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Notes to Accounts of Phoenix Mills Ltd.

Mar 31, 2016

NOTE 1.

Disclosure as per Accounting Standard 15 (Revised) "Employee Benefits".

(a) Defined Contribution Plan, recognised as expenses for the year are as under :

Employer''s Contribution to Provident and Pension Fund Rs. 2,287,369 (PY Rs. 1,571,302).

Employer''s Contribution to ESIC Rs. 24,084 (PY Rs. 71,430)

The Company makes contributions towards provident fund and pension fund for qualifying employees to the Regional Provident Fund Commissioner.

(b) Defined Benefit Plan:

The company provides gratuity benefit to it''s employees which is a defined 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.

NOTE 2.

The Company is mainly engaged in the development and operation of Malls and other real estate properties. All activities of the company revolve around this main business. As such, there are no separate reportable segments as per Accounting Standard 17 -''Segment Reporting''.

Disclosure in Respect of Material Related Party Transactions during the year:

i. Rent & other recoveries include received from Market City Resources (P) Rs. 16,078,608 (P.Y. Rs. 16,078,608), Pallazzio Hotels & Leisure Limited Rs. 14,514,301 (P.Y. Rs. 17,432,584), Big Apple Real Estate Pvt Ltd Rs. 12,506 (P.Y. Nil), Marketcity Management Company Pvt Ltd Rs. 6,85,235 (P.Y. Nil), Savannah Phoenix Pvt Ltd Rs. 68,64,956 (P.Y. Nil) and Mirabel Entertainment Pvt Ltd Rs. 80,66,335 (P.Y. Nil)

ii. Interest received include received from Offbeat Developers (P) Limited Rs. 108,130,193 (P.Y. Rs. 221,805,450), Vamona Developers (P) Limited Rs. 26,973,732 (P.Y. Rs. 106,403,871), Pallazzio Hotels & Leisure Limited Rs. 529,633,022 (P.Y. Rs. 385,902,830) and Graceworks Realty Leisure Pvt Ltd Rs. 100,750,386 (PY. Rs.. 98,865,206), Bellona Hospitality Services Ltd Rs. 7,356,631(P.Y. Nil), Big Apple Real Estate Pvt Ltd Rs. 28,234,225 (P.Y. Nil), Blackwood Developers (P) Ltd Rs. 4,368,452 (P.Y. Nil), Marketcity Resources Pvt Ltd Rs. 7,98,688 (P.Y. Nil), Phoenix Hospitality Company Pvt Ltd Rs. 11,253,979 (P.Y. Nil), Upal Developers Pvt Ltd Rs. 3,927,470 (P.Y. Nil), Gangetic Hotels Pvt Ltd Rs. 63,035,253 (P.Y. Nil) and Starboard Hotels Pvt Ltd Rs. 35,518,188 (P.Y. Nil)

iii. Administrative & other expenses include paid to Pallazzio Hotels & Leisure Limited Rs. Nil (P.Y. Rs. 4,462,279), Market City Resources Private Limited Rs. 37,123,260 (P.Y. 33,050,000), R.R Hosiery (P) Ltd. Rs. 3,645,254 (P.Y. Rs. 5,972,710), Offbeat Developers Pvt Ltd Rs. 8,478,452 (PY. Rs. 1,265,000), Bellona Hospitality Services Ltd Rs. 142,612 (P.Y. Nil), Savannah Phoenix Pvt Ltd Rs. 27,619 (P.Y. Nil) and R R Hosiery Rs. 1,953,600 (P.Y. Nil)

iv. Interest Paid to Classic Mall Developers Company Pvt Ltd Rs. 39,221,311 (P.Y. Nil).

v. Remuneration paid to Ashok Ruia Rs. 6,563,220 (P.Y. Rs. 6,000,000), Atul Ruia Rs. 65,63,220 (P.Y. Rs. 6,000,000) and Kiran Gandhi Rs. 400,000 (P.Y. Rs. 2,792,168)

vi. Loss from firm in Phoenix Construction Company Rs. 174,148 (P.Y. Rs. 512,497).

vii. Inter Corporate Deposit taken from Classic Mall Developers Company Pvt Ltd Rs. 1,500,000,000 (P.Y. Nil)

viii. Inter Corporate Deposit returned by the parties includes Deposits returned by Vamona Developers (P) Limited Rs. 775,956,153 (P.Y. Rs. 20,000,000), Graceworks realty & Leisure Pvt Ltd Rs. 100,000,000 (PY. Rs. 150,000,000), Big Apple Real Estate (P) Ltd. Rs. 50,000,000 (P.Y. Rs. 250,000,000), Offbeat Developers (P) Ltd. Rs. 1,879,019,033 (P.Y. Rs. 105,265,259), Bellona Hospitality Services Ltd Rs. 147,994,760 (P.Y. Nil), Blackwood Developers (p) Ltd Rs. 5,000,000 (P.Y. Nil), Marketcity Resources Pvt Ltd Rs. 65,000,000 (P.Y. Nil), Pallazzio Hotels & Leisure Pvt Ltd Rs. 1,435,020,000 (P.Y. Nil) and Starboards Hotels Pvt Ltd Rs. 159,821,170 (P.Y. Nil)

ix. Inter Corporate Deposits Given includes Deposits given to Vamona Developers (P) Limited Rs. 405,380,000 (P.Y. Nil), Pallazzio Hotels & Leisure Limited Rs. 1,521,045,808 (P.Y. Rs. 878,429,036), Graceworks realty & Leisure Pvt Ltd Rs. 137,000,000 (PY. Rs. 67,000,000), Big Apple Real Estate (P) Ltd Rs. 45,000,000 (P.Y. Rs. 136,500,000), Gangetic Hotels (P) Ltd. Rs. 211,409,000 (P.Y. Rs. 261,200,000), Offbeat Developers (P) Ltd Rs. 1,352,539,391 (P.Y. Rs. 1,241,642,108), Bellona Hospitality Services Ltd Rs. 120,691,328 (P.Y. Nil), Blackwood Developers (p) Ltd Rs. 86,200,000 (P.Y. Nil), Phoenix Hospitality Co Pvt Ltd Rs. 232,500,000 (P.Y. Nil), Upal Developers Pvt Ltd Rs. 89,350,000 (P.Y. Nil) and Starboard Hotels Pvt Ltd Rs. 630,500,000 (P.Y. Nil).

x. Capital Advances given towards capital goods to Offbeat Developers (P) Limited Rs. 320,000,000 (P.Y. Nil).

xi. Capital advances returned by Offbeat Developers (P) Limited Rs. Nil (P.Y. Rs.1,406,181,719).

xii. Deposit given to Island Star Mall Developers (P) Ltd. Rs. 125,000,000 (P.Y. Rs.185,000,000) and R R Hosiery Pvt Ltd Rs. 72,500,000 (P.Y. Rs.Nil).

xiii. Deposits returned by Island Star Mall Developers (P) Ltd. Rs.3,35,000,000 (P.Y. Rs.185,000,000) and Marketcity Resources Pvt Ltd Rs. 10,000,000 (P.Y. Rs. Nil).

xiv. Allotment of Preference share in Savannah Phoenix Pvt Ltd of Rs. 7,840,000 (P.Y. Nil).

xv. Investment in Shares/Application Money pending allotment Phoenix Hospitality Co Pvt Ltd Rs. 232,500,000 (P.Y. Rs. Nil) and Bellona Hospitality Services Ltd Rs. Nil (P.Y. Rs. 3,871,000).

xvi. Share /Debenture application money refund received/converted includes Refund received from Starboard Hotels (P) Ltd. Rs. Nil (P.Y. Rs. 138,399,900), Escort Developers Private limited Rs. Nil (PY Rs. 3,400,000), Pallazzio Hotels Leisures Ltd. Rs. Nil (P.Y. Rs. 810,000,000) and Phoenix Hospitality Co Pvt Ltd Rs. 232,500,000 (P.Y. Rs. Nil)

xvii. Investment in CCD of Pallazzio Hotels & Leisure Limited of Rs. Nil (P.Y. Rs. 727,000,000) and Starboard Hotels (P) Limited Rs. Nil (P.Y. Rs. 138,399,900). Invetsment in OFCD of Bellona Hospitality Services Ltd of Rs. 208,250,000 (P.Y. Nil), Pallazzio Hotels & Leisure Ltd of Rs. 824,654,192 (P.Y. Nil) and Savannah Phoenix Pvt Ltd Rs. 3,292,000 (PY Rs. Nil)

NOTE 3.

CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:-

a. Estimated amount of contracts remaining to be executed on capital account and not provided for in the accounts is Rs. 1,086,356,182 (P.Y. Rs. 1,113,142,797) net of advance paid.

b. The Income tax assessments of the Company have been completed up to Assessment Year 2013-14. The disputed tax demand raised upto the said Assessment Year is Rs. 424,219,328. The Company as well as the Income Tax Department are in appeal before the Appellate Authorities. The impact thereof, if any, on the tax position can be ascertained only after the disposal of the appeals. Accordingly, the accounting entries arising there from will be passed in the year of the disposal of the said appeals.

c. The Service Tax Department had issued a Demand Notice of Rs. 2,03,07,932 (P.Y. Rs. 2,03,07,932) to the company, against which the company has filed an appeal with the Service Tax Tribunal.

d. Demand notices received on account of arrears of Provident Fund dues aggregating to Rs. 2,471,962 (P.Y. Rs. 2,471,962) 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 the said P.F. demands to the P.F. authorities.

e. Other Claims against the company not acknowledge of Rs. 8,395,942/- (P.Y 8,395,942/-)

f. Outstanding guarantees given by Banks Rs.2,769,969 (P.Y. Rs. 2,769,969).

g. The above litigations are not expected to have any material adverse effect on the financial position of the company.

NOTE 4.

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 dated 30th March 2007. The conveyance of the said portion of Land, in favour of PHLL, is pending.

NOTE 5.

The Company carries, as at the year end, Investments of Rs. . 45,01,24,554/- in the equity shares of Entertainment World Developers Limited (EWDL), Rs. 10000 lacs in FCDs of Treasure world Developers Pvt. Ltd. (TWDPL), subsidiary of EWDL and interest accrued thereon, upto 31-03-2012, of Rs. 14,32,51,068 (net of TDS). The company had exercised the put option available as per the Share and Debenture Subscription Deed for the said FCDs in earlier year against which EWDL has paid a part amount of Rs 19,18,80,000 in November 2013. Pending receipt of the balance consideration, the amount received has not been adjusted against the investments/ accrued Interest and has been shown under other current liability . The Networth of EWDL/TWDPL has been eroded as per latest available unaudited accounts as at 31-03-2014. The Company''s Board has, out of abundant caution and as a prudent practice in line with the standard accounting practices, Rs. 84,25,00,000 for the impairment of these investments in the Financial Year 2014-15. The Board has decided to further provide Rs. 21,00,00,000 towards the impairment of these Investments, as at 31st March, 2016. The Company has also made provisions, for loan given of Rs. 70,000,000.

While the Company would continue its efforts for the recovery of the dues against the put option exercised by it on the FCDs, in the opinion of the Board, considering the realisable value of assets of EWDL & its subsidiaries, the impairment provisions against these investments are adequate.

NOTE 6.

Capital work in progress includes Rs. 933,834,120 (P.Y. Rs. 933,834,120) comprising mainly the cost incurred on acquiring long term tenancies on the plot of land admeasuring 7617.51 sq mtrs at High Street Phoenix. The Company is exploring various alternatives for the development of the said plot of land.

NOTE 7.

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 specified by the valuers, which includes an additional charge amounting to Rs. 997,921 (P.Y. Rs. 9,89,845) in comparison to depreciation provided under the Companies Act, 1956.

NOTE 8.

The balances in respect of Trade Receivables & Payables, loans and advances, as appearing in the books of accounts are subject to confirmations by the respective parties and adjustments/reconciliation arising there from, if any.

NOTE 9.

Corporate Social Responsibility:

(a) CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof by the company during the year is Rs. 3,32,20,583 (P.Y. Rs. 3,50,12,702 )

(b) Expenditure related to Corporate Social Responsibility is Rs. 36,26,873/- (Previous Year Rs. 60,00,000).

NOTE 10.

The previous year figures have been regrouped, reworked, rearranged and reclassified, wherever necessary and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2015

NOTE 1.

Out of Rs. 35,012,702/- to be expended towards CSR activities as per Sec 135 of the Companies Act , 2013, company has incurred an expenditure of Rs. 60,00,000/- in the year.

NOTE 2. Disclosure as per Accounting Standard 15 (Revised) "Employee Benefits".

(a) Defined Contribution Plan, recognised as expenses for the year are as under :

Employer's Contribution to Provident and Pension Fund Rs.1,571,302 (P.Y.1,131,596).

Employer's Contribution to ESIC Rs. 71,430 (P.Y.121,052)

The Company makes contributions towards provident fund and pension fund for qualifying employees to the Regional Provident Fund Commissioner.

(b) Defined Benefit Plan:

The company provides gratuity benefit to it's employees which is a defined 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.

Note 3. The Company is mainly engaged in the development and operation of Malls and other real estate properties. All activities of the company revolve around this main business. As such, there are no separate reportable segments as per Accounting Standard 17 -'Segment Reporting'.

Note 4. In view of the Accounting Standard : AS 18 on Related Parties Disclosures, the disclosure in respect of related party transactions for the year ended on 31st March 2015 is as under:

a) RELATIONSHIPS

Category I : Subsidiaries of the Company

Alliance Spaces Private Limited

Blackwood Developers Private Limited

Bellona Hospitality Services Limited

Big Apple Real Estate Private Limited

Butala Farm Lands Private Limited

Classic Mall Development Company Private Limited

Gangetic Developers Private Limited

Graceworks Realty & Leisure Private Limited

Island Star Mall Developers Private Limited

Enhance Holdings Private Limited

Market City Management Private Limited

Marketcity Resources Private Limited

Mugwort Land Holdings Private Limited

Offbeat Developers Private Limited

Palladium Constructions Private Limited

Pallazzio Hotels & Leisure Limited

Pinnacle Real Estate Development Private Limited

Plutocrat Assets and Capital Management Private Limited

Phoenix Hospitality Company Private Limited

Sangam Infrabuild corporation Private Limited

Upal Developers Private Limited

Vamona Developers Private Limited

Category II : Associates of the Company

Classic Housing Projects Private Limited

Escort Developers Private Limited

Galaxy Entertainment Corporation Limited

Galaxy Entertainment (India) Private Limited

Gangetic Hotels Private Limited

Mirabel Entertainment Private Limited

Phoenix Construction Company

Savannah Phoenix Private Limited

Starboard Hotels Private Limited

Category III : Key Managerial Personnel

Key Person Designation

Ashokkumar R Ruia Chairman & Managing Director

Atul Ruia Jt. Managing Director

Kiran B Gandhi Whole-time Director

Shishir Shrivastava Jt. Managing Director

Category IV : Enterprises over which Key Managerial Personnel are able to exercise significant control

Ashok Apparels Private Limited

R.R.Hosiery Private Limited

R.R. Hosiery Padmshil Hospitality & Lesiure Private Limited

Phoenix Retail Private Limited

Vigilant Developers Private Limited

Winston Hotel Private Limited

Category V : Relatives of Key Managerial Personnel

Gayatri A Ruia

B.R.International

Disclosure in Respect of Material Related Party Transactions during the year:

i. Rent & other recoveries include received from Market City Resources (P) Ltd. Rs.16,078,608 (P.Y. Rs. 16,078,608) and Pallazzio Hotels & Leisure Limited Rs. 17,432,584 (P.Y. 9,827,881).

ii. Interest received include received from Island Star Mall Developers (P) limited Rs. Nil (PY 17,108,881), Offbeat Developers (P) Limited Rs. 221,805,450 (P.Y. Rs. 188,264,822), Vamona Developers (P) Limited Rs. 106,403,871 (P.Y. Rs. 122,400,191), Pallazzio Hotels & Leisure Limited Rs. 385,902,830 (P.Y. Rs. 190,581,697) and Graceworks realty & Leisure Pvt Ltd Rs. 98,865,206 (PY. Rs. 79,339,422)

iii. Administrative & other expenses include paid to Market City Resources Private Limited Rs. 33,050,000 (Rs. 20,456,998), R.R Hosiery (P) Ltd. Rs. 5,972,710 (P.Y. Rs. 1,953,600), Pallazzio Hotels & Leisure Limited Rs. 4,462,279 (P.Y. Rs. 4,374,274) and Offbeat Developers Pvt Ltd Rs. 12,65,000 (PY. Rs. 5,270,621)

iv. Interest Paid to B.R. International Rs. Nil (P.Y. Rs. 8,972,730).

v. Remuneration paid to Ashok Ruia Rs. 6,000,000 (P.Y. Rs. 6,000,000), Atul Ruia Rs. 6,000,000 (P.Y. Rs. 6,000,000) and Kiran Gandhi Rs. 2,792,168 (P.Y. Rs. 3,769,615)

vi. Loss from firm in Phoenix Construction Company Rs. 512,497 (P.Y. Rs. 1,242,368).

vii. Inter Corporate Deposit returned by the parties includes Deposits returned by Vamona Developers (P) Limited Rs. 20,000,000 (P.Y. Rs. 438,000,000), Graceworks realty & Leisure Pvt Ltd Rs. 150,000,000 (PY. Rs. 232,500,000), Big Apple Real Estate (P) Ltd. Rs. 250,000,000 (P.Y. Rs. Nil), Classic Mall Development Company Pvt. Ltd. Rs. Nil (PY. Rs.230,000,000) and Offbeat Developers (P) Ltd. Rs. 105,265,259 (P.Y. Rs. Nil).

viii. Inter Corporate Deposits Given includes Deposits given to Vamona Developers (P) Limited Rs. Nil (P.Y. Rs. 389,857,980), Pallazzio Hotels & Leisure Limited Rs. 878,429,036 (P.Y. Rs. 426,038,306), Graceworks realty & Leisure Pvt Ltd Rs. 67,000,000 (PY. Rs. 607,000,000), Big Apple Real Estate (P) Ltd Rs. 136,500,000 (P.Y. Rs. 270,700,000), Gangetic Hotels (P) Ltd. Rs. 261,200,000 (P.Y. Rs. Nil) and Offbeat Developers (P) Ltd Rs. 1,241,642,108 (P.Y. Rs. Nil).

ix. Capital Advances given towards capital goods to Offbeat Developers (P) Limited Rs. Nil (P.Y. Rs. 591,568,976).

x. Capital advances returned by Island Star Mall Developers (P) Ltd. Rs. Nil (P.Y. Rs. 409,190,133) and Offbeat Developers (P) Limited Rs. 1,406,181,719 (P.Y. Rs. Nil).

xi. Deposit given to Island Star Mall Developers (P) Ltd. Rs. 185,000,000 (P.Y. Rs. Nil).

xii. Deposits returned by Island Star Mall Developers (P) Ltd. Rs.185,000,000 (P.Y. Rs. Nil) and Classic Mall Development Company Pvt. Ltd. Rs. Nil (P.Y. Rs. 6,038,517).

xiii. Investment in Shares/Application Money pending allotment Pallazzio Hotels & Leisure Limited Rs. Nil (P.Y. Rs. 810,000,000) and Bellona Hospitality Services Ltd Rs. 3,871,000 (P.Y. Rs. Nil).

xiv. Share /Debenture application money refund received/converted includes Refund received from Starboard Hotels (P) Ltd. Rs. 138,399,900 (P.Y. Rs. Nil), Pinnacle Real Estate Development Private Limited Rs. Nil (PY. Rs. 27,524,885),

Escort Developers Private limited Rs. 3,400,000 (PY Rs. 5,200,000) and Pallazzio Hotels & Leisure Ltd. Rs. 810,000,000 (P.Y. Rs. Nil).

xv. OCD redeemed of Classic Housing Projects (P) Limited Rs. Nil (P.Y. Rs. 124,800,000).

xvi. Investment in CCD of Pallazzio Hotels & Leisure Limited of Rs. 727,000,000 (P.Y. Rs. Nil) and Starboard Hotels (P) Limited Rs. 138,399,900 (P.Y. Rs. Nil).

xvii. Buy Back of the Equity shares includes share purchased from Palladium Constructions (P) Limited Rs. Nil (P.Y. Rs. 546,775,625)

xviii. Conversion of debentures to Equity includes Palladium Constructions Private Limited Rs. Nil (PY Rs. 1,161,300,000).

Note 5. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:-

a. Estimated amount of contracts remaining to be executed on capital account and not provided for in the accounts is Rs. 1,113,142,797 (P.Y. Rs. 1,083,128,320) net of advance paid.

b. The Income tax assessments of the Company have been completed up to Assessment Year 2012-13. The disputed tax demand outstanding upto the said Assessment Year is Rs. 236,729,427. 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.

c. The Service Tax Department had issued a Demand Notice of Rs. 2,03,07,932 (P.Y. Rs. 2,03,07,932) to the company, against which the company has filed an appeal with the Service Tax Tribunal.

d. Demand notices received on account of arrears of Provident Fund dues aggregating to Rs. 2,471,962 (P.Y. Rs. 2,471,962) 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 the said P.F. demands to the P.F. authorities.

e. Other Claims against the company not acknowledge of Rs. 8,395,942/- (P.Y 8,395,942/-)

f. Outstanding guarantees given by Banks Rs. 2,769,969 (P.Y. Rs. 2,769,969).

g. The above litigations are not expected to have any material adverse effect on the financial position of the company.

Note 6. 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 & 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 dated 30th March 2007. The conveyance of the said portion of Land, in favour of PHLL, is pending.

Note 7. The Investments of Rs. 57,92,70,269/-(including through wholly owned subsidiary) in the equity shares of Entertainment World Developers Limited (EWDL) and Rs. 100,00,00,000 in FCDs of Treasure world Developers Pvt. Ltd. (TWDPL), subsidiary of EWDL, which were considered as strategic and long term in nature, have been hitherto carried at cost in the Financial Statements. Interest income aggregating to Rs. 14,32,51,068 (net of TDS) was accrued on the said debentures upto 31st March 2012 and is outstanding as on 31st March, 2015. The company had exercised the put option available as per the Share & Debenture Subscription Deed for the said FCDs and EWDL has paid a part amount of Rs. 19,18,80,000 in November 2013 towards the same. Pending receipt of the balance consideration and the settlement of the matter, the amount received has not been adjusted against the investments/accrued Interest and has been shown under other current liability. The Company has been making all efforts towards settlement of the matter and for recovery of the balance dues against the above put option. There has been limited progress in the matter. The Company is exploring various options, including contractual remedies, for the recovery of its dues. However, the Company's Board has, out of abundant caution and as a prudent practice in line with the standard accounting practices, decided to provide Rs. 84,25,00,000 for the impairment of these investments, which is considered adequate at this stage The Company will continue its efforts for the recovery of the dues against the put option exercised by it and would endeavor to ascertain the realizable values of these Investments. The adequacy of the impairment provision would be reviewed annually based on the future developments.

Note 8. Capital work in progress includes Rs. 933,834,120 (P.Y. Rs. 878,084,120) comprising mainly the cost incurred on acquiring long term tenancies on the plot of land admeasuring 7617.51 sq mtrs at High Street Phoenix. The Company is exploring various alternatives for the development of the said plot of land

Note 9. 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 specified by the valuers, which includes an additional charge amounting to Rs. 997,921 (P.Y. Rs. 9,89,845) in comparison to depreciation provided under the Companies Act, 1956, and an equivalent amount has been withdrawn from Revaluation Reserve and credited to Statement of Profit and Loss.

Note 10. The balances in respect of Trade Receivables & Payables, loans and advances, as appearing in the books of accounts are subject to confirmations by the respective parties and adjustments/reconciliation arising therefrom, if any.

Note 11. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31,2015. The above information, regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of the information available with the Company. This has been relied upon by the Auditors.

Note 12. The previous year figures have been regrouped, reworked, rearranged and reclassified, wherever necessary and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2014

1. Disclosure as per Accounting Standard 15 (Revised) "Employee benefits" as notifed by the Companies (Accounting Standards) Rules, 2006.

(a) (Defined Contribution Plan, recognised as expenses for the year are as under :

Employer''s Contribution to Provident and Pension Fund Rs.1,131,596 (P.Y.1,216,584 ). Employer''s Contribution to ESIC Rs.121,052 (P.Y.196,011 )

The Company makes contributions towards provident fund and pension fund for qualifying employees to the Regional Provident Fund Commissioner.

(b) Defined benefit Plan:

The company provides gratuity benefit to it''s employees which is a Defined benefit plan. Te 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. Te obligation for leave encashment is recognised in the same manner as gratuity.

vi) Reconciliation of Opening and Closing Balances of Fair Value of Plan Assets

2. The Company is mainly engaged in the development and operation of Malls and other real estate properties. All activities of the company revolve around this main business. As such, there are no separate reportable segments as per Accounting Standard 17 -''Segment Reporting'', as notifed by Companies (Accounting Standards) Rules, 2006.

3. 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 2014 is as under:

a) RELATIONSHIPS

Category I : Subsidiaries of the Company

Alliance Spaces Private Limited

Blackwood Developers Private Limited

Bellona Finvest Limited

Big Apple Real Estate Private Limited

Butala Farm Lands Private Ltd.

Gangetic Developers Private Limited

Graceworks Realty & Leisure Private Limited

Island Star Mall Developers Private Limited

Enhance Holding Private Limited

Market City Management Private Limited

Market City Resources Private Limited

Mugwort Land Holdings Private Limited

Palladium Constructions Private Limited

Pallazzio Hotels & Leisure Limited

Pinnacle Real Estate Development Private Limited

Platinum Spaces Private Limited

Plutocrat Assets and Capital Management Private Limited

Phoenix Hospitality Company Private Limited

Sangam Infrabuild Corporation Private Limited

Upal Developers Private Limited

Vamona Developers Private Limited

Classic Mall Development Company Private Limited [w.e.f. 10th July, 2013]

Ofeat Developers Private Limited [w.e.f. 14th October, 2013]

Category II : Associates of the Company

Bartraya Mall Development Company Private Limited

Starboard Hotels Private Limite

Classic Mall Development Company Private Limited [ upto 9th July, 2013]

Classic Housing Projects Private Limited

Entertainment World Developers Limited

Escort Developers Private Limited

Galaxy Entertainment Corporation Limited

Galaxy Entertainment (India) Private Limited

Gangetic Hotels Private Limited

Mirabel Entertainment Private Limited

Ofeat Developers Private Limited [upto 13th October, 2013]

Phoenix Construction Company

Savannah Phoenix Private Limited

Category III : Key Managerial Personnel

Ashokkumar Ruia ) Chairman & Managing Director

Atul Ruia ) Jt. Managing Director

Kiran B Gandhi ) Whole-time Director

Shishir Shrivastava ) Group CEO and Jt. Managing Director

Pradumna Kanodia ) Whole-time Director

Category IV : Enterprises over which Key Managerial Personnel are able to exercise significant control

R.R.Hosiery Private Limited R.R. Hosiery

Phoenix Retail Private Limited

Winston Hotels Private Limited

Category V : Relatives of Key Managerial Personnel

Gayatri A Ruia B.R.International

Disclosure in Respect of Material Related Party Transactions during the year:

i. Rent & other recoveries include received from Market City Resources (P) Ltd. Rs. 16,078,608(P.Y. Rs. 50,646,804) and Pallazzio Hotels & Leisure Limited Rs.9,827,881 (P.Y. Rs.105,072,914).

ii. Interest received include received from Island Star Mall Developers (P) limited Rs.17,108,881(P.Y. Rs.78,422,453),Ofeat Developers (P) Limited Rs.188,264,822(P.Y. Rs.195,404,170), Vamona Developers (P) Limited Rs.122,400,191(P.Y. Rs. 61,616,585) and Pallazzio Hotels & Leisure Limited Rs.190,581,697 (P.Y. Rs. 105,238,038), Graceworks Realty & Leisure (P) Ltd. Rs.79,339,422(PY. Rs.1,781,534)

iii. Administrative & other expenses include paid to Market City Resources (P) Limited Rs. 20,456,998 (Rs. 9,860,000), R.R Hosiery (P) Ltd. Rs. 3,610,778(P.Y. Rs. 3,320,196), R.R Hosiery Rs. 1,953,600(P.Y. Rs. 1,953,600) and Pallazzio Hotels & Leisure Limited Rs.4,374,274 (P.Y. Rs.Nil ) Ofeat Developers Pvt Ltd Rs.5,270,621 (PY. Rs.Nil)

iv. Interest Paid to B.R. International Rs. 8,972,730(P.Y. Rs. 13,907,730).

v. Remuneration paid to Ashok Ruia Rs. 6,000,000 (P.Y. Rs. 6,000,000), Atul Ruia Rs.6,000,000 (P.Y. Rs. 6,000,000) and Kiran Gandhi Rs.3,769,615 (P.Y. Rs. 4,800,000)

vi. Loss from firm in Phoenix Construction Company Rs. 1,242,368 (P.Y. Rs.665,783).

vii. Capital withdrawn from firm in Phoenix Construction Company Rs.Nil(P.Y. Rs.1,123,600).

viii. Loan returned by parties include repayment from Ofeat Developers (P) Limited Rs. Nil (P.Y. Rs. 300,000,000).

ix. Loan given includes loan given to Pinnacle Developers (P) Limited Rs.27,524,885 (P.Y. Rs. Nil).

x. Inter Corporate Deposit returned by the parties includes Deposits returned by Vamona Developers (P) Limited Rs.438,000,000 (P.Y. Rs. 387,000,000), Graceworks Realty & Leisure Pvt Ltd Rs.232,500,000(PY. Rs. .12,000,000) Pallazzio Hotels & Leisure Limited Rs.Nil (P.Y Rs.70,000,000), Classic Mall Development Co. (P) Ltd. Rs.230,000,000 (PY. Rs.8,806,531)

xi. Inter Corporate Deposits Given includes Deposits given to Vamona Developers (P) Limited Rs.389,857,980 (P.Y. Rs.627,000,000), Pallazzio Hotels & Leisure Limited Rs.426,038,306(P.Y 466,000,000), Graceworks Realty & Leisure Pvt Ltd Rs.607,000,000(PY. Rs. 92,000,000)and Big Apple Real Estate (P) Ltd Rs. 270,700,000(P.Y. Rs.Nil)

xii. Capital Advances given towards capital goods to Island Star Mall Developers (P) Ltd. Rs. Nil(P.Y. Rs. . 40,000,000) and Ofeat Developers (P) Limited Rs. 591,568,976 (P.Y. Rs.203,556,801)

xiii. Capital advances returned by Island Star Mall Developers (P) Ltd. Rs.409,190,133 (P.Y. Rs.350,000,000) and Ofeat Developers (P) Limited Rs. Nil(P.Y. Rs.940,050,000) xiv. Deposit given to Ofeat Developers Private Limited Rs.Nil(P.Y. Rs.46,270,644) and Classic Mall Development Co. (P) Ltd. Rs. Nil(P.Y. Rs. 150,000,000)

xv. Deposits returned by Ofeat Developers Private Limited Rs.Nil(P.Y. Rs.111,027,194) and Classic Mall Development Co. (P) Ltd. Rs. 6,038,517(P.Y. Rs. 15,000,000) xvi. Investment in Shares/Application Money pending allotment Pallazzio Hotels & Leisure Limited Rs.810,000,000 (P.Y. Rs. Nil) , Savannah Phoenix (P) Ltd Rs. Nil (P.Y. Rs. 250,000)

xvii. Share /Debenture application money refund includes Refund received from Palladium Constructions (P) Limited Rs.Nil (P.Y. Rs.646,671) Phoenix Retail (P) Limited Rs.Nil (P.Y. Rs. 6,000,000), Pinnacle Development Pvt Ltd Rs.27,524,885 (PY. Rs.Nil), and Escort Developers Private limited Rs.5,200,000(PY Rs. Nil)

xviii. Investment in CCD/OCD/NCD includes Pallazzio Hotels & Leisure Limited Rs.Nil (P.Y. Rs. 857,779,110)

xix. OCD redeemed of Classic Housing Projects (P) Limited Rs. 124,800,000(P.Y. Rs. Nil).

xx. Purchase of Fixed Assets includes purchase from Ofeat Developers (P) Limited Rs. Nil(P.Y. Rs. 227,586,883).

xxi. Buy Back of the Equity shares includes share purchased from Palladium Constructions (P) Limited Rs.546,775,625 (P.Y. Rs. Nil)

xxii. Conversion of debentures to Equity includes Palladium Constructions Pvt Ltd Rs.1,161,300,000(PY Rs.Nil).

4. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:-

a. Estimated amount of contracts remaining to be executed on capital account and not provided for in the accounts is Rs. 1,083,128,320(P.Y. Rs. 1,716,626,120) net of advance paid.

b. The Income tax assessments of the Company have been completed up to Assessment Year 2011-12. The disputed tax demand outstanding upto the said Assessment Year is Rs.196,489,732. 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 afer 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.

c. The Service Tax Department had issued a Demand Notice of Rs. 20,307,932 (P.Y. Rs.20,307,932) to the company, against which the company has fled an appeal with the Service Tax Tribunal.

d. Demand notices received on account of arrears of Provident Fund dues aggregating to Rs. 2,471,962 (P.Y. Rs. 2,471,962) are disputed by the Company. Te Company has paid Rs. 1,000,000 and has also furnished a Bank Guarantee for Rs. 1,471,165 against the said P.F. demands to the P.F. authorities.

e. Disputed excise duty liability amounting Rs. NIL ( P.Y. Rs. 1,646,266).

f. Outstanding guarantees given by Banks Rs.2,769,969 (P.Y. Rs. 2,769,969).

5. 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. Te Company has developed a mixed use retail structure on the said land. Te 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 dated 30th March 2007. Te conveyance of the said portion of Land, in favour of PHLL, is pending.

6. The Company has investments of Rs. 579,270,269 (including through wholly owned subsidiary) in the equity shares of Entertainment World Developers Limited (EWDL) and Rs. 100,00,00,000 in FCDs of Treasure World Developers Pvt. Ltd. (TWDPL), subsidiary of EWDL, which are considered as strategic and long term in nature. Interest income was accrued on the said debentures upto 31st March 2012 aggregating to Rs. 143,251,068 ( net of TDS) remains outstanding as on 31st March, 2014. Te unaudited Financials of EWDL as at March 31, 2014 refect an erosion in its networth. EWDL & its SPVs hold properties which are stated at cost and not at their market values, in their respective financial statements. The company has exercised the put option available as per the Share & Debenture Subscription Deed for the said FCDs & EWDL has paid a part amount of Rs. 19,18,80,000 in November 2013 towards the put option. Pending receipt of the balance consideration and the settlement of the matter, amount received has not been adjusted against the investments/accrued Interest and has been shown under other current liability in Note 9. The management is considering various alternatives for the expeditious recovery of the dues against the said put option and hence no provision is recommended by the company''s management at this stage towards any possible diminution in the value of said investments.

7. Capital work in progress includes Rs. 985,903,467 comprising mainly the cost incurred on acquiring long term tenancies on the plot of land admeasuring 7617.51 sq mtrs at High Street Phoenix. Te Company is exploring various alternatives for the development of the said plot of land

8. Based on the valuation reports of the Government approved valuers, the Company has 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 specified by the valuers, which includes an additional charge amounting to Rs.9,89,845 /- (P.Y. Rs. 981,310) in comparison to depreciation provided under the Companies Act, 1956, and an equivalent amount has been withdrawn from Revaluation Reserve and credited to Statement of Profit and Loss.

9. Te matter of the levy of service tax on renting of immovable property has been sub judice. Te case of Home Solution Retailers of India and others v/s. Union of India and others [Delhi], had again challenged the constitutional validity of Section 65(105) (zzzz) of the Finance Act, 1994 as amended by the Finance Act, 2010. Citing the reason of the matter being subjudice, many licensees had 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. Te Honorable Supreme Court in the case of the appeal fled by Retailers Association of India (RAI), has vide it''s order dated 14th October, 2011, as an interim measure, directed the association members to deposit ffy percent of the service tax dues for the period upto 30th September, 2011 with the authorities and provide surety for the balance amount. Te surety would be payable on the pronouncement of final verdict. Most of the licensees of the Company are members of the said association. Te service tax liability has been adjusted against the relevant receivables, to the extent, the licensees have provided the Company the proof of payment of service tax and surety to government authorities. As at 31st March, 2014, the disputed service tax for the period upto 30th September, 2011 on renting of immovable property not deposited on account of non payment by licensees amounts to Rs. 34,525,256/-. Te company does not expect the outcome of the matter to have any adverse efect on its financial position or results of operations.- 39. Te balances in respect of Trade Receivables & Payables, loans and advances, as appearing in the books of accounts are subject to confirmations by the respective parties and adjustments/reconciliation arising therefrom, if any.

10. The Company is a partner in a partnership firm M/s. Phoenix Construction Company. Te accounts of the partnership firm have been finalised upto the financial year 2012-13. Te details of the Capital Accounts of the Partners as per the latest Financial Statements of the firm are as under:-

The Company has accounted for its share of loss amounting to Rs.(1,242,368) pertaining to the financial year 2012-13 in the year. Te 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 firm.

11. Tere are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2014. Te above information, regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of the information available with the Company. Tis has been relied upon by the Auditors.

12. Te Ministry of Corporate Afairs, 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. Te 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.

13. Te previous year fgures have been regrouped, reworked, rearranged and reclassified, wherever necessary and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2013

1. Disclosure as per Accounting Standard 15 (Revised) "Employee Benefits" as notified by the Companies (Accounting Standards) Rules, 2006.

(a) Defined Contribution Plan, recognised as expenses for the year are as under :

Employer''s Contribution to Provident and Pension Fund Rs. 1,216,584 (P.Y. 1,289,201).

The Company makes contributions towards provident fund and pension fund for qualifying employees to the Regional Provident Fund Commissioner.

(b) Defined Benefit Plan:

The company provides gratuity benefit to it''s employees which is a defined 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.

2. The Company is mainly engaged in the development and operation of Malls and other real estate properties. All Activities of the company revolve around this main business. As such, there are no separate reportable segments as per Accounting Standard 17 -''Segment Reporting'', as notified by Companies (Accounting Standards) Rules, 2006.

3. In view of the Accounting Standard : AS 18 on Related Parties Disclosures as notified by the Companies (Accounting Standards) Rules 2006 : the disclosure in respect of related party transactions for the year ended on 31st March 2013 is as under:

a) RELATIONSHIPS CATEGORY

I : Subsidiaries of the Company

Alliance Hospitality Services Private Limited

Blackwood Developers Private Limited

Bellona Finvest Limited

Big Apple Real Estate Private Limited

Butala Farm Lands Private Ltd.

Gangetic Developers Private Limited

Graceworks Realty & Leisure Private Limited

Market City Management Private Limited

Marketcity Resources Private Limited

Mugwort Land Holdings Private Limited

Palladium Constructions Private Limited

Pallazzio Hotels and Leisure Limited

Pinnacle Real Estate Development Private Limited

Platinum Spaces Private Limited

Plutocrat Assets and Capital Management Private Limited

Phoenix Hospitality Company Private Limited

Sangam Infrabuild corporation Private Limited

Upal Developers Private Limited

Vamona Developers Private Limited

Island Star Mall Developers Private Limited [w.e.f. 28th March, 2013]

Category II : Associates of the Company

Bartraya Mall Development Company Private Limited

Starboard Hotels 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

Juniper Developers Private Limited

Mirabel Entertainment Private Limited

Offbeat Developers Private Limited

Savannah Phoenix Private Limited [w.e.f. 1st November , 2012]

Island Star Mall Developers Private Limited [ up to 27th March, 2013]

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 Managerial 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 Managerial Personnel

Gayatri A Ruia

4. Contingent Liabilities not Provided for in respect of:-

a. Estimated amount of contracts remaining to be executed on capital account and not provided for in the accounts is Rs. 171,662,6120 (P.Y. Rs. 183,047,500) net of advance paid.

b. The Income tax assessments of the Company have been completed up to Assessment Year 2010-11. The disputed tax demand outstanding upto the said Assessment Year is Rs. 120,972,257. 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.

c. The Service Tax Department has issued a Demand Notice of Rs. 20,307,932 to the company, against which the company has filed an appeal with the Service Tax Tribunal.

d. Demand notices received on account of arrears of Provident Fund dues aggregating to Rs. 2,471,962 (P.Y. Rs. 2,471,962) 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 the said P.F. demands to the P.F. authorities.

e. Disputed excise duty liability amounting Rs. 1,646,266 ( PY. Rs. 1,646,266 )

f. Outstanding guarantees given by Banks Rs. 2,769,969 ( P. Y.Rs. 2,769,969).

g. Subsequent to Balance sheet date, in May 2013, the Company received a demand notice from Municipal Corporation for payment of Rs. 64,819889/- towards the arrears of property tax for the period from April, 2010 to March, 2013, based on the property''s capital value. The Company is in the process of verifying the correctness of the said Demand raised by Municipal Department, as well as ascertaining the probability of the said recovery from the licensees. Based on the outcome of the verification and legal opinion, the company may file the appeal to re-assess / recomputed the said demand.

5. The electricity charges recovered from licensees, which were earlier netted off with electricity expenses are now w.e.f. 1st April, 2012 reclassified and disclosed on gross basis as income and expenses. The corresponding figures for the previous year have also been accordingly reclassified.

6. Amount remitted in foreign currency on account of dividend:

The Company has not remitted any amount in foreign currencies on account of dividends during the year and does not have information as to the extent to which remittances, if any, in foreign currencies on account of dividends have been made by/on behalf of the non- resident shareholders. The particulars of dividends declared and paid to non-resident shareholders, are as under:

7. Project Development Expenditure:

(In respect of Projects upto 31st March 2013, included under Capital Work-in-Progress) Preoperative Income / Expenses transferred to capital work-in-progress:

8. 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, PaWazzio 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 dated 30th March 2007.The conveyance of the said portion of Land, in favour of PHLL, as per the said Agreement, 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 said agreement with PHLL.

9. 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 specified by the valuers, which includes an additional charge amounting to Rs. 981310/- (P.Y. Rs. 1,005,006) in comparison to depreciation provided under the Companies Act, 1956, and an equivalent amount has been withdrawn from Revaluation Reserve and credited to Statement of Profit and Loss.

10. The matter of the levy of service tax on renting of immovable property has been subjudice. The case of Home Solution Retailers of India and others v/s. Union of India and others [Delhi], had again challenged the constitutional validity of Section 65(105) (zzzz) of the Finance Act, 1994 as amended by the Finance Act, 2010. Citing the reason of the matter being subjudice, many licensees had 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. The Honorable Supreme Court in the case of the appeal filed by Retailers Association of India (RAI), has vide it''s order dated 14th October, 2011, as an interim measure, directed the association members to deposit fifty percent of the service tax dues for the period upto 30th September, 2011 with the authorities and provide surety for the balance amount. The surety would be payable on the pronouncement of final verdict. Most of the licensees of the Company are members of the said association. The service tax liability has been adjusted against the relevant receivables, to the extent, the licensees have provided the Company the proof of payment of service tax and surety to government authorities. As at 31st March, 2013, the disputed service tax for the period upto 30th September, 2011 on renting of immovable property not deposited on account of non payment by licensees amounts to Rs. . 4,16,24,625/-. The company does not expect the outcome of the matter to have any adverse effect on its financial position or results of operations.

11. The balances in respect of Trade Receivables & Payables, loans and advances, as appearing in the books of accounts are subject to confirmations by the respective parties and adjustments/reconciliation arising therefrom, if any.

12. The Company is a partner in a partnership firm M/s Phoenix Construction Company. The accounts of the partnership firm have been finalised upto the financial year 2011-12. The details of the Capital Accounts of the Partners as per the latest Financial Statements of the firm are as under:-

The Company has accounted for its share of loss amounting to Rs. 665,783 pertaining to the financial year 2011-12 in the year under report. 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 firm.

13. 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, 2013. The above information, regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of the information available with the Company. This has been relied upon by the Auditors.

14. 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 fulfillment of conditions stipulated in the circular. The Company has satisfied 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.

15. The previous year figures have been regrouped, reworked, rearranged and reclassified, wherever necessary and are to be read in relation to the amounts and other disclosures relating to the current year.


Mar 31, 2011

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.












Mar 31, 2010

1. Contingent Liabilities not Provided for in Respect Of:-

i) Disputed excise duty liability amountingRs.ll,376,598(P.Y.Rs. 11,376,598)

ii) 0ther claims against the Company amounting not acknowledged as debts-Rs.Nil.(P.Y.Rs.4,302,309)

iii) Corporate guarantee issued by the Company amounting to Rs. 500,000,000 (P.Y. Rs. 500,000,000 ) to securefinancialassistancebeingavailedbyasubsidiarycompany.

iv) 0utstanding guarantees given by Banks Rs.2,769,969 (P.YRs.2,679,969).

v) Estimated amount of contracts remaining to be executed on capital account and not provided for in the accounts isRs. 129,604,655 (P.YRs. 516,920,853) net of advance paid.

vi) Demand noticesreceivedfordamages/interestonaccountofarrears/late paymentsof ProvidentFund and E.S.I.C dues amounting to Rs. 3,148,254 are disputed by the Company. The Company has paid Rs. 1,000,000 against P.F. demands to the P.F. authorities and has also furnished a Bank Guarantee for Rs. 1,471,165.

vii) The Income tax assessments of the Company have been completed up to Assessment year 2005-06. However, the company as well as the Income Tax Department are in appeal before the Appellate Authorities against the assessments of later financial years. The impactthereof, if any, on the tax position can be ascertained only after the disposal of the above appeals. Accordingly, the accounting entries arisingthere from will be passed intheyearofthedisposalofthesaidappeals.

2. Based on the valuation reports of the Government approved valuers, the Company had revalued its assets consistingof land including leasehold land and land leased in perpetuity, Buildingand Plantand Machinery as on 31st March 1985. Depreciation on revalued land, buildingand plantand machinery has been calculated as per the rates specified by the valuers, which includes an additional charge amounting to Rs. 952,660 (P.Y. Rs. 941,989) in comparison to depreciation provided underthe Companies Act, 1956, and an equivalent amount has been withdrawn from Revaluation Reserveand credited to Profit and Loss account.

3. The Company continued to levy service tax on the license/conducting fees/common area maintenance charges and has accounted the corresponding service tax liability. During the Financial Year 2009-10, the matter of the levy of service tax on renting of immovable property is subjudice and therefore, most of the licensees have not paid the service tax component billed to them and the company has also not deposited the saidservicetaxamount.

The balances of thesundry debtors [licensees] aresubjectto confirmation from the respective partiesandare pendingreconciliations/adjustmentsarisingonaccountoftheservicetaxbilled.

4. The balances in respect of sundry creditors, loans and advances, deposits and fixed deposits pledged with excise authorities, either debit or credit as appearing in the books of accounts have been substantially confirmed bythe respective parties.

5. The Company is a partner in a partnership firm M/s. Phoenix Construction Company. The accounts of the Partner ship firm have been finali sedup to the financial year2008 -2009.Thedetail softhe CapitalAccounts of the Partners as perthe latest FinancialStatementsofthefirm areas under:-

The Company has accounted for its share of profit amounting to Rs. 133,811 pertainingto the financial year 2008-2009 in the current year. The share of profit/loss for the current financial year will be accounted in the books of the Company on thefinalisation of the accounts of the firm.

6. Disclosure as per Accounting Standard 15 (Revised) "Employee Benefits" as notified by the Companies (AccountingStandards) Rules, 2006.

(a)Defined Contribution Plan,recognised as expenses for the year are as under:

Employers Contribution to Providentand Pension FundRs. 1,341,096 (P.Y. 1,120,228)

The Company makes contributions towards provident fund and pension fund for qualifying employees to the Regional Provident Fund Commissioner.

(b) Defined Benefit Plan: The company provides gratuity benefit to its employees which is a defined benefit plan. The present value of obligation is determined based on actuarial valuation usingthe 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 thesamemanneras gratuity.

9. Out of the total Rs. 980 crores raised through Qualified Institutional Placements (QIP), Rs. 848.63 crores have been spent towards projects, repayment of bank loans and QIP related expenses.The balance Rs. 131.17 crores are invested in mutual funds,bank deposits and intercor -porate deposits.

10. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstandingfor more than 45 days as at March 31, 2010. The above information, regarding Micro, Small and Medium enterprises has been determined to the extent such parties have been identified on the basis of the information available with the Company. This has been relied upon bythe Auditors.

11. The disclosure in respect of Segment information as per AccountingStandard : AS 17 on "Segment Reporting" notified by the Companies (AccountingStandards) Rules, 2006 is as under:

Notes:

i The Company has disclosed Business Segment as the primary segment. In the opinion of the Management, the Company is organised into two main business segments namely, Property & Related Services and Textile / Cloth Trading. Thesesegments have been identified in line with AS-17 on segment reporting. ii The activities of the Company being carried on totally within India, the information about Secondary Segment (GeographicSegments)is not required to begiven. iii Segment Revenue,result sandother information includes ther espective amounts identifia bletoeach of the segments as also amounts allocated on a reasonable basis. The items/information which relate to the Company asawholeand cannot bedirectly identified with any particular business segment have beenshownseparately.

12 In view of the Accounting Standard : AS 18 on Related Parties Disclosures as notified by the Companies (AccountingStandards) Rules 2006, thedisclosure in respect of related party transactions fortheyearended on 31st March 2010 is as under.

a) RELATIONSHIPS

Categoryk Subsidiaries of the Company

Blackwood Developers Private Limited

BellonaFinvest Limited

BigApple Real Estate Private Limited

Gangetic Developers Private Limited

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 & Capital Management Private Limited

Ruia Realtors Private Limited upto 25.02.2010

Upal Developers Private Limited

Vamona Developers Private Limited

Category II : Associatesof the Company

Bartraya Mall Development Company Private Limited

Starboard Hotels Private Limited

Classic Mall Development Company Private Limited

Entertainment World Developers Limited

Escort Developers 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.

AshokApparels Private Limited

B.R. International

R.R.Hosiery Private Limited

R.R. Hosiery

R.R. Textiles

PhoenixConstruction Company

Phoenix Retail Private Limited

GalaxyEntertainmentCorporation Limited

Phoenix Hospitality Company Private Limited



Category IV: Key Management Personnel

Ashokkumar R. Ruia - Chairman & Managing Director

AtulRuia - Jt.ManagingDirector

ShishirShrivastava - Executive Director w.e.f. 18.03.2010

Kiran B.Gandhi - Whole-time Director



Category V: Relativesof Key Management Personnel

Amla A Ruia Gayatri A Ruia Atul A Ruia HUF Ashok Kumar Ruia HUF

14 Amount remitted in foreign currency on account of dividend:

The Company has not remitted any amount in foreign currencies on account of dividends duringthe year and does not have information as to the extent to which remittances, if any, in foreign currencies on account of dividends have been made by/on behalf of non-resident shareholders. The particulars of dividends declared and paid to non-residentshareholders, are as under:

15 DEFERREDTAX

Inaccordance with theAccounting Standard -AS 22 Accounting for Taxes on Income" as notified bythe Companies (Accounting Standards) Rules 2006, the company has created deferred tax assets of Rs.9,957,833/- for the currentyear.Thebreakupofthe net deferred tax assetason31stMarch,2010isasunder:

16. The previous years figures have been regrouped and / or recasted wherever necessary so as to conform to the current years classification.

 
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