Mar 31, 2023
1. CORPORATE INFORMATION
DLF Limited (''the Company'') is engaged primarily in the business of colonisation and real estate development. The operations of the Company span all aspects of real estate development, from the identification and acquisition of land, to planning, execution, construction and marketing of projects. The Company is also engaged in the business of leasing, maintenance services and recreational activities which are related to the overall development of real estate business. The Company is a public limited company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognised stock exchanges in India. The registered office is situated at Shopping Mall, 3rd Floor, Arjun Marg, Phase I, DLF City, Gurugram - 122002, Haryana.
The standalone financial statements for the year ended 31 March 2023 were authorised and approved by the Board of Directors for issue on 12 May 2023.
2. SIGNIFICANT ACCOUNTING POLICIES2.1 Basis of preparation
The standalone financial statements (''financial statements'') of the Company have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs (''MCA'') under Section 133 of the Companies Act, 2013 (''Act'') read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time and presentation requirements of Division II of Schedule III to the Companies Act, 2013 (Ind AS compliant Schedule III), as applicable to the standalone financial statements.
The standalone financial statements have been prepared on a going concern basis in accordance with accounting principles generally accepted in India. Further, the standalone financial statements have been prepared on historical cost basis except for certain financial assets, financial liabilities, derivative financial instruments and share based payments which are measured at fair values as explained in relevant accounting policies. The changes in accounting policies are explained in note 2(aa).
The standalone financial statements are presented in Rupees and all values are rounded to the nearest lakh, except when otherwise indicated.
2.2 Summary of significant accounting policies
a) Current and non-current classification
The Company 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 Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
b) Property, plant and equipment
Recognition and initial measurement
Property, plant and equipment at their initial recognition are stated at their cost of acquisition. On transition to Ind AS, the Company had elected to measure all of its property, plant and equipment at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. 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 recognised 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. The Company identifies and determines cost of each component/ part of the asset separately, if the component/ part have a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset.
Subsequent measurement (depreciation and useful lives)
Property, plant and equipment are subsequently measured at cost net of accumulated depreciation and accumulated impairment losses, if any. Depreciation on property, plant and equipment is provided on a straight-line basis over the estimated useful lives of the assets as follows:
Asset category* |
Estimated useful life (in years) |
Estimated useful life as per Schedule II to the Companies Act, 2013 (in years) |
Buildings |
20-60 |
60 |
Plant and machinery |
10-15 |
15 |
Computers and data processing units |
||
- Servers and |
6 |
6 |
networks |
||
- Desktops, laptops |
3 |
3 |
and other devices |
||
Furniture and fixtures |
5-10 |
10 |
Office equipment |
5 |
5 |
Vehicles |
8-10 |
8-10 |
The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of building, furniture and fixtures and plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
*I n case of assets pertaining to Golf and Club operations, the Company based on technical evaluation and management estimate considers the useful life of the assets as below:
Asset category |
Useful life (in years) |
Buildings |
20 |
Plant and machinery |
10 |
Furniture and fixtures |
5 |
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year and adjusted prospectively, if appropriate.
De-recognition
An item of property, plant and equipment and any significant part initially recognised is de-recognised upon disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on de-recognition 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 asset is de-recognised.
c) Capital work-in-progress and intangible assets under development
Capital work-in-progress and intangible assets under development represents expenditure incurred in respect of capital projects/ intangible assets under development and are carried at cost less accumulated impairment loss, if any. Cost includes land, related acquisition expenses, development/ construction costs, borrowing costs and other direct expenditure.
d) Investment properties
Recognition and initial measurement
Investment properties are properties held to earn rentals or for capital appreciation or both. Investment properties are measured initially at their cost of acquisition, including transaction costs. On transition to Ind AS, the Company had elected to measure all of its investment properties at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, cost of replacing parts, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. When significant parts of the investment property are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. All other repair and maintenance costs are recognised in statement of profit and loss as incurred.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognised in statement of profit and loss as incurred.
Transfers are made to (or from) investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the carrying value at the date of change in use.
Subsequent measurement (depreciation and useful lives)
Investment properties are subsequently measured at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation on investment properties is
provided on the straight-line method over the useful lives of the assets as follows:
Asset category |
Estimated useful life (in years) |
Estimated useful life as per Schedule II to the Companies Act, 2013 (in years) |
Buildings and related equipment* |
20-60 |
60 |
Furniture and fixtures |
5-10 |
10 |
The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of building, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
* Apart from all the assets, the Company has developed commercial space (in addition to automated multi-level car parking) over the land parcel received under the build, own, operate and transfer scheme of the public private partnership (as mentioned in the intangible assets policy below) which has been depreciated in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such assets till the end of concession period.
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year and adjusted prospectively.
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 applying valuation model acceptable internationally.
De-recognition
Investment properties are de-recognised 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 recognised in the statement of profit and loss in the period of de-recognition.
e) Intangible assets
Recognition and initial measurement
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their
fair value at the date of acquisition. On transition to Ind AS, the Company had elected to measure all of its intangible assets at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in the statement of profit and loss in the period in which the expenditure is incurred.
The Company has acquired exclusive usage rights for 30 years under the build, own, operate and transfer scheme in respect of properties developed as automated multi-level car parking and commercial space and classified them under the "Intangible Assets - Right under build, own, operate and transfer arrangementâ.
Subsequent measurement (amortisation)
Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.
The cost of capitalized software is amortized over a period of 5 years from the date of its acquisition.
The cost of usage rights is being amortised over the concession period in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such intangible assets till the end of concession period.
De-recognition
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is de-recognised.
f) I nvestment in equity instruments of subsidiaries (including partnership firms), joint ventures and associates
Investment in equity instruments of subsidiaries, joint ventures and associates are stated at cost as per Ind AS 27 ''Separate Financial Statements''. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is assessed for recoverability and in case of permanent diminution, provision for impairment is recorded in statement of Profit and Loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss.
g) Business combinations
The Company applies the acquisition method in accounting for business combinations for the businesses which are not under common
control. 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 Company 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 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 benefits is not probable. However, the following assets and liabilities acquired in a business combination are measured at the basis indicated below:
a) Deferred tax assets or liabilities, and the assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with Ind AS 12 ''Income Tax'' and Ind AS 19 ''Employee Benefits'', respectively.
b) Potential tax effects of temporary differences and carry forwards of an acquiree that exist at the acquisition date or arise as a result of the acquisition are accounted in accordance with Ind AS 12 ''Income Tax''.
c) Liabilities or equity instruments related to share based payment arrangements of the acquiree or share - based payments arrangements of the Company entered into to replace share-based payment arrangements of the acquiree are measured in accordance with Ind AS 102 ''Share-based Payments'' at the acquisition date.
d) Assets (or disposal groups) that are classified as held for sale in accordance with Ind AS 105 ''Non-current Assets Held for Sale and Discontinued Operations'' are measured in accordance with that standard.
e) Reacquired rights are measured at a value determined on the basis of the remaining contractual term of the related contract. Such valuation does not consider potential renewal of the reacquired right.
Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of Ind AS 109 ''Financial Instruments'', is measured at fair value with changes in fair value recognised in statement of profit and loss. If the contingent consideration is not within the scope of Ind AS 109 ''Financial
Instruments'', it is measured in accordance with the appropriate Ind AS. Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and its subsequent settlement is accounted for within equity.
When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognised in statement of profit and loss or OCI, as appropriate.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted through additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date. These adjustments are called as measurement period adjustments. The measurement period does not exceed one year from the acquisition date.
Business combinations under common control
Business combinations involving entities or businesses under common control have been accounted for using the pooling of interest method. The assets and liabilities of the combining entities are reflected at their carrying amounts. No adjustments have been made to reflect fair values, or to recognise any new assets or liabilities.
Property acquisitions and business combinations
Where property is acquired, via corporate acquisitions or otherwise, management considers the substance of the assets and activities of the acquired entity in determining whether the acquisition represents the acquisition of a business.
Where such acquisitions are not judged to be an acquisition of a business, they are not treated as business combinations. Rather, the cost to acquire the corporate entity or assets and liabilities is allocated between the identifiable assets and liabilities (of the entity) based on their relative fair values at the acquisition date. Accordingly, no goodwill or deferred tax arises.
h) Inventories
⢠Land and plots other than area transferred to constructed properties at the commencement of construction are valued at lower of cost/ as re-valued on conversion
to stock and net realisable value. Cost includes land (including development rights and land under agreement to purchase) acquisition cost, borrowing cost if inventorisation criteria are met, estimated internal development costs and external development charges and other directly attributable costs.
⢠Construction work-in-progress of constructed properties other than Special Economic Zone (SEZ) projects includes the cost of land (including development rights and land under agreements to purchase), internal development costs, external development charges, construction costs, overheads, borrowing cost if inventorisation criteria are met, development/ construction materials, and is valued at lower of cost/ estimated cost and net realisable value.
⢠In case of SEZ projects, construction work-in-progress of constructed properties include internal development costs, external development charges, construction costs, overheads, borrowing cost if inventorisation criteria are met, development/ construction materials, and is valued at lower of cost/ estimated cost and net realisable value.
⢠Development rights represent amount paid under agreement to purchase land/ development rights and borrowing cost incurred by the Company to acquire irrevocable and exclusive licenses/ development rights in the identified land and constructed properties, the acquisition of which is either completed or is at an advanced stage. These are valued at lower of cost and net realisable value.
⢠Construction/ development material is valued at lower of cost and net realisable value. Cost comprises of purchase price and other costs incurred in bringing the inventories to their present location and condition.
⢠Stocks for maintenance facilities (including stores and spares) are valued at cost or net realisable value, whichever is lower.
Cost is determined on weighted-average basis.
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.
i) Revenue from contract or services with customer and other streams of revenue
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded
that it is the principal in its revenue arrangements because it typically controls the goods and services before transferring them to the customers.
The disclosures of significant accounting judgements, estimates and assumptions relating to revenue from contracts with customers are provided in note 2.2(bb).
i. Revenue from Contracts with Customers:
Revenue is measured at the fair value of the consideration received/ receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government and is net of rebates and discounts. The Company assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. The Company has concluded that it is acting as a principal in all of its revenue arrangements.
Revenue is recognised in the Statement of Profit and Loss to the extent that it is probable that the economic benefits will flow to the Company and the revenue and costs, if applicable, can be measured reliably.
The Company has applied five step model as per Ind AS 115 ''Revenue from contracts with customers'' to recognise revenue in the standalone financial statements. The Company satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:
a) The customer simultaneously receives and consumes the benefits provided by the Company''s performance as the Company performs; or
b) The Company''s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
c) The Company''s performance does not create an asset with an alternative use to the Company and the entity has an enforceable right to payment for performance completed to date.
For performance obligations where any of the above conditions are not met, revenue is recognised at the point in time at which the performance obligation is satisfied.
Revenue is recognised either at point of time or over a period of time based on various conditions as included in the contracts with customers.
Revenue from real-estate projects
Revenue is recognised at the Point in Time w.r.t. sale of real estate units, including land, plots, apartments, commercial units, development
rights as and when the control passes on to the customer which coincides with handing over of the possession to the customer.
Incremental cost of obtaining contract
The incremental cost of obtaining a contract with a customer is recognised as an asset if company expects to recover those costs subject to other conditions of the standard are met. These costs are charged to statement of profit and loss in accordance with the transfer of the property to the customer.
Over a period of time:
Revenue is recognised over period of time for following stream of revenues:
Revenue from Co-development projects
Co-development projects where the Company is acting as contractor, revenue is recognised in accordance with the terms of the co-developer agreements. Under such contracts, assets created does not have an alternative use for the company and the Company has an enforceable right to payment. The estimated project cost includes construction cost, development and construction material, internal development cost, external development charges, borrowing cost and overheads of such project.
The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.
Construction and fit-out projects
Construction and fit-out projects where the Company is acting as contractor, revenue is recognised in accordance with the terms of the construction agreements. Under such contracts, assets created does not have an alternative use and the Company has an enforceable right to payment. The estimated project cost includes construction cost, development and construction material and overheads of such project.
The Company uses cost based input method for measuring progress for performance obligation satisfied over time. Under this method, the Company recognises revenue in proportion to the actual project cost incurred as against the total estimated project cost. The management reviews and revises its measure of progress periodically and are considered as change in estimates and accordingly, the effect of such changes in estimates is recognised prospectively in the period in which such changes are determined. However, when
the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.
As the outcome of the contracts cannot be measured reliably during the early stages of the project, contract revenue is recognised only to the extent of costs incurred in the statement of profit and loss.
Revenue from golf course operations
Income from golf course operations, capitation, sponsorship etc. is fixed and recognised as per the management agreement with the parties, as and when Company satisfies performance obligation by delivering the promised goods or services as per contractual agreed terms.
Rental and Maintenance income
Revenue in respect of rental and maintenance services is recognised on an accrual basis, in accordance with the terms of the respective contract as and when the Company satisfies performance obligations by delivering the services as per contractual agreed terms.
Other operating income
Income from forfeiture of properties and interest from banks and customers under agreements to sell is accounted for on an accrual basis except in cases where ultimate collection is considered doubtful.
ii. Volume rebates and early payment rebates
The Company provides move in rebates/ early payment rebates/ down payment rebates to the customers. Rebates are offset against amounts payable by the customer and revenue to be recognised. To estimate the variable consideration for the expected future rebates, the Company estimates the expected value of rebates that are likely to be incurred in future and recognises the revenue net of rebates and recognises the refund liability for expected future rebates.
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.
Trade receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e. only the passage of time is required before payment of the consideration is due). Refer to accounting
policies of financial assets in section 2.2(u) Financial instruments - initial recognition and subsequent measurement.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
j) Cost of revenue
Cost of real estate projects
Cost of constructed properties other than SEZ projects, includes cost of land (including cost of development rights/ land under agreements to purchase), estimated internal development costs, external development charges, borrowing costs, overheads, construction costs and development/ construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of SEZ projects
Cost of constructed properties includes estimated internal development costs, external development charges, overheads, borrowing cost, construction costs and development/ construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate SEZ projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of land and plots
Cost of land and plots includes land (including development rights), acquisition cost, estimated internal development costs and external development charges, which is charged to the statement of profit and loss based on the percentage of land/ plotted area in respect of which revenue is recognised as explained in accounting policy for revenue from ''Sale of land and plots'', in consonance with the concept of matching cost and revenue. Final adjustment is made on completion of the specific project.
Cost of development rights
Cost of development rights includes proportionate development rights cost, borrowing costs and other related cost, which
is charged to statement of profit and loss as explained in accounting policy for revenue, in consonance with the concept of matching cost and revenue.
k) Borrowing costs
Borrowing costs directly attributable to the acquisition and/ or construction/ production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are charged to the statement of profit and loss as incurred. Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
l) Taxes
Current income tax
Tax expense recognized in statement of profit and loss comprises the sum of deferred tax and current tax except the ones recognized in other comprehensive income or directly in equity.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations. Current income tax relating to items recognised outside statement of profit and loss is recognized outside statement of profit and loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
In the situations where one or more units/ undertaking in the Company are entitled to a tax holiday under the Income-tax Act, 1961, no deferred tax (asset or liability) is recognized in respect of temporary differences which reverse during the tax holiday period, to the extent the concerned entity''s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the year in which the temporary differences originate. However, the Company restricts recognition of deferred tax assets to the extent it is probable that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the temporary differences which originate first are considered to reverse first.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting
date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
⢠In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside statement of profit and loss is recognised outside statement of profit and loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Sales tax/ value added taxes/ GST paid on acquisition of assets or on incurring expenses
Expenses and assets are recognised net of the amount of Sales tax/ Value Added taxes/ Goods and Services tax paid, except:
⢠When the tax incurred on a purchase of assets or services is not recoverable from
the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
⢠When receivables and payables are stated with the amount of tax included.
The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
m) Foreign currency transactions
Functional and presentation currency
The standalone financial statements are presented in Indian Rupees (T) which is also the functional and presentation currency of the Company.
Transactions and balances
Foreign currency transactions are recorded in the functional currency, by applying the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Foreign currency monetary items outstanding at the balance sheet date are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transactions.
Exchange differences arising on settlement of monetary items, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise.
n) Retirement and other employee benefits
Provident Fund
Retirement benefit in the form of provident fund is a defined benefit scheme. The Company makes contribution to statutory provident fund trust set-up in accordance with the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Company has to meet the interest shortfall, if any. Accordingly, the contribution paid or payable and the interest shortfall, if any, is recognised as an expense in the period in which services are rendered by the employee. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Gratuity
Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability
recognised in the balance sheet in respect of gratuity is the present value of the defined benefit/ obligation at the balance sheet date, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit/ obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. This is based on standard rates of inflation, salary growth rate and mortality. Discount factors are determined close to each year-end by reference to market yields on government bonds that have terms to maturity approximating the terms of the related liability. Service cost and net interest expense on the Company''s defined benefit plan is included in statement of profit and loss. Actuarial gains/ losses resulting from re-measurements of the liability are included in other comprehensive income in the period in which they occur and are not reclassified to statement of profit and loss in subsequent periods.
Compensated absences
Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognised on the basis of discounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged to statement of profit and loss in the year in which such gains or losses are determined.
Pension
Pension is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognised in the balance sheet in respect of pension is the present value of the defined benefit obligation at the balance sheet date, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. This is based on standard rates of inflation, salary growth rate and mortality. Discount factors are determined close to each year-end by reference to market yields on government bonds that have terms to maturity approximating the terms of the related liability. Service cost on the Company''s defined benefit plan is included in employee benefits expense. Net interest expense on the net defined benefit liability is included in finance costs. Actuarial gains/ losses resulting from re-measurements of the liability are included in other comprehensive income in the period in which they occur and are
not reclassified to statement of profit and loss in subsequent periods.
Short-term employee benefits
Expense in respect of short-term benefits is recognised on the basis of the amount paid or payable for the period during which services are rendered by the employee. Contribution made towards superannuation fund (funded by payments to Life Insurance Corporation of India) is charged to statement of profit and loss on accrual basis.
o) Share based payments
Employee Stock Option Plan
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/ or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company''s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit and loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense. Upon exercise of share options, the proceeds received are allocated to share capital up to the par value of the shares issued with any excess being recorded as securities premium.
Employee Shadow Option Scheme (cash settled options)
Fair value of cash settled options granted to employees under the Employee''s Shadow Option Scheme is determined on the basis of excess of the average market price, during the month before the reporting date, over the exercise price of the shadow option. This fair value is expensed over the vesting period with recognition of a corresponding liability. The liability is re-measured to fair value at each reporting date up to, and including the settlement date, with changes in fair value recognised in employee benefits expense over the vesting period.
p) Impairment of non-financial assets
At each reporting date, the Company assesses whether there is any indication based on internal/ external factors, that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. 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 and the impairment loss, including impairment on inventories, is recognised in the statement of profit and loss.
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.
The Company bases its impairment calculation on detailed budgets and forecast calculation. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.
If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the statement of profit and loss.
q) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks 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.
For the purpose of the statement of cash flows, cash and cash equivalents consist of unrestricted cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.
r) Cash dividend and non-cash distribution to equity holders
The Company recognises a liability to make cash or non-cash distributions to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
Non-cash distributions are measured at the fair value of the assets to be distributed with fair value re-measurement recognised directly in equity.
Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognised in the statement of profit and loss.
s) Provisions, contingent assets and contingent liabilities
Provisions are recognized only when there is a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate of the amount of obligation can be made at the reporting date. Provisions are discounted to their present values, where the time value of money is material, 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.
When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
Onerous contracts
If the Company has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision. However, before a separate provision for an onerous contract is established, the Company recognises any impairment loss that has occurred on assets dedicated to that contract.
An onerous contract is a contract under which the unavoidable costs (i.e. the costs that the Company cannot avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it.
These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Contingent liability is disclosed for:
⢠Possible obligations which will be confirmed only by future events not wholly within the control of the Company; or
⢠Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are neither recognised nor disclosed except when realisation of income is virtually certain, related asset is disclosed.
t) Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term as follows:
Asset category |
Lease term |
Land |
28-36 years |
Buildings |
3-16 years |
Assets taken on lease for golf operations |
6 years |
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in note 2.2(p) on impairment of non-financial assets.
Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured, if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of assets that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term.
Company as a lessor
Leases in which the Company 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. 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. Contingent rents are recognised as revenue in the period in which they are earned. Fit-out rental income is recognised in the statement of profit and loss on accrual basis.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company''s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
u) Financial instruments
A financial ins
Mar 31, 2022
1. CORPORATE INFORMATION
DLF Limited (''the Company'') is engaged primarily in the business of colonisation and real estate development. The operations of the Company span all aspects of real estate development, from the identification and acquisition of land, to planning, execution, construction and marketing of projects. The Company is also engaged in the business of leasing, maintenance services and recreational activities which are related to the overall development of real estate business. The Company is a public limited company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognised stock exchanges in India. The registered office is situated at Shopping Mall, 3rd Floor, Arjun Marg, Phase I, DLF City, Gurugram - 122002, Haryana.
The standalone financial statements for the year ended 31 March 2022 were authorised and approved by the Board of Directors for issue on 17 May 2022.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
The standalone financial statements (''financial statements'') of the Company have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs (''MCA'') under Section 133 of the Companies Act, 2013 (''Act'') read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time and presentation requirements of Division II of Schedule III to the Companies Act, 2013 (Ind AS compliant Schedule III), as applicable to the standalone financial statements.
The standalone financial statements have been prepared on a going concern basis in accordance with accounting principles generally accepted in India. Further, the standalone financial statements have been prepared on historical cost basis except for certain financial assets, financial liabilities, derivative financial instruments and share based payments which are measured at fair values as explained in relevant accounting policies. The changes in accounting policies are explained in note 2(aa).
The standalone financial statements are presented in Rupees and all values are rounded to the nearest lakh, except when otherwise indicated.
2.2 Summary of significant accounting policies
a) Current and non-current classification
The Company 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 Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
b) Property, plant and equipment
Recognition and initial measurement
Property, plant and equipment at their initial recognition are stated at their cost of acquisition. On transition to Ind AS, the Company had elected to measure all of its property, plant and equipment at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. 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 recognised 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 or loss as incurred. The Company identifies and determines cost of each component/ part of the asset separately, if the component/ part have a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset.
Subsequent measurement (depreciation and useful lives)
Property, plant and equipment are subsequently measured at cost net of accumulated depreciation and accumulated impairment losses, if any. Depreciation on property, plant and equipment is provided on a straight-line basis over the estimated useful lives of the assets as follows:
Asset category* |
Estimated useful life (in years) |
Estimated useful life as per Schedule II to the Companies Act, 2013 (in years) |
Buildings |
20-60 |
60 |
Plant and machinery |
10-15 |
15 |
Computers and data processing units |
||
- Servers and networks |
6 |
6 |
- Desktops, laptops and other devices |
3 |
3 |
Furniture and fixtures |
5-10 |
10 |
Office equipment |
5 |
5 |
Vehicles |
8-10 |
8-10 |
Helicopter |
20 |
20 |
The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of building and plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
* I n case of assets pertaining to Golf and Club operations, the Company based on technical evaluation and management estimate considers the useful life of the assets as below:
Asset category |
Useful life (in years) |
Buildings |
20 |
Plant and machinery |
10 |
Furniture and fixtures |
5 |
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year and adjusted prospectively, if appropriate.
De-recognition
An item of property, plant and equipment and any significant part initially recognised is de-recognised upon disposal or when no future economic benefits are expected from
its use or disposal. Any gain or loss arising on de-recognition 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 asset is de-recognised.
c) Capital work-in-progress and intangible assets under development
Capital work-in-progress and intangible assets under development represents expenditure incurred in respect of capital projects/ intangible assets under development and are carried at cost less accumulated impairment loss, if any. Cost includes land, related acquisition expenses, development/ construction costs, borrowing costs and other direct expenditure.
d) Investment properties
Recognition and initial measurement
Investment properties are properties held to earn rentals or for capital appreciation or both. Investment properties are measured initially at their cost of acquisition, including transaction costs. On transition to Ind AS, the Company had elected to measure all of its investment properties at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, cost of replacing parts, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. When significant parts of the investment property are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. All other repair and maintenance costs are recognised in profit or loss as incurred.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognised in statement of profit or loss as incurred.
Transfers are made to (or from) investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the carrying value at the date of change in use.
Subsequent measurement (depreciation and useful lives)
Investment properties are subsequently measured at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation on investment properties is provided
on the straight-line method over the useful lives of the assets as follows:
Asset category |
Estimated |
Estimated |
useful life |
useful life as per |
|
(in years) |
Schedule II to the |
|
Companies Act, 2013 (in years) |
||
Buildings and related equipment* |
20-60 |
60 |
Furniture and fixtures |
5-10 |
10 |
The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of building, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
* Apart from all the assets, the Company has developed commercial space (in addition to automated multi-level car parking) over the land parcel received under the build, own, operate and transfer scheme of the public private partnership (as mentioned in the intangible assets policy below) which has been depreciated in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such assets till the end of concession period.
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year and adjusted prospectively.
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 applying valuation model acceptable internationally.
De-recognition
Investment properties are de-recognised 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 recognised in the statement profit or loss in the period of de-recognition.
e) Intangible assets
Recognition and initial measurement
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. On transition to Ind AS, the Company had elected to measure all of its intangible assets at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in the statement of profit or loss in the period in which the expenditure is incurred.
The Company has acquired exclusive usage rights for 30 years under the build, own, operate and transfer scheme in respect of properties developed as automated multi-level car parking and commercial space and classified them under the "Intangible Assets - Right under build, own, operate and transfer arrangementâ.
Subsequent measurement (amortisation)
Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.
The cost of capitalized software is amortized over a period of 5 years from the date of its acquisition.
The cost of usage rights is being amortised over the concession period in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such intangible assets till the end of concession period.
De-recognition
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.
f) Investment in equity instruments of subsidiaries (including partnership firms), joint ventures and associates
Investment in equity instruments of subsidiaries, joint ventures and associates are stated at cost as per Ind AS 27 ''Separate Financial Statements''. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is assessed for recoverability and in case of permanent diminution, provision for impairment is recorded in statement of Profit and Loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss.
g) Business combinations
The Company applies the acquisition method in accounting for business combinations for the businesses which are not under common control. 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 Company 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 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 benefits is not probable. However, the following assets and liabilities acquired in a business combination are measured at the basis indicated below:
a) Deferred tax assets or liabilities and the assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with Ind AS 12 ''Income Tax'' and Ind AS 19 ''Employee Benefits'' respectively.
b) Potential tax effects of temporary differences and carry forwards of an acquiree that exist at the acquisition date or arise as a result of the acquisition are accounted in accordance with Ind AS 12.
c) Liabilities or equity instruments related to share based payment arrangements of the acquiree or share-based payments arrangements of the Company entered into to replace share-based payment arrangements of the acquiree are measured in accordance with Ind AS 102 ''Share-based Payments'' at the acquisition date.
d) Assets (or disposal groups) that are classified as held for sale in accordance with Ind AS 105 ''Non-current Assets Held for Sale and Discontinued Operations'' are measured in accordance with that standard.
e) Reacquired rights are measured at a value determined on the basis of the remaining contractual term of the related contract. Such valuation does not consider potential renewal of the reacquired right.
Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of Ind AS 109 ''Financial Instruments'', is measured at fair value
with changes in fair value recognised in profit or loss. If the contingent consideration is not within the scope of Ind AS 109, it is measured in accordance with the appropriate Ind AS. Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and its subsequent settlement is accounted for within equity.
When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss or OCI, as appropriate.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted through additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date. These adjustments are called as measurement period adjustments. The measurement period does not exceed one year from the acquisition date.
Business combinations under common control
Business combinations involving entities or businesses under common control have been accounted for using the pooling of interest method. The assets and liabilities of the combining entities are reflected at their carrying amounts. No adjustments have been made to reflect fair values, or to recognise any new assets or liabilities.
Property acquisitions and business combinations
Where property is acquired, via corporate acquisitions or otherwise, management considers the substance of the assets and activities of the acquired entity in determining whether the acquisition represents the acquisition of a business.
Where such acquisitions are not judged to be an acquisition of a business, they are not treated as business combinations. Rather, the cost to acquire the corporate entity or assets and liabilities is allocated between the identifiable assets and liabilities (of the entity) based on their relative fair values at the acquisition date. Accordingly, no goodwill or deferred tax arises.
h) Inventories
⢠Land and plots other than area transferred to constructed properties at the commencement of construction are valued at lower of cost/ as re-valued on conversion to stock and net realisable value. Cost includes land (including development rights and land under agreement to purchase) acquisition cost, borrowing cost if inventorisation criteria are met, estimated internal development costs and external development charges and other directly attributable costs.
⢠Construction work-in-progress of constructed properties other than Special Economic Zone (SEZ) projects includes the cost of land (including development rights and land under agreements to purchase), internal development costs, external development charges, construction costs, overheads, borrowing cost if inventorisation criteria are met, development/ construction materials and is valued at lower of cost/ estimated cost and net realisable value.
⢠In case of SEZ projects, construction work-in-progress of constructed properties include internal development costs, external development charges, construction costs, overheads, borrowing cost if inventorisation criteria are met, development/ construction materials and is valued at lower of cost/ estimated cost and net realisable value.
⢠Development rights represent amount paid under agreement to purchase land/ development rights and borrowing cost incurred by the Company to acquire irrevocable and exclusive licenses/ development rights in the identified land and constructed properties, the acquisition of which is either completed or is at an advanced stage. These are valued at lower of cost and net realisable value.
⢠Construction/ development material is valued at lower of cost and net realisable value. Cost comprises of purchase price and other costs incurred in bringing the inventories to their present location and condition.
⢠Stocks for maintenance facilities (including stores and spares) are valued at cost or net realisable value, whichever is lower.
Cost is determined on weighted-average basis.
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.
i) Revenue from contract or services with customer and other streams of revenue
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods and services before transferring them to the customers.
The disclosures of significant accounting judgements, estimates and assumptions relating to revenue from contracts with customers are provided in note 2.2(bb).
i. Revenue from Contracts with Customers:
Revenue is measured at the fair value of the consideration received/ receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government and is net of rebates and discounts. The Company assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. The Company has concluded that it is acting as a principal in all of its revenue arrangements.
Revenue is recognised in the Statement of Profit and Loss to the extent that it is probable that the economic benefits will flow to the Company and the revenue and costs, if applicable, can be measured reliably.
The Company has applied five step model as per Ind AS 115 ''Revenue from contracts with customers'' to recognise revenue in the standalone financial statements. The Company satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:
a) The customer simultaneously receives and consumes the benefits provided by the Company''s performance as the Company performs; or
b) The Company''s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
c) The Company''s performance does not create an asset with an alternative use to the Company and the entity has an enforceable right to payment for performance completed to date.
For performance obligations where any of the above conditions are not met, revenue is recognised at the point in time at which the performance obligation is satisfied.
Revenue is recognised either at point of time or over a period of time based on various conditions as included in the contracts with customers.
Point of Time:
Revenue from real-estate projects
Revenue is recognised at the Point in Time w.r.t. sale of real estate units, including land, plots, apartments, commercial units, development rights as and when the control passes on to the customer which coincides with handing over of the possession to the customer.
Over a period of time:
Revenue is recognised over period of time for following stream of revenues:
Revenue from Co-development projects
Co-development projects where the Company is acting as contractor, revenue is recognised in accordance with the terms of the co-developer agreements. Under such contracts, assets created does not have an alternative use for the Company and the Company has an enforceable right to payment. The estimated project cost includes construction cost, development and construction material, internal development cost, external development charges, borrowing cost and overheads of such project.
The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.
Construction and fit-out projects
Construction and fit-out projects where the Company is acting as contractor, revenue is recognised in accordance with the terms of the construction agreements. Under such contracts, assets created does not have an alternative use and the Company has an enforceable right to payment. The estimated project cost includes construction cost, development and construction material and overheads of such project.
The Company uses cost based input method for measuring progress for performance obligation satisfied over time. Under this method, the Company recognises revenue in proportion to the actual project cost incurred as against the total estimated project cost. The management reviews and revises its measure of progress periodically
and are considered as change in estimates and accordingly, the effect of such changes in estimates is recognised prospectively in the period in which such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.
As the outcome of the contracts cannot be measured reliably during the early stages of the project, contract revenue is recognised only to the extent of costs incurred in the statement of profit and loss.
Revenue from golf course operations
Income from golf course operations, capitation, sponsorship etc. is fixed and recognised as per the management agreement with the parties, as and when Company satisfies performance obligation by delivering the promised goods or services as per contractual agreed terms.
Rental and Maintenance income
Revenue in respect of rental and maintenance services is recognised on an accrual basis, in accordance with the terms of the respective contract as and when the Company satisfies performance obligations by delivering the services as per contractual agreed terms.
Other operating income
Income from forfeiture of properties and interest from banks and customers under agreements to sell is accounted for on an accrual basis except in cases where ultimate collection is considered doubtful.
ii. Volume rebates and early payment rebates
The Company provides move in rebates/ early payment rebates/ down payment rebates to the customers. Rebates are offset against amounts payable by the customer and revenue to be recognised. To estimate the variable consideration for the expected future rebates, the Company estimates the expected value of rebates that are likely to be incurred in future and recognises the revenue net of rebates and recognises the refund liability for expected future rebates.
iii. Contract balances
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is
recognised for the earned consideration that is conditional.
Trade receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e. only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section 2.2(u) Financial instruments - initial recognition and subsequent measurement.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
j) Cost of revenue
Cost of real estate projects
Cost of constructed properties other than SEZ projects, includes cost of land (including cost of development rights/ land under agreements to purchase), estimated internal development costs, external development charges, borrowing costs, overheads, construction costs and development/ construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of SEZ projects
Cost of constructed properties includes estimated internal development costs, external development charges, overheads, borrowing cost, construction costs and development/ construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate SEZ projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of land and plots
Cost of land and plots includes land (including development rights), acquisition cost, estimated internal development costs and external development charges, which is charged to the statement of profit and loss based on the percentage of land/ plotted area in respect of
which revenue is recognised as explained in accounting policy for revenue from ''Sale of land and plots'', in consonance with the concept of matching cost and revenue. Final adjustment is made on completion of the specific project.
Cost of development rights
Cost of development rights includes proportionate development rights cost, borrowing costs and other related cost, which is charged to statement of profit and loss as explained in accounting policy for revenue, in consonance with the concept of matching cost and revenue.
k) Borrowing costs
Borrowing costs directly attributable to the acquisition and/ or construction/ production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are charged to the statement of profit and loss as incurred. Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
l) Taxes
Current income tax
Tax expense recognized in statement of profit and loss comprises the sum of deferred tax and current tax except the ones recognized in other comprehensive income or directly in equity.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations. Current income tax relating to items recognised outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
In the situations where one or more units/ undertaking in the Company are entitled to a tax holiday under the Income-tax Act, 1961, no deferred tax (asset or liability) is recognized in respect of temporary differences which reverse during the tax holiday period, to the extent the concerned entity''s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences
which reverse after the tax holiday period is recognized in the year in which the temporary differences originate. However, the Company restricts recognition of deferred tax assets to the extent it is probable that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the temporary differences which originate first are considered to reverse first.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
⢠In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Sales tax/ value added taxes/ GST paid on acquisition of assets or on incurring expenses
Expenses and assets are recognised net of the amount of sales tax/ value added taxes/ Goods and services tax paid, except:
⢠When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
⢠When receivables and payables are stated with the amount of tax included.
The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
m) Foreign currency transactions
Functional and presentation currency
The standalone financial statements are presented in Indian Rupees (T) which is also the functional and presentation currency of the Company.
Transactions and balances
Foreign currency transactions are recorded in the functional currency, by applying the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Foreign currency monetary items outstanding at the balance sheet date are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transactions.
Exchange differences arising on settlement of monetary items, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise.
n) Retirement and other employee benefits
Provident Fund
Retirement benefit in the form of provident fund is a defined benefit scheme. The Company makes contribution to statutory provident fund trust set up in accordance with the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Company has to meet the interest shortfall, if any. Accordingly, the contribution paid or payable and the interest shortfall, if any, is recognised as an expense in the period in which services are rendered by the employee. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the
contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Gratuity
Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognised in the balance sheet in respect of gratuity is the present value of the defined benefit/ obligation at the balance sheet date, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit/ obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. This is based on standard rates of inflation, salary growth rate and mortality. Discount factors are determined close to each year-end by reference to market yields on government bonds that have terms to maturity approximating the terms of the related liability. Service cost and net interest expense on the Company''s defined benefit plan is included in statement of profit and loss. Actuarial gains/ losses resulting from re-measurements of the liability are included in other comprehensive income in the period in which they occur and are not reclassified to profit or loss in subsequent periods.
Compensated absences
Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognised on the basis of discounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged to statement of profit and loss in the year in which such gains or losses are determined.
Pension
Pension is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognised in the balance sheet in respect of pension is the present value of the defined benefit obligation at the balance sheet date, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. This is based on standard rates of inflation, salary growth rate and mortality. Discount factors are
determined close to each year-end by reference to market yields on government bonds that have terms to maturity approximating the terms of the related liability. Service cost on the Company''s defined benefit plan is included in employee benefits expense. Net interest expense on the net defined benefit liability is included in finance costs. Actuarial gains/ losses resulting from re-measurements of the liability are included in other comprehensive income in the period in which they occur and are not reclassified to profit or loss in subsequent periods.
Short-term employee benefits
Expense in respect of short-term benefits is recognised on the basis of the amount paid or payable for the period during which services are rendered by the employee. Contribution made towards superannuation fund (funded by payments to Life Insurance Corporation of India) is charged to statement of profit and loss on accrual basis.
o) Share based payments
Employee Stock Option Plan
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/ or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company''s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit and loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense. Upon exercise of share options, the proceeds received are allocated to share capital up to the par value of the shares issued with any excess being recorded as securities premium.
Employee Shadow Option Scheme (cash settled options)
Fair value of cash settled options granted to employees under the Employee''s Shadow Option Scheme is determined on the basis of excess of the average market price, during the month before the reporting date, over the exercise price of the shadow option. This fair value is expensed over the vesting period with recognition of a corresponding liability. The liability is re-measured to fair value at each reporting date up to and including the settlement date, with changes in fair value recognised in employee benefits expense over the vesting period.
p) Impairment of non-financial assets
At each reporting date, the Company assesses whether there is any indication based on internal/ external factors, that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. 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 and the impairment loss, including impairment on inventories, is recognised in the statement of profit and loss.
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.
The Company bases its impairment calculation on detailed budgets and forecast calculation. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.
If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the statement of profit and loss.
q) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks 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.
For the purpose of the statement of cash flows, cash and cash equivalents consist of unrestricted cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.
r) Cash dividend and non-cash distribution to equity holders
The Company recognises a liability to make cash or non-cash distributions to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
Non-cash distributions are measured at the fair value of the assets to be distributed with fair value re-measurement recognised directly in equity.
Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognised in the statement of profit and loss.
s) Provisions, contingent assets and contingent liabilities
Provisions are recognized only when there is a present obligation (legal or constructive), as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate of the amount of obligation can be made at the reporting date. Provisions are discounted to their present values, where the time value of money is material, 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.
When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
Onerous contracts
If the Company has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision. However, before a separate provision for an onerous contract is established, the Company recognises any impairment loss that has occurred on assets dedicated to that contract.
An onerous contract is a contract under which the unavoidable costs (i.e. the costs that the Company cannot avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it.
These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Contingent liability is disclosed for:
⢠Possible obligations which will be confirmed only by future events not wholly within the control of the Company; or
⢠Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are neither recognised nor disclosed except when realisation of income is virtually certain, related asset is disclosed.
t) Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term as follows:
Asset category |
Lease term |
Land |
28-36 years |
Buildings |
3-16 years |
Assets taken on lease for golf |
6 years |
operations |
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in note 2.2(p) on impairment of non-financial assets.
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of assets that are considered to be low value. Lease payments on shortterm leases and leases of low value assets are recognised as expense on a straight-line basis over the lease term.
Company as a lessor
Leases in which the Company 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. 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. Contingent rents are recognised as revenue in the period in which they are earned. Fit-out rental income is recognised in the statement of profit and loss on accrual basis.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company''s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
u) 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.
1) Financial Assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI) and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset''s contrac
Mar 31, 2021
1. CORPORATE INFORMATION
DLF Limited (''the Company'') is engaged primarily in the business of colonisation and real estate development. The operations of the Company span all aspects of real estate development, from the identification and acquisition of land, to planning, execution, construction and marketing of projects. The Company is also engaged in the business of leasing, maintenance services and recreational activities which are related to the overall development of real estate business. The Company is a public limited company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognised stock exchanges in India. The registered office is situated at Shopping Mall, 3rd Floor, Arjun Marg, Phase I, DLF City, Gurugram - 122002, Haryana.
The standalone financial statements for the year ended 31 March 2021 were authorised and approved by the Board of Directors for issue on 11 June 2021.
2. SIGNIFICANT ACCOUNTING POLICIES2.1 Basis of preparation
The standalone financial statements (''financial statements'') of the Company have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs (''MCA'') under Section 133 of the Companies Act, 2013 (''Act'') read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time and presentation requirements of Division II of Schedule III to the Companies Act, 2013 (Ind AS compliant Schedule III), as applicable to the standalone financial statements.
The standalone financial statements have been prepared on a going concern basis in accordance with accounting principles generally accepted in India. Further, the standalone financial statements have been prepared on historical cost basis except for certain financial assets, financial liabilities, derivative financial instruments and share based payments which are measured at fair values as explained in relevant accounting policies. The changes in accounting policies are explained in note 2 (z).
The standalone financial statements are presented in Rupees and all values are rounded to the nearest lakh, except when otherwise indicated.
2.2 Summary of significant accounting policies
a) Current and non-current classification
The Company 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 Company classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
b) Property, plant and equipment
Recognition and initial measurement
Property, plant and equipment at their initial recognition are stated at their cost of acquisition. On transition to Ind AS, the Company had elected to measure all of its property, plant and equipment at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. 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 recognised 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 or loss as incurred. The Company identifies and determines cost of each component/ part of the asset separately, if the component/ part have a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset.
Subsequent measurement (depreciation and useful lives)
Property, plant and equipment are subsequently measured at cost net of accumulated depreciation and accumulated impairment losses, if any. Depreciation on property, plant and equipment is provided on a straight-line basis over the estimated useful lives of the assets as follows:
Asset category* |
Estimated useful life (in years) |
Estimated useful life as per Schedule II to the Companies Act, 2013 (in years) |
Buildings |
20-60 |
60 |
Plant and machinery |
10-15 |
15 |
Computers and data processing units |
||
- Servers and networks |
6 |
6 |
- Desktops, laptops and other devices |
3 |
3 |
Furniture and fixtures |
5-10 |
10 |
Office equipment |
5 |
5 |
Vehicles |
8-10 |
8-10 |
Helicopter |
20 |
20 |
Asset category |
Useful life (in years) |
Buildings |
20 |
Plant and machinery |
10 |
Furniture and fixtures |
5 |
The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of building and plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
* I n case of assets pertaining to Golf and Club operations, the Company based on technical evaluation and management estimate considers the useful life of the assets as below:
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year and adjusted prospectively, if appropriate.
De-recognition
An item of property, plant and equipment and any significant part initially recognised is
de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition 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 asset is de-recognised.
c) Capital work-in-progress and intangible assets under development
Capital work-in-progress and intangible assets under development represents expenditure incurred in respect of capital projects/intangible assets under development and are carried at cost less accumulated impairment loss, if any. Cost includes land, related acquisition expenses, development/ construction costs, borrowing costs and other direct expenditure.
d) Investment properties
Recognition and initial measurement
Investment properties are properties held to earn rentals or for capital appreciation or both. Investment properties are measured initially at their cost of acquisition, including transaction costs. On transition to Ind AS, the Company had elected to measure all of its investment properties at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. When significant parts of the investment property are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognised in statement of profit or loss as incurred.
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 Company depreciates them separately based on their specific useful lives. All other repair and maintenance costs are recognised in profit or loss as incurred.
Transfers are made to (or from) investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for
subsequent accounting is the carrying value at the date of change in use.
Subsequent measurement (depreciation and useful lives)
Investment properties are subsequently measured at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation on investment properties is provided on the straight-line method over the useful lives of the assets as follows:
Asset category |
Estimated useful life (in years) |
Estimated useful life as per Schedule II to the Companies Act, 2013 (in years) |
Buildings and related equipment* |
20-60 |
60 |
Furniture and fixtures |
5-10 |
10 |
The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of building, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
* Apart from all the assets, the Company has developed commercial space (in addition to automated multi-level car parking) over the land parcel received under the build, own, operate and transfer scheme of the public private partnership (as mentioned in the intangible assets policy below) which has been depreciated in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such assets till the end of concession period.
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year and adjusted prospectively.
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 applying valuation model acceptable internationally.
De-recognition
Investment properties are de-recognised 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 recognised in the statement profit or loss in the period of de-recognition.
e) Intangible assets
Recognition and initial measurement
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. On transition to Ind AS, the Company had elected to measure all of its intangible assets at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in the statement of profit or loss in the period in which the expenditure is incurred.
The Company has acquired exclusive usage rights for 30 years under the build, own, operate and transfer scheme in respect of properties developed as automated multi-level car parking and commercial space and classified them under the "Intangible Assets - Right under build, own, operate and transfer arrangementâ.
Subsequent measurement (amortisation)
Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.
The cost of capitalized software is amortized over a period of 5 years from the date of its acquisition.
The cost of usage rights is being amortised over the concession period in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such intangible assets till the end of concession period.
De-recognition
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.
f) Investment in equity instruments of subsidiaries (including partnership firms), joint ventures and associates
Investment in equity instruments of subsidiaries, joint ventures and associates are stated at cost as per Ind AS 27 ''Separate Financial Statements''. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is assessed for recoverability and in case of permanent diminution,
provision for impairment is recorded in statement of Profit and Loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss.
g) Inventories
⢠Land and plots other than area transferred to constructed properties at the commencement of construction are valued at lower of cost/ as re-valued on conversion to stock and net realisable value. Cost includes land (including development rights and land under agreement to purchase) acquisition cost, borrowing cost if inventorisation criteria are met, estimated internal development costs and external development charges and other directly attributable costs.
⢠Construction work-in-progress of constructed properties other than Special Economic Zone (SEZ) projects includes the cost of land (including development rights and land under agreements to purchase), internal development costs, external development charges, construction costs, overheads, borrowing cost if inventorisation criteria are met, development/ construction materials, and is valued at lower of cost/estimated cost and net realisable value.
⢠In case of SEZ projects, construction work-in-progress of constructed properties include internal development costs, external development charges, construction costs, overheads, borrowing cost if inventorisation criteria are met, development/ construction materials, and is valued at lower of cost/ estimated cost and net realisable value.
⢠Development rights represent amount paid under agreement to purchase land/ development rights and borrowing cost incurred by the Company to acquire irrevocable and exclusive licenses/ development rights in the identified land and constructed properties, the acquisition of which is either completed or is at an advanced stage. These are valued at lower of cost and net realisable value.
⢠Construction/development material is valued at lower of cost and net realisable value. Cost comprises of purchase price and other costs incurred in bringing the inventories to their present location and condition.
⢠Stocks for maintenance facilities (including stores and spares) are valued at cost or net realisable value, whichever is lower.
Cost is determined on weighted average basis.
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.
h) Revenue from contract or services with customer and other streams of revenue
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods and services before transferring them to the customers.
The disclosures of significant accounting judgements, estimates and assumptions relating to revenue from contracts with customers are provided in note 2.2 (aa).
i. Revenue from Contracts with Customers:
Revenue is measured at the fair value of the consideration received/receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government and is net of rebates and discounts. The Company assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. The Company has concluded that it is acting as a principal in all of its revenue arrangements.
Revenue is recognised in the Statement of Profit and Loss to the extent that it is probable that the economic benefits will flow to the Company and the revenue and costs, if applicable, can be measured reliably.
The Company has applied five step model as per Ind AS 115 ''Revenue from contracts with customers'' to recognise revenue in the standalone financial statements. The Company satisfies a performance obligation and recognises revenue over time, if one of the following criteria is met:
a) The customer simultaneously receives and consumes the benefits provided by the Company''s performance as the Company performs; or
b) The Company''s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
c) The Company''s performance does not create an asset with an alternative use to the Company and the entity has an enforceable right to payment for performance completed to date.
For performance obligations where any of the above conditions are not met, revenue is recognised at the point in time at which the performance obligation is satisfied.
Revenue is recognised either at point of time or over a period of time based on various conditions as included in the contracts with customers.
Revenue from real-estate projects Revenue is recognised at the Point in Time w.r.t. sale of real estate units, including land, plots, apartments, commercial units, development rights as and when the control passes on to the customer which coincides with handing over of the possession to the customer.
Revenue is recognised over period of time for following stream of revenues:
Revenue from Co-development projects Co-development projects where the Company is acting as contractor, revenue is recognised in accordance with the terms of the co-developer agreements. Under such contracts, assets created does not have an alternative use for the Company and the Company has an enforceable right to payment. The estimated project cost includes construction cost, development and construction material, internal development cost, external development charges, borrowing cost and overheads of such project.
The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.
Construction and fit-out projects Construction and fit-out projects where the Company is acting as contractor, revenue is recognised in accordance with the terms of the construction agreements. Under such contracts, assets created does not have an alternative use and the Company has an enforceable right to payment. The estimated project cost includes construction cost, development and construction material and overheads of such project.
The Company uses cost based input method for measuring progress for performance obligation satisfied over time. Under this method, the Company recognises revenue in proportion to the actual project cost incurred as against the total estimated project cost. The management reviews and revises its measure of progress periodically and are considered as change in estimates and accordingly, the effect of such changes in estimates is recognised prospectively in the
period in which such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.
As the outcome of the contracts cannot be measured reliably during the early stages of the project, contract revenue is recognised only to the extent of costs incurred in the statement of profit and loss.
Revenue from golf course operations Income from golf operations, coursecapitation, sponsorship etc. is fixed and recognised as per the management agreement with the parties, as and when Company satisfies performance obligation by delivering the promised goods or services as per contractual agreed terms.
Rental and Maintenance income Revenue in respect of rental and maintenance services is recognised on an accrual basis, in accordance with the terms of the respective contract as and when the Company satisfies performance obligations by delivering the services as per contractual agreed terms.
Other operating income Income from forfeiture of properties and interest from banks and customers under agreements to sell is accounted for on an accrual basis except in cases where ultimate collection is considered doubtful.
ii. Volume rebates and early payment rebates
The Company provides move in rebates/ early payment rebates/ down payment rebates to the customers. Rebates are offset against amounts payable by the customer and revenue to be recognised. To estimate the variable consideration for the expected future rebates, the Company estimates the expected value of rebates that are likely to be incurred in future and recognises the revenue net of rebates and recognises the refund liability for expected future rebates.
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.
Trade receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e. only the passage of
time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section 2.2 (t) Financial instruments - initial recognition and subsequent measurement.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
i) Cost of revenue
Cost of real estate projects
Cost of constructed properties other than SEZ projects, includes cost of land (including cost of development rights/ land under agreements to purchase), estimated internal development costs, external development charges, borrowing costs, overheads, construction costs and development/ construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of SEZ projects
Cost of constructed properties includes estimated internal development costs, external development charges, overheads, borrowing cost, construction costs and development/ construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate SEZ projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of land and plots
Cost of land and plots includes land (including development rights), acquisition cost, estimated internal development costs and external development charges, which is charged to the statement of profit and loss based on the percentage of land/plotted area in respect of which revenue is recognised as explained in accounting policy for revenue from ''Sale of land and plots'', in consonance with the concept of matching cost and revenue. Final adjustment is made on completion of the specific project.
Cost of development rights
Cost of development rights includes proportionate development rights cost, borrowing costs and other related cost, which is charged to statement of profit and loss as explained in accounting policy for revenue, in consonance with the concept of matching cost and revenue.
j) Borrowing costs
Borrowing costs directly attributable to the acquisition and/or construction/production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are charged to the statement of profit and loss as incurred. Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
k) Taxes
Current income tax
Tax expense recognized in statement of profit and loss comprises the sum of deferred tax and current tax except the ones recognized in other comprehensive income or directly in equity.
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations. Current income tax relating to items recognised outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax for the year. The deferred tax asset is recognised for MAT credit available only to the extent that it is probable that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset, it is created by way of credit to the statement of profit and loss and shown as part of deferred tax asset. The Company reviews the "MAT credit entitlementâ asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.
In the situations where one or more units/ undertaking in the Company are entitled to a tax
correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Sales tax/ value added taxes/ GST paid on acquisition of assets or on incurring expenses
Expenses and assets are recognised net of the amount of sales tax/ value added taxes/Goods and services tax paid, except:
⢠When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
⢠When receivables and payables are stated with the amount of tax included.
The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
l) Foreign currency transactions
Functional and presentation currency
The standalone financial statements are presented in Indian Rupees (T) which is also the functional and presentation currency of the Company.
Transactions and balances
Foreign currency transactions are recorded in the functional currency, by applying the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Foreign currency monetary items outstanding at the balance sheet date are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transactions.
Exchange differences arising on settlement of monetary items, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise.
m) Retirement and other employee benefits
Provident Fund
Retirement benefit in the form of provident fund is a defined benefit scheme. The Company makes contribution to statutory provident fund trust set up in accordance with the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Company has to meet the interest shortfall, if any. Accordingly, the contribution paid or payable and the interest shortfall, if any, is recognised as
holiday under the Income-tax Act, 1961, no deferred tax (asset or liability) is recognized in respect of temporary differences which reverse during the tax holiday period, to the extent the concerned entity''s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the year in which the temporary differences originate. However, the Company restricts recognition of deferred tax assets to the extent it is probable that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the temporary differences which originate first are considered to reverse first.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
⢠In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profts will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in
obligation at the balance sheet date, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. This is based on standard rates of inflation, salary growth rate and mortality. Discount factors are determined close to each year-end by reference to market yields on government bonds that have terms to maturity approximating the terms of the related liability. Service cost on the Company''s defined benefit plan is included in employee benefits expense. Net interest expense on the net defined benefit liability is included in finance costs. Actuarial gains/ losses resulting from re-measurements of the liability are included in other comprehensive income in the period in which they occur and are not reclassified to profit or loss in subsequent periods.
Short-term employee benefits
Expense in respect of short-term benefits is recognised on the basis of the amount paid or payable for the period during which services are rendered by the employee. Contribution made towards superannuation fund (funded by payments to Life Insurance Corporation of India) is charged to statement of profit and loss on accrual basis.
n) Share based payments
Employee Stock Option Plan
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/ or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company''s best estimate of the number of equity instruments that will ultimately vest. The statement of profit and loss expense or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense. Upon exercise of share options, the proceeds received are allocated to share capital up to the par value of the shares issued with any excess being recorded as securities premium.
Employee Shadow Option Scheme (cash settled options)
Fair value of cash settled options granted to employees under the Employee''s Shadow Option Scheme is determined on the basis of excess of the average market price, during the month before the reporting date, over the exercise price of the shadow option. This fair value is expensed
an expense in the period in which services are rendered by the employee. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Gratuity
Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognised in the balance sheet in respect of gratuity is the present value of the defined benefit/obligation at the balance sheet date, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit/obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. This is based on standard rates of inflation, salary growth rate and mortality. Discount factors are determined close to each year-end by reference to market yields on government bonds that have terms to maturity approximating the terms of the related liability. Service cost on the Company''s defined benefit plan is included in employee benefits expense. Net interest expense on the net defined benefit liability is included in finance costs. Actuarial gains/ losses resulting from re-measurements of the liability are included in other comprehensive income in the period in which they occur and are not reclassified to profit or loss in subsequent periods.
Compensated absences
Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognised on the basis of discounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged to statement of profit and loss in the year in which such gains or losses are determined.
Pension
Pension is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognised in the balance sheet in respect of pension is the present value of the defined benefit
over the vesting period with recognition of a corresponding liability. The liability is re-measured to fair value at each reporting date up to, and including the settlement date, with changes in fair value recognised in employee benefits expense over the vesting period.
o) Impairment of non-financial assets
At each reporting date, the Company assesses whether there is any indication based on internal/ external factors, that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. 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 and the impairment loss, including impairment on inventories, is recognised in the statement of profit and loss.
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.
The Company bases its impairment calculation on detailed budgets and forecast calculation. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.
If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the statement of profit and loss.
p) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on 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.
For the purpose of the statement of cash flows, cash and cash equivalents consist of unrestricted cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are
considered an integral part of the Company''s cash management.
q) Cash dividend and non-cash distribution to equity holders
The Company recognises a liability to make cash or non-cash distributions to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
Non-cash distributions are measured at the fair value of the assets to be distributed with fair value re-measurement recognised directly in equity.
Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognised in the statement of profit and loss.
r) Provisions, contingent assets and contingent liabilities
Provisions are recognized only when there is a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate of the amount of obligation can be made at the reporting date. Provisions are discounted to their present values, where the time value of money is material, 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.
When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
Onerous contracts
If the Company has a contract that is onerous, the present obligation under the contract is recognised and measured as a provision. However, before a separate provision for an onerous contract is established, the Company recognises any impairment loss that has occurred on assets dedicated to that contract.
An onerous contract is a contract under which the unavoidable costs (i.e., the costs that the Company cannot avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it.
These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Contingent liability is disclosed for:
⢠Possible obligations which will be confirmed only by future events not wholly within the control of the Company or
⢠Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are neither recognised nor disclosed except when realisation of income is virtually certain, related asset is disclosed.
s) Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the lease term as follows:
Asset category |
Lease term |
Land |
28-36 years |
Buildings |
3-16 years |
Assets taken on lease for golf operations |
6 years |
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
The right-of-use assets are also subject to impairment. Refer to the accounting policies in note 2.2(o) on impairment of non-financial assets.
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
The Company''s lease liabilities are included in "other financial liabilitiesâ.
Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of assets that are considered to be low value. Lease payments on short-term leases and leases of low value assets are recognised as expense on a straightline basis over the lease term.
Leases in which the Company 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. 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. Contingent rents are recognised as revenue in the period in which they
are earned. Fit-out rental income is recognised in the statement of profit and loss on accrual basis.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company''s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
t) 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.
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI) and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset''s contractual cash flow characteristics and the Company''s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, net of transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under Ind AS 115. Refer to the accounting policies in section 2.2 (h) ''Revenue from contracts with customers''.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ''solely payments of principal and interest (SPPI)'' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The Company''s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets or both.
Subsequent measurement
i. Financial assets carried at amortised cost - a
financial asset is measured at amortised cost if both the following conditions are met:
⢠The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows; and
⢠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.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method.
ii. Investments in equity instruments of subsidiaries, joint ventures and associates - Investments in equity instruments of subsidiaries, joint ventures and associates are accounted for at cost in accordance with Ind AS 27 Separate Financial Statements.
iii. Investments in other equity instruments -
Investments in equity instruments which are held for trading are classified as at fair value through profit or loss (FVTPL). For all other equity instruments, the Company makes an irrevocable choice upon initial recognition, on an instrument by instrument basis, to classify the same either as at fair value through other comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL). Amounts presented in other comprehensive income are not subsequently transferred to profit or loss. However, the Company transfers the cumulative gain or loss within equity. Dividends on such investments are recognised in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.
iv. Investments in mutual funds - Investments in mutual funds are measured at fair
Mar 31, 2019
DLF Limited (âthe Company'') is primarily engaged in the business of colonization and real estate development. The operations of the Company span all aspects of real estate development, from the identification and acquisition of land, to planning, execution, construction and marketing of projects. The Company is also engaged in the business of leasing, maintenance services and recreational activities which are related to the overall development of real estate business. The Company is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its share are listed on two recognized stock exchanges in India. The registered office is situated at Shopping Mall, 3rd Floor, Arjun Marg, Phase I, DLF City, Gurugram - 122002, Haryana.
The standalone financial statements were authorized for issue in accordance with the resolution of the Board of Directors on dated May 21, 2019.
2.1 Basis of preparation
The standalone financial statements (âfinancial statements'') of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the standalone financial statements..
The standalone financial statements have been prepared on a going concern basis in accordance with accounting principles generally accepted in India. Further, the standalone financial statements have been prepared on historical cost basis except for certain financial assets, financial liabilities, derivative financial instruments and share based payments which are measured at fair values as explained in relevant accounting policies.
In addition, the carrying values of recognized assets and liabilities designated as hedged items in cash flow hedges that would otherwise be carried at amortized cost are adjusted to record changes in the fair values attributable to the risks that are being hedged in effective hedge relationships.
The financial statements are presented in Rupees in lakhs, except when otherwise indicated.
2.2 Summary of significant accounting policies
a) Current and non-current classification
The Company 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 realized or intended to be sold or consumed in normal operating cycle.
- Held primarily for the purpose of trading.
- Expected to be realized 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 Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
b) Property, plant and equipment
Recognition and initial measurement
Property, plant and equipment are stated at their cost of acquisition on transition to Ind AS, the Company had elected to measure all of its property, plant and equipment at the previous GAAP carrying value (deemed cost).
The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. 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 recognized in statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Property, plant and equipment are subsequently measured at cost net of accumulated depreciation and accumulated impairment losses, if any. Depreciation on property, plant
The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of building, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year and adjusted prospectively, if appropriate.
De-recognition
An item of property, plant and equipment and any significant part initially recognized is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is de-recognized.
c) Capital work-in-progress and intangible assets under development
Capital work-in-progress and intangible assets under development represents expenditure incurred in respect of capital projects/ intangible assets under development and are carried at cost less accumulated impairment loss, if any. Cost includes land, related acquisition expenses, development/ construction costs, borrowing costs and other direct expenditure.
d) Investment properties
Recognition and initial measurement
Investment properties are properties held to earn rentals or for capital appreciation, or both. Investment properties are measured initially at their cost of acquisition, including transaction costs. On transition to Ind AS, the Company had elected to measure all of its investment properties at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. When significant parts of the investment property are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognized in statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives)
The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of building, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
* Includes certain assets wherein the Company has developed commercial space (in addition to automated multi-level car parking) over the land parcel received under the build, own, operate and transfer scheme of the public private partnership (as mentioned in the intangible assets policy below) which has been depreciated in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such assets till the end of concession period.
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year and adjusted prospectively.
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 applying valuation model acceptable internationally.
De-recognition
Investment properties are de-recognized 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 the statement of profit or loss in the period of de-recognition.
e) Intangible assets
Recognition and initial measurement
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. On transition to Ind AS, the Company had elected to measure all of its intangible assets at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Internally generated intangibles, excluding capitalized development costs, are not capitalized and the related expenditure is reflected in the statement of profit or loss in the period in which the expenditure is incurred.
The Company has acquired exclusive usage rights for 30 years under the build, own, operate and transfer scheme in respect of properties developed as automated multi-level car parking and commercial space and classified them under the âIntangible Assets - Right under build, own, operate and transfer arrangementâ.
Subsequent measurement (amortization)
Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any.
The cost of capitalized software is amortized over a period of 5 years from the date of its acquisition.
The cost of usage rights is being amortized over the concession period in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such intangible assets till the end of concession period.
De-recognition
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is de-recognized.
f) Investment in equity instruments of subsidiaries, partnership firms, joint ventures and associates
Investment in equity instruments of subsidiaries, joint ventures and associates are stated at cost as per Ind AS 27 âSeparate
Financial Statements''. Where the carrying amount of an investment is greater than its estimated recoverable amount, it is assessed for recoverability and in case of permanent diminution provision for impairment is recorded in statement of Profit and Loss. On disposal of investment, the difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of Profit and Loss.
g) Inventories
- Land and plots other than area transferred to constructed properties at the commencement of construction are valued at lower of cost/ as re-valued on conversion to stock and net realizable value. Cost includes land (including development rights and land under agreement to purchase) acquisition cost, borrowing cost if inventorisation criteria are met, estimated internal development costs and external development charges and other directly attributable costs.
- Construction work-in-progress of constructed properties other than Special Economic Zone (SEZ) projects includes the cost of land (including development rights and land under agreements to purchase), internal development costs, external development charges, construction costs, overheads, borrowing cost if inventorisation criteria are met, development/ construction materials and is valued at lower of cost/ estimated cost and net realizable value.
- In case of SEZ projects, construction work-in-progress of constructed properties include internal development costs, external development charges, construction costs, overheads, borrowing cost if inventorisation criteria are met, development/ construction materials and is valued at lower of cost/ estimated cost and net realizable value.
- Development rights represent amount paid under agreement to purchase land/ development rights and borrowing cost incurred by the Company to acquire irrevocable and exclusive licenses/ development rights in the identified land and constructed properties, the acquisition of which is either completed or is at an advanced stage. These are valued at lower of cost and net realizable value.
- Construction/ development material is valued at lower of cost and net realizable value. Cost comprises of purchase price and other costs incurred in bringing the inventories to their present location and condition.
Cost is determined on weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs of necessary to make the sale.
h) Revenue from contract or services with customer and other streams of revenue
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods and services before transferring them to the customers.
The disclosures of significant accounting judgments, estimates and assumptions relating to revenue from contracts with customers are provided in note 2.2(aa).
i. Revenue from Contracts with Customers:
Pursuant to the application of Ind AS 115 - âRevenue from Contracts with Customers'' effective from 1 April 2018, the Company has applied following accounting policy for revenue recognition:
Revenue is measured at the fair value of the consideration received/ receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government and is net of rebates and discounts. The Company assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. The Company has concluded that it is acting as a principal in all of its revenue arrangements.
Revenue is recognized in the income statement to the extent that it is probable that the economic benefits will flow to the Company and the revenue and costs, if applicable, can be measured reliably.
The Company has applied five step model as per Ind AS 115 âRevenue from contracts with customers'' to recognize revenue in the standalone financial statements. The Company satisfies a performance obligation and recognizes revenue over time, if one of the following criteria is met:
a) The customer simultaneously receives and consumes the benefits provided by the Company''s performance as the Company performs; or
b) The Company''s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
c) The Company''s performance does not create an asset with an alternative use to the Company and the entity has an enforceable right to payment for performance completed to date.
For performance obligations where one of the above conditions are not met, revenue is recognized at the point in time at which the performance obligation is satisfied.
Revenue is recognized either at point of time and over a period of time based on various conditions as included in the contracts with customers.
Point of Time:
Revenue from real-estate projects
Revenue is recognized at a Point in Time w.r.t. sale of real estate units, including land, plots, apartments, commercial units, development rights as and when the control passes on to the customer which coincides with handing over of the possession to the customer.
Over a period of time:
Revenue is recognized over period of time for following stream of revenues:
Revenue from Co-development projects
Co-development projects where the Company is acting as trunkey contractor, revenue is recognized in accordance with the terms of the co-developer agreements. Under such contracts, assets created does not have an alternative use for the company and the Company has an enforceable right to payment. The estimated project cost includes construction cost, development and construction material, internal development cost, external development charges, borrowing cost and overheads of such project.
The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.
Revenue from golf course operations
Income from golf operations, course capitation, sponsorship etc. is fixed and recognized as per the management agreement with the parties, as and when Company satisfies performance obligation by delivering the promised goods or services as per contractual agreed terms.
Maintenance income
Revenue in respect of maintenance services is recognized on an accrual basis, in accordance with the terms of the respective contract as and when the Company satisfies performance obligations by delivering the services as per contractual agreed terms.
Other operating income
Income from forfeiture of properties and delayed interest from customers under agreements to sell is accounted for on an accrual basis except in cases where ultimate collection is not reasonably ascertained.
ii. Volume rebates and early payment rebates
The Company provides move in rebates/ early payment rebates/ down payment rebates to the customers. Rebates are offset against amounts payable by the customer and revenue to be recognized. To estimate the variable consideration for the expected future rebates, the Company estimates the expected value of rebates that are likely to be incurred in future and recognizes the revenue net of rebates and recognizes the refund liability for expected future rebates.
iii. Contract balances
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consideration that is conditional.
Trade receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section 2.2(t) Financial instruments - initial recognition and subsequent measurement.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company performs under the contract.
i) Cost of revenue
Cost of real estate projects
Cost of constructed properties other than SEZ projects, includes cost of land (including cost of development rights/ land under agreements to purchase), estimated internal development costs, external development charges, borrowing costs, overheads, construction costs and development/ construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of SEZ projects
Cost of constructed properties includes estimated internal development costs, external development charges, overheads, borrowing cost, construction costs and development/ construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate SEZ projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of land and plots
Cost of land and plots includes land (including development rights), acquisition cost, estimated internal development costs and external development charges, which is charged to the statement of profit and loss based on the percentage of land/ plotted area in respect of which revenue is recognized as explained in accounting policy for revenue from âSale of land and plots'', in consonance with the concept of matching cost and revenue. Final adjustment is made on completion of the specific project.
Cost of development rights
Cost of development rights includes proportionate development rights cost, borrowing costs and other related cost, which is charged to statement of profit and loss as explained in accounting policy for revenue, in consonance with the concept of matching cost and revenue.
j) Borrowing costs
Borrowing costs directly attributable to the acquisition and/ or construction/ production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are charged to the statement of profit and loss as incurred. Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
k) Taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations. Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax for the year. The deferred tax asset is recognized for MAT credit available only to the extent that it is probable that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset, it is created by way of credit to the statement of profit and loss and shown as part of deferred tax asset. The Company reviews the âMAT credit entitlementâ asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.
In the situations where one or more units/ undertaking in the Company are entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws prevailing in the respective tax jurisdictions where they operate, no deferred tax (asset or liability) is recognized in respect of temporary differences which reverse during the tax holiday period, to the extent the concerned entity''s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the year in which the temporary differences originate. However, the Company restricts recognition of deferred tax assets to the extent it is probable that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the temporary differences which originate first are considered to reverse first.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except:
- In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI or directly in equity.
Sales/ Value Added Taxes/ GST paid on acquisition of assets or on incurring expenses
Expenses and assets are recognized net of the amount of sales/ value added taxes/ Good and services tax paid, except:
- When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognized as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
- When receivables and payables are stated with the amount of tax included.
The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
l) Foreign currency transactions
Functional and presentation currency
The standalone financial statements are presented in Indian Rupees (â'''') which is also the functional and presentation currency of the Company.
Transactions and balances
Foreign currency transactions are recorded in the functional currency, by applying the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Foreign currency monetary items outstanding at the balance sheet date are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transactions.
Exchange differences arising on settlement of monetary items, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise.
m) Employee benefits
Provident Fund
Retirement benefit in the form of provident fund is a defined benefit scheme. The Company makes contribution to statutory provident fund trust set up in accordance with the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Company has to meet the interest shortfall, if any. Accordingly, the contribution paid or payable and the interest shortfall, if any, is recognized as an expense in the period in which services are rendered by the employee. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Gratuity
Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of gratuity is the present value of the defined benefit/ obligation at the balance sheet date, together with adjustments for unrecognized actuarial gains or losses and past service costs. The defined benefit/ obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. This is based on standard rates of inflation, salary growth rate and mortality. Discount factors are determined close to each year-end by reference to market yields on government bonds that have terms to maturity approximating the terms of the related liability. Service cost on the Company''s defined benefit plan is included in employee benefits expense. Net interest expense on the net defined benefit liability is included in finance costs. Actuarial gains/ losses resulting from re-measurements of the liability are included in other comprehensive income in the period in which they occur and are not reclassified to profit or loss in subsequent periods.
Compensated absences
Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognized on the basis of discounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged to statement of profit and loss in the year in which such gains or losses are determined.
Short-term employee benefits
Expense in respect of short-term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee. Contribution made towards superannuation fund (funded by payments to Life Insurance Corporation of India) is charged to statement of profit and loss on accrual basis.
n) Share based payments
Employee Stock Option Plan
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognized, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/ or service conditions are fulfilled in employee benefits expense. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company''s best estimate of the number of equity instruments that will ultimately vest. The statement of profit and loss expense or credit for a period represents the movement in cumulative expense recognized as at the beginning and end of that period and is recognized in employee benefits expense. Upon exercise of share options, the proceeds received are allocated to share capital up to the par value of the shares issued with any excess being recorded as share premium.
Employee Shadow Option Scheme (cash settled options)
Fair value of cash settled options granted to employees under the Employee''s Shadow Option Scheme is determined on the basis of excess of the average market price, during the month before the reporting date, over the exercise price of the shadow option. This fair value is expensed over the vesting period with recognition of a corresponding liability. The liability is re-measured to fair value at each reporting date up to and including the settlement date, with changes in fair value recognized in employee benefits expense over the vesting period.
o) Impairment of non-financial assets
At each reporting date, the Company assesses whether there is any indication based on internal/ external factors, that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the recoverable amount of the asset is estimated. 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 and the impairment loss, including impairment on inventories, are recognized in the statement of profit and loss.
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.
The Company bases its impairment calculation on detailed budgets and forecast calculation. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.
If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the statement of profit and loss.
p) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on 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.
For the purpose of the statement of cash flows, cash and cash equivalents consist of unrestricted cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.
q) Cash dividend and non-cash distribution to equity holders
The Company recognizes a liability to make cash or noncash distributions to equity holders when the distribution is authorized and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in equity.
Non-cash distributions are measured at the fair value of the assets to be distributed with fair value re-measurement recognized directly in equity.
Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognized in the statement of profit and loss.
r) Provisions, contingent assets and contingent liabilities
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
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 recognized as a finance cost.
Onerous contracts
If the Company has a contract that is onerous, the present obligation under the contract is recognized and measured as a provision. However, before a separate provision for an onerous contract is established, the Company recognizes any impairment loss that has occurred on assets dedicated to that contract.
An onerous contract is a contract under which the unavoidable costs (i.e., the costs that the Company cannot avoid because it has the contract) of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfill it.
These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Contingent liability is disclosed for:
- Possible obligations which will be confirmed only by future events not wholly within the control of the Company, or
- Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are neither recognized nor disclosed except when realization of income is virtually certain, related asset is disclosed.
s) Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
Company as a lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as finance lease.
Finance leases, which effectively transfer to the lessee substantially all the risks and benefits incidental to ownership of the leased item, 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 under such leases are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are recognized in finance costs in the statement of profit and loss, unless they are directly attributable to qualifying assets in which case they are capitalized in accordance with the Company''s general policy on the borrowing costs (See note 2.2(j)). Contingent rentals are recognized as expenses in the periods in which they are incurred. A leased assets are depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain the ownership by the end of lease term, capitalized leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.
Assets acquired on leases where a significant portion of risk and rewards of ownership are retained by the less or 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.
Company as a less or
Leases in which the Company 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 recognized on a straight-line basis over the term of the relevant lease except where scheduled increase in rent compensates the Company with expected inflationary costs. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned. Fit-out rental income is recognized in the statement of profit and loss on accrual basis.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company''s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
t) 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.
1) Financial Assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI) and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset''s contractual cash flow characteristics and the Company''s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under Ind AS 115. Refer to the accounting policies in section 2.2(h) âRevenue from contracts with customers''.
In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash flows that are âsolely payments of principal and interest (SPPI)'' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The Company''s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Subsequent measurement
i. Financial assets carried at amortized cost - a financial asset is measured at the amortized cost if both the following conditions are met:
- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows; and
- 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.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method.
ii. Investments in equity instruments of subsidiaries, joint ventures and associates - Investments in equity instruments of subsidiaries, joint ventures and associates are accounted for at cost in accordance with Ind AS 27 Separate Financial Statements.
iii. Investments in other equity instruments - Investments in equity instruments which are held for trading are classified as at fair value through profit or loss (FVTPL). For all other equity instruments, the Company makes an irrevocable choice upon initial recognition, on an instrument by instrument basis, to classify the same either as at fair value through other comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL). Amounts presented in other comprehensive income are not subsequently transferred to profit or loss. However, the Company transfers the cumulative gain or loss within equity. Dividends on such investments are recognized in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.
iv.Investments in mutual funds - Investments in mutual funds are measured at fair value through profit and loss (FVTPL).
De-recognition of financial assets
A financial asset is primarily de-recognized when the contractual rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss for financial assets.
ECL is the weighted-average of difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate, with the respective risks of default occurring as the weights. When estimating the cash flows, the Company is required to consider:
- All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets.
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
(i) Trade receivables
In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.
(ii) Other financial assets
In respect of its other financial assets, the Company assesses if the credit risk on those financial assets has increased significantly since initial recognition. If the credit risk has not increased significantly since initial recognition, the Company measures the loss allowance at an amount equal to 12-month expected credit losses, else at an amount equal to the lifetime expected credit losses.
When making this assessment, the Company uses the change in the risk of a default occurring over the expected life of the financial asset. To make that assessment, the Company compares the risk of a default occurring on the financial asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance sheet date.
Mar 31, 2018
a) Current and non-current classification
The Company 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 Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
b) Property, plant and equipment
Recognition and initial measurement
Property, plant and equipment are stated at their cost of acquisition. On transition to Ind AS, the Company had elected to measure all of its property, plant and equipment at the previous GAAP carrying value (deemed cost).
The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. 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 recognised 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 or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Property, plant and equipment are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Depreciation on property, plant and equipment is provided on a straight-line basis over the estimated useful lives of the assets as follows:
The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of building, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Act. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year and adjusted prospectively, if appropriate.
De-recognition
An item of property, plant and equipment and any significant part initially recognised is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is de-recognised.
c) Capital work-in-progress and intangible assets under development
Capital work-in-progress and intangible assets under development represents expenditure incurred in respect of capital projects/ intangible assets under development and are carried at cost less accumulated impairment loss, if any. Cost includes land, related acquisition expenses, development/ construction costs, borrowing costs and other direct expenditure.
d) Investment properties
Recognition and initial measurement
Investment properties are properties held to earn rentals or for capital appreciation, or both. Investment properties are measured initially at their cost of acquisition, including transaction costs. On transition to Ind AS, the Company had elected to measure all of its property, plant and equipment at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. When significant parts of the investment property are required to be replaced at intervals, the Company depreciates them separately based on theirspecific useful lives.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognised in statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Investment properties are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Depreciation on investment properties is provided on the straight-line method over the useful lives of the assets as follows:
* Apart from all the assets, the Company has developed commercial space (in addition to automated multi-level car parking) over the land parcel received under the build, own, operate and transfer scheme of the public private partnership (as mentioned in the intangible assets policy below) which has been depreciated in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such assets till the end of concession period.
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year.
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 applying a valuation model recommended by the International Valuation Standards Committee.
De-recognition
Investment properties are de-recognised 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 recognised in profit or loss in the period of de-recognition.
e) Intangible assets
Recognition and initial measurement
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. On transition to Ind AS, the Company had elected to measure all of its property, plant and equipment at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is incurred.
The Company has acquired exclusive usage rights for 30 years under the build, own, operate and transfer scheme in respect of properties developed as automated multi-level car parking and commercial space and classified them under the âIntangible Assets - Right under build, own, operate and transfer arrangementâ.
Subsequent measurement (amortisation)
Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. The cost of capitalized software is amortized over a period of 5 years from the date of its acquisition.
The cost of usage rights is being amortised over the concession period in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such intangible assets till the end of concession period.
De-recognition
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.
f) Investment in equity instruments of subsidiaries, joint ventures and associates
Investment in equity instruments of subsidiaries, joint ventures and associates are stated at cost as per Ind AS 27 âSeparate Financial Statementsâ.
g) Inventories
- Land and plots other than area transferred to constructed properties at the commencement of construction are valued at lower of cost/ as re-valued on conversion to stock and net realisable value. Cost includes land (including development rights and land under agreement to purchase) acquisition cost, borrowing cost, estimated internal development costs and external development charges.
- Construction work-in-progress of constructed properties other than Special Economic Zone (SEZ) projects includes the cost of land (including development rights and land under agreements to purchase), internal development costs, external development charges, construction costs, overheads, borrowing cost, development/ construction materials and is valued at lower of cost/ estimated cost and net realisable value.
- In case of SEZ projects, construction work-in-progress of constructed properties include internal development costs, external development charges, construction costs, overheads, borrowing cost, development/ construction materials and is valued at lower of cost/ estimated cost and net realisable value.
- Development rights represent amount paid under agreement to purchase land/ development rights and borrowing cost incurred by the Company to acquire irrevocable and exclusive licenses/ development rights in identified land and constructed properties, the acquisition of which is either completed or is at an advanced stage.
- Construction/ development material is valued at lower of cost and net realisable value. Cost comprises of purchase price and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted-average basis.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and estimated costs of necessary to make the sale.
h) Revenue recognition
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, regardless of when the payment is being made. 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 and is net of rebates and discounts. The Company has concluded that it is the principle in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks. Sales tax/ value added tax (VAT)/ Goods and Services Tax (GST) is not received by the Company on its own account and accordingly excluded from revenue.
The specific recognition criteria described below must also be met before revenue is recognised.
Revenue from real estate projects
Revenue from constructed properties for all projects is recognized in accordance with the âGuidance Note on Accounting for Real Estate Transactionsâ (âGuidance Noteâ). As per the Guidance Note, the revenue has been recognized on percentage of completion method and on the percentage of actual project costs incurred thereon to total estimated project cost, provided the conditions specified in Guidance Note are satisfied.
For projects other than SEZ, revenue is recognised in accordance with the term of duly executed agreements to sell/ application forms (containing salient terms of agreement to sell). Estimated project cost includes cost of land/ development rights, borrowing costs, overheads, estimated construction and development cost of such properties.
For SEZ projects, revenue from development charges is recognised in accordance with the terms of the co-developer agreements/ memorandum of understanding (âMOUâ), read with addendum, if any. The estimated project cost includes construction cost, development and construction material, internal development cost, external development charges, borrowing cost and overheads of such project. Revenue from lease of land pertaining to such projects is recognised in accordance with the terms of the co-developer agreements/ MOU on accrual basis.
The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.
Sale of land and plots
Sale of land and plots (including development rights) is recognised in the financial year in which the agreement to sell/ application forms (containing salient terms of agreement to sell) is executed and there exists no uncertainty in the ultimate collection of consideration from buyers. Where the Company has any remaining substantial obligations as per agreements, revenue is recognised on âpercentage of completion methodâ as explained above under ârevenue from real estate projectsâ above.
Sale of development rights
Sale of development rights is recognized in the financial year in which the agreements of sale are executed and there exists no uncertainty in the ultimate collection of consideration from buyers.
Revenue from golf course operations
Income from golf operations, course capitation, sponsorship etc. is fixed and recognised as per the operation and management agreement entered with the parties, as and when services are rendered as per contractual agreed terms.
Rental income
Rental income arising from operating leases on investment properties is accounted for on a straight-line basis over the lease terms, except for contingent rental income which is recognised when it arises and where scheduled increase in rent compensates the lessor for expected inflationary costs. Parking income and fit-out rental income is recognised in statement of profit and loss on accrual basis.
Maintenance income
Revenue in respect of maintenance services is recognised on an accrual basis, in accordance with the terms of the respective contract.
Other operating income
Income from forfeiture of properties and delayed interest from customers under agreements to sell is accounted for on an accrual basis except in cases where ultimate collection is considered doubtful.
Share of profit/loss from partnership
Share of profit/ loss from firms in which the Company is a partner is accounted for in the financial year ending on (or immediately before) the date of the balance sheet.
Interest income
For all debt instruments measured at amortised cost, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
Dividend income
Revenue is recognised when the Companyâs right to receive the payment is established, which is generally when shareholders approve the dividend.
i) Unbilled receivables
Unbilled receivables represent:
- Revenue recognised based on percentage of completion method, as per policy on revenue, over and above the amount due as per the payment plans agreed with the customers; and
- Balance on account of straight lining of rental income over the estimated rent free period.
j) Cost of revenue
Cost of real estate projects
Cost of constructed properties other than SEZ projects, includes cost of land (including cost of development rights/ land under agreements to purchase), estimated internal development costs, external development charges, borrowing costs, overheads, construction costs and development/ construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of SEZ projects
Cost of constructed properties includes estimated internal development costs, external development charges, overheads, borrowing cost, construction costs and development/ construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate SEZ projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of land and plots
Cost of land and plots includes land (including development rights), acquisition cost, estimated internal development costs and external development charges, which is charged to the statement of profit and loss based on the percentage of land/ plotted area in respect of which revenue is recognised as explained in accounting policy for revenue from âSale of land and plotsâ, in consonance with the concept of matching cost and revenue. Final adjustment is made on completion of the specific project.
Cost of development rights
Cost of development rights includes proportionate development rights cost, borrowing costs and other related cost, which is charged to statement of profit and loss as explained in accounting policy for revenue, in consonance with the concept of matching cost and revenue.
k) Borrowing costs
Borrowing costs directly attributable to the acquisition and/ or construction of a qualifying asset are capitalized during the period of time that is necessary to complete and prepare the asset for its intended use or sale. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the statement of profit and loss as incurred. Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
l) Taxation
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations. Current income tax relating to items recognised outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
âMinimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax for the year. The deferred tax asset is recognised for MAT credit available only to the extent that it is probable that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset, it is created by way of credit to the statement of profit and loss and shown as part of deferred tax asset. The Company reviews the âMAT credit entitlementâ asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.â
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Sales/ value added taxes paid on acquisition of assets or on incurring expenses
Expenses and assets are recognised net of the amount of sales/ value added taxes/ Goods and services tax paid, except:
- When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable
- When receivables and payables are stated with the amount of tax included
The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
m) Foreign currency transactions
Functional and presentation currency
The financial statements are presented in Indian Rupees (â?â) which is also the functional and presentation currency of the Company.
Transactions and balances
Foreign currency transactions are recorded in the functional currency, by applying the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Foreign currency monetary items outstanding at the balance sheet date are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transactions.
Exchange differences arising on settlement of monetary items, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise.
n) Employee benefits
Provident Fund
Retirement benefit in the form of provident fund is a defined benefit scheme. The Company makes contribution to statutory provident fund trust set up in accordance with the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952. The Company has to meet the interest shortfall, if any. Accordingly, the contribution paid or payable and the interest shortfall, if any, is recognised as an expense in the period in which services are rendered by the employee. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Gratuity
Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognised in the balance sheet in respect of gratuity is the present value of the defined benefit/ obligation at the balance sheet date, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit/ obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. This is based on standard rates of inflation, salary growth rate and mortality. Discount factors are determined close to each year-end by reference to market yields on government bonds that have terms to maturity approximating the terms of the related liability. Service cost on the Companyâs defined benefit plan is included in employee benefits expense. Net interest expense on the net defined benefit liability is included in finance costs. Actuarial gains/ losses resulting from re-measurements of the liability are included in other comprehensive income in the period in which they occur and are not reclassified to profit or loss in subsequent periods.
Compensated absences
Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognised on the basis of discounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged to statement of profit and loss in the year in which such gains or losses are determined.
Short-term employee benefits
Expense in respect of short-term benefits is recognised on the basis of the amount paid or payable for the period during which services are rendered by the employee. Contribution made towards superannuation fund (funded by payments to Life Insurance Corporation of India) is charged to statement of profit and loss on accrual basis.
o) Share based payments
Employee Stock Option Plan
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model. That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and/ or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Companyâs best estimate of the number of equity instruments that will ultimately vest. The statement of profit and loss expense or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense. Upon exercise of share options, the proceeds received are allocated to share capital up to the par value of the shares issued with any excess being recorded as share premium.
Employee Shadow Option Scheme (cash settled options)
Fair value of cash settled options granted to employees under the Employeeâs Shadow Option Scheme is determined on the basis of excess of the average market price, during the month before the reporting date, over the exercise price of the shadow option. This fair value is expensed over the vesting period with recognition of a corresponding liability. The liability is re-measured to fair value at each reporting date up to, and including the settlement date, with changes in fair value recognised in employee benefits expense over the vesting period.
p) Impairment of non-financial assets
At each reporting date, the Company assesses whether there is any indication based on internal/ external factors, that an asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated. An assetâs recoverable amount is the higher of an assetâs or cash-generating unitâs (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 and the impairment loss is recognised in the statement of profit and loss.
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.
If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the statement of profit and loss.
q) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on 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.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Companyâs cash management.
r) Cash dividend and non-cash distribution to equity holders
The Company recognises a liability to make cash or non-cash distributions to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
Non-cash distributions are measured at the fair value of the assets to be distributed with fair value re-measurement recognised directly in equity.
Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognised in the statement of profit and loss.
s) Provisions, contingent assets and contingent liabilities
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
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.
These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Contingent liability is disclosed for:
- Possible obligations which will be confirmed only by future events not wholly within the control of the Company or
- Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are neither recognised nor disclosed except when realisation of income is virtually certain, related asset is disclosed.
t) Leases
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as finance lease.
Company as a lessee
Finance leases, which effectively transfer to the lessee substantially all the risks and benefits incidental to ownership of the leased item, are capitalised 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 under such leases are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. If there is no reasonable certainty that the Company will obtain the ownership by the end of lease term, capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.
Assets acquired on leases where a significant portion of risk and rewards of ownership are retained by the lessor are classified as operating leases. Lease rental are charged to statement of profit and loss on straight line basis except where scheduled increase in rent compensate the lessor for expected inflationary costs.
Company as a lessor
Leases in which the Company 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 except where scheduled increase in rent compensates the Company with expected inflationary costs. 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. Contingent rents are recognised as revenue in the period in which they are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Companyâs net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
u) Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit or loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities is described below.
Non-derivative financial assets
Subsequent measurement
i. Financial assets carried at amortised cost - a financial asset is measured at the amortised cost if both the following conditions are met:
- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows; and
- 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.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method.
ii. Investments in equity instruments of subsidiaries, joint ventures and associates - Investments in equity instruments of subsidiaries, joint ventures and associates are accounted for at cost in accordance with Ind AS 27 Separate Financial Statements.
iii. Investments in other equity instruments - Investments in equity instruments which are held for trading are classified as at fair value through profit or loss (FVTPL). For all other equity instruments, the Company makes an irrevocable choice upon initial recognition, on an instrument by instrument basis, to classify the same either as at fair value through other comprehensive income (FVOCI) orfairvalue through profit or loss (FVTPL). Amounts presented in other comprehensive income are not subsequently transferred to profit or loss. However, the Company transfers the cumulative gain or loss within equity. Dividends on such investments are recognised in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.
iv. Investments in mutual funds - Investments in mutual funds are measured at fair value through profit and loss (FVTPL).
De-recognition of financial assets
A financial asset is primarily de-recognised when the contractual rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss for financial assets.
ECL is the weighted-average of difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate, with the respective risks of default occurring as the weights. When estimating the cash flows, the Company is required to consider -
- All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets.
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
Trade receivables
In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.
Other financial assets
In respect of its other financial assets, the Company assesses if the credit risk on those financial assets has increased significantly since initial recognition. If the credit risk has not increased significantly since initial recognition, the Company measures the loss allowance at an amount equal to 12-month expected credit losses, else at an amount equal to the lifetime expected credit losses.
When making this assessment, the Company uses the change in the risk of a default occurring over the expected life of the financial asset. To make that assessment, the Company compares the risk of a default occurring on the financial asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance sheet date.
Non-derivative financial liabilities
Subsequent measurement
Subsequent to initial recognition, all non-derivative financial liabilities are measured at amortised cost using the effective interest method.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. 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 as finance costs in the statement of profit and loss.
De-recognition of financial liabilities
A financial liability is de-recognised 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 de-recognition 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 or loss.
Derivative financial instruments and hedge accounting
The Company holds derivative financial instruments to hedge its foreign currency exposure for underlying external commercial borrowings (âECBâ). Derivative financial instruments are accounted for at FVTPL except for derivatives designated as hedging instruments. To qualify for hedge accounting, the hedging relationship must meet conditions with respect to documentation, strategy and economic relationship of the hedged transaction. The Company has designated the changes in spot element of the derivative as hedging instrument to mitigate variability in cash flows associated with the foreign exchange risk of the said ECB. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
The changes in fair value of the forward element of the derivative are recognised in other comprehensive income and are accumulated in âCash Flow Hedge Reserveâ. The difference between forward and spot element at the date of designation of the hedging instrument is amortised over the period of the hedge. Hence, in each reporting period, the amortisation amount shall be reclassified from the separate component of equity to profit or loss as a reclassification adjustment. However, if hedge accounting is discontinued for the hedging relationship that includes the changes in forward element of the hedging instrument, the net amount (i.e. including cumulative amortisation) that has been accumulated in the separate component of equity shall be immediately reclassified into profit or loss as a reclassification adjustment.
Reclassification of financial instruments
The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Companyâs senior management determines change in the business model as a result of external or internal changes which are significant to the Companyâs operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.
Financial guarantee contracts
Financial guarantee contracts are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified party fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized as a financial liability at the time the guarantee is issued at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of expected loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortization.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
v) Fair value measurement
The Company measures its financial instruments such as derivative instruments, etc. 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 participantâs 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.
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 (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
- Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
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.
External valuers are involved for valuation of significant assets, such as properties and unquoted financial assets and significant liabilities, such as contingent consideration. Involvement of external valuers is decided upon annually by the management.
w) Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted-average number of equity shares outstanding during the period. The weighted-average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted-average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
x) Significant management judgement in applying accounting policies and estimation uncertainty
The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the related disclosures.
Significant management judgements
Recognition of deferred tax assets - The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the future taxable income against which the deferred tax assets can be utilized.
Evaluation of indicators for impairment of assets â The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.
Classification of leases - The Company enters into leasing arrangements for various assets. The classification of the leasing arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lesseeâs option to purchase and estimated certainty of exercise of such option, proportion of lease term to the assetâs economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.
Impairment of financial assets - At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding financial assets.
Provisions - At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However the actual future outcome may be different from this judgement.
Revenue recognition criteria - Revenue is recognized on transactions where more than 10% of sales value is received from customers as prescribed in âGuidance Note on Accounting for Real Estate Transactionsâ. Apart from criteria specified in Guidance note (with respect to criteria of minimum sale less than 25% of total area), the Company recognises revenue on transactions if less than 2 defaults are made by customers or more than 75% of demanded value is received from customers. At each balance sheet date, the management assesses the above mentioned criteria for revenue recognition.
Significant estimates
Revenue and inventories - The Company recognises revenue using the percentage of completion method. This requires forecasts to be made of total budgeted cost with the outcomes of underlying construction and service contracts, which require assessments and judgements to be made on changes in work scopes, claims (compensation, rebates etc.) and other payments to the extent they are probable and they are capable of being reliably measured. For the purpose of making estimates for claims, the Company used the available contractual and historical information.
Useful lives of depreciable/ amortisable assets -
Management reviews its estimate of the useful lives of depreciable/ amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of assets.
Valuation of investment property - Investment property is stated at cost. However, as per Ind AS 40 there is a requirement to disclose fair value as at the balance sheet date. The Group engaged independent valuation specialists to determine the fair value of its investment property as at reporting date.
The determination of the fair value of investment properties requires the use of estimates such as future cash flows from the assets (such as lettings, future revenue streams, capital values of fixtures and fittings, any environmental matters and the overall repair and condition of the property) and discount rates applicable to those assets. In addition, development risks (such as construction and letting risk) are also taken into consideration when determining the fair value of the properties under construction. These estimates are based on local market conditions existing at the balance sheet date.
Defined benefit obligation (DBO) - Managementâs estimate of the DBO is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
Fair value measurements - Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.
Mar 31, 2017
The financial statements have been prepared using the significant accounting policies and measurement basis summarised below. These were used throughout all periods presented in the financial statements, except where the Company has applied certain accounting policies and exemptions upon transition to Ind AS as summarised in note 65.
a) Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set-out in the Act. Deferred tax assets and liabilities are classified as non-current assets and non-current liabilities, as the case may be.
b) Property, plant and equipment Recognition and initial measurement
Property, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognized in statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Property, plant and equipment are subsequently measured at cost less accumulated depreciation and impairment losses. Depreciation on property, plant and equipment is provided on a straight-line basis, computed on the basis of useful lives (as set-out below) prescribed in Schedule II to the Act:
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year.
De-recognition
An item of property, plant and equipment and any significant part initially recognized is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognized in the statement of profit and loss, when the asset is de-recognized.
c) Capital work-in-progress and intangible assets under development
Capital work-in-progress and intangible assets under development represents expenditure incurred in respect of capital projects/intangible assets under development and are carried at cost. Cost includes land, related acquisition expenses, development/ construction costs, borrowing costs and other direct expenditure.
d) Investment properties
Recognition and initial measurement
Investment properties are properties held to earn rentals or for capital appreciation, or both. Investment properties are measured initially at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognized in statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Investment properties are subsequently measured at cost less accumulated depreciation and impairment losses. Depreciation on investment properties is provided on the straight-line method, computed on the basis of useful lives (as set-out below) prescribed in Schedule II to the Act:
* Apart from all the assets, the Company has developed commercial space (in addition to automated multi-level car parking) over the land parcel received under the build, own, operate and transfer scheme of the public private partnership (as mentioned in the intangible assets policy below) which has been depreciated in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such assets till the end of concession period.
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year.
De-recognition
Investment properties are de-recognized either when they have been disposed off 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 profit or loss in the period of de-recognition.
e) Intangible assets
Recognition and initial measurement
Intangible assets are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.
The Company has acquired exclusive usage rights for 30 years under the build, own, operate and transfer scheme in respect of properties developed as automated multi-level car parking and commercial space and classified them under the âIntangible Assets - Right on Building and Right on Plant and Machineryâ.
Subsequent measurement (amortisation)
The cost of capitalized software is amortized over a period of 5 years from the date of its acquisition.
The cost of usage rights is being amortised over the concession period in the proportion in which the actual revenue received during the accounting year bears to the projected revenue from such intangible assets till the end of concession period.
f) Investment in equity instruments of subsidiaries, joint ventures and associates
Investment in equity instruments of subsidiaries, joint ventures and associates are stated at cost as per Ind AS 27 âSeparate Financial Statementsâ.
g) Inventories
- Land and plots other than area transferred to constructed properties at the commencement of construction are valued at lower of cost/approximate average cost/ as re-valued on conversion to stock and net realisable value. Cost includes land (including development rights and land under agreement to purchase) acquisition cost, borrowing cost, estimated internal development costs and external development charges.
- Construction work-in-progress of constructed properties other than Special Economic Zone (SEZ) projects includes the cost of land (including development rights and land under agreements to purchase), internal development costs, external development charges, construction costs, overheads, borrowing cost, development/ construction materials and is valued at lower of cost/ estimated cost and net realisable value.
- In case of SEZ projects, construction work-in-progress of constructed properties include internal development costs, external development charges, construction costs, overheads, borrowing cost, development/ construction materials and is valued at lower of cost/ estimated cost and net realisable value.
- Development rights represent amount paid under agreement to purchase land/development rights and borrowing cost incurred by the Company to acquire irrevocable and exclusive licenses/development rights in identified land and constructed properties, the acquisition of which is either completed or is at an advanced stage.
- Construction/ development material is valued at lower of cost and net realisable value.
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.
h) Revenue recognition
Revenue is recognized when it is probable that the economic benefits will flow to the Company and it can be reliably measured. Revenue is measured at the fair value of the consideration received/receivable net of rebate and taxes. The Company applies the revenue recognition criteria to each nature of revenue transaction as set-out below:
Revenue from real estate projects
Revenue from constructed properties for all projects is recognized in accordance with the âGuidance Note on Accounting for Real Estate Transactionsâ (âGuidance Noteâ). As per this Guidance Note, the revenue has been recognized on percentage of completion method and on the percentage of actual project costs incurred thereon to total estimated project cost, provided the conditions specified in Guidance Note are satisfied.
For projects other than SEZ, revenue is recognized in accordance with the terms of duly executed agreements to sell/application forms (containing salient terms of agreement to sell). Estimated project cost includes cost of land/ development rights, borrowing costs, overheads, estimated construction and development cost of such properties.
For SEZ projects, revenue from development charges is recognized in accordance with the terms of the co-developer agreements/memorandum of understanding (âMOUâ), read with addendum, if any. The estimated project cost includes construction cost, development and construction material, internal development cost, external development charges, borrowing cost and overheads of such project. Revenue from lease of land pertaining to such projects is recognized in accordance with the terms of the co-developer agreements/ MOU on accrual basis.
The estimates of the saleable area and costs are reviewed periodically and effect of any changes in such estimates is recognized in the period such changes are determined. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately.
Sale of land and plots
Sale of land and plots (including development rights) is recognized in the financial year in which the agreement to sell/application forms (containing salient terms of agreement to sell) is executed and there exists no uncertainty in the ultimate collection of consideration from buyers. Where the Company has any remaining substantial obligations as per agreements, revenue is recognized on âpercentage of completion methodâ as explained above under ârevenue from real estate projectsâ.
Rental income
Rental income is recognized on a straight-line basis over the terms of the lease, except for contingent rental income which is recognized when it arises and where scheduled increase in rent compensates the lessor for expected inflationary costs. Parking income and fit out rental income is recognized in statement of profit and loss on accrual basis.
Sale of development rights
Sale of development rights is recognized in the financial year in which the agreements of sale are executed and there exists no uncertainty in the ultimate collection of consideration from buyers.
Share of profit/ loss from partnership
Share of profit/ loss from firms in which the Company is a partner is accounted for in the financial year ending on (or immediately before) the date of the balance sheet.
Revenue from golf course operations
Income from golf operations, course capitation, sponsorship etc. is fixed and recognized as per the agreement with the parties, as and when services are rendered.
Service receipts
- Revenue in respect of maintenance services is recognized on an accrual basis, in accordance with the terms of the respective contract.
- Service receipts, income from forfeiture of properties and interest from customers under agreements to sell is accounted for on an accrual basis except in cases where ultimate collection is considered doubtful.
Interest income
Interest income is recorded on accrual basis using the effective interest rate (EIR) method.
Dividend income
Dividend income is recognized at the time when the right to receive is established by the reporting date.
i) Unbilled receivables
Unbilled receivables represent:
- Revenue recognized based on percentage of completion method, as per policy on revenue, over and above the amount due as per the payment plans agreed with the customers; and
- Balance on account of straight lining of rental income over the estimated rent free period.
j) Cost of revenue
Cost of real estate projects
Cost of constructed properties other than SEZ projects, includes cost of land (including cost of development rights/land under agreements to purchase), estimated internal development costs, external development charges, borrowing costs, overheads, construction costs and development/construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of SEZ projects
Cost of constructed properties includes estimated internal development costs, external development charges, overheads, borrowing cost, construction costs and development/ construction materials, which is charged to the statement of profit and loss based on the revenue recognized as explained in accounting policy for revenue from real estate SEZ projects above, in consonance with the concept of matching costs and revenue. Final adjustment is made on completion of the specific project.
Cost of land and plots
Cost of land and plots includes land (including development rights), acquisition cost, estimated internal development costs and external development charges, which is charged to the statement of profit and loss based on the percentage of land/ plotted area in respect of which revenue is recognized as explained in accounting policy for revenue from âSale of land and plotsâ, in consonance with the concept of matching cost and revenue. Final adjustment is made on completion of the specific project.
Cost of development rights
Cost of development rights includes proportionate development rights cost, borrowing costs and other related cost.
k) Borrowing costs
Borrowing costs directly attributable to the acquisition and/or construction of a qualifying asset are capitalized during the period of time that is necessary to complete and prepare the asset for its intended use or sale. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the statement of profit and loss as incurred.
l) Taxation
Tax expense recognized in statement of profit and loss comprises the sum of deferred tax and current tax except the ones recognized in other comprehensive income or directly in equity.
Current tax is determined as the tax payable in respect of taxable income for the year and is computed in accordance with relevant tax regulations. Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity).
Minimum alternate tax (âMATâ) credit entitlement is recognized as an asset only when and to the extent there is convincing evidence that normal income tax will be paid during the specified period. In the year in which MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT credit entitlement. This is reviewed at each balance sheet date and the carrying amount of MAT credit entitlement is written down to the extent it is not reasonably certain that normal income tax will be paid during the specified period.
Deferred tax is recognized in respect of temporary differences between carrying amount of assets and liabilities for financial reporting purposes and corresponding amount used for taxation purposes. Deferred tax assets on unrealised tax loss are recognized to the extent that it is probable that the underlying tax loss will be utilised against future taxable income. This is assessed based on the Companyâs forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognized outside statement of profit and loss is recognized outside statement of profit or loss (either in other comprehensive income or in equity).
m) Foreign currency transactions
Functional and presentation currency
The financial statements are presented in Indian Rupees (T) which is also the functional and presentation currency of the Company.
Transactions and balances
Foreign currency transactions are recorded in the functional currency, by applying the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Foreign currency monetary items outstanding at the balance sheet date are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transactions.
Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise.
n) Employee benefits
Provident Fund
The Company makes contribution to statutory provident fund in accordance with the Employeesâ Provident Funds and Miscellaneous Provisions Act, 1952. The provident fund trust set-up by the Company is treated as a defined benefit plan to the extent the Company has to meet the interest shortfall, if any. Accordingly, the contribution paid or payable and the interest shortfall, if any is recognized as an expense in the period in which services are rendered by the employee.
Gratuity
Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of gratuity is the present value of the defined benefit/obligation at the balance sheet date, together with adjustments for unrecognized actuarial gains or losses and past service costs. The defined benefit/obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. This is based on standard rates of inflation, salary growth rate and mortality. Discount factors are determined close to each year-end by reference to market yields on government bonds that have terms to maturity approximating the terms of the related liability. Service cost on the Companyâs defined benefit plan is included in employee benefits expense. Net interest expense on the net defined benefit liability is included in finance costs. Actuarial gains/losses resulting from re-measurements of the liability are included in other comprehensive income.
Other long-term employee benefits
Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognized on the basis of discounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged to statement of profit and loss in the year in which such gains or losses are determined.
Short-term employee benefits
Expense in respect of short-term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee. Contribution made towards superannuation fund (funded by payments to Life Insurance Corporation of India) is charged to statement of profit and loss on accrual basis.
o) Share based payments
Employee Stock Option Plan
The fair value of options granted under Employee Stock Option Plan is recognized as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options. The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. Upon exercise of share options, the proceeds received are allocated to share capital up to the par value of the shares issued with any excess being recorded as share premium.
Employee Shadow Option Scheme (cash settled options)
Fair value of cash settled options granted to employees under the Employee Shadow Option Scheme is determined on the basis of excess of the average market price, during the month before the reporting date, over the exercise price of the shadow option. This fair value is expensed over the vesting period with recognition of a corresponding liability. The liability is re-measured to fair value at each reporting date up to and including the settlement date, with changes in fair value recognized in employee benefits expense over the vesting period.
p) Impairment of non-financial assets
At each reporting date, the Company assesses whether there is any indication based on internal/external factors, that an asset may be impaired. If any such indication exists, the recoverable amount of the asset or the cash generating unit is estimated. If such recoverable amount of the asset or cash generating unit to which the asset belongs is less than its carrying amount. The carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If, at the reporting date, there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the statement of profit and loss.
q) Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss for financial assets.
ECL is the weighted-average of difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate, with the respective risks of default occurring as the weights. When estimating the cash flows, the Company is required to consider:
- All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets.
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
Trade receivables
In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.
Other financial assets
In respect of its other financial assets, the Company assesses if the credit risk on those financial assets has increased significantly since initial recognition. If the credit risk has not increased significantly since initial recognition, the Company measures the loss allowance at an amount equal to 12-month expected credit losses, else at an amount equal to the lifetime expected credit losses.
When making this assessment, the Company uses the change in the risk of a default occurring over the expected life of the financial asset. To make that assessment, the Company compares the risk of a default occurring on the financial asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance sheet date.
r) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, demand deposits and short-term highly liquid investments that are readily convertible into known amount of cash and which are subject to an insignificant risk of changes in value.
s) Provisions, contingent assets and contingent liabilities
Provisions are recognized only when there is a present obligation, as a result of past events and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions are discounted to their present values, where the time value of money is material.
Contingent liability is disclosed for:
- Possible obligations which will be confirmed only by future events not wholly within the control of the Company or
- Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are neither recognized nor disclosed except when realisation of income is virtually certain, related asset is disclosed.
t) Operating leases
Leases in which the lessor does not transfer substantially all the risks and rewards of ownership of an asset to the lessee are classified as operating leases.
Company as a lessee
Lease rental are charged to statement of profit and loss on straight-line basis except where scheduled increase in rent compensates the lessor for expected inflationary costs.
Company as a lessor
Rental income is recognized on straight-line basis over the lease term except where scheduled increase in rent compensates the Company with expected inflationary costs.
u) Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit or loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities is described below:
Non-derivative financial assets
Subsequent measurement
i. Financial assets carried at amortised cost - a financial asset is measured at the amortised cost, if both the following conditions are met:
- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
- 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.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method.
ii. Investments in equity instruments of subsidiaries, joint ventures and associates - Investments in equity instruments of subsidiaries, joint ventures and associates are accounted for at cost in accordance with Ind AS 27 Separate Financial Statements.
iii. Investments in other equity instruments - Investments in equity instruments which are held for trading are classified as at fair value through profit or loss (FVTPL). For all other equity instruments, the Company makes an irrevocable choice upon initial recognition, on an instrument by instrument basis, to classify the same either as at fair value through other comprehensive income (FVOCI) or fair value through profit or loss (FVTPL). Amounts presented in other comprehensive income are not subsequently transferred to profit or loss. However, the Company transfers the cumulative gain or loss within equity. Dividends on such investments are recognized in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.
iv. Investments in mutual funds - Investments in mutual funds are measured at fair value through profit and loss (FVTPL).
De-recognition of financial assets
A financial asset is primarily de-recognized when the contractual rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.
Non-derivative financial liabilities
Subsequent measurement
Subsequent to initial recognition, all non-derivative financial liabilities are measured at amortised cost using the effective interest method.
De-recognition of financial liabilities
A financial liability is de-recognized 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 de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Derivative financial instruments and hedge accounting
The Company holds derivative financial instruments to hedge its foreign currency exposure for underlying external commercial borrowings (âECBâ). Derivative financial instruments are accounted for at FVTPL except for derivatives designated as hedging instruments. To qualify for hedge accounting, the hedging relationship must meet conditions with respect to documentation, strategy and economic relationship of the hedged transaction. The Company has designated the changes in spot element of the derivative as hedging instrument to mitigate variability in cash flows associated with the foreign exchange risk of the said ECB.
The changes in fair value of the forward element of the derivative are recognized in other comprehensive income and are accumulated in âCash Flow Hedge Reserveâ. The difference between forward and spot element at the date of designation of the hedging instrument is amortised over the period of the hedge. Hence, in each reporting period, the amortisation amount shall be reclassified from the separate component of equity to profit or loss as a reclassification adjustment. However, if hedge accounting is discontinued for the hedging relationship that includes the changes in forward element of the hedging instrument, the net amount (i.e. including cumulative amortisation) that has been accumulated in the separate component of equity shall be immediately reclassified into profit or loss as a reclassification adjustment.
Financial guarantee contracts
Financial guarantee contracts are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified party fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognized as a financial liability at the time the guarantee is issued at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of expected loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognized less cumulative amortization.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
v) Earnings per share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted-average number of equity shares outstanding during the period. The weighted-average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted-average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
w) Significant management judgement in applying accounting policies and estimation uncertainty
The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the related disclosures.
Significant management judgements
Recognition of deferred tax assets - The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the future taxable income against which the deferred tax assets can be utilized.
Evaluation of indicators for impairment of assets â The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.
Classification of leases - The Company enters into leasing arrangements for various assets. The classification of the leasing arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lesseeâs option to purchase and estimated certainty of exercise of such option, proportion of lease term to the assetâs economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.
Impairment of financial assets - At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding financial assets.
Provisions - At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.
Significant estimates
Revenue and inventories - The Company recognizes revenue using the percentage of completion method. This requires forecasts to be made of total budgeted cost with the outcomes of underlying construction and service contracts, which require assessments and judgements to be made on changes in work scopes, claims (compensation, rebates etc.) and other payments to the extent they are probable and they are capable of being reliably measured. For the purpose of making estimates for claims, the Company used the available contractual and historical information.
Useful lives of depreciable/ amortisable assets -
Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of assets.
Valuation of investment property - Investment property is stated at cost. However, as per Ind AS 40, there is a requirement to disclose fair value as at the balance sheet date. The Group engaged independent valuation specialists to determine the fair value of its investment property as at reporting date.
The determination of the fair value of investment properties requires the use of estimates such as future cash flows from the assets (such as lettings, future revenue streams, capital values of fixtures and fittings, any environmental matters and the overall repair and condition of the property) and discount rates applicable to those assets. In addition, development risks (such as construction and letting risk) are also taken into consideration when determining the fair value of the properties under construction. These estimates are based on local market conditions existing at the balance sheet date.
Defined benefit obligation (DBO) - Managementâs estimate of the DBO is based on a number of underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
Fair value measurements - Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent with how market participants would price the instrument.
Mar 31, 2015
A) Basis of accounting
The financial statements have been prepared in compliance with the
accounting standards as specified under Section 133 of the Companies
Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (as
amended). The financial statements have been prepared on going concern
basis under the historical cost convention on accrual basis in
accordance with the generally accepted accounting principles in India.
The accounting policies have been consistently applied by the Company.
All assets and liabilities have been classified as current or
non-current, wherever applicable as per the operating cycle of the
Company as per the guidance as set out in the Schedule III to the
Companies Act, 2013.
b) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the fi nancial statements and the results of operations during
the reporting periods. Although these estimates are based upon
management's knowledge of current events and actions, actual results
could differ from those estimates and revisions, if any, are recognised
in the current and future periods.
c) Intangible assets and amortisation
i) Softwares which are not integral part of the hardware are classifi
ed as intangibles and are stated at cost less accumulated amortisation.
These are being amortised over the estimated useful life of 5 years.
ii) The Company has acquired exclusive usage rights for 30 years under
the build, own, operate and transfer scheme of the public private
partnership ('PPP') scheme in respect of properties developed as
automated multi-level car parking and commercial space and classified
them under the "Intangible Assets - Right on Building and Right on
Plant & Machinery".
The Company has arrived at the cost of such intangible assets in
accordance with provisions of relevant Accounting Standards. The cost
of these rights is being amortised over the concession period in the
proportion in which the actual revenue received during the accounting
year bears to the projected revenue from such intangible assets till
the end of concession period in accordance with the manner prescribed
in Schedule II to the Companies Act, 2013.
d) Fixed assets and depreciation
i) Fixed assets (gross block) are stated at historical cost less
accumulated depreciation and impairment (if any). Cost comprises the
purchase price and any attributable cost of bringing the asset to its
working condition for its intended use. Building/specific identifiable
portions of building, including related equipments are capitalised when
the construction is substantially complete or upon receipt of the
occupancy certificate, whichever is earlier. Depreciation on assets
(including buildings and related equipments rented out and included
under current assets as inventories) is provided on straight- line
method, computed on the basis of useful life prescribed in Schedule II
to the Companies Act, 2013, on a pro-rata basis from the date the asset
is ready to put to use subject to adjustments arising out of
transitional provisions of Schedule II to the Companies Act, 2013.
ii) Capital work-in-progress (including intangible assets under
development) represents expenditure incurred in respect of capital
projects/intangible assets under development and are carried at cost.
Cost includes land, related acquisition expenses, development/
construction costs, borrowing costs and other direct expenditure.
iii) Leasehold land, under perpetual lease, is not amortised. Leasehold
land, other than on perpetual lease, are being amortised on time
proportion basis over their respective lease periods.
e) Investments
Investments are classified as non-current or current, based on
management's intention at the time of purchase. Investments that are
readily realisable and intended to be held for not more than a year are
classified as current investments. All other investments are classified
as non-current investments.
Trade investments are the investments made for or to enhance the
Company's business interests.
Current investments are stated at lower of cost and fair value
determined on an individual investment basis. Non-current investments
are stated at cost and provision for diminution in their value, other
than temporary, is made in the financial statements.
Profit/loss on sale of investments is computed with reference to the
average cost of the investment.
f) Inventories
Inventories are valued as under:
i) Land and plots other than area transferred to construction work-in-
progress of constructed properties at the commencement of construction
are valued at lower of cost/approximate average cost/as revalued on
conversion to stock and net realisable value. Cost includes land
(including development rights and land under agreements to purchase)
acquisition cost, borrowing cost, estimated internal development costs
and external development charges.
ii) Construction work-in-progress of constructed properties other than
Special Economic Zone (SEZ) projects includes the cost of land
(including development rights and land under agreements to purchase),
internal development costs, external development charges, construction
costs, overheads, borrowing cost, development/ construction materials
and is valued at lower of cost/ estimated cost and net realisable
value.
iii) In case of SEZ projects, construction work-in-progress of
constructed properties include internal development costs, external
development charges, construction costs, overheads, borrowing cost,
development/construction materials and is valued at lower of cost/esti
mated cost and net realisable value.
iv) Development rights represents amount paid under agreement to
purchase land/ development rights and borrowing cost incurred by the
Company to acquire irrevocable and exclusive licenses/ development
rights in identifi ed land and constructed properties, the acquisition
of which is at an advanced stage.
v) Construction/development material is valued at lower of cost and net
realisable value.
vi) Rented buildings and related equipments are valued at lower of cost
(less accumulated depreciation) and net realisable value.
g) Revenue recognition
i) Revenue from constructed properties for all projects commenced on or
before March 31, 2012 and where revenue recognition commenced on or
before the above date, is recognised in accordance with the provisions
of Accounting Standard (AS) 9 on Revenue Recognition, read with
Guidance Note on "Recognition of Revenue by Real Estate
Developers". Revenue is computed based on the "percentage of
completion method" and on the percentage of actual project costs
incurred thereon to total estimated project cost, subject to such
actual cost incurred being 30 per cent or more of the total estimated
project cost.
Revenue from constructed properties for all projects commenced on or
after April 1, 2012 or project where the revenue is recognised for the
first time on or after the above date, is recognised in accordance with
the Revised Guidance Note issued by Institute of Chartered Accountants
of India ("ICAI") on "Accounting for Real Estate Transactions
(Revised 2012)".
As per this Guidance Note, the revenue have been recognised on
percentage of completion method and on the percentage of actual project
costs incurred thereon to total estimated project cost, provided all of
the following conditions are met at the reporting date:
- required critical approvals for commencement of the project have
been obtained;
- atleast 25% of estimated construction and development costs
(excluding land cost) has been incurred;
- atleast 25% of the saleable project area is secured by the
Agreements to sell/ application forms (containing salient terms of the
agreement to sell); and
- atleast 10% of the total revenue as per agreement to sell are
realized in respect of these agreements.
(a) For projects, other than SEZ projects, revenue is recognised in
accordance with the term of duly executed, agreements to sell/
application forms (containing salient terms of agreement to sell).
Estimated project cost includes cost of land/ development rights,
borrowing costs, overheads, estimated construction and development cost
of such properties. The estimates of the saleable area and costs are
reviewed periodically and effect of any changes in such estimates is
recognised in the period in which such changes are determined. However,
when the total project cost is estimated to exceed total revenues from
the project, loss is recognised immediately.
(b) For SEZ projects, revenue from development charges is recognised in
accordance with the terms of the co- developer agreements/memorandum of
understanding ('MOU'), read with addendum, if any. The estimated
project cost includes construction cost, development and construction
material, internal development cost, external development charges,
borrowing cost and overheads of such project. Revenue from lease of
land pertaining to such projects is recognised in accordance with the
terms of the co-developer agreements/ MOU on accrual basis.
ii) Sale of land and plots (including development rights) is recognised
in the fi nancial year in which the agreement to sell/ application
forms (containing salient terms of agreement to sell) is executed and
there exists no uncertainty in the ultimate collection of consideration
from buyers. Where the Company has any remaining substantial
obligations as per the agreements, revenue is recognised on the
percentage of completion method of accounting, as per (i)(a) above.
iii) Sale of development rights is recognised in the financial year in
which the agreements of sale are executed and there exists no
uncertainty in the ultimate collection of consideration from buyers.
iv) Revenue from wind power generation is recognised on the basis of
actual power sold (net of reactive energy consumed), as per the terms
of the power purchase agreements entered into with the respective
purchasers.
v) Income from interest is accounted for on time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
vi) Dividend income is recognised when the right to receive is
established by the reporting date.
vii) Share of profit/ loss from firms in which the Company is a partner
is accounted for in the financial year ending on (or immediately
before) the date of the balance sheet.
viii) Rental income is accounted for on accrual basis except in cases
where ultimate collection is considered doubtful.
ix) Service receipts, income from forfeiture of properties and interest
from customers under agreement to sell is accounted for on accrual
basis except in cases where ultimate collection is considered doubtful.
x) Sale of Certified Emission Reductions (CERs) and Voluntary Emission
Reductions (VERs) is recognised as income on the delivery of the
CERs/VERs to the customer's account and receipt of payment.
h) Unbilled receivables
Unbilled receivables disclosed under note 17 - 'Other Current Assets'
represents revenue recognised based on percentage of completion method
(as per para no. g (i) and g(ii) above), over and above the amount due
as per the payment plans agreed with the customers.
i) Cost of revenue
i) Cost of constructed properties other than SEZ projects, includes
cost of land (including cost of development rights/land under
agreements to purchase), estimated internal development costs, external
development charges, borrowing costs, overheads, construction costs and
development/ construction materials, which is charged to the statement
of profit and loss based on the revenue recognised as per accounting
policy no. - g (i)(a) above, in consonance with the concept of matching
costs and revenue. Final adjustment is made upon completion of the
specific project.
For SEZ projects, cost of constructed properties includes estimated
internal development costs, external development charges, borrowing
costs, overheads, construction costs and development/ construction
materials, which is charged to the statement of profi t and loss based
on the revenue recognised as per accounting policy no. - g (i)(b)
above, in consonance with the concept of matching costs and revenue.
Final adjustment is made upon completion of the specific project.
ii) Cost of land and plots includes land (including development rights)
acquisition cost, estimated internal development costs and external
development charges, which is charged to the statement of profit and
loss based on the percentage of land/ plotted area in respect of which
revenue is recognised as per accounting policy no. g(ii) above to the
saleable total land/ plotted area of the scheme, in consonance with the
concept of matching cost and revenue. Final adjustment is made upon
completion of the specific project.
iii) Cost of development rights is recognised at the rate at which the
same have been purchased from the Land Owning Companies (LOCs) as per
the agreement.
j) Borrowing costs
Borrowing costs that are attributable to the acquisition and/or
construction of qualifying assets are capitalised as part of the cost
of such assets, in accordance with notified Accounting Standard 16
'Borrowing Costs'. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use.
Capitalisation of borrowing costs is suspended in the period during
which the active development is delayed due to, other than temporary,
interruption. All other borrowing costs are charged to the statement of
profit and loss as incurred.
k) Taxation
Tax expense for the year comprises current income tax and deferred tax.
Current income tax is determined in respect of taxable income with
deferred tax being determined as the tax effect of timing differences
representing the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent period(s). Such deferred tax is quantified using
rates and laws enacted or substantively enacted as at the end of the
financial year.
l) Foreign currency transactions
Transactions in foreign currency are accounted for at the exchange rate
prevailing on the date of the transaction. All monetary items
denominated in foreign currency are converted into Indian rupees at the
year-end exchange rate. Income and expenditure of the overseas liaison
office is translated at the yearly average rate of exchange. The
exchange differences arising on such conversion and on settlement of
the transactions are recognised in the statement of profit and loss.
In terms of the clarification provided by Ministry of Corporate Affairs
('MCA') vide a notifi cation no. G.S.R.913(E) on Accounting Standard
- 11 'The Effects of Changes in Foreign Exchange Rates', the exchange
gain/loss on long-term foreign currency monetary items is adjusted in
the cost of depreciable capital assets/accumulated in 'Foreign
Currency Monetary Item Translation Difference Account' (FCMITDA) and
amortised over the balance period of long-term monetary items. The
other exchange gains/losses have been recognised in the statement of
profit and loss.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognised as income or as expense for the
year.
m) Employee benefits
Expenses and liabilities in respect of employee benefits are recorded
in accordance with the notifi ed Accounting Standard 15 - Employee
Benefits.
i) Provident fund
The Company makes contribution to statutory provident fund in
accordance with the Employees' Provident Funds and Miscellaneous
Provisions Act, 1952. In terms of the Guidance on implementing the
revised AS-15, issued by the Accounting Standards Board of the ICAI,
the provident fund trust set-up by the Company is treated as a defined
benefit plan since the Company has to meet the interest shortfall, if
any. Accordingly, the contribution paid or payable and the interest
shortfall, if any is recognised as an expense in the period in which
services are rendered by the employee.
ii) Gratuity
Gratuity is a post-employment benefit and is in the nature of a defined
benefit plan. The liability recognised in the balance sheet in respect
of gratuity is the present value of the defined benefit/ obligation at
the balance sheet date, together with adjustments for unrecognised
actuarial gains or losses and past service costs. The defined
benefit/obligation is calculated at or near the balance sheet date by
an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in
actuarial assumptions are credited or charged to the statement of profi
t and loss in the year in which such gains or losses are determined.
iii) Compensated absences
Liability in respect of compensated absences becoming due or expected
to be availed within one year from the balance sheet date is recognised
on the basis of undiscounted value of estimated amount required to be
paid or estimated value of benefit expected to be availed by the
employees. Liability in respect of compensated absences becoming due or
expected to be availed more than one year after the balance sheet date
is estimated on the basis of an actuarial valuation performed by an
independent actuary using the projected unit credit method. Actuarial
gains and losses arising from past experience and changes in actuarial
assumptions are credited or charged to the statement of profi t and
loss in the year in which such gains or losses are determined.
iv) Employee Shadow Option Scheme (Cash Settled Options)
Accounting value of Cash Settled Options granted to employees under the
"Employee Shadow Option Scheme" is determined on the basis of
intrinsic value representing the excess of the average market price,
during the month before the reporting date, over the exercise price of
the shadow option. The same is charged as employee benefits over the
vesting period, in accordance with Guidance Note 18 "Accounting for
Employee Share-based Payments", issued by the ICAI.
v) Other short-term benefits
Expense in respect of other short-term benefits is recognised on the
basis of the amount paid or payable for the period during which
services are rendered by the employee. Contribution made towards
Superannuation Fund (funded by payments to Life Insurance Corporation
of India (LIC)) is charged to the statement of profit and loss on
accrual basis.
n) Leases
Assets subject to operating leases are included under fixed assets or
current assets as appropriate. Rent (lease) income is recognised in the
statement of profit and loss on a straight-line basis over the lease
term. Costs, including depreciation, are recognised as an expense in
the statement of profit and loss.
o) Employee Stock Option Plan (ESOP)
Accounting value of stock options is determined on the basis of
'intrinsic value' representing the excess of the market price on the
date of grant over the exercise price of the options granted under the
'Employee Stock Option Scheme' of the Company and is being amortised
as 'Deferred employee compensation' on a straight-line basis over the
vesting period in accordance with the SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and
Guidance Note 18 'Share Based Payments' issued by the ICAI.
p) Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognised in the statement of profit and loss. If at the balance sheet
date there is an indication that a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost and is accordingly reversed in the statement of profit
and loss.
q) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, demand deposits with
banks/ corporations and short-term highly liquid investments that are
readily convertible into known amounts of cash and are subject to an
insignificant risk of change in value.
r) Contingent liabilities and provisions
Depending upon the facts of each case and after due evaluation of legal
aspects, claims against the Company are accounted for as either
provisions or disclosed as contingent liabilities. In respect of
statutory dues disputed and contested by the Company, contingent
liabilities are provided for and disclosed as per original demand
without taking into account any interest or penalty that may accrue
thereafter. The Company makes a provision when there is a present
obligation as a result of a past event where the outflow of economic
resources is probable and a reliable estimate of the amount of
obligation can be made.Possible future or present obligations that may
but will probably not require outfi ow of resources or where the same
cannot be reliably estimated, is disclosed as contingent liability in
the financial statements.
s) Earnings per equity share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average numbers of equity shares outstanding during the period
are adjusted for events including a bonus issue, bonus element in a
rights issue to existing shareholders, share split and reverse share
split (consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profi t or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares. The
period during which, number of dilutive potential equity shares change
frequently, weighted average number of shares are computed based on a
mean date in the quarter, as impact is immaterial on earnings per
share.
Mar 31, 2014
A) Basis of accounting
The financial statements have been prepared to comply with the
Accounting Standards referred to in the Companies (Accounting
Standards) Rules, 2006 issued by the Central Government in exercise of
the power conferred under sub-section (1) (a) of Section 642 and
relevant provisions of the Companies Act, 1956 (the Act'') read with the
General Circular 15/ 2013 dated September 13, 2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013.
The financial statements have been prepared on a going concern basis
under the historical cost convention on accrual basis in accordance
with the generally accepted accounting principles in India. The
accounting policies have been consistently applied by the Company.
All assets and liabilities have been classified as current or
non-current, wherever applicable as per the operating cycle of the
Company as per the guidance as set out in the Revised Schedule VI to
the Companies Act, 1956.
b) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements and the results of operations during
the reporting periods. Although these estimates are based upon
management''s knowledge of current events and actions, actual results
could differ from those estimates and revisions, if any, are recognised
in the current and future periods.
c) Intangible assets and amortisation
i) Softwares which are not integral part of the hardware are classified
as intangibles and are stated at cost less accumulated amortisation.
These are being amortised over the estimated useful life of 5 years, as
determined by the management.
ii) The Company has acquired exclusive usage rights for 30 years under
the build,
own, operate and transfer scheme of the public private partnership
(''PPP'') scheme in respect of properties developed as automated
multi-level car parking and commercial space and classified them under
the "Intangible Assets-Right on Building and Right on Plant &
Machinery". The Company has arrived at the cost of such intangible
assets in accordance with provisions of relevant Accounting Standards.
The cost of these rights is being amortised over the concession period
in the proportion in which the actual revenue received during the
accounting year bears to the projected revenue from such intangibles
till the end of concession period in accordance with the notification
no. G.S.R. 298 (E) dated April 17, 2012 as notified by Ministry of
Corporate Affairs ("MCA") on the Intangible Assets of Schedule XIV of
the Companies Act, 1956.
d) Fixed assets and depreciation
i) Fixed assets (gross block) are stated at historical cost less
accumulated depreciation and impairment (if any). Cost comprises the
purchase price and any attributable cost of bringing the asset to its
working condition for its intended use.
Building/specific identifiable portions of building, including related
equipments are capitalised when the construction is substantially
complete or upon receipt of the occupancy certificate, whichever is
earlier.
Depreciation on assets (including buildings and related equipments
rented out and included under current assets as inventories) is
provided on straight-line method at the rates and in the manner
prescribed in Schedule XIV to the Companies Act, 1956.
ii) Capital work-in-progress (including intangible assets under
development) represents expenditure incurred in respect of capital
projects/intangible assets under development and are carried at cost.
Cost includes land, related acquisition expenses, development/
construction costs, borrowing costs and other direct expenditure.
iii) Leasehold land, under perpetual lease, is not amortised. Leasehold
lands, other than on perpetual lease, are being amortised on time
proportion basis over their respective lease periods.
e) Investments
Investments are classified as non-current or current, based on
management''s intention at the time of purchase. Investments that are
readily realisable and intended to be held for not more than a year are
classified as current investments. All other investments are classified
as non-current investments.
Trade investments are the investments made for or to enhance the
Company''s business interests.
Current investments are stated at lower of cost and fair value
determined on an individual investment basis. Non-current investments
are stated at cost and provision for diminution in their value, other
than temporary, is made in the financial statements.
Profit/loss on sale of investments is computed with reference to the
average cost of the investment.
f) Inventories
Inventories are valued as under:
i) Land and plots other than area transferred to constructed properties
at the commencement of construction are valued at lower of
cost/approximate average cost/ as revalued on conversion to stock and
net realisable value. Cost includes land (including development rights
and land under agreements to purchase) acquisition cost, borrowing
cost, estimated internal development costs and external development
charges.
ii) Constructed properties other than Special Economic Zone (SEZ)
projects includes the cost of land (including development rights and
land under agreements to purchase), internal development costs,
external development charges, construction costs, overheads, borrowing
cost, development/ construction materials and is valued at lower of
cost/ estimated cost and net realisable value.
iii) In case of SEZ projects, constructed properties include internal
development costs, external development charges, construction costs,
overheads, borrowing cost, development/construction materials, and is
valued at lower of cost/estimated cost, and net realisable value.
iv) Development rights represents amount paid under agreement to
purchase land/ development rights and borrowing cost incurred by the
Company to acquire irrevocable and exclusive licenses/ development
rights in identified land and constructed properties, the acquisition
of which is at an advanced stage.
v) Construction/development material is valued at lower of cost and net
realisable value.
vi) Rented buildings and related equipments are valued at lower of cost
(less accumulated depreciation) and net realisable value.
g) Revenue recognition
i) Revenue from constructed properties for all projects commenced on or
before March 31, 2012 and where revenue recognition commenced on or
before the above date, is recognized in accordance with the provisions
of Accounting Standard (AS) 9 on Revenue Recognition, read with
Guidance Note on "Recognition of Revenue by Real Estate Developers".
Revenue is computed based on the "percentage of completion method" and
on the percentage of actual project costs incurred thereon to total
estimated project cost, subject to such actual cost incurred being 30
percent or more of the total estimated project cost. Revenue from
constructed properties for all projects commenced on or after April 1,
2012 or project where the revenue is recognized for the first time on
or after the above date, is recognized in accordance with the Revised
Guidance Note issued by the Institute of Chartered Accountants of India
("ICAI") on "Accounting for Real Estate Transactions (Revised 2012)."
As per this Guidance Note, the revenue have been recognized on
percentage of completion method provided all of the following
conditions are met at the reporting date.
- required critical approvals for commencement of the project have been
obtained,
- atleast 25% of estimated construction and development costs
(excluding land cost) has been incurred,
- atleast 25% of the saleable project area is secured by the Agreements
to sell/application forms (containing salient terms of the agreement to
sell); and
- atleast 10% of the total revenue as per agreement to sell are
realized in respect of these agreements.
(a) For projects, other than SEZ projects, revenue is recognised in
accordance with the term of duly executed, agreements to
sell/application forms (containing salient terms of agreement to sell).
Estimated project cost includes cost of land/ development rights,
borrowing costs, overheads, estimated construction and development cost
of such properties. The estimates of the saleable area and costs are
reviewed periodically and effect of any changes in such estimates is
recognised in the period in which such changes are determined. However,
when the total project cost is estimated to exceed total revenues from
the project, loss is recognised immediately.
(b) For SEZ projects , revenue from development charges is recognised
in accordance with the terms of the co- developer agreements/Memorandum
of Understanding (''MOU''), read with addendum, if any. The estimated
project cost includes construction cost, development and construction
material, internal development cost, external development charges,
borrowing cost and overheads of such project. Revenue from lease of
land pertaining to such projects is recognised in accordance with the
terms of the co-developer agreements/MOU on accrual basis.
ii) Sale of land and plots (including development rights) is recognized
in the financial year in which the agreement to sell/ application forms
(containing salient terms of agreement to sell) is executed and there
exists no uncertainty in the ultimate collection of consideration from
buyers. Where the Company has any remaining substantial obligations as
per the agreements, revenue is recognised on the percentage of
completion method of accounting, as per (i) (a) above.
iii) Sale of development rights is recognized in the financial year in
which the agreements of sale are executed and there exists no
uncertainty in the ultimate collection of consideration from buyers.
iv) Revenue from wind power generation is recognised on the basis of
actual power sold (net of reactive energy consumed), as per the terms
of the power purchase agreements entered into with the respective
purchasers.
v) Income from interest is accounted for on time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
vi) Dividend income is recognised when the right to receive is
established by the reporting date.
vii) Share of profit/ loss from firms in which the Company is a partner
is accounted for in the financial year ending on (or immediately
before) the date of the balance sheet.
viii) Rent, service receipts, income from forfeiture of properties and
interest from customers under agreement to sell is accounted for on
accrual basis except in cases where ultimate collection is considered
doubtful.
ix) Sale of Certified Emission Reductions (CERs) and Voluntary Emission
Reductions (VERs) is recognised as income on the delivery of the
CERs/VERs to the customer''s account and receipt of payment.
h) Unbilled receivables
Unbilled receivables disclosed under Note No.
19 - "Other Current Assets" represents revenue recognised based on
percentage of completion method (as per para no. g(i) and g(ii) above),
over and above the amount due as per the payment plans agreed with the
customers.
i) Cost of revenue
i) Cost of constructed properties other than SEZ projects, includes
cost of land (including cost of development rights/ land under
agreements to purchase), estimated internal development costs, external
development charges, borrowing costs, overheads, construction costs and
development/construction materials, which is charged to the statement
of profit and loss based on the revenue recognised as per accounting
policy no. - g(i)(a) above, in consonance with the concept of matching
costs and revenue. Final adjustment is made upon completion of the
specific project.
For SEZ projects, cost of constructed properties includes estimated
internal development costs, external development charges, borrowing
costs, overheads, construction costs and development/ construction
materials, which is charged to the statement of profit and loss based
on the revenue recognised as per accounting policy no.- g(i)(b) above,
in consonance with the concept of matching costs and revenue. Final
adjustment is made upon completion of the specific project.
ii) Cost of land and plots includes land (including development rights)
acquisition cost, estimated internal development costs and external
development charges, which is charged to the statement of profit and
loss based on the percentage of land/plotted area in respect of which
revenue is recognised as per accounting policy no. - g(ii) above to the
saleable total land/ plotted area of the scheme, in consonance with the
concept of matching cost and revenue. Final adjustment is made upon
completion of the specific project.
iii) Cost of development rights is measured at the rate at which the
same have been purchased from the Land Owning Companies (LOCs) as per
the agreement.
j) Borrowing costs
Borrowing costs that are attributable to the acquisition and/or
construction of qualifying assets are capitalised as part of the cost
of such assets, in accordance with notified Accounting Standard 16
"Borrowing Costs". A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use.
Capitalisation of borrowing costs is suspended in the period during
which the active development is delayed due to, other than temporary,
interruption. All other borrowing costs are charged to the statement of
profit and loss as incurred.
k) Taxation
Tax expense for the year comprises current income tax and deferred tax.
Current income tax is determined in respect of taxable income with
deferred tax being determined as the tax effect of timing differences
representing the difference between taxable income and accounting
income that originate in one period, and are capable of reversal in one
or more subsequent period(s). Such deferred tax is quantified using
rates and laws enacted or substantively enacted as at the end of the
financial year.
l) Foreign currency transactions
Transactions in foreign currency are accounted for at the exchange rate
prevailing on the date of the transaction. All monetary items
denominated in foreign currency are converted into Indian rupees at the
year-end exchange rate. Income and expenditure of the overseas liaison
office is translated at the yearly average rate of exchange. The
exchange differences arising on such conversion and on settlement of
the transactions are recognised in the statement of profit and loss.
In terms of the clarification provided by Ministry of Corporate Affairs
("MCA") vide a notification no. G.S.R.913(E) on AS-11 "Changes in
Foreign Exchange Rates", the exchange gain/ loss on long-term foreign
currency monetary items is adjusted in the cost of depreciable capital
assets/accumulated in ''Foreign Currency Monetary Item Translation
Difference Account '' (FCMITDA) and amortised over the balance period of
long- term monetary items. The other exchange gains/ losses have been
recognised in the statement of profit and loss.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognised as income or as expense for the
year.
m) Employee benefits
Expenses and liabilities in respect of employee benefits are recorded
in accordance with the notified Accounting Standard 15 - Employee
Benefits.
(i) Provident fund
The Company makes contribution to statutory provident fund in
accordance with the Employees'' Provident Funds and Miscellaneous
Provisions Act, 1952. In terms of the Guidance on implementing the
revised AS-15, issued by the Accounting Standards Board of the ICAI,
the provident fund trust set up by the Company is treated as a defined
benefit plan since the Company has to meet the interest shortfall, if
any. Accordingly, the contribution paid or payable and the interest
shortfall, if any is recognised as an expense in the period in which
services are rendered by the employee.
(ii) Gratuity
Gratuity is a post-employment benefit and is in the nature of a defined
benefit plan. The liability recognised in the balance sheet in respect
of gratuity is the present value of the defined benefit/ obligation at
the balance sheet date, together with adjustments for unrecognised
actuarial gains or losses and past service costs. The defined
benefit/obligation is calculated at or near the balance sheet date by
an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in
actuarial assumptions are credited or charged to the statement of
profit and loss in the year in which such gains or losses are
determined.
(iii) Compensated absences
Liability in respect of compensated absences becoming due or expected
to be availed within one year from the balance sheet date is recognised
on the basis of undiscounted value of estimated amount required to be
paid or estimated value of benefit expected to be availed by the
employees. Liability in respect of compensated absences becoming due or
expected to be availed more than one year after the balance sheet date
is estimated on the basis of an actuarial valuation performed by an
independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in
actuarial assumptions are credited or charged to the statement of
profit and loss in the year in which such gains or losses are
determined.
(iv) Employee Shadow Option Scheme (Cash Settled Options)
Accounting value of Cash Settled Options granted to employees under the
"Employee Shadow Option Scheme" is determined on the basis of intrinsic
value representing the excess of the average market price, during the
month before the reporting date, over the exercise price of the shadow
option. The same is charged as employee benefits over the vesting
period, in accordance with Guidance Note 18 "Share Based Payments",
issued by the ICAI.
(v) Other short-term benefits
Expense in respect of other short-term benefits is recognised on the
basis of the amount paid or payable for the period during which
services are rendered by the employee.
Contribution made towards
Superannuation Fund (funded by payments to Life Insurance Corporation
of India (LIC)) is charged to the statement of profit and loss on
accrual basis.
n) Leases
Assets subject to operating leases are included under fixed assets or
current assets as appropriate. Rent (Lease) income is recognised in the
statement of profit and loss on a straight- line basis over the lease
term. Costs, including depreciation, are recognised as an expense in
the statement of profit and loss.
o) Employee Stock Option Plan (ESOP)
Accounting value of stock options is determined on the basis of
"intrinsic value" representing the excess of the market price on the
date of grant over the exercise price of the options granted under the
"Employee Stock Option Scheme" of the Company, and is being amortised
as "Deferred employee compensation" on a straight-line basis over the
vesting period in accordance with the SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and
Guidance Note 18 "Share Based Payments" issued by the ICAI.
p) Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognised in the statement of profit and loss. If at the balance sheet
date there is an indication that a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost and is accordingly reversed in the statement of profit
and loss.
q) Contingent liabilities and provisions
Depending upon the facts of each case and after due evaluation of legal
aspects, claims against the Company are accounted for as either
provisions or disclosed as contingent liabilities. In respect of
statutory dues disputed and contested by the Company, contingent
liabilities are provided for and disclosed as per original demand
without taking into account any interest or penalty that may accrue
thereafter. The Company makes a provision when there is a present
obligation as a result of a past event where the outflow of economic
resources is probable and a reliable estimate of the amount of
obligation can be made. Possible future or present obligations that may
but will probably not require outflow of resources or where the same
cannot be reliably estimated, is disclosed as contingent liability in
the Financial Statements.
r) Earnings per share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average numbers of equity shares outstanding during the period
are adjusted for events including a bonus issue, bonus element in a
rights issue to existing shareholders, share split, and reverse share
split (consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares. The
period during which, number of dilutive potential equity shares change
frequently, weighted average number of shares are computed based on a
mean date in the quarter, as impact is immaterial on earnings per
share.
2. SHARE CAPITAL
b) Rights/preferences/restrictions attached to equity shares
The Company has only one class of equity shares having a par value of Rs.
2 per share. Each holder of equity shares is entitled to one vote per
share. The Company declares and pays dividends in Indian Rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting, except
interim dividend. In the event of liquidation of the Company, the
holders of equity shares will be entitled to receive remaining assets
of the Company, after distribution of all preferential amounts, if any.
The distribution will be in proportion to the number of equity shares
held by the shareholders.During the year ended March 31, 2014, the
amount of proposed final dividend recognized as distributions to equity
shareholders is Rs. 2 per share (March 31, 2013 : Rs. 2 per share).
d) Aggregate number of shares issued for consideration other than cash
and shares bought back during the period of five years immediately
preceding the date March 31, 2014
i) Shares bought back during the financial year 2009-10 to 2013-14
15,000 (during FY 2008-09 to 2012-13: 7,638,567) equity shares of Rs. 2
each bought back pursuant to Section 77A of the Companies Act, 1956.
ii) Shares issued under Employee Stock Option Plan (ESOP) during the
financial year 2009-10 to 2013-14
The Company has issued total 3,282,457 equity shares of Rs. 2 each
(during FY 2008-09 to 2012-13: 1,568,644 equity shares) during the
period of five years immediately preceding March 31, 2014 on exercise
of options granted under the Employee Stock Option Plan (ESOP).
e) Shares reserved for issue under options
For details of shares reserved for issue under the Employee Stock
Option Plan (ESOP) of the Company, refer note 38.
1 Repayment terms (excluding current maturities) and security for the
outstanding long-term borrowings as on March 31, 2014:
Listed, Secured, Redeemable, Non-convertible Debentures of Rs. 50,000,000
each referred above to the extent of:
(i) Rs. 75,000 lac are secured by way of pari passu charge on the
immovable property situated at New Delhi, owned by the subsidiary
company. Coupon rate of these debentures is 12.50% and repayment in 4
equal annual installments starting from April 30, 2015 and date of
final redemption is April 30, 2018.
From banks:
Secured INR borrowings
(a) Facility ofRs. 20,833.33 lac, balance amount is repayable in 10 equal
quarterly installments starting from May, 2015. The loan is secured by
way of :
(i) Equitable mortgage of immovable properties situated at Gurgaon,
owned by subsidiary company.
(ii) Corporate guarantee provided by the subsidiary company owning the
aforesaid immovable properties.
(b) Facility of Rs. 25,246.62 lac, balance amount is repayable in 84
equated monthly installments starting from April, 2015. The loan is
secured by way of :
(i) Equitable mortgage of immovable property situated at New Delhi,
owned by the Company.
(ii) Charge on receivables pertaining to the aforesaid immovable
property owned by the Company.
(iii) Exclusive charge on immovable property situated at Gurgaon, owned
by the subsidiary company.
(iv) Corporate guarantee provided by the subsidiary company owning the
aforesaid immovable property.
(c) Facility ofRs. 8,330.00 lac, balance amount is repayable in 25 equal
monthly installments starting from April, 2015. The loan is secured by
way of :
(i) Equitable mortgage of immovable property situated at Gurgaon, owned
by the Company/ subsidiary company.
(ii) Charge on receivables pertaining to the aforesaid immovable
property owned by the Company.
(iii) Corporate guarantee provided by the subsidiary company owning the
aforesaid immovable property.
(d) Facility of Rs. 6,171.43 lac, balance amount is repayable in 72 equal
monthly installments starting from April, 2015. The loan is secured by
way of :
(i) Equitable mortgage of immovable property situated at Gurgaon, owned
by the Company/ subsidiary company.
(ii) Charge on receivables pertaining to the aforesaid immovable
property owned by the Company.
(iii) Corporate guarantee provided by the subsidiary company owning the
aforesaid immovable property.
(e) Facility of Rs. 18,055.56 lac, balance amount is repayable in 26
equal monthly installments starting from April, 2015. The loan is
secured by way of :
(i) Equitable mortgage of immovable property situated at Gurgaon, owned
by the subsidiary company.
(ii) Charge on receivables pertaining to the aforesaid immovable
property owned by the subsidiary company.
(iii) Corporate guarantee provided by the subsidiary company owning the
aforesaid immovable property.
(f) Facility of Rs. 6,250.00 lac, balance amount is repayable in 15 equal
monthly installments starting from April, 2015. The loan is secured by
way of :
(i) Equitable mortgage of immovable property situated at Gurgaon, owned
by the subsidiary company.
(ii) Charge on receivables pertaining to the aforesaid immovable
property owned by the subsidiary company.
(iii) Corporate guarantee provided by the subsidiary company owning the
aforesaid immovable property.
(g) Facility of Rs. 81,998.11 lac, balance amount is repayable in 72
monthly installments starting from April, 2015. The loan is secured by
way of :
(i) Equitable mortgage of immovable properties situated at Gurgaon and
New Delhi, owned by subsidiary companies.
(ii) Charge on receivables pertaining to the aforesaid immovable
properties owned by subsidiary companies.
(iii) Corporate guarantees provided by subsidiary companies owning the
aforesaid immovable properties.
(h) Facility of Rs. 27,542.50 lac, balance amount is repayable in 24
monthly installments starting from April, 2015. The loan is secured by
way of :
(i) Equitable mortgage of immovable property situated at Gurgaon, owned
by subsidiary company.
(ii) Charge on receivables pertaining to the aforesaid immovable
property owned by subsidiary company.
(i) Facility of Rs. 4,000.00 lac, balance amount is repayable in October,
2015.
(j) Facility of Rs. 2,999.99 lac, balance amount is repayable in October,
2015.
The aforesaid term loans are secured by way of
(i) Equitable mortgage of immovable properties situated at Gurgaon,
owned by a subsidiary company.
(ii) Negative lien over immovable properties and assignment of lease
rentals in respect of certain immovable properties situated at New
Delhi and Gurgaon owned by the Company.
(iii) Corporate guarantees provided by the subsidiary company owning
the aforesaid immovable properties.
(k) Facility of Rs. 900.00 lac, balance amount is repayable in October,
2015.
(l) Facility of Rs. 1,100.00 lac, balance amount is repayable in
December, 2015.
The aforesaid term loans are secured by way of
(i) Equitable mortgage of immovable properties situated at Gurgaon,
owned by a subsidiary company.
(ii) Negative lien over immovable properties and assignment of lease
rentals in respect of certain immovable properties situated at New
Delhi and Gurgaon owned by the Company.
(m) Facility of Rs. 748.57 lac, balance amount is repayable in 2 equal
quarterly installments starting from April, 2015. The loan is secured
by way of :
(i) Equitable mortgage of immovable property situated at New Delhi,
owned by subsidiary company.
(ii) Corporate guarantees provided by the subsidiary company owning the
aforesaid immovable property.
(n) Facility of Rs. 29,743.65 lac, balance amount is repayable in 33
monthly installments starting from April, 2015. The loan is secured by
way of :
(i) Equitable mortgage of immovable properties situated at Gurgaon,
owned by subsidiary company.
(ii) Charge on receivables pertaining to the aforesaid immovable
properties owned by subsidiary company.
(o) Facility of Rs. 27,624.37 lac, balance amount is repayable in 36
monthly installments starting from January, 2016. The loan is secured
by way of :
(i) Equitable mortgage of immovable property situated at Gurgaon, owned
by subsidiary company.
(ii) Corporate guarantee provided by the subsidiary company owning the
aforesaid immovable property.
From others
Secured INR borrowings
(a) Facility of Rs. 15,000.00 lac, balance amount is repayable in 3 equal
annual installments starting from August, 2016. The loan is secured by
way of :
(i) Equitable mortgage of immovable properties situated at Gurgaon,
Hyderabad and Chennai, owned by Company/subsidiary companies.
(ii) Charge on receivables pertaining to the aforesaid immovable
property at Gurgaon owned by the Company.
(b) Facility of Rs. 29,000.00 lac, balance amount is repayable in 18
quarterly installments starting from April, 2015. The loan is secured
by way of :
(i) Equitable mortgage of immovable properties situated at Gurgaon,
owned by subsidiary company.
(ii) Corporate guarantee provided by the subsidiary company owning the
aforesaid immovable properties.
(c) Facility of Rs. 4,375.00 lac, balance amount is repayable in 7 equal
monthly installments starting from April, 2015. The loan is secured by
way of :
Equitable mortgage of immovable properties situated at Gurgaon owned by
a subsidiary company.
(d) Facility of Rs. 29,788.00 lac, balance amount is repayable in 26
equal monthly installments starting from April, 2015. The loan is
secured by way of :
Equitable mortgage of immovable properties situated at Gurgaon owned by
a subsidiary company.
(e) Facility of Rs. 34,441.75 lac, balance amount is repayable in 76
monthly installments starting from April, 2015. The loan is secured by
way of :
(i) Equitable mortgage of immovable property situated at Gurgaon, owned
by subsidiary company.
(ii) Charge on receivables pertaining to the aforesaid immovable
property owned by subsidiary company.
(f) Facility of Rs. 55,466.18 lac, balance amount is repayable in 33
monthly installments starting from April, 2015. The loan is secured by
way of :
(i) Equitable mortgage of immovable properties situated at Gurgaon,
owned by subsidiary company.
(ii) Charge on receivables pertaining to the aforesaid immovable
properties owned by subsidiary company.
(g) Facility of Rs. 88,000.00 lac, balance amount is repayable in 41
installments starting from April, 2015. The loan is secured by way of :
(i) Equitable mortgage of immovable properties situated at Gurgaon,
Hyderabad and Chennai, owned by Company/subsidiary companies.
(ii) Charge on receivables pertaining to the aforesaid immovable
property at Gurgaon owned by the Company.
(h) Facility of Rs. 42,300.00 lac, balance amount is repayable in 45
installments starting from April, 2015. The loan is secured by way of :
(i) Equitable mortgage of immovable properties situated at Gurgaon,
Hyderabad and Chennai, owned by Company/subsidiary companies.
(ii) Charge on receivables pertaining to the aforesaid immovable
property at Gurgaon owned by the Company.
(i) Facility of Rs. 3,000.00 lac, balance amount is repayable in October,
2015. The loan is secured by way of :
(i) Equitable mortgage of immovable properties situated at Gurgaon,
owned by a subsidiary company.
(ii) Negative lien over immovable properties and assignment of lease
rentals in respect of certain immovable properties situated at New
Delhi and Gurgaon owned by the Company.
(j) Facility of Rs. 428.57 lac, balance amount is repayable in 3 equal
monthly installments starting from April, 2015. The loan is secured by
way of :
First and exclusive charge by way of hypothecation on assets viz
Helicopter and Aircraft owned by the Company.
(k) Facility of Rs. 142.73 lac, balance amount is repayable in 2 equal
monthly installments starting from April, 2015. The loan is secured by
way of :
First and exclusive charge by way of hypothecation on assets viz
Helicopter owned by the Company.
(l) Facility of Rs. 18,707.55 lac, balance amount is repayable in 97
monthly installments starting from April, 2015.
(m) Facility of Rs. 8,764.72 lac, balance amount is repayable in 108
monthly installments starting from April, 2015.
(n) Facility of Rs. 5,608.97 lac, balance amount is repayable in 104
monthly installments starting from April, 2015.
(o) Facility of Rs. 4,300.21 lac, balance amount is repayable in 104
monthly installments starting from April, 2015.
(p) Facility of Rs. 3,015.82 lac, balance amount is repayable in 108
monthly installments starting from April, 2015.
(q) Facility of Rs. 2,991.45 lac, balance amount is repayable in 104
monthly installments starting from April, 2015.
(r) Facility of Rs. 1,071.79 lac, balance amount is repayable in 104
monthly installments starting from April, 2015.
The aforesaid term loans are secured by way of
(i) Equitable mortgage of immovable properties situated at New Delhi
and Gurgaon, owned by subsidiary/group companies.
(ii) Negative lien on rights under the concession agreements pertaining
to certain immovable properties situated at New Delhi.
(iii) Charge on receivables pertaining to the aforesaid immovable
properties owned by the Company/ subsidiary companies/ group companies.
(iv) Corporate guarantees provided by the subsidiary/ group companies
owning the aforesaid immovable properties.
(s) Facility of Rs. 22,152.78 lac, balance amount is repayable in 29
monthly installments starting from April, 2015. The loan is secured by
way of :
(i) Equitable mortgage of immovable property situated at Gurgaon, owned
by the Company.
(ii) Charge on receivables and other current assets of the aforesaid
immovable property owned by the Company.
(t) Facility of Rs. 5,925.76 lac, balance amount is repayable in 24
monthly installments starting from April, 2015. The loan is secured by
way of :
(i) Equitable mortgage of immovable property situated at Gurgaon, owned
by subsidiary company.
(ii) Charge on receivables pertaining to the aforesaid immovable
property owned by subsidiary company.
(u) Facility of Rs. 2,821.43 lac, balance amount is repayable in 2 equal
quarterly installments starting from April, 2015. The loan is secured
by way of :
(i) Equitable mortgage of immovable property situated at New Delhi,
owned by subsidiary company.
(ii) Corporate guarantee provided by the subsidiary company owning the
aforesaid immovable property.
(v) Facility of Rs. 1,430.00 lac, balance amount is repayable in 2
quarterly installments starting from April, 2015. The loan is secured
by way of :
(i) Equitable mortgage of immovable property situated at New Delhi,
owned by subsidiary company.
(ii) Corporate guarantee provided by the subsidiary company owning the
aforesaid immovable property.
2 Rate of interest - The Company''s borrowings from banks and others
have a effective weighted average rate of interest of 12.08 % p.a.
(previous year 12.40% p.a.) calculated using the interest rates
effective as on March 31, 2014 for the respective borrowings.
3. SHORT-TERM BORROWINGS
Security for the short-term borrowings:
(i) Equitable mortgage of immovable properties situated at New Delhi,
Goa and Gurgaon, owned by the Company/subsidiary companies.
(ii) Charge on receivables pertaining to the aforesaid immovable
properties owned by the Company/ subsidiary companies.
(iii) Corporate guarantees provided by the subsidiary companies owning
the aforesaid immovable properties.
Mar 31, 2013
A) Basis of accounting
The Financial Statements are prepared under historical cost convention,
on accrual basis, in accordance with the generally accepted accounting
principles in India and to comply with the Accounting Standards
prescribed in the Companies (Accounting Standards) Rules, 2006 issued
by the Central Government in exercise of the power conferred under
sub-section (1) (a) of Section 642 and the relevant provisions of the
Companies Act, 1956 (the "Act").
All assets and liabilities have been classified as current or
non-current, wherever applicable as per the operating cycle of the
Company as per the guidance as set out in the Revised Schedule VI to
the Companies Act, 1956.
b) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements and the results of operations during
the reporting periods. Although these estimates are based upon
management''s knowledge of current events and actions, actual results
could differ from those estimates and revisions, if any, are recognised
in the current and future periods.
c) Intangible assets and amortisation
i) Softwares which are not integral part of the hardware are classified
as intangibles and are stated at cost less accumulated amortisation.
These are being amortised over the estimated useful life of 5 years, as
determined by the management.
ii) The Company has acquired exclusive usage rights for 30 years under
the build, own, operate and transfer scheme of the public private
partnership (''PPP'') scheme in respect of properties developed as
automated multi-level car parking and commercial space and classified
them under the "Intangible Assets - Right on Building and Right on
Plant & Machinery". The Company has arrived at the cost of such
intangible assets in accordance with provisions of relevant Accounting
Standards. The cost of these rights is being amortised over the
concession period in the proportion in which the actual revenue
received during the accounting year bears to the Projected Revenue from
such Intangibles till the end of concession period in accordance with
the notification no. G.S.R. 298 (E) dated April 17, 2012 as notified in
Ministry of Corporate Affairs ("MCA") on the Intangible Assets of
Schedule XIV of the Companies Act, 1956.
d) Fixed assets and depreciation
i) Fixed assets (gross block) are stated at historical cost less
accumulated depreciation and impairment (if any). Cost comprises the
purchase price and any attributable cost of bringing the asset to its
working condition for its intended use.
Building / specific identifiable portions of building, including
related equipments are capitalised when the construction is
substantially complete or upon receipt of the occupancy certificate,
whichever is earlier.
Depreciation on assets (including buildings and related equipment''s
rented out and included under current assets as invetories) is provided
on straight-line method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956.
ii) Capital work-in-progress (including intangible assets under
development) represents expenditure incurred in respect of capital
projects / intangible assets under development and are carried at cost.
Cost includes land, related acquisition expenses, development /
construction costs, borrowing costs and other direct expenditure.
iii) Leasehold land, under perpetual lease, is not amortised. Leasehold
lands, other than on perpetual lease, are being amortised on time
proportion basis over their respective lease periods.
e) Investments
Investments are classified as non-current or current, based on
management''s intention at the time of purchase. Investments that are
readily realisable and intended to be held for not more than a year are
classified as current investments. All other investments are classified
as non-current investments.
Trade investments are the investments made for or to enhance the
Company''s business interests.
Current investments are stated at lower of cost and fair value
determined on an individual investment basis. Non-current investments
are stated at cost and provision for diminution in their value, other
than temporary, is made in the financial statements.
Profit/loss on sale of investments is computed with reference to the
average cost of the investment.
f) Inventories
Inventories are valued as under:
i) Land and plots other than area transferred to constructed properties
at the commencement of construction are valued at lower of cost/
approximate average cost/ as revalued on conversion to stock and net
realisable value. Cost includes land (including development rights and
land under agreements to purchase) acquisition cost, borrowing cost,
estimated internal development costs and external development charges.
ii) Constructed properties other than Special Economic Zone (SEZ)
projects includes the cost of land (including development rights and
land under agreements to purchase), internal development costs,
external development charges, construction costs, overheads, borrowing
cost, development/ construction materials and is valued at lower of
cost/ estimated cost and net realisable value.
iii) In case of SEZ projects, constructed properties include internal
development costs, external development charges, construction costs,
overheads, borrowing cost, development/ construction materials, and is
valued at lower of cost/ estimated cost and net realisable value.
iv) Development rights represents amount paid under agreement to
purchase land/ development rights and borrowing cost incurred by the
Company to acquire irrevocable and exclusive licenses/ development
rights in identified land and constructed properties, the acquisition
of which is at an advanced stage.
v) Construction/ development material is valued at lower of cost and
net realisable value.
vi) Rented buildings and related equipments are valued at lower of cost
(less accumulated depreciation) and net realisable value.
g) Revenue recognition
i) Revenue from constructed properties is recognized in accordance with
the provisions of Accounting Standard (AS) 9 on Revenue Recognition,
read with Guidance Note on "Recognition of Revenue by Real Estate
Developers". Revenue is computed based on the "percentage of
completion method" and on the percentage of actual project costs
incurred thereon to total estimated project cost, subject to such
actual cost incurred being 30 per cent or more of the total estimated
project cost .
(a) For projects, other than SEZ projects, Revenue is recognised in
accordance with the term of duly executed, agreements to sell /
application forms (containing salient terms of agreement to sell).
Estimated project cost includes cost of land/ development rights,
borrowing costs, overheads, estimated construction and development cost
of such properties. The estimates of the saleable area and costs are
reviewed periodically and effect of any changes in such estimates is
recognised in the period in which such changes are determined. However,
when the total project cost is estimated to exceed total revenues from
the project, loss is recognised immediately.
(b) For SEZ projects, Revenue from development charges is recognised in
accordance with the terms of the Co- developer Agreements / Memorandum
of Understanding (''MOU''), read with addendum, if any. The estimated
project cost includes construction cost, development and construction
material, internal development cost, external development charges,
borrowing cost and overheads of such project. Revenue from Lease of
land pertaining to such projects is recognised in accordance with the
terms of the Co-developer Agreements/ MOU on accrual basis.
With effect from April 1, 2012 in accordance with the Revised Guidance
Note issued by Institute of Chartered Accountants of India ("ICAI")
on "Accounting for Real Estate Transactions (Revised 2012)", the
Company revised its Accounting Policy of revenue recognition for all
projects commencing on or after April 1, 2012 or project where the
revenue is recognized for the first time on or after the above date. As
per this Guidance Note, the revenue have been recognized on percentage
of completion method provided all of the following conditions are met
at the reporting date.
- atleast 25% of estimated construction and development costs
(excluding land cost) has been incurred;
- atleast 25% of the saleable project area is secured by the
Agreements to sell/ application forms (containing salient terms of the
agreement to sell); and
- atleast 10% of the total revenue as per agreement to sell are
realized in respect of these agreements.
ii) Sale of land and plots (including development rights) is recognised
in the financial year in which the agreement to sell/ application forms
(containing salient terms of agreement to sell) is executed. Where the
Company has any remaining substantial obligations as per the
agreements, revenue is recognised on the percentage of completion
method of accounting, as per (i) (a) above.
iii) Sale of development rights is recognized in the financial year in
which the agreements of sale are executed and there is no uncertainty
in the ultimate collections.
iv) Revenue from wind power generation is recognised on the basis of
actual power sold (net of reactive energy consumed), as per the terms
of the power purchase agreements entered into with the respective
purchasers.
v) Income from interest is accounted for on time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
vi) Dividend income is recognised when the right to receive is
established by the reporting date.
vii) Share of profit/ loss from firms in which the Company is a partner
is accounted for in the financial year ending on (or immediately
before) the date of the balance sheet.
viii) Rent, service receipts and interest from customers under
agreement to sell is accounted for on accrual basis except in cases
where ultimate collection is considered doubtful.
ix) Sale of Certified Emission Reductions (CERs) and Voluntary Emission
Reductions (VERs) is recognised as income on the delivery of the
CERs/VERs to the customer''s account and receipt of payment.
h) Unbilled receivables
Unbilled receivables disclosed under Note No. 19 - "Other Current
Assets" represents revenue recognised based on Percentage of
Completion Method (as per para no. g (i) and g(ii) above), over and
above the amount due as per the payment plans agreed with the
customers.
i) Cost of revenue
i) Cost of constructed properties other than SEZ projects, includes
cost of land (including cost of development rights/ land under
agreements to purchase), estimated internal development costs, external
development charges, borrowing costs, overheads, construction costs and
development/ construction materials, which is charged to the statement
of profit and loss based on the percentage of revenue recognised as per
accounting policy no. g (i)(a) above, in consonance with the concept of
matching costs and revenue. Final adjustment is made upon completion of
the specific project.
For SEZ projects, cost of constructed properties includes estimated
internal development costs, external development charges, borrowing
costs, overheads, construction costs and development/ construction
materials, which is charged to the statement of profit and loss based
on the percentage of revenue recognised as per accounting policy no. g
(i)(b) above, in consonance with the concept of matching costs and
revenue. Final adjustment is made upon completion of the specific
project.
ii) Cost of land and plots includes land (including development rights)
acquisition cost, estimated internal development costs and external
development charges, which is charged to statement of profit and loss
based on the percentage of land/ plotted area in respect of which
revenue is recognised as per accounting policy no. g (ii) above to the
saleable total land/ plotted area of the scheme, in consonance with the
concept of matching cost and revenue. Final adjustment is made upon
completion of the specific project.
iii) Cost of development rights is measured at the rate at which the
same have been purchased from the Land Owning Companies (LOCs) as per
the agreement.
j) Borrowing costs
Borrowing costs that are attributable to the acquisition and/or
construction of qualifying assets are capitalised as part of the cost
of such assets, in accordance with notified Accounting Standard 16
"Borrowing Costs". A qualifying asset is one that necessarily takes
a substantial period of time to get ready for its intended use.
Capitalisation of borrowing costs is suspended in the period during
which the active development is delayed due to, other than temporary,
interruption. All other borrowing costs are charged to the statement of
profit and loss as incurred.
k) Taxation
Tax expense for the year comprises current income tax and deferred tax.
Current income tax is determined in respect of taxable income with
deferred tax being determined as the tax effect of timing differences
representing the difference between taxable income and accounting
income that originate in one period, and are capable of reversal in one
or more subsequent period(s). Such deferred tax is quantified using
rates and laws enacted or substantively enacted as at the end of the
financial year.
l) Foreign currency transactions
Transactions in foreign currency are accounted for at the exchange rate
prevailing on the date of the transaction. All monetary items
denominated in foreign currency are converted into Indian rupees at the
year-end exchange rate. Income and expenditure of the overseas liaison
office is translated at the yearly average rate of exchange.
The exchange differences arising on such conversion and on settlement
of the transactions are recognised in the statement of profit and loss.
In terms of the clarification provided by Ministry of Corporate Affairs
("MCA") vide a notification no. G.S.R.913(E) on Accounting Standard
- 11 "Changes in Foreign Exchange Rates", the exchange gain/loss on
long term foreign currency monetary items is adjusted in the cost of
depreciable capital assets. The other exchange gains/ losses have been
recognised in the statement of profit and loss.
m) Employee benefits
Expenses and liabilities in respect of employee benefits are recorded
in accordance with the notified Accounting Standard 15 - Employee
Benefits.
(i) Provident fund
The Company makes contribution to statutory provident fund in
accordance with the Employees'' Provident Funds and Miscellaneous
Provisions Act, 1952. In terms of the Guidance on implementing the
revised AS - 15, issued by the Accounting Standards Board of the ICAI,
the provident fund trust set up by the Company is treated as a defined
benefit plan since the Company has to meet the interest shortfall, if
any. Accordingly, the contribution paid or payable and the interest
shortfall, if any is recognised as an expense in the period in which
services are rendered by the employee.
(ii) Gratuity
Gratuity is a post-employment benefit and is in the nature of a defined
benefit plan. The liability recognised in the balance sheet in respect
of gratuity is the present value of the defined benefit/ obligation at
the balance sheet date, together with adjustments for unrecognised
actuarial gains or losses and past service costs. The defined
benefit/obligation is calculated at or near the balance sheet date by
an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in
actuarial assumptions are credited or charged to the statement of
profit and loss in the year in which such gains or losses are
determined.
(iii) Compensated absences
Liability in respect of compensated absences becoming due or expected
to be availed within one year from the balance sheet date is recognised
on the basis of undiscounted value of estimated amount required to be
paid or estimated value of benefit expected to be availed by the
employees. Liability in respect of compensated absences becoming due or
expected to be availed more than one year after the balance sheet date
is estimated on the basis of an actuarial valuation performed by an
independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in
actuarial assumptions are credited or charged to the statement of
profit and loss in the year in which such gains or losses are
determined.
(iv) Employee Shadow Option Scheme (Cash Settled Options)
Accounting value of Cash Settled Options granted to employees under the
"Employee Shadow Option Scheme" is determined on the basis of
intrinsic value representing the excess of the average market price,
during the month before the reporting date, over the exercise price of
the shadow option. The same is charged as employee benefits over the
vesting period, in accordance with Guidance Note 18 "Share Based
Payments", issued by the ICAI.
(v) Other short-term benefits
Expense in respect of other short-term benefits is recognised on the
basis of the amount paid or payable for the period during which
services are rendered by the employee.
Contribution made towards
Superannuation Fund (funded by payments to Life Insurance Corporation
of India (LIC)) is charged to the statement of profit and loss on
accrual basis.
n) Leases
Assets subject to operating leases are included under fixed assets or
current assets as appropriate. Rent (Lease) income is recognised in the
statement of profit and loss on a straight- line basis over the lease
term. Costs, including depreciation, are recognised as an expense in
the statement of profit and loss.
o) Employee Stock Option Plan (ESOP)
Accounting value of stock options is determined on the basis of
"intrinsic value" representing the excess of the market price on
the date of grant over the exercise price of the options granted under
the "Employee Stock Option Scheme" of the Company, and is being
amortised as "Deferred employee compensation" on a straight-line basis
over the vesting period in accordance with the SEBI (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and
Guidance Note 18 "Share Based Payments" issued by the ICAI.
p) Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognised in the statement of profit and loss. If at the balance sheet
date there is an indication that a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost and is accordingly reversed in the statement of profit
and loss.
q) Contingent liabilities and provisions
Depending upon the facts of each case and after due evaluation of legal
aspects, claims against the Company are accounted for as either
provisions or disclosed as contingent liabilities. In respect of
statutory dues disputed and contested by the Company, contingent
liabilities are provided for and disclosed as per original demand
without taking into account any interest or penalty that may accrue
thereafter. The Company makes a provision when there is a present
obligation as a result of a past event where the outflow of economic
resources is probable and a reliable estimate of the amount of
obligation can be made. Possible future or present obligations that may
but will probably not require outflow of resources or where the same
cannot be reliably estimated, is disclosed as contingent liability in
the Financial Statements.
r) Earnings per share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average numbers of equity shares outstanding during the period
are adjusted for events including a bonus issue, bonus element in a
rights issue to existing shareholders, share split, and reverse share
split (consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares. The
period during which, number of dilutive potential equity shares change
frequently, weighted average number of shares are computed based on a
mean date in the quarter, as impact is immaterial on earnings per
share.
Mar 31, 2012
A. Basis of accounting
The Financial Statements are prepared under historical cost convention,
on accrual basis, in accordance with the generally accepted accounting
principles in India and to comply with the Accounting Standards
prescribed in the Companies (Accounting Standards) Rules, 2006 issued
by the Central Government in exercise of the power conferred under
sub-section (1)(a) of Section 642 and the relevant provisions of the
Companies Act, 1956 (the "Act").
All assets and liabilities have been classified as current or
non-current, wherever applicable as per the operating cycle of the
Company as per the guidance as set out in the Revised Schedule VI to
the Companies Act, 1956.
b. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements and the results of operations during
the reporting periods. Although these estimates are based upon
management's knowledge of current events and actions, actual results
could differ from those estimates and revisions, if any, are recognised
in the current and future periods.
c. Intangible assets and amortisation
i. Softwares which are not integral part of the hardware are
classified as intangibles and are stated at cost less accumulated
amortisation. These are being amortised over the estimated useful life
of 5 years, as determined by the management.
ii. The Company has acquired exclusive usage rights for 30 years under
the build, own, operate and transfer scheme of the Public Private
Partnership ('PPP') Scheme in respect of properties developed as
automated multi-level car parking and commercial space and classified
them under the "Intangible
Assets - Right on Building and Right on Plant & Machinery". The
Company has arrived at the cost of such intangible assets in accordance
with provisions of relevant Accounting Standards. The cost of these
rights is being amortised over the concession period in the proportion
in which the actual revenue received during the accounting year bears
to the Projected Revenue from such Intangibles till the end of
concession period in accordance with the notification No. G.S.R. 298
(E) dated April 17, 2012 as notified in Ministry of Corporate Affairs
("MCA") on the Intangible Assets of Schedule XIV of the Companies
Act, 1956.
d. Fixed assets and depreciation
i. Fixed assets (gross block) are stated at historical cost less
accumulated depreciation and impairment (if any). Cost comprises the
purchase price and any attributable cost of bringing the asset to its
working condition for its intended use.
Building/specific identifiable portions of building, including related
equipments are capitalised when the construction is substantially
complete or upon receipt of the occupancy certificate, whichever is
earlier.
Depreciation on assets (including buildings and related equipment's
rented out and included under current assets as inventories) is
provided on straight-line method at the rates and in the manner
prescribed in Schedule XIV to the Companies Act, 1956.
ii. Capital work-in-progress (including intangible assets under
development) represents expenditure incurred in respect of capital
projects/intangible assets under development and are carried at cost.
Cost includes land, related acquisition expenses, development/
construction costs, borrowing costs and other direct expenditure.
iii. Leasehold land, under perpetual lease, is not amortised. Leasehold
land, other than on perpetual lease, are being amortised on time
proportion basis over their respective lease periods.
e. Investments
Investments are classified as non-current or current, based on
management's intention at the time of purchase. Investments that are
readily realisable and intended to be held for not more than a year are
classified as current investments. All other investments are classified
as non-current investments.
Trade investments are the investments made for or to enhance the
Company's business interests.
Current investments are stated at lower of cost and fair value
determined on an individual investment basis. Non-current investments
are stated at cost and provision for diminution in their value, other
than temporary, is made in the financial statements.
Profit/loss on sale of investments is computed with reference to the
average cost of the investment.
f. Inventories
Inventories are valued as under:
i) Land and plots other than area transferred to constructed properties
at the commencement of construction are valued at lower of cost/
approximate average cost/ as revalued on conversion to stock and net
realisable value. Cost includes land (including development rights and
land under agreements to purchase) acquisition cost, borrowing cost,
estimated internal development cost and external development charges.
ii. Constructed properties other than Special Economic Zone (SEZ)
projects includes the cost of land (including development rights and
land under agreements to purchase), internal development costs,
external development charges, construction costs, overheads, borrowing
cost, development/ construction materials and is valued at lower of
cost/ estimated cost and net realisable value.
iii. In case of SEZ projects, constructed properties include internal
development costs, external development charges, construction costs,
overheads, borro- wing cost, development / construction materials, and
is valued at lower of cost/ estimated cost, and net realisable value.
iv. Development rights represents amount paid under agreement to
purchase land/ development rights and borrowing cost incurred by the
Company to acquire irrevocable and exclusive licenses/ development
rights in identified land and constructed properties, the acquisition
of which is at an advanced stage.
v. Construction / development material is valued at lower of cost and
net realisable value.
vi. Rented buildings and related equipments are valued at lower of
cost (less accumulated depreciation) and net realisable value.
g. Revenue recognition
i. Revenue from constructed properties:
(a) Revenue from constructed properties, other than SEZ projects, is
recognised on the "percentage of completion method". Total sale
consideration as per the duly executed, agreements to sell/application
forms (containing salient terms of agreement to sell), is recognised as
revenue based on the percentage of actual project costs incurred
thereon to total estimated project cost, subject to such actual cost
incurred being 30 per cent or more of the total estimated project cost.
Estimated project cost includes cost of land/ development rights,
borrowing costs, overheads, estimated construction and development cost
of such properties. The estimates of the saleable area and costs are
reviewed periodically and effect of any changes in such estimates is
recognised in the period in which such changes are determined. However,
when the total project cost is estimated to exceed total revenues from
the project, loss is recognised immediately.
(b) For SEZ projects, revenue from development charges is recognised on
the percentage of completion method in accordance with the terms of the
Co-developer Agreements/ Memorandum of Understanding ('MOU'), read
with addendum, if any. The total development charges is recognised as
Revenue on the percentage of actual project cost incurred thereon to
total estimated project cost, subject to such actual cost incurred
being 30 percent or more of the total estimated project cost. The
estimated project cost includes construction cost, development and
construction material, internal development cost, external development
charges, borrowing cost and overheads of such project. Revenue from
Lease of land pertaining to such projects is recognised in accordance
with the terms of the Co-developer Agreements / MOU on accrual basis.
ii. Sale of land and plots (including development rights) is
recognised in the financial year in which the agreement to sell/
application forms (containing salient terms of agreement to sell) is
executed. Where the Company has any remaining substantial obligations
as per the agreements, revenue is recognised on the percentage of
completion method of accounting, as per (i)(a) above.
iii. Sale of development rights is recognized in the financial year in
which the agreements of sale are executed and there is no uncertainty
in the ultimate collections.
iv. Revenue from wind power generation is recognised on the basis of
actual power sold (net of reactive energy consumed), as per the terms
of the power purchase agreements entered into with the respective
purchasers.
v. Income from interest is accounted for on time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
vi. Dividend income is recognised when the right to receive is
established by the reporting date.
vii. Share of profit/ loss from firms in which the Company is a partner
is accounted for in the financial year ending on (or immediately
before) the date of the balance sheet.
viii. Rent, service receipts and interest from customers under
agreement to sell is accounted for on accrual basis except in cases
where ultimate collection is considered doubtful.
ix. Sale of Certified Emission Reductions (CERs) and Voluntary
Emission Reductions (VERs) is recognised as income on the delivery of
the CERs/VERs to the customer's account and receipt of payment.
h. Unbilled receivables
Unbilled receivables disclosed under Note No. 19 - "Other Current
Assets" represents revenue recognised based on Percentage of
completion method [as per para no. g (i) and g(ii) above], over and
above the amount due as per the payment plans agreed with the
customers.
i. Cost of revenue
i. Cost of constructed properties other than SEZ projects, includes
cost of land (including cost of development rights/ land under
agreements to purchase), estimated internal development costs, external
development charges, borrowing costs, overheads, construction costs and
development / construction materials, which is charged to the statement
of profit and loss based on the percentage of revenue recognised as per
accounting policy no. - g (i) above, in consonance with the concept of
matching costs and revenue. Final adjustment is made upon completion of
the specific project.
For SEZ projects, cost of constructed properties includes estimated
internal development costs, external development charges, borrowing
costs, overheads, construction costs and development/ construction
materials, which is charged to the statement of profit and loss based
on the percentage of revenue recognised as per accounting policy no. -
g (i) above, in consonance with the concept of matching costs and
revenue. Final adjustment is made upon completion of the specific
project.
ii. Cost of land and plots includes land (including development
rights) acquisition cost, estimated internal development costs and
external development charges, which is charged to statement of profit
and loss based on the percentage of land/ plotted area in respect of
which revenue is recognised as per accounting policy no- g
(ii) above to the saleable total land/ plotted area of the scheme, in
consonance with the concept of matching cost and revenue. Final
adjustment is made upon completion of the specific project.
iii. Cost of development rights is measured at the rate at which the
same have been purchased from the Land Owning Companies (LOCs) as per
the agreement.
j. Borrowing costs
Borrowing costs that are attributable to the acquisition and/or
construction of qualifying assets are capitalised as part of the cost
of such assets, in accordance with notified Accounting Standard 16
"Borrowing Costs". A qualifying asset is one that necessarily takes
a substantial period of time to get ready for its intended use.
Capitalisation of borrowing costs is suspended in the period during
which the active development is delayed due to, other than temporary
interruption. All other borrowing costs are charged to the statement of
profit and loss as incurred.
k. Taxation
Tax expense for the year comprises current income tax and deferred tax
Current income tax is determined in respect of taxable income with
deferred tax being determined as the tax effect of timing differences
representing the difference between taxable income and accounting
income that originate in one period, and are capable of reversal in one
or more subsequent period(s). Such deferred tax is quantified using
rates and laws enacted or substantively enacted as at the end of the
financial year.
l. Foreign currency transactions
Transactions in foreign currency are accounted for at the exchange rate
prevailing on the date of the transaction. All monetary items
denominated in foreign currency are converted into Indian rupees at the
year-end exchange rate. Income and expenditure of the overseas liaison
office is translated at the yearly average rate of exchange.
The exchange differences arising on such conversion and on settlement
of the transactions are recognised in the statement of profit and loss.
In terms of the clarification provided by Ministry of Corporate Affairs
("MCA") vide a notification no. G.S.R.913(E) on Accounting Standard
- 11 "Changes in Foreign Exchange Rates", the exchange gain/loss on
long-term foreign currency monetary items is adjusted in the cost of
depreciable capital assets. The other exchange gains/ losses have been
recognised in the statement of profit and loss.
m. Employee benefits
Expenses and liabilities in respect of employee benefits are recorded
in accordance with the notified Accounting Standard 15 - Employee
Benefits.
i. Provident fund
The Company makes contribution to statutory provident fund in
accordance with the Employees' Provident Funds and Miscellaneous
Provisions Act, 1952. In terms of the Guidance on implementing the
revised AS - 15, issued by the Accounting Standards Board of the ICAI,
the provident fund trust set up by the Company is treated as a defined
benefit plan since the Company has to meet the interest shortfall, if
any. Accordingly, the contribution paid or payable and the interest
shortfall, if any is recognised as an expense in the period in which
services are rendered by the employee.
ii. Gratuity
Gratuity is a post-employment benefit and is in the nature of a defined
benefit plan. The liability recognised in the balance sheet in respect
of gratuity is the present value of the defined benefit/obligation at
the balance sheet date, together with adjustments for unrecognised
actuarial gains or losses and past service costs. The defined
benefit/obligation is calculated at or near the balance sheet date by
an independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in
actuarial assumptions are credited or charged to the statement of
profit and loss in the year in which such gains or losses are
determined.
iii. Compensated absences
Liability in respect of compensated absences becoming due or expected
to be availed within one year from the balance sheet date is recognised
on the basis of undiscounted value of estimated amount required to be
paid or estimated value of benefit expected to be availed by the
employees. Liability in respect of compensated absences becoming due or
expected to be availed more than one year after the balance sheet date
is estimated on the basis of an actuarial valuation performed by an
independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in
actuarial assumptions are credited or charged to the statement of
profit and loss in the year in which such gains or losses are
determined.
iv. Employee Shadow Option Scheme (Cash Settled Options)
Accounting value of Cash Settled Options granted to employees under the
"Employees Shadow Option Scheme" is determined on the basis of
intrinsic value representing the excess of the average market price,
during the month before the reporting date, over the exercise price of
the shadow option. The same is charged as employee benefits over the
vesting period, in accordance with Guidance Note No. 18 "Share Based
Payments", issued by the ICAI.
v. Other short-term benefits
Expense in respect of other short-term benefits is recognised on the
basis of the amount paid or payable for the period during which
services are rendered by the employee.
Contribution made towards Superannuation Fund [funded by payments to
Life Insurance Corporation of India (LIC)] is charged to the statement
of profit and loss on accrual basis.
n. Leases
Assets subject to operating leases are included under fixed assets or
current assets as appropriate. Rent (Lease) income is recognised in the
statement of profit and loss on a straight- line basis over the lease
term. Costs, including depreciation, are recognised as an expense in
the statement of profit and loss.
o. Employees Stock Option Plan (ESOP)
Accounting value of stock options is determined on the basis of
"intrinsic value" representing the excess of the market price on
the date of grant over the exercise price of the options granted under
the "Employees Stock Option Scheme" of the Company, and is being
amortised as "Deferred employee compensation" on a straight-line
basis over the vesting period in accordance with the SEBI (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999 and Guidance Note No. 18 "Share Based Payments" issued by the
ICAI.
p. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognised in the statement of profit and loss. If at the balance sheet
date there is an indication that a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost and is accordingly reversed in the statement of profit
and loss.
q. Contingent liabilities and provisions
Depending upon the facts of each case and after due evaluation of legal
aspects, claims against the Company are accounted for as either
provisions or disclosed as contingent liabilities. In respect of
statutory dues disputed and contested by the Company, contingent
liabilities are provided for and disclosed as per original demand
without taking into account any interest or penalty that may accrue
thereafter. The Company makes a provision when there is a present
obligation as a result of a past event where the outflow of economic
resources is probable and a reliable estimate of the amount of
obligation can be made. Possible future or present obligations that may
but will probably not require outflow of resources or where the same
cannot be reliably estimated, is disclosed as contingent liability in
the Financial Statements.
r. Earnings per share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average numbers of equity shares outstanding during the period
are adjusted for events including a bonus issue, bonus element in a
rights issue to existing shareholders, share split, and reverse share
split (consolidation of shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number ofshares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares. The
period during which, number of dilutive potential equity shares change
frequently, weighted average number of shares are computed based on a
mean date in the quarter, as impact is immaterial on earnings per
share.
Mar 31, 2011
1. Basis of accounting
The Financial Statements are prepared under historical cost convention,
on accrual basis, in accordance with the generally accepted accounting
principles in India and to comply with the Accounting Standards
prescribed in the Companies (Accounting Standards) Rules, 2006 issued
by the Central Government in exercise of the power conferred under
sub-section (I) (a) of section 642 and the relevant provisions of the
Companies Act, 1956 (the "Act").
2. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the financial statements and the results of operations during
the reporting periods. Although these estimates are based upon
managements knowledge of current events and actions, actual results
could differ from those estimates and revisions, if any, are recognised
in the current and future periods.
3. Intangible assets and amortisation
Softwares which are not integral part of the hardware are classified as
intangibles and are stated at cost less accumulated amortisation.
These are being amortised over the estimated useful life of 5 years, as
determined by the management.
4. Fixed assets and depreciation/ amortisation
a) Fixed assets (gross block) are stated at historical cost less
accumulated depreciation and impairment (if any). Cost comprises the
purchase price and any attributable cost of bringing the asset to its
working condition for its intended use.
Building / specific identifiable portions of building, including
related equipments are capitalised when the construction is
substantially complete or upon receipt of the occupancy certificate,
whichever is earlier.
Depreciation on assets (including buildings and related equipments
rented out and included under current assets as stocks) is provided on
straight-line method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956.
b) Capital work-in-progress represents expenditure incurred in respect
of capital projects under development and are carried at cost. Cost
includes land, related acquisition expenses, development/ construction
costs, borrowing costs and other direct expenditure including advances
to contractors and others.
c) Leasehold land, under perpetual lease, is not amortised. Leasehold
lands, other than on perpetual lease, are being amortised on time
proportion basis over their respective lease periods.
5. Investments
Investments are classified as long term or current, based on
managements intention at the time of purchase. Investments that are
readily realisable and intended to be held for not more than a year are
classified as current investments. All other investments are classified
as long-term investments.
Trade investments are the investments made for or to enhance the
Companys business interests.
Current investments are stated at lower of cost and fair value
determined on an individual investment basis. Long-term investments are
stated at cost and provision for diminution in their value, other than
temporary, is made in the financial statements.
Profit/loss on sale of investments is computed with reference to the
average cost of the investment.
6. Stocks
Stocks are valued as under:
a) Land and plots other than area transferred to constructed properties
at the commencement of construction are valued at lower of cost/
approximate average cost/ as revalued on conversion to stock and net
realisable value. Cost includes land (including development rights and
land under agreements to purchase) acquisition cost, borrowing cost,
estimated internal development costs and external development charges.
b) Constructed properties other than Special Economic Zone (SEZ)
projects includes the cost of land (including development rights and
land under agreements to purchase), internal development costs,
external development charges, construction costs, overheads, borrowing
cost, development/ construction materials and is valued at lower of
cost/ estimated cost and net realisable value.
c) In case of SEZ projects, constructed properties include internal
development costs, external development charges, construction costs,
overheads, borrowing cost, development/ construction materials, and is
valued at lower of cost/ estimated cost, and net realisable value.
d) Development rights represents amount paid under agreement to
purchase land/ development rights and borrowing cost incurred by the
Company to acquire irrevocable and exclusive licenses/ development
rights in identified land and constructed properties, the acquisition
of which is at an advanced stage.
e) Construction/ development material is valued at lower of cost and
net realisable value.
f) Rented buildings and related equipments are valued at lower of cost
(less accumulated depreciation) and net realisable value.
7. Revenue recognition
a) Revenue from constructed properties:
(i) Revenue from constructed properties, other than SEZ projects, is
recognised on the "percentage of completion method". Total sale
consideration as per the duly executed, agreements to sell /
application forms (containing salient terms of agreement to sell), is
recognised as revenue based on the percentage of actual project costs
incurred thereon to total estimated project cost, subject to such
actual cost incurred being 30 per cent or more of the total estimated
project cost. Estimated project cost includes cost of land/ development
rights, borrowing costs, overheads, estimated construction and
development cost of such properties. The estimates of the saleable area
and costs are reviewed periodically and effect of any changes in such
estimates is recognised in the period in which such changes are
determined. However, when the total project cost is estimated to exceed
total revenues from the project, loss is recognised immediately.
(ii) For SEZ projects, revenue from development charges is recognised
on the percentage of completion method in accordance with the terms of
the Co-developer Agreements / Memorandum of understanding (MOU), read
with addendum, if any. The total development charges is recognised as
Revenue on the percentage of actual project cost incurred thereon to
total estimated project cost subject to such actual cost incurred being
30% or more of the total estimated project cost. The estimated project
cost includes construction cost, development and construction material,
internal development cost, external development charges, borrowing cost
and overheads of such project. Revenue from Lease of land pertaining to
such projects is recognised in accordance with the terms of the
Co-developer Agreements/ MOU on accrual basis.
b) Sale of land and plots (including development rights) is recognised
in the financial year in which the agreement to sell/ application forms
(containing salient terms of agreement to sell) is executed. Where the
Company has any remaining substantial obligations as per the
agreements, revenue is recognised on the percentage of completion
method of accounting, as per (a) (i) above.
c) Sale of development right is recognized in the financial year in
which the agreements of sale are executed.
d) Revenue from wind power generation is recognised on the basis of
actual power sold (net of reactive energy consumed), as per the terms
of the power purchase agreements entered into with the respective
purchasers.
e) Income from interest is accounted for on time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
f) Dividend income is recognised when the right to receive is
established.
g) Share of profit/ loss from firms in which the Company is a partner
is accounted for in the financial year ending on (or immediately
before) the date of the balance sheet.
h) Rent, service receipts and interest from customers under agreement
to sell is accounted for on accrual basis except in cases where
ultimate collection is considered doubtful.
i) Sale of Certified Emission Reductions (CERs) and Voluntary Emission
Reductions (VERs) is recognised as income on the delivery of the
CERs/VERs to the customers account and receipt of payment.
8. Unbilled receivables
Unbilled receivables disclosed under Schedule 11 - "Other Current
Assets" represents revenue recognised based on Percentage of completion
method (as per para no. 7(a) and 7(b) above), over and above the amount
due as per the payment plans agreed with the customers.
9. Co st of revenue
a) Cost of constructed properties other than SEZ projects, includes
cost of land (including cost of development rights/ land under
agreements to purchase), estimated internal development costs, external
development charges, borrowing costs, overheads, construction costs and
development/ construction materials, which is charged to the profit and
loss account based on the percentage of revenue recognised as per
accounting policy no. 7 (a) above, in consonance with the concept of
matching costs and revenue. Final adjustment is made upon completion of
the specific project.
For SEZ projects, cost of constructed properties includes estimated
internal development costs, external development charges, borrowing
costs, overheads, construction costs and development/ construction
materials, which is charged to the profit and loss account based on the
percentage of revenue recognised as per accounting policy no. 7 (a)
above, in consonance with the concept of matching costs and revenue.
Final adjustment is made upon completion of the specific project.
b) Cost of land and plots includes land (including development rights)
acquisition cost, estimated internal development costs and external
development charges, which is charged to profit and loss account based
on the percentage of land/ plotted area in respect of which revenue is
recognised as per accounting policy no. 7(b) above to the saleable
total land/ plotted area of the scheme, in consonance with the concept
of matching cost and revenue. Final adjustment is made upon completion
of the specific project.
c) Cost of development rights is measured at the rate at which the same
have been purchased from the LOCs as per the agreement.
10. Borrowing costs
Borrowing costs that are attributable to the acquisition and/or
construction of qualifying assets are capitalised as part of the cost
of such assets, in accordance with notified Accounting Standard 16
"Borrowing Costs". A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use.
Capitalisation of borrowing costs is suspended in the period during
which the active development is delayed due to, other than temporary,
interruption. All other borrowing costs are charged to the profit and
loss account as incurred.
11. Taxation
Tax expense for the year comprises current income tax and deferred tax
Current income tax is determined in respect of taxable income with
deferred tax being determined as the tax effect of timing differences
representing
the difference between taxable income and accounting income that
originate in one period, and are capable of reversal in one or more
subsequent period(s). Such deferred tax is quantified using rates and
laws enacted or substantively enacted as at the end of the financial
year.
12. Foreign currency transactions
Transactions in foreign currency are accounted for at the exchange rate
prevailing on the date of the transaction. All monetary items
denominated in foreign currency are converted into Indian rupees at the
year-end exchange rate. Income and expenditure of the overseas liaison
office is translated at the yearly average rate of exchange.
The exchange differences arising on such conversion and on settlement
of the transactions are recognised in the profit and loss account.
In terms of the clarification provided by Ministry of Corporate Affairs
("MCA") vide a notification no. G.S.R.225(E) on Accounting Standard Ã
11 "Changes in Foreign Exchange Rates", the exchange gain/loss on long
term foreign currency monetary items are adjusted in the cost of
depreciable capital assets. The other exchange gains/ losses related to
current assets has been recognised in the profit and loss account.
13. Employee benefits
Expenses and liabilities in respect of employee benefits are recorded
in accordance with the notified Accounting Standard 15 - Employee
Benefits.
(i) Provident fund
The Company makes contribution to statutory provident fund in
accordance with the Employees Provident Funds and Miscellaneous
Provisions Act, 1952. In terms of the Guidance on implementing the
revised AS Ã 15, issued by the Accounting Standards Board of the ICAI,
the provident fund trust set up by the Company is treated as a defined
benefit plan since the Company has to meet the interest shortfall, if
any. Accordingly, the contribution paid or payable and the interest
shortfall, if any is recognised as an expense in the period in which
services are rendered by the employee.
(ii) Gratuity
Gratuity is a post employment benefit and is in the nature of a defined
benefit plan. The liability recognised in the balance sheet in respect
of gratuity is the present value of the defined benefit/ obligation at
the balance sheet date, together with adjustments for unrecognised
actuarial gains or losses and past service costs. The defined benefit/
obligation is calculated at or near the balance sheet date by an
independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in
actuarial assumptions are credited or charged to the profit and loss
account in the year in which such gains or losses are determined.
(iii) Compensated absences
Liability in respect of compensated absences becoming due or expected
to be availed within one year from the balance sheet date is recognised
on the basis of undiscounted value of estimated amount required to be
paid or estimated value of benefit expected to be availed by the
employees. Liability in respect of compensated absences becoming due or
expected to be availed more than one year after the balance sheet date
is estimated on the basis of an actuarial valuation performed by an
independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in
actuarial assumptions are credited or charged to the profit and loss
account in the year in which such gains or losses are determined.
(iv) Employee Shadow Option Scheme (Cash Settled Options)
Accounting value of Cash Settled Options granted to employees under the
"Employees Shadow Option Scheme" is determined on the basis of
intrinsic value representing the excess of the average market price,
during the month before the reporting date, over the exercise price of
the shadow option. The same is charged as employee benefits over the
vesting period, in accordance with Guidance Note No. 18 "Share Based
Payments", issued by the ICAI.
(v) Other short term benefits
Expense in respect of other short-term benefits is recognised on the
basis of the amount paid or payable for the period during which
services are rendered by the employee.
Contribution made towards Supernnuation Fund (funded by payments to
Life Insurance Corporation of India (LIC)) are charged to the profit
and loss account on accrual basis.
14. Leases
Assets subject to operating leases are included under fixed assets or
current assets as appropriate. Rent (Lease) income is recognised in the
profit and loss account on a straight-line basis over the lease term.
Costs, including depreciation, are recognised as an expense in the
profit and loss account.
15. Employees Stock Option Plan (ESOP)
Accounting value of stock options is determined on the basis of
"intrinsic value" representing the excess of the market price on the
date of grant over the exercise price of the options granted under the
"Employees Stock Option Scheme" of the Company, and is being amortised
as "Deferred employee compensation" on a straight-line basis over the
vesting period in accordance with the SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and
Guidance Note 18 "Share Based Payments" issued by the ICAI.
16. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognised in the profit and loss account. If at the balance sheet date
there is an indication that a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost and is accordingly reversed in the profit and loss
account.
17. Contingent liabilities and provisions
Depending upon the facts of each case and after due evaluation of legal
aspects, claims against the Company are accounted for as either
provisions or disclosed as contingent liabilities. In respect of
statutory dues disputed and contested by the Company, contingent
liabilities are provided for and disclosed as per original demand
without taking into account any interest or penalty that may accrue
thereafter. The Company makes a provision when there is a present
obligation as a result of a past event where the outflow of economic
resources is probable and a reliable estimate of the amount of
obligation can be made. Possible future or present obligations that may
but will probably not require outflow of resources or where the same
cannot be reliably estimated, is disclosed as contingent liability in
the Financial Statements.
18. Earning Per Share
Basic Earning Per Share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average numbers of equity shares outstanding during the period
are adjusted for events including a bonus issue, bonus element in a
rights issue to existing shareholders, share split, and reverse share
split (consolidation of shares).
For the purpose of calculating diluted earning per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares. The
period during which, number of dilutive potential equity shares change
frequently, weighted average number of shares are computed based on a
mean date in the quarter, as impact is immaterial on Earning Per Share.
Mar 31, 2010
1. Basis of accounting
The Financial Statements are prepared under historical cost convention,
on accrual basis, in accordance with the generally accepted accounting
principles in India and to comply with the Accounting standards
prescribed in the Companies (Accounting Standards) Rules, 2006 issued
by the Central Government in exercise of the power conferred under sub-
section (I) (a) of Section 642 and the relevant provisions of the
Companies Act, 1956 (the "Act").
2. Use of estimates
The preparation of fi nancial statements in conformity with generally
accepted accounting principles requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosure of contingent liabilities on the
date of the fi nancial statements and the results of operations during
the reporting periods. Although these estimates are based upon
managements knowledge of current events and actions, actual results
could differ from those estimates and revisions, if any, are recognised
in the current and future periods.
3. Intangible assets and amortisation
Softwares which are not integral part of the hardware are classifi ed
as intangibles and is stated at cost less accumulated amortisation.
Softwares are being amortised over the estimated useful life of 5 years
as determined by the management.
4. Fixed assets and depreciation/ amortisation
a) Fixed assets (gross block) are stated at historical cost less
accumulated depreciation and impairment. Cost comprises the purchase
price and any attributable cost of bringing the asset to its working
condition for its intended use.
Building / specifi c identifi able portion of building, including
related equipments are capitalised when the construction is
substantially complete or upon receipt of the occupancy certifi cate,
whichever is earlier.
Depreciation on assets (including buildings and related equipments
rented out and included under current assets as stocks) is provided on
straight-line method at the rates and in the manner prescribed in
schedule XIV to the Companies Act, 1956.
b) Capital work-in-progress represents expenditure incurred in respect
of capital projects under development and are carried at cost. Cost
includes land, related acquisition expenses, development / construction
costs, borrowing costs and other direct expenditure including advances
to contractors and others.
c) Leasehold land, under perpetual lease, are not amortised. Leasehold
lands, other than on perpetual lease, are being amortised on time
proportion basis over their respective lease periods.
5. Investments
Investments are classifi ed as long term or current, based on
managements intention at the time of purchase. Investments that are
readily realisable and intended to be held for not more than a year are
classifi ed as current investments. All other investments are classifi
ed as long-term investments. Trade investments are the investments
made for or to enhance the Companys business interests.
Current investments are stated at lower of cost and fair value
determined on an individual investment basis. Long-term investments are
stated at cost and provision for diminution in their value, other than
temporary, is made in the fi nancial statements. Profit/loss on sale
of investments is computed with reference to the average cost of the
investment.
6. Stocks
Stocks are valued as under:
a) Land and plots other than area transferred to constructed properties
at the commencement of construction are valued at lower of cost/
approximate average cost/ as revalued on conversion to stock and net
realisable value. Cost includes land (including development rights and
land under agreements to purchase) acquisition cost, borrowing cost,
estimated internal development costs and external development charges.
b) Constructed properties other than Special Economic Zone (SEZ)
projects includes the cost of land (including development rights and
land under agreements to purchase), internal development costs,
external development charges, construction costs, overheads, borrowing
cost, development/ construction materials and is valued at lower of
cost/ estimated cost and net realisable value.
c) In case of SEZ projects, constructed properties include internal
development costs, external development charges, construction costs,
overheads, borrowing cost, development/ construction materials, and is
valued at lower of cost/ estimated cost, and net realisable value.
d) Development rights represent amount paid under agreement to purchase
land/ development rights and borrowing cost incurred by the Company to
acquire irrevocable and exclusive licenses/ development rights in
identifi ed land and constructed properties, the acquisition of which
is at an advanced stage.
e) Cost of construction/ development material is valued at lower of
cost and net realisable value.
f) Rented buildings and related equipments are valued at lower of cost
(less accumulated depreciation) and net realisable value.
7. Revenue recognition
a) Revenue from constructed properties:
(i) Revenue from constructed properties, other than SEZ projects, is
recognised on the "percentage of completion method". Total sale
consideration as per the duly executed, agreements to sell /
application forms (containing salient terms of agreement to sell), is
recognised as revenue based on the percentage of actual project costs
incurred thereon to total estimated project cost, subject to such
actual cost incurred being 30 per cent or more of the total estimated
project cost. Estimated project cost includes cost of land/ development
rights, borrowing costs, overheads, estimated construction and
development cost of such properties. The estimates of the saleable
area and costs are reviewed periodically and effect of any changes in
such estimates is recognised in the period in which such changes are
determined. However, when the total project cost is estimated to exceed
total revenues from the project, loss is recognised immediately. (ii)
For SEZ projects, revenue from development charges is recognised on the
percentage of completion method in accordance with the terms of the
Co-developer Agreements / Memorandum of Understanding (MOU), read
with addendum, if any. The total development charges is recognised as
Revenue on the percentage of actual project cost incurred thereon to
total estimated project cost subject to such actual cost incurred being
30% or more of the total estimated project cost. The estimated project
cost includes construction cost, development and construction material,
internal development cost, external development charges, borrowing cost
and overheads of such project. Revenue from Lease of land pertaining to
such projects is recognised in accordance with the terms of the
Co-developer Agreements/ MOU on accrual basis.
b) Sale of land and plots (including development rights) is recognised
in the fi nancial year in which the agreement to sell/ application
forms (containing salient terms of agreement to sell) is executed.
Where the Company has any remaining substantial obligations as per the
agreements, revenue is recognised on the percentage of completion
method of accounting, as per a) (i) above.
c) Revenue from wind power generation is recognised on the basis of
actual power sold (net of reactive energy consumed), as per the terms
of the power purchase agreements entered into with the respective
purchasers.
d) Income from interest is accounted for on time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
e) Dividend income is recognised when the right to receive is
established.
f) Share of profit/ loss from fi rms in which the Company is a partner
is accounted for in the fi nancial year ending on (or immediately
before) the date of the balance sheet.
g) Rent, service receipts and interest from customers under agreement
to sell is accounted for on accrual basis except in cases where
ultimate collection is considered doubtful.
h) Sale of Certifi ed Emission Reductions (CERs) and Voluntary Emission
Reductions (VERs) is recognised as income on the delivery of the
CERs/VERs to the customers account and receipt of payment.
8. Unbilled receivables
Unbilled receivables disclosed under Schedule 11 - "Other Current
Assets" represents revenue recognised based on Percentage of completion
method (as per para no. 7a and 7b above), over and above the amount due
as per the payment plans agreed with the customers.
9. Cost of revenue
a) Cost of constructed properties other than SEZ projects, includes
cost of land (including cost of development rights/ land under
agreements to purchase), estimated internal development costs, external
development charges, borrowing costs, overheads, construction costs and
development/ construction materials, which is charged to the profit &
loss account based on the percentage of revenue recognised as per
accounting policy no. - 7 above, in consonance with the concept of
matching costs and revenue. Final adjustment is made upon completion of
the specifi c project.
For SEZ projects, cost of constructed properties includes estimated
internal development costs, external development charges, borrowing
costs, overheads, construction costs and development/ construction
materials, which is charged to the profit & loss account based on the
percentage of revenue recognised as per accounting policy no. - 7
above, in consonance with the concept of matching costs and revenue.
Final adjustment is made upon completion of the specifi c project.
b) Cost of land and plots includes land (including development rights)
acquisition cost, estimated internal development costs and external
development charges, which is charged to profit & loss account based
on the percentage of land/ plotted area in respect of which revenue is
recognised as per accounting policy no.- 7 above to the saleable total
land/ plotted area of the scheme, in consonance with the concept of
matching cost and revenue. Final adjustment is made upon completion of
the specifi c project.
10. Borrowing costs
Borrowing costs that are attributable to the acquisition and/or
construction of qualifying assets are capitalised as part of the cost
of such assets, in accordance with notifi ed
Accounting Standard 16 "Borrowing Costs". A qualifying asset is one
that necessarily takes a substantial period of time to get ready for
its intended use. Capitalisation of borrowing costs is suspended in the
period during which the active development is delayed due to, other
than temporary interruption. All other borrowing costs are charged to
the profit & loss account as incurred.
11. Taxation
Tax expense for the year comprises current income tax and deferred tax
Current income tax is determined in respect of taxable income with
deferred tax being determined as the tax effect of timing differences
representing the difference between taxable income and accounting
income that originate in one period, and are capable of reversal in one
or more subsequent period(s). Such deferred tax is quantifi ed using
rates and laws enacted or substantively enacted as at the end of the fi
nancial year.
12. Foreign currency transactions
Transactions in foreign currency are accounted for at the exchange rate
prevailing on the date of the transaction. All monetary items
denominated in foreign currency are converted into Indian rupees at the
year-end exchange rate. Income and expenditure of the overseas liaison
offi ce is translated at the yearly average rate of exchange.
The exchange differences arising on such conversion and on settlement
of the transactions are recognised in the profit & loss account.
In terms of the clarifi cation provided by Ministry of Corporate
Affairs (MCA) vide a notifi cation no. G.S.R. 225(E) on Accounting
Standard à 11 "Changes in Foreign Exchange Rates", the exchange
gain/loss on long term foreign currency monitory items are adjusted in
the cost of depreciable capital assets. The other exchange
gains/losses related to current assets has been recognised in the profit
& loss account
13. Employee benefits
Expenses and liabilities in respect of employee benefits are recorded
in accordance with the notified Accounting Standard 15 - Employee
Benefits.
(i) Provident fund
The Company makes contribution to statutory provident funds in
accordance with the Employees Provident Funds and Miscellaneous
Provisions Act, 1952. In terms of the Guidance on implementing the
revised AS Ã 15, issued by the Accounting Standards Board of the ICAI,
the provident fund trust set-up by the Company is treated as a defi ned
benefit plan since the Company has to meet the interest shortfall, if
any. Accordingly, the contribution paid or payable and the interest
shortfall, if any is recognised as an expense in the period in which
services are rendered by the employee.
(ii) Gratuity
Gratuity is a post employment benefit and is in the nature of a defi
ned benefit plan. The liability recognised in the balance sheet in
respect of gratuity is the present value of the defi ned benefit/
obligation at the balance sheet date less the fair value of plan
assets, together with adjustments for unrecognised actuarial gains or
losses and past service costs. The defi ned benefit / obligation is
calculated at or near the balance sheet date by an independent actuary
using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in
actuarial assumptions are credited or charged to the profit & loss
account in the year in which such gains or losses are determined.
(iii) Compensated absences
Liability in respect of compensated absences becoming due or expected
to be availed within one year from the balance sheet date is recognised
on the basis of undiscounted value of estimated amount required to be
paid or estimated value of benefit expected to be availed by the
employees. Liability in respect of compensated absences becoming due or
expected to be availed more than one year after the balance sheet date
is estimated on the basis of an actuarial valuation performed by an
independent actuary using the projected unit credit method.
Actuarial gains and losses arising from past experience and changes in
actuarial assumptions are credited or charged to the profit & loss
account in the year in which such gains or losses are determined.
(iv) Cash settled options
Accounting value of Cash Settled Options granted to employees under the
"Employees Shadow Option Scheme" is determined on the basis of
intrinsic value representing the excess of the average market price,
during the month before the reporting date, over the exercise price of
the shadow option. The same is charged as employee benefits over the
vesting period, in accordance with Guidance Note No 18 "Share Based
Payments", issued by the ICAI.
(v) Other short term benefits
Expense in respect of other short-term benefits is recognised on the
basis of the amount paid or payable for the period during which
services are rendered by the employee.
Contribution made towards
Supernnuation Fund (funded by payments to Life Insurance Corporation of
India (LIC)) are charged to the profit & loss account on accrual
basis.
14. Leases
Assets subject to operating leases are included under fi xed assets or
current assets as appropriate. Rent (Lease) income is recognised in the
profit & loss account on a straight-line basis over the lease term.
Costs, including depreciation, are recognised as an expense in the
profit & loss account.
15. Employees stock option plan (ESOP)
Accounting value of stock options is determined on the basis of
"intrinsic value"
representing the excess of the market price on the date of grant over
the exercise price of the options granted under the "Employees Stock
Option Scheme" of the Company, and is being amortised as "Deferred
employee compensation" on a straight-line basis over the vesting period
in accordance with the SEBI (Employees Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and Guidance Note No.18 "Share
Based Payments" issued by the ICAI.
16. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount and the reduction is treated as an impairment loss and is
recognised in the profit & loss account. If at the balance sheet date
there is an indication that a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
refl ected at the recoverable amount subject to a maximum of
depreciated historical cost and is accordingly reversed in the profit
& loss account.
17. Contingent liabilities and provisions
Depending upon the facts of each case and after due evaluation of legal
aspects, claims against the Company are accounted for as either
provisions or disclosed as contingent liabilities. In respect of
statutory dues disputed and contested by the Company, contingent
liabilities are provided for and disclosed as per original demand
without taking into account any interest or penalty that may accrue
thereafter. The Company makes a provision when there is a present
obligation as a result of a past event where the outfl ow of economic
resources is probable and a reliable estimate of the amount of
obligation can be made.
Possible future or present obligations that may but will probably not
require outfl ow of resources or where the same cannot be reliably
estimated, is disclosed as contingent liability in the Financial
Statements.
18. Earning per share
Basic earning per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
are adjusted for events including a bonus issue, bonus element in a
rights issue to existing shareholders, share split, and reverse share
split (consolidation of shares).
For the purpose of calculating diluted earning per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares. The
period during which, number of dilutive potential equity shares change
frequently, weighted average number of shares are computed based on a
mean date in the quarter, as impact is immaterial on Earning per