The following discussion is intended to convey our managements perspective on our financial condition and results of our operations. Our Financial Year commences on April 1 and ends on March 31 of the following year, so all references to a particular Financial Year or a Fiscal are to the twelve months ended March 31 of that year.
You should read the following discussion in conjunction with the Restated Consolidated Financial Information included in this Red Herring Prospectus as at and for last 3 Financial Years ended March 31, 2024, March 31, 2023 and March 31, 2022 including the related notes, schedules, and annexures. For further information, see ‘Restated Consolidated Financial Information on page 280.
The Restated Consolidated Financial Information included in this Red Herring Prospectus are prepared and presented in accordance with requirements of Section 26 of the Companies Act, the SEBI ICDR Regulations and the Guidance Note on
‘Reports in Company Prospectuses (Revised 2019) issued by the ICAI, which differ in certain material respects from IFRS, U.S. GAAP and GAAP in other countries, and our assessment of the factors that may affect our prospects and performance in future periods. This discussion may include certain forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors or contingencies, including those described below and elsewhere in, this Red Herring Prospectus. For further information, see
‘Forward-Looking Statements on page 18. Also read ‘Risk Factors and ‘Principal factors affecting our financial condition and results of operations on pages 31 and 353, respectively, for a discussion of certain factors or contingencies that may affect our business, financial condition or results of operations.
Unless otherwise indicated, industry and market data used in this section has been derived from the Anarock Report by Anarock appointed by us pursuant to engagement letter dated July 15, 2024, and exclusively commissioned and paid for by us in connection with the Issue. Unless otherwise indicated, all industry and other related information derived from the Anarock Report and included herein with respect to any particular year refers to such information for the relevant calendar year. Anarock was appointed by our Company and is not connected to our Company, our Directors, and our Promoters. A copy of the Anarock Report is available on the website of our Company at https://arkade.in/wp-content/uploads/2024/08/Industry-Report_Arkade_Developers_Limited_Final_Report-5-8-2024.pdf. For further details and risks in relation to commissioned reports, see ‘Risk Factor - This Red Herring Prospectus contains information from an industry report prepared by Anarock which we have commissioned and paid for on page 57. Unless stated otherwise, the data in relation to our Ongoing Projects and Upcoming Projects included here is as of June 30, 2024.
OVERVIEW
We are a real estate development Company concentrating on the development of premium aspirational lifestyle residential premises in Mumbai, Maharashtra, Indias commercial capital. Our business can broadly be classified into two categories: (i) development / construction of residential premises on land acquired by our Company (New Projects) and (ii) redevelopment of existing premises (Redevelopment Projects). As on June 30, 2024, we have developed 2.20 million square feet of residential property (including through partnership entities in which we hold the majority stake). We are engaged in the development of new projects and redevelopment of existing premises, and between 2017 and Q1 2024, we have launched 1,220 residential units and sold 1,045 residential units in different markets in MMR, Maharashtra. In particular, we have established a successful track record of completing our projects on time, and from CY 2003 to March 2024, we have successfully completed redevelopment of 10 projects in the western suburbs of Mumbai and 1 project in south-central Mumbai (through a partnership firm in which we hold the majority stake) with a combined constructed area of 1,000,000 square feet (approx.). This track record has established us as one of the major player of redevelopment in the Mumbai western suburbs (Source: Anarock Report).
Our operations are strategically located in Mumbai, one of the biggest and most expensive real estate markets in India. Since CY 2021 to Q1 2024, MMR, Maharashtra has contributed the highest annual sales share of residential units across the top 7 cities in India, ranging from 29% to 33%. On average, the sales in MMR, Maharashtra accounted for 31% of the total residential unit absorption during this time frame. Further, the residential market in MMR, Maharashtra stands out as the most expensive, amongst the top 7 cities in India with a capital value of 14,600 per sq. ft as of Q1 2024. (Source: Anarock Report) Within MMR, Maharashtra, our operations are strategically located, and we have significant operations in the western suburbs of MMR, Maharashtra and, from 2017, are amongst the top 10 developers in terms of supply in the Borivali West, Goregaon East and Santacruz West micro-markets. (Source: Anarock Report)
We have developed a strong brand proposition and successful track record including by leveraging our lineage Amit Mangilal Jain, our Promoter, is a second-generation real estate entrepreneur whose family has been involved in real estate development since 1986. We owe our strong brand recognition in MMR, Maharashtra and our track-record to our customer-centric approach, and our business model which lays emphasis on developing high-end and premium budget aesthetically designed, sustainable residential premises with life-style amenities and facilities in the high-density areas in MMR, Maharashtra. We also have a consistent track-record of meeting our project delivery timelines which is a critical aspect of our brand.
While we have over the years developed projects at different price points, we are currently developing projects which have a very broad per unit price point ranging from 9.44 million to 62.53 million. Set out below is our average per unit price point.
| Particulars | Highest price per unit | Lowest price per unit | Average per unit |
| Fiscal 2024 | 57.99 | 10.36 | 20.55 |
| Fiscal 2023 | 62.53 | 9.44 | 21.13 |
| Fiscal 2022 | 63.60 | 6.95 | 16.96 |
While our initial projects were stand-alone residential buildings, our current portfolio of Ongoing Projects includes gated communities such as Arkade Nest, Arkade Aspire, Arkade Prime and Arkade Aura.
In the last 2 decades we have completed 28 projects (including 11 projects on a stand-alone basis (including 2 projects executed through partnership firms in which we hold the majority stake), 8 projects executed by our Promoter through his proprietorship, M/s Arkade Creations, and 9 projects through joint development arrangements with other third parties) aggregating more than 4.5 million square feet of development and have catered to more than approximately 4,000 customers. Our projects have, generally, been financed primarily through a mix of promoter equity and internal accruals. As on March 31, 2024, our net debt to equity ratio was 0.14. The break-up of the projects undertaken by us on a stand-alone basis (including 2 projects executed through partnership firms in which we hold the majority stake), projects undertaken by us through joint development arrangements with other third parties, and projects executed by our Promoter through his proprietorship, M/s Arkade Creations, is set out below:
Projects undertaken by our Company on a stand-alone basis
| Project | Location | Nature of the project | Total Constructed area (in square feet) |
| 1. New Bharat Villa CHSL | Vile Parle West | Redevelopment | 21,000 |
| 2. Gangadhar Nagar | Borivali East | Redevelopment | 72,000 |
| 3. Mahant | Vile Parle East | Redevelopment | 25,000 |
| 4. Jeevan Sarita | Vile Parle East | Redevelopment | 100,000 |
| 5. Arkade Adornia | Goregaon East | Redevelopment | 78,000 |
| 6. Arkade Earth | Kanjurmarg East | New Project | 890,000 |
| 7. Arkade Serene | Sundar Nagar, Malad West | Redevelopment | 130,000 |
| 8. Arkade Rise* | Carmichel Road, Mumbai | Redevelopment | 50,000 |
| 9. Arkade Art* | Mira Road | New Project | 400,000 |
| 10. Darshan | Vile Parle East | New Project | 36,074 |
| 11. Arkade Crown | Borivali West | Redevelopment | 401,073 |
| Total | 2,203,147 |
*Executed through a partnership firm in which we hold the majority stake.
As certified by Sher Singh B. Chilotra, independent chartered engineer pursuant to a certificate dated September 5, 2024.
Projects undertaken by us through joint development arrangements with other third parties
| Project | Location | Nature of the project | Total Constructed area (in square feet) | Our Companys profit-sharing ratio in the project* |
| 1. Acropolis | Virar | New project development | 1,000,000 | 34% |
| 2. Arkade Bhoomi Heights | Kandivali West | New project development | 55,000 | 50%# |
| 3. Bhoomi Arkade Building 1 | Kandivali East | New project development | 275,000 | 50%# |
| 4. Bhoomi Arkade Building 2 | Kandivali East | New project development | ||
| 5. Shubh Industrial Estate | Vasai East | New project development | 80,000 | 25%# |
| 6. Shubh Innov8 | Vasai East | New project development | 100,000 | 25%# |
| 7. Wallace Fortuna | Mazgaon | New project development | 477,000 | 28.80%# |
| 8. Fortuna | Forjett Street | New project development | 15,000 | 30%# |
| 9. White Lotus | Mira Road | New project development | 110,000 | 50%# |
| Total | 2,112,000 |
As certified by Sher Singh B. Chilotra, independent chartered engineer pursuant to a certificate dated September 5, 2024.
*The projects undertaken by us through joint development arrangements with other third parties were developed on a profit sharing basis as set out above. #Through our Promoter, Amit Mangilal Jain, who is also our Chairman and Managing Director.
Projects undertaken through M/s Arkade Creations, sole proprietorship of our Promoter
| Project | Location | Nature of the project | Total Constructed area (in square feet) |
| 1. Green Avenue 1 | Borivali East | New project development | 35,000 |
| 2. Green Avenue 2 | Borivali East | New project development | 55,000 |
| 3. Park Side | Borivali East | New project development | 75,000 |
| 4. Harmony | Borivali East | New project development | 13,000 |
| 5. Casa Bella | Borivali East | New project development | 21,000 |
| 6. Vineet CHSL | Kandivali West | Redevelopment | 39,000 |
| 7. Om Khushal CHSL | Vile Parle East | Redevelopment | 59,000 |
| 8. Jayshree | Malad West | Redevelopment | 74,000 |
| Total | 371,000 |
As certified by Sher Singh B. Chilotra, independent chartered engineer pursuant to a certificate dated September 5, 2024.
We are, currently, developing approximately 3.7 million square feet across 6 Ongoing Projects and 6 Upcoming Projects (for which we have executed development agreements and are in the process of obtaining approvals, on a standalone basis.
Ongoing Projects
Our Ongoing Projects comprise 6 projects located in prime locations in the western and eastern suburbs of Mumbai, Maharashtra, which are at various stages of development. Set out below are some of the key aspects of our Ongoing Projects as on June 30, 2024:
| Particulars# | Nature of the project | Expected completion date* | Total number of units available for sale * | Number of units sold (in %) |
| Arkade Aura, Santacruz, MMR, Maharashtra | Residential | December 31, 2025 | 43 | 55.81 |
| Arkade Prime, Andheri East, MMR, Maharashtra | Residential / Commercial | December 31, 2025 | 116 | 92.24 |
| Arkade Aspire, Goregaon East, MMR, Maharashtra | Residential / Commercial | December 31, 2025 | 228 | 89.04 |
| Arkade Nest, Mulund West, MMR, Maharashtra | Residential | June 30, 2027 | 87 | 63.22 |
| Arkade Pearl, Vile Parle, MMR, Maharashtra | Residential | December 31, 2026 | 38 | 34.21 |
| Arkade Eden, Malad, MMR, Maharashtra | Residential | December 31, 2026 | 55 | 41.82 |
| Particulars# | Nature of the project | Expected completion date* | Total number of units available for sale * | Number of units sold (in %) |
| Total | 567 | 74.96 |
# Information provided in respect of our Ongoing Projects is based on our current management plans and is subject to change.
* Per RERA filings.
As of June 30, 2024, out of our 6 projects that are currently under-development 3 are New Projects and 3 are Redevelopment Projects constituting 50.00% each of our under-development projects. Set out below is break-up of the revenue from Redevelopment Projects and New Projects Fiscal 2024, Fiscal 2023 and Fiscal 2022.
| Projects | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | |||
| Revenue (in million) | Percentage of total revenue | Revenue (in million) | Percentage of total revenue | Revenue (in million) | Percentage of total revenue | |
| Redevelopment Projects | 2,103.97 | 33.15% | 913.21 | 41.48% | Nil | Nil |
| New Projects | 4,243.40 | 66.85% | 1,288.31 | 58.52% | 2,289.34 | 100.00% |
Upcoming Projects
As of June 30, 2024, our Upcoming Projects comprise 6 projects in MMR, Maharashtra i.e., 1 New Project, viz., Arkade Rare located in Bhandup, i.e. Copper Rollers Private Limited, and 5 Redevelopment Projects i.e., 1 project Arkade Vistas and Arkade Views located in Goregaon East, 2 projects viz., Municipal Employees Arunachal Co-operative Housing Society and Maheshwar Niwas Co-operative Housing Society located in Santacruz West, 1 project viz., Laxmi Ramana Co-operative Housing Society located in Goregaon West and 1 project Nutan Ayojan Nagar Co-operative Housing Society located in Malad West, respectively.
In addition to our Upcoming Projects, as of June 30, 2024, we have received letter of intent for 2 redevelopment projects for which we are yet to execute a contract.
Set out below are the developable area and the RERA of our Ongoing Projects.
| Particulars | Total number of projects | Developable area (in square feet) | Saleable RERA carpet area (in square feet) | RERA carpet area sold (in square feet) |
| Ongoing Projects | 6 | 1,872,188 | 661,616 | 345,402 |
| Upcoming Projects | 6 | 1,824,256 | 592,923 | Nil |
| Total | 12 | 3,696,444 | 1,254,539 | 345,402 |
As certified by Sher Singh B Chilotra, independent chartered engineer pursuant to certificate dated September 5, 2024.
Information provided in respect of our Ongoing Projects and upcoming projects are based on our current management plans and are subject to change.
All our projects have been, and are, in MMR, Maharashtra. Our projects configuration and construction lay-outs are, predominantly, 2 BHK and 3 BHK, (we have also undertaken projects with a 1, 3.5, 4 BHK configuration) and are designed to cater to discerning customers. Since aspirational life-style amenities and facilities are a key element of our projects, our average land development area admeasures approximately 1 acre. We also strive to maintain fast turn-around time and, currently, our average project completion time frame i.e. the period between receiving possession of the land to delivery of the possession to the first customer is approximately 3 years (Average PCT).
Our revenue in Fiscal 2024, Fiscal 2023 and Fiscal 2022 was 6,357.12 million, 2,240.13 million and 2,371.82 million, respectively. Our revenue from operations has grown at a CAGR of 66.51% between Fiscal 2022 and Fiscal 2024.
While, historically, our focus has been on the western suburbs of MMR, Maharashtra we have also a developed high-end luxury project located in south Mumbai, Maharashtra. Further, in the recent years, we have sought to broaden our area of focus and have undertaken projects in the eastern suburbs of Mumbai, Maharashtra, which have experienced substantial expansion and development over a long period of time (Source: Anarock Report) where we expect to be able to acquire larger land parcels. Like the western suburbs, the east suburbs also harbour some of the biggest residential catchments in the city. Hence, the submarket has emerged as one of the biggest real estate markets in the city across the asset classes. (Source: Anarock Report)
Set out below details of the residential units sold in our projects in the western suburbs and eastern suburbs of MMR, Maharashtra Fiscal 2024, Fiscal 2023 and Fiscal 2022:
| Particulars | Western MMR*, Maharashtra | Eastern MMR**, Maharashtra | Total | |
| Fiscal 2024 | No. of residential units | 215 | 42 | 257 |
| Total value of residential units booked (in million) | 5,078.96 | 627.51 | 5,706.48 | |
| Percentage of total value of residential units booked (%) | 89.00 | 11.00 | 100.00 | |
| No. of residential units | 257 | 1 | 258 | |
| Fiscal 2023 | Total value of residential units booked (in million) | 5,435.92 | 15.06 | 5,450.98 |
| Percentage of total value of residential units booked (%) | 99.72 | 0.28 | 100.00 | |
| No. of residential units | 46 | 41 | 87 | |
| Fiscal 2022 | Total value of residential units booked (in million) | 905.92 | 569.73 | 1,475.65 |
| Percentage of total value of residential units booked (%) | 61.39 | 38.61 | 100.00 |
* Western MMR, Maharashtra comprises Vile Parle East and Malad West, Goregaon East, Andheri East, and Santacruz West, Borivali West. ** Eastern MMR, Maharashtra comprises Kanjurmarg East and Mulund West.
We have over the years expanded our in-house capabilities and our in-house team is equipped to supervise all aspects of project development conceptualisation to completion land acquisition, legal, construction, and marketing and sales. We have also established and maintain empanelled vendors for various aspects of project development such as design architects, structural engineers, landscape consultants etc, with whom we work closely for ensuring timely completion of our projects.
We have also set up an integrated in-house project management team to focus on procurement efficiencies, vendor selection and construction activities. Our in-house sales team is supported by a distribution network of multiple non-exclusive and select channel partners across India which cater to key high net worth individuals and non-resident Indians. We also have a full-fledged in-house customer relationship team and after-sales team which supports customers from the property booking stage till the final delivery of the property.
We have also established a long-standing relationship with professionals in the real estate development sector who are essential part of a real estate project including interior designers and architects, RCC and structural engineers, and landscape and gardening consultants. We have a select panel of professionals for each category and these professionals are identified on the basis of various considerations including their technical abilities, track record of timeliness, and cost efficacy. We approach our empanelled professionals on a project-by-project basis and execute project specific contracts taking into account various factors including suitability to the scale of the project, availability and costing.
Land Reserves
We identify and acquire land as the need arises, and after having evaluated and analysed the need for, and the viability of, a residential housing project in the area. Thereafter, our in-house teams carefully evaluate the proposed site and consider various factors such as the dimensions of the land, proximity to public infrastructure such as hospitals and schools, connectivity, legal antecedents including title etc.
PRINCIPAL FACTORS AFFECTING OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Macro-economic conditions, and the factors affecting the real estate market, in India
We are pure-play real estate developer operating primarily in the MMR and surrounding regions. Accordingly, we generate all our revenue from our real estate activities in India. Consequently, factors affecting the state of the Indian real estate sector, particularly, the real estate sector in the MMR and neighbouring areas, and the Indian economy in general, are of significance for our performance.
The Indian real estate sector faced challenges of adapting to various reforms and changes brought about by demonetization, RERA, GST & IBC. These measures initially posed difficulties for the sector in aligning with the new regulations. However, they ultimately proved beneficial by strengthening the industry and promoting transparency, accountability, and financial discipline over the past few years. The structural changes introduced by RERA and GST played a crucial role in enhancing the maturity and credibility of the sector, and gaining trust of various stakeholders. (Anarock Report) Further, Indias urbanization rate is also increasing at a fast pace. As per UNDP projections, approximately 50% of Indias population will be urban by 2046. Rapid urbanization is expected to drive the demand for housing, offices, and other real estate asset classes in the medium to long term. UNDP has projected that there will be 8 cities with a population of 10 million and above by the year 2035 in India, highlighting the unmet housing demand. Also, the Per Capita Net National Income of India has nearly doubled in less than a decade despite being affected by the pandemic. Further, the mortgage industry in India has been on a continued growth trajectory and the CAGR in the last 15 years has been 17%. (Anarock Report) All the aforementioned factors play a crucial role in the growth of the real estate market in India. Our business operations are located in MMR and neighbouring regions and, therefore, our growth is also linked to the performance of the MMR real estate market. During the period from 2017 to Q1 2024, MMR achieved the highest annual sales share of residential units across the top seven cities of India, ranging from 27% to 33%. On average, the sales in MMR accounted for 30% of the total residential unit absorption during this time frame. (Anarock Report) During Fiscal 2024, Fiscal 2023 and Fiscal 2022, we have sold an average of 205 residential units per annum across 10 development / redevelopment projects, and our revenue from operations increased from 2,289.34 million in Fiscal 2022 to 6,347.36 million in Fiscal 2024 at a CAGR of 66.51%. Overall economic growth in India, rising income levels and availability of disposable income, particularly in MMR region are, therefore, critical for us to maintain our growth trajectory.
Continuing our focus on our blended business model
We follow a two-pronged approach to business growth (i) developing new projects, and (ii) redeveloping existing projects. This is a business model that we have followed since inception and it has stood in good stead. The new projects give us additional visibility and allow us to conceive and design projects without certain constraints that redevelopment project, often, entail such as paucity of land and other parties with their interests. However, the redevelopment model has other advantages including comparatively lower capital expenditure vis-?-vis a new project development and choice of selecting projects for redevelopment in well-established prime locations within our micro-markets.
We aim to continue our blended business model consisting of (i) redevelopment of residential premises and (ii) development / construction of residential premises on land acquired by our Company. Our efficient use of capital and the financial strength derived from our redevelopment projects provides us financial flexibility to undertake new projects in developing areas of MMR, Maharashtra and also enables us to develop more premium properties. Therefore, we expect that our continuing focus on the blended business model will remain a catalyst for our growth.
Fluctuations in market prices for our projects
Our revenue from operations is directly proportionate to the price points at which we sell our projects. Over the years we have developed projects at different price points, and our Ongoing Projects have a very broad per unit price point ranging from 9.44 million to 62.53 million. Set out below is our average per unit price point.
| Particulars | Highest price per unit | Lowest price per unit | Average per unit |
| Fiscal 2024 | 57.99 | 10.36 | 20.55 |
| Fiscal 2023 | 62.53 | 9.44 | 21.13 |
| Fiscal 2022 | 63.60 | 6.95 | 16.96 |
While we generally try to maintain reasonable level of consistency with our per unit price point, and these vary across micro-markets, our prices are affected by
(i) prevailing market conditions and prices in the real estate sector in the MMR and in India, generally,
(ii) the nature and location of our projects, and
(iii) other factors such as our brand and reputation and the design of the projects. In addition, price of projects is affected by the market supply and demand which in-turn are affected by varying factors beyond our control, including:
a) General macro-economic factors affecting real estate in India;
b) Local micro-economic factors;
c) The demographics of the location in which we are developing the project;
d) The prevailing rates of interest and the ease of availing financing;
e) Competition from other developers in the micro-markets we operate in or are targeting; and
f) Prevailing governmental policies and schemes and the regulatory and tax environment.
Since all of our Ongoing and Forthcoming projects are concentrated in the MMR, and in certain micro-markets within MMR, we are particularly affected by changes in real estate market conditions in the MMR.
Availability and cost of acquisition of land
Our business operations are extremely reliant on the availability of land, whether free hold or leasehold, and the cost of such land. In particular, we are dependent on the specific micro-markets of the MMR in which a vast majority of our operations are located. The MMR is one of the biggest and most expensive real estate markets in India. In the MMR, the availability and cost of land varies between micro-markets. For instance, island city of Mumbai has more older buildings than other parts of MMR and has fewer vacant land parcels to do development,
b) Between western suburbs and eastern (central railway) suburbs proportion of redevelopment projects will be lower in eastern suburbs owing to availability of industrial lands getting converted into residential development,
c) Rest of MMR has the least proportion owing to the age of buildings being relatively lower and more availability of vacant land. (Anarock Report)
A majority of our Ongoing Projects are located in the western suburbs and we also have a project ongoing in the central suburbs. We expect that going forward our focus will continue to be on the western and central suburbs. Therefore, the availability and cost of land, in these areas is critical to our continuing operations and growth. While in the past we have jointly developed projects, we have, in the recent past, moved away from this model, and are developing projects independently. In the recent past, our practice has been to acquire the land on which we propose to develop the project. The acquisition of land also requires us to deploy capital upfront which would either require us to maintain sufficient cash reserves or to avail financing. Further, while we have a team that is proficient and specialises in land acquisition, acquisition of land in India is still not easy.
Cost of Construction and Development
Our cost of construction includes the cost of raw materials such as steel, cement, wood, flooring and other building materials and labor costs. Raw material prices, particularly those of steel and cement, may be affected by price volatility caused by various factors that affect the Indian and international commodity markets. If there are extraordinary price increases in construction materials due to increase in demand for cement and steel, or shortages in supply, the contractors we hire for construction or development work may be unable to fulfil their contractual obligations and may, therefore, be compelled to increase their contract prices. Hence, increase in costs of construction materials may affect our construction costs, and, consequently, our margins, unless we are able to pass on such costs by increasing the sales price or rentals for our projects. Further, certain approval costs and premiums payable to Government authorities are linked to the ready reckoner rates announced by the relevant government authorities periodically. Any increase in the ready reckoner rates increases our approval costs.
In addition, the timing and quality of construction of the projects we develop depends on the availability and skill of our contractors and consultants, as well as contingencies affecting them, including labor and industrial actions, such as strikes and lockouts. Such labor and industrial actions may cause significant delays to the construction timetables for our projects and we may therefore be required to find replacement contractors and consultants at higher cost. As a result, any increase in prices resulting from higher construction costs could adversely affect demand for our projects and our profit margins. Further, timely completion of our projects is dependent on the adherence to timelines by the various entities we engage on the project including contractors for civil works. Our contracts with contractors for civil works for instance include penalty clauses for delays in meeting the agreed construction timelines and, or, termination where on failure to adhere with specific aspects of the work order. Nevertheless, we are, and will continue to remain, dependent on third parties for timely completion of our projects.
Impact of COVID-19 or other contagion resulting in similar circumstances
The COVID-19 pandemic has had significant repercussions across local, national and global economies and financial markets. The global and domestic impact of the COVID-19 pandemic, and the response of government authorities and public health officials, has evolved over time. At the height of the pandemic, various measures were adopted including quarantines, prohibiting public gatherings, travel restrictions, issuing "stay-at-home" orders and restricting the types of businesses that may continue to operate. In addition to these lifestyle factors
Initially, COVID-19 caused construction delays at project sites of our Ongoing Projects due to several factors such as lockdowns enforced by the government agencies, work-stoppage orders, disruptions in the supply of materials and shortage of labour. The pandemic also resulted in a mass migration of the contract labour. We operated in strict compliance with the various directions issued by the central, state and local authorities, from time to time.
To the extent the COVID-19 pandemic or other contagion or similar situations results in similar circumstances, our business and financial conditions could be adversely affected and it may also significantly exacerbate the effect of other risks that we are generally exposed to. See "Risk Factors - The COVID-19 pandemic adversely affects our business, financial condition, results of operations, cash flows, liquidity and performance, and it may reduce the demand for our projects in future" on page
39 .
KEY PERFORMANCE INDICATORS
Set out below are certain financial metrics of our Company.
| Particulars | Financial Year ended March 31, 20234 | Financial Year ended March 31, 2023 | Financial Year ended March 31, 2022 |
| Revenue From operations ( in million) | 6,347.36 | 2,201.52 | 2,289.34 |
| EBIT ( in million) | 1,682.37 | 680.54 | 699.01 |
| EBIT (%) of Revenue from operations | 26.51 | 30.91 | 30.53 |
| Profit after tax ( in million) | 1,228.08 | 507.66 | 508.44 |
| PAT Margin (%) | 19.35 | 23.06 | 22.21 |
| Debt To Equity Ratio | 0.21 | 0.74 | 0.43 |
| EBITDA ( in million) | 1,693.75 | 683.25 | 699.72 |
| EBITDA Margin (%) | 26.68 | 31.04 | 30.56 |
| Basic EPS ( ) | 8.08 | 3.34 | 3.32 |
| Diluted EPS ( ) | 8.08 | 3.34 | 3.32 |
| Interest Coverage Ratio | 53.80 | 53.12 | 16.15 |
| Return on Equity (ROE) (%) | 46.90 | 29.02 | 40.90 |
| Adjustable Return on Capital Employed (ROCE) (%) | 47.34 | 24.30 | 46.17 |
| Sales (in terms of number of units booked by customers) | 257 | 258 | 87 |
| Sales (in terms of area booked by customers) (in million square feet) | 0.20 | 0.19 | 0.06 |
| Completed Developable Area (in million square feet) | - | 0.26 | 0.30 |
| Collection ( million) | 5,702.31 | 2,584.03 | 1,700.64 |
| Voluntary employee attrition ratio (A/B) (%) | 12.76 | 10.26 | 11.11 |
Notes:
(1) Revenue from Operations means the Revenue from Operations as appearing in the Restated Consolidated Financial Information.
(2) EBIT refers to earnings before interest, taxes, gain or loss from discontinued operations.
(3) EBIT Margin refers to EBIT during a given period as a percentage of revenue from operations during that period.
(4) Net Profit Ratio/Margin quantifies efficiency in generating profits from revenue and is calculated by dividing net profit after taxes by revenue from operations.
(5) Debt to equity ratio is calculated by dividing the debt (i.e., borrowings (current and non-current) and current maturities of long-term borrowings) by total equity (which includes issued capital and all other equity reserves).
(6) EBITDA refers to earnings before interest, taxes, depreciation, amortisation, gain or loss from discontinued operations and exceptional items.
(7) EBITDA Margin refers to EBITDA during a given period as a percentage of revenue from operations during that period.
(8) EPS has been calculated in accordance with the Indian Accounting Standard 33 - ‘Earning per share notified under the Companies (Indian Accounting Standards) Rules, 2015. The above statement should be read with significant accounting policies and notes on Restated Consolidated Financial Information.
(9) Interest Coverage Ratio measures ability to make interest payments from available earnings and is calculated by dividing EBIT by finance cost.
(10) Return on equity (RoE) is equal to profit for the year divided by the average total equity and is expressed as a percentage.
(11) Adjusted RoCE (Adjusted Return on Capital Employed) (%) is calculated as EBIT divided by capital employed. Capital employed is calculated as total assets reduced by current liabilities. (12) Voluntary employee attrition ratio (A/B) (%) = No of employees that voluntarily left during the year / period divide No of employees at the beginning of the year / period + No of employees joined during the year / period
In addition to the financial metrics set out above, set out below are some of the key parameters that we use to analyse, track, or monitor our business operations.
| Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Sales (in terms of number of units booked by customers) | 257 | 258 | 87 |
| Sales (in terms of area booked by customers) (in million square feet) | 0.20 | 0.19 | 0.06 |
| Completed Developable Area (in million square feet) | - | 0.26 | 0.30 |
| Collection (in million) | 5,702.31 | 2,584.03 | 1,700.64 |
| Voluntary employee attrition ratio (A/B) (%)** | 12.76 | 10.26 | 11.11 |
(1) Sales in terms of units booked is calculated by counting the total number of units that customers have committed to purchasing or renting within a specific time frame.
(2) Sales in terms of area booked is calculated by measuring the total area of properties or spaces that customers have committed to.
(3) Completed Developable area is the area of the projects delivered (Occupancy Certificate received during the year) by the Company in a particular period. There were no Occupancy Certificates received during the Financial Year 2023-24 for any ongoing projects.
(4) Collection refers to the amount of money received from customers in a particular time frame. (5) Voluntary employee attrition ratio (A/B) (%) = No of employees that voluntarily left during the year / period divide No of employees at the beginning of the year / period + No of employees joined during the year / period.
SIGNIFICANT ACCOUNTING POLICIES Basis of preparation Compliance with Ind AS
The restated consolidated financial information of the Group comprises of the Restated Consolidated Statement of Assets and Liabilities as at March 31, 2024, March 31, 2023 and March 31, 2022, the Restated Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Restated Consolidated Statement of Changes in Equity, the Restated Consolidated Statement of Cash flows for the year ended March 31, 2024, March 31, 2023 and March 31, 2022 and Notes to the Restated Consolidated Financial Information and Statement of Adjustments to Audited Consolidated Financial Statements (collectively, the ‘Restated Consolidated Financial Information).
These Restated Consolidated Financial Information have been prepared by the Management of the Group for the purpose of inclusion in the Red Herring Prospectus (‘RHP) to be filed by the Group with the Securities and Exchange Board of India ("SEBI"), National Stock Exchange of India Limited and BSE Limited in connection with proposed Initial Public Offering ("IPO") of its equity shares.
The Restated Consolidated Financial Information, which have been approved by the Board of Directors of the Group, have been prepared in accordance with the requirements of:
i. Section 26 of the Companies Act, 2013 ("the Act") as amended from time to time;
ii. Paragraph A of Clause 11 (I) of Part A of Schedule VI of the Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2018, as amended to date (the "SEBI ICDR Regulations") issued by the Securities and Exchange Board of India (the "SEBI"); and
iii. Guidance Note on Reports in Group Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India ("ICAI") as amended from time to time (the "Guidance Note").
The Restated Consolidated Financial Information have been prepared by the Management from the audited consolidated financial statements as at and for the years ended March 31, 2024, March 31, 2023 and March 31, 2022 which is prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Act (Companies (Indian Accounting Standards) Rules, 2015) and other relevant provisions of the Act,
These Restated Consolidated Financial Information do not reflect the effects of events that occurred subsequent to the respective dates of auditors reports on the audited consolidated financial statements mentioned above.
The Restated Consolidated Financial Information:
a. have been prepared after incorporating adjustments for the changes in accounting policies, material errors, if any, and regrouping/reclassifications retrospectively in the years ended March 31, 2024, March 31, 2023 and March 31, 2022 to reflect the same accounting treatment as per the accounting policies and grouping/classifications followed as at and for the year ended March 31, 2023.
b. do not require any adjustment for qualification as there are no qualifications in the underlying audit reports.
These Restated financial Information have been prepared on a going concern basis following the accrual basis of accounting in accordance with the Generally accepted Accounting Principles (GAAP) in India (Indian Accounting standards referred to as "IndAS") as specified under the section 133 of the Companies Act, 2013 read with Rule 3 of Companies (Indian Accounting Standard) Rules, 2015 and relevant amendments rules issued there after and and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III). These standalone financial statements are presented in INR and all values are rounded to the nearest Millions, except when otherwise indicated.
The financial statements have been prepared on a historical cost convention, except for the following assets and liabilities:
i. Certain financial assets and liabilities that is measured at fair value;
ii. Defined benefit plans-plan assets measured at fair value.
iii. Investments in equity instruments, other than investments in subsidiary & associates firm, measured at fair value thorugh profit & loss account (FVTPL).
Principles of Consolidation Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
The Group combines the financial statements of the parent and its subsidiaries line by line adding together like items of assets, liabilities, equity, income and expenses. InterGroup transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the restated consolidated statement of profit and loss, restated consolidated statement of changes in equity and restated consolidated statement of assets and liabilities respectively.
Associates
Associates are all entities over which the Group has significant influence but not control or joint control. This is generally the case where the Group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost.
Equity Method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the
Companys share of the post acquisition profits or losses of the investee in profit and loss, and the Companys share of other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment.
When the Companys share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other unsecured long-term receivables, the Company does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Companys interest in these entities.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Company.
Current versus non-current classification
i. The Group presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
ii. Expected to be realised or intended to be sold or consumed in normal operating cycle
iii. Held primarily for the purpose of trading
iv. Expected to be realised within twelve months after the reporting period, or
v. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
vi. All other assets are classified as non-current.
A liability is current when:
i. It is expected to be settled in normal operating cycle ii. It is held primarily for the purpose of trading iii. It is due to be settled within twelve months after the reporting period, or
iv. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
The operating cycle is the time between the acquisition of assets and their realisation in cash and cash equivalents. The Group has identified twelve months as its operating cycle.
Property, Plant & Equipments
Property, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group.
All other repair and maintenance costs are recognized in statement of profit or loss as incurred.
Subsequent costs are included in assets carrying amount or recognized as separate assets, as appropriate, only when it is probable that future economic benefit associated with the item will flow to the Group and the cost of item can be measured reliably.
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.
Capital work- in- progress includes cost of property, plant and equipment under installation/under development as at the balance sheet date.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Cost of intangible assets acquired in business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any.
Internally generated intangibles, excluding capitalized development cost, are not capitalized and the related expenditure is reflected in statement of Profit and Loss in the period in which the expenditure is incurred. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.
Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash- generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. The Group has assessed indefinite life for such brand considering the expected usage, expected investment on brand, business forecast and challenges to establish a premium electronic segment. These are carried at historical cost and tested for impairment annually.
An intangible asset is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Gains or losses arising from disposal of the intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the assets are disposed off.
Depreciation and Amortisation
Depreciation on property, plant and equipment is calculated on pro-rata basis on straight-line method using the useful lives prescribed in Schedule II to the Companies Act 2013.
Followings are the estimated useful lives of various category of assets used which are aligned with useful lives defined in schedule II of Companies Act,2013 :
| Fixed Asset Name | No. Of Years Useful Life |
| Buildings (Temporary Structures) | 3 Years |
| Vehicles (Car) | 8 Years |
| Office Equipment | 5 Years |
| Computers & Mobiles | 3 Years |
| Leasehold Improvements | Period of the initial lease |
| Furniture and Fixtures | 10 Years |
| Network and Server | 6 Years |
The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortized over their useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of profit and loss.
The useful lives of intangible assets other than having indefinite life :
| Class of Asset | Useful lives |
| Computer Software | 8 Years |
Impairment of non-financial assets
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash-generating units (CGU) fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Groups CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow projections beyond periods covered by the most recent budgets/forecasts, the Group extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products, industries, or country or countries in which the Group operates, or for the market in which the asset is used.
Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit and loss, except for properties previously revalued with the revaluation surplus taken to OCI. For such properties, the impairment is recognized in OCI up to the amount of any previous revaluation surplus.
For assets excluding goodwill and intangible assets having indefinite life, an assessment is made at each reporting date to determine whether there is an indication that previously recognized impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the assets or CGUs recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the statement of profit and loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
As per the assessment conducted by the Group there were no indications that the non-financial assets have suffered an impairment loss during the reporting periods.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Financial assets
All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
Classification of financial assets
Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):
i. the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows: and
ii. the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on th principal amount outstanding.
Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (except for debt instruments that are designated as at fair value through profit or loss on initial recognition): the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial asset and the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on th principal amount outstanding.
Interest income is recognised in profit or loss for FVTOCI debt instruments. For the purposes of recognising foreign exchange gains and losses, FVTOCI debt instruments are treated as financial assets measured at amortised cost. Thus, the exchange differences on the amortised cost are recognised in profit or loss and other changes in the fair value of FVTOCI financial assets are recognised in other comprehensive income and accumulated under the heading of Reserve for debt instruments through other comprehensive income. When the investment is disposed of, the cumulative gain or loss previously accumulated in this reserve is reclassified to profit or loss.
All other financial assets are subsequently measured at fair value.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL. Interest income is recognised in profit or loss and is included in the "Other income" line item.
Financial assets at fair value through profit or loss (FVTPL)
Initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments, which are not held for trading. Debt instruments that do not meet the amortised cost criteria or FVTOCI criteria (see above) are measured at FVTPL. In addition, debt instruments that meet the amortised cost criteria or the FVTOCI criteria but are designated as at FVTPL are measured at FVTPL.
A financial asset that meets the amortised cost criteria or debt instruments that meet the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases, The Group has not designated any debt instrument as at FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurements recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the Other income line item. Dividend on financial assets at FVTPL is recognised when the Groups right to receive the dividends is established, it is probable that the economic benefits associated with the dividend will flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably.
Investments in equity instruments at FVTOCI
On initial recognition, the Group can make an irrevocable election (on an instrument-by-instrument basis) to present the subsequent changes in fair value in other comprehensive income pertaining to investments in equity instruments. This election is not permitted if the equity investment is held for trading. These elected investments are initially measured at fair value plus transaction costs.
Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the Reserve for equity instruments through other comprehensive income. The cumulative gain or loss is not reclassified to profit or loss on disposal of the investments.
A financial asset is held for trading if:
i. it has been acquired principally for the purpose of selling it in the near term; or
ii. on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actu pattern of short-term profit-taking; or
iii. it is a derivative that is not designated and effective as a hedging instrument or a financial guarantee.
Dividends on these investments in equity instruments are recognised in profit or loss when the Groups right to receive the dividends is established, it is probable that the economic benefits associated with the dividend win flow to the entity, the dividend does not represent a recovery of part of cost of the investment and the amount of dividend can be measured reliably. Dividends recognised in profit or loss is included in the Other income line item.
The Group has not elected for the FVTOCI irrevocable option for this investment.
Impairment of financial assets
The Group assesses on a forward-looking basis the expected credit losses associated with its assets. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18, the Group always measures the loss allowance at an amount equal to lifetime expected credit losses.
Derecognition of financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the assets carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset.
On derecognition of a financial asset other than in its entirety (e.g. when the Group retains an option to repurchase part of a transferred asset), the Group allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss if such gain or loss would have otherwise been recognised in profit or loss on disposal of that financial asset. A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts.
Financial liabilities and equity instruments
Classification as debt or equity
Debt and equity instruments issued by the Group are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
Deducting all of its liabilities. Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
Repurchase of the Groups own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Groups own equity instruments.
Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
Financial liabilities at FVTPL:
Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL. A financial liability is classified as held for trading if:
i. It has been incurred principally for the purpose of repurchasing it in the near term; or
ii. on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actu pattern of short-term profit-taking; or
iii. it is a derivative that is not designated and effective as a hedging instrument.
A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:
i. such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise;
ii. the financial liability forms part of a Group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Groups documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or
iii. it forms part of a contract containing one or more embedded derivatives, and Ind AS 109 permits the entire combined contract to be designated as at FVTPL in accordance with Ind AS 109.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in Statement of Profit and Loss. The net gain or loss recognised in Statement of Profit and Loss incorporates any interest paid on the financial liability and is included in the ‘other gains and losses line item in the Statement of Profit and Loss. The
Group derecognises financial liabilities when, and only when, the Groups obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in Statement of Profit and Loss.
Other financial liabilities:
Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Groups obligations are discharged, cancelled or have expired. An exchange between with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability, Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.
Investment in Subsidiaries
The investment in subsidiaries are carried at cost as per IND AS 27. The Group regardless of the nature of its involvement with an entity (the investee), determines whether it is a parent by assessing whether it controls the investee. The Group controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Thus, the Group controls an investee if and only if it has all the following: i. power over the investee; ii. exposure, or rights, to variable returns from its involvement with the investee and iii. the ability to use its power over the investee to affect the amount of the returns.
Investments are accounted in accordance with Ind AS 105 when they are classified as held for sale. On disposal of investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
Inventories
Inventories comprise of:
(i) Construction materials and consumables
(ii) Construction Work-In-Progress representing properties under construction/development
(iii) Finished Inventories representing unsold units in completed projects
The construction materials and consumables are valued at lower of cost or net realisable value.
The construction work in progress is valued at lower of cost or net realisable value. Cost includes cost of land, development rights, rates and taxes, construction costs, borrowing costs, other direct expenditure, allocated overheads and other incidental expenses.
Finished stock of completed projects and stock in trade of units is valued at lower of cost or net realisable value.
Revenue recognition
Revenue from contacts with customer is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. Revenue is measured based on the transaction price which is the consideration, adjusted for discount and other credits, if any, as specified in the contract with customer. The Group presents revenue from contracts with customer net of indirect taxes in its statement of profit and loss. The Group assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangement.
Income from property development
The Group considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated in determining the transaction price, the Group considers the effect of variable consideration, the existence of significant financing components, non-cash consideration, and consideration payable to the customer (if any).
The Group satisfies a performance obligation and recognize the revenue over the time if the Groups performance does not create an asset with an alternative use to the Group and it has an enforceable right to receive payment for performance completed till the date on the basis of the agreement entered with customers, otherwise revenue is recognized point in time. The revenue is recognized at the point in time when the control of the asset is transferred to the customer and the performance obligation is satisfied i.e. on transfer of legal title of the residential unit and on completion of project and occupation certificate is received.
In respect of property under development, Group starts recognising the revenue once the construction linked milestone is achieved with respect to project cost incurred and work progress.
When it is not possible to reasonably measure the outcome of a performance obligation and the Group expect to recover the cost incurred in satisfying the performance obligation revenue is recognized only to the extent of the cost incurred until such time that it can reasonably measure the outcome of the performance obligation
The Group becomes entitled to invoice customers for construction of residential and commercial properties based on achieving a series of construction-linked milestones. When the Group satisfies a performance obligation by delivering the promised goods or services it creates a contract asset based on the amount of consideration earned by the performance. Any amount previously recognized as a contract asset is reclassified to trade receivable at the point when the Group has the right to receive the consideration that is unconditional. If a customer pays consideration before the Group transfer goods or services to the customer, the contract liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue, when the Group performs under the contract.
Income Tax
The income tax expense or credit for the period is the tax payable on the current periods taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Group and its subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statement. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are excepted to apply when the related deferred income tax assets is realized or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are off set where the Group has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax is recognised in the Statement of profit and loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Employee Benefits:
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service are recognized in respect of employee service upto the end of the reporting period and are measured at the amount expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
Post-employment
Defined contribution plan
The Group makes specified monthly contribution towards employee provident fund to Employees Provident Fund. The Groups contributions to the fund are recognised in the Statement of Profit and Loss in the financial year to which the employee renders the service.
Defined benefit plan
The Groups gratuity scheme is a defined benefit plan. The present value of obligation under such defined benefit plan is determined based on actuarial valuation carried at the year-end using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of the estimated future cash flows. The discount rate used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date.
The Group recognizes the following changes in the net defined benefit obligation under Employee benefit expense in statement of profit or loss:
i. Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements
ii. Net interest expense or income
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through other comprehensive income in the period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
As a lessee
The Groups lease asset classes primarily comprise of lease for office and other premises. The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
Right-of-use assets (ROU)
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight- line basis over the shorter of the lease term and the estimated useful lives.
If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment.
Lease Liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including insubstance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees.
The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Variable lease payments that depend on sales are recognized in profit or loss in the period in which the condition that triggers those payments occur.
Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows. Lease liabilities have been included in financial liabilities.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term.
Group as a lessor
Leases for which the Group is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases. For operating leases, rental income is recognised on a straight-line basis over the term of the relevant lease.
Transition to Ind AS
The following is the summary of practical expedients elected on initial application:
i. Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date
ii. Applied the exemption not to recognise right-of-use assets and liabilities for leases with less than 12 months of lease term on the date o initial application, variable lease and low value asset.
iii. Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.
Segment reporting :
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Board of directors monitors the operating results of all product segments separately for the purpose of making decisions about resource allocation and performance assessment.
The operating segments have been identified on the basis of the nature of products/services. Further:
i. Segment revenue includes sales and other income directly identifiable with / allocable to the segment including inter segment revenue.
ii. Expenses that are directly identifiable with / allocable to segments are considered for determining the segment result.
Expenses which relate to the Group as a whole and not allocable to segments are included under unallocable expenditure.
iii. Income which relates to the Group as a whole and not allocable to segments is included in unallocable income.
iv. Segment assets and liabilities include those directly identifiable with the respective segments. Unallocable assets and liabilities represent the assets and liabilities that relate to the Group as a whole and not allocable to any segment.
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. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) if any 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 effect of all potentially dilutive equity shares.
Borrowing costs
Borrowing costs that are directly attributable to real estate project development activities are inventorised / capitalized as part of project cost.
Borrowing costs are inventorised / capitalised as part of project cost when the activities that are necessary to prepare the inventory / asset for its intended use or sale are in progress. Borrowing costs are suspended from inventorisation / capitalisation when development work on the project is interrupted for extended periods and there is no imminent certainty of recommencement of work.
All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that the Group incurs in connection with the borrowing of funds.
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 presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposit held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
Foreign currency translation Functional and presentation currency
The Groups Financial Statements are presented in Indian rupee ( ) which is also the Groups functional currency. Foreign currency transaction are recorded on initial recognition in the functional currency, using the exchange rate prevailing at the date of transaction.
Measurement of foreign currency item at the balance sheet date:
i. Foreign currency monetary assets and liabilities denominated in foreign currency are translated at the exchange rates prevailing on th reporting date.
ii. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at th dates of the initial transactions
Exchange differences:
Exchange differences arising on settlement or translation of monetary items are recognised as income or expense in the Statement of Profit & Loss.
Provisions, Contingent Liabilities
Provisions:
A provision is recognized when the Group 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. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. 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.
When the Group expects some or all of a provision to be reimbursed, reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
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 recognised as a finance cost in respective expense.
Provision for Defects Liabilities and Repairs
As per, Real Estate (Regulation and Development) Act, 2016 (RERA) vide section 14(3) a builder or developer will be liable to repair any defect, on the building sold, for a period of Five years. Further, as per the terms of contracts with customers, the Group is liable for any defects, repairs and other claims for crtain period after completion and handover of the possession of developed properties. Provision for defect liability and repairs is recognized when sales from contracts with customer is recognized. Certain percentage to the sales recognised is applied for the current accounting period to derive the provision for expense to be accrued. The recognition percentage is based on management estimates of the possible future incidence. The claims against defect liability and repairs from customers may not exactly match the historical percentage, so such estimates are reviewed annually for any material changes in assumptions and likelihood of occurrence and revised accordingly.
Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non- occurrence of one or more uncertain future events beyond the control of the Group 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 Group does not recognize a contingent liability but discloses its existence in the financial statements unless the probability of outflow of resources is remote.
Fair value measurement
The Group measures financial instruments, such as investments (other than equity investments in subsidiaries and joint ventures) and derivatives at fair value at each Balance Sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an ordinary transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
i. In the principal market for asset or liability, or ii. iii. In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non- financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
i. Level 1- Quoted(unadjusted) market prices in active markets for identical assets or liabilities
ii. Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
iii. 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 Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
Critical accounting estimates, judgement and assumptions
The preparation of these Consolidated financial statements requires the management to make judgments, use estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the acGrouping disclosures, and the disclosure of contingent liabilities. Uncertainty about these judgements, assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.
Taxes
Uncertainties exist with respect to the interpretation of tax regulations, changes in tax laws, and the amount and timing of future taxable income. Given the wide range of business relationships differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax assessments and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.
Employee benefit plans
The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions 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. In determining the appropriate discount rate, management considers the interest rates of long term government bonds with extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for India. Future salary increases and pension increases are based on expected future inflation rates for India.
Contingencies
Contingent liabilities may arise from the ordinary course of business in relation to claims against the Group, including legal, contractor and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events.
Property Plant and Equipment
Property, Plant and Equipment represent significant portion of the asset base of the Group. The charge in respect of periodic depreciation is derived after determining an estimate of assets expected useful life and expected value at the end of its useful life. The useful life and residual value of Groups assets are determined by Management at the time asset is acquired and reviewed periodically including at the end of each year. The useful life is based on historical experience with similar assets, in anticipation of future events, which may have impact on their life such as change in technology.
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset including intangible assets having indefinite useful life and goodwill may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets CGUS fair value less cost of disposal and its value in use. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use , the estimated future cash flows are estimated based on past trend and discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, or other fair value indicators.
Provisions for Defect liability and repairs
As per, Real Estate (Regulation and Development) Act, 2016 (RERA) vide section 14(3) a builder or developer will be liable to repair any defect, on the building sold, for a period of Five years. Further, as per the terms of contracts with customers, the Group is liable for any defects, repairs and other claims for crtain period after completion and handover of the possession of developed properties. Provision for defect liability and repairs is recognized when sales from contracts with customer is recognized. Certain percentage to the sales recognised is applied for the current accounting period to derive the provision for expense to be accrued. The recognition percentage is based on management estimates of the possible future incidence. The claims against defect liability and repairs from customers may not exactly match the historical percentage, so such estimates are reviewed annually for any material changes in assumptions and likelihood of occurrence and revised accordingly.
Provision for expected credit losses (ECL) of trade receivables and contract assets
The Group follows ‘simplified approach for recognition of impairment loss allowance on trade receivables. Under this approach the Group does not track changes in credit risk but recognizes impairment loss allowance based on lifetime ECLs at each reporting date. For this purpose the Group uses a provision matrix to determine the impairment loss allowance on the portfolio of trade receivables. The said matrix is based on historically observed default rates over the expected life of the trade receivables duly adjusted for forward looking estimates.
For recognition of impairment loss on other financial assets and risk exposures, the Group determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month expected credit loss(ECL) is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the Group reverts to recognizing impairment loss allowance based on 12-month ECL.
For assessing increase in credit risk and impairment loss, the Group combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12 month ECL is a portion of the lifetime ECL which results from default events on a financial instrument that are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. The ECL impairment loss allowance (or reversal) recognized during the period in the statement of profit and loss and the cumulative loss is reduced from the carrying amount of the asset until it meets the write off criteria, which is generally when no cash flows are expected to be realised from the asset.
Impairment for Investments in Subsidiary & Associates
Determining whether the investments in subsidiaries are impaired requires an estimate in the value in use of investments. In considering the value in use, the Directors have anticipated the future operating margins, resources and availability of infrastructure, discount rates and other factors of the underlying businesses/operations of the investee companies. Any subsequent changes to the cash flows due to changes in the above-mentioned factors could impact the carrying value of investments.
Leases
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. Wherever, lease contracts that include extension and termination options, the Group applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.
Recent Indian Accounting Standards (Ind AS)
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian
Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from April 1, 2022, as below:
i. Ind AS 103 Reference to Conceptual Framework
The amendments specify that to qualify for recognition as part of applying the acquisition method, the identifiable assets acquired, and liabilities assumed must meet the definitions of assets and liabilities in the Conceptual Framework for Financial Reporting under Indian Accounting Standards (Conceptual Framework) issued by the Institute of Chartered Accountants of India at the acquisition date. These changes do not significantly change the requirements of Ind AS 103. The Group does not expect the amendment to have any significant impact in its Financial Statements.
ii. Ind AS 16 Proceeds before intended use
The amendments mainly prohibit an entity from deducting from the cost of property, plant and equipment amounts received from selling items produced while the Group is preparing the asset for its intended use. Instead, an entity will recognise such sales proceeds and related cost in profit or loss. The Group does not expect the amendments to have any impact in its recognition of its property, plant, and equipment in its Financial Statements.
iii. Ind AS 37 Onerous Contracts - Costs of Fulfilling a Contract
The amendments specify that that the ‘cost of fulfilling a contract comprises the ‘costs that relate directly to the contract. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour materials) or an allocation of other costs that relate directly to fulfilling contracts. The amendment is essentially a clarification, and the Group does not expect the amendment to have any significant impact in its Financial Statements.
iv. Ind AS 109 Annual Improvements to Ind AS (2021)
The amendment clarifies which fees an entity includes when it applies the ‘10 percent test of Ind AS 109 in assessing whether to derecognise a financial liability. The Group does not expect the amendment to have any significant impact in its Financial Statements.
v. Ind AS 116 Annual Improvements to Ind AS (2021)
The amendments remove the illustration of the reimbursement of leasehold improvements by the lessor in order to resolve any potential confusion regarding the treatment of lease incentives that might arise because of how lease incentives were described in that illustration. The Group does not expect the amendment to have any significant impact in its Financial Statements.
PRINCIPAL COMPONENTS OF OUR STATEMENT OF PROFIT AND LOSS
Our total income for Fiscal 2024, Fiscal 2023 and Fiscal 2022, was 6,357.12 million, 2,240.13 million and 2,371.82 million, respectively.
Total Income
Total income comprises revenue from operations and other income. Revenue from operations Our revenue from operations comprises
(i) revenue from the sale of properties; and
(ii) development and amenities charges from the sale of flats.
Other income
Our other income comprises:
(i) interest income on financial assets measured at amortised cost;
(ii) other gains and losses; and
(iii) other non-operating income.
Total Expenses
Our total expenses comprise:
(i) cost of construction;
(ii) changes in inventories of finished goods and works in progress;
(iii) employee benefit expense;
(iv) finance cost;
(v) depreciation and amortisation; and
(vi) other expenses.
Cost of construction
The cost of construction comprises, primarily:
(i) land and land related cost;
(ii) construction cost; and
In addition, it comprises expenses allocated to a project.
Change in inventories of finished goods and work-in-progress
The change in inventories of finished goods is determined by unsold number of units in completed projects. The change in inventories of work-in-progress is determined by units under construction in ongoing projects.
Employee benefits expenses
Employee benefit expenses comprise, primarily:
(i) salaries, wages and bonus;
(ii) directors remuneration and bonus;
(iii) contribution to provident and other funds;
(iv) ESIC contribution; and
(v) Gratuity.
Finance costs
Finance cost comprises
(i) interest cost - on financial liabilities at amortised cost i.e.
(a) borrowings from banks, NBFCs and others, and
(b) lease liabilities.
(ii) transaction cost related to long term borrowings;
(iii) bank charges and Stamp Duty charges on long term borrowings; and
(iv) finance cost allocated to cost of constructions.
Depreciation and amortisation expense
Depreciation and amortisation expenses comprises:
(i) depreciation of property plant and equipment;
(ii) amortisation of intangible assets; and
(iii) right-of-use assets.
Other expenses
Other expenses comprise, primarily:
(i) brokerage and commission;
(ii) business promotion and advertising;
(iii) donation and CSR expense;
(iv) house-keeping expense;
(v) legal and professional fees;
(vi) security expenses;
(vii) miscellaneous expenses; and
(viii) other expenses allocated to cost of constructions.
Tax expenses
Tax expense comprises current tax and deferred tax.
RESULTS OF OUR OPERATIONS
The table on the following page provides certain information with respect to our results of operations for Fiscal 2024, Fiscal 2023 and Fiscal 2022 from our Restated Consolidated Financial Information and each item as a percentage of total income for the periods indicated.
| Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 | |||
| Amount | % of total income | Amount | % of total income | Amount | % of total income | |
| INCOME | ||||||
| Revenue from operations | 6,347.36 | 99.85% | 2,201.52 | 98.28% | 2,289.34 | 96.52% |
| Other income | 9.76 | 0.15% | 38.61 | 1.72% | 82.48 | 3.48% |
| Total income | 6,357.12 | 100.00% | 2,240.13 | 100.00% | 2,371.82 | 100.00% |
| EXPENSES | ||||||
| Cost of construction | 4,163.97 | 65.50% | 3,344.28 | 149.29% | 2,548.79 | 107.46 |
| Changes in inventories of finished goods and work in progress | 126.24 | 1.99% | (2,015.19) | (89.96)% | (949.19) | (40.2)% |
| Employee benefit expense | 167.02 | 2.63% | 170.83 | 7.63% | 79.46 | 3.35% |
| Finance costs | 31.27 | 0.49% | 12.81 | 0.57% | 43.29 | 1.83% |
| Depreciation and amortisation expense | 11.38 | 0.18% | 2.71 | 0.12% | 0.71 | 0.03% |
| Other expenses | 215.72 | 3.39% | 98.69 | 4.41% | 65.82 | 2.78% |
| Total Expenses | 4,715.61 | 74.18% | 1,614.14 | 72.06% | 1,788.89 | 75.42% |
| FProfit before tax and share of profit (loss) from associates | 1,641.51 | 25.82% | 625.99 | 27.94% | 582.93 | 24.58% |
| Share of profit (loss) from associates | 9.59 | 0.15% | 41.74 | 1.86% | 72.79 | 3.07% |
| Profit before Tax | 1,651.10 | 25.97% | 667.73 | 29.81% | 655.72 | 27.65% |
| TAX EXPENSE | ||||||
| (i) Current tax | 424.72 | 6.68% | 160.88 | 7.18% | 147.73 | 6.23% |
| (ii) Deferred tax expense / (credit) | (1.71) | (0.03)% | (0.82) | (0.04)% | (0.45) | (0.02)% |
| Total tax expense | 423.02 | 6.65% | 160.07 | 7.15% | 147.28 | 6.21% |
| Profit for the year | 1,228.08 | 19.32% | 507.66 | 22.66% | 508.44 | 21.44% |
| Profit for the owners | 1,228.40 | 19.32% | 507.83 | 22.67% | 504.73 | 21.28% |
| Non-controlling interest | (0.31) | 0.00% | (0.17) | (0.01)% | 3.71 | 0.16% |
Set out below is a narrative comparing our financial performance across our financial periods on key elements of our revenue and expenses.
FISCAL 2024 COMPARED TO FISCAL 2023
Income
Our total income increased by 183.78% from 2,240.13 million in Fiscal 2023 to 6,357.12 million in Fiscal 2024 due to a increase in our revenue from operations.
Revenue from operations
Our revenue from operations increased by 188.32% from 2,201.52 million in Fiscal 2023 to 6,347.36 million in Fiscal 2024 primarily due to an increase in the number of residential units sold from 130 in Fiscal 2023 to 253 in Fiscal 2024.
Other income
Our other income decreased by 74.73% from 38.61 million in Fiscal 2023 to 9.76 million in Fiscal 2024 primarily due to
(i) reduction in the balances/provisions written back (net) from 24.44 million to 1.66 million, and (ii) decrease in gain on sale of current investments from 7.27 million to 2.37 million.
Expenses
Our total expenses increased by 192.14% from 1,614.14 million in Fiscal 2023 to 4,715.61 million in Fiscal 2024 primarily due to
(i) increase in total inventory cost (i.e., construction cost plus changes in inventories of finished goods and work in progress), and
(ii) increase in other expenses.
Cost of construction and Change in inventories of finished goods and work-in-progress (i.e. Inventory cost)
Our cost of construction increased by 24.51% from 3,344.28 million in Fiscal 2023 to 4,163.97 million in Fiscal 2024 primarily due to an increase in
(i) construction costs from 1,715.52 million in Fiscal 2023 to 2,477.40 million in Fiscal 2024 and (ii) expenses directly allocated to projects from 184.85 million in Fiscal 2023 to 299.11 million in Fiscal 2024, commensurate with the increase in construction of residential units which was partially off-set by a decrease in the land and land related of costs from 1,443.91 million in Fiscal 2023 to 1,387.46 million in Fiscal 2024.
Changes in inventories of completed saleable units and construction work-in-progress increased from (2,015.19) million Fiscal 2023 to 126.24 million Fiscal 2024.
Employee benefit expenses
Our employee benefit expenses decreased by 2.23% from 170.83 million in Fiscal 2023 to 167.02 million in Fiscal 2024 primarily due to an increase in salaries, wages and bonuses due to an increase in number of employees from 105 to 171 which is partly compensated by decrease in directors, remuneration from 101.70 million in Fiscal 2023 to 33.14 million in Fiscal
2024. The higher director remuneration in Fiscal 2023 was due to a one-time bonus given to directors in Fiscal 2023.
Finance Costs
Finance cost increased by 144.09% from 12.81 million in Fiscal 2023 to 31.27 million in Fiscal 2024 primarily due to an increase in (i) interest expenses from 11.48 million in Fiscal 2023 to 73.72 million in Fiscal 2024 on higher borrowings, and (ii) transaction cost from 0.24 million in Fiscal 2023 to 24.64 million Fiscal 2024.
Depreciation and amortisation expenses
Depreciation and amortisation expenses increased by 319.84% from 2.71 million in Fiscal 2023 to 11.38 million in Fiscal
2024 primarily due capitalisation of experience centre at Arkade, Nest during Fiscal 2024.
Other expenses
Other expenses increased by 118.58% from 98.69 million in Fiscal 2023 to 215.72 million in Fiscal 2024 primarily due to an increase in
(i) business promotion and advertising expenses from 78.21 million in Fiscal 2023 to 138.33 million in Fiscal 2024
(ii) legal and professional fees from 54.96 million in Fiscal 2023 to 79.87 million in Fiscal 2024. Further, we incurred expenses aggregating 17.39 million in Fiscal 2024 due to the increase in the authorised capital of our Company which was
‘Nil in Fiscal.
Share of profit (loss) from associates
Share of profit (loss) from associates decreased by 77.02% from 41.74 million in Fiscal 2023 to 9.59 million in Fiscal 2024 on account of lower revenue recognised in one of our associate entities in Fiscal 2024 as compared to Fiscal 2023.
Profit / (loss) before taxes
For the reasons discussed above, our profit before tax increased by 147.27% from 667.73 million in Fiscal 2023 to 1,651.10 million Fiscal 2024.
Tax expenses
Our tax expenses increased from 160.07 million in Fiscal 2023 to 423.02 million in Fiscal 2024 primarily due to an increase in current tax from 160.88 million in Fiscal 2023 to 424.72 million in Fiscal 2024.
Profit/ (loss) for the year
For the reasons discussed above, our profit for the year increased by 141.91% from 507.66 million in Fiscal 2023 to 1,228.08 million in Fiscal 2024.
FISCAL 2023 COMPARED TO FISCAL 2022
Income
Our total income decreased by 5.55% from 2,371.82 million in Fiscal 2022 to 2,240.13 million in Fiscal 2023 due to a decrease in our revenue from operations.
Revenue from operations
Our revenue from operations decreased by 3.84% from 2,289.34 million in Fiscal 2022 to 2,201.52 million in Fiscal 2023 primarily due to decrease in the number of residential units sold from 182 in Fiscal 2022 to 130 in Fiscal 2023.
Other income
Our other income decreased by 53.19% from 82.48 million in Fiscal 2022 to 38.61 million in Fiscal 2023 primarily due to
(i) reduction in the balances/provisions written back (net),
(ii) decrease in gain on sale of current investments and
(iii) reduction in miscellaneous income.
Expenses
Our total expenses decreased by 9.77% from 1,788.89 million in Fiscal 2022 to 1,614.14 million in Fiscal 2023 primarily due to
(i) reduction in total inventory cost (i.e., construction cost plus changes in inventories of finished goods and work in progress), and
(ii) reduction in finance cost which was off-set to a certain extent by increase in employee benefit expenses, depreciation and other expenses.
Cost of construction and Change in inventories of finished goods and work-in-progress (i.e. Inventory cost)
Our cost of construction increased by 31.21% from 2,548.79 million in Fiscal 2022 to 3,344.28 million in Fiscal 2023 primarily due to an increase in
(i) land and land related cost from 1,327.85 million in Fiscal 2022 to 1,443.91 million in Fiscal 2023
(ii) construction costs from 1,122.96 million in Fiscal 2022 to 1,715.52 million in Fiscal 2023 and (iii) and (iii) expenses directly allocated to projects from 97.98 million in Fiscal 2022 to 184.85 million in Fiscal 2023, commensurate with the increase in construction of residential units.
Changes in inventories of completed saleable units and construction work-in-progress increased by 112.31% from (949.19) million Fiscal 2022 to (2,015.19) million Fiscal 2023.
Employee benefit expenses
Our employee benefit expenses increased by 114.99% from 79.46 million in Fiscal 2022 to 170.83 million in Fiscal 2023 primarily due to an increase in
(i) salaries, wages and bonuses due to an increase in number of employees from 64 to 105 and
(ii) directors remuneration from 33.24 million in Fiscal 2022 to 101.70 million in Fiscal 2023 due to one-time bonus given to directors.
Finance Costs
Finance cost decreased by 70.41% from 43.29 million in Fiscal 2022 to 12.81 million in Fiscal 2023 due to allocation of finance cost 66.24 million in Fiscal 2023 of to the cost of construction that was related to a work in progress (i.e. a project).
Depreciation and amortisation expenses
Depreciation and amortisation expenses increased by 281.69% from 0.71 million in Fiscal 2022 to 2.71 million in Fiscal 2023 primarily due to acquisition of vehicles in December 2021.
Other expenses
Other expenses increased by 49.92% from 65.82 million in Fiscal 2022 to 98.69 million in Fiscal 2023 primarily due to an increase in business promotion and advertising expenses from 7.91 million in Fiscal 2022 to 78.21 million in Fiscal 2023 and legal and professional fees from 45.04 million in Fiscal 2022 to 54.96 million in Fiscal 2023 which was partly off-set by GST reversed / paid from 40.96 million in Fiscal 2022 to Nil in Fiscal 2023.
Share of profit (loss) from associates
Share of profit (loss) from associates decreased by 42.65% from 72.79 million in Fiscal 2022 to 41.74 million in Fiscal
2023 because revenue recognised in Fiscal 2023 is lower than revenue recognised in Fiscal 2022 in one of our associate entity.
Profit / (loss) before taxes
For the reasons discussed above, our profit before tax increased marginally from 582.93 million in Fiscal 2022 to 625.99 million Fiscal 2023.
Tax expenses
Our tax expenses increased from 147.28 million in Fiscal 2022 to 160.07 million in Fiscal 2023 due to an increase in current tax from 147.73 million in Fiscal 2022 to 165.01 million in Fiscal 2023 which was partially off-set by a higher deferred tax credit of 3.89 million in Fiscal 2023.
Profit/ (loss) for the year
For the reasons discussed above, our profit for the year decreased marginally from 508.44 million in Fiscal 2022 to 507.66 million in Fiscal 2023.
Liquidity and capital resources
As on March 31, 2024, we had trade receivables of 80.72 million. In addition, we had a sum of 233.03 million in cash and cash equivalents (balance in current accounts and cash in hand).
Historically, we have been able to finance our capital requirements and the expansion of our business through a combination of funds generated from our operations and working capital facilities from banks and unsecured loans from our Promoters.
Our primary capital requirements are working capital for our operations and capital expenditures. We believe that considering the expected cash to be generated from our business and the Net Proceeds, we will have sufficient capital to meet our anticipated capital requirements for our working capital requirements for the 12 months following the date of this Red Herring Prospectus.
CASH FLOWS
The following table sets forth certain information in relation to our cash flows with respect to operating activities, investing activities and financing activities for Fiscal 2024, Fiscal 2023 and Fiscal 2022:
( in million)
| Particulars | Fiscal | ||
| 2024 | 2023 | 2022 | |
| Net cash generated from (used in) operating activities (A) | 1,014.88 | (987.04) | (1,231.83) |
| Net cash generated from (used in) investing activities (B) | (121.94) | 291.96 | 760.05 |
| Net cash generated from (used in) financing activities (C) | (828.56) | 835.69 | 448.79 |
| (Loss)/Gain on remeasurement of the defined benefit plan (D) | 2.44 | 0.38 | (1.19) |
| Net increase / (decrease) in cash and cash equivalent (A+B+C+D+E) | 66.83 | 140.99 | (24.18) |
As certified by our Statutory Auditors, M/s Mittal & Associates, pursuant to a certificate dated September 5, 2024.
Net cash generated from / used in operating activities
Fiscal 2024
Our net cash flow generated from operating activities for the Fiscal 2024 was 1,014.88 million. While our profit before tax was 1,651.10 million, our operating cash flow before working capital changes stood at 1,690.22 million. This was due to adjustments for finance costs of 31.27 million, and depreciation and amortisation expenses of 11.38 million, interest income of (2.93) million, loss/(gain) on disposal of property, plant and equipment (net) 1.76 and gain on sale of current investments (net) of (2.37) million. Changes in working capital primarily reflect adjustments for trade receivables of (43.67) million, inventories of 126.24 million, other financial assets (non-current and current) of 37.13 million, other assets (non-current and current) of (104.22) million, trade payables of 147.74 million, provisions (non-current and current) of 25.73 million, other financial liabilities (non-current and current) of (91.51) million and other current liabilities of (359.26) million.
Fiscal 2023
Our net cash flow used operating activities in Fiscal 2023 was 987.04 million. While our profit before tax was 667.73 million, our operating cash flow before working capital changes stood at 671.43 million. This was due to adjustments for finance costs of 12.81 million, and depreciation and amortisation expenses of 2.71 million, interest income of (4.55) million and gain on sale of current investments (net) of 7.27 million. Changes in working capital primarily reflect adjustments for trade receivables of 15.55 million, inventories of (2,015.18) million, other financial assets (non-current and current) of (77.62) million other assets (non-current and current) of 96.93 million, trade payables of 97.87 million, other financial liabilities (non-current and current) of 60.21 million and other current liabilities of 339.89 million.
Fiscal 2022
Our net cash flow used in operating activities in Fiscal 2022 was 1,231.83 million. While our profit before tax was 655.72 million, our operating cash flow before working capital changes stood at 661.65 million. This was primarily due to adjustments for finance cost of 43.29 million, interest income of (6.51) million and gain on sale of current investments of 30.43 million. Changes in working capital primarily reflect adjustments for trade receivables of 73.53 million, inventories of (949.19) million, other assets (non-current and current) of (77.63) million, trade payables of (85.61) million, and other current liabilities of (724.00) million.
Net cash generated from / used in investing activities
Fiscal 2024
Net cash used in investing activities for Fiscal 2024 was (121.94) million, which primarily comprised investment in bank deposits aggregating (6.06) million, investments in subsidiary and associates firms aggregating (11.61) million, proceeds from current investments aggregating (net) of (2.37) million, purchase of property, plant and equipment and other intangible assets of (121.67) million, interest income of 2.93 million and proceeds from disposal of property, plant and equipment and other intangible assets 12.10 million.
Fiscal 2023
Net cash generated from investing activities in Fiscal 2023 was 291.96 million, which primarily comprised proceeds from bank deposits aggregating 60.51 million, proceeds from current investments aggregating 238.90 million and purchase of property, plant and equipment and other intangible assets of (6.03) million and interest income of 4.55 million.
Fiscal 2022
Net cash generated from investing activities in Fiscal 2022 was 760.05 million, which primarily comprised proceeds from current investment aggregating 776.43 million and purchase of property, plant and equipment and other intangible assets of (18.14) million and interest income of 6.51 million.
Net cash generated by / used in financing activities
Fiscal 2024
Net cash used in financing activities for the Fiscal 2024, was (828.56) million primarily due to proceeds from borrowing of 1,785.81 million, repayment of borrowings of (2,581.66) million and interest paid of (30.75) million.
Fiscal 2023
Net cash generated by financing activities in Fiscal 2023 was 835.69 million primarily due to proceeds from borrowings of 1,230.30 million and repayment of borrowings of 384.48 million.
Fiscal 2022
Net cash generated by financing activities in Fiscal 2022 was 448.79 million primarily due to proceeds from borrowings of 564.55 million and repayment of borrowings of 57.36 million.
CAPITAL EXPENDITURE
During the Fiscal 2024, Fiscal 2023 and Fiscal 2022, our capital expenditure towards additions to fixed assets viz., leasehold improvements, buildings (temporary structure), office equipments, furniture and fixures, computers, network and servers and vehicles was 120.85 million, 3.54 million, and 18.14 million.
The following table sets forth the net block of our capital assets.
| Particulars | Fiscal 2024 | Fiscal 2023 | Fiscal 2022 |
| Property, plant, and equipment | 118.25 | 19.11 | 18.28 |
| Right of use assets | 18.23 | Nil | Nil |
| Intangible assets | 3.30 | 2.49 | Nil |
SELECT BALANCE SHEET ITEMS
Current Assets
| Particulars | As at March 31, 2024 | As at March 31, 2023 | As at March 31, 2022 |
| Inventories | 4,879.02 | 5,005.26 | 2,990.08 |
| Financial Assets | |||
| (i) Investments | - | - | 231.63 |
| (ii) Trade receivables | 80.72 | 37.05 | 52.60 |
| (iii) Cash and cash equivalents | 233.03 | 166.20 | 25.21 |
| Particulars | As at March 31, 2024 | As at March 31, 2023 | As at March 31, 2022 |
| (iv) Bank balances other than cash and | 15.58 | 9.52 | 70.03 |
| cash equivalents | |||
| (v) Loans | 1.11 | 0.91 | 0.15 |
| (vi) Other financial assets | 29.55 | 26.77 | 1.88 |
| Other current assets | 138.83 | 34.07 | 131.82 |
| Total current assets | 5,377.84 | 5,279.78 | 3,503.39 |
Current Liabilities
| Particulars | As at March 31, 2024 | As at March 31, 2023 | As at March 31, 2022 |
| Financial Liabilities | |||
| (i) Borrowings | 403.68 | 702.41 | 632.14 |
| (ii) Lease liabilities | 3.86 | ||
| (iii) Trade payables | |||
| Total outstanding dues to small and micro enterprises | 101.23 | 79.66 | 32.54 |
| Total outstanding dues of creditors other than micro enterprises and small enterprises | 281.70 | 155.53 | 104.77 |
| (iv) Other financial liabilities | 45.78 | 137.29 | 77.08 |
| Other current liabilities | 1,288.75 | 1,648.01 | 1,308.11 |
| Provisions | 53.23 | 29.05 | 30.95 |
| Current tax liabilities (net) | 18.25 | - | - |
| Total current liabilities | 2,196.48 | 2,751.94 | 2,185.60 |
FINANCIAL INDEBTEDNESS
As of June 30, 2024, we had total outstanding borrowings aggregating 942.54 million comprising secured borrowings aggregating 482.54 million and unsecured borrowings aggregating 460.00 million. For further details of our indebtedness, please see ‘Financial Indebtedness on page 347.
CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)
Contingent liabilities
Set out in the table below are details of our contingent liabilities based on our Restated Consolidated Financial Information.
| Particulars | As at March 31, 2024 | As at March 31, 2023 | As at March 31, 2022 |
| (i) Bank Guarantees | 35.75 | 19.00 | 16.50 |
| Demands/Claims by Government Authorities not acknowledged as debts and contested/to be contested by the Company: |
| Particulars | As at March 31, 2024 | As at March 31, 2023 | As at March 31, 2022 |
| a. Income Tax FY 2015-16 and FY 2017-18 | 1.10 | - | - |
| b. Service Tax - FY 2016-17 | 0.89 | 0.89 | 0.89 |
| c. Goods & Service Tax - FY 2017- 18 to FY 2022-23* | 536.65 | 297.54 | 272.35 |
| Total | 574.38 | 317.43 | 289.74 |
* The figures for the year ended March 31, 2024, March 31, 2023 and March 31, 2022 include the amount of contingent liabilities for the respective years, where show cause notice or claims have been received after the close of respective reporting period and till the date of approval of the financial statements by the Board of Directors. Further, the amount of contingent liabilities disclosed above, does not include the amount of interest or penalty, wherever the same are not ascertain or included in demand notices.
For further details of our contingent liabilities, see ‘Restated Consolidated Financial Information - Contingent liabilities on page 329.
Contractual Payments
The table below summarises the maturity profile of companys financial liabilities based on contractual undiscounted payments.
| Particulars | Upto 1 year | 1 to 5 years | Total |
| As at March 31, 2024 | |||
| Borrowings | 403.68 | 290.42 | 694.10 |
| Lease liabilities | 3.86 | 14.34 | 18.20 |
| Trade payables | 382.93 | - | 382.93 |
| Other financial liabilities | 45.78 | - | 45.78 |
| Total | 836.24 | 304.76 | 1,141.01 |
| As at March 31, 2023 | |||
| Borrowings | 702.41 | 787.54 | 1,489.95 |
| Trade payables | 235.19 | - | 235.19 |
| Other financial liabilities | 137.29 | - | 137.29 |
| Total | 1,074.88 | 787.54 | 1,862.43 |
| As at March 31, 2022 | |||
| Borrowings | 632.14 | 11.99 | 644.13 |
| Trade Payables | 137.32 | - | 137.32 |
| Other Financial Liabilities | 77.08 | - | 77.08 |
| Total | 846.54 | 11.99 | 858.52 |
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, derivative instruments, swap transactions or relationships with affiliates or other unconsolidated entities or financial partnerships that would have been established for the purpose of facilitating off-balance sheet arrangements.
Related Party Transactions
We have engaged in the past, and may engage in the future, in transactions with related parties, including with our key management personnel, their relatives, enterprise over which they are able to exercise significant influence and associate firm/LLP on an arms length basis, in compliance with applicable law. For further details of our related party transactions, please see ‘Restated Consolidated Financial Information - Note no. 39 - Related Party Disclosures on page 336.
Summary of reservations or qualifications or matters of emphasis or adverse remarks of auditors
Our Restated Consolidated Financial Information do not contain any qualifications, reservations and matters of emphasis by our Statutory Auditor in their examination report.
Change in accounting policies
Other than as disclosed in the Restated Consolidated Financial Information, there have been no changes in accounting policies in the last 3 Fiscals.
Quantitative and Qualitative Disclosures About Market Risk
Our Companys principal financial liabilities comprise loans and borrowings and trade and other payables. The main purpose of these financial liabilities is to finance the Companys operations. Our Companys principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.
Our Company is exposed to market risk, credit risk and liquidity risk. Our Company periodically reviews the risk management policy so that the management manages the risk through properly defined mechanism. The focus is to foresee the unpredictability and minimise potential adverse effects on the Companys financial performance. Our Companys overall risk management procedures to minimise the potential adverse effects of financial market on the Companys performance are as follows:
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 three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk.
Interest rate risk:
Our Company is exposed to cash flow interest rate risk from long-term borrowings at variable rate. Currently the Company has external borrowings and borrowings from promoter & promoter groups which are fixed and floating rate borrowings. Our Company achieves the optimum interest rate profile by refinancing when the interest rates go down. However this does not protect Company entirely from the risk of paying rates in excess of current market rates nor eliminates fully cash flow risk associated with variability in interest payments, it considers that it achieves an appropriate balance of exposure to these risks.
Foreign currency risk:
Foreign Currency Risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign currency rates. Exposures can arise on account of the various assets and liabilities which are denominated in currencies other than Indian Rupee.
Our Company had no unhedged foreign currency exposures as on March 31, 2024.
Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Our Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Our Companys exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Companys customer base, including the default risk of the industry and country, in which customers operate, has less influence on the credit risk.
Our Company has entered into contracts for the sale of residential and commercial units on an instalment basis. The installments are specified in the contracts. Our Company is exposed to credit risk in respect of installments due. However, the possession of residential and commercial units is handed over to the buyer only after all the installments are recovered. In addition, instalment dues are monitored on an ongoing basis with the result that the Companys exposure to credit risk is not significant. Our
Company evaluates the concentration of risk with respect to trade receivables as low, as none of its customers constitutes significant portions of trade receivables as at the year end.
Credit risk from balances with banks and financial institutions is managed by Companys treasury in accordance with the Companys policy. The company limits its exposure to credit risk by only placing balances with local banks of good repute.
Given the profile of its bankers, management does not expect any counterparty to fail in meeting its obligations.
Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value. Our Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. Our Companys exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. Our Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. Surplus funds not immediately required are invested in certain financial assets which provide flexibility to liquidate at short notice and are included in cash equivalents.
Competitive Conditions
We operate in a competitive environment. For further information, please see ‘Risk Factors- We operate in a competitive industry. Any inability to compete effectively may lead to a lower market share or reduced operating margins, ‘Industry Overview, ‘Our Business Competition on pages 39, 137, and 232, respectively.
Seasonality / Cyclicality of business
Our Companys business is not subject to seasonal changes.
Unusual or infrequent events or transaction
Except as set out in this Red Herring Prospectus, there have been, to our knowledge, no unusual or infrequent events or transactions that have in the past, or may in the future, affect our business operations or future financial performance.
Segment Reporting
Our business activity primarily falls within a single reportable segment, i.e., real estate development and we do not follow any segment reporting.
Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or services or increased sales prices
Not applicable. Increase in sales volume of our units is the primary factor which increases our revenue.
Total turnover of each major industry segment in which the Company operated
Our Company operates only in the real estate industry and our entire revenue from operations is generated from this industry.
Significant dependence on a single or few suppliers or Customers
We are a real estate development company engaged in construction of residential premises. Accordingly, we are not reliant on any single or few customers or vendors.
Significant economic changes that materially affect or are likely to affect income from continuing operations
Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect income from continuing operations identified above in this chapter. For further details see ‘Risk Factors- A slowdown in economic growth in India could adversely affect our business ‘Risk Factors - Political, economic or other factors that are beyond our control may have an adverse effect on our business and results of operations ‘Risk Factors -
Financial instability, economic developments and volatility in securities markets in other countries may also cause the price of the Equity Shares to decline and ‘Industry Overview on pages 61, 62, 65, and 137, respectively.
Known Trends or Uncertainties
Our business has been, and we expect will continue to be, subject to significant economic changes arising from the trends identified above under ‘Principal factors affecting our financial condition and results of operations and the uncertainties described in the section ‘Risk Factors- Changing laws, rules and regulations and legal uncertainties, including adverse application of corporate and tax laws, may adversely affect our business, results of operations, cash flows and prospects on page 48. To our knowledge, except as has been described in this Red Herring Prospectus, there are no known trends or uncertainties, that have or had or are expected to have a material adverse impact on our revenues from continuing operations.
Future Relationships between Costs and Income
Other than as described in ‘Risk Factors, ‘Our Business and ‘Managements Discussion and Analysis of Financial Condition and Results of Operations on pages 31, 215 and 353, respectively, to our knowledge, there are no known factors that may have a material adverse impact on our business, results of operations and financial condition.
New Services or Business Segments
Except as disclosed in this Red Herring Prospectus, we have not announced and do not expect to announce any new services or business segments in the near future.
Significant Developments after March 31, 2024 that may affect our results of operations
Except as disclosed in this Red Herring Prospectus, there are, to our knowledge, no significant developments after the date of the last financial statements contained in this Red Herring Prospectus which materially and adversely affects, or is likely to affect, our operations or profitability, or the value of our assets, or our ability to pay our material liabilities within the next 12 months.
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