2A. MATERIAL ACCOUNTING POLICIES2.1 Basis of preparation

The standalone financial statements of the company
have been prepared in accordance with Indian
Accounting Standards (Ind AS) notified under the
Companies (Indian Accounting Standards) Rules,
2015 (as amended from time to time).

The Company has a net profit, positive operating cash
flows, positive net worth and net current asset. It would
be able to meet all its obligations. Accordingly, the
standalone financial statements have been prepared
on a going concern basis using historical cost
convention and on an accrual method of accounting,
except for the following assets and liabilities which
have been measured at fair value amount:

• Derivative financial instruments,

• Certain financial assets and liabilities measured
at fair value (refer accounting policy regarding
financial instruments),

• Non-cash distribution liability

The financial statements are presented in INR
and all values are rounded to the nearest crores
(INR 00,00,000), except when otherwise indicated.

2.2 Current versus non-current classification

The Company presents assets and liabilities in
the balance sheet based on current / non-current
classification. An asset is treated as current when
it is:

• Expected to be realised or intended to be sold or
consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months
after the reporting period, or

• Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating
cycle

• It is held primarily for the purpose of trading

• It is due to be settled within twelve months after
the reporting period, or

• There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.

The Company classifies all other liabilities as non¬
current.

Deferred tax assets and liabilities are classified as
non-current assets and liabilities. The operating
cycle is the time between the acquisition of assets
for processing and their realisation in cash and cash
equivalents. The Company has identified twelve
months as its operating cycle.

The normal operating cycle of the Company
depends on signing of agreement, size of the project,
phasing of the project, type of development, project
complexities, approvals needed and realisation of
project into cash and cash equivalents and range
from 3 to 7 years. Accordingly, project related assets
and liabilities have been classified into current and
non-current based on operating cycle of respective
projects. All other assets and liabilities have been
classified into current and non-current based on a
period of twelve months.

2.3 Fair value measurement

The company measures financial instruments, such
as derivatives, investments etc, 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 orderly 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:

• In the principal market for the asset or liability, or

• 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 Company. The fair value of an
asset or a 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 participant's 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 Company 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
minimising the use of unobservable inputs.

All assets and liabilities for which fair value is
measured or disclosed in the financial statements are
categorised 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:

• Level 1 - Quoted (unadjusted) market prices in
active markets for identical assets or liabilities

• Level 2 - Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is directly or indirectly
observable

• 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 recognised in the
financial statements on a recurring basis, the Company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to
the fair value measurement as a whole) at the end of
each reporting period.

For the purpose of fair value disclosures, the Company
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.

This note summarises accounting policy for fair value.
Other fair value related disclosures are given in the
relevant notes.

2.4 Revenue from contract with customer

Revenue from contracts with customers is recognised
when control of the goods or services are transferred
to the customer at an amount that reflects the
consideration to which the Company expects to be
entitled in exchange for those goods or services.
The Company has generally concluded that it is
the principal in its revenue arrangements, because
it typically controls the goods or services before
transferring them to the customer.

Sale of Goods

Revenue from sale of goods is recognised at the
point in time when control of the asset is transferred
to the customer, generally on delivery of the goods.
The Company 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 for the sale of goods, the Company considers the
effects of variable consideration, and consideration
payable to the customer (if any).

Sale of real estate units

Revenue is recognized upon transfer of control of
residential units or service to customers, in an amount
that reflects the consideration the Company expects
to receive in exchange for those residential units. The
Company determines the performance obligations

associated with the contract with customers at
contract inception and also determine whether they
satisfy the performance obligation over time or at a
point in time. In case of residential units, the Company
satisfies the performance obligation and recognises
revenue at a point in time i.e., upon completion, receipt
of occupancy certificate and transfer of control to the
customers as per the agreement.

To estimate the transaction price in a contract,
the Company adjusts the promised amount of
consideration for the time value of money if that
contract contains a significant financing component.
The Company when adjusting the promised amount
of consideration for a significant financing component
is to recognise revenue at an amount that reflects the
cash selling price of the transferred residential unit.

Variable Consideration

If the consideration in a contract includes a variable
amount, the Company estimates the amount of
consideration to which it will be entitled in exchange
for transferring the goods to the customer. The
variable consideration is estimated at contract
inception and constrained until it is highly probable
that a significant revenue reversal in the amount of
cumulative revenue recognised will not occur when the
associated uncertainty with the variable consideration
is subsequently resolved. Some contracts for the sale
provide customers with discounts. The discounts give
rise to variable consideration.

Discounts

Discounts includes target and growth rebates, price
reductions, incentives to customers or retailers.
To estimate the amount of discount, the company
applies accumulated experience using the most likely
method. The Company determines that the estimates
of discounts are not constrained based on its historical
experience, business forecast and the current
economic conditions. The Company then applies the
requirements on constraining estimates of variable
consideration and recognises a refund liability for the
expected discount. No element of financing is deemed
present as the sales are made with credit terms largely
ranging between 7 days to 120 days.

Other operating income

Interest on delayed receipts, income from
cancellations or forfeitures, transfer fees, and similar
charges from customers, is recognised at a point in
time in accordance with the terms of the underlying
customer agreements. Such income is recorded when
the right to receive consideration arises and collection
is reasonably certain.

Contract balances

Contract assets

A contract asset is the right to consideration in
exchange for goods or services transferred to the
customer. If the Company performs by transferring
goods or services to a customer before the customer
pays consideration or before payment is due, a contract
asset is recognised for the earned consideration that is
conditional.

Trade receivables

A receivable represents the Company's right to an
amount of consideration that is unconditional (i.e., only
the passage of time is required before payment of the
consideration is due).

Contract liabilities

A contract liability is the obligation to transfer goods
or services to a customer for which the Company has
received consideration (or an amount of consideration
is due) from the customer. If a customer pays
consideration before the Company transfers goods
or services to the customer, a contract liability is
recognised when the payment is made or the payment
is due (whichever is earlier). Contract liabilities are
recognised as revenue when the Company performs
under the contract

Refund liabilities

A refund liability is the obligation to refund some or
all of the consideration received (or receivable) from
the customer and is measured at the amount the
Company ultimately expects it will have to return to
the customer. The Company updates its estimates of
refund liabilities (and the corresponding change in the
transaction price) at the end of each reporting period.

2.5 Government grants

Government grants are recognised where there is
reasonable assurance that the grant will be received
and all attached conditions will be complied with. When
the grant relates to an expense item, it is recognised as
income on a systematic basis over the periods that the
related costs, for which it is intended to compensate,
are expensed. When the grant relates to an asset, it
is recognised as income in equal amounts over the
expected useful life of the related asset.

When the Company receives grants of non-monetary
assets, the asset and the grant are recorded at fair
value amounts and released to profit or loss over the
expected useful life in a pattern of consumption of
the benefit of the underlying asset i.e. by equal annual
instalments.

Government grants such as sales tax incentive, export
benefit schemes are recognized in the Statement of
Profit and Loss as a part of other operating revenues
whereas grants related to royalty, power incentives
and interest subsidies are netted of from the related
expense.

2.6 Taxes

Current tax

Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax
laws used to compute the amount are those that are
enacted or substantially enacted by the end of the
reporting period.

Current income tax relating to items recognised
outside profit or loss is recognised outside profit or
loss (i.e in other comprehensive income). Current tax
items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.
Management periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method on
temporary differences between the tax bases of assets

and liabilities and their carrying amounts for financial
reporting purposes at the reporting date. Deferred
tax is recognised on temporary differences between
the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases
used in the computation of taxable profit. Deferred
tax liabilities are recognised for all taxable temporary
differences. Deferred tax assets are generally
recognised for all deductible temporary differences to
the extent that it is probable that taxable profits will be
available against which those deductible temporary
differences can be utilised. Such deferred tax assets
and liabilities are not recognised if the temporary
difference arises from the initial recognition of assets
and liabilities in a transaction that affects neither the
taxable profit nor the accounting profit and does not
give rise to equal taxable and deductible temporary
differences.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to
the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the
asset to be utilised.

Unrecognised deferred tax assets are re-assessed at
each reporting date and are recognised to the extent
that it has become probable that future taxable profits
will allow the deferred tax asset to be recovered.
Deferred tax liabilities and assets are measured at the
tax rates that are expected to apply in the period in
which the liability is settled or the asset realised, based
on tax rates (and tax laws) that have been enacted
or substantively enacted by the end of the reporting
period.

Deferred tax relating to items recognised outside profit
or loss is recognised outside profit or loss (either in
other comprehensive income or in equity). Deferred tax
items are recognised in correlation to the underlying
transaction in OCI.

The measurement of deferred tax liabilities and
assets reflects the tax consequences that would
follow from the manner in which the Company
expects, at the end of the reporting period, to recover
or settle the carrying amount of its assets and
liabilities.

Current and deferred tax for the year

Current and deferred tax are recognised in profit
or loss, except when they relate to items that are
recognised in other comprehensive income or directly
in equity, in which case, the current and deferred tax
are also recognised in other comprehensive income or
directly in equity respectively.

Minimum Alternate Tax (MAT)

Minimum alternate tax (MAT) paid in a year is charged
to the statement of profit and loss as current tax for
the year. The deferred tax asset is recognised for MAT
credit available only to the extent that it is probable
that the concerned company will pay normal income
tax during the specified period, i.e., the period for which
MAT credit is allowed to be carried forward. In the year
in which the company recognizes MAT credit as an
asset, it is created by way of credit to the statement
of profit and loss as credit in current tax expense and
shown as part of deferred tax asset. The company
reviews the "MAT credit entitlement" asset at each
reporting date and writes down the asset to the extent
that it is no longer probable that it will pay normal tax
during the specified period

GST paid on acquisition of assets or on incurring
expenses

Expenses and assets are recognised net of the amount
of GST paid, except:

- When the tax incurred on a purchase of assets
or services is not recoverable from the taxation
authority, in which case, the tax paid is recognized
as part of the cost of acquisition of the asset or as
part of the expense item, as applicable

- When receivables and payables are stated with
the amount of tax included

The net amount of tax recoverable from, or payable to,
the taxation authority is included as part of receivables
or payables in the balance sheet.

2.7 Property, plant and equipments

Capital work in progress is stated at cost, net of
accumulated impairment loss, if any. Plant and
equipment is stated at cost, net of accumulated

depreciation and accumulated impairment losses,
if any. Such cost includes the cost of replacing part
of the plant and equipment and borrowing costs for
long-term construction projects if the recognition
criteria are met. When significant parts of plant and
equipment are required to be replaced at intervals, the
Company depreciates them separately based on their
specific useful lives. Likewise, when a major inspection
is performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement
if the recognition criteria are satisfied. All other repair
and maintenance costs are recognised in profit or loss
as incurred.

Depreciation is recognised so as to depreciate the cost
of assets (other than freehold land and properties under
construction) less their residual values over their useful
lives, using the straight-line method. The estimated
useful lives, residual values and depreciation method
are reviewed at the end of each reporting period, with
the effect of any changes in estimate accounted for on
a prospective basis.

Depreciation is calculated on a straight-line basis over
the estimated useful lives of the assets as follows:

The management has estimated the above useful life
and the same is supported by technical expert. Which
is different form useful life prescribed in Companies
Act, 2013.

Refer Note 2.11 on accounting of leases as per Ind As
116 applied from April 1,2019 for right of use.

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising
on the disposal or retirement of an item of property,
plant and equipment is determined as the difference
between the sales proceeds and the carrying amount
of the asset and is recognised in profit or loss.

2.8 Intangible Assets

Intangible assets with finite useful lives that
are acquired separately are carried at cost less
accumulated amortisation and accumulated
impairment losses. Amortisation is recognised on a
straight-line basis over their estimated useful lives.
The estimated useful life and amortisation method are
reviewed at the end of each reporting period, with the
effect of any changes in estimate being accounted for
on a prospective basis. Cost of software capitalised is
amortised over its useful life which is estimated to be
a period of five years.

2.9 Investment properties

Investment properties are properties held to earn rentals
and/or for capital appreciation (including property under
construction for such purposes). Investment properties
are measured initially at cost, including transaction
costs. Subsequent to initial recognition, investment
properties are stated at cost less accumulated
depreciation and impairment losses, if any.

The cost includes the cost of replacing parts and
borrowing costs for long-term construction projects if
the recognition criteria are met. When significant parts
of the investment property are required to be replaced
at intervals, the company depreciates them separately
based on their specific useful lives. All other repair and
maintenance costs are recognised in profit or loss as
incurred.

The company, based on technical assessment
made by management, depreciates the building over
estimated useful lives of 40 years. The management
believes that these estimated useful lives are realistic
and reflect fair approximation of the period over which
the assets are likely to be used.

Though the Company measures investment property
using cost based measurement, the fair value of
investment property is disclosed in notes. Fair values are
determined based on an annual evaluation performed
by an accredited external independent valuer.

2.10 Non-current assets held for sale / distribution to
owners and discontinued operations

The Company classifies non-current assets and
disposal company as held for sale/distribution if their

carrying amounts will be recovered principally through
a sale/distribution rather than through continuing use.
Actions required to complete the sale/distribution
should indicate that it is unlikely that significant
changes to the sale will be made or that the decision
to sell will be withdrawn. Management must be
committed to the sale/distribution expected within
one year from the date of classification.

For these purposes, sale transactions include
exchanges of non-current assets for other non-current
assets when the exchange has commercial substance.
The criteria for held for sale/distribution classification
is regarded met only when the assets or disposal
company is available for immediate sale/distribution
in its present condition, subject only to terms that are
usual and customary for sales/distribution of such
assets (or disposal company), its sale/distribution
is highly probable; and it will genuinely be sold, not
abandoned. The Company treats sale/distribution of
the asset or disposal company to be highly probable
when:

• The appropriate level of management is
committed to a plan to sell the asset (or disposal
company),

• An active programme to locate a buyer and
complete the plan has been initiated (if applicable),

• The asset (or disposal company) is being actively
marketed for sale at a price that is reasonable in
relation to its current fair value,

• The sale is expected to qualify for recognition as
a completed sale within one year from the date of
classification and

• Actions required to complete the plan indicate that
it is unlikely that significant changes to the plan will
be made or that the plan will be withdrawn.

Non-current assets held for sale/ for distribution to
owners and disposal company are measured at the
lower of their carrying amount and the fair value less
costs to sell/ distribute. Assets and liabilities classified
as held for sale/distribution are presented separately
in the balance sheet.

Property, plant and equipment and intangible assets
once classified as held for sale/distribution are not
depreciated or amortised.

A disposal company qualifies as discontinued
operation if it is a component of an entity that either
has been disposed of, or is classified as held for sale,
and:

• Represents a separate major line of business or
geographical area of operations,

• Is part of a single co-ordinated plan to dispose of
a separate major line of business or geographical
area of operations.

Discontinued operations are excluded from the results
of continuing operations and are presented as a single
amount as profit or loss after tax from discontinued
operations in the statement of profit and loss.
Additional disclosures are provided in Note 35. All
other notes to the financial statements mainly include
amounts for continuing operations, unless otherwise
mentioned.

2.11 Leases

At inception of contract, the Company assesses
whether the Contract is, or contains, a lease. A contract
is, or contains, a lease if the contract conveys the right
to control the use of an identified asset for a period
of time in exchange for consideration. At inception or
on reassessment of a contract that contains a lease
component, the Company allocates consideration in
the contract to each lease component on the basis of
their relative standalone price.

As a lessee

i) Right-of-use assets

The Company recognises right-of-use assets at
the commencement date of the lease. 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 recognised, initial direct costs incurred, lease
payments made at or before the commencement
date less any lease incentives received and estimate
of costs to dismantle. Right-of-use assets are
depreciated on a straight-line basis over the shorter
of the lease term and the estimated useful lives of
the assets.

The Company presents right-to-use assets within the
same line item as that within which the corresponding
underlying assets would be presented if they were
owned by the Company.

ii) Lease liabilities

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments to be made over the lease term.
In calculating the present value of lease payments, the
Company generally uses its incremental borrowing
rate at the lease commencement date if the discount
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.
The carrying amount is remeasured when there is a
change in future lease payments arising from a change
in index or rate. 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 or a change in the assessment of an option
to purchase the underlying asset.

The Company presents lease liabilities under financial
liabilities in the Balance Sheet.

iii) Short term leases and leases of low value of
assets

The Company applies the short-term lease recognition
exemption to its short-term leases. It also applies the
lease of low-value assets recognition exemption that
are considered to be low value. Lease payments on
short-term leases and leases of low value assets are
recognised as expense on a straight-line basis over
the lease term.

As a lessor

Leases in which the Company does not transfer
substantially all the risks and rewards of ownership
of an asset are classified as operating leases. Rental
income from operating lease is recognised on a
straight-line basis over the term of the relevant lease.
Initial direct costs incurred in negotiating and arranging
an operating lease are added to the carrying amount of
the leased asset and recognised over the lease term

on the same basis as rental income. Contingent rents
are recognised as revenue in the period in which they
are earned.

Leases are classified as finance leases when
substantially all of the risks and rewards of ownership
transfer from the Company to the lessee. Amounts
due from lessees under finance leases are recorded
as receivables at the Company’s net investment
in the leases. Finance lease income is allocated to
accounting periods so as to reflect a constant periodic
rate of return on the net investment outstanding in
respect of the lease.

2.12 Borrowing costs

Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalised as part of the cost
of the asset. Borrowing cost also includes exchange
differences to the extent regarded as an adjustment to
the borrowing costs.

2.13 Inventories

Inventories are valued at the lower of cost and net
realisable value.

Costs incurred in bringing each product to its present
location and condition are accounted for as follows:

• Real Estate Inventory: Direct expenditure relating
to construction activity is inventorised. Other
expenditure (including borrowing costs) during
construction period is inventorised to the extent
the expenditure is directly attributable cost of
bringing the asset to its working condition for
its intended use. Other expenditure (including
borrowing costs) incurred during the construction
period which is not directly attributable for bringing
the asset to its working condition for its intended
use is charged to the statement of profit and loss.
Direct and other expenditure is determined based
on specific identification to the construction
and real estate activity. Cost incurred/ items
purchased specifically for projects are taken as
consumed as and when incurred/ received

• Real Estate Projects - Construction work-in¬
progress: Represents cost incurred in respect

of unsold area of the real estate development
projects or cost incurred on projects where the
revenue is yet to be recognised. Real estate
inventory is valued at lower of cost and net
realisable value.

• Raw materials: cost includes cost of purchase and
other costs incurred in bringing the inventories
to their present location and condition. Cost is
determined on weighted average cost basis.

• Finished goods and work in progress: cost
includes cost of direct materials and labour and
a proportion of manufacturing overheads based
on the normal operating capacity, but excluding
borrowing costs. Cost is determined on weighted
average cost basis.

• Traded goods: cost includes cost of purchase and
other costs incurred in bringing the inventories
to their present location and condition. Cost is
determined on weighted average basis.

Net realisable value is the estimated selling price in
the ordinary course of business, less estimated costs
of completion and the estimated costs necessary to
make the sale.

2.14 Impairment of non-financial assets

The Company 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
Company estimates the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an
assets or cash-generating units (CGU) fair value less
costs of disposal and its value in use. 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
company 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 Company bases its impairment calculation on
detailed budgets and forecast calculations, which
are prepared separately for each of the Company’s
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 Company 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 entity operates, or for the
market in which the asset is used.

Impairment loss of continuing operations, including
impairment on inventories is recognised in the
statement of profit and loss.