Financial assets, other than equity instruments, are subsequently measured at amortised cost, fair
value through other comprehensive income (FVOCI) or fair value through profit or loss (FVTPL) on
the basis of both:
(a) The entity’s business model for managing the financial assets, and
(b) The contractual cash flow characteristics of the financial asset.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other
comprehensive income. For investments in debt instruments, this will depend on the business
model in which the investment is held.
The Company reclassifies debt investments when and only when its business model for managing
those assets changes.
Measurement
At initial recognition, the Company measures a financial asset at its fair value plus, in the case of
a financial asset not carried at fair value through profit or loss, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction costs of financial assets carried
at fair value through profit or loss are expensed in profit or loss.
Debt instruments
Subsequent measurement of debt instruments depends on the Company’s business model for
managing the asset and the cash flow characteristics of the asset. There are three measurement
categories into which the Company classifies its debt instruments:
• Amortised cost: Assets that are held for collection of contractual cash flows where those cash
flows represent solely payments of principal and interest are measured at amortised cost. A
gain or loss on a debt investment that is subsequently measured at amortised cost and is not
part of a hedging relationship is recognised in profit or loss when the asset is derecognised or
impaired. Interest income from these financial assets is included in finance income using the
effective interest rate method.
• Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or
FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment
that is subsequently measured at fair value through profit or loss and is not part of a hedging
relationship is recognised in profit or loss and presented net in the statement of profit and
loss within other gains/(losses) in the period in which it arises. Interest income from these
financial assets is included in other income.
Equity instruments
The Company subsequently measures all equity investments at fair value except investment in
subsidiary, joint venture and associate entities.
Changes in the fair value of financial assets at fair value through profit or loss are recognised in
the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity
investments measured at FVOCI are not reported separately from other changes in fair value.
Impairment of financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its
assets carried at amortised cost. 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.
Derecognition of financial assets
A financial asset is derecognised only when
• The Company has transferred the rights to receive cash flows from the financial asset or
• The Company retains the contractual rights to receive the cash flows of the financial asset,
but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset, the Company evaluates whether it has transferred
substantially all risks and rewards of ownership of the financial asset. In such cases, the financial
asset is derecognised.
Where the entity has not transferred substantially all risks and rewards of ownership of the
financial asset, the financial asset is not derecognised. Where the entity has neither transferred a
financial asset nor retains substantially all risks and rewards of ownership of the financial asset,
the financial asset is derecognised if the Company has not retained control of the financial asset.
Where the Company retains control of the financial asset, the asset is continued to be recognised
to the extent of continuing involvement in the financial asset.
Financial Liabilities
All Financial liabilities are measured at amortised cost using effective interest method or fair value
through profit and loss. However, financial liabilities that arise when a transfer of a financial asset
does not qualify for derecognition or when the continuing involvement approach applies, financial
guarantee contracts issued by the Company, and commitments issued by the Company to provide
a loan at below-market interest rate are measured in accordance with the specific accounting
policies set out below.
Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liability is either contingent
consideration recognised by the Company as an acquirer in a business combination to which Ind
AS 103 applies or is held for trading or it is designated as at FVTPL.
A financial liability is classified as held for trading if:
• it has been incurred principally for the purpose of repurchasing it in the near term; or
• on initial recognition it is part of a portfolio of identified financial instruments that the Company
manages together and has a recent actual pattern of short-term profit-taking; or
• it is a derivative that is not designated and effective as a hedging instrument
A financial liability other than a financial liability held for trading or contingent consideration
recognised by the Company as an acquirer in a business combination to which Ind AS 103 applies,
may be designated as at FVTPL upon initial recognition if:
• such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise;
• the financial liability is managed and its performance is evaluated on a fair value basis, in
accordance with the Company’s documented risk management or investment strategy, or
• it forms part of a contract containing one or more embedded derivatives, and Ind AS 109
permits the entire combined contract to be designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on
remeasurement recognised in Statement of Profit and Loss. The net gain or loss recognised in
Statement of Profit and Loss incorporates any interest paid on the financial liability and is included
in the ‘Other income’ line item.
Gains or losses on financial guarantee contracts and loan commitments issued by the Company
that are designated by the Company as at fair value through profit or loss are recognised in
Statement of Profit and Loss.
Financial liabilities subsequently measured at amortised cost
Financial liabilities that are not held-for-trading and are not designated as at FVTPL are measured
at amortised cost at the end of subsequent accounting periods. The carrying amounts of financial
liabilities that are subsequently measured at amortised cost are determined based on the effective
interest method. Interest expense that is not capitalised as part of costs of an asset is included in
the ‘Finance costs’ line item. 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
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.
Derecognition of financial liabilities
The Company derecognises financial liabilities when, and only when, the Company’s obligations
are discharged, cancelled or have expired. An exchange with a lender of debt instruments with
substantially different terms is accounted for as an extinguishment of the original financial liability
and the recognition of a new financial liability. Similarly, a substantial modification of the terms of
an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is
accounted for as an extinguishment of the original financial liability and the recognition of a new
financial liability. The difference between the carrying amount of the financial liability derecognised
and the consideration paid and payable is recognised in Statement of Profit and Loss.
4.2 Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or less, that are readily convertible into known
amounts of cash and which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and
short term deposits, as defined above, as they are considered an integral part of the Company’s
cash management.
4.3 Property Plant and Equipment
Recognition and initial measurement
Property, plant and equipment are valued at cost of acquisition or construction less accumulated
depreciation and impairment loss. The Company capitalises all costs relating to the acquisition,
installation and construction of property, plant and equipment. Subsequent costs are included
in the asset’s carrying amount or recognised as 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 instatement of profit or loss as incurred.
Subsequent measurement (depreciation and useful lives):
Depreciation is provided on the assets on their original costs up to their net residual value estimated
at 5% of the original cost, prorata to the period of use on the written down value method, over
their estimated useful life. Assets individually costing upto Rs 5,000 are fully depreciated in the
year of purchase.
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 derecognized
upon disposal or when no future economic benefits are expected from its use or disposal. Any gain
or loss arising on derecognition 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.
4.4 Intangible AssetsRecognition 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.
Subsequent measurement (amortisation):
The cost of capitalized software is amortized over a period of 6 years from the date of its acquisition.
4.5 Capital work in progress and Capital advances
Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work
in progress. Advances given towards acquisition of property, plant and equipment outstanding at
each Balance Sheet date are disclosed in Other Non-Financial Assets.
Revenue from real estate development/ sale, maintenance services and project management
services
Revenue is recognised on satisfaction of performance obligation upon transfer of control of
promised products (residential or commercial completed units) or services to customers in an
amount that reflects the consideration the Company expects to receive in exchange for those
products or services.
The Company satisfies the performance obligation and recognises revenue over time, if one of the
following criteria is met:
1. The customer simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs; 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 an entity has an enforceable right to payment for performance completed to date.
For performance obligations where any 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, revenue is recognised over the time, it is being recognised from the financial year in
which the agreement to sell or any other binding documents containing salient terms of agreement
to sell is executed. In respect of ‘over the period of time’, the revenue is recognised based on
the percentage-of-completion method (‘POC method’) of accounting with cost of construction
incurred (input method) for the respective projects determining the degree of completion of the
performance obligation.
The revenue recognition requires forecasts to be made of total budgeted costs with the outcomes
of underlying construction contracts, which further require assessments and judgments 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. In case, where the contract cost is estimated to exceed total
revenues from the contract, the loss is recognised immediately in the Statement of Profit and Loss.
Revenue in excess of billing (unbilled revenue) are classified as contract asset while invoicing in
excess of revenues (bill in advance) are classified as contract liabilities.
Rent
Rental Income is recognised on a time proportion basis as per the contractual obligations agreed
with the respective tenant.
Interest
Interest income from a financial asset is recognised when it is probable that the economic benefits
will flow to the Company and the amount of income can be measured reliably. Interest income is
accrued on a time basis, by reference to the principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated future cash receipts through the
expected life of the financial asset to that asset’s net carrying amount on initial recognition.
Dividend
Dividend income from investments is recognised when the Company’s right to receive payment has
been established (provided that it is probable that the economic benefits will flow to the Company
and the amount of income can be measured reliably).
4.7 Cost of Revenue
Cost of Real estate projects Cost of project, includes cost of land (including cost of development
rights/ land under agreements to purchase), liasoning costs, estimated internal development costs,
external development charges, borrowing costs, overheads, construction costs and development/
construction materials, which is charged to the statement of profit and loss based on the revenue
recognised as explained in policy under revenue recognition, in consonance with the concept of
matching costs and revenue. Final adjustment is made on completion of the specific project.
4.8 Borrowing cost
Borrowing costs directly attributable to the acquisition and/or construction of a qualifying asset
are capitalized during the period of time that is necessary to complete and prepare the asset for
its intended use or sale. A qualifying asset is one that necessarily takes substantial period of time
to get ready for its intended use. All other borrowing costs are charged to the statement of profit
and loss as incurred.
4.9 Investments in equity instruments of subsidiaries, limited liability Partnership, joint ventures
and associates
Investments in equity instruments of subsidiaries, limited liability partnership, joint ventures and
associates are stated at cost as per Ind AS 27 ‘Separate Financial Statements’
4.10 Inventories:
Inventories comprise of Land and development rights, Construction materials, Work-in-progress,
completed unsold flats/units. These are valued at lower of the cost and net realisable value.
costs of completion (wherever applicable) and estimated costs necessary to make the sale.
4.11 Impairment of non - financial assets
The carrying amounts of the Company’s property, plant & equipment and intangible assets are
reviewed at each reporting period to determine whether there is any indication of impairment. If
any such indication exists, the asset’s recoverable amounts are estimated in order to determine
the extent of impairment loss, if any. An impairment loss is recognised whenever the carrying
amount of an asset exceeds its recoverable amount. The impairment loss, if any, is recognised in
the statement of profit and loss in the period in which impairment takes place.
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.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to
the revised estimate of its recoverable amount, however subject to the increased carrying amount
not exceeding the carrying amount that would have been determined (net of amortisation or
depreciation) had no impairment loss been recognised for the asset in prior accounting periods. A
reversal of an impairment loss is recognised immediately in profit or loss.
4.12 Employee benefits4.12.1 Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled
wholly within 12 months after the end of the period in which the employees render the related
service are recognised in respect of employees’ services up to the end of the reporting period and
are measured at the amounts expected to be paid when the liabilities are settled.
4.12.2 Post-employment obligations
The Company operates the following post-employment schemes:
(a) defined benefit plan such as gratuity; and
(b) defined contribution plan such as provident fund.
Gratuity obligations:
The liability or asset 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 plan assets. The defined benefit obligation is calculated annually by actuaries using the
projected unit credit method.
The present value of the defined benefit obligation denominated in INR 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 by 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 employee benefit
expense 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.
Defined contribution plan
The Company pays provident fund contributions to publicly administered provident funds as per
local regulations. The Company has no further payment obligations once the contributions have
been paid. The contributions are accounted for as defined contribution plans and the contributions
are recognised as employee benefit expense when they are due. Prepaid contributions are
recognised as an asset to the extent that a cash refund or a reduction in the future payments is
available.
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