credit             (22.27)       (20.83)        (22.27)        (20.83)
 
 - MAT Credit
 Utilisation/ 
 Entitlement          4.10         (4.10)           4.10          (410)
 
 Wealth tax              -           0.02              -           0.02 
 
 Net profit after 
 tax               1,824.61      1,366.62        1,845.62      1,383.13
 
 Less: Minority 
 Interest                -              -           32.90         42.15 
 
 Share of Profit/ 
 (Loss) of
 Associate               -              -          (0.20)          0.01 
 
 Profit available 
 for 
 appropriations    1,824.61       1,366.62       1,812.92      1,340.97
 
 Appropriations
 
 Proposed dividend 
 (Includes tax 
 on dividend)        343.05         286.81         343.05        286.81
 
 Transfer to 
 General Reserve     183.00         140.00         183.00        140.00
 
 Balance carried 
 to Balance Sheet  1,298.56         939.81       1,286.87        914.16
 
 RESULT OF OPERATIONS
 
 During the year under review, our Company has executed and handed over
 11 residential projects covering an area of 4.12 million square feet
 and 25 contractual projects covering an area of 2.20 million square
 feet resulting in an aggregate development of 6.32 million square feet.
 Since inception, the Company has completed 71 residential projects and
 191 contractual projects covering about 42.68 million square feet of
 area. The Company currently has 23 ongoing residential projects
 aggregating to 6.99 million square feet and 38 ongoing contractual
 projects aggregating to 7.42 million square feet under various stages
 of construction. The company has a geographic presence in 20 cities and
 12 states across India.
 
 TRANSFER TO RESERVES
 
 An amount of Rs.183.00 million is proposed to be transferred out of the
 current profits to the General Reserve.
 
 DIVIDEND
 
 The Board of Directors recommend dividend at the rate of Rs. 3.00 for
 every equity share of Rs. 10 each resulting in a dividend rate of 30%
 for the financial year 2010 - 2011.
 
 BUSINESS
 
 The Company’s main operations can be divided into
 
 1. Development and construction of residential and commercial projects
 
 2. Contractual projects
 
 The summary of the completed and ongoing projects as on March 31, 2011
 have been detailed in the Management Discussion Analysis Report.
 
 DEBENTURES
 
 During the year under review, the Company has not issued any
 Debentures. The Company has redeemed various series of Non- Convertible
 Debentures aggregating Rs. 250 million.
 
 DEPOSITS
 
 The Company has not accepted any deposits in terms of provisions of
 Section 58A of the Companies Act, 1956, during the year under review.
 
 DIRECTORS
 
 As on date, the Board of Directors of the Company comprise of eight
 directors of which four are independent directors.
 
 During the year, the shareholders in the fifteenth Annual General
 Meeting of the Company had reappointed Mr. P. N. C. Menon as a
 Wholetime Director designated as Chairman, Mr. Ravi Menon as a
 Wholetime Director designated as Vice Chairman and Mr. J. C. Sharma as
 Managing Director for a period of five years effective from April 01,
 2010. Mr. P. Ramakrishnan who was earlier appointed as an Additional
 Director was appointed as a Wholetime Director for a period of five
 years and designated as Deputy Managing Director of the Company with
 effect from April 01, 2010.
 
 In terms of Article 107, 108 and 109 of Articles of Association, Dr.
 S.K. Gupta and Mr. R.V. S. Rao, Independent Directors are liable to
 retire by rotation at the ensuing Annual General Meeting and being
 eligible offer themselves for re-appointment.
 
 The Notice convening the Annual General Meeting includes the proposals
 for the re-appointment of the Directors. Brief resumes of the Directors
 proposed to be re-appointed, nature of their expertise in specific
 functional areas and names of the companies in which they hold
 directorship/ membership/ chairmanship of the Board Committees, as
 stipulated under Clause 49 of the Listing Agreement with the Stock
 Exchanges have been provided as an annexure to the Notice convening the
 Annual General Meeting.
 
 AUDITORS
 
 M/s S. R. Batliboi & Associates, Chartered Accountants, statutory
 auditors of the Company retire at the ensuing Annual General Meeting
 and being eligible, offer themselves for re-appointment.  The Board of
 Directors upon the recommendation of the Audit Committee proposes the
 re-appointment of M/s S. R. Batliboi & Associates, Chartered
 Accountants as the statutory auditors of the Company.
 
 The Auditors had given certain observations in their Paragraph 4 of
 their report and the Board feels it expedient to address the same as
 follows:
 
 The Registrar of Companies, Karnataka during the course of technical
 scrutiny conducted in the year 2007 had observed that the Company
 during the earlier years has undertaken certain transactions without
 the prior approval of the Central Government required under Section 297
 of the Companies Act, 1956. These transactions were done on an arms
 length basis and in the normal course of business. The Company has
 filed an application for composition under Section 621A of the
 Companies Act, 1956 earlier and the same is pending before the Hon’ble
 Company Law Board, Chennai Bench, Chennai. However the Company has
 obtained necessary approvals for transactions covered under Section 297
 of the Companies Act, 1956 undertaken during the year.
 
 SUBSIDIARIES
 
 There are no subsidiaries of the Company within the meaning of Section
 4 of the Companies Act 1956 except investments as detailed in the
 financial statements forming part of the Annual Report.
 
 HUMAN RESOURCES
 
 Sobha Developers Limited is one of the leading real estate companies in
 India with a total workforce of 2,224 as on March 31, 2011. The Company
 aims to contribute to the overall development of its employees through
 extensive training and motivational programmes. It also strives to
 create an atmosphere of creativity by encouraging the employees to take
 initiative and further the Company’s growth through innovative ideas
 and techniques.
 
 Employee relations continue to be cordial and harmonious at all levels
 and in all divisions of the Company. The Board of Directors would like
 to express their appreciation to employees for their hard work and
 dedication.
 
 However during the year there was an illegal stoppage of work by
 certain contractual workmen for a period of 71 days in the Interiors
 Division of the Company. The Department of Labour, Government of
 Karnataka ruled that this strike by such contractual workmen is illegal
 and based on this the operations were resumed in the Interiors Division
 of the Company. The impact of the strike was minimal on the operations
 of the Company as a whole and the Interiors Division is confident of
 meeting its delivery milestones.
 
 A separate section on the Employees function is provided in the Annual
 Report.
 
 QUALITY, SAFETY AND TECHNOLOGY
 
 The Company gives paramount importance to deliver products conforming
 to world class quality standards. The Department of Quality, Safety and
 Technology (QST) is entrusted with the responsibility of monitoring the
 qualitative and safety aspects of works in our various projects. It is
 also responsible for inducting the latest construction technology
 thereby enabling project delivery on par with relevant specifications,
 norms and standards.
 
 The department lays emphasis on the quality of construction, safety
 standards, infrastructure execution, civil maintenance works,
 geotechnical aspects, drawing detail development and importing/
 implementing new tools and material for process up gradation.
 
 CORPORATE GOVERNANCE
 
 A detailed report on Corporate Governance and a Certificate from the
 Practicing Company Secretary regarding compliance with conditions of
 Corporate Governance have been furnished in the Annual Report.
 
 RESPONSIBILITY STATEMENT OF THE BOARD OF DIRECTORS
 
 The Director’s Responsibility Statement, setting out compliance with
 the accounting and financial reporting requirements specified under
 Section 217(2AA) of the Companies Act, 1956, in respect of the
 financial statements, is furnished below and on behalf of the Board of
 Directors, it is hereby confirmed that:
 
 i. In the preparation of the annual accounts, the applicable accounting
 standards had been followed along with the proper explanation relating
 to material departures, if any.
 
 ii The Directors had selected the accounting policies and applied them
 consistently and made judgements and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company at the end of the financial year and of the profit of the
 Company for that period.
 
 iii. The Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956, for safeguarding the assets of
 the Company and for preventing and detecting frauds and other
 irregularities.
 
 iv. The Directors had prepared the annual account on a “going concern”
 basis.
 
 CORPORATE SOCIAL RESPONSIBILITY
 
 Sobha Developers is a responsible corporate citizen and is committed to
 Corporate Social Responsibility. A separate section on Corporate Social
 Responsibility forms part of the Annual Report.
 
 CODE OF CONDUCT
 
 Pursuant to Clause 49 of the Listing Agreement, the declaration signed
 by the Managing Director affirming compliance of the Code of Conduct by
 the Directors and senior management personnel of the Company for the
 financial year 2010-11 is annexed and forms part of the Directors’ and
 Corporate Governance Report
 
 DISCLOSURE OF EMPLOYEES
 
 The statement of employees in receipt of remuneration exceeding the
 limits prescribed under Section 217(2A) of the Companies Act 1956, read
 with the Companies (Particulars of Employees) Rules, 1975 as amended
 from time to time is attached herewith as an annexure to this report.
 
 SECRETARIAL AUDIT REPORT
 
 The Company has appointed Mr. Nagendra D Rao, Practicing Company
 Secretary to conduct the Secretarial Audit for the year ended March 31,
 2011. The Secretarial Audit Report confirming compliance with all the
 applicable provisions of corporate laws and the Listing Agreement is
 provided separately in the Annual Report.
 
 CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY
 ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
 
 In terms of Section 217 (1) (e) of the Companies Act, 1956 read with
 the Companies (Disclosure of Particulars in the report of Board of
 Directors) Rules,1988, the particulars of conservation of energy,
 technology absorption, foreign exchange earnings and outgo are set out
 as an annexure to this report.
 
 ADDITIONAL INFORMATION TO SHAREHOLDERS
 
 The Company ensures prompt and timely dissemination of all the latest
 information on the Company’s projects and matters of interest to the
 investors such as financial results, investor presentations, press
 releases etc through the Company’s website www.sobha.com.
 
 MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 In accordance with the requirements of the Listing Agreement, the
 Management Discussion and Analysis Report is presented in a separate
 section forming part of the Annual Report.
 
 ACKNOWLEDGMENTS
 
 The Directors would like to place on record their sincere appreciation
 to the Company’s customers, vendors, and bankers for their continued
 support to the Company during the year. The Directors also wish to
 place on record their appreciation for the contribution made by
 employees at all levels for sustaining the organizational growth
 especially during the challenging times.  We thank the Government of
 India, state governments and other government agencies for their
 assistance and cooperation and look forward to their continued support
 in future. Finally, the Board expresses its gratitude to the members
 for their continued trust, cooperation and support.
 
                          For and on behalf of the Board of Directors
 
                                    Ravi Menon             J C Sharma
                                 Vice Chairman      Managing Director
 
 Place: Bangalore 
 Date : May 10, 2011