j4| MATERIAL ACCOUNTING POLICIES

4.1 Fair value measurement

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,
regardless of whether that price is directly observable
or estimated using another valuation technique. In
estimating the fair value of an asset or a liability, the
Company takes into account the characteristics of
the asset or liability if market participants would take
those characteristics into account when pricing the
asset or liability at the measurement date. Fair value
for measurement and/or disclosure purposes in these
financial statements is determined on such a basis,
except for leasing transactions that are within the
scope of Ind AS 116, and measurements that have
some similarities to fair value but are not fair value,
such as net realisable value in Ind AS 2 or value in use
in Ind AS 36.

In addition, for financial reporting purposes, fair value
measurements are categorised into Level 1 , 2, or 3
based on the degree to which the inputs to the fair value
measurements are observable and the significance of
the inputs to the fair value measurement in its entirety,
which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities
that the entity can access at the measurement
date;

- Level 2 inputs are inputs, other than quoted prices
included within Level 1, that are observable for the
asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the
asset or liability.

4.2 Revenue Recognition

a. Revenue from contracts with customers

Revenue from contracts with customers is
recognised when control of the goods or services
are transferred to the customer at an amount that
reflects the consideration to which the Company
expects to be entitled in exchange for those goods
or services. Revenue is measured based on the
transaction price, which is the consideration,
adjusted for discounts and other credits, if any, as
specified in the contract with the customer. The

Company presents revenue from contracts with
customers net of indirect taxes in its Statement of
Profit and Loss.

The Company considers whether there are
other promises in the contract that are separate
performance obligations to which a portion of
the transaction price needs to be allocated. In
determining the transaction price, the Company
considers the effects of variable consideration,
the existence of significant financing components,
non-cash consideration, and consideration
payable to the customer (if any).

i. Recognition of revenue from sale of real
estate developments

Revenue from real estate development of
residential or commercial unit is recognised
at the point in time, when the control of the
asset is transferred to the customer, which
generally coincides with either of the two
conditions as stated below -

- on transfer of legal title of the residential
or commercial unit to the customer; or

- on transfer of physical possession of
the residential or commercial unit to the
customer.

Sale of residential and commercial units
consists of sale of undivided share of land
and constructed area to the customer, which
have been identified by the Company as a
single performance obligation, as they are
highly interrelated with each other.

The performance obligation in relation to
real estate development is satisfied upon
completion of project work and transfer of
control of the asset to the customer.

For contracts involving sale of real estate
unit, the Company receives the consideration
in accordance with the terms of the contract
in proportion of the percentage of completion
of such real estate project and represents
payments made by customers to secure
performance obligation of the Company
under the contract enforceable by customers.
Such consideration is received and utilised
for specific real estate projects in accordance
with the requirements of the Real Estate
(Regulation and Development) Act, 2016.
Consequently, the Company has concluded

the Company expects to recover the costs
incurred towards satisfying the performance
obligation.

The stage of completion on a project is
measured on the basis of proportion of the
contract work based upon the contracts/
agreements entered into by the Company
with its customers.

When it is probable that total contract
costs will exceed total contract revenue, the
expected loss is recognised as an expense
immediately when such probability is
determined.

iii. Revenue from hospitality services

Revenues from the room rentals during the
guest’s stay at the hotel is recognised based
on occupation, revenue from sale of food and
beverages and other allied services, as the
services are rendered.

iv. Revenue from facility maintenance

These services represent series of daily
services that are individually satisfied over
time because the tenants simultaneously
receive and consume the benefits provided
by the Company. The Company applies the
time elapsed method to measure progress.

v. Recognition of revenue from other operating
activities

Revenue from project management fees is
recognised over period of time as per terms
of the contract.

Revenue from assignment / cancellation is
recognised at the point in time as per terms
of the contract.

Revenue from marketing and commission is
recognised at the point in time basis efforts
expended.

vi. Contract Balances

Contract asset is the right to consideration in
exchange for goods or services transferred
to the customer. If the Company performs by
transferring goods or services to a customer
before the customer pays consideration or
before payment is due, a contract asset is
recognised for the earned consideration that
is conditional.

e. Dividend income

Revenue is recognised when the shareholders’
or unit holders’ right to receive payment is
established, which is generally when shareholders
approve the dividend.

4.3 Land

a. Advance paid towards land procurement

Advances paid by the Company to the seller/
intermediary towards outright purchase of land is
recognised as land advance under other current
assets during the course of obtaining clear and
marketable title, free from all encumbrances and
transfer of legal title to the Company, whereupon
it is transferred to land stock under inventories.
Management is of the view that these advances
are given under normal trade practices and are
neither in the nature of loans nor advance in the
nature of loans.

b. Land/ development rights received under joint
development arrangements ('JDA')

Land/ development rights received under joint
development arrangements ('JDA’) is measured
at the fair value of the estimated construction
service rendered to the landowner and the same
is accounted on launch of the project. The amount
of non-refundable deposit paid by the Company
under JDA is transferred as land cost to work
in-progress/ capital work in progress. Further,
the amount of refundable deposit paid by the
Company under JDA is recognized as deposits.

4.4 Leases

The Company assesses at contract inception 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 for consideration.

a. The Company as lessor

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 terms.
Contingent rents are recognised as revenue in the
period in which they are earned.

b. The Company as lessee

The Company applies a single recognition and
measurement approach for all leases, except for

short-term leases and leases of low-value assets.
The Company recognises right-of-use assets
and lease liabilities at the lease commencement
date. The right-of-use assets is initially measured
at cost which includes the initial 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 lease term.

The lease liabilities is initially measured at the
present value of lease payments to be made over
the lease term, discounted using the Company’s
incremental borrowing rate. It is re-measured
when there is a change in future lease payments
arising from a change in an index or rate, if there
is a change in the Company’s estimate of the
amount expected to be payable under a residual
value guarantee, or if the Company changes its
assessment of whether it will exercise a purchase,
extension or termination option. When the lease
liability is re-measured in this way, a corresponding
adjustment is made to the carrying amount of the
right-of-use asset, or is recorded in Statement of
Profit and Loss.

The Company applies the short-term lease
recognition exemption to Short-term leases of
assets (i.e., those leases that have a lease term of
12 months or less from the commencement date
and do not contain a purchase option).

Lease payments on short term leases are
recognised as expense on a straight-line basis
over the lease term.

4.5 Borrowing Costs

Borrowing costs consist of interest and other costs
that an entity incurs in connection with the borrowing
of funds. Borrowing cost also includes exchange
differences to the extent regarded as an adjustment
to the borrowing costs. Borrowing costs, allocated
to and utilised for qualifying assets, pertaining to the
period from commencement of activities relating to
construction / development of the qualifying asset upto
the date of capitalisation of such asset, is added to the
cost of the assets. Capitalisation of borrowing costs is
suspended and charged to the Statement of Profit and
Loss during extended periods when active development
activity on the qualifying assets is interrupted.

A qualifying asset is an asset that necessarily takes a
substantial period of time to get ready for its intended

use or sale and includes the real estate properties
developed by the Company.

4.6 Foreign Currency Transactions

Foreign currency transactions are recorded in the
reporting currency, by applying to the foreign currency
amount the exchange rate between the reporting
currency and the foreign currency at the date of
the transaction. Foreign currency monetary items
are reported using the exchange rate prevailing at
the reporting date. Non-monetary items, which are
measured in terms of historical cost denominated in a
foreign currency, are reported using the exchange rate
at the date of the transaction. Exchange differences
arising on the settlement of monetary items or on
reporting monetary items of Company at rates different
from those at which they were initially recorded during
the year, or reported in previous financial statements,
are recognised as income or as expense in the year in
which they arise.

4.7 Employee Benefits

Employee benefits include provident fund, employee
state insurance scheme, gratuity and compensated
absences.

a. Short-term obligations

The undiscounted amount of short-term employee
benefits expected to be paid in exchange for the
services rendered by employees are recognised
during the year when the employees render the
service. These benefits include performance
incentive and compensated absences which are
expected to occur within twelve months after the
end of the period in which the employee renders
the related service.

The cost of short-term compensated absences is
accounted as under:

(a) in case of accumulated compensated
absences, when employees render the
services that increase their entitlement of
future compensated absences; and

(b) i n case of non-accumulating compensated
absences, when the absences occur.

b. Long-term employee benefit obligations

Compensated absences which are not expected
to occur within twelve months after the end of the
period in which the employee renders the related
service are recognised as a liability at the present
value of expected future payments to be made in

respect of services provided by employees upto
the end of the reporting period using the projected
unit credit method. The benefits are discounted
using the market yields at the end of the reporting
period that have terms approximating to the terms
of the related obligation. Remeasurements as a
result of experience adjustments and changes
in actuarial assumptions are recognised in
Statement of Profit and Loss.

The obligations are presented as current liabilities
in the Balance Sheet if the entity does not have
an unconditional right to defer the settlement for
at least twelve months after the reporting period,
regardless of when the actual settlement is
expected to occur.

c. Post-employment obligations

The Company operates the following post¬
employment schemes:

i. Defined Contribution Plan:

The Company’s contribution to provident
fund is considered as defined contribution
plan and is charged as an expense based
on the amount of contribution required to be
made. The Company has no further payment
obligations once the contributions have been
paid.

ii. Defined Benefit Plan:

The liability or assets recognised in the
Balance Sheet in respect of defined benefit
gratuity plan is the present value of the
defined benefit obligation at the end of the
reporting period less the fair value of the
plan assets. 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 applying
the discount rate to the net balance of the
defined benefit obligation and the fair value
of plan assets. This cost is included in the
employee benefit expenses 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 retained earnings in the Statement of
Changes in Equity and in the Balance Sheet.

Changes in the present value of the defined
benefit obligation resulting from plan
amendments or curtailments are recognised
immediately in Statement of Profit and Loss
as past service cost.

d. Other Defined Contribution Plan

The Company’s contribution to employee state
insurance scheme is charged as an expense
based on the amount of contribution required to
be made. The Company has no further payment
obligations once the contributions have been paid.

4.8 Income Taxes

Income tax expense represents the sum of current tax

and deferred tax.

a. Current tax

Current tax assets and liabilities are measured
at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates
and tax laws used to compute the amount are
those that are enacted or substantively enacted,
at the reporting date. Current tax relating to items
recognised outside Statement of Profit and Loss
is recognised outside Statement of Profit and
Loss (either in other comprehensive income (OCI)
or in equity). Current tax items are recognised in
correlation to the underlying transaction either in
OCI or directly in equity.

b. Deferred tax

Deferred tax is recognised on temporary
differences arising between the tax bases of
assets and liabilities and their carrying amounts
in the financial statements. However, deferred tax
liabilities are not recognised if they arise from the
initial recognition of goodwill.

Deferred tax is also not accounted for if it arises
from initial recognition of an asset or liability in
a transaction other than a business combination
that at the time of the transaction affects neither
accounting profit nor taxable profit / loss.

Deferred tax is determined using tax rates (and
laws) that have been enacted or substantively
enacted by the end of the reporting period and
are expected to apply when the related deferred
tax asset is realised or the deferred tax liability is
settled.

Deferred tax assets are recognised for all
deductible temporary differences and unused
tax losses only if it is probable that future
taxable amounts will be available to utilise those
temporary differences and losses.

Current tax and deferred tax is recognised in
Statement of Profit and Loss, except to the
extent that it relates to items recognised in other
comprehensive income or directly in equity. In
this case, the tax is also recognised in other
comprehensive income or directly in equity,
respectively.

Deferred tax assets are recognised for unused tax
losses to the extent that it is probable that taxable
profit will be available against which the losses can
be utilised. Significant management judgement is
required to determine the amount of deferred tax
assets that can be recognised, based upon the
likely timing and the level of future taxable profits.

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
future taxable profits will be available to allow all
or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed
at each reporting date and are recognised to the
extent that it has become probable that future
taxable profits will allow the deferred tax asset to
be recovered.

4.9 Property, plant and equipment

Property, plant and equipment are stated at cost,
net of accumulated depreciation and accumulated
impairment losses, if any. The cost comprises purchase
price, borrowing costs if capitalisation criteria are met
and directly attributable cost of bringing the asset to its
working condition for the intended use. Each part of an
item of property, plant and equipment with a cost that
is significant in relation to the total cost of the item is
depreciated separately.

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. Cost of the asset includes expenditure that is
directly attributable to the acquisition and installation,
including interest on borrowing for the project /
property, plant and equipment up to the date the asset
is put to use. Any cost incurred relating to settlement of
claims regarding titles to the properties is accounted
for and capitalised as incurred.

Advances paid towards the acquisition of property,
plant and equipment outstanding at each Balance
Sheet date is classified as capital advances under other
non-current assets.

Depreciation method, estimated useful lives and
residual values

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 is provided using written-down value
method over the useful lives of assets estimated by the
Management. The Management estimates the useful
lives for the property, plant and equipment as follows:
# includes certain assets that has been assessed with
useful lives of 15 years.

For these class of assets, based on internal assessment
and independent technical evaluation carried out by
external valuers, taking into account the nature of the
asset, the estimated usage of the asset, the operating
conditions of the asset, past history of replacement,
the Management believes that the useful lives as
given above best represent the period over which the
Management expects to use these assets. Hence the
useful lives for these assets is different from the useful
lives as prescribed under Part C of Schedule II to the
Companies Act, 2013.

Gains and losses on disposals are determined by
comparing proceeds with the carrying amount. These
are included in Statement of Profit and Loss.

In respect of leasehold building, leasehold improvement
- plant and machinery and leasehold improvement -
furniture and fixtures, depreciation has been provided
over lower of useful lives or lease period.

4.10 Capital work-in-progress

Projects under which tangible assets are not yet ready
for their intended use are carried at cost comprising
direct cost, related incidental expenses and attributable
borrowing costs.

Depreciation is not provided on capital work-in-progress
until construction and installation are complete and the
asset is ready for its intended use.

4.11 Investment Property

Investment properties are properties held to earn
rentals and/or for capital appreciation (including
property under construction for such purposes).
Investment properties are measured initially at cost,
including transaction costs. Subsequent to initial
recognition, investment properties are measured in
accordance with Ind AS 16’s requirements for cost
model. The cost of Investment property includes the
cost of replacing parts and borrowing costs for long¬
term construction projects if the recognition criteria are
met. When significant parts of the investment property
are required to be replaced at intervals, the Company
depreciates them separately based on their specific
useful lives. All other repair and maintenance costs are
recognised in Statement of Profit and Loss as incurred.

Investment properties are depreciated using written-
down value method over the useful lives as stated in
note 4.9 The useful life has been determined based
on internal assessment and independent technical
evaluation carried out by external valuer, taking into
account the nature of the asset, the estimated usage
of the asset, the operating conditions of the asset, past
history of replacement.

The fair value of investment property is disclosed in the
notes. Fair values are determined based on evaluation
performed by accredited external independent valuers.

An investment property is derecognised upon disposal
or when the investment property is permanently
withdrawn from use and no future economic benefits
are expected from the disposal. Any gain or loss arising
on derecognition of the property (calculated as the
difference between the net disposal proceeds and the
carrying amount of the asset) is included in Statement
of Profit and Loss in the period in which the property is
derecognised.

4.12 Intangible Assets

Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less accumulated
amortization and accumulated impairment losses,
if any. Intangible assets, comprising of software are
amortized on the basis of written down value method
over a period of 6 years, which is estimated to be the
useful life of the asset. Gains or losses arising from
de-recognition of an intangible asset are measured as
the difference between the net disposal proceeds and
the carrying amount of the asset and are recognised
in the Statement of Profit and Loss when asset is
derecognised.

4.13 Impairment of tangible and intangible assets other
than goodwill

At the end of each reporting period, the Company reviews
the carrying amounts of its tangible and intangible
assets to determine whether there is any indication
that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent
of the impairment loss (if any). When it is not possible
to estimate the recoverable amount of an individual
asset, the Company estimates the recoverable amount
of the cash generating unit to which the asset belongs.
When a reasonable and consistent basis of allocation
can be identified, corporate assets are also allocated to
individual cash-generating units, or otherwise they are
allocated to the smallest Company of cash-generating
units for which a reasonable and consistent allocation
basis can be identified.

Intangible assets with indefinite useful lives and
intangible assets not yet available for use are tested for
impairment at least annually, and whenever there is an
indication that the asset may be impaired.

Recoverable amount is the higher of fair value less
costs of disposal and value in use. In assessing 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 the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash¬
generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash¬
generating unit) is reduced to its recoverable amount.
An impairment loss is recognised immediately in
Statement of Profit and Loss.

When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating
unit) is increased to the revised 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 (or cash-generating
unit) in prior years. A reversal of an impairment loss
is recognised immediately in Statement of Profit and
Loss.

4.14 Inventories

Related to contractual and real estate activity
Direct expenditure relating to construction activity is
inventorised. Other expenditure (including borrowing
costs) during construction period is inventorised
to the extent the expenditure is directly attributable
cost of bringing the asset to its working condition
for its intended use. Other expenditure (including
borrowing costs) incurred during the construction
period which is not directly attributable for bringing
the asset to its working condition for its intended use
is charged to the Statement of Profit and Loss. Direct
and other expenditure is determined based on specific
identification to the construction and real estate
activity. Cost incurred/ items purchased specifically for
projects are taken as consumed as and when incurred/
received.

Work-in-progress - Real estate projects (including
land inventory): Represents cost incurred in respect of
unsold area of the real estate development projects or
cost incurred on projects where the revenue is yet to be
recognised. Real estate work-in-progress is valued at
lower of cost and net realisable value.

Finished goods - Flats & Plots: Valued at lower of cost
and net realisable value.

Land inventory - Valued at lower of cost and net
realisable value.

Inventory also comprises of stock of food and beverages
and operating supplies and is carried at the lower of
cost and net realisable value. 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. However,
inventory held for use in production of finished goods is
not written down below cost if the finished products in
which they will be incorporated are expected to be sold
at or above cost.