2. Material Accounting Policies
2.1 Statement of compliance and 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) and presentation requirements of Division II of Schedule III to the Companies
Act, 2013, (Ind AS compliant Schedule III), as applicable to the Standalone Financial Statements.
The accounting policies adopted and methods of computation followed are consistent with those of the
previous financial year.
The standalone financial statements have been prepared on the historical cost basis, except for certain
financial assets and liabilities measured at fair value at the end of each reporting period, as explained in
the accounting policies below. The standalone financial statements are presented in INR and all values are
rounded to the nearest Lakhs (INR 00,000), except when otherwise indicated.
The Company has prepared the financial statements on the basis that it will continue to operate as a
going concern.
2.2 Summary of Material Accounting Policies
a) Use of estimates
The preparation of financial statements in conformity with Ind AS requires the management to make
judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets
and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although
these estimates are based on the management's best knowledge of current events and actions,
uncertainty about these assumptions and estimates could result in the outcomes requiring a material
adjustment to the carrying amounts of assets or liabilities. The effect of change in an accounting
estimate is recognized prospectively.
b) 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:
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.
The Company's normal operating cycle in respect of operations relating to the construction of real estate
projects may vary from project to project depending upon the size of the project, type of development,
project complexities and related approvals. Operating cycle for all completed projects is based on 12
months period. Assets and liabilities have been classified into current and non-current based on their
respective operating cycle.
c) Property, Plant and Equipment
Property, plant and equipment, are stated at cost net of accumulated depreciation and accumulated
impairment losses, if any The cost comprises purchase price, borrowing costs if capitalization criteria
are met and directly attributable cost of bringing the asset to its working condition for the intended use
and initial estimate of decommissioning, restoring and similar liabilities. Any trade discounts and rebates
are deducted in arriving at the purchase price. 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.
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. Cost of the asset includes expenditure
that is directly attributable to the acquisition and installation, including interest on borrowing for the
project / property, plant and equipment up to the date the asset is put to use.
When a major inspection is performed, its cost is recognized 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 recognized in profit or loss as incurred.
Borrowing costs directly attributable to acquisition of property, plant and equipment which take
substantial period of time to get ready for its intended use are also included to the extent they relate to
the period till such assets are ready for its intended use.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance
sheet date is classified as capital advances under other non-current assets.
An item of property, plant and equipment and any significant part initially recognized is de-recognized
upon disposal or when no future economic benefits are expected from its use or disposal. Any gain
or loss arising on de-recognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in the income statement when the Property,
plant and equipment is de-recognized.
Capital work-in-progress and intangible assets under development represents expenditure incurred in
respect of capital projects/ intangible assets under development and are carried at cost less accumulated
impairment loss, if any.
The leasehold improvements are depreciated over the period of lease term or life of asset whichever
is less.
The residual values, useful lives and methods of depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted prospectively, if appropriate.
e) Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less accumulated amortization and accumulated
impairment losses, if any.
Intangible assets comprising of computer softwares are amortized on a straight line basis over a period
of three to six years, and Trademark are amortized on a straight line basis over a period of eight to ten
years which is estimated by the management to be the useful life of the asset
The residual values, useful lives and methods of amortization of intangible assets are reviewed at
each financial year end and adjusted prospectively, if appropriate. An intangible asset is derecognised
upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are
expected from its use or disposal. Gains or losses arising from de-recognition of an intangible asset are
measured as the difference between the net disposal proceeds and the carrying amount of the asset
and are recognized in the statement of profit and loss when asset is derecognized.
f) Borrowing Costs
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing
of funds.
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 capitalized/
inventorised as part of the cost of the respective asset. All other borrowing costs are charged to
statement of profit and loss.
g) Inventories
Direct expenditures relating to real estate activity are 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 real
estate activity.
i. Construction work-in-progress (including land inventory): 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 recognized. Work-in-progress is valued at lower of cost and net realizable value.
ii. Unsold developed plots of land and units : Valued at lower of cost and net realizable value.
iii. Construction materials and components : Valued at lower of cost and net realizable value. Cost is
determined based on Weighted Average Basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs
of completion and estimated costs necessary to make the sale.
h) Land Advance
Advances paid by the Company to the seller/ intermediary towards outright purchase of land is
recognized as land advance under other assets during the course of obtaining clear and marketable
title, free from all encumbrances and transfer of legal title to the Company, whereupon it is transferred
to land stock under inventories.
The amount of refundable deposits towards land acquisition paid by the group under Development
Agreement is recognised as other financial assets.
i) Revenue from contracts with customers
(i) Revenue recognition
Revenue from contracts with customers
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. Revenue is measured based on the
transaction price, which is the consideration and adjusted for discounts, if any, as specified in the
contract with the customer. The Company presents revenue from contracts with customers net of
indirect taxes in its statement of profit and loss.
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, the Company considers the effects of variable consideration
and the existence of significant financing components, if any.
Revenue from real estate development of residential or commercial unit is recognised at the point
in time, when the control of the asset is transferred to the customer.
Revenue consists of sale of undivided share of land and constructed area to the customer, which
have been identified by the Company as a single performance obligation, as they are highly
interrelated/ interdependent.
The performance obligation in relation to real estate development is satisfied upon completion of
project work and transfer of control of the asset to the customer.
For contracts involving sale of real estate unit, the Company receives the consideration in
accordance with the terms of the contract in proportion of the percentage of completion of such
real estate project and represents payments made by customers to secure performance obligation
of the Company under the contract enforceable by customers. Such consideration is received and
utilised for specific real estate projects in accordance with the requirements of the Real Estate
(Regulation and Development) Act, 2016. Consequently, the Company has concluded that such
contracts with customers do not involve any financing element since the same arises for reasons
explained above, which is other than for provision of finance to/from the customer.
Recognition of revenue from other operating activities
Revenue from project management fees is recognised over period of time as per terms of
the contract
Estimates and underlying assumptions are reviewed at each reporting date. Any revision to
accounting estimates and assumptions are recognised prospectively i.e. recognised in the period
in which the estimate is revised and future periods affected.
(i) Contract balances
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 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 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.
(ii) Cost to obtain a contract
The Company recognises as an asset the incremental costs of obtaining a contract with a customer
if the Company expects to recover those costs.The asset recognised is amortised on a systematic
basis that is consistent with the transfer to the customer of the goods or services to which the
asset relates.
(iii) Share in profit/ loss of Limited liability partnerships (“LLPs”)
The Company's share in profits from LLPs, where the Company is a partner, is recognised as
income in the statement of profit and loss as and when the right to receive its profit/ loss share is
established by the Company in accordance with the terms of contract between the Company and
the partnership entity.
(iv) Interest income
Interest income, including income arising from other financial instruments measured at amortised
cost, is recognised using the effective interest rate method.
j) Retirement and other employee benefits
Retirement benefits in the form of state governed Employee Provident Fund and Employee State
Insurance are defined contribution schemes (collectively the 'Schemes'). The company has no obligation,
other than the contribution payable to the schemes. The company recognizes contribution payable to
the schemes as expenditure, when an employee renders the related service. The contribution paid in
excess of amount due is recognized as an asset and the contribution due in excess of amount paid is
recognized as a liability
Gratuity which is a defined benefit plan, is accrued based on an independent actuarial valuation, which
is done based on project unit credit method as at the balance sheet date. The company recognizes
the net obligation of a defined benefit plan in its balance sheet as an asset or liability. Gains and
losses through re-measurements of the net defined benefit liability/ (asset) are recognized in other
comprehensive income. In accordance with Ind AS, re-measurement gains and losses on defined benefit
plans recognized in OCI are not to be subsequently reclassified to statement of profit and loss.
The Company recognizes the following changes in the net defined benefit obligation as an expense in
the statement of profit and loss:
1) Service costs comprising past and current service costs, gains and losses on curtailments and
settlements; and 2) Net interest expense or income.
The company treats accumulated leave expected to be carried forward beyond twelve months, as
long-term employee benefit for measurement purposes. Such long-term compensated absences are
provided for based on the actuarial valuation using the projected unit credit method, made at the end of
each financial year. Actuarial gains/losses are immediately taken to the statement of profit and loss The
Company presents the leave as a current liability in the balance sheet, to the extent it does not have an
unconditional right to defer its settlement for 12 months after the reporting date. Where company has
the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the
same is presented as non-current liability.
k) Income taxes
Income tax expense comprises current tax expense and the net change in the deferred tax asset or
liability during the year. Current and deferred tax are recognized in the statement of profit and loss,
except when they relate to items that are recognized in other comprehensive income or directly in
equity, in which case, the current and deferred tax are also recognized in other comprehensive income
or directly in equity, respectively.
Current tax for the current and prior periods are measured at the amount expected to be recovered
from or paid to the taxation authorities based on the taxable income for that period. The tax rates
and tax laws used to compute the amount are those that are enacted or substantively enacted by the
balance sheet date.
Deferred tax is recognized using the balance sheet approach, deferred tax is recognized on temporary
differences at the balance sheet date between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused
tax credits and unused tax losses, 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 utilized.
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 and does not give rise to
equal taxable and deductible temporary differences
The carrying amount of Deferred tax assets is reviewed at each balance sheet 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 utilized.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the balance sheet date.
The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off
current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate
to income taxes levied by the same tax authority.
l) Share based payment
Employees (including senior executives) of the company receives remuneration in the form of share-
based payments, whereby employees render services as consideration for equity instruments (equity-
settled transactions).
The Company has created the ASL ESOP Trust for implementation of the ESOP scheme. The Company
treats the ESOP trust as its extension and shares held by ESOP Trust are treated as treasury shares.
The cost of equity-settled transactions is determined by the fair value at the date when the grant is
made using an appropriate valuation model and the cost is recognised, together with a corresponding
increase in share options outstanding account in equity, over the period in which the performance and/
or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for
equity-settled transactions at each reporting date until the vesting date reflects the extent to which
the vesting period has expired and the Company's best estimate of the number of equity instruments
that will ultimately vest. The statement of profit and loss expense or credit for a period represents
the movement in cumulative expense recognised as at the beginning and end of that period and is
recognised in employee benefits expense. Upon exercise of share options, the proceeds received are
allocated to share capital up to the par value of the shares issued with any excess being recorded as
securities premium.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of
diluted earnings per share.
m) Leases
The Company assesses whether a contract contains a lease, at the inception of the 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
identified asset; (ii) the Company has substantially all of the economic benefits from the use of the asset
through the period of lease and (iii) the Company has right to direct the use of the asset.
Where the Company is the lessee
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 site on
which it is located, less any lease incentives received.
Certain lease arrangements include the option to extend or terminate the lease before the end of the
lease term. The right-of-use assets and lease liabilities include these options when it is reasonably certain
that the option will be exercised.
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. 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, and the Company's incremental borrowing rate. Generally, the Company uses its
incremental borrowing rate as the discount rate.
The lease liability is measured at amortized cost using the effective interest method. It is re-measured
when there is a change in future lease payments arising from a change in an index or rate, if there is
a change in the Company's estimate of the amount expected to be payable under a residual value
guarantee, or if Company changes its assessment of whether it will exercise a purchase, extension or
termination option.
When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use
asset has been reduced to zero.
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 recognized as expense on a straight-line basis
over the lease term.
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