3 A) Material Accounting Policies:
a) Basis of measurement:
The Financial Statements have been prepared on historical
cost basis, except the following:
• Certain financial assets and liabilities that is measured
at fair value.
• Defined benefit plans - plan assets measured at fair
value less present value of defined obligations.
• Share Based Payments Measured at Fair Value.
b) Use of Estimates:
The preparation of the financial statements requires
management to make estimates, judgements and
assumptions that affect the reported balances of assets
and liabilities, disclosure of contingent liabilities as on
the date of financial statements and reported amounts of
income and expenses during the period. Uncertainty about
these assumptions and estimates could result in outcomes
that require a material adjustment to the carrying amount
of assets or liabilities affected in future periods.
The key assumptions concerning the future and other
key sources of estimation uncertainty at the reporting
date that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year are described in Notes No.
4. The Company based its assumptions and estimates on
parameters available when the financial statements were
prepared. Existing circumstances and assumptions about
future developments, however, may change due to market
changes or circumstances arising that are beyond the
control of the Company. Such changes are reflected in the
assumptions when they occur.
c) Property, Plant and Equipment:
Freehold land is carried at historical cost. Capital work
in progress, and all other items of property, plant and
equipment are stated at historical cost net of accumulated
depreciation and accumulated impairment losses, if any.
Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Such cost
includes the costs for long-term construction projects if the
recognition criteria are met.
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. The carrying
amount of any component accounted for as a separate
asset is derecognised when replaced. All other repairs and
maintenance are charged to statement of profit and loss
during the reporting period in which they are incurred.
Depreciation methods, estimated useful lives and
residual value
Depreciation is calculated using the Written down Value
method to allocate their cost, net of their residual values,
over their estimated useful Life as specified by Schedule II
to the Companies Act; 2013. The residual values are not
more than 5% of the original cost of the asset. The assets'
residual values and useful Life and method of depreciation
are reviewed, and adjusted if appropriate, at the end of
each reporting period.
d) Investment properties:
Recognition and measurement:
Freehold land is carried at historical cost.
Investment properties are held to earn rentals or for capital
appreciation, or 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. Investment
properties are measured initially at their cost of acquisition.
The cost comprises purchase price, borrowing cost for
long term construction contract if capitalisation criteria
are met and directly attributable cost of bringing the asset
to its working condition for the intended use. Subsequent
to initial recognition, investment property is measured at
cost less accumulated depreciation and accumulated
impairment losses, if any.
Investment Property under Construction
Investment Property under Construction comprises of the
cost of investment property that are not yet ready for their
intended use as at the balance sheet date.
e) Impairment of Financial assets:
The company assesses impairment based on expected
credit losses (ECL) model for the following:
• Financial assets carried at amortised cost;
• Financial assets measured at FVTOCI.
At each reporting date, the Company assesses whether
financial assets carried at amortized cost and debt
securities at FVTOCI are credit impaired. A financial asset
is ‘credit impaired' when one or more events that have a
detrimental impact on the estimated future cash flows of
the financial asset have occurred.
Trade Receivables
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.
The Company uses a provision matrix to determine
impairment loss allowance on its trade receivables. The
provision matrix is based on its historically observed default
rates over the expected life of the trade receivables and is
adjusted for forward-looking estimates. At every reporting
date, the historical observed default rates are updated and
changes in the forward-looking estimates are analysed.
For recognition of impairment loss on other financial
assets and risk exposure, the Company determines that
whether there has been a significant increase in the
credit risk since initial recognition. If credit risk has not
increased significantly, 12-month ECL is used to provide
for impairment loss. However, if credit risk has increased
significantly, lifetime ECL is used. If, in a subsequent period,
credit quality of the instrument improves such that there is
no longer a significant increase in credit risk since initial
recognition, then the entity reverts to recognise impairment
loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected life of
a financial instrument. The 12-month ECL is a portion of
the lifetime ECL which results from default events that are
possible within 12 months after the reporting date.
For assessing increase in credit risk and impairment loss,
the Company combines financial instruments on the basis
of shared credit risk characteristics with the objective of
facilitating an analysis that is designed to enable significant
increases in credit risk to be identified on a timely basis.
Financial Liabilities and equity instruments:
Debt and equity instruments issued by the Company
are classified as either financial liabilities or as equity
in accordance with the substance of the contractual
arrangements and the definitions of a financial liability and
an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a
residual interest in the assets of an entity after deducting all
of its liabilities. Equity instruments issued by the Company
are recognised at the proceeds received, net of direct
issue costs.
i) Initial recognition and measurement:
All financial liabilities are recognised initially at fair
value and, in the case of borrowings, net of directly
attributable transaction costs.
The Company's financial liabilities include trade and
other payables, security deposits for lease rentals and
borrowings including bank overdrafts.
(ii) Subsequent measurement:
The measurement of financial liabilities depends on
their classification, as described below:
• Financial liabilities at fair value through profit
or loss
Financial liabilities at fair value through profit or
loss include financial liabilities held for trading or
has designated upon initial recognition 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.
Gains or losses arising on remeasurement of on
liabilities held for trading are recognised in the
statement of profit and loss.
Financial liabilities designated upon initial recognition
at fair value through profit or loss are designated as
such at the initial date of recognition, and only if the
criteria in Ind AS 109, ‘Financial Instruments' are
satisfied.
Loans and Borrowings:
After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost
using the effective interest rate (EIR) method. Gains and
losses are recognised in profit or loss when the liabilities
are derecognised as well as through the EIR amortisation
process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation
is included as finance costs in the statement of profit and
loss.
Trade and other payables:
These amounts represent liabilities for goods and services
provided to the Company prior to the end of financial year
which are unpaid. Trade and other payables are presented
as current liabilities unless payment is not due within 12
months after the reporting period.
f) Revenue Recognition:
The Company's revenue from contracts with customers is
mainly from License Fees and Other Services rendered to
the customers in Malls. Ind AS 116 ‘Leases' sets out the
principles for the recognition, measurement, presentation
and disclosures for both parties to a contract, i.e., the
lessee and the lessor.
Revenue from license fees and other services
Revenue from license fees are recognised on a straight¬
line basis over the lease terms. Income from utilities and
other services provided to licensees' specific usage is
recognised on accrual basis in accordance with the terms
of the agreements.
Revenue from other services is recognized on satisfaction
of performance obligation upon transfer of control of
promised services to customers in an amount that reflects
the consideration the Company expects to receive in
exchange for those services, excluding amounts collected
on behalf of third parties (for example taxes and duties
collected on behalf of the government). Consideration is
generally due upon satisfaction of performance obligations
and a receivable is recognized when it becomes
unconditional. Generally, the credit period varies between
0-30 days from the delivery of services. A contract asset
(trade receivables) is the right to consideration in exchange
for goods or services transferred to the customer. If the
Company performs part of its obligation 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 when that right is
conditional on the Company's future performance.
g) Employees benefits:
Post-employment benefits
a. Defined Contribution Plan
The defined contribution plan is post-employment
benefit plan under which the Company contributes
fixed contribution to a government administered
fund and will have no legal or constructive obligation
to pay further contribution. The Company's defined
contribution plan comprises of Provident Fund and
Labour Welfare Fund. The Company's contribution
to defined contribution plans is recognized as an
expense in the period in which the employee renders
the related services.
b. Defined benefit plan
Short-term employee benefit obligations are measured
on an undiscounted basis and 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 amount of obligation can be
estimated reliably.
The Company has a defined benefit plan comprising
of gratuity. Company's obligation towards gratuity
liability is funded and is managed by Life Insurance
Corporation of India (LIC). The present value of the
defined benefit obligations is determined based on
actuarial valuation using the projected unit credit
method. The rate used to discount defined benefit
obligation is determined by reference to market yields
at the Balance Sheet date on Indian Government
Bonds for the estimated term of obligations.
Re-measurements comprising of (a) actuarial gains
and losses, (b) the effect of the asset ceiling (excluding
amounts included in net interest on the net defined
benefit liability) and (c) the return on plan assets
(excluding amounts included in net interest on the net
defined benefit liability) are recognized immediately in
the balance sheet with a corresponding debit or credit
to retained earnings through other comprehensive
income in the period in which they occur. Re¬
measurements are not reclassified to the profit or loss
in subsequent periods.
The expected return on plan assets is the Company's
expectation of average long-term rate of return on
the investment of the fund over the entire life of the
related obligation. Plan assets are measured at fair
value as at the Balance Sheet date.
The interest cost on defined benefit obligation and
expected return on plan assets is recognised under
“Employee Benefits Expense”.
Gains or losses on the curtailment or settlement
of defined benefit plan are recognised when the
curtailment or settlement occurs.
Service cost (including current service cost,
past service cost, as well as gains and losses on
curtailments and settlements) is included in profit or
loss in the line item Employee benefits expense.
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