S

SOBHA
 SO BHA

Today, SOBHA is one of the most admired and trusted real estate brands in the country. This

is because SOBHA is known for delivering quality products on time in a transparent manner.

Working with passion and integrity are SOBHA’s hallmarks. Helping it achieve all this and much

more is SOBHA’s tried and tested self-reliant (backward integrated) business model which

ensures that the Company has control over almost all of its production processes. This helps

the Company ensure that it continues to deliver products of impeccable quality.

SOBHA is the only real estate player in the country to follow this model. Its strong in-house

design team tries to stay a step ahead by reimagining spaces to suit the demands of SOBHA’s

discerning customers. Its various engineering departments are always abreast of the latest

that is on offer across the world so that it can be provided to its customers. Today, SOBHA has

a presence in 10 cities - Bengaluru, Gurugram, Chennai, Pune, Coimbatore, Thrissur, Kozhikode,

Kochi, Gujarat (Gift City) and Mysore. Overall, SOBHA has its footprint in 27 cities in 14 states

across India.

The inbuilt culture to do things indigenously has stood the Company in good stead. During

trying times, SOBHA is uniquely placed to manage large chunks of its works in-house, be it

design, architecture, MEP, concrete blocks, wood work or glazing & metal works. All this adds

to the innate strength of the Company and helps it stay resilient.

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S TA Y I NG RE S I LIENT

V VERTICALS

SOBHA REAL ESTATE

From being a boutique player in Bangalore
25 years ago, today the Company has scaled
up its operation and is a well-known name
across the country for its projects. It builds
presidential apartments, villas, row houses,
luxury and super luxury apartments, plotted
development and aspirational homes. It is one
of the most admired and trusted real estate
brands and is known for its impeccable quality
products delivered on time in a transparent
manner. Till date, SOBHA has completed
160 real estate projects. SOBHA products
come with the promise of international quality,
superior designs and best-in-class technology
from across the world. The internal teams at
SOBHA make huge efforts to protect the
environment through rainwater harvesting
and sewage treatment plants. The Company
takes pride in doing things in-house. This
in-house expertise and focus on providing the
best in quality homes has also made SOBHA
self-reliant and resilient enough to face the
challenges that come its way.

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 VERTICALS

SOBHA CONTRACTUAL SOBHA MANUFACTURING

SOBHA Contractual was started in 2000 to One of SOBHA’s core strengths is that it
provide a range of services starting from is a self-reliant company with a backward
conceptualizing a project to its execution. integrated business model. SOBHA largely
Since inception, SOBHA Contractual has functions through three manufacturing
provided its services to a range of corporate divisions - Glazing and Metal Works, Interiors
houses in design and architecture, civil, and Concrete Products. SOBHA also has
mechanical, electrical, plumbing, interiors, a high-end mattress manufacturing unit
landscape, aluminium and glazing. Having and it sells its mattresses under the brand
completed 322 projects, SOBHA’s Contractual name: SOBHA Restoplus. The mattress
portfolio includes developing offices, manufacturing unit was started in
convention centres, software development 2007. All these divisions use state-
blocks, multiplex theatres, hostel facilities, of-the-art equipment imported from
hotels, guest houses, food courts, restaurants, different parts of the world. Our workers
research centres, club houses and factory at the factories are highly skilled
buildings for its many well-known and as they receive in-house training and
respected corporate clients. Among SOBHA’s certification in technical aspects at SOBHA
corporate clients are Infosys, Taj Group, Academy. SOBHA factories are equipped
Dell, HP, Timken, Biocon, Institute of Public to cater not only to SOBHA’s project
Enterprises (IPE), Lulu and the Azim Premji requirements but also to the demands of
Foundation. SOBHA Contractual has a team the players in the construction industry.
of experts trained at the Company’s in-house These factories are self-sustaining, revenue
training facility to provide products that are generating units which are pushing the
world-class. boundary of excellence.

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S TA Y I NG RE S I LIENT

C
CONTENTS

4 A NNU AL REPORT 202 1

 CONTENTS

INFORMATION FOR OUR SHAREHOLDERS

6 Staying Resilient
18 Chairman’s Message
22 Board of Directors
24 Board Committees
24 Corporate Information
25 Directors’ Report

CORPORATE RESPONSIBILITY
45 Corporate Governance Compliance Certificate

60 Corporate Governance Report

MANAGEMENT REPORT
88 Markets and Operating Environment
94 Projects and Work Done in 2020-21
97 Environment, Health and Safety
100 Corporate Social Responsibility
103 Research and Development
104 Employees
106 Risk Management Report
111 Operational and Financial Analysis

FINANCIAL STATEMENTS - STANDALONE

117 CEO & CFO Certification
118 Independent Auditors’ Report
133 Standalone Financial Statements
137 Notes to the Standalone Financial Statements

FINANCIAL STATEMENTS - CONSOLIDATED

201 Independent Auditors’ Report
213 Consolidated Financial Statements
217 Notes to Consolidated Financial Statements
280 Statement Relating to Subsidiary Companies

NOTICE OF THE ANNUAL GENERAL MEETING

282 Notice of the Annual General Meeting

ADDITIONAL INFORMATION
294 Glossary
295 Fiscal 2021 - Quarterly Highlights
296 3 years Financial Highlights

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S TA Y I NG RE S I LIENT

SSTAYING
RESILIENT

6 A NNU AL REPORT 202 1 SOBHA Manhattan Towers - TownPark, Bengaluru. (Artistic Impression: Not shot at site)
 ST A Y I N G R E SI LI E N T

This pandemic brought huge challenges for mankind. It tested the

resilience of businesses worldwide. The ability to bounce back, if faced
with adversity is a very desirable attribute for any company. In 2008-09
when the world was hit by the global financial crisis, India’s real estate
sector was badly impacted. SOBHA survived that crisis and bounced back
quickly. Since then, the Company has worked on strengthening its internal
processes and making it more risk proof. Staying resilient and future ready
has become a part of the Company culture. The corona pandemic came
and spread swiftly giving little time to companies to manage the crisis
at hand. With large scale infections, deaths, flight of labour, lockdowns,
woefully short health infrastructure and rampant scarcity and confusion,
we decided to stand our ground firmly and manage the crisis with
empathy and common sense. At SOBHA, being nimble footed and flexible
has been part of our work ethics since its inception. The Company’s
self-reliant (backward integrated) business model, its strong and
dedicated workforce and its focus on technology and staying ahead of the
curve has helped us to remain resilient. Barring a momentary pause in our
operations during the full-scale national lockdown by the government, we
sprung to our feet taking innovative steps for safeguarding the interests
of thousands of workers and employees. We quickly adopted technology
even in our sales and marketing activities and introduced virtual tours for
our customers. The online experience of buying a SOBHA home sitting in
the safe comfort of one’s own home reassured our customers.

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S TA Y I NG RE S I LIENT

SOBHA Interiors Division, Bengaluru

With the onset of the COVID-19 pandemic in 2020, before, during and after the adversity. This was a
the world stepped into a new period of uncertainty. crisis, over which people had limited or no control.
Almost all nations, societies and business entities We grappled with the crisis with our limited means.
were caught unprepared, witnessing devastating
loss of lives and livelihood of millions around the Like other businesses, the real estate sector in
world. Our ability to cope was severely tested India was badly hit. Work at construction sites
during this pandemic. This was the time when came to a halt. Construction workers headed for
governments, businesses and civic bodies had to their villages in different parts of the country.
show their resilience. The adversity that had struck There was scare all around.
mankind was huge. How could people overcome
As was expected, we at SOBHA too felt the
this adversity? Thousands were dying every
pandemic’s devastating impact on human lives
day. Powerful nations were on their knees - their
and business opportunities. After the initial shock
modern health infrastructure fell woefully short in
coping with the stress of the situation. and confusion, we gathered our thoughts and
began working on the problem. We gave primacy
In such circumstances, few governments and to ‘safety first’ for our workers, employees and
organizations came to the fore with immense customers. We already had a strong process
resilience – the ability to bounce back and tried framework and a dedicated workforce. The idea
to bring some semblance of order. The question was to repose faith and confidence and make
was of survival first. The microbe that was causing people aware about what causes the infection and
unprecedented deaths was highly infectious and ways to protect themselves. We put all protocols
difficult to control. This was the time that called and government guidelines in place, provisioned
for collective wisdom-how to survive and thrive dry rations for all our workers at their site camps

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and created good awareness amongst our people

as to what to do and what not to do. We also took
calibrated steps toward cost reduction, cash flows
and integrated technology for virtual site visits and
online meetings. The focus was on how quickly we
could adapt to the evolving situation.

There was a complete reset in the way people

wanted to do business. We catered to their safety
concerns and took care of our workers, brought
them back and continued with our work though
at a slower pace. But even as we dealt with the
devastation what gave us direction was our inner
strength and our innate sense of purpose to tide
over the crisis.

BEING RESILIENT IS PART OF OUR

EXISTENCE
There are various reasons why we at SOBHA
managed this. For one, being resilient is something
that forms a part of our very existence. SOBHA
was started by its founder and now Chairman
Emeritus, P N C Menon in 1995 with resilience as
one of its core mantras.

The Company started operations in Bangalore

in a real estate environment which was known
to be unorganized and which had little or no
professionalism. Introducing quality workmanship
and a transparent way of functioning in providing the
best-in-class products was not easy then. Treading
the uncharted path of establishing a business
model where the Company would manufacture its
own wood work, metal works and concrete blocks
for making homes was a very bold step. This gave
the Company the rare ability to control its supply
chain and keep an eye on its quality.

This also enabled SOBHA to be nimble footed so

that it could easily pivot and find its way, should
sudden challenges crop up. This was like sowing
the seeds of resilience and making the Company
future ready. As expected, the Company continued
to deliver exquisite quality products, on time in a
transparent way, year on year.

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S TA Y I NG RE S I LIENT

Over the decades, SOBHA moved into position

of strength and expanded its footprint across the
country. However, with the highs also came some
lows when SOBHA had to draw on its strengths.
And it did. The most significant of these was the
global financial crisis of 2008-09 which led to
turbulence across the world which also hit India’s
stock markets, financial institutions and industries.

Those were tough times as companies had to

deal with reduced confidence and trust among
their stakeholders. Consumers were cautious and
unsure about investing their hard-earned money
and had restricted and expensive access to funds.
The macroeconomic conditions were such that
SOBHA’s mettle was tested at a deeper level.

It was SOBHA’s inherent strengths and single-

minded focus on continuous improvements that
helped it sail through those turbulent times. The
Company relied on its human capital, superior
product quality and total commitment to timely
delivery to stay relevant. The Company realizes
that challenges will come and go but the important
thing is to face the challenges with empathy –
doing the right things, prioritizing and using lots of
common sense. This is what it did when the COVID
pandemic struck in March 2020.

REAL ESTATE SECTOR HIT HARD

During the financial crisis and even during
the COVID pandemic, the real estate sector
was hit hard. SOBHA not only survived but
even moved ahead due to its faith in its
unique business model. SOBHA has all the
key competencies and in-house resources to
deliver a project from its conceptualization
to completion so it does not have to depend
on others for key functions and ingredients.
This unique structure allows it to sail through
tough times.

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 ST A Y I N G R E SI LI E N T

SOBHA Glazing and Metal Works Division, Bengaluru

LEARNING FROM TOUGH TIMES LEADERSHIP AND TEAMS

A company needs to learn to be able to withstand At SOBHA, the leadership took the lead in charting
shocks in the future for no one can say when the out a course after the first wave of the pandemic
next crisis will strike. We, at SOBHA learnt during subsided. The Company put its house in order
the global financial crisis to remain agile and which is the first step in being and staying resilient
be ready to change tack quickly in the face of in an uncertain environment. The Company had
adversity. This is what came to our aid during the two-fold concerns: getting SOBHA back on the
COVID pandemic. rails and managing the safety of all its employees
and workers. New SOPs were created, COVID
Real estate is an interesting business. This is testing facilities were made available and so were
more so when the going is tough. Customers ambulances at worksites to deal with any eventuality.
have high expectations. Besides these, there
Putting safety first, we ensured a safe work
are commitments of delivering the best-in-class
environment for everyone. We called in our workers
products on time which cannot be done without
and gave them better facilities and safer working
depending on strong human resources. During the
environments. And, of course, all COVID protocols
first wave of the pandemic in 2020, everyone was
were followed and we are continuing to do so.
caught unawares. The Indian real estate sector
witnessed large scale labour migration which led Soon enough construction on our projects started.
to complete halt of all work at construction sites. At the same time, the focus also moved to cutting
The future seemed uncertain. But some of us costs and bringing in greater efficiency. All the
got back by using a common sensical approach departments came up with innovative ways of
to prioritize and break the problem into smaller cutting costs without compromising on SOBHA’s
pieces and finding intelligent and doable solutions. hallmark – quality.

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S TA Y I NG RE S I LIENT

SOBHA Concrete Products Division, Bengaluru

In a heartening development SOBHA’s Mattress zones. Treatment in the camps or in hospital was
Division received orders from America and given. All this helped us as construction work
Canada for the first time. Our factories too continued during the pandemic because of the
focused on keeping the costs down and cut down availability of at least 70 percent workers on the
the turnaround time to help the Company achieve sites. The other SOBHA employees too were paid
more revenues. equal attention and given appropriate help.

Equally importantly, our in-house doctors were

HUMAN RESOURCES
made available 24/7 for consultations and
There has never been a substitute for hard work
counselling. Using technology, classroom teaching
and that is what we did at SOBHA. We worked
and site training at SOBHA Academy was provided
hard. The Company raised the bar on hygiene
online in both technical and behavioural fields.
and taught its workforce to work collectively and
In all, 92 behavioural and 188 technical training
decisively to move ahead.
sessions were held online. Further, a central
Every aspect of SOBHA’s strong workforce was marketing team was set up with over 150 members
part of the focus during the pandemic. This started which responds to all customer queries efficiently.
with labour camps which are micro communities The Concrete Products Division developed a
where between 100 to 1,000 workers live. The formulation for mortar-based products and
Company ensured that everyone strictly adhered integrated its operations backwards. The Glazing
to the prescribed COVID protocols, ensuring and Metal Works Division and the Interiors
individual and collective hygiene practices. Daily Division too started work almost immediately
grocery and other essential supplies were provided after the lockdown was lifted leading to very little
to all those living in the camps and in quarantine inconvenience for our customers.

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 ST A Y I N G R E SI LI E N T

DESIGN AND ENGINEERING

When it comes to design interventions the
focus was on specific issues which were both
collaborative and cross disciplinary. SOBHA’s
design team started reimagining the built space
to ensure that it is more sustainable and self-
sufficient. It is likely that more people will choose
to work from home in the future. The emphasis
now is on creating larger balconies, terraces, and
roof tops wherever possible and providing both
ornamental and utilitarian plants in these spaces.
Further, the design team is also working on making
one bedroom accessible from the entrance foyer

CUSTOMERS FIRST
Our customers were given special attention.
Since site visits were a problem, SOBHA
introduced technology and matterport
cameras to create virtual experiences of its
mock up apartments. This helped interested
customers to virtually visit the actual sites
and see for themselves what we are offering.

Our customers could shortlist their home

options before approaching our sales team
or even visiting the actual sites. We have
seen that presenting our properties in a
digital friendly manner helped us improve our
conversion rate to a large extent. Our virtual
tour model is compatible with all devices
and comes with options such as doll house
view – a single doll-sized view of the entire
apartment, and measurement mode, where
you can measure the size of each room and
space. The other options include floor plan
view, drone view, downloadable floor plans,
image capturing, voiceover, auto play, and
one-on-one or one-on-multiple video calling.

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S TA Y I NG RE S I LIENT

14 A NNU AL REPORT 202 1 SOBHA Windsor, Bengaluru. (Artistic Impression: Not shot at site)
 ST A Y I N G R E SI LI E N T

in each apartment so that it can be converted into

a home office. Bedrooms too are being looked
at to provide enough space for a study table
and adequate lighting and internet connectivity.
Taking the safety measures further, SOBHA’s
design team is also looking at using touchless
technology in common areas like automatic doors,
voice activated elevators and sensor operated
lights and water spouts.

POWER OF TECHNOLOGY
Techonology has helped us delight our customers.
It was due to technology that we continued with our
business even during this on-going COVID crisis.

We renewed our contracts with our suppliers,

strengthened our supply chain further, trimmed our
workforce and brought in more efficiency but never
lost focus of the big picture. We stayed committed
throughout to create quality products at the best
price, most transparently. And that is what counts
for every customer. Technology also helped the
design team reimagine the covered space. Since
designers could work from their homes, regular
online meetings were held not only for delegating
and monitoring the jobs already underway but also
for sharing experiences and finding solutions for
the concerns raised.

Moving a step ahead, SOBHA is now exploring the

use of AI (artificial intelligence) in certain areas to
overcome problems due to various restrictions. AI is
revolutionizing the land surveying and construction
industry, with a promise of reducing the time taken
for activities such as land surveys and monitoring
construction progress by 50 percent.

We at SOBHA have realized that come what may,

if we have a great product and if our intentions are
rightly aligned with those of our customers we can
surpass all odds and continue to be in the business.
The important thing is to stay resilient and keep a
sharp eye while following the best practices.

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S TA Y I NG RE S I LIENT

A AWARDS

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 A W A R DS

SOBHA CITY, Gurugram (Artistic Impression: Not shot at site)

Awards and recognitions provide immense November 2020. SOBHA has been recognised for
encouragement, and more so when they are the ‘Outstanding Performance in Best Safe Practices
given at a time when the world is going through an during the year 2020’ in March 2021 by Government
unprecedented pandemic which has slowed down of Karnataka, State Safety Institute. The Company
both businesses and human activities. This year we has also been honoured by Hindustan Times as
were the proud recipients of the following awards: the ‘Titans of Real Estate – Iconic Project with Best
Amenities’ for SOBHA City, Gurugram project.
In April 2020, The Financial Times recognised
SOBHA in a list of 500 high-growth companies in the These awards are an acknowledgement of the
APAC region. According to the report, about 140 benchmark quality, customer-centric approach,
Indian companies will assist in the revival of the Indian and timeless values pursued by SOBHA.
economy. Catering to India’s housing demand, Following robust engineering, in-house research,
SOBHA is the only Indian real estate company to uncompromising business ethics and transparency
make it to this prestigious list of growth drivers for in all spheres of business conduct has helped
the APAC region. SOBHA was recognized as ‘One SOBHA to become one of the most admired real
of India’s Top Builders’ at the CWAB (Construction estate brands in India. We are extremely delighted
World Architect and Builder) Awards held virtually to receive these awards and recognition that
in August 2020. The CWAB Awards 2020 were reinforces our belief in creating benchmark quality
themed ‘Futuristic Awards’ and SOBHA has always products, have customer-centric approach, and
been at the forefront of innovation with its unique timeless values. Each year, the awards are a true
self-reliant (backward integrated) model. The recognition for the entire SOBHA team that works
Company was recognised as the ‘Developer of the passionately towards achieving the goals. As we
Year’ in the national category by Franchise India move forward, we will continue to create value for
at the 12th Annual Estate Awards held virtually in our customers and redefine the city skylines.

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S TA Y I NG RE S I LIENT

18 A NNU AL REPORT 202 1

 C HA I R MA N ’ S ME SSA G E

Dear shareholders and friends of SOBHA,

FY 2020-21 began with an unexpected and unusual turn of events. The
declaration of a national lockdown, albeit an effective tool to combat
the rising COVID threat, came all too sudden for people, business, and
the economy to even fathom. SOBHA, over our journey in the past
25 years, has witnessed several such stress tests which not only have we
confidently overcome but at same time have imbibed their learnings. Here
again, we were of the firm belief that the resilience challenge posed by
COVID would be no different.

We immediately began to double down efforts on all key parameters of

our business. In the last fiscal, SOBHA made significant progress in its debt
reduction efforts. This was made possible due to improved sales numbers,
stronger cash flows and a decline in interest rate on our borrowings in
recent quarters. SOBHA’s total income in FY 2020-21 stood at ₹21.90 billion
with a cash inflow of ₹30.77 billion. SOBHA also recorded its highest ever
yearly sales value of ₹31.37 billion in FY 2020-21. In Q4-21, the real estate
vertical achieved the best ever quarterly sales volume of 1.34 million sq.ft.
(SBA) along with the highest ever quarterly cash inflow of ₹7.15 billion.

During the financial year, we have completed 2.56 million square feet of
developable area. We also launched new projects with a developable
area of 3.66 million square feet. These launches were spread across
Bangalore and Thrissur. Overall, SOBHA has delivered 112.30 million sq.ft.
of residential and commercial developments since its inception. Today,
the Company has a presence in 27 cities across 14 states through its
residential and contractual project portfolio.

The improved financial metrics for the fiscal show SOBHA’s resilience and
strong business fundamentals, even in a year severely affected by the
pandemic. This has been possible due to our unique self-reliant business
model that enables optimal resource utilization and timely project
delivery with unmatched quality. In our journey over last 25 years, we
have also been able to gain trust of our customers with a focus on world
class product quality, unwavering commitment, sincere hard work and
transparency. In today’s uncertain times when the Real estate industry is
undergoing consolidation and customers are seeking to minimize risk, this
trust from customers has held us in good stead.

However, the tough macroeconomic conditions engendered by the

pandemic have forced quicker decision making in organizations with
very little reaction times. At SOBHA, we have adapted to this crisis by
changing how we collaborate. There has been a paradigm shift within the

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S TA Y I NG RE S I LIENT

organization and the internal collaboration between teams has become

much more effective and technology driven. We have also driven
digitization in our sales and marketing processes through rapid adoption
of technology. Our initiatives like the STM app and centralized call centre
are already showing positive results.

In the last fiscal, we have made significant progress in driving operational

efficiency, improvement in cash flows and reduction in overall debt. We
have been able to leverage on technology and process improvements
throughout the organization to achieve these goals successfully.

Immediately after the lockdown restrictions were eased, our focus was
to restart project execution and avoid any effect on delivery timelines.
We were able to achieve this by putting new SOPs in place to minimize
the impact of the pandemic on our people and overall productivity. All
COVID related protocols were strictly followed at all our sites. Workers
were tested for COVID and a strong framework for safety and hygiene
was put in place. As a result, our project teams got back to action with
safety and speed. Through our CRM team, we also provided comfort to
our customers by addressing all pandemic induced apprehensions about
delivery timelines.

This drive for constant improvement through technological interventions

and process changes has now been deeply ingrained in our DNA. Through
improved cross-functional collaboration, especially between Design and
Project teams, we have focused extensively on value engineering as
an organization wide initiative. We are striving to improve operational
effectiveness by making our project designs more efficient, benchmarking
structural designs, and working on vendor development. One example of
such a cross-functional collaboration effort is an increased utilization of
Precast technology in project execution. We are now increasingly using
precast elements for basements and ancillary structures like UG sumps
in our projects. This has helped us in accelerating our execution timelines
without any compromise on quality and workmanship.

We are also working on incorporating technology in our design workflow

so that we can reduce the time required for bringing a project from
conceptualization stage to drawing preparation and submission stage.
Since we have a self-reliant operating model, we are able to make
changes and incorporate market inputs in our project designs much
faster. For instance, we have already started designing larger homes
with ample working spaces and with the option of home offices to cater
to the new requirement of ‘Work from home’.

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 C HA I R MA N ’ S ME SSA G E

SOBHA has been able to transform the way we interact with our potential and existing customers
through use of technology. We have made the sales process much more seamless through pan India
implementation of virtual site visits. This allows our customers to have an immersive view of our experience
centers and show residences. It also enables the salesperson to showcase project interiors and exteriors
along with the project plans effectively. With this implementation, we have been able to drive sales without
physical interaction with customers and help them in making the purchase decision from the comfort of their
homes, safely.

We have driven these massive changes in our sales and marketing process with the help of our newly
created central marketing team that now comprises over 150 members. The team has been able to bring
in more efficiency in the client acquisition costs and has made us more effective in handling customer
enquiries. Our focus on efficiency is also visible in initiatives like marketing automation tools and use of
business intelligence platforms.

Our world class products and customer centricity has attracted multiple awards and recognitions, despite
the pandemic. The Financial Times recognized SOBHA as one of the 500 high-growth companies in the
APAC region. We were also recognized as ‘One of India’s Top Builders’ at the CWAB (Construction World
Architect and Builder) Awards. The Company was given the ‘Developer of the Year’ award in the national
category by Franchise India. These recognitions have encouraged us to carry on with the work that we have
been doing for the last 25 years with more sincerity and a renewed vigor.

SOBHA’s business growth has always been interwoven with our unwavering efforts towards enabling the
growth of our societies. Under the aegis of the Sri Kurumba Educational and Charitable Trust, SOBHA carries
out transformative work in 3 panchayats of Palakkad, Kerala since 2006. All CSR activities at SOBHA stem
out of a genuine concern for the underprivileged. Our CSR work covers areas like education, health, women
empowerment, and livelihood programs for nearly 4,525 families (around 17,311 people) from the below
poverty line (BPL) segment.

I would like to thank all my colleagues on the Board for their valuable guidance and support. They have
helped us in setting up new benchmarks and in building greater corporate resilience. I am also thankful to all
our employees, workers, and stakeholders for their continued faith in SOBHA. I hope that you will, as always,
continue to provide us with support and encouragement so that we can emerge stronger each year.

Wishing you all a safe and a healthy year ahead.

Ravi PNC Menon

A N N U A L R E P O R T 2021 21
INFORMATION FOR OUR
SHAREHOLDERS

BOARD OF DIRECTORS AS ON MARCH 31, 2021

MR. RAVI PNC MENON - CHAIRMAN

Mr. Ravi PNC Menon is the Chairman of the Company. He holds a degree in Bachelor
of Science in Civil Engineering from Purdue University, USA. He has seventeen
years of experience in the field of construction and real estate development. He
is responsible for developing the strategic vision of the Company, establishing
the organisations’ goals and objectives and directing the Company towards its
fulfilment. He focuses on the overall functioning of the Company, in particular,
emphasising on product delivery, project execution, quality control, technology
advancement, process and information technology and customer satisfaction. He
supervises the performance of various departments in the organisation such as Design and Engineering,
Project Management, Sales and Marketing, Quality, Safety and Technology, Estimation, Cost Audit, Value
Engineering, Landscaping, etc. He played a key role in the successful integration of pre-cast technology
in our construction methodology. He plays an influential and prominent role in augmenting the product
delivery levels of the Company, attainment of superior standards of quality, new product launches and
customer relationship management.

MR. J.C. SHARMA - VICE CHAIRMAN AND MANAGING DIRECTOR

Mr. J.C. Sharma is the Vice Chairman and Managing Director of the Company. He
holds a degree in Bachelor of Commerce (Honours) from St. Xavier’s College,
Calcutta. He is a qualified Chartered Accountant and Company Secretary with
over 39 years of experience in diversified industries such as automobiles,
textiles and steel. He has been associated with SOBHA since June 2001. With
20 years of cumulative experience in the Company, he has been a member of
the Board of Directors since the year 2003. Mr. J.C. Sharma is entrusted with the
overall responsibility of managing the affairs of the Company especially finance,
purchase, legal and land acquisition, administration and also responsible for achieving the targets of the
Company. He plays an instrumental role in spearheading the growth mantle of the Company.

MR. T.P. SEETHARAM – WHOLE-TIME DIRECTOR

Mr. T.P. Seetharam, Whole-time Director holds MA degree in English Literature
from Madras Christian College. He joined the Indian Foreign Service in 1980.
After a distinguished service of 36 years as a career diplomat, he retired as
Ambassador of India to UAE in August, 2016. He was also High Commissioner
of India to Mauritius, Additional Secretary in Ministry of External Affairs, New
Delhi dealing with Western Europe and European Union, Director General of
India-Taipei Association (Taiwan), Program Director in Indian Council for Cultural
Relations and served in various capacities at Indian diplomatic missions in Hong
Kong, Lusaka (Zambia), Windhoek (Namibia), Beijing (China), Phnom Penh (Cambodia), Johannesburg
and Cape Town (South Africa) and Bangkok (Thailand). He served as Minister Counsellor in the Indian
Permanent Mission to the Conference on Disarmament in Geneva (Switzerland). He was Press Secretary to
H.E. Mr. K.R. Narayanan, President of India. He was also Permanent Representative of India to International
Renewable Energy Agency (IRENA) in Abu Dhabi. Mr. Seetharam was appointed as Whole-time Director
of the Company effective 1st April, 2019. Mr. Seetharam looks into the CSR activities of the Company.

22 S O B HA ANNUAL REPORT 2 02 1
 INFORMATION FOR OUR
SHAREHOLDERS
MR. R.V.S. RAO - INDEPENDENT DIRECTOR
Mr. R.V.S. Rao is an Independent Director of the Company. He holds a bachelor’s
degree in Commerce from the University of Mysore and a bachelor’s degree in
law from Bangalore University. He is a fellow member of Indian Institute of Banking
and Finance. He has over 49 years of experience in the areas of banking and
finance. He has served on the Board of Directors of Housing Development Finance
Corporation Limited. As a United States Agency for International Development
(USAID) Consultant, he was the team leader that reviewed operations and made
recommendations for the Housing Finance Company, Ghana, Africa. He also
led the consultancy team, which advised the National Development Bank of Sri Lanka in establishing its
mortgage finance business. He is an associate of Indian Institute of Bankers and a life member of All India
Management Association.

MR. ANUP SHAH - INDEPENDENT DIRECTOR

Mr. Anup Shah is an Independent Director of the Company. He holds
a bachelor’s degree in commerce from HR College, Mumbai and a degree in law
from Government Law College, Mumbai. He has over 37 years of experience
in the field of law, specifically real estate law. Since founding his own firm in
1993, he has advised developers, builders and foreign and domestic investors in
structuring real estate transactions, leases, development agreements and joint
ventures. He specialises in commercial and property documentation, corporate
and commercial litigation, property related issues, land laws and arbitration and
alternative dispute resolutions. He is the Founder Partner of ASLF LAW OFFICES (formerly known as
Anup S Shah Law Firm) in Bangalore.

MR. SUMEET JAGDISH PURI - INDEPENDENT DIRECTOR

Mr. Sumeet Jagdish Puri is an independent Director of the Company. He has
worked as Managing Director at Deutsche Bank, Morgan Stanley and Merrill Lynch
for over 23 years, in the area of Global Investment Banking and is currently the
Managing Director of Samaya Capital Advisors, Hong Kong. He has handled some
of the world’s largest IPO’s. He is an Advisor to Stock Exchange of Hong Kong, Bain
Capital, Carlyle Group, Tiger Funds, etc., for their capital raising and investments.
He was also an Advisor to Piramal Enterprises for Asia’s largest mandatory
structured transaction, LoneStar Funds for the launch of one of India’s largest
NBFC platforms, etc. He holds Master of Business Administration (MBA) degree from S.P. Jain Institute
of Management & Research, Mumbai and a Bachelor’s degree from Sydenham Institute of Management
Studies, Research and Entrepreneurship.

MS. SRIVATHSALA K N - INDEPENDENT DIRECTOR

Ms. Srivathsala K N is an Independent Director of the Company. She is an
entrepreneur, strategic business advisor, financial planner, active angel investor,
start-up expert and a mentor. She is the founder of four organisations - Fintrans
Investment Advisors, Wintrans Consultancy, Eleasee and Vandyam Prasada Foods.
She is a mentor at Prahlad Kakkar’s Institute of Branding and Entrepreneurship,
and IIT Bombay and Kharagpur. She guides students on financial planning and
entrepreneurship. Besides this, she has conducted several training and awareness
programmes on entrepreneurship and financial literacy for corporates, public and
students. Ms. Srivathsala is a certified financial planner and an accounting technician from the Institute of
Chartered Accountants of India. She holds a Master’s degree in Commerce from the Bangalore University.

SO BHA A N N U A L R E P O R T 2021 23
INFORMATION FOR OUR
SHAREHOLDERS

COMMITTEES OF CORPORATE
THE BOARD INFORMATION
AUDIT COMMITTEE COMPANY SECRETARY AND
COMPLIANCE OFFICER
Mr. R V S Rao (Chairman)
Mr. Vighneshwar G Bhat
Mr. J C Sharma
Mr. Sumeet Puri CHIEF FINANCIAL OFFICER
Mr. Subhash Mohan Bhat

STAKEHOLDERS RELATIONSHIP COMMITTEE

STATUTORY AUDITORS
Mr. Sumeet Puri (Chairman) M/s. BSR & Co. LLP
Mr. Ravi PNC Menon Maruthi Infotech Center, 11-12/1
Inner Ring Road, Koramangala,
Mr. J C Sharma
Bangalore 560071
Mr. T P Seetharam
BANKERS

NOMINATION, REMUNERATION AND Union Bank of India

Axis Bank
GOVERNANCE COMMITTEE
Arka Fincap Limited
Bajaj Housing Finance Limited
Mr. Anup Shah (Chairman)
DBS Bank of India Limited
Mr. R V S Rao ICICI Bank
Mr. Sumeet Puri Karur Vysya Bank Limited
Mr. Ravi PNC Menon PNB Housing Finance Limited
South Indian Bank Limited
Standard Chartered Bank
State Bank of India
RISK MANAGEMENT COMMITTEE
Tata Capital Financial Services Limited
Mr. Anup Shah (Chairman) RBL Bank Limited
HDFC Bank Limited
Mr. Ravi PNC Menon
CSB Bank Limited
Mr. J C Sharma Deutsche Bank
Mr. Subhash Mohan Bhat Bank of Baroda
Kotak Mahindra Bank Limited
Kotak Mahindra Investments Limited
CORPORATE SOCIAL RESPONSIBILITY Aditya Birla Finance Limited
Aditya Birla Housing Finance Limited
COMMITTEE
Karnataka Bank Limited
HDFC Limited
Mr. Sumeet Puri (Chairman)
Indian Bank
Mr. J C Sharma
Ms. Srivathsala K N REGISTERED AND CORPORATE OFFICE
Sobha Limited
‘SOBHA’
SHARE TRANSFER COMMITTEE
Sarjapur-Marathahalli Outer Ring Road (ORR),
Mr. J C Sharma (Chairman) Devarabisanahalli, Bellandur Post,
Bangalore - 560 103
Mr. T P Seetharam Tel: +91 80 4932 0000 Fax: +91 80 4932 0444
Mr. Ravi PNC Menon www.sobha.com

24 S O B HA ANNUAL REPORT 2 02 1
 INFORMATION FOR OUR
SHAREHOLDERS
DIRECTORS’ REPORT
Dear Members,
Your Directors have pleasure in presenting the Twenty Sixth Annual Report on the business and operations
of the Company together with the audited results for the financial year ended March 31, 2021.

FINANCIAL HIGHLIGHTS (₹ In million)

Standalone Consolidated
Particulars
2020-21 2019-20 2020-21 2019-20

Total Revenue 21,911.51 38,304.87 21,904.00 38,256.59

Operating Expenditure 14,650.33 26,488.29 14,346.34 26,386.16

Earnings before Interest, Depreciation and Amortisation 7,261.18 11,816.58 7,557.66 11,870.43

Depreciation and Amortisation 754.96 673.52 793.67 722.85

Finance Cost 5,759.58* 6,732.28* 6,012.14** 6,816.03**

Profit Before Tax 746.64 4,410.78 751.85 4,331.55

Tax Expenses 91.25 1,515.99 129.09 1,514.86

Profit after Tax 655.39 2,894.79 622.76 2,816.69

* Includes notional interest accrued on advance from customers as per Ind AS 115, ₹2,515 million, ₹3,558 million for the year ended
March 31, 2021 and year ended March 31, 2020 respectively.
** Includes notional interest accrued on advance from customers as per Ind AS 115, ₹2,650 million, ₹3,558 million for the year ended
March 31, 2021 and year ended March 31, 2020 respectively.

There have been no material changes and B. FINANCIAL OVERVIEW

commitments effecting the financial position of
the Company which have occurred between the Standalone
end of the financial year to which the balance During the Financial Year 2020-21, the
sheet relates and the date of this report.
Company has on a standalone basis,
earned total revenues of ₹21,911.51 million as
BUSINESS AND OPERATIONS
compared to ₹38,304.87 million in the previous
A. BUSINESS OVERVIEW year, a decrease of 42.80% y-o-y. The Profit
before Tax during the year was ₹746.64 million
The Company is operating in the following
as against ₹4,410.78 million in the previous
two segments:
year, decreased by 83.07% and Profit after Tax
• Construction and development of during the year was ₹655.39 million as against
residential and commercial projects ₹2,894.79 million in the previous year, that is,
• Contractual projects decreased by 77.36%.
A summary of completed and ongoing
Consolidated
projects as on March 31, 2021 has been
detailed in the Management Discussion and The consolidated revenues of the Company
Analysis Report titled ‘Management Report’ during the financial year 2020-21 were
forming part of the Annual Report. ₹21,904.00 million, a decrease of 42.74%

SO BHA A N N U A L R E P O R T 2021 25
INFORMATION FOR OUR
SHAREHOLDERS

from the previous year. The Profit before change in the issued, subscribed and fully
Tax decreased by 82.64% and Profit after paid up share capital of the Company during
Tax (after considering minority interest) the year under review. Sobha Limited is a
decreased by 77.89% as compared to the public limited company and its equity shares
financial year 2019-20. are listed on National Stock Exchange of
India Limited and BSE Limited.
Transfer to Reserves
B. BUYBACK OF EQUITY SHARES
Your Directors propose to transfer
₹65.54 million of the current profits to the There was no buyback offer made by the
General Reserve. Company during the period under review.

Dividend C. CHANGES IN SUBSIDIARIES, JOINT

VENTURES AND ASSOCIATES
The Board of Directors, subject to the approval
of the shareholders at the ensuing Annual During the year under review, there was
General Meeting are pleased to recommend no change in Subsidiaries, Joint Ventures
a dividend of ₹3.50/- per equity share of and Associates.
₹10/- each.
However, Sobha Highrise Ventures Private
C. OPERATIONAL OVERVIEW Limited, a wholly owned subsidiary of the
Company, during the year, acquired the entire
Completed Projects shares of Annalakshmi Land Developers
Private Limited making it a wholly owned
During the year under review, the Company
subsidiary of Sobha Highrise Ventures
executed and handed over 0.23 million square
Private Limited. With this acquisition, as on
feet real estate projects and 2.33 million
the date of this report, the Company has
square feet of contractual projects resulting
six direct subsidiaries and six step down
in an aggregate development of 2.56 million
subsidiaries.
square feet.
The details of subsidiaries, step down
The Company has completed construction
subsidiaries and associates are given
of 112.30 million square feet of area since
elsewhere in the Annual Report.
inception.

Ongoing Projects BOARD OF DIRECTORS AND ITS

COMMITTEES
The Company currently has real estate
projects aggregating 30.11 million square feet A. COMPOSITION OF THE BOARD OF
of developable area. It has 5.64 million square DIRECTORS
feet of ongoing contractual projects which
As on 31st March, 2021, the Board of Directors
are under various stages of construction.
of the Company comprises of seven
The Company has a geographic presence in Directors of which, four are Non-Executive
27 cities across 14 states in India. Independent Directors and three are
Executive Directors. The composition of
the Board of Directors is in compliance with
SHARE CAPITAL RELATED MATTERS
Regulation 17 of SEBI (Listing Obligations and
A. SHARE CAPITAL Disclosure Requirements) Regulations, 2015
(Listing Regulations) and Section 149 of the
The authorized share capital of the Company
Companies Act, 2013.
is ₹2,000,000,000 divided into 150,000,000
equity shares of ₹10 each and 5,000,000 The Company has received necessary
preference shares of ₹100 each. At the declarations from the Independent Directors
beginning of the year under review, the stating that they meet the criteria of
Issued, subscribed and fully paid up capital independence as specified in Section 149(6)
was ₹948,458,530 divided into 94,845,853 of the Companies Act, 2013 and Regulation
equity shares of ₹10 each. There was no 25(8) of the Listing Regulations.

26 S O B HA ANNUAL REPORT 2 02 1
 INFORMATION FOR OUR
SHAREHOLDERS
B. CHANGES IN DIRECTORS AND KEY E. PERFORMANCE EVALUATION
MANAGERIAL PERSONNEL
In terms of Section 134 (3) (p) read
During the year under review, Mr. Jagadish with Articles VII and VIII of Schedule IV
Nangineni has resigned from the position of the Companies Act, 2013, the Board
of Deputy Managing Director and has carried out an annual performance
Whole-time Director with effect from evaluation of its own performance and
February 24, 2021. Except the above, there that of its statutory committees - the
were no changes in the key managerial Audit Committee, Stakeholder Relationship
personal of the company. Committee, Nomination, Remuneration
and Governance Committee and that of
C. MEETINGS Individual Directors.
During the year under review, the Board of The Board assessed the performance and
Directors met 4 times on the following dates: the potential of each of the Independent
• June 27, 2020 Directors with a view to maximizing their
contribution to the Board. As envisaged
• August 07, 2020 by the Act, the Independent Directors
• November 07, 2020 reviewed the performance of the Chairman
of the Board at a meeting especially called
• February 12, 2021 for that purpose. At the same meeting, a
In accordance with the provisions of the review of the Executive Directors were also
Companies Act, 2013, a separate meeting of carried out.
the Independent Directors of the Company
was held on 31st March, 2021. F. DIRECTORS’ RESPONSIBILITY
STATEMENT
D. RE-APPOINTMENT OF DIRECTORS According to the information and explanations
RETIRING BY ROTATION obtained, pursuant to Section 134(5) of the
Pursuant to the provisions of Section Companies Act, 2013, your Directors hereby
152 of the Companies Act, 2013, confirm that:
Mr. J C Sharma, Vice Chairman and a) in the preparation of the annual
Managing Director (DIN: 01191608) is liable accounts, the applicable accounting
to retire by rotation at the ensuing Annual standards have been followed along
General Meeting and being eligible offers with proper explanations relating to
himself for re-appointment. The Board of material departures;
Directors based on the recommendation of
b) the directors have selected such
Nomination, Remuneration and Governance
accounting policies and applied them
Committee, have recommended the
consistently and made judgments
re-appointment of Mr. J C Sharma, Director
and estimates that are reasonable
retiring by rotation.
and prudent so as to give a true and
The Notice convening the Annual General fair view of the state of affairs of the
Meeting includes the proposal for Company at the end of the financial
re-appointment of Mr. J C Sharma, as a year and of the profit of the Company
Director. A brief resume of Mr. J C Sharma for that period;
has been provided as an Annexure to
c) proper and sufficient care was taken
the Notice convening the Annual General
for the maintenance of adequate
Meeting. Specific information about
accounting records in accordance
the nature of Mr. J C Sharma’s expertise
with the provisions of this Act for
in specific functional areas and the names
safeguarding the assets of the Company
of the companies in which he holds
and for preventing and detecting fraud
directorship and membership / chairmanship
and other irregularities;
of the Board Committees have also been
provided in the Notice convening the d) the annual accounts have been
Annual General Meeting. prepared on a going concern basis;

SO BHA A N N U A L R E P O R T 2021 27
INFORMATION FOR OUR
SHAREHOLDERS

e) internal financial controls to be followed C. SECRETARIAL AUDIT

by the Company have been laid down
Secretarial Audit of the Company for the
and such internal financial controls
year ended March 31, 2021 was conducted
are adequate and were operating
by Mr. Nagendra D Rao, Practicing Company
effectively; and
Secretary. The Secretarial Audit Report
f) proper systems have been devised issued by Mr. Nagendra D Rao, in accordance
to ensure compliance with the with the provisions of Section 204 of the
provisions of all applicable laws and Companies Act, 2013 is provided separately
that such systems were adequate and in the Annual Report (Annexure A).
operating effectively.
There are no qualifications or adverse
AUDIT RELATED MATTERS remarks in the Secretarial Audit Report
which require any explanation from the Board
A. AUDIT COMMITTEE of Directors.
The composition of the Audit Committee as
on 31st March 2021 was: D. COST AUDIT

1. Mr. R V S Rao (Independent Director) - The Cost Audit Report for the financial
Chairman year 2019-20 was filed with the Ministry
2. Mr. Sumeet Puri (Independent Director) of Corporate Affairs, New Delhi within
- Member the due date prescribed under the
3. Mr. J C Sharma (Vice Chairman and Companies (Cost Records and Audit)
Managing Director) - Member Rules, 2014. There were no qualifications or
adverse remarks in the Cost Audit Report
The terms of reference, powers, role and which require any explanation from the
responsibilities of the Audit Committee are in Board of Directors.
accordance with the requirements mandated
under Section 177 of the Companies Act, 2013 Based on the recommendations of the Audit
and Regulation 18 of the Listing Regulations. Committee, the Board of Directors have
re-appointed M/s. Srinivas and Co. Cost
During the period under review, the advice Accountants (Firm Registration No: 000278)
and suggestions recommended by the as the Cost Auditors of the Company for
Audit Committee were duly considered and the financial year 2020-21. In terms of Rule
accepted by the Board of Directors. There
14 of the Companies (Audit and Auditors)
were no instances of non-acceptance of
Rules, 2014, the remuneration payable to the
such recommendations.
Cost Auditors for the financial year 2020-21
is subject to ratification by the shareholders
B. STATUTORY AUDITORS
of the Company. The Notice convening
At the Twenty Second Annual General the Annual General Meeting contains the
Meeting held on 4th August, 2017, the proposal for ratification of the remuneration
members appointed M/s. B S R & Co. LLP, payable to the Cost Auditors.
Chartered Accountants (Firm Registration
No.101248W/W-100022), as Statutory Auditors E. INTERNAL AUDIT AND INTERNAL
of the Company for a period of 5 years from FINANCIAL CONTROLS
the conclusion of the Twenty Second Annual The in-house Internal Audit Team is
General Meeting until the conclusion of the
responsible for assurance with regard
Twenty Seventh Annual General Meeting.
to the effectiveness, accuracy and
The Statutory Auditors expressed an efficiency of the internal control systems
unmodified opinion in the audit reports with and processes in the Company. The
respect to audited financial statements for Company’s Audit Team is independent,
the financial year ended March 31, 2021. There designed to add value and empowered to
are no qualifications or adverse remarks in improve the Company’s processes. It helps
the Statutory Auditors’ Report which require the Company accomplish its objectives
any explanation from the Board of Directors. by bringing a systematic, disciplined

28 S O B HA ANNUAL REPORT 2 02 1
 INFORMATION FOR OUR
SHAREHOLDERS
approach for evaluating and improving the risks faced by the Company and methods and
effectiveness of risk management, control procedures for identifying, monitoring and
and governance processes. mitigating such risks. The Board of Directors
of the Company has constituted a Risk
There are adequate internal financial
Management Committee which is entrusted
controls in place with reference to
with the task of evaluating, monitoring
the financial statements. During the
and reviewing the risk management plan
year under review, the Internal Audit
and procedures of the Company. The risk
Department and the Statutory Auditors
management function is supporting the
tested these controls and no significant
internal control mechanism of the Company
weakness was identified either in the
and supplements the internal and statutory
design or operations of the controls. A
audit functions.
report issued by the Statutory Auditors,
M/s. B S R & Co. LLP, on the Internal There were no offence or fraud that needs to
Financial Controls forms a part of the be reported by the Statutory Auditors as per
Annual Report. Section 143 (12) of the Companies Act, 2013.

C. CORPORATE SOCIAL RESPONSIBILITY

POLICY MATTERS
POLICY
A. NOMINATION AND REMUNERATION The Company believes that its achievements
POLICY
do not refer only to its growth but are also
The Nomination, Remuneration and spread to society. Accordingly, under the
Governance Committee of the Board of aegis of its CSR arm, Sri Kurumba Educational
Directors is responsible for recommending & Charitable Trust, it has adopted three
the appointment of the directors and senior village panchayats - Vadakkenchery,
management to the Board of Directors of Kizhakkenchery and Kannambra in Palakkad
the Company. The Company has in place district of Kerala, each consisting of 2 villages,
a Nomination and Remuneration Policy to improve the lifestyle of the people at the
containing the criteria for determining grassroot level.
qualifications, positive attributes and
The Corporate Social Responsibility
independence of a director and policy
Policy, as formulated by the Corporate
relating to the remuneration for the
Social Responsibility Committee and
directors, key managerial personnel and
approved by the Board of Directors is
senior management personnel of the
available on the Company’s website at:
Company. The Committee also postulates
h t t p s : // w w w. s o b h a . c o m / w p - c o n te n t /
the methodology for effective evaluation
uploads/2020/10/158036284320200130.pdf
of the performance of individual directors,
committees of the Board and the Board In terms of Section 134 of the Companies
as a whole which should be carried Act, 2013 read with the Companies (Corporate
out by the Board, committee or by an Social Responsibility Policy) Rules, 2014,
independent external agency and reviews the annual report on the Corporate Social
its implementation and compliance. The Responsibility activities of the Company is
Nomination and Remuneration Policy given in Annexure C to this report.
is available on the Company’s website:
h t t p s : // w w w. s o b h a . c o m / w p - c o n te n t / D. VIGIL MECHANISM
uploads/2020/10/153630165920180907.pdf The Company has established a vigil
Extracts from the policy are reproduced in mechanism to promote ethical behaviour
Annexure B to this report. in all its business activities. It has in place a
mechanism for employees and directors
B. THE RISK MANAGEMENT FRAMEWORK
to report any genuine grievances, illegal,
The Company has developed and unethical behaviour, suspected fraud or
implemented a risk management framework violation of laws, rules and regulations or
detailing the various internal and external conduct to the Vigilance Officer and the Audit

SO BHA A N N U A L R E P O R T 2021 29
INFORMATION FOR OUR
SHAREHOLDERS

Committee of the Board of Directors. The D. SIGNIFICANT OR MATERIAL ORDERS

policy also provides for adequate protection PASSED BY REGULATORS / COURTS
to the whistle blower against victimisation
During the year under review, there were no
or discriminatory practices. The policy is
significant or material orders passed by the
available on the Company’s website at:
regulators or courts or tribunals impacting
h t t p s : // w w w. s o b h a . c o m / w p - c o n te n t /
the going concern status and Company’s
uploads/2020/10/153630159420180907.pdf operations in future.
During the year under review, the Company
did not receive any complaints relating to E. HUMAN RESOURCES
unethical behaviour, actual or suspected Employee relations continue to be cordial
fraud or violation of the Company’s code of at all levels and in all divisions of the
conduct from any employee or Directors. Company. The Board of Directors would like
to express its sincere appreciation to all the
OTHER MATTERS employees for their continued hard work and
A. DEBENTURES steadfast dedication.

There were no outstanding debentures as As on March 31, 2021, the Company had an
organisational strength of 3,061 employees.
on the closure of the financial year ended
31st March, 2021. Details about the Employees are provided in
a separate section of the Annual Report.
B. DEPOSITS
F. DISCLOSURE UNDER THE SEXUAL
The Company has not accepted any deposits
HARASSMENT OF WOMEN AT
in terms of Chapter V of the Companies WORKPLACE (PREVENTION,
Act, 2013 read with the Companies PROHIBITION AND REDRESSAL) ACT, 2013
(Acceptance of Deposit) Rules, 2014, during
the year under review. As such, no amount The Company has adopted a policy for
of principal or interest was outstanding as the prevention and redressal of sexual
on date of this report. harassment at the workplace. Pursuant to
the provisions of the Sexual Harassment
C. TRANSFER TO INVESTOR EDUCATION of Women at the Workplace (Prevention,
AND PROTECTION FUND Prohibition and Redressal) Act, 2013, the
Company has in place an Internal Complaints
In compliance with Section 124 of the
Committee for prevention and redressal of
Companies Act, 2013, the dividends
complaints of sexual harassment of women
pertaining to the financial year 2012-13 which
at the workplace. No complaints were
were lying unclaimed with the Company received by the Company during the year
were transferred to the Investor Education under review.
and Protection Fund during the financial year
2020-21. The details of unclaimed dividends G. AWARDS AND RECOGNITIONS
transferred to the Investor Education and
Protection Fund have been detailed in the During financial year 2020-21, the Company
Corporate Governance Report forming part was conferred with various awards and
of the Annual Report. recognitions, the details of which are given in
a separate section of the Annual Report.
As required under Section 124 of the
Companies Act, 2013 and the Rules made H. CORPORATE GOVERNANCE
thereunder, 2,574 equity shares, in respect of
In accordance with Regulation 34(3) read with
which dividend had not been claimed by the
Schedule V of the SEBI (Listing Obligations
shareholders for seven consecutive years
and Disclosure Requirements) Regulations,
or more, were transferred to the Investor
2015, a separate report on Corporate
Education and Protection Fund during the
Governance forms part of this report.
year under review. The details of the shares
and shareholders are available on the A certificate from Mr. Nagendra D Rao,
Company’s website. Practicing Company Secretary affirming

30 S O B HA ANNUAL REPORT 2 02 1
 INFORMATION FOR OUR
SHAREHOLDERS
compliance with the various conditions with a related party which can be
of Corporate Governance in terms of the considered as material in terms of the
Listing Regulations is given in Annexure D to policy on related party transactions laid
this report. down by the Board of Directors. Related
party transactions, if any, pursuant to the
I. CODE OF CONDUCT Listing Regulations were approved by
The Company has laid down a Code of the Audit Committee from time to time
Conduct for the Directors as well as for prior to entering into the transactions.
all senior management of the Company. The related party transactions undertaken
As prescribed under Regulation 17 of the during financial year 2020-21 are
Listing Regulations, a declaration signed by detailed in the Notes to Accounts of the
the Vice Chairman and Managing Director Financial Statements.
affirming compliance with the Code of Further, during the year under review,
Conduct by the Directors and senior there were no contracts or arrangements
management personnel of the Company
with related parties referred to in sub-
for financial year 2020-21 forms part of the
section (1) of Section 188 of the Companies
Corporate Governance Report.
Act, 2013. Therefore, there is no requirement
to report any transaction in Form AOC-2
J. DISCLOSURE ON CONFIRMATION WITH
SECRETARIAL STANDARDS in terms of Section 134 of the Companies
Act, 2013 and the rules made thereunder.
The Directors confirm that the Secretarial
Standards issued by the Institute of Company O. CONSERVATION OF ENERGY,
Secretaries of India have been complied with TECHNOLOGY ABSORPTION AND FOREIGN
pursuant to the Companies Act, 2013 and EXCHANGE EARNINGS AND OUTGO
rules made thereunder.
In terms of Section 134 of the Companies
K. MANAGEMENT DISCUSSION AND Act, 2013 read with Rule 8(3) of the Companies
ANALYSIS REPORT (Accounts) Rules, 2014, the details of energy
conservation, technology absorption, foreign
In accordance with the requirements of exchange earnings and outgoings are given
the Listing Regulations, the Management as Annexure E to this report.
Discussion and Analysis Report titled
‘Management Report’ is presented in a P. REMUNERATION DETAILS OF DIRECTORS,
separate section of the Annual Report. KEY MANAGERIAL PERSONNEL AND
EMPLOYEES
L. ANNUAL RETURN
Details of remuneration of Directors, key
In accordance with the Companies Act, 2013, managerial personnel and the statement
the annual return in the prescribed format is of employees in receipt of remuneration
available under the link https://www.sobha. exceeding the limits prescribed under
com/investor-relationsdownloads.php Section 134 of the Companies Act, 2013 read
with Rule 5 of the Companies (Appointment
M. PARTICULARS OF LOANS, GUARANTEES
and Remuneration of Managerial Personnel)
AND INVESTMENTS
Rules, 2014 is provided in Annexure F to
In terms of Section 134 of the Companies this report.
Act, 2013, the particulars of loans, guarantees
and investments made by the Company Q. FINANCIAL POSITION AND
under Section 186 of the Companies PERFORMANCE OF SUBSIDIARIES, JOINT
Act, 2013 are detailed in Notes to Accounts of VENTURES AND ASSOCIATES
the Financial Statements. In terms of Section 134 of the Act and Rule
8(1) of the Companies (Accounts) Rules, 2014,
N. RELATED PARTY TRANSACTIONS
the financial position and performance of the
During the year, the Company did not enter subsidiaries are given as an annexure to the
into any contract/arrangement/transaction Consolidated Financial Statements.

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R. BUSINESS RESPONSIBILITY REPORT ACKNOWLEDGEMENTS

As required under Regulation 34 of the Listing The Directors would like to place on record their
Regulations, the Business Responsibility sincere appreciation to the Company’s customers,
Report is given in Annexure G to this report. vendors and bankers for their continued support
to the Company during the year. The Directors
S. ADDITIONAL INFORMATION TO also wish to acknowledge the contribution made
SHAREHOLDERS by employees at all levels for steering the growth
of the organisation. We thank the Government
All important and pertinent investor of India, the State Governments and other
information such as financial results, investor government agencies for their assistance and
presentations, press releases, new launches cooperation and look forward to their continued
and project updates are made available on support in future. Finally, the Board would like
the Company’s website (www.sobha.com) on to express its gratitude to the members for their
a regular basis. continued trust, co-operation and support.

For and on behalf of the Board of Directors of Sobha Limited

Sd/- Sd/-
Place: Bangalore Ravi PNC Menon T P Seetharam
Date: June 22, 2021 Chairman Whole-time Director

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ANNEXURE A
To,
The Members,
Sobha Limited,
SOBHA, Sarjapur-Marathahalli Outer Ring Road (ORR),
Devarabisanahalli, Bellandur Post,
Bengaluru – 560 103.

My report of even date is to be read along with this letter.

MANAGEMENT’S RESPONSIBILITY
It is the responsibility of the management of the Company to maintain secretarial records, devise proper
systems to ensure compliance with the provisions of all applicable laws and regulations and to ensure that
the systems are adequate and operate effectively.

AUDITOR’S RESPONSIBILITY
1. My responsibility is to express an opinion on these secretarial records, standards and procedures
followed by the Company with respect to secretarial compliances.
2. I believe that audit evidence and information obtained from the Company’s management is adequate
and appropriate for me to provide a basis for my opinion.
3. Wherever required, I have obtained the management’s representation about the compliance of laws,
rules and regulations and happening of events etc.

Disclaimer
The Secretarial Audit Report is neither an assurance as to the future viability of the Company nor of the
efficacy or effectiveness with which the management has conducted the affairs of the Company.

Sd/-
Nagendra D. Rao
Practising Company Secretary
Membership No. FCS – 5553
Certificate of Practice – 7731
UDIN: F005553C000500487

No. 543/A, 7th Main, 3rd Cross,

S.L. Bhyrappa Road, Hanumanthanagar,
Bengaluru – 560 019.
Place: Bengaluru
Date : June 22, 2021

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FORM NO. MR-3

SECRETARIAL AUDIT REPORT
FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2021
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,
The Members,
Sobha Limited,
SOBHA, Sarjapur-Marathahalli Outer Ring Road (ORR),
Devarabisanahalli, Bellandur Post,
Bengaluru – 560 103.

I have conducted the secretarial audit of the compliance of the applicable statutory provisions and the
adherence to good corporate practices by SOBHA LIMITED (hereinafter called “the Company”). Secretarial
Audit was conducted in the manner that provided me a reasonable basis for evaluating the corporate
conducts/statutory compliances and expressing my opinion thereon.
Based on my verification of the Company’s books, papers, minute books, forms and returns filed and
other records maintained by the company and also the information provided by the company, its
officers, agents and authorized representatives during the conduct of the secretarial audit, I hereby
report that in my opinion, the company has, during the audit period covering the financial year ended on
31st March, 2021 complied with the statutory provisions listed hereunder and also that the Company has
proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject
to the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns filed and other records maintained by
the Company for the financial year ended on 31st March, 2021 according to the provisions of:
(i) The Companies Act, 2013 (the Act) and the rules made there under;
(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the
extent of Foreign Direct Investment and Overseas Direct Investment;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of
India Act, 1992 (‘SEBI Act’):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011;
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2018 [Not Applicable as the Company has not raised any Share Capital by Issue
of Shares during the financial year under review].
(d) The Securities and Exchange Board of India (Share based employee benefits) Regulations, 2014)
[Not Applicable to the Company during the financial year under review];
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)
Regulations, 2008;
(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents)
Regulations, 1993 regarding the Companies Act and dealing with clients [Not Applicable as the

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Company is not registered as Registrar to Issue and Share Transfer Agent during the financial
year under review];
(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 [Not
Applicable as the Company has not delisted/ propose to delist its equity shares from any
stock exchange during the financial year under review]; and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018 [Not
Applicable as the Company has not bought back / propose to buyback any of its securities
during the financial year under review];
(i) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015.
(vi) The Laws as are applicable specifically to the Company are as under:
(a) Real Estate (Regulation & Development) Act, 2016;
(b) Transfer of Property Act, 1882;
(c) Indian Easements Act, 1882;
(d) Registration Act, 1908;
(e) The Building and Other Construction Workers (Regulation of Employment and Conditions of
Service) Act, 1996;
(f) The Land Acquisition Act, 1894;
(g) Indian Stamp Act, 1899; and
(h) Karnataka Stamp Act, 1957.
I have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards with respect to Meetings of Board of Directors (SS-1) and General Meetings
(SS-2) issued by The Institute of Company Secretaries of India and made effective 1stJuly, 2015.

(ii) The Listing Agreements entered into by the Company with BSE Limited and National Stock Exchange
of India Limited.
(iii) The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations,
Guidelines, Standards, etc. mentioned above except the following:
1. National Stock Exchange of India Limited and BSE Limited had each levied a fine of ₹10,000/-
(Ten Thousand) on the Company for the delay of one day in furnishing prior intimation as required under
regulation 29(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, about
the board meeting held on March 19, 2020, to the stock exchanges (BSE Limited and National Stock
Exchange of India Limited). In view of the appropriate response submitted by the Company, the same was
subsequently waived by the stock exchanges.
I further report that
The Board of Directors of the company is duly constituted with proper balance of Executive Directors,
Non-Executive Directors and Independent Directors. The changes in the composition of the Board of
Directors that took place during the period under review were carried out in compliance with the provisions
of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on
agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further
information and clarifications on the agenda items before the meeting and for meaningful participation at
the meeting.

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As per the Minutes of the Board of Directors duly recorded and signed by the Chairman, the decisions were
unanimous and no dissenting views were required to be recorded.
I further report that in respect of matters relating to certain transactions entered into by the Company
in earlier years, the Company has been asked to produce documents and information by regulatory
authorities. The Company has responded to the same within the stipulated timeline. Further, in the current
year, the Company has also received Summons from SEBI under section 11(2), and 11C(2), 11C(3) of the SEBI
Act, 1992. The Company has appropriately responded to the same within the stipulated time.
I further report that there are adequate systems and processes in the company commensurate with
the size and operations of the company to monitor and ensure compliance with applicable laws, rules,
regulations and guidelines.
I further report that during the audit period, the company has passed following Special Resolution at the
Annual General Meeting held on 7th August, 2020 which are having major bearing on the Company’s Affairs
in pursuance of the above referred Laws, Rules, Regulations, Guidelines, Standards, etc.
1. Issue of Non-Convertible Debentures on private placement basis.
2. Amendment to Main objects clause in the Memorandum of Association of the Company.

Sd/-
Nagendra D. Rao
Practising Company Secretary
Membership No. FCS – 5553
Certificate of Practice – 7731
UDIN: F005553C000500487

No. 543/A, 7th Main, 3rd Cross,

Place: Bengaluru S.L. Bhyrappa Road, Hanumanthanagar,
Date : June 22, 2021 Bengaluru – 560 019.

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ANNEXURE B
EXTRACT FROM NOMINATION AND REMUNERATION POLICY

Policy on Appointment and Removal of Limits on Directorship: No person shall

Directors, Key Managerial Personnel and Senior be appointed as a Whole-time Director/
Management: Independent Director of the Company
unless such directorship is within the limits
A. ELIGIBILITY OR CRITERIA FOR prescribed by law in this behalf.
APPOINTMENT:
Limits on Committee Membership: The
Educational Qualification: No person shall
number of Chairmanship or membership of
be eligible for appointment as a Director,
committees held by a person shall be within
Key Managerial Personnel and/or Senior
Management Personnel unless he/she the limits prescribed by law in this behalf in
possesses at least a bachelors’ degree in a order to be considered for appointment as
recognized and relevant field. Educational a Whole-time Director/Independent Director
qualification over and above the bachelors’ of the Company.
degree, though not mandatory, shall be
preferable. However, the requirement of B. TERM OF OFFICE:
minimum educational qualification can Whole-time Director:
be waived if the candidate showcases
i. The Whole-time Director(s) of the Company
exceptional knowledge, talent, creativity
shall be appointed for a term not exceeding
and/or aptitude for the position.
five years at a time.
Experience: A person shall be eligible for
appointment as a Director, Key Managerial ii. The Whole-time Director(s) shall be eligible
Personnel and/or Senior Management for re-appointment for further terms not
Personnel if he/she possess adequate exceeding five years at a time subject to the
experience in the respective field(s). approval of members of the Company.
Between two candidates possessing same/ iii. No such re-appointment shall be made
similar educational qualification, the person
earlier than one year before the expiry of the
with more experience will ordinarily be
current term.
preferred. Experience in diverse fields will be
given due weightage. Independent Director(s):
Integrity: The person considered for i. An Independent Director shall hold office for
appointment shall be a person of integrity
a term up to five consecutive years on the
and good standing. No person convicted of
Board of Directors of the Company.
any offence involving moral turpitude shall
be considered for appointment to post of a ii. An Independent Director shall be eligible for
Director, Key Managerial Personnel and/or re-appointment for another term up to five
Senior Management. consecutive years on passing of a special
resolution in this regard by the members of
Age: A person shall not be considered for
appointment to the post of a Whole-time the Company.
Director of the Company if he/she has iii. No Independent Director shall hold office
attained the age of seventy years. for more than two consecutive terms. An
Independence: No person shall be Independent Director shall be eligible for
appointed as an Independent Director of the re-appointment after the expiry of three
Company unless he/she meets the criteria of years of ceasing to be an Independent
independence as specified in the Companies Director where he/she has served for two
Act, 2013 and Listing Agreement. consecutive terms.

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Key Managerial Personnel and Senior performance of Non-Independent directors

Management: and the Board as a whole. The Independent
The term of office of Key Managerial Personnel Directors shall take into consideration the
and Senior Management of the Company shall be views of the Committee.
in accordance with the prevailing Human Resource iv. The Independent Directors shall review
policy of the Company. the performance of the Chairperson of the
Company, taking into account the views of
C. REMOVAL OF DIRECTOR, KEY the Committee, the Executive Directors and
MANAGERIAL PERSONNEL AND SENIOR
Non-Executive Directors.
MANAGEMENT OF THE COMPANY:
The Independent Directors of the Company
The Committee shall recommend to the
are experts in their respective fields.
Board of Directors, the removal from office
They bring with them specialized skills,
of any Director, Key Managerial Personnel
vast repertoire of knowledge and a wide
and/or Senior Management Personnel of the
diversity of experience and perspectives.
Company:
In view of their significant expertise, the
i. Whenever a Director, Key Managerial Independent Directors may recommend the
Personnel and/or Senior Management mechanism for evaluating the performance
Personnel of the Company incurs any of the Board as a whole as well as
disqualification specified under any Individual Directors.
applicable law which renders their position
In lieu of such recommendation, the criteria
untenable.
for Performance Evaluation laid down below
ii. Whenever a Director, Key Managerial may be considered. However, the below
Personnel and/or Senior Management mentioned criteria is only suggestive and the
Personnel of the Company is found guilty Board/Directors may consider such other
of violating the Code of Conduct, the Code criteria as they may deem necessary for
of Conduct for Prevention of Insider Trading effective evaluation of performance.
of the Company and/or such other policy as
may be decided by the Committee Board of Directors:

iii. Whenever a Director, Key Managerial i. Establishment of distinct performance

Personnel and/or Senior Management objectives and comparison of performance
of the Company acts in a manner which against such objectives.
is manifestly against the interests of the
ii. Contribution of the Board to the development
Company. In case of any proceedings
of strategy.
under this sub-clause, the concerned
Director, Key Managerial Personnel and/or iii. Contribution of the Board in developing
Senior Management of the Company shall and ensuring robust and effective risk
be given an opportunity of being heard by management system.
the Committee. iv. Response of the Board to problems or crises
that have emerged.
Performance Evaluation:
v. Suitability of matters being reserved for the
i. The performance evaluation of each director
Board under the Listing Agreement.
will be carried out by the Committee in the first
instance. It shall place its recommendations vi. Relationship between the Board and its main
before the Board of Directors. Committees and between the Committees
themselves.
ii. The performance evaluation of Independent
Directors shall be done by the entire Board vii. Communication of the Board with the
of Directors (excluding the director being Management team, Key Managerial
evaluated). It shall take into consideration the Personnel and other employees.
views of the Committee.
viii. Knowledge of latest developments in the
iii The Independent Directors shall review the regulatory environment and the market.

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ix Appropriateness, quality and timeliness of Whole-time Director(s):
flow of information to the Board.
i. Contribution of the Whole-time Director in
x. Adequacy and quality of feedback by the achieving the Business Plan of the Company.
Board to management on its requirements.
ii. Contribution of Whole-time Director in the
xi. Adequacy of frequency and length of Board development of new business ideas or
and Committee meetings. verticals.

xii. Appropriate mix of knowledge and skills iii. Contribution of Whole-time Director towards
in the composition of the Board and the top line and/or bottom line of the
its Committees. Company where such contribution is capable
of measurement.
Committees of the Board of Directors:
iv. Contribution of Whole-time Director in
i. Suitability of matters being reserved for the implementing the strategy set by the Board
Committee(s). of Directors of the Company.
ii. Communication of the Committee(s) with v. Knowledge and understanding of current
the management team, Key Managerial industry and market conditions.
Personnel and other employees.
vi. Contribution of Whole-time Director in
iii. Appropriateness, quality and timeliness of identifying, understanding and mitigating the
flow of information to the Committee(s). risks faced by the Company.
iv. Adequacy and quality of feedback by vii. Contribution of Whole-time Director in
the Committee(s) to management on its identifying and exploiting new business
requirements. opportunities for the Company.
v. Adequacy of frequency and length of the viii. Level of preparedness for the meetings of
Committee meetings. the Board and Committees.
vi. Appropriate mix of knowledge and skills in ix. Attendance at the meetings of the Board
the composition of the Committees. and Committees of which such Whole-time
Director is a member.
Independent Directors:
POLICY RELATING TO THE REMUNERATION
i. Level of preparedness for the meetings of
OF DIRECTORS, KEY MANAGERIAL
the Board and Committees. PERSONNEL AND SENIOR MANAGEMENT:
ii. Willingness to devote time and effort to
understand the Company and its business. A. REMUNERATION CRITERIA:

iii. Quality and value of their contributions at The guiding principle while determining the
Board and Committees meetings. level and composition of remuneration is the
competitiveness required to attract, retain
iv. Contribution of their knowledge and and motivate competent personnel. While
experience to the development of strategy deciding the remuneration of Directors,
of the Company. Key Managerial Personnel and Senior
v. Effectiveness and pro-activeness in recording Management, the following factors shall be
and following up their areas of concern. taken into consideration:

vi. Relationship with fellow Board members, a. availability of talented, skilled and
Key Managerial personnel and Senior experienced professionals.
Management. b. industry standards.
vii. Knowledge and understanding of current c. profitability of the Company and growth
industry and market conditions. prospects.
viii. Attendance at the meetings of the Board
B. PAYMENT OF REMUNERATION:
and Committees of which the Independent
Director is a member. i. The Committee shall recommend the payment

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of remuneration (including any revision Personnel and Senior Management personnel

thereof) to the Directors of the Company shall be entitled to such perquisites,
including the Independent Directors which allowances, benefits, facilities and amenities as
shall be subject to the approval of the Board per the Human Resource policy of the Company
of Directors. It shall also be approved by the in force or as may be approved by the Board from
shareholders of the Company and/or Central time to time.
Government, wherever required.
D. REMUNERATION OF INDEPENDENT
ii. The remuneration of Key Managerial
DIRECTORS:
Personnel and Senior Management Personnel
shall be determined by the Company in Commission: Each Independent Director
accordance with the prevailing HR Policy of shall be paid remuneration by way of Commission
the Company. as recommended by the Committee which
shall be approved by the Board of Directors.
C. REMUNERATION OF WHOLE-TIME Such Commission shall be within the overall
DIRECTORS, KEY MANAGERIAL
limits approved by the shareholders of the
PERSONNEL AND SENIOR MANAGEMENT:
Company.
Basic Salary: Sitting Fees: The Independent Director may
Each Whole-time Director, Key Managerial receive remuneration by way of fees for attending
Personnel and Senior Management personnel the meetings of Board or Committee thereof as
shall be paid a monthly remuneration. The may be decided by the Board of Directors from
monthly remuneration of Whole-time Director time to time.
as recommended by the Committee shall be
approved by the Board of Directors and also by E. LIMITS ON REMUNERATION:
the shareholders of the Company, if required. i. The overall remuneration paid by the
Company to the Directors including
Accommodation or House Rent Allowance:
Independent Directors shall not exceed 11%
Each Whole-time Director shall be provided of the net profits of the Company for that
with rent-free furnished accommodation or financial year.
up to a specified percent of the basic
ii. The remuneration paid by the Company to
salary as House Rent Allowance in lieu of
all its Whole-time Directors shall not exceed
accommodation. Key Managerial Personnel and
10% of the net profits of the Company for
Senior Management personnel shall be provided
with a specified percent of the basic salary as that financial year.
House Rent Allowance. iii. The remuneration paid by the Company to
its Independent Directors (excluding sitting
Performance Incentives:
fees) shall not exceed 1% of the net profits of
Each Whole-time Director shall be eligible for the Company for that financial year.
performance incentives which shall not exceed a
iv. If, in any financial year, the Company has
specified percent of profits of the Company. Key
no profits or its profits are inadequate, the
Managerial Personnel and Senior Management
Company shall pay remuneration to its
personnel shall be eligible for performance
Whole-time Director in accordance with the
incentives as per the prevailing Human
provisions of Schedule V of the Companies
Resource policy of the Company in this regard.
Act, 2013. If the remuneration payable
The incentive is linked to the performance of
the Company in general and their individual exceeds the limits laid down in Schedule V,
performance is measured against specific then the Company shall obtain the approval
Key Result Areas, which are aligned with the of the Shareholders.
Company’s objectives. v. Revision of existing remuneration may be
recommended by the Committee to the
Perquisites and Other Allowances:
Board which should be within the limits
Each Whole-time Director, Key Managerial approved by the shareholders.

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ANNEXURE C
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES

1. BRIEF OUTLINE OF CSR POLICY forces veterans, war widows and their
dependents, [Central Armed Police
The Board of Directors, upon
Forces (CAPF) and Central Para Military
recommendation of the Corporate Social
Forces (CPMF) veterans, and their
Responsibility Committee, have identified
dependents including widows];
the following areas listed in Schedule VII of
the Companies Act, 2013 for carrying out its vii. Training to promote rural sports,
CSR activities: nationally recognised sports, paralympic
i. Eradicating hunger, poverty and sports and olympic sports;
malnutrition, promoting health care viii. Contribution to the prime minister’s
including preventive health care and national relief fund or Prime Minister’s
sanitation including contribution to Citizen Assistance and Relief in
the Swatch Bharat Kosh set-up by the Emergency Situations Fund (PM CARES
Central Government for the promotion Fund) or any other fund set up by
of sanitation and making available safe the Central Govt. for socio economic
drinking water; development and relief and welfare
ii. Promoting education, including of the schedule caste, tribes, other
special education and employment backward classes, minorities and
enhancing vocation skills especially women;
among children, women, elderly and ix. Contribution to incubator or research
the differently abled and livelihood and development projects in the field
enhancement projects; of science, technology, engineering
iii. Promoting gender equality, empowering and medicine, funded by the Central
women, setting up homes and hostels Government or State Government
for women and orphans; setting up or Public Sector Undertaking or any
old age homes, day care centres and agency of the Central Government or
such other facilities for senior citizens State Government;
and measures for reducing inequalities x. Contributions to public funded
faced by socially and economically Universities; Indian Institute of
backward groups; Technology (IITs); National Laboratories
iv. Ensuring environmental sustainability, and autonomous bodies established
ecological balance, protection of under Department of Atomic Energy
flora and fauna, animal welfare, (DAE); Department of Biotechnology
agroforestry, conservation of natural (DBT); Department of Science and
resources and maintaining quality of Technology (DST); Department of
soil, air and water including contribution Pharmaceuticals; Ministry of Ayurveda,
to the Clean Ganga Fund set-up by the Yoga and Naturopathy, Unani, Siddha
Central Government for rejuvenation of and Homoeopathy (AYUSH); Ministry
river Ganga; of Electronics and Information
Technology and other bodies, namely
v. Protection of national heritage, art and Defense Research and Development
culture including restoration of buildings Organisation (DRDO); Indian Council
and sites of historical importance and of Agricultural Research (ICAR);
works of art; setting up public libraries; Indian Council of Medical Research
promotion and development of (ICMR) and Council of Scientific and
traditional art and handicrafts; Industrial Research (CSIR), engaged
vi. Measures for the benefit of armed in conducting research in science,

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technology, engineering and medicine aimed at promoting Sustainable Development

Goals (SDGs).

xi. Rural development projects.

xii. Slum area development.

xiii. Disaster management, including relief, rehabilitation and reconstruction activities.

xiv. Such other areas as may be included in Schedule VII of the Companies Act, 2013 from time to
time.

The projects/programmes may be undertaken by an Implementation Agency or the Company directly,

provided that, such projects/programmes are in line with the activities enumerated in Schedule VII of the
Companies Act, 2013.

2. COMPOSITION OF CSR COMMITTEE FOR THE YEAR ENDED MARCH 31, 2021

The Corporate Social Responsibility (CSR) Committee comprises of the following members:

Corporate Social Responsibility

Committee meetings
Name Category
June 27, November February
2020 07, 2020 12, 2021
Mr. Sumeet Puri Chairman Non-Executive Independent ✓ ✓ ✓

Mr. J C Sharma Member Vice Chairman & Managing ✓ ✓ ✓

Director
Mr. Jagadish Nangineni* Member Deputy Managing Director ✓ ✓ ✓

Ms. Srivathsala K N** Member Non-Executive Independent NA NA NA

* Resigned effective February 24, 2021. ** Appointed effective June 12, 2021.

3. The detailed Corporate Social Responsibility Policy is available on the website of the Company at:
https://www.sobha.com/wp-content/uploads/2020/10/158036284320200130.pdf

4. Impact assessment of CSR project: NA

5. Amount available for set-off from preceding financial year (in ₹)/Amount required to be set-off for the
financial year, if any.

S. No. Financial Year Amount Available for set-off From Amount required to be set-off for
Proceeding Financial Year (in ₹) Financial Year (in ₹)

1 2020-21 - -

6. Average Net Profits

The average profits, i.e. profits before tax of the Company during the three immediately preceding
financial year was ₹3,851.34 Million.

7. (a) Two percent of average net profit of the company as per section 135(5): ₹77.03 Million.

(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial year:
Nil.

(c) Amount required to be set off for the financial year, if Any: Nil.

(d) Total CSR obligation for the financial year (7a + 7b - 7c) : ₹77.03 Million.

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8. (a) CSR amount spent or unspent for the financial year:

Amount Unspent (in ₹)

Total Amount
Total Amount transferred to Amount transferred to any fund specified
Spent for the
Unspent CSR Account as per under Schedule VII as per second proviso to
Financial Year
section 135(6) section 135(5)
(in ₹)
Amount Date of transfer Name of the Fund Amount Date of transfer
90.70 Million - - - - -

(b) Details of CSR amount spent against ongoing projects for the financial year:

Amount
trans-
ferred to
Unspent Mode of
CSR Implementation
Amount Account - Through
spent for the Implementing
Amount in the project Mode of Agency
Local allocated current as per Imple-
Item from the list of area Location of the for the financial Section mentation Name/ CSR
Name of the activities in Schedule (Yes/ project Project project Year 135(6) - Direct Registration
Project VII to the Act No) State/District duration (in ₹) (in ₹) (in ₹) (Yes/No) number
Rural i. Eradicating Yes 1. Local Ongoing 87.46 87.46 - No Sri Kurumba
Development hunger, poverty Million Million Educational
and malnutrition, 2. Kerala- and
promoting preventive Vadakkenchery, Charitable
health care and Kannambra Trust
sanitation. and
Kizhakkenchery CSR00003295
ii. Promoting education, Panchayats in
and employment the district of
enhancing vocation Palakkad,
skills especially Kerala
among children,
women, elderly,
and the differently
abled and livelihood
enhancement
projects .

iii. Promoting gender

equality, empowering
women, setting up
homes and hostels
for women and
orphans; setting up
old age homes, day
care centres and
such other facilities
for senior citizens
and measures for
reducing inequalities
faced by socially
and economically
backward groups.

(c) Details of CSR amount spent against other than ongoing projects for the financial year:

Sl. Name of Item from the Local area Location of the Amount Mode of im- Mode of implementation
No. the Project list of activities (Yes/ No) project spent for the plementa- - Through implementing
in schedule VII project tion - Direct agency
to the Act State Dis- (in ₹) (Yes/No) Name CSR registra-
trict tion number
- - - - - - - - -

(d) Amount spent in Administrative Overheads: ₹3.24 Million

(e) Amount spent on Impact Assessment, if applicable: NA
(f) Total amount spent for the Financial Year (8b+8c+8d+8e): ₹90.70 Million

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(g) Excess amount for set off, if any:

No. Particular Amount (in ₹)

(i) Two percent of average net profit of the company as per section 135(5) -
(ii) Total amount spent for the Financial Year -
(iii) Excess amount spent for the financial year [(ii)-(i)] -
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous financial -
year, if any
(v) Amount available for set off in succeeding financial year, [(iii)-(iv)] -

9. (a) Details of Unspent CSR amount for the preceding three financial years:

Sl. Preceding Amount transferred Amount Amount transferred to any fund specified Amount remaining
No. Financial to Unspent CSR spent in the under Schedule VII as per section 135(6), to be spent in
Year Account under reporting if any succeeding
section 135 (6) (in ₹) Financial Year Name of the Amount Date of financial year
(in ₹) Fund (in ₹) transfer (in ₹)
1. 2017-18 - - - - - -
2. 2018-19 - - - - - -
3. 2019-20 - - - - - -
Total - - - - - -

(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding financial
year(s):

Project Name Financial Year Project Total amount Amount spent on Cumulative amount Status of
ID of the in which the duration allocated for the project in the spent at the end of the project -
Project project was the project reporting Financial reporting Financial Completed/
commenced (in ₹) Year (in ₹) Year (in ₹) Ongoing
- - - - - - - -

10. In case of creation or acquisition of capital asset, furnish the details relating to the asset so created or
acquired through CSR spent in the financial year (asset-wise details).
(a) Date of creation or acquisition of the capital asset(s): NA
(b) Amount of CSR spent for creation or acquisition of capital asset: NA
(c) Details of the entity or public authority or beneficiary under whose name such capital asset is
registered, their address etc.: NA
(d) Provide details of the capital asset(s) created or acquired (including complete address and
location of the capital asset): NA

11. Specify the reason(s), if the company has failed to spend two per cent of the average net profit as per
section 135(5): NA

For and on behalf of the Board of Directors of Sobha Limited

Sd/- Sd/-
Place: Bangalore Sumeet Puri T P Seetharam
Date: June 22, 2021 Chairman of CSR Committee Whole-time Director

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ANNEXURE D
CORPORATE GOVERNANCE COMPLIANCE CERTIFICATE

To
The Members,
Sobha Limited,
“Sobha”, Sarjapur-Marathahalli, Outer Ring Road, Devarabisanahalli,
Bellandur Post, Bengaluru – 560103.

I have examined the compliance of the conditions of Corporate Governance by Sobha Limited (‘the
Company’) for the year ended on March 31, 2021, as stipulated under Regulations 17 to 27, clauses (b)
to (i) of sub- regulation (2) of Regulation 46 and para C, D and E of Schedule V of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing
Regulations”).
The compliance of the conditions of Corporate Governance is the responsibility of the management of the
Company. My examination was limited to the review of procedures and implementation thereof, as adopted
by the Company for ensuring compliance with conditions of Corporate Governance. It is neither an audit
nor an expression of opinion on the financial statements of the Company.
In my opinion and to the best of my information and according to the explanations given to me, and the
representations made by the Directors and the Management, I certify that the Company has complied with
the conditions of Corporate Governance as stipulated in the SEBI Listing Regulations for the year ended
on March 31, 2021.
I further state that such compliance is neither an assurance as to the future viability of the Company nor
of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

Sd/-
Nagendra D. Rao
Practicing Company Secretary
FCS No: 5553CP No: 7731
UDIN: F005553C000451691

543/A, 7th Main,

3rd Cross, S.L.Byrappa Road,
Hanumanthanagar,
Bengaluru – 560 019.
Place : Bengaluru
Date : June 12, 2021

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ANNEXURE E
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN
EXCHANGE EARNINGS AND OUTGO
(Pursuant to section 134 of the Act and Rule 8(3) of the Companies (Accounts) Rules, 2014)

A. CONSERVATION OF ENERGY b. At Sobha corporate office, 90% of

power wheeled from solar power plant.
I. STEPS TAKEN OR IMPACT ON
CONSERVATION OF ENERGY c. Sobha Glazing factory provided with
225kW and Sobha Interior factory
The Company has adopted the following
provided with 750kW roof top solar
energy conservation measures:
power plant in view of utilizing alternate
a. Use of energy efficient lamps, control source of energy.
gears, ballast VFDs, highly efficient
d. Use of heat pumps and solar water
motors and PV cells.
heaters instead of geysers to reduce
b. Use of LED Light fixtures in the common
power consumption.
areas of residential projects.
c. Use of external street light fixtures with III. CAPITAL INVESTMENT ON ENERGY
timers. CONSERVATION EQUIPMENT
d. Use of lighting software in the design The Company continues to make project level
stage of our projects. investments for reduction in consumption
e. Use of motion sensors and occupancy of energy and capital investment on
sensors with electronic drivers. energy conservation equipment cannot be
f. Use of best quality wires, cables, quantified.
switches and low self-power loss
breakers wherever essential. B. TECHNOLOGY ABSORPTION
g. Following standard specifications like I. EFFORTS MADE TOWARDS TECHNOLOGY
colour codes, independent neutral and ABSORPTION
earthing for each circuit to curb energy The Company uses German tools,
leakage. waterproofing techniques and follows
h. Use of low- loss electronic ballast. European standards in all its construction
i. Selection of high efficiency transformers, activities. Sobha uses both indigenous and
DG sets and other equipment. imported technologies for implementation at
j. Introduction of auto-correction power all its projects. The Company has taken the
factor capacitor panels for common area following initiatives in the area of technology:
loads. 1. Introduction of laser plummets for
k. The use of separate energy meters accurate marking.
for major common area loads so that 2. Introduction of “Scaff board” for safety
power consumption can be monitored of workforce who work at heights.
and efforts can be made to minimize
3. Software for BBS to generate fast and
the same.
accurate bar bending schedules.
l. Use of energy efficient lifts with group
4. “Grab & Trolley” for block shifting.
control in residential projects.
5. “Debris Crusher” for crushing & recycling
II. STEPS TAKEN BY THE COMPANY FOR the debris generated at the site.
UTILIZING ALTERNATIVE SOURCES OF 6. Instead of cast – in-situ coping for
ENERGY
the terrace parapet and compound
a. Provision of back-up solar power for walls, precast methodology has been
common area lighting in residential projects. introduced and implemented.

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7. Adoption of power feeders for spindle prevent direct heat transmission from
machine instead of manual feeding. the roof slab and to protect water
resistance treatment of roofs for longer
The Company derives benefits in the form of
duration.
cost reduction, lesser customer complaints, and
better quality of the end products. The above 9. Introduction of tile round cutting using
initiations and implementations have been made mini drilling machine and tile holesaw
after continuous market research - trial and cutter to get a perfect round finish.
testing for quality, durability and compatibility 10. Wooden / Bamboo textered glass
in consideration of cost and time for developing reinforced concrete cladding panels
new systems and better technologies at par with which is lightweight when compared to
international standards. conventional concrete.
11. Physical measurement technique tools
II. IMPORTED TECHNOLOGY
software to measure and analyze
No technology was imported by the Company elevator ride quality, vibration and sound.
during the last three financial years. 12. Epoxy flooring applied to concrete for
protection, aesthetic enhancement,
III. EXPENDITURE INCURRED ON RESEARCH strong adhesion, long lasting, rustproof,
AND DEVELOPMENT
waterproof, heat resistant, salt and acid
The Company had carried out R&D in the resistance.
following areas:
Benefits derived as a result of the above R&D
1. ‘Ready Mixed Concrete Batching Plant
Audit’ for Vendor Evaluation. The benefits derived from the above ensure
2. Materials testing and validation of the that the final product delivered by the Company
construction materials used on site conforms to international standards.
to check their quality, durability, and
compatibility. Future plan of action

3. Pile Integrity Test for qualitative The success of R&D initiatives in the construction
evaluation of the physical dimensions industry primarily depends on the selection
(cross sectional variation), soundness of the right method of construction, type of
or defects of the piles concrete with machines and kind of materials. It also depends
respect to its continuity. on integrating the planning and training process
4. Introduction of ‘Lightweight within the Company and it has to be understood
Deflectometer’ for measuring the as an ongoing process.
deflection modulus of sub grade/ sub
Expenditure on R&D
soils and unbound base layers.
5. Introduction of ‘Block Testing Plates’ for The R & D activity of the Company forms part of
testing blocks at sites. project implementation and cannot be quantified.
6. Introduction of ‘Lift Well’ gate for fall C. FOREIGN EXCHANGE EARNINGS AND
protection into the lift pits or shafts. OUTGO
7. Introduction of ‘Laser Plummet’ for
maintaining verticality of columns and Total expenditure in foreign exchange: ₹61.47
buildings. Million.

8. Raised floor system in terraces to Total income in foreign exchange: ₹4.48 Million.

For and on behalf of the Board of Directors of Sobha Limited

Sd/- Sd/-
Place: Bangalore Ravi PNC Menon T P Seetharam
Date: June 22, 2021 Chairman Whole-time Director

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ANNEXURE F
REMUNERATION DETAILS OF DIRECTORS AND EMPLOYEES
(Pursuant to section 134 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014)
i. Ratio of remuneration of each director to the median remuneration of the employees and percentage
increase in remuneration:

Ratio of
% Increase in Comparison of KMP
Sl. Name of Director / Remuneration
Designation Remuneration remuneration against the
No. KMP to Median
Y-O-Y Company’s performance
Remuneration

1 Mr. Ravi PNC Menon Chairman 138.7 -56.8 The revenues decreased by
42.80%, the Profit before
Tax and Profit after Tax have
decreased by 83.07% and
77.36% respectively on a
standalone basis.

On a consolidated basis,
the revenues were lower by
42.74%, the Profit before Tax
2 Mr. J C Sharma Vice Chairman & 49.4 -73.00 by 82.64% and Profit after
Managing Director Tax by 77.89% as compared
to the previous financial year
3 Mr. Jagadish Nangineni* Deputy Managing 19.2 -27.5 2019-20.
Director

4 Mr. T P Seetharam Whole Time Director 19.2 -13.60

5 Mr. R V S Rao Independent Director 4.8 - 1.1

6 Mr. Sumeet Jagdish Puri Independent Director 5 41.6

7 Ms. Srivathsala K N Independent Director 4.7 105.4 Not applicable.

8 Mr. Anup Shah Independent Director 4.7 -5.3

9 Mr. Subhash Mohan Bhat Chief Financial Officer 27.1 -8.72 The revenues decreased by
42.80%, the Profit before
Tax and Profit after Tax have
decreased by 83.07% and
77.36% respectively on a
standalone basis.

On a consolidated basis,
the revenues were lower by
42.74%, the Profit before Tax
by 82.64% and Profit after
Tax by 77.89% as compared
to the previous financial year
10 Mr. Vighneshwar G Bhat Company Secretary & 9 -12.54
2019-20.
Compliance Officer

* Mr. Jagadish Nangineni ceased to be a Director of the Company w.e.f. February 24, 2021.

ii. The median remuneration of employees during the financial year was ₹381,744 (Rupees Three Lakhs
Eighty One Thousand Seven Hundred Forty Four only).

iii. The percentage increase in the median remuneration of employees in the financial year 2020-21
was 7.10%.

iv. The number of permanent employees on the rolls of Company as on March 31, 2021 was 3,061.

v. The average increase in median remuneration during the financial year 2020-21 was 7.10%. During
the same period, the revenues have decreased by 42.80%, the Profit before Tax and Profit after Tax
have declined by 83.07% and 77.36% respectively on a standalone basis. On a consolidated basis, the

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revenues were lower by 42.74%, the Profit before Tax by 82.64% and Profit after Tax by 77.89% as
compared to the previous financial year 2019-20.
vi. Average percentile increase in the salaries of employees other than the managerial personnel during
2020-21 was 7.10%. The percentile increase in the managerial remuneration during the same period
was -53.85%. The percentile decrease in the managerial remuneration was on account of decrease
in fixed component and reduction in variable component of remuneration payable to the managerial
personnel as per the terms and conditions of their appointment.
vii. The key parameters for any variable component of remuneration availed by the directors: The
Whole-time Directors are entitled to receive a fixed salary comprising of basic salary, allowances and
perquisites. They are also eligible for performance incentives up to a specified percentage or amount
as the case may be. The break-up of the remuneration is provided in the Corporate Governance
Report forming part of the Annual Report.
viii. There was no employee whose remuneration was in excess of the remuneration of the highest paid
director during the financial year.
ix. The remuneration is as per the Nomination and Remuneration Policy formulated by the Nomination,
Remuneration and Governance Committee and approved by the Board of Directors of the Company.
Statement pursuant to Section 134 of the Companies Act, 2013 and Rule 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014)

Sl. Name Age Designation Nature of Gross Qualifica- Expe- Date of Previous
No. Employment Remunera- tion rience commence- Employment
(Contractual tion (Years) ment of held
or otherwise) ₹ Employment

(A) Employed throughout the financial year

1 Mr. Ravi PNC 40 Chairman Permanent 54,939,211 B.S.C.E 17 08.06.2004 -

Menon Employee
2 Mr. J.C. 63 Vice Chairman Permanent 20,071,901 B.Com 39 01.06.2001 Grasim
Sharma and Managing Employee (Hons), Industries
Director ACA, Limited
ACS
3 Mr. Gaurav Senior Vice Permanent 11,496,198 B.Sc, 15 05.01.2017 Square Yards
Bhatia 48 President Employee MMM
4 Mr. Varghese 58 Chief Permanent 14,650,976 B.Sc, 31 01.04.2006 Sobha Glazing
PV Executive Employee B.Tech and Metal
Officer - Works Private
Glazing Limited
Division
5 Mr. Subhash 50 Chief Financial Permanent 10,347,237 B. Com., 29 16.02.2015 Schneider
Mohan Bhat Officer Employee ACA, ACS, Electric IT
ICWA Business India
Private Limited

(B) Employed for part of the financial year: None

(C) Employed for whole or part of the financial year: None

Notes:
1. Gross remuneration comprises salary, allowances, Company’s contribution to provident fund and
taxable value of perquisites.
2. An employee would be qualified to be included in Category (A), (B) or (C) on the following basis:
For (A) if the aggregate remuneration drawn by him during the year was not less than ₹10,200,000 per
annum.
For (B) if the aggregate remuneration drawn by him during the part of the year was not less than
₹850,000 per month.

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For (C), if the aggregate remuneration drawn by him during the year or part of the year was in excess
of the remuneration drawn by the managing director or whole-time director and holds by himself or
along with his spouse and dependent children, not less than 2% of the equity shares of the Company.
3. None of the employees mentioned above are relatives of any Director of the Company.
4. All the employees referred above are / were in full-time employment of the Company and there is
no other employee who is in receipt of remuneration in terms of the provisions of Section 134 of
the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.

For and on behalf of the Board of Directors of Sobha Limited

Sd/- Sd/-
Place: Bangalore Ravi PNC Menon T P Seetharam
Date: June 22, 2021 Chairman Whole-time Director

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ANNEXURE G
BUSINESS RESPONSIBILITY REPORT

SECTION A: GENERAL INFORMATION ABOUT THE COMPANY

1. Corporate Identity Number : L45201KA1995PLC018475
2. Name of the Company : Sobha Limited
3. Registered Address : SOBHA, Sarjapur – Marathahalli Outer Ring Road (ORR),
Devarabisanahalli, Bellandur Post, Bangalore – 560 103.
4. Website : www.sobha.com
5. Email ID : investors@sobha.com
6. Financial Year Reported : 2020-21
7. Sector that the Company is engaged in : The Company is engaged in the business of construction
and real estate development, development and
management of commercial premises and related
activities.
8. List key products/services that the Company manufactures/ provides:
i. Construction of Residential and Commercial projects.
ii. Execution of Contractual projects (custom–designed turnkey projects).
iii. Manufacturing activities related to interiors, glazing and metal works and concrete products.
9. Total number of locations where business activity is undertaken by the Company:
i. Number of international locations : Nil
ii. Number of national locations : The Company is headquartered in Bangalore having its
business in NCR, Chennai, Thrissur, Pune, Coimbatore,
Cochin, Calicut, Mysore and Gujarat.
10. Markets served by the Company : The Company is in the business of Construction
of Residential and Commercial projects, execution
of Contractual projects in the territory of India and
Manufacturing activities related to interiors, glazing and
metal works and concrete products.

SECTION B: FINANCIAL DETAILS OF THE COMPANY

1. Paid Up Capital : ₹948,458,530
2. Total Turnover : ₹21,911.51 million (On standalone basis)
3. Total profit after taxes : ₹655.39 million (On standalone basis)
4. Total Spending on Corporate Social Responsibility (CSR) : ₹90.70 million (On a standalone basis)
5. List of activities in which expenditure in 4 above has been incurred :
• Providing education and vocational training
• Providing healthcare facilities
• Looking after the aged and the impoverished
• Social Empowerment measures

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SECTION C: OTHER DETAILS

Sl. No. Particulars Remark

1. Does the Company have any subsidiary Yes, the Company has 6 direct subsidiaries
company/companies? and 6 step down subsidiaries.
2. Do the subsidiary company/companies Yes, the subsidiaries earning profits and
participate in the BR initiatives of the parent meeting the criteria of section 135 of the
Company? If yes, then indicate the number of Companies Act, 2013 are supporting the BR
such subsidiary company(s). initiatives of the Company.
3. Do any other entity/entities (e.g. suppliers, No other entities that the Company does
distributors etc.) that the Company does business with, participate in BR initiatives of
business with participate in the BR initiatives the Company.
of the Company? If yes, then indicate the
percentage of such entity/entities? [Less than
30%, 30-60%, more than 60%]

SECTION D: BUSINEE RESPONSIBILITY (BR) INFORMATION

1. Details of Director/Directors responsible for BR

a) Details of the Director/Directors responsible for the implementation of BR policy/policies:

No Director has been specifically nominated for being responsible for the BR policy/procedure.

The Corporate Social Responsibility (CSR) Committee of the Board comprising of Mr. Sumeet Puri,
Independent Director, Chairman of the Committee, Mr. J C Sharma, Vice Chairman and Managing
Director, Mr. Jagadish Nangineni*, Deputy Managing Director and Ms. Srivathsala K N**, Members of
the Committee drive the social responsibility initiatives.
* Mr. Jagadish Nangineni ceased to be a Director and Member of the Committee w.e.f. February 24, 2021.
** Ms. Srivathsala K N was appointed as a member of the Committee effective June 12, 2021.

b) Details of the BR heads:

S. No. Particulars Details

1. DIN 01191608 08391622

2. Name Mr. J C Sharma Mr. T P Seetharam
3. Designation Vice Chairman and Managing Director Whole-time Director
4. Telephone Number 080 – 4932 0000 080 – 4932 0000
5. E-mail ID mdsoffice@sobha.com seetharam.tp@sobha.com

2. Principle-wise (as per NVGs) BR Policy / Policies

(a) Details of compliance (Reply in Y/N)

Sl. No. Questions P P P P P P P P P

1 2 3 4 5 6 7 8 9
1. Do you have a policy/policies for the BR Y Y Y Y Y Y Y Y Y
principles?
2. Has the policy being formulated in consultation Yes. All the policies are being formulated in
with the relevant stakeholders? consultations with the relevant stakeholders.
As per the Statutory Requirements, mandatory
policies are made available to the public through
the website of the Company.

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Sl. No. Questions P P P P P P P P P
1 2 3 4 5 6 7 8 9
3. Does the policy confirm to any national / All the policies are framed in line with the
international standards? If yes, specify? (50 Statutory requirements and hence, they adhere
words) to the National Voluntary Guidelines (NVGs)
issued by the Ministry of Corporate Affairs.
4. Has the policy being approved by Board? If Wherever necessary, the policies were placed
yes, has it been signed by MD/owner/CEO/ before the Board and requisite approvals were
appropriate Board Director? obtained.
5. Does the company have a specified Yes
Committee of the Board/ Director/Official to
oversee the implementation of the policy?
6. Indicate the link for the policy to be viewed Internal policies are available for employees
online? only. For other policies please refer to the link:
https://www.sobha.com/investor-relations-
downloads.php
7. Has the policy been formally communicated to Internal stakeholders are made aware of
all relevant internal and external stakeholders? the policies. External stakeholders are
communicated to the extent applicable to the
stakeholders. The policies are also loaded on
the website of the Company for easy access.
8. Does the Company have in-house structure Yes
to implement the policy/policies?
9. Does the Company have a grievance redressal Yes, all stakeholders’ grievances may be
mechanism related to the policy/policies to addressed to investors@sobha.com
address stakeholders’ grievances related to
the policy/policies?
10. Has the company carried out independent The policies are reviewed by the Board from
audit/evaluation of the working of this policy time to time. Further, the policies and their
by an internal or external agency? compliance are also reviewed internally and
whenever necessary, by external agencies
periodically.

(b) If answer to the question at S. No. 1 against any principle, is ‘No’, please explain why: (Tick up to 2
options)

Sl. No. Questions P P P P P P P P P

1 2 3 4 5 6 7 8 9

1. The company has not understood the

Principles
2. The company is not at a stage where it finds
itself in a position to formulate and implement
the policies on specified principles
3. The company does not have financial or Not Applicatble
manpower resources available for the task
4.. It is planned to be done within next 6 months
5. It is planned to be done within the next 1 year
6. Any other reason (please specify)

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3. Governance related to BR

Sl. No. Particulars Remark

1. Indicate the frequency with which the Board of The Board assess the performance on a
Directors, Committee of the Board or CEO to quarterly basis i.e. every 3 months.
assess the BR performance of the Company.
Further, in line with the requirements of the
Within 3 months, 3-6 months, annually, more
Companies Act, 2013, the Board has constituted
than 1 year.
the CSR Committee which formulates the CSR
Policy and also approves CSR expenditure to
be incurred on CSR activities. The Committee
ensures that the expenditure is made for the
right cause.

2. Does the Company publish a BR or a The Company has published the Sustainability
Sustainability Report? What is the hyperlink Report. The report can be accessed from the
for viewing this report? How frequently it is website of the Company at: https://www.sobha.
published? com/wp - content /uploads/2020/09/sobha-
sustainability-report.pdf.
The Company publishes its Business
Responsibility Report on an annual basis.
However, in-house magazine Innerve is published
on a quarterly basis which captures the welfare
initiatives undertaken by the Company.

SECTION E: PRINCIPLE-WISE PERFORMANCE

Principle 1:

Sl. No. Particulars Remark

1. Does the policy relating to ethics, bribery and Yes. The Company has a Code of Conduct to
corruption cover only the company? Yes/ No. address ethics, bribery and corruption related
matters. The code is applicable to all internal and
Does it extend to the Group/Joint Ventures/
external stakeholders. The code may be accessed
Suppliers/ Contractors / NGOs /Others?
form the Company’s website at: https://www.
sobha.com/wp - content /uploads/2020/09/
sobha-sustainability-report.pdf.
In addition, the Company has a vigil mechanism
which monitors the ethical behaviour of
the stakeholders and also alerts the top
management of the Company to tap the gaps, if
any, in the system.
2. How many stakeholder complaints have been The Company has a dedicated e-mail ID to
received in the past financial year and what which the stakeholders may address their
percentage was satisfactorily resolved by the queries. The Secretarial Department caters to
management? If so, provide details thereof, in the needs of the investors. A summary of the
about 50 words or so. complaints received and resolved during the
year is provided in a separate section of the
Corporate Governance Report attached to the
Director’s Report. As at the end of the financial
year, there was no query pending which needs
to be addressed.

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Principle 2:

Sl. No. Particulars Remark

1. List up to 3 of your products or services Given the nature of our business, the Company
whose design has incorporated social can consider the following three ‘products’:
or environmental concerns, risks and/or (i) Residential/commercial projects developed
opportunities. by the Company for sale.
(ii) Projects undertaken on a contractual basis.
(iii) Manufacturing related to interiors, glazing
and metal works and concrete products.
The Company designs its ‘products’ in a way
that they comply with the mandatorily required
standards under the requisite laws.
The Company and its contractors make all
possible efforts to provide a healthy and
safe working environment for workers at
construction sites.
2. For each such product, provide the following Since the products are built in multiple quantities
details in respect of resource use (energy, and spread for multiple years, the details are not
water, raw material etc.) per unit of product quantified unit-wise. Hence, these details are
(optional): not available.
i. Reduction during sourcing/production/
distribution achieved since the previous
year throughout the value chain?
ii. Reduction during usage by consumers
(energy, water) has been achieved since
the previous year?
3. Does the Company have procedures in Yes, the Company has set procedures to select
place for sustainable sourcing (including suppliers, contractors and service providers
transportation)? based on their competence and capability
to perform and being in compliance with the
If yes, what percentage of your inputs were
Company’s Code of Conduct which includes
sourced sustainably? Also provide details
health and safety, environment, ethics and
thereof, in about 50 words or so.
integrity and working conditions among others.
As a guiding principle, the Company prefers
to do business with compliant and sustainable
suppliers. The detailed percentage is not
quantifiable. Further details are provided
in the Sustainability Report, which can be
accessed at: https://www.sobha.com/wp-
content/uploads/2020/09/sobha-sustainability-
report.pdf.
4. Has the company taken any steps to procure Yes, to the extent possible, the goods are
goods and services from local & small procured from local and small producers. The
producers, including communities surrounding Company maintains an equitable balance for
their place of work? sourcing its raw materials. SOBHA insists that
its vendors constantly upgrade the process
If yes, what steps have been taken to improve
of manufacturing and thereby enhance their
their capacity and capability of local and small
competencies to match the requisite quality.
vendors?

SO BHA A N N U A L R E P O R T 2021 55
INFORMATION FOR OUR
SHAREHOLDERS

Sl. No. Particulars Remark

5. Does the Company have a mechanism to A separate section on this is provided in the
recycle products and waste? If yes, what Management Report attached to the Director’s
is the percentage of recycling of products Report. Additional details can be obtained
and waste (separately as≤ 5%, 5-10%, ≥10%). from the web-link: https://www.sobha.
Also, provide details thereof, in about 50 com/wp - content /uploads/2020/09/sobha-
words or so. sustainability-report.pdf.

Principle 3:

Sl. No. Particulars Remark

1. Please indicate the total number of employees. As on 31 March 2021, the Company had 3,061
st

employees.

2. Please indicate the total number of employees 16 employees are hired on a contract basis.
hired on temporary/contractual/casual basis.

3. Please indicate the number of permanent The Company had 370 permanent women
women employees. employees as on 31st March 2021.

4. Please indicate the number of permanent The Company had 4 permanent employees with
employees with disabilities. disabilities as on 31st March 2021.

5. Do you have an employee association that is There is no employee association in the

recognized by management? Company.

6. What percentage of your permanent Not Applicable.

employees are members of this recognised
employee association?

7. Please indicate the Number of complaints The Company does not employ child labour,
relating to child labour, forced labour, forced labour or involuntary labour. Further, no
involuntary labour, sexual harassment in the complaints were received pertaining to sexual
last financial year and pending as on the end harassment during the financial year 2020-21.
of the financial year.

8. What percentage of your under mentioned

employees were given safety & skill
upgradation training in the last year?
• Permanent Employees 2,192 employees
• Permanent Women Employees 136 employees
• Casual/Temporary/Contractual Employees 16 employees
• Employees with Disabilities Nil

Principle 4:

Sl. No. Particulars Remark

1. Has the company mapped its internal and Yes, the Company has mapped its internal and
external stakeholders? Yes/No external stakeholders. The key stakeholders of
the Company includes its Customers, Regulatory
Authorities including Government, Employees,
Vendors, Contractors, Bankers, Investors and
Shareholders.

56 S O B HA ANNUAL REPORT 2 02 1
 INFORMATION FOR OUR
SHAREHOLDERS
Sl. No. Particulars Remark
2. Out of the above, has the company identified All the stakeholders are equally important for
the disadvantaged, vulnerable & marginalized the Company and none of the stakeholders are
stakeholders? considered as disadvantaged, vulnerable and
marginalized.

3. Are there any special initiatives taken by the Not applicable.

company to engage with the disadvantaged,
vulnerable and marginalized stakeholders? If
so, provide details thereof, in about 50 words
or so.

Principle 5:

Sl. No. Particulars Remark

1. Does the policy of the company on human Company does not have a specific policy
rights cover only the company or extend to the on human rights. However, it has a Code of
Group/Joint Ventures/Suppliers /Contractors / Conduct which regulates practices relating to
NGOs/Others? the non-employment of child labour, assuring
safety measures etc. This Code is applicable
to the Company, its subsidiaries as well as to
the contractors engaged by the Company.
The Code is applicable to the employees of
the Company, its subsidiaries and contractors
engaged by the Company.

2. How many stakeholder complaints have been No, complaints were received by the Company
received in the past financial year and what on human rights violations.
percentage was satisfactorily resolved by the
management?

Principle 6:

Sl. No. Particulars Remark

1. Does the policy related to Principle 6 cover The Company has its own set of principles
only the company or extends to the Group/ when it comes to utilising natural and manmade
Joint Ventures/Suppliers/ Contractors /NGOs/ resources. The same principles are being
others? extended to group companies.

2. Does the company have strategies/initiatives Yes, the Company has strategies /initiatives
to address global environmental issues such to address global environmental issues. The
as climate change, global warming, etc? Y/N. details may be accessed from: https://www.
If yes, please give hyperlink for webpage etc. sobha.com/wp - content /uploads/2020/09/
sobha-sustainability-report.pdf.

3. Does the company identify and assess Yes, the Company identifies and assesses
potential environmental risks? Y/N potential environmental risks and takes steps as
far as possible to minimise the same.

4. Does the company have any project related to Yes, the Sustainability Report addresses the
Clean Development Mechanism? If so, provide clean development mechanism.
details thereof, in about 50 words or so. Also,
if Yes, whether any environmental compliance
report is filed?

SO BHA A N N U A L R E P O R T 2021 57
INFORMATION FOR OUR
SHAREHOLDERS

Sl. No. Particulars Remark

5. Has the company undertaken any other Yes, the policy may be accessed from the
initiatives on – clean technology, energy website: https://www.sobha.com/wp-content/
efficiency, renewable energy, etc. Y/N? If yes, uploads/2020/09/sobha-sustainability-report.
please give hyperlink for web page etc. pdf.
6. Are the Emissions/Waste generated by the Yes.
company within the permissible limits given
by CPCB/SPCB for the financial year being
reported?
7. Number of show cause/ legal notices No, there are no show cause / legal notices
received from CPCB/SPCB which are pending received which are materially important and
(i.e. not resolved to satisfaction) as on end of are pending to be resolved at the end of the
Financial Year. financial year.

Principle 7:

Sl. No. Particulars Remark

1. Is your company a member of any trade Yes, the Company is a member of CREDAI
and chamber or association? If Yes, Name Bangalore, a forum of real estate developers.
only those major ones that your business
deals with.
2. Have you advocated/lobbied through Yes, the Company works for the advancement of
above associations for the advancement or public good along with our industry colleagues.
improvement of public good? Yes/No; if yes
Such work mainly involves creating a framework
specify the broad areas (drop box: Governance
for sustainable business development for urban
and Administration, Economic Reforms,
areas and inclusive development in this industry.
Inclusive Development Policies, Energy
security, Water, Food Security, Sustainable
Business Principles, Others)

Principle 8:

Sl. No. Particulars Remark

1. Does the company has specified programmes Yes, such details are given in CSR Report
/initiatives/projects in pursuit of the policy attached to the Director’s Report and also in a
related to Principle 8? If yes details thereof. section in the Management Report.
2. Are the programmes/projects undertaken The programmes are carried out by the
through in-house team/own foundation/ Sri Kurumba Educational and Charitable Trust, a
external NGO/government structures/any trust associated with the Company.
other organization?
3. Have you done any impact assessment of The expenditure made on CSR activities and
your initiative? the impact of such expenditure is periodically
monitored by the CSR Committee of the Board.
The Trust (implementing agency) has hired Azim
Premji University for the impact assessment.
However, due to COVID-19, the same could not
get completed.
4 What is your company’s direct contribution to The Company along with its subsidiaries spent
community development projects amount in ₹97.90 million towards its CSR initiatives during
INR and the details of the projects undertaken?. 2020-21.

58 S O B HA ANNUAL REPORT 2 02 1
 INFORMATION FOR OUR
SHAREHOLDERS
Sl. No. Particulars Remark
. Details of the projects undertaken are:
i. Eradicating hunger, poverty and malnutrition
promoting preventive healthcare and
sanitation.
ii. Promoting education and employment
enhancing vocation skills especially among
children, women, elderly and the differently
abled and livelihood enhancement projects.
iii. Promoting gender equality, empowering
women, setting up homes and hostels for
women and orphans; setting up old age
homes, day care centres and such other
facilities for senior citizens; and measures for
reducing inequalities faced by socially and
economically backward groups. For further
details, please refer to the Annual Report on
CSR and the CSR Report in the Management
Report.
5. Have you taken steps to ensure that Yes. For further details, please refer to the CSR
this community development initiative is Report, which forms part of the Management
successfully adopted by the community? Report.
Please explain in 50 words, or so.

Principal 9:

Sl. No. Particulars Remark

1. What No. of customer complaints/consumer 21 consumer cases were pending at the end of
cases were pending as on the end of financial the financial year 2020-21.
year?
2. Does the company display product Yes. The advertisements, agreements,
information on the product label, over and application forms and other relevant documents
above what is mandated as per local laws? depicts them, as per the requirement of local
Yes/No/N.A./Remarks (additional information) laws.
3. Is there any case filed by any stakeholder No.
against the company regarding unfair trade
practices, irresponsible advertising and/or
anti-competitive behaviour during the last
five years and pending as on end of financial
year? If so, provide details thereof, in about
50 words or so.
4. Did your company carry out any consumer Yes.
survey/ consumer satisfaction trends?

For and on behalf of the Board of Directors of Sobha Limited

Sd/- Sd/-
Place: Bangalore Ravi PNC Menon T P Seetharam
Date: June 22, 2021 Chairman Whole-time Director

SO BHA A N N U A L R E P O R T 2021 59
 CORPORATE GOVERNANCE REPORT
COMPANY’S PHILOSOPHY of ensuring concord among shareholders’
The Company is committed to high standards of expectations, the Company’s plans, and the
corporate governance and believes in conducting management’s performance. The Board is also
its business lawfully, with integrity and in an ethical responsible for developing and approving the
manner. The Company is determined to provide mission of the Company’s business, its objectives
in time, correct and complete information, as and goals and the strategy for achieving these.
required, to all its stakeholders. The Company The Company meets the requirements of the
RESPONSIBILITY

regularly interacts with all the stakeholders; Listing Regulations in terms of the composition of
CORPORATE

its borders are expanding; its environment is its Board.

changing ever faster; and its social responsibilities
The strength of the Board as on March 31, 2021
are growing. The Company firmly believes that
was seven Directors. The Board is headed
good Corporate Governance can be achieved by
by the Executive Chairman and comprises of
promoting corporate fairness, transparency and
eminent personalities with expertise in diverse
accountability. To achieve Corporate Governance of
fields. As on the date of this report, there are
the highest standards, the Company has adopted a
seven Directors on the Board. Out of these, one
comprehensive Corporate Governance policy.
Director represents the promoter group, two are
SOBHA is in compliance with the Corporate Professional Directors and four are Non-Executive,
Governance guidelines as stipulated under the Independent Directors, including one woman as
Corporate Governance Policy and various clauses the Independent Director. The Company does not
of the SEBI (Listing Obligations and Disclosure have any nominee Director.
Requirements) Regulations, 2015 (Listing
None of the Directors are related to each other.
Regulations). A report on these is detailed below.
The composition of the Board of Directors
satisfies the requirements of Regulation 17
BOARD OF DIRECTORS of the Listing Regulations read with
The Board, as defined in Sobha Limited’s Corporate Section 149 of the Companies Act, 2013 and the
Governance principles has the responsibility rules made thereunder.

The composition of the Board of Directors as on March 31, 2021 was:.

Name Designation Category Date of Director Committee Committee Directorship in other

appointment -ships* chairman member listed entity and
-ships** -ships** category of Directorship
Mr. Ravi PNC Menon Chairman Executive June 08, 2004 15 (1 listed
- 1 -
entity)
Mr. J C Sharma Vice Chairman Executive April 01, 2003 16 (1 listed
& Managing entity) - 2 -
Director
Mr. R V S Rao Independent Non-Executive June 28, 2006 1 listed
1 - -
Director entity
Mr. Anup S Shah Independent Non-Executive June 28, 2006 4 (2 listed Puravankara Limited
Director entity) 2 - - Non-Executive
Independent Director
Mr. Seetharam T P Whole-time Executive April 01, 2019 1 listed
- 1 -
Director entity
Mr. Sumeet Puri Independent Non-Executive July 08, 2019 4 (1 listed
1 1 -
Director entity)
Ms. Srivathsala K N Independent Non-Executive January 04, 10 (2 listed Pioneer Distilleries
Director 2020 entity) - 2 Limited – Non-Executive
Independent Director

* Includes directorship in both public (listed and unlisted) and private limited companies.
**Includes memberships / chairmanships of only Audit Committee and Stakeholders’ Relationship Committee of all listed companies.
Note: Mr. Jagadish Nangineni, Deputy Managing Director resigned during the year and ceased to be a Director of the Company
w.e.f. February 24, 2021.

60 S O B HA ANNUAL REPORT 2 02 1
As per the declarations received by the Company, goals and revising and altering its direction in
none of the Directors are disqualified under light of changing circumstances. Board meetings
Section 164(2) of Companies Act, 2013 read with are scheduled as required under the Listing
the Companies (Appointment and Qualification Regulations, the Companies Act, 2013 and the
of Directors) Rules, 2014. Rules made thereunder and as required under
business exigencies. At every quarterly scheduled
The Directors have made necessary disclosures
meeting, the Board reviews recent developments,
stating that they did not hold directorships in
if any, the regulatory compliance position, and
more than eight listed companies during the year
proposals for business growth that impact the
2020-21 and did not serve as independent Company’s strategy.
directors in more than seven listed entities pursuant

RESPONSIBILITY
to Regulation 17A of the Listing Regulations. The Board meetings are usually held at the
Company’s Registered and Corporate Office - in

CORPORATE
Also, the membership of the committees (Audit
Committee and the Stakeholders’ Relationship Bangalore or through VC/OVAM, as permitted by
Committee) shall not exceed more than 10 the regulations.
committees and / or are acting as chairpersons in The Company, as required by the regulations,
more than five committees in terms of Regulation convened at least one Board meeting in a quarter
26 of the Listing Regulations. and the maximum time gap between any two
The Company has obtained Directors and meetings was not more than 120 days.
Officers’ insurance (‘D and O Insurance’) for all The dates of the Board meetings held during
its Directors of such quantum and for such risks financial year 2020-21 are:
as determined by its Board of Directors.
Date of the Total Strength No. of Directors
Inter-se relationships among Directors Meeting of BOD Present
There are no inter-se relationship between our June 27, 2020 8 8
Board members. August 07, 2020 8 8

BOARD MEETINGS November 07, 8 8

2020
The Board has the responsibility of monitoring
February 12, 2021 8 8
the Company’s progress towards achieving its

Details of the Directors’ attendance in Board meetings and the previous Annual General Meeting are:

Director Board Meetings/Annual General Meeting (AGM)

June 27, August 07, November 07, February 12, AGM - August 07,
2020 2020 2020 2021 2020
Mr. Ravi PNC Menon ✓ ✓ ✓ ✓ ✓
Mr. J C Sharma ✓ ✓ ✓ ✓ ✓
Mr. R V S Rao ✓ ✓ ✓ ✓ ✓
Mr. Anup S Shah ✓ ✓ ✓ ✓ ✓
Mr. T P Seetharam ✓ ✓ ✓ ✓ ✓
Mr. Jagadish Nangineni* ✓ ✓ ✓ ✓ ✓
Mr. Sumeet Puri ✓ ✓ ✓ ✓ ✓
Ms. Srivathsala K N ✓ ✓ ✓ ✓ ✓

* Mr. Jagadish Nangineni ceased to be a Director of the Company w.e.f. February 24, 2021.

AGENDA FOR THE MEETINGS AND the Chairman and Vice Chairman and Managing
INFORMATION FURNISHED TO THE BOARD Director. The agenda along with detailed notes
The agenda for the meetings is arranged by and necessary supporting documents are
the Company Secretary in consultation with circulated to the Directors within the timelines

SO BHA A N N U A L R E P O R T 2021 61
 prescribed by the regulations. The Company statutory or listing requirements and
provides a separate window for meetings of shareholders’ services such as non-payment
Independent Directors and also facilitates of dividend and delay in share transfers etc.
independent consultations with the Statutory • Sale of investments, subsidiaries and assets
Auditors and Internal Auditors of the Company, which are material in nature and not in the
if necessary. The Company also has a well- normal course of business.
defined process in place for placing vital and
• Any issue which involves possible public or
sufficient information before the Board.
product liability claims of a substantial nature,
All items mentioned under Regulation 17(7) read including any judgement or order which
with Part A of Schedule II to the Listing Regulations may have passed strictures on the conduct
RESPONSIBILITY

are covered to the fullest extent. Extensive of the Company or taken an adverse view
information and presentations are made to the
CORPORATE

regarding another enterprise that may have

Board on the following matters among others: negative implications for the Company.
Information Placed Before the Board •
Significant labour problems and their
• Minutes of the meetings of the Board and proposed solutions. Any significant
various Board and management committees. developments on the human resources/
industrial relations front like signing of wage
• Annual operating/business plans, budgets
agreements and the implementation of the
and any updates.
Voluntary Retirement Scheme etc.
• Capital budgets and any updates.
•
Presentations covering sales, delivery,
• Operational performance of the Company, a finance, compliance and risk management
comparison of the budget with the actuals.
practices.
• Financial analysis of the performance with a
•
The Company’s safety performance
ratio analysis.
including a report on serious and fatal
•
Quarterly Unaudited and Annual Audited accidents, dangerous occurrences, any
Financial Results of the Company and material effluent or pollution problems.
operating division or business segment.
•
Material litigations by and against the
•
Cash flows with a focus on financial Company.
obligations, timelines for payment of credit
• Any material default in financial obligations
facilities and interest.
to and by the Company, or substantial non-
•
Financial statements and minutes of payment for goods sold by the Company.
subsidiary companies.
• Report on the Corporate Social Responsibility
•
Joint ventures, collaborations and
(CSR) activities of the Company.
acquisitions undertaken by the Company.
• Key regulatory updates and their impact on
•
Transactions that involve substantial
the Company.
payments towards goodwill, brand equity or
intellectual property. • Minutes of the meetings of the Board of
Directors of the subsidiaries.
•
Quarterly details of foreign exchange
exposures and the steps taken by the • Other such information as may be required
management to limit the risks of adverse by law or otherwise to be placed before
exchange rate movements, if material. the Board.
• Information on recruitment and remuneration Compliances Related to Board/Committee
of senior officers just below the Board Meetings
level including appointment or removal of The Company is in compliance with the
the Chief Financial Officer and Company provisions of the Listing Regulations pertaining
Secretary.
to the intimation of notice of a Board Meeting,
• Show cause, demand, persecution notices publication of the notice and the results and
and penalty notices which are materially outcome of the meeting etc. The information
important. is also made available to the investors on the
•
Non-compliance with any regulatory, Company’s website: www.sobha.com.

62 S O B HA ANNUAL REPORT 2 02 1
Appointment and Re-appointment of Directors Directors’ Compensation
During the year under review, Mr. Jagadish The Board of Directors, basis recommendations
Nangineni resigned from the position of Deputy of the Nomination, Remuneration and Governance
Managing Director (Whole-time Director) and Committee is responsible for the appointment
Director of the Company with effect from and re-appointment of directors and determining
February 24, 2021. The current overall composition their remuneration subject to approval by the
of the Board constitutes the requisition of the shareholders at the Annual General Meeting.
Listing Regulations. Remunerations for the Board of Directors are
In terms of Section 152 of the Companies approved by the shareholders and disclosed
Act, 2013, not less than two-third of the total separately in the Notes to Accounts. As on

RESPONSIBILITY
number of directors of a public company shall March 31, 2021, the Company had three Executive/
Whole-time Directors. Remuneration for

CORPORATE
be liable to retire by rotation and one-third of
such directors shall retire every year. Further, Whole-time Director(s) consists of a fixed salary
Independent Directors shall not be liable to and/ or performance incentive/commission on
retire by rotation. the consolidated profits earned by the Company.
The Executive Directors of the Company are not
Mr. Jagdish Chandra Sharma, Vice Chairman entitled to sitting fees for attending Board or
and Managing Director of the Company is liable Committee meetings.
to retire by rotation at the ensuing Annual
General Meeting and being eligible offers Independent Directors’ Compensation
himself for re-appointment. The Board
has recommended the re-appointment of The Company has an eminent pool of
Mr. Jagdish Chandra Sharma as Director retiring Independent Directors who, with their expertise
by rotation, designated as Vice Chairman and and diverse experience, contribute to the
development of the Company’s strategies. The
Managing Director.
Independent Directors meet the criteria defined
As required under Regulation 36(3) of under the Companies Act, 2013 and the Listing
the Listing Regulations and Secretarial Regulations. A confirmation of independence has
Standards – 2, particulars of Directors seeking been obtained from all the Independent Directors
appointment/ re-appointment at the ensuing of the Company. The Board hereby confirms that
Annual General Meeting are given in the Annexure in its opinion, the Independent Directors fulfill the
to the Notice of the ensuing AGM. conditions specified in the Listing Regulations
and are independent of the management.
CERTIFICATE PURSUANT TO REGULATION 34(3)
AND SCHEDULE V, PARA C, CLAUSE (10)(I) OF THE Apart from receiving the Director’s remuneration/
SEBI (LISTING OBLIGATIONS AND DISCLOSURE sitting fees, Independent Directors do not
REQUIREMENTS) REGULATIONS, 2015. have any material pecuniary relationships or
A certificate issued by Mr. Nagendra D Rao, transactions with the Company, its promoters,
Company Secretary in practice stating that none its management or its subsidiaries and associate
of the Directors on the Board of the Company companies except to the extent permitted under
have been debarred or disqualified from the applicable laws, which in the opinion of the
being appointed or continuing as directors of Board may affect the independence of their
companies, by the Board/ Ministry of Corporate judgement.
Affairs or any such statutory authority forms
The Directors, being experts in their respective
part of this report as Annexure A.
fields such as Finance (Banking, Accounts,
Audits), Technical (Civil Engineering etc.), and
Resolutions Passed by Circulation
Administration, Management and Legal (Real
During financial year 2020-21, the Board passed Estate) are able to contribute effectively to
one circular resolution: Company’s overall performance.
1. To take note of resignation of Mr. Jagadish Further, a separate meeting of Independent
Nangineni, Deputy Managing Director Directors' was held on March 31, 2021. All
(Whole-time Director) and Director of the the Independent Directors were present at
Company with effect from February 24, 2021. the meeting.

SO BHA A N N U A L R E P O R T 2021 63
 The following are the details of the remuneration paid/payable to the Directors for financial year 2020-21:

(Amount in ₹)

Name Salary Perquisites Contribution to Commission Sitting Total

Provident Fund /Incentive fees

Mr. Ravi PNC Menon 40,999,423 3,789,400 3,780,000 6,370,388 - 54,939,211

Mr. J C Sharma 6,662,413 29,700 672,000 12,707,788 - 20,071,901

Mr. Jagadish Nangineni* 6,440,351 29,700 17,400 - - 6,487,451

Mr. T P Seetharam 6,688,101 615,600 20,700 - - 7,324,401

RESPONSIBILITY

Mr. R V S Rao - - - 1,700,000 130,000 1,830,000

CORPORATE

Mr. Anup Shah - - - 1,700,000 90,000 1,790,000

Mr. Sumeet Puri - - - 1,700,000 190,000 1,890,000

Ms. Srivathsala K N - - - 1,700,000 80,000 1,780,000

Note: The details of the nature of contract are provided in the extracts of the Nomination and Remuneration Policy. None of the
Directors are entitled to severance fee.

* Mr. Jagadish Nangineni has ceased to be a Director of the Company w.e.f. February 24, 2021.

Pursuant to Section 197 of the Companies net profits of the Company for a period of five
Act, 2013, a Director who is neither in whole-time years commencing from April 01, 2019.
employment of the Company nor a Managing
Director may be paid remuneration, subject to The Directors, excluding the Executive Directors,
the approval of the shareholders. The members who attend the Board meetings are entitled
of the Company at the 24th Annual General to sitting fees of ₹20,000 per meeting. Non-
Meeting held on August 9, 2019, approved paying Executive Directors who are members of various
remuneration to Non-Executive Directors at a committees of the Board are entitled to a sitting
rate not exceeding 1 per cent per annum of the fees of ₹10,000 per meeting which they attend.

Directors’ Shareholding
The shareholding of the Directors of the Company as on March 31, 2021 was:

Name of the Director Category No. of equity %

shares

Mr. Ravi PNC Menon Executive Chairman 31,85,930 3.36

Mr. J C Sharma Vice Chairman and Managing Director 107,177 0.11

Mr. T P Seetharam Whole-time Director - -

Mr. R V S Rao Non- Executive Independent Director 15,000 0.02

Mr. Anup Shah Non- Executive Independent Director 4,300 0.00

Mr. Sumeet Puri Non- Executive Independent Director - -

Ms. Srivathsala K N Non- Executive Independent Director - -

Total 33,12,407 3.49

COMMITTEES OF THE BOARD OF DIRECTORS constituted various committees. These

As required under the Companies Act, 2013 committees are entrusted with such powers
and Listing Regulations and to cater to and functions as detailed in their terms of
specific matters, the Board of Directors has reference.

64 S O B HA ANNUAL REPORT 2 02 1
The Company’s Board of Directors has constituted on exercise of judgement by a management
the following committees in terms of the provisions and review of significant adjustments arising
of Companies Act, 2013 and Listing Regulations: out of the audit.

Committees as Mandated Under the • Oversight of the listed entity’s financial

Companies Act, 2013 and Listing reporting process and disclosure of its
Regulations financial information to ensure that the
financial statement is correct, sufficient and
1. Audit Committee
credible.
2. Stakeholders’ Relationship Committee
• Review of qualifications in the Draft Audit
3. Nomination, Remuneration and Governance

RESPONSIBILITY
Report and suggesting action points.
Committee

CORPORATE
4. Corporate Social Responsibility Committee • Establishing and reviewing the scope of the
Independent Audit including the observations
5. Risk Management Committee
of the auditors and a review of the quarterly,
half-yearly and annual financial statements
Other Committees: Share Transfer Committee
before submission to the Board.
1. AUDIT COMMITTEE
• The committee shall have post-audit
The Audit Committee supports the Board by
discussions with the Independent Auditors
overseeing the quality and integrity of the
accounting, auditing and reporting practices to ascertain any areas of concern.
of the Company and its compliance with • Establishing the scope and frequency of the
legal and regulatory requirements. It ensures internal audit, reviewing the findings of the
objectivity, credibility and correctness of the Internal Auditors and ensuring the adequacy
Company’s financial reporting and disclosure of internal control systems.
processes, internal controls, risk management
policies and processes, tax policies and • Reviewing and monitoring the auditors’
compliance and legal requirements and independence and the performance and
associated matters. effectiveness of the audit process.

As required under Section 177 of the • To look into reasons for substantial defaults in
Companies Act, 2013, the Audit Committee payments to depositors, debenture holders,
should comprise of at least three shareholders and creditors.
Directors with Independent Directors
• To look into matters pertaining to the
forming the majority. As per Regulation 18
Director’s Responsibility Statement with
of the Listing Regulations, the Committee
should comprise of at least three members respect to compliance with accounting
of which at least two-third should be standards and accounting policies.
independent. As on March 31, 2021 the • Appointment, remuneration and terms
Audit Committee of the Company had of appointment of Statutory and Internal
three members, out of which, two were Auditors and approval of payment to
Independent Directors. Statutory Auditors for any other services
The powers, roles and terms of reference rendered by them.
of the committee are in consonance with
• Compliance with the stock exchange’s
the requirements under Section 177 of the
legal requirements concerning financial
Companies Act, 2013 and Regulation 18 of
statements to the extent applicable.
the Listing Regulations.
• Reviewing the adequacy of the internal
Terms of Reference
audit function, if any, including the structure
• Regular review of accounts, accounting of the Internal Audit Department, staffing
policies, financial and risk management and seniority of the officer heading the
policies, disclosures etc.
department, reporting structure and
• Review of major accounting entries based coverage and frequency of internal audits.

SO BHA A N N U A L R E P O R T 2021 65
 • Discussions with Internal Auditors on any • Securing attendance of outsiders with
significant findings and follow ups thereon. relevant expertise, if it considers necessary.
• Reviewing the findings of any internal Review of Information by the Audit Committee
investigations by the Internal Auditors into
• Management discussions and analyses of the
matters where there is suspected fraud or
financial condition and results of operations.
irregularities or a failure of the internal control
systems of a material nature and reporting • Financial statements and the Draft Audit
the matter to the Board. Report, including quarterly/half-yearly
• Approving the appointment of the Chief financial information.
Financial Officer after assessing the • Reports relating to compliance with laws and
RESPONSIBILITY

candidate’s qualifications, experience and risk management.

CORPORATE

background.
• Records of related party transactions and
• The committee shall look into any related
a statement of significant related party
party transactions, that is, the Company’s
transactions submitted by the management.
transactions of a material nature with
promoters or the management, their • Management letters/letters of weaknesses in
subsidiaries or relatives, etc., that may internal control issued by Statutory/Internal
have potential conflict with the interests of Auditors.
the Company at large, including approval
• Internal audit reports related to weaknesses
or any subsequent modifications of such
in internal controls.
transactions.
• Scrutiny of inter-corporate loans and • The appointment, removal and terms of
investments. remuneration of the head of the internal
audit function.
• Valuation of the Company’s undertakings or
assets, wherever necessary. • Statement of deviations:
• Evaluation of internal financial controls and – Quarterly statements of deviations
risk management systems. including the report of the monitoring
• Reviewing the functioning of the vigil agency, if applicable, submitted to the
mechanism. stock exchange in terms of Regulation
• Monitoring the end use of funds raised 32(1) of the Listing Regulations.
through public offers and related matters. – Annual statement of funds used for
• Reviewing the utilization of loans and/ or purposes other than those stated in the
advances from/ investments by the holding offer document/ prospectus/notice in
company in the subsidiary exceeding ₹100 terms of Regulation 32(7) of the Listing
crore or 10 per cent of the asset size of Regulations.
the subsidiary, whichever is lower including
As required under Regulation 18 of the Listing
existing loans/ advances/ investments
Regulations, the Chairman of the Audit Committee
existing as on the date of coming into force
is an Independent Director. All members are
of this provision.
financially literate and have financial management
• Such other matters as may from time to time expertise. Mr. Vighneshwar G Bhat, Company
be required by any statutory, contractual or Secretary and Compliance Officer of the Company,
other regulatory requirements to be attended acted as the Secretary to the Committee.
by the Audit Committee.
Meetings
Powers of the Audit Committee
The quorum of the committee is two Independent
• Investigating any activity within its terms of Members present or one-third of the total
reference. members of the committee, whichever is higher.
• Seeking information from any employee. The Audit Committee met four times during
• Obtaining outside legal or other professional financial year 2020-21. There was no gap of more
advice. than 120 days between two meetings.

66 S O B HA ANNUAL REPORT 2 02 1
The dates of the meetings held during the financial year are:

Date of the meeting Total strength of the Committee No. of members present
June 27, 2020 3 3
August 07, 2020 3 3
November 07, 2020 3 3
February 12, 2021 3 3

The composition and attendance of the members of the Audit Committee are:

RESPONSIBILITY
Audit Committee meetings

CORPORATE
Name Category June 27, August 07, November 07, February 12,
2020 2020 2020 2021
Mr. R V S Rao Chairman Non-Executive
✓ ✓ ✓ ✓
Independent Director
Mr. J C Sharma Member Vice Chairman &
Managing Director ✓ ✓ ✓ ✓

Mr. Sumeet Puri Member Non-Executive

✓ ✓ ✓ ✓
Independent Director

Invitees are in consonance with the requirements

The Chairman of the Board, the Chief Financial mandated under Section 178 of the
Officer, Head of Internal Audit and the Statutory Companies Act, 2013 and Regulation 20 of
Auditors attended all the Audit Committee the Listing Regulations.
meetings held during financial year 2020-21 as
Terms of Reference
invitees.
• Resolving the grievances of security holders
2. STAKEHOLDERS’ RELATIONSHIP of the listed entity including complaints
COMMITTEE related to transfer/ transmission of shares,
The Stakeholders’ Relationship Committee of non-receipt of Annual Report, non-receipt of
the Board of Directors deals with stakeholder declared dividends, issue of new/duplicate
relations and share/ debenture holders’ certificates and general meetings.
grievances including matters related to non- • Review of measures taken for effective
receipt of the Annual Report, non-receipt of exercise of voting rights by shareholders.
the declared dividend and other such issues • Review of adherence to the service
as may be raised by them from time to time. It standards adopted by the listed entity with
ensures that investor grievances/ complaints/ respect to various services being rendered
queries are redressed in a timely manner by the Registrar and Share Transfer Agents.
and to the satisfaction of the investors. The • Review of the various measures and initiatives
committee oversees the performance of the taken by the listed entity for reducing
Registrar and Share Transfer Agents of the the quantum of unclaimed dividends and
Company relating to investor services. ensuring timely receipt of dividend warrants/
In accordance with Regulation 20 of the annual reports/ statutory notices by the
Listing Regulations read with Section 178 of shareholders of the Company.
the Companies Act, 2013, the Committee Compliance Officer
comprises of four Directors. The Chairman
Mr. Vighneshwar G Bhat, Company Secretary &
of the Committee, Mr. Sumeet Puri, is a
Compliance Officer, is the Compliance Officer for
Non-Executive Independent Director. The
complying with requirements of securities laws.
Company Secretary and Compliance Officer
of the Company acted as the Secretary to Meetings
the Committee.
The quorum for the committee’s meeting is any
The terms of reference of the Committee two members present for the meeting.

SO BHA A N N U A L R E P O R T 2021 67
 The Stakeholders’ Relationship Committee met three times during financial year 2020-21:

Date of the meeting Total strength of the Committee No. of members present
June 27, 2020 4 4
November 07, 2020 4 4
February 12, 2021 4 4

The composition and attendance of the members of the Stakeholders’ Relationship Committee are:

Stakeholders Relationship Committee

Category meetings
Name
RESPONSIBILITY

June 27, November February 12,

CORPORATE

2020 07, 2020 2021

Mr. Sumeet Puri Chairman Non-Executive Independent
✓ ✓ ✓
Director
Mr. Ravi PNC Menon Member Executive Chairman ✓ ✓ ✓
Mr. J C Sharma Member Vice Chairman & Managing
✓ ✓ ✓
Director
Mr. T P Seetharam Member Whole-time Director ✓ ✓ ✓

Investor Grievances and Queries

The queries received and resolved to the satisfaction of the investors during financial year 2020-21 are:

Particulars Balance as on Received during Resolved during the Balance as on

April 01, 2020 the year year March 31, 2021
SEBI SCORES Website - - - -
Registrar of Companies - - - -
Stock Exchange - - - -
Non-Receipt/ Revalidation of
Dividend Warrants - 4 4 -
Miscellaneous - - - -
Total - 4 4 -

3. NOMINATION, REMUNERATION AND thereof and to regularly review the structure,

GOVERNANCE COMMITTEE size and composition, balance of skills,
The Nomination, Remuneration and knowledge and experience of the Board
Governance Committee of the Board of and the Board’s committees and make
Directors recommends the nomination of recommendations to the Board or where
Directors, key managerial personnel and appropriate, to the relevant committee with
senior management of the Company and regard to any adjustments that are deemed
carries out an evaluation of the performance necessary.
of Individual Directors, recommends the • To formulate criteria for evaluating
remuneration policy for Directors, key Independent Directors and the Board of
managerial personnel and other employees, Directors.
recommends to the Board all remunerations,
in whatever form, payable to the senior • To evaluate the performance of the
management and also deals with the Chairman and other members of the Board
Company’s governance related matters. on an annual basis and to monitor and
evaluate the performance and effectiveness
Terms of Reference of the Board and the Board’s committees
• To identify, review, assess, recommend and the contribution of each Director to the
and lead the process for appointment of Company. The committee shall also seek
Executive, Non-Executive and Independent the views of Executive Directors on the
Directors to the Board and Committees performance of Non-Executive Directors.

68 S O B HA ANNUAL REPORT 2 02 1
• Whether to extend or continue the terms of • To receive reports, investigate, discuss
appointment of Independent Directors on and make recommendations with respect
the basis of a report of their performance to breaches or suspected breaches of the
evaluation. Company’s Code of Conduct.

• To devise a policy for the Board’s diversity. • To review and monitor the Company’s
policies and practices on compliance with
• To identify persons who are qualified
legal and regulatory requirements and to
to become directors and who may be
develop, review and monitor the Code of
appointed in senior management positions
Conduct and Compliance Manual applicable
in accordance with the criteria laid down and
to employees and Directors.

RESPONSIBILITY
recommend to the Board their appointment
and removal. • Such other matters as may from time to time

CORPORATE
be required by any statutory, contractual
• To recommend to the Board all remuneration,
or other regulatory requirements to be
in whatever form, payable to Board members
attended to by such a committee.
and key managerial personnel.

• To make recommendations to the Board on Meetings

the following matters: The quorum for a meeting is either two members
or one-third of the members of the committee,
– Re-appointment of any Executive
whichever is greater, including at least one
and Non-Executive Director at the
Independent Director being present for the
conclusion of his/her specified term of
meeting.
office.
– Re-election by members of any Director As required under Regulation 19 of the Listing
who is liable to retire by rotation as per Regulations, the committee comprises of four
the Company’s Articles of Association. Directors. The Chairman of the Committee,
Mr. Anup Shah, is a Non-Executive Independent
– Any matters relating to the continuation
Director. Mr. Vighneshwar G Bhat, Company
in office of any Director at any time.
Secretary and Compliance Officer of the Company
• To formulate a policy relating to the acted as the Secretary to the committee.
remuneration for the Directors, key
The Nomination and Remuneration Policy
managerial personnel and other employees.
contains the criteria for evaluating the Board,
• To define and articulate the Company’s its committees and Directors. The policy
overall Corporate Governance structure and is available on the Company’s website at
to develop and recommend to the Board of h t t p s : // w w w. s o b h a . c o m / w p - c o n te n t /
Directors the Board’s Corporate Governance u p l oa ds /2020/ 1 0/ 153 63 01 659201 8 0 9 07. p df
Guidelines. and also forms a part of the Directors’ Report.

The Nomination, Remuneration and Governance Committee met once during financial year 2020-21:

Date of the meeting Total strength of the Committee No. of members present
June 27, 2020 4 4

The composition and attendance of the members of the Nomination, Remuneration and Governance
Committee are:
Nomination, Remuneration
Name Category and Governance Committee’s
Meeting June 27, 2020
Mr. Anup Shah Chairman Non-Executive Independent Director ✓
Mr. R V S Rao Member Non-Executive Independent Director ✓
Mr. Ravi PNC Menon Member Executive Chairman ✓
Mr. Sumeet Puri Member Non-Executive Independent Director ✓

SO BHA A N N U A L R E P O R T 2021 69
 4. CORPORATE SOCIAL RESPONSIBILITY Responsibility Policy which shall indicate the
COMMITTEE activities to be undertaken by the Company.
The Corporate Social Responsibility
• Recommend the amount of expenditure to
Committee of the Board of Directors
be incurred on the aforesaid activities.
is entrusted with the responsibility of
formulating and monitoring the Company’s • Monitor the Corporate Social Responsibility
Corporate Social Responsibility Policy. The Policy of the Company from time to time.
Corporate Social Responsibility Policy is
• Prepare an annual report on Corporate Social
available on the Company’s website at
Responsibility initiatives for inclusion in the
h t t p s : // w w w. s o b h a . co m / w p - co n te n t /
uploads/2020/10/158036284320200130.pdf Board’s Report.
RESPONSIBILITY

The role and terms of reference of the • Perform such functions as may be detailed
CORPORATE

committee are as per the requirements in the Companies Act, 2013 and the relevant
mandated under Section 135 of the rules made thereunder and any other
Companies Act, 2013 and the relevant rules applicable legislation.
made thereunder.
Meetings
Terms of Reference The quorum for a meeting is any two members
• Formulating the Corporate Social present for the meeting.

The committee met three times during financial year 2020-21:

Date of the meeting Total strength of Committee No. of members present

June 27, 2020 3 3

November 07, 2020 3 3

February 12, 2021 3 3

The composition and attendance of the members of the Corporate Social Responsibility Committee are:

Corporate Social Responsibility

Name Category Committee meetings
June 27, November February
2020 07, 2020 12, 2021
Mr. Sumeet Puri Chairman Non-Executive Independent
✓ ✓ ✓
Director
Mr. J C Sharma Member Vice Chairman & Managing
✓ ✓ ✓
Director
Mr. Jagadish Nangineni* Member Deputy Managing Director ✓ ✓ ✓

* Mr. Jagadish Nangineni ceased to be a Director and member of the Committees w.e.f. February 24, 2021.

The Corporate Social Responsibility was reconstituted at a meeting of the Board of Directors held on
12th June, 2021 and the reconstituted committee comprises of the following members:

Sr. No. Name of the Member Category

1. Mr. Sumeet Puri, Independent Director Chairman

2. Mr. J C Sharma, Vice Chairman and Managing Director Member

3. Ms. Srivathsala K N, Independent Director Member

The Company Secretary and Compliance Officer of the Company acted as the Secretary to the Committee.

70 S O B HA ANNUAL REPORT 2 02 1
5. RISK MANAGEMENT COMMITTEE Company faces and update them as events
The Risk Management Committee of the change and risks shift.
Board of the Directors is entrusted with • Review reports on any material breach of
the responsibility of establishing policies to risk limits and the adequacy of the proposed
monitor and evaluate the Company’s risk actions undertaken.
management systems specifically covering
cyber security. • In consultation with the Audit Committee,
review and discuss the following with the
Terms of Reference management:
• Oversee and approve the Company’s risk
i. key guidelines and policies governing the
management, internal compliance and

RESPONSIBILITY
Company’s significant processes for risk
control policies and procedures.
assessment and risk management; and

CORPORATE
• Oversee the design and implementation of
the risk management and internal control ii the Company’s major risk exposures
systems (including reporting and internal and the steps that the management
audit systems), in conjunction with existing has taken to monitor and control such
business processes and systems to manage exposures.
the Company’s material business risks. • Report the proceedings of the committee
• Receive reports from, review with and to the Board or the Audit Committee of the
provide feedback to the management on the Board at its regular meetings on all matters
categories of risks that the Company faces which fall within its terms of reference.
including but not limited to credit, market,
• Recommend to the Board or the Audit
liquidity and operational risks, exposures
Committee of the Board, as it deems
in each category, significant concentration
appropriate, any area within its terms of
within those risk categories, the metrics
reference where an action or improvement is
used for monitoring the exposures, and the
needed.
management’s views on the acceptable and
appropriate levels of these risk exposures. • Review its own performance, constitution
• Establish policies for the monitoring and and terms of reference to ensure that it
evaluation of risk management systems to is operating at maximum effectiveness
assess the effectiveness of these systems and recommend any changes it considers
in minimizing risks that may adversely affect necessary to the Board for approval.
the Company’s business. Meetings
• Oversee and monitor the management’s The quorum for a meeting is any two members
documentation of the material risks that the present for the meeting.

The committee met once during financial year 2020-21:

Date of the meeting Total strength of the Committee No. of members present

February 15, 2021 4 3

The composition and attendance of the members of the Risk Management Committee are:

Name Category Risk Management Committee

meeting - February 15, 2021

Mr. Anup Shah Chairman Non-Executive Independent Director 

Mr. Ravi PNC Menon Member Executive Chairman ✓

Mr. J C Sharma Member Vice Chairman & Managing Director ✓

Mr. Subhash Mohan Bhat Member Chief Financial Officer ✓

The Company Secretary and Compliance Officer of the Company acted as the Secretary to the committee.

SO BHA A N N U A L R E P O R T 2021 71
 OTHER COMMITTEES: SHARE TRANSFER During the year under review, there were no
COMMITTEE materially significant related party transactions
The Share Transfer Committee of the Board of which may have potential conflict with the interests
Directors specifically addresses matters relating of the Company at large.
to transfer, split, consolidation, dematerialization Subsidiary Monitoring Framework
and re-materialization of shares.
The Company has the following six
Terms of Reference subsidiaries and six step-down subsidiaries in
• To look into requests for transfer and terms of the Companies Act, 2013. The Company
transmission of shares. also has 100 per cent economic interests in a
partnership firm.
RESPONSIBILITY

• To look into requests for the re-materialization

A. Subsidiaries
CORPORATE

of shares.
• To issue duplicate share certificates in lieu of • Sobha Developers (Pune) Limited
original share certificates. • Sobha Highrise Ventures Private Limited
• To issue split share certificates as requested • Sobha Assets Private Limited
by a member.
• Sobha Tambaram Developers Limited
• To take all such steps as may be necessary
in connection with the transfer, transmission, • Sobha Nandambakkam Developers Limited
splitting and issuing of duplicate share • Sobha Construction Products Private
certificates in lieu of original share certificates. Limited
Composition B. Step-down Subsidiaries
As on March 31, 2021, share Transfer Committee
• Sobha Contracting Private Limited
comprises of Mr. J C Sharma, Chairman,
Mr. T P Seetharam and Mr. Jagadish Nangineni • Kilai Builders Private Limited
(till February 24, 2021), members of the Committee.
• Sobha Interiors Private Limited
Effective 12th June, 2021, Mr. Ravi P N C Menon was
appointed as the member of the Committee. • Kuthavakkam Builders Private Limited

Meetings • Kuthavakkam Realtors Private Limited

The quorum for a meeting is any two members • Annalakshmi Land Developers Private
present at the meeting. Limited
No requests pertaining to transfer, C. Sobha City, a Registered Partnership firm
dematerialization, re-materialization, issue of
In terms of Regulation 16 of the Listing
duplicate or split share certificates were received
Regulations, the Board of Directors formulated
during financial year 2020-21.
a policy for determining material subsidiaries
The Share Transfer Committee was not required and the policy is available on the Company’s
to meet during the year. website at: https://www.sobha.com/wp-content/
uploads/2020/10/157345087920191111.pdf
DISCLOSURES
None of the aforesaid subsidiaries is a material
Related Party Transactions non-listed Indian subsidiary as defined under the
Pursuant to Regulation 23 of the Listing Listing Regulations and the Material Subsidiary
Regulations, the Board of Directors formulated Policy of the Company.
a Policy on Related Party Transactions which
The Company monitors the performance of
can be accessed from the Company’s website at
subsidiary companies, inter alia, by the following
h t t p s : // w w w. s o b h a . c o m / w p - c o n te n t /
means:
u p l o a d s / 2 0 2 0/ 1 0/ 1 5 7 3 4 4 978 42 0 1 9 1 1 1 1 . p d f
Disclosures of related party transactions is • Financial statements, in particular investments
part of the Notes to Accounts section of the made by the subsidiaries are reviewed by
Annual Report. the Company’s Audit Committee.

72 S O B HA ANNUAL REPORT 2 02 1
• Review of annual business plans and budgets. Code of Conduct for Prevention of Insider
Trading
• Review of budget versus actuals and an
analysis of the variance. The Company has adopted a Code of Conduct
for Prevention of Insider Trading in terms of SEBI
• All the minutes of Board meetings of the
(Prohibition of Insider Trading) Regulations, 2015.
subsidiaries are placed before the Company’s
This code is applicable to all Promoters, Directors,
Board regularly.
Key Managerial Personnel and Designated
• A statement of all significant transactions Persons. The code is available on the Company’s
and arrangements entered into by the website at https://www.sobha.com/wp-content/
subsidiaries.
uploads/2020/10/157322075120191108.pdf

RESPONSIBILITY
Code of Conduct

CORPORATE
As required under SEBI Insider Trading Regulations,
In terms of Regulation 17 of the Listing Regulations, the Board of Directors has formulated a structured
the Company has adopted a Code of Conduct digital database for tracking compliance of
for the Company’s Board of Directors and senior insider trading activities. The database covers
management personnel. The code is circulated all the designated persons and is hosted on the
to all the Directors and senior management
Company’s server.
personnel and their compliance is affirmed by
them for 2020-21. The Code of Conduct adopted Vigil Mechanism /Whistle Blower Policy
by the Company has been posted on its website. A comprehensive vigil mechanism and whistle
blower policy to ensure ethical behaviour in all its
business activities and a system for employees to
CONFIRMATION OF THE report any illegal, unethical behaviour, suspected
fraud or violation of laws, rules and regulations
CODE OF CONDUCT BY or conduct to the Audit Committee of the Board
THE VICE CHAIRMAN & of Directors is in place in the Company. The
MANAGING DIRECTOR mechanism adequately insulates whistle blowers
against victimization or discriminatory practices.

This is to confirm that the Company All such reports are taken up for consideration at
has adopted a Code of Conduct for its appropriate intervals depending on the gravity of
Board members and senior management the matter reported so that adequate measures
personnel and the same is available on can be initiated in right earnest at appropriate
the Company’s website. levels. The Company further confirms that no
personnel have been denied access to the Audit
I confirm that the Company has, in
Committee.
respect of the financial year ended
March 31, 2021, received from the senior Familiarization Programmes
management personnel of the Company
The familiarization programmes for Independent
and the members of the Board, a
Directors are bifurcated into:
declaration of compliance with the Code
of Conduct as applicable to them. I. Initial or Preliminary
During their appointment, Independent
Sd/- Directors are apprised of their roles, duties and
J C Sharma responsibilities in the Company. A detailed letter
Vice Chairman containing the Company’s expectations, the
& Managing Director rights, powers, responsibilities and liabilities of
the Independent Directors and the policies of the
Place: Bangalore Company are issued to the Independent Directors
Date: June 04, 2021 during their appointment. The Independent
Directors are required to adhere to these.

SO BHA A N N U A L R E P O R T 2021 73
 II. Continual or Ongoing
Notifications and Circulars related to stock
Updates on the affairs of the Company exchanges/SEBI/other statutory authorities on
including operational and financial details are all matters related to capital markets. There are no
provided to the Independent Directors on a
penalties or strictures imposed on the Company
quarterly basis. Further, immediate updates
by the stock exchanges/ SEBI/ any other statutory
on significant issues, if any, are provided
authority relating to the above.
to all the Directors immediately on the
occurrence of such an event. Periodical Management Discussion and Analysis Report
presentations are made to the Independent
The Management Discussion and Analysis Report
Directors on the Company’s strategies
titled ‘Management Report’ forms a part of the
and business plans. The Independent Directors
RESPONSIBILITY

are also regularly informed about material Annual Report. It includes, among other things, a
CORPORATE

regulatory and statutory updates affecting discussion on the following:

the Company. • Industry structure and developments
Details of the familiarization programmes imparted • Risks and concerns
to the Independent Directors are given on the • Discussion on financial performance with
Company’s website at https://www.sobha.com/
respect to operational performance
wp - co nte nt /u p l oads/2020/ 1 0/ 15755 478 662
0191205.pdf • Human resources

• Outlook
Compliances
In general there was no instance of non- Corporate Governance Compliance Certificate
compliance with any legal requirements on any The Corporate Governance Compliance Certificate
matter relating to the capital market nor was any for the year ended March 31, 2021, issued by
restriction imposed by any stock exchange or
Mr. Nagendra D. Rao, Practicing Company
SEBI during the last three years.
Secretary in terms of the Listing Regulations is
The Company complied with the applicable annexed to the Directors’ Report and forms a part
provisions of the Regulations, Acts, Rules, of the Annual Report.

As required under Schedule V of the Listing Regulations, the skills/expertise/competence of Board

members are provided below:

Name Designation Category Skills/ expertise/ competence

Mr. Ravi PNC Menon Chairman Executive Expertise in construction and real estate
development along with product delivery, project
execution, quality control, technology advancement,
process and information technology and customer
satisfaction.

Mr. J C Sharma Vice Chairman & Executive Expertise in finance, purchase, legal and land
Managing Director acquisition, administration and overall operations.

Mr. R V S Rao Independent Director Non-Executive An expert in banking and finance.

Mr. Anup Shah Independent Director Non-Executive Expertise in law, specifically real estate law.

Mr. Seetharam T P Whole-time Director Executive Expertise in administrative services and CSR
activities.

Mr. Sumeet Puri Independent Director Non-Executive Expertise in global investment banking, capital raising
and investments.

Ms. Srivathsala K N Independent Director Non-Executive Expertise in strategic business, financial planning,
active angel investment, start-up business.

Detailed skills/experience/expertise of each of the Directors are provided elsewhere in the Annual Report.

74 S O B HA ANNUAL REPORT 2 02 1
Secretarial Audit Report Disclosures on compliance of mandatory
The Secretarial Audit Report for the year requirements and adoption (and compliance)/
ended March 31, 2021, issued by Mr. Nagendra non-adoption of the non-mandatory requirements
D. Rao, Practicing Company Secretary in is made in the Corporate Governance Report of
accordance with the provisions of Section 204
the Annual Report. The status of compliance of
of the Companies Act, 2013 forms part of the
Annual Report. non-mandatory requirements is as follows:

CEO / CFO Certificate A. The Board

The Chief Executive Officer (CEO)/Chief The details required to be provided with
Financial Officer (CFO) certification in terms

RESPONSIBILITY
respect to the Non-Executive Chairman are
of the Listing Regulations forms part of the
not applicable as the Chairman of the Board

CORPORATE
Annual Report.
is an Executive Chairman.
Remuneration to Statutory Auditors
B. Shareholders’ Rights
During financial year 2020-21, the fees paid
to the Statutory Auditors of the Company is as The half-yearly declaration of financial
follows: performance together with the summary of
(₹ in million) significant events in the last six months are

Audit fees [includes fees for limited 10.00 not individually provided to the shareholders.
reviews] However, information on financial and
Out of pocket expenses 0.88 business performance is provided in the

Total 10.88 ‘Investors section’ of the Company’s website,

www.sobha.com on a quarterly basis.
DISCLOSURE UNDER THE SEXUAL
HARASSMENT OF WOMEN AT THE C. Modified opinion(s) in the Audit Report
WORKPLACE (PREVENTION, PROHIBITION The audited financial statements of the
AND REDRESSAL) ACT, 2013:
Company for financial year 2020-21 do not
The Company has always believed in providing
contain any qualifications and the Statutory
a safe and harassment free workplace for every
individual working in the Company’s premises Auditors Report/ Secretarial Audit Report
through various interventions and practices. does not contain any adverse remarks. The
The Company always endeavours to create Audit Reports are unmodified reports.
and provide an environment that is free from
discrimination and harassment including sexual D. Separate Posts of Chairman and CEO
harassment.
The Company has appointed separate
The following is a summary of sexual harassment persons to the posts of Chairman and Vice
complaints received and disposed of during Chairman and Managing Director.
financial year 2020-21:
E. Reporting by the Internal Auditor
a. Number of complaints filed during the
financial year: NIL The Internal Auditor reports to the Audit
b. Number of complaints disposed of during Committee of the Board of Directors of
the financial year: NIL the Company. The Audit Committee is
empowered to hold separate meetings and
c. Number of complaints pending as at the end
of the financial year: NIL discussions with the Internal Auditor.

COMPLIANCE OF NON-MANDATORY The Company complied with Corporate

REQUIREMENTS Governance requirements specified in Regulations
Part-E of Schedule-II of the Listing Regulations 17 to 27 and Clauses (b) to (i) of Sub-regulation (2)
contains certain non-mandatory requirements of Regulation 46 of SEBI (Listing Obligations and
that a company may implement at its discretion. Disclosure Requirements) Regulations, 2015.

SO BHA A N N U A L R E P O R T 2021 75
 COMPANY INFORMATION
Annual General Meeting
The details of the Annual General Meetings convened during the last three years are as follows:

Financial Date and Time Venue Special Resolutions

Year

2019-2020 August 07, 2020 Through Video 1. Issue of Non-Convertible Debentures

at 3.00 pm Conferencing (VC)/ on a private placement basis.
Other Audio-Visual
2. Amendment to the Memorandum of
Means (OAVM)
RESPONSIBILITY

Association of the Company.

CORPORATE

2018-2019 August 09, 2019 Taj MG Road, 1. Re-appointment of Mr. Jagdish Chandra
at 3.30 pm Bengaluru, 41/3, Sharma (DIN: 01191608), as Vice
Mahatma Gandhi Road, Chairman and Managing Director.
Bengaluru
2. Appointment of Mr. Seetharam Thettalil
- 560 001
Parameswaran Pillai (DIN: 08391622) as
Whole-time Director of the Company.
3. Appointment of Mr. Jagadish Nangineni
(DIN: 01871780) as Deputy Managing
Director of the Company.
4. Approval of Remuneration for
Mr. Ravi PNC Menon (DIN: 02070036),
Chairman of the Company.
5. Re-appointment of Mr. Ramachandra
Venkatasubba Rao (DIN: 00061599) as
a Non-Executive Independent Director
of the Company.
6. Re-appointment of Mr. Anup Sanmukh
Shah (DIN: 00317300) as a Non-
Executive Independent Director of the
Company.
7. Issue of Non-Convertible Debentures
on a private placement basis.

2017-2018 August 07, 2018 The Gateway Hotel 1. Issue of Non-Convertible Debentures
at 3.30 pm Residency Road on a private placement basis.
Bangalore, 66,
Residency Road,
Bengaluru – 560 025.

Extraordinary General Meeting

No Extraordinary General meeting was held during financial years 2018-19, 2019-20 and 2020-21.

Postal Ballot
No ordinary or special resolutions were passed through postal ballot during the year. None of the businesses
proposed to be transacted at the ensuing Annual General meeting require passing an ordinary or special
resolution through postal ballot.

76 S O B HA ANNUAL REPORT 2 02 1
MEANS OF COMMUNICATION

Website Appropriate information relating to the Company and its performance

including financial results, press releases pertaining to important
developments, performance updates and corporate presentations are
regularly posted on the Company’s website www.sobha.com.
The ‘Investors section’ provides up-to-date information to shareholders
on matters such as the shareholding pattern, outcome of Board and
general meetings, stock performance, unclaimed equity shares, unclaimed
dividends and investor presentations.

RESPONSIBILITY
Financial Results Quarterly, half-yearly and annual financial results are published in an

CORPORATE
English newspaper (The Financial Express) and a regional language
newspaper (Prajavani).

NEAPS Stock exchange intimations are electronically submitted to NSE through

the NSE Electronic Application Processing System (NEAPS).

BSE Listing Centre Stock exchange intimations are electronically submitted to BSE through
the BSE Listing Centre.

Annual Report The Chairman’s Message, Directors’ Report, the Management Discussion
and Analysis Report and the Corporate Governance Report form part
of the Company’s Annual Report and are available on the Company’s
website.

Investor Servicing The contact details for investor queries are given elsewhere in this Report.
The Company has a designated e-mail ID, investors@sobha.com for
investor servicing.

Stakeholder Satisfaction An online survey is available on the Company’s website for addressing
Survey stakeholders’ grievances and for their feedback on the efficacy of investor
services.

List of all Credit Ratings India Ratings: IND AA- (Stable).

obtained by the entity
CRISIL: A+ (Stable)
along with revisions, if any,
thereto during the relevant
financial year

RECOMMENDATION OF DIVIDEND AND DIVIDEND PAYMENT DATE

The Board of Directors has recommended a dividend of ₹3.50 per equity share of ₹10 each which is subject
to the approval of the members at the ensuing Annual General meeting.
In terms of Section 123 of the Companies Act, 2013, the dividend amount will be deposited in a separate
bank account within 5 days from the date of the Annual General meeting and will be paid to the shareholders
within the prescribed time.

SO BHA A N N U A L R E P O R T 2021 77
 DIVIDEND HISTORY
The dividends declared by the Company in the previous seven years are:

Financial year Rate of dividend (%) Dividend per equity share of ₹10 each

2013-14 70.00 7.00

2014-15 70.00 7.00

2015-16* 20.00 2.00

2016-17** 25.00 2.50

RESPONSIBILITY

2017-18 70.00 7.00

CORPORATE

2018-19 70.00 7.00

2019-20 70.00 7.00

*A buy-back of 1,759,192 equity shares @ ₹330 per share amounting to ₹58.05 crore was carried out during financial year 2016-17.
** A buy-back of 1,458,823 equity shares @ ₹425 per share amounting to ₹62.00 crore was carried out during financial year 2017-18.

OTHER INFORMATION

Listing fee The Company has paid annual listing fees for the financial year 2021-22 to BSE
Limited and to the National Stock Exchange of India Limited.

Listing on stock exchanges The equity shares of the Company are listed on the National Stock Exchange of
India Limited (NSE) and BSE Limited (BSE).

Reconciliation of the share In terms of Regulation 76 of the SEBI (Depositories and Participants) Regulations,
capital audit 2018, reconciliation of the Share Capital Audit is conducted every quarter by
Mr. Natesh K., Practicing Company Secretary to reconcile the total admitted
capital with the National Securities Depository Limited (NSDL), the Central
Depository Services (India) Limited (CDSL) and physically with the shareholders
and the total issued and listed capital. The report is forwarded to the stock
exchanges within the prescribed timeline, where the shares of the Company
are listed.

Outstanding GDRs/ADRs/ As on March 31, 2021, the Company did not have any outstanding GDRs/ADRs/
Warrants/Convertible Warrants/Convertible Instruments.
Instruments and their impact
on equity

Plant locations of the Interiors Division:

divisions Plot No.9, KIADB Industrial Area, Jigani-Bommasandra Link Road, Hennagara
(Post), Anekal Taluk, Bommasandra, Bengaluru - 560 105
Plot No. A-915 RIICO Industrial Area Bhiwadi, Tehsil Tijara Distt. Alwar,
Rajasthan - 301 019
Metals & Glazing Division:
Plot No.10, Bommasandra Industrial Area, Bommasandra Jigani Link Road,
Jigani Post, Opposite to Biocon, KIADB Industrial Area, Anekal Taluk, Bengaluru
- 560 105
Concrete Products Division:
Plot No # 329, Bommasandra Jigani Link Road, Industrial Area, Jigani, Anekal
Taluk, Bengaluru - 560 105
Restoplus Division:
Plot No: 9, KIADB Industrial Area, Jigani Bommasandra Link Road, Bommasandra,
Hennagara Post, Anekal Taluk, Bengaluru - 560 105

78 S O B HA ANNUAL REPORT 2 02 1
STOCK CODE DETAILS

Particulars International Securities National Stock BSE Limited

Identification Number Exchange of India
Limited
Company | Stock Code INE671H01015 SOBHA 532784

The Bloomberg code for the Company is SOBHA: IN. The Reuters code is SOBH.NS (NSE) and SOBH.BO (BSE).

STOCK PRICE DATA

RESPONSIBILITY
National Stock Exchange of India Limited (NSE) BSE Limited (BSE)

CORPORATE
High Low Average Volume High Low Average Volume

₹ ₹ ₹ No. ₹ ₹ ₹ No.

April-20 246.55 130.25 197.52 8,083,398 247.00 131.15 198.69 3,381,163

May-20 220.00 172.05 194.25 6,779,033 220.00 172.40 194.81 1,002,543

June-20 248.00 197.50 222.40 6,970,339 248.00 196.05 222.24 561,322

July-20 245.00 217.10 231.05 5,688,442 244.90 217.20 230.86 453,765

August-20 276.00 210.00 241.20 12,236,246 275.50 209.70 240.95 1,064,469

September-20 272.00 221.00 244.49 6,665,760 272.00 220.90 244.27 444,077

October-20 317.00 200.25 269.51 12,790,637 317.00 225.00 269.58 803,247

November-20 324.00 284.00 301.99 8,510,876 324.30 282.35 301.70 606,904

December-20 420.80 297.05 333.97 12,112,820 420.00 296.80 333.62 818,450

January-21 496.00 395.15 460.76 9,537,328 495.30 390.10 460.40 649,154

February-21 487.00 432.05 454.92 2,752,066 486.00 433.65 433.65 207,654

March-21 488.80 426.80 450.35 3,708,418 485.70 402.50 450.19 729,715

The Company’s share price performance vis-à-vis broad-based indices during financial year 2020-21 forms a part of
the Annual Report.

SHAREHOLDING PATTERN

Distribution of Shareholding as on March 31, 2021

Range of equity No. of shareholders % of total Number of shares % of

shares held shareholders Issued capital

1 – 500 66,174 97.43 3,030,744 3.20

501 – 1,000 973 1.43 723,072 0.76

1,001 – 2,000 360 0.53 540,830 0.57

2,001 – 3,000 113 0.17 285,382 0.30

3,001 – 4,000 48 0.07 170,728 0.18

4,001 – 5,000 42 0.06 198,988 0.21

5,001 – 10,000 61 0.09 448,881 0.47

10,001 and above 147 0.22 89,447,228 94.31

Total 67,918 100.00 94,845,853 100.00

SO BHA A N N U A L R E P O R T 2021 79
 SHARE CAPITAL HISTORY

Date of No. of Face Issue Nature of Reasons for Cumulative Cumulative

allotment Equity Value Price Consideration Allotment No. of Equity paid-up share
Shares (₹) (₹) Shares capital (₹)

August 07, 30 10 10 Cash Subscribers to 30 300

1995 memorandum
February 11, 1,174,729 10 10 Cash Further allotment 1,174,759 11,747,590
1998
October 16, 1,934,823 10 10 Cash Further allotment 3,109,582 31,095,820
1998
RESPONSIBILITY

December 855,000 10 10 Cash Further allotment 3,964,582 39,645,820

CORPORATE

22, 1998
March 25, 3,000,000 10 10 Cash Further allotment 6,964,582 69,645,820
1999
July 11, 14,175,898 10 10 Cash Further allotment 21,140,480 211,404,800
2002
June 28, 42,280,960 10 10 - Bonus issue in the 63,421,440 634,214,400
2006 ratio of 2:1
October 97,245 10 617 Cash Preferential 63,518,685 635,186,850
28, 2006* allotment-pre-
IPO placement to
Bennett, Coleman
& Co. Limited
October 486,223 10 617 Cash Preferential 64,004,908 640,049,080
28, 2006** allotment pre-IPO
placement to
Kotak Mahindra
Private Equity
Trustee Limited
December 8,896,825 10 640 Cash 8,014,705 e q u it y 72,901,733 729,017,330
12, 2006*** shares were
allotted to the
public and
882,120 equity
shares were
allotted pursuant
to employee
reservation
pursuant to the
initial public
offering
July 03, 25,162,135 10 209.40 Cash Qualified 98,063,868 980,638,680
2009**** Institutional
Placement
July 21, 1,759,192 10 330.00 Cash Buyback 96,304,676 963,046,760
2016$
October 12, 1,458,823 10 425.00 Cash Buyback 94,845,853 948,458,530
2017^
* Pursuant to a Shareholders’ Agreement dated October 25, 2006, 97,245 equity shares were issued and allotted to Bennett,
Coleman & Co. Limited, at a price of ₹617 per equity share including a share premium of ₹607 per equity share, aggregating ₹60
million.
** Pursuant to a subscription agreement dated October 26, 2006, 486,223 equity shares at a subscription price of ₹617 per equity
share including a share premium of ₹607 per equity share, aggregating ₹299.99 million.
*** 8,896,825 equity shares of ₹10 each were issued as fully paid-up shares.
**** 25,162,135 equity shares of ₹10 each were issued as fully paid-up shares by way of Qualified Institutional Placement.
$
1,759,192 equity shares of ₹10 each were bought back from the shareholders at a price of ₹330 per share.
^1,458,823 equity shares of ₹0 each were bought back from the shareholders at a price of ₹425 per share.

80 S O B HA ANNUAL REPORT 2 02 1
Shares held in physical and dematerialized form
As on March 31, 2021, 99.99 per cent of the Company’s shares were held in dematerialized form and the
rest in physical form. The following is a break-up of the equity shares held in electronic and physical forms:

Description No. of shareholders No. of shares % of equity

NSDL 36,328 82,560,097 87.04

CDSL 31,583 12,285,683 12.95

Physical 7 73 0.01

Total 67,918 94,845,853 100.00

RESPONSIBILITY
ADDITIONAL SHAREHOLDER INFORMATION

CORPORATE
Unclaimed Dividend
Pursuant to Section 124 of the Companies Act, 2013, the amount lying unpaid or unclaimed in the Unpaid
Dividend Account of the Company for a period of seven years from the date of transfer of the dividend
amount to the Unpaid Dividend Account shall be transferred by the Company to the Investor Education and
Protection Fund established by the Central Government.
During financial year 2020-21, the Company was required to transfer to the Investor Education and
Protection Fund, the dividend declared in the Annual General Meeting held on July 05, 2013. Accordingly,
the Company transferred an amount of ₹302,463 (Rupees three lakh two thousand four hundred and
sixty-three only) to the Investor Education and Protection Fund.
The details of the unclaimed dividends along with the names and addresses of the shareholders were
published on the Company’s website. Individual communication to each of the shareholders who had not
claimed the dividend continuously for the previous seven years was sent to their registered addresses. The
said details were also uploaded on the website of the Ministry of Corporate Affairs.
The following table provides the dates of declaration of dividend after the shares were listed and the
corresponding date when unclaimed dividends are due to be transferred to the Central Government:

Financial Date of declaration Last date for claiming Unclaimed amount as Due date for transfer to
year of dividend unpaid dividend on March 31, 2021 (₹) IEPF Fund
2013-14 July 11, 2014 August 09, 2021 265,426.00 September 08, 2021
2014-15 July 15, 2015 August 19, 2022 471,107.00 September 18, 2022
2015-16 August 03, 2016 September 04, 2023 145,258.00 October 03, 2023
2016-17 August 04, 2017 September 06, 2024 179,327.50 October 05, 2024
2017-18 August 07, 2018 September 09, 2025 501,704.00 October 08, 2025
2018-19 August 09, 2019 September 11, 2026 445,095.00 October 10, 2026
2019-20 August 07, 2020 September 05, 2027 317,728.00 October 04, 2027

Members can claim the unpaid dividend from the Company before transfer to the Investor Education and
Protection Fund. Members who have so far not encashed the dividend warrant(s) are requested to make
their claim to the Secretarial Department at the Registered and Corporate Office of the Company or send
an e-mail to investors@sobha.com.

Unclaimed equity shares

In terms of Regulation 39(4) of the Listing Regulations, unclaimed equity shares shall be transferred to
an ‘Unclaimed Suspense Account’ opened by the Company for the purpose and the equity shares lying
therein shall be dematerialized with a Depository Participant. The voting rights of such equity shares remain
frozen till the rightful owner claims the shares.
Accordingly, the Company has opened a Demat account with Depository Participant Geojit BNP Paribas
Financial Services Limited. The following table provides details of the equity shares lying in the Unclaimed
Suspense Account:

SO BHA A N N U A L R E P O R T 2021 81
 Financial Aggregate no. of Number of shareholders Number of Aggregate no. of
year shareholders and who approached the shareholders to shareholders and
outstanding equity Company for transfer of whom equity outstanding equity
shares as on April 01, equity shares during the shares were shares as on March 31,
2020 year transferred 2021
2020-21 83 shareholders and 83 shareholders and
841 outstanding equity - - 841 outstanding equity
shares shares

Allottees who have not claimed their equity shares are requested to make their claim to the
Secretarial Department at the Registered and Corporate Office of the Company or send an e-mail to
investors@sobha.com
RESPONSIBILITY

Pursuant to the notification issued by Ministry of Corporate Affairs, Government of India, the Company has
CORPORATE

transferred the following equity shares to the designated IEPF’s Demat account:

Base year Number of shareholders No. of equity shares transferred to IEPF’s Demat account
2009-10 175 2,470
2010-11 64 1,550
2011-12 62 1,413
2012-13 45 2,574

GENERAL SHAREHOLDER INFORMATION

Corporate Identification L45201KA1995PLC018475

Number

Registered and Corporate Sobha Limited, ‘SOBHA’, Sarjapur–Marathahalli Outer Ring Road (ORR),
Office Devarabisanahalli, Bellandur Post, Bengaluru – 560 103.

Date, Time and Venue of Date: Friday, August 13, 2021.

the Annual General Meeting Time: 3:00 PM.
(AGM)
Venue: Pursuant to Circular Nos 14/2020, 17/2020, 20/2020 dated April 8, 2020,
April 13, 2020, May 5, 2020, Circular No. 13th January, 2021 issued by the Ministry
of Corporate Affairs (MCA) and Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79
dated May 12, 2020 SEBI/HO/CFD /CMD2/CIR/P /2021/11SEBI/HO/CFD /CMD2/CIR/P
/2021/11 dated 15th January, 2021 issued by the Securities and Exchange Board of
India (hereinafter collectively referred to as ‘Circulars’), the Annual General Meeting
of the Company is (“AGM”) is convened through Video Conferencing / Other Audio
Visual Means (VC/OAVM) and as such, there is no requirement to have venue for the
AGM. For details, please refer to the Notice of the AGM.

Financial Year The financial year of the Company starts from 01 April of every year and ends on
31 March of the following year.

Book Closure The date of book closure is 30th July, 2021.

Dividend Payment Date If approved by the shareholders in the ensuing Annual General meeting, the
dividend will be paid on or before September 11, 2021.

Declaration of Financial For quarter ending June 30, 2020 – August 07, 2020.
Results for Financial Year For quarter ending September 30, 2020 – November 07, 2020.
2020-21 For quarter ending December 31, 2020 – February 12, 2021.
For year ending March 31, 2021 – June 22, 2021.

Tentative Dates for For quarter ending June 30, 2021 – Second week of August 2021.
Declaration of Financial For quarter ending September 30, 2021 – Second week of November 2021.
Results for 2021-22 For quarter ending December 31, 2021 – Second week of February 2022.
For the year ending March 31, 2022 –Third week of May 2022.

82 S O B HA ANNUAL REPORT 2 02 1
Correspondence Details of Various Authorities

The Securities and Securities and Exchange Board of India

Exchange Board of India SEBI Bhavan, Plot No.C4-A, ‘G’ Block, Bandra Kurla Complex, Bandra (East),
Mumbai - 400051
Tel: 1800 266 7575
Website: www.sebi.gov.in | www.scores.gov.in

National Stock Exchange of National Stock Exchange of India Limited

India Limited Exchange Plaza, Plot No. C/1, 'G' Block, Bandra Kurla Complex, Bandra (East),
Mumbai – 400 051
Tel: +91 22 2659 8100 - 8114

RESPONSIBILITY
Website: www.nseindia.com

CORPORATE
BSE Limited The BSE Limited
Floor 25, P.J. Towers, Dalal Street, Mumbai – 400 001
Tel: +91 22 2272 1233/4
Website: www.bseindia.com

National Securities National Securities Depository Limited

Depository Limited 4th Floor, 'A' Wing, Trade World, Kamala Mills Compound, Senapati Bapat Marg,
Lower Parel, Mumbai – 400 013
Tel: +91 22 2499 4200
Website: www.nsdl.co.in

Central Depository Central Depository Services (India) Limited

Services (India) Limited 17th floor, P. J. Towers, Dalal Street, Fort, Mumbai – 400 001
Tel: +91 2272 8658 | +91 2272 8645
Website: www.cdslindia.com

R&T Agents Link Intime India Private Limited

C-101,247 Park, L B S Marg, Vikhroli West, Mumbai-400083.
Tel: 022-49186000
Fax Number:022-49186060
Email: rnt.helpdesk@linkintime.co.in

Share Transfer System

Share transfers will be registered and returned within a period of 15 days from the date of receipt, subject to
the documents being valid and complete in all respects. Share transfers and other communication regarding
share certificates and change of address etc., may be addressed to the R&T Agents as mentioned earlier.

Commodity price risk or foreign exchange risk and hedging activities

The Company had no exposure in commodities and hence the disclosure is not required to be given.
For a detailed discussion on foreign exchange risk and hedging activities, please refer to Management
Discussion and Analysis Report.

Nomination
Pursuant to the provisions of Section 72 of the Companies Act, 2013 read with Companies (Share Capital
and Debentures) Rules, 2014, members may file nominations in respect of their shareholdings/debenture
holdings:
i. For shares held in physical form, members are requested to give the nomination request to Registrar
and Share Transfer Agents of the Company.
ii. For shares held in a dematerialized form, members are requested to give the nomination request to
their respective Depository Participants directly.

E-voting
Pursuant to the provisions of Section 108 of the Companies Act, 2013 read with the Companies (Management
and Administration) Rules, 2014, the Company provides a remote e-voting facility to the shareholders. The

SO BHA A N N U A L R E P O R T 2021 83
 Company has availed the services of the Link Intime India Private Limited for providing the necessary
e-Voting platform to members of the Company for the ensuing Annual General meeting.
For detailed information on the e-voting procedure, members may please refer to the Notes to the Notice
of the Annual General meeting.

Website Disclosures

Corporate Social
https://www.sobha.com/wp-content/uploads/2020/10/158036284320200130.pdf
Responsibility Policy

Vigil Mechanism https://www.sobha.com/wp-content/uploads/2020/10/153630159420180907.pdf

RESPONSIBILITY
CORPORATE

Code of Conduct https://www.sobha.com/wp-content/uploads/2020/10/153630161520180907.pdf

Nomination and
https://www.sobha.com/wp-content/uploads/2020/10/153630165920180907.pdf
Remuneration Policy

Code of Conduct for

Prevention of Insider https://www.sobha.com/wp-content/uploads/2020/10/157322075120191108.pdf
Trading

Material Subsidiary
https://www.sobha.com/wp-content/uploads/2020/10/157345087920191111.pdf
Policy

Policy on Related Party

https://www.sobha.com/wp-content/uploads/2020/10/157344978420191111.pdf
Transactions

Policy on Determination
of Materiality of Events https://www.sobha.com/wp-content/uploads/2020/10/153630154920180907.pdf
and Information

Policy on Preservation
https://www.sobha.com/wp-content/uploads/2020/10/153630157420180907.pdf
of Documents

Terms and Conditions

of Appointment of https://www.sobha.com/wp-content/uploads/2020/10/153630451520180907.pdf
Independent Directors
Composition of Various
Committees of the https://www.sobha.com/wp-content/uploads/2021/07/Composition-of-Committees.pdf
Board of Directors

Dividend Distribution
https://www.sobha.com/wp-content/uploads/2020/10/153630151720180907.pdf
Policy

ADDRESS FOR CORRESPONDENCE

For any queries, please write to: For queries relating to financial statements,
please write to:
Mr. Vighneshwar G Bhat
Company Secretary & Compliance Officer Mr. Subhash Mohan Bhat
Sobha Limited Chief Financial Officer
‘SOBHA’, Sarjapur – Marathahalli Outer Ring Road Sobha Limited
(ORR), Devarabisanahalli, ‘SOBHA’, Sarjapur – Marathahalli Outer Ring Road
Bellandur Post, Bengaluru– 560 103 (ORR), Devarabisanahalli,
Board Line: +91 80 4932 0000 | Extension: 6024 Bellandur Post, Bengaluru– 560 103
Fax: +91 80 4932 0444 Telephone: +91 80 4932 0000 | Extension: 5026
E-mail: vighneshwar.bhat@sobha.com Fax: +91 80 4932 0444
investors@sobha.com E-mail: subhash.bhat@sobha.com
investors@sobha.com

84 S O B HA ANNUAL REPORT 2 02 1
SHARE PRICE PERFORMANCE

250 1 Year Chart - Sobha vs NIFTY Sobha NIFTY

% Change in Closing Price

200

150

100

50

RESPONSIBILITY
-50

CORPORATE
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21

250 1 Year Chart - Sobha vs NSE Realty Sobha NSE Reality

% Change in Closing Price

200

150

100

50

-50
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21

1 Year Chart - Sobha v Sensex Sobha Sensex

250
% Change in Closing Price

200

150

100

50

-50
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21

250 1 Year Chart - Sobha vs BSE Realty Sobha BSE Realty

% Change in Closing Price

200

150

100

50

-50
Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21

SO BHA A N N U A L R E P O R T 2021 85
 CATEGORY WISE DISTRIBUTION OF SHAREHOLDERS AS ON MARCH 31, 2021
CATEGORY WISE DISTRIBUTION OF SHAREHOLDERS AS ON MARCH 31, 2020

Promoter and Promoter Group : 51.99%

RESPONSIBILITY

Foreign Portfolio Investor : 18.08%

CORPORATE

Mutual Funds : 10.81%

Corporate Bodies : 10.56%

Others : 8.56%

SHAREHOLDING MOVEMENTS

Particulars No. of Shares as on No. of Shares as on Change in %

March 31, 2021 March 31, 2020
Promoter and Promoter Group 4,93,07,663 4,91,13,903 0.20
FPI 1,71,51,312 2,21,63,169 -5.28
Mutual Funds 1,02,55,233 1,30,63,993 -2.96
Corporate Bodies 1,00,37,499 10,10,103 9.52
Financial Insitutions 175 5,93,205 -0.63
Others 80,93,971 89,01,480 -0.85
Total 9,48,45,853 9,48,45,853

MARKET CAPITALISATION

50000

45000

40000

35000

30000
₹ in millions

25000

20000

15000

10000

5000

Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21

86 S O B HA ANNUAL REPORT 2 02 1
ANNEXURE A
CERTIFICATE PURSUANT TO REGULATION 34(3) AND SCHEDULE V
PARA C CLAUSE (10)(I) OF THE SEBI (LISTING OBLIGATIONS AND
DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

To,
The Members,

RESPONSIBILITY
Sobha Limited
SOBHA, Sarjapur-Marathahalli Outer Ring Road (ORR)

CORPORATE
Devarabisanahalli, Bellandur Post,
Bengaluru – 560 103.

I have examined the relevant registers, records, forms and returns filed, notices and disclosures
received from the Directors, minutes books, other books and papers of Sobha Limited having
CIN: L45201KA1995PLC018475 and having registered office at 'SOBHA', Sarjapur-Marathahalli Outer
Ring Road (ORR) Devarabisanahalli, Bellandur Post, Bengaluru – 560 103 (hereinafter referred to as ‘the
Company’), produced before me by the Company for the purpose of issuing this Certificate, in accordance
with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board of
India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ‘the
LODR’), as amended vide notification no. SEBI/LAD/NRO/GN/2018/10 dated May 9, 2018 issued by SEBI.

In my opinion and to the best of my information and according to the verifications (including DIN status at
the portal www.mca.gov.in) as considered necessary and explanations furnished to me by the Company,
its officers and Management Representation Letter of even date, I hereby certify that none of the Directors
who were on the Board of the Company as on 31st March, 2021 have been debarred or disqualified from
being appointed or continuing as Directors of the Companies by the Securities and Exchange Board of
India, Ministry of Corporate Affairs or any other Statutory Authority.

Ensuring the eligibility of every Director on the Board is the responsibility of the management of the
Company. Our responsibility is to express an opinion on these based on our verification.

I have conducted necessary verification as much as is appropriate to obtain reasonable assurance about
the eligibility or disqualification of the Directors on the Board of the Company.

This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or
effectiveness with which the management has conducted the affairs of the Company.

Sd/-

Nagendra D. Rao
Practising Company Secretary
Membership No. FCS – 5553
Certificate of Practice – 7731

UDIN: F005553C000451680
No. 543/A, 7th Main, 3rd Cross,
Place : Bengaluru S.L. Bhyrappa Road, Hanumanthanagar,
Date : June 12, 2021 Bengaluru - 560 019.

SO BHA A N N U A L R E P O R T 2021 87
 MANAGEMENT REPORT
MARKETS AND OPERATING ENVIRONMENT

MACROECONOMIC OVERVIEW showed robust resilience, which was further

Financial year 2020-21 was one of the most backed by a steady upward performance of
challenging years of our lifetime. Innumerable financial markets in India. Indices are financial
lives, jobs and growth prospects were lost due results driven and have responded positively
to the corona virus induced pandemic. The with all sectors showing signs of a robust revival.
This is a healthy development, considering the
world has lost 4-5 per cent of its GDP output
fact that various parts of the country going
amounting to a US dollar value of 4 trillion
under limited and sporadic lockdowns at regular
approximately. The unprecedented health hazard
intervals to contain the spread of the virus, which
continued to disrupt the lives and livelihoods of
is generally a threat to day-to-day functioning of
millions of people across the globe throughout
various industries and impacts the performance
the year. Demand-supply situation remained
of various sectors.
unstable for most part of the year, impacted
further by the second wave of pandemic across The challenging phase we are living through is
the nation. Bringing the economy back from unprecedented in nature. Its impact on business
the brink of catastrophe and maintaining steady operations has thrown light on sectors and
growth has been the greatest challenge of all related businesses which are well positioned to
MANAGEMENT

time. However, it is refreshing to know that with adopt to ever changing needs of the marketplace.
great collaboration between all nations, the fiscal Businesses with ability to innovate, agility to
REPORT

stimuli announced by the various governments adapt, efficient systems and processes in place,
and central banking systems, and rapid testing a customer centric approach and digital reach will
and vaccination the situation is being managed be in a position to succeed and scale new heights
efficiently across the globe. in the coming years. In hindsight, readiness to
manage and overcome a probable third wave of
India’s GDP growth stands at -7.3 per cent for the pandemic will determine the direction of the
financial year 2020-21, and the Reserve Bank of economy in the near-to-medium term range.
India’s projections indicate a strong revival of the
economy with GDP growth expected to be at 10.5
SECTOR OVERVIEW
per cent for financial year 2021-22. This trend is
already visible in quarterly GDP movement during Construction, a key contributor to the core
2020-21, with GDP moving from a contraction of sector, has always been a focus area for
24 per cent in Q1-21 to a growth of 1.6 per cent successive governments. Policy decisions taken
during Q4-21 despite the disruptions caused by the in recent years have had a reflective impact
ongoing second wave of the pandemic. However, on the real estate sector. Consolidation in the
we need to review and monitor with great caution, industry is happening in an anticipated manner
the short-to-medium term impact of the second and Covid-19 related challenges are adding fuel
and a probable third wave of the pandemic while and accelerating the pace of process. The sector
which forms about 7 per cent of India’s GDP is
continuing to work on more efficient ways of
expected to contribute about 13 per cent to the
tackling its economic impact.
GDP with market size of USD 1 trillion by 2030.
This brings us to the efforts and role played While the ongoing pandemic has challenged the
by the research fraternity, pharma players, survival of some small businesses, it has also
economists, central governments, various opened up avenues for listed and large players
banking and administrative systems, and private with scale and agility as their advantage. Scalability
players across the world who worked relentlessly is very crucial in times of sectoral consolidation
for over a year and continue to focus on deriving as the large players are marking substantial sales
more amicable solutions to the ongoing health volume increases and geographical expansion
crisis and the resultant impact on livelihoods. plans. Smaller players continue to face operational
Throughout the pandemic, all core sector players challenges while large players like Sobha with

88 S O B HA ANNUAL REPORT 2 02 1
brand recognition, known for quality products, While the Company is present in major cities in
and in-house manufacturing facilities continue to India, it is also exploring new markets pan-India.
gain a considerable market share.
Despite the macroeconomic challenges faced
Despite the setbacks during first half of across industries, SOBHA was able to deliver
FY 2020-21, the realty sector witnessed a major a commendable operational and financial
revival in the second half of FY 2020-21. The performance during financial year 2020-21. This
sector survived a challenging environment and was backed by the Company’s increased digital
showed robust signs of recovery. This was backed presence and the best practices followed. The
by innovative sales and marketing efforts and Company witnessed strong performance across
continuous improvements in processes. Digital regions and all the business verticals that it
marketing and virtual tours of projects acted as operates in. New product launches in view
a saviour for the industry - otherwise dependent of ever-changing demand sentiments across
on in-person visits and meetings. Adapting and the sector supported its business operations.
implementing innovations with regard to virtual As far as the real estate sector is concerned,
reality and augmented reality too played a crucial higher sales volume coupled with upward price
role in increasing sale volumes in the sector. realization is a welcome sign during a tough
Following a digital approach increased the speed macro environment.
of the overall process and also the quality of the
Demand sentiment on the residential side
customer base with serious buyers at advanced
continued to be skewed towards larger units, while
stages of buying decisions approaching to
in the commercial space, managed or co-working
enquire about projects.
workspaces are increasingly becoming popular.

MANAGEMENT
The real estate sector is anticipated to undergo New and renewed concepts like work from home
further consolidation. With demand sentiment or work from anywhere will benefit residential

REPORT
improving, execution of projects back at real estate. Despite all the favourable factors
pre-Covid levels, and incentives for buyers like leading to listed players getting a better grip on
lowest interest rates and schemes for achieving the market challenges do exist ahead of us. The
housing for all by the Government of India, sector is increasingly becoming cautious of the
we trust that the coming years will be better ever-changing demands of customers. Adapting
operationally and will also give us an edge over to these changing behavioural and cyclical
the other sectors. Apart from the emotional patterns and customizing our product offerings
value, housing has gained more prominence accordingly will remain our utmost priority among
during this period due to human safety and all our deliverables.
security concerns and we believe this will augur
well for the large players with quality products With SOBHA’s unique self-reliant model, a strong
and vast project pipelines across regions. The brand name, and unmatched execution capabilities,
focus of a viable and successful business remains the Company continues to deliver all its projects
in agility in seizing gainful opportunities, how on time. The Company currently has ongoing real
quickly it can adapt to the changing behaviour estate projects aggregating 30.11 million square
of the customers and staying ahead of the curve feet of developable area and 21.90 million square
always with the quality of processes, people and feet of saleable area, and ongoing contractual
products that it has to offer. projects aggregating 5.64 million square feet
under various stages of construction.
OUTLOOK OF OUR MARKETS As on March 31, 2021, the Company had delivered
A. REAL ESTATE overall 112.30 million square feet of developable
area. Since its inception, the Company has
SOBHA is the foremost backward integrated
completed real estate projects measuring
company in the real estate space known for
58.97 million square feet of developable area and
quality product delivery and on time completion
44.84 million square feet of super built-up area.
and handover of projects. A reputed brand across
regions, SOBHA has a presence in 10 cities across During the year, the Company completed
6 states. The Company is present in Bangalore, construction activities to the extent of 0.23 million
Gurugram (NCR), Chennai, Thrissur, Kochi, Calicut, square feet of total developable area and
Coimbatore, Pune, Mysore, and GIFT City, Gujarat. 0.22 million square feet of super built-up area.

SO BHA A N N U A L R E P O R T 2021 89
 BANGALORE auto-ancillary units along with considerable
Sobha Limited, based out of Bangalore has a contribution from the IT and ITES sectors.
sales volume of 67 per cent (approximate) coming Presently, the Company has 3 ongoing projects
from the Bangalore market. During 2020-21, it in Chennai, aggregating 1.30 million square feet
completed 'SOBHA 25 Richmond' in Bangalore. of total developable area and 0.88 million square
At Sobha we create masterpieces and 'SOBHA feet of super built-up area in this market.
25 Richmond' is among the most coveted. The
project has 5 spacious 3-bed apartments and two
CALICUT
penthouses. What makes 'SOBHA 25 Richmond'
unique and sought after is not just its location SOBHA has been operating in Calicut since
or the amenities, but also its rare sophistication. 2013-14 with its first project 'SOBHA Bela Encosta',
The project covers a developable area of 0.016 a super luxury villa development. The Company
million square feet and 0.012 million square feet added 'SOBHA Rio Vista', providing super luxury
of saleable area. living on a beautiful river side. The spacious
apartments in the lone tower are nestled on 3.66
SOBHA has also completed 'Sobha Dream Acres' acres of elevated land overlooking the river with
- Tropical Greens, Phase-18 Wing 39 & 40 with
acres of greenery and open space.
a total developable and saleable area of
0.21 million square feet. The “Sobha Dream Presently, the Company has 2 ongoing projects
Acres” project along with other projects across in Calicut that aggregate 1.07 million square feet
regions continued to be completed and handed of total developable area and 0.72 million square
over within stipulated timelines despite facing feet of super built-up area.
major macroeconomic challenges.
MANAGEMENT

KOCHI
Presently, the Company has ongoing projects
REPORT

aggregating 15.74 million square feet of total Kochi is referred to as the commercial capital of
developable area and 11.37 million square feet of Kerala. The city is a major port city in the country.
super built-up area in Bangalore. It is one of the rapidly growing cities, and home to
a number of technology and industrial campuses
GURUGRAM - NCR such as Info Park, Cochin Special Economic Zone,
the KINFRA Export Promotion Industrial Park,
SOBHA started its operation in the Gurugram-NCR
Smart City at Kakkanad, and Cyber City. The
market in 2011-12 with the launch of International
City. After experiencing a positive feedback for Company entered Kochi market in 2013-14 with
this apartment project, the Company launched the launch of “SOBHA Atlantis”.
the ‘Sobha City’ project in Gurugram. Sobha City Presently, the Company has 2 ongoing projects
is one of the single largest group housing projects in Kochi, aggregating 3.20 million square feet of
in Gurugram. total developable area and 2.57 million square
Under the SOBHA City project, the Company is feet of super built-up area.
working on 2.92 million square feet of developable
area and 2.25 million square feet of super built- THRISSUR
up area. Under the International SOBHA City SOBHA entered the Thrissur market in 2007-08
project is working on 2.54 million square feet of with its landmark project “SOBHA City”, the first
developable area and 1.61 million square feet of integrated township in Kerala.
super built-up area.
During 2020-21, SOBHA launched Phase-1 of
In total, the Company has ongoing projects its new luxury project, “SOBHA Metropolis”
aggregating 5.46 million square feet of total in Thrissur. The total developable area of the
developable area and 3.86 million square feet of project is 1.52 million square feet with a super
super built-up area, which will be developed and built-up area of 1.17 million square feet. This
delivered in phases in Gurugram- NCR. project also features a commercial space of
27,607 square feet. The Company launched
CHENNAI only Phase-1 with a developable area of 0.74
Chennai is known as the automobile capital million square feet and a super built-up area of
of India. It is home to large automobile and 0.57 million square feet.

90 S O B HA ANNUAL REPORT 2 02 1
Presently, the Company has 3 ongoing projects, MYSORE
SOBHA Lake Edge, SOBHA Silver Estate, SOBHA started operations in Mysore in 2011-12
and SOBHA Metropolis (Phase 1) in Thrissur with the plotted development project “SOBHA
aggregating 1.34 million square feet of total Garden”.
developable area and 1.01 million square feet of
super built-up area. As of March 2021, the Company does not have
any ongoing projects in Mysore.
COIMBATORE
GIFT CITY GUJARAT
The Company entered into the Coimbatore
market in 1998-99 with the plotted development Gujarat International Finance-Tec city (GIFT) – A
project of 'SOBHA Harishree Gardens' and Global Financial Hub is India’s first operational
launched its first villa development, 'SOBHA smart city. Founded by Prime Minister Narendra
Emerald' in 2008-09. Modi, it is a business district promoted by
the Government of Gujarat through a joint
The Company currently has 3 ongoing projects in venture company. GIFT City aims to tap into
Coimbatore, 'SOBHA Elan' with 0.42 million square India’s huge potential for providing financial
feet of developable area and 0.34 million square services by offering world-class infrastructure
feet of super built-up area, 'SOBHA West Hill' with and facilities to leading global financial institutions
0.05 million square feet of developable area and and companies.
0.03 million square feet of super built-up area,
and 'SOBHA Verdure' with 0.14 million square feet Currently SOBHA has 1 ongoing project in the
of developable area and 0.10 million square feet affordable segment - “SOBHA Dream Heights
“with a developable area of 0.71 and super built-

MANAGEMENT
of super built-up area.
up area of 0.52 million square feet.

REPORT
PUNE
SALES PERFORMANCE
The Company ventured into the Pune market in
During the year, SOBHA achieved 4.01
2007-08 with the project ‘SOBHA Carnation', a
million square feet of new sales area which
super luxury multi-storied apartment.
is a praiseworthy accomplishment in a tough
The Company has one ongoing project in Pune, operational environment. The total value of this
'SOBHA Nesara', with a developable are of 0.68 area including the share of joint development
million square feet and a total saleable area of stood at ₹31,372 million with an average price
0.51 million square feet. The project located near realization of ₹7,817 per square foot. SOBHA’s
the pristine foothills of NDA Hills, offers wide share of sales value stood at ₹24,759 million. This
lush greens as a view, a bounty of birdlife, and a shows that customers trust brand 'SOBHA' as
healthier lifestyle. their preferred choice for quality home.

Sales Value (₹ in million)

35,000
31,225 31,372
28,612 28,806
30,000
24,217 25,401 24,759
25,000 23,827
20,125
20,000 18,661

15,000

10,000

5,000

0
2016-17 2017-18 2018-19 2019-20 2020-21

Total sales value (incl JD share) Sobha share of sales value

SO BHA A N N U A L R E P O R T 2021 91
 Total Average Price Realization (₹/sq.ft.)

8,000 7892,06
7,749 7,817

7,500

7,075
In ₹

7,000

6,704.16

6,500

6,000

2016-17 2017-18 2018-19 2019-20 2020-21

MANAGEMENT
REPORT

3.50
New Sales (in million square feet)
3.00

2.50

2.00
Area in Million sqft

1.50

1.00

0.50

Bangalore Gurugram Kochi Chennai Coimbatore Mysore Thrissur Calicut Pune GIFT City

 FY 2016-17 2.26 0.23 0.07 0.18 0.03 0.08 0.08 0.03 0.05 -

 FY 2017-18 2.60 0.36 0.32 0.10 0.07 0.07 0.06 0.05 0.003 -

 FY 2018-19 2.77 0.35 0.32 0.18 0.11 0.18 0.07 0.04 0.01 0.01

 FY 2019-20 3.00 0.24 0.15 0.21 0.07 0.06 0.10 0.03 0.07 0.13

 FY 2020-21 2.70 0.37 0.40 0.12 0.06 0.03 0.15 0.02 0.09 0.07

Despite commercial products, SOBHA’s prime focus remains on its residential business to generate positive
cash flows through speedy delivery and revenue realization and to ensure appropriate investments in the
best available opportunities.

92 S O B HA ANNUAL REPORT 2 02 1
B. COMMERCIAL SOBHA’s ability and capacity to deliver high
SOBHA has primarily focused on the residential quality, custom-designed turnkey projects,
real estate segment since its inception with and the domain knowledge to address tough
sporadic presence in the commercial segment. challenges have gained it a loyal customer base
Although SOBHA has created some landmark for its Contracts Division. In the Contractual
commercial projects like Thrissur’s most iconic vertical, SOBHA has a presence in 27 cities across
landmark: the “SOBHA City Mall”, the Company’s 14 states.
presence in the segment has been relatively
limited. Now SOBHA has a renewed focus on Contracts - Completed (in million sqft)
commercial development with several projects
under progress in multiple cities.
As of March 2021, the Company had two
commercial malls in this business vertical: the 13.08
“Sobha City Mall” in Thrissur operations of
which started in December 2015. It has a total
developable area of 0.44 million square feet with
a total leasable area of 0.34 million square feet.
SOBHA had initially sold 0.61 million square feet.
The second offering in this vertical is “1 SOBHA”
mall, Bangalore with a total developable area of
0.38 million square feet and a total leasable area of

MANAGEMENT
0.23 million square feet. The launch of “1 SOBHA” 40.25
mall in Bangalore marks the Company’s entry into

REPORT
the city’s commercial shopping space. Located
in the heart of Bangalore, this commercial
development will be a host to topmost in Infosys Non-Infosys

brands from retail, F&B, entertainment, and

fashion industries. The mall is poised to become
Bangalore’s next go to destination for shopping
Contracts - Ongoing (in million sqft)
and recreation.

C. CONTRACTUAL
The year 2020-21 was a milestone year for Sobha’s
Contracts vertical. Despite the challenges, the 1.75
Company completed 2.33 million square feet in
this vertical.
Overall, the Company has delivered 53.33 million
square feet of contractual work and it has
5.64 million square feet of area under execution in
9 cities across India.
While SOBHA values a long-standing relationship 3.89
with a few select clients which contributes to the
major scope of its total work done in this vertical,
there is emphasis on diversifying the client
base and reducing SOBHA’s risk portfolio. The
Company is actively involved in major contractual
Infosys Non-Infosys
projects across India helping it with geographical
diversity and a multi-client approach. The
Company’s corporate clients include the LuLu As the Company predominantly operates on
group, Biocon, Syngene, Taj Hotels, HCL, Wipro, a cost-plus margin basis, it seeks to expand
Infosys, ITC Hotels, Huawei Technologies, Manipal its contractual operations while preserving
group, and GAR Corporation. its margins.

SO BHA A N N U A L R E P O R T 2021 93
 PROJECTS AND WORK DONE
SOBHA, with its self-reliant model of operations, II. COMPLETED PROJECTS
quality products, customer satisfaction and timely Financial year 2020-21 witnessed the overall
delivery has set a benchmark in the industry
completion of 2.56 million square feet of
and garnered customer loyalty over the years.
developable area and 2.55 million square
Despite the macroeconomic challenges that were
feet of super built-up area both in real
witnessed, steady performance continued during
estate and contractual verticals.
financial year 2020-21 too when the Company
completed and handed over 2.56 million square A. REAL ESTATE
feet of developable area.
In 2020-21 SOBHA completed
0.23 million square feet of developable
I. OVERALL EXECUTION
area and 0.22 million square feet of
Overall, SOBHA has completed 112.30 million super built-up area. During FY-21, the
square feet of area since its operation in Company delivered 0.21 million square
1995. The Company has been steady in
feet of developable area in the SOBHA
launching new real estate projects and
Dream Acres project, Bangalore. The
executing new contractual projects wherein
remaining phases of development are
significant project level investments are
in progress and are ahead of schedule.
being made on a regular basis. These
The construction of these project is
MANAGEMENT

ongoing projects are excluded from the

done using the pre-cast technology.
purview of overall execution since, on
average, a real estate project takes around
REPORT

During 2020-21, the Company

3 to 4 years to complete. completed 'SOBHA 25, Richmond'
in Bangalore. At Sobha we create
masterpieces and SOBHA 25
Richmond is among the most
Execution Track Record
[Area in Million Square Feet] coveted. The project has five
spacious 3-bed apartments and
2 penthouses. What makes SOBHA
25 Richmond unique and sought
112.30
2020-21 after is not just its location and
the amenities but also its rare
sophistication.
2019-20 109.74
The Company has also completed
Sobha Dream Acres - Tropical Greens,
Phase-18 Wing 39 & 40 with a
103.88
2018-19 total developable and saleable
area of 0.21 million square feet. The
Sobha Dream Acres project along
2017-18 92.53 with other projects across regions
continued to be completed and
handed over within stipulated timelines
0 20 40 60 80 100 120
despite facing major macroeconomic
challenges.
2017-18 2018-19 2019-20 2020-21
Since its inception, the Company
 Cumulative 92.53 103.88 109.74 112.30 has completed real estate projects
 Real Estate 2.58 9.75 3.98 0.23 measuring 58.97 million square feet
of developable area and 44.84 million
 Contracts 3.22 1.60 1.88 2.33
square feet of super built-up area.

94 S O B HA ANNUAL REPORT 2 02 1
 Real Estate Completed - Location wise break-up Real Estate Completed - Product Mix
[Area in Million Square Feet] [Area in Million Square Feet]

Bangalore 46.32 35.34

Apartments 42.17 32.44

Coimbatore n 3.73 n 3.07

Plots n 6.58 n 5.09
Thrissur n 2.90 n 2.34

Chennai Villas n 3.42 n 1.95

n 1.68 n 1.31

Gurugram n 1.56 n 1.10 Club Houses,

Others n 4.30 n 3.32

Mysore n 1.58 n 0.80

Row Houses n 2.51 n 2.04
Pune n 1.20 n 0.88

0 5 10 15 20 25 30 35 40 45 50 0 5 10 15 20 25 30 35 40 45 50

Developed Area Super Built-up Area Developed Area Super Built-up Area

B. CONTRACTUAL

MANAGEMENT
During financial year 2020-21, the Company completed 2.33 million square feet spread across 4 cities.
Since the start of its operations, SOBHA has completed 53.33 million square feet of area for various clients

REPORT
in 27 cities across India.
Note: Others include Durgapur, Greater Noida, Salem, Baddi, Indore, Gurugram, Kolkata, Ooty, Calicut and
Mumbai.

Contracts Completed (Area in million square feet)

Bangalore 13.06
Mysore 10.35
Pune 6.45
Hyderabad 6.26
Chennai 4.37

Mangalore 2.56

Trivandrum 2.60

Kochi 1.66
Bhubaneshwar 1.53
Chandigarh 1.37

Jaipur 0.70

Roorkee 0.45
Coimbatore 0.30
Gurugram 0.28

Nagpur 0.22

Others 1.18

SO BHA A N N U A L R E P O R T 2021 95
 III. ONGOING PROJECTS
The Company is currently executing 35.75 million square feet of developable area and 27.54 million square
feet of super built-up area.

A. REAL ESTATE
SOBHA currently has ongoing real estate projects aggregating 30.11 million square feet of developable
area and 21.90 million square feet of super built-up area spread across 9 cities.

Real Estate Ongoing - Location wise break-up Real Estate ongoing - Product Mix
[Area in Million Square Feet] [Area in Million Square Feet]

Bangalore n 15.74 n 11.36 Apartments n24.73 n18.64

Gurugram n 5.46 n 3.86
Kochi n 3.20 n 2.57
Villas n 3.84 n 2.26
Thrissur n 1.34 n 1.01
Chennai n 1.30 n 0.88
Calicut n 1.07 n 0.72 Row Houses n 0.90 n 0.57
GIFT City n 0.71 n 0.52
Pune n 0.68 n 0.51 Plots n 0.64 n 0.43
Coimbatore n 0.61 n 0.47

0 2 4 6 8 10 12 14 16 0 5 10 15 20 25 30
MANAGEMENT

Developed Area Saleable Area Developed Area Saleable Area

REPORT

B. CONTRACTUAL
SOBHA has ongoing contractual projects aggregating 5.64 million square feet spread across 9 cities.

Contracts Ongoing Projects (Area in million square feet)

Trivandrum 2.76

Bangalore 1.53

Nagpur 0.41

Indore 0.37

Mysore 0.29

Chennai 0.12

Kochi 0.09

Pune 0.07

Bhubaneshwar 0.01

96 S O B HA ANNUAL REPORT 2 02 1
ENVIRONMENT, HEALTH AND SAFETY
Ensuring a healthy and safe work environment its construction activities, SOBHA uses pre-cast
involves developing safe, high quality, and elements which come with many advantages.
environment friendly processes, working They are fast to make, consume less labour, lead
practices, and activities that prevent or reduce to minimal wastage, and do not need plastering
the risk of harm to the people working in that work. These pre-cast elements use minimum
environment. It also involves complying with resources while also reducing wastage at the
environmental regulations such as managing same time.
waste or air emissions for reducing the Company’s
carbon footprint. ENERGY SAVING MEASURES
SOBHA practices energy conservation by
At SOBHA, procedures are in place for identifying
installing solar panels for lighting common areas
workplace hazards and reducing accidents and
and solar water heaters in all its projects. Some of
exposure to harmful situations and substances
the highlights in this area are:
for providing a safe work environment to its
workers. This includes training employees in • Eighty per cent of the power required for the
accident prevention, accident response, emergency glazing factory is being catered to by roof
preparedness, and use of protective clothing and top solar systems.
equipment.
• Around 90 per cent of the power required
SOBHA is an ISO 9001, ISO 14001, and OHSAS

MANAGEMENT
for SOBHA’s corporate office is by solar and
18001 certified Company for its quality, wind power using an off-grid system.
environment, and safety management systems

REPORT
• All lights in apartment projects’ staircases
respectively.
come with inbuilt sensors to save energy.
ENVIRONMENT
RAINWATER HARVESTING
SOBHA strives to ensure that its construction,
development activities, and real estate operations Rainwater harvesting is another effort at the
are environmental friendly. The Company Company for addressing the acute problem
complies with all environmental and occupational of water scarcity. Rainwater harvesting has
health and safety laws and regulations such as emerged as one of the most viable options
the Water (Prevention & Control of Pollution) for meeting the water requirements of an
Act, 1974; amendment 1988 and the rules increasing population. Rainwater harvesting also
thereunder, the Air (Prevention & Control of helps restore depleted aquifers thus enhancing
Pollution) Act, 1981 and the rules and orders sustainable water yields in areas surrounding
made thereafter; the Environment (Protection) SOBHA’s project sites.
Rules, 1986; Environmental Impact Assessment Rainwater harvesting is done in two ways:
Notification, 2006; and Hazardous Waste through collection tanks for roof-based runoffs
(Management, Handling & Transboundary and through recharge pits for land-based
movement) Rules, 2008 and the amendment runoffs. Water from the terrace runoffs is
thereafter across all its projects wherever treated and re-used thus reducing the need
applicable. The Company also focuses on for getting water from external sources or
minimizing emissions and increasing the extracting groundwater to meet a project’s
use of renewable resources both in its requirements. The land-based (surface) runoff
construction activities and operations phase in
is passed through percolation pits which help
its manufacturing facilities where all attempts
in enhancing the depleting groundwater table.
are made to keep the carbon footprint low by
Wherever feasible in residential projects, even
following the best industry practices.
surface runoff is collected in storage tanks
For achieving all this, the Company has installed a and after treatment the water is used for
pre-cast unit for its construction activities. Instead primary purposes further reducing the demand
of using the conventional block work or bricks for for external fresh water.

SO BHA A N N U A L R E P O R T 2021 97
 SEWAGE TREATMENT PLANTS is handed over to authorized waste recyclers.
SOBHA uses specially designed Sewage All these efforts help the Company in restoring
Treatment Plants (STPs) to treat the waste water eco-sanitation wherever it works.
generated in its buildings. The treated water
is used for secondary activities like flushing WATER TREATMENT PLANTS (WTPS)
toilets, watering the landscape areas, cleaning For ensuring safe and healthy drinking water,
the common areas, and at construction sites SOBHA provides water treated with Pressure
for dust suppression. The STPs help reduce Sand Filters and Reverse Osmosis units in all its
a project’s consumption of fresh water for its projects. The RO treated water is provided in
various activities. one point in the kitchen for drinking purposes.
STP uses a hybrid technology – the Activated
LABORATORY FACILITY FOR WATER TESTING
Sludge Process (ASP) followed by the Ultra
Filtration (UF) technology for enhancing the The Company has a functional chemical
quality of the final treated sewage. This process laboratory and microbiological laboratory at the
conforms with the standards set by the Pollution Sobha Academy to analyse water samples for
Control Board. physicochemical and microbiological parameters.
This laboratory is managed by qualified personnel
Acoustic enclosures are being provided for air and equipped with instruments like pH meter,
blowers to mitigate noise pollution that can DO meter with probe, COD reactor, spectroflex
possibly be caused in the vicinity. Ozonators meter, BOD incubator, centrifuge, a water
are being provided at STPs’ exhaust and fresh distillation unit, laminar flow, biological incubator,
air ducts to remove odour and also improve electron microscope, digital colony counter, and
MANAGEMENT

the quality of air for the operators working autoclave which are essential for ascertaining
inside the plant room. Air curtains are also the quality of the water from physicochemical
REPORT

provided at the STPs’ entrance to prevent the and microbiological points of view.
odour from escaping into the open area. The
Company has regular educational programmes COVID-19 SPECIFIC ACTION
for its construction workers on the do’s and
The previous year posed unique challenges
don’ts of using natural resources. The Company
with the global Covid-19 pandemic and the
also constructs dedicated STPs for camps
subsequent lockdowns through the April and
where the construction workers stay.
May 2020.

ORGANIC WASTE CONVERTERS As the lockdown eased in May 2020 and

The Company has been successfully using Organic construction sites geared up to restart
Waste Converters across all its projects in India. operations, all project heads and EHS managers
It is mandatory to use solid waste management were briefed with a detailed presentation about
plants during the operational phase of all projects. extant rules and regulations and the precautions
The integrated solid waste management system to be taken at the sites to prevent the spread
operates on the principle of the 4Rs - Reduce, of Covid-19.
Re-use, Recycle, and Recover.
HEALTH AD SAFETY
Waste is segregated at the household level
Safety is integrated in the Company core
into organic/ inorganic waste and collected
processes to help inculcate the value of health
in separate bins. Organic waste is converted
and safety among its workforce. The Company
into compost using Organic Waste Converters.
strongly believes that environment, health, and
The compost is used as organic manure for
safety (EHS) are an integral part of our day-to-
the landscape and plantations at project sites.
day activities at the workplace. Continuous efforts
Inorganic waste is given to authorized waste
are made to raise awareness and understanding
recyclers for further processing.
about the value of safety and health programmes
Organic waste generated in and around the across the spectrum including management
projects during the construction stages is leadership and workers. A systematic approach
diverted to nearby piggery farms and the local at finding and fixing hazards in the workplace
municipal corporation while the inorganic waste forms a part of these programmes.

98 S O B HA ANNUAL REPORT 2 02 1
The EHS management system at SOBHA is •
Out station projects’ monitoring process
effective as it is partnered by an effective done through virtual audits to ensure a safe
leadership and owned by every employee of and healthy work environment.
the Company. This shows a demonstrably strong
commitment to health, safety, and environment NEW PRACTICES AND THEIR
by the top management in implementing IMPLEMENTATION
industrial best practices and achieving the
• All the safety documents, check lists, and
Company’s goal of zero accidents.
procedures were revised and updated during
SOBHA’s safety team creates awareness and the lockdown.
provides skill development training programmes
• QST home page application designed and
to enhance the skills and competencies of
live status.
workers and tradesmen on this important aspect.
•
LOTO (Lockout Tagout) system for all
The National Safety Council conferred electrical panels, pumps, DG, hoist, and
the Company with the first position in other equipment.
the state level safety awards in the construction
category for Sobha Royal Pavilion. In addition to • The safety health tag system implemented
already existing practices, during 2020-21, the for all power tools.
following activities were undertaken for health •
Earth pits’ values display and standard
and safety: board/stickers.
• Electrical cable routing fixed standards using
COVID-19 RISK REDUCTION MANAGEMENT

MANAGEMENT
holders for external and insulated J hook for
•
CDRRM-Covid19 Disaster Risk Reduction internally.
Management implemented at projects and

REPORT
workmen colonies Pan-India. ACHIEVEMENTS
•
Site operating procedures prepared for • FY 2020-21: There were zero accidents with
lockdown and post-lockdown phases. 23 million manhours in Pan-India projects.

SO BHA A N N U A L R E P O R T 2021 99
 CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) takes Broadly, SOBHA’s CSR activities cover the
on a whole new meaning at Sobha Limited, following areas:
the only backward integrated real estate player
– Providing education
in the country. CSR at SOBHA Group is a
sincere devotion that stems out of genuine – Providing healthcare facilities
concern and drive to provide comprehensive – Looking after the aged and others in need
and sustainable social development in rural
India. It is in this context that the Company, EDUCATION
under the aegis of the Sri Kurumba Educational
THE SOBHA ACADEMY
and Charitable Trust, initiated Graamasobha,
a unique social developmental initiative for The Sobha Academy was established in 2007
Vadakkenchery, Kizhakkenchery, and Kannambra to empower and enable rural poor to break
grama panchayats in Palakkad district of Kerala away from the vicious circle of poverty, ignorance,
in 2006. deprivation, and exclusion by providing their
children with high-quality education. Selection
The Trust identified nearly 4,525 families to the Academy is done through an open draw
(around 17,311 people) from below the poverty from a list of eligible candidates short-listed
line (BPL) segment. The families were adopted after intense research. Targeted specifically
through an in-depth scientific poverty mapping at children from the weaker sections, all
MANAGEMENT

called the Social Empowerment Mapping applications that come to the Sobha Academy
Exercise (SEME). Beneficiary identity cards are scrutinized to ensure that only deserving
REPORT

were issued to the adopted families. As a candidates are given access to the free and
result, the Trust has detailed and authentic quality education that the Academy provides.
data about each beneficiary and his or her Selected students undergo a medical fitness
individual requirements. Based on the data, test and the final selection of students is done
the Graamasobha model was developed. The through an open draw. Every year 90 girls are
lives of thousands of underprivileged citizens admitted to LKG through a draw. The Academy,
are getting positively transformed through this which follows the CBSE curriculum, provides
growth model, which has a bottom-up approach academic and integrated support such as books,
for poverty alleviation. transportation, uniforms, food and healthcare,
all free and also provides a smart classroom
The in-depth Social Empowerment Mapping
facility, a good library facility, full-fledged
Exercise was undertaken by the Social
science and computer labs, special emphasis
Empowerment Department (SED) of the Trust to
on sports and cultural activities, communicative
fulfil the following objectives:
English, and personality development. During
• Identify and enlist genuine beneficiary 2020 - 21, 1,115 students in the Vadakkenchery,
families from the three panchayats (6 villages) Kizhakkenchery, and Kannambra panchayats
using clear-cut norms and terms. were on the rolls from LKG to Class 12.

• Generate qualitative and multi-dimensional The quality of the students pursuing higher
baseline reports on the target families, so education in various reputed universities in
that specific programmes and activities can the country after passing higher secondary
be implemented for their benefit. education from The Sobha Academy, bears
testimony to the excellent training it has been
• Devise target-based, area-specific
providing since its inception. A good number
empowerment programmes and activities of students crack entrance examinations such
for key human development verticals like as NEET, JEE, and KEAM every year. Most of
education, health, employment, and housing. these students ensure their seats in professional
• Design an effective mechanism to measure colleges without any special coaching by private
and monitor processes and the pace of the institutions. This exemplifies the possibility of a
Trust’s empowerment programmes. person achieving success irrespective of any

100 S O B HA ANNUAL REPORT 2 02 1

kind of adverse circumstances if s/he is provided from Sobha Hermitage, young mothers and
quality education and befitting opportunities. their children, all employees of the Sri Kurumba
Educational and Charitable Trust, SOBHA’s project
SOBHA ICON HSS staff, and migrant workers. The facilities include
Sobha Icon Higher Secondary (commenced free consultations, diagnosis, tests, treatment,
from 2013) is a full-time teaching and learning and medicines. The hospital has the following
programme with Science and Commerce facilities:
streams. It has 30 admissions in each class.
• Cardiac and Pulse Oxymetry
Icon is not an affiliated school but functions as a
Teaching and Learning Centre within the • Centralized Oxygen, Suction provision
scope of the Kerala State Council for Open
• 3 and 12 Channel ECGs
and Lifelong Education (SCOLE) and is
registered as an open regular programme • Digital Ultra Sound Scanning System and
of the Kerala Directorate of Higher Secondary ECHO Test
Education. Students enjoy the same
• 300 MA X-Ray with Computerized
status as regular school students. Students
Radiology (CR)
are given intensive 8 hour teaching-learning
sessions, 6 days a week. All facilities and services • Laboratory with Automatic Haematology
are free of cost including uniforms, books and Bio-chemistry Analysers
and food. • Minor Operation Theatre
It is interesting to note that Icons have secured • Pharmacy
scholarship worth over Rs 9.5 crore during the

MANAGEMENT
last 6 years from major universities through open • Ophthalmology Department with
competitions. This does not include government automatic digital equipment, upgraded

REPORT
scholarships or fellowships or grants. auto refractometer, slit lamp, indirect
ophthalmoscope and direct ophthalmoscope.
As of March 2021, more than 160 students
had graduated through Sobha Icon. A close • Dental Department with an ultra-modern
monitoring of their progress is being done unit with a PLANMECA RVG unit, Intra oral
continually to ensure the initiative is delivering on camera, and fibre optic twin beam micro
its purpose. It is very heartening that there is cent motors.
per cent college enrolment among Sobha Icons, • Physiotherapy Unit with Short Wave
a rare feat for many institutions. Sobha Icons have Diathermy, Ultra Sound Therapy, Interferential
joined courses that appealed to them. Therapy, Traction Unit (Cervical and Lumbar),
Ninety per cent of the beneficiary students TENS, Wax Therapy, and Portable TENS.
belong to OBC and SC families while 75 per cent In total 7,057 outpatients were treated
are girl students. Social change should start with during 2020-21 under Sobha Healthcare. On
educational empowerment of this segment and an average, 24 patients were treated every day
hence this prioritization. at the centre.

PROVIDING HEALTHCARE FACILITIES LOOKING AFTER THE AGED AND THE

SOBHA HEALTH CARE IMPOVERISHED
Established in February 2007 by the SOBHA HERMITAGE
Sri Kurumba Educational and Charitable Trust, The focus of SOBHA’s CSR activities is
Sobha Healthcare is one of SOBHA’s flagship equally on the aged. Besides the young,
CSR activities which provides free and easy the Trust also firmly believes in looking after
access to primary healthcare. It has redefined the elderly. Sobha Hermitage, which was
the limits of primary healthcare institutions set up with the specific aim of providing
anywhere in the country. The target group shelter and assistance to elderly from weaker
comprises of 4,525 BPL families from the three sections of society, has now become a
adopted panchayats including students of home for senior citizens and young widows
Sobha Academy and Sobha Icon, their parents, and their children. Besides providing residents
and widow pensioners, besides senior citizens a roof over their heads, Sobha Hermitage

SO BHA A N N U A L R E P O R T 2021 101

 also makes sure that they are provided all SOBHA DOWRY LESS SOCIAL WEDDING
necessary amenities to lead comfortable lives. PROGRAMME
Residents have independent rooms, a library This social wedding programme is a constructive
and a common television room, a gym and also approach to tackling multiple serious issues
internet access. All residents can also avail of of dowry and destitution. So far 647 girls from
round-the-clock medical facilities, including economically and socially weaker sections of
overnight which are provided by paramedical society have been married under the aegis of the
staff; there is a doctor on call during non-working programme ‘Dowry free social wedding.’ The girls
hours. The Hermitage also has an in-house clinic. and parents are given pre-marriage counselling
Cultural and social activities and celebrating and the Trust also does post-marriage monitoring
birthdays of residents are also organized at the and renders help as needed.
Hermitage.
SOBHA COMMUNITY CENTRE
SOBHA YOUNG MOTHERS REHABILITATION The Sobha Community Centre is a beautiful and
PROGRAMME spacious building for the deprived. It plays host
A comprehensive rehabilitation package for to various community mobilization programmes
young mothers (widows) living in the Hermitage including medical camps, orientation and training
is in operation. Special arrangements are in place classes, and social weddings. The centre also has
for their living, safety, security, and welfare at no a dining hall that has a seating capacity of 300,
cost. The widowed mothers and their children where several poor people are fed twice a day
live together. All mothers are encouraged free of cost.
to continue their education and many have SOBHA GOING GREEN
MANAGEMENT

completed their graduation and others are

SOBHA’s green philosophy of development is
catching up. All of them are employed at the
widely accepted across the spectrum. Several
REPORT

Sobha Academy with good remuneration which

green initiatives are underway in the CSR
they can save. One of the young mothers is a
project areas also. The entire campus was
post graduate and is employed at the Sobha
constructed with a minimum carbon footprint
Academy as a qualified teacher. Their children
and without making many changes to the
are admitted to the prestigious Sobha Academy, natural surroundings. Large-scale rain harvesting
where they get quality education. For those methods and processes are in place, planting of
young mothers whose children have grown more than 3,000 trees and herbs has been done,
up, individual self-contained flats have been and preserving the existing flora and fauna to the
constructed and allotted for each family. The extent possible has been undertaken. The Trust
Trust also provides free of cost vegetables, also has very large waste management plants to
provisions, fruits, milk, and dresses to these process the waste generated. All the CSR project
families. There are 10 young mothers and their campuses are plastic free, no-smoking, and non-
16 children living at Sobha Hermitage. Support is alcoholic areas, striving to achieves sustainable
also provided if they want to get re-married. It is lifestyle. The power laundry at Sobha Hermitage
remarkable that out of 18, 7 young widows have is run on steam generated by a boiler to conserve
been remarried with support from the Trust. electrical energy. Recently a solar energy plant
has also been installed. SOBHA also provides
SOBHA RURAL WOMEN’S support to other green attempts like maintaining
EMPOWERMENT a community pond.
To empower rural women, 36 widowed mothers
SOBHA ORGANIC FARMING
and their 65 children from the Vadakkenchery and
Kizhakkenchery panchayats are being provided The Trust is cultivating vegetables, fruits, and
with basic monthly living allowances besides paddy at Moolamcode, Anakkappara, and
clothing, medical, and other personal accessories. Mangalam for in-house use. During 2020-21,
Their children’s educational expenses too are met around 13,000 kg of paddy and 4,000 kg of
by the Trust. organic vegetables were harvested.

102 S O B HA ANNUAL REPORT 2 02 1

RESEARCH AND DEVELOPMENT
During 2020-21 the Research & Development off from fire pipes were exposed in the terraces.
Department’s focus was on the following areas. Improvements in paint methodology and process
This was a much-needed focus as it contributes by fabrication vendors and use of application
to SOBHA’s strength and helps it to stay resilient specific coatings were advocated.
while providing best in class products to its
consumers. INTRODUCING NEW CONSTRUCTION
MATERIAL
ISSUE MITIGATION i. M-Sand/P-Sand as replacement for natural
A study on the performance and distress of river sand for use in external plastering
different elements in the building, external was explored and use of admixtures for
landscape and hardscape in handed over projects making them compatible with performance
was done. Cost effective solutions to issues requirements was done.
as listed below were provided after thorough
investigations. ii. Use of UPVC door frame protectors
preventing damage to SIL door frames post
WATER INGRESS IN LARGE OPENINGS installation and until handover snag was
With architectural detailing on facades, improving done thus reducing huge replacement costs.
external aesthetics by eliminating chajjas and
iii. Introduced cable sealing solutions for cable
increasing window aperture sizes (for increased
entries to basements enhancing water

MANAGEMENT
lighting and ventilation), preventing water
tightness at cable entry cut-outs.
ingress was a challenge. This was addressed

REPORT
with the development of newer window profiles IMPROVIZATION IN WORK METHODOLOGY
incorporating step, slope, and level difference The process for the refurbishment of aluminium
(Fig Old and New Section). Newer profiles for
shuttering materials was set to maximize
large windows with fixed bottom and top sliding
quality output in the process of re-cycling of
were adopted.
shuttering resources which helps to minimize new
UPROOTING OF EXTERNAL KERBS /PAVERS procurement.
DUE TO UNCONTROLLED GROWTH OF TREE
The following feasibility study was done on
ROOTS.
Alternate Construction Material as part of the
Tree Root Barriers (Terram Root Guard) were Cost Reduction Study.
placed selectively around trees closer to the
kerbs/pavements that deflect the roots away i. Use of Welded Wire Reinforcement.
from them. i. Use of Fly Ash in Concrete.
RUSTING OF MILD STEEL ELEMENTS iii. Use of PVC/WPC boards as alternatives for
Rusting of mild steel elements such as fences and imported multi boards for utility door shutter
light posts in external areas and the paint peeling panels etc.

SO BHA A N N U A L R E P O R T 2021 103

 EMPLOYEES
Attracting and retaining talent has been the SOBHA’s organizational strength as on
cornerstone of the Company’s Human Resource 31 March, 2021 was 3,061 employees as against
function. SOBHA’s human capital plays a critical 3,219 as on 31 March, 2020.
role in its growth. Its robust talent acquisition
TRAINING AND DEVELOPMENT
system has enabled it to fulfil all business demands
with a strong resource supply at all times. Training and developing employees is a must for
any organization to be successful. This can be done
The Company’s onboarding model has helped by ensuring that the employees’ skills, abilities, and
it to effectively integrate employees joining knowledge are constantly updated both to meet
the Company and bring them up to speed for world standards and also to satisfy discerning and
delivering results. demanding customers’ needs. Training also helps
SOBHA’s focus on competency building of fresh employees move ahead on their career paths and
recruits has enabled faster release of freshers to helps them take on more responsibilities. SOBHA
its projects. too benefits as a company through training as
it helps it to plan succession roles, address the
During the last year, the employees had to
challenges of changing technologies, and opens
embrace new and different ways of working such
up possibilities of widening the scope of the work
as ‘work from home’ and were subject to stress,
that it does.
fears and anxiety never experienced before.
MANAGEMENT

Technology played a vital role during this crisis, At SOBHA, the organizational training and
especially in terms of workforce connectivity and development plan includes in-house and external
ensured that work went on unaffected. workshops/seminars as per need.
REPORT

A comparative table depicting employee strength as against cumulative delivery is given below:

3500 3555 140

3354
3219
3000 3061 120
3046
2857
2741 2698 112.3
2500 108.34 100
103.88

92.53
2000 80
86.73
81.64

1500 70.54 60
62.93

1000 40

500 20

0 0
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

Organisational Strength Cumulative Delivery (Mn Sqft)

104 S O B HA ANNUAL REPORT 2 02 1

The training provided to employees has resulted During 2020-21, 104 planned behavioural training
in boosting productivity, increasing employee programmes were conducted for employees
satisfaction, fostering an organizational learning at different levels in which 922 employees were
culture, creating a safe working environment, trained.
and the upgradation and updation of technology.
It has also led to improvements in leadership ADHOC TRAINING
and management skills and quality and higher
172 adhoc behavioural and technical training
productivity and the resultant optimum ROI.
programmes were also conducted during the
Training at SOBHA is broadly divided into year which were attended by 1,545 employees at
Technical, Behavioural and Adhoc (mainly sales). different levels. Other training included 4 training
programmes for the sales team, 11 department
TECHNICAL TRAINING centric training programmes, and 47 post
Technical employees are trained at different effectiveness evaluation programmes; these were
levels to help them become the best in class by attended by 662 employees.
mastering the latest technological developments
In all, the Training Division conducted 656 training
in the field. During FY 2020-21, 78 online technical
programmes covering 5,736 participants including
training programmes were conducted in which
employees on non-SOBHA rolls (many employees
526 employees were trained. These webinar
attended multiple trainings) during the year.
training was conducted for employees working
in Bengaluru, Thrissur, Chennai, Calicut, NCR,
Hyderabad, and other locations where SOBHA TRAINING, A CONTINUOUS EXERCISE

MANAGEMENT
has projects. SOBHA’s training wing, Sobha Academy,
conducts training on a regular basis. The
Eleven candidates (management trainees/ trainee
Company assesses employee performance to

REPORT
engineers) were trained for 12 days; 42 webinar
gauge employee skills and provides employees
sessions on Good Practices to be Implemented at
requisite training for enhancing their skills.
Sites were conducted for 340 site staff members
Smooth transition from offline to online
from SOBHA projects pan-India.
training was done using the change management
process. Due to the pandemic, most of the
BEHAVIOURAL TRAINING
training was conducted online in the first quarter
At SOBHA, behavioural training is equally important while later, regular training was started at site, the
as it helps empower employees to leverage their
corporate office and Academy following all Covid
positive skills. Behavioural training helps enhance
protocols.
employees’ ability to handle conflicts, helps in
creating win-win situations, accommodating
EMPLOYEE COMMUNIQUES
changes and flexibility, and following a dynamic
approach. Since behavioural training polishes SOBHA publishes an in-house magazine 'Innerve'
skills and develops talent, it also contributes to which communicates news and developments
an individual’s overall development. Behavioural in the organization to its employees. The
training at SOBHA covers a range of subjects magazine also carries articles written on various
including team building, time management, issues by the senior management, recognizes
and developing motivational, leadership and high performing employees, and also carries
interpersonal skills. contributions by employees.

SO BHA A N N U A L R E P O R T 2021 105

 RISK MANAGEMENT REPORT
The Company’s financial position and the results RISK MANAGEMENT PROCESS:
of its operations are subject to certain risks and The risk management process is another form
liabilities that may affect its performance and of decision-making which can be understood
ability to achieve its objectives. The factors through the risk management chart provided
that the Company believes could lead to its below:
actual results differing materially from expected
and previous results are discussed hereunder.
RISK
However, there are other risks and uncertainties MANAGEMENT
PROGRAMME
that may also affect the Company’s performance
and ability to achieve its objectives that are not • Identify all risks • Identify alternative • Implement
• Establish risk controls • Monitor and
currently known to the Company or which are tolerance • Evaluate: feedback
deemed immaterial. cost/benefit
• Select controls
• Develop
programme plan
CAUSES OF RISKS RISK OPERATE RISK
MANAGEMENT MANAGEMENT
Real estate risks can be caused by many factors. STRATEGY PROGRAMME

To provide some structure, these factors can

be grouped under several major categories as
provided below: This system helps the Company facilitate its
MANAGEMENT

CAUSES OF RISK IN REAL ESTATE abilities to respond appropriately to risks and in

achieving its objectives and ensuring compliance
In the real estate sector, a company is exposed
REPORT

with the applicable RERA law and its statutory

to risks at various levels some of which are within
obligations.
its control while many of them are not. Hence,
a company must have a risk mitigation and The principal risks and uncertainties that might
management policy in place. affect the Company’s business are identified
below. The listing agreement with the stock
SOBHA has implemented an ERM programme
exchanges mandates the identification,
through which it reviews and assesses significant
minimization, and periodical review of these risks
risks on a regular basis to ensure that it has
and uncertainties. However, it is not possible for
internal controls. This system includes:
the Company to implement controls to adequately
• Policies and procedures, respond to all the risks that it may face and there
can be no complete assurance provided that, the
• Communication, supervision, and continuous
steps that it undertakes to address certain risks,
monitoring,
including those listed below will manage these
• Training programmes, and risks effectively or at all. The key risk factors are
listed here to give a brief overview of the types
• Processes for taking the issues to appropriate
levels of the senior management. of uncertainties that are prevailing in the existing
scenario.
Risks which are beyond the Company’s control
• Inaccurate data include:
DATA • Inadequate information
• Invalid or unreliable predictive models
& ANALYSIS • lack of understanding of market NATURAL AND MAN-MADE DISASTERS
fundamentals
Natural disasters include earthquakes, fires,
droughts, floods, and pandemics (like Covid-19 or
Spanish flu) and man-made disasters include acts
• Changes in real estate law of terrorism and war.
UNFORESEEN • Other regulatory changes
CHANGES • Changes in the competitive environment RISK CONTROL MECHANISMS
• Other changes
Insurance coverage is an appropriate way of
managing disaster-related risks. Apart from a

106 S O B HA ANNUAL REPORT 2 02 1

sufficient insurance coverage, SOBHA also takes REGULATORY RISKS
appropriate measures to ensure that the structural
Local, state, and central regulatory bodies
design of its buildings conforms to applicable
control the real estate sector through laws
construction standards in the various regions that
and regulations governing the acquisition,
it is operating in. The Company’s properties are
construction, and development of land including
insured against natural risks like fire, floods, and
zoning, permitted land use, fire safety standards,
earthquakes with periodical review of adequacy,
height of buildings, and access to water and other
rates, and risks covered under professional advice.
utilities. SOBHA’s business is subject to all these
laws and regulations. Any delay in obtaining an
RISKS RELATED TO THE SECTOR approval under these laws and regulations will
SALES MARKET RISKS expose the business to higher risks.
Modern day businesses including those in the real LEGAL RISKS
estate sector are customer centric and driven
SOBHA is involved in some legal proceedings
by market sentiment and competition. Though
related to the land it owns and claims in relation
everyone aspires to own a home, there is a
to taxation matters. Any adverse decision here
chance that the decision to purchase a house can
may have a significant effect on the Company’s
be deferred due to certain changes in existing
business, prospects, and financials.
economic or market conditions.
POLITICAL RISKS
LAND RELATED RISKS
Changes in government policy, social and civil
For any construction company, land is a primary
unrest, and political developments in or effecting

MANAGEMENT
input and non-availability of an appropriate parcel
India could affect the Company’s business
of land at a strategic place at a reasonable price
interests. Specific laws and policies effecting real
can lead to an increase in its prices. Such a situation

REPORT
with its resultant increase in the price of the land estate, foreign investments, and other matters
can have an adverse impact on the Company’s effecting investments in the Company’s securities
performance. Further, availability of land, its use, could also change.
and development are subject to approvals by RISKS RELATED TO THE ECONOMY
various local authorities under applicable local
An economic slowdown and uncertainty in the
laws and regulations. This makes the price of land
economic system like the natural risks associated
volatile. A drop in land prices may erode the book
with the construction sector are beyond the
value carrying the cost of land. This in turn could
control of a company so also the risks that have
affect the Company’s profitability.
to do with the economy. A sluggish economy
OWNERSHIP AND LAND TITLE RISKS or even recession in a specific industry such as
Lack of information and low transparency coupled IT/ITES can lead to a decrease in sales or
with age old property related issues and risk of market rates for residential projects. In extreme
legal disputes and their related costs are key risks cases of an economic downturn, a company
in the real estate segment in India leading to the may also run the risk of customer insolvency
slackening of overall growth in the sector. though the registration of property happens
only on the receipt of all the dues from a
MACROECONOMIC RISKS customer. These factors could decrease revenue
Interest rates, inflation, and exchange rate risks generation from some or all a company’s
are among the important macroeconomic businesses, adversely effecting its business and
indicators which are subject to several factors future growth.
which primarily have to do with the government,
Further, uncertainties in the national or global
monetary and tax policies, domestic/international
economic scenario, a changing demographic
economic and political conditions, and other
profile of the country, and inflation also have
factors beyond a company’s control. Changes in
a bearing on the functioning of a company
interest rates may increase a company’s cost of
operating in the real estate sector.
borrowing and impact its profitability. These risk
factors are a driving factor in the development of In India, a real estate company’s business is
the real estate sector. dependent on the easy availability of finance. An

SO BHA A N N U A L R E P O R T 2021 107

 economic slowdown can result in fund shortages CREDIT RISKS
as lenders may want to act safe. In most of the cases, SOBHA develops properties
on a joint venture basis. Credit risks arise when
RISKS WHICH ARE IN SOBHA’S CONTROL its JV partners do not discharge their obligations
and, in such circumstances, SOBHA may be
CUSTOMER RISKS
required to make additional investments in a joint
SOBHA operates in 10 cities which contribute to
venture or become liable for the other party’s
the Company’s revenue. A significant portion of
obligations.
sales from its real estate operations is generated
in Bengaluru. A decline in revenue in this real PROJECT IMPLEMENTATION RISKS
estate market or a shift in customer loyalty Real estate projects are vulnerable to several
may have an adverse effect on its business and implementational problems such as regulatory
operating results. compliances which may cause project start up
The Contractual business depends solely on delays, construction delays, cost over-runs,
orders received from corporate entities for their and unavailability of skilled labour, accidents,
construction requirements. A substantial portion and quality gaps. SOBHA’s operations may be
of the revenue from Contractual projects is unfavourably impacted if these risks are not
generated from major clients operating in the mitigated on a real-time basis.
information technology sector. Due to the ongoing INPUT COST RISKS
pandemic, most of the IT firms have provided
Many times, operations of a real estate project
work from home facility to their employees,
are subject to budget over-runs due to several
which will impact demand in the commercial
MANAGEMENT

factors like increase in construction costs, growing

office segment. If these client either reduce or
sub-contracted service costs, and increase in
stop providing SOBHA contractual projects, or if
REPORT

labour costs. Increased operating expenses may

there is a slowdown in the IT sector, this could
affect SOBHA’s profit margins if is not able to sell
adversely affect the Company’s business.
the properties with desired margins. There is a
BORROWING RISKS chance of reduction in demand if the selling price
of unsold properties is increased.
Construction activities which are a major
contributor to the Company’s revenue are capital SUPPLY CHAIN RISKS
intensive and require significant expenditure on If suppliers of raw materials curtail, discontinue, or
land acquisition and development. An efficient disrupt the supply of materials, SOBHA’s ability to
borrowing strategy has placed SOBHA ahead of meet its material requirements for projects could
its competition with respect to borrowing costs. be impaired. This could lead to a disruption in
However, SOBHA is subject to risks normally construction schedules and projects may not be
associated with debt financing and may be completed on time.
required to dedicate a portion of its cash flows
to the repayment of its debt commitments. It MANPOWER RISKS
may not be possible to generate adequate cash The construction industry is highly dependent
flows in certain extreme scenarios to service on its manpower and its ability to retain this
principal and interest payments. In certain cases, manpower. Employee attrition could have an
lenders also have the right to recall a loan. Such adverse impact on SOBHA’s business. SOBHA’s
an event could impact SOBHA’s liquidity and performance could also be affected if it is unable
credit rating. to identify, attract and retain key employees like
engineers and architects.
LIQUIDITY RISKS
The real estate industry has its own challenges COMPETITION RISKS
and dynamics. The time required to liquidate a The residential real estate sector is highly
real estate property can vary depending on the competitive. Other developers undertaking
quality and location of the property. Therefore, similar projects within the same regional markets
SOBHA may not be able to liquidate its assets are in direct competition with SOBHA. Due to the
promptly in response to economic, real estate fragmented nature of the real estate development
market, or other conditions. business, adequate information about small and

108 S O B HA ANNUAL REPORT 2 02 1

medium level competitors’ projects may not To avoid dependency on a single large client in
be available and SOBHA could run the risk of the Contractual vertical, the Company is making
underestimating the supply in the market. a conscious effort to enlarge its corporate client
base. Enlarging this client base includes tapping
DIVERSIFICATION AND INVESTMENT RISKS into a big pool of corporates and institutions to
Though SOBHA is a backward integrated company, ensure that its dependency on any one client is
expanding into new businesses or new geographies reduced. Out of the projects currently underway,
exposes it to new risks such as low levels of the share of contractual orders received from
familiarity with the development of properties in other clients has increased.
the specific area or market for the new project’s SOBHA has a proven track record in servicing
development. Its competitors may be better its debt obligations. The gearing levels of the
known in these markets and may also enjoy better Company have been efficiently managed in
relationships with vendors/suppliers/landowners/ previous financial years because of which the
joint-venture partners, and customers. gearing ratio has come down. Every investment
avenue is evaluated on the basis of the risks and
RISK CONTAINMENT STRATEGY AND rewards attached to it.
MEASURES TAKEN FOR RISK MITIGATION The Company takes strategic decisions
SOBHA always strives to produce customer with respect to land acquisition. Effective
centric and high-value products for quality methodologies are in place for managing the land
conscious and niche customers. This is evident portfolio. Requisite due diligence is carried out
from the customer support that it got during before acquiring land or entering into partnerships

MANAGEMENT
the recent economic reforms initiated by the for joint ventures or joint development.
central Government. SOBHA’s customers are not
SOBHA has adopted a standard process for
dependent on external resources and are able to

REPORT
ensuring product quality. Technology related to
manage their financial requirements internally. the industry is upgraded periodically by comparing
The Company has a dedicated and robust in-house it to global standards. This helps in minimizing
sales and marketing team which is entrusted with implementation risks. The in-house Quality, Safety,
the task of generating enquiries for its products and Technology Department is in-charge of
and transforming them into sales. This reduces addressing quality issues of the products.
dependency on external agents and brokers. Vendors supplying key materials have long-
SOBHA also has a dedicated Customer standing relationships with SOBHA. Since the
Relationship Management (CRM) Department Company is a backward integrated organization,
key inputs are sourced in-house, reducing
to cater to customer feedback, resolving their
dependency on external suppliers.
queries and grievances, addressing their issues,
streamlining the purchase process, and receiving Comparatively, the attrition rate in the Company
feedback. An online portal has been designed for is below the industry/sector average. To minimize
customers on which they can share their views attrition and for retaining talent, SOBHA has
and check the status of the projects. The CRM adopted effective and employee friendly policies.
Department’s core responsibility is ensuring SOBHA is confident that with the economic
smooth and hassle-free transfer of products to and sector specific reforms introduced by the
the satisfaction of the customers. government in the recent past, the outlook for
Taking calculated risks is a part of all businesses. long-term demand for the real estate sector in
A business’ growth depends on company’s India is stable and positive. The emergence of
ability to absorb the risks related to the sector. Tier-II and Tier-III cities, urbanization, large-scale
After a careful evaluation of the risks SOBHA has employment opportunities in Tier-II cities, and
been steadily expanding its geographic presence larger numbers of nuclear families will contribute
to a substantial increase in demand for real estate
in the real estate domain. This diversification
and corporate space in the future.
has reduced its dependency on a single market,
Bangalore, which at one point accounted for all its The dedicated and strong in-house Legal
sales. Bangalore now contributes only 65-70 per Department at SOBHA along with outside experts,
cent of its sales. ensures the minimization of legal and regulatory

SO BHA A N N U A L R E P O R T 2021 109

 risks. The Company is a member of trade successfully executed in the cities and hence,
associations like CREDAI and is active in making joint there is a good understanding of the local factors
representations to the government and regulators at play. The Company also engages locally
on common issues faced by the sector. available manpower resources.

SOBHA’S foray into new geographies is based

on a thorough analysis of prevailing market RISK INTERACTION
conditions and the regulatory environment. The risks faced by a company are not mutually
Several contractual projects have been exclusive.

The following table depicts the interplay of various risks:

Implementation
One Customer

Availability of

Availability of
Dependency

Interest Rate

Competition
Purchasing

Regulatory
Preference

Manpower
Approvals
Economic

Customer
Risk

Inflation
Growth

Project
Power

loans

land
Economic Growth ü ü - ü ü - - - ü ü -

Purchasing Power ü ü - ü ü - - - ü ü ü
MANAGEMENT

Customer Preference ü ü ü - ü ü - - ü - ü
REPORT

One Customer Dependency ü - ü - - - - ü - - ü

Availability of Loans ü - - - ü - - ü ü - -

Interest Rate ü ü ü - ü - - ü ü - -

Availability of Land - ü ü - - - ü - - - ü

Regulatory Approvals - - - - - - ü ü - - -

Project Implementation ü - - ü ü ü - ü ü ü ü

Inflation ü ü ü - ü ü - - ü - -

Manpower ü ü - - - - - - ü - ü

Competition ü ü ü ü - - ü - ü - ü

VARIOUS RISKS FACED BY SOBHA AND THEIR and the acceptable and appropriate levels
LIKELIHOOD AND IMPACT of these exposures. It also monitors the
The Company has a Risk Management Committee steps taken by the management to control
for evaluating the risk of each category. such exposures and ensures that the
The committee assists in identifying and overall risk exposure is within the Company’s
assessing risks so that appropriate mitigation risk capacity and risk appetite. The Company’s
mechanisms can be devised. The Audit Board of Directors is also apprised
Committee reviews and advises the of the risks faced by the Company and
management on all categories of risks that the timely risk management measures taken for
Company faces, the exposure in each category, mitigating them.

110 S O B HA ANNUAL REPORT 2 02 1

OPERATIONAL AND FINANCIAL ANALYSIS
As we close a rather turbulent financial on cash flow management and professional
year, it gives us immense pleasure to record approach in this area resulted in efficient
one of our best operational and financial utilization of available resources and reduced
performance during financial year 2020- the turnaround cycle which helped business
21. The Corona virus induced pandemic operations greatly.
dented prospects and had a lasting impact
The Company is expected to do better in the
on almost all the industries. Prospects of life,
coming financial years with customers showing
living, and growth were challenged as we crawled
confidence in the SOBHA brand, its exceptional
through the first quarter of FY-21. However, the
execution capabilities, and reputation of
situation eased during the second half of the quality products delivered on agreed timelines.
financial year with demand and supply, labour This is also backed by the Company’s strong
material availability, and most importantly the new projects launch pipeline and expansion
introduction of multiple vaccines for Covid-19. of operations into new cities as part of its
Despite all the challenges at the macro level, geographic expansion plan. SOBHA believe
SOBHA achieved the best ever sales volume that being a pioneer in the use of advanced
during Q4 of FY-21 and improved on price operational methodologies, best practices in
realization in the successive quarters. During the sector, use of technology tools and greater
FY 2020-21, the Company achieved the digital presence, the Company should be able to
highest ever sale value in its history for any

MANAGEMENT
perform better both financially and operationally
financial year. This development is significant in the coming years.
and gives SOBHA a direction that the demand

REPORT
In this backdrop, SOBHA’s financial and operational
story of the housing sector is here to stay,
performance for 2020-21 is now presented.
and we can hope for better performance in
the coming years. It is also worth noting price Following are the key financial takeaways for
realization which is improving over several fiscal year 2020 –21:
quarters in the same light. • Registered a income of ₹21,904 million
The ongoing pandemic and its 2 nd
wave • ₹13,103 million revenue from real estate
with multiple mutants has gripped the globe operations
with an unprecedented impact on life and
living please see comment at the beginning. • ₹7,995 million in revenue from contracts and
However, this situation has opened manufacturing operations.
up avenues for professionally managed • PBT of ₹752 million
businesses. Business houses with a strong
presence in the industry or sector that • PAT of ₹630 million
they are in have shown resilience during • Collections of ₹30,769 million
this tough macro-operational environment.
Industry consolidation is happening • Net operational cash flows at ₹6,390 million
at a rapid pace which augurs well for large • Total sales value of ₹31,372 million with
listed players with the ability to tap the SOBHA’s share of ₹24,759 million
potential market space across geographies.
• Total average price realization at ₹7,817 per
However, caution needs to be exercised in
square foot
view of the ongoing second wave of the
pandemic which has sent stronger shock waves • Debt Equity ratio as on March 31, 2021 is 1.17
across industries.
On operational parameters, the Company has:
Despite the second wave of the pandemic,
• Developed 112.30 million square feet of total
intermittent lockdowns across the country, and
area since its inception
restrictions on movement of goods, labour etc.
SOBHA was able to deliver on all its project • Execution of 35.75 million square feet of total
execution commitments. Its continued focus area in progress

SO BHA A N N U A L R E P O R T 2021 111

 • Execution presence of Real Estate and NEW SALES
Contractual projects in 27 cities covering SOBHA recorded considerable sales despite
14 states in India the challenging macro environment during
• Completed total developable area of 2.56 2020-21. The Covid-19 pandemic and its resulting
million square feet in the real estate and impact on our lives has changed the way many
Contracts domain in 2020-21 businesses operate. This environment was used
as an opportunity by the large players across the
industry to ramp up their technological capabilities
Income (₹ Million)
thereby reducing physical interactions. SOBHA’s
efforts in the digital marketing space gave fruitful
2020-21 21,904 results which are evident in its sales performance
during 2020-21.

During the financial year, the Company registered

2019-20 38,257 new sales SBA of 4.01 million square feet valued at
₹31,372 million at an average price realization of
₹7,817 per square foot.
2018-19 35,156 The classification of new sales in terms of price
band is as follows:
MANAGEMENT

Sales Value in terms of Price Band (in ₹ Million)

REPORT

Profit after Tax (₹ Million)

2020-21 630

2019-20 2,820 <10 Million 10 to 20 Million 20 to 30 Million Above 30 Million

2018-19 2019-20 2020-21

< 10 Million 6,549 9,896 5,984
10 to 20 Million 13,205 13,984 15,406
2018-19 2,953
20 to 30 Million 7,364 3,489 6,430
Above 30 Million 4,107 1,437 3,552

Area Sold in terms of Price Band [in Million SqFt]

Profit before Tax (₹ Million)

2020-21 752

2019-20 4,330
<10 Million 10 to 20 Million 20 to 30 Million Above 30 Million

2018-19 2019-20 2020-21

< 10 Million 1.18 1.68 1.03

2018-19 4,483 10 to 20 Million 1.75 1.88 1.96

20 to 30 Million 0.72 0.36 0.67
Above 30 Million 0.38 0.15 0.35

112 S O B HA ANNUAL REPORT 2 02 1

SOBHA’S CUSTOMERS: SOBHA operates a representative office in Dubai
The product-mix offered by the Company and a branch office in Singapore to market
has been well accepted by its customers. The its products among the NRI/NR community.
Company, on an ongoing basis, analyses its However, resident Indians continue to dominate
customer base and the analysis revealed that its its overall customer profile.
customer profile has a healthy mix, comprising A comparative position of the customer base is
IT/ITES professionals, non-IT professionals, provided below:
entrepreneurs, and professionals. About 65 per
cent of its customers are in the salaried category,
which includes 49 per cent from IT/ITES and 16
per cent from non-IT industries. In addition, 4 per 91% 93% 89%
cent of the Company’s customers are from the
business and entrepreneur category.

Profession Profile
11%
9% 7%

2018-19 2019-20 2020-21

IT / ITES Professionals
24% Resident Indians NRI

Non-IT Professionals

MANAGEMENT
49% REAL ESTATE
Business / 7%
Entrepreneurs Customer centricity is at the core of SOBHA’s

REPORT
4% business strategy in addition to the Company’s
Medical /
Pharmaceutical ability to consistently deliver quality products in
16% the real estate space. The Company’s real estate
Others* operations are currently spread across 9 cities.
Performance of the real estate vertical:
₹ in million
* Others include agriculturists, government
Particulars 2020-21 2019-20 2018-19
employees etc.
Revenue 13,103 22,801 22,653
Share of
60.19 59.59 64.43
Revenue (%)
Age Profile
PROJECT LAUNCHES
During the year, the Company launched the
following real estate projects –
Above 50 - 15% 21-30 - 16%
• SOBHA Athena Bangalore, a luxury project
measuring a total saleable area of 0.12 million
square feet.
• SOBHA Windsor Bangalore, a luxury project
41-50 - 23% measuring total saleable area of 1.35 million
square feet.
• SOBHA Metropolis in Thrissur, measuring a
31-40 - 46%
total saleable area of 1.17 million square feet.
• SOBHA Chartered Woodpecker Bangalore,
under the development management model
measuring a total saleable area of 0.25 million
square feet.

SO BHA A N N U A L R E P O R T 2021 113

 In total, SOBHA launched new projects to the tune SOBHA’s self-reliant model comprises of Glazing
of 2.89 million square feet during financial year and Metal Works, Interiors and Furnishing Works
2020-21. During Q4 of FY 2020-21, the Company and, Concrete Works, which supplements its core
opened its first flagship retail showroom under business of real estate and contracting. Each of
the 'metercube' brand with an area of 29,526 these manufacturing divisions is a profit centre
square feet at '1 SOBHA' commercial space in and is efficiently and professionally managed.
Bengaluru.
THE GLAZING AND METAL WORKS DIVISION
CONTRACTING The Company owns one of the largest glazing
During 2020-21, the revenue from contracting and metal factories in India. The facility is
and manufacturing divisions was impacted spread over 7.3 acres of land with a 2,322
by the ongoing Corona virus induced square metre (25,000 square feet) state-of-the-
pandemic. Revenue from this vertical contributed art manufacturing unit, with future expansion
around 25 per cent to the Company’s topline. capability up to 11,148 square metres (120,000
The Contracts vertical has been executing square feet) space facility. The factory is
orders ranging from civil structures, finishes, equipped with advanced machineries like
MEP work, metal and glazing work, and interior the CNC profile cutting machine, TIG welding
furnishings for various reputed clients. With machines, ACP routing machine, and milling
5.64 million square feet of contractual orders machines. Apart from the Bangalore unit, the
under progress and unbilled contractual orders Company has established Glazing and Metal
of approximately ₹20.69 billion pending to be Works Divisions in Chennai and Sonepat. The
executed as at March 31, 2021, the Contractual products manufactured in these facilities include
MANAGEMENT

operations will continue to be a source of steady aluminium doors, windows, structural glazing,
revenue. MS and SS metal fabrications, aluminium
REPORT

composite panels, SS cladding, architectural

Performance of the Contracts vertical:
metal works, and pre-engineered buildings.
₹ in million
INTERIORS DIVISION
Particulars 2020-21 2019-20 2018-19
The Interiors and Furnishing Division is one of
Revenue 5,325 10,181 8,331 the largest wood working/joinery facilities
Share of in India. The division has two highly mechanized
24.58 26.61 23.69
Revenue (%) factories with total floor area of 2,55,000 square
feet located at Bommasandra, Bangalore. The
MANUFACTURING
division is equipped with imported machinery from
SOBHA is pioneer in the real estate industry Spain, Italy, and Germany. The Company also has
to integrate a self-reliant model of operations. an Interiors Division in Alwar. The product range
The Company has the capabilities, skills, includes large scale corporate and residential
and resources to deliver a project from interiors, solid wood veneer panelled doors and
conceptualization to completion backed by MDF panelled doors, customized joinery works
this unique strength. It is known for its use of like panelling, partitions, tables, loose furniture
quality products and services required for the like chairs, sofas, and cots and modular kitchens.
construction and development of a project
and to meet desired quality and agreed CONCRETE PRODUCTS DIVISION
delivery schedule. The construction material is The Company has a fully automated Concrete
manufactured in-house which helps to ensure Products Division which uses remote controlling
that the products are superior in quality and systems. The manufacturing facility in Bangalore
the Company has a reduced dependence on is spread over 32,000 square metres (8 acres) and
external suppliers. The Company is ahead of manufactures concrete products of international
the curve, with the Government of India pushing quality. The unit has imported technologies from
for self-reliant and self-sustained models of Germany (Masa Plant) and England. In addition,
businesses and practices. The Company believes the Company has opened Concrete Products
that this model has been one of the important Divisions in Gurgaon and Pune also. The units
factors in its successful execution track record are manufacturing ready-to-use products,
without compromising on quality. including concrete blocks, pavers, kerb stones,

114 S O B HA ANNUAL REPORT 2 02 1

water drainage channels, paving slabs, and The Company spent ₹382 million towards land
related landscapes. The facility has a production payments during the year. In addition, the
capacity of 28,000 of blocks/ day or 20 million Company incurred ₹150 million towards capex
landscaping products. expenditure, ₹95 million as CSR contribution, and
₹664 million on dividend (including dividend tax).
Performance of the Manufacturing vertical:
₹ in million DEBT
Sales 2020-21 2019-20 2018-19 The Company seeks to maintain an optimum
Glazing and Metal balance between low-cost debt and relatively
1,452 2,194 1,575 higher cost equity. Debt financing is used
Works Division
Interiors Division 799 1,871 1,429 for executing various projects - residential,
commercial, and contractual.
Concrete Products
411 486 434
Division As on March 31, 2021, the Company’s net debt was
Total 2,662 4,551 3,438 ₹28,525 million as compared to ₹30,232 million in
Share of Revenue (%) 12.23 11.92 9.78 the previous year. The debt-equity ratio stood at
1.17 at the close of the financial year.
CASH FLOWS
The cash flow summary for financial year 2020-21
under the direct cash flow method is as follows: Composition of Borrowings
₹ in million
13%
Particulars 2020-21 Cash Credit /

MANAGEMENT
Overdraft
Operational Cash inflow 30,769
Operational Cash outflow 24,379

REPORT
Net Operational Cash inflow 6,390
Financial Out Flow (Interest and Taxes) 2,830
Net Operational Cash inflow after
3,560
Financial outflow
Net Cash flow 2,269

The Company collected ₹30,769 million during

the year from its real estate, contractual, and
manufacturing activities. After expending on
construction expenses for real estate, contractual, Term Loan - 87%
manufacturing activities, and overheads, etc. the
net operating cash inflows are ₹6,390 million. The
Company recorded a net positive cash flow of
₹2,269 million.
The Company utilized ₹2,733 million towards Debt Equity
meeting its financial obligations and ₹97 million
1.24
for income tax.

Collections (in ₹ Billion) 1.17

36.47
35.97

1.09

30.77

2018-19 2019-20 2020-21 2018-19 2019-20 2020-21

SO BHA A N N U A L R E P O R T 2021 115

 BORROWING COST: FIXED ASSETS
As of March 2021, the average borrowing cost During financial year 2020-21, the gross addition
stood at 9.04 per cent. to fixed assets was ₹370 million. This is about a
5 per cent addition year on year on account of
Borrowing Cost (%) investments in scaffolding items and additions to
10.42 plant and machinery.

9.72 6.69 CURRENT ASSETS

9.39
9.04
During financial year 2020-21, the Company’s
current assets increased by ₹598 million
as compared to the previous year.
2016-17 2017-18 2018-19 2019-20 2020-21
CURRENT LIABILITIES
During the year, the Company’s borrowings were
During financial year 2020-21, SOBHA’s current
rated by:
liabilities increased by ₹842 million.
• CRISIL as ‘A+’ (Stable)
• India Ratings and Research (Ind-Ra) as DIVIDEND
‘IND AA-‘ (Stable)
The Company aims to follow a consistent
NET WORTH dividend pay-out while striving to achieve a
The Company’s net worth as on March 31, 2021 trade-off between deployment of internal
was ₹24,277 million. accruals for growth and the payment of
MANAGEMENT

dividend. The Company has been paying dividend

in the range of 25 per cent- 35 per cent of
REPORT

Net Worth (₹ Million)

its profits.
24,312 24,277
The Board of Directors has recommended a
dividend of ₹3.50 per equity share for the year.

22,291

2018-19 2019-20 2020-21

116 S O B HA ANNUAL REPORT 2 02 1

CHIEF EXECUTIVE OFFICER AND CHIEF
FINANCIAL OFFICER CERTIFICATE
[AS PER REGULATION 17 AND PART B OF SCHEDULE II OF THE SECURITIES
AND EXCHANGE BOARD OF INDIA (LISTING OBLIGATIONS AND DISCLOSURE
REQUIREMENTS) REGULATIONS, 2015]

We certify that:

A. We have reviewed financial statements and the cash flow statement for the financial year ended
March 31, 2021 and that to the best of our knowledge and belief:
(1) these statements do not contain any materially untrue statement or omit any material fact or
contain statements that might be misleading;
(2) these statements together present a true and fair view of the Company’s affairs and are in
compliance with existing accounting standards, applicable laws and regulations.

B. There are, to the best of our knowledge and belief, no transactions entered into by the Company
during the year which are fraudulent, illegal or violative of the Company’s code of conduct.

C. We accept responsibility for establishing and maintaining internal controls for financial reporting and
that we have evaluated the effectiveness of internal control systems of the Company pertaining to
financial reporting and we have disclosed to the auditors and the audit committee, deficiencies in the

FINANCIAL STATEMENTS
design or operation of such internal controls, if any, of which we are aware and the steps we have
taken or propose to take to rectify these deficiencies.

STANDALONE
D. We have indicated to the auditors and the Audit committee
(1) significant changes in internal control over financial reporting during the financial year ended
March 31, 2021;
(2) significant changes in accounting policies during the financial year ended March 31, 2021 and that
the same have been disclosed in the notes to the financial statements; and
(3) instances of significant fraud of which we have become aware and the involvement therein, if any,
of the management or an employee having a significant role in the Company’s internal control
system over financial reporting.

Sd/- Sd/-
Place: Bangalore Subhash Mohan Bhat J C Sharma
Date: June 22, 2021 Chief Financial Officer Vice Chairman & Managing Director

SO BHA A N N U A L R E P O R T 2021 117

 INDEPENDENT AUDITORS’ REPORT
To the Members of Sobha Limited
Report on the Audit of the Standalone Financial Statements

Opinion
We have audited the standalone financial statements of Sobha Limited (“the Company”), which comprise
the standalone balance sheet as at 31 March 2021, the standalone statement of profit and loss (including
other comprehensive income), standalone statement of changes in equity and standalone statement of
cash flows for the year then ended, and notes to the standalone financial statements, including a summary
of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid standalone financial statements give the information required by the Companies Act, 2013
(“Act”) in the manner so required and give a true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as at 31 March 2021, and profit and other
comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10)
of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the
Audit of the Standalone Financial Statements section of our report. We are independent of the Company
in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together
with the ethical requirements that are relevant to our audit of the standalone financial statements under
the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities
in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial
statements.
FINANCIAL STATEMENTS

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the standalone financial statements of the current year. These matters were addressed in the
context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon,
STANDALONE

and we do not provide a separate opinion on these matters.

A. Inquiry from regulator - refer note 39 to the standalone financial statements

Key Audit Matter How the matter was addressed in our audit

Assessment of certain transactions entered i Our audit procedures on the transactions included
nto by the Company and recoverability of the following:
balances, on which regulatory enquiries are
• Inquired with senior personnel of the
ongoing
Company to understand the commercial
During the current and previous years, the rationale and status of aged receivables and
Company has received enquiries from Securities other asset balances outstanding from these
and Exchange Board of India (SEBI) about certain transactions;
transactions entered into by the Company in earlier
• Verified the correspondence with the various
years. Further, in the current year, the Company
parties to recover the outstanding balance;
has also received Summons from SEBI under
section 11(2), and 11C(2), 11C(3) of the SEBI Act, • Verified the documentation entered into
1992 for production of documents and responses (including subsequent to the balance sheet
in respect of the aforesaid transactions. date) with the parties relating to the various
projects and recoverability of the dues;

118 S O B HA ANNUAL REPORT 2 02 1

INDEPENDENT AUDITORS’ REPORT (continued)
Key Audit Matter (continued)

Key Audit Matter How the matter was addressed in our audit

The enquiries and consequently the Summons • Read the Company’s communication to SEBI to
are directed to ascertain if there has been any ensure consistency with the explanations and
undue favour towards any individual in these documentation / correspondences provided
specific business transactions carried out by the to us;
Company.
• Evaluated and challenged the Company’s
These transactions represent aged receivables assessment of recoverability of the balances
and other asset balances recoverable from the outstanding as at the balance sheet date and
counter parties and SEBI has sought responses the business rationale for these transactions
and evidences for the efforts taken by the and the timing and manner of settlement,
Company to recover these amounts. including considering the developments
The Company has consistently responded to subsequent to the balance sheet date;
SEBI on these transactions and efforts taken • Evaluated the legal opinion obtained by
by them to recover the outstanding dues and the Company on the enforceability of the
maintains their position that there is no undue documentation with the other parties for
favour to any party. The matter has not yet been recovery of dues;
concluded by SEBI.
• Communicated and discussed periodic
Subsequent to the balance sheet date, the updates on these transactions to those
Company and the other parties to the transactions charged with governance, including the
have agreed to a manner of settlement of the recoverability and business rationale aspects
dues. for these transactions;
Considering the significance of the matter which • Read the minutes of the meetings of the
involves uncertainty of outcome due to ongoing management discussions with the Board of
enquiries from SEBI and significant judgements

FINANCIAL STATEMENTS
Directors and those charged with governance
and estimates by the Company on the realizability on this matter; and
of these balances, this is considered as a key
• Considered the adequacy of the disclosures in
audit matter.
the standalone financial statements.

STANDALONE
B. Revenue recognition - refer note 2.2(a)(ii)(a) to the standalone financial statements

Key Audit Matter How the matter was addressed in our audit

Measurement of revenue recorded from sale of Our audit procedures on revenue recognition on
residential units sale of residential units included the following:
Revenues from sale of residential units represents ● Evaluation of the Company’s accounting
the largest portion of the total revenues of the policies for revenue recognition on sale of
Company. residential units are in line with the applicable
accounting standards and their application
to customer contracts, including consistent
application;
• Identifying and testing operating effectiveness
of key controls around approvals of contracts,
milestone billing, intimation of handover letters
and controls over collection from customers; ¯

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 INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Key Audit Matter (continued)

Key Audit Matter How the matter was addressed in our audit

Revenue is recognised upon transfer of control of • For samples selected, verifying the underlying
residential units to customers for an amount which documents – handover letter, sale agreement
reflects the consideration the Company expects signed by the customer, handover intimation
to receive in exchange for those units. The point mail sent to the customer and the collections
of revenue recognition is normally based on against the units sold;
the terms as included in the intimation for the
• Cut-off procedures for recording of revenue in
handover of unit to the customer on completion
the relevant reporting period;
of the project, post which the contract becomes
non-cancellable by the parties. The Company • Site visits during the year for selected projects
records revenue at a point in time upon transfer to understand the scope, nature, status and
of control of residential units to the customers. progress of the projects; and
Considering the volume of the Company’s projects, • Considering the adequacy of the disclosures
spread across different regions within the country in note 2.2(a)(ii)(a) to the standalone financial
and the competitive business environment, statements in respect of recognising revenue
there is a risk of revenue being recorded in an on sale of residential units.
incorrect period (for example, through premature
revenue recognition i.e. recording revenue prior to
handover of unit to the customers or improperly
shifting revenues to a later period) in order to
present consistent financial results. Since revenue
recognition has direct impact on the Company’s
profitability, there is a possibility of the Company
being biased, hence this is considered as a key
audit matter.
FINANCIAL STATEMENTS

C. Revenue recognition - refer note 3(b)(i) to the standalone financial statements

Key Audit Matter How the matter was addressed in our audit
STANDALONE

Measurement of revenue on contractual Our audit procedures on revenue recognition on

construction projects recorded over time which contractual construction projects included the
is dependent on the estimates of the costs to following:
complete
• Evaluation of Company’s accounting policies
Revenue recognition from contractual projects for revenue recognition on contractual projects
represents a significant portion of the total are in line with the applicable accounting
revenues of the Company. standards and their application to customer
contracts, including consistent application;
Revenue recognition from contractual projects
involves significant estimates primarily pertaining • Identifying and testing operating effectiveness
to measurement of costs to complete the projects. of key controls around budgeting of project
Revenue from projects is recorded based on cost, approval of purchase orders, recording of
Company’s assessment of the work completed, actual cost, raising of invoices and estimating
costs incurred and accrued and the estimate of the cost to complete the project;
the balance costs to complete.
• For samples selected during the year, verifying
the underlying documents – contracts with
customers, invoices raised and collections
from the customers;

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INDEPENDENT AUDITORS’ REPORT (continued)
Key Audit Matter (continued)

Key Audit Matter How the matter was addressed in our audit

Due to inherent nature of the projects and • Comparing the estimated costs to complete
significant judgment involved in the estimate of with the budgeted costs and analysis of the
costs to complete, there is risk of overstatement variances, if any;
or understatement of revenue, hence this is
• Sighting approvals for budgeted costs with the
considered as a key audit matter.
rationale for the changes;
• Assessment of costs incurred on projects,
which is used by the Company to determine
the percentage of completion;
• Considering the adequacy of the disclosures
in note 3(b)(i) to the standalone financial
statements in respect of judgements taken
to recognise revenue for contractual projects;
and
• Considering the adequacy of the disclosures in
note 41 to the standalone financial statements
in respect of revenue recognized, cost
incurred, amount received/ retentions due
from customers, work in progress, value of
inventories and profit recognized till date.

D. Revenue recognition - refer note 2.2(a)(iii) to the standalone financial statements

FINANCIAL STATEMENTS
Key Audit Matter How the matter was addressed in our audit

Measurement of revenue recorded from sale of Our audit procedures on revenue recognition
manufactured products from sale of manufactured products included the
following:

STANDALONE
Revenue is recognised upon transfer of control
of products manufactured by the Company to • Evaluation of Company’s accounting policies
customers for an amount which reflects the for revenue recognition on sale of products
consideration the Company expects to receive manufactured, are in line with the applicable
in exchange for those products. The point of accounting standards and their application
revenue recognition is normally upon transfer of to agreement with customers, including
control to the customer on delivery of product. consistent application;
Considering the competitive business • Identifying and testing operating effectiveness
environment, there is a risk of revenue being of key controls around approvals of sale order
overstated (for example, through premature received, invoice raised, intimation of delivery
revenue recognition i.e. recording revenue of product, and controls over collection from
prior to transfer of control to the customers) or customers;
understated (for example, through improperly
• For samples selected, verifying the underlying
shifting revenues to a later period) in order to
documents – sales order, invoice raised, good
present consistent financial results.
received note authorised by the customer and
the collections;
• Cut-off procedures for recording of revenue in
the relevant reporting period; and

SO BHA A N N U A L R E P O R T 2021 121

 INDEPENDENT AUDITORS’ REPORT (continued)
Key Audit Matter (continued)

Key Audit Matter How the matter was addressed in our audit

Since revenue recognition has direct impact on • Considering the adequacy of the disclosures
the Company’s profitability, there is a possibility in note 2.2(a)(iii) to the standalone financial
of the Company being biased, hence this is statements in respect of recognizing revenue
considered as a key audit matter. on sale of manufactured products.

E. Inventories - refer note 3(b)(iii) to the standalone financial statements

Key Audit Matter How the matter was addressed in our audit
Assessment of net realisable value (NRV) of Our audit procedures to assess the net realisable
inventories value (NRV) of inventories included the following:
Inventories on construction of residential units • Enquiry with the Company’s personnel to
comprising ongoing and completed projects, understand the basis of computation and
initiated but unlaunched projects and land stock, justification for the estimated recoverable
represents a significant portion of the Company’s amounts of the unsold units in both
total assets. ongoing and completed projects (“the NRV
The Company recognises profit on the sale assessment”);
of each residential unit with reference to the • Assessing the Company’s valuation
overall profit margin depending upon the methodology for the key estimates, data
total cost incurred on the project. A project inputs and assumptions adopted in the
comprises multiple units, the construction of valuation. This involved comparing the total
which is carried out over a number of years. cost per sqft with expected average selling
FINANCIAL STATEMENTS

The recognition of profit for sale of a unit, is prices such as recently transacted prices
therefore dependent on the estimate of future maintained by the Company. For projects
selling prices and construction costs. Further, which are not launched and / (or) there are no
estimation uncertainty and exposure to cyclicality sales, the total cost per sqft is compared to
STANDALONE

exists within long- term projects. the selling prices of similar properties located
Forecasts of future sales are dependent on market in nearby vicinity of each project
conditions, which can be difficult to predict and • While analyzing the expected average selling
be influenced by political and economic factors. price, we have performed a sensitivity analysis
Considering the significance of the amount of on the selling price and compared this to the
carrying value of inventories and the involvement budgeted cost;
of significant estimation and judgement in
• For our samples of land stock, obtained
assessment of NRV, this is considered as a key
the fair valuation reports and published
audit matter.
guidance values for assessing the valuation
methodology, key estimates and assumptions
adopted in the valuation; and
• Verifying the NRV assessment and comparing
the estimated construction costs to complete
each development with the Company’s
updated budgets.

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INDEPENDENT AUDITORS’ REPORT (continued)
Key Audit Matter (continued)

F. Land Advances - refer note 3(b)(iii) to the standalone financial statements

Key Audit Matter How the matter was addressed in our audit
Assessment of recoverability of land advances Our audit procedures to assess the recoverability
of land advances included the following:
Land advances represents a significant portion
of the Company’s total assets. • Enquiry with the Company’s personnel on
the process of providing land advances
Land advance represents the amount paid
and testing of key controls over such land
towards procurement of land parcels to be
advances paid during the year;
used in the future for construction of residential
projects. These advances are carried at cost • Enquiry with the Company’s personnel also
less impairment losses. These land advances covered obtaining explanations on the long-
are converted into land stock as per the terms standing land advances and understanding
of the underlying contracts under which these Company’s plan for conversion of the land
land advances have been given. The carrying advances to land stock;
value of advances are tested for recoverability
• For our samples, verifying the underlying
by the Company by comparing the valuation
agreements or Memorandum of
of land parcels in the same area for which land
understanding in possession of the
advances have been given.
Company, based on which land advances
Due to quantum of carrying value of land were given, to assess the Company’s rights
advances to total assets of the Company and over the land parcels in subject;
significant estimates and judgements involved
• For our samples, obtaining the fair valuation
in assessing recoverability of land advances,
reports of such land parcels for assessing
this is considered as a key audit matter.
the valuation methodology, key estimates
and assumptions adopted in the valuation;
and

FINANCIAL STATEMENTS
• For our samples, verifying the published
guidance values for the area in which these
land parcels are situated.

STANDALONE
Information Other than the Standalone Financial Statements and Auditors’ Report Thereon
The Company’s management and Board of Directors are responsible for the other information. The other
information comprises the information included in the Company’s annual report, but does not include the
financial statements and our auditors’ report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this regard.

Management’s and Board of Directors’ Responsibility for the Standalone Financial Statements
The Company’s Management and Board of Directors are responsible for the matters stated in section 134(5)
of the Act with respect to the preparation of these standalone financial statements that give a true and fair
view of the state of affairs, profit/loss and other comprehensive income, changes in equity and cash flows

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 INDEPENDENT AUDITORS’ REPORT (Continued)
Auditor’s Responsibilities of the Audio of the Standalone Financial Statements

of the Company in accordance with the accounting principles generally accepted in India, including the
Indian Accounting Standards (Ind AS) specified under section 133 of the Act. This responsibility also includes
maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding
of the assets of the Company and for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate internal financial controls that were
operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the standalone financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible
for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the Board of Directors
either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
FINANCIAL STATEMENTS

• Identify and assess the risks of material misstatement of the standalone financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
STANDALONE

a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the company has adequate internal financial controls with reference
to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures in the standalone financial statements made by the Management and
Board of Directors.
• Conclude on the appropriateness of the Management and Board of Directors use of the going concern
basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to cease
to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements, including

124 S O B HA ANNUAL REPORT 2 02 1

INDEPENDENT AUDITORS’ REPORT (Continued)
Auditor’s Responsibilities of the Audio of the Standalone Financial Statements

the disclosures, and whether the standalone financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the standalone financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) Order, 2016 (“the Order”) issued by the Central
Government in terms of section 143 (11) of the Act, we give in the “Annexure A” a statement on the
matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. (A) As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our
knowledge and belief were necessary for the purposes of our audit.

FINANCIAL STATEMENTS
b. In our opinion, proper books of account as required by law have been kept by the Company so
far as it appears from our examination of those books.
c. The standalone balance sheet, the standalone statement of profit and loss (including other
comprehensive income), the standalone statement of changes in equity and the standalone

STANDALONE
statement of cash flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified
under section 133 of the Act.
e. On the basis of the written representations received from the directors as on 31 March 2021 taken
on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021 from
being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls with reference to financial
statements of the Company and the operating effectiveness of such controls, refer to our
separate Report in “Annexure B”.
(B) With respect to the other matters to be included in the Auditors’ Report in accordance with
Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our
information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations as at 31 March 2021 on its financial
position in its standalone financial statements - Refer Note 39 to the standalone financial
statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there
were any material foreseeable losses;

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 INDEPENDENT AUDITORS’ REPORT (Continued)
Auditor’s Responsibilities of the Audio of the Standalone Financial Statements

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Company; and
iv. The disclosures in the standalone financial statements regarding holdings as well as dealings
in specified bank notes during the period from 8 November 2016 to 30 December 2016 have not
been made in these financial statements since they do not pertain to the financial year ended
31 March 2021.
(C) With respect to the matter to be included in the Auditors’ Report under section 197(16):
In our opinion and according to the information and explanations given to us, the remuneration
paid by the Company to its directors during the current year is in accordance with the provisions
of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid
down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other
details under Section 197(16) which are required to be commented upon by us.

for B S R & Co. LLP

Chartered Accountants
ICAI Firm registration number: 101248W/W-100022

Amrit Bhansali
Partner
Membership number: 065155
FINANCIAL STATEMENTS

UDIN: 21065155AAAADI7042

Place: Bengaluru
STANDALONE

Date: 22 June 2021

126 S O B HA ANNUAL REPORT 2 02 1

Annexure A to the Independent Auditors’ Report on the standalone financial
statements of Sobha Limited (‘the Company’)

With reference to the Annexure A referred to in the Independent Auditors’ Report to the members of the
Company on the standalone financial statements for the year ended 31 March 2021, we report the following:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative
details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which all
fixed assets are verified in a phased manner over a period of 3 years, except scaffolding items.
In our opinion, this periodicity of physical verification is reasonable having regard to the size
of the Company and the nature of its assets. Pursuant to the programme, certain fixed assets
were physically verified during the year and no material discrepancies were noticed on such
verification.
(c) In our opinion and according to the information and explanations given to us and on the basis of
our examination of the records of the Company, the title deeds of immovable properties included
in property, plant and equipment are held in the name of the Company.
(ii) The Company’s inventory includes construction work-in-progress. The requirements under paragraph
3(ii) of the Order are not applicable for construction work-in-progress. The other inventory comprising
of raw material and finished goods has been physically verified by the management during the year. In
our opinion, the frequency of such verification is reasonable. The discrepancies noticed on verification
between physical stock and the book records were not material and not adjusted in the books of
accounts;
(iii) The Company has granted unsecured loans to three companies covered in the register maintained
under Section 189 of the Companies Act, 2013 (‘the Act’). According to the information and explanations
given to us, the Company has not granted any loans, secured or unsecured to firms, limited liability
partnerships or other parties covered in the register maintained under Section 189 of the Companies
Act, 2013 (“the Act”).

FINANCIAL STATEMENTS
(a) According to the information and explanations given to us and based on the audit procedures
conducted by us, we are of the opinion that the rate of interest and other terms and conditions
of unsecured loans granted by the Company to companies covered in the register required to

STANDALONE
be maintained under Section 189 of the Act are not, prima facie, prejudicial to the interest of the
Company.
(b) According to the information and explanations given to us and based on the audit procedures
conducted by us, the unsecured loans granted to the companies and the interest thereon are
repayable on demand or repayable as per contractual terms of the respective agreements.
The borrowers have been regular in payment of principal and interest as demanded or as per
contractual terms, as applicable.
(c) There are no overdue amounts of more than 90 days in respect of the unsecured loans granted
to companies by the Company.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied
with the provisions of Sections 185 and 186 of the Act, with respect to loans given, investments made
and guarantees given. Further, there are no security given in respect of which provisions of Sections
185 and 186 of the Act are applicable.
(v) In our opinion, and according to the information and explanations given to us, the Company has not
accepted any deposits from the public within the meaning the directives issued by the Reserve Bank
of India, provisions of Section 73 to 76 of the Act, any other relevant provisions of the Act and the
relevant rules framed thereunder.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules

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 Annexure A to the Independent Auditors’ Report on the standalone financial
statements of Sobha Limited (‘the Company’) (continued)
prescribed by the Central Government for maintenance of cost records under Section 148(1) of the Act
in respect of the construction industry and are of the opinion that prima facie, the prescribed accounts
and records have been made and maintained. However, we have not made a detailed examination of
the records.
(vii) a) According to the information and explanations given to us and on the basis of our examination
of the records of the Company, amounts deducted / accrued in the books of account in respect
of undisputed statutory dues including provident fund, employees state insurance, income-
tax, goods and service tax, duty of customs, cess and any other material statutory dues have
generally been regularly deposited with the appropriate authorities though there has been a
slight delay in a few cases. As explained to us, the Company did not have any dues on account
of sales-tax, service-tax, duty of excise and value added tax during the year.
According to the information and explanations given to us, no undisputed amounts payable in
respect of provident fund, employees state insurance, income-tax, goods and service tax, duty
of customs, cess and any other material statutory dues were in arrears, as at 31 March 2021, for
a period of more than six months from the date they became payable. As explained to us, the
Company did not have any dues on account of sales-tax, service-tax, duty of excise and value
added tax during the year.
(b) According to the information and explanations given to us, there are no dues of income-tax or
duty of customs or sales tax or service-tax or duty of excise or value added tax which have not
been deposited by the Company on account of disputes except for the following:

Amount Period to which Forum where dispute is

Nature of statue Nature of dues
(₹ in million) * amount relates pending
Basis of charge of
Andhra Pradesh Sales Tax Act 2.05 2002-05 High Court of Andhra Pradesh
sales tax
FINANCIAL STATEMENTS

Basis of charge of
Karnataka Sales Tax Act 127.27 2007-08 High Court of Karnataka
sales tax
Basis of charge of
Karnataka Sales Tax Act 25.60 2008-09 High Court of Karnataka
sales tax
STANDALONE

Basis of charge of
Karnataka Sales Tax Act 27.62 2009-10 High Court of Karnataka
sales tax
Basis of charge of
Karnataka Sales Tax Act 67.71 2010-11 High Court of Karnataka
sales tax
Basis of charge of
Karnataka Sales Tax Act 43.97 2011-12 High Court of Karnataka
sales tax
Basis of charge of
Karnataka Sales Tax Act 64.63 2013-14 High Court of Karnataka
sales tax
Basis of charge of
Karnataka Sales Tax Act 43.52 2014-15 High Court of Karnataka
sales tax
Basis of charge of
Karnataka Sales Tax Act 11.71 2012-13 High Court of Karnataka
sales tax
Basis of charge of
Karnataka Sales Tax Act 7.19 2016-17 High Court of Karnataka
sales tax
District Commissioner
Basis of charge of
Kerala Sales Tax Act 28.57 2013-14 - (Appeals)
sales tax
Thiruvananthapuram
District Commissioner
Basis of charge of
Kerala Sales Tax Act 20.97 2012-13 - (Appeals)
sales tax
Thiruvananthapuram

128 S O B HA ANNUAL REPORT 2 02 1

Annexure A to the Independent Auditors’ Report on the standalone financial
statements of Sobha Limited (‘the Company’) (continued)

Amount Period to which Forum where dispute is

Nature of statue Nature of dues
(₹ in million) * amount relates pending
District Commissioner
Basis of charge of
Kerala Sales Tax Act 192.02 2014-15 - (Appeals)
sales tax
Thiruvananthapuram
Basis of charge of Commissioner Appeal,
Haryana Sales Tax Act 1.28 2011-12
sales tax Gurgaon
Basis of charge of Commissioner Appeal,
Haryana Sales Tax Act 43.25 2015-16
sales tax Gurgaon
Basis of charge of Excise and Taxation
Haryana VAT Act 2.36 2017-18
sales tax Commissioner
Maharashtra Value Added Basis of charge of Joint Commissioner of Sales
5.87 2008-09
Tax Act sales tax Tax appeal, Pune
Maharashtra Value Added Basis of charge of Joint Commissioner of Sales
6.22 2010-11
Tax Act sales tax Tax appeal, Pune
Maharashtra Value Added Basis of charge of Joint Commissioner of Sales
1.43 2010-11
Tax Act sales tax Tax appeal, Pune
Maharashtra Value Added Basis of charge of Joint Commissioner of Sales
0.34 2008-09
Tax Act sales tax Tax appeal, Pune
Maharashtra Value Added Basis of charge of Commissioner of Central Tax,
0.38 2011-12
Tax Act sales tax Pune
Maharashtra Value Added Basis of charge of Commissioner of Central Tax,
0.85 2011-12
Tax Act sales tax Pune
Maharashtra Value Added Basis of charge of Commissioner of Central Tax,
0.51 2014-15
Tax Act sales tax Pune

FINANCIAL STATEMENTS
Maharashtra Value Added Basis of charge of Commissioner of Central Tax,
0.93 2016-17
Tax Act sales tax Pune
Basis of charge of West Bengal Commercial
Kolkata Value Added Tax Act 1 2009-10
sales tax Taxes appellate, Kolkata

STANDALONE
Finance Act, 1994 (service tax Central Excise and Service Tax
Service tax demand 343.09 2006-12
provisions) Appellate Tribunal, Bangalore
Finance Act, 1994 (service tax Commissioner of Central Tax,
Service tax demand 91.47 2008-16
provisions) GST Commissioner, Bangalore
Central Excise and Service Tax
Excise duty Excise duty demand 6.00 2013-15
Appellate Tribunal, Bangalore
Differential tax Central Excise and Service Tax
Customs Act, 1962 1.27 2010-11
treatment Appellate Tribunal, Bangalore
Assistant Commissioner of
Income tax Act Disallowance 153.21 2005-08
Income tax, Bangalore
Income Tax Appellate Tribunal,
Income tax Act Disallowance 23.07 2007-15
Bangalore
*Net of Rs. 337.15 million in total paid under protest

(viii) In our opinion and according to the information and explanations given to us, the Company has not
defaulted in repayment of loans or borrowings to financial institutions and banks during the year. The
Company did not have any outstanding loans or borrowings from government or dues to debenture
holders during the year.
(ix) According to the information and explanations given to us and based on examination of the records
of the Company, the term loans obtained during the year were applied for the purpose for which they

SO BHA A N N U A L R E P O R T 2021 129

 Annexure A to the Independent Auditors’ Report on the standalone financial
statements of Sobha Limited (‘the Company’) (continued)

were obtained. The Company has not raised any money by way of initial public offer or further public
offer (including debt instruments) during the year.
(x) During the course of our examination of the books and records of the Company, carried out in
accordance with the generally accepted auditing practices in India, and according to the information
and explanations given to us, we have neither come across any instance of fraud by the Company or
on the Company by its officers or employees, noticed or reported during the year, nor have we been
informed of any such case by the management.
(xi) According to the information and explanations given to us and based on examination of the records
of the Company, the Company has paid managerial remuneration in accordance with the requisite
approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) According to the information and explanations given to us, in our opinion, the Company is not a Nidhi
Company as prescribed under Section 406 of the Act.
(xiii) According to the information and explanations given to us and based on our examination of the
records of the Company, transactions with the related parties are in compliance with Sections 177 and
188 of the Act, where applicable, and details of all transactions have been disclosed in the standalone
financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the
records of the Company, the Company has not made preferential allotment or private placement of
shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the
records of the Company, the Company has not entered non-cash transactions with directors or
persons connected with him.
(xvi) According to the information and explanation given to us and in our opinion the Company is not
FINANCIAL STATEMENTS

required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
STANDALONE

for B S R & Co. LLP

Chartered Accountants
ICAI Firm registration number: 101248W/W-100022

Amrit Bhansali
Partner
Membership number: 065155
UDIN: 21065155AAAADI7042

Place: Bengaluru
Date: 22 June 2021

130 S O B HA ANNUAL REPORT 2 02 1

Annexure B to the Independent Auditors’ report on the standalone financial
statements of Sobha Limited (‘the Company’) for the year ended 31 March 2021

Report on the Internal Financial Controls with reference to the aforesaid standalone financial
statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013
(Referred to in paragraph (A) (f) under ‘Report on Other Legal and Regulatory Requirements’ section
of our report of even date)

Opinion
We have audited the internal financial controls with reference to standalone financial statements of Sobha
Limited (“the Company”) as of 31 March 2021 in conjunction with our audit of the standalone financial
statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material respects, adequate internal financial controls with reference
to standalone financial statements and such internal financial controls were operating effectively as at
31 March 2021, based on the internal financial controls with reference to standalone financial statements
criteria established by the Company considering the essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of
Chartered Accountants of India (the “Guidance Note”).

Management’s Responsibility for Internal Financial Controls

The Company’s management and the Board of Directors are responsible for establishing and maintaining
internal financial controls based on the internal financial controls with reference to standalone financial
statements criteria established by the Company considering the essential components of internal control
stated in the Guidance Note. These responsibilities include the design, implementation and maintenance
of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and completeness of the accounting records,
and the timely preparation of reliable financial information, as required under the Companies Act, 2013

FINANCIAL STATEMENTS
(hereinafter referred to as “the Act”).

Auditors’ Responsibility

STANDALONE
Our responsibility is to express an opinion on the Company’s internal financial controls with reference
to standalone financial statements based on our audit. We conducted our audit in accordance with the
Guidance Note and the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent
applicable to an audit of internal financial controls with reference to standalone financial statements. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether adequate internal financial controls with reference
to standalone financial statements were established and maintained and whether such controls operated
effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal
financial controls with reference to standalone financial statements and their operating effectiveness.
Our audit of internal financial controls with reference to standalone financial statements included
obtaining an understanding of such internal financial controls, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk.

The procedures selected depend on the auditor’s judgement, including the assessment of the risks of
material misstatement of the standalone financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion on the Company’s internal financial controls with reference to standalone financial statements.

SO BHA A N N U A L R E P O R T 2021 131

 Annexure B to the Independent Auditors’ report on the standalone financial statements
of Sobha Limited (‘the Company’) for the year ended 31 March 2021 (continued)
Meaning of Internal Financial controls with Reference to Standalone Financial Statements
A company’s internal financial controls with reference to standalone financial statements is a process
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of standalone financial statements for external purposes in accordance with generally accepted accounting
principles. A company’s internal financial controls with reference to standalone financial statements include
those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of standalone
financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorisations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection
of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect
on the standalone financial statements.

Inherent Limitations of Internal Financial controls with Reference to Standalone Financial Statements
Because of the inherent limitations of internal financial controls with reference to standalone financial
statements, including the possibility of collusion or improper management override of controls, material
misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation
of the internal financial controls with reference to standalone financial statements to future periods are
subject to the risk that the internal financial controls with reference to standalone financial statements may
become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.

for B S R & Co. LLP

FINANCIAL STATEMENTS

Chartered Accountants
ICAI Firm registration number: 101248W/W-100022
STANDALONE

Amrit Bhansali
Partner
Membership number: 065155
UDIN: 21065155AAAADI7042

Place: Bengaluru
Date: 22 June 2021

132 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
STANDALONE BALANCE SHEET
in ₹ million
Particulars Note As at 31 March 2021 As at 31 March 2020
Assets
Non-current assets
Property, plant and equipment 4 2,647.77 2,841.75
Investment property 5 1,691.59 -
Investment property under construction 6 700.58 2,323.14
Intangible assets 7 0.21 0.38
Right of use assets 8 245.99 128.19
Financial assets
Investments 10 3,975.63 3,674.05
Trade receivables 11 423.99 141.02
Other non-current financial assets 12 1,414.40 249.28
Other non-current assets 13 5,200.77 5,283.17
16,300.93 14,640.98
Current assets
Inventories 9 67,515.27 64,235.06
Financial assets
Trade receivables 11 1,934.98 3,521.91
Cash and cash equivalents 14 1,572.88 597.48
Bank balance other than cash and cash equivalents 15 392.61 207.02
Other current financial assets 12 6,021.52 8,486.99
Other current assets 13 13,802.75 13,742.05
91,240.01 90,790.51
Total assets 107,540.94 105,431.49

Equity and liabilities

Equity
Equity share capital 16 948.46 948.46
Other equity 17 21,922.28 21,924.31
Equity attributable to owners of the Company 22,870.74 22,872.77
Non-controlling interest - -
Total equity 22,870.74 22,872.77

Non-current liabilities
Financial liabilities
Borrowings 19 2,767.76 1,575.38

FINANCIAL STATEMENTS
Lease liabilities 19 67.97 60.64
Provisions 21 151.46 144.67
Deferred tax liabilities (net) 22 258.67 264.02
3,245.86 2,044.71
Current liabilities

STANDALONE
Financial liabilities
Borrowings 19 26,104.02 28,345.05
Lease liabilities 19 61.98 73.56
Trade payables
Total outstanding dues of micro enterprises and small enterprises; and 23 - -
Total outstanding dues of creditors other than micro enterprises and small enterprises 23 7,339.81 9,596.51
Other current financial liabilities 20 5,644.09 4,287.08
Other current liabilities 24 42,048.86 37,791.39
Provisions 21 138.50 151.39
Liabilities for current tax (net) 22 87.08 269.03
81,424.34 80,514.01
Total liabilities 84,670.20 82,558.72
Total equity and liabilities 107,540.94 105,431.49
Summary of significant accounting policies 2.2
The accompanying notes are an integral part of the standalone financial statements.
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Sobha Limited
ICAI Firm registration number: 101248W/W-100022
Ravi PNC Menon T P Seetharam
Amrit Bhansali Chairman Whole-time Director
Partner DIN: 02070036 DIN: 08391622
Membership No.: 065155
Subhash Bhat Vighneshwar G Bhat
Chief Financial Officer Company Secretary and Compliance Officer
Place: Bengaluru, India Place: Bengaluru, India
Date: 22 June 2021 Date: 22 June 2021

SO BHA A N N U A L R E P O R T 2021 133

 SOBHA LIMITED
STANDALONE STATEMENT OF PROFIT AND LOSS
in ₹ million
For the year ended For the year ended
Particulars Note
31 March 2021” 31 March 2020”
Income
Revenue from operations 25 20,966.96 37,558.40
Finance income 27 451.73 446.70
Other income 26 492.82 299.77
Total income 21,911.51 38,304.87

Expenses
Land purchase cost 2,148.20 4,257.15
Cost of raw materials and components consumed 28 1,861.96 3,001.53
Purchase of project materials 4,009.55 7,296.54
Changes in Inventories of Raw materials, Land stock, Work in progress, 29 (3,383.09) (3,164.09)
Stock in trade and Finished goods
Subcontractor and other charges 5,093.60 8,832.71
Employee benefits expense 30 1,771.27 2,464.19
Finance costs 34 5,759.58 6,732.28
Depreciation and amortization expense 31 754.96 673.52
Other expenses 32 3,148.84 3,800.26
Total expenses 21,164.87 33,894.09

Profit before tax 746.64 4,410.78

Tax expenses
Current tax 22 98.78 444.49
Deferred tax (credit) /charge 22 (7.53) 1,071.50
Income tax expense 91.25 1,515.99
FINANCIAL STATEMENTS

Profit for the year 655.39 2,894.79

STANDALONE

Other comprehensive income

Item that will not be reclassified to profit or loss in subsequent periods:
Re-measurement on defined benefit plan 37 6.50 4.61
Other comprehensive income for the year, net of tax 6.50 4.61

Total comprehensive income for the year 661.89 2,899.40

Earnings per equity share [nominal value of ₹ 10 fully paid (31 March
2020 - ₹ 10 fully paid)]
Basic and diluted (amount in ₹) 38 6.91 30.52
Summary of significant accounting policies 2.2

The accompanying notes are an integral part of the standalone financial statements.
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Sobha Limited
ICAI Firm registration number: 101248W/W-100022
Ravi PNC Menon T P Seetharam
Amrit Bhansali Chairman Whole-time Director
Partner DIN: 02070036 DIN: 08391622
Membership No.: 065155
Subhash Bhat Vighneshwar G Bhat
Chief Financial Officer Company Secretary and Compliance Officer
Place: Bengaluru, India Place: Bengaluru, India
Date: 22 June 2021 Date: 22 June 2021

134 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
STANDALONE STATEMENT OF CHANGES IN EQUITY
a. Equity share capital
No. of shares Amount
in million in ₹ million
Equity shares of ₹ 10 each issued, subscribed and fully paid
Balance as at 1 April 2019 94.84 948.46
Balance as at 31 March 2020 94.84 948.46

Balance as at 1 April 2020 94.84 948.46

Balance as at 31 March 2021 94.84 948.46

b. Other equity
in ₹ million
Attributable to owners of the Company
Items of
Reserves and Surplus Total
OCI
Capital Debenture
Securities General Retained Other items
redemption redemption
premium reserve earnings of OCI
reserve reserve
As at 1 April 2019 119.47 9,328.92 300.22 3,530.59 6,558.55 (12.45) 19,825.30
Profit for the year - - - - 2,894.79 - 2,894.79
Other comprehensive income (net of tax) - - - - - 4.61 4.61
Total comprehensive income 119.47 9,328.92 300.22 3,530.59 9,453.34 (7.84) 22,724.70
Transfer to other reserves
Debenture redemption reserve - - 49.82 - (49.82) - -
Debentures redeemed during the year - - (350.04) 350.04 - - -
General reserve - - - 289.48 (289.48) - -
Total transfer to other reserves - - (300.22) 639.52 (339.30) - -
Transaction with owners, recorded directly in equity
Distribution to owners
Dividend (including dividend distribution tax) refer note 18 - - - - (800.39) - (800.39)

FINANCIAL STATEMENTS
Total distribution to owners - - - - (800.39) - (800.39)
As at 31 March 2020 119.47 9,328.92 - 4,170.11 8,313.65 (7.84) 21,924.31
As at 1 April 2020 119.47 9,328.92 - 4,170.11 8,313.65 (7.84) 21,924.31
Profit for the year - - - - 655.39 - 655.39

STANDALONE
Other comprehensive income (net of tax) - - - - - 6.50 6.50
Total comprehensive income 119.47 9,328.92 - 4,170.11 8,969.04 (1.34) 22,586.20
Transfer to other reserves
General reserve - - - 65.54 (65.54) - -
Total transfer to other reserves - - - 65.54 (65.54) - -
Transaction with owners, recorded directly in equity
Distribution to owners
Dividend (including dividend distribution tax) refer note 18 - - - - (663.92) - (663.92)
Total distribution to owners - - - - (663.92) - (663.92)
As at 31 March 2021 119.47 9,328.92 - 4,235.65 8,239.58 (1.34) 21,922.28
Summary of significant accounting policies 2.2

The accompanying notes are an integral part of the standalone financial statements.
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Sobha Limited
ICAI Firm registration number: 101248W/W-100022
Ravi PNC Menon T P Seetharam
Amrit Bhansali Chairman Whole-time Director
Partner DIN: 02070036 DIN: 08391622
Membership No.: 065155
Subhash Bhat Vighneshwar G Bhat
Chief Financial Officer Company Secretary and Compliance Officer
Place: Bengaluru, India Place: Bengaluru, India
Date: 22 June 2021 Date: 22 June 2021

SO BHA A N N U A L R E P O R T 2021 135

 SOBHA LIMITED
STANDALONE STATEMENT OF CASH FLOWS
in ₹ million
Particulars For the year ended For the year ended
31 March 2021 31 March 2020
Cash flows from operating activities
Profit before tax 746.64 4,410.78
Adjustments to reconcile profit before tax to net cash flows from operating activities
Depreciation and amortization expense 656.30 673.52
Depreciation of investment properties 98.66 -
Gain on sale of property, plant and equipment (1.69) (4.41)
Finance income (including fair value change in financial instruments) (451.73) (446.70)
Finance costs (including fair value change in financial instruments) 5,759.58 6,513.00
Allowance for credit loss 191.70 239.33
Share of profit from sale of interest in partnership firm (144.25) -
Share of (profit)/ loss from investment in partnership firm (138.43) (16.84)
Working capital adjustments
Decrease / (Increase) in trade receivables 1,299.97 (647.55)
Increase in inventories (3,280.21) (3,022.53)
Decrease / (Increase) in other financial assets 1,388.32 (2,303.41)
Decrease in other assets 53.83 3,255.92
Decrease in trade payables and other financial liabilities (1,223.81) (1,723.21)
(Decrease) / Increase in provisions (6.10) 24.88
Increase/(decrease) in other non-financial liabilities 1,742.50 (5,098.34)
Cash generated from operating activities 6,691.28 1,854.44
Income tax paid (net of refund) (280.73) (1,029.43)
Net cash flows from/ (used in) operating activities (A) 6,410.55 825.01
Cash flows from investing activities
Purchase of property, plant and equipment (444.73) (1,129.62)
Proceeds from sale of property, plant and equipment 2.03 4.93
Proceeds from sale of interest in partnership firm 144.25 -
Investment in subsidiary - (10.00)
Loan to subsidiaries (126.77) (176.68)
(Contribution to) / proceeds from partnership current account (440.01) 482.01
FINANCIAL STATEMENTS

Investments in fixed deposits (net) (184.04) (127.19)

Interest received 132.26 108.46
Net cash flows used in investing activities (B) (917.01) (848.09)
Cash flows from financing activities
Proceeds from long-term borrowings 1,718.45 -
STANDALONE

Repayment of long-term borrowings (174.73) (1,624.98)

Proceeds from short-term borrowings 14,167.21 24,689.22
Repayment of short-term borrowings (16,436.47) (19,985.24)
Lease payments (22.70) (50.06)
Finance cost paid (3,105.80) (3,213.08)
Dividend paid on equity shares (664.10) (663.74)
Tax on dividend paid - (136.47)
Net cash flows used in financing activities (C) (4,518.14) (984.35)
Net increase/ (decrease) in cash and cash equivalents (A+B+C) 975.40 (1,007.43)
Cash and cash equivalents at the beginning of the year (refer note 14) 597.48 1,604.91
Cash and cash equivalents at the end of the year (refer note 14) 1,572.88 597.48
Summary of significant accounting policies 2.2

The accompanying notes are an integral part of the standalone financial statements.
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Sobha Limited
ICAI Firm registration number: 101248W/W-100022
Ravi PNC Menon T P Seetharam
Amrit Bhansali Chairman Whole-time Director
Partner DIN: 02070036 DIN: 08391622
Membership No.: 065155
Subhash Bhat Vighneshwar G Bhat
Chief Financial Officer Company Secretary and Compliance Officer
Place: Bengaluru, India Place: Bengaluru, India
Date: 22 June 2021 Date: 22 June 2021

136 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

1 Corporate information
Sobha Limited (‘Company’ or ‘SL’) was incorporated on 7 August 1995. SL is a leading real estate
developer engaged in the business of construction, development, sale, management and operation
of all or any part of townships, housing projects, commercial premises and other related activities. The
Company is also engaged in manufacturing activities related to interiors, glazing and metal works and
concrete products which also provides backward integration to SL’s turnkey projects.
The Company is a public limited company domiciled in India and incorporated under the provisions of
the Companies Act, 1956. The registered office is located at Bangalore. The Company’s shares and
debentures are listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
The standalone financial statements are approved for issue by the Company’s Board of Directors on
22 June 2021.

2 Significant accounting policies

2.1 Basis of preparation
These financial statements are separate financial statements prepared in accordance with Indian
Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards)
Rules, 2015 notified under Section 133 of Companies Act, 2013, ( the ‘Act’) and other relevant
provision of the Act.
The standalone financial statements have been prepared on the historical cost basis, except for
the following assets and liabilities which have been measured at fair value:
➢ Certain financial assets and liabilities measured at fair value (refer accounting policy
regarding financial instruments)
The standalone financial statements are presented in ₹ and all values are rounded to the nearest

FINANCIAL STATEMENTS
millions, except when otherwise indicated.

2.2 Summary of significant accounting policies

a) Revenue recognition

STANDALONE
Revenue is recognised to the extent that it is probable that the economic benefits will flow
to the Company and the revenue can be reliably measured. Revenue is measured at the
fair value of the consideration received or receivable, taking into account contractually
defined terms of payment and excluding taxes or duties collected on behalf of the
government. Revenue includes excise duty, since the recovery of excise duty flows to
the Company on its own account. However, sales tax/ value added tax (VAT)/Goods and
Services Tax(GST) is not received by the Company on its own account. These taxes are
collected on value added to the commodity by the seller on behalf of the government.
Accordingly, it is excluded from revenue.
The specific recognition criteria described below must also be met before revenue is
recognised.

i. Recognition of revenue from contractual projects

If the outcome of contractual contract can be reliably measured, revenue associated
with the construction contract is recognised by reference to the stage of completion
of the contract activity at year end (the percentage of completion method). The stage
of completion on a project is measured on the basis of proportion of the contract
work/ based upon the contracts/ agreements entered into by the Company with its
customers.

SO BHA A N N U A L R E P O R T 2021 137

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

ii. Recognition of revenue from real estate projects

a. Recognition of revenue from property development

Revenue is recognized upon transfer of control of residential units to customers, in an amount
that reflects the consideration the Company expects to receive in exchange for those
residential units. The Company shall determine the performance obligations associated
with the contract with customers at contract inception and also determine whether they
satisfy the performance obligation over time or at a point in time. In case of residential units,
the Company satisfies the performance obligation and recognises revenue at a point in
time i.e., upon handover/deemed handover of the residential units.
Deemed handover of the residential units is considered upon intimation to the customers
about receipt of occupancy certificate and receipt of total sale consideration.
To estimate the transaction price in a contract, the Company adjusts the promised
amount of consideration for the time value of money if that contract contains a
significant financing component. The Company when adjusting the promised amount
of consideration for a significant financing component is to recognise revenue at an
amount that reflects the cash selling price of the transferred residential unit.

b. Recognition of revenue from sale of land and development rights

Revenue from sale of land and development rights is recognised upon transfer of all
significant risks and rewards of ownership of such real estate/ property, as per the terms
of the contracts entered into with buyers, which generally coincides with the firming of
the sales contracts/ agreements. Revenue from sale of land and development rights is
only recognised when transfer of legal title to the buyer is not a condition precedent
for transfer of significant risks and rewards of ownership to the buyer.
FINANCIAL STATEMENTS

iii. Recognition of revenue from manufacturing division

Revenue from sale of materials is recognised when the significant risks and rewards of
STANDALONE

ownership of the goods have passed to the buyer, which coincides with dispatch of goods
to the customers. Service income is recognised on the basis of completion of a physical
proportion of the contract work/ based upon the contracts/ agreements entered into by the
Company with its customers.

iv. Dividend income

Revenue is recognised when the shareholders’ or unit holders’ right to receive payment is
established, which is generally when shareholder approve the dividend.

v. Share in profits of partnership firm investments

The Company’s share in profits from a firm where the Company is a partner, is recognised on
the basis of such firm’s audited accounts, as per terms of the partnership deed.

vi. Interest income

Interest income, including income arising from other financial instruments, is recognised using
the effective interest rate method.

b) Property, plant and equipment

Property, plant and equipment are stated at their cost of acquisition/construction, net of

138 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

accumulated depreciation and impairment losses, if any. The cost comprises purchase price,
borrowing costs if capitalization criteria are met, directly attributable cost of bringing the
asset to its working condition for the intended use and initial estimate of decommissioning,
restoring and similar liabilities. Each part of an item of property, plant and equipment with a
cost that is significant in relation to the total cost of the item is depreciated separately. This
applies mainly to components for machinery. When significant parts of plant and equipment
are required to be replaced at intervals, the Company depreciates them separately based
on their specific useful lives. Likewise, when a major inspection is performed, its cost is
recognized in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs are recognised in
statement of profit and loss as incurred.
Subsequent expenditure related to an item of property, plant and equipment is added to
its book value only if it increases the future benefits from the existing asset beyond its
previously assessed standard of performance.
Borrowing costs directly attributable to acquisition of property, plant and equipment which
take substantial period of time to get ready for its intended use are also included to the
extent they relate to the period till such assets are ready to be put to use.
An item of property, plant and equipment and any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the asset) is
included in the statement of profit and loss when the property, plant and equipment is
derecognised.
Expenditure directly relating to construction activity is capitalised. Indirect expenditure
incurred during construction period is capitalised to the extent to which the expenditure

FINANCIAL STATEMENTS
is indirectly related to construction or is incidental thereto. Other indirect expenditure
(including borrowing costs) incurred during the construction period which is not related
to the construction activity nor is incidental thereto is charged to the statement of profit

STANDALONE
and loss.
Advances paid towards the acquisition of property, plant and equipment outstanding at each
balance sheet date is classified as capital advances under other non-current assets.

c) Investment properties
Investment properties are measured initially at cost, including transaction costs.
Subsequent to initial recognition, investment properties are stated at cost less accumulated
depreciation and accumulated impairment loss, if any.
The cost includes the cost of replacing parts and borrowing costs for long-term
construction projects if the recognition criteria are met. When significant parts of the
investment property are required to be replaced at intervals, the Group depreciates them
separately based on their specific useful lives. All other repair and maintenance costs are
recognized in statement of profit and loss as incurred.
Though the Company measures investment property using cost based measurement, the
fair value of investment property is disclosed in the notes. Fair values are determined
based on an annual evaluation performed by an accredited external independent valuer.
Investment properties are derecognized either when they have been disposed of or when
they are permanently withdrawn from use and no future economic benefit is expected from

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 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

their disposal. The difference between the net disposal proceeds and the carrying amount
of the asset is recognized in statement of profit and loss in the period of derecognition.

d) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following
initial recognition, intangible assets are carried at cost less accumulated amortization and
accumulated impairment losses, if any. Intangible assets, comprising of software and
intellectual property rights are amortized on a straight line basis over a period of 3 years,
which is estimated to be the useful life of the asset and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortisation period
and the amortisation method for an intangible asset with a finite useful life are reviewed at
least at the end of each reporting period.

e) Depreciation on property, plant and equipment

Depreciation is calculated on written down value basis using the following useful lives
prescribed under Schedule II of the Act, except where specified.

Particulars Useful lives estimated by the

management
(in years)
Property, plant and equipment
Factory buildings 30
Buildings - other than factory buildings 60
Buildings - temporary structure for precast plant 8
Buildings - temporary structure 3
Plant and machinery
i. General plant and machinery 15
FINANCIAL STATEMENTS

ii. Plant and machinery - Civil construction 12

iii. Plant and machinery - Electrical installations 10
Furniture and fixtures 10
STANDALONE

Motor vehicles 8
Computers
i. Computer equipment 3
ii. Servers and network equipment 6
Office equipment 5
Investment property
Buildings - other than factory buildings 60
Plant and machinery
i. General plant and machinery 15
ii. Plant and machinery - Civil construction 12
iii. Plant and Machinery - Electrical installations 10
Furniture and fixtures 10

Steel scaffolding items are depreciated using straight line method over a period of
6 years, which is estimated to be the useful life of the asset by the management based on
planned usage and technical advice thereon. These lives are higher than those indicated
in Schedule II.
The residual values, useful lives and methods of depreciation of property, plant and
equipment are reviewed at each financial year end and adjusted prospectively, if
appropriate.

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NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

f) Impairment of non-financial assets

The Company assesses, at each reporting date, whether there is an indication that any
non-financial asset may be impaired. If any indication exists, or when annual impairment
testing for a non-financial asset is required, the Company estimates the asset’s recoverable
amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating
unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is
determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets. When the carrying
amount of an asset or CGU exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In determining fair value less costs of
disposal, recent market transactions are taken into account. If no such transactions can be
identified, an appropriate valuation model is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly traded companies or other available
fair value indicators.
Impairment losses, including impairment on inventories, are recognised in the statement
of profit and loss.

g) Impairment of financial assets

The Company assesses at each date of balance sheet whether a financial asset or a group
of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured
through a loss allowance. The Company recognises lifetime expected losses for all contract
assets and / or all trade receivables that do not constitute a financing transaction. For

FINANCIAL STATEMENTS
all other financial assets, expected credit losses are measured at an amount equal to
the 12-month expected credit losses or at an amount equal to the life time expected
credit losses if the credit risk on the financial asset has increased significantly since initial
recognition.

STANDALONE
h) Current versus non-current classification
The Group presents assets and liabilities in the balance sheet based on current/ non-
current classification. An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a
liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period

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NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

The Group classifies all other liabilities as non-current.

The operating cycle is the time between the acquisition of assets for processing and their
realisation in cash and cash equivalents. The real estate development projects undertaken
by the Group generally run over a period ranging up to 5 years. Operating assets and
liabilities relating to such projects are classified as current based on an operating cycle of
up to 5 years. Borrowings in connection with such projects are classified as short-term (i.e.
current) since they are payable over the term of the respective projects.
Assets and liabilities, other than those discussed above, are classified as current to the
extent they are expected to be realised / are contractually repayable within 12 months
from the balance sheet date and as non-current, in other cases.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.

i) Fair value measurement

The Company measures financial instruments 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 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, maximising the
FINANCIAL STATEMENTS

use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorised within the fair value hierarchy, described as follows, based on
STANDALONE

the lowest level input that is significant to the fair value measurement as a whole:
• Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2 — inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3 — inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
For assets and liabilities that are recognised in the financial statements on a recurring
basis, the Company determines whether transfers have occurred between levels in the
hierarchy by re-assessing categorisation (based on the lowest level input that is significant
to the fair value measurement as a whole) at the end of each reporting period.

j) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and
a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets

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NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

not recorded at fair value through profit or loss, transaction costs that are attributable to
the acquisition of the financial asset.
Classification and subsequent measurement
On initial recognition, financial asset is classified as measured at:
- amortised cost
- fair value through other comprehensive income (FVTOCI) - debt investment
- fair value through other comprehensive income (FVTOCI) - equity investment
- fair value through profit or loss (FVTPL)

Financial assets at amortised cost

A ‘financial asset’ is measured at the amortised cost if both the following conditions are
met and is not designated as FVTPL:
a) the asset is held within a business model whose objective is to hold assets for collecting
contractual cash flows, and
b) contractual terms of the asset give rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Company. After initial measurement, such financial
assets are subsequently measured at amortised cost using the effective interest rate (EIR)
method. Amortised cost is calculated by taking into account any discount or premium
on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation
is included in finance income in the statement of profit and loss. The losses arising from
impairment are recognised in the statement of profit and loss. This category generally
applies to trade and other receivables.

FINANCIAL STATEMENTS
Debt investment at Fair value through Other comprehensive income (FVTOCI)
A ‘Debt investment’ is classified as at the FVTOCI if both of the following criteria are met

STANDALONE
and is not designated as FVTPL:
a) the objective of the business model is achieved both by collecting contractual cash
flows and selling the financial assets, and
b) contractual terms of the asset give rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.
Debt investment included within the FVTOCI category are measured initially as well as
at each reporting date at fair value. Fair value movements are recognized in the other
comprehensive income (OCI)

Financial assets at Fair Value Through Profit or Loss (FVTPL)

FVTPL is a residual category for financial assets. Any financial assets, which does not meet
the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
financial assets included within the FVTPL category are measured at fair value with all
changes recognized in the statement of profit and loss. In addition, the Company may elect
to designate a financial asset, which otherwise meets amortized cost or FVTOCI criteria,
as at FVTPL. However, such election is allowed only if doing so reduces or eliminates
a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). The
Company has not designated any financial asset as at FVTPL.

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NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Equity investments in subsidiaries and joint ventures

The Company has availed the option available in Ind AS 27 separate financial statements
to carry its investment in subsidiaries and joint ventures at cost. Impairment recognized, if
any, is reduced from the carrying value.

Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Company of
similar financial assets) is primarily derecognised when:
• The rights to receive cash flows from the asset have expired, or
• The Company has transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material delay to
a third party under a ‘pass-through’ arrangement and either (a) the Company has
transferred substantially all the risks and rewards of the asset, or (b) the Company has
neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or
has entered into a pass-through arrangement, it evaluates if and to what extent it has
retained the risks and rewards of ownership. When it has neither transferred nor retained
substantially all of the risks and rewards of the asset, nor transferred control of the asset,
the Company continues to recognise the transferred asset to the extent of the Company’s
continuing involvement. In that case, the Company also recognises an associated liability.
The transferred asset and the associated liability are measured on a basis that reflects the
rights and obligations that the Company has retained.

Financial liabilities
FINANCIAL STATEMENTS

Initial recognition and measurement

All financial liabilities are recognised initially at fair value plus, in the case of financial
STANDALONE

liabilities not recorded at fair value through profit or loss, transaction costs that are directly
attributable to its acquisition or issue.
Classification, subsequent measurement and gains and losses
The financial liabilities are classified as measured at amortised cost or FVTPL. A financial
liability is classified as FVTPL if it is classified as held-for-trading or it is as derivative
or deginated as such on initial recognition. Financial liabilities measured as FVTPL are
measured at fair value and net gains or losses, including any interest expense, are
recognised in statement of profit and loss. Other financial liabilities are subsequently
measured at amortised cost using effective interest method. Interest expense and foreign
exchange gains and losses are recognised in the statement of profit and loss. Any gain or
loss on derecognition is also recognised in the statement of profit and loss.

Derecognition
A financial liability is derecognised when the obligation under the liability is discharged
or cancelled or expires. When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the derecognition of
the original liability and the recognition of a new liability. The difference in the respective
carrying amounts is recognised in the statement of profit and loss.

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NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

k) Borrowing costs
Borrowing costs are interest and other costs incurred in connection with borrowings
of funds. Borrowing costs directly attributable to acquisition/ construction of qualifying
assets are capitalised until the time all substantial activities necessary to prepare the
qualifying assets for their intended use are complete. A qualifying asset is one that
necessarily takes substantial period of time to get ready for its intended use/ sale.
All other borrowing costs not eligible for inventorisation/ capitalisation are charged to
statement of profit and loss.

l) Cash and cash equivalents

Cash and cash equivalents for the purposes of cash flow statement comprise cash at
bank and in hand and short-term deposits with an original maturity of three months or
less, which are subject to an insignificant risk of changes in value, net of outstanding bank
overdrafts as they are considered an integral part of the Company’s cash management.

m) Employee benefits

i. Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays
fixed contributions into a separate entity and will have no legal or constructive obligation
to pay further amounts. The Company makes specified monthly contributions towards
Government administered provident fund scheme. Obligations for contributions to defined
contribution plans are recognised as an employee benefit expense in profit or loss in the
periods during which the related services are rendered by employees.
Prepaid contributions are recognised as an asset to the extent that a cash refund or a

FINANCIAL STATEMENTS
reduction in future payments is available.

ii. Defined benefit plans

STANDALONE
A defined benefit plan is a post-employment benefit plan other than a defined contribution
plan. The Company’s net obligation in respect of defined benefit plans is calculated
separately for each plan by estimating the amount of future benefit that employees have
earned in the current and prior periods, discounting that amount and deducting the fair
value of any plan assets.
The calculation of defined benefit obligation is performed annually by a qualified actuary
using the projected unit credit method. When the calculation results in a potential asset
for the Company, the recognised asset is limited to the present value of economic
benefits available in the form of any future refunds from the plan or reductions in future
contributions to the plan (‘the asset ceiling’). In order to calculate the present value of
economic benefits, consideration is given to any minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and
losses, the return on plan assets (excluding interest) and the effect of the asset ceiling
(if any, excluding interest), are recognised in Other Comprehensive Income (OCI) . The
Company determines the net interest expense (income) on the net defined benefit liability
(asset) for the period by applying the discount rate used to measure the defined benefit
obligation at the beginning of the annual period to the then-net defined benefit liability
(asset), taking into account any changes in the net defined benefit liability (asset) during
the period as a result of contributions and benefit payments. Net interest expense and

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NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

other expenses related to defined benefit plans are recognised in the statement of profit
and loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change
in benefit that relates to past service (‘past service cost’ or ‘past service gain’) or the gain
or loss on curtailment is recognised immediately in the statement of profit and loss. The
Company recognises gains and losses on the settlement of a defined benefit plan when
the settlement occurs.
The Company makes contributions to Sobha Developers Employees Gratuity Trust (‘the
trust’) to discharge the gratuity liability to employees. Provision towards gratuity, a defined
benefit plan, is made for the difference between actuarial valuation by an independent
actuary and the fund balance, as at the year-end. The cost of providing benefits under
gratuity is determined on the basis of actuarial valuation using the projected unit credit
method at each year end.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest on the net defined benefit liability and the
return on plan assets (excluding amounts included in net interest on the net defined benefit
liability), are recognised immediately in the balance sheet with a corresponding debit or
credit to retained earnings through OCI in the period in which they occur. Remeasurements
are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in profit or loss on the earlier of
• The date of the plan amendment or curtailment, and
• The date that the company recognises related restructuring costs Net interest is
calculated by applying the discount rate to the net defined benefit liability or asset.
The Company recognises the following changes in the net defined benefit obligation
FINANCIAL STATEMENTS

as an expense in the statement of profit and loss

• Service costs comprising current service costs, past-service costs, gains and losses on
curtailments and non-routine settlements; and
STANDALONE

• Net interest expense or income

Accumulated leave, which is expected to be utilized within the next 12 months, is treated as
short-term employee benefit. The Company measures the expected cost of such absences
as the additional amount that it expects to pay as a result of the unused entitlement that
has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond twelve
months, as long-term employee benefit for measurement purposes. Such long-term
compensated absences are provided for based on the actuarial valuation using the
projected unit credit method at the year-end. The Company presents the entire leave as a
current liability in the balance sheet, since it does not have an unconditional right to defer
its settlement for 12 months after the reporting date.
Expense in respect of other short term benefits is recognised on the basis of the amount
paid or payable for the period for which the services are rendered by the employee.

n) Provisions
A provision is recognized when an enterprise has a present obligation (legal or constructive)
as result of past event and it is probable that an outflow of embodying economic benefits
of resources will be required to settle a reliably assessable obligation. Provisions are

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NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

determined based on best estimate required to settle each obligation at each balance
sheet date. If the effect of the time value of money is material, provisions are discounted
using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is
recognised as a finance cost.

o) Contingent liabilities

A contingent liability is a possible obligation that arises from past events whose
existence will be confirmed by the occurrence or non-occurrence of one or more
uncertain future events beyond the control of the Company or a present obligation that
is not recognized because it is not probable that an outflow of resources will be required
to settle the obligation. A contingent liability also arises in extremely rare cases where
there is a liability that cannot be recognized because it cannot be measured reliably.
The Company does not recognize a contingent liability but discloses its existence in the
financial statements.

p) Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the year
attributable to equity shareholders (after deducting preference dividends and attributable
taxes) by the weighted average number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding during the year is adjusted for
events of bonus issue and buy back

For the purpose of calculating diluted earnings per share, the net profit or loss for
the year attributable to equity shareholders and the weighted average number of

FINANCIAL STATEMENTS
shares outstanding during the year are adjusted for the effects of all dilutive potential
equity shares.

q) Foreign currency transactions

STANDALONE
Foreign currency transactions are recorded in the reporting currency, by applying to the
foreign currency amount the exchange rate between the reporting currency and the
foreign currency at the date of the transaction. Foreign currency monetary items are
reported using the exchange rate prevailing at the reporting date. Non-monetary items,
which are measured in terms of historical cost denominated in a foreign currency, are
reported using the exchange rate at the date of the transaction. Exchange differences
arising on the settlement of monetary items or on reporting monetary items of Company
at rates different from those at which they were initially recorded during the year, or
reported in previous financial statements, are recognised as income or as expenses in the
year in which they arise.

r) Inventories

Related to contractual and real estate activity

Direct expenditure relating to construction activity is inventorised. Other expenditure

(including borrowing costs) during construction period is inventorised to the extent the
expenditure is directly attributable cost of bringing the asset to its working condition
for its intended use. Other expenditure (including borrowing costs) incurred during the
construction period which is not directly attributable for bringing the asset to its working

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NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

condition for its intended use is charged to the statement of profit and loss. Direct and
other expenditure is determined based on specific identification to the construction and
real estate activity. Cost incurred/ items purchased specifically for projects are taken as
consumed as and when incurred/ received.

i. Work-in-progress - Contractual: Cost of work yet to be certified/ billed, as it pertains to

contract costs that relate to future activity on the contract, are recognised as contract
work-in-progress provided it is probable that they will be recovered. Contractual work-
in-progress is valued at lower of cost and net realisable value.

ii. Work-in-progress - Real estate projects (including land inventory): Represents cost
incurred in respect of unsold area of the real estate development projects or cost
incurred on projects where the revenue is yet to be recognised. Real estate work-in-
progress is valued at lower of cost and net realisable value

iii. Finished goods - Flats: Valued at lower of cost and net realisable value.

iv. Finished goods - Plots: Valued at lower of cost and net realisable value.

v. Building materials purchased, not identified with any specific project are valued at lower
of cost and net realisable value. Cost is determined based on a weighted average
basis.

vi. Land inventory: Valued at lower of cost and net realisable value.

Related to manufacturing activity

i. Raw materials are valued at lower of cost and net realisable value. Cost is determined
based on a weighted average basis.
FINANCIAL STATEMENTS

ii. Work-in-progress and finished goods are valued at lower of cost and net
realisable value. Cost includes direct materials and labour and a proportion of
manufacturing overheads based on normal operating capacity. Cost of finished goods
STANDALONE

includes excise duty.

Net realisable value is the estimated selling price in the ordinary course of business,
less estimated costs of completion and estimated costs necessary to make the sale.
However, inventory held for use in production of finished goods is not written down below
cost if the finished products in which they will be incorporated are expected to be sold at
or above cost.

s) Land

Advances paid by the Company to the seller/ intermediary toward outright purchase
of land is recognised as land advance under loans and advances during the course of
obtaining clear and marketable title, free from all encumbrances and transfer of legal title
to the Company, whereupon it is transferred to land stock under inventories.

Land/ development rights received under joint development arrangements is measured

at the fair value of the estimated construction service rendered to the land owner and
the same is accounted on launch of the project. Further, non-refundable deposit amount
paid by the Company under joint development arrangements is recognised as land
advance under other assets and on the launch of the project, the non-refundable amount
is transferred as land cost to work-in-progress.

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NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

t) Leases

Where the Company is lessee

Finance leases, which effectively transfer to the Company substantially all the risks
and benefits incidental to ownership of the leased asset, are capitalized at the
lower of the fair value and present value of the minimum lease payments at the inception
of the lease term and disclosed as leased assets. Lease payments are apportioned
between the finance charges and reduction of the lease liability based on the implicit
rate of return. Finance charges are recognized as finance costs in the statement of
profit and loss.
Right of use asset is depreciated on a straight-line basis over the lower of the lease term or
the estimated useful life of the asset unless there is reasonable certainty that the Company
will obtain ownership, wherein such assets are depreciated over the estimated useful life
of the asset
Leases where the lessor effectively retains substantially all the risks and benefits of
ownership of the leased term, are classified as operating leases. Operating lease payments
are recognized as an expense in the statement of profit and loss on a straight-line basis
over the lease term.
finance lease note and disclosure required

u) Cash dividend to equity holders of the Company

The Company recognises a liability to make cash distributions to equity holders of the
Company when the distribution is authorised and the distribution is no longer at the
discretion of the Company. Final dividends on shares are recorded as a liability on the date

FINANCIAL STATEMENTS
of approval by the shareholders and interim dividends are recorded as a liability on the
date of declaration by the Company’s Board of Directors.

STANDALONE
3 Significant accounting judgements, estimates and assumptions
The preparation of financial statements in conformity with the recognition and measurement principles
of Ind AS requires management to make judgements, estimates and assumptions that affect the
reported balances of revenues, expenses, assets and liabilities and the accompanying disclosures,
and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment to the carrying amount of assets or liabilities
affected in future periods.

a) Judgements
In the process of applying the accounting policies, management has made the following
judgements, which have the most significant effect on the amounts recognised in the financial
statements:

Classification of property
The Company determines whether a property is classified as investment property or inventory
property:
Investment property comprises land and buildings (principally offices, commercial warehouse
and retail property) that are not occupied substantially for use by, or in the operations of, the
Company, nor for sale in the ordinary course of business, but are held primarily to earn rental

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NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

income and capital appreciation. These buildings are substantially rented to tenants and not
intended to be sold in the ordinary course of business.
Inventory property comprises property that is held for sale in the ordinary course of business.
Principally, this is residential property that the Company develops and intends to sell before or
on completion of construction.

b) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at
the reporting date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year, are described below. The Company
based its assumptions and estimates on parameters available when the financial statements
were prepared. Existing circumstances and assumptions about future developments, however,
may change due to market changes or circumstances arising that are beyond the control of the
Company. Such changes are reflected in the assumptions when they occur.

i) Revenue recognition, contract costs and valuation of unbilled revenue

The Company uses the percentage-of-completion method for recognition of revenue,
accounting for unbilled revenue and contract cost thereon for its contractual projects. The
percentage of completion is measured by reference to the stage of the projects and contracts
determined based on the proportion of contract costs incurred for work performed to date
bear to the estimated total contract costs. Use of the percentage-of-completion method
requires the Company to estimate the efforts or costs expended to date as a proportion of
the total efforts or costs to be expended. Significant assumptions are required in determining
the stage of completion, the extent of the contract cost incurred, the estimated total contract
revenue and contract cost and the recoverability of the contracts. These estimates are based
on events existing at the end of each reporting date.
FINANCIAL STATEMENTS

ii) Income taxes

Income tax expense comprises of current and deferred tax. It is recognised in the statement
STANDALONE

of profit and loss except to the extent that it relates to an item recognised directly in equity
or in other comprehensive income.

Current income tax

Current income tax comprises the expected tax payable or receivable on the taxable income
or loss for the year and any adjustment to the tax payable or receivable in respect of previous
years. The amount of current tax reflects the best estimate of the tax amount expected to
be paid or received after considering the uncertainty, if any, related to income taxes. It is
measured using tax rates (and tax laws) enacted or substantively enacted by the reporting
date.
Current tax assets and current tax liabilities are offset only if there is a legally enforceable right
to set off the recognised amounts, and it is intended to realise the asset and settle the liability
on a net basis or simultaneously.

Deferred income tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the corresponding amounts used
for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses
and tax credits. Deferred tax is not recognised for:

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NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

• temporary differences arising on the initial recognition of assets or liabilities in a transaction

that is not a business combination and that affects neither accounting nor taxable profit or
loss at the time of the transaction;
• temporary differences related to investments in subsidiaries, associates and joint arrangements
to the extent that the Group is able to control the timing of the reversal of the temporary
differences and it is probable that they will not reverse in the foreseeable future; and
• taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits
will be available against which they can be used. The existence of unused tax losses is strong
evidence that future taxable profit may not be available. Therefore, in case of a history of
recent losses, the Company recognises a deferred tax asset only to the extent that it has
sufficient taxable temporary differences or there is convincing other evidence that sufficient
taxable profit will be available against which such deferred tax asset can be realised. Deferred
tax assets – unrecognised or recognised, are reviewed at each reporting date and are
recognised/ reduced to the extent that it is probable/ no longer probable respectively that
the related tax benefit will be realised.

iii) Accounting for advance from customer considering the time value of money
When determining whether a contract includes a significant financing component, the
Company considers the period between performance and payment for that performance.
For contracts where revenue is recognised at a point in time, the period considered is that
between transfer of control of the good and the payment. Therefore, if payment for a property
is made before the date on which control is transferred, an assessment is required of whether
the contract includes a significant financing component, especially if the period is greater than
twelve months.

FINANCIAL STATEMENTS
Advanced payments from the customer lead to higher amount of revenue being recognised
than the contract price because the Company accepts a lower amount in return for financing.
As the entity recognises the interest expense related to the financing component, the

STANDALONE
corresponding amount is recorded as a contract liability/revenue.

iv) Estimation of net realisable value for inventory property (including land advances)
Inventory property is stated at the lower of cost and net realisable value (NRV).
NRV for completed inventory property is assessed by reference to market conditions and
prices existing at the reporting date and is determined by the Company, based on comparable
transactions identified by the Company for properties in the same geographical market
serving the same real estate segment.
NRV in respect of inventory property under construction is assessed with reference to market
prices at the reporting date for similar completed property, less estimated costs to complete
construction and an estimate of the time value of money to the date of completion.
With respect to land advance given, the net recoverable value is based on the present value
of future cash flows, which depends on the estimate of, among other things, the likelihood
that a project will be completed, the expected date of completion, the discount rate used and
the estimation of sale prices and construction costs.

SO BHA A N N U A L R E P O R T 2021 151

 FINANCIAL STATEMENTS
STANDALONE

152
SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

4. Property, plant and equipment in ₹ million

Particulars Freehold Factory Other Plant and Scaffolding Furniture Vehicles Computers Office Total
land buildings buildings machinery items and fixtures equipment
Cost
As at 1 April 2019 81.90 643.24 1,181.19 1,393.12 1,266.16 40.15 9.95 110.40 22.97 4,749.08
Additions during the year - 16.14 17.99 259.12 312.81 1.06 0.37 14.91 5.44 627.84

S O B HA ANNUAL REPORT 2 02 1
Deletions during the year - - - (3.86) (6.24) - (1.72) (9.32) (0.46) (21.60)
As at 31 March 2020 81.90 659.38 1,199.18 1,648.38 1,572.73 41.21 8.60 115.99 27.95 5,355.32
Additions during the year - 2.23 6.57 58.23 289.36 2.70 1.78 28.21 1.88 390.96
Deletions during the year - - - (4.35) (0.43) (0.02) - (0.16) (0.04) (5.00)
As at 31 March 2021 81.90 661.61 1,205.75 1,702.26 1,861.66 43.89 10.38 144.04 29.79 5,741.28

Accumulated depreciation
As at 1 April 2019 - 284.24 236.16 563.71 723.96 22.38 6.80 67.71 12.66 1,917.62
Charge for the year - 107.01 74.25 205.82 187.39 3.76 0.76 31.55 6.49 617.03
Deletions during the year - - - (3.51) (6.23) - (1.65) (9.25) (0.44) (21.08)
As at 31 March 2020 - 391.25 310.41 766.02 905.12 26.14 5.91 90.01 18.71 2,513.57
Charge for the year - 105.64 59.05 206.26 184.03 3.41 0.59 21.28 4.34 584.60
Deletions during the year - - - (4.02) (0.43) (0.01) - (0.16) (0.04) (4.66)
As at 31 March 2021 - 496.89 369.46 968.26 1,088.72 29.54 6.50 111.13 23.01 3,093.51

Carrying amount
As at 31 March 2021 81.90 164.72 836.29 734.00 772.94 14.35 3.88 32.91 6.78 2,647.77
As at 31 March 2020 81.90 268.13 888.77 882.36 667.61 15.07 2.69 25.98 9.24 2,841.75

Note:
a) Capitalised borrowing costs
The amount of borrowing costs capitalised during the year ended 31 March 2021 was ₹ Nil million (31 March 2020 - ₹ 224.23 million). The rate used to determine the amount of borrowing
costs eligible for capitalisation was 9.45% (31 March 2020 - 9.97%), which is the effective interest rate of the specific borrowing.
b) Property, plant and equipment
Property, plant and equipment with a carrying amount of ₹ 1,420.16 million (31 March 2020 - ₹ 1,046.44 million) are subject to a first charge to secure the Company’s bank loans.
SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

5. Investment property

in ₹ million
Other assets forming part of
Building
Other Plant and Furniture and Total
buildings machinery fixtures
Cost
As at 1 April 2019 - - - -
Additions during the year - - - -
As at 31 March 2020 - - - -
Additions during the year 1,652.99 137.26 - 1,790.25
As at 31 March 2021 1,652.99 137.26 - 1,790.25

Accumulated depreciation
- - - -
As at 1 April 2019
Charge for the year - - - -
As at 31 March 2020 - - - -
Charge for the year 73.82 24.84 - 98.66
As at 31 March 2021 73.82 24.84 - 98.66

Carrying amount
As at 31 March 2021 1,579.17 112.42 - 1,691.59
As at 31 March 2020 - - - -

FINANCIAL STATEMENTS
Investment property with a carrying amount of ₹ 1,691.59 million (31 March 2020 - ₹ 1,623.14 million) are subject to a first
charge to secure the Company’s loans.

STANDALONE
Note:
Information regarding income and expenditure of investment property 31 March 2021 31 March 2020
₹ million ₹ million
Rental income derived from investment properties 121.08 -
Direct operating expenses (including repairs and maintenance) generating rental (29.85) -
income
Profit arising from investment properties before depreciation and indirect 91.23 -
expenses
Less:- Depreciation (98.66) -
Profit arising from investment properties before indirect expenses (7.43) -

The fair value of Investment property is ₹ 3,967 million (31 March 2020 - ₹ NIL million). These valuations are based
on valuations performed by an independent valuer. Fair value hierarchy for investment properties have been provided in
Note 47b.

SO BHA A N N U A L R E P O R T 2021 153

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

6 Investment property under construction

in ₹ million
Investment
property under
construction
Balance as at 1 April 2019 1,900.37
Additions during the year (refer note 46) 422.77
Balance as at 31 March 2020 2,323.14
Additions during the year (refer note 46) 167.68
Capitalised as investment property during the year (refer note 46) (1,790.24)
Balance as at 31 March 2021 700.58

7 Intangible assets
in ₹ million
Software Intellectual Total
property rights
Cost
Balance as at 1 April 2019 15.23 0.05 15.28
Additions during the year 0.10 - 0.10
Balance as at 31 March 2020 15.33 0.05 15.38
Additions during the year - - -
Balance as at 31 March 2021 15.33 0.05 15.38
FINANCIAL STATEMENTS

Amortization and impairment

Balance as at 1 April 2019 14.53 0.05 14.58
Charge for the year 0.42 - 0.42
STANDALONE

Balance as at 31 March 2020 14.95 0.05 15.00

Charge for the year 0.17 - 0.17
Balance as at 31 March 2021 15.12 0.05 15.17

Carrying amount
Balance as at 31 March 2021 0.21 - 0.21
Balance as at 31 March 2020 0.38 - 0.38

154 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

8 Right of use assets

in ₹ million
Other buildings Vehicles Plant and Total
machinery

Cost
Balance as at 1 April 2019 - - - -

Additions during the year - 93.53 90.73 184.26

Balance as at 31 March 2020 - 93.53 90.73 184.26
Additions during the year 143.77 45.56 - 189.33
Deletions during the year - (15.14) - (15.14)
Balance as at 31 March 2021 143.77 123.95 90.73 358.45

Accumulated depreciation
Balance as at 1 April 2019 - - - -
Charge for the year - 33.73 22.34 56.07
Balance as at 31 March 2020 - 33.73 22.34 56.07
Charge for the year 19.04 30.28 22.21 71.53
Deletions during the year (15.14) - (15.14)
Balance as at 31 March 2021 19.04 48.87 44.55 112.46

Carrying amount
Balance as at 31 March 2021 124.73 75.08 46.18 245.99

FINANCIAL STATEMENTS
Balance as at 31 March 2020 - 59.80 68.39 128.19

9 Inventories (valued at lower of cost and net realisable value)

STANDALONE
in ₹ million
As at As at
31 March 2021 31 March 2020
Raw materials and components 545.68 648.56
Building materials 77.55 91.59
Land stock * 12,037.89 10,391.08
Work-in-progress * 43,437.87 40,816.00
Stock in trade - flats * 11,362.75 12,232.21
Finished goods 53.53 55.62
67,515.27 64,235.06

* Carrying amount of inventories pledged as securities against borrowings as at 31 March 2021 - ₹ 34,653.23 million (31 March
2020 -₹ 40,447.03 million)

SO BHA A N N U A L R E P O R T 2021 155

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

10 Investments
in ₹ million
As at As at
31 March 2021 31 March 2020
Non-current investments:
Investments carried at cost
Trade investments (valued at cost unless stated otherwise)
Unquoted equity shares
Investment in subsidiaries
199,999 (31 March 2020 - 199,999) Class A equity shares of ₹10 each fully paid-up in 2.00 2.00
Sobha Highrise Ventures Private Limited
10,200,000 (31 March 2020 - 10,200,000) Class C equity shares of ₹ 33.90 each fully 345.78 345.78
paid-up in Sobha Highrise Ventures Private Limited
2,500,000 (31 March 2020 - 2,500,000) Class D equity shares of ₹ 10 each fully paid- 25.00 25.00
up in Sobha Highrise Ventures Private Limited
526,320 (31 March 2020 - 526,320) equity shares of ₹ 1 each fully paid-up in Sobha 986.41 986.41
Developers (Pune) Limited
50,000 (31 March 2020 - 50,000) equity shares of ₹ 10 each fully paid-up in Sobha 13.74 13.74
Nandambakkam Developers Limited
50,002 (31 March 2020 - 50,002) equity shares of ₹ 10 each fully paid-up in Sobha 2.24 2.24
Tambaram Developers Limited
10,000 (31 March 2020 - 10,000) equity shares of ₹ 10 each fully paid-up in Sobha 0.10 0.10
Assets Private Limited
10,00,000 (31 March 2020 - 10,00,000) equity shares of ₹ 10 each fully paid-up in 10.00 10.00
Sobha Construction Products Private Limited

Unquoted preference instruments (in the nature of equity)

Investment in subsidiary
FINANCIAL STATEMENTS

7,700,000 (31 March 2020 - 7,700,000) compulsorily convertible preference shares of 77.00 77.00
₹ 10 each fully paid-up in Sobha Highrise Ventures Private Limited

Investment in the capital of partnership firm (Subsidiary)

STANDALONE

99% (31 March 2020 - 99%) share in the profits of partnership firm:
Sobha City - Capital account 399.99 399.99
Sobha City - Current account 842.77 541.19
Consideration paid for additional share in capital and profit of the partnership firm 128.00 128.00

Investment in the capital of partnership firm (Joint Venture)

50% (31 March 2020 - 50%) share in the profits of partnership firm:
Kondhwa Projects LLP - Current account 1,142.52 1,142.52
Total investments carried at cost 3,975.55 3,673.97

Investments carried at fair value through profit and loss (FVTPL)

Investments at amortized cost
Government and trust securities (unquoted)
National savings certificates 0.08 0.08
Investments at fair value through profit or loss
Total investments carried at amortised cost 0.08 0.08
Total investments 3,975.63 3,674.05

Aggregate amount of unquoted investments 3,975.63 3,674.05

Aggregate amount of impairment in value of investments - -

156 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

11 Trade receivables
in ₹ million
Current Non-current
As at As at As at As at
31 March 2021 31 March 2020 31 March 2021 31 March 2020
Trade receivables
Unsecured, considered good 1,934.98 3,521.91 423.99 141.02
Unsecured, considered doubtful 638.09 534.40 - -
2,573.07 4,056.31 423.99 141.02
Less: Allowances for credit loss (638.09) (534.40) - -
Net trade receivables 1,934.98 3,521.91 423.99 141.02

12 Other financial assets

in ₹ million
Current Non-current
As at As at As at As at
31 March 2021 31 March 2020 31 March 2021 31 March 2020
Unsecured, considered good
Refundable deposit towards joint development 3,677.32 6,052.36 1,152.66 -
agreement
Less: Allowances for credit loss (73.02) - - -
3,604.30 6,052.36 1,152.66 -

FINANCIAL STATEMENTS
Unsecured, considered good
Security deposits 126.66 129.66 201.14 187.13
Loans to related parties (refer note 35) 303.45 176.68 - -

STANDALONE
Others 1,987.11 2,128.29 - -
Non-current bank balances* - - 60.60 62.15
6,021.52 8,486.99 1,414.40 249.28
* Bank deposits due to mature after twelve months from the reporting date.

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 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

13 Other assets
in ₹ million
Current Non-current
As at As at As at As at
31 March 2021 31 March 2020 31 March 2021 31 March 2020
Unsecured, considered good
Capital advances - - 298.61 281.95
Land advances (refer note 35)* 8,925.49 9,282.31 4,852.69 4,857.45
Advances recoverable in kind (refer note 35)** 418.99 903.75 - -
Prepaid expenses 344.40 224.67 49.47 143.77
Balances with statutory/ government authorities 1,019.31 1,270.61 - -
Contract assets 3,094.56 2,060.71 - -
13,802.75 13,742.05 5,200.77 5,283.17
*Advances for land though unsecured, are considered good as the advances have been given based on arrangements/
memorandum of understanding executed by the Company and the Company/ seller/ intermediary is in the course of
obtaining clear and marketable title, free from all encumbrances, including for certain properties under litigation.
**Advances recoverable in cash or kind due by Directors or other officers or companies in which Directors are interested
in ₹ million
Current Non-current
As at As at As at As at
31 March 2021 31 March 2020 31 March 2021 31 March 2020
Advances recoverable in cash or kind
Dues from Sobha Projects & Trade Private - 13.17 - -
Limited, in which the Company’s director is a
director and a member
Dues from Sobha Assets Private Limited, in which 87.24 84.24 - -
the Company’s director is a director
FINANCIAL STATEMENTS

14 Cash and cash equivalents

in ₹ million
STANDALONE

Non-current
As at As at
31 March 2021 31 March 2020
Cash on hand 8.10 7.91
Cheques/ drafts on hand 147.66 52.66
Balances with banks:
– On current accounts 1,417.12 536.91
1,572.88 597.48

15 Bank balance other than cash and cash equivalents

in ₹ million
Non-current
As at As at
31 March 2021 31 March 2020
Bank balance other than cash and cash equivalents
– On unclaimed dividend account 2.33 2.52
– Margin money deposit 390.28 204.50
392.61 207.02

Margin money deposits given as security

Margin money deposits with a carrying amount of ₹ 450.88 million (31 March 2020 - ₹ 266.65 million) are subject to first charge
to secure the Company’s borrowings.
Short-term deposits are made for varying periods of between seven day and three months, depending on the immediate cash
requirements of the Company, and earn interest at the respective short-term deposit rates.

158 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

16 Equity share capital

in ₹ million
As at As at
31 March 2021 31 March 2020

Authorised shares
150,000,000 (31 March 2020 - 150,000,000) equity shares of ₹10 each 1,500.00 1,500.00
5,000,000 (31 March 2020 - 5,000,000) 7% redeemable preference shares of ₹100 500.00 500.00
each
Issued, subscribed and fully paid-up shares
94,845,853 (31 March 2020 - 94,845,853) equity shares of ₹10 each fully paid up 948.46 948.46

Total issued, subscribed and fully paid-up share capital 948.46 948.46
(a) Reconciliation of the equity shares outstanding at the end of the reporting year
31 March 2021 31 March 2020
No of shares ₹ million No of shares ₹ million

Equity shares
At the beginning of the year 94,845,853 948.46 94,845,853 948.46
Outstanding at the end of the year 94,845,853 948.46 94,845,853 948.46

(b) Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of ₹10 per share fully paid up. Each holder of
equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend

FINANCIAL STATEMENTS
proposed by the Board of Directors is subject to the approval of the shareholders in ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares would be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders.

STANDALONE
(c) Details of equity shareholders holding more than 5% shares in the Company
31 March 2021 31 March 2020
No of shares Holding No of shares in Holding
in million percentage million percentage

Equity shares of ₹10 each fully paid up

Mrs. Sobha Menon 28.73 30.29% 28.73 30.29%
Mr. P.N.C. Menon 11.06 11.66% 12.06 12.72%
Mr. P.N.C. Menon (inclusive of joint holding with Mrs. Sobha 5.29 5.58% 5.29 5.58%
Menon)
Anamudi Real Estates LLP 9.48 10.00% - -
Schroder International Selection Fund Emerging Asia 6.24 6.58% 5.25 5.54%
Franklin India Focused Equity Fund 4.80 5.06% 8.33 8.78%

Note : As per records of the Company, including its register of shareholders/ members and other declaration received from
shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

SO BHA A N N U A L R E P O R T 2021 159

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

17 Other equity
in ₹ million
As at As at
31 March 2021 31 March 2020

Capital redemption reserve

Balance at the beginning and end of the year 119.47 119.47
Closing balance 119.47 119.47

Debenture redemption reserve [Refer note (a) below]

Balance at the beginning of the year - 300.22
Add: Amount transferred from surplus balance in the statement of profit and loss - 49.82
Less: Transfer to general reserve on redemption of debentures - (350.04)
Closing balance - -

Securities premium
Balance at the beginning and end of the year 9,328.92 9,328.92
Closing balance 9,328.92 9,328.92

General reserve
Balance at the beginning of the year 4,170.11 3,530.59
Add: Transfer from statement of profit and loss 65.54 289.48
FINANCIAL STATEMENTS

Add: Transfer from Debenture redemption Reserve - 350.04

Closing balance 4,235.65 4,170.11
STANDALONE

Surplus in the statement of profit and loss

Balance at the beginning of the year 8,305.81 6,546.10
Profit for the year 655.39 2,894.79
Other comprehensive income
Re-measurement gains/ (loss) on defined benefit plans 6.50 4.61

Less: Appropriations
Dividend (including dividend distribution tax) refer note 18 (663.92) (800.39)
Transfer to debenture redemption reserve - (49.82)
Transfer to general reserve (65.54) (289.48)

Net surplus in the statement of profit and loss 8,238.24 8,305.81

Total other equity 21,922.28 21,924.31

160 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Nature and purpose of reserve

(a) Capital redemption reserve
The Company had issued redeemable non-convertible debentures. Accordingly, the Companies (Share capital and
Debentures) Rules, 2014 (as amended), require the Company to create Debenture Redemption Reserve (DRR) out of profits
of the Company available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of
the value of debentures issued. The Company has created the DRR of ₹ Nil million (31 March 2020 - ₹ Nil million), as the
debentures have been redeemed during the previous year.

(b) Debenture redemption reserve

The Company had issued redeemable non-convertible debentures. Accordingly, the Companies (Share capital and
Debentures) Rules, 2014 (as amended), require the Company to create Debenture Redemption Reserve (DRR) out of profits
of the Company available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of
the value of debentures issued. The Company has created the DRR of Nil million (31 March 2020 - million), as the debentures
have been redeemed during the previous year.

(c) Securities premium

Securities premium reserve is used to record the premium received on issue of shares by the Company. The reserve can be
utilised in accordance with the provision of Section 52(2) of Companies Act, 2013.

(d) General reserve

The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the
general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive
income, items included in general reserve will not be reclassified subsequently to profit and loss.

(e) Surplus in the statement of profit and loss

The cumulative gain or loss arising from the operations which is retained by the Company is recognised and accumulated
under the heading of retained earnings. At the end of the year, the profit after tax is transferred from the Standalone
statement of profit and loss to Surplus in the statement of profit and loss account.

18 Distribution made and proposed

FINANCIAL STATEMENTS
31 March 2021 31 March 2020

STANDALONE
Cash dividend on equity shares paid
Final dividend paid during the year ended 31 March 2020- ₹ 7 per share (31 March 663.92 663.92
2019- ₹ 7 per share)
Dividend distribution tax on final dividend - 136.47
663.92 800.39

Proposed dividend on equity shares

Final dividend for the year ended 31 March 2021- ₹3.5 per share (31 March 2020- 331.96 663.92
₹7 per share)
331.96 663.92

SO BHA A N N U A L R E P O R T 2021 161

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

19 Borrowings
in ₹ million
As at As at
31 March 2021 31 March 2020
Non-current borrowings
Secured loans
Term loans from banks 3,187.76 1,675.06
Term loans from financial institutions - -
Finance lease obligations 67.97 60.64
Equipment loans - 0.19
3,255.73 1,735.89

Amount disclosed under the head “other current financial liabilities” (refer (420.00) (99.87)
note 20)
Total non-current borrowings 2,835.73 1,636.02
Current borrowings
Secured loans
Term loans from banks* 15,992.65 16,927.23
Term loans from financial institutions* 6,270.66 8,209.48
Finance lease obligations 61.98 73.56
Cash credit from banks 3,840.71 3,208.34
Total current borrowings 26,166.00 28,418.61
FINANCIAL STATEMENTS

* Term loan from banks and financial institutions represents amount repayable within the operating cycle amounting to
₹ 26,104.02 million (31 March 2020 - ₹ 28,345.05 million)
As at 31 March 2021, the Company is not in breach of any covenants as defined in the loan agreements.
STANDALONE

Terms and repayment schedule

Non-current borrowings
Secured loans

in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest
31 March 31 March rate
2021 2020
Term loans - 49.87 9%-11% Secured by equitable mortgage of Twelve quarterly instalments of
from banks fixed assets and receivables of the ₹25 million commencing at end of
Company. 15th month from the date of first
disbursement.
Term loans 1,576.82 1,625.19 7%-9% Secured by equitable mortgage 153 Structured Monthly
from banks of project specific inventory and instalments, starting at the end
certain receivables of the Company of Moratorium 3 months from the
and maintaining Debt Service date of disbursement - June -2020
Reserve account equal to 2 months
interest & principal.
Term loans 518.94 - 8%-10% Secured by equitable mortgage of Repayable in 16 equal quarterly
from banks fixed assets of the Company. instalments of ₹ 37.50 million
afrom the date of disbursement.

162 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Term loans 1,092.00 - 9%-11% Secured by equitable mortgage of Repayable in 20 equal quarterly
from banks certain land of the company instalments starting from
7th Month from the date of
disburement after 6 month
moratorium period
Equipment loan - 0.19 13%-15% Hypothecation against specific Thirty five monthly instalments
equipment. commencing from the month the
loan is availed.

Current borrowings
Secured loans
in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest
31 March 31 March
rate
2021 2020
Term loans - 599.88 9%-11% Secured by equitable mortgage of Three structured quarterly
from banks 61.10% of the project land stock, instalments commencing after
building to be constructed on initial moratorium period of eleven
the land stock and first charge quarters from the date of first
on project cash flow/receivables disbursement.
including escrow account
Term loans - 149.90 9%-11% Secured by equitable mortgage of Repayable in 36 equal monthly
from banks land stock and hypothecation pari- instalments commencing from
passu charge on the entire escrow 13th month from the date of
receivables of the project. disbursement.
Term loans 697.79 694.85 7%-9% Secured by charge on specific Repayable on demand( Sub limit
from banks project inventory, current assets of Cash Credit)
and receivables of the Company.
Term loans 86.92 166.25 9%-11% Secured by equitable mortgage of Repayable in 12 quarterly

FINANCIAL STATEMENTS
from banks certain land stock of the Company. instalments commencing from 30
June 2018.
Term loans - 1,000.00 9%-11% Secured by equitable mortgage of One instalment in every ninety
from banks receivables of the Group. days.

STANDALONE
Term loans 260.72 415.72 9%-11% Secured by equitable mortgage of Repayable in 12 quarterly
from banks certain land stock of the Company. instalments commencing from 30
September 2018.
Term loans 681.70 1,591.00 8%-10% Secured by equitable mortgage Repayable in equal monthly
from banks of immovable properties, building instalments after 30 months
and other assets of the project and moratorium period commencing
first charge on company’s share of from first disbursement.
receivables of the projects.
Term loans 1,985.76 1,493.15 8%-10% Secured by equitable mortgage Repayable on demand (Sub limit
from banks of certain land stock , project of Cash Credit)
specific inventory and receivables
of the Company and hypothecation
of movable fixed assets of the
Company.
Term loans 48.09 232.07 8%-10% Secured by equitable mortgage of Repayable in equal monthly
from banks certain land stock of the Company. instalments after 12 months
moratorium period commencing
from first disbursement.
Term loans 1,122.16 1,639.23 9%-11% Secured by equitable mortgage Repayable in equal quarterly
from banks of immovable properties, building instalments after 9 quarter
and other assets of the project and moratorium period commencing
first charge on company’s share of from first disbursement.
receivables of the projects.

SO BHA A N N U A L R E P O R T 2021 163

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Current borrowings
Secured loans (continued)
in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest
31 March 31 March
rate
2021 2020
Term loans 1,044.25 1,148.70 8%-10% Secured by equitable mortgage of Repayable in 12 quarterly
from banks certain land stock of the Company. instalments commencing from 30
September 2018.
Term loans 923.37 648.03 7%-9% Secured by equitable mortgage Repayable in 5 quarterly equal
from banks of immovable properties, building instalments commencing Q-12 to
and other assets of the project and Q-16 from first disbursement.
first charge on receivables of the
projects.
Term loans 3,033.19 2,492.82 7%-9% Secured by equitable mortgage Repayable in 10 quarterly equal
from banks of immovable properties, building instalments commencing Q-14 to
and other assets of the project and Q-23 from first disbursement.
first charge on receivables of the
projects.
Term loans - 590.50 8%-10% Secured by equitable mortgage Repayable in 10 quarterly unequal
from banks of immovable properties, building instalments commencing Q-11 to
and other assets of the project and Q-20 from first disbursement.
first charge on company’s share of
receivables of the projects.
Term loans 136.66 350.77 8%-10% Secured by equitable mortgage Repayable in 10 quarterly equal
from banks of immovable properties, building instalments commencing Q-12 to
and other assets of the project and Q-16 from first disbursement.
first charge on company’s share of
receivables of the projects.
FINANCIAL STATEMENTS

Term loans 347.87 434.47 8%-10% Secured by equitable mortgage Repayable in 10 quarterly unequal
from banks of immovable properties, building instalments commencing Q-8 to
and other assets of the project and Q-26 from first disbursement.
first charge on company’s share of
receivables of the projects.
STANDALONE

Term loans 1,042.19 721.29 7%-9% Secured by equitable mortgage Repayable in 10 quarterly equal
from banks of immovable properties, building instalments commencing Q-15 to
and other assets of the project and Q-24 from first disbursement.
first charge on company’s share of
receivables of the projects.
Term loans 510.00 960.00 8%-10% Secured by equitable mortgage of Repayable on demand( Sub limit
from banks certain land stock and receivables of Cash Credit)
of the Company.
Term loans 300.00 300.00 8%-10% Secured by equitable mortgage of Repayable on demand( Sub limit
from banks certain land stock and receivables of Cash Credit)
of the Company.
Term loans 574.27 487.84 8%-10% Secured by equitable mortgage Repayable in 10 quarterly equal
from banks of immovable properties, building instalments commencing Q-11 to
and other assets of the project and Q-20 from first disbursement.
first charge on receivables of the
projects.
Term loans 1,001.64 660.78 8%-10% Secured by equitable mortgage Repayable in 24 monthly
from banks of property, hypothecation on instalments commencing from 15
scheduled company’s share of June 2022.
receivables, Escrow account
and maintaining of Debt Service
Reserve account equal to three
months interest.

164 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Current borrowings
Secured loans (continued)
in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest
31 March 31 March
rate
2021 2020
Term loans 148.81 150.00 8%-10% Secured by equitable mortgage Repayable in 24 monthly
from banks of property, hypothecation on instalments commencing from 15
scheduled company’s share of June 2022.
receivables, Escrow account
and maintaining of Debt Service
Reserve account equal to three
months interest.
Term loans 500.00 - 8%-10% Secured by equitable mortgage of Repayable Rs.50Cr on 30.04.2021
from banks certain land and receivables of the
Company.
Term loans 16.67 - 7%-9% Secured by equitable mortgage Repayable in 6 Monthly instalments
from banks of certain land, specific project starting from 7th Month from the
inventory, and receivables of the date of disburement after 6 month
Company. moratorium period
Term loans 83.33 - 9%-11% Secured by equitable mortgage of Repayable in 18 Monthly
from banks certain land and receivables of the instalments starting from
Company. 7th Month from the date of
disburement after 6 month
moratorium period
Term loans 476.63 - 9%-11% Secured by equitable mortgage Repayable in 30 quarterly
from banks of certain land, specific project instalments starting from
inventory, and receivables of the 31st quarter from the date of

FINANCIAL STATEMENTS
Company. disburement after 30 month
moratorium period
Term loans 193.62 - 8%-10% Secured by equitable mortgage Repayable in 16 quarterly
from banks of certain land, specific project instalments starting from

STANDALONE
inventory, and receivables of the 31st quarter from the date of
Company. disburement after 30 month
moratorium period
Term loans 187.06 - 8%-10% Secured by equitable mortgage of Repayable in 8 quarterly
from banks certain land and receivables of the instalments starting from
Company. 13th Month from the date of
disburement after 12 month
moratorium period
Term loans 442.04 - 8%-10% Secured by equitable mortgage Repayable in 24 Monthly
from banks of immovable properties, building instalments starting from
and other assets of the project and 31st Month from the date of
first charge on company’s share of disburement after 30 month
receivables of the projects. moratorium period
Term loans 147.91 - 8%-10% Secured by equitable mortgage Repayable in 30 Monthly
from banks of immovable properties, building instalments starting from
and other assets of the project and 31st Month from the date of
first charge on company’s share of disburement after 30 month
receivables of the projects. moratorium period
Term loans - 61.77 9%-11% Secured by equitable mortgage of Repayable in equal monthly
from financial land stock and hypothecation pari- instalments staring from 12th
institutions passu charge on the entire escrow month moratorium starts from
receivables of the project. date of first disbursement.

SO BHA A N N U A L R E P O R T 2021 165

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Current borrowings
Secured loans (continued)
in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest
31 March 31 March
rate
2021 2020
Term loans 142.22 362.96 9%-11% Secured by equitable mortgage Repayable in 30 monthly
from financial of certain land stock , building and instalments after principle
institutions project specific inventory of the moratorium period of 18 months.
Company, leasehold rights of the
company and hypothecation of
receivables and Escrow account of
the Company. Corporate guarantee
of Group Company.
Term loans - 250.91 9%-11% Secured by equitable mortgage of Repayable in 36 monthly
from financial certain land stock and immovable instalments after principle
institutions properties, building and other moratorium period of 18 months
assets of the project and first from first disbursement.
charge on company’s share of
receivables of the projects.
Term loans 124.68 807.21 9%-11% Secured by equitable mortgage of Repayable in 36 monthly
from financial certain land stock and immovable instalments after principle
institutions properties, building and other moratorium period of 18 months
assets of the project and first from first disbursement.
charge on receivables of the
projects.
Term loans 530.02 506.32 9%-11% Secured by equitable mortgage of Repayable in 18 monthly
from financial certain land stock and first charge instalments after principle
institutions on receivables certain projects. moratorium period of 24 months
FINANCIAL STATEMENTS

from first disbursement.

Term loans 746.89 712.30 9%-11% Secured by equitable mortgage of Repayable in 18 monthly
from financial certain land stock and first charge instalments after principle
institutions on receivables certain projects. moratorium period of 24 months
from first disbursement.
STANDALONE

Term loans 1,410.46 1,458.20 10%-12% Secured by equitable mortgage Repayable in 24 monthly
from financial of immovable properties, building instalments after principle
institutions and other assets of the project moratorium period of 30 months
and first charge on receivables of from first disbursement.
company’s share of receivables of
the projects.
Term loans - 461.22 9%-11% Secured by equitable mortgage of Repayable in 24 monthly
from financial certain land stock and immovable instalments 3.75cr each & 30
institutions properties, building and other monthly instalments 2.67cr
assets of the project and first each after principle moratorium
charge on receivables company’s period of 30 months from first
share of receivables of the projects. disbursement.
Term loans 889.03 903.05 10%-12% Secured by equitable mortgage of Repayable in 18 monthly
from financial certain land stock and first charge instalments after principle
institutions on receivables certain projects. moratorium period of 24 months
from first disbursement.
Term loans 816.61 972.69 9%-11% Secured by equitable mortgage of Repayable in equal monthly
from financial certain land stock and first charge instalments starting from7 the
institutions on receivables certain projects. month from first disbursement.
Term loans 278.51 292.94 9%-11% Secured by equitable mortgage of Repayable in 48 unequal monthly
from financial land stock and hypothecation pari- instalments
institutions passu charge on the entire escrow
receivables of the project.

166 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Current borrowings
Secured loans (continued)
in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest
31 March 31 March
rate
2021 2020
Term loans 447.08 494.20 9%-11% Secured by equitable mortgage of Repayable in 11 quarterly
from financial certain land stock and first charge instalments after principle
institutions on receivables certain projects. moratorium period of 3 months
from first disbursement.
Term loans 885.16 925.69 9%-11% Secured by equitable mortgage of Repayable in 24 Monthly
from financial certain land stock and first charge instalments after principle
institutions on receivables certain projects. moratorium period of 24 months
from first disbursement.
Cash credit 1,949.44 993.40 9%-11% Secured by way of equitable Repayable on demand
mortgage of certain land stock and
certain receivables of the Group
Company.
Cash credit 175.72 41.33 7%-9% Secured by equitable mortgage of Repayable on demand
certain land stock , specific project
inventory, and receivables of the
Company.
Cash credit 9.41 29.36 7%-9% Secured by equitable mortgage of Repayable on demand
certain land stock , specific project
inventory, and receivables of the
Company.
Cash credit - 2.91 7%-9% Secured by equitable mortgage of Repayable on demand
certain land stock , specific project
inventory, and receivables of the
Company.

FINANCIAL STATEMENTS
Cash credit 1.63 300.78 10%-12% Secured by equitable mortgage of Repayable on demand
certain land stock and receivables
of the Company.
Cash credit 197.42 508.51 8%-10% Secured by equitable mortgage of Repayable on demand
certain land stock and receivables

STANDALONE
of the Company.
Cash credit 7.71 3.00 8%-10% Secured by equitable mortgage Repayable on demand
of certain land stock , project
specific inventory and receivables
of the Company and hypothecation
of movable fixed assets of the
Company.
Cash credit - 104.27 9%-11% Secured by equitable mortgage Repayable in 10 quarterly unequal
of immovable properties, building instalments commencing Q-11 to
and other assets of the project and Q-20 from first disbursement.
first charge on company’s share of
receivables of the projects.
Cash credit 181.22 192.66 8%-10% Secured by equitable mortgage of Repayable on demand
certain land stock and receivables
of the Company.
Cash credit 538.82 659.86 9%-11% Secured by equitable mortgage of Repayable on demand
certain land stock and receivables
of the Company.
Cash credit 102.67 53.09 8%-10% Secured by equitable mortgage Repayable in 24 monthly
of property, hypothecation on instalments commencing from 15
scheduled company’s share of June 2022.
receivables, Escrow account
and maintaining of Debt Service
Reserve account equal to three
months interest.

SO BHA A N N U A L R E P O R T 2021 167

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Current borrowings
Secured loans (continued)
in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest
31 March 31 March
rate
2021 2020
Cash credit - 0.02 7%-9% Secured by equitable mortgage of Repayable on demand
certain land stock , specific project
inventory, and receivables of the
Company.

Cash credit 8.64 0.26 8%-10% Secured by equitable mortgage Repayable on demand
of certain land stock , project
specific inventory and receivables
of the Company and hypothecation
of movable fixed assets of the
Company. Corporate guarantee of
Group Company.

Cash credit 0.84 1.77 8%-10% Secured by equitable mortgage Repayable on demand
of certain land stock , project
specific inventory and receivables
of the Company and hypothecation
of movable fixed assets of the
Company. Corporate guarantee of
Group Company.

Cash credit - 305.96 8%-10% Secured by equitable mortgage Repayable on demand

of certain land stock , project
specific inventory and receivables
of the Company and hypothecation
of movable fixed assets of the
FINANCIAL STATEMENTS

Company. Corporate guarantee of

Group Company.

Cash credit - 2.57 8%-10% Secured by equitable mortgage Repayable on demand

of certain land stock , project
STANDALONE

specific inventory and receivables

of the Company and hypothecation
of movable fixed assets of the
Company. Corporate guarantee of
Group Company.

Cash credit 21.25 8.59 8%-10% Secured by equitable mortgage Repayable on demand
of certain land stock , project
specific inventory and receivables
of the Company and hypothecation
of movable fixed assets of the
Company. Corporate guarantee of
Group Company.

Cash credit 645.94 - 8%-10% Secured by equitable mortgage of Repayable on demand

certain land and receivables of the
Company.
Total
29,291.78 30,020.30
borrowings

168 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Details of collateral securities offered by related companies in respect of loans availed by the Company

Carrying amount as at
Nature of loan Year of maturity Name of the Company
31 March 2021 31 March 2020
Term loans Sri Durga Devi Property Management Private Limited
1,279.21 1,224.00 2022
Term loans Sri Parvathy Land Developers Private Limited
Term loans 4,189.16 4,290.00 On Demand Kilai Builders Private Limited
Term loans 1,100.00 - 2026 Sobha Interior Private Limited

20 Other financial liabilities

in ₹ million
As at As at
31 March 2021 31 March 2020
Current
Current maturities of long-term borrowings (refer note 19) 420.00 99.87
Letter of credit payable 2,459.77 1,776.84
Book overdraft from scheduled banks 240.39 4.01
Interest accrued but not due on borrowings 30.85 63.35
Unclaimed dividend* 2.33 2.52
Lease deposit 64.15 -
Deferred Lease Rental 7.82 -
Non-trade payable 207.18 302.73

FINANCIAL STATEMENTS
Security deposit towards lease and maintenance services 2,034.35 1,882.94
Payable to related parties (refer note 35) 156.41 143.30
Payable for purchase of property, plant and equipment 20.84 11.52

STANDALONE
Revenue share payable - -
Total other financial liabilities 5,644.09 4,287.08

*Investor Protection and Education Fund is credited for unclaimed dividends when due.

21 Provisions
in ₹ million
Current Non-current
As at As at As at As at
31 March 2021 31 March 2020 31 March 2021 31 March 2020
Provision for employee benefits
Provision for gratuity (refer note 37) 66.50 68.64 151.46 144.67
Provision for compensated absence 72.00 82.75 - -
138.50 151.39 151.46 144.67

SO BHA A N N U A L R E P O R T 2021 169

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

22 Income taxes
The major components of income tax expense for the years ended 31 March 2021 and 31 March 2020 are:

A. Amounts charged to statement of profit and loss

in ₹ million
Particulars As at As at
31 March 2021 31 March 2020
Current income tax:
Current income tax charge 98.78 444.49
Adjustments in respect of current income tax of previous year - -

Deferred tax:
Relating to origination and reversal of temporary differences (7.53) 1,071.50

Income tax expense reported in the statement of profit and loss 91.25 1,515.99

B. Income tax recognised in other comprehensive income

in ₹ million
31 March 2021 31 March 2020
Net loss/(gain) on remeasurements of defined benefit plans - -
Income tax charge to other comprehensive income - -
FINANCIAL STATEMENTS

C. Reconciliation of effective tax rate

in ₹ million
Particulars As at As at
31 March 2021 31 March 2020
STANDALONE

Accounting profit before income tax 746.64 4,410.78

Tax on accounting profit at statutory income tax rate 25.17% (31 March 2020: 187.93 1,110.19
25.17%)*
Adjustments in respect of current income tax of previous years - -
Non-deductible expenses for tax purposes:
Permanent disallowances (147.53) 60.11
Others 16.01 42.50
Non taxable income for tax purposes:
Tax impact on profit/ (loss) from partnership firm 34.84 4.24
Other:
Effect of increase in surcharge - -
MAT credit reversal/(entitlement) - 298.95
At the effective income tax rate of 12.22% (31 March 2020: 34.37%) 91.25 1,515.99
Tax expense reported in the statement of profit and loss 91.25 1,515.99

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SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

D. Deferred tax

Deferred tax assets and liabilities relates to the following

in ₹ million
Balance Movement Balance as at Movement Balance as at
as at during 31 March during 31 March
1 April 2019 2019-20 2020 2020-21 2021
Interest u/s 36(1)(iii)-interest inventorised/capitalised (3,457.09) 967.46 (2,489.63) (139.97) (2,629.60)
in the books but claimed as expense in tax
Property, plant and equipment 147.28 (10.22) 137.06 (0.19) 136.87
Provision for compensated absence 26.90 (6.07) 20.83 (2.71) 18.12
Provision for gratuity 67.86 (14.17) 53.69 1.17 54.86
Provision for doubtful debts 47.24 (10.36) 36.88 64.28 101.16
Difference of finance lease depreciation and interest - 1.51 1.51 0.57 2.08
as per books and rent allowed as per IT Act
Deferred tax adjustment on adoption of Ind AS 115 4,188.66 (2,213.02) 1,975.64 82.20 2,057.84
Deferred tax adjustment for periods Ind AS (50.66) 50.66 - - -
adjustments*
Deferred tax expense / (income) - (1,234.21) - 5.35 -
Net deferred tax assets / (liabilities) 970.19 - (264.02) - (258.67)
(*) adjusted against current tax liability

Reconciliation of deferred tax assets/(liabilities), net:

in ₹ million

FINANCIAL STATEMENTS
As at As at
31 March 2021 31 March 2020
Balance at the beginning of the year (264.02) 970.19
Tax income/(expense) during the period recognised (7.53) 1,071.50

STANDALONE
in profit or loss
Deferred tax adjustment on adoption of Ind AS 115 12.88 (2,305.71)
Tax income/(expense) during the period recognised in OCI - -
Closing balance (258.67) (264.02)

E. Liabilities for current tax (net)

in ₹ million
Particulars As at As at
31 March 2021 31 March 2020
Current income tax:
Opening 269.03 555.02
Add: Additions during the year 98.78 444.49
Less: MAT credit adjustment - -
Less: Payments during the year (280.73) (730.48)
87.08 269.03

SO BHA A N N U A L R E P O R T 2021 171

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

23 Trade payables
in ₹ million
As at As at
31 March 2021 31 March 2020
Trade payables
Land cost payable 200.00 200.00
Others* 7,139.81 9,396.51
7,339.81 9,596.51

Terms and conditions of the above financial liabilities:

Trade payables are non-interest bearing and are normally settled on 30 to 60 day terms. For explanations on the
Company’s credit risk management processes, refer to note 48.

24 Other liabilities
in ₹ million
As at As at
31 March 2021 31 March 2020

Advance from customers 41,868.07 37,653.26

Withholding taxes payable 75.04 52.91
Others 105.75 85.22

42,048.86 37,791.39
FINANCIAL STATEMENTS

Breakup of financial liabilities carried at amortised cost

in ₹ million
STANDALONE

As at As at
31 March 2021 31 March 2020

Borrowings (refer note 19) 29,001.73 30,054.63

Other financial liabilities (refer note 20) 5,644.09 4,287.08
Trade payables (refer note 23) 7,339.81 9,596.51
Total financial liabilities carried at amortised cost 41,985.63 43,938.22

172 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

25 Revenue from operations

in ₹ million
For the year For the year
ended ended
31 March 2021 31 March 2020
Sale of products/ finished goods
Income from property development 12,285.06 21,762.11

Income from sale of land and development rights 249.18 508.43

Income from glazing works 1,452.35 2,193.53
Income from interior works 805.76 1,870.97
Income from concrete blocks 410.59 485.71
Sale of services
Income from contractual activity - Subsidiaries 287.54 514.94
Income from contractual activity - Others 5,324.63 10,181.49
Rental income from operating leases 121.08 3.95
Other operating revenue
Scrap sales 30.77 37.27
20,966.96 37,558.40

26 Other income
in ₹ million
For the year For the year
ended ended

FINANCIAL STATEMENTS
31 March 2021 31 March 2020

Other non-operating income (net of expenses directly attributable to such 352.65 276.51
income)

STANDALONE
Share in profits/ (loss) of partnership firm investments (post tax) 138.43 16.84
Gain on foreign exchange difference (net) 0.05 2.01
Profit on sale of property, plant and equipment (net) 1.69 4.41
492.82 299.77

27 Finance income
in ₹ million
For the year For the year
ended ended
31 March 2021 31 March 2020
Interest income on
Bank deposits 132.26 108.46
Unwinding of discount on deposits 319.47 338.24
451.73 446.70

SO BHA A N N U A L R E P O R T 2021 173

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

28 Cost of raw material and components consumed

in ₹ million
For the year For the year
ended ended
31 March 2021 31 March 2020
Raw material at the beginning of the year 648.56 584.03
Add: Purchases during the year 1,759.08 3,066.06
Less: Raw Material at the end of the year 545.68 648.56
Cost of raw material and components consumed 1,861.96 3,001.53

29 Changes in Inventories of Raw Materials, Land stock, Work in Progress, Stock in

Trade and Finished Goods
in ₹ million
For the year For the year
ended ended
31 March 2021 31 March 2020
Inventories at the end of the year
Building materials 77.55 91.59
Land stock 12,037.89 10,391.08
Work-in-progress 43,437.87 40,816.00
FINANCIAL STATEMENTS

Stock in trade - flats 11,362.75 12,232.21

Finished goods 53.53 55.62
66,969.59 63,586.50
STANDALONE

Inventories at the beginning of the year

Building materials 91.59 78.35
Land stock 10,391.08 8,346.47
Work-in-progress 40,816.00 50,084.02
Stock in trade - flats 12,232.21 3,604.71
Finished goods 55.62 46.16
63,586.50 62,159.71

Less: Transferred to other assets for development charges recoverable at cost - 1,737.30
from customers
63,586.50 60,422.41

(Increase)/ decrease (3,383.09) (3,164.09)

174 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

30 Employee benefits expense

in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020
Salaries, wages and bonus 1,612.64 2,250.42
Contribution to provident and other funds 63.54 79.35
Gratuity expenses (refer note 37) 36.35 36.72
Compensated absence 9.59 34.02
Staff welfare expenses 49.15 63.68
1,771.27 2,464.19

31 Depreciation and amortization expense

in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020

Depreciation of property, plant and equipment 656.13 673.10

Amortization of intangible assets 0.17 0.42
Depreciation of investment properties 98.66 -
754.96 673.52

32 Other expenses
in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020

FINANCIAL STATEMENTS
License fees and plan approval charges 177.72 57.23
Power and fuel 374.11 536.51
Water charges 33.80 44.54

STANDALONE
Freight and forwarding charges 159.88 245.90
Rent (refer note 35) 194.69 259.58
Rates and taxes 88.93 148.24
Insurance 91.22 80.13
Property maintenance expenses 162.72 98.26
Repairs and maintenance
Plant and machinery 30.21 44.84
Others 60.61 56.15
Advertising and sales promotion 422.38 540.09
Brokerage and discounts 129.08 141.03
Donation 91.20 185.10
Travelling and conveyance 178.61 235.11
Printing and stationery 29.18 44.31
Legal and professional fees 190.23 245.09
Directors’ commission and sitting fees (refer note 35) 7.29 6.85
Payment to auditor (Refer details below)* 10.88 10.36
Allowance for credit loss 191.70 239.33
Security charges 180.45 196.60
Miscellaneous expenses 343.95 385.01
3,148.84 3,800.26

SO BHA A N N U A L R E P O R T 2021 175

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

*Payment to auditor
in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020
As auditor:
Audit fees [including fees for limited review ₹ 4.20 million (31 March 2020 10.00 9.00
- ₹ 4.20 million)]
In other capacity:
Reimbursement of expenses 0.88 1.36
10.88 10.36

33 Details of CSR expenditure:

Gross amount required to be spent during the year was ₹77.03 million (31 March 2020 ₹ 62.62 million)

Amount spent during the year ended 31 March 2021: In Cash Yet to be paid in cash
Construction/acquisition of any asset (in ₹ million) - -
On purposes other than above (in ₹ million) 90.70 -
90.70 -

Amount spent during the year ended 31 March 2020:

Construction/acquisition of any asset (in ₹ million) - -
On purposes other than above (in ₹ million) 149.60 -
FINANCIAL STATEMENTS

149.60 -

34 Finance costs
in ₹ million
STANDALONE

For the year ended For the year ended

31 March 2021 31 March 2020
Interest
- On borrowings 2,696.01 2,602.42
- Others 2,892.26 4,134.82
Other borrowing cost and bank charges 171.31 219.28
5,759.58 6,956.52
Less: Interest inventorised on qualifying assets - (224.24)
Total finance costs 5,759.58 6,732.28

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SOBHA LIMITED
Notes to the standalone financial statements for the year ended 31 March 2021

35 Related party disclosures

a) Name of the related parties and the nature of its relationship with the Company’s as below

Subsidiaries
Direct Subsidiaries
Sobha City
Sobha Highrise Ventures Private Limited
Sobha Developers (Pune) Limited
Sobha Assets Private Limited
Sobha Tambaram Developers Limited
Sobha Nandambakkam Developers Limited
Sobha Construction Products Private Limited

Subsidiaries of Sobha City

Vayaloor Properties Private Limited
Vayaloor Builders Private Limited
Vayaloor Developers Private Limited
Vayaloor Real Estate Private Limited
Vayaloor Realtors Private Limited
Valasai Vettikadu Realtors Private Limited

FINANCIAL STATEMENTS
Subsidiaries of Sobha Highrise Ventures Private Limited
Sobha Contracting Private Limited
Annalakshmi Land Developers Pvt Ltd (with effect from 19.01.2021)

STANDALONE
Subsidiaries of Sobha Developers (Pune) Limited
Kilai Builders Private Limited
Kuthavakkam Builders Private Limited
Kuthavakkam Realtors Private Limited
Sobha Interiors Private Limited

Joint Venture
Kondhwa Projects LLP

Key Shareholder
Mr. P. N. C. Menon
Mrs. Sobha Menon

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 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Key Management Personnel (‘KMP’)

Mr. Ravi PNC Menon - Chairman
Mr. J. C. Sharma - Vice Chairman and Managing Director
Mr. T P Seetharam - Whole-time Director
Mr. Jagadish Nangineni - Deputy Managing Director (till 25 February 2021)

Additional related parties (‘KMP’s) as per Companies Act, 2013 with whom transactions have taken place
Mr. Subhash Bhat - Chief Financial Officer
Mr. Vighneshwar G Bhat - Company Secretary

Other Directors
Mr. Anup Shah
Mr. R V S Rao
Mrs. Srivathsala KN
Mr. Sumeet Jagdish Puri

Relatives of key management personnel

Mrs. Sudha Menon

Other related parties [Enterprise owned or significantly influenced by key management personnel]
C.V.S.Tech Park Private Limited
CVS TechZone LLP
FINANCIAL STATEMENTS

Divyakaushal Properties LLP

Mannur Properties Private Limited
Mannur Real Estate Private Limited
STANDALONE

Punkunnam Builders and Developers Private Limited

Puzhakkal Developers Private Limited
SBG Housing Private Limited
Sobha Aviation and Engineering Services Private Limited
Sobha Contracting LLC, Dubai
Sobha Glazing & Metal Works Private Limited
Sobha Projects & Trade Private Limited
Sobha Puravankara Aviation Private Limited
Sobha Renaissance Information Technology Private Limited
Sobha Space Private Limited
Sobha Technocity Private Limited
Sri Durga Devi Property Management Private Limited
Sri Kanakadurga Property Developers Private Limited
Sri Kurumba Educational and Charitable Trust
Sri Parvathy Land Developers Private Limited
Technobuild Developers Private Limited

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SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

b) Details of the transactions with the related parties:

in ₹ million
Particulars For the year For the year
ended 31.03.2021 ended 31.03.2020
I. Transaction with wholly owned subsidiaries

Income from contractual activity

Sobha City 108.56 260.40
Sobha Developers (Pune) Limited - 26.32
Sobha Highrise Ventures Private Limited 6.63 5.31

Income from other services

Sobha Highrise Ventures Private Limited 7.94 7.51

Purchase of project items

Sobha Highrise Ventures Private Limited 1.34 -

Share in profit/ (loss) of partnership firm

Sobha City 138.43 16.84

Interest income on unsecured loans to related parties

Sobha Highrise Ventures Private Limited 8.39 1.21
Sobha Developers (Pune) Limited 0.56 -

FINANCIAL STATEMENTS
Amount contributed to partnership current account
Sobha City 301.58 -

STANDALONE
Amount withdrawn from partnership current account
Sobha City - 513.21

Payments made on behalf of related party

Sobha Assets Private Limited 3.00 1.40
Sobha Construction Products Privated Limited - 0.22

Unsecured loans
Sobha Highrise Ventures Private Limited 89.90 61.09
Sobha Developers (Pune) Limited 13.91 -

II. Transaction with Joint venture

Amount contributed to partnership current account

Kondhwa Projects LLP - 14.36

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 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

in ₹ million
Particulars For the year For the year
ended 31.03.2021 ended 31.03.2020

III. Transaction with other related parties

Income from contractual activity
Sobha Projects & Trade Private Limited 42.00 623.42
Kilai Builders Private Limited 25.87 -
Sobha Contracting Private Limited 56.13 81.88
Mr. Ravi PNC Menon 19.58 -

Income from glazing works

Sri Kurumba Educational and Charitable Trust - 0.37
Mr. Ravi PNC Menon 18.04 -

Income from interior works

Sri Kurumba Educational and Charitable Trust - 0.45
Mr. Anup Shah 4.56 -
Mr. Ravi PNC Menon 15.20 -

Interest income on unsecured loans to related parties

Sobha Contracting Private Limited 12.03 6.22

Investment in partnership firm

CVS TechZone LLP 3.59 -
FINANCIAL STATEMENTS

Sale of interest in partnership firm

CVS TechZone LLP 144.25 -
STANDALONE

Purchase of project items

Sobha Projects & Trade Private Limited 179.78 746.08

Aircraft hire charges

Sobha Puravankara Aviation Private Limited 61.38 60.20

CSR expenditure - Donation

Sri Kurumba Educational and Charitable Trust 91.20 149.60

Unsecured loans
Sobha Contracting Private Limited 22.96 115.59

Land advance
Technobuild Developers Private Limited 41.36 85.11

Advance paid towards purchase of goods or services

Sobha Projects & Trade Private Limited - 731.59
Sobha Puravankara Aviation Private Limited - -

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SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

in ₹ million
Particulars For the year For the year
ended 31.03.2021 ended 31.03.2020

Puzhakkal Developers Private Limited 0.03 73.52

Sri Parvathy Land Developers Private Limited - 3.24
Sri Durga Devi Property Management Private Limited 0.13 -

Refund of advance by the related party

Technobuild Developers Private Limited 14.71 749.36
Sobha Projects & Trade Private Limited 13.17 -
Puzhakkal Developers Private Limited - 171.72

Rent paid
Sobha Interiors Private Limited 14.05 14.05
Sobha Glazing & Metal Works Private Limited 5.06 5.52

Directors’ remuneration
Mr. J. C. Sharma 19.92 70.21
Mr. Ravi PNC Menon 51.15 121.40
Mr.T P Seetharam 6.71 7.56
Mr. Jagadish Nangineni (till 25 February 2021) 6.46 10.06

Dividend paid (payment basis)

FINANCIAL STATEMENTS
Mr. Ravi PNC Menon 21.74 20.75
Mr. J. C. Sharma 0.75 0.16

Salary (including perquisites)

STANDALONE
Mr. Subhash Bhat 10.35 11.34
Mr. Vighneshwar G Bhat 3.45 3.94

Directors’ sitting fees and commission

Mr. Anup Shah 1.79 1.89
Mr. R V S Rao 1.83 1.85
Dr. Punita Kumar Sinha - 0.91
Mr. Sumeet Jagdish Puri 1.89 1.33
Mrs. Srivathsala KN 1.78 0.87

IV. Transaction with key shareholders

Dividend paid (payment basis)

Mr. P. N. C. Menon 84.43 84.43
Mrs. Sobha Menon 201.08 201.08
Mr. P. N. C. Menon and Mrs. Sobha Menon (jointly held shares) 37.02 37.02

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 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

c) Details of balances receivable from and payable to related parties are as follows:
in ₹ million
Particulars As at 31.03.2021 As at 31.03.2020

I. Balances receivable from and payable to wholly owned subsidiaries

Investment in unquoted equity shares

Sobha Highrise Ventures Private Limited 372.78 372.78
Sobha Developers (Pune) Limited 986.41 986.41
Sobha Nandambakkam Developers Limited 13.74 13.74
Sobha Tambaram Developers Limited 2.24 2.24
Sobha Assets Private Limited 0.10 0.10
Sobha Construction Products Private Limited 10.00 10.00

Investment in the capital of partnership firm

Sobha City - Capital account 399.99 399.99
Sobha City - Consideration paid for additional share in capital 128.00 128.00

Investment in subsidiaries - current account

Sobha City - partner current account 842.77 541.19

Investment in preference shares

Sobha Highrise Ventures Private Limited 77.00 77.00
FINANCIAL STATEMENTS

Advances recoverable in cash or in kind

Sobha Assets Private Limited 87.24 84.24
Sobha Construction Products Private Limited 0.22 0.22
STANDALONE

Sobha Nandambakkam Developers Limited 0.09 -

Trade receivables
Sobha Highrise Ventures Private Limited 4.18 20.60
Sobha Developers (Pune) Limited 40.31 74.90

Advance from customers

Sobha Nandambakkam Developers Limited - 0.31
Sobha Tambaram Developers Limited 7.45 7.45

Unsecured loan to related parties

Sobha Highrise Ventures Private Limited 150.98 61.09
Sobha Developers (Pune) Limited 13.91 -

Guarantees & Collaterals provided

Sobha Assets Private Limited 227.32 227.32
Sobha City 1,498.78 1,153.30

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SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

in ₹ million
Particulars As at 31.03.2021 As at 31.03.2020

II. Balances receivable from and payable to joint ventures

Investment in partners current account

Kondhwa Projects LLP 1,142.52 1,142.52

III. Balances receivable from and payable to other related parties

Unsecured loan to related parties

Sobha Contracting Private Limited 138.56 115.59

Land advance
Technobuild Developers Private Limited 8,539.36 8,512.72
Puzhakkal Developers Private Limited 52.20 52.17
Sri Parvathy Land Developers Private Limited 164.43 164.43
Sri Durga Devi Property Management Private Limited 43.05 42.92

Rent deposit
Sobha Interiors Private Limited 107.83 95.71
Sobha Glazing & Metal Works Private Limited 42.36 37.60

FINANCIAL STATEMENTS
III. Balances receivable from and payable to other related parties

STANDALONE
Advances recoverable in cash or in kind
Sobha Projects & Trade Private Limited - 13.17
Sobha Puravankara Aviation Private Limited 189.91 221.84
Punkunnam Builders and Developers Private Limited 0.05 0.05
Sobha Aviation and Engineering Services Private Limited 0.01 0.01
Mannur Properties Private Limited 0.02 0.02
Sobha Technocity Private Limited 0.02 0.02
Moolamcode Traders Private Limited 0.02 0.02

Trade receivables
Sri Kurumba Educational and Charitable Trust 15.42 15.74
Sobha Projects & Trade Private Limited 361.96 695.06
Sobha Contracting Private Limited 153.22 185.03

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 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

in ₹ million
Particulars As at 31.03.2021 As at 31.03.2020

Trade payables
Kilai Builders PriSvate Ltd 36.38 38.47
SBG Housing Private Limited 2.67 2.67
Sobha Projects & Trade Private Limited 14.80 -
Divyakaushal Properties LLP 0.60 0.66

Guarantees & Collaterals received

Sri Durga Devi Property Management Private Limited 1,500.00 1,500.00
Sri Parvathy Land Developers Private Limited 1,500.00 1,500.00
Kilai Builders Private Ltd 5,250.00 5,250.00
Sobha Interiors Private Limited 1,100.00 -

IV. Balances receivable from and payable to key managerial personnel

in ₹ million
Non-trade payable As at As at
31 March 2021 31 March 2020
Mr. J. C. Sharma 11.81 80.59
Mr. Ravi PNC Menon 2.00 18.62

d) Terms and conditions of transactions with related parties

FINANCIAL STATEMENTS

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. The
above related party transactions have been approved by the Board of Directors. Outstanding balances at the year-end
are unsecured and interest free (except for loans taken mentioned in (d) and investment in debentures of subsidiaries) and
settlement occurs in cash. For the year ended 31 March 2021, the Company has not recorded any impairment of receivables
STANDALONE

relating to amounts owed by related parties (31 March 2020 - ₹ Nil). This assessment is undertaken each financial year through
examining the financial position of the related party and the market in which the related party operates.

e) Compensation of key management personnel of the Company

in ₹ million
Particulars As at As at
31 March 2021 31 March 2020
Short-term employee benefits 79.08 106.98
Commission to independent directors 7.29 6.85
Other benefits* 18.96 117.53
105.33 231.36

*As the liability for gratuity and leave encashment is provided on actuarial basis for the Company as whole, the amount
pertaining to the directors are not included above.
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key
management personnel.

f) Also, refer note 18 as regards guarantees received from key management personnel and relative of key management
personnel and collateral securities offered by related companies in respect of loans availed by the Company.

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SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

36 Segment information

Basis of segmentation
An operating segment is a component of the Company that engages in business
activities from which it may earn revenues and incur expenses, including revenues and
expenses that relate to transactions with any of the Company’s other components, and
for which discrete financial information is available. All operating segments’ operating
results are reviewed regularly by the Company’s Chief Executive Officer (CEO) to make
decisions about resources to be allocated to the segments and assess their performance.
The Company has two reportable segments, as described below, which are the Company’s strategic
business units. These business units offer different products and services, and are managed
separately because they require different marketing strategies. For each of the business units, the
Company’s CEO reviews internal management reports on at least a quarterly basis.
The CEO monitors the operating results of its business units separately for the purpose of making
decisions about resource allocation and performance assessment. Accordingly, the Group has
identified following as its reportable segment for the purpose of Ind AS 108:
a) Real estate segment;
b) Contractual and manufacturing segment.
Real Estate segment (RE) comprises development, sale, management and operation of all or any
part of townships, housing projects, also includes leasing of self owned commercial premises.
The operation of the Contractual and Manufacturing segment (CM) comprises development of
commercial premises and other related activities, also includes manufacturing activities related to
interiors, glazing and metal works and concrete products.

FINANCIAL STATEMENTS
Segment performance is evaluated based on profit or loss and is measured consistently with
profit or loss in the financial statements. Also, the Company’s financing (including finance costs
and finance income) and income taxes are managed on a overall basis and are not allocated to

STANDALONE
operating segments.
Transfer prices between operating segments are on an arm’s length basis in a manner similar to
transactions with third parties.

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 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

The following tables present revenue and profit information for the Company’s operating segments for the year
ended 31 March 2021 and 31 March 2020 respectively:
Business segments
in ₹ million
Particulars For the year ended For the year ended
31 March 2021 31 March 2020
Segment revenue
Real estate 12,686.09 22,311.76
Contractual and manufacturing 8,979.02 16,415.27
Total Segment revenue 21,665.11 38,727.03
Inter segment revenues (698.15) (1,168.63)
Net revenue from operations 20,966.96 37,558.40
Segment result
Real estate 3,331.72 9,781.58
Contractual and manufacturing 1,417.98 2,966.43
Total Segment results 4,749.70 12,748.01
Finance costs (3,244.61) (6,732.28)
Other unallocable expenditure (1,703.00) (2,351.42)
Share of profits/ (losses) in a subsidiary partnership firm 138.43 16.84
Other income (including finance income) 806.12 729.63
Profit before taxation 746.64 4,410.78
Income taxes (91.25) (1,515.99)
Profit after taxation 655.39 2,894.79

The following table presents assets and liabilities information for the Company’s operating segments as at 31 March 2021 and 31
FINANCIAL STATEMENTS

March 2020 reszpectively:-

Segment assets
Real estate 86,635.67 90,032.63
STANDALONE

Contractual and manufacturing 10,397.00 8,071.84

Total segment assets 97,032.67 98,104.47
Unallocated assets 10,508.27 7,327.02
Total assets 107,540.94 105,431.49
Segment liabilities
Real estate 49,732.42 45,790.45
Contractual and manufacturing 4,264.96 5,205.40
Total segment liabilities 53,997.38 50,995.85
Unallocated liabilities 30,672.82 31,562.87
Total liabilities 84,670.20 82,558.72
Capital employed
Real estate 36,903.25 44,242.18
Contractual and manufacturing 6,132.04 2,866.45
Unallocated capital employed (20,164.55) (24,235.86)
Total capital employed 22,870.74 22,872.77
Finance income and costs, and fair value gains and losses on financial assets pertaining to individual segments are allocated
to respective segments.
Current taxes, deferred taxes and certain financial assets and liabilities are considered as unallocated as they are also
managed on a Company basis.

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SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

in ₹ million
Particulars For the year ended For the year ended
31 March 2021 31 March 2020
Capital expenditure
Real estate 69.60 249.67
Contractual and manufacturing 293.46 378.17
Unallocated capital expenditure 202.92 726.02
Total capital expenditure 565.98 1,353.86

Capital expenditure consists of additions of property, plant and equipment, intangible assets and investment property under
development.
Information of revenue and non-current operating assets based on location has not been furnished since there are no
revenue generated from business activities outside India and there are no non-current operating assets held by the
Company outside India.

Reconciliations to amounts reflected in the financial statements

(i) Reconciliation of assets

in ₹ million
Particulars As at As at
31 March 2021 31 March 2020
Segment assets 97,032.67 98,104.47
Investment (refer note 10) 3,975.63 3,674.05
Prepaid expenses (refer note 13) 393.87 368.44

FINANCIAL STATEMENTS
Balances with statutory/ government authorities (refer note 13) 1,019.31 1,270.61
Cash and bank balances (refer note 14 and 15) 1,965.49 804.50
Non-current bank balances (refer note 12) 60.60 62.15

STANDALONE
Other unallocable assets 3,093.37 1,147.27
Total assets 107,540.94 105,431.49

(ii) Reconciliation of liabilities

in ₹ million
Particulars As at As at
31 March 2021 31 March 2020
Segment liabilities 53,997.38 50,995.85
Borrowings (refer note 19) 29,001.73 30,054.63
Provisions (refer note 21) 289.96 296.06
Deferred tax liabilities (refer note 22) 258.67 264.02
Liabilities for current tax (net) (refer note 22) 87.08 269.03
Withholding taxes payable (refer note 24) 75.04 52.91
Others payable (refer note 24) 105.75 85.22
Other unallocable liabilities 854.59 541.00
Total liabilities 84,670.20 82,558.72

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 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

37 Employment benefit plans

in ₹ million
Particulars As at As at
31 March 2021 31 March 2020
Net benefit liability-gratuity 217.96 213.31

Non-current 151.46 144.67

Current 66.50 68.64

The Company has a defined benefit gratuity plan in India (‘the Plan’), governed by the Payment of Gratuity Act, 1972. The
Plan entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen days
on salary for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn
by the employee concerned.

The defined benefit plan for gratuity is administered by a single gratuity fund that is legally separate from the Company. The
board of the gratuity fund comprises three employees. The board of the gratuity fund is required by law to act in the best
interests of the plan participants and is responsible for setting certain policies (e.g. investment and contribution policies) of
the fund.

The following tables summarise the components of net benefit expense recognised in the statement of profit and loss and
the funded status and amounts recognised in the balance sheet for the respective plans:

in ₹ million
Particulars 31 March 2021 31 March 2020
FINANCIAL STATEMENTS

Reconciliation of present value defined benefit obligation

Obligation at the beginning of the year 215.46 196.34
Service cost 23.13 22.84
STANDALONE

Interest cost 13.44 13.88

Benefits settled (23.02) (11.41)
Actuarial (gain)/loss (through OCI) (8.65) (6.19)
Obligation at the end of the year 220.36 215.46

Reconciliation of present value of planned assets

Plan assets at the beginning of the year, at fair value 2.15 2.13
Interest income 0.13 0.15
Actuarial gain/(loss) (through OCI) 0.04 (0.02)
Contributions paid into the plan 23.10 11.30
Transfer
Benefits settled (23.02) (11.41)
Plan assets at the end of the year, at fair value 2.40 2.15

Present value of defined benefit obligation at the end of the year 220.36 215.46
Less: Fair value of plan assets at the end of the year 2.40 2.15
Net liability recognised in the balance sheet 217.96 213.31

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SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

in ₹ million
Particulars 31 March 2021 31 March 2020

Expenses recognised in statement of profit and loss

Service cost 23.13 22.99
Interest cost (net) 13.31 13.73
Gratuity cost 36.44 36.72
Capitalised to property plant and equipment (0.09) (0.15)
Net gratuity cost 36.35 36.57

Re-measurement gains/ (losses) in OCI

Actuarial gain / (loss) due to demographic assumption changes - -
Actuarial gain / (loss) due to financial assumption changes (1.62) (7.12)
Actuarial gain / (loss) due to experience adjustments 10.27 13.31
Return on plan assets greater (less) than discount rate 0.04 (0.02)
Deferred tax charge (2.19) (1.56)
Total expenses routed through OCI 6.50 4.61

The major categories of plan assets as a percentage of the fair value of the total plan assets are as follows:

Particulars 31 March 2021 31 March 2020

Investment in insurance fund 100% 100%

Acturial assumptions

FINANCIAL STATEMENTS
Particulars 31 March 2021 31 March 2020
Discount rate 6.06% 6.24%

STANDALONE
Future salary growth 5.00% 5.00%
Employee turnover 15.00% 15.00%
Estimated rate of return on plan assets 6.24% 7.07%

Assumptions regarding future mortality are based on Indian Assured Lives Mortality (2006-08)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions
constant, would have affected the defined benefit obligation by the amounts shown below.

Particulars 31 March 2021 31 March 2020

Effect of + 1% change in rate of discounting (8.67) (8.51)
Effect of - 1% change in rate of discounting 9.53 9.35
Effect of + 1% change in rate of salary growth 8.68 8.47
Effect of - 1% change in rate of salary growth (8.13) (7.91)
Effect of + 1% change in rate of employee turnover 0.17 0.24
Effect of - 1% change in rate of employee turnover (0.22) (0.30)

The sensitivity analyses above have been determined based on a method that extrapolates the impact on projected benefit
obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

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 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

The following payments are expected contributions to the projected benefit plan in future years:
in ₹ million
Particulars 31 March 2021 31 March 2020
Within the next 12 months 42.77 39.51
Between 2 and 5 years 109.01 107.43
Between 5 and 10 years 81.27 82.92
Total expected payments 233.05 229.86

38 Earnings per share [‘EPS’]

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average
number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number
of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on
conversion of all the dilutive potential equity shares into equity shares.

The following reflects the income and share data used in the basic and diluted EPS computations:

Particulars 31 March 2021 31 March 2020

Profit after tax attributable to shareholders (amount in ₹ million) 655.39 2,894.79

FINANCIAL STATEMENTS

Weighted average number of equity shares of ₹10 each fully paid outstanding 94,845,853 94,845,853
during the year used in calculating basic and diluted EPS
Earnings per share - Basic and diluted (amount in ₹)* 6.91 30.52
STANDALONE

* The Company does not have any potential dilutive equity shares and therefore basic and diluted EPS are same.

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SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

39 Leases

Operating lease - Company as lessor

The Company has entered into commercial property leases on its property, plant and equipment. These operating leases
have variable terms ranging from 12 months to 36 months up to eleven years. All leases include a clause to enable upward
revision of the lease rental on periodical basis and includes variable rent determined based on percentage of sales of
lessee.

The Company has recognised ₹ 121.08 million (31 March 2020 - ₹ 3.95 million) during the year towards lease rental income.

Minimum lease payments receivable in respect of these leases for non-cancellable period are as follows:
in ₹ million
Particulars 31 March 2021 31 March 2020

Within one year 181.12 157.78

After one year but not more than five years 555.72 466.63
More than five years 65.02 -
801.86 624.41

Operating lease - Company as lessee

Operating lease obligations: The Company has taken office, other facilities and other equipment under cancellable and

FINANCIAL STATEMENTS
non-cancellable operating leases, which are renewable on a periodic basis with escalation as per agreement.

The Company has paid ₹ 176.47 million (31 March 2020 - ₹ 259.58 million) during the year towards minimum lease payments.

STANDALONE
Future minimum rentals payable under non-cancellable operating lease are as follows:
in ₹ million
Particulars 31 March 2021 31 March 2020

Within one year 77.92 66.75

After one year but not more than five years 164.56 140.21
More than five years 66.91 88.49
309.39 295.45

SO BHA A N N U A L R E P O R T 2021 191

 SOBHA LIMITED
Notes to the standalone financial statements for the year ended 31 March 2021

40 Contingent liabilities

Contingent liabilities (to the extent not provided for)

in ₹ million
Particulars 31 March 2021 31 March 2020

i Guarantees given by the Company 3,331.97 3,956.40

ii Income tax matters in dispute 250.42 176.28
iii Sales tax matters in dispute 727.26 526.52
iv Service tax matters in dispute 434.56 459.53
v Excise duty matters in dispute 7.27 7.27
4,751.48 5,126.00

The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are
required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect
the outcome of these proceedings to have a materially adverse effect on its financial position. The Company does not expect
any reimbursements in respect of the above contingent liabilities
In respect of matters relating to certain transactions entered into by the Company in earlier years, the Company was
asked to provide contracts, documents, correspondences, business rationale and justification for these transactions
by regulatory authorities, the Company has been responding to the same from time to time. Further, in the current year,
the Company has also received Summons from SEBI under section 11(2), and 11C(2), 11C(3) of the SEBI Act, 1992 on the
same transactions. The Company has duly responded to the e-mail queries and the Summons within the time allotted.

These transactions have been entered into by the Company in the normal course of business and includes construction of
FINANCIAL STATEMENTS

residence, joint development of residential and commercial properties and advances given for land acquisition. The Company
has receivables and other balances outstanding as at the balance sheet date from these transactions and expects to recover
the same from the other parties in its normal course of business. The Company collected Rs 2 crores during the year against
the construction of residence for the counter party and Rs 6.5 crores was outstanding as at the balance sheet date. Further,
STANDALONE

the Company had paid a refundable deposit of Rs 51 crores to the counter parties, which will be due to be received by
the Company on completion of its obligation on the contract that is expected to happen in fiscal year 2022. Subsequent
to the balance sheet date, the Company has agreed, with the other parties, for a manner of settlement of the remaining
dues amounting to Rs 57.8 crores. Based on this, Rs 27.8 crores has been settled by transfer of other parties’ units of an
ongoing launched project (Project 1). The Company intends to sell these units in its normal course of business, so transferred,
and realise the amount. The realization terms of the balance, i.e. Rs 30 crores has been renegotiated and agreed to be
settled through the landowners’ revenue share in sales proceeds of another project (Project 2), which is expected to be
launched by next year. The Company has a consent / confirmation from the other party for appropriation of the landowners’
revenue share in sales proceeds of another project (Project 2), settlement of this due which is supported by a legal advise
on its enforceability. Based on the best estimate of the management, this will be realized over a period of 2 – 4 years.

Based on the Company’s overall assessment including legal advice on enforceability of the manner of settlement, the
outstanding amounts are considered fully recoverable and the terms of the aforesaid transactions are not prejudicial to the
interests of the Company and will not have any adverse impact on the financial statements.

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SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

41 Commitments and other litigations

a. Commitments
(a) The estimated amount of contracts, net of advances remaining to be executed on capital account is ₹ 0.07 million (31 March
2020 - ₹ 8.19 million).

(b) At 31 March 2021, the Company has given ₹ 13,778.18 million (31 March 2020 - ₹ 14,139.76 million) as advances for purchase
of land. Under the agreements executed with the land owners, the Company is required to make further payments under the
agreements based on the terms/ milestones stipulated under the agreements.

(c) The Company has entered into joint development agreements with owners of land for its construction and development.
Under the agreements, the Company is required to pay deposits to the owners of the land and share in area/ revenue from
such development in exchange of undivided share in land as stipulated under the agreements. As of 31 March 2021, the
Company has paid ₹ 4,829.98 million (31 March 2020 - ₹ 6,052.36 million) as refundable deposit (undiscounted) against the
joint development agreements.

(d) The Company has entered into an aircraft usage agreement with a party wherein the Company along with certain other
parties has committed minimum usage of aircraft. During the year ended 31 March 2021, the Company incurred ₹ 61.38 million
(31 March 2020 - ₹ 60.20 million) towards aircraft usage as per the agreement.

b. Other litigations
(a) Claims have been levied on the Company by Bruhat Bengaluru Mahanagara Palike (‘BBMP’) towards certain statutory
charges which includes betterment charges, ground rent charges, etc. on certain real estate projects undertaken by the
Company, the impact of which is not quantifiable. These claims are pending with various courts and are scheduled for hearings.
Based on internal assessment, the management is confident that the matter would be decided in its favour, accordingly no
provisions has made in this regard.

FINANCIAL STATEMENTS
(b) The Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business, including
certain litigation for lands acquired by it for construction purposes, either through joint development agreements or through
outright purchases, the impact of which is not quantifiable. These cases are pending with various courts and are scheduled

STANDALONE
for hearings. After considering the circumstances and legal advice received, management believes that these cases will not
adversely effect its financial statements.

Service tax matters in dispute includes demands raised for joint development agreements, the tax impact of which for future
years is not ascertainable. The Company has evaluated such arrangements for tax compliance and based on experts opinion,
the management is of the view that the tax positions are appropriate.

42 Construction contracts
in ₹ million
Particulars 31 March 2021 31 March 2020

Contract revenue recognised as revenue for the year ended 17,922.74 32,002.23
Aggregate amount of contract costs incurred and recognised profits (less 72,663.02 67,752.59
recognised losses) up to for all the contracts in progress
The amount of customer advances outstanding for contracts in progress for 8,229.27 11,638.12
which revenue has been recognised
The amount of work-in-progress and value of inventories 24,330.29 23,771.96
The amount of retentions due from customers for contracts in progress 514.35 199.40

SO BHA A N N U A L R E P O R T 2021 193

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

43 Contract balances
The following table discloses the movement in contract assets
in ₹ million
Particulars 31 March 2021 31 March 2020

Opening balance 2,060.71 396.81

Revenue recognised during the year 3,094.56 2,060.71
Invoices during the year (2,060.71) (396.81)
Closing balance 3,094.56 2,060.71

44 Derivative instruments and unhedged foreign currency exposure

in ₹ million
Particulars 31 March 2021 31 March 2020

Foreign currency exposure that are not hedged by derivative instruments or

otherwise:
Trade payables 11.40 19.02

45 Based on the information available with the Company, there are no suppliers who are registered as micro, small or medium
enterprises under “The Micro, Small and Medium Enterprises Development Act, 2006” as at 31 March 2021.
FINANCIAL STATEMENTS

46 Capitalization of expenditure

During the year, the Company has capitalized the following expenses of revenue nature to capital work-in-progress (CWIP).
Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the Company.
STANDALONE

in ₹ million
Particulars 31 March 2021 31 March 2020

Opening capital work in progress 2,323.14 1,900.37

Add: Expenses incurred during the year

Purchase of project materials 103.65 50.09
Subcontractor and other charges 37.94 94.89
Salaries, wages and bonus 4.89 11.51
Rent 0.95 17.41
Others 20.25 248.87
Sub-total 167.68 422.77

Less: Expenses capitalised as investment property 1,790.24 -

Closing capital work in progress 700.58 2,323.14

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SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

47 Fair value measurements

a. The carrying amounts of financial instruments by categories is as follows:

in ₹ million
Particulars As at 31 March 2021 As at 31 March 2020
At cost Fair value At At cost Fair value At
through amortised through amortised
profit or cost profit or cost
loss loss
Financial assets
Investments (refer note 10) 3,975.55 - 0.08 3,673.97 - 0.08
Trade receivables (refer note 11) - - 2,358.97 - - 3,662.93
Cash and bank balances (refer note 14 and 15) - - 1,965.49 - - 804.50
Other financials assets (refer note 12) - - 7,435.92 - - 8,736.27
Total 3,975.55 - 11,760.46 3,673.97 - 13,203.78

Financial liabilities
Borrowings (refer note 19) - - 29,001.73 - - 30,054.63
Trade payables (refer note 23) - - 7,339.81 - - 9,596.51
Other financial liabilities (refer note 20) - - 5,644.09 - - 4,287.08
Total - - 41,985.63 - - 43,938.22

b. Fair value hierarchy

The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities
in ₹ million
Particulars As at 31 March 2021 As at 31 March 2020

FINANCIAL STATEMENTS
Carrying Fair value Carrying Fair value
amount Level 1 Level 2 Level 3 amount Level 1 Level 2 Level 3
Financial assets
Investments carried at fair - - - - - - - -

STANDALONE
value through profit and loss
Investments at amortized cost 0.08 - - 0.08 0.08 - - 0.08
0.08 - - 0.08 0.08 - - 0.08
Assets for which fair value are disclosed
Investment properties - - - -
1,691.59 3,967.00
1,691.59 - - 3,967.00 - - - -

Notes:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at
the measurement date.
Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
There have been no transfers between the levels during the year.
Financial instruments carried at amortised cost such as instruments, trade receivables, cash and other financial assets,
borrowings, trade payables and other financial liabilities are considered to be same as their fair values, due to their short
term nature.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

SO BHA A N N U A L R E P O R T 2021 195

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

48 Financial risk management objectives and policies

The Company’s principal financial liabilities comprise borrowings, trade payables and other financial liabilities. The main
purpose of these financial liabilities is to finance and support Company’s operations. The Company’s principal financial assets
include instruments, trade and other receivables, cash and bank balances, land advances and refundable deposits that derive
directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the
management of these risks. The Company’s senior management is supported by a risk management committee that advises
on financial risks and the appropriate financial risk governance framework for the Company. The risk management committee
provides assurance to the Company’s senior management that the Company’s financial risk activities are governed by
appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the
Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks,
which are summarised below.

A. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises two types of risk: interest rate risk and other price risk, such as equity price risk and
commodity/ real estate risk. Financial instruments affected by market risk include borrowings and refundable deposits.
The sensitivity analysis in the following sections relate to the position as at 31 March 2021 and 31 March 2020. The sensitivity
analyses have been prepared on the basis that the amount of net debt and the ratio of fixed to floating interest rates of the
debt.
The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post
retirement obligations; provisions.
The below assumption has been made in calculating the sensitivity analysis:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based
on the financial assets and financial liabilities held at 31 March 2021 and 31 March 2020.
FINANCIAL STATEMENTS

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’s exposure to the risk of changes in market interest rates relates primarily to the
Company’s long-term debt obligations with floating interest rates.
STANDALONE

The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate of borrowings. The
Company does not enter into any interest rate swaps.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of
borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the impact
on floating rate borrowings, as follows:
in ₹ million
Increase/ Effect on profit
decrease in before tax *
interest rate ₹ million
31 March 2021
INR +1% (292.92)
INR -1% 292.92

31 March 2020
INR +1% (300.76)
INR -1% 300.76

* determined on gross basis i.e. with out considering inventorisation of such borrowing cost.

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SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

B. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading
to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its
financing activities, including refundable joint development deposits, security deposits, loans to employees and other financial
instruments.
Trade receivables
(a) Receivables resulting from sale of properties: Customer credit risk is managed by requiring customers to pay advances
before transfer of ownership, therefore, substantially eliminating the Company’s credit risk in this respect.

(b) Receivables resulting from other than sale of properties: Credit risk is managed by each business unit subject to the
Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer
receivables are regularly monitored. The impairment analysis is performed at each reporting date on an individual basis for
major clients. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for
impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of
financial assets. The Company does not hold collateral as security. The Company’s credit period generally ranges from 30-60
days.
(c) Revenue from one customer individually accounted for more than 10% of the company’s revenue for the year ended 31
March 2021 and 31 March 2020. No single customer individually accounted for more than 10% of the trade receivable balance
of the company as at 31 March 2021 and 31 March 2020.
Movement in allowance for credit losses
in ₹ million
Particulars 31 March 2021 31 March 2020
Opening balance 534.40 332.01
Amounts written off - (36.94)
Net remeasurement of loss allowance 103.69 239.33
Closing balance 638.09 534.40

FINANCIAL STATEMENTS
Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance
with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits

STANDALONE
assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual
basis, and may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits are set
to minimise the concentration of risks and therefore mitigate financial loss through a counterparty’s potential failure to make
payments. The Company’s maximum exposure to credit risk for the components of the statement of financial position at 31
March 2021 and 31 March 2020 is the carrying amounts.

SO BHA A N N U A L R E P O R T 2021 197

 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

C. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company uses
activity-based costing to cost its products and services, which assists it in monitoring cash flow requirements and optimising
its cash return on investments.

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank
deposits and loans
The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted
payments:
in ₹ million
On Less than 3 to 12 1 to 5 > 5 years Total
demand 3 months months years
31 March 2021
Borrowings (refer note 19) 3,846.01 1,797.08 4,791.00 17,488.16 1,079.48 29,001.73
Trade payables (refer note 23) 200.00 5,691.26 1,150.07 250.67 47.81 7,339.81
Other financial liabilities (refer note 20) 206.54 2,336.06 3,101.49 - - 5,644.09
4,252.55 9,824.40 9,042.56 17,738.83 1,127.29 41,985.63

31 March 2020
Borrowings (refer note 19) 6,656.33 2,365.14 4,586.97 15,230.20 1,215.99 30,054.63
Trade payables (refer note 23) - 6,991.17 2,340.26 232.16 32.92 9,596.51
FINANCIAL STATEMENTS

Other financial liabilities (refer note 20) 305.25 1,356.81 2,625.02 - - 4,287.08
6,961.58 10,713.12 9,552.25 15,462.36 1,248.91 43,938.22
STANDALONE

198 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

49 Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all
other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital
management is to maximise the shareholder value

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing
ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing
borrowings, trade payables and other financial liabilities (excluding liability under JDA), less cash and bank balances.
in ₹ million
As at 31 March As at 31 March
2021 2020

Borrowings (long-term and short-term, including current maturities of long term 29,421.73 30,154.50
borrowings) (Note 19 & 20)
Trade payables (Note 23) 7,339.81 9,596.51
Other financial liabilities (current and non-current, excluding current maturities of 5,224.09 4,187.21
long term borrowings) (Note 20)
Other liabilities (Note 24) 42,048.86 37,791.39
Less: Cash and bank balances (Note 14 and 15) (1,965.49) (804.50)
Net debt 82,069.00 80,925.11

Equity share capital (Note 16) 948.46 948.46

FINANCIAL STATEMENTS
Other equity (Note 17) 21,922.28 21,924.31

Total capital 22,870.74 22,872.77

STANDALONE
Capital and net debt 104,939.74 103,797.88

Gearing ratio 78.21% 77.96%

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure
that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure
requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings.
There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2021
and 31 March 2020.

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 SOBHA LIMITED
NOTES TO THE STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

50 Impact due to oubreak of COVID-19

During the year ended 31 March 2021, the Company had to suspend the operations in all ongoing projects at different
times in compliance with the lockdown instructions issued by the Central and respective State Governments. This impacted
the normal business operations of the Company by way of interruption in projects execution, supply chain disruption and
unavailability of personnel during the lock-down period.

The Company has considered the possible impacts on the carrying value of assets. The Company, as at the date of these
financial results has used internal and external sources of information to assess the expected future performance of the
Company. The Company has also performed a sensitivity analysis on the assumptions used and based on the current
estimates, the Company expects that the carrying amount of these assets reported in the balance sheet as at 31 March 2021
are fully recoverable. The Company has also estimated the future cash flows with the possible effects that may result from the
COVID-19 pandemic and does not foresee any adverse impact on realising its assets and meeting its liabilities as and when
they fall due. The actual impact of the COVID-19 pandemic may be different from that estimated as at the date of approval
of these financial results. During the year ended 31 March 2021, the Management has also made a detailed assessment of
the progress of construction work on its ongoing projects during the period of lockdown and has concluded that the same
was only a temporary slowdown in activities and has accordingly capitalised/ inventorised the borrowing costs incurred in
accordance with Ind AS 23.

As per our report of even date attached

for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Sobha Limited
ICAI Firm registration number: 101248W/W-100022

Amrit Bhansali Ravi PNC Menon T P Seetharam

Partner Chairman Whole-time Director
FINANCIAL STATEMENTS

Membership No.: 065155 DIN: 02070036 DIN: 08391622

STANDALONE

Subhash Bhat Vighneshwar G Bhat

Chief Financial Officer Company Secretary and
Compliance Officer

Place: Bengaluru, India Place: Bengaluru, India

Date: 22 June 2021 Date: 22 June 2021

200 S O B HA ANNUAL REPORT 2 02 1

INDEPENDENT AUDITORS’ REPORT
To the Members of Sobha Limited
Report on the Audit of Consolidated Financial Statements

Opinion
We have audited the consolidated financial statements of Sobha Limited (hereinafter referred to as the
‘Holding Company”) and subsidiaries, including step down subsidiaries (Holding Company and subsidiaries,
including step down subsidiaries together referred to as “the Group”) and its joint venture, which comprise
the consolidated balance sheet as at 31 March 2021, the consolidated statement of profit and loss (including
other comprehensive income), consolidated statement of changes in equity and consolidated statement
of cash flows for the year then ended, and notes to the consolidated financial statements, including a
summary of significant accounting policies and other explanatory information (hereinafter referred to as
“the consolidated financial statements”).
In our opinion and to the best of our information and according to the explanations given to us, and based
on the consideration of reports of other auditors on separate financial statements of such subsidiaries
and joint venture as were audited by the other auditors, the aforesaid consolidated financial statements
give the information required by the Companies Act, 2013 (“Act”) in the manner so required and give a
true and fair view in conformity with the accounting principles generally accepted in India, of the
consolidated state of affairs of the Group and its joint venture as at 31 March 2021, of its consolidated profit
and other comprehensive income, consolidated changes in equity and consolidated cash flows for the year
then ended.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10)
of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities
for the Audit of the Consolidated Financial Statements section of our report. We are independent of the
Group and its joint venture in accordance with the ethical requirements that are relevant to our audit of
the consolidated financial statements in terms of the Code of Ethics issued by the Institute of Chartered
Accountants of India and the relevant provisions of the Act, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence obtained by us
along with the consideration of audit reports of the other auditors referred to in sub paragraph (a) of the
“Other Matters” paragraph below, is sufficient and appropriate to provide a basis for our opinion on the
consolidated financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in
the context of our audit of the consolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters. FINANCIAL STATEMENTS

A. Inquiry from regulator - refer note 39 to the consolidated financial statements

CONSOLIDATED

Key Audit Matter How the matter was addressed in our audit
Assessment of certain transactions entered Our audit procedures on the transactions included
into by the Holding Company and recoverability the following:
of balances, on which Summons have been
• Inquired with senior personnel of the Holding
received from SEBI
Company to understand the commercial
rationale and status of aged receivables and
other asset balances outstanding from these
transactions;

SO BHA A N N U A L R E P O R T 2021 201

 INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Key Audit Matters (continued)

Key Audit Matter How the matter was addressed in our audit
During the current and previous years, the Holding • Verified the correspondence with various
Company has received enquiries from Securities parties to recover the outstanding balance;
and Exchange Board of India (SEBI) about certain
• Verified the documentation entered into
transactions entered into by the Holding Company
(including subsequent to the balance sheet
in earlier years. Further, in the current year, the
date) with the parties relating to the various
Holding Company has also received Summons
projects and recoverability of the dues;
from SEBI under section 11(2), and 11C(2), 11C(3) of
the SEBI Act, 1992 for production of documents and • Read the Holding Company’s communication
responses in respect of the aforesaid transactions. to SEBI to ensure consistency with
the explanations and documentation /
The enquiries and consequently the Summons are
correspondences provided to us;
directed to ascertain if there has been any undue
favour towards any individual in these specific • Evaluated and challenged the Holding
business transactions carried out by the Holding Company’s assessment of recoverability of
Company. the balances outstanding as at the balance
sheet date and the business rationale for
These transactions represent aged receivables
these transactions and the timing and manner
and other asset balances recoverable from the
of settlement, including considering the
counter parties and SEBI has sought responses
developments subsequent to the balance
and evidences for the efforts taken by the Holding
sheet date;
Company to recover these amounts.
• Evaluated the legal opinion obtained by the
The Holding Company has consistently responded
Holding Company on the enforceability of
to SEBI on these transactions and efforts taken
documentation with the other parties for
by them to recover the outstanding dues and
recovery of dues;
maintains their position that there is no undue
favour to any party. The matter has not yet been • Communicated and discussed periodic updates
concluded by SEBI. on these transactions to those charged with
governance, including the recoverability
Subsequent to the balance sheet date, the Holding
and business rationale aspects for these
Company and the other parties to the transactions
transactions;
have agreed to a manner of settlement of the dues.
• Read the minutes of the meetings of the
Considering the significance of the matter, which
management discussions with the Board of
involves uncertainty of outcome due to ongoing
Directors and those charged with governance
enquiries from SEBI and involvement of significant
on this matter; and
judgements and estimates by the Holding
Company on the realizability of these balances, • Considered the adequacy of the disclosure in
this is considered as a key audit matter. the consolidated financial statements.
FINANCIAL STATEMENTS

B. Revenue recognition - refer note 2.2(a)(ii)(a) to the consolidated financial statements

CONSOLIDATED

Key Audit Matter How the matter was addressed in our audit
Measurement of revenue recorded from sale of Our audit procedures on revenue recognition on
residential units sale of residential units included the following:
• Evaluation of the Group’s accounting policies
for revenue recognition on sale of residential
units are in line with the applicable accounting
standards and their application to customer
contracts, including consistent application;

202 S O B HA ANNUAL REPORT 2 02 1

INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Key Audit Matters (continued)

Key Audit Matter How the matter was addressed in our audit
Revenues from sale of residential units • Identifying and testing operating effectiveness
represents the largest portion of the total of key controls around approvals of contracts,
revenues of the Group. milestone billing, intimation of handover letters
Revenue is recognised upon transfer of control of and controls over collection from customers;
residential units to customers for an amount which • For samples selected, verifying the underlying
reflects the consideration the Group expects to documents – handover letter, sale agreement
receive in exchange for those units. The point signed by the customer, handover intimation
of revenue recognition is normally based on mail sent to the customer and the collections
the terms as included in the intimation for the against the units sold;
handover of unit to the customer on completion
• Cut-off procedures for recording of revenue in
of the project, post which the contract becomes
the relevant reporting period;
non-cancellable by the parties. The Group records
revenue at a point in time upon transfer of control • Site visits during the year for selected projects
of residential units to the customers. to understand the scope, nature, status and
progress of the projects; and
Considering the volume of the Group’s projects,
spread across different regions within the country • Considering the adequacy of the disclosures in
and the competitive business environment, there note 2.2(a)(ii)(a) to the consolidated financial
is a risk of revenue being overstated (for example, statements in respect of recognising revenue
through premature revenue recognition i.e. on sale of residential units.
recording revenue prior to handover of unit to the
customers) or understated (for example, through
improperly shifting revenues to a later period) in
order to present consistent financial results. Since
revenue recognition has direct impact on the
Group’s profitability, there is a possibility of the
Group being biased, hence this is considered as a
key audit matter.

C. Revenue recognition - refer note 3(b)(i) to the consolidated financial statements

Key Audit Matter How the matter was addressed in our audit
Measurement of revenue on contractual Our audit procedures on revenue recognition on
construction projects recorded over time which contractual construction projects included the
is dependent on the estimates of the costs to following:

FINANCIAL STATEMENTS
complete
• Evaluation of Group’s accounting policies for
revenue recognition on contractual projects are CONSOLIDATED
in line with the applicable accounting standards
Revenue recognition from contractual projects
and their application to customer contracts,
represents a significant portion of the total
including consistent application;
revenues of the Group.
• Identifying and testing operating effectiveness
of key controls around budgeting of project
cost, approval of purchase orders, recording of
actual cost, raising of invoices and estimating
the cost to complete the project;

SO BHA A N N U A L R E P O R T 2021 203

 INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Key Audit Matters (continued)

Key Audit Matter How the matter was addressed in our audit
Revenue recognition from contractual projects • For samples selected during the year, verifying
involves significant estimates primarily pertaining the underlying documents – contracts with
to measurement of costs to complete the projects. customers, invoices raised and collections from
Revenue from projects is recorded based on the customers;
Group’s assessment of the work completed, costs
• Comparing the estimated costs to complete
incurred and accrued and the estimate of the
with the budgeted costs and analysis of the
balance costs to complete.
variances, if any;
Due to inherent nature of the projects and
• Sighting approvals for budgeted costs with the
significant judgment involved in the estimate of
rationale for the changes; and
costs to complete, there is risk of overstatement
or understatement of revenue, hence this is • Assessment of costs incurred on projects,
considered as a key audit matter. which is used by the Group to determine the
percentage of completion.
• Considering the adequacy of the disclosures
in note 3(b)(i) to the consolidated financial
statements in respect of judgements taken to
recognise revenue for contractual projects.
• Considering the adequacy of the disclosures
in note 41 to the consolidated financial
statements in respect of revenue recognized,
cost incurred, amount received/ retentions due
from customers, work in progress, value of
inventories and profit recognized till date.

D. Revenue recognition - refer note 2.2(a)(iii) to the consolidated financial statements

Key Audit Matter How the matter was addressed in our audit
Measurement of revenue recorded from sale of Our audit procedures on revenue recognition
manufactured products from sale of manufactured products included the
following:
Revenue is recognised upon transfer of control of
products manufactured by the Group to customers • Evaluation of Group’s accounting policies
for an amount which reflects the consideration the for revenue recognition on sale of products
Group expects to receive in exchange for those manufactured, are in line with the applicable
FINANCIAL STATEMENTS

products. The point of revenue recognition is accounting standards and their application to
normally upon transfer of control to the customer agreement with customers, including consistent
on delivery of product. application;
CONSOLIDATED

• Identifying and testing operating effectiveness

of key controls around approvals of sale order
received, invoice raised, intimation of delivery
of product, and controls over collection from
customers;
• For samples selected, verifying the underlying
documents – sales order, invoice raised, good
received note authorised by the customer and
the collections;

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INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Key Audit Matters (continued)

Key Audit Matter How the matter was addressed in our audit
Considering the competitive business environment, • Cut-off procedures for recording of revenue in
there is a risk of revenue being overstated (for the relevant reporting period; and
example, through premature revenue recognition i.e.
• Considering the adequacy of the disclosures
recording revenue prior to transfer of control to the
in note 2.2(a)(iii) to the consolidated financial
customers) or understated (for example, through
statements in respect of recognizing revenue
improperly shifting revenues to a later period) in
on sale of manufactured products.
order to present consistent financial results.
Since revenue recognition has direct impact on
the Group’s profitability, there is a possibility of
the Group being biased, hence this is considered
as a key audit matter.

E. Inventories - refer note 3(b)(iii) to the consolidated financial statements

Key Audit Matter How the matter was addressed in our audit
Assessment of net realisable value (NRV) of Our audit procedures to assess the net realisable
inventories value (NRV) of inventories included the following:
Inventories on construction of residential units • Enquiry with the Group’s personnel to
comprising ongoing and completed projects, understand the basis of computation and
initiated but unlaunched projects and land stock, justification for the estimated recoverable
represents a significant portion of the Group’s amounts of the unsold units in both ongoing and
total assets. completed projects (“the NRV assessment”);
The Group recognises profit on the sale of each • Assessing the Group ‘s valuation methodology
residential unit with reference to the overall profit for the key estimates, data inputs and
margin depending upon the total cost incurred on assumptions adopted in the valuation. This
the project. A project comprises multiple units, involved comparing the total cost per sqft with
the construction of which is carried out over a expected average selling prices such as recently
number of years. The recognition of profit for sale transacted prices maintained by the Group. For
of a unit, is therefore dependent on the estimate projects which are not launched and / (or) there
of future selling prices and construction costs. is no sales, the total cost per sqft is compared
Further, estimation uncertainty and exposure to to the selling prices of similar properties located
cyclicality exists within long- term projects. in nearby vicinity of each project
Forecasts of future sales are dependent on market • While analyzing the expected average selling

FINANCIAL STATEMENTS
conditions, which can be difficult to predict and price, we have performed a sensitivity analysis
be influenced by political and economic factors. on the selling price and compared this to the
budgeted cost;
Considering the significance of the amount of
CONSOLIDATED

carrying value of inventories and the involvement • For our samples of land stock, obtained the
of significant estimation and judgement in fair valuation reports and published guidance
assessment of NRV, this is considered as a key values for assessing the valuation methodology,
audit matter. key estimates and assumptions adopted in the
valuation; and
• Verifying the NRV assessment and comparing
the estimated construction costs to complete
each development with the Group’s updated
budgets.

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 INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Key Audit Matters (continued)

F. Land Advances - refer note 3(b)(iii) to the consolidated financial statements

Key Audit Matter How the matter was addressed in our audit
Assessment of recoverability of land advances Our audit procedures to assess the recoverability
of land advances included the following:
Land advances represents a significant portion of
the Group’s total assets. • Enquiry with the Group’s personnel on the
process of providing land advances and testing
Land advance represents the amount paid
of key controls over such land advances paid
towards procurement of land parcels to be
during the year;
used in the future for construction of residential
projects. These advances are carried at cost • Enquiry with the Group’s personnel also
less impairment losses. These land advances are covered obtaining explanations on the long-
converted into land stock as per the terms of standing land advances and understanding
the underlying contracts under which these land Group’s plan for conversion of the land
advances have been given. The carrying value advances to land stock;
of advances are tested for recoverability by the
• For our samples, verifying the underlying
Group by comparing the valuation of land parcels
agreements or Memorandum of understanding
in the same area for which land advances have
in possession of the Group, based on which
been given.
land advances were given, to assess the
Due to quantum of carrying value of land advances Group’s rights over the land parcels in subject;
to total assets of the Group and significant
• For our samples, obtaining the fair valuation
estimates and judgements involved in assessing
reports of such land parcels for assessing the
recoverability of land advances, this is considered
valuation methodology, key estimates and
as a key audit matter.
assumptions adopted in the valuation; and
• For our samples, verifying the published
guidance values for the area in which these
land parcels are situated.

Information Other than the Consolidated Financial Statements and Auditors’ Report Thereon
The Holding Company’s management and Board of Directors are responsible for the other information. The
other information comprises the information included in the Holding Company’s Annual Report, but does
not include the financial statements and our auditor’s report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not
FINANCIAL STATEMENTS

express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent with
CONSOLIDATED

the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to
be materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.

Management’s and Board of Directors’/Designated Partners Responsibilities for the

Consolidated Financial Statements
The Holding Company’s Management and Board of Directors are responsible for the preparation and

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INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Key Audit Matters (continued)

presentation of these consolidated financial statements in term of the requirements of the Act that give
a true and fair view of the consolidated state of affairs, consolidated profit and other comprehensive
income, consolidated statement of changes in equity and consolidated cash flows of the Group including
its joint venture in accordance with the accounting principles generally accepted in India, including the
Indian Accounting Standards (Ind AS) specified under section 133 of the Act. The respective Management
and Board of Directors of the companies / Designated Partners of limited liability partnership included
in the Group and of its joint venture are responsible for maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of each company. and for preventing
and detecting frauds and other irregularities; the selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and prudent; and the design, implementation
and maintenance of adequate internal financial controls, that were operating effectively for ensuring
accuracy and completeness of the accounting records, relevant to the preparation and presentation of the
consolidated financial statements that give a true and fair view and are free from material misstatement,
whether due to fraud or error, which have been used for the purpose of preparation of the consolidated
financial statements by the Management and Directors of the Holding Company, as aforesaid.
In preparing the consolidated financial statements, the respective Management and Board of Directors
of the companies / Designated Partners of limited liability partnership included in the Group and of its
joint venture are responsible for assessing the ability of each company / limited liability partnership to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the respective Board of Directors / Designated Partners either
intends to liquidate the Company / limited liability partnership or to cease operations, or has no realistic
alternative but to do so.
The respective Board of Directors of the companies / Designated Partners of limited liability partnership
included in the Group and of its joint venture is responsible for overseeing the financial reporting process
of each company / limited liability partnership.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee
that an audit conducted in accordance with SAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these consolidated financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether FINANCIAL STATEMENTS
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
CONSOLIDATED

evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible
for expressing our opinion on the internal financial controls with reference to the consolidated financial
statements and the operating effectiveness of such controls based on our audit.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Management and Board of Directors.

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 INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Key Audit Matters (continued)

• Conclude on the appropriateness of Management and Board of Directors use of the going concern
basis of accounting in preparation of consolidated financial statements and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the appropriateness of this assumption. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group and its joint venture to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of such entities or
business activities within the Group and its joint venture to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance of the audit of
financial information of such entities included in the consolidated financial statements of which we are the
independent auditors. For the other entities included in the consolidated financial statements, which have
been audited by other auditors, such other auditors remain responsible for the direction, supervision
and performance of the audits carried out by them. We remain solely responsible for our audit opinion.
Our responsibilities in this regard are further described in sub-paragraph (a) of the section titled ‘Other
Matters’ in this audit report.
• We believe that the audit evidence obtained by us along with the consideration of audit reports of the
other auditors referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and
appropriate to provide a basis for our audit opinion on the consolidated financial statements.
We communicate with those charged with governance of the Holding Company and such other entities
included in the consolidated financial statements of which we are the independent auditors regarding,
among other matters, the planned scope and timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
FINANCIAL STATEMENTS

a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
CONSOLIDATED

Other Matters
We did not audit the financial statements of 19 subsidiaries (including step down subsidiaries), whose
financial statements reflect total assets (before consolidation adjustments) of ₹8,285.66 million as at
31 March 2021, total revenues (before consolidation adjustments) of ₹470.12 million and net cash
outflows amounting to ₹13.09 million for the year ended on that date, as considered in the consolidated
financial statements. The consolidated financial statements also include the Group’s share of net
profit/loss (and other comprehensive income) (before consolidation adjustments) of ₹ Nil for the year
ended 31 March 2021, in respect of a joint venture, whose financial statements have not been audited by
us. These financial statements have been audited by other auditors whose reports have been furnished

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INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Key Audit Matters (continued)

to us by the Management and our opinion on the consolidated financial statements, in so far as it relates
to the amounts and disclosures included in respect of these subsidiaries and our report in terms of
sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries is based solely
on the audit reports of the other auditors.
Our opinion on the consolidated financial statements, and our report on Other Legal and
Regulatory Requirements below, is not modified in respect of the above matters with respect to our
reliance on the work done and the reports of the other auditors and the financial statements certified by
the Management.

Report on Other Legal and Regulatory Requirements

A. As required by Section 143(3) of the Act, based on our audit and on the consideration of reports of the
other auditors on separate financial statements of such subsidiaries and joint venture as were audited by
other auditors, as noted in the ‘Other Matters’ paragraph, we report, to the extent applicable, that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge
and belief were necessary for the purposes of our audit of the aforesaid consolidated financial
statements.
b. In our opinion, proper books of account as required by law relating to preparation of the aforesaid
consolidated financial statements have been kept so far as it appears from our examination of those
books and the reports of the other auditors.
c. The consolidated balance sheet, the consolidated statement of profit and loss (including other
comprehensive income), the consolidated statement of changes in equity and the consolidated
statement of cash flows dealt with by this Report are in agreement with the relevant books of
account maintained for the purpose of preparation of the consolidated financial statements.
d. In our opinion, the aforesaid consolidated financial statements comply with the Ind AS specified
under section 133 of the Act.
e. On the basis of the written representations received from the directors of the Holding Company as
on 31 March 2021 taken on record by the Board of Directors of the Holding Company and the reports
of the statutory auditors of its subsidiary companies incorporated in India, none of the directors of
the Group companies incorporated in India is disqualified as on 31 March 2021 from being appointed
as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls with reference to financial statements
of the Holding Company and its subsidiary companies incorporated in India and the operating
effectiveness of such controls, refer to our separate Report in “Annexure A”.
B. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of FINANCIAL STATEMENTS
the Companies (Audit and Auditor’s) Rules, 2014, in our opinion and to the best of our information and CONSOLIDATED
according to the explanations given to us and based on the consideration of the reports of the other
auditors on separate financial statements of the subsidiaries and joint venture, as noted in the ‘Other
Matters’ paragraph:
i. The consolidated financial statements disclose the impact of pending litigations as at 31 March
2021 on the consolidated financial position of the Group and its joint venture. Refer Note 40 to the
consolidated financial statements;
ii. The Group and its joint venture did not have any material foreseeable losses on long-term contracts
including derivative contracts during the year ended 31 March 2021.
iii. There has been no delay in transferring amounts to the Investor Education and Protection Fund by

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 INDEPENDENT AUDITORS’ REPORT (CONTINUED)
Key Audit Matters (continued)

the Holding Company or its subsidiary companies and joint venture incorporated in India during the
year ended 31 March 2021;
iv. The disclosures in the consolidated financial statements regarding holdings as well as dealings in
specified bank notes during the period from 8 November 2016 to 30 December 2016 have not been
made in the financial statements since they do not pertain to the financial year ended 31 March 2021;
and
C. With respect to the matter to be included in the Auditor’s report under section 197(16):
In our opinion and according to the information and explanations given to us and based on the reports
of the statutory auditors of such subsidiary companies incorporated in India which were not audited by
us, the remuneration paid during the current year by the Holding Company and its subsidiary companies
to its directors is in accordance with the provisions of Section 197 of the Act. The remuneration paid to
any director by the Holding Company and its subsidiary companies is not in excess of the limit laid down
under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under
Section 197(16) which are required to be commented upon by us.

for B S R & Co. LLP

Chartered Accountants
ICAI Firm registration number: 101248W/W-100022

Amrit Bhansali
Partner
Membership number: 065155
UDIN: 21065155AAAADH8733

Place: Bengaluru
Date: 22 June 2021
FINANCIAL STATEMENTS
CONSOLIDATED

210 S O B HA ANNUAL REPORT 2 02 1

Annexure A to the Independent Auditors’ report on the consolidated financial statements of
Sobha Limited for the period ended 31 March 2021.

Report on the Internal financial controls with reference to the aforesaid consolidated financial
statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013
(Referred to in paragraph (A) (f) under ‘Report on Other Legal and Regulatory Requirements’ section
of our report of even date)

Opinion
In conjunction with our audit of the consolidated financial statements of the Company as of and for the year
ended 31 March 2021 we have audited the internal financial controls with reference to consolidated financial
statements of Sobha Limited (hereinafter referred to as “the Holding Company”) and such companies
incorporated in India under the Companies Act, 2013 which are its subsidiary companies, as of that date.
In our opinion, the Holding Company and such companies incorporated in India which are its subsidiary
companies, have, in all material respects, adequate internal financial controls with reference to consolidated
financial statements and such internal financial controls were operating effectively as at 31 March 2021, based
on the internal financial controls with reference to consolidated financial statements criteria established by
such companies considering the essential components of such internal controls stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India (the “Guidance Note”).
Management’s Responsibility for Internal Financial Controls
The respective Company’s management and the Board of Directors are responsible for establishing and
maintaining internal financial controls with reference to consolidated financial statements based on the
criteria established by the respective Company considering the essential components of internal control
stated in the Guidance Note. These responsibilities include the design, implementation and maintenance
of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to the respective company’s policies, the safeguarding of its
assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial information, as required under the Companies Act,
2013 (hereinafter referred to as “the Act”).
Auditors’ Responsibility
Our responsibility is to express an opinion on the internal financial controls with reference to consolidated
financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and
the Standards on Auditing, prescribed under section 143(10) of the Act, to the extent applicable to an audit
of internal financial controls with reference to consolidated financial statements. Those Standards and the
Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain

FINANCIAL STATEMENTS
reasonable assurance about whether adequate internal financial controls with reference to consolidated
financial statements were established and maintained and if such controls operated effectively in all
material respects.
CONSOLIDATED

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal
financial controls with reference to consolidated financial statements and their operating effectiveness. Our
audit of internal financial controls with reference to consolidated financial statements included obtaining an
understanding of internal financial controls with reference to consolidated financial statements, assessing
the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness
of the internal controls based on the assessed risk. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors

SO BHA A N N U A L R E P O R T 2021 211

 of the relevant subsidiary companies in terms of their reports referred to in the Other Matters paragraph
below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls
with reference to consolidated financial statements.
Meaning of Internal Financial controls with Reference to Consolidated Financial Statements
A company’s internal financial controls with reference to consolidated financial statements is a process
designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles.
A company’s internal financial controls with reference to consolidated financial statements includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorisations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Inherent Limitations of Internal Financial controls with Reference to consolidated Financial
Statements
Because of the inherent limitations of internal financial controls with reference to consolidated financial
statements, including the possibility of collusion or improper management override of controls, material
misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation
of the internal financial controls with reference to consolidated financial statements to future periods are
subject to the risk that the internal financial controls with reference to consolidated financial statements
may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Our aforesaid reports under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of
the internal financial controls with reference to consolidated financial statements insofar as it relates to
19 subsidiary companies (including step down subsidiaries), which are companies incorporated in India, is
based on the corresponding reports of the auditors of such companies incorporated in India.

for B S R & Co. LLP

Chartered Accountants
ICAI Firm registration number: 101248W/W-100022
FINANCIAL STATEMENTS

Amrit Bhansali
CONSOLIDATED

Partner
Membership number: 065155
UDIN: 21065155AAAADH8733

Place: Bengaluru
Date: 22 June 2021

212 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
CONSOLIDATED BALANCE SHEET

in ₹ million
Particulars Note As at 31 March 2021 As at 31 March 2020
Assets
Non-current assets
Property, plant and equipment 4 4,415.00 4,630.71
Investment property 5 3,529.21 1,880.95
Investment property under construction 6 700.58 2,323.14
Intangible assets 7 232.13 231.74
Right of use assets 8 157.42 128.19
Financial assets
Investments 10 1,142.70 1,142.69
Trade receivables 11 423.99 141.02
Other non-current financial assets 12 1,418.24 162.32
Other non-current assets 13 5,200.77 5,180.55
Current tax assets (net) 22 96.75 113.44
Deferred tax asset (net) 22 19.21 20.56
17,336.00 15,955.31
Current assets
Inventories 9 71,246.35 67,044.90
Financial assets
Trade receivables 11 1,937.18 3,604.63
Cash and cash equivalents 14 1,637.38 675.09
Bank balance other than cash and cash equivalents 15 404.11 208.80
Other current financial assets 12 5,718.07 8,310.31
Other current assets 13 13,822.43 14,323.22
94,765.52 94,166.95
Total assets 112,101.52 110,122.26

Equity and liabilities

Equity
Equity share capital 16 948.46 948.46
Other equity 17 23,328.89 23,363.55
Equity attributable to owners of the Company 24,277.35 24,312.01
Non-controlling interest - -
Total equity 24,277.35 24,312.01
Non-current liabilities
Financial liabilities
Borrowings 19 3,504.33 2,377.64
Lease liabilities 19 67.97 60.64
Provisions 21 151.46 144.67
Deferred tax liabilities (net) 22 341.75 311.33
4,065.51 2,894.28
Current liabilities
Financial liabilities
Borrowings 19 26,396.34 28,625.05
Lease liabilities 19 61.98 73.56
Trade payables
Total outstanding dues of micro enterprises and small enterprises; and 23 - -
Total outstanding dues of creditors other than micro enterprises and small
23 7,317.59 9,566.88
enterprises
Other current financial liabilities 20 6,562.97 4,937.06
Other current liabilities 24 43,194.17 39,292.99
Provisions 21 138.50 151.39
Liabilities for current tax (net) 22 87.11 269.04

FINANCIAL STATEMENTS
83,758.66 82,915.97
Total liabilities 87,824.17 85,810.25
Total equity and liabilities 112,101.52 110,122.26
Summary of significant accounting policies 2.4
CONSOLIDATED

The accompanying notes are an integral part of the consolidated financial statements.

As per our report of even date attached

for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Sobha Limited
ICAI Firm registration number: 101248W/W-100022
Ravi PNC Menon T P Seetharam
Amrit Bhansali Chairman Whole-time Director
Partner DIN: 02070036 DIN: 08391622
Membership No.: 065155
Subhash Bhat Vighneshwar G Bhat
Chief Financial Officer Company Secretary and Compliance Officer
Place: Bengaluru, India Place: Bengaluru, India
Date: 22 June 2021 Date: 22 June 2021

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 SOBHA LIMITED
CONSOLIDATED STATEMENT OF PROFIT AND LOSS

in ₹ million
Particulars Note For the year ended For the year ended 31
31 March 2021 March 2020
Income
Revenue from operations 25 21,097.79 37,538.52
Finance income 27 419.81 429.92
Other income 26 386.40 288.15
Total income 21,904.00 38,256.59

Expenses
Land purchase cost 2,543.94 4,268.33
Cost of raw materials and components consumed 28 1,861.96 3,001.53
Purchase of project materials 3,920.98 7,215.95
Changes in Inventories of Raw materials, Land stock, Work in progress, Stock 29 (4,169.41) (3,412.49)
in trade and Finished goods
Subcontractor and other charges 5,124.14 8,836.30
Employee benefits expense 30 1,771.27 2,464.19
Finance costs 34 6,012.14 6,816.03
Depreciation and amortization expense 31 793.67 722.85
Other expenses 32 3,293.46 4,012.35
Total expenses 21,152.15 33,925.04

Profit before tax 751.85 4,331.55

Tax expenses
Current tax 22 100.81 451.90
Deferred tax charge 22 28.28 1,062.96
Income tax expense 129.09 1,514.86

Profit for the year 622.76 2,816.69

Other comprehensive income

Item that will not be reclassified to profit or loss in subsequent periods:
Re-measurement on defined benefit plan 37 6.50 4.61
Income tax effect - -
Other comprehensive income for the year, net of tax 6.50 4.61

Total comprehensive income for the year attributable to owners of the Company 629.26 2,821.30

Profit for the year attributable to :

Owners of the Company 622.76 2,816.69
Non-controlling interests - -
622.76 2,816.69
Total comprehensive income for the year attributable to :
Owners of the Company 629.26 2,821.30
Non-controlling interests - -
629.26 2,821.30
Earnings per equity share [nominal value of ₹ 10 fully paid (31 March
2020 - ₹ 10 fully paid)]
Basic and diluted (amount in ₹) 38 6.57 29.69
FINANCIAL STATEMENTS

Summary of significant accounting policies 2.4

CONSOLIDATED

The accompanying notes are an integral part of the consolidated financial statements.

As per our report of even date attached

for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Sobha Limited
ICAI Firm registration number: 101248W/W-100022
Ravi PNC Menon T P Seetharam
Amrit Bhansali Chairman Whole-time Director
Partner DIN: 02070036 DIN: 08391622
Membership No.: 065155
Subhash Bhat Vighneshwar G Bhat
Chief Financial Officer Company Secretary and Compliance Officer
Place: Bengaluru, India Place: Bengaluru, India
Date: 22 June 2021 Date: 22 June 2021

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SOBHA LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

a. Equity share capital

Number of Amount in
shares ₹ million
in million
Equity shares of ₹10 each issued, subscribed and fully paid
Balance as at 1 April 2019 94.84 948.46
Balance as at 31 March 2020 94.84 948.46

Balance as at 1 April 2020 94.84 948.46

Balance as at 31 March 2021 94.84 948.46

b. Other equity
in ₹ million
Attributable to owners of the Company
Reserves and Surplus Items of OCI Total
Capital Securities Debenture General Retained Other
redemption premium redemption reserve earnings items of
reserve reserve OCI
As at 1 April 2019 119.47 9,328.92 300.22 3,530.59 8,074.05 (10.61) 21,342.64
Profit for the year - - - - 2,816.69 - 2,816.69
On account of adoption of Ind AS 115 - - - - - - -
Other comprehensive income (net of tax) - - - - - 4.61 4.61
Total comprehensive income 119.47 9,328.92 300.22 3,530.59 10,890.74 (6.00) 24,163.94
Transfer to other reserves
Debenture redemption reserve - - 49.82 - (49.82) - -
Debentures redeemed during the year - - (350.04) 350.04 - - -
General reserve - - - 289.48 (289.48) - -
Total transfer to other reserves - - (300.22) 639.52 (339.30) - -
Transaction with owners, recorded directly in equity
Distribution to owners
Dividend (including dividend distribution tax) (refer note 18) - - - - (800.39) - (800.39)
Total distribution to owners - - - - (800.39) - (800.39)
As at 31 March 2020 119.47 9,328.92 - 4,170.11 9,751.05 (6.00) 23,363.55
As at 1 April 2020 119.47 9,328.92 - 4,170.11 9,751.05 (6.00) 23,363.55
Profit for the year - - - - 622.76 - 622.76
Other comprehensive income (net of tax) - - - - - 6.50 6.50
Total comprehensive income 119.47 9,328.92 - 4,170.11 10,373.81 0.50 23,992.81
Transfer to other reserves
General reserve - - - 65.54 (65.54) - -
Total transfer to other reserves - - - 65.54 (65.54) - -
Transaction with owners, recorded directly in equity
Distribution to owners
Dividend (including dividend distribution tax) refer note 18 - - - - (663.92) - (663.92)
Total distribution to owners - - - - (663.92) - (663.92)

FINANCIAL STATEMENTS
As at 31 March 2021 119.47 9,328.92 - 4,235.65 9,644.35 0.50 23,328.89
Summary of significant accounting policies 2.4
CONSOLIDATED
The accompanying notes are an integral part of the consolidated financial statements.

As per our report of even date attached

for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Sobha Limited
ICAI Firm registration number: 101248W/W-100022
Ravi PNC Menon T P Seetharam
Amrit Bhansali Chairman Whole-time Director
Partner DIN: 02070036 DIN: 08391622
Membership No.: 065155
Subhash Bhat Vighneshwar G Bhat
Chief Financial Officer Company Secretary and Compliance Officer
Place: Bengaluru, India Place: Bengaluru, India
Date: 22 June 2021 Date: 22 June 2021

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 SOBHA LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS

in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020
Cash flows from operating activities
Profit before tax 751.85 4,331.55
Adjustments to reconcile profit before tax to net cash flows from operating activities
Depreciation and amortization expense 651.68 679.39
Depreciation of investment properties 141.99 43.46
Gain on sale of property, plant and equipment (1.69) (4.41)
Finance income (including fair value change in financial instruments) (419.81) (429.92)
Finance costs (including fair value change in financial instruments) 6,012.14 6,595.35
Allowance for credit loss 191.70 239.33
Share of profit from sale of interest in partnership firm (144.25) -
Bad debts written off - 8.80
Working capital adjustments:
Decrease / (Increase) in trade receivables 1,405.57 (623.35)
Increase in inventories (4,187.60) (3,157.76)
Decrease / (Increase) in other financial assets 1,180.73 (2,222.05)
Decrease in other assets 512.70 3,019.16
Decrease in trade payables and other financial liabilities (945.29) (1,742.28)
(Decrease) / Increase in provisions (6.10) 24.88
Increase/(decrease) in other non-financial liabilities 1,250.87 (2,755.68)
Cash generated from operating activities 6,394.49 4,006.47
Income tax paid (net of refund) (266.05) (1,062.94)
Net cash flows from/ (used in) operating activities (A) 6,128.44 2,943.53
Cash flows from investing activities
Purchase of property, plant and equipment (413.72) (2,913.84)
Purchase of intangible assets (4.12) (102.27)
Proceeds from sale of property, plant and equipment 23.04 4.93
Proceeds from sale of interest in partnership firm 144.25 -
Purchase of investment properties - (19.28)
Contribution to partnership current account - (14.45)
Investment in Mutual funds (0.01) -
Investments in fixed deposits (net) (193.76) (127.88)
Interest received 112.46 102.44
Net cash flows used in investing activities (B) (331.86) (3,070.35)
Cash flows from financing activities
Proceeds from long-term borrowings 1,718.45 -
Repayment of long-term borrowings (245.78) (1,624.98)
Proceeds from short-term borrowings 14,185.29 24,969.22
Repayment of short-term borrowings (16,414.27) (20,039.50)
Lease payments (22.70) (50.06)
Finance cost paid (3,391.17) (3,298.80)
Dividend paid on equity shares (664.11) (663.74)
Tax on dividend paid - (136.47)
Net cash flows used in financing activities (C) (4,834.29) (844.33)
Net increase/ (decrease) in cash and cash equivalents (A+B+C) 962.29 (971.15)
FINANCIAL STATEMENTS

Cash and cash equivalents at the beginning of the year (refer note 14) 675.09 1,644.54
Cash inflow due to acquisition of subsidiary - 1.70
Cash and cash equivalents at the end of the year (refer note 14) 1,637.38 675.09
Summary of significant accounting policies 2.4
CONSOLIDATED

The accompanying notes are an integral part of the consolidated financial statements.
As per our report of even date attached
for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Sobha Limited
ICAI Firm registration number: 101248W/W-100022
Ravi PNC Menon T P Seetharam
Amrit Bhansali Chairman Whole-time Director
Partner DIN: 02070036 DIN: 08391622
Membership No.: 065155
Subhash Bhat Vighneshwar G Bhat
Chief Financial Officer Company Secretary and Compliance Officer
Place: Bengaluru, India Place: Bengaluru, India
Date: 22 June 2021 Date: 22 June 2021

216 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

1 Corporate information
Sobha Limited (‘Company’ or ‘SL’) was incorporated on 7 August 1995. SL together with its subsidiaries (herein after
collectively referred to as ‘the Group’) is a leading real estate developer engaged in the business of construction,
development, sale, management and operation of all or any part of townships, housing projects, commercial premises
and other related activities. The Group is also engaged in manufacturing activities related to interiors, glazing and
metal works and concrete products which also provides backward integration to SL’s turnkey projects.
The Company is a public limited Company domiciled in India and incorporated under the provisions of the Companies
Act, 1956. The registered office is located at Bangalore. The Company’s shares and debentures are listed on Bombay
Stock Exchange (BSE) and National Stock Exchange (NSE).
The consolidated financial statements are approved for issue by the Board of Directors on 22 June 2021.

2 Significant accounting policies

2.1 Basis of preparation

The financial statements are separate financial statements prepared in accordance with Indian Accounting
Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 notified under
Section 133 of Companies Act, 2013, (the ‘Act’) and other relevant provision of the Act.
The consolidated financial statements have been prepared on the historical cost basis, except for the following
assets and liabilities which have been measured at fair value:
● Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial
instruments)
The consolidated financial statements are presented in ₹ and all values are rounded to the nearest millions,
except when otherwise indicated.

2.2 Group information

The consolidated financial statements of the Group includes subsidiaries listed in the table below:
Name of investee Principal Country of Percentage of ownership/
activities incorporation voting rights
31 March 2021 31 March 2020
Subsidiaries
Annalakshmi Land Developers Pvt Ltd (with effect from 19.01.2021) India 100% 0%
Sobha City [‘Partnership firm’] India 100% 100%
Sobha Contracting Pvt Ltd India 100% 100%
Sobha Developers (Pune) Limited India 100% 100%
Sobha Assets Private Limited India 100% 100%
Sobha Highrise Ventures Private Limited India 100% 100%
Sobha Interiors Private Limited India 100% 100%

FINANCIAL STATEMENTS
Sobha Nandambakkam Developers Limited India 100% 100%
Sobha Tambaram Developers Limited India 100% 100%
Sobha Construction Products Private Limited Real estate India 100% 100%
CONSOLIDATED

Kilai Builders Private Limited development India 100% 100%

Kondhwa Projects LLP [‘Partnership firm’] India 50% 50%
Kuthavakkam Builders Private Limited India 100% 100%
Kuthavakkam Realtors Private Limited India 100% 100%
Vayaloor Properties Private Limited India 100% 100%
Vayaloor Builders Private Limited India 100% 100%
Vayaloor Developers Private Limited India 100% 100%
Vayaloor Real Estate Private Limited India 100% 100%
Vayaloor Realtors Private Limited India 100% 100%
Valasai Vettikadu Realtors Private Limited India 100% 100%

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 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

The consolidated financial statements also includes the result of a joint venture, Kondhwa Projects
LLP, which has been accounted for under the equity method of accounting.

2.3 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company, its
subsidiaries and a joint venture. Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Specifically, the Group controls an investee if and only if the
Group has:
● Power over the investee (i.e. existing rights that give it the current ability to direct the relevant
activities of the investee)
● Exposure, or rights, to variable returns from its involvement with the investee and
● The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights result in control. To support this
presumption and when the Group has less than a majority of the voting or similar rights of an
investee, the Group considers all relevant facts and circumstances in assessing whether it has
power over an investee, including:
● The contractual arrangement with the other vote holders of the investee
● Rights arising from other contractual arrangements
● The Group’s voting rights and potential voting rights
● The size of the group’s holding of voting rights relative to the size and dispersion of the holdings
of the other voting rights holders
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group
loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or
disposed of during the year are included in the consolidated financial statements from the date the
Group gains control until the date the Group ceases to control the subsidiary.
Consolidated financial statements are prepared using uniform accounting policies for like
transactions and other events in similar circumstances. If a member of the group uses accounting
policies other than those adopted in the consolidated financial statements for like transactions
FINANCIAL STATEMENTS

and events in similar circumstances, appropriate adjustments are made to that group member’s
financial statements in preparing the consolidated financial statements to ensure conformity with
the group’s accounting policies.
CONSOLIDATED

The financial statements of all entities used for the purpose of consolidation are drawn up to same
reporting date as that of the parent company, i.e., year ended on 31 March 2021.
Consolidation procedure
(a) Combine like items of assets, liabilities, equity, income, expenses and cash flows of the parent
with those of its subsidiaries. For this purpose, income and expenses of the subsidiary are
based on the amounts of the assets and liabilities recognised in the consolidated financial
statements at the acquisition date.
(b) Offset (eliminate) the carrying amount of the parent’s investment in each subsidiary and the

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SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

parent’s portion of equity of each subsidiary. Business combinations policy explains how to
account for any related goodwill.
(c) Eliminate in full intragroup assets and liabilities, equity, income, expenses and cash flows
relating to transactions between entities of the Group (profits or losses resulting from
intragroup transactions that are recognised in assets, such as inventory and fixed assets, are
eliminated in full). Intragroup losses may indicate an impairment that requires recognition in the
consolidated financial statements. Ind AS 12 Income Taxes applies to temporary differences
that arise from the elimination of profits and losses resulting from intragroup transactions.
(d) Include the results, i.e. profit or loss from the joint venture in the consolidated Statement of
profit and loss.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for
as an equity transaction. If the Group loses control over a subsidiary, it:
● Derecognises the assets (including goodwill) and liabilities of the subsidiary
● Derecognises the carrying amount of any non-controlling interests
● Derecognises the cumulative translation differences recorded in equity
● Recognises the fair value of the consideration received
● Recognises the fair value of any investment retained
● Recognises any surplus or deficit in profit or loss
● Reclassifies the parent’s share of components previously recognised in OCI to profit or loss
or retained earnings, as appropriate, as would be required if the Group had directly disposed
of the related assets or liabilities.

2.4 Summary of significant accounting policies

a) Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration transferred measured at
acquisition date fair value and the amount of any non-controlling interests in the acquiree. For
each business combination, the Group elects whether to measure the non-controlling interests
in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net
assets. Acquisition-related costs are expensed as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are
FINANCIAL STATEMENTS
recognised at their acquisition date fair values. For this purpose, the liabilities assumed
include contingent liabilities representing present obligation and they are measured at their
acquisition fair values irrespective of the fact that outflow of resources embodying economic
CONSOLIDATED

benefits is not probable.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred and the amount recognised for non-controlling interests, and any previous interest
held, over the net identifiable assets acquired and liabilities assumed. After initial recognition,
goodwill is measured at cost less any accumulated impairment losses. For the purpose of
impairment testing, goodwill acquired in a business combination is, from the acquisition date,
allocated to each of the Group’s cash-generating units that are expected to benefit from the
combination, irrespective of whether other assets or liabilities of the acquiree are assigned to
those units.

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 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

b) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Group and the revenue can be reliably measured. Revenue is measured at the fair value of the
consideration received or receivable, taking into account contractually defined terms of payment
and excluding taxes or duties collected on behalf of the government. Revenue includes excise
duty, since the recovery of excise duty flows to the Group on its own account. However, sales
tax/ value added tax (VAT)/Goods and Services Tax(GST) is not received by the Group on its own
account. These taxes are collected on value added to the commodity by the seller on behalf of the
government. Accordingly, it is excluded from revenue.
The specific recognition criteria described below must also be met before revenue is recognised.

i. Recognition of revenue from contractual projects

If the outcome of contractual contract can be reliably measured, revenue associated with the
construction contract is recognised by reference to the stage of completion of the contract
activity at year end (the percentage of completion method). The stage of completion on
a project is measured on the basis of proportion of the contract work/ based upon the
contracts/ agreements entered into by the Group with its customers.

ii. Recognition of revenue from real estate projects

a. Recognition of revenue from property development

Revenue is recognized upon transfer of control of residential units to customers, in an
amount that reflects the consideration the Group expects to receive in exchange for those
residential units. The Group shall determine the performance obligations associated with
the contract with customers at contract inception and also determine whether they satisfy
the performance obligation over time or at a point in time. In case of residential units, the
Group satisfies the performance obligation and recognises revenue at a point in time i.e.,
upon handover/deemed handover of the residential units.
Deemed handover of the residential units is considered upon intimation to the customers
about receipt of occupany certificate and receipt of total sale consideration.
To estimate the transaction price in a contract, the Group adjusts the promised amount of
consideration for the time value of money if that contract contains a significant financing
component. The Group when adjusting the promised amount of consideration for a
significant financing component is to recognise revenue at an amount that reflects the
cash selling price of the transferred residential unit.
FINANCIAL STATEMENTS

b. Recognition of revenue from sale of land and development rights

Revenue from sale of land and development rights is recognised upon transfer of all
CONSOLIDATED

significant risks and rewards of ownership of such real estate/ property, as per the terms
of the contracts entered into with buyers, which generally coincides with the firming of
the sales contracts/ agreements. Revenue from sale of land and development rights is
only recognised when transfer of legal title to the buyer is not a condition precedent for
transfer of significant risks and rewards of ownership to the buyer.

iii. Recognition of revenue from manufacturing division

Revenue from sale of materials is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer, which coincides with dispatch of goods

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SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

to the customers. Service income is recognised on the basis of completion of a physical

proportion of the contract work/ based upon the contracts/ agreements entered into by the
Group with its customers.

iv. Dividend income

Revenue is recognised when the shareholders’ or unit holders’ right to receive payment is
established, which is generally when shareholders approve the dividend.

v. Rental income from operating leases

Rental income receivable under operating leases (excluding variable rental income) is
recognized in the statement of profit and loss on a straight-line basis over the term of the
lease including lease income on fair value of refundable security deposits. Rental income
under operating leases having variable rental income is recognized as per the terms of the
contract.

vi. Interest income

Interest income, including income arising from other financial instruments, is recognised using
the effective interest rate method.

c) Property, plant and equipment

Property, plant and equipment are stated at their cost of acquisition/construction, net of
accumulated depreciation and impairment losses, if any. The cost comprises purchase price,
borrowing costs if capitalization criteria are met, directly attributable cost of bringing the asset
to its working condition for the intended use and initial estimate of decommissioning, restoring
and similar liabilities. Each part of an item of property, plant and equipment with a cost that is
significant in relation to the total cost of the item is depreciated separately. This applies mainly
to components for machinery. When significant parts of plant and equipment are required to
be replaced at intervals, the Group depreciates them separately based on their specific useful
lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying
amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All
other repair and maintenance costs are recognised in statement of profit and loss as incurred.
Subsequent expenditure related to an item of property, plant and equipment is added to its
book value only if it increases the future benefits from the existing asset beyond its previously
assessed standard of performance.
Borrowing costs directly attributable to acquisition of property, plant and equipment which

FINANCIAL STATEMENTS
take substantial period of time to get ready for its intended use are also included to the
extent they relate to the period till such assets are ready to be put to use.
CONSOLIDATED
An item of property, plant and equipment and any significant part initially recognised is
derecognised upon disposal or when no future economic benefits are expected from its use
or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in the
statement of profit and loss when the property, plant and equipment is derecognised.
Expenditure directly relating to construction activity is capitalised. Indirect expenditure incurred
during construction period is capitalised to the extent to which the expenditure is indirectly
related to construction or is incidental thereto. Other indirect expenditure (including borrowing
costs) incurred during the construction period which is not related to the construction activity
nor is incidental thereto is charged to the statement of profit and loss.

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 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Advances paid towards the acquisition of property, plant and equipment outstanding at each
balance sheet date is classified as capital advances under other non-current assets.

d) Investment properties
Investment properties are measured initially at cost, including transaction costs. Subsequent
to initial recognition, investment properties are stated at cost less accumulated depreciation
and accumulated impairment loss, if any.
The cost includes the cost of replacing parts and borrowing costs for long-term construction
projects if the recognition criteria are met. When significant parts of the investment property
are required to be replaced at intervals, the Group depreciates them separately based on
their specific useful lives. All other repair and maintenance costs are recognized in statement
of profit and loss as incurred.
Though the Group measures investment property using cost based measurement, the fair
value of investment property is disclosed in the notes. Fair values are determined based on
an annual evaluation performed by an accredited external independent valuer.
Investment properties are derecognized either when they have been disposed of or when
they are permanently withdrawn from use and no future economic benefit is expected from
their disposal. The difference between the net disposal proceeds and the carrying amount of
the asset is recognized in statement of profit and loss in the period of derecognition.

e) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following
initial recognition, intangible assets are carried at cost less accumulated amortization and
accumulated impairment losses, if any. Intangible assets, comprising of software and
intellectual property rights are amortized on a straight line basis over a period of 3 years,
which is estimated to be the useful life of the asset and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with a finite useful life are reviewed at least
at the end of each reporting period.

f) Depreciation on property, plant and equipment

Depreciation is calculated on written down value basis using the following useful lives
prescribed under Schedule II of the Act, except where specified.

Particulars Useful lives estimated by the

FINANCIAL STATEMENTS

management (in years)

Property, plant and equipment
Factory buildings 30
CONSOLIDATED

Buildings - other than factory buildings 60

Buildings - temporary structure for precast plant 8
Buildings - temporary structure 3
Plant and machinery
i. General plant and machinery 15
ii. Plant and machinery - Civil construction 12
iii. Plant and machinery - Electrical installations 10
Furniture and fixtures 10
Motor vehicles 8

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SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Particulars Useful lives estimated by the

management (in years)
Computers
i. Computer equipment 3
ii. Servers and network equipment 6
Office equipment 5
Investment property
Buildings - other than factory buildings 60
Plant and machinery
i. General plant and machinery 15
ii. Plant and machinery - Civil construction 12
iii. Plant and Machinery - Electrical installations 10
Furniture and fixtures 10

Steel scaffolding items are depreciated using straight line method over a period of 6 years,
which is estimated to be the useful life of the asset by the management based on planned
usage and technical advice thereon. This estimate of useful life is higher than those indicated
in Schedule II.
The residual values, useful lives and methods of depreciation of property, plant and equipment
are reviewed at each financial year end and adjusted prospectively, if appropriate.

g) Impairment of non-financial assets

The Group assesses, at each reporting date, whether there is an indication that any non-
financial asset may be impaired. If any indication exists, or when annual impairment testing
for a non-financial asset is required, the Group estimates the asset’s recoverable amount. An
asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair
value less costs of disposal and its value in use. Recoverable amount is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent
of those from other assets or groups of assets. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset. In determining fair value less costs of disposal,
recent market transactions are taken into account. If no such transactions can be identified,

FINANCIAL STATEMENTS
an appropriate valuation model is used. These calculations are corroborated by valuation
multiples, quoted share prices for publicly traded companies or other available fair value
indicators.
CONSOLIDATED

Impairment losses, including impairment on inventories, are recognised in the statement of

profit and loss.

h) Impairment of financial assets

The Group assesses at each date of balance sheet whether a financial asset or a group of
financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through
a loss allowance. The Group recognises lifetime expected losses for all contract assets and
/ or all trade receivables that do not constitute a financing transaction. For all other financial
assets, expected credit losses are measured at an amount equal to the 12-month expected

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credit losses or at an amount equal to the life time expected credit losses if the credit risk on
the financial asset has increased significantly since initial recognition.

i) Current versus non-current classification

The Group presents assets and liabilities in the balance sheet based on current/ non-current
classification. An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve
months after the reporting period
The Group classifies all other liabilities as non-current.
The operating cycle is the time between the acquisition of assets for processing and their
realisation in cash and cash equivalents. The real estate development projects undertaken by
the Group generally run over a period ranging up to 5 years. Operating assets and liabilities
relating to such projects are classified as current based on an operating cycle of up to 5 years.
Borrowings in connection with such projects are classified as short-term (i.e. current) since
they are payable over the term of the respective projects.
Assets and liabilities, other than those discussed above, are classified as current to the extent
they are expected to be realised / are contractually repayable within 12 months from the
balance sheet date and as non-current, in other cases.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.

j) Fair value measurement

FINANCIAL STATEMENTS

The Group measures financial instruments 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
CONSOLIDATED

orderly transaction between market participants at the measurement date.

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 Group uses valuation techniques that are appropriate in the circumstances and for which

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

sufficient data are available to measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements
are categorised 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 — Quoted prices (unadjusted) in active markets for identical assets or liabilities
● Level 2 — inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
● Level 3 — inputs for the asset or liability that are not based on observable market data
(unobservable inputs)
For assets and liabilities that are recognised in the financial statements on a recurring basis,
the Group determines whether transfers have occurred between levels in the hierarchy by
re-assessing categorisation (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period.

k) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not
recorded at fair value through profit or loss, transaction costs that are attributable to the
acquisition of the financial asset.
Classification and subsequent measurement
On initial recognition, financial asset is classified as measured at:
- amortised cost
- fair value through other comprehensive income (FVTOCI) - debt investment
- fair value through other comprehensive income (FVTOCI) - equity investment
- fair value through profit or loss (FVTPL)

Financial assets at amortised cost

A ‘financial asset’ is measured at the amortised cost if both the following conditions are met FINANCIAL STATEMENTS
and is not designated as FVTPL:
CONSOLIDATED

a) the asset is held within a business model whose objective is to hold assets for collecting
contractual cash flows, and b) contractual terms of the asset give rise on specified dates to
cash flows that are solely payments of principal and interest (SPPI) on the principal amount
outstanding.
This category is the most relevant to the Group. After initial measurement, such financial assets
are subsequently measured at amortised cost using the effective interest rate (EIR) method.
Amortised cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortisation is included in
finance income in the statement of profit and loss. The losses arising from impairment are

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

recognised in the statement of profit and loss. This category generally applies to trade and
other receivables.

Debt instrument at Fair value through Other comprehensive income (FVTOCI)

A ‘debt instrument’ is classified as at the FVTOCI if both of the following criteria are met and
is not designated as FVTPL:
a) the objective of the business model is achieved both by collecting contractual cash flows
and selling the financial instrument, and
b) contractual terms of the asset give rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.
Debt investment included within the FVTOCI category are measured initially as well as at each
reporting date at fair value. Fair value movements are recognized in the other comprehensive
income (OCI).

Financial assets at Fair Value Through Profit or Loss (FVTPL)

FVTPL is a residual category for financial assets. Any financial assets, which does not meet
the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
Financial assets included within the FVTPL category are measured at fair value with all changes
recognized in the statement of profit and loss. In addition, the Group may elect to designate
a financial asset, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL.
However, such election is allowed only if doing so reduces or eliminates a measurement
or recognition inconsistency (referred to as ‘accounting mismatch’). The Group has not
designated any financial asset as at FVTPL.

Equity investments in joint ventures

Interests in joint ventures are accounted for using the equity method. They are initially
recognised at cost which includes transaction costs. Subsequent to initial recognition, the
consolidated financial statements include the Group’s share of profit or loss and OCI of joint
ventures until the date on which significant influence or joint control ceases.

Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Group of similar
financial assets) is primarily derecognised when:
FINANCIAL STATEMENTS

● The rights to receive cash flows from the asset have expired, or
● The Group has transferred its rights to receive cash flows from the asset or has assumed
an obligation to pay the received cash flows in full without material delay to a third party
CONSOLIDATED

under a ‘pass-through’ arrangement; =and either (a) the Group has transferred substantially
all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if and to what extent it has retained the risks
and rewards of ownership. When it has neither transferred nor retained substantially all of
the risks and rewards of the asset, nor transferred control of the asset, the Group continues
to recognise the transferred asset to the extent of the Group’s continuing involvement. In
that case, the Group also recognises an associated liability. The transferred asset and the

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

associated liability are measured on a basis that reflects the rights and obligations that the
Group has retained.
Financial liabilities

Initial recognition and measurement

All financial liabilities are recognised initially at fair value plus, in the case of financial liabilities
not recorded at fair value through profit or loss, transaction costs that are directly attributable
to its acquisition or issue.

Classification, subsequent measurement and gains and losses

The financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability
is classified as FVTPL if it is classified as held-for-trading or it is as derivative or deginated as
such on initial recognition. Financial liabilities measured as FVTPL are measured at fair value
and net gains or losses, including any interest expense, are recognised in statement of profit
and loss. Other financial liabilities are subsequently measured at amortised cost using effective
interest method. Interest expense and foreign exchange gains and losses are recognised in
the statement of profit and loss. Any gain or loss on derecognition is also recognised in the
statement of profit and loss.

Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expired. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts
is recognised in the statement of profit and loss.

l) Borrowing costs
Borrowing costs are interest and other costs incurred in connection with borrowings of funds.
Borrowing costs directly attributable to acquisition/ construction of qualifying assets are
capitalised until the time all substantial activities necessary to prepare the qualifying assets for
their intended use are complete. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use/ sale. All other borrowing costs not eligible for
inventorisation/ capitalisation are charged to statement of profit and loss.

FINANCIAL STATEMENTS
m) Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank
and in hand and short-term deposits with an original maturity of three months or less, which
CONSOLIDATED

are subject to an insignificant risk of changes in value, net of outstanding bank overdrafts as
they are considered an integral part of the Group’s cash management.

n) Employee benefits

i. Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays
fixed contributions into a separate entity and will have no legal or constructive obligation
to pay further amounts. The Group makes specified monthly contributions towards

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Government administered provident fund scheme. Obligations for contributions to defined

contribution plans are recognised as an employee benefit expense in the statement of
profit and loss in the periods during which the related services are rendered by employees.
Prepaid contributions are recognised as an asset to the extent that a cash refund or a
reduction in future payments is available.

ii. Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution
plan. The Group’s net obligation in respect of defined benefit plans is calculated separately
for each plan by estimating the amount of future benefit that employees have earned in
the current and prior periods, discounting that amount and deducting the fair value of any
plan assets.

The calculation of defined benefit obligation is performed annually by a qualified actuary

using the projected unit credit method. When the calculation results in a potential asset
for the Group, the recognised asset is limited to the present value of economic benefits
available in the form of any future refunds from the plan or reductions in future contributions
to the plan (‘the asset ceiling’). In order to calculate the present value of economic benefits,
consideration is given to any minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and
losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if
any, excluding interest), are recognised in Other Comprehensive Income (OCI) . The Group
determines the net interest expense (income) on the net defined benefit liability (asset) for
the period by applying the discount rate used to measure the defined benefit obligation at
the beginning of the annual period to the then-net defined benefit liability (asset), taking
into account any changes in the net defined benefit liability (asset) during the period as
a result of contributions and benefit payments. Net interest expense and other expenses
related to defined benefit plans are recognised in the statement of profit and loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change
in benefit that relates to past service (‘past service cost’ or ‘past service gain’) or the gain
or loss on curtailment is recognised immediately in the statement of profit and loss. The
Group recognises gains and losses on the settlement of a defined benefit plan when the
settlement occurs.

The Group makes contributions to Sobha Developers Employees Gratuity Trust (‘the
FINANCIAL STATEMENTS

Trust’) to discharge the gratuity liability to employees. Provision towards gratuity, a defined
benefit plan, is made for the difference between actuarial valuation by an independent
CONSOLIDATED

actuary and the fund balance, as at the year-end. The cost of providing benefits under
gratuity is determined on the basis of actuarial valuation using the projected unit credit
method at each year end.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest on the net defined benefit liability and the return
on plan assets (excluding amounts included in net interest on the net defined benefit
liability), are recognised immediately in the balance sheet with a corresponding debit or
credit to retained earnings through OCI in the period in which they occur. Remeasurements
are not reclassified to profit or loss in subsequent periods.

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Past service costs are recognised in profit or loss on the earlier of:
● The date of the plan amendment or curtailment, and
● The date that the Group recognises related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability
or asset. The Group recognises the following changes in the net defined benefit obligation
as an expense in the statement of profit and loss:
● Service costs comprising current service costs, past-service costs, gains and losses on
curtailments and non-routine settlements; and
● Net interest expense or income
Accumulated leave, which is expected to be utilized within the next 12 months, is treated
as short-term employee benefit. The Group measures the expected cost of such absences
as the additional amount that it expects to pay as a result of the unused entitlement that
has accumulated at the reporting date.
The Group treats accumulated leave expected to be carried forward beyond twelve months,
as long-term employee benefit for measurement purposes. Such long-term compensated
absences are provided for based on the actuarial valuation using the projected unit credit
method at the year-end. The Group presents the entire leave as a current liability in the
balance sheet, since it does not have an unconditional right to defer its settlement for 12
months after the reporting date.
Expense in respect of other short term benefits is recognised on the basis of the amount
paid or payable for the period for which the services are rendered by the employee.

o) Provisions
A provision is recognized when an enterprise has a present obligation (legal or constructive)
as result of past event and it is probable that an outflow of embodying economic benefits of
resources will be required to settle a reliably assessable obligation. Provisions are determined
based on best estimate required to settle each obligation at each balance sheet date. If the
effect of the time value of money is material, provisions are discounted using a current pre-
tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is
used, the increase in the provision due to the passage of time is recognised as a finance cost.

p) Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will
be confirmed by the occurrence or non-occurrence of one or more uncertain future events
beyond the control of the Group or a present obligation that is not recognized because it is FINANCIAL STATEMENTS
not probable that an outflow of resources will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where there is a liability that cannot be recognized
CONSOLIDATED

because it cannot be measured reliably. The Group does not recognize a contingent liability
but discloses its existence in the financial statements.

q) Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the year
attributable to equity shareholders (after deducting preference dividends and attributable
taxes) by the weighted average number of equity shares outstanding during the year. The
weighted average number of equity shares outstanding during the year is adjusted for events
of bonus issue and buy back.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

For the purpose of calculating diluted earnings per share, the net profit or loss for the year
attributable to equity shareholders and the weighted average number of shares outstanding
during the year are adjusted for the effects of all dilutive potential equity shares.

r) Foreign currency transactions

Foreign currency transactions are recorded in the reporting currency, by applying to the
foreign currency amount the exchange rate between the reporting currency and the foreign
currency at the date of the transaction. Foreign currency monetary items are reported using
the exchange rate prevailing at the reporting date. Non-monetary items, which are measured
in terms of historical cost denominated in a foreign currency, are reported using the exchange
rate at the date of the transaction. Exchange differences arising on the settlement of monetary
items or on reporting monetary items of Group at rates different from those at which they
were initially recorded during the year, or reported in previous financial statements, are
recognised as income or as expenses in the year in which they arise.

s) Inventories
Related to contractual and real estate activity
Direct expenditure relating to construction activity is inventorised. Other expenditure (including
borrowing costs) during construction period is inventorised to the extent the expenditure is
directly attributable cost of bringing the asset to its working condition for its intended use.
Other expenditure (including borrowing costs) incurred during the construction period which
is not directly attributable for bringing the asset to its working condition for its intended use is
charged to the statement of profit and loss. Direct and other expenditure is determined based
on specific identification to the construction and real estate activity. Cost incurred/ items
purchased specifically for projects are taken as consumed as and when incurred/ received.
i. Work-in-progress - Contractual: Cost of work yet to be certified/ billed, as it pertains to
contract costs that relate to future activity on the contract, are recognised as contract
work-in-progress provided it is probable that they will be recovered. Contractual work-in-
progress is valued at lower of cost and net realisable value.
ii. Work-in-progress - Real estate projects (including land inventory): Represents cost
incurred in respect of unsold area of the real estate development projects or cost incurred
on projects where the revenue is yet to be recognised. Real estate work-in-progress is
valued at lower of cost and net realisable value.
iii. Finished goods - Flats: Valued at lower of cost and net realisable value.
FINANCIAL STATEMENTS

iv. Finished goods - Plots: Valued at lower of cost and net realisable value.
v. Building materials purchased, not identified with any specific project are valued at lower of
cost and net realisable value. Cost is determined based on a weighted average basis.
CONSOLIDATED

vi. Land inventory: Valued at lower of cost and net realisable value.

Related to manufacturing activity

i. Raw materials are valued at lower of cost and net realisable value. Cost is determined
based on a weighted average basis
ii. Work-in-progress and finished goods are valued at lower of cost and net realisable value.
Cost includes direct materials and labour and a proportion of manufacturing overheads
based on normal operating capacity. Cost of finished goods includes excise duty.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Net realisable value is the estimated selling price in the ordinary course of business, less
estimated costs of completion and estimated costs necessary to make the sale. However,
inventory held for use in production of finished goods is not written down below cost if the
finished products in which they will be incorporated are expected to be sold at or above cost.

t) Land
Advances paid by the Group to the seller/ intermediary towards outright purchase of land is
recognised as land advance under loans and advances during the course of obtaining clear
and marketable title, free from all encumbrances and transfer of legal title to the Group,
whereupon it is transferred to land stock under inventories.
Land/ development rights received under joint development arrangements is measured at
the fair value of the estimated construction service rendered to the land owner and the same
is accounted on launch of the project. Further, non-refundable deposit amount paid by the
Group under joint development arrangements is recognised as land advance under other
assets and on the launch of the project, the non-refundable amount is transferred as land cost
to work-in-progress.

u) Leases

Where the Group is lessee

Finance leases, which effectively transfer to the Group substantially all the risks and benefits
incidental to ownership of the leased asset, are capitalized at the lower of the fair value
and present value of the minimum lease payments at the inception of the lease term and
disclosed as leased assets. Lease payments are apportioned between the finance charges
and reduction of the lease liability based on the implicit rate of return. Finance charges are
recognized as finance costs in the statement of profit and loss.
Right of use asset is depreciated on a straight-line basis over the lower of the lease term or
the estimated useful life of the asset unless there is reasonable certainty that the Group will
obtain ownership, wherein such assets are depreciated over the estimated useful life of the
asset.
Leases where the lessor effectively retains substantially all the risks and benefits of ownership
of the leased term, are classified as operating leases. Operating lease payments are recognized
as an expense in the statement of profit and loss on a straight-line basis over the lease term.

Where the Group is lessor

FINANCIAL STATEMENTS
Leases in which the Group does not transfer substantially all the risks and rewards of
ownership of an asset are classified as operating leases. Rental income from operating lease
is recognised on a straight-line basis over the term of the relevant lease, unless the lease CONSOLIDATED
agreement explicitly states that increase is on account of inflation. Initial direct costs incurred
in negotiating and arranging an operating lease are added to the carrying amount of the
leased asset and recognised over the lease term on the same basis as rental income.

v) Cash dividend to equity holders of the Group

The Group recognises a liability to make cash distributions to equity holders of the Group
when the distribution is authorised and the distribution is no longer at the discretion of the
Group. Final dividends on shares are recorded as a liability on the date of approval by the
shareholders and interim dividends are recorded as a liability on the date of declaration by
the Group’s Board of Directors.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

3 Significant accounting judgements, estimates and assumptions

The preparation of these consolidated financial statements in conformity with the recognition
and measurement principles of Ind AS requires management to make judgements, estimates and
assumptions that affect the reported balances of revenues, expenses, assets and liabilities and
the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in future periods.

a) Judgements
In the process of applying the accounting policies, Management has made the following
judgements, which have the most significant effect on the amounts recognised in the financial
statements:

i) Classification of property

The Group determines whether a property is classified as investment property or inventory

property:

Investment property comprises land and buildings (principally offices, commercial

warehouse and retail property) that are not occupied substantially for use by, or in the
operations of, the Group, nor for sale in the ordinary course of business, but are held
primarily to earn rental income and capital appreciation. These buildings are substantially
rented to tenants and not intended to be sold in the ordinary course of business.

Inventory property comprises property that is held for sale in the ordinary course of
business. Principally, this is residential property that the Group develops and intends to sell
before or on completion of construction.

ii) Business combination

The Group has granted land advances to a land aggregator Group, named Technobuild
Developers Private Limited (‘Technobuild’), wherein Technobuild is engaged in business
of acquiring large parcels of lands and transferring it for development for consideration
to the Group. In order to protect the right of the Company to recover the advance, the
shareholders of Technobuild have signed a non-disposal undertaking with the Company. The
management assessed whether or not the Company has control over Technobuild based
on such non-disposal undertaking. In exercising its judgement, management considers, that
FINANCIAL STATEMENTS

rights are only protective rights to safeguard the Group’s interest to the extent of land
advances granted by it to Technobuild. Further, such rights will get terminated once the
entire land parcels are transferred to the Company as per the terms of the arrangement.
CONSOLIDATED

Also the Group does not exercise any control/ power over the entire financial and business
operations of Technobuild since it neither holds (directly/Indirectly) any shareholding/ voting
rights in Technobuild nor it exercises any board control to demonstrate any power or ability
to use its power over the operations of Technobuild, which could impact the returns of the
Company. The undertaking provided by the shareholders of Technobuild does not provide
substantive rights to the Group to participate in the business operations of Technobuild,
since such rights are only protective in nature, hence management has concluded that
the Company does not have sufficient dominant vesting interest to exert control over
Technobuild.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

b) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at
the reporting date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year, are described below. The Group
based its assumptions and estimates on parameters available when the financial statements
were prepared. Existing circumstances and assumptions about future developments, however,
may change due to market changes or circumstances arising that are beyond the control of
the Group. Such changes are reflected in the assumptions when they occur.

i) Revenue recognition, contract costs and valuation of unbilled revenue

The Group uses the percentage-of-completion method for recognition of revenue,
accounting for unbilled revenue and contract cost thereon for its contractual projects.
The percentage of completion is measured by reference to the stage of the contracts
determined based on the proportion of contract costs incurred for work performed to
date bear to the estimated total contract costs. Use of the percentage-of-completion
method requires the Group to estimate the efforts or costs expended to date as
a proportion of the total efforts or costs to be expended. Significant assumptions
are required in determining the stage of completion, the extent of the contract cost
incurred, the estimated total contract revenue and contract cost and the recoverability
of the contracts. These estimates are based on events existing at the end of each
reporting date.

ii) Accounting for advance from customer considering the time value of money
When determining whether a contract includes a significant financing component, the
Group considers the period between performance and payment for that performance.
For contracts where revenue is recognised at a point in time, the period considered is
that between transfer of control of the good and the payment. Therefore, if payment
for a property is made before the date on which control is transferred, an assessment is
required of whether the contract includes a significant financing component, especially if
the period is greater than twelve months.
Advanced payments from the customer lead to higher amount of revenue being recognised
than the contract price because the Group accepts a lower amount in return for financing.
As the entity recognises the interest expense related to the financing component, the
corresponding amount is recorded as a contract liability/revenue.

FINANCIAL STATEMENTS
iii) Income taxes
Income tax expense comprises of current and deferred tax. It is recognised in the statement
of profit and loss except to the extent that it relates to an item recognised directly in
CONSOLIDATED

equity or in other comprehensive income.

Current income tax

Current income tax comprises the expected tax payable or receivable on the taxable
income or loss for the year and any adjustment to the tax payable or receivable in respect
of previous years. The amount of current tax reflects the best estimate of the tax amount
expected to be paid or received after considering the uncertainty, if any, related to income
taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by
the reporting date.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Current tax assets and current tax liabilities are offset only if there is a legally enforceable
right to set off the recognised amounts, and it is intended to realise the asset and settle
the liability on a net basis or simultaneously.

Deferred income tax

Deferred tax is recognised in respect of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the corresponding
amounts used for taxation purposes. Deferred tax is also recognised in respect of carried
forward tax losses and tax credits. Deferred tax is not recognised for:
● temporary differences arising on the initial recognition of assets or liabilities in a
transaction that is not a business combination and that affects neither accounting nor
taxable profit or loss at the time of the transaction;
● temporary differences related to investments in subsidiaries, associates and joint
arrangements to the extent that the Group is able to control the timing of the reversal of
the temporary differences and it is probable that they will not reverse in the foreseeable
future; and
● taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised to the extent that it is probable that future taxable
profits will be available against which they can be used. The existence of unused tax
losses is strong evidence that future taxable profit may not be available. Therefore, in
case of a history of recent losses, the Group recognises a deferred tax asset only to the
extent that it has sufficient taxable temporary differences or there is convincing other
evidence that sufficient taxable profit will be available against which such deferred tax
asset can be realised. Deferred tax assets – unrecognised or recognised, are reviewed
at each reporting date and are recognised/ reduced to the extent that it is probable/ no
longer probable respectively that the related tax benefit will be realised.

iv) Estimation of net realisable value for inventory property (including land advances)
Inventory property is stated at the lower of cost and net realisable value (NRV).
NRV for completed inventory property is assessed by reference to market conditions
and prices existing at the reporting date and is determined by the Group, based on
comparable transactions identified by the Group for properties in the same geographical
market serving the same real estate segment.
NRV in respect of inventory property under construction is assessed with reference to
FINANCIAL STATEMENTS

market prices at the reporting date for similar completed property, less estimated costs
to complete construction and an estimate of the time value of money to the date of
completion.
CONSOLIDATED

With respect to land advance given, the net recoverable value is based on the present
value of future cash flows, which depends on the estimate of, among other things, the
likelihood that a project will be completed, the expected date of completion, the discount
rate used and the estimation of sale prices and construction costs.

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 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

4 Property, plant and equipment

in ₹ million
Freehold Factory Other Plant and Scaffolding Furniture Vehicles Computers Office Total
land buildings buildings machinery items and fixtures equipment
Cost
As at 1 April 2019 92.42 643.24 1,181.19 1,393.12 1,266.16 40.15 9.95 110.40 22.97 4,759.60
Additions during the year 1,719.40 72.11 17.99 260.05 312.81 7.73 0.37 14.97 6.72 2,412.15
Deletions during the year - - - (3.86) (6.24) - (1.72) (9.32) (0.46) (21.60)
As at 31 March 2020 1,811.82 715.35 1,199.18 1,649.31 1,572.73 47.88 8.60 116.05 29.23 7,150.15
Additions during the year - 2.23 6.57 58.26 289.36 2.70 1.78 29.79 5.42 396.11
Deletions during the year (21.01) - - (4.35) (0.43) (0.02) - (0.16) (0.04) (26.01)
As at 31 March 2021 1,790.81 717.58 1,205.75 1,703.22 1,861.66 50.56 10.38 145.68 34.61 7,520.25

Accumulated depreciation
As at 1 April 2019 - 284.24 236.16 563.71 723.96 22.38 6.80 67.71 12.66 1,917.62
Charge for the year - 112.23 74.25 205.88 187.39 4.24 0.76 31.57 6.58 622.90
Deletions during the year - - - (3.51) (6.23) - (1.65) (9.25) (0.44) (21.08)
As at 31 March 2020 - 396.47 310.41 766.08 905.12 26.62 5.91 90.03 18.80 2,519.44
Charge for the year - 110.37 59.05 206.31 184.03 4.04 0.59 21.36 4.72 590.47
Deletions during the year - - - (4.02) (0.43) (0.01) - (0.16) (0.04) (4.66)
As at 31 March 2021 - 506.84 369.46 968.37 1,088.72 30.65 6.50 111.23 23.48 3,105.25

Carrying amount
As at 31 March 2021 1,790.81 210.74 836.29 734.85 772.94 19.91 3.88 34.45 11.13 4,415.00
As at 31 March 2020 1,811.82 318.88 888.77 883.23 667.61 21.26 2.69 26.02 10.43 4,630.71

Note:
a) Capitalised borrowing costs
The amount of borrowing costs capitalised during the year ended 31 March 2021 was ₹ Nil million (31 March 2020 - ₹ 224.23 million). The rate used to determine the amount of

SO BHA A N N U A L R E P O R T 2021
borrowing costs eligible for capitalisation was 9.45% (31 March 2020 - 9.97%), which is the effective interest rate of the specific borrowing.
b) Property, plant and equipment

235
Property, plant and equipment with a carrying amount of ₹ 1,420.16 million (31 March 2020 - ₹ 1,046.44 million) are subject to a first charge to secure the Group’s loans.

FINANCIAL STATEMENTS
CONSOLIDATED
 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

5 Investment property
in ₹ million
Other assets forming part of
Building
Freehold Other Plant and Furniture and Total
land buildings machinery fixtures
Cost
As at 1 April 2019 132.47 1,714.23 164.45 24.31 2,035.46
Additions during the year - 7.54 - 11.74 19.28
As at 31 March 2020 132.47 1,721.77 164.45 36.05 2,054.74
Additions during the year - 1,652.99 137.26 - 1,790.25
As at 31 March 2021 132.47 3,374.76 301.71 36.05 3,844.99

Accumulated depreciation
As at 1 April 2019 - 85.58 37.64 7.11 130.33
Charge for the year - 28.20 12.58 2.68 43.46
As at 31 March 2020 - 113.78 50.22 9.79 173.79
Charge for the year - 102.02 36.54 3.43 141.99
As at 31 March 2021 - 215.80 86.76 13.22 315.78

Carrying amount
As at 31 March 2021 132.47 3,158.96 214.95 22.83 3,529.21
As at 31 March 2020 132.47 1,607.99 114.23 26.26 1,880.95

Investment property with a carrying amount of ₹ 3,529.21 million (31 March 2020 - ₹ 3,504.09 million) are subject to a first
charge to secure the Group’s loans.

Note:
Information regarding income and expenditure of investment property 31 March 2021 31 March 2020
₹ million ₹ million

Rental income derived from investment properties 301.34 295.57

Direct operating expenses (including repairs and maintenance) generating rental (115.54) (144.84)
FINANCIAL STATEMENTS

income
Profit arising from investment properties before depreciation and indirect 185.80 150.73
expenses
CONSOLIDATED

Less:- Depreciation (141.99) (43.46)

Profit arising from investment properties before indirect expenses 43.81 107.27

The fair value of Investment property is ₹ 6,890 million (31 March 2020 - ₹ 2,805 million). These valuations are based on valuations
performed by an independent valuer. Fair value hierarchy for investment properties have been provided in Note 47b.

236 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

6 Investment property under construction

in ₹ million
Investment property under
construction
Balance as at 1 April 2019 1,900.37
Additions during the year (refer note 46) 422.77
Balance as at 31 March 2020 2,323.14
Additions during the year (refer note 46) 167.68
Capitalised as investment property during the year (refer note 46) (1,790.24)
Balance as at 31 March 2021 700.58

7 Intangible assets
in ₹ million
Goodwill Software Intellectual Total
property
rights

Cost
Balance as at 1 April 2019 127.14 17.28 0.05 144.47
Additions during the year 94.95 7.32 - 102.27
Balance as at 31 March 2020 222.09 24.60 0.05 246.74
Additions during the year 1.23 2.89 - 4.12
Balance as at 31 March 2021 223.32 27.49 0.05 250.86

Amortization and impairment

Balance as at 31 March 2019 - 14.53 0.05 14.58
Charge for the year - 0.42 - 0.42
Balance as at 31 March 2020 - 14.95 0.05 15.00
Charge for the year - 3.73 - 3.73
Balance as at 31 March 2021 - 18.68 0.05 18.73

Carrying amount

FINANCIAL STATEMENTS
Balance as at 31 March 2021 223.32 8.81 - 232.13
Balance as at 31 March 2020 222.09 9.65 - 231.74
CONSOLIDATED

SO BHA A N N U A L R E P O R T 2021 237

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

8 Right of use assets

in ₹ million
Other Vehicles Plant and Total
buildings machinery
Cost
Balance as at 1 April 2019 - - - -
Additions during the year - 93.53 90.73 184.26
Deletions during the year - - - -
Balance as at 31 March 2020 - 93.53 90.73 184.26
Additions during the year 41.15 45.56 - 86.71
Deletions during the year - (15.14) - (15.14)
Balance as at 31 March 2021 41.15 123.95 90.73 255.83

Accumulated depreciation
Balance as at 1 April 2019 - - - -
Charge for the year - 33.73 22.34 56.07
Balance as at 31 March 2020 - 33.73 22.34 56.07
Charge for the year 4.99 30.28 22.21 57.48
Deletions during the year - (15.14) - (15.14)
Balance as at 31 March 2021 4.99 48.87 44.55 98.41

Carrying amount
Balance as at 31 March 2021 36.16 75.08 46.18 157.42
Balance as at 31 March 2020 - 59.80 68.39 128.19

9 Inventories (valued at lower of cost and net realisable value)

in ₹ million
As at As at
31 March 2021 31 March 2020
Raw materials and components 545.68 648.56
Building materials 77.55 91.59
Land stock * 13,982.28 11,992.28
FINANCIAL STATEMENTS

Work-in-progress * 44,840.41 41,913.65

Stock in trade - flats * 11,684.87 12,301.52
Finished goods 115.56 97.30
CONSOLIDATED

71,246.35 67,044.90

* Carrying amount of inventories pledged as securities against borrowings as at 31 March 2021 - ₹ 35,388.27 million (31 March
2020 -₹ 41,046.35 million)

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SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

10 Investments
in ₹ million
As at As at
31 March 2021 31 March 2020

Investment in the capital of partnership firm (Joint Venture)

50% (31 March 2020 - 50%) share in the profits of partnership firm:
Kondhwa Projects LLP - Current account 1,142.52 1,142.52
Total investments carried at cost 1,142.52 1,142.52
As at As at
31 March 2021 31 March 2020

Investments carried at fair value through profit and loss (FVTPL)

Investments at amortized cost
Government and trust securities (unquoted)
National savings certificates 0.08 0.08
Investment in Mutual funds 0.10 0.09
Investments at fair value through profit or loss
Total investments carried at amortised cost 0.18 0.17

Total investments 1,142.70 1,142.69

Aggregate amount of unquoted investments 1,142.70 1,142.69

Aggregate amount of impairment in value of investments - -

Details of investments in partnership firms

Investment in Kondhwa Projects LLP
Name of Partner Share of partner in profits (%)
31 March 2021 31 March 2020
Sobha Limited 50 50

Total capital of the firm ( ₹ million) 1,142.52 1,142.52

11 Trade receivables
in ₹ million
Current Non-current

FINANCIAL STATEMENTS
As at As at As at As at
31 March 2021 31 March 2020 31 March 2021 31 March 2020
Trade receivables
CONSOLIDATED

Unsecured, considered good 1,937.18 3,604.63 423.99 141.02

Unsecured, considered doubtful 638.09 534.40 - -
2,575.27 4,139.03 423.99 141.02
Less: Allowances for credit loss (638.09) (534.40) - -
1,937.18 3,604.63 423.99 141.02

Net trade receivables 1,937.18 3,604.63 423.99 141.02

SO BHA A N N U A L R E P O R T 2021 239

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

12 Other financial assets

in ₹ million
Current Non-current
As at As at As at As at
31 March 2021 31 March 2020 31 March 2021 31 March 2020

Unsecured, considered good

Refundable deposit towards joint development 3,677.32 6,052.36 1,152.66 -
agreement
Less: Allowances for credit loss (73.02) - - -
3,604.30 6,052.36 1,152.66 -
Unsecured, considered good
Security deposits 126.66 129.66 204.98 100.17
Others 1,987.11 2,128.29 - -
Non-current bank balances* - - 60.60 62.15

5,718.07 8,310.31 1,418.24 162.32

* Bank deposits due to mature after twelve months from the reporting date.

13 Other assets
in ₹ million
Current Non-current
As at As at As at As at
31 March 2021 31 March 2020 31 March 2021 31 March 2020

Unsecured, considered good

Capital advances - - 298.61 281.95
Land advances (refer note 35)* 8,958.99 9,636.64 4,852.69 4,857.45
Advances recoverable in kind (refer note 35)** 374.04 917.50 - -
Prepaid expenses 345.08 212.10 49.47 41.15
Balances with statutory/ government authorities 1,097.26 1,624.48 - -
Contract assets 3,047.06 1,932.50 - -

13,822.43 14,323.22 5,200.77 5,180.55

*Advances for land though unsecured, are considered good as the advances have been given based on arrangements/
FINANCIAL STATEMENTS

memorandum of understanding executed by the Group and the Group/ seller/ intermediary is in the course of obtaining clear
and marketable title, free from all encumbrances, including for certain properties under litigation.
**Advances recoverable in cash or kind due by Directors or other officers or companies in which Directors are interested
CONSOLIDATED

in ₹ million
Current Non-current
As at As at As at As at
31 March 2021 31 March 2020 31 March 2021 31 March 2020
Advances recoverable in cash or kind
Dues from Sobha Projects & Trade Private Limited, - 13.17 - -
in which the Company’s director is a director and a
member

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SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

14 Cash and cash equivalents

in ₹ million
Current
As at As at
31 March 2021 31 March 2020

Cash on hand 8.46 8.40

Cheques/ drafts on hand 147.66 52.66
Balances with banks:
– On current accounts 1,481.26 614.03
1,637.38 675.09

15 Bank balance other than cash and cash equivalents

in ₹ million
Current
As at As at
31 March 2021 31 March 2020

Bank balance other than cash and cash

equivalents

– On unclaimed dividend account 2.33 2.52

– Margin money deposit 401.78 206.28
404.11 208.80
Margin money deposits given as security
Margin money deposits with a carrying amount of ₹ 450.88 million (31 March 2020 - ₹ 266.65 million) are subject to first charge
to secure the Group’s borrowings.

Short-term deposits are made for varying periods of between seven day and three months, depending on the immediate cash
requirements of the Group, and earn interest at the respective short-term deposit rates.

FINANCIAL STATEMENTS
CONSOLIDATED

SO BHA A N N U A L R E P O R T 2021 241

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

16 Equity share capital

in ₹ million
As at As at
31 March 2021 31 March 2020
Authorised shares
150,000,000 (31 March 2020 - 150,000,000) equity shares of ₹10 each 1,500.00 1,500.00
5,000,000 (31 March 2020 - 5,000,000) 7% redeemable preference shares of ₹100 500.00 500.00
each

Issued, subscribed and fully paid-up shares

94,845,853 (31 March 2020 - 94,845,853) equity shares of ₹10 each fully paid up 948.46 948.46

Total issued, subscribed and fully paid-up share capital 948.46 948.46

(a) Reconciliation of the equity shares outstanding at the end of the reporting year
31 March 2021 31 March 2020
No of shares ₹ million No of shares ₹ million

Equity shares
At the beginning of the year 94,845,853 948.46 94,845,853 948.46
Outstanding at the end of the year 94,845,853 948.46 94,845,853 948.46

(b) Terms/ rights attached to equity shares

The Company has only one class of equity shares having a par value of ₹10 per share fully paid up. Each holder of
equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend
proposed by the Board of Directors is subject to the approval of the shareholders in ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares would be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares
held by the shareholders.

(c) Details of equity shareholders holding more than 5% shares in the Company
31 March 2021 31 March 2020
No of shares in Holding No of shares in Holding
million percentage million percentage
Equity shares of ₹10 each fully paid up
FINANCIAL STATEMENTS

Mrs. Sobha Menon 28.73 30.29% 28.73 30.29%

Mr. P.N.C. Menon 11.06 11.66% 12.06 12.72%
CONSOLIDATED

Mr. P.N.C. Menon (inclusive of joint holding with 5.29 5.58% 5.29 5.58%
Mrs. Sobha Menon)
Anamudi Real Estates LLP 9.48 10.00% - -
Schroder International Selection Fund Emerging 6.24 6.58% 5.25 5.54%
Asia
Franklin India Focused Equity Fund 4.80 5.06% 8.33 8.78%
Note : As per records of the Company, including its register of shareholders/ members and other declaration received from
shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

242 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

17 Other equity
in ₹ million
As at As at
31 March 2021 31 March 2020
Capital redemption reserve
Balance at the beginning and end of the year 119.47 119.47
Closing Balance 119.47 119.47
Debenture redemption reserve [Refer note (a) below]
Balance at the beginning of the year - 300.22
Add: Amount transferred from surplus balance in the consolidated statement of profit - 49.82
and loss
Less: Transfer to general reserve on redemption of debentures - (350.04)
Closing balance - -
Securities premium
Balance at the beginning and end of the year 9,328.92 9,328.92
General reserve
Balance at the beginning of the year 4,170.11 3,530.59
Add: Transfer from consolidated statement of profit and loss 65.54 289.48
Add: Transfer from Debenture redemption Reserve - 350.04
Closing balance 4,235.65 4,170.11
Surplus in the statement of profit and loss
Balance at the beginning of the year 9,745.05 8,063.44
Profit for the year 622.76 2,816.69
Other comprehensive income
Re-measurement gains/ (loss) on defined benefit plans 6.50 4.61
Less: Appropriations
Dividend (including dividend distribution tax) refer note 18 (663.92) (800.39)
Transfer to debenture redemption reserve - (49.82)
Transfer to general reserve (65.54) (289.48)
Net surplus in the consolidated statement of profit and loss 9,644.85 9,745.05
Total other equity 23,328.89 23,363.55
Nature and purpose of reserve
(a) Capital redemption reserve
The Group recognises profit and loss on purchase, sale, issue or cancellation of the Group’s own equity instruments to capital reserve.
(b) Debenture redemption reserve

FINANCIAL STATEMENTS
The Group had issued redeemable non-convertible debentures. Accordingly, the Companies (Share capital and Debentures)
Rules, 2014 (as amended), require the Group to create Debenture Redemption Reserve (DRR) out of profits of the Group
available for payment of dividend. DRR is required to be created for an amount which is equal to 25% of the value of debentures
issued. The Group has created the DRR of Nil million (31 March 2020 - million), as the debentures have been redeemed during
CONSOLIDATED

the previous year.

(c) Securities premium
Securities premium reserve is used to record the premium received on issue of shares by the Group. The reserve can be
utilised in accordance with the provision of Section 52(2) of Companies Act, 2013.
(d) General reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the
general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive
income, items included in general reserve will not be reclassified subsequently to profit and loss.
(e) Surplus in the statement of profit and loss
The cumulative gain or loss arising from the operations which is retained by the Group is recognised and accumulated under
the heading of retained earnings. At the end of the year, the profit after tax is transferred from the Consolidated statement of
profit and loss to Surplus in the statement of profit and loss account.

SO BHA A N N U A L R E P O R T 2021 243

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

18 Distribution made and proposed

in ₹ million
As at As at
31 March 2021 31 March 2020
Cash dividend on equity shares proposed and paid
Final dividend paid during the year ended 31 March 2020- ₹ 7 per share (31 March 663.92 663.92
2019- ₹ 7 per share)
Dividend distribution tax on final dividend - 136.47
663.92 800.39

Proposed dividend on equity shares

Final dividend for the year ended 31 March 2021- ₹ 3.5 per share (31 March 2020- ₹ 331.96 663.92
7 per share)
331.96 663.92

19 Borrowings
in ₹ million
As at As at
31 March 2021 31 March 2020
Non-current borrowings

Secured loans
Term loans from banks 3,990.02 2,548.37
Term loans from financial institutions - -
Finance lease obligation 67.97 60.64
Equipment loans - 0.19
4,057.99 2,609.20

Amount disclosed under the head “other current financial liabilities” (refer note 20) (485.69) (170.92)

Total non-current borrowings 3,572.30 2,438.28

Current borrowings
Secured loans
FINANCIAL STATEMENTS

Term loans from banks* 16,284.97 17,207.23

Term loans from financial institutions* 6,270.66 8,209.48
Finance lease obligation 61.98 73.56
CONSOLIDATED

Cash credit from banks 3,840.71 3,208.34

Total current borrowings 26,458.32 28,698.61

* Term loan from banks and financial institutions represents amount repayable within the operating cycle amounting to
₹ 26,396.34 million (31 March 2020 - ₹ 28,625.05 million)
As at 31 March 2021, the Group is not in breach of any covenants as defined in the loan agreements.

244 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Terms and repayment schedule

Non-Current Borrowings
Secured loans
in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest rate
31 March 2021 31 March 2020
Term loans - 49.87 9%-11% Secured by equitable mortgage of fixed assets Twelve quarterly instalments of `
from banks and receivables of the Company. 25 million commencing at end of
15th month from the date of first
disbursement.
Term loans 1,576.82 1,625.19 7%-9% Secured by equitable mortgage of project 153 Structured Monthly
from banks specific inventory and certain receivables of instalments, starting at the end
the Company and maintaining Debt Service of Moratorium 3 months from the
Reserve account equal to 2 months interest & date of disbursement - June -20
principal.
Term loans 802.26 873.30 7%-9% Secured by equitable mortgage of project 126 Structured Monthly
from banks specific inventory and certain receivables of instalments ,as per repayment
the Company. Corporate guarantee of Group schedule from 15 January
Company 2018 & 120 Structured Monthly
instalments ,as per repayment
schedule from 15 January 2020
Term loans 518.94 - 8%-10% Secured by equitable mortgage of fixed Repayable in 16 equal quarterly
from banks assets of the Company. instalments of ₹37.50 million
from the date of disbursement.
Term 1,092.00 - 9%-11% Secured by equitable mortgage of certain land Repayable in 20 equal quarterly
loans from of the company instalments starting from
financial 7th Month from the date of
institutions disburement after 6 month
moratorium period
Equipment - 0.19 13%-15% Hypothecation against specific equipment. Thirty five monthly instalments
loan commencing from the month the
loan is availed.

Current Borrowings
Secured loans

in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest rate
31 March 2021 31 March 2020
Term loans - 599.88 9%-11% Secured by equitable mortgage of 61.10% Three structured quarterly
from banks of the project land stock, building to be instalments commencing after
constructed on the land stock and first charge initial moratorium period of
on project cash flow/receivables including eleven quarters from the date of
escrow account first disbursement.
Term loans - 149.90 9%-11% Secured by equitable mortgage of land stock Repayable in 36 equal monthly
from banks and hypothecation pari-passu charge on the instalments commencing from
entire escrow receivables of the project. 13th month from the date of

FINANCIAL STATEMENTS
disbursement.
Term loans 697.79 694.85 7%-9% Secured by charge on specific project Repayable on demand (Sub limit
from banks inventory, current assets and receivables of of Cash Credit)
the Company.
CONSOLIDATED

Term loans 86.92 166.25 9%-11% Secured by equitable mortgage of certain land Repayable in 12 quarterly
from banks stock of the Company. instalments commencing from
30 June 2018.
Term loans - 1,000.00 9%-11% Secured by equitable mortgage of receivables One instalment in every ninety
from banks of the Group. days.
Term loans 260.72 415.72 9%-11% Secured by equitable mortgage of certain land Repayable in 12 quarterly
from banks stock of the Company. instalments commencing from
Sep 30, 2018.
Term loans 681.70 1,591.00 8%-10% Secured by equitable mortgage of immovable Repayable in equal monthly
from banks properties, building and other assets of the instalments after 30 months
project and first charge on company’s share of moratorium period commencing
receivables of the projects. from first disbursement.

SO BHA A N N U A L R E P O R T 2021 245

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Current Borrowings
Secured loans (continued)

in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest rate
31 March 2021 31 March 2020
Term loans 1,985.76 1,493.15 8%-10% Secured by equitable mortgage of certain Repayable on demand (Sub limit
from banks land stock, project specific inventory of Cash Credit)
and receivables of the Company and
hypothecation of movable fixed assets of
the Company.
Term loans 48.09 232.07 8%-10% Secured by equitable mortgage of certain Repayable in equal monthly
from banks land stock of the Company. instalments after 12 months
moratorium period commencing
from first disbursement.
Term loans 1,122.16 1,639.23 9%-11% Secured by equitable mortgage of immovable Repayable in equal quarterly
from banks properties, building and other assets of the instalments after 9 quarter
project and first charge on company’s share moratorium period commencing
of receivables of the projects. from first disbursement.
Term loans 1,044.25 1,148.70 8%-10% Secured by equitable mortgage of certain Repayable in 12 quarterly
from banks land stock of the Company. instalments commencing from 30
September 2018.
Term loans 923.37 648.03 7%-9% Secured by equitable mortgage of Repayable in 5 quarterly equal
from banks immovable properties, building and other instalments commencing Q-12 to
assets of the project and first charge on Q-16 from first disbursement.
receivables of the projects.
Term loans 3,033.19 2,492.82 7%-9% Secured by equitable mortgage of Repayable in 10 quarterly equal
from banks immovable properties, building and other instalments commencing Q-14 to
assets of the project and first charge on Q-23 from first disbursement.
receivables of the projects.
Term loans - 590.50 8%-10% Secured by equitable mortgage of immovable Repayable in 10 quarterly unequal
from banks properties, building and other assets of the instalments commencing Q-11 to
project and first charge on company’s share Q-20 from first disbursement.
of receivables of the projects.
Term loans 136.66 350.77 8%-10% Secured by equitable mortgage of immovable Repayable in 10 quarterly equal
from banks properties, building and other assets of the instalments commencing Q-12 to
project and first charge on company’s share Q-16 from first disbursement.
of receivables of the projects.
Term loans 347.87 434.47 8%-10% Secured by equitable mortgage of immovable Repayable in 10 quarterly unequal
from banks properties, building and other assets of the instalments commencing Q-8 to
project and first charge on company’s share Q-26 from first disbursement.
of receivables of the projects.
Term loans 1,042.19 721.29 7%-9% Secured by equitable mortgage of immovable Repayable in 10 quarterly equal
from banks properties, building and other assets of the instalments commencing Q-15 to
project and first charge on company’s share Q-24 from first disbursement.
of receivables of the projects.
Term loans 510.00 960.00 8%-10% Secured by equitable mortgage of certain Repayable on demand (Sub limit
from banks land stock and receivables of the Company. of Cash Credit)
FINANCIAL STATEMENTS

Term loans 300.00 300.00 8%-10% Secured by equitable mortgage of certain Repayable on demand (Sub limit
from banks land stock and receivables of the Company. of Cash Credit)
Term loans 574.27 487.84 8%-10% Secured by equitable mortgage of Repayable in 10 quarterly equal
CONSOLIDATED

from banks immovable properties, building and other instalments commencing Q-11 to
assets of the project and first charge on Q-20 from first disbursement.
receivables of the projects.
Term loans 1,001.64 660.78 8%-10% Secured by equitable mortgage of property, Repayable in 24 monthly
from banks hypothecation on scheduled company’s instalments commencing from 15
share of receivables, Escrow account and June 2022.
maintaining of Debt Service Reserve account
equal to three months interest.
Term loans 148.81 150.00 8%-10% Secured by equitable mortgage of property, Repayable in 24 monthly
from banks hypothecation on scheduled company’s instalments commencing from 15
share of receivables, Escrow account and June 2022.
maintaining of Debt Service Reserve account
equal to three months interest.

246 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Current Borrowings
Secured loans (continued)

in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest rate
31 March 2021 31 March 2020
Term loans 292.32 280.00 9%-11% Secured by equitable mortgage of project Repayable in 7 quarterly
from banks specific inventory and certain receivables of instalments after 21 months
the Company. Corporate guarantee of Group moratorium period commencing
Company. from first disbursement.

Term loans 500.00 - 8%-10% Secured by equitable mortgage of certain Repayable Rs.50Cr on 30.04.2021
from banks land and receivables of the Company.

Term loans 16.67 - 7%-9% Secured by equitable mortgage of certain Repayable in 6 Monthly instalments
from banks land, specific project inventory, and starting from 7th Month from the
receivables of the Company. date of disburement after 6 month
moratorium period

Term loans 83.33 - 9%-11% Secured by equitable mortgage of certain Repayable in 18 Monthly
from banks land and receivables of the Company. instalments starting from
7th Month from the date of
disburement after 6 month
moratorium period

Term loans 476.63 - 9%-11% Secured by equitable mortgage of certain Repayable in 30 quarterly
from banks land, specific project inventory, and instalments starting from
receivables of the Company. 31st quarter from the date of
disburement after 30 month
moratorium period

Term loans 193.62 - 8%-10% Secured by equitable mortgage of certain Repayable in 16 quarterly
from banks land, specific project inventory, and instalments starting from
receivables of the Company. 31st quarter from the date of
disburement after 30 month
moratorium period

Term loans 187.06 - 8%-10% Secured by equitable mortgage of certain Repayable in 8 quarterly
from banks land and receivables of the Company. instalments starting from
13th Month from the date of
disburement after 12 month
moratorium period

Term loans 442.04 - 8%-10% Secured by equitable mortgage of immovable Repayable in 24 Monthly
from banks properties, building and other assets of the instalments starting from
project and first charge on company’s share 31st Month from the date of
of receivables of the projects. disburement after 30 month
moratorium period

Term loans 147.91 - 8%-10% Secured by equitable mortgage of immovable Repayable in 30 Monthly
from banks properties, building and other assets of the instalments starting from
project and first charge on company’s share 31st Month from the date of
of receivables of the projects. disburement after 30 month
moratorium period

FINANCIAL STATEMENTS
Term - 61.77 9%-11% Secured by equitable mortgage of land stock Repayable in equal monthly
loans from and hypothecation pari-passu charge on the instalments starting from 12th
financial entire escrow receivables of the project. month moratorium starts from
institutions date of first disbursement.
CONSOLIDATED

Term 142.22 362.96 9%-11% Secured by equitable mortgage of certain Repayable in 30 monthly
loans from land stock, building and project specific instalments after principle
financial inventory of the Company, leasehold moratorium period of 18 months.
institutions rights of the company and hypothecation
of receivables and Escrow account of the
Company. Corporate guarantee of Group
Company.

Term - 250.91 9%-11% Secured by equitable mortgage of certain Repayable in 36 monthly

loans from land stock and immovable properties, instalments after principle
financial building and other assets of the project moratorium period of 18 months
institutions and first charge on company’s share of from first disbursement.
receivables of the projects.

SO BHA A N N U A L R E P O R T 2021 247

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Current Borrowings
Secured loans (continued)

in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest rate
31 March 2021 31 March 2020
Term 124.68 807.21 9%-11% Secured by equitable mortgage of certain Repayable in 36 monthly
loans from land stock and immovable properties, instalments after principle
financial building and other assets of the project and moratorium period of 18 months
institutions first charge on receivables of the projects. from first disbursement.
Term 530.02 506.32 9%-11% Secured by equitable mortgage of certain Repayable in 18 monthly
loans from land stock and first charge on receivables instalments after principle
financial certain projects. moratorium period of 24 months
institutions from first disbursement.
Term 746.89 712.30 9%-11% Secured by equitable mortgage of certain Repayable in 18 monthly
loans from land stock and first charge on receivables instalments after principle
financial certain projects. moratorium period of 24 months
institutions from first disbursement.
Term 1,410.46 1,458.20 10%-12% Secured by equitable mortgage of immovable Repayable in 24 monthly
loans from properties, building and other assets of instalments after principle
financial the project and first charge on receivables moratorium period of 30 months
institutions of company’s share of receivables of the from first disbursement.
projects.
Term - 461.22 9%-11% Secured by equitable mortgage of certain Repayable in 24 monthly
loans from land stock and immovable properties, instalments 3.75cr each & 30
financial building and other assets of the project monthly instalments 2.67cr
institutions and first charge on company’s share of each after principle moratorium
receivables of the projects. period of 30 months from first
disbursement.
Term 889.03 903.05 10%-12% Secured by equitable mortgage of certain Repayable in 18 monthly
loans from land stock and first charge on receivables instalments after principle
financial certain projects. moratorium period of 24 months
institutions from first disbursement.
Term 816.61 972.69 9%-11% Secured by equitable mortgage of certain Repayable in equal monthly
loans from land stock and first charge on receivables instalments starting from 7th
financial certain projects. month from first disbursement.
institutions
Term 278.51 292.94 9%-11% Secured by equitable mortgage of land stock Repayable in 48 unequal monthly
loans from and hypothecation pari-passu charge on the instalments
financial entire escrow receivables of the project.
institutions
Term 447.08 494.20 9%-11% Secured by equitable mortgage of certain Repayable in 11 quarterly
loans from land stock and first charge on receivables instalments after principle
financial certain projects. moratorium period of 3 months
institutions from first disbursement.
Term 885.16 925.69 9%-11% Secured by equitable mortgage of certain Repayable in 24 Monthly
loans from land stock and first charge on receivables instalments after principle
financial certain projects. moratorium period of 24 months
institutions from first disbursement.
FINANCIAL STATEMENTS

Cash credit 1,949.44 993.40 9%-11% Secured by way of equitable mortgage of Repayable on demand
certain land stock and certain receivables of
the Group Company.
CONSOLIDATED

Cash credit 175.72 41.33 7%-9% Secured by equitable mortgage of certain Repayable on demand
land stock, specific project inventory, and
receivables of the Company.
Cash credit 9.41 29.36 7%-9% Secured by equitable mortgage of certain Repayable on demand
land stock, specific project inventory, and
receivables of the Company.
Cash credit - 2.91 7%-9% Secured by equitable mortgage of certain Repayable on demand
land stock, specific project inventory, and
receivables of the Company.
Cash credit 1.63 300.78 10%-12% Secured by equitable mortgage of certain Repayable on demand
land stock and receivables of the Company.
Cash credit 197.42 508.51 8%-10% Secured by equitable mortgage of certain Repayable on demand
land stock and receivables of the Company.

248 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Current Borrowings
Secured loans (continued)

in ₹ million
Particulars Carrying amount as at Effective Security Details Repayment terms
interest rate
31 March 2021 31 March 2020
Cash credit 7.71 3.00 8%-10% Secured by equitable mortgage of certain Repayable on demand
land stock, project specific inventory
and receivables of the Company and
hypothecation of movable fixed assets of
the Company.
Cash credit - 104.27 9%-11% Secured by equitable mortgage of Repayable in 10 quarterly unequal
immovable properties, building and other instalments commencing Q-11 to
assets of the project and first charge on Q-20 from first disbursement.
company’s share of receivables of the
projects.
Cash credit 181.22 192.66 8%-10% Secured by equitable mortgage of certain Repayable on demand
land stock and receivables of the Company.
Cash credit 538.82 659.86 9%-11% Secured by equitable mortgage of certain Repayable on demand
land stock and receivables of the Company.
Cash credit 102.67 53.09 8%-10% Secured by equitable mortgage of property, Repayable in 24 monthly
hypothecation on scheduled company’s instalments commencing from
share of receivables, Escrow account and June 15, 2022.
maintaining of Debt Service Reserve account
equal to three months interest.
Cash credit - 0.02 7%-9% Secured by equitable mortgage of certain Repayable on demand
land stock, specific project inventory, and
receivables of the Company.
Cash credit 8.64 0.26 8%-10% Secured by equitable mortgage of certain Repayable on demand
land stock, project specific inventory
and receivables of the Company and
hypothecation of movable fixed assets
of the Company. Corporate guarantee of
Group Company.
Cash credit 0.84 1.77 8%-10% Secured by equitable mortgage of certain Repayable on demand
land stock, project specific inventory
and receivables of the Company and
hypothecation of movable fixed assets
of the Company. Corporate guarantee of
Group Company.
Cash credit - 305.96 8%-10% Secured by equitable mortgage of certain Repayable on demand
land stock, project specific inventory
and receivables of the Company and
hypothecation of movable fixed assets
of the Company. Corporate guarantee of
Group Company.
Cash credit - 2.57 8%-10% Secured by equitable mortgage of certain Repayable on demand

FINANCIAL STATEMENTS
land stock, project specific inventory
and receivables of the Company and
hypothecation of movable fixed assets
of the Company. Corporate guarantee of
CONSOLIDATED

Group Company.
Cash credit 21.25 8.59 8%-10% Secured by equitable mortgage of certain Repayable on demand
land stock, project specific inventory
and receivables of the Company and
hypothecation of movable fixed assets
of the Company. Corporate guarantee of
Group Company.
Cash credit 645.94 - 8%-10% Secured by equitable mortgage of certain Repayable on demand
land and receivables of the Company.

Total
30,386.36 31,173.61
borrowings

SO BHA A N N U A L R E P O R T 2021 249

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Details of collateral securities offered by related companies in respect of loans availed by the Group
Carrying amount as at
Nature of loan Year of maturity Name of the Company
31 March 2021 31 March 2020
Term loans Vayaloor Developers Private Limited
802.25 873.00 2029
Term loans Vayaloor Builders Private Limited
Term loans Vayaloor Properties Pvt. Ltd.
Term loans Vayaloor Real Estate Pvt. Ltd
292.32 280.00 2021
Term loans Vayaloor Builders Pvt. Ltd
Term loans Vayaloor Developers Pvt. Ltd
Term loans Sri Durga Devi Property Management Private Limited
1,279.21 1,224.00 2022
Sri Parvathy Land Developers Private Limited
Term loans 4,189.16 4,290.00 On demand Kilai Builders Private Limited
Term loans 1,100.00 - 2026 Sobha Interior Private Limited

20 Other financial liabilities

in ₹ million
As at As at
31 March 2021 31 March 2020

Current

Current maturities of long-term borrowings (refer note 19) 485.69 170.92

Letter of credit payable 2,459.77 1,776.84
Book overdraft from scheduled banks 240.39 4.01
Interest accrued but not due on borrowings 35.98 65.32
Unclaimed dividend* 2.33 2.52
Lease deposit 111.54 76.27
Deffered Lease Rental 29.69 -
Non-trade payable 207.26 302.73

Security deposit towards maintenance services 2,311.38 2,047.30

Payable to related parties (refer note 35) 658.10 479.63
Payable for purchase of property, plant and equipment 20.84 11.52

Total other financial liabilities 6,562.97 4,937.06

FINANCIAL STATEMENTS

21 Provisions
in ₹ million
CONSOLIDATED

Current Non-current
As at As at As at As at
31 March 31 March 31 March 31 March
2021 2020 2021 2020

Provision for employee benefits

Provision for gratuity (refer note 37) 66.50 68.64 151.46 144.67
Provision for compensated absence 72.00 82.75 - -
138.50 151.39 151.46 144.67

250 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

22 Income tax

The major components of income tax expense for the years ended 31 March 2021 and 31 March 2020 are:
A Amounts charged to statement of profit and loss
Profit or loss section
in ₹ million
Particulars As at As at
31 March 2021 31 March 2020

Current income tax:

Current income tax charge 100.81 451.90

Deferred tax:
Relating to origination and reversal of temporary differences 28.28 1,062.96

Income tax expense reported in the statement of profit and loss 129.09 1,514.86

B. Income tax recognised in other comprehensive income

in ₹ million

Particulars As at As at
31 March 2021 31 March 2020

Net loss/(gain) on remeasurements of defined benefit plans - -

Income tax charge to other comprehensive income - -

C. Reconciliation of effective tax rate

in ₹ million
Particulars As at As at
31 March 2021 31 March 2020

Accounting profit before income tax 751.85 4,331.55

Tax on accounting profit at statutory income tax rate 25.17% (31 March 2020: 25.17%)* 189.24 1,090.25

FINANCIAL STATEMENTS
Adjustments in respect of current income tax of previous years - -
Adjustments in respect of deferred tax of previous years - -
Adjustments in respect of losses in subsidiaries on consolidation - -
CONSOLIDATED

Non-deductible expenses for tax purposes:

Permanent disallowances (76.16) 63.39
Permanent differences in subsidiaries 16.01 -
Others - 62.27
Effect of increase in surcharge - -
MAT credit reversal/(entitlement) - 298.95
At the effective income tax rate of 17.17% (31 March 2020: 34.69%) 129.09 1,514.86
Tax expense reported in the statement of profit and loss 129.09 1,514.86

SO BHA A N N U A L R E P O R T 2021 251

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

22 D. Deferred tax
Deferred tax assets and liabilities relates to the following
in ₹ million
Balance Movement Balance Movement Balance
as at during as at during as at
1 April 2019-20 31 March 2020-21 31 March
2019 2020 2021
Interest u/s 36(1)(iii)-interest inventorised/capitalised (3,457.09) 967.46 (2,489.63) (182.02) (2,671.65)
in the books but claimed as expense in tax
Property, plant and equipment 147.28 (16.43) 130.85 (23.73) 107.12
Provision for compensated absence 26.90 (6.07) 20.83 (2.71) 18.12
Provision for gratuity 67.86 (14.17) 53.69 1.17 54.86
Provision for doubtful debts 47.24 (9.01) 38.23 62.93 101.16
Difference of finance lease depreciation and interest - 1.51 1.51 0.57 2.08
as per books and rent allowed as per IT Act
Deferred tax on brought forward losses - - - - -
Deferred tax adjustment on adoption of Ind AS 115 2,283.58 (329.83) 1,953.75 112.02 2,065.77
Deferred tax adjustment for periods Ind AS (50.66) 50.66 - - -
adjustments*
Deferred tax expense / (income) - 644.12 - (31.77) -
Net deferred tax assets / (liabilities) (934.89) (290.77) (31.77) (322.54)
(*) adjusted against current tax liability

Reconciliation of deferred tax assets/(liabilities), net:

in ₹ million
As at As at
31 March 2021 31 March 2020
Balance at the beginning of the year (290.77) 934.89
Tax income/(expense) during the period recognised in profit or loss 28.28 1,062.96
Deferred tax adjustment on adoption of Ind AS 115 (60.05) (2,288.62)

Closing balance (322.54) (290.77)

E. Liabilities for current tax (net)

FINANCIAL STATEMENTS

in ₹ million
Particulars As at As at
CONSOLIDATED

31 March 2021 31 March 2020

Current income tax:
Opening (155.60) 467.69
Add: Additions during the year 100.81 451.90
Add/(less): MAT credit adjustment - -
Less: Payments during the year 45.15 (1,075.19)
(9.64) (155.60)

252 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

23 Trade payables
in ₹ million
As at As at
31 March 2021 31 March 2020

Trade payables
Land cost payable 200.00 200.00
Others* 7,117.59 9,366.88

7,317.59 9,566.88
Trade payables are non-interest bearing and are normally settled on 30 to 60 day terms. For explanations on the
Company’s credit risk management processes, refer to note 48.
24 Other liabilities
in ₹ million
As at As at
31 March 2021 31 March 2020

Advance from customers 42,996.49 39,140.42

Withholding taxes payable 79.10 56.96
Others 118.58 95.61

43,194.17 39,292.99
Breakup of financial liabilities carried at amortised cost
in ₹ million
As at As at
31 March 2021 31 March 2020

Borrowings (refer note 19) 30,030.62 31,136.89

Other financial liabilities (refer note 20) 6,562.97 4,937.06
Trade payables (refer note 23) 7,317.59 9,566.88

Total financial liabilities carried at amortised cost 43,911.18 45,640.83

FINANCIAL STATEMENTS
CONSOLIDATED

SO BHA A N N U A L R E P O R T 2021 253

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

25 Revenue from operations

in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020
Sale of products/ finished goods
Income from property development 12,521.55 21,952.14
Income from sale of land and development rights 249.18 515.83
Income from glazing works 1,452.35 2,193.53
Income from interior works 799.13 1,870.97
Income from concrete blocks 410.59 485.71
Sale of services
Income from contractual activity 5,324.63 10,181.49
Rental income from operating leases 206.04 193.94
Income from retail sales 8.25 6.01
Income from maintenance 95.30 101.63
Other operating revenue
Scrap sales 30.77 37.27
21,097.79 37,538.52

26 Other income
in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020
Other non-operating income (net of expenses directly attributable to 384.66 281.46
such income)
Gain on foreign exchange difference (net) 0.05 2.28
Profit on sale of property, plant and equipment (net) 1.69 4.41
386.40 288.15

27 Finance income
in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020
Interest income on
Bank deposits 112.46 102.44
FINANCIAL STATEMENTS

Unwinding of discount on deposits 307.35 327.48

419.81 429.92
CONSOLIDATED

28 Cost of raw material and components consumed

in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020
Raw material at the beginning of the year 648.56 584.03
Add: Purchases during the year 1,759.08 3,066.06
Less: Raw material at the end of the year 545.68 648.56
Cost of raw material and components consumed 1,861.96 3,001.53

254 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

29 Changes in Inventories of Raw materials, Land stock, Work in progress, Stock in

trade and Finished goods
in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020

Inventories at the end of the year

Building materials 77.55 91.59
Land stock 13,982.28 11,992.28
Work-in-progress 44,840.41 41,913.65
Stock in trade - flats 11,684.87 12,301.52
Finished goods 115.56 97.30
70,700.67 66,396.34

Inventories at the beginning of the year

Building materials 91.59 78.35
Land stock 11,992.28 9,812.50
Work-in-progress 41,913.65 50,863.44
Stock in trade - flats 12,301.52 3,778.83
Finished goods 97.30 56.22
66,396.34 64,589.34

Less: Transferred to other assets for development charges recoverable at 25.23 1,737.30
cost from customers
Add: Opening inventory acquired on acquisition of subsidiary* 160.15 131.81
66,531.26 62,983.85

(Increase)/ decrease (4,169.41) (3,412.49)

* Inventory acquired from acquisition of Annalakshmi Land Developers Pvt Ltd (with effect from 19.01.2021) by Sobha
Highrise Ventures Private Limited

30 Employee benefits expense

FINANCIAL STATEMENTS
in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020
CONSOLIDATED

Salaries, wages and bonus 1,612.64 2,250.42

Contribution to provident and other funds 63.54 79.35
Gratuity expenses (refer note 37) 36.35 36.72
Compensated absence 9.59 34.02
Staff welfare expenses 49.15 63.68

1,771.27 2,464.19

SO BHA A N N U A L R E P O R T 2021 255

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

31 Depreciation and amortization expense

in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020

Depreciation of property, plant and equipment 647.95 678.97

Amortization of intangible assets 3.73 0.42
Depreciation of investment properties 141.99 43.46

793.67 722.85

32 Other expenses
in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020

License fees and plan approval charges 177.72 57.75

Power and fuel 416.74 610.89
Water charges 33.80 44.54
Freight and forwarding charges 160.31 246.30
Rent (refer note 35) 207.58 232.33
Rates and taxes 106.89 157.02
Insurance 93.30 82.21
Property maintenance expenses 193.87 171.99
Repairs and maintenance
Plant and machinery 30.21 44.84
Others 62.60 56.15
Advertising and sales promotion 424.63 548.77
Brokerage and discounts 129.28 143.20
Donation 97.90 198.10
Travelling and conveyance 178.86 237.04
Printing and stationery 29.59 44.55
Communication costs 0.18 0.19
FINANCIAL STATEMENTS

Legal and professional fees 214.30 274.35

Directors’ commission and sitting fees (refer note 35) 7.29 6.85
CONSOLIDATED

Payment to auditor (Refer details below)* 11.77 11.20

Exchange difference (net) 0.05 -
Allowance for credit loss 191.70 239.33
Bad debts written off - 8.80
Security charges 180.45 196.60
Miscellaneous expenses 344.44 399.35

3,293.46 4,012.35

256 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

*Payment to auditor
in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020

As auditor:
Audit fees [including fees for limited review ₹ 4.50 million (31 March 10.68 9.00
2020 - ₹ 4.20 million)]
In other capacity:
Other services 0.21 -
Reimbursement of expenses 0.88 1.36
11.77 10.36

33 Details of CSR expenditure:

Gross amount required to be spent during the year was ₹ 79.90 million (31 March 2020 - ₹ 68.21 million)

Amount spent during the year ended 31 March 2021: In cash Yet to be paid in cash
Construction/acquisition of any asset (in ₹ million) - -
On purposes other than above (in ₹ million) 97.90 -
97.90 -

Amount spent during the year ended 31 March 2020:

Construction/acquisition of any asset (in ₹ million) - -
On purposes other than above (in ₹ million) 162.60 -
162.60 -

34 Finance costs
in ₹ million
For the year ended For the year ended
31 March 2021 31 March 2020

Interest
- On borrowings 2,793.02 2,680.90 FINANCIAL STATEMENTS
- Others 3,045.39 4,138.69
CONSOLIDATED

Other borrowing cost and bank charges 173.73 220.68

6,012.14 7,040.27
Less: Interest inventorised on qualifying assets - (224.24)
Total finance costs 6,012.14 6,816.03

SO BHA A N N U A L R E P O R T 2021 257

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

35 Related party disclosures

a) Name of the related parties and the nature of its relationship with the Group as below:

Joint Venture
Kondhwa Projects LLP

Key Shareholder
Mr. P. N. C. Menon
Mrs. Sobha Menon

Key Management Personnel (‘KMP’)

Mr. Ravi PNC Menon - Chairman
Mr. J. C. Sharma - Vice Chairman and Managing Director
Mr. T P Seetharam - Whole-time Director
Mr. Jagadish Nangineni - Deputy Managing Director (till 25 February 2021)

Additional related parties (‘KMP’s) as per Companies Act, 2013 with whom transactions have
taken place
Mr. Subhash Bhat - Chief Financial Officer
Mr. Vighneshwar G Bhat - Company Secretary

Other Directors
Mr. Anup Shah
Mr. R V S Rao
Mrs. Srivathsala KN
Mr. Sumeet Jagdish Puri

Relatives of key management personnel

Mrs. Sudha Menon
Other related parties [Enterprise owned or significantly influenced by key management personnel]
C.V.S.Tech Park Private Limited
CVS TechZone LLP
Divyakaushal Properties LLP
Mannur Properties Private Limited
FINANCIAL STATEMENTS

Mannur Real Estate Private Limited

Punkunnam Builders and Developers Private Limited
CONSOLIDATED

Puzhakkal Developers Private Limited

SBG Housing Private Limited
Sobha Aviation and Engineering Services Private Limited
Sobha Contracting LLC, Dubai
Sobha Glazing & Metal Works Private Limited
Sobha Projects & Trade Private Limited
Sobha Puravankara Aviation Private Limited
Sobha Renaissance Information Technology Private Limited

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Notes to the consolidated financial statements for the year ended 31 March 2021

Sobha Space Private Limited

Sobha Technocity Private Limited
Sri Durga Devi Property Management Private Limited
Sri Kanakadurga Property Developers Private Limited
Sri Kurumba Educational and Charitable Trust
Sri Parvathy Land Developers Private Limited
Technobuild Developers Private Limited

b) Details of the transactions with the related parties:

in ₹ million
Particulars For the year ended For the year ended
31 March 2021 31 March 2020

I. Transaction with joint venture

Amount contributed to partnership current account
Kondhwa Projects LLP - 14.36

II. Transaction with other related parties

Income from contractual activity
Sobha Projects & Trade Private Limited 42.00 623.42
Mr. Ravi PNC Menon 19.58 -

Income from glazing works

Sri Kurumba Educational and Charitable Trust - 0.37
Mr. Ravi PNC Menon 18.04 -

Income from interior works

Sri Kurumba Educational and Charitable Trust - 0.45
Mr. Anup Shah 4.56 -
Mr. Ravi PNC Menon 15.20 -

Investment in partnership firm

CVS TechZone LLP 3.59 -

Sale of interest in partnership firm FINANCIAL STATEMENTS

CVS TechZone LLP 144.25 -

CONSOLIDATED

Purchase of project items

Sobha Projects & Trade Private Limited 179.78 746.08

Aircraft hire charges

Sobha Puravankara Aviation Private Limited 61.38 60.20

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

in ₹ million
Particulars For the year ended For the year ended
31 March 2021 31 March 2020

CSR expenditure - Donation

Sri Kurumba Educational and Charitable Trust 97.90 162.60

Payments made on behalf of related party

Sobha Projects & Trade Private Limited - -
Moolamcode Traders Private Limited - -
Pallavur Projects Private Limited 0.01 0.01
Puzhakkal Developers Private Limited 0.01 0.01

Land Advance
Technobuild Developers Private Limited 41.36 77.14

Advance paid towards purchase of goods or services

Sobha Projects & Trade Private Limited - 731.59
Sobha Puravankara Aviation Private Limited - -
Puzhakkal Developers Private Limited 0.03 73.52
Sri Parvathy Land Developers Private Limited - 3.24
Sri Durga Devi Property Management Private Limited 0.13 -

Refund of advance by the related party

Technobuild Developers Private Limited 14.71 749.36
Sobha Projects & Trade Private Limited 13.17 -
Puzhakkal Developers Private Limited - 171.72

Rent
Sobha Glazing & Metal Works Private Limited 5.06 5.52

III. Transaction with key managerial personnel

Directors’ remuneration
Mr. J. C. Sharma 19.92 70.21
FINANCIAL STATEMENTS

Mr. Ravi PNC Menon 51.15 121.40

Mr.T P Seetharam 6.71 7.56
Mr. Jagadish Nangineni (till 25 February 2021) 6.46 10.06
CONSOLIDATED

Dividend paid (payment basis)

Mr. Ravi PNC Menon 21.74 20.75
Mr. J. C. Sharma 0.75 0.16

Salary (including perquisites)

Mr. Subhash Bhat 10.35 11.34
Mr. Vighneshwar G Bhat 3.45 3.94

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

in ₹ million
Particulars For the year ended For the year ended
31 March 2021 31 March 2020

Directors’ sitting fees and commission

Mr. Anup Shah 1.79 1.89
Mr. R V S Rao 1.83 1.85
Dr. Punita Kumar Sinha - 0.91
Mr. Sumeet Jagdish Puri 1.89 1.33
Mrs. Srivathsala KN 1.78 0.87

IV. Transaction with key shareholders

Dividend paid (payment basis)
Mr. P. N. C. Menon 84.43 84.43
Mrs. Sobha Menon 201.08 201.08
Mr. P. N. C. Menon and Mrs. Sobha Menon (jointly held shares) 37.02 37.02

c) Details of balances receivable from and payable to related parties are as follows:
in ₹ million
Particulars As at As at
31 March 2021 31 March 2020

I. Balances receivable from and payable to joint ventures

Investment in partners current account
Kondhwa Projects LLP 1,142.52 1,142.52

II. Balances receivable from and payable to other related parties

Land advance
Technobuild Developers Private Limited 8,543.01 8,519.00
Puzhakkal Developers Private Limited 52.20 52.17
Sri Parvathy Land Developers Private Limited 164.43 164.43
Sri Durga Devi Property Management Private Limited 43.05 42.92

Rent deposit

FINANCIAL STATEMENTS
Sobha Glazing & Metal Works Private Limited 42.36 37.60

Advances recoverable in cash or in kind

CONSOLIDATED

Sobha Projects & Trade Private Limited - 13.17

Sobha Puravankara Aviation Private Limited 189.91 221.84
Punkunnam Builders and Developers Private Limited 0.05 0.05
Sobha Aviation and Engineering Services Private Limited 0.01 0.01
Mannur Properties Private Limited 0.02 0.02
Sobha Technocity Private Limited 0.02 0.02
Moolamcode Traders Private Limited 0.02 0.02

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

in ₹ million
Particulars As at As at
31 March 2021 31 March 2020
Trade receivables
Sri Kurumba Educational and Charitable Trust 15.42 35.42
Puzhakkal Developers Private Limited 0.01 0.01
Sobha Projects & Trade Private Limited 361.96 695.06

Trade payables
SBG Housing Private Limited 2.67 2.67
Sobha Projects & Trade Private Limited 28.09 13.11
Divyakaushal Properties LLP 0.60 0.66
Technobuild Developers Private Limited 586.42 355.91
Puzhakkal Developers Private Limited 0.01 -
Sri Parvathy Land Developers Private Limited 0.04 -
Sri Durga Devi Property Management Private Limited 0.02 -

Guarantees & Collaterals received

Sri Durga Devi Property Management Private Limited 1,500.00 1,500.00
Sri Parvathy Land Developers Private Limited 1,500.00 1,500.00

III. Balances receivable from and payable to key managerial personnel

Non-trade payable
Mr. J. C. Sharma 11.81 80.59
Mr. Ravi PNC Menon 2.00 18.62

d) Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions.
The above related party transactions have been approved by the Board of Directors. Outstanding balances at the
year-end are unsecured and interest free and will be settled in cash. For the year ended 31 March 2021, the Company
has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2020 - ₹ Nil).
This assessment is undertaken each financial year through examining the financial position of the related party and the
market in which the related party operates.

e) Compensation of key management personnel of the Group

in ₹ million
Particulars As at As at
31 March 2021 31 March 2020
FINANCIAL STATEMENTS

Short-term employee benefits - 106.98

Commission to independent directors 79.08 6.85
CONSOLIDATED

Other benefits* 7.29 117.53

86.37 231.36

*As the liability for gratuity and leave encashment is provided on actuarial basis for the Group as whole, the amount
pertaining to the directors are not included above.
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to
key management personnel.

f) Also, refer note 19 as regards guarantees received from key management personnel and relative of key management
personnel and collateral securities offered by related companies in respect of loans availed by the Group.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

36 Segment information
Basis of segmentation
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components, and
for which discrete financial information is available. All operating segments’ operating results are reviewed regularly by the
Group’s Chief Executive Officer (CEO) to make decisions about resources to be allocated to the segments and assess their
performance.

The Group has two reportable segments, as described below, which are the Group’s strategic business units. These business
units offer different products and services, and are managed separately because they require different marketing strategies.
For each of the business units, the Group’s CEO reviews internal management reports on at least a quarterly basis.
The CEO monitors the operating results of its business units separately for the purpose of making decisions about resource
allocation and performance assessment. Accordingly, the Group has identified following as its reportable segment for the
purpose of Ind AS 108:
a) Real estate segment;
b) Contractual and manufacturing segment.

Real Estate segment (RE) comprises development, sale, management and operation of all or any part of townships, housing
projects, also includes leasing of self owned commercial premises.

The operation of the Contractual and Manufacturing segment (CM) comprises development of commercial premises and
other related activities, also includes manufacturing activities related to interiors, glazing and metal works and concrete
products.

Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial
statements. Also, the Group’s financing (including finance costs and finance income) and income taxes are managed on a
overall basis and are not allocated to operating segments.
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.
The following tables present revenue and profit information for the Group’s operating segments for the year ended 31 March
2021 and 31 March 2020 respectively:

Business segments
in ₹ million
Particulars For the year ended For the year ended
31 March 2021 31 March 2020
Segment revenue
Real estate 13,102.84 22,800.81
Contractual and manufacturing 7,296.80 15,906.71
Total segment revenue 20,399.64 38,707.52
Inter segment revenues 698.15 (1,169.00)
Net revenue from operations 21,097.79 37,538.52

Segment result FINANCIAL STATEMENTS

Real estate 3,629.21 9,808.15
CONSOLIDATED

Contractual and manufacturing 1,381.26 2,972.44

Total segment results 5,010.47 12,780.59

Finance costs (3,361.83) (6,816.03)

Other unallocable expenditure (1,703.00) (2,351.08)
Other income (including finance income) 806.21 718.07
Profit before taxation 751.85 4,331.55
Income taxes (129.09) (1,514.86)
Profit after taxation 622.76 2,816.69

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

The following table presents assets and liabilities information for the Group’s operating segments as at 31 March 2021 and 31
March 2020 respectively:-
in ₹ million
Particulars As at As at
31 March 2021 31 March 2020
Segment assets
Real estate 94,324.95 97,120.76
Contractual and manufacturing 10,008.87 8,071.84
Total segment assets 104,333.82 105,192.60
Unallocated assets 7,767.70 4,929.66
Total assets 112,101.52 110,122.26

Segment liabilities
Real estate 51,932.87 47,921.42
Contractual and manufacturing 4,106.48 5,196.39
Total segment liabilities 56,039.35 53,117.81
Unallocated liabilities 31,784.82 32,692.44
Total liabilities 87,824.17 85,810.25

Capital employed
Real estate 42,392.08 49,199.34
Contractual and manufacturing 5,902.39 2,875.45
Unallocated capital employed (24,017.12) (27,762.78)
Total capital employed 24,277.35 24,312.01

Finance income and costs, and fair value gains and losses on financial assets pertaining to individual segments are allocated
to respective segments.
Current taxes, deferred taxes and certain financial assets and liabilities are considered as unallocated as they are also managed
on a Group basis.
in ₹ million
Particulars For the year ended For the year ended
31 March 2021 31 March 2020
Capital expenditure
FINANCIAL STATEMENTS

Real estate 57.86 2,033.99

Contractual and manufacturing 293.46 378.17
Unallocated capital expenditure 202.92 847.47
CONSOLIDATED

Total capital expenditure 554.24 3,259.63

Capital expenditure consists of additions of property, plant and equipment, intangible assets and investment property under
development.
Information of revenue and non-current operating assets based on location has not been furnished since there are no revenue
generated from business activities outside India and there are no non-current operating assets held by the Group outside
India.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

Reconciliations to amounts reflected in the financial statements

(i) Reconciliation of assets

in ₹ million
Particulars As at As at
31 March 2021 31 March 2020

Segment assets 104,333.82 105,192.60

Investment (refer note 10) 1,142.70 1,142.69
Prepaid expenses (refer note 13) 394.55 253.25
Balances with statutory/ government authorities (refer note 13) 1,097.26 1,624.48
Current tax assets (net) (refer note 22) 96.75 113.44
Deferred tax assets (net) (refer note 22) 19.21 -
Cash and bank balances (refer note 14 and 15) 2,041.49 883.89
Non-current bank balances (refer note 12) 60.60 62.15
Other unallocable assets 2,915.14 849.76
Total assets 112,101.52 110,122.26

(ii) Reconciliation of liabilities

in ₹ million
Particulars As at As at
31 March 2021 31 March 2020

Segment liabilities 56,039.35 53,117.81

Borrowings (refer note 19) 30,030.62 31,136.89
Provisions (refer note 21) 289.96 296.06
Deferred tax liabilities (refer note 22) 341.75 290.77
Liabilities for current tax (net) (refer note 22) 87.11 155.60
Withholding taxes payable (refer note 24) 79.10 56.96
Others payable (refer note 24) 118.58 95.61
Other unallocable liabilities 837.70 660.55
Total liabilities 87,824.17 85,810.25

37 Employment benefit plans FINANCIAL STATEMENTS

in ₹ million
CONSOLIDATED

Particulars As at As at
31 March 2021 31 March 2020
Net benefit liability-gratuity 217.96 213.31

Non-current 151.46 144.67

Current 66.50 68.64

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 SOBHA LIMITED
Notes to the consolidated financial statements for the year ended 31 March 2021

The Group has a defined benefit gratuity plan in India (‘the Plan’), governed by the Payment of Gratuity Act, 1972. The Plan
entitles an employee, who has rendered at least five years of continuous service, to gratuity at the rate of fifteen days on
salary for every completed year of service or part thereof in excess of six months, based on the rate of wages last drawn by
the employee concerned.
The defined benefit plan for gratuity is administered by a single gratuity fund that is legally separate from the Group. The
board of the gratuity fund comprises three employees. The board of the gratuity fund is required by law to act in the best
interests of the plan participants and is responsible for setting certain policies (e.g. investment and contribution policies) of
the fund.
The following tables summarise the components of net benefit expense recognised in the consolidated statement of profit
and loss and the funded status and amounts recognised in the balance sheet for the respective plans:

in ₹ million
Particulars 31 March 2021 31 March 2020

Reconciliation of present value defined benefit obligation

Obligation at the beginning of the year 215.46 196.34
Service cost 23.13 22.84
Interest cost 13.44 13.88
Benefits settled (23.02) (11.41)
Actuarial (gain)/loss (through OCI) (8.65) (6.19)
Obligation at the end of the year 220.36 215.46

Reconciliation of present value of planned assets

Plan assets at the beginning of the year, at fair value 2.15 2.13
Interest income 0.13 0.15
Actuarial gain/(loss) (through OCI) 0.04 (0.02)
Contributions paid into the plan 23.10 11.30
Benefits settled (23.02) (11.41)
Plan assets at the end of the year, at fair value 2.40 2.15

Present value of defined benefit obligation at the end of the year 220.36 215.46
Less: Fair value of plan assets at the end of the year 2.40 2.15
Net liability recognised in the consolidated balance sheet 217.96 213.31

Expenses recognised in consolidated statement of profit and loss

Service cost 23.13 22.99
Interest cost (net) 13.31 13.73
FINANCIAL STATEMENTS

Gratuity cost 36.44 36.72

Capitalised to property plant and equipment (0.09) (0.15)
Net gratuity cost 36.35 36.57
CONSOLIDATED

Re-measurement gains/ (losses) in OCI

Actuarial gain / (loss) due to demographic assumption changes - -
Actuarial gain / (loss) due to financial assumption changes (1.62) (7.12)
Actuarial gain / (loss) due to experience adjustments 10.27 13.31
Return on plan assets greater (less) than discount rate 0.04 (0.02)
Deferred tax charge (2.19) (1.56)
Total expenses routed through OCI 6.50 4.61

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

The major categories of plan assets as a percentage of the fair value of the total plan assets are as follows:

Particulars 31 March 2021 31 March 2020

Investment in insurance fund 100% 100%

Acturial assumptions

Particulars 31 March 2021 31 March 2020

Discount rate 6.06% 6.24%
Future salary growth 5.00% 5.00%
Employee turnover 15.00% 15.00%
Estimated rate of return on plan assets 6.24% 7.07%

Assumptions regarding future mortality are based on Indian Assured Lives Mortality (2006-08)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions
constant, would have affected the defined benefit obligation by the amounts shown below.
in ₹ million
Particulars 31 March 2021 31 March 2020

Effect of + 1% change in rate of discounting (8.67) (8.51)

Effect of - 1% change in rate of discounting 9.53 9.35
Effect of + 1% change in rate of salary growth 8.68 8.47
Effect of - 1% change in rate of salary growth (8.13) (7.91)
Effect of + 1% change in rate of employee turnover 0.17 0.24
Effect of - 1% change in rate of employee turnover (0.22) (0.30)

The sensitivity analyses above have been determined based on a method that extrapolates the impact on projected benefit
obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The following payments are expected contributions to the projected benefit plan in future years:
in ₹ million
Particulars 31 March 2021 31 March 2020

FINANCIAL STATEMENTS
Within the next 12 months 42.77 39.51 CONSOLIDATED

Between 2 and 5 years 109.01 107.43

Between 5 and 10 years 81.27 82.92
Total expected payments 233.05 229.86

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

38 Earnings per share [‘EPS’]

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average
number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number
of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on
conversion of all the dilutive potential equity shares into equity shares.
The following reflects the income and share data used in the basic and diluted EPS computations:

Particulars 31 March 2021 31 March 2020

Profit after tax attributable to shareholders (amount in ₹ million) 622.76 2,816.69

Weighted average number of equity shares of ₹10 each fully paid outstanding 94,845,853 94,845,853
during the year used in calculating basic and diluted EPS
Earnings per share - Basic and diluted (amount in ₹) * 6.57 29.69
* The Group does not have any potential dilutive equity shares and therefore basic and diluted EPS are same

39 Leases

Operating lease - Group as lessor

The Group has entered into commercial property leases on its property, plant and equipment. These operating leases have
variable terms ranging from 12 months to 36 months up to eleven years. All leases include a clause to enable upward revision
of the lease rental on periodical basis and includes variable rent determined based on percentage of sales of lessee.
The Group has recognised ₹ 206.04 million (31 March 2020 - ₹ 193.94 million) during the year towards lease rental income.

Minimum lease payments receivable in respect of these leases for non-cancellable period are as follows:
in ₹ million
Particulars 31 March 2021 31 March 2020

Within one year 320.18 273.61

After one year but not more than five years 1,073.06 906.70
More than five years 66.50 -
1,459.74 1,180.31

Operating lease - Group as lessee

FINANCIAL STATEMENTS

Operating lease obligations: The Group has taken office, other facilities and other equipment under cancellable and non-
cancellable operating leases, which are renewable on a periodic basis with escalation as per agreement.
The Group has paid ₹ 189.37 million (31 March 2020 - ₹ 232.33 million) during the year towards minimum lease payments.
CONSOLIDATED

Future minimum rentals payable under non-cancellable operating lease are as follows:
in ₹ million
Particulars 31 March 2021 31 March 2020

Within one year 77.92 66.75

After one year but not more than five years 164.56 140.21
More than five years 66.91 88.49
309.39 295.45

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

40 Contingent liabilities

Contingent liabilities (to the extent not provided for)

in ₹ million
Particulars 31 March 2021 31 March 2020

i Guarantees given by the Group 3,516.61 4,027.11

ii Income tax matters in dispute 308.82 246.86
iii Sales tax matters in dispute 909.00 669.87
iv Service tax matters in dispute 581.85 606.82
v Excise duty matters in dispute 7.27 7.27
5,323.55 5,557.93

The Group has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are
required and disclosed as contingent liabilities where applicable, in its consolidated financial statements. The Group does
not expect the outcome of these proceedings to have a materially adverse effect on its financial position. The Group does
not expect any reimbursements in respect of the above contingent liabilities
In respect of matters relating to certain transactions entered into by the Group in earlier years, the Group was asked to
provide contracts, documents, correspondences, business rationale and justification for these transactions by regulatory
authorities, the Group has been responding to the same from time to time. Further, in the current year, the Group has also
received Summons from SEBI under section 11(2), and 11C(2), 11C(3) of the SEBI Act, 1992 on the same transactions. The Group
has duly responded to the e-mail queries and the Summons within the time allotted.

These transactions have been entered into by the Group in the normal course of business and includes construction of
residence, joint development of residential and commercial properties and advances given for land acquisition. The Group
has receivables and other balances outstanding as at the balance sheet date from these transactions and expects to recover
the same from the other parties in its normal course of business. The Group collected Rs 2 crores during the year against the
construction of residence for the counter party and Rs 6.5 crores was outstanding as at the balance sheet date. Further, the
Group had paid a refundable deposit of Rs 51 crores to the counter parties, which will be due to be received by the Group
on completion of its obligation on the contract that is expected to happen in fiscal year 2022. Subsequent to the balance
sheet date, the Group has agreed, with the other parties, for a manner of settlement of the remaining dues amounting to Rs
57.8 crores. Based on this, Rs 27.8 crores has been settled by transfer of other parties’ units of an ongoing launched project
(Project 1). The Group intends to sell these units in its normal course of business, so transferred, and realise the amount. The
realization terms of the balance, i.e. Rs 30 crores has been renegotiated and agreed to be settled through the landowners’
revenue share in sales proceeds of another project (Project 2), which is expected to be launched by next year. The Group
has a consent / confirmation from the other party for appropriation of the landowners’ revenue share in sales proceeds of
another project (Project 2), settlement of this due which is supported by a legal advise on its enforceability. Based on the
best estimate of the management, this will be realized over a period of 2 – 4 years.

Based on the Group’s overall assessment including legal advice on enforceability of the manner of settlement, the outstanding

FINANCIAL STATEMENTS
amounts are considered fully recoverable and the terms of the aforesaid transactions are not prejudicial to the interests of
the Group and will not have any adverse impact on the consolidated financial statements.
CONSOLIDATED

41 Commitments and other litigations

a. Commitments
(a) The estimated amount of contracts, net of advances remaining to be executed on capital account is ₹ 0.07 million (31
March 2020 - ₹ 8.19 million).
(b) At 31 March 2021, the Group has given ₹ 13,811.68 million (31 March 2020 - ₹ 14,139.76 million) as advances for purchase
of land. Under the agreements executed with the land owners, the Group is required to make further payments under the
agreements based on the terms/ milestones stipulated under the agreements.

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 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

(c) The Group has entered into joint development agreements with owners of land for its construction and development.
Under the agreements, the Group is required to pay deposits to the owners of the land and share in area/ revenue from
such development in exchange of undivided share in land as stipulated under the agreements. As of 31 March 2021, the
Group has paid ₹4,829.98 million (31 March 2020 - ₹6,052.36 million) as refundable deposit (undiscounted) against the joint
development agreements.
(d) The Group has entered into an aircraft usage agreement with a party wherein the Group along with certain other parties
has committed minimum usage of aircraft. During the year ended 31 March 2021, the Group incurred ₹61.38 million (31 March
2020 - ₹60.20 million) towards aircraft usage as per the agreement.

b. Other litigations
(a) Claims have been levied on the Group by Bruhat Bengaluru Mahanagara Palike (‘BBMP’) towards certain statutory charges
which includes betterment charges, ground rent charges, etc. on certain real estate projects undertaken by the Group, the
impact of which is not quantifiable. These claims are pending with various courts and are scheduled for hearings. Based on
internal assessment, the management is confident that the matter would be decided in its favour, accordingly no provisions
has made in this regard.
(b) The Group is subject to legal proceedings and claims, which have arisen in the ordinary course of business, including
certain litigation for lands acquired by it for construction purposes, either through joint development agreements or through
outright purchases, the impact of which is not quantifiable. These cases are pending with various courts and are scheduled
for hearings. After considering the circumstances and legal advice received, management believes that these cases will not
adversely effect its financial statements.

Service tax matters in dispute includes demands raised for joint development agreements, the tax impact of which for future
years is not ascertainable. The Group has evaluated such arrangements for tax compliance and based on experts opinion,
the management is of the view that the tax positions are appropriate.

42 Construction contracts
in ₹ million
Particulars 31 March 2021 31 March 2020

Contract revenue recognised as revenue for the year ended 17,916.11 31,487.29
Aggregate amount of contract costs incurred and recognised profits (less 69,305.80 65,431.94
recognised losses) up to for all the contracts in progress
The amount of customer advances outstanding for contracts in progress for which 8,229.27 11,616.08
revenue has been recognised
The amount of work-in-progress and value of inventories 24,330.29 23,711.96
The amount of retentions due from customers for contracts in progress 514.35 199.40

43 Contract balances
FINANCIAL STATEMENTS

The following table discloses the movement in contract assets

in ₹ million
Particulars 31 March 2021 31 March 2020
CONSOLIDATED

Opening balance 396.81 396.81

Revenue recognised during the year 3,047.06 2,060.71
Invoices during the year (396.81) (396.81)
Closing balance 3,047.06 2,060.71

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

44 Derivative instruments and unhedged foreign currency exposure

in ₹ million
Particulars 31 March 2021 31 March 2020

Foreign currency exposure that are not hedged by derivative instruments or

otherwise:
Trade payables 11.40 19.02

45 Based on the information available with the Group, there are no suppliers who are registered as micro, small or medium
enterprises under “The Micro, Small and Medium Enterprises Development Act, 2006” as at 31 March 2021.

46 Capitalization of expenditure

During the year, the Group has capitalized the following expenses of revenue nature to capital work-in-progress (CWIP).
Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the Group.
in ₹ million
Particulars 31 March 2021 31 March 2020

Opening capital work in progress 2,323.14 1,900.37

Add: Expenses incurred during the year

Purchase of project materials 103.65 50.09
Subcontractor and other charges 37.94 94.89
Salaries, wages and bonus 4.89 11.51
Rent 0.95 17.41
Others 20.25 248.87
Sub-total 167.68 422.77

Less: Expenses capitalised as investment property 1,790.24 -

Closing capital work in progress 700.58 2,323.14

FINANCIAL STATEMENTS
CONSOLIDATED

SO BHA A N N U A L R E P O R T 2021 271

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

47 Fair value measurements

a. The carrying amounts of financial instruments by categories is as follows:
Particulars As at 31 March 2021 As at 31 March 2020
At cost Fair value At At cost Fair value At
through amortised through amortised
profit or cost profit or cost
loss loss
Financial assets
Investments (refer note 10) 1,142.52 - 0.18 1,142.52 - 0.17
Trade receivables (refer note 11) - - 2,361.17 - - 3,745.65
Cash and bank balances (refer note 14 and 15) - - 2,041.49 - - 883.89
Other financials assets (refer note 12) - - 7,136.31 - - 8,472.63
Total 1,142.52 - 11,539.15 1,142.52 - 13,102.34

Financial liabilities
Borrowings (refer note 19) - - 30,030.62 - - 31,136.89
Trade payables (refer note 23) - - 7,317.59 - - 9,566.88
Other financial liabilities (refer note 20) - - 6,562.97 - - 4,937.06
Total - - 43,911.18 - - 45,640.83

b. Fair value hierarchy

The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities
in ₹ million
Particulars As at 31 March 2021 As at 31 March 2020
Carrying Fair value Carrying Fair value
amount amount
Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Financial assets
Investments carried at fair - - - - - - - -
value through profit and loss
Investments at amortized cost 0.18 - - 0.18 0.17 - - 0.17
0.18 - - 0.18 0.17 - - 0.17

Assets for which fair value

are disclosed
FINANCIAL STATEMENTS

Investment properties 3,529.21 - - 6,890.00 1,880.95 - - 2,805.00

3,529.21 - - 6,890.00 1,880.95 - - 2,805.00
Notes:
CONSOLIDATED

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at
the measurement date.
Level 2 inputs are inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
There have been no transfers between the levels during the year.
Financial instruments carried at amortised cost such as instruments, trade receivables, cash and other financial assets,
borrowings, trade payables and other financial liabilities are considered to be same as their fair values, due to their short
term nature.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.

272 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

48 Financial risk management objectives and policies

The Group’s principal financial liabilities comprise loans and borrowings, trade payables and other financial liabilities. The
main purpose of these financial liabilities is to finance and support the Group’s operations. The Group’s principal financial
assets include instruments, trade and other receivables, cash and bank balances, land advances and refundable deposits
that derive directly from its operations.

The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the
management of these risks. The Group’s senior management is supported by a risk management committee that advises
on financial risks and the appropriate financial risk governance framework for the Group. The risk management committee
provides assurance to the Group’s senior management that the Group’s financial risk activities are governed by appropriate
policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s
policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which
are summarised below.
A. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises two types of risk: interest rate risk and other price risk, such as equity price risk and
commodity/ real estate risk. Financial instruments affected by market risk include borrowings and refundable deposits.
The sensitivity analysis in the following sections relate to the position as at 31 March 2021 and 31 March 2020. The
sensitivity analyses have been prepared on the basis that the amount of net debt and the ratio of fixed to floating interest
rates of the debt.
The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post
retirement obligations; provisions.
The below assumption has been made in calculating the sensitivity analysis:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is
based on the financial assets and financial liabilities held at 31 March 2021 and 31 March 2020.
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 Group’s exposure to the risk of changes in market interest rates relates primarily to
the Group’s long-term debt obligations with floating interest rates.
The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.
The Group does not enter into any interest rate swaps.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of
borrowings affected. With all other variables held constant, the Group’s profit before tax is affected through the impact
on floating rate borrowings, as follows:
in ₹ million
Increase/ decrease in Effect on profit
interest rate before tax * ₹ million

FINANCIAL STATEMENTS
31 March 2021 CONSOLIDATED

INR +1% (303.86)

INR -1% 303.86

31 March 2020
INR +1% (311.74)
INR -1% 311.74

* determined on gross basis i.e. with out considering inventorisation of such borrowing cost.

SO BHA A N N U A L R E P O R T 2021 273

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

B. Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade
receivables) and from its financing activities, including refundable joint development deposits, security deposits,
loans to employees and other financial instruments.
Trade receivables
(a) Receivables resulting from sale of properties: Customer credit risk is managed by requiring customers to pay
advances before transfer of ownership, therefore, substantially eliminating the Group’s credit risk in this respect.

(b) Receivables resulting from leasing of properties: Group has established credit limits for customers and monitors
their balances on an on-going basis. Credit appraisal is performed by the management before lease agreements
are entered into with customers. The risk is also mitigated due to customers placing significant amount of security
deposits for lease and fit-out rentals

(c) Receivables resulting from other than sale of properties and leasing of properties : Credit risk is managed by
each business unit subject to the Group’s established policy, procedures and control relating to customer credit
risk management. Outstanding customer receivables are regularly monitored. The impairment analysis is performed
at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are
grouped into homogeneous groups and assessed for impairment collectively. The maximum exposure to credit risk
at the reporting date is the carrying value of each class of financial assets. The Group does not hold collateral as
security. The Group’s credit period generally ranges from 30-60 days.
(d) Revenue from one customer individually accounted for more than 10% of the Group’s revenue for the year
ended 31 March 2021 and 31 March 2020. No single customer individually accounted for more than 10% of the trade
receivable balance of the Group as at 31 March 2021 and 31 March 2020.

Movement in allowance for credit losses in ₹ million

Particulars 31 March 2021 31 March 2020
Opening balance 534.40 332.01
Amounts written off - (36.94)
Net remeasurement of loss allowance 103.69 239.33
Closing balance 638.09 534.40

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Group’s treasury department in accordance
with the Group’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits
assigned to each counterparty. Counterparty credit limits are reviewed by the Group’s Board of Directors on an annual
basis, and may be updated throughout the year subject to approval of the Group’s Finance Committee. The limits are set to
minimise the concentration of risks and therefore mitigate financial loss through a counterparty’s potential failure to make
payments. The Group’s maximum exposure to credit risk for the components of the statement of financial position at 31 March
2021 and 31 March 2020 is the carrying amounts.
FINANCIAL STATEMENTS
CONSOLIDATED

274 S O B HA ANNUAL REPORT 2 02 1

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

C. Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities
that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as
far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group uses activity-based
costing to cost its products and services, which assists it in monitoring cash flow requirements and optimising its cash return
on investments.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits
and loans.

The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted
payments:
in ₹ million
On Less than 3 to 12 1 to 5 years > 5 years Total
demand 3 months months

31 March 2021

Borrowings (refer note 19) 3,846.01 1,868.84 5,006.30 18,012.32 1,297.15 30,030.62
Trade payables (refer note 23) 200.00 5,686.70 1,150.07 250.67 47.81 7,335.25
Other financial liabilities (refer note 20) 207.49 3,037.47 3,318.01 - - 6,562.97
4,253.50 10,593.01 9,474.38 18,262.99 1,344.96 43,928.84

31 March 2020

Borrowings (refer note 19) 6,656.33 2,382.45 4,640.71 15,904.01 1,553.39 31,136.89
Trade payables (refer note 23) - 6,961.53 2,340.27 232.16 32.92 9,566.88
Other financial liabilities (refer note 20) 305.25 1,712.63 2,919.18 - - 4,937.06
6,961.58 11,056.61 9,900.16 16,136.17 1,586.31 45,640.83

FINANCIAL STATEMENTS
CONSOLIDATED

SO BHA A N N U A L R E P O R T 2021 275

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

49 Capital management
For the purpose of the Group’s capital management, capital includes issued equity capital, share premium and all other equity
reserves attributable to the equity holders of the parent. The primary objective of the Group’s capital management is to
maximise the shareholder value.

The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the
requirements of the financial covenants. To maintain or adjust the capital structure, the Group may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares. The Group monitors capital using a gearing ratio,
which is net debt divided by total capital plus net debt. The Group includes within net debt, interest bearing borrowings, trade
payables and other financial liabilities (excluding liability under JDA), less cash and bank balances.

in ₹ million
As at As at
31 March 2021 31 March 2020

Borrowings (long-term and short-term, including current maturities of long term 30,030.62 31,136.89
borrowings) (Note 19 and 20)
Trade payables (Note 23) 7,317.59 9,566.88
Other financial liabilities (current and non-current, excluding current maturities of 6,077.28 4,766.14
long term borrowings) (Note 20)
Other liabilities (Note 24) 43,194.17 39,292.99
Less: Cash and bank balances (Note 14 and 15) (2,041.49) (883.89)
Net debt 84,578.17 83,879.01

Equity share capital (Note 16) 948.46 948.46

Other equity (Note 17) 23,328.89 23,363.55
Total capital 24,277.35 24,312.01

Capital and net debt 108,855.52 108,191.02

Gearing ratio 77.70% 77.53%

In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure that it
meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements.
Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have
been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
FINANCIAL STATEMENTS

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2021
and 31 March 2020.
CONSOLIDATED

276 S O B HA ANNUAL REPORT 2 02 1

 SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

50 Additional information pursuant to para 2 of general instructions for the preparation of the consolidated financial
statements for year ended 31 March 2021 and 31 March 2020

31 March 2021 in ₹ million

Net assets Share in profit or loss Share in OCI Share in total

comprehensive income
Name of the entity % of ₹ million % of ₹ million % of ₹ million % of ₹ million
consolidated consolidated consolidated consolidated
net assets profit or loss OCI total
comprehensive
income

Parent
Sobha Limited 84.68% 22,870.74 81.70% 655.39 100.00% 6.50 81.85% 661.89
Subsidiaries
Indian
Sobha City [‘Partnership firm’] 4.56% 1,232.57 17.72% 142.11 0.00% - 17.57% 142.11
Vayaloor Properties Private Limited 0.01% 2.07 0.00% 0.01 0.00% - 0.00% 0.01
Vayaloor Builders Private Limited 0.01% 3.43 0.00% 0.01 0.00% - 0.00% 0.01
Vayaloor Developers Private Limited 0.01% 3.32 0.00% 0.01 0.00% - 0.00% 0.01
Vayaloor Real Estate Private Limited 0.01% 3.43 0.00% 0.01 0.00% - 0.00% 0.01
Vayaloor Realtors Private Limited 0.00% 0.70 0.00% - 0.00% - 0.00% -
Valasai Vettikadu Realtors Private Limited 0.01% 1.47 0.00% - 0.00% - 0.00% -
Sobha Developers (Pune) Limited 7.84% 2,117.92 0.48% 3.89 0.00% - 0.48% 3.89
Sobha Assets Private Limited 0.00% (0.06) 0.00% (0.01) 0.00% - 0.00% (0.01)
Sobha Highrise Ventures Private Limited 2.42% 654.66 -0.64% (5.16) 0.00% - -0.64% (5.16)
Sobha Interiors Private Limited 0.10% 27.95 0.67% 5.37 0.00% - 0.66% 5.37
Sobha Construction Products Private Limited 0.04% 9.92 0.02% 0.16 0.00% - 0.02% 0.16
Sobha Contracting Private Ltd -0.01% (1.36) -0.03% (0.24) 0.00% - -0.03% (0.24)
Annalakshmi Land Developers Private Ltd 0.00% (0.11) 0.00% (0.01) 0.00% - 0.00% (0.01)
Sobha Nandambakkam Developers Limited 0.15% 41.37 0.11% 0.87 0.00% - 0.11% 0.87
Sobha Tambaram Developers Limited 0.31% 83.59 0.00% 0.01 0.00% - 0.00% 0.01
Kilai Builders Pvt Ltd 0.00% (0.11) 0.00% - 0.00% - 0.00% -
Kuthavakkam Builders Private Limited -0.07% (18.69) 0.00% - 0.00% - 0.00% -
Kuthavakkam Realtors Private Limited -0.10% (25.72) -0.03% (0.23) 0.00% - -0.03% (0.23)
Joint ventures (Investment as per the equity method)
Kondhwa Projects LLP 0.00% - 0.00% - 0.00% - 0.00% -
Sub total 100.00% 27,007.09 100.00% 802.19 100.00% 6.50 100.00% 808.69

SO BHA A N N U A L R E P O R T 2021
Adjustments arising out of consolidation (2,727.46) (177.15) - (177.15)

277
Total 24,279.63 625.04 6.50 631.54

FINANCIAL STATEMENTS
CONSOLIDATED
 FINANCIAL STATEMENTS
CONSOLIDATED

SOBHA LIMITED

278
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

50 Additional information pursuant to para 2 of general instructions for the preparation of the consolidated financial
statements for year ended 31 March 2021 and 31 March 2020 (continued)
31 March 2020 in ₹ million

Net assets Share in profit or loss Share in OCI Share in total

comprehensive income
Name of the entity % of ₹ million % of ₹ million % of ₹ million % of ₹ million
consolidated consolidated consolidated consolidated

S O B HA ANNUAL REPORT 2 02 1
net assets profit or loss OCI total
comprehensive
income
Parent
Sobha Limited 85.74% 22,872.77 102.38% 2,894.79 100.00% 4.61 102.37% 2,899.40
Subsidiaries
Indian
Sobha City [‘Partnership firm’] 3.47% 926.81 0.60% 16.96 0.00% - 0.60% 16.96
Vayaloor Properties Private Limited 0.01% 2.06 0.00% - 0.00% - 0.00% -
Vayaloor Builders Private Limited 0.01% 3.42 0.00% 0.01 0.00% - 0.00% 0.01
Vayaloor Developers Private Limited 0.01% 3.32 0.00% 0.01 0.00% - 0.00% 0.01
Vayaloor Real Estate Private Limited 0.01% 3.43 0.00% 0.01 0.00% - 0.00% 0.01
Vayaloor Realtors Private Limited 0.00% 0.70 0.00% - 0.00% - 0.00% -
Valasai Vettikadu Realtors Private Limited 0.01% 1.47 0.00% - 0.00% - 0.00% -
Sobha Developers (Pune) Limited 7.88% 2,101.91 -1.46% (41.16) 0.00% - -1.45% (41.16)
Sobha Assets Private Limited 0.00% (0.05) 0.00% (0.02) 0.00% - 0.00% (0.02)
Sobha Highrise Ventures Private Limited 2.48% 661.21 -0.38% (10.72) 0.00% - -0.38% (10.72)
Sobha Interiors Private Limited 0.09% 23.24 0.25% 7.09 0.00% - 0.25% 7.09
Sobha Contracting Private Ltd 0.00% (1.12) -0.02% (0.49) 0.00% - -0.02% (0.49)
Sobha Nandambakkam Developers Limited 0.15% 40.50 0.13% 3.57 0.00% - 0.13% 3.57
Sobha Tambaram Developers Limited 0.31% 83.58 0.11% 3.17 0.00% - 0.11% 3.17
Kilai Builders Pvt Ltd 0.00% (0.11) 0.01% 0.27 0.00% - 0.01% 0.27
Kuthavakkam Builders Private Limited -0.07% (18.69) -0.67% (18.92) 0.00% - -0.67% (18.92)
Kuthavakkam Realtors Private Limited -0.10% (26.76) -0.95% (26.95) 0.00% - -0.95% (26.95)

Joint ventures (Investment as per the equity method)

Kondhwa Projects LLP 0.00% - 0.00% - 0.00% - 0.00% -

Sub total 100.00% 26,677.69 100.00% 2,827.62 100.00% 4.61 100.00% 2,832.23

Adjustments arising out of consolidation (2,365.68) (10.93) - (10.93)

Total 24,312.01 2,816.69 4.61 2,821.30

SOBHA LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2021

51 Impact due to oubreak of COVID-19

During the year ended 31 March 2021, the Group had to suspend the operations in all ongoing projects at different times in
compliance with the lockdown instructions issued by the Central and respective State Governments. This impacted the normal
business operations of the Group by way of interruption in projects execution, supply chain disruption and unavailability of
personnel during the lock-down period.

The Group has considered the possible impacts on the carrying value of assets. The Group, as at the date of these financial
results has used internal and external sources of information to assess the expected future performance of the Group. The
Group has also performed a sensitivity analysis on the assumptions used and based on the current estimates, the Group
expects that the carrying amount of these assets reported in the balance sheet as at 31 March 2021 are fully recoverable. The
Group has also estimated the future cash flows with the possible effects that may result from the COVID-19 pandemic and
does not foresee any adverse impact on realising its assets and meeting its liabilities as and when they fall due. The actual
impact of the COVID-19 pandemic may be different from that estimated as at the date of approval of these financial results.
During the year ended 31 March 2021, the Management has also made a detailed assessment of the progress of construction
work on its ongoing projects during the period of lockdown and has concluded that the same was only a temporary slowdown
in activities and has accordingly capitalised/ inventorised the borrowing costs incurred in accordance with Ind AS 23.

As per our report of even date attached

for B S R & Co. LLP for and on behalf of the Board of Directors of
Chartered Accountants Sobha Limited
ICAI Firm registration number: 101248W/W-100022
Ravi PNC Menon T P Seetharam
Amrit Bhansali Chairman Whole-time Director
Partner DIN: 02070036 DIN: 08391622
Membership No.: 065155
Subhash Bhat Vighneshwar G Bhat
Chief Financial Officer Company Secretary and Compliance Officer

Place: Bengaluru, India Place: Bengaluru, India

Date: 22 June 2021 Date: 22 June 2021

FINANCIAL STATEMENTS
CONSOLIDATED

SO BHA A N N U A L R E P O R T 2021 279

 FINANCIAL STATEMENTS
CONSOLIDATED

280
Form AOC – I
(Pursuant to first proviso to sub-section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of Subsidiaries, Associate Companies / Joint Ventures
Part “A”: Subsidiaries

Particulars Sobha Sobha Sobha Sobha Sobha Sobha Sobha Kilai Sobha Kuthavakkam Kuthavakkam Annalaxmi
Developers Highrise Assets Tambaram Nandambakkam Construction Contracting Builders Interiors Builders Realtors Land
(Pune) Ventures Private Developers Developers Products private Private Private Private Private Developers
Limited Private Limited Limited Limited Private Limited* Limited** Limited** Limited** Limited** Private
Limited Limited Limited*

S O B HA ANNUAL REPORT 2 02 1
Reporting Period 2020-21 2020-21 2020-21 2020-21 2020-21 2020-21 2020-21 2020-21 2020-21 2020-21 2020-21 2020-21

Reporting Currency INR in Million INR in Million INR in Million INR in Million INR in Million INR in Million INR in Million INR in Million INR in Million INR in Million INR in Million INR in Million

Share Capital 0.53 206.00 0.10 0.50 0.50 10.00 0.10 0.50 6.00 0.50 0.50 0.10

Reserves and 2,117.92 448.66 (0.16) 83.09 40.87 (0.08) (1.46) (0.47) 21.95 (19.21) (26.34) (0.21)
Surplus

Total Assets 2,199.85 1,070.46 87.20 129.52 91.69 10.17 858.63 243.42 266.59 53.08 111.08 160.16

Total Liabilities 80.92 415.80 84.26 45.93 50.32 0.25 859.99 243.40 238.64 71.80 136.92 160.26

Investments 1,697.16 0.10 - - - - - - - - - -

Turnover 13.67 43.89 - 0.05 2.28 0.19 - - 26.79 - - -

Profit before 6.90 (6.13) (0.01) 0.02 1.17 0.18 (0.24) (0.02) 7.51 (0.02) (0.35) (0.01)
Taxation

Provision for 2.01 (0.96) - 0.01 0.30 0.03 - (0.16) 2.14 - - -

Taxation

Profit after Taxation 3.89 (5.16) (0.01) 0.01 0.87 0.15 (0.24) 0.14 5.37 (0.02) (0.35) (0.01)

Proposed Dividend - - - - - - - - - - - -

% Share Holding 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

*Sobha Contracting Private Limited and Annalaxmi Land Developers Private Limited are wholly owned subsidiaries of Sobha Highrise Ventures Private Limited. Hence, stepdown subsidiaries
of Sobha Limited.
**Kilai Builders Private Limited, Sobha Interiors Private Limited, Kuthavakkam Builders Private Limited and Kuthavakkam Realtors Private Limited are wholly owned
subsidiaries of Sobha Developers (Pune) Limited. Hence a stepdown subsidiaries of Sobha Limited.

1.      Names of subsidiaries which are yet to commence business: None

2.      Names of subsidiaries which have been liquidated or sold during the year: None
 Part “B”: Associates and Joint Ventures
CVS Tech Park Private Limited, an associate of Sobha Limited was incorporated on 5th March 2018.

Particulars CVS Tech Park Private Limited

Reporting Period 2020-21
Reporting Currency INR in Million
Share Capital 0.10
Reserves and Surplus -
Total Assets 0.12
Total Liabilities 0.02
Investments -
Turnover -
Profit before Taxation (0.02)
Provision for Taxation -
Profit after Taxation (0.02)
Proposed Dividend -
% Share Holding 49%

for and on behalf of the Board of Directors of Sobha Limited

Ravi PNC Menon T P Seetharam

Chairman Whole-time Director
DIN: 02070036 DIN: 08391622

Subhash Bhat Vighneshwar G Bhat

Chief Financial Officer Company Secretary and Compliance Officer

Place: Bengaluru, India

Date: 22 June 2021

FINANCIAL STATEMENTS
CONSOLIDATED

SO BHA A N N U A L R E P O R T 2021 281

 NOTICE OF ANNUAL GENERAL MEETING
NOTICE is hereby given that the Twenty Sixth this meeting, be and is hereby appointed
Annual General Meeting of the Members of as a Director of the Company.”
Sobha Limited will be held on Friday, the
13th August, 2021 at 3:00 P.M. through Video SPECIAL BUSINESS:
Conferencing (“VC”) / Other Audio Visual Means 4. Ratification of remuneration payable to
(“OAVM”) to transact the following business: Cost Auditors:
To consider and if thought fit, to pass with
ORDINARY BUSINESS:
or without modification(s), the following
1. To receive, consider and adopt: resolution as an Ordinary Resolution:
(a) The standalone financial statements of "RESOLVED THAT pursuant to Section 148
the Company which includes the Audited and other applicable provisions, if any, of
Balance Sheet as at March 31, 2021, the the Companies Act, 2013 read with Rule
Statement of Profit and Loss for the 14 of the Companies (Audit and Auditors)
financial year ended as on that date and Rules, 2014, including any amendment or
the Cash Flow Statement together with re-enactment thereof and any other law
reports of the Board of Directors and for the time being in force, the approval
the Statutory Auditors thereon. of the members of the Company be and
(b) The consolidated financial statements is hereby accorded for the payment of
of the Company which includes remuneration not exceeding ₹185,000
the Audited Balance Sheet as at (Rupees One lakh and eighty five thousand
March 31, 2021, the Statement of Profit only) plus reimbursement of out of pocket
and Loss for the financial year ended expenses and taxes as may be applicable
as on that date and the Cash Flow from time to time to M/s. Srinivas and Co.,
Statement together with reports of the Cost Accountants (Firm Registration No:
Statutory Auditors thereon. 000278), the Cost Auditors of the Company
2. To declare a dividend on equity shares for the for the financial year 2020-21.
financial year ended March 31, 2021 and in this RESOLVED FURTHER THAT any of the
regard, to consider and if thought fit, to pass Directors or the Company Secretary and
with or without modification(s), the following Compliance Officer of the Company be
resolution as an Ordinary Resolution: and are hereby severally authorised to do
"RESOLVED THAT a dividend at the rate of all such acts, deeds, things, matters, and
₹3.50/- (Three rupees fifty paisa only) per equity to execute all such documents as may be
share of ₹10/- (Ten rupees) each fully paid-up required to give effect to this Resolution.”
of the Company, as recommended by the 5. Issue of Non-Convertible Debentures on
Board of Directors, be and is hereby declared private placement basis:
for the financial year ended March 31, 2021 To consider, and if thought fit, to pass with
and the same be paid out of the profits of the or without modification(s), the following
Company.” resolution as a Special Resolution:
3. To appoint a Director in place of Mr. Jagdish "RESOLVED THAT pursuant to the provisions
Chandra Sharma, who retires by rotation as of Section 42, 71 and other applicable
a Director and in this regard, to consider provisions, if any, of the Companies Act,
and if thought fit, to pass with or without 2013, relevant rules made thereunder
modification(s), the following resolution as and any other law for the time being in
an Ordinary Resolution: force and the provisions contained in the
"RESOLVED THAT in accordance with Memorandum and Articles of Association
the provisions of Section 152 and other of the Company, Securities and Exchange
applicable provisions of the Companies Board of India (Issue and Listing of Debt
Act, 2013, Mr. Jagdish Chandra Sharma Securities) Regulations 2008, the guidelines
ANNNUAL GENERAL

(DIN 01191608), who retires by rotation at issued by the Securities and Exchange

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 Board of India (SEBI), and subject to the the Companies Act, 2013 and relevant rules
approval, permissions and sanctions of made thereunder, and other applicable
the lenders of the Company, SEBI, Stock enactments, as amended from time to time,
Exchanges, Reserve Bank of India (RBI), consent and approval of members of the
Government of India and other concerned Company be and is hereby accorded for
authorities, as may be necessary and the re-appointment of Mr. Ravi PNC Menon
subject to such conditions and modifications (DIN: 02070036) as a Whole- time Director
as may be prescribed or imposed by any designated as Chairman of the Company for
of the aforementioned authorities while a further period of five years and be paid
granting such approvals, permissions and remuneration by way of salary, perquisites
sanctions, which may be agreed to by the and allowances, performance incentive etc.
Board of Directors of the Company, the as detailed in the Statement pursuant to
approval of the members be and is hereby Section 102(1) of the Companies Act, 2013
accorded to the Board of Directors of the annexed to the Notice, which shall be
Company to offer or invite subscription for effective from April 01, 2021, with authority
secured or unsecured redeemable non- to the Board of Directors to revise the
convertible debentures including but not terms and conditions of appointment and
limited to other debt securities, in one or remuneration from time to time based on
more series or tranches, aggregating up to the recommendations of the Nomination,
₹700,00,00,000 (Rupees Seven Hundred Remuneration and Governance Committee.
Crores Only), on a private placement RESOLVED FURTHER THAT pursuant
basis, on such terms and conditions as to Regulation 17(6) (e) of the Securities
the Board of Directors may, from time to and Exchange Board of India (Listing
time, determine and consider proper and Obligations and Disclosure Requirements)
beneficial to the Company. Regulations, 2015 (Listing Regulations)
RESOLVED FURTHER THAT for the purpose and other applicable provisions, if any,
of giving effect to the above resolution, the approval of the members be and is hereby
members hereby authorise the Board of accorded for payment of remuneration
to Mr. Ravi PNC Menon (DIN: 02070036),
Directors to do all such acts, deeds, matters
Chairman of the Company, by way of salary,
and things, settle all question, difficulties or
perquisites and allowances, performance
doubts that may arise in regard to the issue
incentive, etc. in excess of ₹5 crore or 2.5
or allotment of such Debentures, utilisation
per cent of the net profits of the Company,
of the issue proceeds and to do all acts,
whichever is higher, during his current
deeds and things in connection therewith
tenure as a Whole-time Director designated
and incidental thereto as the Board of
as Chairman of the Company.
Directors may in its absolute discretion
deem fit without being required to seek any RESOLVED FURTHER THAT any of the
further consent or approval of the members Directors or the Company Secretary and
or otherwise to the end and intent that Compliance Officer of the Company be
they shall be deemed to have given their and are hereby severally authorised to do
approval thereto expressly by the authority all such acts, deeds, things, matters, and
of this resolution.” to execute all such documents as may be
required to give effect to this Resolution.”
6. Re-appointment of Mr. Ravi PNC Menon
(DIN: 02070036) as a Whole-time Director
designated as Chairman of the Company: By Order of the Board of Directors
To consider and if thought fit, to pass with For Sobha Limited
or without modification(s), the following
resolution as a Special Resolution:
"RESOLVED THAT pursuant to Sections Sd/-
196, 197, 198 and 203 read with Vighneshwar G Bhat
Schedule V to the Companies Act, 2013, Place: Bangalore Company Secretary
ANNNUAL GENERAL

and other applicable provisions, if any, of Date: 22nd June, 2021 & Compliance Officer

SO BHA A N N U A L R E P O R T 2021 283

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 NOTES:

1. Pursuant to Circular Nos. 14/2020, 17/2020, 20/2020 dated April 8, 2020, April 13, 2020, May 5, 2020, Circular No.
02/2021 dated 13th January, 2021 issued by the Ministry of Corporate Affairs (MCA) and Circular No. SEBI/HO/CFD/
CMD1/CIR/P/2020/79 dated May 12, 2020 SEBI/HO/CFD /CMD2/CIR/P /2021/11SEBI/HO/CFD /CMD2/CIR/P /2021/11
dated 15th January, 2021 issued by the Securities and Exchange Board of India (hereinafter collectively referred to
as ‘Circulars’), the Annual General Meeting of the Company is (“AGM”) is convened through Video Conferencing /
Other Audio Visual Means (VC/OAVM).

2. In terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial
Standards issued by the Institute of Company Secretaries of India, additional information on directors
seeking appointment/ re-appointment is provided separately.

3. Statement pursuant to the provisions of Section 102(1) of the Companies Act, 2013 is annexed to and forms
part of this Notice.

4. SINCE THIS AGM IS BEING HELD PURSUANT TO THE ABOVE REFERRED CIRCULARS THROUGH VC / OAVM,
PHYSICAL ATTENDANCE OF MEMBERS HAS BEEN DISPENSED WITH. ACCORDINGLY, THE FACILITY FOR
APPOINTMENT OF PROXIES BY THE MEMBERS WILL NOT BE AVAILABLE FOR THE AGM AND HENCE, THE
PROXY FORM AND ATTENDANCE SLIP ARE NOT ANNEXED TO THIS NOTICE.

5. Since the AGM being held through VC/OAVM, the Route Map and Attendance Slip are not attached to this
Notice.

VOTING THROUGH ELECTRONIC MEANS AND PARTICIPATION AT THE ANNUAL GENERAL MEETING

6. In terms of Section 108 of the Companies Act, 2013 read with the Companies (Management and Administration)
Rules, 2014 (including any statutory modification or re-enactment thereof for the time being in force), listed
companies are required to provide members with the facility to exercise their votes at general meetings through
electronic means. The Company has availed the services of M/s. Link Intime India Private Limited (Link Intime)
for providing the necessary remote e-Voting platform to the members of the Company.

7. Members may note that the Notice of the Twenty Sixth Annual General Meeting and the Annual
Report 2021 will be available on the Company’s website: www.sobha.com. The Notice of Annual General
Meeting shall also be available on the website of Link Intime India Private Limited. The Company has
published a Public Notice by way of advertisement in a Kannada newspaper and in an English newspaper
with the required details of 26th AGM, for information of the Members.

8. The e-Voting period shall commence on 10th August, 2021 at 9.00 AM and ends on 12th August, 2021 at
5.00 PM. Once the vote on a resolution is cast by a shareholder, it cannot be changed subsequently.

9. Members who have acquired the shares of the Company after the dispatch of the Notice of Annual General
Meeting and whose names appear in the Register of Members of the Company or in the Register of
Beneficial owners maintained by the depositories as on the cut-off date i.e. 6th August, 2021 will be eligible
to cast their vote through remote e-Voting.

10. The Board of Directors has appointed Mr. Nagendra D Rao, Practising Company Secretary (Membership
No. 5553, COP No. 7731) and in his absence Mr. Natesh K, Practising Company Secretary (Membership
No. 6835, COP No. 7277) as the Scrutinizer for conducting the remote e-Voting and poll process in
accordance with law and in a fair and transparent manner. The Scrutinizer shall within a period not exceeding
48 hours from the conclusion of the annual general meeting, prepare a Consolidated Scrutinizer’s Report of
the votes cast in favour or against, if any, and submit it forthwith to the Chairman of the Company.

11. The Results declared along with the Scrutinizer’s Report shall be placed on the website of the Company and
on the website of Link Intime.

12. The voting rights of Members shall be in proportion to their shares in the paid-up equity share capital of the
Company as on the cut-off date.
ANNNUAL GENERAL

13. The details of the process and manner for remote e-Voting are explained herein below:

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Remote e-Voting Instructions for shareholders post change in the Login mechanism for Individual
shareholders holding securities in demat mode, pursuant to SEBI circular dated December 9, 2020:
a. In terms of SEBI circular dated December 9, 2020 on e-Voting facility provided by Listed Companies,
Individual shareholders holding securities in demat mode are allowed to vote through their demat account
maintained with Depositories and Depository Participants. Shareholders are advised to update their mobile
number and email Id in their demat accounts in order to access e-Voting facility.
b. Login method for Individual shareholders holding securities in demat mode is given below:
Type of shareholders Login Method

Individual Shareholders 1. If you are already registered for NSDL IDeAS facility, please visit the e-Services website
holding securities in of NSDL. Open web browser by typing the following URL: https://eservices.nsdl.com
demat mode with either on a Personal Computer or on a mobile. Once the home page of e-Services
NSDL. is launched, click on the “Beneficial Owner” icon under “Login” which is available
under ‘IDeAS’ section. A new screen will open. You will have to enter your User ID
and Password.
2. After successful authentication, you will be able to see e-Voting services. Click on
“Access to e-Voting” under e-Voting services and you will be able to see e-Voting
page. Click on company name or e-Voting service provider name and you will be
re-directed to e-Voting service provider website for casting your vote during the
remote e-Voting period or joining virtual meeting & voting during the meeting.
3. If the user is not registered for IDeAS e-Services, option to register is available at
https://eservices.nsdl.com. Select “Register Online for IDeAS" Portal or click at
https://eservices.nsdl.com/SecureWeb/IdeasDirectReg.jsp
4. Visit the e-Voting website of NSDL. Open web browser by typing the following
URL: https://www.evoting.nsdl.com either on a Personal Computer or on a mobile.
Once the home page of e-Voting system is launched, click on the icon “Login”
which is available under ‘Shareholder/Member’ section. A new screen will open.
You will have to enter your User ID (i.e. your sixteen digit demat account number
hold with NSDL), Password/OTP and a Verification Code as shown on the screen.
After successful authentication, you will be redirected to NSDL Depository site
wherein you can see e-Voting page. Click on company name or e-Voting service
provider name and you will be redirected to e-Voting service provider website for
casting your vote during the remote e-Voting period or joining virtual meeting &
voting during the meeting.
Individual Shareholders 1. Existing users who have opted for Easi/Easiest, they can login through their
holding securities in user id and password. Option will be made available to reach e-Voting page
demat mode with CDSL without any further authentication. The URL for users to login to Easi / Easiest are
https://web.cdslindia.com/myeasi/home/login or www.cdslindia.com and click on
New System Myeasi.
2. After successful login of Easi/Easiest the user will be also able to see the e-Voting
Menu. The Menu will have links of e-Voting service provider i.e. NSDL, Karvy, Link
Intime or CDSL. Click on e-Voting service provider name to cast your vote.
3. If the user is not registered for Easi/Easiest, option to register is available at
https://web.cdslindia.com/myeasi/Registration/EasiRegistration
4. Alternatively, the user can directly access e-Voting page by providing demat Account
Number and PAN No. from a link in www.cdslindia.com home page. The system will
authenticate the user by sending OTP on registered Mobile & Email as recorded in
the demat Account. After successful authentication, user will be provided links for
the respective ESP i.e. Link Intime where the e-Voting is in progress.
Individual Shareholders 1. You can also login using the login credentials of your demat account through
(holding securities your Depository Participant registered with NSDL/CDSL for e-Voting facility.
in demat mode) 2. Upon logging in, you will be able to see e-Voting option. Click on e-Voting
login through their option, you will be redirected to NSDL/CDSL Depository site after successful
depository participants authentication, wherein you can see e-Voting feature. Click on company name
or e-Voting service provider and you will be redirected to e-Voting website for
casting your vote during the remote e-Voting period or joining virtual meeting &
ANNNUAL GENERAL

voting during the meeting.

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 Individual Shareholders 1. Open the internet browser and launch the URL: https://instavote.linkintime.co.in
holding securities
➣ Click on “Sign Up” under ‘SHARE HOLDER’ tab and register with your following
in Physical mode
details: -
& evoting service
provider is LINK INTIME. a. User ID: Shareholders/members holding shares in physical form shall provide
Event No + Folio Number registered with the Company.
b. PAN: Enter your 10-digit Permanent Account Number (PAN) (Members who have
not updated their PAN with the Depository Participant (DP)). The Company shall
use the sequence number provided to you, if applicable.
c. DOB/DOI: Enter the Date of Birth (DOB)/Date of Incorporation (DOI) (As recorded
with your DP/Company - in DD/MM/YYYY format).
d. Bank Account Number: Enter your Bank Account Number (last four digits), as
recorded with your DP/Company.
e. Shareholders/ members holding shares in physical form but have not recorded
‘c’ and ‘d’, shall provide their Folio number in ‘d’ above.
➣ Set the password of your choice (The password should contain minimum
8 characters, at least one special Character (@!#$&*), at least one numeral, at
least one alphabet and at least one capital letter).
➣ Click “confirm” (Your password is now generated).
2. Click on ‘Login’ under ‘SHARE HOLDER’ tab.
3. Enter your User ID, Password and Image Verification (CAPTCHA) Code and click
on ‘Submit’.
4. After successful login, you will be able to see the notification for e-Voting. Select
‘View’ icon.
5. E-Voting page will appear.
6. Refer the Resolution description and cast your vote by selecting your desired
option ‘Favour / Against’ (If you wish to view the entire Resolution details, click
on the ‘View Resolution’ file link).
7. After selecting the desired option i.e. Favour/Against, click on ‘Submit’.
A confirmation box will be displayed. If you wish to confirm your vote, click on
‘Yes’, else to change your vote, click on ‘No’ and accordingly modify your vote.

c. Institutional shareholders:

Institutional shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodians are required to log on the
e-Voting system of LIIPL at https://instavote.linkintime.co.in and register themselves as ‘Custodian/Mutual Fund
/Corporate Body’. They are also required to upload a scanned certified true copy of the board resolution
/authority letter/power of attorney etc., together with attested specimen signature of the duly authorised
representative(s) in PDF format in the ‘Custodian/Mutual Fund/Corporate Body’ login for the Scrutinizer to verify
the same.

d. Individual Shareholders holding securities in Physical mode & evoting service Provider is
LINKINTIME, have forgotten the password:

● Click on ‘Login’ under ‘SHARE HOLDER’ tab and further Click ‘forgot password?’
● Enter User ID, select Mode and enter Image verification (CAPTCHA) code and Click on ‘Submit’.
● In case shareholder/ member is having valid email address, Password will be sent to his / her registered
e-mail address.
● Shareholders/ members can set the password of his/her choice by providing the information about the
particulars of the Security Question and Answer, PAN, DOB/DOI, Bank Account Number (last four digits)
ANNNUAL GENERAL

etc., as mentioned above.

286 S O B HA ANNUAL REPORT 2 02 1

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● The password should contain minimum 8 characters, at least one special character (@!#$&*), at least one
numeral, at least one alphabet and at least one capital letter.

e. Individual Shareholders holding securities in demat mode with NSDL/CDSL have forgotten
the password:

Shareholders/ members who are unable to retrieve User ID/ Password are advised to use Forget User ID and
Forget Password option available at above mentioned depository/ depository participants website.

f. For shareholders/ members holding shares in physical form, the details can be used only for voting on the
resolutions contained in this Notice.

g. During the voting period, shareholders/ members can login any number of time till they have voted on the
resolution(s) for a particular “Event”.

h. Helpdesk for Individual Shareholders holding securities in demat mode for any technical issues
related to login through Depository i.e. NSDL and CDSL.

Login type Helpdesk details

Individual Shareholders Members facing any technical issue in login can contact NSDL helpdesk by
holding securities in demat sending a request at evoting@nsdl.co.in or call at toll free no.: 1800 1020 990
mode with NSDL and 1800 22 44 30

Individual Shareholders Members facing any technical issue in login can contact CDSL helpdesk
holding securities in demat by sending a request at helpdesk.evoting@cdslindia.com or contact at
mode with CDSL 022- 23058738 or 022-23058542-43

Helpdesk for Individual shareholders holding securities in physical mode/ Institutional shareholders &
e-Voting service provider is LINK INTIME.

In case shareholders/ members holding securities in physical mode/Institutional shareholders have any
queries regarding e-Voting, they may refer the Frequently Asked Questions (‘FAQs’) and InstaVote
e-Voting manual available at https://instavote.linkintime.co.in, under Help section or send an email to
enotices@linkintime.co.in or contact on: - Tel: 022 –4918 6000.

i. General Guidelines for shareholders:

1. Institutional shareholders (i.e. other than individuals, HUF, NRI etc.) are required to send scanned copy (PDF/
JPG Format) of the relevant Board Resolution/ Authority letter etc. with attested specimen signature of the duly
authorized signatory(ies) who are authorized to vote, to the Scrutinizer by e-mail: nagendradrao@gmail.com
with a copy marked to enotices@linkintime.co.in.

2. It is strongly recommended not to share your password with any other person and take utmost care to keep
your password confidential.

j. Instructions for members for e-Voting on the day of the AGM are as under:

- Once the electronic voting is activated by the scrutinizer/ moderator during the meeting, shareholders/
members who have not exercised their vote through the remote e-Voting can cast the vote as under:

1. On the Shareholders VC page, click on the link for e-Voting “Cast your vote”
2. Enter your 16 digit Demat Account No./Folio No. and OTP (received on the registered mobile number/
registered email Id) received during registration for InstaMEET and click on ‘Submit’.
3. After successful login, you will see “Resolution Description” and against the same the option “Favour/
Against” for voting.
4. Cast your vote by selecting appropriate option i.e. “Favour/Against” as desired. Enter the number of
shares (which represents no. of votes) as on the cut-off date under ‘Favour/Against’.
5. After selecting the appropriate option i.e. Favour/Against as desired and you have decided to vote, click
on “Save”. A confirmation box will be displayed. If you wish to confirm your vote, click on “Confirm”, else
ANNNUAL GENERAL

to change your vote, click on “Back” and accordingly modify your vote.

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 k. Instructions for members for attending the AGM through VC/OAVM are as under:

- Open the internet browser and launch the URL: https://instameet.linkintime.co.in

- Select the “Company” and ‘Event Date’ and register with your following details: -
i, Demat Account No. or Folio No: Enter your 16 digit Demat Account No. or Folio No.
ii. Shareholders/ members holding shares in physical form shall provide Folio Number registered with the
Company.
iii. PAN: Enter your 10-digit Permanent Account Number (PAN) (Members who have not updated their
PAN) with the Depository Participant (DP)/Company shall use the sequence number provided to you, if
applicable.
iv. Mobile No.: Enter your mobile number.
v. Email ID: Enter your email id, as recorded with your DP/Company.
- Click “Go to Meeting” (You are now registered for InstaMeet and your attendance is marked for the
meeting).

l. Instructions for Shareholders/ Members to Speak during the Annual General Meeting through InstaMeet:

1. Shareholders who would like to speak during the meeting must register their request from
August 07, 2021 (9:00 a.m. IST) to August 09, 2021 (5:00 p.m. IST) by sending their request from their
registered email address mentioning their name, DP ID and Client ID/folio number, PAN, mobile number
at: investors@sobha.com
2. Shareholders will get confirmation on first cum first serve basis.
3. Other shareholder may ask questions to the panelist, via active chat-board during the meeting.
4. Please start your conversation with panelist by switching on video mode and audio of your device.
5. Shareholders are requested to speak only when moderator of the meeting/ management will announce
the name for speaking. Members are encouraged to join the Meeting through Laptops for better
experience.

m. Further, Members will be required to use Internet with a good speed to avoid any disturbance during
the meeting.
n. Please note that participants connecting from Mobile Devices or Tablets or through Laptop connecting via
Mobile Hotspot may experience Audio/Video loss due to fluctuation in their respective network. It is therefore
recommended to use stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid glitches.

o. All documents referred to in the accompanying Notice and Statement annexed thereto shall be open for
inspection at the Registered Office of the Company during normal business hours on any working day till the
date of the Annual General Meeting.

p. The Members can join the AGM in the VC/OAVM mode 15 minutes before and after the scheduled
time of the commencement of the Meeting by following the procedure mentioned in the Notice. The
facility of participation at the AGM through VC/OAVM will be made available for 2,000 members
on first come first served basis. This will not include large Shareholders (Shareholders holding
2% or more shareholding), Promoters, Institutional Investors, Directors, Key Managerial Personnel, the
Chairpersons of the Audit Committee, Nomination and Remuneration Committee and Stakeholders
Relationship Committee, Auditors etc., who are allowed to attend the AGM without restriction on account of
first come first served basis.

q. The attendance of the Members attending the AGM through VC/OAVM will be counted for the purpose of
reckoning the quorum under Section 103 of the Companies Act, 2013.

r. Shareholders/ Members, who will be present in the Annual General Meeting through InstaMEET facility and
have not casted their vote on the Resolutions through remote e-Voting and are otherwise not barred from
doing so, shall be eligible to vote through e-Voting facility during the meeting. Shareholders/ Members
who have voted through Remote e-Voting prior to the Annual General Meeting will be eligible to attend/
participate in the Annual General Meeting through InstaMeet. However, they will not be eligible to vote again
ANNNUAL GENERAL

during the meeting.

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DIVIDEND

1. The Register of Members and the Share Transfer Books of the Company shall remain closed on 30th July, 2021.

2. The dividend if approved by the members at the Annual General Meeting will be deposited in a separate
bank account within 5 days from the date of the Annual General Meeting and the same will be paid to the
shareholders as per the provisions of the Companies Act 2013 and the rules made thereunder.

INVESTOR CLAIMS
1. Members who have not yet encashed their dividend warrants for earlier years are requested to write to
the Secretarial Department at the Registered and Corporate Office of the Company or send an e-mail to:
investors@sobha.com to claim the dividend. Details of unclaimed dividend as on 31.03.2021 are available in
the ‘Investors Section’ of the website of the Company www.sobha.com.

2. During the financial year 2021-22, the Company will be required to transfer to the Investor Education and
Protection Fund, the dividend declared in the Annual General Meeting of the Company held on July 11, 2014
and which is lying unclaimed with the Company for a period of seven years from the date of transfer to the
Unpaid Dividend Account.

3. Allottees who have not yet claimed the equity shares allotted to them during the Initial Public Offer (IPO)
of the Company are requested to make their claim to the Secretarial Department at the Registered and
Corporate Office of the Company or send an e-mail to investors@sobha.com. Details of unclaimed equity
shares are available in the ‘investors section’ of the website of the Company www.sobha.com.

INVESTOR SERVICING
1. As per Regulation 40 of SEBI Listing Regulations, as amended, securities of listed companies can be
transferred only in dematerialized form with effect from, April 1, 2019, except in case of request received for
transmission or transposition of securities. In view of this and to eliminate all risks associated with physical
shares and for ease of portfolio management, members holding shares in physical form are requested to
consider converting their holdings to dematerialized form. Members can contact the Company or Company’s
Registrars and Transfer Agents, Link Intime India Pvt. Ltd. for assistance in this regard.

2. To support the ‘Green Initiative’, Members who have not yet registered their email addresses are requested
to register the same with their DPs in case the shares are held by them in electronic form and with the
Company in case the shares are held by them in physical form.

3. Members are requested to intimate changes, if any, pertaining to their name, postal address, email address,
telephone/ mobile numbers, Permanent Account Number (PAN), mandates, nominations, power of attorney,
bank details such as, name of the bank and branch details, bank account number, MICR code, IFSC code, etc.,
to their DPs in case the shares are held by them in electronic form and to Sobha Limited in case the shares
are held by them in physical form.

4. As per the provisions of Section 72 of the Act, the facility for making nomination is available for the Members
in respect of the shares held by them. Members who have not yet registered their nomination are requested
to register the same by submitting Form No. SH-13. Members are requested to submit the said details to their
DP in case the shares are held by them in electronic form and to Sobha Limited in case the shares are held
in physical form.

5. All Investor Queries/Complaints/Grievances may be addressed to the Secretarial Department at the

Registered and Corporate Office of the Company or by sending an e-mail to investors@sobha.com.
Members can also write to M/s Link Intime India Private Limited, the Registrar and Share Transfer Agents of
the Company, having their office at 247, LBS Marg, Vikhroli (West), Mumbai - 400083 or send an e-mail to
rnt.helpdesk@linkintime.co.in.

OTHERS

1. In compliance with the aforesaid MCA Circulars and SEBI Circulars, Notice of the AGM along with the Annual
Report 2020-21 is being sent only through electronic mode to those Members whose email addresses are
ANNNUAL GENERAL

registered with the Company/ Depositories. Members may note that the Notice and Annual Report 2020-21

SO BHA A N N U A L R E P O R T 2021 289

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 will also be available on the Company’s website: www.sobha.com, websites of the Stock Exchanges i.e.
BSE Limited and National Stock Exchange of India Limited at www.bseindia.com and www.nseindia.com
respectively.

2. Pursuant to Finance Act 2020, dividend income will be taxable in the hands of shareholders w.e.f. April 1, 2020
and the Company is required to deduct tax at source from dividend paid to shareholders at the prescribed
rates.

A Resident individual shareholder with PAN and who is not liable to pay income tax can submit a yearly
declaration in Form No. 15G/15H, to avail the benefit of non-deduction of tax at source by email to
rnt.helpdesk@linkintime.co.in on or before July 29, 2021. Further no tax shall be deducted on the dividend
payable to a resident individual shareholders if the total amount of dividend to be received from the Company
during the Financial Year 2020-21 does not exceed ₹5,000/-. Shareholders may note that in case PAN is not
updated with the Depository Participant/Register of the Company, the tax will be deducted at a higher rate
of 20%.

Non-resident shareholders can avail beneficial tax rates under Double Tax Avoidance Agreement [DTAA] i.e.
tax treaty between India and their country of residence. Non- resident shareholders are required to provide
details on applicability of beneficial tax rates and provide following documents:

- Copy of PAN card, if any, allotted by Indian Income Tax Authorities duly self attested by the member
- Copy of Tax Residency Certificate [TRC] for the FY2021-22/calendar year 2021 obtained from the
revenue authorities of country of tax residence duly attested by the member
- Self Declaration in Form 10-F
- No-PE [permanent establishment] certificate
- Self Declaration of beneficial ownership by the non-resident shareholder -Lower withholding Tax
certificate, if any, obtained from the Indian Tax Authorities
The members/shareholders are required to provide above documents/declarations by sending an E-mail to
rnt.helpdesk@linkintime.co.in on or before July 29, 2021. The aforesaid documents are subject to verification
by the Company and in case of ambiguity, the Company reserves its right to deduct the TDS as per the rates
mentioned in the Income Tax Act, 1961.

In case of Foreign Institutional Investors / Foreign Portfolio Investors tax will be deducted under Section 196D
of the Income Tax Act @20% plus applicable Surcharge and Cess.

3. Regulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 directs listed
companies to send soft copies of the annual report to those shareholders who have registered their e-mail
addresses. Sections 101 and 136 of the Companies Act, 2013 read with the Companies (Management and
Administration) Rules, 2014 and Companies (Accounts) Rules, 2014 permit prescribed companies to send a
notice and financial statements through electronic mode. In view of the same, shareholders are requested
to update their e-mail IDs with their Depository Participants where shares are held in dematerialised mode
and where the shares are held in physical form to update the same in the records of the Company in order to
facilitate electronic servicing of annual reports and other documents.
ANNNUAL GENERAL

290 S O B HA ANNUAL REPORT 2 02 1

MEETING
EXPLANATORY STATEMENT ANNEXED TO NOTICE
[PURSUANT TO PROVISIONS OF SECTION 102(1) OF THE COMPANIES ACT, 2013]

Item No. 4: borrowings from financial institutions, debentures

etc. A mix of these instruments will result in
In terms of Section 148 of the Companies Act, 2013
optimum utilisation of funds at an optimum cost and
and the Companies (Cost Records and Audit)
help meet the various business requirements of the
Rules, 2014 as may be amended from time to time,
Company. The Board is therefore, contemplating
the Company is required to get its cost records
the feasibility of borrowing money through further
audited.
issue of Non-Convertible Debentures.
The Board of Directors, based on the
In terms of Rule 14 of The Companies (Prospectus
recommendation of the Audit Committee, have
and Allotment of Securities) Rules, 2014, the issue
appointed M/s. Srinivas and Co, Cost Accountants
of Non-Convertible Debentures on a private
(Firm Registration No: 000278) as the Cost
placement basis requires previous approval of the
Auditors of the Company for the financial year
members of the Company by way of a Special
2020-21. Further, the Board of Directors, on the
Resolution and such an approval shall be valid for all
recommendations of the Audit Committee, have the offers or invitation for such Debentures during
approved the payment of remuneration not the year.
exceeding ₹185,000 (Rupees One lakh and eighty
five thousand only) plus out of pocket expenses Accordingly, approval of the members is being
and taxes as may be applicable from time to time sought to enable the Board of Directors to offer or
to the Cost Auditors for undertaking the cost audit invite subscriptions for non-convertible debentures
of the Company for the financial year 2020-21. aggregating up to ₹700,00,00,000 (Rupees Seven
Hundred Crores Only) as may be required and such
In terms of Section 148 of the Companies Act, 2013 approval shall be valid for a year.
read with the Companies (Audit and Auditors)
Rules, 2014, the remuneration payable to the Cost None of the Directors or the Key Managerial
Auditors has to be ratified by the shareholders of Personnel or their relatives are in any way interested
the Company. or concerned, financially or otherwise, in this
Resolution except to the extent of their shareholding
Accordingly, consent of the members is sought for in the Company.
ratification of the remuneration payable to the Cost
Auditors for the financial year ending March 31, 2021. The Board recommends the Special Resolution
set-out in Item 5 of the Notice for approval by the
None of the Directors or Key Managerial Personnel or members.
their relatives are in any way interested or concerned,
financially or otherwise in this Resolution except to Item No. 6:
the extent of their shareholding in the Company.
Mr. Ravi PNC Menon (DIN: 02070036) was appointed
The Board of Directors recommends the Ordinary as a Whole-time Director designated as Chairman of
Resolution set out in Item No. 4 for approval by the the Company vide a Special resolution passed in the
Members. Seventeenth Annual General Meeting held on June
30, 2012. Mr. Menon, 40, graduated with distinction
Item No. 5: in Bachelor of Science in Civil Engineering from
Purdue University, USA. He has seventeen years of
The Company in order to execute various projects,
experience in the field of construction and real estate
both residential and contractual, has to borrow
development. He is responsible for developing the
money from banks and other financial institutions
strategic vision of the Company, establishing the
as a means of finance. The Company has currently
organisations’ goals and objectives and directing
availed project-specific or general purpose
the Company towards its fulfilment. He focuses
borrowings from various banks and financial
on the overall functioning of the Company with
institutions to finance the execution of the projects
particular emphasis on product delivery, project
of the Company.
execution, quality control, technology advancement,
The Board of Directors envisages a continued need process and information technology and customer
for the funding requirements of the Company to satisfaction. He supervises the performance of
be met through various components, i.e. equity, various departments in the organisation such as
ANNNUAL GENERAL

project loans, general purpose corporate loans, Design and Engineering, Project Management,

SO BHA A N N U A L R E P O R T 2021 291

MEETING
 Sales & Marketing, Quality, Safety & Technology, ● Company’s contribution to Provident
Estimation, Cost Audit, Value Engineering, Fund
Landscaping, etc. He played a pivotal role in the
● Payment of gratuity and other retirement
successful integration of pre-cast technology in our
benefits
construction methodology. He plays an influential
and prominent role in augmenting the product ● Encashment of leave
delivery levels of the Company, attainment of
superior standards of quality, new product launches ● Personal Accident and Mediclaim
and customer relationship management. Insurance

In his term of office, Mr. Menon has contributed Mr. Menon is not entitled to any severance pay
extensively towards the growth of the Company and is required to serve such notice period as is
and has been responsible for the launch of new specified in the HR policy of the Company.
product lines and attainment of highest standards If re-appointed, Mr. Menon will hold office for a
of quality. By focusing on key areas such as ERP
term of 5 years, which will end at the close of the
implementation, Value Engineering, Process
financial year 2025 - 2026. Mr. Menon satisfies the
Documentation, Environment Health and Safety
conditions set out in Section 196(3) and Part 1 of
measures, he has significantly strengthened the
Schedule V of the Companies Act, 2013.
foundation of the Company.
Mr. Menon has given his consent to act as a
Based on the recommendation received from
Whole-time Director designated as Chairman of the
the Nomination, Remuneration and Governance
Committee and in view of the contributions made Company. Further, as per the declarations received
by him, it is proposed to re-appoint Mr. Menon as by the Company, Mr. Menon is not disqualified
a Whole-time Director designated as Chairman under Section 164 of the Companies Act, 2013. The
of the Company for a further period of five years directorships held by Mr. Menon are within the limits
commencing from April 01, 2021 on the remuneration prescribed under Section 165 of the Companies
set-out below: Act, 2013. Mr. Menon is not related to any of the
directors or key managerial personnel of the
A. Basic salary: ₹2,625,000 (Rupees Twenty-Six
Company.
Lakhs Twenty Five Thousand only) per month
with authority to the Board of Directors to Mr. Menon attended all four meetings of the Board
revise the basic salary from time to time taking of Directors held during the financial year 2020-21.
into account the performance of the Company,
Mr. Menon holds 31,85,930 equity shares of ₹10
subject however to a ceiling of ₹35,00,000
each in the Company as on June 22, 2021. The
(Rupees Thirty Five Lakhs only) per month.
relatives of Mr. Menon holds 46,076,763 equity
B. Accommodation: Rent-free furnished shares in the Company. Mr. Menon and his relatives
accommodation or up to 40% of the basic are interested in passing of this resolution by
salary as House Rent Allowance in lieu of virtue of his directorship and to the extent of their
accommodation. shareholding in the Company. None of the other
C. Other Allowances: Up to 60% of the basic Directors or the Key Managerial Personnel or their
salary and as determined by the Board from relatives are in any way interested or concerned,
time to time. financially or otherwise in this Resolution.
D. Commission: As decided by the Board. Shall The above may also be treated as an abstract of the
not exceed 2% of the Consolidated Net Profits. terms of contract of re-appointment of Mr. Menon
as a Whole-time Director designated as Chairman
E. Perquisites: He shall be entitled to perquisites,
allowances, benefits, facilities and amenities of the Company and a memorandum as to the
(collectively called Perquisites) as per the nature of concern and interest of the Directors in
policy of the Company. the said re-appointment, as required under Section
190 of the Act.
F. In addition to the above, he shall be entitled to
the allowance and benefits as per the policy The Board of Directors based on the
of the Company in force, such as: recommendation of the Nomination, Remuneration
and Governance Committee, recommends the
● Company maintained car with driver.
Special Resolution set out in Item No. 6 for approval
ANNNUAL GENERAL

● Telephone at residence by the Members.

292 S O B HA ANNUAL REPORT 2 02 1

MEETING
ADDITIONAL INFORMATION ON DIRECTORS SEEKING RE-ELECTION AT THE ANNUAL GENERAL MEETING
PURSUANT TO SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS), REGULATIONS 2015 AND
SECRETARIAL STANDARDS ON GENERAL MEETINGS:

Name of Director Mr. Ravi PNC Menon Mr. Jagdish Chandra Sharma

Age 40 Years 63 Years

Date of First Appointment June 08, 2004 April 01, 2003

Qualifications Bachelor of Science in Civil Engineering from B.Com(Honours), ACA, ACS.

Purdue University, USA.
No. of Board Meetings
attended during the 4 4
financial year 2020-21
Experience 17 years in the Company. Over 39 years cumulative experience inclusive of
20 years in the Company.
Expertise in specific Mr. Ravi PNC Menon oversees the overall Over 39 years of experience in diversified
functional areas management and functioning of the Company. industries such as real estate, automobiles,
His responsibilities in the Company encompass textiles and steel. Mr. Sharma is entrusted with
product delivery, project execution, technology the responsibility of managing the overall affairs
advancements, quality control and enhancement, of the Company and is responsible for achieving
process and information technology and the goals of the Company. He plays an active role
customer satisfaction. He supervises the in overall growth of the Company.
performance of various departments in the
organisation such as Project Management, Design
and Engineering, Sales & Marketing, Quality
Safety & Technology, Purchase, Estimation, Cost
Audit, Value Engineering, Landscaping, Human
Resources etc. Mr. Menon specifically aims at
scaling the delivery levels of the Company,
adhering to quality standards, launching new
product lines and strengthening the customer
relationship management function.
Details of remuneration Remuneration paid and payable is in accordance Remuneration paid and payable is in accordance
with the approval of shareholders granted with the approval of shareholders granted vide
vide special resolution passed in the Annual special resolution passed in the Annual General
General Meeting held on 9th August 2019. The Meeting held August 9, 2019 and as may be
remuneration paid for the financial year 2020-21 approved at the ensuing Annual General Meeting.
is disclosed in the Corporate Governance Report The remuneration paid for the financial year
that forms part of the Annual Report. 2020-21 is disclosed in the Corporate Governance
Report that forms a part of the Annual Report.
Directorship and
membership of Committees
None None
of the Board held in other
listed companies
Directorships held in other Sobha Assets Private Limited & Sobha Highrise Sobha Developers (Pune) Limited, Sobha Assets
public limited companies Ventures Private Limited. Private Limited and Sobha Highrise Ventures
Private Limited [Subsidiaries of Sobha Limited, a
[Subsidiaries of Sobha Limited, a public company]. public company.
Relationship with other
Directors and Key None. None.
Managerial Personnel
Number of shares held as 31,85,930 equity shares of ₹10 each. 107,177 shares equity shares of ₹10 each .
on 22nd June, 2021.
46,076,763 equity shares of ₹10 each held by 9,456 equity shares of ₹10 each held by relatives.
relatives.
Terms and conditions of The terms and conditions of appointment The terms and conditions of appointment shall be
appointment continue to be governed by the approval governed by the approval of shareholders as set
of shareholders to be granted vide special out in the Notice of the Annual General Meeting.
resolutions to be passed in the Annual General
Meeting .
ANNNUAL GENERAL

SO BHA A N N U A L R E P O R T 2021 293

MEETING
GLOSSARY

ADR American Depository Receipts JD / JV Joint Development / Joint Venure

BBS Bar Bending Schedule KMP Key Managerial Personnel
BSE BSE Limited LED Light-emitting diode
CAGR Compounded Annual Growth Rate Listing SEBI (Listing Obligations and
Regulations Disclosure Requirements) Regulations,
CDSL Central Depository Services (India) 2015
Limited
MCA Ministry of Corporate Affairs, New
CEO Chief Executive Officer Delhi
CFO Chief Financial Officer MD&A Management Discussion & Analysis
CIN Corporate Identification Number MEP Mechanical, Electrical and Plumbing
CPD Concretes Product Division NCR National Capital Region
CREDAI Confederation of Real Estate NEAPS NSE Electronic Application Processing
Developers Association of India System
CRM Customer Relationship Management NECS National Electronic Clearing System
CSR Corporate Social Responsibility NEFT National Electronic Fund Transfer
Demat Dematerialised Account NRI Non Resident Indian
DG Diesel Generator NSDL National Securities Depository Limited
DIN Director Identification Number NSE National Stock Exchange of India
EBITDA Earnings before Interest, Depreciation Limited
and Amortisation OHSAS Occupational Health Safety
Assessment Series
ECS Electronic Clearing System
PAT Profit after Tax
EHS Environment, Healt & Safety
PBDIT Profit before Depreciation, Interest
EPS Earnings Per Share
and Tax
ERP Enterprise Resource Planning
PBIT Profit before Interest and Tax
EVEN E-Voting Event Number
PBT Profit before Tax
FII Foreign Institutional Investors
PV Cells Photovoltaic Cells
FSI Floor Space Index
QST Quality, Safety and Technology
GDP Gross Domestic Product
R&D Research and Development
GDR Global Depository Receipts
R&T Agents Registrar and Share Transfer Agents
HUF Hindu Undivided Family
RBI Reserve Bank of India
HVAC Heating, Ventilating and Air
RERA Real Estate (Regulation and
Conditioning
Development) Act, 2016
ICRA ICRA Limited [Formerly Investment
ROCE Return on Capital Employed
Information and Credit Rating Agency
of India Limited] ROE Return on Equity
IEPF Investor Education and Protection RTGS Real Time Gross Settlement
Fund
SBA Super Built-up Area
IPO Initial Public Offer
SCORES SEBI Complaint Redress System
ISIN International Securities Identification
SEBI Securities and Exchange Board of
Number
India
ISO International Organization for
VFD Variable Frequency Drive
Standardization
WTD Whole-time Director
IT / ITES Information Technology / Information
Technology Enabled Services Y-O-Y Year-on-Year

294 S O B HA ANNUAL REPORT 2 02 1

FISCAL 2021 HIGHLIGHTS

• Revenues of ₹3,593 million with a PBT of ₹54 million and PAT of ₹67 million
• Collections of ₹5,466 million
Q1 - 2021 • Average cost of debt as end of Q1-21 stood at 9.64%
• Sold 0.65 million square feet of area total valued at ₹4,877 million (Sobha Share
value of ₹3,931 million)

• Revenues of ₹5,459 million with a PBT of ₹229 million and PAT of ₹170 million
• Collections of ₹6,859 million
Q2 - 2021 • Average cost of debt as end of Q2-21 stood at 9.32%
• Sold 0.89 million square feet of area, total valued at ₹6,899 million (Sobha Share
of ₹5,309 million)

• Revenues of ₹6,963 million with a PBT of ₹323 million and PAT of ₹209 million
• Collections of ₹8,669 million
• Average cost of debt as end of Q3-21 stood at 9.17%
• Sold 1.13 million square feet of area, total valued at₹8,876 million (Sobha Share
Q3 - 2021 of ₹6,777 million)
• Launched a new luxury project, SOBHA City Athena in Bangalore with total
Residential SBA of 121,606 sqft and Commercial SBA of 28,863 sqft
• Completed 0.02 million square feet of Real Estate projects and 1.61 million
square feet of contractual projects, totalling 1.63 million square feet of
developable area during Q3-21.

• Revenues of ₹5,889 million with a PBT of ₹146 million and PAT of ₹186 million
• Collections of ₹ 9,775 million
• Average cost of debt as end of Q4-21 stood at 9.04%
• Sold 1.34 million square feet of area total valued at ₹10,720 million (Sobha Share
of ₹8,742 million)
• Completed 0.21 million square feet of Real Estate projects and 0.72 million
Q4 - 2021
square feet of contractual projects, totalling 0.93 million square feet of
developable area during Q4-21.
• Launched “SOBHA Windsor” in Bangalore with a total developable area of
1.68 million square feet, also launched “SOBHA Metropolis” project in Thrissur
with a total developable area of 1.17 million square feet. We also entered in to
Development Manager role for the project “Sobha Chartered Woodpecker”
with a developable area of 0.34 million square feet.

SO BHA A N N U A L R E P O R T 2021 295

3 YEARS FINANCIAL HIGHLIGHTS (CONSOLIDATED FINANCIALS)
(₹ in Million)
Particulars 2020-21 2019-20 2018-19
Financial Performance
Total Income 21,904.00 38,256.59 35,155.41
Profit before depreciation interest and tax (PBDIT) 4,907.35 8,312.66 7,467.57
Depreciation 793.67 722.85 623.17
Profit before interest and tax (PBIT) 4,113.68 7,589.81 6,844.40
Interest 3,361.83 3,258.26 2,362.20
Profit before tax (PBT) 751.85 4,331.55 4,482.20
Profit after tax (PAT) 629.26 2,821.30 2,962.39
Dividend
Equity (paid/proposed) 331.96 663.92 663.92
Rate of dividend 35% 70% 70%

Financial position
Shareholder’s funds 24,277.35 24,312.01 22,291.10
Borrowed fund 30,386.36 31,173.61 26,038.86
Total 54,663.71 55,485.62 48,329.96

Net fixed assets 9,034.34 9,194.73 6,777.36

Investments 1,142.70 1,142.69 1,128.24
Net current and non current assets 47,583.32 44,589.99 39,489.47
Deferred tax assets/ (liability) (322.54) (290.77) 934.89
Total 57,437.82 54,636.64 48,329.96

Ratios
EBIDTA Margin 22.40% 21.73% 21.24%
Pre-Tax Margin 3% 11% 13%
Post Tax Margin 3% 7% 8%
Interest coverage ratio 1.22 2.33 2.90
Net debt to EBIDTA (times) 5.76 3.64 3.25
Fixed assets to turnover ratio 41% 24% 19%
Debtors turnover ratio (Net Debtors) -172% -93% -108%
Debtors turnover ratio (Gross Debtors) 25% 10% 11%
Return on Equity (ROE) 2% 11% 12%
Return on Capital Employed (ROCE)* 8% 15% 14%
Earnings per share(EPS) 6.57 29.69 31.33
Book Value 255.97 256.33 235.02
Debt/Equity Ratio 1.17 1.24 1.09
Price Earning Ratio 66.55 4.51 16.49
Price/book value 1.71 0.52 2.20

*EBIT/ Average capital employed.

Figures are regrouped wherever necessary.

296 S O B HA ANNUAL REPORT 2 02 1