A. Business combination
Transaction costs are expensed as incurred, except to
the extent related to the issue of debt or equity securities.
The consideration transferred does not include amounts
related to the settlement of pre-existing relationships
with the acquiree. Such amounts are recognised in the
Standalone Statement of Profit and Loss.
Common control
Business combinations involving entities that are
ultimately controlled by the same parties before and
after the business combination are considered as
Common control entities. Common control transactions
are accounted using pooling of interest method. The
financial statements in respect of prior periods have been
restated from the period that the Transferor Company
became a subsidiary of the Transferee Company where
the assets and liabilities of the transferee are recorded at
their existing carrying values, the identity of reserves of
the transferee Company is preserved.
B. Revenue recognition
(I) Revenue from operations:
i. Hospitality business
Revenue is measured based on the
consideration specified in a contract with a
customer. The Company recognises revenue
when it transfers control over a good or service
to a customer. Revenue from sales of goods or
rendering of services is net of Indirect taxes,
returns and variable consideration on account
of discounts and schemes offered by the
Company as part of the contract.
Revenue from operations
Rooms, Food and Beverage and banquet
services: Revenue is recognised at the
transaction price that is allocated to the
performance obligation. Revenue includes
room revenue, food and beverage sale and
banquet services which is recognised once the
rooms are occupied, food and beverages are
sold and banquet services have been provided
as per the contract with the customer.
Rental income
Revenue is recognised upon rendering of
the service, provided pervasive evidence
of an arrangement exists, tariff / rates are
fixed or are determinable and collectability is
reasonably certain.
Revenue recognised is net of indirect taxes,
returns and discounts.
ii. Real estate development and sale
The Company derives revenues from sale of
properties comprising of residential units.
The Company recognises revenue when it
determines the satisfaction of performance
obligations at a point in time i.e. Completed
contract method of accounting as per IND AS
115. Company recognise revenue when all the
below conditions get satisfied: (a) Occupancy
certificate for the project is received by the
Company; (b) Possession is either taken by
the customer or offer letter for possession
along with invoice for the full amount of
consideration is issued to the customer; (c)
substantial consideration has been received
and the Company is reasonable certain that
the remaining consideration will flow to the
entity; (d) No significant uncertainty exists
regarding the amount of consideration. The
revenue is measured in an amount that reflects
the consideration which the Company expects
to receive in exchange for those products.
iii. Rental income
Revenues from property leased out under an
operating lease are recognised over the tenure
of the lease / service agreement on a straight
line basis over the term of the lease and
except where there is uncertainty of ultimate
collection.
Income from other services
Maintenance income is recognised as and
when related expenses are incurred.
Income from ancillary services are recognised
as and when the services are rendered.
(II) Other Income:
i. Dividend income
Dividend income is recognised only when
the right to receive the same is established,
it is probable that the economic benefits
associated with the dividend will flow to the
Company, and the amount of dividend can be
measured reliably.
ii. Interest income
For all financial instruments measured at
amortised cost, interest income is recorded
using the effective interest rate (EIR), which
is the rate that discounts the estimated
future cash payments or receipts through the
expected life of the financial instruments or a
shorter period, where appropriate, to the net
carrying amount of the financial assets on
initial recognition. Interest income is included
in other income in the Standalone Statement
of Profit or Loss.
iii. Share in profit/loss of Limited Liability
Partnership (LLP)
Share of profit/loss from LLP is recognised
based on the financial information/ statements
provided and which is recorded under Partner's
Current account
C. Foreign currency
Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates at the
dates of the transactions. Foreign exchange gains and
losses resulting from the settlement of such transactions
and from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange
rates are generally recognised in Standalone Statement
of Profit or Loss.
Foreign exchange differences regarded as an adjustment
to borrowing costs are presented in the Standalone
Statement of Profit and Loss, within finance costs. All
other foreign exchange gains and losses are presented
in the Standalone Statement of Profit and Loss on a net
basis within other gains / (losses).
Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated using
the exchange rates at the dates of transactions. Non¬
monetary items that are measured at fair value in a
foreign currency shall be translated using the exchange
rates at the date when the fair value was measured.
D. Employee benefits
i. Short-term employee benefits
All employee benefits payable wholly within twelve
months of rendering services are classified as short¬
term employee benefits. Short-term employee
benefits are expensed as the related service is
provided. A liability is recognised for the amount
expected to be paid if the Company has a present
legal or constructive obligation to pay this amount
as a result of past service provided by the employee
and the obligation can be estimated reliably.
Short-term benefits such as salaries, wages, short¬
term compensation absences, etc., are determined
on an undiscounted basis and recognised in the
period in which the employee renders the related
service.
ii. Post-employment benefits
Defined contribution plans
The defined contribution plans i.e. provident fund
(administered through Regional Provident Fund
Office) and employee state insurance corporation
are post-employment benefit plans under which
a Company pays fixed contributions and will have
no legal and constructive obligation to pay further
amounts. Obligations for contributions to defined
contribution plans are recognised as an employee
benefit expense in the Statement of Profit and
Loss when they are due. Prepaid contributions are
recognised as an asset to the extent that a cash
refund or a reduction in future payments is available.
Defined benefit plans
A defined benefit plan is a post-employment benefit
plan other than a defined contribution plan. The
Company's net obligation in respect of defined
benefit plans is calculated separately for each plan
by estimating the amount of future benefit that
employees have earned in the current and prior
periods, discounting that amount and deducting the
fair value of any plan assets.
The following post - employment benefit plans are
covered under the defined benefit plans:
• Gratuity
The Company follows unfunded gratuity except
for one of its Hotel division (Westin, Hyderabad)
where fund is maintained with Life Insurance
Corporation of India. The Company provides
for gratuity, a defined benefit retirement plan
covering eligible employees. The Gratuity
Plan provides a lump-sum payment to vested
employees at retirement, death, incapacitation
or termination of employment, of an amount
based on the respective employee's salary and
the tenure of employment with the Company.
The calculation of defined benefit obligations
is performed annually by a qualified actuary
using the projected unit credit method. The
retirement benefit obligation recognised in the
balance sheet represents the actual deficit
or surplus of the Company's defined benefit
plans.
When the calculation results in a potential asset
for the Company, the recognised asset is limited
to the present value of economic benefits available
in the form of any future refunds from the plan or
reductions in future contributions to the plan.
The Company determines the net interest expense
(income) on the net defined benefit liability (asset)
for the period by applying the discount rate used
to measure the defined benefit obligation at the
beginning of the annual period to the then-net
defined benefit liability (asset), taking into account
any changes in the net defined benefit liability
(asset) during the period as a result of contributions
and benefit payments. Net interest expense and
other expenses related to defined benefit plans are
recognised in the Statement of Profit and Loss.
When benefits of a plan are changed or when a plan is
curtailed, the resulting change in benefit that relates
to past service or the gain or loss on curtailment is
recognised immediately in the Statement of profit
and loss. The Company recognises gains and losses
on the settlement of a defined benefit plan when
the settlement occurs.
Remeasurements, comprising of actuarial gains and
losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net
defined benefit (excluding amounts included in
net interest on the net defined benefit liability), are
recognised immediately in the balance sheet with a
corresponding debit or credit to retained earnings
through OCI in the period in which they occur. Re¬
measurements are not reclassified to profit or loss
in subsequent periods.
i. Terminal Benefits:
All terminal benefits are recognised as an
expense in the period in which they are
incurred.
ii. Other employee benefits-compensated
absences
The Company provides for encashment of
leave or leave with pay subject to certain rules.
The employees are entitled to accumulate
leave subject to certain limits for future
encashment / availment. The Company makes
a provision for compensated absences based
on an independent actuarial valuation carried
out at the end of the year. Actuarial gains and
losses are recognised in the Statement of
Profit and Loss
iii. Employee stock option expense
The grant date fair value of equity settled
share-based payment awards granted to
employees is recognised as an employee
expense, with a corresponding increase in
equity, over the period that the employees
unconditionally become entitled to the awards.
The amount recognised as expense is based
on the estimate of the number of awards for
which the related service and non-market
vesting conditions are expected to be met,
such that the amount ultimately recognised as
an expense is based on the number of awards
that do meet the related service and non¬
market vesting conditions at the vesting date.
When the terms of an equity-settled award are
modified, the minimum expense recognised
is the expense had the terms had not been
modified, if the original terms of the award are
met. An additional expense is recognised for
any modification that increases the total fair
value of the share-based payment transaction,
or is otherwise beneficial to the employee as
measured at the date of modification. Where
an award is cancelled by the entity or by the
counterparty, any remaining element of the fair
value of the award is expensed immediately
through the Restated Consolidated Statement
of Profit and Loss. The dilutive effect of
outstanding options is reflected as additional
share dilution in the computation of diluted
earnings per share.
E. Income-tax
Income-tax expense comprises current and deferred tax.
It is recognised in net profit in the Standalone Statement
of Profit or Loss except to the extent that it relates to
items recognised directly in equity or in the Other
Comprehensive Income (OCI).
i. Current tax
Current tax is the amount of tax payable
(recoverable) in respect of the taxable profit / (tax
loss) for the year determined in accordance with
the provisions of the Income-tax Act, 1961.
Taxable profit differs from 'profit before tax' as
reported in the Standalone Statement of Profit and
Loss because of items of income or expenses that
are taxable or deductible in other years & items that
are never taxable or deductible. Current income tax
for current and prior periods is recognised at the
amount expected to be paid to or recovered from
the tax authorities, using tax rates and tax laws
that have been enacted or substantively enacted
at the reporting date. Provision for tax liabilities
require judgements on the interpretation of tax
legislation, developments in case laws and the
potential outcomes of tax audits and appeals which
may be subject to significant uncertainty. Therefore
the actual results may vary from expectations
resulting in adjustments to provisions, the valuation
of deferred tax assets and therefore the tax charge
in the Statement of Profit and Loss.
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.
Current tax assets and liabilities are offset only if,
the Company:
a) has a legally enforceable right to set off the
recognised amounts; and
b) intends either to settle on a net basis, or
to realise the asset and settle the liability
simultaneously.
ii. Deferred tax
Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and
the amounts used for taxation purposes. Deferred
tax is not recognised for:
• temporary differences on the initial recognition
of assets or liabilities in a transaction that is
not a business combination and that (i) affects
neither accounting nor taxable profit or loss;
and (ii) does not give rise to equal taxable and
and deductible temporary differences.
• temporary differences related to investments
in subsidiaries and associates to the extent
that the Company is able to control the timing
of the reversal of the temporary differences
and it is probable that they will not reverse in
the foreseeable future.
Deferred tax assets are recognised for unused tax
losses, unused tax credits and deductible temporary
differences to the extent that it is probable that
future taxable profits will be available against
which they can be used. Deferred tax assets are
reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the
related tax benefit will be realised; such reductions
are reversed when the probability of future
taxable profits improves. Unrecognised deferred
tax assets are reassessed at each reporting date
and recognised to the extent that it has become
probable that future taxable profits will be available
against which they can be used.
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. Taxes relating to items recognised directly in
equity or OCI is recognised in equity or OCI and not
in the Standalone Statement of Profit and Loss.
The measurement of deferred tax reflects the tax
consequences that would follow from the manner
in which the Company expects, at the reporting
date, to recover or settle the carrying amount of its
assets and liabilities.
Deferred tax assets and liabilities are offset only if:
a) the entity has a legally enforceable right to
set off current tax assets against current tax
liabilities; and
b) the deferred tax assets and the deferred tax
liabilities relate to income taxes levied by the
same taxation authority on the same taxable
entity.
Minimum Alternative Tax ("MAT”) credit forming part
of deferred tax asset is recognised as an asset only
when and to the extent there is convincing evidence
that the Company will pay normal income tax during
the specified period. Such asset is reviewed at each
Balance Sheet date and the carrying amount of the
MAT credit asset is written down to the extent there
is no longer a reasonable certainty to the effect that
the Company will pay normal income tax during the
specified period.
A new Section 115BAA was inserted in the Income
Tax Act, 1961, by The Government of India on
September 20, 2019 vide the Taxation Laws
(Amendment) Ordinance 2019 which provides
an option to companies for paying income tax at
reduced rates in accordance with the provisions/
conditions defined in the said section.
F. Inventories
Hospitality
Stocks of stores, food and beverages are carried at the
lower of cost and net realisable value. Net realisable
value is the estimated selling price in the ordinary course
of business less the estimated costs of completion and
selling expenses. Cost of inventories comprises of all
costs of purchase and other costs incurred in bringing
the inventories to their present condition and location.
Cost is arrived at by the weighted average cost method.
Stocks of stores and spares and operating supplies (viz.
crockery, cutlery, glassware and linen) once issued to
the operating departments are considered as consumed
and expensed to the Standalone Statement of Profit and
Loss. Unserviceable/damaged/discarded stocks and
shortages are charged to the Standalone Statement of
Profit and Loss.
Real Estate Development (Residential Flats)
Property is valued at lower of cost and net realisable value.
Cost comprises of land, development rights, materials,
services, and other expenses attributable to the projects.
Costs of construction / development (including cost of
land) incurred is charged to the Standalone Statement
of Profit and Loss proportionate to area sold and the
balance cost is carried over under inventories as part of
property under development.
Cost of construction material (including unutilised project
materials) at site is computed by the weighted moving
average method and carried at lower of cost and Net
Realisable value.
G. Property, plant and equipment
i. Recognition and measurement
The cost of an item of property, plant and equipment
shall be recognised as an assets if, and only if it is
probable that future economic benefits associated
with the item will flow to the Company and the cost
of the items can be measured reliably
Property, plant and equipment are stated at cost
less accumulated depreciation / amortisation
and impairment losses, if any except for freehold
land which is not depreciated. Cost comprises
of purchase price and any attributable cost such
as duties, freight, borrowing costs, erection and
commissioning expenses incurred in bringing the
asset to its working condition for its intended use.
If significant parts of an item of property, plant and
equipment have different useful lives, then they
are accounted and depreciated for as separate
items (major components) of property, plant and
equipment. Any gain or loss on disposal of an item
of property, plant and equipment is recognised in
the Standalone Statement of Profit and Loss.
Properties in the course of construction for
production, supply or administration purposes
are carried at cost, less any impairment loss
recognised. Cost includes professional fees and,
for qualifying assets borrowing costs capitalised in
accordance with the Company's accounting policy.
Such properties are classified to the appropriate
categories of Property, Plant & Equipment when
completed and are ready for intended use.
Depreciation on these assets, on the same basis as
other property assets, commences when the assets
are ready for their intended use.
On transition to Ind AS, the carrying values of all
the property, plant and equipment (other than
Freehold Land) under the previous GAAP have been
considered to be the deemed cost under Ind AS.The
Company has chosen to reflect the fair value of all
freehold land as their respective deemed cost.
ii. Subsequent expenditure
Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
associated with the expenditure will flow to the
Company and the cost of the item can be measured
reliably.
iii. Depreciation
Depreciation is charged to the Standalone
Statement of Profit and Loss so as to expense
the cost of assets (other than freehold land and
properties under construction) less their residual
values over their useful lives, using the straight line
method, as per the useful life prescribed in Schedule
II to the Companies Act, 2013 except in respect of
the following categories of assets in whose case
the life of the assets had been re-assessed as
under based on technical evaluation, taking into
account the nature of the asset, the estimated
usage of the asset, the operating conditions of
the asset, past history of replacement, anticipated
technological changes, manufacturers' warranties
and maintenance support, etc. :
Building interiors and accessories comprise of the
interiors of the Hotel building which will undergo
renovation, are depreciated on a SLM basis over
a period of 10 years, which in management's view,
represents the useful life of such assets.
Building constructed on leasehold land are
amortised from the date of commencement of
commercial operations over the balance lease
period.
Leasehold Improvements are depreciated over the
primary period of lease.
Temporary structures and assets costing ' 5,000/-
or less are depreciated at 100% in the year of
capitalisation.
Freehold land is measured at fair value as per Ind
AS 113 with the resultant impact being accounted
for in the reserves. The fair value of the Company's
freehold land parcels as at April 01, 2016 have been
arrived at on the basis of a valuation carried out by
an independent registered appraiser not related to
the Company with appropriate qualifications and
relevant experience in the valuation of properties
at relevant locations. The fair value was determined
based on a combination of Discounted Cash Flow
method and Residual method.
The assets' useful lives and residual values are
reviewed at the Balance Sheet date and the effect
of any changes in estimates are accounted for on a
prospective basis.
H. Intangible assets
i. Recognition and measurement
Intangible assets comprises of trademarks and
computer software and are measured at cost
less accumulated amortisation and accumulated
impairment loss, if any.
On transition to Ind AS, the carrying values of all
the Intangible Assets under the previous GAAP have
been considered to be the deemed cost under Ind
AS.
ii. Subsequent expenditure
Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in
the specific asset to which it relates and the cost of
the item can be measured reliably.
iii. Amortisation
Amortisation is calculated over the cost of the
asset, or other amount substituted for cost, less
its residual value. Amortisation is recognised in
the Standalone Statement of Profit or Loss on a
straight-line basis over the estimated useful lives
of intangible assets, from the date that they are
available for use, since this most closely reflects
the expected pattern of consumption of the future
economic benefits embodied in the asset.
Intangible assets are amortised on straight-line
method over estimated useful life of 4 years, which
in management's view represents the economic
useful life of these assets.
Intangible assets with indefinite useful lives and
intangible assets not yet available for use are tested
for impairment at least annually, and whenever there
is an indication that the asset may be impaired.
Amortisation methods, useful lives and residual
values are reviewed at each reporting date and
adjusted if appropriate prospectively.
The carrying values of assets / cash generating
units at each balance sheet date are reviewed for
impairment if any indication of impairment exists.
If the carrying amount of the assets exceed the
estimated recoverable amount, an impairment is
recognised for such excess amount. The impairment
loss is recognised as an expense in the Standalone
Statement of Profit and Loss, unless the asset
is carried at revalued amount, in which case any
impairment loss of the revalued asset is treated as
a revaluation decrease to the extent a revaluation
reserve is available for that asset.
I. Goodwill
Measurement
Goodwill arising on the acquisition of subsidiaries is
measured at cost less accumulated impairment losses.
Goodwill on business combination is not amortised but
it is tested for impairment annually or more frequently if
events or changes in circumstances indicate that it might
be impaired.
The recoverable amount is the greater of the net selling
price and their value in use. Value in use is arrived at by
discounting the future cash flows to their present value
based on an appropriate discount factor.
When there is indication that an impairment loss
recognised for an asset (other than a revalued asset)
in earlier accounting periods which no longer exists or
may have decreased, such reversal of impairment loss
is recognised in the Standalone Statement of Profit and
Loss, to the extent the amount was previously charged to
the Standalone Statement of Profit and Loss. In case of
revalued assets, such reversal is not recognised.
J. Investment property and investment property under
construction
(a) Recognition and measurement
Investment property is property held either to earn
rental income or for capital appreciation or for both,
but not for sale in the ordinary course of business,
use in the production or supply of goods or
services or for administrative purposes. Upon initial
recognition, an investment property is measured at
cost. Subsequent to initial recognition, investment
property is measured at cost less accumulated
depreciation and accumulated impairment losses, if
any.
Investment property is derecognised either when
it has been disposed of or when it is permanently
withdrawn from use and no future economic benefit
is expected from its disposal. Any gain or loss on
disposal of investment property (calculated as the
difference between the net proceeds from disposal
and the carrying amount of the item) is recognised
in profit or loss.
On transition to Ind AS, the carrying values of all
the Investment Property (other than Freehold Land)
under the previous GAAP have been considered to
be the deemed cost under Ind AS. The Company has
chosen to reflect the fair value of all freehold land as
their Investment property and investment property
under construction represents the cost incurred in
respect of areas retail block and commercial office
space. Property under construction is accounted
for as investment property under construction until
construction or development is complete.
Direct expenses like cost of land, including related
transaction costs, site labour cost, material used
for project construction, project management
consultancy, costs for moving the plant and
machinery to the site and general expenses incurred
specifically for the respective project like insurance,
design and technical assistance, and construction
overheads are taken as the cost of the project.
Investment properties are carried individually at
cost less accumulated depreciation and impairment,
if any. Investment properties under construction are
carried individually at cost less impairment, if any.
Impairment of investment property is determined in
accordance with the policy stated for impairment of
assets.
(b) Subsequent expenditure
Subsequent expenditure is capitalised only if it
is probable that the future economic benefits
associated with the expenditure will flow to the
entity and the cost of the item can be measured
reliably.
(c) Depreciation
Depreciation on investment property has been
provided pro rata for the period of use by the
Straight Line Method. The useful lives of Investment
Property is estimated by management and the same
is as prescribed in Schedule II to the Act, except in
respect of the following categories of assets, where
the life of these assets differs from Schedule II.
Any gain or loss on disposal of an investment
property is recognised in Standalone Statement of
Profit and Loss.
The fair values of investment property are disclosed
in the notes. Fair values are determined by an
independent valuer who holds a recognised and
relevant professional qualification and has recent
experience in the location and category of the
investment property being valued.
Investment properties are tested for impairment
periodically including when events occur or changes
in circumstances indicate that the recoverable
amount of the cash generating unit is less than its
carrying value. The recoverable amount of cash
generating units is higher of value-in-use and fair
value less cost to sell.
K. Investments
The Company reviews its carrying value of investments
carried at cost or amortised cost annually, or more
frequently when there is indication for impairment. If the
recoverable amount is less than its carrying amount, the
impairment loss is accounted for.
L. Borrowing costs
General and specific borrowing costs directly attributable
to the acquisition or construction of qualifying assets
that necessarily takes substantial period of time to
get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets
are substantially ready for their intended use or sale.
Borrowing costs consist of interest and other costs that
the Company incurs in connection with the borrowing of
funds.
Borrowing costs that are not directly attributable to
a qualifying asset are recognised in the Standalone
Statement of Profit and Loss using the effective interest
method.
M. Segment reporting
As per IND AS 108 Operating Segments, if a financial
report contains both the Consolidated financial
statements of a parent that is within the scope of IND
AS 108 as well as the parent's Standalone financial
statements, segment information is required only in
the Consolidated financial statements. Accordingly,
information required to be presented under IND AS 108
Operating Segments has been given in the consolidated
financial statements.
N. Financial Instruments
1. Financial assets
(a) Recognition and initial measurement
Financial assets are recognised when, and
only when, the Company becomes a party
to the contractual provisions of the financial
instrument. The Company determines the
classification of its financial assets at initial
recognition.
When financial assets are recognised initially,
they are measured at fair value, plus, in the
case of financial assets not at fair value through
profit or loss directly attributable transaction
costs. Transaction costs of financial assets
carried at fair value through profit or loss
are expensed in the Statement of Profit and
Loss. However, trade receivables that do not
contain a significant financing component are
measured at transaction price.
Classification and subsequent measurement
The Company classifies its financial assets
into a) financial assets measured at amortised
cost, and b) financial assets measured at
fair value through profit or loss (FVTPL).
Management determines the classification
of its financial assets at the time of initial
recognition or, where applicable, at the time of
reclassification.
(i) Financial assets measured at amortised
costs
A financial asset is classified at amortised
costs if it is held within a business model
whose objective is to a) hold financial
asset in order to collect contractual cash
flows and b) the contractual terms of
the financial asset give rise on specific
dates to cash flows that are solely
payments of principal and interest on the
principal amount outstanding. After initial
measurement, such financial assets are
subsequently measured at amortised
cost using effective interest rate method
(EIR). Amortised cost is arrived at after
taking into consideration any discount
on fees or costs that are an integral part
of the EIR. The amortisation of such
interests forms part of finance income
in the Standalone Statement of Profit
and Loss. Any impairment loss arising
from these assets are recognised in the
Standalone Statement of Profit and Loss.
(ii) Financial assets measured at fair value
through profit and loss (FVTPL)
This is a residual category for
classification. Any asset which do not
meet the criteria for classification as at
amortised cost, is classified as FVTPL.
Financial assets at fair value through
profit or loss are measured at fair value,
and changes therein are recognised in
the Standalone Statement of Profit or
Loss.
(iii) Financial assets measured at fair value
through other comprehensive income
(FVOCI)
- Debt investments at FVOCI: These
assets are subsequently measured
at fair value. Interest income under
the effective interest method,
foreign exchange gains and losses
and impairment are recognised
in Standalone Statement of Profit
and Loss. Other net gains and
losses are recognised in OCI. On
derecognition, gains and losses
accumulated in OCI are reclassified
to Standalone Statement of Profit
and Loss.
- Equity investments at FVOCI:
These assets are subsequently
measured at fair value. Dividends
are recognised as income in
Standalone Statement of Profit and
Loss unless the dividend clearly
represents a recovery of part of the
cost of the investment. Other net
gains and losses are recognised
in OCI and are not reclassified to
Standalone Statement of Profit and
Loss.
(b) Derecognition
The Company derecognises a financial asset
when the contractual rights to the cash
flows from the asset expire, or it transfers
the rights to receive the contractual cash
flows on the financial asset in a transaction
in which substantially all the risks and
rewards of ownership of the financial asset
are transferred. Any interest in transferred
financial assets that is created or retained
by the Company is recognised as a separate
asset and associated liability for any amounts
it may have to pay.
(c) 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 on the following financial assets and
credit risk exposure:
a) Financial assets that are debt instruments,
and are measured at amortised cost e.g.,
loans, debt securities, deposits, and
bank balance.
b) Trade receivables- The Company follows
'simplified approach' for recognition
of impairment loss allowance on trade
receivables which do not contain a
significant financing component. The
application of simplified approach
does not require the Company to
track changes in credit risk. Rather, it
recognises impairment loss allowance
based on lifetime ECLs at each reporting
date, right from its initial recognition.
2. Financial liabilities
(a) Recognition, measurement and classification
Financial liabilities are classified as either held
at a) fair value through profit or loss, or b)
at amortised cost. Management determines
the classification of its financial liabilities
at the time of initial recognition or, where
applicable, at the time of reclassification. The
classification is done in accordance with the
substance of the contractual arrangement
and the definition of a financial liability and
an equity instruments. All financial liabilities
are recognised initially at fair value and, in the
case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Company's financial liabilities at amortised
cost includes loan and borrowings, interest
free security deposit, interest accrued but not
due on borrowings, Retention money payable,
trade and other payables. Amortised cost is
calculated by taking into account any discount
or premium on acquisition and transactions
costs. Subsequent to initial recognition these
financial liabilities are measured at amortised
cost using the effective interest method.
The Company's financial liabilities at fair value
through profit or loss includes derivative
financial instruments.
(a) Financial guarantee contracts
The Company on a case to case basis elects
to account for financial guarantee contracts
as a financial instruments or as an insurance
contracts as specified in Ind AS 109 on Financial
Instruments and Ind AS 104 on Insurance
contracts. The Company has regarded all its
financial guarantee contracts as insurance
contracts. At the end of each reporting period,
the Company performs a liability adequacy
test, (i.e. it assesses the likelihood of a pay¬
out based on current undiscounted estimates
of future cash flows), and any deficiency is
recognised in Standalone Statement of Profit
and Loss.
Derecognition
The Company derecognises financial
liabilities when its contractual obligations are
discharged or cancelled or have expired.
3. Offsetting of financial assets and financial liabilities
Financial assets and liabilities are offset and the
net amount presented in the Standalone statement
of financial position when, and only when, the
Company has legal right to offset the amounts and
intends either to settle on a net basis or to realise
the asset and settle the liability simultaneously.
4. Derivative financial instruments
The Company uses derivative financial instruments,
such as foreign exchange forward contracts,
interest rate swaps and currency options to manage
its exposure to interest rate and foreign exchange
risks. 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 to their fair value. The
resulting gain/loss is recognised in Standalone
Statement of Profit and Loss immediately at the end
of each reporting period. Derivatives are carried as
financial assets when the fair value is positive and
as financial liabilities when the fair value is negative.
The Company does not designate the derivative
instrument as a hedging instrument.
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