3. Significant Accounting Policies
a. Fixed Assets
Recognition and measurement
Tangible Fixed assets are carried at cost of acquisition less accumulated depreciation
and/ or accumulated impairment loss, if any. The cost of an item of tangible fixed asset
comprises its purchase price, including non-refundable taxes or levies and any directly
attributable cost of bringing the asset to its working condition for its intended use; any
trade discounts and rebates are deducted in arriving at the purchase price.
Depreciation on all the assets have been provided at the rates and in the manner
prescribed under Part C of Schedule II to the Act on Straight line basis. Depreciation on
additions to assets or on sale / disposal of assets is calculated on a pro-rata basis from
the date of such addition, sale or disposal.
b. Investments
Investments that are readily realisable and intended to be held for not more than a year
from the date of acquisition are classified as current investments. All other investments
are classified as long-term investments.
Current investments are carried at lower of cost and fair value. Long term Investments
are stated at cost less provision for diminution, other than temporary, in the value of
such investments.
c. Revenue Recognition
i. Income from real estate projects advisory services is recognized on accrual basis.
Marketing and lease management income are accounted for when the underline
contracts are duly executed, on accrual basis when the services are completed,
except in cases where ultimate collection is considered doubtful.
ii. Interest income is recognized on time proportion basis taking into account the
amount outstanding and rate applicable.
iii. Revenue from real estate projects under development is computed on the
percentage of completion method. Revenue is recognised in the financial year in
which the agreement to sell or application forms (containing salient terms of
agreement to sell) is executed, on the percentage of completion method which
is applied on a cumulative basis in each accounting year to the current estimate
of contract revenue and related project costs, when the stage of completion of
each project reaches a significant level which is estimated to be at least 25% of
the total estimated construction cost of the respective projects. Revenue from
real estate projects under development for all projects commenced on or after
April 1, 2012 or project where the revenue is recognized for the first time on or
after the above date, is recognized in accordance with the Revised Guidance
Note issued by the Institute of Chartered Accountants of India ('ICAI') on
"Accounting for Real Estate Transactions (Revised 2012)."
The estimates of the saleable area and costs are reviewed periodically and effect
of any changes in such estimates is recognized in the period such changes are
determined. However, when the total project cost is estimated to exceed total
revenues from the project, the loss is recognized immediately.
d. Employee Benefit Expenses
Short Term Employee Benefits
Short-term employee benefits like salaries, wages, bonus and welfare expenses payable
wholly within twelve months of rendering the services are accrued in the year in which
the associated services are rendered by the employees.
e. Borrowing Cost
Borrowing costs that are attributable to the acquisition or construction of qualifying
assets are capitalized as part of the cost of such assets in accordance with notified
Accounting Standard 16 "Borrowing costs". A qualifying asset is one that necessarily
takes substantial period of time to get ready for its intended use. All other borrowing
costs are charged to the Statement of Profit and Loss as incurred.
f. Taxes on Income
Current Tax
Current tax is measured at the amount expected to be paid to / recovered from the tax
authorities, using the applicable tax rates.
Deferred Tax
Deferred income tax reflect the current period timing differences between taxable
income and accounting income for the period and reversal of timing differences of
earlier years / period. Deferred tax assets are recognized only to the extent that there is
reasonable certainty that sufficient future income will be available except that the
deferred tax assets, in case there are unabsorbed depreciation and losses, are
recognized if there is a virtual certainty that sufficient future taxable income will be
available to realize the same. Since the Deferred Tax arrived at a minimal amount it has
been ignored in the preparation of financial statements.
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