2. MATERIAL ACCOUNTING POLICIES

The material accounting policies applied by the Company
in preparation of its standalone financial statements
are listed below. Such accounting policies have been
applied consistently to all the periods presented in these
standalone financial statements.

2.1 Statement of compliance and basis of preparation

a) Statement of compliance:

These standalone financial statements are
prepared in accordance with the Indian
Accounting Standards (hereinafter referred to
as the 'Ind AS') notified under the Companies
(Indian Accounting Standards) Rules, 2015 (as
amended from time to time) and presentation
requirements of Division II of Schedule III to
the Companies Act, 2013 (Ind AS compliant
schedule III) and the SEBI (Listing Obligations
and Disclosure Requirements) Regulations,
2015 (as amended), as are applicable.

b) Basis of measurement

These standalone financial statements are
prepared under the historical cost convention
on accrual basis except for the following
material items those have been measured at
fair value as required by relevant Ind AS:

- certain financial assets and liabilities that
are measured at fair value;

- defined benefit plans - plan assets
measured at fair value;

Also, the fair values of financial instruments
measured at amortised cost are required to
be disclosed in the said standalone financial
statements.

Historical cost is generally based on the fair
value of the consideration given in exchange
for assets.

Fair value measurement

Fair value is the price that would be received on
sale of an asset or paid to transfer a liability in an
orderly transaction between market participants
at the measurement date (that is, an exit price).
It is a market-based measurement, not an
entity-specific measurement. 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 is available to measure
fair value, maximizing the use of relevant
observable inputs and minimizing the use of
unobservable inputs.

Where required/appropriate, external valuers
are involved.

All financial assets and liabilities for which fair
value is measured or disclosed in the standalone
financial statements are categorised within the
fair value hierarchy established by Ind AS-113
that categorizes into three levels, the inputs
to valuation techniques used to measure fair
value. These are based on the degree to which
the inputs to the fair value measurements are
observable and the significance of the inputs to
the fair value measurement in its entirety:

Level 1: inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities
that the entity can access at the measurement
date.

Level 2: inputs are inputs other than quoted
prices included within Level 1 that are
observable for the asset or liability, either
directly(i.e. as prices) or indirectly (i.e. derived
from prices).

Level 3: inputs are unobservable inputs for the
asset or liability.

The fair value hierarchy gives the highest
priority to quoted prices (unadjusted) in active
markets for identical assets or liabilities (Level 1
inputs) and the lowest priority to unobservable
inputs (Level 3 inputs).

For financial assets and liabilities maturing
within one year from the Balance Sheet date
and which are not carried at fair value, the
carrying amount approximates fair value due to
the short maturity of these instruments.

The Company recognises transfers between levels
of fair value hierarchy at the end of reporting
period during which change has occurred.

c) Current 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.

Operating cycle for the business activities
of the Company covers the duration of the
specific project/contract/product line/service
including the defect liability period, wherever
applicable and extends up to the realisation of
receivables (including retention monies) within
the agreed credit period normally applicable to
the respective projects/lines of business.

d) Functional and presentation currency

Items included in the standalone financial
statements of the Company are measured
using the currency of the primary economic
environment in which the Company operates
(i.e. the "functional currency"). The standalone
financial statements are presented in Indian
Rupee, the national currency of India, which is
the functional currency of the Company.

e) Rounding of amounts

All amounts disclosed in the standalone financial
statements and notes are in Indian Rupees
in lakhs rounded off to two decimal places as
permitted by Schedule III to the Companies Act,
2013, unless otherwise stated.

2.2 Use of estimates

The preparation of standalone financial statements
in conformity with the recognition and measurement
principles of the Ind AS requires management to
make judgements, estimates and assumptions that
affect the application of the accounting policies and
the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the

date of the standalone financial statements, and the
reported amounts of revenues, expenses and the
results of operations during the reporting period.
Actual results could differ from those estimates. The
estimates and underlying assumptions are reviewed
on an ongoing basis. Such estimates & assumptions
are based on management evaluation of relevant
facts & circumstances as on date of standalone
financial statements. Revisions to accounting
estimates are recognised in the period in which the
estimate is revised if the revision affects only that
period; they are recognised in the period of the
revision and future periods if the revision affects
both current and future periods.

2.3 Revenue recognition

Revenue from construction/project related activities
are recognised as follows:

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.

A single performance obligation is identified in the
construction projects that the Company engages
in, owing to the high degree of integration and
customisation of the various goods and services to
provide a combined output which is transferred to
the customer over time and not at a specific point
in time since the entity's performance creates or
enhances as asset (e.g., work in progress) that
the customer controls as the asset is created or
enhanced.

With respect to the method for recognising revenue
over time (i.e. the method for measuring progress
towards complete satisfaction of a performance
obligation), the Company has established certain
criteria that are applied consistently for similar
performance obligations. In this regard, the method
chosen by the Company to measure the value of
goods or services for which control is transferred to
the customer over time is the output method based
on surveys of performance completed to date (or
measured unit of work), according to which revenue
is recognised corresponding to the units of work
performed and on the basis of the price allocated
thereto. In cases where the work performed till
the reporting date has not reached the milestone
specified in the contract, the Company recognises
revenue only to the extent that it is highly probable

that the customer will acknowledge the same. This
method is applied as the progress of the work
performed can be measured during its performance
on the basis of the contract. Under this method,
on a regular basis, the work completed under each
contract is measured and the corresponding output
is recognised as revenue.

For performance obligations in which control is not
transferred over time, control is transferred as at a
point in time at the transaction price.

Transaction price is the amount of consideration
to which the Company expects to be entitled
in exchange for transferring good or service
to a customer excluding amounts collected on
behalf of a third party and is adjusted for variable
considerations.

Contract modifications are accounted for when
additions, deletions or changes are approved
either to the scope or price or both. Goods/services
added that are not distinct are accounted for on a
cumulative catch-up basis. Goods / services that
are distinct are accounted for prospectively as a
separate contract, if the additional goods/services
are priced at the standalone selling price else as a
termination of the existing contract and creation of
a new contract. In cases where the additional work
has been approved but the corresponding change
in price has not been determined, the recognition
of revenue is made for an amount with respect to
which it is highly probable that a significant reversal
will not occur.

If the consideration promised in a contract includes
a variable amount, this amount is recognised only to
the extent that it is highly probable that a significant
reversal in the amount recognised will not occur.

In some circumstances (for example, in the early
stages of a contract), an entity may not be able to
reasonably measure the outcome of a performance
obligation, but the entity expects to recover the costs
incurred in satisfying the performance obligation. In
those circumstances, the entity recognise revenue
only to the extent of the costs incurred until such
time that it can reasonably measure the outcome of
the performance obligation.

Contract costs

Costs related to work performed in projects are
recognised on an accrual basis. Costs incurred in
connection with the work performed are recognised
as an expense.

Provision for future losses

Provision for future losses are recognised as soon as
it becomes evident that the total costs expected to
be incurred in a contract exceed the total expected
revenue from that contract.

Contract balances

i) Contract assets

A contract asset is recognised for amount of work
done but pending billing/acknowledgement by
customer or amounts billed but payment is due
on completion of future performance obligation,
since it is conditionally receivable. The provision
for Expected Credit Loss on contract assets is
made on the same basis as financial assets as
stated in Note No. 2.7.

ii) 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). Refer to
accounting policies of financial assets in section
Financial instruments - Initial recognition and
subsequent measurement.

iii) Contract liabilities

A contract liability is the obligation to transfer
goods or services to a customer for which the
Company has received advance payments 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 consideration received.

Revenue (other than sale)

Revenue (other than sale) is recognised as and
when the right to receive such income arises
and it is probable that the economic benefits
will flow to the company and the revenue can
be reliably measured.

Claim on insurance companies and others,
where quantum of accrual cannot be ascertained
with virtual certainty, are accounted for on
acceptance basis.

Claim on clients

Claims are accounted as income in the period
of receipt of arbitration award or acceptance
by client or evidence of acceptance received.
Interest awarded, being in the nature of

additional compensation under the terms of
the contract, is accounted as other revenue on
receipt of favourable arbitration award.

Rental Income

Rental Income from investment property is
recognized in statement of profit and loss on
straight-line basis over the term of the lease.

Interest Income

Interest income from financial assets is
recognised when it is probable that the
economic benefits will flow to the Company and
the amount of income can be measured reliably.
Interest income is accrued on a time basis by
reference to the principal outstanding and at
the effective interest rate (EIR) applicable, which
is the rate that exactly discounts estimated
future cash receipts through the expected life
of the financial asset to that asset's net carrying
amount on initial recognition.

2.4 Property, plant and equipment (PPE)

Property, plant and equipment is stated at
acquisition cost net of accumulated depreciation
and accumulated impairment losses, if any except
freehold non mining land which is carried at cost
less accumulated impairment losses. Subsequent
costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits
associated with the item will flow to the Company
and the cost of the item can be measured reliably.
All other repairs and maintenance are charged to
the Statement of Profit and Loss during the period
in which they are incurred.

Cost of an item of property, plant and equipment
comprises:

i. its purchase price, including import duties
and non -refundable purchase taxes (net of
duty/ tax credit availed), after deducting trade
discounts and rebates.

ii. any costs directly attributable to bringing the
asset to the location and condition necessary
for it to be capable of operating in the manner
intended by management.

iii. borrowing cost directly attributable to the
qualifying asset in accordance with accounting
policy on borrowing cost.

iv. the costs of dismantling, removing the item and
restoring the site on which it is located.

PPE in the course of construction for production,
supply or administrative purposes are carried at cost,
less any recognised impairment loss. Cost includes
direct costs, related pre-operational expenses and
for qualifying assets applicable borrowing costs to
be capitalised in accordance with the Company's
accounting policy. Administrative, general overheads
and other indirect expenditure (including borrowing
costs) incurred during the project period which are
not directly related to the project nor are incidental
thereto, are expensed.

Property, plant and equipment which are not ready
for intended use as on the date of Balance Sheet are
disclosed as "Capital work-in-progress". They are
classified to the appropriate categories of property,
plant and equipment when completed and ready for
intended use. Depreciation of these assets, on the
same basis as other items of PPE, commences when
the assets are ready for their intended use.

Capital work-in-progress are carried at cost,
comprising direct cost, related incidental expenses
and attributable borrowing cost, less impairment
losses if any.

An item of property, plant and equipment is
derecognized upon disposal or when no future
economic benefits are expected to arise from the
continued use of 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 the Statement of
Profit and Loss.

When significant parts of an item of property, plant
and equipment have materially different useful lives,
they are accounted for as separate items (major
components) of property, plant and equipment.
Such items, if any, are depreciated separately.

Machinery spares which meets the criteria of PPE is
capitalized and depreciated over the useful life of
the respective asset.

Deemed cost on transition to Ind AS

Under the Previous GAAP, all property, plant and
equipment were carried at in the Balance Sheet on
basis of historical cost.

Depreciation

Depreciation on Property, Plant & Equipment's
(other than freehold land and capital work in
progress) is provided on the straight line method,
based on their respective estimate of useful lives,
as given below. Estimated useful lives of assets

Companies Act, 2013. However, based on internal
technical evaluation and external advice received,
the management believes that the useful lives as
considered for arriving at the depreciation rates,
best represent the period over which management
expect to use these assets.

Assets individually costing '5000 or less are fully
depreciated in the year of acquisition.

Depreciation of an asset begins when it is available
for use, i.e., when it is in the location and condition
necessary for it to be capable of operating in the
manner intended by management. Depreciation
of an asset ceases at the earlier of the date that
the asset is retired from active use and is held for
disposal and the date that the asset is derecognised.

Depreciation methods, useful lives and residual
values are reviewed periodically including at the end
of each financial year. Any changes in depreciation
method, useful lives and residual values are treated
as a change in accounting estimate and applied/
adjusted prospectively, if appropriate.

2.5 Intangible assets

Identifiable intangible assets are recognised when
the Company controls the asset, it is probable that
future economic benefits attributed to the asset will
flow to the Company and the cost of the asset can be
reliably measured.

At initial recognition, the separately acquired
intangible assets with finite useful lives are
recognised at cost of acquisition. Following initial
recognition, the intangible assets are carried at cost
less any accumulated amortisation and accumulated
impairment losses, if any.

Intangible assets not ready for the intended use
on the date of the balance sheet are disclosed as
'intangible assets under development'.

Intangible assets are derecognised (eliminated from
the balance sheet) on disposal or when no future
economic benefits are expected from its use and
subsequent disposal.

Gains or losses arising from the retirement or
disposal of an intangible asset are determined as
the difference between the net disposal proceeds
and the carrying amount of the asset and should be
recognised as income or expense in the statement
of profit and loss.

Deemed cost on transition to Ind AS

Under the Previous GAAP, all Intangible assets were
carried at in the Balance Sheet on basis of historical

cost. The Company has elected to continue with the
carrying value of all of its intangible assets recognised
as of April 1, 2016 (the transition date) measured as
per the previous GAAP and use such carrying value
as its deemed cost as of the transition date.

Amortisation

Intangible assets are amortised on a straight line
basis over the estimated useful lives of respective
assets from the date when the asset are available for
use, on pro-rata basis. Estimated useful lives by major
class of finite-life intangible assets are as follows:

The amortisation period and the amortisation
method for finite-life intangible assets is reviewed
at each financial year end. Changes in the expected
useful life or the expected pattern of consumption
of future economic benefits embodied in the asset
are considered to modify the amortisation period or
method, as appropriate, and are treated as changes
in accounting estimates and adjusted prospectively.

2.6 Investment properties

Properties including those under construction (land
or a building—or part of a building—or both) held
(by the owner or by the lessee under a finance lease)
to earn rentals or for capital appreciation or both,
rather than for: (a) use in the production or supply
of goods or services or for administrative purposes;
or (b) sale in the ordinary course of business; are
classified as investment property.

Investment properties are measured initially at cost,
including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost
less accumulated depreciation and accumulated
impairment loss, if any.

Costs include costs incurred initially to acquire an
investment property, being purchase price and any
directly attributable expenditure and costs incurred
subsequently to add to, replace part of, or service a
property. Costs of the day-to-day servicing of such
a property primarily being the cost of labour and
consumables, and may include the cost of minor
parts (the purpose of these expenditures whereof is
often described as for the 'repairs and maintenance'
of the property) are recognised in the Statement of
profit or loss as incurred.

The Company has developed a building (being Bus
Terminal and Depot and Commercial Complex at
Kota) for Rajasthan State Road Transport Corporation

(RSRTC) under an "Agreement to develop"/ License
Agreement on the land belonging to RSRTC under
finance lease arrangement. The expenditure
(construction cost) incurred has been shown in
Balance Sheet under the main head "Investment
Property" and sub-head Right of Use Assets (Building)
meeting the definition of Investment Property as
defined in Ind As 40. The Company has a right to
sub-lease Right of Use Asset (Commercial Complex).
The primary lease period of Commercial complex is
30 years which can be extended for a further period
of 10 years at the option of the Company from the
date of completion of the project. Thereafter, the
Commercial Complex will be handed over to RSRTC.
The Management expects to use the said property in
primary period of lease of 30 years.

Depreciation is recognised using straight line
method so as to write off the cost of the investment
property less their residual values over their
estimated useful lives.

The Company depreciates building held as
investment property over the period of 30 years
having zero residual value.

Estimated useful life of the asset and residual value
thereof is determined based on internal assessment
estimated by the management of the Company
and supported by technical advice wherever so
required. Based on such assessment and advice, the
management believes that useful life and residual
value currently used is different from the useful life
and residual value prescribed in Schedule II to the
Companies Act, 2013. However based on internal
technical evaluation and external advice received,
the management believes that the estimated useful
life and residual value is realistic and reflect fair
approximation of the period over which the asset is
likely to be used.

Depreciation method is reviewed at each financial
year end to reflect the expected pattern of
consumption of the future benefits embodied in
the investment property. The estimated useful
life and residual values are also reviewed at each
financial year end and the effect of any change in the
estimates of useful life/residual value is accounted
on prospective basis. Freehold land and properties
under construction are not depreciated.

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

An investment property is derecognised upon
disposal or when the investment property is
permanently withdrawn from use/ expiry of lease
term and no future economic benefits are expected
from the disposal. Any gain or loss arising on
derecognition of property is recognised in the
Statement of Profit and Loss in the same period.

On transition to Ind AS, the Company has opted
to continue with the carrying values measured
under the previous GAAP as at 1 April 2016 of its
investment properties and used that carrying value
as the deemed cost of the investment properties on
the date of transition i.e. 1 April 2016.

2.7 Financial instruments
Financial Assets

Initial recognition and measurement:

Financial assets are recognised when the Company
becomes a party to the contractual provisions of the
instrument.

On initial recognition, a financial asset is recognised
at fair value, except for trade receivables which are
initially measured at transaction price. In case of
financial assets which are recognised at fair value
through profit and loss (FVTPL), its transaction costs
are recognised in the statement of profit and loss.
In other cases, the transaction costs are added to or
deducted from the fair value of the financial assets.

Financial assets are subsequently classified as
measured at

• amortised cost (if it is held within a business
model whose objective is to hold the asset in
order to collect contractual cash flows and the
contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding)

• fair value through profit and loss (FVTPL)

• fair value through other comprehensive income
(FVOCI).

Equity Instruments:

Investment in subsidiaries are measured at cost less
impairment losses, if any.

All investments in equity instruments in scope of Ind
AS 109 classified under financial assets are initially
measured at fair value.

If the equity investment is not held for trading, the
Company may, on initial recognition, irrevocably

elect to measure the same either at FVOCI or FVTPL.
The Company makes such election on an instrument-
by-instrument basis. Equity Instruments which are
held for trading are classified as measured at FVTPL.

Fair value change on an equity instrument is
recognised as other income in the Statement of
Profit and Loss unless the Company has elected
to measure such instrument at FVOCI. Fair value
changes excluding dividends, on an equity instrument
measured at FVOCI are recognized in OCI. Amounts
recognised in OCI are not subsequently reclassified
to the Statement of Profit and Loss. Dividend
income on the investments in equity instruments
are recognised as 'other income' in the Statement of
Profit and Loss.

The Company does not have any equity investments
designated at FVOCI.

Derecognition:

The Company derecognises a financial asset when
the contractual rights to the cash flows from the
financial asset expire, or it transfers the contractual
rights to receive the cash flows from the asset.

Impairment of Financial Asset:

In accordance with Ind AS 109, the Company
applies the expected credit loss ("ECL") model
for measurement and recognition of impairment
loss on financial assets and credit risk exposures.
The Company follows 'simplified approach' for
recognition of impairment loss allowance on
trade receivables or contract revenue receivables.
Simplified approach does not require the Company
to track changes in credit risk. Rather, it recognizes
impairment loss allowance based on lifetime ECL at
each reporting date, right from its initial recognition.
This involves use of provision matrix constructed
on the basis of historical credit loss experience
and adjusted for forward looking information. The
expected credit loss allowance is based on the
ageing of the receivables that are due and the rates
used in the provision matrix.

For recognition of impairment loss on other financial
assets and risk exposure, the Company determines
that whether there has been a significant increase
in the credit risk since initial recognition. If credit
risk has not increased significantly, 12-month 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 entity reverts to recognising
impairment loss allowance based on 12-month ECL.

ECL is the difference between all contractual
cash flows that are due to the Company 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. 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 that
are possible within 12 months after the reporting date.

The Company measures the expected credit loss
associated with its assets based on historical trend,
industry practices and the business environment in
which the entity operates or any other appropriate
basis. The impairment methodology applied
depends on whether there has been a significant
increase in credit risk.

ECL impairment loss allowance (or reversal)
recognised during the period is recognised as
income/ expense in the Statement of Profit and Loss.

Financial Liabilities and equity instruments

Classification as debt or equity

Debt and equity instruments issued by the Company
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

An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments
issued by a company entity are recognised at the
proceeds received, net of direct issue costs.

Financial liabilities

Initial recognition and measurement
Financial liabilities are recognised when the
Company becomes a party to the contractual
provisions of the instrument.

Financial liabilities are classified, at initial recognition,
as financial liabilities at fair value through profit
or loss, loans and borrowings, payables, or as
derivatives designated as hedging instruments in
an effective hedge, as appropriate. All financial
liabilities are recognised initially at fair value and, in
the case of loans and borrowings and payables, net
of directly attributable transaction costs.

The fair value of a financial instrument at initial
recognition is normally the transaction price. If the
Company determines that the fair value at initial
recognition differs from the transaction price,
difference between the fair value at initial recognition
and the transaction price shall be recognized as gain
or loss unless it qualifies for recognition as an asset
or liability. This normally depends on the relationship
between the lender and borrower or the reason for
providing the loan. Accordingly in case of interest-free
loan from promoters to the Company, the difference
between the loan amount and its fair value is treated
as an equity contribution to the Company.

In accordance with Ind AS 113, the fair value of a
financial liability with a demand feature is not less
than the amount payable on demand, discounted
from the first date that the amount could be required
to be paid.

The Company's financial liabilities include trade and
other payables and loans and borrowings including
bank overdrafts.

Subsequent measurement

The measurement of financial liabilities depends on
their classification, as described below:

Loans and borrowings

After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortised cost using the EIR method. Gains and
losses are recognised in profit or loss when the
liabilities are derecognised as well as through the
EIR amortisation process.

Amortised cost is calculated by taking into account
any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The
EIR amortisation is included as finance costs in the
statement of profit and loss, unless and to the extent
capitalised as part of costs of an asset.

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.

Trade and other payables

For trade and other payables maturing within one
year from the balance sheet date, the carrying
amounts approximate fair value due to the short
maturity of these instruments.

Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the terms
of an existing liability are substantially modified,
such an exchange or modification is treated as
the derecognition of the original liability and the
recognition of a new liability. The difference in the
respective carrying amounts is recognised in the
statement of profit or loss.

Offsetting of Financial Instruments

Financial assets and financial liabilities are offset
and the net amount is reported in the Balance Sheet
if there is currently enforceable legal right to offset
the recognised amount and there is an intention to
settle on a net basis, to realise the assets and settle
the liabilities simultaneously.

2.8 Impairment of non-financial assets

The carrying amounts of non-financial assets other
than inventories are assessed at each reporting
date to ascertain whether there is any indication
of impairment. If any such indication exists then
the asset's recoverable amount is estimated. An
impairment loss is recognised, as an expense in
the Statement of Profit and Loss, for the amount
by which the asset's carrying amount exceeds its
recoverable amount. The recoverable amount is the
higher of an asset's fair value less cost to sell and
value in use. Value in use is ascertained through
discounting of the estimated future cash flows using
a discount rate that reflects the current market
assessments of the time value of money and the risk
specific to the assets. For the purpose of assessing
impairment, assets are grouped at the lowest levels
into cash generating units for which there are
separately identifiable cash flows.

Impairment losses recognised in prior years are
reversed when there is an indication that the
impairment losses recognised no longer exist or
have decreased. Such reversals are recognised as an
increase in carrying amounts of assets to the extent
that it does not exceed the carrying amounts that
would have been determined (net of amortization

or depreciation) had no impairment loss been
recognised in previous years.

2.9 Borrowing costs

Borrowing costs comprises interest expense on
borrowings calculated using the effective interest
method and exchange differences arising from
foreign currency borrowings to the extent that they
are regarded as an adjustment to interest costs.

The effective interest method is a method of
calculating the amortised cost of a financial asset
or a financial liability and of allocating the interest
income or interest expense over the relevant period.

The effective interest rate (EIR) is the rate that
exactly discounts estimated future cash payments
or receipts through the expected life of the financial
instrument or, when appropriate, a shorter period
to the net carrying amount of the financial asset or
financial liability. EIR calculation does not include
exchange differences.

Borrowing costs that are directly attributable to
the acquisition, construction or production of a
qualifying asset, which are assets that necessarily
take a substantial period of time to get ready for
their intended use or sale, are included in the cost of
those assets. Such borrowing costs are capitalised as
part of the cost of the asset when it is probable that
they will result in future economic benefits to the
entity and the costs can be measured reliably. Other
borrowing costs are recognised as an expense in the
period in which they are incurred.

The capitalisation of borrowing costs as part of
the cost of a qualifying asset commences when
expenditure for the asset is being incurred,
borrowing costs are being incurred and activities
that are necessary to prepare the asset for its
intended use or sale are in progress.

Capitalisation of borrowing costs is suspended or
ceases when substantially all the activities necessary
to prepare the qualifying asset, if any, for its intended
use or sale are interrupted or completed.

Investment income earned on the temporary
investment of specific borrowings pending their
expenditure on qualifying assets is deducted from
the borrowing costs eligible for capitalisation.

2.10 Foreign currency transactions

The standalone financial statements are presented
in Indian Rupees (INR), the functional currency of the
Company. Items included in the standalone financial

statements of the Company are recorded using the
currency of the primary economic environment
in which the Company operates (the 'functional
currency').

Foreign currency transactions are translated into
the functional currency using exchange rates at the
date of the transaction. Foreign exchange gains and
losses from settlement of these transactions and
from translation of monetary assets and liabilities at
the reporting date exchange rates are recognised in
the Statement of Profit and Loss.

Non-monetary assets and liabilities denominated in
a foreign currency and measured at historical cost
are translated at the exchange rate prevalent at the
date of transaction.

2.11 Leases

The determination of whether an arrangement is
(or contains) a lease is based on the substance of
the arrangement at the inception of the lease. The
arrangement is, or contains, a lease if fulfillment
of the arrangement is dependent on the use of a
specific asset or assets and the arrangement conveys
a right to use the asset or assets, even if that right is
not explicitly specified in an arrangement.

(a) Company as a Lessee

The Company's lease asset classes primarily
consist of leases for commercial complex, land
and buildings. The Company assesses whether
a contract contains a lease, at inception of
a contract. 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. To assess
whether a contract conveys the right to control
the use of an identified asset, the Company
assesses whether: (i) the contract involves the
use of an identified asset (ii) the Company has
substantially all of the economic benefits from
use of the asset through the period of the lease
and (iii) the Company has the right to direct the
use of the asset.

The company recognises a right-of-use asset
and a lease liability at the lease commencement
date. The right-of-use asset is initially measured
at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or before the commencement date,
plus any initial direct costs incurred and an
estimate of costs to dismantle and remove the
underlying asset or to restore the underlying

asset or the site on which it is located, less any
lease incentives received.

The right-of-use asset is subsequently
depreciated using the straight-line method from
the commencement date to the earlier of the
end of the useful life of the right-of-use asset or
the end of the lease term. The estimated useful
lives of right-of-use assets are determined on
the same basis as those of property, plant and
equipment. In addition, the right-of-use asset
is periodically reduced by impairment losses, if
any, and adjusted for certain re-measurements
of the lease liability.

The lease liability is initially measured at the
present value of the lease payments that are not
paid at the commencement date, discounted
using the interest rate implicit in the lease
or, if that rate cannot be readily determined,
company's incremental borrowing rate.

Generally, the company uses its incremental
borrowing rate as the discount rate.

Lease payments included in the measurement
of the lease liability comprise the following:

- Fixed payments, including in-substance
fixed payments;

- Variable lease payments that depend on
an index or a rate, initially measured using
the index or rate as at the commencement
date;

- Amounts expected to be payable under a
residual value guarantee; and

- The exercise price under a purchase
option that the company is reasonably
certain to exercise, lease payments in an
optional renewal period if the company is
reasonably certain to exercise an extension
option, and penalties for early termination
of a lease unless the company is reasonably
certain not to terminate early.

The lease liability is subsequently remeasured
by increasing the carrying amount to reflect
interest on the lease liability, reducing the
carrying amount to reflect the lease payments
made and re-measuring the carrying amount to
reflect any reassessment or lease modifications
or to reflect revised in-substance fixed lease
payments. The company recognises the amount
of the re-measurement of lease liability due
to modification as an adjustment to the right-

of-use asset and statement of profit and loss
depending upon the nature of modification.
Where the carrying amount of the right-of-use
asset is reduced to zero and there is a further
reduction in the measurement of the lease
liability, the Company recognises any remaining
amount of the re-measurement in the statement
of profit and loss.

The company presents right-of-use assets and
lease liabilities separately in balance sheet.

Short-term leases and leases of low-value
assets

The company has elected not to recognise right-
of- use assets and lease liabilities for short
term leases that have a lease term of 12 months
or less and low value leases. The company
recognises the lease payments associated with
these leases as an expense on a straight-line
basis over the lease term.

(b) Company as a Lessor

Lease for which the Company 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.

Finance lease

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.

Operating lease

Rental income from operating sub lease of Right
of Use (ROU) Asset is recognised on a straight¬
line basis over the term of the relevant lease
unless either another systematic basis is more
representative of the time pattern in which
use benefit derived from the leased asset is
diminished, even if the payments to the lessor
are not on that basis. It assesses the lease
classification of a sub-lease with reference to the
right-of-use asset arising from the head lease,
not with reference to the underlying asset.

Where the Company provides incentives for
the lessee to enter into the agreement such as

an up-front cash payment to the lessee or the
reimbursement or assumption by the lessor
of costs of the lessee (such as relocation costs,
leasehold improvements and costs associated
with a pre-existing lease commitment of the
lessee), such incentives are recognised as an
integral part of the net consideration agreed
for the use of the leased asset, irrespective of
the incentive's nature or form or the timing of
payments.

2.12(a) 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:

• Construction materials, stores and spares: cost
includes cost of purchase (viz. the purchase
price, import duties and other taxes (other than
those subsequently recoverable by the entity
from the taxing authorities), and transport,
handling and other costs directly attributable
to the acquisition and is net of trade discounts,
rebates and other similar items) and other
costs incurred in bringing the inventories to
their present location and condition. Cost is
determined on first in first out (FIFO) 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 first in first out 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.

Assessment of net realisable value is made in each
subsequent period and when the circumstances
that previously caused inventories to be written-
down below cost no longer exist or when there is
clear evidence of an increase in net realisable value
because of changed economic circumstances, the
write-down, if any, in the past period is reversed to
that extent of the original amount written-down so
that the resultant carrying amount is the lower of
the cost and the revised net realisable value.

Obsolete, slow moving and defective inventories are
identified from time to time and, where necessary, a
provision is made for such inventories.

(b) Inventory property

Properties (including under construction) acquired
for sale in the ordinary course of business, rather
than to be held for rental or capital appreciation, is
held as inventory property and is measured at the
lower of cost and net realisable value (NRV).

Cost includes: Freehold and leasehold rights for
land, amounts paid to contractors/builders for
construction linked payments for flats acquired by
allotment from builders, property transfer taxes,
and other related costs.

Non-refundable commissions paid to sales or
marketing agents on the sale of real estate units are
expensed when paid.

NRV is the estimated selling price in the ordinary
course of the business, based on market prices at
the reporting date and discounted for the time
value of money if material, less estimated costs of
completion and the estimated costs necessary to
make the sale.

The cost of inventory property recognised in profit
or loss on disposal is determined with reference to
the specific costs incurred on the property sold.

2.13Employee benefits

Short- term employee benefits:

All employee benefits payable wholly within twelve
months of rendering the service are classified as
short-term employee benefits. Benefits such as
salaries, wages, social security contributions, short
term compensated absences (paid annual leaves)
etc. are measured on an undiscounted basis at the
amounts expected to be paid when the liabilities are
settled and are expensed in the period in which the
employee renders the related service.

Post-employment benefits:
i) Defined contribution plan

The defined contribution plan is post¬
employment benefit plan under which the
Company contributes fixed contribution to a
government administered fund and will have
no obligation to pay further contribution. The
Company's defined contribution plan comprises
of Provident Fund, Employee State Insurance
Scheme and Labour Welfare Fund. The
Company's contribution to defined contribution
plans are recognized in the Statement of Profit

and Loss in the period in which employee
renders the related service.

ii) Defined benefit plan

The Company's obligation towards gratuity
liability is funded to an approved gratuity
fund which is managed by Life Insurance
Corporation of India (LIC). The present value of
the defined benefit obligations is determined
based on actuarial valuation using the
projected unit credit method. The difference,
if any between the actuarial valuation of the
gratuity of the employees at the year end and
the balance of funds is provided for assets/
liabilities in the books.

The amount recognised as 'Employee benefit
expenses' in the Statement of Profit and Loss
is the cost of accruing employee benefits
promised to employees over the current year
and the costs of individual events such as past/
future service benefit changes and settlements
(such events are recognised immediately in the
Statement of Profit and Loss).

The amount of net interest expense calculated
by applying the liability discount rate to the net
defined benefit liability or asset is charged or
credited to 'Finance costs' in the Statement of
Profit and Loss.

Re-measurement of net defined benefit
liability/ asset pertaining to gratuity comprise
of actuarial gains/ losses (i.e. changes in the
present value of the defined benefit obligation
resulting from experience adjustments and
effects of changes in actuarial assumptions), the
return on plan assets (excluding interest) and
the effect of the asset ceiling (if any, excluding
interest) and is recognised immediately in the
balance sheet with a charge or credit recognised
in other comprehensive income in the period
in which they occur. Re-measurements are
not reclassified to profit or loss account in
subsequent periods.

Other long-term employee benefit obligations:

The liabilities for earned leave that are not
expected to be settled wholly within 12
months are measured as the present value
of expected future payments to be made in
respect of services provided by employees up
to the end of the reporting period using the
projected unit credit method. The benefits

are discounted using the market yields at the
end of the reporting period that have terms
approximating to the terms of the related
obligation. Re-measurements as a result
of experience adjustments and changes in
actuarial assumptions are recognised in the
Statement of Profit and Loss. Accumulated
leave, which is expected to be utilized within
the next 12 months, is treated as short term
employee benefit.

2.14Taxation

Tax expense comprises of current and deferred
tax and includes any adjustments related to
past periods in current and/or deferred tax
adjustments that may become necessary due
to certain developments or reviews during the
relevant period.

Current income tax:

Tax on income for the current period is determined
on the basis of taxable income (or on the basis of
book profits wherever minimum alternate tax is
applicable) and tax credits computed in accordance
with the provisions of the Income Tax Act 1961, and
based on the expected outcome of assessments/
appeals.

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 substantively enacted, at the
reporting date in the countries where the Company
operates and generates taxable income.

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

Current tax assets and current tax liabilities are
offset when there is a legally enforceable right to set
off the recognized amounts and there is an intention
to settle the asset and the liability on a net basis.

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 liabilities are recognised for all taxable
temporary differences, except:

• When the deferred tax liability arises from the
initial recognition of goodwill or an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit or loss

• In respect of taxable temporary differences
associated with investments in subsidiaries,
associates and interests in joint arrangements,
when the timing of the reversal of the temporary
differences can be controlled and it is probable
that the temporary differences will not reverse
in the foreseeable future.

Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused
tax credits and any unused tax losses & unabsorbed
tax depreciation. Deferred tax assets are recognised
to the extent that it is probable that taxable profit will
be available against which the deductible temporary
differences, and the carry forward of unused tax
credits and unused tax losses can be utilised, except:

• When the deferred tax asset relating to the
deductible temporary difference arises from
the initial recognition of an asset or liability in
a transaction that is not a business combination
and, at the time of the transaction, affects
neither the accounting profit nor taxable profit
or loss

• In respect of deductible temporary differences
associated with investments in subsidiaries,
associates and interests in joint arrangements,
deferred tax assets are recognised only to the
extent that it is probable that the temporary
differences will reverse in the foreseeable future
and taxable profit will be available against which
the temporary differences can be utilized

The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of
the deferred tax asset to be utilised. Unrecognized
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 assets and liabilities are measured at
the tax rates that are expected to apply in the year
when the asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting
date.

Deferred tax relating to items recognised outside
profit or loss is recognised outside profit or loss.
Deferred tax items are recognised in correlation to
the underlying transaction either in OCI or directly
in equity.

Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity
and the same taxation authority.

2.15Claims & Counter Claims

Claims and counter claims including under
arbitrations are accounted for on their settlement/
award. Contract related claims are recognised when
there is a reasonable certainty.