2. Material Accounting Policy Information

2.1 Statement of Compliance

These financial statements have been prepared in accordance with the Indian Accounting Standards ('Ind
AS') prescribed under Section 133 of the Companies Act, 2013 (“the Act”) read with the Companies (Indian
Accounting Standards) Rules, as amended from time to time.

2.2 Basis of preparation

(i) Historical cost convention

These financial statements have been prepared on the historical cost basis except for freehold land
under property, plant and equipment which is carried out on revalued amount and measurement of
certain financial instruments and defined benefit plans that are measured at fair values at the end of
each reporting period, as explained in the accounting policies below. Historical Cost is generally based
on the fair value of the consideration given in exchange for goods and services.

(ii) Fair Value measurement

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, regardless of whether that price is
directly observable or estimated using another valuation technique. In measuring fair value of an asset
or liability, the Company takes into account those characteristics of the assets or liability that market
participants would take into account when pricing the asset or liability at the measurement date.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2
or 3 based on the degree to which the inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that
the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for
the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

(iii) Functional and presentational currency

These financial statements are presented in Indian Rupee (INR) which is also the functional currency.

(iv) Rounding off amounts

All amounts disclosed in the financial statements have been rounded off to the nearest two decimal
rupees in Lakhs, unless otherwise stated.

(v) Use of estimates and judgements

The preparation of financial statements in conformity with Ind AS requires the management to make
judgements, estimates and assumptions that affect the application of accounting policies and the
reported amounts of assets, liabilities, income and expenses. Actual results may differ from these
estimates. Estimates and underlying assumptions are reviewed on an ongoing basis.

In particular, information about critical judgements and estimates in applying accounting policies that
have the most significant effect on the amounts recognised in the financial statements are as below:

• Measurement of Defined Benefit Obligations and actuarial assumptions;

• Contingencies;

• Fair Value of Freehold Land at Howrah under the head “Property, Plant and Equipment”;

• Reclassification of Freehold Land at Bhandup, including the buildings thereon from “Property,
Plant and Equipment” to “Investment property”; and

• Impairment loss allowance on Financial Assets.

• Initial measurement of security deposits received under Joint Development Agreement.

Revisions to accounting estimates are recognised in the period in which the estimates are revised and
in any future period affected.

2.3 Current versus 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 the 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 the 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.

All other liabilities are classified as non-current.

The Company has deemed its operating cycle as twelve months for the purpose of current/non-current
classification.

2.4 Revenue recognition

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price.

a) Leases where the risks and rewards incidental to ownership of an asset substantially vest with
the lessor are classified as operating leases in cases where the Company is the lessor. The
Company recognises lease receipts from operating leases as income on either a straight line
basis or another systematic basis. The lessor shall apply another systematic basis if that basis
is more representative of the pattern in which benefit from the use of the underlying asset is
diminished.

b) Dividend income is recognised when the right to receive the payment 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.

c) Interest income from a financial asset is recognised when it is probable that the economic benefits
will flow to the Company and the amount of income can be measured reliably. Interest income
is accrued on a time proportion basis, by reference to the principal outstanding and the effective
interest rate ('EIR') applicable, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial assets to that asset's net carrying amount on
initial recognition.

d) In accordance with Ind AS 40, gain or loss arising on de-recognition of the Investment Property
is calculated as difference between the net disposal proceeds and the carrying amount
of the asset, which is included in the Statement of Profit and Loss in the period in which the
Investment Property is derecognised. In respect of Joint Development Agreement, an Investment
Property is derecognised at the point in time, when control of the asset is transferred as per
the Joint Development Agreement. The Company may, however, receive consideration over the
development period in the form of a revenue sharing under the JDA.

2.5 Property, Plant and Equipment

Property, Plant and Equipment are stated at cost, as except for freehold land which are carried on revalued
amount determined by an independent Registered valuer less accumulated depreciation and impairment,
if any. Costs directly attributable to acquisition and installation are capitalized until the Property, Plant and
Equipment are available for use, as intended by the management. Each part of an item of Property, Plant
and Equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

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 and the cost of the item can be measured reliably. Any cost incurred relating to settlement of
claims regarding titles to the properties is accounted for and capitalised as incurred.

When an item of Property, Plant and equipment is revalued, the carrying amount of that asset is adjusted
to the revalued amount. At the date of the revaluation, the asset is treated in one of the following ways;

(a) the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the
carrying amount of the asset.

(b) the accumulated depreciation is eliminated against the gross carrying amount of the asset.

Revaluation surplus is recorded in OCI and credited to the revaluation surplus in other equity. However,
to the extent that it reverses a revaluation deficit of the same asset previously recognised in profit or loss,

the increase is recognised in profit or loss. A revaluation deficit is recognised in the statement of profit
and loss, except to the extent that it offsets an existing surplus on the same asset recognised in the asset
revaluation reserve.

For transition to Ind AS, the Company had elected to continue with the carrying value of all of its Property,
Plant and Equipment recognised as at the transition date (i.e. 1st April, 2016) measured as per the
previously applicable Indian GAAP and use that carrying value as its deemed cost as at transition date.
Depreciation is recognised so as to write off the cost of assets (other than Freehold Land and Capital Work-
in-Progress) less their residual values, over their useful lives. The estimated useful lives, residual values
and depreciation methods are reviewed at the end of each reporting period, with the effect of any changes
in estimate being accounted for on a prospective basis.

Assets held under finance leases are depreciated/amortised over their expected useful lives on the same
basis as owned assets. However, when there is no reasonable certainty that ownership will be obtained by
the end of lease term, assets are depreciated over the shorter of lease term and their useful lives.
Depreciation has been provided on straight line method based on useful life specified in Schedule II of the
Act, after retaining residual value of 5% of the original cost of the assets.

An item of Property, Plant and Equipment is derecognised upon disposal or when no future economic
benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal
or retirement of an item of Property, Plant and Equipment is determined as the difference between the net
disposal proceeds and carrying amount of the Property, Plant and Equipment and is recognised in the
Statement of Profit and Loss.

2.6 Capital Work-In-Progress

Projects under which tangible assets are not yet ready for their intended use are carried at cost comprising
direct cost, related incidental expenses and attributable borrowing costs, if any. Depreciation is not provided
on capital work-in-progress until construction and installation are complete and the asset is ready for its
intended use.

2.7 Investment Property

Investment property is property held to earn rentals or for capital appreciation or both, rather than for;

a. Used in the production or supply of goods or services or for administrative purposes; or

b. Sale in the ordinary course of business.

As the Company is engaged in the businesses of 'Warehousing' and 'Investment and Treasury', which
involve leasing out warehousing space and investing in bank deposits, equity instruments, bonds, and
mutual funds, the Company has classified properties intended for the aforesaid activities as owner-occupied
properties. And accordingly, properties for which the Company has entered into a Joint Development
Agreement (refer to Note No. 4 and 50) have been accounted for as Investment Property.

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial
recognition, investment property are measured in accordance with Ind AS 16's requirements for cost
model. The cost of Investment Property includes the cost of replacing parts and borrowing costs for
long-term construction projects if the recognition criteria are met. Any cost incurred relating to settlement
of claims regarding titles to the properties is accounted for and capitalised as incurred. When significant
parts of the investment property are required to be placed 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.

Depreciation on Investment Property, except for freehold land, has been provided on straight line method
based on useful life specified in Schedule II of the Act, after retaining residual value of 5% of the original
cost of the assets, as stated in note 2.5.

The Company transfer a property to, or from, investment property when, and only when, there is a change
in use. A change in use occurs when the property meets, or ceases to meet, the definition of investment
property and there is evidence of the change in use. Such evidence of change in use includes, inter alia,
end of owner-occupation, for a transfer from owner-occupied property to investment property. However,
transfers between investment property and owner-occupied property do not change the carrying amount
of the property transferred.

An investment property is derecognised upon disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from disposal. Any gain or loss arising
on de-recognition of the property (calculated as difference between the net disposal proceeds and the
carrying amount of the asset) is included in the Statement of Profit and Loss in the period in which the
property is derecognised.

2.8 Intangible assets

An intangible asset is recognised when the asset is identifiable, is within the control of the Company, it is
probable that the future economic benefits that are attributable to the asset will flow to the Company and
cost of the asset can be reliably measured.

Intangible Assets with finite useful lives are carried at cost less accumulated amortisation and accumulated
impairment losses. Amortisation is recognised on a straight line basis over their estimated useful lives, if
any other method which reflects the pattern in which the assets' future economic benefits are expected
to be consumed by the entity cannot be determined reliably. The estimated useful lives and amortisation
methods are reviewed at the end of each reporting period, with the effect of any changes in estimate being
accounted for on a prospective basis.

For transition to Ind AS, the Company had elected to continue with the carrying value of all its intangible
assets recognised as at transition date, measured as per the previously applicable Indian GAAP and use
that carrying value as its deemed cost as at transition date.

2.9 Security Deposits received under Joint Development Agreement

The amount of non-interest bearing non-refundable security deposit received by the Company under the
Joint Development Agreement is initially recognised as a liability (“Liabilities under Joint Development
Agreement”), in accordance with The Conceptual Framework for Financial Reporting under Indian
Accounting Standards. The liability will be subsequently amortised in the statement of Profit and Loss in
the proportion to sale of Investment Property. In case, agreement is cancelled, entire unamortized portion
of security deposits shall be transferred to statement of profit and loss in the year of cancellation.

The amount of non-interest bearing refundable security deposit received by the Company under the Joint
Development Agreement is initially recognised as a financial liability at fair value. Further, the difference
between the fair value at initial recognition and the transaction price of the deposit is accounted for as a
liability (“Liabilities under Joint Development Agreement”), which is subsequently amortised in the statement
of Profit and Loss in the proportion to sale of Investment Property. In case, agreement is cancelled, entire
unamortized portion of security deposits shall be transferred to statement of profit and loss in the year of
cancellation.

2.10 Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity.

Financial Assets

(i) Classification

The Company classifies financial assets as subsequently measured at amortised cost, fair value
through other comprehensive income or fair value through profit or loss on the basis of its business
model for managing the financial assets and the contractual cash flow characteristics of the
financial assets.

(ii) Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets
not recognised at fair value through profit or loss, transaction costs that are attributable to the
acquisition of the financial asset. However, trade receivables that do not contain significant
financing component are measured at transaction price.

Subsequent measurements of financial assets are dependent on initial categorisation. For
impairment purposes, significant financial assets are tested on an individual basis and other
financial assets are assessed collectively in groups that share similar credit risk characteristics.

(iii) Financial assets measured at Amortised cost

Financial assets are measured at amortised cost when 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.
Such financial assets are subsequently measured at amortised cost using the EIR method.

(iv) Financial assets measured at Fair Value Through Other Comprehensive Income (FVTOCI)

Financial assets under this category are measured initially as well as at each reporting date at fair
value. Fair value movements are recognised in the other comprehensive income.

Pertaining to its non-current investments in equity instruments, the Company had exercised an
irrevocable option at the transition date to measure the subsequent changes in the fair value
through Other Comprehensive Income.

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

Financial assets under this category are measured initially as well as at each reporting date at fair
value, with all changes recognised in the Statement of Profit and Loss. The Company's current
investments in mutual funds and bonds are measured at FVTPL.

(vi) (vi) Reclassification of financial assets

When and only when the business model is changed, the Company shall reclassify all affected
financial assets prospectively from the reclassification date as subsequently measured at amortised
cost, fair value through other comprehensive income or fair value through profit or loss without
restating the previously recognised gains, losses or interest and in terms of the reclassification
principles laid down in the Ind AS relating to Financial Instruments.

(vii) De-recognition of financial assets

A financial asset is primarily derecognised when the rights to receive cash flows from the asset
have expired or the Company has transferred its rights to receive cash flows from the asset.

Financial liabilities

(i) Classification

The Company classifies all financial liabilities as subsequently measured at amortised cost,
except for financial liabilities at fair value through profit or loss.

(ii) Initial recognition and measurement

All financial liabilities are recognised initially at fair value and in case of borrowings, if any, net of
directly attributable transaction costs.

(iii) Financial liabilities measured at Fair Value Through Profit or Loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading
and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading, if they are incurred for the purpose of
repurchasing in the near term.

(iv) Financial liabilities measured at Amortised Cost

Financial liabilities are subsequently measured at amortised cost using the EIR method unless at
initial recognition, they are classified as fair value through profit or loss.

(v) Trade and other payables

A payable is classified as 'trade payable' if it is in respect of the amount due on account of goods
purchased or services received in the normal course of business. These amounts represent
liabilities for goods and services provided to the Company prior to the end of financial year,
which are unpaid. They are recognised initially at their fair value and subsequently measured at
amortised cost using the EIR method.

(vi) De-recognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires. The difference between the carrying amount of a financial liability that
has been extinguished or transferred to another party and the consideration paid, including any
non-cash assets transferred or liabilities assumed, is recognised in the Statement of Profit and
Loss as other income or finance costs.

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, or to realise the assets and settle the liabilities simultaneously.

2.11 Impairment
Financial assets

The Company recognises loss allowances, if any, using the expected credit loss ('ECL') model for the
financial assets which are not fair valued. Loss allowance for trade receivables with no significant financing
component is measured at an amount equal to lifetime ECL. For all other financial assets, ECL is measured
at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from
initial recognition, in which case, those are measured at lifetime ECL. The amount of expected credit
losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is
required to be recognised, is recognised as an impairment loss or gain in the Statement of Profit and Loss.

Non-financial assets

Non-financial assets are evaluated for recoverability whenever events or changes in circumstances
indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e., the higher of the fair value less cost to sell and the value-in-use) is determined
on an individual basis unless the asset does not generate cash flows that are largely independent of those
from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit
(CGU) to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognised in the Statement of Profit
and Loss is measured by the amount by which the carrying value of the asset exceeds the estimated
recoverable amount of the asset. An impairment loss is reversed in the Statement of Profit and Loss if there
has been a change in the estimates used to determine the recoverable amount. The carrying amount of
the asset is increased to its revised recoverable amount, provided that this amount does not exceed the
carrying amount that would have been determined (net of any accumulated amortisation or depreciation)
had no impairment loss been recognised for the asset in prior years.

2.12 Leases

a) Arrangements where the Company is the lessee

The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration. To assess whether a contract conveys the right to control the use of an
identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii)
the Company has substantially all of the economic benefits from use of the asset through the period of the
lease and (iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognises a Right-of-use Asset and a
corresponding Lease Liability for all lease arrangements in which it is a lessee, except for leases with a
term of twelve months or less ('short-term leases') and low value leases. For these short-term and low value
leases, the Company recognises the rent as an operating expense in the Statement of Profit and Loss.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the
lease term. Right-of-use Assets and Lease Liabilities includes these options when it is reasonably certain
that they will be exercised.

The Right-of-use Assets are initially recognised at cost, which comprises the initial amount of the lease
liability i.e. present value of future lease payments adjusted for any lease payments made at or prior
to the commencement date of the lease plus any initial direct costs less any lease incentives. They
are subsequently measured at cost less accumulated depreciation and impairment losses. The lease
payments are discounted using the incremental borrowing rates. Interest on lease liability is recognised
using the effective interest method. Lease liabilities are subsequently increased to reflect the accretion of

interest and reduced for the lease payments made. Lease liabilities are remeasured with a corresponding
adjustment to the related Right-of-use asset if the Company changes its assessment if whether it will
exercise an extension or a termination option.

Right-of-use Assets are depreciated from the commencement date on a straight-line basis over the shorter
of the lease term and useful life of the underlying asset.

b) Arrangements where the Company is the lessor

Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the
terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract
is classified as a finance lease. All other leases are classified as operating leases.

The Company's significant leasing arrangements are in respect of operating leases for warehouses that
are cancellable in nature. The lease rentals under such agreements are recognised in the Statement of
Profit and Loss as per the terms of the lease.

2.13 Employee benefits

a) Short-term employee benefits

Short-term employee benefits are recognised as an expense at an undiscounted amount in the Statement
of Profit and Loss of the year in which the related services are rendered.

b) Post-employment benefits

Defined Contribution Plans

Employee benefits in the form of Provident Fund and Employees State Insurance are defined contribution
plans. The Company recognises contribution payable to a defined contribution plan as an expense, when an
employee renders the related service. If the contribution payable to the scheme for services received before
the balance sheet date exceeds the contribution already paid, the contribution payable to the scheme is
recognised 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, the excess is recognised as an asset
to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.

Defined Benefit Plans

i) Gratuity liability, Leave encashment liability and Pension Fund liability are defined benefit plans. The
cost of providing benefits under the defined benefit plans is determined using the projected unit credit
method, with actuarial valuations being carried out at the end of each annual reporting period.

ii) Re-measurements of the net defined benefit liability/asset comprise:

a) actuarial gains and losses;

b) the return on plan assets, excluding amounts included in net interest on the net defined benefit
liability/asset; and

c) any change in the effect of the asset ceiling, excluding amounts included in net interest on the net
defined benefit liability/asset.

iii) Re-measurements of net defined benefit liability/asset are charged or credited to Other Comprehensive
Income.

c) Termination benefits

Expenditure on account of Voluntary Retirement Scheme are charged to Statement of Profit and Loss as
and when incurred.

2.14 Taxes on Income

Income tax expense comprises of current tax and deferred tax. It is recognised in the Statement of Profit
and Loss, except to the extent that it relates to items recognised directly in Equity or Other Comprehensive
Income. In such cases, the tax is recognised directly in Equity or in Other Comprehensive Income.

Current tax

Current tax is the amount of tax payable on the taxable income for the year, determined in accordance with
the provisions of the Income Tax Act, 1961.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities
in the balance sheet and their corresponding tax bases.

Deferred tax liabilities are generally recognised for all taxable temporary differences.

Deferred tax assets are generally recognised for all deductible temporary differences, unused tax credits
and unused tax losses being carried forward, to the extent that it is probable that taxable profits will be
available in future against which these can be utilised.Such deferred tax assets and liabilities are not
recognised if the temporary difference arises from initial recognition (other than in a business combination)
of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial
recognition of goodwill.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part
of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in
which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted
or substantively enacted by the end of the reporting period.

Minimum Alternate Tax (MAT)

MAT Credit 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 i.e. the period for which MAT credit is
allowed to be carried forward. In the year in which the MAT Credit becomes eligible to be recognised as an
asset in accordance with the recommendations contained in the Guidance Note issued by the Institute of
Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and
Loss and shown as MAT Credit Entitlement. The Company reviews the same at each Balance Sheet date
and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing
evidence to the effect that the Company will pay normal income tax during the specified period.