1.03 Summary of Material Accounting Policies
The financial statements have been prepared using the material accounting policies and measurement basis summarised below. These were used throughout all periods presented in the financial statements.
1.04 Changes in Accounting Policy
The accounting policies applied to the year ended March 31, 2024 standalone financial statements are identical to those applied to and described in the financial statement year ended March 31,2023.
1.05 Compliance with Ind AS
The standalone financial statements comply in all material aspects with Indian Accounting Standards ("Ind AS") notified under Section 133 of the Companies Act, 2013 ("the Act"), and relevant rules issued thereunder. In accordance with proviso to the Rule 4A of the Companies (Accounts) Rules, 2014 (as amended), the terms used in these financial statements are in accordance with the definitions and other requirements specified in the applicable Accounting standards.
1.06 Basis of Preparation
The financial statements have been prepared on going concern basis in accordance with accounting principles generally accepted in India. Further, the financial statements have been prepared on historical cost basis except for certain financial assets and financial liabilities which are measured at fair values as explained in relevant accounting policies.
1.07 Recent Accounting Pronouncement
There are no such notifications which would have been applicable from April 1, 2024.
1.08 Rounding of Amounts
All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest lakhs, except where otherwise indicated.
1.09 Current and Non-Current Classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is classified as current if:
(i) it is expected to be realised or intended to be sold or consumed in normal operating cycle
(ii) it is held primarily for the purpose of trading
(iii) it is expected to be realised within twelve months after the reporting period, or
(iv) 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 classified as current if:
(i) it is expected to be settled in normal operating cycle
(ii) it is held primarily for the purpose of trading
(iii) it is due to be settled within twelve months after the reporting period, or
(iv) 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 on net basis.
All assets and liabilities have been classified as current or non-current as per Company's normal operating cycle. Based on the nature of operations, the Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
1.10 Use of Judgements, Estimates and Assumptions
While preparing standalone financial statements in conformity with Ind AS, the management makes certain estimates and assumptions that require subjective and complex judgments. These judgments affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses, disclosure of contingent liabilities at the statement of financial position date and the reported amount of income and expenses for the reporting period. Financial reporting results rely on our estimate of the effect of certain matters that are inherently uncertain. Future events rarely develop exactly as forecast and the best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions. The management continually evaluate these estimates and assumptions based on the most recently available information.
Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the standalone financial statements are as below:
Key sources of estimation uncertainty
(i) Financial Instruments; (Refer note 4.10 )
(ii) Useful lives of Property, Plant and Equipment and Intangible Assets; (Refer note 1.11 and 1.14)
(iii) Valuation of Inventories; (Refer note 1.18)
(iv) Assets and Obligations relating to Employee Benefits; (Refer note 4.04)
(v) Evaluation of recoverability of Deferred Tax Assets; (Refer note 1.22) and
(vi) Contingencies (Refer note 4.02).
(vii) Impairment of Financial Assets (Refer note 1.16)
(viii) Revenue and Cost Recognition (Refer note 1.19)
1.11 Property, Plant and Equipment Recognition and Initial Measurement
Property, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to the location and condition for it to be capable of operating in a manner intended by the management and initial estimation of any decommissioning obligation if any. Any trade discount and rebates are deducted in arriving at the purchase price.
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. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to statement of profit and loss during the reporting period in which they are incurred.
Similarly, when major inspection is performed, cost is recognised in the carrying amount of the item of the plant and equipment and remaining carrying amount of the previous inspection is derecognised.
Spares and stand by equipment and servicing equipment are recognised when they meet the definition of property, plant and equipment.
Subsequent Measurement (Depreciation and Useful Lives)
Property, plant and equipment are subsequently measured at cost less accumulated depreciation and impairment losses. Depreciation on property, plant and equipment are provided based on the rates and manner prescribed in Schedule II to the Companies Act, 2013 except for certain assets where it has identified the useful life on the internal assessments as mentioned below.
Depreciation in the case of building is provided on straight-line method and the manner as per schedule II to the Act.
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year.
De-Recognition
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 recognized in the statement of profit and loss, when the asset is de-recognized.
Land which was re-valued is stated at the values determined by the valuer
1.12 Capital Work-in-Progress
Capital work-in-progress represents expenditure incurred in respect of capital projects under development and are carried at cost. Cost includes land, related acquisition expenses, development/ construction costs, borrowing costs and other direct expenditure.
1.13 Investment Properties Recognition and Initial Measurement
Investment properties are properties held to earn rentals or for capital appreciation, or both. Investment properties are measured initially at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company. All other repair and maintenance costs are recognized in statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Investment properties are subsequently measured at cost less accumulated depreciation and impairment losses. Depreciation on investment properties is provided on the straight-line method in respect of buildings and on written down value for plant and equipment's, furniture and fixtures based on the internal assessment as mentioned below:
The residual values, useful lives and method of depreciation are reviewed at the end of each financial year. De-Recognition
I nvestment properties are de-recognized either when they have been disposed off or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of de-recognition.
1.14 Intangible Assets
Recognition and Initial Measurement
Intangible assets are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use.
Intangible assets comprises of computer software and customer acquisition cost Subsequent Measurement (Amortisation)
Computer Software
The cost of capitalized software is amortized over a period of 5 years from the date of its acquisition. Customer Acquisition Costs
The cost of brokerage or referral incentive is paid for identifying the customers of residential projects is amortized over a period of life of the project from the date of incurring such expenditure till the completion of the said projects. If the customer acqusition cost is incurred for a completed property, the same is charged to expenses.
Derecognition of Intangible Assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in statement of profit and loss when the asset is derecognised.
1.15 Borrowing Cost
Borrowing cost includes interest, amortisation of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, production or construction of the qualifying assets are considered as direct cost and are capitalised. The qualifying asset is an asset that necessarily takes substantial period of time to get ready for tis intended use or sale. All other borrowings cost are recognised as expense in the period in which they are incurred. Where borrowings are specifically for obtaining a qualifying asset for developments, the amount capitalised is borrowing cost incurred less any income on temporary investment of these borrowings.
Capitalisation of borrowing cost is suspended during the extended period in which the active development is interrupted. Capitalisation of borrowing cost is ceased when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale is complete.
Borrowing cost is not capitalised on the purchase of land for development unless activities necessary to prepare the land for development are in progress.
1.16 Impairment of Assets
Carrying amount of tangible assets, intangible assets, investments in subsidiaries (carried at cost) are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use.
In assessing the 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 risks specific to that asset. In determining fair value less cost of disposal, recent market transactions are taken in to account. If no transactions can be identified, an appropriate valuation model is being used.
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or group of assets (cash generating units)
Non -financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of the each reporting period. When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the reversed estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss is recognised immediately in statement of profit and loss.
1.17 Financial Instruments
Financial assets and financial liabilities are recognised when a Company becomes a party to the contractual provisions of the instruments.
a) Initial Recognition and Measurement
Financial Assets: All financial assets are recognized initially at fair value plus, in the case of financial assets not recognized at fair value through profit and loss, 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.
Financial Libilities: All financial liabilities are recognized initially at fair value, in the case of loans, borrowings and payables, net of directly attributable transaction costs.
b) Classification and Subsequent Measurement : Financial Assets
The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive Income ("FVTOG") or fair value through profit or loss ("FVTPL") on the basis of following :
- the entity's business model for managing the financial assets and
- the contractual cash flow characteristics of the financial asset.
(i) Amortised Cost
A financial asset is classified and measured at amortised cost if both of the following conditions are met:
- the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) FVTOCI
A financial asset is classified and measured at FVTOCI if both of the following conditions are met:
- the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
- the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(iii) FVTPL
A financial asset is classified and measured at FVTPL unless it is measured at amortised cost or at FVTOCI. All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
c) Investment in Equity Instruments of Subsidiaries
Investment in equity instruments of subsidiaries are stated at cost as per Ind AS 27 'Separate Financial Statements' and reviewed for impairment at each reporting date.
d) Impairment of Financial Assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables only, the Company applies the simplified approach permitted by Ind AS 109 Financial Instruments, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
e) Classification and Subsequent Measurement : Financial Liabilities
The Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts.
(i) Financial Liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is held for trading or are designated upon initial recognition as FVTPL. Gains or losses on financial liabilities held for trading are recognised in the Statement of Profit and Loss.
(ii) Other Financial Liabilities
Other financial liabilities (including borrowings and trade and other payables) are subsequently measured at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.
f) Derecognition of Financial Assets and Financial Liabilities
The Company de-recognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred. If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised. A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
g) Offsetting Financial Instruments
Financial asset and financial liabilities are offset and the net amount is reported in the balance sheets when, the entity currently has a legal enforceable right to set off the recognised amounts and it intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
1.18 Inventories
Inventories comprise of property held for sale, property under construction (work in progress) and stock of construction materials. a) Unsold premises held as inventory are valued at lower of cost and net realizable value. b) Construction Work-in-Progress comprises of cost of acquisition of land, if any, construction & development expenses, and borrowing cost and is valued at lower of cost (net of indirect taxes, wherever applicable) and net realisable value. c) Inventory of construction materials is valued at lower of cost (net of indirect taxes, wherever recoverable) and net realizable value. Cost is determined on FIFO basis.
1.19 Revenue Recognition
The Company derives revenues primarily from the business of real estate development. It also earns revenue from the allied activities such as renting of property.
Revenue is recognized on satisfaction of performance obligations upon transfer of control of promised works or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those works or services.
1. The customer simultaneously receives and consumes the benefits provided by the Company's performance; or
2. The Company's performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
3. The Company's performance does not create an asset with an alternative use to the Company and the Company has an enforceable right to payment for performance completed to date.
For performance obligations where one of the above conditions are not met, revenue is recognised at the point in time at which the performance obligation is satisfied.
In case of real estate development where revenue is recognised over the time, the amount is determined from the financial year in which the agreement to sell is executed. The period over which revenue is recognised is based on right to payment for performance completed. In determining whether the Company has right to payment, the Company shall consider whether it would have an enforceable right to demand or retain payment for performance completed to date if the contract were to be terminated before completion for reasons other than Company's failure to perform as per the terms of the contract.
The revenue recognition of Real estate property under development requires forecasts to be made of total budgeted costs with the outcomes of underlying construction contracts, which further require assessments and judgements to be made on changes in work scopes and other payments to the extent they are probable and they are capable of being reliably measured. However, where the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately in the Statement of Profit and Loss.
The expenditure incurred in relation to the projects under development is accumulated under the head Construction work-in-progress. The estimated project cost includes construction cost, construction materials, other direct cost, borrowing cost and other overheads of such projects.
Amount of Revenue recognised is determined on the basis of project expenses incurred in relation to estimated project expenses.
A Contract asset is the Company's right to consideration in exchange for products or services that it has transferred to a customer. The Company assess a contract asset for impairment in accordance with Ind AS 109.
A Contract liability is the Company's obligation to transfer products or services to a customer for which it has received consideration from the customer.
Rental Income
Income earned by way of leasing or renting commercial or residential premises is recognized as income. Initial direct costs such as brokerage, etc. is recognized as expenses on accrual basis in statement of profit and loss in the year of lease.
Maintenance Income
Revenue in respect of maintenance services is recognised on an accrual basis, in accordance with the terms of the respective contract as and when the Company satisfies performance obligations by delivering the services as per contractual agreed terms.
Dividend Income
Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
Interest Income
Interest income from debt instruments is recognised using the effective interest rate method.
Share of Profit /Loss of the Partnership Firm
Share of profit / loss from Partnership firm is recognised in the Statement of Profit and Loss in respect of the financial year of the Partnership firm ending on or before the balance sheet date, on the basis of its audited accounts.
1.20 Employee Benefit Expense Short-Term Obligations
Short term employee benefits are recognised as an expense at an undiscounted amount in the Statement of profit & loss of the year in which the related services are rendered.
Post-Employment Obligations
The Company operates the following post-employment schemes:
• defined benefit plans such as gratuity; and
• defined contribution plans such as provident fund Gratuity Obligations
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period. The defined benefit obligation is calculated annually by an independent actuary using the projected unit credit method.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from changes in actuarial assumptions are recognised at amount in the period in which they occur, directly in other comprehensive income.
Defined Contribution Plans
Contributions to provident fund, a defined contribution plan, are made in accordance with the rules of the statute and are recognized as expenses when employees render service entitling them to the contributions. The Company has no obligation, other than contribution payable to the provident fund.
The obligations are presented as current liabilities in the balance sheet if the entity does no have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
1.21 Leases
As a Lessee
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, 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 shortterm leases and leases of low-value assets. For these short-term leases, the Company recognises the lease payments as an expense on a straight-line basis over the term of the lease or another systematic basis. The Company recognises lease liabilities to make lease payments and Right of Use assets representing the right to use the underlying assets as below.
Right of Use (ROU) Assets
The Company recognises Right of Use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right ofUse assets are measured at cost, less any accumulated depreciation
and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of Right of Use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right of Use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
Lease Liabilities
The lease liability is initially measured at amortised cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rate. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. Lease liabilities are remeasured with a corresponding adjustment to the related ROU assets.
ROU assets and Lease liabilities have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
As a Lessor
Lease income from operating leases where the Company is a lessor is recognised as income on a straightline basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
Commercial properties which are subject to operating lease are disclosed as Investment Property. Costs including depreciation are recognised as expense in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the statement of profit and loss.
1.22 Taxes on Income
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current Tax
The tax currently payable is based on the taxable profit for the current year. Taxable profit differs from 'profit before tax' as reported in statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company's current tax is determined based on the relevant provisions of the regulatory tax laws.
Minimum Alternate Tax
Minimum alternate tax ('MAT') credit entitlement is recognized as an asset only when and to the extent there is convincing evidence that normal income tax will be paid during the specified period. In the year in which MAT credit becomes eligible to be recognized as an asset, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT credit entitlement under Deferred Tax Assets. This is reviewed at each balance sheet date and the carrying amount of MAT credit entitlement is written down to the extent it is not reasonably certain that normal income tax will be paid during the specified period.
Deferred Tax
Deferred tax is recognized on temporary differences between carrying amounts of assets and liabilities in financial statements and corresponding tax basis used in computation of taxable profits. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
Deferred tax assets on unrealised tax loss are recognised to the extent that is probable that the underlying tax loss will be utilised against future taxable income.
The carrying amount of deferred tax assets is reviewed at each reporting 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 asset to be recovered.
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 or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences would follow from the manner in which the Company expects, at the end of the reporting period, to recover the carrying amounts of its assets and liabilities.
Deferred tax relating to items recognised outside statement of profit and loss is recognised outside statement of profit and loss (either in other comprehensive income or other equity)
1.23 Earnings Per Share (EPS)
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and all periods presented is adjusted for the events such as bonus shares that have changed the number of equity shares outstanding without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders is adjusted for after income tax effect of interest and other financing cost associated with dilutive potential equity shares and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
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