1. Background
 
 Sobha Developers Limited (‘Company’ or ‘SDL’) was incorporated on
 August 7, 1995. SDL is a leading real estate developer engaged in the
 business of construction, development, sale, management and operation
 of all or any part of townships, housing projects, commercial premises
 and other related activities. The Company is also engaged in
 manufacturing activities related to interiors, glazing and metal works
 and concrete products which also provides backward integration to SDL’s
 turnkey projects.
 
 2. RELATED PARTY DISCLOSURE
 
 a.  List of related parties Subsidiaries
 
 Direct Subsidiaries 
 Sobha City
 
 Subsidiaries of Sobha City 
 Vayaloor Properties Private Limited 
 Vayaloor Builders Private Limited 
 Vayaloor Developers Private Limited 
 Vayaloor Real Estate Private Limited 
 Vayaloor Realtors Private Limited 
 Valasai Vettikadu Realtors Private Limited
 
 Key management personnel 
 Mr. P. N. C. Menon 
 Mr. Ravi Menon Mr. 
 J. C. Sharma
 Mr. P. Ramakrishnan [from January 29, 2010] 
 Mr. S. Baaskaran
 Mr. N. Venkatramani [upto July 29, 2009] 
 Mr. Kishore Kayarat [from July 29, 2009]
 
 Relatives of key management personnel 
 Mrs. Sobha Menon 
 Mr. P. N. Haridasx
 
 Al Barakah Financial Services Limited
 Allapuzha Fine Real Estate Private Limited
 Architectural Metal Works FZCO
 Bikasa Properties Private Limited
 Bikasa Realtors Private Limited
 Chauma Properties and Construction Private Limited
 Chikmangaloor Realtors Private Limited
 Chimangaloor Properties Private Limited
 Cochin Cyber City Private Limited
 Cochin Cyber Golden Properties Private Limited
 Cochin Cyber Value Added Properties Private Limited
 Cochin Super City Developers Private Limited
 Daram Cyber Developers Private Limited
 Daram Cyber Properties Private Limited
 Daram Land Real Estate Private Limited
 Greater Cochin Cyber City Private Limited
 Greater Cochin Developers Private Limited
 Greater Cochin Properties Private Limited
 Greater Cochin Realtors Private Limited
 HBR Consultants Private Limited
 Hill and Menon Securities Private Limited
 Kilai Builders Private Limited
 Kilai Properties Private Limited
 Kilai Super Developers Private Limited
 Kuthavakkam Developers Private Limited
 Kuthavakkam Properties Private Limited
 Mannur Real Estate Private Limited
 Mapedu Realtors Private Limited
 Megatech Software Private Limited
 Mepedu Real Estates Private Limited
 Moolamcode Traders Private Limited
 Oman Builders Private Limited.
 Padmalochana Enterprises Private Limited
 Pallavur Projects Private Limited
 Perambakkam Builders Private Limited
 PNC Technologies Private Limited
 Punkunnam Builders and Developers Private Limited
 Puzhakkal Developers Private Limited
 Red Lotus Realtors Private Limited
 Royal Interiors Private Limited
 Rusoh Fine Builders Private Limited
 Rusoh Marina Properties Private Limited
 Rusoh Modern Properties Private Limited
 SBG Housing Private Limited
 Sengadu Builders Private Limited
 Sengadu Developers Private Limited
 Sengadu Properties Private Limited
 Services and Trading Co. LLC
 Sobha Aviation and Engineering Services Private Limited
 Sobha Contracting LLC (Dubai)
 Sobha Developers (Pune) Private Limited (An associate of the
 Company under AS 18)
 Sobha Electro Mechanical Private Limited
 Sobha Glazing & Metal Works Private Limited
 Sobha Innercity Technopolis Private Limited
 Sobha Interiors Private Limited
 Sobha Jewellery Private Limited
 Sobha Projects & Trade Private Limited
 Sobha Puravankara Aviation Private Limited
 Sobha Renaissance Information Technology Private Limited
 Sobha Space Private Limited
 Sobha Technocity Private Limited
 Sri Durga Devi Property Management Private Limited
 Sri Kanakadurga Property Developers Private Limited
 Sri Kurumba Trust
 Sunbeam Projects Private Limited
 Technobuild Developers Private Limited
 Thakazhi Developers Private Limited
 Thakazhi Realtors Private Limited
 Tirur Cyber City Developers Private Limited
 Tirur Cyber Real Estates Private Limited
 
 3. Leases
 
 a. Assets taken on lease
 
 Operating lease obligations: The Company has taken office, other
 facilities and other equipments under cancelable and non-cancelable
 operating leases, which are renewable on a periodic basis with
 escalation as per agreement.
 
 4. Contingent liabilities not provided for
 
 (Rs. in Million)
 
 Particulars                   March 31, 2011   March 31, 2010
 
 i.  Guarantees and counter 
 guarantees given by the Company 1,193.39           677.09
 
 ii.  Claims against the Company, 
 not acknowledged as debts*        846.72             -
 
 iii. ncome tax matters in dispute 209.63           226.94
 
 iv.  Sales tax matters in dispute 125.06            60.51
 
 v.  Service tax matters in dispute 1,078.06        939.59
 
                                 3,452.86         1,904.13
 
 * During the year, a customer has initiated arbitration proceedings
 against the Company for Rs. 846.72 million for breach of contractual
 obligation for which the Company has filed a statement of objection and
 counter claim for non payment. Based on legal advice obtained by the
 management, the Company is confident of recovering full dues. Pending
 settlement, the claims made against the Company have been disclosed as
 contingent liability.
 
 Note:
 
 The Company is also involved in certain litigation for lands acquired
 by it for construction purposes, either through joint development
 agreements or through outright purchases. These cases are pending with
 various courts and are scheduled for hearings. After considering the
 circumstances and legal advice received, management believes that these
 cases will not adversely effect its financial statements.
 
 5. Employee benefits
 
 The Company has a defined benefit gratuity plan. Every employee who has
 completed five years or more of service gets a gratuity on departure at
 15 days salary (last drawn salary) for each completed year of service
 subject to a maximum of Rs. 1,000,000. The following tables summarise
 the components of net benefit expense recognised in the profit and loss
 account and the funded status and amounts recognised in the balance
 sheet for gratuity benefit
 
 Notes:
 
 i.  The Company expects to contribute Rs. 5 million (Previous year -
 Rs. 7 million) to the trust towards gratuity fund in 2011-12.
 
 ii. A limited revision to AS 15 (revised) allows an entity to make
 disclosures required by paragraph 120(n) of AS 15 (revised)
 prospectively from the transition date.
 
 iii. The estimates of future salary increases, considered in actuarial
 valuation, take account of inflation, seniority, promotion and other
 several factor such as supply and demand factor in the employment
 market. Employee turnover varies based on various age groups.
 
 6. Segment reporting
 
 As the Company operates on a backward integration model and its
 business activity primarily falls within a single business segment
 which constitutes real estate development, there are no additional
 disclosures to be provided under Accounting Standard 17 ‘Segment
 Reporting’. The Company operates primarily in India and there is no
 other significant geographical segment.
 
 7. In respect of manufacturing activities of interiors, glazing and
 block making unit, on account of the nature of the business carried on
 by the Company and since the turnover, purchase and consumption of raw
 material of each item is less than 10%, the management is of the view
 that it is exempt from disclosing the quantitative information under
 Paragraphs 3(i)(a) and 3(ii)(b) of Part II of Schedule VI of the
 Companies Act, 1956 granted vide Notifi cation S.O 301(E) dated
 February 8, 2011 issued by the Ministry of Corporate Affairs.
 
 8. Based on the information available with the Company, there are no
 suppliers who are registered as micro, small or medium
 enterprises under The Micro, Small and Medium Enterprises Development
 Act, 2006 as at March 31, 2011.
 
 9. Excise duty on sales amounting to Rs. 32.36 million (Previous year
 - Rs. 33.91 million) has been reduced from Income from operations in
 profit and loss account and excise duty on decrease in inventory of
 finished goods amounting to Rs. 0.53 million (Previous year - increase
 in inventory of finished goods amounting to Rs. 0.15 million) has been
 accounted in the profit and loss account under the head `Cost of
 sales.
 
 10. The Company has entered into certain transactions for purchase of
 material and services in the prior years from private limited
 companies/ firms, covered under section 297 of the Act, which require
 prior approval of the Central Government under proviso to Section
 297(1) of the Act. In this regard, the Company has filed an application
 for composition of the offence and obtaining approval from the Company
 Law Board under Section 621A of the Act. The Company is confi dent of
 obtaining the approvals, and pending obtaining such approvals, no
 adjustments have been made in the financial statements.
 
 11. The figures of previous year have been regrouped/reclassified,
 where necessary, to conform with the current years classification.