Post the applicability of Goods and Service Tax (GST) with effect from July 1, 2017, Works Contract Tax (WCT) and Service Tax etc. have been replaced by GST. In accordance with the lnd AS- 115 on Revenue and Schedule Ill of Companies Act, 2013, GST is not to be included in revenue from operations and the same is disclosed net of GST. Accordingly, in view of the restructuring of the indirect taxes, the revenue from operations and expenses for the quarter ended June 30, 2018 are not comparable with the corresponding previous period presented in the results, to that extent.

The Company has aligned its policy of revenue recognition with lnd AS 115 "Revenue from Contracts with Customers" which is effective from April 1, 2018. Consequent upon the withdrawal of Guidance Note on Accounting for Real Estate Transactions (for entities to whom lnd AS is applicable), issued in May 2016 in Real Estate Segment and restructuring of performance obligations in PMC segment, the net cumulative impact of initial application of lnd AS 115 upto March 31, 2018 aggregating to~ 498.8620 crore has been appropriated against the retained earnings as at the initial adoption date, as permitted by the standard. Profit for the quarter ending June 30, 2018 would have been lower by~ 19.4087 crore if the company would have recognised the revenue based upon lnd AS 11 and lnd AS 18. The comparative information is not restated in the financial results.

• Operating margin contracted by 100 bps to 3.6% largely due to change in recognition of revenue and margin as per IND AS 115 in comparison to the relation to accounting standard followed for corresponding previous period. Cost of work/consultancy as proportion to net of stocks (RE) was up by 210 bps to 88.8% and that of provision for expected credit loss was higher by 70 bps to 2%. However the material cost was lower by 10 bps to 0.1%, the staff cost was lower by 150 bps to 4.3% and OE was down by 50 bps to 0.9%.
• EBIT was down by 16% to Rs 147.09 crore and that is largely due to lower segment profit from PMC and EPC segments. Segment profit of PMC was down by 55% to Rs 75.14 crore and that of EPC was down by 53% to RS 3.64 crore. However the segment profit of Real Estate jumped to Rs 68.31 crore from mere Rs 1.55 crore in the corresponding previous period largely with higher sales as well as expansion in its margin to 52.7% from 17.6% in corresponding previous period. Segment margin of PMC and EPC was down by 730 bps (to 4.9%) and 220 bps (to 2.1%) respectively.
• Other income was up by 41% to Rs 44.19 crore. The interest cost was lower by 91% to Rs 0.94 crore. The depreciation was lower by 1% to Rs 1.27 crore. Thus the PBT before EO and share of profit from JV was up by 19% to Rs 110.90 crore.
• Share of profit from JV was up at Rs 0.19 crore compared to a loss of Rs 0.01 crore in corresponding previous period. Thus the PBT after Share of profit from JV but before EO was up by 20% to Rs 109.82 crore. The EO income was lower by 100% to nil from Rs 0.06 crore in corresponding previous period. Thus PBT after EO was lower by 19% to Rs 109.82 crore.
• The taxation was up by 3% to Rs 41.06 crore but the tax rate was lower at 30.2% compared to 33.4% in the corresponding previous period. Thus the PAT was up by 25% to Rs 76.65 crore.
• Non controlling interest was up by 64% to Rs 3.45 crore. After accounting for Non controlling interest the PAT (Non controlling interest) was up by 24% to Rs 73.20 crore.
• The other comprehensive income net of tax was an expense of Rs 1.06 crore compared to an income of Rs 0.04 crore in the corresponding previous period. Thus the net profit attributable to owners was up by 22% to Rs 72.14 crore.