III. Material Accounting Policies
a) Property, plant and equipment and depreciation and
amortisation
i) Recognition and Measurement:
Items of property, plant and equipment, other than Freehold
Land, are recognised and measured at cost less accumulated
depreciation and impairment losses, if any. Freehold Land is
carried at cost and is not depreciated. The cost of an item of
property, plant and equipment comprises:
• its purchase price, including import duties and non-refundable
purchase taxes, after deducting trade discounts and rebates; and
• 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.
If significant parts of an item of property, plant and equipment
have different useful lives, then they are accounted for as separate
items (major components) of property, plant and equipment.
Property, plant and equipment are derecognised from the
standalone financial statements, either on disposal or when no
economic benefits are expected from its use or disposal. The gain
or loss arising from disposal of property, plant and equipment
are determined by comparing the proceeds from disposal
with the carrying amount of property, plant and equipment
recognised in the Standalone Statement of Profit and Loss in the
year of occurrence.
Assets under construction includes the cost of property, plant
and equipment that are not ready to use at the balance sheet date.
Advances paid to acquire property, plant and equipment before
the balance sheet date are disclosed under other non-current
assets. Assets under construction are not depreciated as these
assets are not yet available for use.
ii) Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that
the future economic benefits associated with the expenditure
will flow to the Company and the cost of the expenditure can be
measured reliably.
iii) Depreciation and amortisation
Depreciable amount for assets is the cost of an asset, or other
amount substituted for cost, less its estimated residual value.
Depreciation on property, plant and equipment, other than
Freehold Land, of the Company has been provided using the
written down value method based on the useful lives specified in
Schedule II to the Companies Act, 2013.
The useful lives of certain motor vehicles are estimated in the
range of 3-8 years. The useful lives of certain furniture and
fixtures (artworks) are estimated for 10 years and residual value at
50% of actual cost. These lives are different from those indicated
in Schedule II and are based on internal technical evaluation.
Useful lives of site equipments (included in plant and machinery)
being not specified in Schedule II are based on internal technical
evaluation which represents the best estimate of the period
depending upon number of repetitions over which such
equipment is expected to be used. Site equipment consists of
shuttering materials used in the construction of the projects.
Assets costing less than '5,000 are depreciated at 100% in the
year of acquisition.
Assets acquired on lease and leasehold improvements are
amortised over the period of the lease on straight line basis.
Depreciation method, useful lives and residual values are
reviewed at each financial year-end and adjusted if appropriate.
b) Investment property and depreciation
i) Recognition and measurement:
Investment properties comprises of land and building
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.
Though the Company measures investment property using cost
based measurement, the fair value of investment property is
disclosed in the notes.
ii) Subsequent Expenditure:
Subsequent expenditure is capitalised only if it is probable that
the future economic benefits associated with the expenditure
will flow to the Company and the cost of the item can be
measured reliably.
iii) Depreciation:
Depreciation on Investment Property is provided using the
written down value method based on the useful lives specified in
Schedule II to the Companies Act, 2013.
iv) Reclassification from/to investment property:
Transfers to (or from) investment property are made only
when there is a change in use. Transfers between investment
property, owner-occupied property and inventories do not
change the carrying amount of the property transferred and
they do not change the cost of that property for measurement
or disclosure purposes.
c) Intangible assets and amortisation
i) Recognition and measurement:
Items of Intangible Assets are recognised and measured at cost
less accumulated amortisation and impairment losses, if any.
The cost of intangible assets comprises:
- its purchase price, including import duties and non-refundable
purchase taxes, after deducting trade discounts and rebates; and
- 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.
ii) Subsequent expenditure
Subsequent expenditure is capitalised only if it is probable that
the future economic benefits associated with the expenditure
will flow to the Company and the cost of the expenditure can be
measured reliably.
iii) Amortisation
Intangible assets are amortised over their estimated useful life
using straight line method.
Trademark is amortised over a period of 20 years.
Intangible assets (other than trademark) are amortised over a
period of 6 years.
Amortisation method, useful lives and residual values are
reviewed at the end of each financial year and adjusted
if appropriate.
d) Impairment of non-financial assets
The carrying values of assets / cash generating units at each
balance sheet date are reviewed for impairment if any indication
of impairment exists.
If the carrying amount of the assets exceed the estimated
recoverable amount, an impairment loss is recognised for such
excess amount. The impairment loss is recognised as an expense
in the Standalone Statement of Profit and Loss, unless the asset
is carried at revalued amount, in which case any impairment
loss of the revalued asset is treated as a decrease to the extent a
revaluation reserve is available for that asset.
The recoverable amount is the greater of the net selling price
and the value in use. Value in use is arrived at by discounting the
future cash flows to their present value based on an appropriate
discount factor.
When there is indication that an impairment loss recognised
for an asset (other than a revalued asset) in earlier accounting
periods which no longer exists or may have decreased, such
reversal of impairment loss is recognised in the Standalone
Statement of Profit and Loss, to the extent the amount was
previously charged to the Standalone Statement of Profit and
Loss. In case of revalued assets, such reversal is not recognised.
e) Investment in subsidiaries, joint ventures and associate
Investments in equity shares of subsidiaries, joint ventures and
associate are recorded at cost and reviewed for impairment at
each reporting date. Where an indication of impairment exists,
the carrying amount of the investment is assessed and written
down immediately to its recoverable amount. On disposal of
investments in subsidiaries, joint ventures and associate, the
difference between net disposal proceeds and the carrying
amounts are recognised in the Standalone Statement of
Profit and Loss.
f) Financial instruments
I. Financial assets
Classification
The Company classifies financial assets as subsequently measured
at amortised cost, fair value through other comprehensive income
or fair value through profit or loss on the basis of its business
model for managing the financial assets and the contractual cash
flow characteristics of the financial asset.
Initial recognition and measurement
Trade receivables and debt securities issued are initially
recognised when they originate and recorded at transaction price.
The Company recognises financial assets (other than trade
receivables and debt securities) when it becomes a party to the
contractual provisions of the instrument. All financial assets
(excluding trade receivables that are recorded at transaction
price) are recognised initially at fair value, plus in the case of
financial assets not recorded at fair value through profit or loss
(FVTPL), transaction costs that are attributable to the acquisition
of the financial asset. However, trade receivables that do not
contain a significant financing component are measured at
transaction price.
Subsequent measurement
For the purpose of subsequent measurement, the financial assets
are classified in three categories:
• Debt instruments at amortised cost
• Debt instruments at fair value through profit or loss
• Equity investments
Debt instruments at amortised cost
A 'debt instrument' is measured at the amortised cost if both the
following conditions are met:
a) The asset is held within a business model whose objective is
to hold assets for collecting contractual cash flows, and
b) Contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and
interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently
measured at amortised cost using the effective interest rate (EIR)
method. Amortised cost is calculated by taking into account any
discount or premium and fees or costs that are an integral part
of the EIR. The EIR amortisation is included in Interest income in
the Standalone Statement of Profit and Loss. The losses arising
from impairment are recognised in the Standalone Statement of
Profit and Loss.
Convertible Debt instruments
Debt instruments that are convertible into a fixed number of
equity instruments of the issuer do not meet the "solely payment
of principal and interest" criterion because the return on the debt
instrument is inconsistent with a basic lending arrangement and
reflects the value of the issuer's equity. The Company classifies
such debt instruments at fair value through profit or loss.
Debt instruments included in the fair value through profit or loss
(FVTPL) category are measured at fair value with all changes
recognised in the Standalone Statement of Profit and Loss.
Net gains and losses, including any interest income, if any, are
recognised in profit or loss.
Equity investments
All equity investments other than investment in subsidiaries,
joint ventures and associate are measured at fair value.
Equity instruments which are held for trading are classified
as at FVTPL. For all other equity instruments, the Company
decides to classify the same either as at fair value through other
comprehensive income (FVTOCI) or FVTPL. The Company
makes such election on an instrument-by-instrument basis.
The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at
FVTOCI, then all fair value changes on the instrument, excluding
dividends, are recognised in other comprehensive income (OCI).
There is no recycling of the amounts from OCI to the Standalone
Statement of Profit and Loss, even on sale of such investments.
Equity instruments included within the FVTPL category are
measured at fair value with all changes recognised in the
Standalone Statement of Profit and Loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset)
is primarily derecognised when:
(a) The rights to receive cash flows from the asset have expired,
or the Company has transferred substantially all the risks
and rewards of the asset, or
(b) the Company has neither transferred nor retained
substantially all the risks and rewards of the asset, but has
transferred control of the asset.
Impairment of financial assets
The Company applies the simplified approach for measurement
of expected credit losses on trade receivables and contract
assets, whereby lifetime expected credit losses are recognised
from initial recognition.
For other financial assets measured at amortised cost, including
loans, debt securities, deposits and bank balances, the Company
applies the general approach and recognises 12-month expected
credit losses, unless there has been a significant increase in credit
risk since initial recognition, in which case lifetime expected
credit losses are recognised.
II. Financial Liabilities
Classification
The Company classifies all financial liabilities as subsequently
measured at amortised cost.
Initial recognition and measurement
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.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings
are subsequently measured at amortised cost using the Effective
Interest Rate (EIR) method. Gains and losses are recognised in
the Standalone Statement of Profit and Loss when the liabilities
are derecognised.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and transactions costs.
The EIR amortisation is included as finance costs in the
Standalone Statement of Profit and Loss.
This category generally applies to loans and borrowings.
Derecognition
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 Standalone Statement of
Profit and Loss.
III. Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the net
amount is reported in the balance sheet if there is a currently
enforceable legal right to offset the recognised amounts and
there is an intention to settle them on a net basis or to realise the
assets and settle the liabilities simultaneously.
IV. Share Capital
Ordinary equity shares
Incremental costs directly attributable to the issue of ordinary
equity shares are recognised as a deduction from equity.
g) Inventories
Inventories are valued as under:
Inventories are measured at lower of cost or net-realisable value.
The cost of inventory is based on specific identification method
for real estate segment. It includes cost of purchase, conversion
costs and other costs incurred in bringing them to their present
location or condition.
Construction Work-in-Progress/Finished Goods includes cost
of land, premium for development rights, construction costs,
allocated interest and expenses incidental to the projects
undertaken by the Company.
Net-realisable 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) Revenue Recognition
The Company derives revenues primarily from the sale of
residential and commercial units, sale of plotted and other
lands, and development and project management services.
Revenue is recognised upon satisfaction of performance
obligations identified in contracts with customers, either over
time or at a point in time, in accordance with Ind AS 115 -
Revenue from Contracts with Customers. Revenue is measured
at the transaction price, being the consideration to which the
Company expects to be entitled in exchange for transferring
promised goods or services to customers.
Sale of residential and commercial units / sale of plotted and
other lands: Revenue from sale of residential and commercial
units is recognised over time, as the performance obligations are
satisfied over time and the Company has an enforceable right to
payment for performance completed to date, which commences
from the date on which the agreement becomes non-cancellable.
Progress towards satisfaction of the performance obligation is
measured based on the stage of construction, determined using
an appropriate input method.
Development management services: Revenue from development
and project management services is recognised at a point in time,
when the related services are performed and the Company has
an enforceable right to payment, which is generally evidenced
by the raising of invoices in accordance with the terms of the
respective agreements. Revenue is recognised when control of
the services is transferred to the customer, and it is probable that
the Company will collect the consideration to which it is entitled.
In arrangements for sale of units the Company has applied
the guidance in Ind AS 115, on "Revenue from contracts with
customers", by applying the revenue recognition criteria for
each distinct performance obligation. The arrangements with
customers generally meet the criteria for considering sale of
units as distinct performance obligations. For allocating the
transaction price, the Company has measured the revenue in
respect of each performance obligation of a contract at its
relative standalone selling price. The price that is regularly
charged for an item when sold separately is the best evidence of
its standalone selling price. The transaction price is also adjusted
for the effects of the time value of money if the contract includes
a significant financing component. Any consideration payable to
the customer is adjusted to the transaction price, unless it is a
payment for a distinct product or service from the customer.
The Company receives maintenance amount from the customers
and utilises the same towards the maintenance of the respective
projects. Revenue is recognised to the extent of maintenance
expenses incurred by the Company towards maintenance
of respective projects. The balance amount of maintenance
expenses to be incurred is reflected as liability under the head
other current non-financial liabilities.
Contract assets are recognised when the Company has
transferred goods or services to a customer but does not yet
have an unconditional right to consideration. Contract assets are
classified as unbilled receivables when the right to consideration
is unconditional and only the passage of time is required before
payment becomes due.
Contract liabilities represent the Company's obligation to
transfer goods or services to a customer for which consideration
has been received in advance or is due from the customer.
i) Interest income
Interest income is accounted on an accrual basis at effective
interest rate. Interest on delayed payment and forfeiture
income are accounted based upon underlying agreements
with customers.
j) Share of profits/losses in LLP
Share of profits/losses in LLP is recognised when the right to
receive/liability to pay the same is established.
k) Leases
At the inception of a contract, the Company assesses whether a
contract is or contains, a lease. 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 of consideration. To assess
whether a contract conveys the right to control the use of an
asset the Company assesses whether:
- The contract involves the use of an identified asset - this may
be specified explicitly or implicitly, and should be physically
distinct or represent substantially all of the capability of
a physical distinct asset. If the supplier has a substantive
substitution right, then the asset is not identified
- The Company has the right to obtain substantially all of the
economic benefits from use of the asset throughout the
period of use; and
- The Company has the right to direct the use of the asset.
The Company has this right when it has the decision-making
rights that are most relevant to changing how and for what
purpose the asset is used.
As a Lessee
Right-of-use Asset
The Company recognises a right-of-use asset and a lease liability
at the lease commencement date. At the commencement date,
a lessee shall measure the right-of-use asset at cost which
comprises initial measurement of the lease liability, any lease
payments made at or before the commencement date, less any
lease incentives received, any initial direct costs incurred by the
lessee; and an estimate of costs to be incurred by the lessee in
dismantling and removing the underlying asset, restoring the
site on which it is located or restoring the underlying asset to the
condition required by the terms and conditions of the lease.
Lease Liability
At the commencement date, a lessee shall measure the lease
liability at the present value of the lease payments that are not
paid at that date. The lease payments shall be discounted using
the interest rate implicit in the lease, if that rate can be readily
determined. If that rate cannot be readily determined, the lessee
shall use the lessee's incremental borrowing rate.
Short-term lease 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 less than 12 months or less and leases of low-value assets,
including IT Equipment. The Company recognises the lease
payments associated with these leases as an expense on a
straight-line basis over the lease term.
The election for short-term leases shall be made by class of
underlying asset to which the right of use relates. A class of
underlying asset is a grouping of underlying assets of a similar
nature and use in Company's operations. The election for leases
for which the underlying asset is of low value can be made on a
lease-by-lease basis.
l) Income tax
Income tax expense comprises current tax and deferred tax.
It is recognised in the Standalone Statement of Profit and Loss
except to the extent that it relates to items recognised directly in
equity or in OCI.
Current tax
Current tax comprises the expected tax payable or receivable
on the taxable income or loss for the year and any adjustment
to the tax payable or receivable in respect of previous years. It is
measured using tax rates enacted or substantively enacted at the
reporting date.
Current tax assets and liabilities are offset only if, the Company:
a) has a legally enforceable right to set off the
recognised amounts; and
b) intends either to realise the asset and settle the liability on a
net basis or simultaneously.
Deferred tax
Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes.
Deferred tax assets are recognised for unused tax losses, unused
tax credits and deductible temporary differences to the extent
that is probable that future taxable profits will be available
against which they can be used. Deferred tax assets are reviewed
at each reporting date and are reduced to the extent that it is
no longer probable that the related tax benefit will be realised;
such reductions are reversed when the probability of future
taxable profits improves. Deferred tax liabilities are recognised
for taxable temporary differences.
Unrecognised deferred tax assets are reassessed at each
reporting date and recognised to the extent that it has become
probable that future taxable profits will be available against
which they can be used.
Deferred tax is measured at the tax rates that are expected to be
applied to temporary differences when they reverse, using tax
rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences
that would follow from the manner in which the Company
expects, at the reporting date, to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if:
a) the Company has a legally enforceable right to set off
current tax assets against current tax liabilities; and
b) The deferred tax assets and the deferred tax liabilities relate
to income taxes levied by the same taxation authority on
the same taxable entity.
m) Employee benefits
Short-term employee benefits
Short-term employee benefits are measured on an undiscounted
basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid if the
Company has a present legal or constructive obligation to pay
this amount as a result of past service provided by the employee
and the obligation can be estimated reliably.
Defined contribution plans
Obligations for contributions to defined contribution plans such
as Provident Fund and Employee State Insurance Corporations
are expensed as the related service is provided.
Defined benefit plans
The Company's net obligation in respect of defined benefit plans
is calculated separately for each plan by estimating the amount
of future benefit that employees have earned in the current and
prior periods, after discounting the same.
The calculation of defined benefit obligations is performed
annually by an independent qualified actuary using the projected
unit credit method.
Re-measurement of the net defined benefit liability, which
comprise actuarial gains and losses are recognised immediately
in other comprehensive income (OCI). Re-measurement, if
any, are not reclassified to the Standalone Statement of Profit
and Loss in subsequent period. Net interest expense (income)
on the net defined liability (assets) is computed by applying
the discount rate, based on the market yield on government
securities as at the reporting date, used to measure the net
defined liability (asset). Net interest expense and other expenses
related to defined benefit plans are recognised in the Standalone
Statement of Profit and Loss.
When the benefits of a plan are changed or when a plan
is curtailed, the resulting change in benefit that relates to
past service or the gain or loss on curtailment is recognised
immediately in the Standalone Statement of Profit and Loss.
The Company recognises gains and losses on the settlement of a
defined benefit plan when the settlement occurs.
Other long-term employee benefits
The Company's net obligation in respect of long-term employee
benefits is the amount of future benefit that employees have
earned in return for their service in the current and prior periods.
They are therefore measured at the present value of expected
future payments to be made in respect of services provided by
the employees up to the end of the reporting period using the
projected unit credit method. The discount rates used are based
on the market yields on government securities as at the reporting
date. Re-measurements are recognised in the Standalone
Statement of Profit and Loss in the period in which they arise.
Other long-term benefits include payable in respect of long-term
incentive scheme recorded based on arithmetical model
estimating the possible cash outflows based on assessment
of parameters of the scheme and pro-rated to the completed
service period and discounted at present value.
n. Share-based payment transactions
Employees Stock Options Plans ("ESOPs") and Employee Stock
Grant Scheme ("ESGS"): The grant date fair value of options
granted to employees is recognised as an employee benefits
expense, with a corresponding increase in equity, over the
period that the employees become unconditionally entitled to
the options. The expense is recorded for each separately vesting
portion of the award as if the award was, in substance, multiple
awards. The increase in equity recognised in connection with
share-based payment transaction is presented as a separate
component in equity under "Employee stock grant scheme
reserve". The amount recognised as an expense is adjusted to
reflect the actual number of stock options that vest.
o) Borrowing costs
Borrowing costs are interest and other costs that the Company
incurs in connection with the borrowing of funds and is measured
with reference to the effective interest rate applicable to the
respective borrowing.
Borrowing costs, pertaining to development of long-term
projects, are transferred to Construction work-in-progress,
as part of the cost of the projects till the time all the activities
necessary to prepare these projects for its intended use or
sale are complete.
All other borrowing costs are recognised as an expense in the
period in which they are incurred.
p) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash
at banks and on hand and short-term deposits with an original
maturity of three months or less, which are subject to an
insignificant risk of changes in value.
For the purpose of the Standalone Statement of Cash Flows, cash
and cash equivalents consist of cash and short-term deposits, as
defined above, net of outstanding bank overdrafts as they are
considered an integral part of the Company's cash management.
q) Earnings per share
Basic earnings per share is computed by dividing the profit
/ (loss) after tax by the weighted average number of equity
shares outstanding during the year. Diluted earnings per share
is computed by dividing the profit / (loss) after tax as adjusted
for dividend, interest and other charges to expense or income
(net of any attributable taxes) relating to the dilutive potential
equity shares, by the weighted average number of equity
shares considered for deriving basic earnings per share and the
weighted average number of equity shares which could have
been issued on conversion of all dilutive potential equity shares.
If potential equity shares converted into equity shares increases
the earnings per share, then they are treated as anti-dilutive and
anti-dilutive earning per share is computed.
|