Mar 31, 2023
6.1) Notes on Investment Property
i. The Companyâs investment properties consists of Retail Mall and Commercial properties in India. The Management has determined that the investment properties consist of One class of asset - Retail Mall and Commercial Property - based on the nature, characteristics and risks of each property. ii Right on Leasehold Land consist of long term lease rights.
Refer note 36 (a) for disclosure of contractual commitments for the acquisition of investment properties
iv. Capitalised Borrowing cost
No borrowing costs were capitalised during the current year and previous year.
v. Investment Property Pledge as security
Investment properties under construction amounts to '' 19,834.51 lakhs (P.Y. '' 9,460.55 lakhs). The Management is of the view that the fair value of investment properties under construction cannot be reliably measured and hence fair value disclosures pertaining to investment properties under construction have not been provided. Investment Properties under construction excluding the building under construction at Phoenix Palladium (named as Rise II) have not been pledged to secure borrowings of the Company.
Freehold Land & building and Building included in Investment Property Under Construction (excluding the building under construction at Phoenix Palladium named as Rise II) are Secured by Registered Mortgage in respect of certain immovable properties situated at Phoenix Palladium, Senapati bapat marg, Lower Parel, Mumbai and hypothecation of rentals receivable from licencees on pari pasu basis against the borrowings. (Refer Note. 20 & 23).
The Company has created a charge, by way of mortgage, on 12,714.25 square meters of its land on Plot B 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.
vi. The Companyâs investment properties consist of Retail Mall which has been determined based on the nature, characteristics and risks of each property. As at 31 March 2023 and 31 March 2022, the fair values of the properties are '' 5,76,650 lakhs and '' 4,56,910 lakhs respectively.
The fair value of investment property has been determined by external, independent registered property valuers, having appropriate recognised professional qualification and recent experience in the location and category of the property being valued. A valuation model in accordance with that recommended by the international valuation standards committee had been applied. The Company obtains independent valuations for its investment properties annually and fair value measurement has been categorised as Level 3. The fair value has been arrived using discounted cash flow projections based on reliable estimates of future cash flows considering growth in rental of 5% (31 March 2022: 5%) and discount rate of 12.58% (March 31, 2022: 12.35%).
vii. During the year, the Company has sold 20% & 5% proportionate ownership of two flats in Phoenix Tower to Promoter Group Companies namely Radhakrishna Ramnarain Pvt. Ltd. and Senior Advisory Services Pvt. Ltd. for a consideration of '' 76 lacs and '' 20 lacs, respectively. Accordingly, those two flats are jointly held by the Company with Promoter Group (refer note no 41).
@ 51% shares of Island Star Mall Developers Private Limited, 51% shares of Destiny Retail Mall Developers Private Limited, 30% shares of Pallazzio Hotels & Leisure Limited (PHLL) (Pledge), 50.01% shares of Graceworks Realty & Leisure Private Limited and 100% shares of Alliances Spaces Private Limited are held subject to a non-disposal undertaking to the lender bank/Trustee stating that it shall not dispose / transfer /pledge /encumber these shares owned/held in the Company without prior consent from lender until the loans taken by these companies are fully repaid to the bank.
* The Phoenix Mills Limited (PML) (along with its nominee) has 100% stake in Big Apple Real Estate Private Limited (BARE) and BARE has 100% stake in Blackwood Developers Private Limited (BDPL) and UPAL Developers Private Limited (UDPL). BARE has pledged 30% of the shares of BDPL and UDPL to Kotak Mahindra Investment Limited (KMIL) and has given Non-Disposal Undertaking for balance 70% shares.
** 10,973 shares are held by a bank in their name as security.
$ The company has acquired balance 50% equity stake in Classic Mall Development Company Limited on May 05, 2022 from Crest Ventures Limited (46.35%) and Escort Developers Private Limited (3.65%) (a 100% subsidiary of Crest Ventures Limited). Accordingly, from the said date Classic Mall Development Company Limited has become wholly owned subsidiary of the Company.
Note 18.2 - Rights, preferences and restrictions attaching to each class of shares including restrictions on the distribution of dividends and the repayment of capital.
The Company has only one class of equity shares having face value of '' 2 per share. Each holder of equity shares is entitled to one vote per share. Equity shareholder are also entitled to dividend as and when proposed by the Board of Directors and approved by Share holders in Annual General Meeting. In the event of liquidation of the Company, the holder of Equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts which shall be in proportion to the number of shares held by the shareholders.
1) Capital Reserve: Capital reserve represents reserve created pursuant to the business combinations.
2) Securities Premium: Securities premium reserve represents premium received on equity shares issued, which can be utilised only in accordance with the provisions of the Companies Act, 2013 for specified purposes.
3) Share Option Outstanding Account: Reserve relates to stock options granted by the Company to employees of the group under an employee stock options plan.
4) General Reserve: General reserve is created from time to time by transferring profits from retained earnings and can be utilised for purposes such as dividend payout, bonus issue, etc.
Note : The above amount dose not include the processing fees paid at the time of borrowing taken.
20.2) Pledge as security:
1) First Pari Passu Mortgage on Undivided share of land to the extent of approximately 8279.24 sq. metres in Plot A out of total area of Plot A ad measuring approximately 21020.24 sq. metres which comprises of existing and proposed structures with BUA approximately 37535.52 sq. metres on Plot A and existing structure with BUA approximately 14737.42 sq. metres on Plot B along-with entire car parking spaces of P1, P2, and P3 levels situated above Sai Podium at Block 41/47 and entire car parking spaces of P4 and P5 levels situated above Palladium Mall at Block 34/14B.
The above is part of Larger Property situated at Phoenix Mills Compound, 462, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013, in the state of Maharashtra, India. It is hereby clarified that the security excludes -
(i) The portion of MCGM Leasehold Land admeasuring 11,811 sq. mtrs and
(ii) Plutocrat UDS in Plot A to the extent of 12,741 sq. mts.
(iii) Plot B Land (Land underneath Palladium Mall)
2) First pari-passu charge by way of hypothecation on all current assets, movables and inflows from existing & future sales, leasing, leave & license, CAM, receivables in relation to the Project.
3) First exclusive charge on DSRA in the form of a fixed deposit to be maintained with Bank, and First Pari- Passu charge on Escrow A/c and all Current a/c.
20.3) Interest is calculated on T-Bill / REPO spread / applicable margin. Average rate of Interest varies in the range of 6.55% p.a. to 8.52% p.a. ( P.Y 8.00% to 8.90%)during the FY 2023. Interest is calculated on reference rate as published by RBI applicable margin.
Expenses recognised to Defined benefits plan:
The Company provides gratuity benefit to itâs 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 recognises 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
1 Salary escalation rate is arrived after taking into account regular increment, price inflation and promotion and other relevant factors such as supply and demand in employment market.
2 Discount rate is based on prevailing market yields of Indian Government Securities as at balance sheet date for estimated terms of obligation.
3 Attrition rate/ withdrawal rate is based on companyâs policy towards retention of employees, historical data and industry outlook.
4 Expected contribution to defined benefit plans for the next financial year 2023 - 24 is '' 2 lakhs.
5 The above information is certified by actuary.
These gratuity plan typically expose to the Company to actuarial risks such as: investment risk, interest risk, longevity risk and salary risk.
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government Debt Securities. For other defined benefit plans, the discount rate is determined by reference to market yield at the end of reporting period on high quality corporate Debt Securities when there is a deep market for such Debt Securities, if the return on plan asset is below this rate, it will create a plan deficit.
A decrease in the Debt Securities interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.
The present value of the defined benefit plan liability is calculated by reference to the best estimate of mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in salary of plan participants will increase the planâs liability.
The Company is mainly engaged in real estate activities where revenue is principally derived from operating lease rental income attributable to retail outlets in its retail mall together with provision of related services, which constitutes the sole operating segment of the Company catering to Indian Customer Accordingly, the Company has only one identifiable segment reportable under Ind AS 108 - Operating Segments. Managing Director (the âChief Operational Decision Makerâ as defined in Ind AS 108) monitors the operating results of the Companyâs business for the purpose of making decisions about resource allocation and performance assessment.
The revenues from transactions with a single customer does not exceed 10 per cent or more of the Companyâs revenues.
The Company operates in a single geographical area i.e. India.
| 34. | LEAVE AND LICENSE FEES - COMPANY AS LICENSOR
The Leave and License agreements are generally for a period of 1 to 5 years. The terms also provide for escalation of License fees on a periodical basis. Generally, the Company has a right to terminate these agreements by giving advance notice as stipulated therein.
| 36. | 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 '' 4,885.46 Lakhs (PY. 1079.75 Lakhs) net of advance paid.
b The Income tax assessments of the Company have been completed up to Assessment Year 2021-22. The disputed tax demand outstanding upto the said Assessment year is '' 13,354.66 Lakhs (PY. '' 9,839.39 Lakhs).The Company as well as the Income Tax Department are in appeal before the Authorities. The impact thereof, if any, on the tax position can be ascertained only after the disposal of the appeals. Accordingly, the accounting impact if any arising there from will be considered in the year of the disposal of the said appeals. Out of the above amount, '' 4,643.86 lakhs (PY 1,543.31 lakhs) pertain to matters where ITATorders are in favour of the Company and the income tax department is in appeal before honourable High court.
c The Company has received demand on traces for TDS default for Assessment Year 2014-2015 to 2019-2020 amounting to '' 69.46 lakhs.The Company has filed an appeal before CIT (A) against the said demand. d The Company has received an order of Commissioner of GST & Central Excise from Service Tax Department, in respect of the Service Tax on renting of immovable property related matter filled by Retailers Association of India (RAI). The order seeks to recover the interest for delayed payment of service tax at an appropriate rate. The company has filed an appeal with CESTAT against the said order. The interest liability on such delayed payment of service tax shall be determined on the basis of the Supreme Court judgement on the RAI membersâ Service Tax matters, which is pending before honourable Supreme court.
e Demand notices received on account of arrears of Provident Fund dues aggregating to '' 24.72 Lakhs (PY. '' 24.72 Lakhs) are disputed by the Company. The Company has paid '' 10 Lakhs against the said P.F. Demands to the P.F. Authorities. f Outstanding guarantees given by Banks of '' 91.64 Lakhs (PY '' 105.89 Lakhs).
g As per the hotel operating agreement, PML has given unconditional and irrevocable guarantee on behalf of the Pallazzio Hotels & Leisure Ltd ( PHLL) to Starwood Hotels & Resorts India Pvt Ltd. The said guarantee is outstanding in the current year for an amount of '' 4,736.45 Lakhs and was also outstanding in the previous year for an amount of '' 5,008.40 Lakhs. h The company has committed to provide financial support to Starboard Hotels Private Limited as and when the need arises by infusing the required funds to meets its obligation of debts and other liabilities (current as well as in future). i I n Suit No. 7537 of 1981 (HC Suit No. 337 of 1981) (in the matter of Cotton Corporation of India (CCI) v/s. the Phoenix
Mills Limited (PML)), by an order dated July 04, 2018, the Bombay City Civil Court has directed PML to pay a sum of '' 79,66,142.26/- along with interest thereon. PML has challenged the said order in First Appeal No. 140 of 2019 and the same is pending for adjudication before the Honâble Bombay High Court. j I n T.E.& R. Suit No. 19 of 2009, (in the matter of Narendra Patwa vs. the Phoenix Mills Limited(PML)), by an Order dated
December 21, 2015, the Honâble Small Causes Court has ordered PML to handover the vacant possession of the godown, PML has accordingly handed over the possession. Narendra Patwa has filed Mesne Profit Application No. 287 of 2017
claiming mesne profits @ '' 3,63,608/- per month from June 09, 2008 to December 2013 and from January 01, 2014 onwards @ of '' 4,64,744/- per month together with costs and interest as the Honâble Court may order.
k The Company has created a charge, by way of mortgage, on 12,714.25 square meters of its land on Plot B for the loan taken by its subsidiary, Pallazzio Hotels and Leisure Limited (PHLL) from the banks. Loan amount outstanding for above loan at year end is '' 42,833.17 lakhs.
l Subsequent, to the year end, Good and Service Tax (GST) department has initiated Proceedings under Section 67 of MGST Act on May 19, 2023 and the department have not communicated any adverse observations till the approval of the Financial Statements. As of now, management does not foresee any significant impact of the said proceedings.
[37] âMunicipal Corporation of Greater Mumbai has raised demand of ''. 2,548.18 Lakhs (P.Y 2321.18 lakhs) towards property tax for the period April 2010 - March 2023, which was hiked by imposing value added taxes.
The company had filed a writ petition bearing number 872 of 2016 dated March 21, 2016 before the Bombay High Court challenging the property tax assessment of PML and the bills raised by MCGM from financial year 2010 and onwards. The High Court vide its order dated April 24, 2019 quashed the Capital Value Rules and allowed PML to pay 50% (fifty per cent) of the amount demanded (âInterim Orderâ). MCGM had challenged the Interim Order before the Supreme Court via Special Leave to Appeal [C] No(s). 17009 / 2019. The Hon. Supreme Court in its interim order dated July 29, 2019 granted PML interim relief to pay the property tax basis the previous Interim Order of Bombay High Court and admitted the petition. PML has, in accordance with the directions of the Hon. Supreme Court, duly made payments of the amounts specified under the Interim Order. The Supreme Court vide its order dated November 07, 2022 upheld the order passed by the Bombay High Court and disposed off the said SLP. MCGM had challenged the Order dated November 07, 2022 before the Supreme Court via Review Petition (Civil) No. 298 of 2023. The Honâble Supreme Court vide its order dated March 14, 2023 dismissed the said review petition.
| 40. | Exceptional item for the year ended March 31, 2023 refers to âAs per the sanctioned development plan of G/S Municipal Ward of Brihanmumbai Municipal Corporation (BMC) and as per the mandate / compulsion of development permission granted by BMC to the Company with regards to the land parcel owned by Company at Lower Parel, Company has surrendered the land admeasuring area of 1919.73 Square Meters which was reserved for ROS 1.4 (Play Ground) under Regulation No.32, Table 12(A) of the DCPR-2034 to BMC for free of cost vide transfer deed dated January 18, 2023. As per the Regulation No.32 Table(12A) of the DCPR-2034, MCGM has granted FSI of 4,506.17 Sqr Meters against the said surrender of the land to BMC excluding for the land area admeasuring 117.26 Square Meters. As per the requirement under Indian Accounting Standard, Company has recognized an exceptional gain of '' 4,843.99 lakhs on grant of the said FSI by MCGM against surrender of Land to BMC as per DCPR-2034 on the fair value basis.â
| 41. | In accordance with the requirement of Ind AS 24, on related party disclosure, name of related party, related party relationships, transactions and outstanding balances including commitments where control exits and with whom transactions have taken place during reported periods, are:
i) SGH Realty LLP is 50% partner in True Value infra build LLP
| 39. | During FY 2007-2008 and FY 2008-2009, Company has invested '' 4501.25 lakhs in the equity shares of Entertainment World Developers Limited (EWDL) and '' 10,000 lakhs in FCDs of Treasure world Developers Pvt. Ltd. (TWDPL), subsidiary of EWDL. 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 (on behalf of the TWDPL) has paid a part amount of '' 1,918.80 Lakhs in November 2013. Pending receipt of the balance consideration, the amount received has not been adjusted against the investments and has been shown under other liabilities. Net worth of EWDL/TWDPL has been eroded as per the latest available accounts as at March 31, 2015, thus Company had made an impairment provision of '' 8,425 lakhs in the year ended March 31, 2015, '' 2,100 lakhs in the year ended March 31, 2016 and '' 2,057.44 lakhs in the year ended March 31, 2020 against the said investments. During the current financial year, Company has written off the investment in equity shares of '' 4,501.25 lakhs in EWDL and investment in FCDs of TWDPL of '' 8,081.20 lakhs against the said provision.
Figures in brackets are pertaining to the previous year.
1 The transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions.
2 Review of outstanding balances is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. These balances are unsecured and their settlement occurs through the normal banking channel.
3 Administrative expenses paid to subsidiaries include '' 118.17 lakhs (P.Y. '' 305.00 Lakhs) paid to Marketcity Resources Private Limited towards the provision of personnel services including the four key managerial personnel.
4 As per the hotel operating agreement, PML had given unconditional and irrevocable guarantee on behalf of the Pallazzio Hotels & Leisure Ltd ( PHLL) to Starwood Hotels & Resorts India Pvt Ltd. The said guarantee is outstanding in the current year for an amount of '' 4,736.45 Lakhs and was also outstanding in the previous year for an amount of '' 5,008.40 Lakhs.
5 The Company has committed to provide financial support to Starboard Hotels Private Limited as and when the need arises by infusing the required funds to meet its obligation of debts and other liabilities (Current as well as in future).
6 The Company has created a charge, by way of mortgage, on 12,714.25 square meters of its land on Plot B for the loan taken by its subsidiary, Pallazzio Hotels and Leisure Limited (PHLL) from the banks. Loan amount outstanding for above loan at year end is '' 42,818.72 lakhs.
7 The above disclosures does not include payment of sitting fees made to Independent Directors.
8 Remuneration paid to the Managing Director and Executive Director of the Company, cumulatively exceeds the limits approved by the shareholders to the tune of '' 209.00 lakh. As per the requirements of the Companies Act, 2013, excess amount paid has been reflected as recoverable from them, in the financial statements of the Company as on March 31, 2023.
| 42. | PARTICULARS OF LOANS GIVEN INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED :
The company has complied with provision of section 186 (1) of the Companies Act 2013(âthe Actâ), with respect to investments made. The Company being infrastructure facilities provider as defined under section 186 of the said Act read with Schedule VI to the Act. Thus, the provisions of section 186 (other than clause 1) of the said Act with respect to investment, loans given, guarantees and security provided is not applicableâ.
| 43. | 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 FY 2022. The details of the Capital Accounts of the Partners as per the latest Financial Statements of the firm are as under:-
* Amount transferred to separate Unspent CSR A/c as per requirement of Companies Act 2013. Contributed '' 35.01 Lahks (PY 1,27.90 Lakhs) during the current financial year to related party and others.
The CSR unspent amount relates to ongoing projects that have been identified by the Board. The unspent amount for these ongoing projects, which spans over a period of three years, has been transferred to the âUnspent CSR Accountâ and the transferred amount shall be spent as per obligation within three financial years of the date of such transfer.
# Refer note no 41.
| 46. | FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES:
Set out below is the comparison by class of carrying amounts and fair value of Companyâs financial instruments that are recognised in the financial statements.
Note : The Financial Assets above do not include investments in subsidiaries which are carried at cost in terms of the option available in Ind AS 27 âSeparate Financial Statementsâ.
The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.
The following methods and assumptions were used to estimate the fair values
1 Fair value of the Quoted Equity Shares are based on price of equity share on stock exchange.
2 Fair value of the Mutual funds, debt securities and listed preferences shares are based on NAV price.
3 Fair value of unquoted equity shares and Compulsory Convertible Debentures is Fair value under level 3 of hierarchy.
4 Fair value of Long term Borrowings is calculated based on discounted cash flow.
5 Fair value of Financial Assets & Financial Liability (except Long term Borrowings) are carried at amortised cost and is not materially different from itâs carrying cost.
The following table provides the fair value measurement hierarchy of Companyâs asset and liabilities, grouped into Level 1 to Level 3 as described below:
Level 1: Quoted prices / published NAV (unadjusted) in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Fair value of the financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the Company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2
Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
The Company is exposed to very minimum foreign exchange risk.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk pertaining to funds borrowed at floating interest rates.
Almost 100% of the Companyâs borrowings are linked to BR Margin. With all other variables held constant, the following table demonstrates the impact of change in interest rate on borrowing cost on floating rate portion of loans.
| 47. | FINANCIAL RISK MANAGEMENT:
The Companyâs activities expose it to credit risk, liquidity risk and market risk. This note explains the sources of risks which the entity is exposed to and how it mitigates that risk.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings and investments in securities.
Commodity and Other price risk
The Company is not exposed to the commodity and other price risk.
Credit risk is the risk of financial loss to the Company that a customer or counter party to a financial instrument fails to meet its obligations. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, mutual funds, financial institutions and other financial instruments.
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. To manage credit risk, the Company periodically assesses the financial reliability of the customer, taking into account the financial condition, current economic trends, and analysis of historical bad debts and aging of accounts receivables. Outstanding customer receivables are regularly monitored to make an assessment of recoverability. Receivables are provided as doubtful / written off, when there is no reasonable expectation of recovery. Where receivables have been provided / written off, the Company continues regular followup , engage with the customers, legal options / any other remedies available with the objective of recovering these outstanding.
The Company is not exposed to concentration of credit risk to any one single customer since services are provided to vast spectrum. The Company also takes security deposits, advances , post dated cheques etc from its customers, which mitigate the credit risk to an extent.
Cash and cash equivalents and other investments
The Company is exposed to counter party risk relating to medium term deposits with banks, mutual fund and debt securities.
The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings.
The Company is required to maintain ratios (such as debt service coverage ratio and secured coverage ratio) as mentioned in the loan agreements at specified levels and also cash deposits with banks to mitigate the risk of default in repayments. In the event of any failure to meet these covenants , these loans become callable to the extent of failure at the option of lenders, except where exemption is provided by lender.â
The primary objective of the Companyâs capital management is to maximise the shareholder value. The Companyâs primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Companyâs ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31, 2023 and March 31, 2022. For the purpose of the Companyâs capital management, capital includes issued capital, share premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings less cash and short term deposits.
Cash and Cash equivalents, other Investments, Loans and other financial assets are neither past due nor impaired. Management is of the view that these financial assets are considered good and 12 months ECL is, accordingly, not provided.
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.
âThe Companyâs objective is to maintain at all time optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its needs for funds. The current borrowings are sufficient to meet its short to medium term expansion needs. Management monitors the Companyâs net liquidity position through rolling forecasts on the basis of expected cash flows.
| 50. | SHARE-BASED PAYMENT ARRANGEMENTS:
A. Description of share-based payment arrangements i. Share option programmes (equity-settled)
The Company has granted stock options under the following employee stock option scheme:
1. 33,90,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2007. During the year 49,250 Equity Shares have been issued and allotted to the eligible employees against exercise of Options under ESOP 2007.
2. 31,00,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2018. During the year 40,278 Equity Shares have been issued and allotted to the eligible employees against exercise of Options under ESOP 2018.
Each option when exercised would be converted into one fully paid-up equity share of '' 2 each of the Company. The options granted under ESOP 2007 and options granted under the ESOP 2018 scheme carry no rights to dividends and no voting rights till the date of exercise.
i. Equity-settled share-based payment arrangements
The fair value of the employee share options has been measured using the Black-Scholes formula. Service and nonmarket performance conditions attached to the arrangements were not taken into account in measuring fair value.
The requirement that the employee has to save in order to purchase shares under the share purchase plan has been incorporated into the fair value at grant date by applying a discount to the valuation obtained. The discount has been determined by estimating the probability that the employee will stop saving based on historical behaviour
| 52. | ADDITIONAL REGULATORY INFORMATION REQUIRED BY SCHEDULE III
i) Details of benami property held -
No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
ii) Borrowing secured against current assets
Filing of Quarterly returns / stock statements with HDFC Bank Limited, Kotak Mahindra Bank Limited and HSBC India are not applicable to PML loan facilities and hence, reporting Quarterly return/statements reconciliation with books of accounts is not applicable.
iii) Wilful defaulter
Company have not been declared wilful defaulter by any bank or financial institution or government or any government authority.
iv) Relationship with struck off companies
The company has no transactions with companies struck off under Companies Act, 2013 or Companies Act, 1956.
v) Registration of charges or satisfaction with Registrar of Companies
All the charges created or satisfied during the year was registered with registrar of companies within the due time. Further, charges open at MCA Portal amounting of '' 402.60 lakhs for old periods are closed and intimated to MCA to remove the same.
vi) Compliance with number of layers of companies
The company has complied with the number of layers prescribed under the Companies Act, 2013.
vii) Compliance with approved scheme(s) of arrangements
The company has not entered into any scheme of arrangement which has an accounting impact on current financial year. During the previous year the scheme of Amalgamation has came into effective and accordingly the effect of the same have been accounted in the book of the company in accordance with the scheme & in accordance with the Indian accounting standard 103 âBusiness Combinationsâ.
viii) Undisclosed Income
The company has not surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
ix) Details of crypto currency or virtual currency
The company has not traded or invested in crypto currency or virtual currency during the current or previous year.
x) Valuation of PP&E, intangible asset and investment property
The company has not revalued its property, plant and equipment or Investment Properties (including right-of-use assets) or intangible assets during the current or previous year (refer note no 6).
xi) Utilisation of borrowed funds, equity and Share premium
The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were taken.
| 56. | The Board of Directors have recommended a final dividend of '' 5/- (250 %) per equity share of '' 2/- each subject to shareholders approval at the ensuing annual general meeting.
Mar 31, 2022
i. The Company''s investment properties consists of Retail Mall and Commercial properties in India. The Management has determined that the investment properties consist of One class of asset - Retail Mall - based on the nature, characteristics and risks of each property.
Refer note 37 (a) for disclosure of contractual commitments for the acquisition of investment properties
No borrowing costs were capitalised during the current year and previous year.
*Freehold Land & building and Building included in Capital work in progress are Secured by Registered Mortgage in respect of certain immovable properties situated at High Street Phoenix, Senapati bapat marg, Lower Parel, Mumbai and hypothecation of rentals receivable from licencees on pari pasu basis against the borrowings. (Refer Note. 20 & 23)
v. The Company''s investment properties consist of Retail Mall which has been determined based on the nature, characteristics and risks of each property. As at 31 March 2022 and 31 March 2021, the fair values of the properties are C 4,56,910.00 lakhs and C 4,26,871.40 Lacs respectively.
The fair value of investment property has been determined by external, independent registered property valuers, having appropriate recognised professional qualification and recent experience in the location and category of the property being valued. A valuation model in accordance with that recommended by the international valuation standards committee had been applied. The Company obtains independent valuations for its investment properties annually and fair value measurement has been categorised as Level 3. The fair value has been arrived using discounted cash flow projections based on reliable estimates of future cash flows considering growth in rental of 5% (31 March 2021: 5%) and discount rate of 12.35% (31 March 2021: 12.35%).
@ 51% shares of Island Star Mall Developers Private Limited, 51% shares of Destiny Retail Mall Developers Private Limited, 50% shares of Classic Mall Development Company Limited, 30% shares of Pallazzio Hotels & Leisure Limited (PHLL) (Pledge), 50.01% shares of Graceworks Realty & Leisure Private Limited and 100% shares of Alliances Spaces Private Limited are held subject to a non-disposal undertaking to the lender bank/Trustee stating that it shall not dispose / transfer /pledge /encumber these shares owned/held in the company without prior consent from lender until the loans taken by these companies are fully repaid to the bank.
*The Phoenix Mills Limited (PML) (along with its nominee) has 100% stake in Big Apple Real Estate Private Limited (BARE) and BARE has 100% stake in Blackwood Developers Private Limited (BDPL) and UPAL Developers Private Limited (UDPL). BARE has pledged 30% of the shares of BDPL and UDPL to Kotak Mahindra Investment Limited (KMIL) and has given Non-Disposal Undertaking for balance 70% shares.
In PHLL, after conversion of CCD''s, 15% shareholding of the Company & 15% shareholding of ABIPL in the PHLL should be pledged.
** 10,973 shares are held by a Bank in their name as security
The Company has only one class equity shares having face value of C 2 per share. Each holder of equity shares is entitled to one vote per share. Equity shareholder are also entitled to dividend as and when proposed by the Board of Directors and approved by Share holders in Annual General Meeting. In the event of liquidation of the company, the holder of Equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts which shall be in proportion to the number of shares held by the shareholders.
1) Capital Reserve: Capital reserve represents reserve created pursuant to the business combinations upto year end.
2) Securities Premium: Securities Premium represents premium received on equity shares issued, which can be utilised only in accordance with the provisions of the Companies Act, 2013 for specified purposes.
3) Share Option Outstanding Account: Reserve relates to stock options granted by the Company to employees of the Group under an employee stock options plan.
4) General Reserve: General reserve is created from time to time by transferring profits from retained earnings and can be utilised for purposes such as dividend payout, bonus issue, etc.
20.2) In terms of the Reserve Bank of India (RBI) circular of March 2020, the Company in the previous year had requested its lenders for rescheduling instalments falling due between 1st March, 2020 and 31st August, 2020 (the moratorium period). The Company had received acceptance from all its lenders, for granting the moratorium and shifting the repayment schedule for such loans as also the residual tenure by six months. The Company had accordingly classified its loan liabilities into non-current liabilities and current liabilities.
20.3) Interest is calculated on MCLR applicable margin. Average rate of Interest varies in the range of 8.00% p.a. to 8.90% p.a. during the FY 2021-22 Interest is calculated on reference rate as published by RBI applicable margin.
Note 32 Disclosure as per Ind As - 19 âEmployee Benefitsâ.
(A) Expenses recognised for Defined Contribution Plan:
Employer''s Contribution to Provident and Pension Fund C 32.84 Lakhs (PY C 24.70 Lakhs).
Employer''s Contribution to ESIC C 0.37 Lakhs (PY C 0.33 Lakhs)
The Company makes contributions towards provident fund and pension fund for qualifying employees to the Regional Provident Fund Commissioner.
(B) Expenses recognised 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.
1. Salary escalation rate is arrived after taking into account regular increments, price inflation and promotion and other relevant factors such as supply and demand in employment market.
2. Discount rate is based on prevailing market yields of Indian Government Securities as at balance sheet date for estimated term of obligations.
3. Attrition rate/ withdrawal rate is based on Company''s policy towards retention of employees, historical data and industry outlook.
4. Expected contribution to defined benefit plans for financial year 2022-23 is C 2/- Lakhs (P.Y. C 2/- Lakhs).
5. The above information is certified by actuary.
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. For other defined benefit plans, the discount rate is determined by reference to market yield at the end of reporting period on high quality corporate bonds when there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit.
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
Contingent License Fees comprising of Revenue Share income (computed as a % of sales) charged to the Licensees during the year is C 2,565.91 Lakhs (P.Y. C 3,441.22 Lakhs)
Figures mentioned in above table are as per Leave and License Agreements with Licenses and this excludes any concession given or may be given (Refer Note 47)
In accordance with the requirement of Ind AS 24, on related party disclosure, name of related party, related party relationships, transactions and outstanding balances including commitments where control exits and with whom transactions have taken place during reported periods, are:
The Company is mainly engaged in real estate activities where revenue is principally derived from operating lease rental income attributable to retail outlets in its retail mall together with provision of related services, which constitutes the sole operating segment of the company catering to Indian Customer Accordingly, the Company has only one identifiable segment reportable under Ind AS 108 - Operating Segments. Managing Director (the ''Chief Operational Decision Maker'' as defined in Ind AS 108) monitors the operating results of the company''s business for the purpose of making decisions about resource allocation and performance assessment.
The revenues from transactions with a single customer does not exceed 10 per cent or more of the company''s revenues.
The Company operates in a single geographical area i.e. India.
Note 34 Leave and License Fees - Company as Licensor
The Leave and License agreements are generally for a period of 1 to 5 years. The terms also provide for escalation of License fees on a periodical basis. Generally, the company has a right to terminate these agreements by giving advance notice as stipulated therein.
2 Review of outstanding balances is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. These balances are unsecured and their settlement occurs through the normal banking channel.
3 Administrative expenses paid to subsidiaries include C 305.00 Lakhs (P.Y. C 655.00 Lakhs) paid to Marketcity Resources Private Limited towards the provision of personnel services including the four key managerial personnel.
4 As per the hotel operating agreement, PML had given unconditional and irrevocable guarantee on behalf of the Pallazzio Hotels & Leisure Limited (PHLL). The said guarantee is outstanding in the current year and was also outstanding in the previous year. Further, the company has also committed to support PHLL as and when the need arises by infusing the required funds.
5 The Company has committed to provide financial support Starboard Hotels Private Limited and Pinnacle Real Estate Development Company Private Limited as and when the need arises by infusing the required funds to meet its obligation of debts and other liabilities (Current as well as in future).
6 The above disclosures does not include payment of sitting fees made to independent Directors.
Note 37 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 C 1079.75 Lakhs (P.Y. C 620.94 Lakhs) net of advance paid.
b The Income tax assessments of the Company have been completed up to Assessment Year 2018-19. The disputed tax demand outstanding upto the said Assessment year is C 9,839.39 Lakhs (P.Y. C 8,205.83 Lakhs).
The Company as well as the Income Tax Department are in appeal before the 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 Company has received an order of Commissioner of GST & Central Excise from Service Tax Department, in respect of the Retailers Association of India (RAI) related matter. The order seeks to recover the interest for delayed payment of service tax at an appropriate rate. The company has filed an appeal with CESTAT against the said order. The interest liability on such delayed payment of service tax shall be determined on the basis of the Supreme Court judgement on the RAI members'' Service Tax matters, which is pending.
d Demand notices received on account of arrears of Provident Fund dues aggregating to C 24.72 Lakhs (P.Y. C 24.72 Lakhs) are disputed by the Company. The Company has paid C 10 Lakhs and has also furnished a Bank Guarantee for C 14.72 Lakhs against the said P.F. demands to the P.F. authorities.
e Outstanding guarantees given by Banks of C 105.89 Lakhs (P.Y. C 285.89 Lakhs).
f As per the hotel operating agreement, PML had given unconditional and irrevocable guarantee on
behalf of the Pallazzio Hotels & Leisure Limited (PHLL). The said guarantee is outstanding in the current year for an amount of C 5,008.40 Lakhs and was also outstanding in the previous year for an amount of C 5,280.35 Lakhs. Further, the company has also committed to support PHLL as and when the need arises by infusing the required funds.
g The Company has committed to provide financial support Starboard Hotels Private Limited and Pinnacle Real Estate Development Company Private Limited as and when the need arises by infusing the required funds to meet its obligation of debts and other liabilities (Current as well as in future).
h The above litigations in "bâ, "câ and "dâ are not expected to have any material adverse effect on the financial position of the company.
Municipal Corporation of Greater Mumbai has raised demand of C 2321.18 Lakhs (PY 2,094.17) towards property tax for the period April 2010 - March 2022, which was hiked by imposing value added taxes. The said Order by the MCGM for value added taxes and the Constitutional Validity was challenged by the Company before the High Court Mumbai, wherein the High Court was pleased to pass an interim Order directing the Company to pay 50% of the invoice amount raised by MCGM.
On the matter being finally heard Mumbai High Court passed a Judgement upholding the payment of 50% demand of property tax to be paid by the company vide its judgement dated 24th April 2019, and dismissed our prayer which sought the Constitutional validity of imposing value added taxes by the MCGM. MCGM has filed Special Leave Petition in Supreme Court challenging part of the Order i.e. the deposit of 50% of invoice payment and the Company has filed an Application for being impleaded as a party in the said Special Leave Petition filed before the Supreme Court. Pending outcome of the matter Company has provided full amount of demand in the books on conservative basis.
The Company has created a charge, by way of mortgage, on 12,714.25 square meters of its land on Plot B 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 carries, as at the year end, Investments of C 4,501.25 lakhs in the equity shares of Entertainment World Developers Limited (EWDL), C 10,000 lakhs in FCDs of Treasure world Developers Pvt. Ltd. (TWDPL), subsidiary of EWDL and interest accrued thereon, upto 31-03-2012, of C 1,432.51 lakhs (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 C 1,918.80 Lakhs 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 liability. The Networth of EWDL/TWDPL has been eroded as per latest available unaudited accounts as at 31-03-2015. The Company''s Board had made an impairment provision of C 2,100 Lakh in the year ended 31st March 2016 and C 8,425 Lakh for the year ended 31st March 2015. The Company had initiated legal proceedings in High Court of Mumbai to set aside the transfer of certain asset by EWDL and TWDPL after commencement of Winding up proceedings. The company has, out of abundant caution and as a prudent practice in line with the standard accounting practices, now made a further provision in respect of the above, during the financial year under report, thereby fully providing for the diminution in the value of these Investments.
a) During the current year, the company has sold its investment in three wholly Owned Subsidary (Offbeat Developers Pvt. Ltd. (ODPL), Vamona Developers Private Limited (VDPL) and Plutocrate Commercial Real Estate Private Limited (PCREPL) formerly known as Plutocrate Asset & Capital Management Company Private Limited) for C 29,694.67 Lakhs in total resulting in profit of C 23,309.09 Lakhs.
b) During the previous year, the company had sold commercial units of Centrium and Art Guild House including Furniture & Fit outs to Wholly Owned Subsidiary (Offbeat Developers Pvt. Ltd.) for consideration of C 31,002.58 Lakhs, having Carrying Value of C 22,285.84 Lakhs resulting in profit of C 8,716.75 Lakhs. Also sold of various parcel of land / lease rights (lying as CWIP) to Wholly Owned subsidiary (Plutocrate Commercial Real Estate Pvt. Ltd.formerly known as Plutocrate Asset & Capital Management Company Private Limited) for consideration of C 31,000 Lakhs, having Carrying Value of C 14,985.28 Lakhs, resulting in profit of C 16,014.72 Lakhs. As per the terms of agreement, the amounts are payable within 1 year from the date of transaction and the same amount has been realised.
Particulars of loans given, investments made, guarantees given and securities provided
The Company has complied with provisions of Section 186(1) of the Act with respect to investments made. The
Company, being infrastructure facilities provider as defined under Section 186 of the Act read with Schedule VI
to the Act, the provisions of Section 186 (Other than clause 1) of the Act with respect to investment, loans given,
guarantees and security provided are not applicable.â
Additional information as required under the Companies Act, 2013:
The Company''s Mall operations have been partially impacted during initial months of the Financial year 2021-22 due to Covid -19 induced restrictions. However, due to varied measures including vaccination at large & the subsequent easing of the covid restrictions, the Company has witnessed a significant recovery in the footfalls and consumptions during the later part of the year. For the recognition of the revenues from mall operations, the management has considered concessions/reliefs on the lease rentals extended to its Licensees for the period impacted due to Covid-19 induced lockdowns and some further period considering the extended impact of pandemic.
In preparation of these financial statement, the Company has considered internal and external sources of information to assess the extended impact of Covid-19 pandemic, including but not limited to assessment of liquidity and going concern, recoverable values of its financial and non-financial assets. Accordingly, the Company as at the date of approval of financial statement and based on current estimates, expects to recover carrying amounts of the assets including trade receivables as at 31.3.2022. The extended impact of Covid-19 pandemic may be different from that estimated as at the date of approval of these financial results and the company will continue to monitor any material changes to future economic conditions.
Note 49 Corporate Social Responsibility:
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 C 332.13 Lakhs (P.Y. C 345.68 Lakhs).
The Company has accounted for its share of loss amounting to C 2.53 Lakhs (P.Y.C 2.20 Lakhs) pertaining to the financial year 2020-21 in the 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 firm.
Will be transferred to separate Unspend CSR A/c as per requirement of our above C 332.13 Lakhs (PY 345.68 Lakhs). Contributed C 127.90 Lahks (PY 90.00 Lakhs) during the current financial year to related party.
*The CSR unspent amount relates to ongoing projects that have been identified by the Board. The unspent amount for these ongoing projects, which spans over a period of three years, has been transferred to the "Unspent CSR Accountâ and the transferred amount shall be spent as per obligation within three financial years of the date of such transfer.
The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.
The following methods and assumptions were used to estimate the fair values
1 Fair value of the Equity Shares are based on price quoted on stock exchange.
2 Fair value of unquoted equity shares and CCD''s is Fair value under level 3 of hierarchy, Equity share in EWDL of C 4,501.25 Lakhs & NCD of C 10,000 Lakhs in TWDPL which are fully provided (Refer Note 42). Except same other CCD not being material carrying value is considered FV.
3 Fair value of Long term Borrowings is calculated based on discounted cash flow.
4 Fair value of Financial Assets & Financial Liability(except Long term Borrowings) are carried at amortised cost and is not materially different from it''s carrying cost.
The following table provides the fair value measurement hierarchy of Company''s asset and liabilities, grouped into Level 1 to Level 3 as described below:
Level 1: Quoted prices / published NAV (unadjusted) in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Fair value of the financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2
Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Note 52 Financial risk Management:
The Company''s activities expose it to credit risk, liquidity risk and market risk. This note explains the sources of risks which the entity is exposed to and how it mitigates that risk.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings and investments in securities.
The Company is exposed to insignificant foreign exchange risk as at the respective reporting dates.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk pertaining to funds borrowed at floating interest rates.
Almost 100% of the company''s borrowings are linked to BR Margin. With all other variables held constant, the following table demonstrates the impact of change in interest rate on borrowing cost on floating rate portion of loans.
The Company is not exposed to the comodity and other price risk.
Credit risk is the risk of financial loss to the Company that a customer or counter party to a financial instrument fails to meet its obligations. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, mutual funds, financial institutions and other financial instruments.
Trade and other receivables:
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. To manage credit risk, the Company periodically assesses the financial reliability of the customer, taking into account the financial condition, current economic trends, and analysis of historical bad debts and aging of accounts receivables. Outstanding customer receivables are regularly monitored to make an assessment of recoverability. Receivables are provided as doubtful / written off, when there is no reasonable expectation of recovery. Where receivables have been provided / written off, the Company continues regular followup, engage with the customers, legal options / any other remedies available with the objective of recovering these outstandings.
The Company is not exposed to concentration of credit risk to any one single customer since services are provided to vast specturm. The Company also takes security deposits, advances, post dated cheques etc from its customers, which mitigate the credit risk to an extent.â
The Company is exposed to counter party risk relating to medium term deposits with banks. The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings.
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.
The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its needs for funds. The current borrowings are sufficient to meet its short to medium term expansion needs. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
Note 53 Capital management
The primary objective of the Company''s capital management is to maximize the shareholder value. The Company''s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company''s ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31, 2022 and March 31, 2021.
Note 55 Share-based payment arrangements:
A. Description of share-based payment arrangements i. Share option programmes (equity-settled)
The Company has granted stock options under the following employee stock option scheme:
1. 33,90,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2007. During the year 3,78,250 Equity Shares have been issued and allotted to the eligible employees against exercise of Options under ESOP 2007.
2. 31,00,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2018. During the year Nil Equity Shares have been issued and allotted to the eligible employees against exercise of Options under ESOP 2018.
The Scheme of Amalgamation ("Schemeâ) under section 230 to 232 of the Companies Act, 2013 for merger of the company''s Subsidary, Phoenix Hospitality Company Private Limited ("PHCPLâ), with the Company, from the Appointed Date 1st April, 2019, has been approved by the Hon''ble National Company Law Tribunal ("NCLTâ) vide their Order dated 21st December, 2021, which has become effective on 11th January, 2022. The effect of the said merger had, accordingly, been accounted for in the current financial year 2021-22.
Pursuant to the scheme being approved by NCLT, 10,00,000 shares held by the Company in PHCPL stood cancelled and 62,70,000 shares of C 2/- each of the Company allotted at par to the shareholders of the transferor company in the ratio of 6.27 equity shares for every 1 equity shares held in PHCPL. Above has resulted in increase in paid up equity share capital by C 1,25,40,000/- and recognition of Retained Earnings of C (217.89) Lakhs.
The shares issued to the shareholders of the transferor company pursuant to the said Scheme was shown under Equity share suspense account for previous reporting period and accordingly were considered while calculating earnings per share (EPS) for the previous reporting periods as per Indian Accounting Standard (Ind AS 33 "Earning per Shareâ). The said shares have now been allotted during the year ended 31st March, 2022.
The figures of the previous periods have been adjusted to give the effect of the Scheme from its appointed date i.e. from 1st April, 2019.
i) Details of benami property held -
No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
ii) Borrowing secured against current assets
The Company is not obligated to file Quarterly return/statements with HDFC Bank Limited, Kotak Mahindra Bank Limited and HSBC India, hence reporting Quarterly return/statements reconciliation with books of accounts is not applicable.
iii) Wilful defaulter
Company have not been declared wilful defaulter by any bank or financial institution or government or any government authority.
v) Compliance with number of layers of companies
The company has complied with the number of layers prescribed under the Companies Act, 2013.
vi) Compliance with approved scheme(s) of arrangements
During the year the scheme of Amalgamation has came into effective and accordingly the effect of the same have been accounted in the book of the company in accordance with the scheme & in accordance with the Indian accounting standard 103 Business Combinations. (Refer note 56)
vii) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
viii) Details of crypto currency or virtual currency
The company has not traded or invested in crypto currency or virtual currency during the current or previous year.
ix) Valuation of PP&E, intangible asset and investment property
The company has revalued its property, plant and equipment or Investment Properties (including right-of-use assets) or intangible assets or all during the current or previous year.
Note 61 Events Occurring after the reporting period
The Phoenix Mills Limited (''the Company'') owns 50% in Classic Mall Development Company Limited (CMDCL) and the balance 50% was owned by Crest Ventures Ltd. (46.35%) and Escort Developers Pvt. Ltd. (3.65%). The company has acquired balance 50% equity stake in CMDCL on May 05, 2022 from Crest Ventures Limited (46.35%) and Escort Developers Private Limited (3.65%) (a 100% subsidiary of Crest Ventures Limited). Accordingly, from the said date CMDCL has become wholly owned subsidiary of the Company, and the same is an non adjusting event.
Mar 31, 2021
1) Capital Reserve: Capital reserve represents reserve created pursuant to the business combinations upto year end.
2) Securities Premium: Securities premium reserve represents premium received on equity shares issued, which can be utilised only in accordance with the provisions of the Companies Act, 2013 for specified purposes.
3) Share Based Payment Reserve: Reserve relates to stock options granted by the Group to employees under an employee stock options plan.
4) General Reserve: General reserve is created from time to time by transferring profits from retained earnings and can be utilised for purposes such as dividend payout, bonus issue, etc.
18.2) In terms of the Reserve Bank of India (RBI) circular of March 2020, the Company in the previous year had requested its lenders for rescheduling instalments falling due between 1st March, 2020 and 31st August,
2020 (the moratorium period). The Company had received acceptance from all its lenders, for granting the moratorium and shifting the repayment schedule for such loans as also the residual tenure by six months. The Company had accordingly classified its loan liabilities into non-current liabilities and current liabilities.
18.3) Interest is calculated on MCLR applicable margin. Average rate of Interest varies in the range of 8.90% p.a. to 780% p.a. during the FY 2020-21
Employer''s Contribution to Provident and Pension Fund '' 24.70 Lakhs (PY '' 31.41 Lakhs).
Employer''s Contribution to ESIC '' 0.33 Lakhs (PY '' 0.50 Lakhs)
The Company makes contributions towards provident fund and pension fund for qualifying employees to the Regional Provident Fund Commissioner.
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.
1. Salary escalation rate is arrived after taking into account regular increments, price inflation and promotion and other relevant factors such as supply and demand in employment market.
2. Discount rate is based on prevailing market yields of Indian Government Securities as at balance sheet date for estimated term of obligations.
3. Attrition rate/ withdrawal rate is based on Company''s policy towards retention of employees, historical data and industry outlook.
4. Expected contribution to defined benefit plans for financial year 2021-22 is ''2/- Lakhs (PY ''10/- Lakhs).
5. The above information is certified by actuary.
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. For other defined benefit plans, the discount rate is determined by reference to market yield at the end of reporting period on high quality corporate bonds when there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit.
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
31 The Company is mainly engaged in real estate activities where revenue is principally derived from operating lease rental income attributable to retail outlets in its retail mall together with provision of related services, which constitutes the sole operating segment of the company catering to Indian Customer Accordingly, the Company has only one identifiable segment reportable under Ind AS 108 - Operating Segments. Managing Director (the ''Chief Operational Decision Maker'' as defined in Ind AS 108) monitors the operating results of the company''s business for the purpose of making decisions about resource allocation and performance assessment.
The revenues from transactions with a single customer does not exceed 10 per cent or more of the company''s revenues.
The Company operates in a single geographical area i.e. India
32 LEAVE AND LICENSE FEES - COMPANY AS LICENSOR
The Leave and License agreements are generally for a period of 1 to 5 years. The terms also provide for escalation of License fees on a periodical basis. Generally, the company has a right to terminate these agreements by giving advance notice as stipulated therein.
Contingent License Fees comprising of Revenue Share income (computed as a % of sales) charged to the Licensees during the year is '' 3,441.22 Lakhs (PY '' 2,537.83 Lakhs)
Figures mentioned in above table are as per Leave and License Agreements with Licenses and this excludes any concession given or may be given (Refer Note 45)
33 In accordance with the requirement of Ind AS 24, on related party disclosure, name of related party, related party relationships, transactions and outstanding balances including commitments where control exits and with whom transactions have taken place during reported periods, are:
1 The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions.
2 Review of outstanding balances is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. These balances are unsecured and their settlement occurs through the normal banking channel.
3 Administrative expenses paid to subsidiaries include ''655.00 Lakhs (P.Y. ''775.00 Lakhs) paid to Marketcity Resources Private Limited towards the provision of personnel services including two of the key managerial personnel.
4 As per the hotel operating agreement, PML had given unconditional and irrevocable guarantee on behalf of the Pallazzio Hotels & Leisure Limited (PHLL). The said guarantee is outstanding in the current year and was also outstanding in the previous year. Further, the company has also committed to support PHLL as and when the need arises by infusing the required funds.
5 The Company has committed to provide financial support Starboard Hotels Private Limited and Pinnacle Real Estate Development Company Private Limited as and when the need arises by infusing the required funds to meet its obligation of debts and other liabilities (Current as well as in future).
35 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 '' 620.94 Lakhs (PY ''1,361.29 Lakhs) net of advance paid.
b "The Income tax assessments of the Company have been completed up to Assessment Year 2018-19. The disputed tax demand outstanding upto the said Assessment year is '' 8,205.83 Lakhs (PY '' 5,176.05 Lakhs).
The Company as well as the Income Tax Department are in appeal before the 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.â
c The Company has received an order of Commissioner of GST & Central Excise from Service Tax Department, in respect of the Retailers Association of India (RAI) related matter. The order states to recover the interest for delayed payment of service tax at an appropriate rate. The company has filed an appeal with CESTAT against the said order. The interest liability on such delayed payments of service tax shall be determined on the basis of the Supreme Court judgement on the RAI Parties Service Tax matter, which is pending.
d Demand notices received on account of arrears of Provident Fund dues aggregating to '' 24.72 Lakhs (PY '' 24.72 Lakhs) are disputed by the Company. The Company has paid '' 10 Lakhs under protest and has also furnished a Bank Guarantee for '' 14.72 Lakhs against the said P.F. demands to the P.F. authorities. The matter is pending with P.F. authorities.
e Outstanding Bank Guarantees/ Letter of credit given by Banks of ''285.89 Lakhs (PY '' 0.45 Lakhs).
f "Other claims against the company not acknowledged as debts of '' Nil (PY '' Nil) (Excluding matters pending in courts for which amount cannot be ascertained).
Note - Company has been advised that probablity of crystalising the liability against the company is less than likely.â
g The above litigations in "bâ, "câ and "dâ are not expected to have any material adverse effect on the financial position of the company.
36 Municipal Corporation of Greater Mumbai has raised demand of '' 2,094.17 Lakhs towards property tax for the period April 2010 - March 2021, which was hiked by imposing value added taxes. The said Order by the MCGM for value added taxes and the Constitutional Validity was challenged by the Company before the High Court Mumbai, wherein the High Court was pleased to pass an interim Order directing the Company to pay 50% of the invoice amount raised by MCGM.
On the matter being finally heard Mumbai High Court passed a Judgement upholding the payment of 50% demand of property tax to be paid by the company vide its judgement dated 24th April 2019, and dismissed our prayer which sought the Constitutional validity of imposing value added taxes by the MCGM.
MCGM has filed Special Leave Petition in Supreme Court challenging part of the Order i.e. the deposit of 50 % of invoice payment and the Company has filed an Application for being impleaded as a party in the said Special Leave Petition filed before the Supreme Court. Pending outcome of the matter Company has provided full amount of demand in the books on conservative basis.â
i) Butala Farm Lands Private Limited is having investment in equity shares of fellow subsidiary company -Vamona Developers Private Limited.
ii) Phoenix Hospitality Co. Private Limited is having investments in equity shares of fellow Subsidiaries -Alliance Spaces Private Limited, Palladium Constructions Private Limited and Graceworks Realty & Leisure Private Limited as well as in the Associate company - Starboard Hotels Private Limited.
iii) SGH Realty LLP is 50% partner in True Value LLP
39 The Company has created a charge, by way of mortgage, on 17,853.12 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 FSI rights of 2/3rd portion out of freehold land of 12,714.25 square meters of the said land to PHLL for the construction of a hotel, vide a Development Agreement dated 30th March 2007 The conveyance of the said portion of freehold Land admeasuring 8,547 sqmt, in favour of PHLL, is executed on 31st December, 2020.
40 a) The Company carries, as at the year end, Investments of ''4,501.25 lakhs in the equity shares of
Entertainment World Developers Limited (EWDL), ''10,000 lakhs in FCDs of Treasure world Developers Pvt. Ltd. (TWDPL), subsidiary of EWDL and interest accrued thereon, upto 31-03-2012, of ''1,432.51 lakhs (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 ''1,918.80 Lakhs 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 liability. The Networth of EWDL/TWDPL has been eroded as per latest available unaudited accounts as at 31-03-2015. The Company''s Board had made an impairment provision of ''2,100 Lakh in the year ended 31st March 2016 and ''8,425 Lakh for the year ended 31st March 2015. The Company had initiated legal proceedings in High Court of Mumbai to set aside the transfer of certain asset by EWDL and TWDPL after commencement of Winding up proceedings. The company has, out of abundant caution and as a prudent practice in line with the standard accounting practices, now made a further provision in respect of the above, during the financial year under report, thereby fully providing for the diminution in the value of these Investments.
The same has been shown as an Exceptional Item [Refer Note No. 40 b].
b) Exceptional items include : (i) Provision for diminution of ''2,05745 lakhs on the equity investments in Entertainment World Developers Ltd and fully convertible debentures of Treasure World Developers Pvt. Ltd.; (ii) Write off of interest accrued of '' 1,432.51 lakhs on the above debentures; (iii) Provision of doubtful loans of '' 1,535.20 Lakhs (including '' 1,293.22 lakhs given to a subsidiary); and (iv) Claim Settlement of '' 4,900 lakhs (details given hereunder) in a suit for damages filed by Company.
c) The Company had filed a suit for damages against certain parties in FY 18-19 which has been settled during the year under review. The Hon''ble High Court at Bombay has passed a consent decree for '' 6,500 lakhs in favour of the Company as per the Consent Terms agreed between the parties for settling the said suit. The Defendants/Respondents in the said suit had paid to the Company, an amount of '' 1,000 lakhs
upon the passing of the consent decree and undertaken to pay a further amount of '' 3,900 lakhs on or before expiry of one year from the date of passing of the said decree, upon due payment of which, the consent decree shall be marked as fully satisfied. In accordance with the terms of the consent decree, the defendent/Respondent have made payment of '' 3,900 Lakhs in FY 2020-21 in full and the decree accordindly stands discharged.
Also, the entire claim settlement amount of '' 4,900 lakhs is treated as Capital Receipt (not taxable) based on available judgements with the Company and based on obtained written opinion from renowned tax expert.
42 The company has sold commercial units of Centrium and Art Guild House including Furniture & Fit outs to Wholly Owned Subsidiary (Offbeat Developers Pvt. Ltd.) for consideration of Rs. 31,002.58 Lakhs, having Carrying Value of Rs. 22,285.84 Lakhs resulting in profit of Rs. 8,716.75 Lakhs. Also sold of various parcel of land / lease rights (lying as CWIP) to Wholly Owned subsidiary (Plutocrate Commercial Real Estate Pvt. Ltd.) for consideration of Rs. 31,000 Lakhs, having Carrying Value of Rs.14,985.28 Lakhs, resulting in profit of Rs. 16,014.72 Lakhs. As per the terms of agreement, the amounts are payable within 1 year from the date of transaction and amount is yet to be realised.
43 Additional information as required as required u/s 186(4) of Companies Act, 2013 :
a Investment made in Body Corporate are mentioned in Note 6.
b Loans (including interest accured) given by the company to Body Corporate or Person are as under:
COVID -19 outbreak was declared as a pandemic by the WHO, subsequent to which the Government of India had initiated a series of measures to contain the outbreak, including imposing multiple ''lock-downs'' across the country. This had posed significant challenges to the business of the Company. As per the directives of
the Central/State Governments it was mandated to close all business activities during the lockdown period and as a result of the same, operations of High Street Mumbai, was shut from March 24, 2020. The Central and State Governments had initiated steps to lift the lockdown and the Company had adhered to the same and it resumed its activities. Mall operations at High Street Phoenix, Mumbai had commenced. However, the State Government had imposed a further lockdown for a brief period . Post this, the mall had again begun its operations.
The Company''s operations have been impacted by the COVID-19 pandemic induced lockdowns..
In preparation of these financial statements, the Company has taken into account internal and external sources of information to assess the possible impacts of the pandemic, including but not limited to assessment of liquidity and going concern, recoverable values of its financial and non-financial assets.
In order to conserve its cash flows, the Company has availed moratorium offered by lenders as per the RBI guidelines on principal and interest for a period of 6 months.
The Company has also assessed the potential impact of Covid-19 on the carrying value of property, plant & equipment, trade receivables, and other current assets appearing in the financial statements of the Company.
In developing the assumptions and estimates relating to the future uncertainties in the economic conditions because of this pandemic, the Company as at the date of approval of financial statements and based on current estimates, expects to recover the carrying amounts of the assets including trade receivables as at 31.3.2021.
For recognition of revenues from mall operations, management has considered certain concessions/relief on rentals extended to its retailers/licensees for the period of lockdown as well as some further period considering the extended impact of the pandemic. Such concessions are determined based on ongoing discussions as well as those concluded and agreed with retailers/licensees on case to case basis. Considering the impact of such concessions given in lease rentals and other recoveries during the Financial Year 2020-21.
Considering the evolving nature of the pandemic, its actual impact in future could be different from that estimated as at the date of approval of these financial statements. The Company will continue to closely monitor uncertainties arising out of material changes to the future economic conditions.
The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.
The following methods and assumptions were used to estimate the fair values
1 Fair value of the Equity Shares are based on price quoted on stock exchange.
2 Fair value of unquoted equity shares and CCD''s is Fair value under level 3 of hierarchy Equity share in EWDL of '' 4,501.25 Lakhs & NCD of '' 10,000 Lakhs in TWDPL which are fully provided (Refer Note 40). Except same other CCD not being material carrying value is considered FV.
3 Fair value of Long term Borrowings is calculated based on discounted cash flow.
4 Fair value of Financial Assets & Financial Liability(except Long term Borrowings) are carried at amortised cost and is not materially different from it''s carrying cost.
The following table provides the fair value measurement hierarchy of Company''s asset and liabilities, grouped into Level 1 to Level 3 as described below:
Level 1: Quoted prices / published NAV (unadjusted) in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Fair value of the financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2
The Company''s activities expose it to credit risk, liquidity risk and market risk. This note explains the sources of risks which the entity is exposed to and how it mitigates that risk.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings and investments in securities.
Foreign currency risk
The Company is exposed to insignificant foreign exchange risk as at the respective reporting dates. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk pertaining to funds borrowed at floating interest rates.
Almost 100% of the company''s borrowings are linked to BR Margin. With all other variables held constant, the following table demonstrates the impact of change in interest rate on borrowing cost on floating rate portion of loans.
Commodity and Other price risk
The Company is not exposed to the comodity and other price risk.
Credit risk is the risk of financial loss to the Company that a customer or counter party to a financial instrument fails to meet its obligations. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, mutual funds, financial institutions and other financial instruments.
Trade and other receivables:
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. To manage credit risk, the Company periodically assesses the financial reliability of the customer, taking into account the financial condition, current economic trends, and analysis of historical bad debts and aging of accounts receivables. Outstanding customer receivables are regularly monitored to make an assessment of recoverability. Receivables are provided as doubtful / written off, when there is no reasonable expectation of recovery. Where receivables have been provided / written off, the Company continues regular followup , engage with the customers, legal options / any other remedies available with the objective of recovering these outstandings.
The Company is not exposed to concentration of credit risk to any one single customer since services are provided to vast specturm. The Company also takes security deposits, advances , post dated cheques etc from its customers, which mitigate the credit risk to an extent.
Cash and cash equivalents an other investments
The Company is exposed to counter party risk relating to medium term deposits with banks.
The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings.
Cash and Cash equivalents, other Investments, Loans and other financial assets are neither past due nor impaired. Management is of the view that these financial assets are considered good and 12 months ECL is, accordingly, not provided.
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.
The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its needs for funds. The current borrowings are sufficient to meet its short to medium term expansion needs. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
The Company is required to maintain ratios (such as debt service coverage ratio and secured coverage ratio) as mentioned in the loan agreements at specified levels and also cash deposits with banks to mitigate the risk of default in repayments. In the event of any failure to meet these covenants , these loans become callable to the extent of failture at the option of lenders, except where exemption is provided by lender.
The primary objective of the Company''s capital management is to maximize the shareholder value. The Company''s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company''s ability to continue as a going concern in order to support its business and provide maximum returns for shareholder The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31, 2021 and March 31, 2020.
51 Share-based payment arrangements:
A. Description of share-based payment arrangements i. Share option programmes (equity-settled)
The Company has granted stock options under the following employee stock option scheme:
1. 30,00,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2011.
2. 30,00,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2015.
Each option when exercised would be converted into one fully paid-up equity share of '' 2 each of the Company.â
i. Equity-settled share-based payment arrangements
The fair value of the employee share options has been measured using the Black-Scholes formula. Service and non-market performance conditions attached to the arrangements were not taken into account in measuring fair value.
The requirement that the employee has to save in order to purchase shares under the share purchase plan has been incorporated into the fair value at grant date by applying a discount to the valuation obtained. The discount has been determined by estimating the probability that the employee will stop saving based on historical behavior.
52 The previous year figures have been regrouped, reworked and rearranged, wherever necessary and are to be read in relation to the amounts and other disclosures relating to the current year.
Mar 31, 2018
1) Corporate Information:
The Company is a public limited company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. The registered office of the company is located at 462, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013.
The Company is engaged in the development and leasing of commercial and retail space. The principal place of business is at High Street Phoenix, 462, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013.
These financial statements were approved and adopted by the Board of Directors of the Company in their meeting held on 8th May, 2018.
2) Basis of preparation of financial statements:
The Financial Statements have been prepared to comply in all material aspects with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended.
The Financial statements provide comparative information in respect of the previous year.
The significant accounting policies used in preparing financial statements are set out in Note 3 of the Notes on Financial Statements and are applied consistently to all the periods presented.
3. Use of significant accounting estimates, judgments and assumptions
In the process of applying the Companyâs accounting policies, management has made the following estimates and judgements, which have significant effect on the amounts recognised in the financial statements:
(a) Depreciation and useful lives of Property, Plant and Equipment
Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful lives and residual values are based on the Companyâs historical experience with similar assets and take into account anticipated technological changes. The depreciation for future periods is adjusted if there are significant changes from previous estimates.
(b) Investment Property
Management has assessed applicability of Ind AS 40- Investment property to the property held to earn income from licensee fees. In assessing such applicability, management has considered the ownership of assets, terms of license agreement, various services provided to the licensee etc. The Company considers these other services as significant in addition to the License fees charged. Based on such assessment, the management has considered the mall property as owner-occupied property and hence classified as Property, Plant & Equipment.
(c) Recoverability of trade receivables
Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. The Company uses a provision matrix to determine impairment loss allowance on its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
(d) Defined Benefit plans
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
(e) Treatment of Security Deposit for Lease Rentals
In assessing the applicability of Ind AS 32-Financial Instruments to security deposits received, the management has considered the substance of the transactions, terms and conditions of agreement and historical experience to conclude whether such security deposits meet the criteria of a financial liability. These deposits are primarily intended to secure compliance of the licenseesâ obligations under the agreement and have no bearing on the license fees charged. Further, there is no contractual obligation to deliver cash or other financial asset to the said entity and can be adjusted against the dues, if any and therefore these have been treated as non- financial liability.
(f) Provisions:
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgement to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
(g) Impairment of financial assets:
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
(h) Fair Value measurement:
When the fair values of financials assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques, including the discounted cash flow model, which involve various judgements and assumptions.
4. Standards Issued but not Effective:
On March 28, 2018, the Ministry of Corporate Affairs (MCA) has notified Ind AS 115 - Revenue from Contract with Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the Company from April 01, 2018.
(a) Issue of Ind AS 115 - Revenue from Contracts with Customers
Ind AS 115 will supersede the current revenue recognition guidance including Ind AS 18 Revenue, Ind AS 11 Construction Contracts and the related interpretations. Ind AS 115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.
(b) Amendment to Existing issued Ind AS
The MCA has also carried out amendments of the following accounting standards:
i) Ind AS 21 - The Effects of Changes in Foreign Exchange Rates
ii) Ind AS 40 - Investment Property (Not applicable to the company)
iii) Ind AS 12 - Income Taxes
iv) Ind AS 28 - Investments in Associates and Joint Ventures and
v) Ind AS 112 - Disclosure of Interests in Other Entities
Application of above standards are not expected to have any significant impact on the Companyâs Financial Statements.
The company has only one class equity shares having face value of â2 per share. Each holder of equity shares is entitled to one vote per share. Equity shareholders are also entitled to dividend as and when proposed by the Board of Directors and approved by Share holders in Annual General Meeting. In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts which shall be in proportion to the number of shares held by the Shareholders.
Note 5.1 Issue of shares for ESOP
During the period of five years immediately preceeding the reporting date, the company has issued total 304,388 shares (2017: 229,555 ) on exercise of options granted under the Employees Stock Options (ESOP), wherein part consideration was received in the form of employee services.
Nature & Purpose of Reserves & Surplus
1) Capital Reserve: Capital reserve represents reserve created pursuant to the business combinations upto year end.
2) Securities Premium Reserve: Securities premium reserve represents premium received on equity shares issued, which can be utilised only in accordance with the provisions of the Companies Act, 2013 for specified purposes.
3) Share Based Payment Reserve: Reserve relates to stock options granted by the Group to employees under an employee stock options plan.
4) General Reserve: General reserve is created from time to time by transferring profits from retained earnings and can be utilised for purposes such as dividend payout, bonus issue, etc.
6. Disclosure as per Ind As - 19 âEmployee Benefitsâ.
(A) Expenses recognised for Defined Contribution Plan :
Employerâs Contribution to Provident and Pension Fund Rs.29.67 Lakhs (PY Rs.25.37 Lakhs).
Employerâs Contribution to ESIC Rs.1.09 Lakhs (PY Rs.0.44 Lakhs)
The Company makes contributions towards provident fund and pension fund for qualifying employees to the Regional Provident Fund Commissioner.
(B) Expenses recognised Defined Benefit Plan:
The company provides gratuity benefit to itâs 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.
1. Salary escalation rate is arrived after taking into account regular increments, price inflation and promotion and other relevant factors such as supply and demand in employment market.
2. Discount rate is based on prevailing market yields of Indian Government Securities as at balance sheet date for estimated term of obligations.
3. Attrition rate/ withdrawal rate is based on Companyâs policy towards retention of employees, historical data and industry outlook.
4. Expected contribution to defined benefit plans for financial year 2018-19 is Rs.3/- Lakhs. (P.Y. Rs.1.50 Lakhs.)
5. The above information is certified by actuary.
ix) Sensitivity analysis:
Increase/ (decrease) on present value of defined benefits obligations at the end of the year:
These gratuity plan typically expose the Company to actuarial risks such as: investment risk, interest risk, longevity risk and salary risk.
Investment Risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. For other defined benefit plans, the discount rate is determined by reference to market yield at the end of reporting period on high quality corporate bonds when there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit.
Interest risk
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the planâs liability.
Salary risk
The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the planâs liability.
7. The Company is mainly engaged in real estate activities catering to Indian customers. Accordingly, the Company has only one identifiable segment reportable under Ind AS 108 - Operating Segments. Managing Director (the âChief Operational Decision Makerâ as defined in Ind AS 108) monitors the operating results of the companyâs business for the purpose of making decisions about resource allocation and performance assessment.
The revenues from transactions with a single customer does not exceed 10 per cent or more of the companyâs revenues.
8. The company provides units at its mall on License basis for which it charges license fee. The license agreements are generally for the period of 1 year to 5 years. The terms also provide for escalation of License fees and other charges on a periodical basis. Generally, the company has a right to terminate the license agreement by giving 6 months notice.
9. In view of the Ind As 24 âRelated Parties Disclosuresâ, the disclosure in respect of related party transactions for the year ended on 31st March 2018 is as under:
a) RELATIONSHIPS
Category I : Subsidiaries of the Company (Control Exists)
Alliance Spaces Private Limited
Alyssum Developers Private Limited (Subsidiary from 17/03/2017)
Big Apple Real Estate Private Limited Bellona Hospitality Services Limited Blackwood Developers Private Limited Butala Farm Lands Private Limited Enhance Holding Private Limited Gangetic Developers Private Limited Graceworks Realty & Leisure Private Limited
Insight Hotels & Leisures Private Limited (Subsidiary from 05/05/2017)
Island Star Mall Developers 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 and Leisure Limited Phoenix Hospitality Company Private Limited Pinnacle Real Estate Development Private Limited Plutocrat Assets and Capital Management Private Limited Sangam Infrabuild corporation Private Limited
Sparkle One Mall Developers Private Limited (Subsidiary from 29/08/2017) Savannah Phoenix Private Limited Upal Developers Private Limited Vamona Developers Private Limited
Category II : Associates of the Company
Classic Housing Projects Private Limited
Classic Mall Development Company Private Limited
Columbus Investment Advisory Private Limited (Associates from 04/10/2017)
Mirabel Entertainment Private Limited
Starboard Hotels Private Limited
Category III : Key Managerial Personnel
Category IV : Enterprises over which Key Managerial Personnel are able to exercise significant control
R.R.Hosiery Private Limited R.R. Hosiery
Phoenix Construction Company Phoenix Retails Private Limited Vigilance Developers Private Limited Padmashil Hospitality & Leisures Private Limited
Category V : Relatives of Key Managerial Personnel
Gayatri Ruia
Note : Figures in brackets are pertaining to the previous year.
1. The transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions.
2. Review of outstanding balances is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. These balances are unsecured and their settlement occurs through the normal banking channel.
3. Administrative expenses paid to subsidiaries include Rs.630.00 Lakhs (P.Y. Rs.503.21 Lakhs) paid to Marketcity Resources Pvt Ltd towards the provision of personnel services including one of the key managerial personnel.
Compensation of key management personnel:
The remuneration of director and other member of key management personnel during the year was as follows:
10. 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.2844.17 Lakhs (P.Y. Rs.2987.26 Lakhs) net of advance paid.
b. The Income tax assessments of the Company have been completed up to Assessment Year 2015-16. The disputed tax demand outstanding upto the said Assessment Year is Rs.5148.72 Lakhs (P.Y. Rs.2726.22 Lakhs). 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 â Nil (P.Y. Rs.203.08 Lakhs) to the company, against which the company has filed an appeal with the Service Tax Tribunal. During the year the company received the Tribunalâs decision in itâs favour.
d. Demand notices received on account of arrears of Provident Fund dues aggregating to Rs.24.72 Lakhs (P.Y. Rs.24.72 Lakhs) are disputed by the Company. The Company has paid Rs.10 Lakhs and has also furnished a Bank Guarantee for Rs.14.71 Lakhs against the said P.F. demands to the P.F. authorities.
e. Other Claims against the company not acknowledged as debts of Rs.83.96/- Lakhs (P.Y â83.96/- Lakhs)
f.Outstanding guarantees given by Banks of â23.10 Lakhs (P.Y. Rs.27.70 Lakhs).
The above litigations in âbâ and âdâ are not expected to have any material adverse effect on the financial position of the company.
11. Municipal Corporation of Greater Mumbai has raised demand of Rs.1193.13 Lakhs towards property tax up to 31st March, 2018 As per the interim order of Bombay High Court 50% of the property tax demand has been paid by the company. The balance amount would be payable on the final outcome of the petition. The Company has made the necessary provisions in the books on conservative basis.
12. Project Development Expenditure
(In respect of Projects upto 31st March 2018, included under Capital Work-in-Progress)
Preoperative Income / Expenses transferred to capital work-in-progress:-
(i) Butala Farm Lands Private Limited is having investment in equity shares of fellow subsidiary company - Vamona Developers Private Limited.
(ii) Phoenix Hospitality Co. Private Limited is having investments in equity shares of fellow Subsidiaries - Alliance Spaces Private Limited and Palladium Constructions Private Limited as well as in the Associate company - Starboard Hotels Private Limited.
13. 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, 385 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.
14. Exceptional items for the previous year ended 31st March, 2017 pertains to the reversal of interest of Rs.3,500 lakhs accrued on loan advanced to wholly owned subsidiary Pallazzio Hotels & Leisure Ltd.
15. The Company carries, as at the year end, Investments of â4,501.25 lakhs in the equity shares of Entertainment World Developers Limited (EWDL), Rs.10,000 lakhs in FCDs of Treasure world Developers Pvt. Ltd. (TWDPL), subsidiary of EWDL and interest accrued thereon, upto 31-03-2012, of Rs.1,432.51 lakhs (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.1,918.80 Lakhs 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 liability. The Networth of EWDL/TWDPL has been eroded as per latest available unaudited accounts as at 31-03-2015. The Companyâs Board has, out of abundant caution and as a prudent practice in line with the standard accounting practices, made an impairment provision of Rs.2,100 Lakh in the year ended 31st March 2016 and Rs.8,425 Lakh for the year ended 31st March 2015. 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.
16. Capital work in progress includes Rs.10,511.29 Lakhs (P.Y.Rs.10,465.39 Lakhs) 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.
17. 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.
18. Additional information as required under Section 186 (4) of the Companies Act, 2013 :
a. Investment made in Body Corporate are mentioned in Note 7.
b. No Guarantee is given by the Company.
c. Loans given by the company to Body Corporate or Person are as under:
19. 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 2016-17. 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.1.98 Lakhs (P.Y.Rs.1.85 Lakhs) pertaining to the financial year 2016-17 in the 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 firm.
20. Event after Reporting date :
The Board of Directors have recommended dividend of Rs.2.60 per fully paid up equity share of Rs.2 /- each, aggregating Rs.4684.34 lakhs, including â702.65 lakhs dividend distribution tax for the financial year 2017-18, which is based on relevant share capital as on March 31, 2018. The actual dividend amount will be dependent on the relevant share capital outstanding as on the record date / book closure.
21. 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.323.48 Lakhs (P.Y. Rs.353.24 Lakhs ).
(b) Expenditure related to Corporate Social Responsibility is Rs.162.58 Lakhs (Previous Year Rs.90.13 Lakhs).
22 Fair Value of Financial Assets and Liabilities:
Set out below is the comparison by class of carrying amounts and fair value of Companyâs financial instruments that are recognised in the financial statements.
Fair valuation techniques:
The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.
The following methods and assumptions were used to estimate the fair values
1 Fair value of the Equity Shares are based on price quoted on stock exchange.
2 Fair value of unquoted equity shares and CCDâs is taken at net asset value.
3 Fair value of Long term Borrowings is calculated based on discounted cash flow.
4 Fair value of Financial Assets & Financial Liability(except Long term Borrowings) are carried at amortised cost and is not materially different from itâs carrying cost.
Fair Value hierarchy:
The following table provides the fair value measurement hierarchy of Companyâs asset and liabilities, grouped into Level 1 to
Level 3 as described below:
Level 1: Quoted prices / published NAV (unadjusted) in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Fair value of the financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on the company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2
Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
There are no reclassification of financial instruments between level 2 and level 3 Reconciliation of fair value of measurement categorised within level 3 of the value hierarchy
23 Financial risk Management:
The Companyâs activities expose it to credit risk, liquidity risk and market risk. This note explains the sources of risks which the entity is exposed to and how it mitigates that risk.
- Market risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings and investments in securities.
Foreign currency risk
The Company is exposed to insignificant foreign exchange risk as at the respective reporting dates.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk pertaining to funds borrowed at floating interest rates. Almost 100% of the companyâs borrowings are linked to BR Margin. With all other variables held constant, the following table demonstrates the impact of change in interest rate on borrowing cost on floating rate portion of loans.
Increase/ (decrease) in Interest cost of Long term borrowings for the year:
Commodity and Other price risk
The Company is not exposed to the commodity and other price risk.
- Credit Risk
Credit risk is the risk of financial loss to the Company that a customer or counter party to a financial instrument fails to meet its obligations. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, mutual funds, financial institutions and other financial instruments.
Trade and other receivables:
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. To manage credit risk, the Company periodically assesses the financial reliability of the customer, taking into account the financial condition, current economic trends, and analysis of historical bad debts and aging of accounts receivables. Outstanding customer receivables are regularly monitored to make an assessment of recoverability. Receivables are provided as doubtful / written off, when there is no reasonable expectation of recovery. Where receivables have been provided / written off, the Company continues regular followup, engage with the customers, legal options / any other remedies available with the objective of recovering these outstandings.
The Company is not exposed to concentration of credit risk to any one single customer since services are provided to vast spectrum. The Company also takes security deposits, advances , post dated cheques etc from its customers, which mitigate the credit risk to an extent.
Cash and cash equivalents an other investments
The Company is exposed to counter party risk relating to medium term deposits with banks.
The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings.
Exposure to credit risk
The gross carrying amount of financial assets, net of impairment losses recognised represents the maximum credit exposure. The maximum exposure to credit risk as at March 31.2018 and March 31, 2017 is as follows:
Cash and Cash equivalents, other Investments, Loans and other financial assets are neither past due nor impaired. Management is of the view that these financial assets are considered good and 12 months ECL is, accordingly, not provided.
- Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.
The Companyâs objective is to at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its needs for funds. The current borrowings are sufficient to meet its short to medium term expansion needs. Management monitors the Companyâs net liquidity position through rolling forecasts on the basis of expected cash flows.
The Company is required to maintain ratios (such as debt service coverage ratio and secured coverage ratio) as mentioned in the loan agreements at specified levels and also cash deposits with banks to mitigate the risk of default in repayments. In the event of any failure to meet these covenants , these loans become callable to the extent of failture at the option of lenders, except where exemption is provided by lender.
24. Capital management
The primary objective of the Companyâs capital management is to maximize the shareholder value. The Companyâs primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Companyâs ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31, 2018 and March 31, 2017.
For the purpose of the Companyâs capital management, capital includes issued capital, share premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings less cash and short term deposits.
25. Share-based payment arrangements:
A. Description of share-based payment arrangements
i. Share option programmes (equity-settled)
The Company has granted stock options under the following employee stock option scheme:
1. 30,00,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2011. During the year 1,99,998 Equity Shares have been issued and allotted to the eligible employees against exercise of Options under ESOS 2011.
2. 30,00,000 Equity Shares are reserved for allotment of equity shares under Employee Stock Option Scheme 2015. During the year Nil Equity Shares have been issued and allotted to the eligible employees against exercise of Options under ESOS 2015.
Each option when exercised would be converted into one fully paid-up equity share of Rs.2 each of the Company. The options granted under ESOP 2011 and options granted under the ESOS 2015 scheme carry no rights to dividends and no voting rights till the date of exercise.
B. Measurement of fair values
i. Equity-settled share-based payment arrangementsâ
The fair value of the employee share options has been measured using the Black-Scholes formula. Service and nonmarket performance conditions attached to the arrangements were not taken into account in measuring fair value.
The requirement that the employee has to save in order to purchase shares under the share purchase plan has been incorporated into the fair value at grant date by applying a discount to the valuation obtained. The discount has been determined by estimating the probability that the employee will stop saving based on historical behavior.
26. 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
The notes referred to above form an integral part of the Financial Statements
Mar 31, 2017
1. Use of significant accounting estimates, judgments and assumptions
In the process of applying the Company''s accounting policies, management has made the following estimates and judgments, which have significant effect on the amounts recognized in the financial statements:
(a) Depreciation and useful lives of Property, Plant and Equipment
Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation for future periods is adjusted if there are significant changes from previous estimates.
(b) Investment Property
Management has assessed applicability of Ind AS 40- Investment property to the property held to earn income from licensee fees. In assessing such applicability, management has considered the ownership of assets, terms of license agreement, various services provided to the licensee etc. The Company considers these other services as significant in addition to the License fees charged. Based on such assessment, the management has considered the mall property as owner-occupied property and hence classified as Property, Plant & Equipment.
(c) Recoverability of trade receivables
Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required.
The Company uses a provision matrix to determine impairment loss allowance on its trade receivables.
The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analyzed.
(d) Defined Benefit plans
The cost of the defined benefit plan and other postemployment benefits and the present value of such obligation are determined using actuarial valuations. An
actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
(e) Treatment of Security Deposit for Lease Rentals
In assessing the applicability of Ind AS 32-Financial Instruments to security deposits received, the management has considered the substance of the transactions, terms and conditions of agreement and historical experience to conclude whether such security deposits meet the criteria of a financial liability. These deposits are primarily intended to secure compliance of the licensees'' obligations under the agreement and have no bearing on the license fees charged. Further, there is no contractual obligation to deliver cash or other financial asset to the said entity and can be adjusted against the dues, if any and therefore these have been treated as non- financial liability.
(f) Provisions:
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgment to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
(g) Impairment of financial assets:
The impairment provisions for financial assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Estimates and judgments are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances. They are continuously evaluated.
(h) Fair Value measurement:
The Company measures financial instrument such as certain investments, at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
- Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
- Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
The company has only one class equity shares having face value of '' 2 per share. Each holder of equity shares is entitled to one vote per share. Equity shareholders are also entitled to dividend as and when proposed by the Board of Directors and approved by Share holders in Annual General Meeting. In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts which shall be in proportion to the number of shares held by the Shareholders.
Note 2
During the Financial year 2015-16, the Company undertook Private Placement, as authorized by the Board of Directors, for issuance of 7,991,907 Equity Shares of face value of '' 2/- each to Qualified Institutional Buyers at a price of Rs, 353.60/- per Equity Share, including share premium of Rs, 351.60/- per Equity Share, aggregating to Rs, 282.59/- crores in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulations, 2009 (SEBI ICDR Regulations) and Section 42 of the Companies Act, 2013 and the Rules made there under. The Private Placement issue was closed on 14/07/2015 and consequently, the said Equity Shares were allotted on 17/07/2015.
1. Salary escalation rate is arrived after taking into account regular increments, price inflation and promotion and other relevant factors such as supply and demand in employment market.
2. Discount rate is based on prevailing market yields of Indian Government Securities as at balance sheet date for estimated term of obligations.
3. Attrition rate/ withdrawal rate is based on Company''s policy towards retention of employees, historical data and industry outlook.
4. Expected contribution to defined benefit plans for financial year 2017-18 is Rs, 1.50/- Lakhs.
5. The above information is certified by actuary.
ix) Sensitivity analysis:
Increase/ (decrease) on present value of defined benefits obligations at the end of the year:
These gratuity plan typically expose the Company to actuarial risks such as: investment risk, interest risk, longevity risk and salary risk. Investment Risk:
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. For other defined benefit plans, the discount rate is determined by reference to market yield at the end of reporting period on high quality corporate bonds when there is a deep market for such bonds; if the return on plan asset is below this rate, it will create a plan deficit.
Interest risk
A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.
Longevity risk
The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan''s liability.
Salary risk
The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan''s liability.
30. The Company is mainly engaged in real estate activities catering to Indian customers. Accordingly, the Company has only one identifiable segment reportable under Ind AS 108 - Operating Segments.
Managing Director (the ''Chief Operational Decision Maker'' as defined in Ind AS 108) monitors the operating results of the company''s business for the purpose of making decisions about resource allocation and performance assessment.
The revenues from transactions with a single customer does not exceed 10 per cent or more of the company''s revenues.
3. The company provides units at its mall on License basis for which it charges license fee. The license agreements are generally for the period of 1 year to 5 years. The terms also provide for escalation of License fees and other charges on a periodical basis. Generally, the company has a right to terminate the license agreement by giving 6 months notice.
4. In view of the Ind As 24 "Related Parties Disclosures", the disclosure in respect of related party transactions for the year ended on 31st March 2017 is as under:
a) RELATIONSHIPS
Category I : Subsidiaries of the Company (Control Exists)
Alliance Spaces Private Limited
Alyssum Developers Private Limited (Subsidiary from 17/03/2017)
Blackwood Developers Private Limited
Bellona Hospitality Services Limited
Big Apple Real Estate Private Limited
Butala Farm Lands Private Limited
Gangetic Developers Private Limited
Gangetic Hotels Private Limited
Graceworks Realty & Leisure Private Limited
Island Star Mall Developers Private Limited
Enhance Holding 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 and 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
Savannah Phoenix Private Limited
Upal Developers Private Limited
Vamona Developers Private Limited
Category II : Associates of the Company
Classic Housing Projects Private Limited
Classic Mall Development Company Pvt Ltd (Subsidiary upto 31/03/2017)
Escort Developers Private Limited (up to 31/03/2017)
Mirabel Entertainment Private Limited Starboard Hotels Private Limited
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
Padmashil Hospitality & Leisure Private Limited Phoenix Retail Private Limited Vigilant Developers Private Limited Winston Hotel Private Limited Phoenix Construction Company
Category V : Relatives of Key Managerial Personnel
Gayatri Ruia
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, 2,987.26 Lakhs (P.Y.Rs, 10,863.56 Lakhs) net of advance paid.
b. The Income tax assessments of the Company have been completed up to Assessment Year 2014-15. The disputed tax demand outstanding upto the said Assessment Year is Rs, 2,726.22 Lakhs. 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, 203.08 Lakhs (P.Y. Rs, 203.08 Lakhs) 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, 24.72 Lakhs (P.Y. Rs, 24.72 Lakhs) are disputed by the Company. The Company has paid Rs, 10 Lakhs and has also furnished a Bank Guarantee for Rs, 14.71 Lakhs against the said P.F. demands to the P.F. authorities.
e. Other Claims against the company not acknowledged as debts of Rs, 83.96/- Lakhs (P.Y Rs,83.96/- Lakhs)
f. Outstanding guarantees given by Banks of Rs,27.70 Lakhs (P.Y. Rs, 27.70 Lakhs).
The above litigations are not expected to have any material adverse effect on the financial position of the company.
6. Municipal Corporation of Greater Mumbai has raised demand of Rs, 1193.13 Lakhs towards property tax up to 31st March, 2017
As per the interim order of Bombay High Court 50% of the property tax demand has been paid by the company. The balance
amount would be payable on the final outcome of the petition. Company has provided full amount of demand in the books on
conservative basis.
(i) Butala Farm Lands Private Limited is having investment in equity shares of subsidiary company - Vamona Developers Private Limited.
(ii) Phoenix Hospitality Co. Private Limited is having investment in equity shares of Subsidiary - Gracework Realty & Lesiure Private Limited, Alliance Spaces Private Limited, Palladium Constructions Private Limited & Associates - Starboard Hotels Private Limited, Gangetic Hotels Private Limited.
7. 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.
8. Exceptional items for the year ended 31st March, 2017 pertains to reversal of interest accrued of Rs, 3,500 lakh upto previous financial year on loan advance to wholly owned subsidiary Pallazzio Hotels & Leisure Ltd. For the year ended 31st March, 2016 pertains to impairment provision of Rs, 2,100 Lakhs on Investment in Entertainment World Developers Ltd, Treasure World Developers Pvt Ltd and provision for doubtful loans & advances of Rs,700 Lakhs. (Refer Note No. 41)
9. The Company carries, as at the year end, Investments of Rs,.4,501.25 lakhs in the equity shares of Entertainment World Developers Limited (EWDL), Rs, 10,000 lakhs in FCDs of Treasure world Developers Pvt. Ltd. (TWDPL), subsidiary of EWDL and interest accrued thereon, upto 31-03-2012, of Rs, 1,432.51 lakhs (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, 1,918.80 Lakhs 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 liability. The Net worth of EWDL/TWDPL has been eroded as per latest available unaudited accounts as at 31-03-2015. The CompanyRs,s Board has, out of abundant caution and as a prudent practice in line with the standard accounting practices, made an impairment provision of Rs, 2,100 Lakh in the year ended 31st March 2016 and Rs, 8,425 Lakh for the year ended 31st March 2015. 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 realizable value of assets of EWDL & its subsidiaries, the impairment provisions against these investments are adequate.
10. Capital work in progress includes Rs, 10,465.39 Lakhs (P.Y. Rs, 10,417.49 Lakhs) 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.
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 there from, if any.
12. Additional information as required under Section 186 (4) of the Companies Act, 2013 :
a. Investment made in Body Corporate are mentioned in Note 6.
b. No Guarantee is given by the Company.
The Company has accounted for its share of loss amounting to Rs, 1.85 Lakhs (P.Y.Rs, 1.74 Lakhs) pertaining to the financial year
2015-16 in the year. The share of profit/loss for the current financial year will be accounted in the books of the Company on the finalization of the accounts of the firm.
13. Event after Reporting date :
The Board of Directors have recommended dividend of Rs, 2.40 per fully paid up equity share of Rs, 2 /- each, aggregating Rs, 4,421.18 lakhs, including Rs, 747.58 lakhs dividend distribution tax for the financial year 2016-17, which is based on relevant share capital as on March 31, 2017. The actual dividend amount will be dependent on the relevant share capital outstanding as on the record date / book closure.
14. 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, 353.24 Lakhs (P.Y. Rs, 332.03 Lakhs ).
(b) Expenditure related to Corporate Social Responsibility is Rs, 90.13/- Lakhs (Previous Year Rs, 36.27) Lakhs.
15. Fair Value of Financial Assets and Liabilities:
Set out below is the comparison by class of carrying amounts and fair value of Company''s financial instruments that are recognized in the financial statements.
*In respect of Investment in equity shares of EWDL having carrying value of Rs, 4501.24 Lakhs and in CCD''s of TWDPL having carrying value of Rs, 10,000 Lakhs, the financial information on the assets and liabilities position of these companies for determining the fair value for the current period is not available, same has been carried at cost.
Fair valuation techniques:
The Company maintains policies and procedures to value financial assets or financial liabilities using the best and most relevant data available.
The following methods and assumptions were used to estimate the fair values
1. Fair value of the Equity Shares are based on price quoted on stock exchange.
2. Fair value of unquoted equity shares and CCD''s is taken at intrinsic value.
3. Fair value of Long term Borrowings is calculated based on discounted cash flow.
4. Fair value of Financial Assets & Financial Liability(except Long term Borrowings) are carried at amortized cost and is not materially different from it''s carrying cost.
Fair Value hierarchy:
The following table provides the fair value measurement hierarchy of Company''s asset and liabilities, grouped into Level 1 to Level
3 as described below:
Level 1: Quoted prices / published NAV (unadjusted) in active markets for identical assets or liabilities. It includes fair value of financial instruments traded in active markets and are based on quoted market prices at the balance sheet date.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices). Fair value of the financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on the company specific estimates. If all significant inputs required to fair value an instrument are observable then instrument is included in level 2
Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
16. Financial risk Management:
The Company''s activities expose it to credit risk, liquidity risk and market risk. This note explains the sources of risks which the entity is exposed to and how it mitigates that risk.
- Market risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings and investments in securities.
Foreign currency risk
The Company is exposed to insignificant foreign exchange risk as at the respective reporting dates.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk pertaining to funds borrowed at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix between fixed and floating rate borrowings.
Commodity and Other price risk
The Company is not exposed to the commodity and other price risk.
- Credit Risk
Credit risk is the risk of financial loss to the Company that a customer or counter party to a financial instrument fails to meet its obligations. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, mutual funds, financial institutions and other financial instruments.
Trade and other receivables:
The Company extends credit to customers in normal course of business. The Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. To manage credit risk, the Company periodically assesses the financial reliability of the customer, taking into account the financial condition, current economic trends, and analysis of historical bad debts and aging of accounts receivables. Outstanding customer receivables are regularly monitored to make an assessment of recoverability. Receivables are provided as doubtful / written off, when there is no reasonable expectation of recovery. Where receivables have been provided / written off, the Company continues regular follow-up , engage with the customers, legal options / any other remedies available with the objective of recovering these outstanding. The Company is not exposed to concentration of credit risk to any one single customer since services are provided to vast specturm. The Company also takes security deposits, advances , post dated cheques etc from its customers, which mitigate the credit risk to an extent.
Cash and cash equivalents another investments
The Company is exposed to counter party risk relating to medium term deposits with banks.
The Company considers factors such as track record, size of the institution, market reputation and service standards to select the banks with which balances and deposits are maintained. Generally, the balances are maintained with the institutions with which the Company has also availed borrowings.
Cash and Cash equivalents, other Investments, Loans and other financial assets are neither past due nor impaired. Management is of the view that these financial assets are considered good and 12 months ECL is, accordingly, not provided.
- Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses.
The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and collateral requirements. The Company relies on a mix of borrowings, capital infusion and excess operating cash flows to meet its needs for funds. The current borrowings are sufficient to meet its short to medium term expansion needs. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
The Company is required to maintain ratios (such as debt service coverage ratio and secured coverage ratio) as mentioned in the loan agreements at specified levels and also cash deposits with banks to mitigate the risk of default in repayments. In the event of any failure to meet these covenants , these loans become callable to the extent of failure at the option of lenders, except where exemption is provided by lender.
17. Capital management
The primary objective of the Company''s capital management is to maximize the shareholder value. The Company''s primary objective when managing capital is to ensure that it maintains an efficient capital structure and healthy capital ratios and safeguard the Company''s ability to continue as a going concern in order to support its business and provide maximum returns for shareholders. The Company also proposes to maintain an optimal capital structure to reduce the cost of capital. No changes were made in the objectives, policies or processes during the year ended March 31, 2017 and March 31, 2016.
For the purpose of the Company''s capital management, capital includes issued capital, share premium and all other equity reserves. Net debt includes, interest bearing loans and borrowings less cash and short term deposits.
The following table lists the average inputs to the models used for the plans for the year ended 31 March 2017 Particulars Description of the inputs used
Expected volatility Expected volatility of the option is based on historical volatility, during a period equivalent to the option life, of
(weighted-average) the observed market prices of the Company''s publicly traded equity shares._
Expected dividends Dividend yield of the options is based on recent dividend activity.
Risk-free interest Risk-free interest rates are based on the government securities yield in effect at the time of the grant. rate (based on
government bonds)_
Option Exercise Option can be Exercise anytime in three year from the Vesting date.
Period_
18. Disclosure as required by Ind AS 101 - First time adoption of Indian Accounting Standards Exemptions Applied:
Ind AS 101 allows first time adopters certain exemptions from the retrospective application of certain Ind AS, effective for April 1, 2015 opening balance sheet.
The following exceptions to the retrospective application of other Ind AS as per Appendix D of Ind AS 101 are applied by the company :-
1 Deemed cost of Property,Plant and Equipment: (PPE)
The Company has opted to continue with the carrying value for all of its PPE as recognized in the financial statements as at the date of transition to Ind AS and measured as per previous GAAP and use that as its deemed cost as at the date of transition to Ind AS.
2 The Company has decided to disclose prospectively from the date of transition the following as required by Ind AS 19
i) The present value of the defined benefit obligation, the fair value of the plan assets and the surplus or deficit in the plan, and
ii) The experience adjustments arising on;
a) The plan liabilities expressed as either an amount or a percentage of the plan liabilities at the end of the reporting period; and
b) The plan assets expressed as either an amount or a percentage of the plan liabilities at the end of the reporting period.
3 Financial assets and liabilities:
The Company has financial receivables and payables that are non-derivative financial instruments. Under previous GAAP, these were carried at transactions cost less allowances for impairment, if any. Under Ind AS, these are financial assets and liabilities are initially recognized at fair value and subsequently measured at amortized cost, less allowance for impairment, if any. For transactions entered into on or after the date of transition to Ind AS, the requirement of initial recognition at fair value is applied prospectively.
4 Business Combination Exemption:
The Company has applied the exemption as provided in Ind AS 101 on non-application of Ind AS 103, "Business Combinations" to business combinations consummated prior to April 1, 2015 (the "Transition Date"), pursuant to which goodwill/capital reserve arising from a business combination has been stated at the carrying amount prior to the date of transition under Indian GAAP. The Company has also applied the exemption for past business combinations to acquisitions of investments in subsidiaries / associates / joint ventures consummated prior to the Transition Date.
5 Share-based payment transactions:
Ind AS 101 encourages, but does not require, first time adopters to apply Ind AS 102 Share based Payment to equity instruments that were vested before the date of transition to Ind AS. The Company has elected not to apply Ind AS 102 to options that vested prior to April 1, 2015.
6 Investments in subsidiaries and associates:
The Company has elected to measure investment in subsidiaries and associates at cost.
(e) Footnotes to the reconciliation of equity as at 1st April 2015 and 31st March 2016 and Statement of profit and loss for the year ended 31st March 2016: Notes:
I Expected Credit Loss (ECL) Provision : The Company has provided ECL as per Ind AS. Impact of ECL as on date of transition is recognized in opening reserves and changes thereafter are recognized in Statement of Profit and Loss .
II Fair Valuation of Financial Asset : The Company has valued Financial assets (other than investment in subsidiaries, associates which are accounted at cost) at fair value. Impact of fair value changes on the date of transition is recognized in opening reserve and changes thereafter are recognized in statement of Profit and Loss or Other Comprehensive Income as the case may be.
III Remeasurement gain/ (loss) on defined benefit plans : Under Ind AS, such obligation is recognized in other comprehensive income. Under previous Indain GAAP it was recorded in Statement of Profit and Loss.
IV Fair value of Employee Stock Option: Employee Stock Option has been accounted at fair value under Ind AS which were earlier accounted at intrinsic value under previous Indian GAAP
V Dividend and dividend distribution tax:-
Under Indian GAAP, proposed dividends were recognized as an adjusting event occurring after the balance sheet date however under the Ind AS proposed dividend are non adjusting events after the balance sheet date and hence recognized as and when approved by the Shareholders In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability for dividend for the year ended on 31st March, 2015 has been derecognized with corresponding impact in the retained earnings on 1st April, 2015
19. 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, 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, 2012
Notes :
1) * Amount added on Revaluation ( as at 31.03.1985) Rs.18,48,43,610 (Net
of Depreciation). Refer to Note No. 25
2) @ Represents write off on the basis of the period of the lease.
3) Lease Hold Land
a) Includes land taken on leased for period of 999 years as from 1951
renewal at the option for further like period.
b) Includes Rs. 2,66,38,617 (as revalued) leased in perpetuity against
which there is no writeoff required.
4) Capital Work in Progress includes pre-operative expenses of Rs.
-17,140,403/- ( P. Y. Rs. Nil) Refer to Note No. 39
Note :
@@ Represents Equity/Preference Shares held subject to a non-disposal
undertaking to the lender bank stating that it shall not dispose /
transfer /pledge /encumber these shares owned/held in the company until
the loans taken by these companies are fully repaid to the bank.
* Out of 7,265 shares, 1,995 shares are held by a Bank in their name as
security
Debtors include Rs. 14,200,142/- (Previous year : Rs. 20,527,108/-) from
private limited companies in which a director is a director / member.
1. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF:-
a. Disputed excise duty liability amounting Rs. 1,646,266 ( P.Y. Rs.
1,646,266 )
b. Outstanding guarantees given by Banks Rs. 2,769,969 ( P. Y. Rs.
2,769,969 ).
c. Estimated amount of contracts remaining to be executed on capital
account and not provided for in the accounts is Rs. 183,047,500(P.Y. Rs.
24,081,092) net of advance paid.
d. Demand notices received on account of arrears of Provident Fund
dues Rs. 2,471,962 aggregating to Rs. (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 P.F. demands to the P.F.
authorities.
e. The Income tax assessments of the Company have been completed up to
Assessment Year 2009-10. The disputed tax demand outstanding upto the
said Assessment Year is Rs. 51,996,382. 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. 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, 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.
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
specified by the valuers, which includes an additional charge amounting
to Rs. 1,005,006 (P.Y. Rs. 962,748) 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.
4. 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.
Honorable Supreme Court in the case of appeal filed by Retailers
Association of India (RAI) vide it's order dated 14th October, 2011, as
on interim measure, directed 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 balance amount. The
surety would be payable on the pronouncement of final verdict. Most of
the licensees of the Company are members of association. To the extent,
licensees have provided the Company the proof of payment of service tax
and surety to government authorities, the service tax liability have
been adjusted against the relevant receivables. As at 31st March, 2012,
the disputed service tax for the period upto 30th September, 2011 on
renting of immovable property not deposited on account on nonpayment by
licensees amounts to Rs.72,870,076/-. The company does not expect the
outcome of the matter to have any adverse effect on its financial
position or results of operations.
5. 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.
6. 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 2010-11. 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. 42,432,
pertaining to the financial year 2010-2011 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
firm.
7. Disclosure as per Accounting Standard 15 (Revised) ÃEmployee
Benefitsà 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.
1,289,201(P.Y. Rs. 1,137,059).
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.
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 certified by the actuary.
8. 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, 2012.
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 by the Auditors
9. 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.
10. 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 2012 is as under:
a) RELATIONSHIPS
Category I : Subsidiaries of the Company
Alliance Hospitality Services Private Limited [w.e.f. 23rd January,
2012]
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 [w.e.f. 23rd January, 2012]
Enhance Holdings Private Limited
(formerly Kalani Holdings Private Limited )
Market City Management Private Limited
Marketcity Resources Private Limited
Mugwort Land Holdings Private Limited [w.e.f. 31st August, 2011]
Palladium Constructions Private Limited
Pallazzio Hotels and Leisure Limited
Pinnacle Real Estate Development Private Limited
Platinum Spaces Private Limited [w.e.f. 23rd January, 2012]
Plutocrat Assets and Capital Management Private Limited
Phoenix Hospitality Company Private Limited [w.e.f. 23rd January, 2012]
Sangam Infrabuild corporation Private Limited [w.e.f. 16th March, 2012]
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 Development 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
Mirabel Entertainment Private Limited [w.e.f. 23rd January, 2012]
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 [upto 22nd January, 2012]
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
Disclosure in Respect of Material Related Party Transactions during the
year:
i. Rent & other recoveries include received from Market City Resources
Pvt Ltd Rs. 50,646,804 (P.Y. Rs. 50,646,792), Phoenix Retails (P) Limited Rs.
6,280,986 (P.Y. Rs. 25,485,828), Pallazzio Hotels & Leisure Limited Rs.
16,308,742 (P.Y. 2,115,811) and Galaxy Entertainment Corporation
Limited Rs. Nil (P.Y. Rs. 4,051,091).
ii. Interest received include received from Upal Developers (P) Ltd Rs.
13,330,423 (P.Y. Rs. 40,874,646), Entertainment World Developers L t d .
Rs. Nil (P.Y. 587,100), Classic Mall Development Company (P) Limited Rs.
9,785,034 (P.Y. Rs. Nil), Island Star Mall Developers (P) Limited Rs.
52,387,158 (P.Y. Rs. 5,650,254) and Offbeat Developers (P) Limited Rs.
298,702,220 (P.Y. Rs. 1,697,946).
iii. Administrative & other expenses include paid to Market City
Resources Private Limited Rs.16,690,500 (Rs. 36,972,000), B.R.
International Rs. Nil (P.Y. Rs. 13,234,561) and R.R Hosiery (P) Ltd. Rs.
3,320,196 (P.Y. Rs. 3,398,874)
iv. Interest Paid to B.R. International Rs. 13,459,091 (P.Y. Rs. Nil)
v . Capital Investment in Partnership firm includes investments in
Phoenix Construction Company Rs. 750,000 (P.Y. Rs. Nil).
vi. Loan returned by parties include repayment from Bellona Finvest
Limited Rs. 6,125,000 (P.Y. Rs. 7,147,600), Pallazzio Hotels & Leisure
Limited Rs. Nil (Rs. 215,000,000), Entertainment World Developers Ltd. Rs.
Nil (P.Y. Rs. 2,50,587,100) and Offbeat Developers (P) Limited Rs. Nil
(P.Y. Rs. 482,450,128).
vii. Loan given includes loan given to Pallazzio Hotels & Leisure
Limited Rs. 440,000,000 (P.Y Rs. 50,000,000) Vamona Developers (P) Limited
Rs. Nil (P.Y. Rs. 225,000,000), Offbeat Developers (P) Limited Rs.
300,000,000 (P.Y. Rs. 205,000,000), Island Star Mall Developers (P)
Limited Rs. Nil (P.Y. Rs. 100,000,000) and Upal Developers (P) Limited Rs.
Nil (P.Y. Rs. 48,412,500).
viii. Advances given towards capital Goods to Offbeat Developers (P)
Limited Rs. 1,764,502,372 (P.Y. Rs. 568,287,013) and Island Star Mall
Developers (P) Limited Rs. 607,500,000 (P.Y. Rs. Nil).
ix. Advance returned by Offbeat Developers (P) Limited Rs. 200,000,000
(P.Y. Rs. Nil).
x. Deposit given to Island Star Mall Developers (P) Limited Rs.
205,000,000 (P.Y. Rs. 5,000,000), R.R.Hosiery Rs. Nil (P.Y. Rs. 20,000,000),
R.R. Hosiery (P) Ltd Rs. Nil (P.Y. Rs. 9,275,000), Vamona Developers (P)
Limited Rs. 240,000,000 (P.Y. Rs. Nil).
xi. Deposit returned by Vamona Developers (P) Limited Rs. 257,596,439
(P.Y. Nil) and Upal Developers (P) Limited Rs. 240,000,000 (P.Y. Rs. Nil).
xii. Advance received against sale of Car Parking includes Pinnacle
Real Estate Development Private Limited Rs.50,000 (P.Y. Rs. Nil), Market
City Management Private Limited Rs. 50,000 (P.Y. Rs. Nil) Phoenix Retail
(P) Ltd. Rs. 50,000 (P.Y. Rs. Nil).
xiii. Investment in Shares/Application Money pending allotment/Optional
Convertible Debentures (OCD) includes Island Star Mall Developers (P)
Limited Rs. Nil (P.Y. Rs. 185,053,088), Phoenix Hospitality Co (P) Ltd Rs.
Nil (P.Y. Rs. 104,768,100), Classic Housing Projects (P) Limited Rs. Nil
(P.Y. Rs. 160,033,340) and Big Apple Real Estate (P) Ltd Rs. 61,200,000
(P.Y. Rs. 73,400,000).
xiv. OCD redeemed of Classic Housing Projects (P) Limited Rs. 800,000,000
(P.Y. Rs. Nil).
xv. Investment in OCD includes Palladium Construction (P) Limited Rs.
1,161,300,000 (P.Y. Rs. Nil).
xvi. Allocation of common capital work-in-progress cost includes
Pallazzio Hotels & Leisure Limited Rs. Nil (P.Y. Rs. 13,716,670).
xvii. Sale of land development rights to Offbeat Developers (P) Limited
Rs. 269,100,003 (P.Y. Rs. 792,714,650).
xviii. Expenses incurred on behalf of Pallazzio Hotels & Leisure
Limited Rs. 109,900,000 (P.Y. Rs. Nil).
xix. Purchase of Fixed Assets includes purchase from B. R.
International Rs. 179,454,545 (P.Y. Rs. Nil).
xx. Remuneration paid to Ashok Ruia Rs. 6,000,000 (P.Y. Rs. 6,129,006),
Atul Ruia Rs. 6,000,000 (P.Y. Rs. 8,537,400) and Kiran Gandhi Rs. 4,800,000
(P.Y. Rs. 4,800,000)
xxi. Profit / (Loss) from investment in Phoenix Construction Company Rs.
(42,432) (P.Y. Rs. (329,071)).
xxii. Sundry Balances written off Galaxy Entertainment Corporation
Limited Rs. 2,688,262 (P.Y. Rs. 4,210,422).
xxiii. Share Application money refund includes money refunded from
Ramayana Merchant (P) Limited Rs. 4,83,33,375 (P.Y. Rs. Nil) and Picasso
Developers (P) Limited Rs. 1,62,59,600 (P.Y. Rs. Nil)
11. PROJECT DEVELOPMENT EXPENDITURE
(In respect of Projects upto 31st March 2012, included under Capital
Work-in-Progress) Preoperative Income / Expenses transferred to capital
work-in-progress
Notes :
(i) Loans and Advances shown above are in the nature of loans which are
repayable on demand and do not have any repayment schedule.
(ii) Loans to the subsidiaries (a) to (d) are interest free.
(iii) Butala Farm Lands Private Limited is having investment in equity
shares of subsidiary company - Vamona Developers Private Limited.
(iv) Phoenix Hospitality Co. Pvt. Ltd. Is having investment in equity
shares of Gracework Realty &Lesiure Pvt. Ltd.
12. 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.
13. The revised schedule VI notified under the Companies Act 1956 has
become applicable to the Company during the current year. The previous
year figures have been regrouped, reworked, rearranged and
reclassified, wherever necessary, to conform to revised schedule VI
classification 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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