2. MATERIAL 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(ab).
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 material 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
• It does not have the right at the end of the
reporting period to defer 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:
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.
* In 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
eligible for capitalisation.
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 the
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. Transfer amongst investment property,
owner-occupied property and inventory do not
change the carrying amount of the property
transferred and they do not change the cost of
property for measurement or disclosure purpose.
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:
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 arrangement’.
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) 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 the 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 the 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 the 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.
Asset acquisitions and business combinations
Where asset 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(ac).
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 including development
agreements as and when the control
passes on to the customer upon completion
of performance obligations and intimation
to the customers thereof.
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.
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 is
accounted for on an accrual basis except
in cases where ultimate collection is
considered doubtful.
Other income
Income from 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 (i.e. transfers
contract of the related goods or services to
the customer).
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.
Incremental cost of obtaining contract
The Company pays commissions/ brokerage
for each contract, wherever applicable, that
they obtain for sale of constructed properties.
These incremental cost of obtaining a contract
with a customer is recognised as an asset if
the Company expects to recover those costs
subject to other conditions as stipulated in Ind
AS 115 are met. These costs are charged to
the Statement of Profit and Loss when control
of goods and services are transferred to the
customer.
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 wherever appropriate.
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.
• When the deferred tax liability arises from
the initial recognition of goodwill or an
asset or liability in a transaction that is
not a business combination and, at the
time of the transaction, affects neither the
accounting profit nor taxable profit or loss
and does not give rise to equal taxable and
deductible temporary differences.
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 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/ Code of Social Security, 2020. 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. Services cost comprises of
current service cost, past service cost, gain
and loses on curtailments or plan amendment
and non-routine amendments. 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. Since, the Company does
not have any control over leave availment, the
same is considered as current.
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 the statement of profit and
loss on accrual basis.
o) Share-based payments
Employee Stock Option Plan (Equity Settled)
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.
Long term incentive plan (cash settled)
Long-Term Incentive Program (‘LTIP’), referred to as
Phantom Stock, is granted to eligible employees
as determined by the Board of Directors.
These awards are cash-settled and are initially
measured at fair value at the grant date. The
liability is subsequently remeasured at fair value
at each reporting period until settlement. The fair
value of Phantom Stock granted is recognised as
an employee benefits expense in the Statement
of Profit and Loss over the vesting period, during
which the relevant performance and/ or service
conditions are satisfied by the employees.
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.
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