Moneycontrol Be a Pro
Get App
SENSEX NIFTY
Moneycontrol.com India | Notes to Account > Construction & Contracting - Civil > Notes to Account from Mahindra Lifespace Developers - BSE: 532313, NSE: MAHLIFE
YOU ARE HERE > MONEYCONTROL > MARKETS > CONSTRUCTION & CONTRACTING - CIVIL > NOTES TO ACCOUNTS - Mahindra Lifespace Developers

Mahindra Lifespace Developers

BSE: 532313|NSE: MAHLIFE|ISIN: INE813A01018|SECTOR: Construction & Contracting - Civil
SET ALERT
|
ADD TO PORTFOLIO
|
WATCHLIST
LIVE
BSE
Oct 22, 16:00
423.50
-2.9 (-0.68%)
VOLUME 1,142
LIVE
NSE
Oct 22, 15:57
425.45
-2.4 (-0.56%)
VOLUME 50,815
Mar 18
Notes to Accounts Year End : Mar '19

1. General Information

Mahindra Lifespace Developers Limited (‘the Company’) is a limited company incorporated in India. The equity shares of the Company are listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) and its debentures are listed on BSE. Its parent and ultimate holding company is Mahindra & Mahindra Limited.

The addresses of its registered office and principal place of business are disclosed in the introduction to the annual report. The Company along with its subsidiary companies is engaged in the development of residential projects and large formats developments such as integrated cities and industrial clusters.

Fair value disclosure on Company’s investment properties

The Company’s investment property consist of a commercial property constructed on land taken on perpetual lease in India, Mahindra Towers at Delhi. Management determined that the investment properties consist of two classes of assets - office and retail - based on the nature, characteristics and risks of each property.

# The fair values of the Mahindra Towers at Delhi have been arrived at on the basis of a valuation carried out as on 31st March, 2019 by Anarock Property Consultant Pvt. Ltd. and as on 31st March 2018 by Jones Lang Lasalle Property Consultant (India) Pvt. Ltd., independent valuers not related to the Company. Anarock Property Consultant Pvt. Ltd. and Jones Lang Lasalle Property Consultant (India) Pvt. Ltd. are registered with the authority which governs the valuers in India and they have appropriate qualifications and experience in the valuation of properties in the relevant locations. The Fair value was determined using the market comparable approach based on recent market prices without any significant adjustments being made to the market observable data.

* During the previous year ended 31st March, 2018, the Company had sold its investment property GE Plaza at Pune.

Notes:

2. Based on projections and estimates by the Company of the expected revenues and costs to completion, provision for losses to completion and/ or write off of costs carried to inventory are made on projects where the expected revenues are lower than the estimated costs to completion. In the opinion of the management, the net realisable value of the construction work in progress will not be lower than the costs so included therein. The amount of inventories recognised as an expense of Rs. 33,283.67 lakhs (31st March, 2018: Rs. 32,441.65 lakhs) include 31st March, 2019: Rs. 5.34 Lakhs (31st March, 2018: Rs. 1,190.14 lakhs) in respect of write down of inventory to net realisable value.

3. The Company has availed cash credit facilities, short term loans and borrowed through Non-Convertible Debentures, which are secured by hypothecation of inventories.

4. The Company had purchased land parcel at Alibaug and two GAT Numbers (1755 and 1756) out of this land parcel have been attached by Income Tax department by serving order of attachment dated 31st July 2017 on one of the erstwhile land owners in lieu of recovery proceedings of income tax dues of Rs. 5,988.00 lakhs payable towards Income Tax department. The Company has lodged objections to the attachment of these two GAT Numbers with Income Tax Department and pursuing the matter.

*The Company had entered into an agreement to acquire a parcel of land near Thane, Maharashtra, at a consideration of Rs. 2,000.00 lakhs. While full consideration was paid, the land was not conveyed pending completion of certain formalities. The amount currently standing in the books as a current asset is Rs. 2,879 lakh. Tahsildar (Thane) has issued an order against the registered owner alleging non-adherence of certain conditions pertaining to Bombay Tenancy and Agricultural Lands Act, 1948 and changed the land records to reflect Government of Maharashtra as the holder of the land. The Company has been legally advised that the said order and the demand thereunder is grossly erroneous and not tenable. Accordingly, the Company has filed an appeal before Sub-Divisional Officer Thane (SDO). SDO after hearing and completing the process has issued an order dated 07th February, 2019 and set aside the order passed by Tahsildar (Thane) and has also directed Tahsildar (Thane) to delete the name of Government of Maharashtra from the land records of the aforesaid land.

Terms/rights attached to equity shares with voting rights

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share and carry a right to dividends. 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 ensuing Annual General Meeting.

The Company has 96,850 (Previous Year 1,17,000) equity shares of Rs. 10/- each reserved for issue under options [Refer Note 25].

v) The allotment of 51,063 (Previous Year 51,063) equity shares of the Company has been kept in abeyance in accordance with Section 206A of the Companies Act, 1956 (Section 126 of the Companies Act 2013), till such time the title of the bonafide owner of the shares is certified by the concerned Stock Exchange or the Special Court (Trial of Offences relating to Transactions in Securities).

vi) The Board of Directors had at its meeting held on 27th October, 2016, approved Rights Issue upto an amount of Rs. 30,000 lakhs. During the previous year ended 31st March, 2018, the Company completed the Rights Issue by allotting on 5th May, 2017, 10,263,388 equity shares at a price of Rs. 292 (including face value of Rs. 10 each) per equity share aggregating Rs. 29,969 lakhs in the ratio of 1 (one) Right Equity Share for every 4 (four) fully paid-up equity shares of the Company held by the Equity Shareholders on the Record Date i.e. 31st March, 2017. The Rights Issue was subscribed 129.18 percent of the Issue size in terms of number of equity shares applied. Consequently, the paid up equity share capital of the Company had increased to Rs. 5,132 lakhs divided into 5,13,18,988 equity shares of Rs. 10 each. The Securities Premium account had increased to Rs. 97,438 lakhs. The Rights Issue proceeds had been fully utilised for the purpose of the Issue.

Description of the nature and purpose of Other Equity:

General Reserve: The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. There is no policy of regular transfer. Items included under General Reserve shall not be reclassified back into the P&L.

Securities Premium: The Securities Premium is created on issue of shares at a premium.

Share Options Outstanding Account: The Share Options Outstanding Account represents reserve in respect of equity settled share options granted to the Company’s employees in pursuance of the Employee Stock Option Plan.

Retained Earnings: This reserve represents cumulative profits of the Company and effects of remeasurement of defined benefit obligations. This reserve can be utilised in accordance with the provisions of Companies Act, 2013.

Capital Redemption Reserve: The Capital Redemption Reserve was created against redemption of Preference Shares.

Debenture Redemption Reserve: Debenture Redemption Reserve is a Statutory Reserve (as per Companies Act, 2013) created out of profits of the Company available for payment of dividend for the purpose of redemption of Debentures issued by the Company. On completion of redemption, the reserve is transferred to retained earnings.

Share Application Money Pending allotment- This represents share application money received from the eligible employees upon exercise of employee stock option. The same will be transferred to equity share capital account after the allotment of shares to the applicants. The share application money pending allotment of Rs. 0.53 lakhs pertaining to previous year has been transferred to equity share capital during the year upon allotment of shares.

Defect Liability Provisions:

Provision for defect liability represents present value of management’s best estimate of the future outflow of economic resources that will be required in respect of residential units when control over the property has been transferred to the customer, the estimated cost of which is accrued during the period of construction, upon sale of units and recognition of related revenue. Management estimates the related provision for future defect liability claims based on historical cost of rectifications and is adjusted regularly to reflect new information. The residential units are generally covered under a the defect liability period limited to 5 year from the date when control over the property has been transferred to the customer.

Secured Borrowing

(a) The cash credit facility carrying interest rate in the range of 8.80% p.a. to 9.20% p.a. (Previous Year 8.70% p.a. to 8.85% p.a.) is secured by first charge on all existing and future current assets excluding land and immovable properties.

Unsecured Borrowings

(a) The cash credit facility is carrying interest rate in the range of 8.20% p.a. to 8.30% p.a. (Previous Year 8.20% p.a.)

(b) In the previous year, loans from related parties included inter company borrowings obtained at 7.50% p.a.

(c) Other loans from banks include short term loan carrying interest rate in the range of 8.05% p.a. to 8.80% p.a. (Previous Year 7.90% p.a. to 8.50% p.a.)

(d) In the previous year, loans from other parties included commercial papers issued for working capital purposes carrying interest rate of 7.35% p.a.

Trade Payables are payables in respect of the amount due on account of goods purchased or services received in the normal course of business.

*This information has been determined to the extent such parties have been identified on the basis of intimation received from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Based on the information available with the Company there are no dues outstanding in respect to Micro, Small and Medium Enterprises as of Balance Sheet Date.

Notes:

(1) Contract Balances

(a) Amounts received before the related performance obligation is satisfied are included in the balance sheet (Contract liability) as “Advances received from Customers” in note no. 21- Other Current Liabilities. Amounts billed for development milestone achieved but not yet paid by the customer are included in the balance sheet under trade receivables in note no. 11.

(b) During the year, the Company recognised Revenue of Rs. 14,925.36 lakhs from opening contract liability (after Ind AS 115 adoption) of Rs. 32,095.47 lakhs.

(c) There were no significant changes in the composition of the contract liabilities and Trade receivable during the reporting period other than on account of periodic invoicing and revenue recognition.

(d) Amounts previously recorded as contract liabilities increased due to further milestone based invoices raised during the year and decreased due to revenue recognised during the year on completion of the construction.

(e) Amounts previously recorded as Trade receivables increased due to further milestone based invoices raised during the year and decreased due to collections during the year.

(f) There are no contract assets outstanding at the end of the year.

(g) The aggregate amount of the transaction price allocated to the performance obligations that are completely or partially unsatisfied as at March 31, 2019, is Rs. 78,615.64 lakhs. Out of this, the Company expects, based on current projections, to recognize revenue of around 50% within the next one year and the remaining thereafter. This includes contracts that can be terminated for convenience with a penalty as per the agreement since, based on current assessment, the occurrence of the same is expected to be remote.

(a) The Company incurs commissions that are incremental costs of obtaining a contract with a customer. Previously, all such costs were expensed as and when incurred. Under Ind AS 115, the Company recognises the incremental costs of obtaining a contract as assets under Prepaid Expenses under note no. 13 - Other Assets and amortises it upon completion of the related property sale contract.

(b) For the year ended 31 March 2019, amortisation amounting to Rs. 375.97 lakhs was recognised as Brokerage cost in note no. 24 - Cost of Sales. There were no impairment loss in relation to the costs capitalised.

Share based payment

The Company has granted options to its eligible employees under the Employee Stock Options Scheme 2006 (“ESOS 2006”) and the Employee Stock Options Scheme 2012 (“ESOS 2012). The options granted under both the schemes are equity settled. Options granted vest in 4 instalments bifurcated as 20% each on the expiry of 12 months & 24 months, 30% each on the expiry of 36 months & 48 months respectively from the date of grant. The options may be exercised on any day over a period of five years from the date of vesting.

The other details of the schemes are summarised below:

Share Options outstanding at the end of the year

The share options outstanding at the end of the year had a range of exercise prices of Rs. 10 - Rs. 325 (as at March 31, 2018: Rs. 10 - Rs. 325), and weighted average remaining contractual life of 2135 days (as at March 31, 2018: 2115 days).

Diluted earnings per share

The diluted earnings per share has been computed by dividing the net profit after tax available for equity shareholders by the weighted average number of equity shares, after giving dilutive effect of the outstanding stock options for the respective periods.

5. - Impact of application of Ind AS 115 Revenue from Contracts with Customers

a) The Ministry of Corporate Affairs vide notification dated 28th March 2018 has made Ind AS 115 “Revenue from Contracts with Customers” (Ind AS 115) w.e.f. 1st April, 2018. The Company has applied the modified retrospective approach as per para C3(b) of Ind AS 115 to contracts that were not completed as on 1st April 2018 and the cumulative effect of applying this standard is recognised at the date of initial application i.e.1st April, 2018 in accordance with para C7 of Ind AS 115 as an adjustment to the opening balance of Retained Earnings, only to contracts that were not completed as at 1st April, 2018. The transitional adjustment of Rs. 7,958.14 lakhs (net of deferred tax) has been adjusted against opening Retained Earnings based on the requirements of the Ind AS 115 pertaining to recognition of revenue based on satisfaction of performance obligation (at a point in time).

(b) For sales of property under development that were recognised on the percentage-of-completion basis under the previous year accounting policy, the Company has determined that they generally do not meet the criteria for recognising revenue over time under Ind AS 115 owing to non-enforceable right to payment from Customer for performance completed to date and, therefore recognises revenue at a point in time.

(c) Refer note 2.4 - ‘‘Revenue recognition” under Significant accounting policies in the Annual report of the Company, for the revenue recognition policy prior to April 1, 2018.

(d) Due to the application of IND AS 115 for the full year ended March 31, 2019 Income from Projects as per note no. 22 is higher by Rs. 11,770.32 lakhs, Cost of Project as per note no. 24 is higher by Rs. 7,432.24 lakhs, Profit before Tax is higher by Rs. 4,338.08 lakhs, Tax expense as per note no. 28(a) is higher by Rs. 1,699.62 lakhs and Profit after tax is higher by Rs. 2,638.46 lakhs. The Basic and Diluted EPS as per note no. 29 is Rs. 11.41 and Rs. 11.39 per share instead of Rs. 6.27 and Rs. 6.26 per share. These changes are due to recognition of revenue based on satisfaction of performance obligation (at a point in time), as opposed to the previously permitted percentage of completion method. Accordingly, the comparatives have not been restated for the full year ended March 31, 2018 and hence not comparable.

(e) Due to the application of Ind AS 115, Construction Work-in-progress as per note no. 10 is higher by Rs. 34,644.03 lakhs, Deferred Tax Asset as per note no. 18 is higher by Rs. 1,806.71 lakhs, Prepaid Expenses as per note no. 13 is lower by Rs. 11,237.11 lakhs, Retained Earnings as per note no. 15 is lower by Rs. 6,408.33 lakhs and Advances received from customers as per note no. 21 is higher by Rs. 31,621.96 lakhs as at March 31, 2019.

(f) There has been no material impact on the Cash flows Statement as the Company continues to collects from its Customers based on payment plans. Additionally there is no material impact on Other Comprehensive Income on account of Ind AS 115 transition.

6 - Financial Instruments

Capital management

The Company’s capital management objectives are:

- safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders

- maintain an optimal capital structure to reduce the cost of capital

The Management of the Company monitors the capital structure using debt equity ratio which is determined as the proportion of total debt to total equity.

Financial Risk Management Framework

The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk. In order to manage the aforementioned risks, the Company operates a risk management policy and a program that performs close monitoring of and responding to each risk factor.

CREDIT RISK

(i) Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises from trade receivables, cash and cash equivalents, mutual funds & other financial assets.

Trade Receivables:

The Company’s trade receivables include receivables on sale of residential flats and rent receivable. As per the Company’s flat handover policy, a flat is handed over to a customer only upon payment of entire amount of consideration. The rent receivables are secured by security deposits obtained under the lease agreement. Thus, the Company is not exposed to any credit risk on receivables from sale of residential flats and rent receivables.

Cash and Cash Equivalents, Mutual Funds & Other Financial Assets

For banks and financial institutions, only high rated banks/institutions are accepted. The Company holds cash and cash equivalents with bank and financial institution counterparties, which are having highest safety ratings based on ratings published by various credit rating agencies. The Company considers that its cash and cash equivalents have low credit risk based on external credit ratings of the counterparties.

The Company holds mutual funds with financial institution counterparties, which are having highest safety ratings based on ratings published by various credit rating agencies. The Company considers that its mutual funds have low credit risk based on external credit ratings of the counterparties.

For other financial assets, the Company assesses and manages credit risk based on reasonable and supportive forward looking information. The Company does not have significant credit risk exposure for these items.

LIQUIDITY RISK

(i) Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Company’s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

(ii) Maturities of financial liabilities

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The amount disclosed in the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

MARKET RISK

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk such as equity price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. All such transactions are carried out within the guidelines set by the Board of Directors.

Currency Risk

Foreign currency risk is the risk that the fair value or the future cash flows of an exposure will fluctuate because of changes in the foreign exchange rate. The Company undertakes transactions denominated in foreign currencies only for the purchases of the components which are required to carry out the construction activities. The Company manages its foreign currency risk by forward contracts that are expected to occur within a maximum 12 month from the entering of a contract.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and floating rate loans and borrowings.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:

7 - Segment information

The reportable segments of the Company are ‘Projects, Project Management and Development’ and ‘Operating of Commercial Complexes’.

The segments are largely organised and managed separately according to the organisation structure that is designed based on the nature of business. Operating segments are reported in a manner consistent with the internal reporting provided to the Managing Director regarded as the Chief Operating Decision Maker (“CODM”).

Description of each of the reportable segments for all periods presented, is as under:

i) Projects, Project Management & Development: This Segment of the business includes income from sale of residential units across projects, project management and development in India.

ii) Operating of Commercial Complexes: This Segment of the business includes rental income from commercial properties at Gurgaon

The CODM evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by operating segments. The CODM reviews revenue and gross profit as the performance indicator for all of the operating segments. The measurement of each segment’s revenues, expenses and assets is consistent with the accounting policies that are used in preparation of the financial statements. Segment profit represents the profit before interest and tax.

Revenue from type of products and services

The operating segments are primarily based on nature of products and services and hence the Revenue from external customers of each segment is representative of revenue based on products and services.

Geographical Information

The Company operates in one reportable geographical segment i.e. “Within India”. Hence, no separate geographical segment wise disclosure is applicable as per the requirements of Ind AS 108 Operating Segments.

Information about major customers

During the year ended 31st March, 2019 and 2018 respectively, revenues from transactions with a single external customer did not amount to 10 percent or more of the Company’s revenues from external customers.

Segment revenue reported above represents revenue generated from external customers. There were no inter-segment sales in the current year as well as previous year.

8 - Employee benefits

(a) Defined Contribution Plan

The Company’s contribution to Provident Fund and Superannuation Fund aggregating Rs. 316.41 lakhs (31st March, 2018 : Rs. 304.63 lakhs) has been recognised in the Statement of Profit or Loss under the head Employee Benefits Expense.

(b) Defined Benefit Plans:

Gratuity

The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the Payment of Gratuity Act, 1972 or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

Through its defined benefit plans the Company is exposed to a number of risks, the most significant of which are detailed below:

Investment risk

The present value of the defined benefit plan liability (denominated in Indian Rupee) is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest risk

A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan’s debt investments.

Longevity risk

The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk

The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

The significant actuarial assumptions used for the purposes of the actuarial valuations were as follows:

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the Balance sheet.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to previous period.

The Company expects to contribute Rs. 91.04 lakhs (31st March, 2018 Rs. 97.96 Lakhs) to the gratuity trusts during the next financial year.

Terms and conditions of transactions with related parties

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. 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.

9 - Additional Information to the Financial Statements Dividend

In respect of the current year, the directors proposed dividend of Rs. 6 per share be paid on equity shares on 22nd April, 2019. This equity dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The proposed equity dividend is payable to those shareholders whose names appear on Register of Members as on the book closure date. The total estimated equity dividend to be paid is Rs. 3,080.95 lakhs. The payment of this dividend is estimated to result in payment of dividend distribution tax of Rs. 633.41 lakhs @ 20.56% on the amount of dividends grossed up for the related dividend distribution tax.

10 - Recent Indian Accounting Standards (Ind AS)

IND AS 116 - Leases

On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 will replace the existing leases Standard, Ind AS 17 Leases, and related Interpretations. The Standard sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract i.e., the lessee and the lessor. Ind AS 116 introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than twelve months, unless the underlying asset is of low value. Currently, operating lease expenses are charged to the statement of Profit & Loss. The Standard also contains enhanced disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor accounting requirements in Ind AS 17. The Company is currently assessing the impact of application of Ind AS 116 on Company’s financial statements.

Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments :

On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments which is to be applied while performing the determination of taxable profit (or loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. According to the appendix, companies need to determine the probability of the relevant tax authority accepting each tax treatment, or group of tax treatments, that the companies have used or plan to use in their income tax filing which has to be considered to compute the most likely amount or the expected value of the tax treatment when determining taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates. The standard permits two possible methods of transition - i) Full retrospective approach - Under this approach, Appendix C will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors, without using hindsight and ii) Retrospectively with cumulative effect of initially applying Appendix C recognized by adjusting equity on initial application, without adjusting comparatives. The effective date for adoption of Ind AS 12 Appendix C is annual periods beginning on or after April 1, 2019. The Company will adopt the standard on April 1, 2019 and has decided to adjust the cumulative effect in equity on the date of initial application i.e. April 1, 2019 without adjusting comparatives. The effect on adoption of Ind AS 12 Appendix C would be insignificant in the standalone financial statements.

Amendment to Ind AS 12 - Income taxes :

On March 30, 2019, Ministry of Corporate Affairs issued amendments to the guidance in Ind AS 12, ‘Income Taxes’, in connection with accounting for dividend distribution taxes.

The amendment clarifies that an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events. Effective date for application of this amendment is annual period beginning on or after April 1, 2019. The Company is currently evaluating the effect of this amendment on the standalone financial statements.”

Amendment to Ind AS 19 - plan amendment, curtailment or settlement:

On March 30, 2019, Ministry of Corporate Affairs issued amendments to Ind AS 19, ‘Employee Benefits’, in connection with accounting for plan amendments, curtailments and settlements.

The amendments require an entity:

- to use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement; and

- to recognise in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even if that surplus was not previously recognised because of the impact of the asset ceiling.

Effective date for application of this amendment is annual period beginning on or after April 1, 2019. The Company does not have any impact on account of this amendment.”

11. Input Tax Credit (ITC) benefits to the customers

Revenue from operations for the year ended 31st March, 2019 is net of Rs. 205.22 Lakhs (31st March, 2018 - Rs. 1,119 lakhs) towards input tax credit benefits passed on to the customers as per the provisions of section 171 on Anti-Profiteering of CGST Act, 2017. The treatment is as per the prevailing Indian Accounting Standards.

12. Events after the reporting period

No material events have occurred after the Balance Sheet date and upto the approval of the financial statements.

13. Previous Year Figures

The figures for previous year have been regrouped wherever necessary to confirm to current year’s grouping.

Source : Dion Global Solutions Limited
Quick Links for mahindralifespacedevelopers
Explore Moneycontrol
Stocks     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z | Others
Mutual Funds     A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.