2.5 Material Accounting Policies

a) Property, Plant and Equipment

Freehold land and capital work-in-progress is carried at
cost, including transaction costs and borrowing costs. All
other items of property, plant and equipment are stated
at cost less accumulated depreciation and accumulated
impairment loss, if any.

The cost of an item of property, plant and equipment
comprises of its purchase price, any costs directly
attributable to its acquisition and an initial estimate of the
costs of dismantling and removing the item and restoring
the site on which it is located, the obligation for which the
company incurs when the item is acquired. 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 profit or loss
during the reporting period in which they are incurred.

Depreciation on property, plant and equipment is
calculated using the straight-line method to allocate their
cost, net of their residual values, over their estimated
useful lives. The useful lives estimated for the major
classes of property, plant and equipment are as follows:

The useful lives have been determined based on technical
evaluation done by the management, which in few cases
are different than the lives as specified by Schedule II to
the Companies Act, 2013. The residual values are not
more than 5% of the original cost of the asset. The asset’s
residual values and useful lives are reviewed, and adjusted
if appropriate, at the end of each reporting period.

An item of property, plant and equipment and any
significant part initially recognised is derecognised
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 is included in the statement
of profit and loss when the asset is derecognised.

Physical verification of Property, Plant and Equipment
is carried out in a phased manner. Certain Plant and
Machinery including Shuttering and Scaffoldings is verified
on completion of a Project due to nature of such assets.

b) Investment properties

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

The building component of the investment properties are
depreciated using the straight-line method over 60 years
from the date of original purchase, being their useful life
as estimated by the management. The estimated useful
life of the building is same as that prescribed in Schedule
II to the Companies Act, 2013.

The company discloses the fair value of investment
properties as at the end of the year, which is determined
by registered accredited independent valuers.

Investment properties are derecognised 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.

c) 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
amortisation and accumulated impairment loss.

The useful lives of intangible assets are assessed as
either finite or indefinite.

Intangible assets with finite lives are amortised 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
amortisation period and the amortisation 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
amortised but are tested for impairment annually.

d) 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
amortised while they are classified as held for sale.

e) Inventories

Construction material and hotel and club consumables
are valued at lower of cost and net realisable value.
However, materials and other items are not written down
below cost if the constructed units/food and beverages
in which they are used are expected to be sold at or above
cost. Cost is determined on first in first out (FIFO) basis.

Land/Development Rights are valued at lower of cost
and net realisable value.

Completed units and project development forming part
of work in progress are valued at lower of cost and net
realisable value. Cost includes direct materials, labour,
project specific direct and indirect expenses, borrowing
costs and pro-rata unrealised cost from EWS/LIG units.

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.

f) Cash and Cash Equivalents

Cash and cash equivalent in the balance sheet comprise
cash at banks and on hand and short-term deposits
maturing within twelve months from the date of balance
sheet, which are subject to an insignificant risk of changes
in value. Bank overdrafts are shown under borrowings in
the balance sheet.

Other Bank Balances includes Balances with Bank to the
extent secured against the borrowings, Bank Balances
for unclaimed dividend, and Balances in Bank Accounts
designated as RERA Account wherein 70% of amount
collected from allottees is deposited.

g) Financial Instruments

A. Financial Instruments - Initial recognition and
measurement

Financial assets and financial liabilities are
recognised in the company’s statement of financial
position when the company becomes a party to
the contractual provisions of the instrument.
The company determines the classification of its
financial assets and liabilities at initial recognition. All
financial assets are recognised initially at fair value
plus, in the case of financial assets not recorded
at fair value through profit or loss, transaction
costs that are attributable to the acquisition of the
financial asset.

B. 1. Financial assets -Subsequent measurement

The Subsequent measurement of financial assets
depends on their classification which is as follows:

a. Financial assets at fair value through profit or
loss

Financial assets at fair value through profit
and loss include financial assets held for
sale in the near term and those designated
upon initial recognition at fair value through
profit or loss.

b. Financial assets measured at amortised cost

Loans and receivables are non derivative
financial assets with fixed or determinable
payments that are not quoted in an active
market. Trade receivables do not carry any
interest and are stated at their nominal
value as reduced by appropriate allowance
for estimated irrecoverable amounts based
on the ageing of the receivables balance and
historical experience. Additionally, a large
number of minor receivables are grouped
into homogenous groups and assessed
for impairment collectively. Individual trade
receivables are written off when management
deems them not to be collectible.

c. Financial assets at fair value through OCI

All equity investments, except investments in
subsidiaries, joint ventures and associates,
falling within the scope of Ind AS 109,
are measured at fair value through Other
Comprehensive Income (OCI). The company
makes an irrevocable election on an
instrument by instrument basis to present
in other comprehensive income subsequent
changes in the fair value. The classification is
made on initial recognition and is irrevocable.

If the company decides to designate an equity
instrument at fair value through OCI, then
all fair value changes on the instrument,
excluding dividends, are recognized in the OCI.

B. 2. Financial assets -Derecognition

The company derecognises a financial asset when
the contractual rights to the cash flows from the
assets expire or it transfers the financial asset
and substantially all the risks and rewards of
ownership of the asset.

Upon derecognition of equity instruments
designated at fair value through OCI, the associated
fair value changes of that equity instrument is
transferred from OCI to Retained Earnings.

C. Investment in subsidiaries, joint ventures and
associates

Investments made by the company in subsidiaries,
joint ventures and associates are measured at cost
in the separate financial statements of the company.

D. 1. Financial liabilities -Subsequent measurement

The Subsequent measurement of financial liabilities
depends on their classification which is as follows:

a. Financial liabilities at fair value through profit
or loss

Financial liabilities at fair value through profit
or loss include financial liabilities held for
trading, if any.

b. Financial liabilities measured at amortised
cost

Interest bearing loans and borrowings
including debentures issued by the company
are subsequently measured at amortised
cost using the effective interest rate method
(EIR). Amortised cost is calculated by taking
into account any discount or premium
on acquisition and fee or costs that are
integral part of the EIR. The EIR amortised is
included in finance costs in the statement of
profit and loss.

D. 2. Financial liabilities -Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged or expires.

E. Offsetting financial instruments

Financial assets and financial liabilities are offset
and the net amount reported in the statement of
financial position, if and only if, there is a currently
enforceable legal right to offset the recognised
amounts and there is an intention to settle on a
net basis, or to realise the assets and settle the
liabilities simultaneously.

F. Fair value measurement

The company measures certain financial
instruments at fair value at each reporting date.
Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement is
based on presumption that the transaction to sell
the asset or transfer the liability takes place either:

• In the principal market for the assets
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 to the company.

The company uses valuation technique that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,

maximising the use of relevant observable inputs
and minimising the use of unobservable inputs.

h) EWS/LIG units

In terms of the building bye laws of various states in which
the company operates, it is required to develop certain
units for Economically Weaker Section (EWS) and Lower
Income Group (LIG) people along with the development of
the main group housing project.

EWS/LIG units in the balance sheet comprise of amounts
deployed by the company towards land, development
and/or purchase of EWS/LIG units, as reduced by
amounts received from the allottees and unrealised cost
from such units.

i) Revenue Recognition

Revenue is recognised upon transfer of control of
promised product or services to customer in an amount
that reflects the consideration the company expects
to receive in exchange for those product or service,
regardless of when the payment is received. Revenue is
measured at the Transaction price, excluding amounts
collected on behalf of the third parties.

The specific recognition criteria for the various types of
the company’s activities are described below:

Real estate projects

In accordance with the principles of Ind AS 115,
revenue in respect of real estate project is recognised
on satisfaction of Performance obligation at a point
in time by transferring a promised good or services
(i.e. an asset) to a customer and the customer obtains
control of that asset.

To determine the point in time at which a customer obtains
control of a promised asset and the entity satisfies a
performance obligation, the company considers following
indicators of the transfer of control to customers:

(a) the company has a present right to
payment for the asset;

(b) the company has transferred to the buyer the
significant risks and rewards of ownership of
the real estate;

(c) the company retains neither continuing managerial
involvement to the degree usually associated
with ownership nor effective control over the
real estate sold;

(d) the amount of revenue can be measured reliably;

(e) the costs incurred or to be incurred in respect of
the transaction can be measured reliably;

(f) the customer has accepted the asset.

The satisfaction of performance obligation and the
control thereof is transferred from the company to the
buyer upon possession or upon issuance of letter for offer
of possession ("deemed date of possession"), whichever
is earlier, subject to certainty of realisation.

Hotel and club services

Revenue from rooms, food and beverages, club and other
allied services, is recognised upon rendering of the services.

Interest income

Interest income from debt instruments (including Fixed
Deposits) is recognised using the effective interest
rate method. The effective interest rate is that rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the
gross carrying amount of a financial asset. While
calculating the effective interest rate, the company
estimates the expected cash flows by considering all
the contractual terms of the financial instrument (for
example, prepayment, extension, call and similar options)
but does not consider the expected credit losses.

Dividends

Revenue is recognised when the Company’s right to
receive the payment is established.

Rental Income

Rental income arising from operating leases on
investment properties is accounted for on a straight-line
basis over the lease term.

Delayed payment charges

Delayed payment charges claimed to expedite recoveries
are accounted for on realisation.

Other Income

Other Income is accounted for on accrual basis except,
where the receipt of income is uncertain.

j) Foreign currency transactions

Foreign currency transactions are translated into Indian
rupee using the exchange rates prevailing on the date
of the transaction. Foreign exchange gains and losses
resulting from the settlement of these transactions and
from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange
rates are recognised in profit or loss.

k) Employee benefits

Short Term employee benefits

Liabilities for wages, salaries and other employee benefits
that are expected to be settled within twelve months of

rendering the service by the employees are classified as
short term employee benefits. Such short term employee
benefits are measured at the amounts expected to be
paid when the liabilities are settled.

Post employment benefits

(a) Defined contribution plans

The company pays provident fund contribution to
publicly administered provident funds as per the
local regulations. The contributions are accounted
for as defined contribution plans and are recognised
as employee benefit expense when they are due.

(b) Defined benefit plans

The liabilities recognised in the balance sheet in
respect of defined benefit plan, namely gratuity
and leave pay, are the present value of the defined
benefit obligation at the end of the year less the
fair value of plan assets, if any. The defined benefit
obligation is calculated by actuaries using the
projected unit credit method.

The present value of the defined benefit obligation
is determined by discounting the estimated future
cash outflows by reference to market yields at the
end of the reporting period on government bonds
that have terms approximating to the terms of the
related obligation.

The net interest cost is calculated by applying the
discount rate to the net balance of the defined
benefit obligation and fair value of plan assets. This
cost is included in employee benefit expense in the
statement of profit and loss.

Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in
which they occur, directly in other comprehensive
income. They are included in the retained earnings
in the statement of changes in equity and in
the balance sheet.

l) Leases

A. Company as a Lessee

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 applies a single recognition and
measurement approach for all leases, except for
leasehold land, short-term leases and leases of
low-value. For short-term and leases of low value,
the Company recognises the lease payments as
an operating expense on a straight line basis over
the term of the lease. Leasehold land is carried at
the acquisition cost i.e. one-time lease premium
paid at the time of acquisition of leasehold rights.
For all other leases, the Company recognises
lease liabilities to make lease payments and right-
of-use assets representing the right to use the
underlying assets.

The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the
lease liability adjusted for any lease payments made
at or prior to the commencement date of the lease
plus any initial direct costs less any lease incentives.
They are subsequently measured at cost less
accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset. Right of use assets are evaluated
for recoverability whenever events or changes in
circumstances indicate that their carrying amounts
may not be recoverable.

The lease liability is initially measured at amortized
cost at the present value of the future lease
payments. The lease payments are discounted
using the incremental borrowing rate at the lease
commencement date. After the commencement
date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for
the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in
the lease payments or a change in the assessment
of an option to purchase the underlying asset.

Right-of-use assets are included in the Leased
Assets and lease liabilities are included in other
current and non-current financial liabilities in
the balance sheet. Lease payments have been
classified as financing cash flows in the Statement
of Profit and Loss.

Leasehold Land under Leased assets represents
land allotted by Government of Rajasthan for 99
years on leasehold basis and is recognised at cost.

Leased building improvements under Leased assets
are initially recognised at cost and subsequently
measured at cost less accumulated depreciation.
The depreciation is calculated on a straight line
basis based on the lease period.

B. Company as a Lessor

Leases for which the company is a lessor is
classified as finance or operating leases. Leases in
which the Company does not transfer substantially
all the risks and rewards incidental to ownership of
an asset are classified as operating leases. Rental
income arising is accounted for on a straight-line
basis over the lease term, unless the receipts
are structured to increase in line with expected
general inflation.

m) Finance Costs

Borrowing costs that are attributable to ongoing projects
of the company are charged to work in progress as a part
of the cost of such project.

Other borrowing costs are recognised in the statement
of profit and loss in the period in which they are incurred.

n) Selling Costs

Selling expenses related to specific projects/units are
being charged to Statement of Profit and Loss in the
year in which the revenue thereof is accounted and till
such time these costs are carried forward as Unaccrued
Selling Expenses under the head Other Current Assets.

Project-wise unaccrued selling expenses carried
forward are reviewed by the management annually after
commencement of revenue recognition of such projects
and abnormal selling expenses in excess of standard
costs as estimated by the management minus selling
costs estimated to be incurred thereof in future are
charged to Statement of Profit and Loss.

o) Taxes
Current Tax

The current tax expense for the period is determined as
the amount of tax payable in respect of taxable income
for the period, based on the applicable income tax rates.

Current tax relating to items recognised in other
comprehensive income or equity is recognised in other
comprehensive income or equity, respectively.

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

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 at the
reporting date.

Deferred tax relating to items recognised in other
comprehensive income or equity is recognised in other
comprehensive income or equity, respectively.

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.