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Mahindra Lifespace Developers Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018

Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018

1. The above results have been reviewed by the Audit Committee and approved by the Board of Directors of the Company at their respective meetings held on 28th January, 2019. The unaudited interim standalone financial results for the quarter and Nine Months ended 31st December, 2018 have been subjected to limited review by the statutory auditors, Deloitte Haskins and Sells LLP who have expressed an unmodified opinion.

2. The standalone financial results of the Company have been prepared in accordance with the Indian Accounting Standards (In AS) as prescribed under Section 133 of the Companies Act, 2013 read with the. Relevant rules issued thereunder and the other accounting principles generally accepted in India.

3. Since the nature of activities being carried out by the Company is such that profits / losses from certain transactions do not necessarily accrue evenly over the year, results of a quarter may not be representative of profits / losses for the year.

4. As per Ind AS 108 'Operating Segment', the Company has reported Segment Information for below segments ;

a. Projects, Project Management and Development

b. Operating of Commercial Complexes
For the purpose of this, the Managing Director is the Chief Operating Decision Maker.

a) The Ministry of Corporate Affairs vide notification dated 28th March 2018 has made Ind AS 115 "Revenue from Contracts with Customers" (Ind AS 115) w.e.f. 1 st April, 2018. The Company has applied the modified retrospective approach as per para C3(b) of Ind AS 115 to contracts that were not completed as on 1st April 2018 and the cumulative effect of applying this standard is recognised at the date of initial application i.e. 1st April, 2018 in accordance with para C7 of Ind AS 115 as an adjustment to the opening balance of Retained Earnings, only to contracts that were not completed as at 1st April, 2018. The transitional adjustment of Rs.7,958 lakhs (net of deferred tax) has been adjusted against opening Retained Earnings based on the requirements of the Ind AS 115 pertaining to recognition of revenue based on satisfaction of performance obligation (at a point in time),
b) (i) Due to the application of IND AS 115 for Nine Months ended December 31, 2018 Revenue from Operations is higher by Rs.7,043 lakhs, Cost of sales is higher by Rs.2,670 lakhs, Profit before Tax is higher by Rs.4,373 lakhs, Tax expense is higher by Rs. 1,258 lakhs and Profit after tax is higher by Rs.3,115 lakhs. The Basic and Diluted EPS is Rs. 10.27 and Rs. 10.25 per share instead of Rs. 4.20 and Rs. 4.19 per share. These changes are due to recognition of revenue based on satisfaction of performance obligation (at a point in time), as opposed to the previously permitted Percentage of Completion Method. Accordingly, the comparatives have not been restated for the Nine Months ended 31st December, 2017 and hence not comparable.

(ii) Due to application of Ind AS 115 for the quarter ended December 31, 2018 Revenue from Operations is higher by Rs.2,195 lakhs, Cost of sales is higher by Rs.446 lakhs, Profit before Tax is higher by Rs.1,749 lakhs, Tax expense is higher by Rs.355 lakhs and Profit after tax is higher by Rs. 1,392 lakhs. The Basic and Diluted EPS is Rs.0.29 and Rs. 0.29 per share instead of Rs.3.01 and Rs. 3.00 per share.These changes are due to recognition of revenue based on satisfaction of performance obligation (at a point in time), as opposed to jthe previously permitted Percentage of Completion Method. Accordingly, the comparatives have not been restated for the quarter ended 31st December 2017 and hence not comparable with previous period figures.

Sangeeta Prasad
Managing Director