a) Company Overview
Poddar Housing and Development Limited ("the Company") is engaged primarily in the business of real
estate construction, development and other related activities. The Company is a public limited Company
incorporated and domiciled in India having its registered office at Unit 3-5 Neeru Silk Mills Mathuradas Mill
Compound 126 NM Joshi Marg Lower Parel (W), Mumbai 400 013. The Company is listed on BSE Limited
(BSE) and The National Stock Exchange of India Limited (NSE).
b) Basis of Accounting
The Financial Statements of the Company have been prepared in accordance with the Indian Accounting
Standards (Ind AS) to comply with the Section 133 of the Companies Act, 2013 ("the 2013 Act"), and the
relevant provisions, rules and amendments, as applicable. The Financial Statements have been prepared on
accrual basis under the historical cost convention except certain assets measured at fair value.
c) Functional and Presentation Currency
These financial statements are presented in Indian rupees, which is the functional currency of the Company. All
financial information presented in Indian rupees has been rounded to the nearest lakh as per the requirement
of Schedule III, unless otherwise stated.
d) Use of Estimates and Judgements
The preparation of financial statements in conformity with Ind AS requires management to make estimates
and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities)
and the reported revenue and expenses during the year. The Management believes that the estimates used
in preparation of the Financial Statements are prudent and reasonable. Significant estimates used by the
management in the preparation of these financial statements include project revenue, project cost, saleable
area, economic useful lives of fixed assets, accrual of allowance for bad and doubtful receivables, loans
and advances and current and deferred taxes. Differences between the actual results and the estimates are
recognised in the periods in which the results are known / materialise.
e) Property, Plant and Equipment & Depreciation
i. Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and
impairment losses, if any. The cost of an item of property, plant and equipment comprises:
- its purchase price, including import duties and non-refundable purchase taxes, after deducting trade
discounts and rebates.
- any costs directly attributable to bringing the asset to the location and condition necessary for it to be
capable of operating in the manner intended by management.
If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted for as separate items (major components) of property, plant and equipment.
Property, plant and equipment are derecognised from financial statement, either on disposal or when
no economic benefits are expected from its use or disposal. The gain or loss arising from disposal of
property, plant and equipment are determined by comparing the proceeds from disposal with the
carrying amount of Property, plant and equipment recognised in the statement of profit and loss account
in the year of occurrence.
ii. Subsequent expenditure
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
Depreciation on assets sold, discarded or scrapped, is provided upto the date on which the said asset is
sold, discarded or scrapped.
In respect of an asset for which impairment loss is recognized, depreciation is provided on the revised
carrying amount of the assets.
f) Intangible Assets -
i. Recognition and measurement
Items of Intangible Assets are measured at cost less accumulated amortisation and impairment losses, if
any. The cost of intangible assets comprises:
- its purchase price, including import duties and non-refundable purchase taxes, after deducting trade
discounts and rebates; and
- any costs directly attributable to bringing the asset to the location and condition necessary for it to be
capable of operating in the manner intended by management.
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
iii. Amortisation
Intangible assets are amortised over their estimated useful life on Straight Line Method.
g) Impairment of Assets
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment or more frequently if events or changes in circumstances indicate that they might be impaired.
Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs
of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash inflows which are largely independent of the cash inflows
from other assets or groups of assets (cash-generating units). Non-financial assets that suffered impairment
are reviewed for possible reversal of the impairment at the end of each reporting period.
h) Exchange Fluctuations
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 profit or loss. They are deferred in equity if they relate to qualifying cash
flow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign
operation. A monetary item for which settlement is neither planned nor likely to occur in the foreseeable
future is considered as a part of the entity's net investment in that foreign operation.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of
profit and loss, within finance costs. All other foreign exchange gains and losses are presented in the statement
of profit and loss on a net basis within other gains/ (losses).
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined. Translation differences on assets and liabilities carried
at fair value are reported as part of the fair value gain or loss. For example, translation differences on non¬
monetary assets and liabilities such as equity instruments held at fair value through profit or loss are recognised
in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such
as equity investments classified as FVOCI are recognised in other comprehensive income.
i) Investments and other financial assets
(i) Classification
The Company classifies its financial assets in the following measurement categories:
a) those to be measured subsequently at fair value (either through other comprehensive income, or
through profit or loss), and
b) those to be measured at amortised cost.
The classification depends on the entity's business model for managing the financial assets and the
contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in equity instruments that are not held for trading, this will
depend on whether the company has made an irrevocable election at the time of initial recognition to
account for the equity investment at FVOCI.
The company reclassifies debt investments when and only when its business model for managing those
assets changes.
(ii) Recognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the
company commits to purchase or sale the financial asset.
(iii) Measurement
At initial recognition, the company measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss, transaction costs that are directly attributable to
the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through
profit or loss are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether
their cash flows are solely payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the company's business model for managing
the asset and the cash flow characteristics of the asset. There are three measurement categories into
which the company classifies its debt instruments:
a) Amortised cost:
Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. Interest income from these
financial assets is included in finance income using the effective interest rate method. Any gain or
loss arising on derecognition is recognised directly in profit or loss and presented in other gains/
(losses). Impairment losses are presented as separate line item in the statement of profit and loss.
b) Fair value through other comprehensive income (FVOCI):
Assets that are held for collection of contractual cash flows and for selling the financial assets,
where the assets' cash flows represent solely payments of principal and interest, are measured
at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition
of impairment gains or losses, interest income and foreign exchange gains and losses which are
recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss
previously recognised in OCI is reclassified from equity to profit or loss and recognised in other
gains/(losses). Interest income from these financial assets is included in other income using the
effective interest rate method. Foreign exchange gains and losses are presented in other gains/
(losses) and impairment expenses are presented as separate line item in statement of profit and loss.
c) Fair value through profit or loss:
Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through
profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value
through profit or loss is recognised in profit or loss and presented net within other gains/(losses) in
the period in which it arises. Interest income from these financial assets is included in other income.
Equity instruments
The company subsequently measures all equity investments at fair value. Where the company's
management has elected to present fair value gains and losses on equity investments in other
comprehensive income, there is no subsequent reclassification of fair value gains and losses to
profit or loss following the derecognition of the investment. Dividends from such investments
are recognised in profit or loss as other income when the company's right to receive payments is
established.
Changes in the fair value of financial assets at fair value through profit or loss are recognised in other
gain/ (losses) in the statement of profit and loss. Impairment losses (and reversal of impairment
losses) on equity investments measured at FVOCI are not reported separately from other changes
in fair value.
(iv) Impairment of financial assets
The company assesses on a forward looking basis the expected credit losses associated with its assets
carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends
on whether there has been a significant increase in credit risk. Note 29 details how the company
determines whether there has been a significant increase in credit risk.
For trade receivables only, the company applies the simplified approach required by Ind AS 109, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.
(v) Derecognition of financial assets
A financial asset is derecognised only when
a) The company has transferred the rights to receive cash flows from the financial asset or
b) retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset, the company evaluates whether it has transferred
substantially all risks and rewards of ownership of the financial asset. In such cases, the financial
asset is derecognised. Where the entity has not transferred substantially all risks and rewards of
ownership of the financial asset, the financial asset is not derecognised.
Where the entity has neither transferred a financial asset nor retains substantially all risks and
rewards of ownership of the financial asset, the financial asset is derecognised if the company has
not retained control of the financial asset. Where the company retains control of the financial asset,
the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
j) Measurement at fair values
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability or
- In the absence of a principal market, in the most advantageous market for the asset or liability
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the
use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the
fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable
For the purpose of fair value disclosures, the Company has determined classes of assets & liabilities on the
basis of the nature, characteristics and the risks of the asset or liability and the level of the fair value hierarchy
as explained above.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period
during which the change has occurred.
k) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on
future events and must be enforceable in the normal course of business and in the event of default, insolvency
or bankruptcy of the Company or the counterparty.
l) Inventories
i. The cost of inventories comprises all cost of purchase, cost of conversion and other costs incurred in bringing
the inventories to their present location and condition. Inventories are valued at cost or net realizable value,
whichever is lower on the basis of first in first out method or specific identification, as the case may be.
ii. Construction work in progress is valued at lower of cost or net realizable value. Cost includes cost of
land, development rights, construction costs, specific borrowing costs and other direct costs attributable
to the project.
iii. Finished stock of completed real estate projects, land and land development rights are valued at lower of
cost or net realizable value on the basis of actual identified units.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
m) Revenue Recognition
The Company recognise revenue when or as the entity satisfies a performance obligation by transferring a
promised good or service i.e. an asset to a customer. An asset is transferred when or as the customer obtains
control of that asset. For each performance obligation, the Company determines at contract inception whether
it satisfies the performance obligation over time or satisfies the performance obligation at a point in time.
Determination of the timing of revenue recognition on the sale of completed and under development
property in respect of Real Estate Development activity:
Determination of revenue whether over time (Percentage Completion Method) or at a point in time (Project
Completion Method) necessarily involves making judgement as to when the performance obligation under
the contracts with customers is satisfied.
Recognition of Revenue over time:
To determine the satisfaction of performance obligations over time the Company considers the terms of
contract with the customers and regulatory obligations whether they meet all the following criteria :-
(a) the customer simultaneously receives and consumes the benefits provided by the Company's performance
as the Company performs
(b) the Company's performance creates or enhances an asset (for example, work in progress) that the customer
controls as the asset is created or enhanced
(c) the Company's performance does not create an asset with an alternative use to the Company and the
Company has a non-cancellable enforceable right to payment for performance
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.
i. The Company recognises revenue for performance obligation satisfied over time only if it can reasonably
measure its progress towards complete satisfaction of the performance obligation. In order to determine
the same the Company uses following thresholds : All critical approvals necessary for the commencement
of the project have been obtained including, wherever applicable environmental & other clearances,
approval of plans, designs etc., title to land or other rights of development / construction and change in
land use.
ii. The expenditure incurred on construction and development costs is not less than 25 per cent of the total
estimated construction and development costs;
iii. At least 25 percent of the saleable project area is secured by contracts or agreements with buyers; and
iv. At least 10 percent of the contract consideration is realized at the reporting date in respect of such contracts
and it is reasonable to expect that the parties to such contracts will comply with the payment terms as
defined in the contracts.
Recognition of Revenue at point in time
Where the satisfaction of performance obligation does not meet the criteria of over the time, the Company
recognises the revenue at point in time i.e. on handing over the unit for fit out to customer or on obtaining the
occupation certificate from the regulatory authority whichever is earlier. Accordingly expenditure incurred
for the development and construction of the unit and other project costs are also recognised at point in time.
The revenue is measured at the transaction price agreed under the contract. The Company invoices the
customers for construction contracts based on achieving performance-related milestones. For other cases, the
consideration is due when legal title has been transferred.
For certain contracts involving the sale of property under development, the Company offers deferred payment
schemes to its customers. The Company adjusts the transaction price for the effects of the significant financing
component.
Revenue from Sale of land and other rights is generally a single performance obligation and the Company
has determined that this is satisfied at the point in time when control transfers as per the terms of the contract
entered into with the buyers, which generally are with the conformity of the sale contracts / agreements.
n) Advance from Customers
The amounts received from the customers against progressive demand note from time to time, are credited
to Advances against sale of flats and the same are treated as Current Liabilities and adjusted against the sale
value as per the terms of the agreement at the time of recognizing the revenue. Moreover, the amounts lying in
the debit to account of certain customers, due to the difference in surrender value of the flat and rate at which
it was originally booked, are being netted off from the aggregate credit of the customer's account and finally
reduced from the sale value whenever revenue of such flats is recognized.
On the balance sheet, the Company reports the net contract position for each contract as either an asset or a
liability. A contract represents an asset where costs incurred plus recognised profits (less recognised losses)
exceed progress billings; a contract represents a liability where the opposite is the case.
o) Taxation
The income tax expense or credit for the period is the tax payable on the current period's taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period in the countries where the Company operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred
tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is
also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting profit nor taxable profit (tax
loss). Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially
enacted by the end of the reporting period and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current
tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
p) Employee Benefits
i. Short term employee benefits
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are
recognised in respect of employees' services up to the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.
ii. Post-employment benefits
The Company operates the following post-employment schemes:
Defined contribution plans
The Company pays contributions to publicly administered funds as per local regulations. The Company
has no further payment obligations once the contributions have been paid. The contributions are
accounted for as defined contribution plans and the contributions are recognised as employee benefit
expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in the future payments is available.
Defined benefit plans
The liability or asset recognised in the balance sheet in respect of defined benefit plans is the present
value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets.
The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future
cash outflows by reference to market yields at the end of the reporting period on government bonds that
have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit
obligation and the fair value of plan assets. This cost is included in employee benefit expense in the
statement of profit and loss.
Re-measurement gains and losses arising from experience adjustments and changes in actuarial
assumptions are recognised in the period in which they occur, directly in other comprehensive income.
They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or
curtailments are recognised immediately in profit or loss as past service cost.
Other long-term employee benefits
The liabilities for earned leave/ benefits which are not expected to be settled wholly within 12 months after
the end of the period in which the employees render the related service. They are therefore measured as
the present value of expected future payments to be made in respect of services provided by employees
up to the end of the reporting period using the projected unit credit method. The benefits are discounted
using the appropriate market yields at the end of the reporting period that have terms approximating to
the terms of the related obligation. Re-measurement as a result of experience adjustments and changes in
actuarial assumptions are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting period, regardless
of when the actual settlement is expected to occur.
q) Leases
As a lessee
Long term leases are recognised as a right-of-use asset and a corresponding liability at the date at which the
leased asset is available for use by the Company
Assets and liabilities arising from a lease are initially measured on a present value basis.
Lease rentals associated with short-term leases i.e. for a period of 12 months or less are recognised in the
statement of profit and loss.
As a lessor
Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line
basis over the lease term. Initial direct costs incurred in obtaining an operating lease are added to the carrying
amount of the underlying asset and recognised as expense over the lease term on the same basis as lease
income. The respective leased assets are included in the balance sheet based on their nature.
r) Cash and Cash equivalent
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on
hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value.
s) Earnings per share
Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number
of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend,
interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential
equity shares, by the weighted average number of equity shares considered for deriving basic earnings per
share and the weighted average number of equity shares which could have been issued on conversion of all
dilutive potential equity shares.
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