(p) Provisions, contingent liabilities and contingent
assets
A provision is recognized when the Company has a
present obligation (legal or constructive) as a result of
past event, it is probable that an outflow of resources
embodying economic benefits will be required to
settle the obligation and a reliable estimate can be
made of the amount of the obligation. If the effect
of the time value of money is material, provisions
are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the
liability. When discounting is used, the increase in the
provision due to the passage of time is recognized as
a finance cost.
A contingent liability is a possible obligation that
arises from past events and whose existence
will be confirmed only by the occurrence or non¬
occurrence of one or more uncertain future events
not wholly within the control of the Company or a
present obligation that is not recognized because
it is not probable that an outflow of resources will
be required to settle the obligation. A contingent
liability also arises in extremely rare cases where
there is a liability that cannot be recognized because
it cannot be measured reliably. The Company does
not recognize a contingent liability but discloses it in
the financial statements, unless the possibility of an
outflow of resources embodying economic benefits is
remote.
If the Company has a contract that is onerous, the
present obligation under the contract is recognised
and measured as a provision. However, before
a separate provision for an onerous contract is
established, the Company recognises any impairment
loss that has occurred on assets dedicated to that
contract.
A contingent asset is a possible asset that arises
from past events and whose existence will be
confirmed only by the occurrence or non-occurrence
of one or more uncertain future events not wholly
within the control of the entity. The Company does
not recognize the contingent asset in its financial
statements since this may result in the recognition of
income that may never be realised. Where an inflow of
economic benefits is probable, the Company discloses
a brief description of the nature of contingent assets
at the end of the reporting period. However, when
the realisation of income is virtually certain, then
the related asset is not a contingent asset and the
Company recognize such assets.
Provisions, contingent liabilities and contingent
assets are reviewed at each reporting date.
(q) Financial Instruments
Financial assets and liabilities are recognized when
the Company becomes a party to the contractual
provisions of the instrument. Financial assets
and liabilities are initially measured at fair value
at initial recognition. Transaction costs that are
directly attributable to the acquisition or issue of
financial assets and financial liabilities are added to
or deducted from the fair value measured on initial
recognition of financial asset or financial liability,
except for transaction costs directly attributable to
the acquisition of financial assets and liabilities at fair
value through profit or loss which are immediately
recognized in statement of profit and loss. However,
trade receivables that do not contain a significant
financing component are measured at transaction
price.
i. Financial assets at fair value through other
comprehensive income
Financial assets are measured at fair value
through other comprehensive income if these
financial assets are held within a business
whose objective is achieved by both collecting
contractual cash flows and selling financial
assets and the contractual terms of the financial
asset give rise on specified dates to cash flows
that are solely payments of principal and interest
on the principal amount outstanding.
ii. Financial assets at fair value through profit or
loss
Financial assets are measured at fair value
through profit or loss unless it is measured at
amortized cost or at fair value through other
comprehensive income on initial recognition.
iii. Debt instruments at amortized cost
A 'debt instrument' is measured at the amortized
cost if both the following conditions are met:
a) The asset is held within a business model
whose objective is to hold assets for
collecting contractual cash flows, and
b) Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI) on
the principal amount outstanding.
After initial measurement, such financial assets
are subsequently measured at amortized cost
using the effective interest rate (EIR) method.
Amortized 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 amortization is included in finance
income in the profit or loss. The losses arising
from impairment are recognized in the profit or
loss. This category generally applies to trade and
other receivables.
iv Investment in subsidiaries, joint ventures and
associates
Investment in subsidiaries, joint ventures and
associates are carried at cost. Impairment
recognized, if any, is reduced from the carrying
value.
v. De-recognition of financial asset
The Company derecognizes a financial asset
when the contractual rights to the cash flows
from the financial asset expire or it transfers the
financial asset and the transfer qualifies for de¬
recognition under Ind AS 109.
vi. Financial liabilities
Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings, or as
payables, as appropriate. The Company's financial
liabilities include trade and other payables, loans
and borrowings including bank overdrafts. The
subsequent measurement of financial liabilities
depends on their classification, which is described
below.
vii. Financial liabilities 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.
viii. Financial liabilities at amortized cost
Financial liabilities are subsequently measured at
amortized cost using the effective interest ('EIR')
method. Gains and losses are recognized in profit
or loss when the liabilities are derecognized as
well as through the EIR amortization process.
Amortized 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 amortization is included as finance
costs in the statement of profit and loss.
ix. De-recognition of financial liability
A financial liability is derecognized when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, such an exchange or modification is
treated as the derecognition of the original
liability and the recognition of a new liability. The
difference in the respective carrying amounts is
recognized in the statement of profit or loss.
x. Fair value of financial instruments
In determining the fair value of its financial
instruments, the Company uses following
hierarchy and assumptions that are based on market
conditions and risks existing at each reporting
date.
Fair value hierarchy:
AH 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:
O Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities
O Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is directly or indirectly observable
O Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are recognized in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorization
(based on the lowest level input that is significant to
the fair value measurement as a whole) at the end of
each reporting period.
(r) Cash dividend to equity holders of the Company
The Company recognizes a liability to make cash
distributions to equity holders of the Company when
the distribution is authorized and the distribution
is no longer at the discretion of the Company. Final
dividends on shares are recorded as a liability on the
date of approval by the shareholders and interim
dividends are recorded as a liability on the date of
declaration by the Company's Board of Directors.
(s) Earnings Per Share
Basic earnings per share are calculated by dividing
the net profit or loss for the period attributable to
equity shareholders by the weighted average number
of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an
equity share to the extent that they are entitled to
participate in dividends relative to a fully paid equity
share during the reporting period. The weighted
average number of equity shares outstanding during
the period is adjusted for events such as bonus issue
that have changed the number of equity shares
outstanding, without a corresponding change in
resources.
For the purpose of calculating diluted earnings per
share, the net profit or loss for the period attributable
to equity shareholders and the weighted average
number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity
shares.
(t) Cash and cash equivalents
Cash and cash equivalent in the balance sheet
comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or
less, that are readily convertible to a known amount
of cash and subject to an insignificant risk of changes
in value. For the purpose of the Company's statement
of cash flows, cash and cash equivalents consist of
cash and short-term deposits, as defined above, net
of outstanding cash credit/bank overdrafts as they
are considered an integral part of the Company's
cash management.
(u) Events after the reporting period
If the Company receives information after the
reporting period, but prior to the date of approved
for issue, about conditions that existed at the end
of the reporting period, it will assess whether the
information affects the amounts that it recognises
in its financial statements. The Company will adjust
the amounts recognised in its financial statements
to reflect any adjusting events after the reporting
period and update the disclosures that relate to
those conditions in light of the new information. For
non-adjusting events after the reporting period, the
Company will not change the amounts recognised in
its financial statements but will disclose the nature
of the non-adjusting event and an estimate of its
financial effect, or a statement that such an estimate
cannot be made, if applicable.
(v) Derivative financial instruments
The Company uses derivative financial instruments,
such as forward currency contracts to hedge its
foreign currency risks. Such derivative financial
instruments are not designated as hedging
instruments and accordingly, the Company does not
apply hedge accounting.
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 at fair value. Any gains
or losses arising from changes in the fair value
of derivatives are taken directly to profit or loss.
Derivatives are carried as financial assets when the
fair value is positive and as financial liabilities when
the fair value is negative.
2.3 Significant accounting judgments, estimates and
assumptions
The preparation of financial statements requires
management to make judgments, estimates and
assumptions that affect the reported balances of revenues,
expenses, assets and liabilities and the accompanying
disclosures, and the disclosure of contingent liabilities.
Uncertainty about these judgments, assumptions and
estimates could result in outcomes that require a material
adjustment to the carrying amount of assets or liabilities
affected in future periods.
In the process of applying the Company's accounting
policies, management makes judgement, estimates and
assumptions which have the most significant effect on
the amounts recognized in the financial statements.
The key judgements, estimates and 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 below. The Company based its
judgements, 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.
i) Revenue from contracts with customers
The Company applied the following judgements that
significantly affect the determination of the amount
and timing of revenue from contracts with customers:
a) Identification of performance obligation
Revenue consists of sale of undivided share
of land and constructed area to the customer,
which have been identified by the Company as
a single performance obligation, as they are
highly interrelated/ interdependent. In assessing
whether performance obligations relating to
sale of undivided share of land and constructed
area are highly interrelated/ interdependent, the
Company considers factors such as:
O whether the customer could benefit
from the undivided share of land or the
constructed area on its own or together
with other resources readily available to the
customer.
O whether the entity will be able to fulfil its
promise under the contract, to transfer the
undivided share of land without transfer of
constructed area or transfer the constructed
area without transfer of undivided share of
land.
b) Timing of satisfaction of performance obligation
Revenue from sale of real estate units is
recognised when (or as) control of such units is
transferred to the customer. The entity assesses
timing of transfer of control of such units to the
customers as transferred over time if one of the
following criteria are met:
O The customer simultaneously receives and
consumes the benefits provided by the
entity's performance as the entity performs.
O The entity's performance creates or
enhances an asset that the customer
controls as the asset is created or enhanced.
O The entity's performance does not create an
asset with an alternative use to the entity
and the entity has an enforceable right to
payment for performance completed to
date.
If control is not transferred over time as above,
the entity considers the same as transferred at
a point in time.
For contracts where control is transferred at
a point in time the Company considers the
following indicators of the transfer of control of
the asset to the customer:
O When the entity obtains a present right to
payment for the asset.
O When the entity transfers legal title of the
asset to the customer.
O When the entity transfers physical
possession of the asset to the customer.
O When the entity transfers significant risks
and rewards of ownership of the asset to
the customer.
O When the customer has accepted the asset.
The aforesaid indicators of transfer of control
are also considered for determination of the
timing of derecognition of investment property.
c) Accounting for revenue and land cost for
projects executed through joint development
arrangements ('JDA')
For projects executed through joint development
arrangements, the Company has evaluated that
land owners are not engaged in the same
line of business as the Company and hence
has concluded that such arrangements are
contracts with customers. The revenue from
the development and transfer of constructed
area/revenue sharing arrangement and the
corresponding land/ development rights
received under JDA is measured at the fair value
of the estimated construction service rendered
to the land owner and the same is accounted
on launch of the project. The fair value is
estimated with reference to the terms of the
JDA (whether revenue share or area share) and
the related cost that is allocated to discharge
the obligation of the Company under the JDA.
Fair value of the construction is considered
to be the representative fair value of the
revenue transaction and land so obtained. Such
assessment is carried out at the launch of the
real estate project and is not reassessed at each
reporting period. The management is of the view
that the fair value method and estimates are
reflective of the current market condition.
d) Significant financing component
For contracts involving sale of real estate unit,
the Company receives the consideration in
accordance with the terms of the contract in
proportion of the percentage of completion of
such real estate project and represents payments
made by customers to secure performance
obligation of the Company under the contract
enforceable by customers. Such consideration
is received and utilised for specific real estate
projects in accordance with the requirements of
the Real Estate (Regulation and Development)
Act, 2016. Consequently, the Company has
concluded that such contracts with customers
do not involve any financing element since the
same arises for reasons explained above, which
is other than for provision of finance to/from the
customer.
ii) Classification of property
The Company determines whether a property is
classified as investment property or inventory as
below.
Investment property comprises land and buildings
(principally office and retail properties) that are not
occupied substantially for use by, or in the operations
of, the Company, nor for sale in the ordinary course
of business, but are held primarily to earn rental
income and capital appreciation. These buildings are
substantially rented to tenants and not intended to
be sold in the ordinary course of business.
Inventory comprises property that is held for sale
in the ordinary course of business. Principally, this
is residential and commercial property that the
Company develops and intends to sell before or
during the course of construction or upon completion
of construction.
iii) Estimation of net realizable value for inventory
and land advance
Inventory is stated at the lower of cost and net
realizable value (NRV).
NRV for completed inventory property is assessed by
reference to market conditions and prices existing at
the reporting date and is determined by the Company,
based on comparable transactions identified by the
Company for properties in the same geographical
market serving the same real estate segment.
NRV in respect of inventory property under
construction is assessed with reference to market
prices at the reporting date for similar completed
property, less estimated costs to complete
construction and an estimate of the time value of
money to the date of completion.
With respect to land inventory and land advance
given, the net recoverable value is based on the
present value of future cash flows, which depends on
the estimate of, among other things, the likelihood
that a project will be completed, the expected date of
completion, the discount rate used and the estimation
of sale prices and construction costs.
iv) Impairment of non-financial assets
Impairment exists when the carrying value of an
asset or cash generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs
of disposal and its value in use. The fair value less
costs of disposal calculation is based on available
data from binding sales transactions, conducted at
arm's length, for similar assets or observable market
prices less incremental costs for disposing of the
asset. The value in use calculation is based on a DCF
model. The cash flows are derived from the budget for
the next five years and do not include restructuring
activities that the Company is not yet committed to
or significant future investments that will enhance
the asset's performance of the CGU being tested.
The recoverable amount is sensitive to the discount
rate used for the DCF model as well as the expected
future cash-inflows and the growth rate used for
extrapolation purposes. These estimates are most
relevant to disclosure of fair value of investment
property recorded by the Company.
v) Defined benefit plans - Gratuity
The cost of the defined benefit gratuity plan and
other post-employment medical benefits and
the present value of the gratuity obligation are
determined using actuarial valuations. An actuarial
valuation involves making various assumptions that
may differ from actual developments in the future.
These include the determination of the discount
rate, future salary increases and mortality rates. Due
to the complexities involved in the valuation and
its long-term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount
rate. In determining the appropriate discount rate for
plans operated in India, the management considers
the interest rates of government bonds. The
mortality rate is based on publicly available mortality
tables. Those mortality tables tend to change only
at interval in response to demographic changes.
Future salary increases are based on expected future
inflation rates and expected salary increase thereon.
vi) Measurement of financial instruments at
amortized cost
Financial instrument are subsequently measured at
amortized cost using the effective interest ('EIR')
method. The computation of amortized cost is
sensitive to the inputs to EIR including effective
rate of interest, contractual cash flows and the
expected life of the financial instrument. Changes
in assumptions about these inputs could affect the
reported value of financial instruments.
vii) Useful life and residual value of property,
plant and equipment, investment property and
intangible assets
The useful life and residual value of property, plant
and equipment, investment property and intangible
assets are determined based on evaluation made
by the management of the expected usage of the
asset, the physical wear and tear and technical or
commercial obsolescence of the asset. Due to the
judgements involved in such estimates the useful life
and residual value are sensitive to the actual usage in
future period.
viii) Provision for litigations and contingencies
Provision for litigations and contingencies is
determined based on evaluation made by the
management of the present obligation arising from
past events the settlement of which is expected to
result in outflow of resources embodying economic
benefits, which involves judgements around
estimates the ultimate outcome of such past events
and measurement of the obligation amount. Due to
judgements involved in such estimation the provision
is sensitive to the actual outcome in future periods.
ix) Fair value measurement of financial instruments
When the fair values of financial instruments recorded
in the balance sheet cannot be measured based on
quoted prices in active markets, their fair value is
measured using valuation techniques including the
DCF model. The inputs to these models are taken
from observable markets where possible, but where
this is not feasible, a degree of judgement is required
in establishing fair values. The fair valuation requires
management to make certain judgments about the
model inputs, including forecast cash flows, discount
rate, credit risk and volatility. Changes about these
factors could affect the reported fair value of financial
instruments.
2.4 New and amended standards
The Company applied for the first-time certain standards
and amendments, which are effective for annual periods
beginning on or after 1 April 2025. The Company has not
early adopted any standard, interpretation or amendment
that has been issued but is not yet effective.
i) Amendments to Ind AS 21 - Lack of exchangeability
The Ministry of Corporate Affairs (MCA) notified the
Companies (Indian Accounting Standards) Amendment
Rules, 2025, which amend Ind AS 21, The Effects
of Changes in Foreign Exchange Rates to specify
how an entity should assess whether a currency is
exchangeable and how it should determine a spot
exchange rate when exchangeability is lacking. The
amendments also require disclosure of information
that enables users of its financial statements to
understand how the currency not being exchangeable
into the other currency affects, or is expected to
affect, the entity's financial performance, financial
position and cash flows.
The amendments are effective for annual reporting
periods beginning on or after 1 April 2025. When
applying the amendments, an entity cannot restate
comparative information.
The amendments do not have a material impact on
the Company's financial statements.
ii) Amendments to Ind AS 1 - Classification of Liabilities
as Current or Non-current and Non-current Liabilities
with Covenants
In August 2025, the MCA notified amendments
to paragraphs 69 to 76 of Ind AS 1 to specify the
requirements for classifying liabilities as current or
non-current. The amendments clarify:
O What is meant by a right to defer settlement
O That a right to defer must exist at the end of the
reporting period
O That classification is unaffected by the likelihood
that an entity will exercise its deferral right
O That only if an embedded derivative in a
convertible liability is itself an equity instrument
would the terms of a liability not impact its
classification
In addition, a requirement has been introduced to
require disclosure when a liability arising from a
loan agreement is classified as non-current and
the entity's right to defer settlement is contingent
on compliance with future covenants within twelve
months.
If there is a breach of a material covenant of a long
term loan arrangement on or before the end of the
reporting period, resulting in the liability becoming
payable on demand as at the reporting date, and the
lender agrees—after the reporting period but before
the financial statements are approved for issue—not
to demand repayment for at least 12 months as
a consequence of the breach, this shall be treated
as an adjusting event. Accordingly, the entity is not
required to classify the liability as current.
The amendments are effective for annual reporting
periods beginning on or after 1 April 2025
retrospectively in accordance with Ind AS 8.
The amendments do not have a material impact on
the Company's financial statements.
iii) Amendments to Ind AS 7 and Ind AS 107 - Supplier
Finance Arrangements
In August 2025, the MCA notified amendments to
Ind AS 7 Statement of Cash Flows and Ind AS 107
Financial Instruments: Disclosures to clarify the
characteristics of supplier finance arrangements and
require additional disclosure of such arrangements.
The disclosure requirements in the amendments
are intended to assist users of financial statements
in understanding the effects of supplier finance
arrangements on an entity's liabilities, cash flows and
exposure to liquidity risk.
The amendments do not have a material impact on
the Company's financial statements.
iv) International Tax Reform—Pillar Two Model Rules -
Amendments to Ind AS 12
In August 2025, the MCA notified amendments to Ind
AS 12 Income Taxes in response to the OECD's BEPS
Pillar Two rules and include:
O A mandatory temporary exception to the
recognition and disclosure of deferred taxes
arising from the jurisdictional implementation of
the Pillar Two model rules; and
O Disclosure requirements for affected entities to
help users of the financial statements better
understand an entity's exposure to Pillar Two
income taxes arising from that legislation,
particularly before its effective date.
The mandatory temporary exception - the use of
which is required to be disclosed - applies immediately.
The remaining disclosure requirements apply for
annual reporting periods beginning on or after 1 April
2025, but not for any interim periods ending on or
before 31 March 2026.
The amendments do not have a material impact on
the Company's financial statements.
b. Fair valuation information
The Company's investment properties consist of commercial properties in South India.
As at March 31, 2026 and March 31, 2025, the fair values of the properties are Rs. 33.71 crore and Rs. 32.22 crore, respectively.
These valuations are based on valuations performed by independent external valuer, who specialise in valuing these types of
investment properties. The aforesaid independent external valuers are not registered valuer as defined under rule 2 of the
Companies (Registered Valuers and Valuation) Rules, 2017.
The fair value of investment properties is primarily based on discounted cashflow method ('DCF') and classified as level 3 fair
value in the fair value hierarchy due to the use of unobservable inputs. There has been no change in valuation techniques used
in current and previous years.
Under the DCF method, fair value is estimated using assumptions regarding the benefits and liabilities of ownership over the
asset's life including an exit or terminal value. This method involves the projection of a series of cash flows on a real property
interest. To this projected cash flow series, a market-derived discount rate is applied to establish the present value of the
income stream associated with the asset. The exit yield is normally separately determined and differs from the discount rate.
The duration of the cash flows and the specific timing of inflows and outflows are determined by events such as rent reviews,
#The Company has provided securities by way of pledge of investments in equity shares of certain investee entities for the
loans taken by such investee entities.
*During the year ended March 31, 2025, the Company had acquired an additional stake of 39.54% in an existing associate
entity - Sobha Puravankara Aviation Private Limited ('SPAPL') from another shareholders for a consideration of Rs.0.04
crore. Pursuant to the said acquisition, the Company holds 89.49% shareholding and control thereon in SPAPL, thereby
SPAPL had become a subsidiary of the Company. Further during the year ended March 31, 2026 the Company has acquired
additional stake of 10.46% for a consideration of Rs. 0.01 crore. Pursuant to the said acquisition, the Company holds 99.95%
shareholding.
** During the year ended March 31, 2025, the Company had identified impairment aggregating to Rs. 16.82 crore on investment
in certain subsidiaries, which had been recognised in the statement of profit and loss.
c) There are no amounts of loans and advances in the nature of loans granted to companies, firms, limited liability partnerships
or any other parties which are overdue for more than ninety days.
d) There were no loans granted to companies, limited liability partnerships and other parties which was fallen due during the year,
that have been renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties.
e) The Company has granted loans or advances in the nature of loans, either repayable on demand or without specifying any
terms or period of repayment to companies and Limited Liability Partnerships. Of these following are the details of the
aggregate amount of loans or advances in the nature of loans granted to promoters or related parties as defined in clause
(76) of section 2 of the Companies Act, 2013.
b. Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of Rs. 5 per share. Each holder of equity shares is
entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the
Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except interim
dividend.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity
shares held by the shareholders.
Nature and purpose of reserves:
1. Securities premium
Securities premium is used to record the premium on issue of shares, which can be utilised only in accordance with the
provisions of the Companies Act, 2013.
2. General reserve
General reserve represents amounts transferred from retained earnings, which can be utilised in accordance with the
provisions of the Companies Act, 2013.
3. Employee Stock Option(ESOP) Reserve
The ESOP reserve account is used to recognise the grant date fair value of options issued to employees under the
Company's Employee stock option plan over the vesting period.
4. Retained earnings
Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general
reserve, dividends or other distributions paid to shareholders.
Notes:
a) The Company has not filed any quarterly returns/statements with banks or financial institutions during the year for its
borrowings.
b) The Company has loans amounting to Rs. 520.89 crore repayable on demand. Such loans and interest thereon have not
been demanded for repayment during the year. The Company has not defaulted in repayment of other borrowings or
payment of interest thereon to any lender.
c) The above loans were applied for the purpose for which such loans were obtained.
d) No funds raised on short-term basis have been used for long-term purposes by the Company.
e) The Company had taken funds from following entities and persons on account of or to meet the obligations of its
subsidiary as per details below:
Notes:
a) In respect of other than ongoing projects, there are no unspent amounts that are required to be transferred to a fund
specified in Schedule VII of the Companies Act 2013 (the Act), in compliance with second proviso to sub section 5 of
section 135 of the Act.
b) There are no unspent amounts in respect of ongoing projects, that are required to be transferred to a special account in
compliance of provision of sub section 6 of section 135 of the Companies Act 2013.
32aExceptional items
During the year ended March 31, 2025, the Company had acquired an additional stake of 36.26% in an existing joint venture
partnership entity - Pune Projects LLP ('PPL') from another partner for a consideration of Rs.35.00 crore. Pursuant to the
said acquisition, the Company holds 68.26% share and control thereon in PPL, thereby PPL had become a subsidiary of the
Company from December 31, 2024. Further, the partners of PPL had agreed to revise their profit sharing ratio, which had
resulted in recognition of additional share of loss of Rs.33.33 crore by the Company and the same had been disclosed under
exceptional items.
33 Fair value measurements
The fair value of the financial assets and liabilities is determined as the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale..
The following methods and assumptions were used to estimate the fair values:
> The management assessed the fair values of the unquoted debt instruments using a DCF model. The valuation requires
management to make certain assumptions about the model inputs, including forecast cash flows, discount rate, credit
risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in
management's estimate of fair value for these unquoted instruments.
> The management assessed that the carrying values of cash and bank balances, trade receivables, trade payables, and
other financial assets and liabilities approximate their fair values largely due to their short-term maturities.
> The management assessed that the carrying values of bank deposits, borrowings and other financial assets and liabilities
approximate their fair values based on cash flow discounting using parameters such as interest rates, tenure of instrument,
creditworthiness of the customer and the risk characteristics of the financed project, as applicable.
> Refer note 4 with respect to investment properties.
> The quoted investments (mutual funds) are valued using the quoted market prices in active markets.
The Company's investments in its subsidiaries, joint ventures and associates are accounted at cost (refer note 6).
> The unquoted investments (other funds) are valued using the unquoted net asset value of the units.
These financial assets and financial labilities as summarised below are classified as level 3 fair values except otherwise stated
below in the fair value hierarchy due to the use of unobservable inputs as explained above. There have been no transfers
between levels during the year.
34 Financial risk management
The Company's principal financial liabilities, comprise borrowings, trade payables and other payables. The main purpose of
these financial liabilities is to finance the Company's operations. The Company's principal financial assets include loans, trade
receivables, cash and bank balances and other receivables that derive directly from its operations.
The Company's activities expose it to market risk, liquidity risk and credit risk.
The Company's management oversees the management of these risks and ensures that the Company's financial risk activities
are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance
with the Company's policies and risk objectives.
a. Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments if a counterparty default on its obligations.
Credit risk arises from cash and cash equivalents, trade receivables and deposits with banks and financial institutions.
Credit risk management
Other financial assets like bank deposits and other receivables are mostly with banks and hence, the Company does not
expect any credit risk with respect to these financial assets.
With respect to trade receivables, the Company has constituted teams to review the receivables on periodic basis and to
take necessary mitigations, wherever required. For trade receivables and contract assets, the Company applies a simplified
approach in calculating ECLs. Therefore, the Company does not track changes in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each reporting date. The recoverability of trade receivables is considered good as the
handover/possession of residential/commercial units to the customers in case of real estate arrangements or refund of
security deposit in case of lease arrangements is not processed till the time the Company collects the entire receivables.
Accordingly, the Company does not have any loss allowance based on historical life time credit loss experience and
forward looking factor as detailed above.
b. Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of
funding through an adequate amount of committed credit facilities to meet obligations when due and also generating
cash flow from operations.
c. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes
in market prices. Market risk comprises two types of risk: interest rate risk and other price risk, such as equity price risk
and commodity/ real-estate risk.
The sensitivity analysis in the following sections relate to the position as at March 31, 2026 and March 31, 2025. The
analysis excludes the impact of movements in market variables on the carrying values of gratuity and other post
retirement obligations/provisions.
The below assumption has been made in calculating the sensitivity analysis:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is
based on the financial assets and financial liabilities held at March 31, 2026 and March 31, 2025.
Interest rate risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes
in Interest rate. The entity's exposure to the risk of changes in Interest rates relates primarily to the entity's operating
activities (when receivables or payables are subject to different interest rates) and the entity's net receivables or payables.
The Company is affected by the price volatility of certain commodities/ real estate. Its operating activities require the
ongoing development of real estate. The Company's management has developed and enacted a risk management strategy
regarding commodity/ real estate price risk and its mitigation. The Company is subject to the price risk variables, which are
expected to vary in line with the prevailing market conditions.
Interest rate sensitivity
Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of changes in interest rates. The
following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables
held constant. The impact on the entity's profit before tax is due to changes in the fair value of financial assets and
liabilities.
35 Capital Management
The Company's objectives when managing capital are to maximise returns for shareholders and benefits for other stakeholders,
and maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The Company monitors its capital using gearing ratio, which is net debt divided by total equity. Net debt comprises long term
borrowings, short term borrowings, current maturities of long term borrowings less cash and cash equivalents and other bank
balances. Total equity comprises equity share capital and other equity.
In order to achieve the objective of maximize shareholders value, the Company's capital management, amongst other things,
aims to ensure that it meets financial covenants attached to the interest-bearing borrowings that define capital structure
requirements. Any significant breach in meeting the financial covenants would allow the bank to call borrowings. There have
been no breaches in the financial covenants of above-mentioned interest-bearing borrowing.
No changes were made in the objectives, policies or processes for managing capital during the current and previous years.
38 Commitments and contingencies
a. Other commitments
(i) As at March 31, 2026, the Company has contracts remaining to be executed on capital account that were not
provided for is Rs. Nil (March 31, 2025: Rs.1.29 crore).
(ii) As at March 31, 2026, the Company has given Rs.143.23 crore (March 31, 2025: Rs.208.42 crore) towards land
advances and Rs. 214.21 crore (March 31, 2025: Rs. 233.35 crore) towards deposit under joint development
arrangements. Under the agreements executed with the land owners, the Company is required to make further
payments and/or give share in area/ revenue from such development in exchange of undivided share in land based on
the agreed terms/ milestones.
(iii) The Company is committed to provide financial support to some of its subsidiaries to ensure that these entities operate
on going concern basis and are able to meet their debts and liabilities as they fall due.
iii) The Company has entered into an arrangement with Vistra ITCL India Limited ('Trustee') and Purva Asset Management
Private Limited ('Fund Manager' ) and has agreed to act as a sponsor of Purva Real Estate Fund ('Trust'), which is
being controlled by the Trustee. As part of the aforesaid arrangement, the Company and the Fund Manager (a wholly
owned subsidiary of the Company) have agreed to make capital contribution of upto Rs.15.08 crore (March 31, 2025:
Rs.14.83 crore) and Rs.1.00 crore (March 31, 2025: Rs. 1.00 crore), respectively. The funds raised by the Trust are to
be invested in entities engaged in residential projects developed by the Company and its affiliates and the Company
has committed to fund any shortfall in internal rate of return of 12% on such investments. The Company has
assessed and is of the view that the surplus from the respective projects will be sufficient to repay the committed
return. Accordingly, the Company doesn't expect any further liability in this regard.
(iv) Ongoing legal proceedings related to property, income tax search and other matters
a) The Company is subject to ongoing legal proceedings in respect of the following matters as summarised below.
(i) Deposits and advances of Rs. 53.70 crore (March 31, 2025: Rs. 54.10 crore) towards joint development
arrangements and land acquisitions which are subject to legal proceedings related to obtaining clear and
marketable tittle for underlying properties.
(ii) Inventories related to launched project of Rs.82.70 crore (March 31, 2025: Rs. 78.30 crore) under land acquisition
proceedings by government authorities
(iii) Other balances of Rs.5.20 crore (March 31, 2025: Rs. 6.20 crore) recoverable from joint development partners
and other parties which are subject to litigations.
Pending resolution of the aforesaid legal proceedings, no provision has been made towards aforesaid claims and
the deposits, advances, inventory and other balances referred above are classified as good and recoverable in the
accompanying standalone financial statements based on the legal evaluation by the management of the ultimate
outcome of the legal proceedings.
b) A search under section 132 of the Income Tax Act ('the Act') was conducted in October 2023 in case of the Company,
certain group companies and its promoters. Pursuant to the proceedings of the Income tax authorities ('the
authorities'), requisite information was provided by the Company to the authorities.
The Company has received assessment orders from the authorities disallowing certain expenses on the grounds that
the same are not incurred for the purpose of business and other adjustments with potential tax impact of Rs.28.84
crore from AY 2016-17 to AY 2024-25 (March 31, 2025: Rs. 12.04 crore from AY 2020-21 to AY 2023-24). The
Company is of the view that these expenses were incurred in the ordinary course of business towards its ongoing
real estate development projects. The Company has filed appeal against such assessment orders and is reasonably
confident of providing necessary supporting evidences to the authorities in support of allowance of such expenses.
Further, during the quarter ended September 30, 2025, the Company had received notice from the authorities under
Prohibition of Benami Property Transactions Act, 1988 requiring the Company to submit response as to why Benami
proceedings should not be initiated against the Company and why the Company should not be held as the Beneficial
owner for the 43.5 acres of land parcels with carrying value of Rs. 13.20 crore. The Company has filed responses
against such notice to the authorities.
Pending resolution of the aforesaid legal proceedings, no provision has been made towards the consequential impact
arising from such assessment orders in the accompanying standalone financial statements, based on the legal
evaluation by the management of the ultimate outcome of the legal proceedings.
v) The Company is also subject to certain legal proceedings and claims, which have arisen in the ordinary course of business,
including certain litigation for commercial development or land parcels held for construction purposes, either through
joint development arrangements or through outright purchases, the impact of which is not quantifiable. These cases are
pending with various courts/statutory authorities. After considering the circumstances and legal evaluation thereon, the
management believes that these cases will not have an adverse effect on these financial statements.
Note: The Company does not expect any reimbursement in respect of the above contingent liabilities and it is not
practicable to estimate the timing of the cash outflows, if any, in respect of aforesaid matters and it is not probable that
an outflow of resources will be required to settle the above obligations/claims.
40 Related party transactions (contd.)IV. Other information:
1. Outstanding balances at the year-end are unsecured and settlement occurs in cash. There have been no guarantees
provided or received for any related party receivables or payables, other than those disclosed above. The Company has
not recorded any provision/ write-off of receivables relating to amounts owed by related parties. Also refer note 6, 20 and
43 for other related party information.
2. In respect of the transactions with the related parties, the Company has complied with the provisions of Section 177 and
188 of the Companies Act, 2013 where applicable, and the details have been disclosed above, as required by the applicable
accounting standards.
3. The Company has given loans to related parties and has provided guarantees on behalf of related parties for loans taken
by them from third parties. Such loans have been used by the related parties to fund their business operations.
4. The share based payment expense represents expense recognised as per Ind AS 102. The value of perquisite in this regard
under Income Tax Act 1961 is Nil as no option has been exercised during the year.
5. The Company had additionally received security by pledge of inventory of subsidiary - Provident Housing Limited of Rs.
54.59 crore for the loan taken by the Company during the year ended March 31, 2025. Such loan has been closed and
the pledge on the security is released during the year ended March 31, 2026.
6. Disclosure of the loans, advances, etc. to subsidiaries, associates and other entities in which the directors are interested:
41 Defined benefit plan - Gratuity
A. The Company has gratuity as defined benefit retirement plan for its employees. The Company provides for gratuity for
employees in India who are in continuous service for a period of 5 years and employees are eligible for gratuity at the rate
of 15 days eligible salary for each year of service until the retirement age. As at March 31, 2026 and March 31, 2025 the
plan assets were invested in insurer managed funds.
The average duration of the defined benefit plan obligation at the end of the reporting period is 8 years (31 March 2025:
8 years).
D The Government of India has implemented four new Labour Codes ("Labour Codes"), including the Code on Wages, 2019,
with effect from November 21, 2025. The Ministry of Labour & Employment published draft Central Rules and FAQs to
enable assessment of the financial impact due to changes in regulations. The Company has carried out actuarial valuation
as on March 31, 2026 considering the provisions of the Labour Codes and recorded additional obligation of Rs. 1.35 crore,
which has been recorded as Employee benefits expense in the financial statements for the year ended March 31, 2026.
The Company continues to monitor the finalization of the rules and clarifications from the Government on the Labour
Codes and would provide appropriate accounting effect, if any, as and when such clarifications are issued / rules are
notified.
42 Segmental information
The Company's business activities fall within a single reportable segment, i.e. real estate development. Hence, there are no
additional disclosures to be provided under Ind-AS 108 - Operating segments with respect to the single reportable segment,
other than those already provided in these financial statements.
The Company is domiciled in India. The Company's revenue from operations from external customers relate to real estate
development in India and all the non-current assets of the Company are located in India.
43 Share Based PaymentsEquity Settled Share Based Payment Transaction
Certain employees of the Company and its subsidiary are covered under the group-wide share-based schemes of the Company,
wherein the Company has the obligation to settle the share-based transaction with equity settled options. Further, there is no
recharge arrangement between the Company and its subsidiary for the aforesaid share-based transactions.
The Company had approved a scheme of Employees Stock Option Plan vide shareholders' special resolution dated September
27, 2022.
The eligible employees including members of key management personnel of the Company and its subsidiary as may be decided
by the Board and/or the Nomination and Remuneration committee at its own discretion are covered under the share-based
schemes of Puravankara Employee Stock Option Plan 2022.
There are no cash settlement alternatives. The Company accounts for the options as an equity-settled plan.
Vesting Schedule
The vesting schedule for the options granted is detailed in the grant letter issued to each employee. These options have a
minimum vesting period of one year and a maximum vesting period of five years, with 20% to 50% of the options vesting per
tranche. Moreover, the vesting of these options is dependent upon achieving specified performance metrics related to Revenue
and Profit, irrespective of market conditions.
The Company determines expected volatility on all options granted using available implied volatility rates. The Company
believes that market-based measures of implied volatility are currently the best available indicators of the expected
volatility used in these estimates.
The Company determines expected lives of options based on the weighted average life of the options. The Company
believes that the weighted average life of the options is the best estimate currently available.
Risk-free interest rates based on the yields on government bonds of term equivalent to the expected life of the option as
on the date of grant. Dividend yield to be Zero as the Company does not have a dividend payment policy in place in the
visible future.
Includes 27,700 options (March 31, 2025: Nil) granted to an eligible employee of the subsidiary company.
"includes 11,404 options (March 31, 2025: 77,265 options) lapsed relating to eligible employees of the subsidiary
company.
#includes 1,25,414 options surrendered by an employee of the subsidiary company.
The expected life of the stock is based on current expectations and is not necessarily indicative of exercise patterns that
may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of
the options is indicative of future trends, which may also not necessarily be the actual outcome.
44 Other Statutory Information
(i) There are no proceedings initiated or are pending against the Company for holding any benami property under the
Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.
(ii) The Company does not have any balances with companies struck off under section 248 of Companies Act, 2013 or section
560 of Companies Act,1956.
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
(iv) The Company has not traded or invested in Cryptocurrency transactions or Virtual Currency during the financial year.
(v) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with
the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly
lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vi) No funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"),
with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly,
lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party
("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vii) The Company has not surrendered or disclosed any transaction, previously unrecorded in the books of account, in the tax
assessments under the Income Tax Act, 1961 as income during the year.
(viii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government
authority or any other lender.
46 The Company has defined process to take daily back-up of books of account in electronic mode on servers physically located
in India.
The Company has used accounting software (SAP S/4 HANA) for maintaining its books of account which has a feature of
recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded
in the accounting software, except that audit trail feature is not enabled for direct changes to data when using certain access
rights as the audit trail feature is not enabled at the database level insofar as it relates to SAP S/4 HANA accounting software.
Further no instance of audit trail feature being tampered with was noted in respect of the accounting software to the extent
it was enabled. Additionally, the audit trail of relevant prior years has been preserved by the Company as per the statutory
47 Standards notified but not yet effective:
The new and amended standards that are notified by the Ministry of Corporate Affairs (MCA), but not yet effective, up to the
date of issuance of the Company's financial statements are disclosed below. The Company will adopt these amendments to the
standards, when they become effective.
Amendments to Ind AS 1 - Classification of Liabilities as Current or Non-current and Non-current Liabilities with Covenants
In accordance with Ind AS 1 currently applicable, breach of an immaterial covenant is ignored deciding in current vs. non-current
classification of liabilities. Also, in case of breach of a material covenant of a non-current loan on or before the reporting date,
the entity can obtain waiver from the lender after the reporting date and continue to classify the loan as non-current liability.
In accordance with changes to Ind AS 1 already notified by the MCA, the above relaxations to classify loan as non-current
liability will not be available from FY 2026-27 onward and need to be applied retrospectively. Consequently:
• A breach of either material or immaterial covenant will trigger current classification of liability.
• To continue classifying loan as non-current liability, entities will need to obtain waiver from the breach on or before the
reporting date.
The Company is currently assessing the impact the amendments will have on its financial statements.
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