2.1 Material Accounting Policies
i) Basis of Preparation
The financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred
to as the ‘Ind AS’) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (‘Act’)
read with of the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of
the Act. The Company has uniformly applied the accounting policies during the year presented.
ii) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable for goods supplied and services
rendered, net of returns and discounts to customers.
a) Real Estate Projects
The Company has aligned its policy of revenue recognition with Ind AS 115 “Revenue from Contracts with Customers”
which is effective from April 1, 2018. Accordingly, revenue in realty business is recognised on completion of
performance obligation as against recognition based on percentage of completion method hitherto in accordance
with the guidance note issued by ICAI which has since been withdrawn for entity preparing financials as per Indian
Accounting Standard (Ind AS).
b) Interest Income
Interest on fixed deposits and inter-corporate deposits is accounted on accrual basis.
c) Sale of completed real estate projects
Revenue is accounted for: (i) on delivery of absolute physical possession of the respective units on completion, or
(ii) on deemed possession of the respective units on completion, or (iii) on physical possession for fit out, as
considered appropriate by the management based on circumstantial status of the project.
iii) Borrowing Costs
Borrowing cost that are directly attributable to the acquisition or construction of a qualifying asset (including real estate
projects) are considered as part of the cost of the asset/ project. All other borrowing costs are treated as period cost and
charged to the statement of profit and loss in the year in which incurred.
iv) 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 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 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. All other repair and maintenance costs are
recognised in statement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives)
Depreciation on Property, Plant and Equipment is provided on Straight Line Method as prescribed in Schedule II to the
Companies Act, 2013. The management estimates the useful life of the assets as prescribed in Schedule II to the
Companies Act, 2013.
De-recognition
An item of property, plant and equipment and any significant part initially recognised is derecognized 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 asset is derecognized.
v) 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. Any trade
discount and rebates are deducted in arriving at the purchase price.
Subsequent measurement (amortization and useful lives)
Intangible assets comprising of ERP & other computer software are stated at cost of acquisition less accumulated
amortization and are amortised over a period of five years on straight line method.
Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of all its intangible assets recognised
as at 1 April 2016 measured as per the provisions of Previous GAAP and use that carrying value as the deemed cost of
intangible assets.
vi) Impairment of Non Financial Assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If
any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of
the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying
amount, the carrying amount is reduced to its recoverable amount.The reduction is treated as an impairment loss and
is recognized in the statement of profit and loss.
vii) Goodwill
The cost of acquisition of business over and above the face value of investment in capital is identified in the financial
statements as Goodwill. After initial recognition, Goodwill is tested for impairment annually and measured at cost less
accumulated impairment loss, if any.
viii) Financial Instruments
a) Financial assets
Initial recognition and measurement
Financial assets are recognised when the Company becomes a party to the contractual provisions of the financial
instrument and are measured initially at fair value adjusted for transaction costs.
Subsequent measurement
1) Financial instruments at amortised cost - the financial instrument is measured at the amortised cost if both the
following conditions are met:
• The asset is held within a business model whose objective is to hold assets for collecting contractual cash
flows, and
• Contractual terms of the 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. All other debt instruments are measured at Fair Value through other comprehensive
income or Fair value through profit and loss based on Company’s business model.
2) Equity investments - All equity investments in scope of Ind AS 109 are measured at fair value and at deemed
cost on the basis of Ind AS 101. Equity instruments which are held for trading are generally classified as at fair
value through profit and loss (FVTPL). For all other equity instruments, the Company decides to classify the
same either as at fair value through other comprehensive income (FVOCI) or fair value through profit and loss
(FVTPL). The Company makes such election on an instrument by instrument basis. The classification is made
on initial recognition and is irrevocable.
De-recognition of financial assets
A financial asset is primarily de-recognised when the rights to receive cash flows from the asset have expired
or the Company has transferred its rights to receive cash flows from the asset.
b) Financial Liabilities
Initial recognition and measurement
All financial liabilities are recognised initially at fair value and transaction cost that are attributable to the acquisition
of the financial liabilities are also adjusted. These liabilities are classified as amortised cost.
Subsequent measurement
Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method.
These liabilities include borrowings and deposits.
De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expired.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or
on the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit or loss.
c) Financial Guarantee contracts
Financial guarantee contracts are those contracts that require a payment to be made to reimburse the holder for a
loss it incurs because the specified party fails to make a payment when due in accordance with the terms of a debt
instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction
costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the
higher of the amount of expected loss allowance determined as per impairment requirements of Ind-AS 109 and
the amount recognised less cumulative amortization.
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 and FVOCI debt instruments. 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) 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 on a net basis,
to realize the assets and settle the liabilities simultaneously.
ix) Inventories and Projects in progress
a) Inventories
• Building material and consumable stores are valued at cost.
• Construction work in progress is valued at cost. Cost includes cost of materials, cost of land including premium
for development rights, services and other related overheads related to project under construction.
• Completed real estate project for sale are valued at lower of cost or net realizable value. Cost includes cost of
land (including premium for development rights), materials, construction, services and other related overheads.
b) Projects in progress
Projects in progress are valued at cost. Cost includes cost of land, materials, construction, services, borrowing
costs and other overheads relating to projects.
x) Retirement benefits
a) Contributions payable by the Company to the concerned government authorities in respect of provident fund,
family pension fund and employee state insurance are charged to the statement of profit and loss.
b) The Company is having Group Gratuity Scheme with Life Insurance Corporation of India. Provision for gratuity is
made based on actuarial valuation in accordance with Ind AS-19.
c) Provision for leave encashment in respect of unavailed leave standing to the credit of employees is made on
actuarial basis in accordance with Ind AS-19.
d) Actuarial gains/losses resulting from remeasurements of the liability/asset are included in other comprehensive
income.
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