B. Summary of Material Accounting Policies
a) Statement of Compliance
The financial statements (separate financial statements)
have been prepared on accrual basis in accordance with
Indian Accounting Standards (Ind AS) notified under the
Companies (Indian Accounting Standards) Rules, 2015 and
the provisions of the Companies Act, 2013.
b) Basis of preparation of financial statements
The financial statements have been prepared on historical
cost basis, except for certain financial assets and liabilities
which have been measured at fair value (refer accounting
policy regarding financial instruments).
The Functional currency of the Company is Indian Rupees.
These Financial Information are presented in Indian Rupees.
All the assets and liabilities have been classified as current
and non-current as per the Company's normal operating
cycle and other criteria set out in Schedule III of the
Companies Act, 2013. The normal operating cycle of the
company has been considered as 12 months.
Use of estimates:
The preparation of financial statement in conformity with
the recognition and measurement principles of Ind AS
requires management to make judgments, estimates and
assumptions that affect the reported balances of revenues,
expenses, assets and liabilities and the accompanying
disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment to
the carrying amount of assets or liabilities affected in future
periods.
Key estimates and assumptions :
The key assumptions concerning the future and other key
sources of estimation uncertainty at the reporting date,
that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the
next financial year, are described below. The Company
based its assumptions and estimates on parameters
available when the financial statements were prepared.
Existing circumstances and assumptions about future
developments, however, may change due to market
changes or circumstances arising that are beyond the
control of the Company. Such changes are reflected in the
assumptions when they occur.
c) Revenue recognition, contract costs and valuation of
unbilled revenue
i Revenue from own construction
In accordance with Ind AS 115 "Revenue from
Contracts with customers", Revenue is recognized
from construction and service activities based on
"Point in time" method and Company is recognizing
revenue either after handover of Possession to
customer or Registration, whichever is earlier.
ii Revenue from Construction Contracts
In accordance with Ind AS 115 "Revenue from
Contracts with customers", Revenue is recognized
from construction and service activities based on
"over time" method and the Company uses the output
method to measure progress of delivery.
When the outcome of individual contracts can be
estimated reliably, contract revenue and contract
cost are recognized as revenue and expenses
respectively by reference to the stage of completion
at the reporting date. Costs are recognized as incurred
and revenue is recognized on the basis of the actual
work certified out of performance obligation at the
reporting date.
No margin is recognized until the outcome of the
contract can be estimated with reasonable certainty.
Provision is made for all known or expected losses on
individual contracts once each losses are foreseen.
Revenue in respect of variations to contracts and
incentive payments is recognized when it is highly
probable and agreed by the customer. Revenue
in respect of claim is recognized only if it is highly
probable not to reverse in future periods.
i. Real Estate: Sales is exclusive of GST, if any, net
of sales return.
ii. Revenue from services are recognised on
rendering of services to customers except
otherwise stated.
iii. Rental income from assets is recognised for
on accrual basis except in case where ultimate
collection is considered doubtful. Rental income
is exclusive of GST.
iv. Income from interest is accounted for on time
proportion basis taking into account the amount
outstanding and the applicable rate of interest.
d) Estimation of net realisable value for inventory
property (including land advance)
Inventory property is stated at the lower of cost and net
realisable value (NRV).
NRV for completed inventory property is assessed by
reference to market conditions and prices existing at the
reporting date and is determined by the Company, based
on comparable transactions identified by the Company for
properties in the same geographical market serving the
same real estate segment.
NRV in respect of inventory property under construction is
assessed with reference to market prices at the reporting
date for similar completed property, less estimated costs to
complete construction and an estimate of the time value of
money to the date of completion.
With respect to land advance given, the net recoverable
value is based on the present value of future cash flows,
which depends on the estimate of, among other things, the
likelihood that a project will be completed, the expected
date of completion, the discount rate used and the
estimation of sale prices and construction costs.
e) Property, Plant and Equipment
The cost of an item of property, plant and equipment
comprises of its purchase price, any costs directly
attributable to its acquisition and an initial estimate of the
costs of dismantling and removing the item and restoring
the site on which it is located, the obligation for which the
company incurs when the item is acquired. 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 and the cost of the item can be
measured reliably. All other repairs and maintenance costs
are charged to profit or loss during the reporting period in
which they are incurred.
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. This applies mainly to
components for machinery. When significant parts of plant
and equipment are required to be replaced at intervals,
the Company depreciates them separately based on their
specific useful lives. Likewise, when a major inspection is
performed, its cost is recognized in the carrying amount of
the plant and equipment as a replacement if the recognition
criteria are satisfied. All other repair and maintenance costs
are recognised in profit or loss as incurred.
An item of property, plant and equipment and any significant
part initially recognized is de-recognised 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 property, plant
and equipment is de-recognized.
f) Intangible Assets
Intangible assets acquired separately are measured on
initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated
amortization and accumulated impairment loss.
The amortisation period and the amortisation method for
an intangible asset with a finite useful life are reviewed at
least at the end of each reporting period.
g) Borrowing Costs
Borrowing costs attributable to the acquisition or
construction of a qualifying asset are carried as part of the
cost of such asset. A qualifying asset is one that necessarily
takes substantial period of time to get ready for its intended
use. All other borrowing costs are expensed in the year they
are incurred.
h) Depreciation and amortization
Depreciation on property, plant and equipment is calculated
using the straight-line method to allocate their cost, net of
their residual values, over their estimated useful lives.
The useful lives estimated for the major classes of property,
plant and equipment are as follows:
Depreciation on tangible assets is provided on written down
value method over the useful lives of assets estimated by the
management and as given in schedule II of The Companies
Act, 2013. Depreciation for assets purchased/sold during a
period is proportionately charged.
Softwares are amortized over the estimated useful life of
5 years.
The residual values, useful lives and methods of depreciation
of property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate.
i) Impairment of Non-Financial Assets
The management periodically assesses using external
and internal sources, whether there is an indication that
both tangible and intangible asset may be impaired. An
impairment loss is recognized wherever the carrying value
of an asset exceeds its recoverable amount. An impairment
loss for an asset is reversed if, and only if, the reversal
can be related objectively to an event occurring after the
impairment loss was recognized.
j) Inventories
i. Constructed properties, shown as work in
progress, includes the cost of land (including
development rights and land under agreements
to purchase), internal development costs,
external development costs, construction
costs, overheads, borrowing costs, construction
materials including material lying at respective
sites, finance and administrative expenses which
contribute to bring the inventory to their present
location and condition and is valued at lower of
cost/estimated cost and net realizable value.
ii. On completion of projects, unsold stocks are
transferred to project finished stock under the
head "Inventory" and the same is carried at cost
or net realizable value, whichever is less.
iii. Finished Goods - Flats: Valued at cost and net
realizable value.
iv. Land Inventory: Valued at lower of cost and net
realizable value.
Provision for obsolescence in inventories is made,
wherever required.
k) Retirement Benefits
a. Short Term employee benefits
Short term employee benefits such as salaries, wages,
bonus, expected cost of ex-gratia etc. are recognised
in the period in which the employee renders the
related service.
b. Long Term and Post-employment benefits
i. Defined Contribution Plan: Employee benefits
in the form of Employees State Insurance
Corporation and Provident Fund are considered
as defined contribution plan and the
contributions are charged to the Statement
of Profit and Loss for the period when the
contributions to the respective funds are due.
ii. Defined Benefit Plan: Employee benefits in
the form of Gratuity is considered as defined
benefit plan and are provided for on the basis
of an independent actuarial valuation, using
the projected unit credit method, as at the
Balance Sheet date as per requirements of
Indian Accounting Standard-19 on "Employee
Benefits".
Remeasurements, comprising of actuarial gains
and losses, the effect of the asset ceiling, excluding
amounts included in net interest on the net defined
benefit liability and the return on plan assets (excluding
amounts included in net interest on the net defined
benefit liability), are recognised immediately in the
balance sheet with a corresponding debit or credit to
retained earnings through OCI in the period in which
they occur. Remeasurements are not reclassified to
profit or loss in subsequent periods.
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