Note 2 Material Accounting Policies
2.1 Basis of preparation of Financial Statements
The Financial Statements have been prepared on accrual basis in accordance with Indian Accounting Standards (Ind AS) notified
under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) and the provisions of the Companies Act, 2013.
The Financial Statements have been prepared on accrual and going concern basis under historical cost convention except
for certain financial assets and liabilities which have been measured at fair value (refer accounting policy regarding financial
instruments). If no such transactions can be identified, an appropriate valuation model is used. Impairment losses of continuing
operations, including impairment on inventories, are recognized.
The Financial Statements are presented in Indian Rupees ("Rs" or "H") and all amounts are rounded to the nearest lakhs, except as
stated otherwise.
The standalone Financial Statements of the Company for the year ended March 31, 2025 were approved by the Board of
Directors and authorized for issue on May 24, 2025.
2.2 Use of Estimates and Judgments
The preparation of the Financial Statements in conformity with Ind AS requires management to make estimates, judgments and
assumptions. These estimates, judgments and assumptions effect the application of accounting policies and the reported amounts
of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the Financial Statements and reported
amounts of revenues and expenses during the period. Accounting estimates could change from period to period and actual
results may differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes
in circumstances surrounding the estimates. Changes in estimates are reflected in the Financial Statements in the period in which
changes are made and, if material, their effects are disclosed in the notes to the Financial Statements. The basis of the description
is as under:
1) Evaluation of satisfaction of performance obligation at a point in time for the purpose of revenue recognition:
Determination of revenue under the satisfaction of performance obligation at a point in time method necessarily involves
making estimates, some of which are of a technical nature, concerning, where relevant, the timing of satisfaction of
performance obligation, costs to completion, the expected revenues from the project or activity and the foreseeable losses
to completion. The Company recognizes revenue when the company satisfies its performance obligation
2) Evaluation of percentage of completion for the purpose of revenue recognition:
Determination of revenue under the percentage of completion method necessarily involves making estimates, some of which
are of a technical nature, concerning, where relevant, the percentage of completion, cost of completion, the expected
revenue from the project or activity and the foreseeable losses to completion. Estimates of project income, as well as project
costs, are reviewed periodically. The effect of changes, if any, to estimates is recognized in the standalone Financial
Statements for the period in which such changes are determined.
3) Useful life and residual value of Property, Plant and Equipment and Intangible Assets:
Useful lives of Property, Plant and Equipment and Intangible Assets are based on the life prescribed in Schedule II of the
Companies Act, 2013 or based on internal technical evaluation. Assumptions are also made when the company assesses,
whether an asset may be capitalized and which components of the cost of the asset may be capitalized.
4) Recognition of Deferred Tax Asset:
The extent of which deferred tax asset can be recognized is based on an assessment of the probability of the future taxable
income against which the deferred tax assets can be utilized.
5) Provisions and contingencies:
The recognition and measurement of other provisions are based on the assessment of the probability of an outflow of
resources, and on past experience and circumstances known at the balance sheet date. The actual outflow of resources at
a future date may therefore vary from the amount included in other provisions.
2.3 Current versus Non-Current classification
The Company presents Assets and Liabilities in the Balance Sheet based on Current/Non-Current classification. The normal
operating cycle, in the context of the Company, is the time between the acquisition of Land for a real estate project and its
realization in Cash and Cash Equivalents by way of sale of developed units.
An Asset is treated as Current when it is:
Ý Expected to be realized or intended to be sold or consumed in normal operating cycle
Ý Held primarily for the purpose of trading
Ý Expected to be realized within twelve months after the reporting period, or
Ý 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:
Ý It is expected to be settled in normal operating cycle
Ý It is held primarily for the purpose of trading
Ý It is due to be settled within twelve months after the reporting period, or
Ý There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as Non-Current.
Deferred Tax Assets and Liabilities are classified as Non-Current Assets and Liabilities.
2.4 Property, Plant and Equipment
i. Recognition and measurement
All property, plant and equipment except freehold land are stated at historical cost less accumulated depreciation. Building
was recorded at fair value as deemed cost as at the date of transition to Ind AS. Historical cost includes expenditure that
is directly attributable to the acquisition of the items. Cost includes freight, duties, taxes, borrowing cost and incidental
expenses related to the acquisition and installation of the asset.
Freehold Land is measured at cost. Valuations are performed with sufficient frequency to ensure that the carrying value of
revalued asset does not defer materially from its fair value. Revaluation surplus is recorded in Other Comphrensive Income
and credited to the Revaluation reserve in Other Equity.
ii. Subsequent costs
Subsequent expenditure is capitalized only when it is probable that the future economic benefits of the expenditure will
flow to the Company. All other repairs and maintenance are charged to the Standalone Ind AS Statement of Profit and Loss
during the reporting period in which they are incurred.
iii. Derecognition
The carrying amount of an item of Property, Plant and Equipment is derecognized on disposal or when no future economic
benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of Property, Plant
and Equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and
is recognized in the Standalone Statement of Profit and Loss when the item is derecognized.
iv. Capital work in progress
Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work in progress.
v. Depreciation
Depreciation is calculated on a written down value basis over the estimated useful lives of the assets as specified in Schedule
II of Companies Act, 2013 except for site/sales offices, sample flats and aluminium formwork wherein the estimated useful
lives is determined by the management. Management believes that such estimated useful lives are realistic and reflect fair
approximation of the period over which the assets are likely to be used.
Depreciation on addition to property plant and equipment is provided on pro-rata basis from the date of acquisition.
Depreciation on assets sold during the year is charged to the Standalone Statement of Profit and Loss up to the month
preceding the month of sale.
Depreciation methods, useful lives and residual values are reviewed periodically at each financial year end and adjusted
prospectively, as appropriate.
2.5 Intangible Assets
Intangible Assets acquired separately are measured on initial recognition at cost. Following initial recognition, Intangible Assets
are carried at cost less any accumulated amortization and impairment loss. Subsequent expenditure is capitalized only if it is
probable that the future economic benefits associated with the expenditure will flow to the Company.
On transition to Ind AS, the Company has elected to continue with the carrying value of all its Intangible Assets recognized as at
1st April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of Intangible Assets.
The useful lives of Intangible Assets are assessed as either finite or indefinite.
Intangible Assets with finite lives are amortized on a Straight-Line Method over the useful economic life and assessed for impairment
whenever there is an indication that the Intangible Asset may be impaired. The amortization period and the amortization method
for an Intangible Asset are reviewed at least at the end of each reporting period and adjusted, if appropriate. The useful economic
lives estimated for various classes of Intangible Assets are as follows:
Intangible Assets with indefinite useful lives are not amortized, but are tested for impairment annually.
2.6 Investment Properties
Investment properties are measured initially at cost, including transaction costs and borrowing costs, wherever applicable.
Subsequent to initial recognition. Subsequent expenditure is capitalized to the asset's carrying amount only when it is probable
that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured
reliably. All other repairs and maintenance costs are expensed when incurred.
On transition to Ind AS, the Company has elected to continue with the carrying value of all its Investment Properties recognized as
at 1st April, 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the Investment Properties.
Investment Properties are derecognized upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss arising on de-recognition of Investment Properties are included in Profit and Loss in the period of de-recognition.
2.7 Finance Costs
Borrowing costs that are directly attributable to real estate project development activities are inventoried / capitalized as part of
project cost.
Borrowing costs are inventoried / capitalized as part of project cost when the activities that are necessary to prepare the inventory
/ asset for its intended use or sale are in progress. Borrowing costs are suspended from inventorization / capitalization when
development work on the project is interrupted for extended periods and there is no imminent certainty of recommencement
of work.
All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that
the Company incurs in connection with the borrowing of funds.
2.8 Leases
The Company evaluates each contract or arrangement, whether it qualifies as lease as defined under Ind AS 116.
Company as a Lessee
The Company assesses, whether the contract is, or contains, a lease at the inception of the contract or upon the modification 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.
The Company at the commencement of the lease contract recognizes a Right-of-Use (RoU) asset at cost and corresponding lease
liability, except for leases with a term of twelve months or less (short-term leases) and leases for which the underlying asset is of low
value (low-value leases). For these short-term and low-value leases, the Company recognizes the lease payments as an operating
expense on a straight-line basis over the term of the lease.
The cost of the right-of-use assets comprises the amount of the initial measurement of the lease liability, adjusted for any lease
payments made at or prior to the commencement date of the lease, any initial direct costs incurred by the Company, any lease
incentives received and expected costs for obligations to dismantle and remove right-of-use assets when they are no longer used.
Subsequently, the right-of-use assets is measured at cost less any accumulated depreciation and accumulated impairment losses,
if any. The right-of-use assets are depreciated on a straight-line basis from the commencement date of the lease over the shorter of
the end of the lease term or useful life of the right-of-use asset.
Right-of-use assets are assessed for impairment whenever there is an indication that the balance sheet carrying amount may not
be recoverable using cash flow projections for the useful life.
For lease liabilities at commencement date, the Company measures the lease liability at the present value of the future lease
payments as from the commencement date of the lease to end of the lease term. The lease payments are discounted using the
interest rate implicit in the lease or, if not readily determinable, the Company's incremental borrowing rate for the asset subject to
the lease in the respective markets.
Subsequently, the Company measures the lease liability by adjusting carrying amount to reflect interest on the lease liability and
lease payments made.
The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever
there is a change to the lease terms or expected payments under the lease, or a modification that is not accounted for as a
separate lease.
The portion of the lease payments attributable to the repayment of lease liabilities is recognized in cash flows used in financing
activities. Also, the portion attributable to the payment of interest is included in cash flows from financing activities. Further, Short¬
term lease payments, payments for leases for which the underlying asset is of low-value and variable lease payments not included
in the measurement of the lease liability is also included in cash flows from operating activities.
Company as a Lessor
In arrangements where the Company is the lessor, it determines at lease inception whether the lease is a finance lease or an
operating lease. Leases that transfer substantially all of the risk and rewards incidental to ownership of the underlying asset to the
counterparty (the lessee) are accounted for as finance leases. Leases that do not transfer substantially all of the risks and rewards
of ownership are accounted for as operating leases. Lease payments received under operating leases are recognized as income
in the statement of profit and loss on a straight-line basis over the lease term or another systematic basis. The Company applies
another systematic basis if that basis is more representative of the pattern in which benefit from the use of the underlying asset
is diminished.
2.9 Non-Current Assets held for Sale
Non-Current Assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction
rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying
amount and fair value less costs to sell.
Non-current Assets classified as held for sale and their related Liabilities are presented separately in the Balance Sheet. Non¬
current Assets are not depreciated or amortized while they are classified as Held for Sale.
2.10 Dividends Declared
Provision is made for the amount of any Dividend declared, being appropriately authorized and no longer at the discretion of the
Company, on or before the end of the reporting period but not distributed at the end of the reporting period.
2.11 Inventories
Construction Materials and Consumables
Construction Materials and Consumables are valued at lower of cost and net realizable value.
Land/Development Rights
Land/Development Rights are valued at lower of cost and net realizable value.
Construction work in Progress
Completed units and project development forming part of Work in Progress are valued at lower of cost and net realizable value.
Cost includes direct materials, labour, project specific direct indirect expenses.
Finished Goods
Finished goods of completed projects and Stock in trade of units is valued at lower of cost or net realizable value.
Net realizable 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.
Cash and Cash Equivalents
Cash and Cash Equivalent in the Balance Sheet comprise Cash at Banks and on in Hand and Short- Term Deposits maturing within
twelve months from the date of Balance Sheet.
2.12 Impairment of Non-Financial Assets
The carrying amounts of Assets are reviewed at each reporting date if there is any indication of impairment based on internal
/ external factors. An impairment loss is recognized wherever the carrying amount of an Asset exceeds its recoverable amount.
The recoverable amount is the greater of the asset's fair value less cost of disposals and value in use. 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. Fair value is the price that would be received to sell an
Asset or paid to transfer a Liability in orderly transaction between market participants at the measurement date. After impairment,
depreciation is provided on the revised carrying amount of the Asset over its remaining useful life.
The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for the
Company Cash Generating Unit's (CGU) 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.
Impairment losses are recognized in the Statement of Profit and Loss in expense categories.
An assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses
may no longer exist or may have decreased. If such indication exists, the Company estimates the asset's or CGU's recoverable
amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine
the asset's recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount
of the Asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognized for the Asset in prior years.
|