2 Significant accounting policies
(a) Basis of preparation
The Standalone Financial Statements have been prepared to comply in all material respects with the Indian Accounting Standards
notified under Section 133 of Companies Act, 2013 (the Act) read with Companies Indian Accounting Standards (Ind AS) Rules,
2015 and other relevant provisions of the Act and rules framed thereunder.
The standalone financial statements have been prepared under the historical cost convention and on accrual basis, except for
certain financial assets and liabilities measured at fair value as explained in accounting policies below.
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 as if market participants would take those characteristics into account when pricing the asset or liability at the
measurement date.
The financial statements are presented in Indian National Rupee (INR) lakhs, except when otherwise indicated.
(b) Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle (twelve
months) and other criteria set out in Schedule III to the Act.
(c) Property, plant and equipment
i) All property, plant and equipment are stated at original cost of acquisition/installation (net of input tax credits availed) less
accumulated depreciation and impairment loss, if any, except freehold land which is carried at fair market value. Cost includes
cost of acquisition, construction and installation, taxes (other than input tax credit availed), duties, freight and other
incidental expenses that are directly attributable to bringing the asset to its working condition for the intended use and
estimated cost for decommissioning of an asset
ii) Subsequent expenditure is capitalised only if it is probable that future economic benefit associated with the
expenditure will flow to the Company.
iii) Property, plant and equipment is derecognised from financial statements, either on disposal or when no future economic
benefits are expected from its use or 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 the statement of profit and
loss in the period in which the property, plant and equipment is derecognised.
iv) Depreciation on property, plant and equipment is provided on “Straight Line Method" based on the useful life specified in
Schedule II of the Companies Act, 2013.
(d) Investment Property
i) Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the
ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Upon initial
recognition, an investment property is measured initially at its cost, including related transaction costs and where applicable
borrowing costs. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation
and accumulated impairment losses, if any. All other repairs and maintenance costs are expensed when incurred. When part
of an investment property is replaced, the carrying amount of the replaced part is derecognised.
ii) The useful lives have been determined based on technical evaluation done by the management's expert which are as per those
specified by Schedule II to the Companies Act; 2013, in order to reflect the actual usage of the assets.
iii) The fair values of investment property is disclosed in the notes. Fair values is determined by an independent valuer who holds
a recognised and relevant professional qualification and has recent experience in the location and category of the investment
property being valued.
(e) Inventories
Direct expenditure relating to real estate 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 real estate activity.
i) Construction materials and consumables
The construction materials and consumables are valued at lower of cost or net realisable value. The construction materials
and consumables purchased for construction work issued to construction are treated as consumed.Cost is determined based
on FIFO basis.
ii) Construction work in progress
Represents cost incurred in respect of unsold area (including land) of the real estate development projects or cost incurred on
projects where the revenue is yet to be recognized. The construction work in progress is valued at lower of cost or net
realisable value.
iii) Finished stock of completed projects
Finished stock of completed projects and stock in trade of units is valued at lower of cost or net realisable value.
(f) Fair value measurement
The Company's accounting policies and disclosures require the measurement of fair values for financial instruments.
The Company has an established control framework with respect to the measurement of fair values. The management regularly
reviews significant unobservable inputs and valuation adjustments.
All financial assets and financial liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
• Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
• Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable, or
• Level 3-Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the
change has occurred.
(g) Equity investments in subsidiary
Investments in subsidiary are accounted at cost in accordance with Ind AS 27 “Separate financial statements".
(h) Financial instruments
I Financial assets
I) Classification
The Company classifies its financial assets either at fair value through profit or loss (FVTPL), fair value through other
comprehensive income (FVTOCI) or at amortised cost, based on the Group's business model for managing the financial
assets and their contractual cash flows.
ii) Initial recognition and measurement
The Comapany at initial recognition measures a financial asset at its fair value plus transaction costs that are directly
attributable to it's acquisition. However, transaction costs relating to financial assets designated at fair value through profit
or loss (FVTPL) are expensed in the statement of profit and loss for the year.
iii) Subsequent measurement
For the purpose of subsequent measurement, the financial asset are classified in four categories:
(a) Debt instrument at amortised cost
(b) Debt instrument at fair value through other comprehensive income
(c) Debt instrument at fair value through profit or loss
(d) Equity investments
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 such instruments is recognised in profit or loss when the
asset is derecognised or impaired. Interest income from these financial assets is calculated using the effective interest
rate method and is included under the head "Finance income".
• Fair value through other comprehensive income (FVTOCI):
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash
flows represent solely payments of principal and interest, are measured at fair value through other comprehensive
income (FVTOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment
gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the statement of profit
and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified
from equity to statement of profit and loss. Interest income from these financial assets is calculated using the effective
interest rate method and is included under the head ''Finance income”.
• Fair value through profit or loss:
Assets that do not meet the criteria for amortised cost or fair value through other comprehensive income (FVTOCI) are
measured at fair value through profit or loss. Gain and losses on fair value of such instruments are recognised in
statement of profit and loss. Interest income from these financial assets is included in other income.
• Equity investments other than investments in subsidiaries, joint ventures and associates
The Comapny subsequently measures all equity investments other than investments in subsidiaries, joint ventures and
associates at fair value. Where the Group's management has elected to present fair value gains and losses on equity
investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to the
statement of profit and loss in the event of de-recognition. Dividends from such investments are recognised in the
statement of profit and loss as other income when the Group's right to receive payments is established. 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 FVTOCI are not reported separately from
other changes in fair value.
iv) 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
v) De-recognition of financial assets
A financial asset is derecognised only when:
• The rights to receive cash flows from the financial asset have expired
• The Company has transferred substantially all the risks and rewards of the financial asset or
• The Company has neither transferred nor retained substantially all the risks and rewards of the financial asset, but has
transferred control of the financial asset
II Financial liabilities
(I) Classification
The Company classifies all financial liabilities at amortised cost or fair value through profit or loss.
(ii) Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, deposits or as payables, as appropriate. All financial liabilities are recognised initially at fair value and, in the
case of loans and borrowings and payables, net of directly attributable transaction costs.
(iii) Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
a. Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for
trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading
are recognised in the profit or loss.
b. Loans, borrowings and deposits
After initial recognition, loans, borrowings and deposits are subsequently measured at amortised cost using the effective
interest rate (EIR) method. Gains and losses are recognised in the statement of profit and loss when the liabilities are
derecognised as well as through the EIR amortization process. The EIR amortisation is included in project costs in the
statement of profit and loss
c. Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year
which are unpaid. For trade and other payables maturing within one year from the balance sheet date, the carrying
amounts approximate fair value due to the short-term maturity of these instruments.
d. De-recognition of financial liabilities
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or 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.
(i) Cash and cash equivalents
(i) Cash and cash equivalents in the balance sheet comprise cash at bank and on hand and short-term deposit with original
maturity upto three months, which are subject to insignificant risk of changes in value.
(ii) For the purpose of presentation in the statement of cash flows, cash and cash equivalents consists of cash and short- term
deposit, as defined above, net of outstanding bank overdraft as they are considered as an integral part of Group's cash
management.
(j) Revenue recognition
(i) Revenue from real estate development/sale, maintenance services, construction and project management services
Revenue from contracts with customers
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. Revenue and trade receivables are recorded at transaction price, which is
the consideration, adjusted for discounts and other credits, if any, as specified in the contract with customers.
The Company satisfies the performance obligation and recognises revenue over time if one of the following criteria is met: i)
the Customer simultaneously receives and consumes the benefit provided by the Company's performance as the Company
performs; or ii) the Company's performance creates or enhances an asset that the customer controls as the asset is created or
enhanced; or iii) the Company's performance does not create an asset with an alternative use to the Company and the 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 a 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 period over which revenue is recognised is based on entity’s right to payment for performance completed. In determining
whether an entity has right to payment, the entity 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 entity's failure to perform as per the terms of the contract.
The Company bills to customers for construction contracts as per agreed terms. The Company adjusts the transaction price for
the effects of the significant financing component included in the contract price in the case of contracts involving the sale of
property under development, where the Company offers deferred payment schemes to its customers.
Revenue from construction services being cost plus contracts is recognised over time and is determined with reference to the
extent performance obligations have been satisfied. The amount of transaction price allocated to the performance obligations
satisfied represents the recoverable costs incurred during the period plus the margin as agreed with the customer.
The revenue recognition requires forecasts to be made of the 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. 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 an Revenue
recognised in excess of invoicing is classified as contract asset while invoicing in excess of revenue recognised (billing in
excess of contract revenue), deferred revenue i.e. where revenue is being recognised post completion of the project and
advance from customers are classified as contract liabilities.
(ii) Revenue from sale of goods
Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the
buyer, recovery of the consideration is probable, the associated cost can be estimated reliably, there is no continuing effective
control or managerial involvement with the goods, and the amount of revenue can be measured reliably. Revenue from sale of
goods is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms
of payment and excluding taxes or duties collected on behalf of the government.
(iii) Dividend income
Dividend income is recognized when the Company's right to receive the dividend is established.
(iv) Interest income
Interest income for all debt instruments, measured at amortised cost or fair value through other comprehensive income, is
recognised using the effective interest rate method.
(iv) Rentincome
Rental income is recognised on a time proportion basis as per the contractual obligations agreed with the respective tenant.
k) Foreign currency transactions
(i) Foreign currency transactions are recorded in the reporting currency (INR) by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign currency on the date of the transaction.
(ii) All monetary items denominated in foreign currency are converted into (INR) at the year-end exchange rate. The exchange
differences arising on such conversion and on settlement of the transactions are recognised in the statement of profit and loss.
Non-monetary items in terms of historical cost denominated in a foreign currency are reported using the exchange rate
prevailing on the date of the transaction.
(l) Income taxes
The income tax expenses comprises current and deferred tax. It is recognised in the statement of profit and loss except to the
extent that it relates to items recognised directly in equity or in other comprehensive income.
Current tax:
The current tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period.
Deferred tax:
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for financial
reporting purposes and the amount used for taxation purposes.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent
that is probable that future taxable profits will be available against which they can be used. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised, such
reductions are reversed when the probability of future taxable profit improves.
Unrecognised deferred tax assets are measured at each reporting date and recognised to the extent it has become probable that
future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, using tax
rates enacted or substantively enacted at the reporting date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Company expects
at the reporting date to recover or settle the carrying amount of its assets and liabilities.
Minimum Alternate Tax (MAT) credit is recognised as deferred tax asset only when and to the extent there is convincing evidence
that the Company will pay normal income tax during the specified period. Such asset is reviewed at each balance sheet date and the
carrying amount of MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the
Company will pay normal income tax during the specified period.
(m) Employee benefits
(i) Short-term benefits
Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss for
the year in which the related services are rendered.
(ii) Defined contribution plans
Payments to defined contribution retirement benefit schemes are charged to the statement of profit and loss of the year when
the contribution to the respective funds are due. There are no other obligations other than the contribution payable to the
fund.
(iii) Defined benefit plans
Defined benefits plans are recognized as an expense in the consolidated statement of profit and loss for the year in which the
employee has rendered services. The expense is recognized at the present value of the amount payable determined using
actuarial valuation techniques. The cost of providing benefits under the defined benefit plan is determined using the
projected unit credit method.
Re-measurement of the net defined benefit liability, which comprises of actuarial gains and losses, are recognised in other
comprehensive income in the period in which they occur.
(n) Impairment of non-financial assets
The carrying amounts of non financial assets are reviewed at each balance sheet date if there is any indication of impairment based
on internal/external factors. An asset is treated as impaired when the carrying amount exceeds its recoverable value. The
recoverable amount is the greater of an asset's or cash generating unit's, net selling price and value in use. In assessing value in use,
the estimated future cash flows are discounted to the present value using a pre-tax discount rate that reflects current market
assessment of the time value of money and risks specific to the assets. An impairment loss is charged to the statement of profit and
loss in the year in which an asset is identified as impaired. After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life. The impairment loss recognized in prior accounting periods is reversed by
crediting the statement of profit and loss if there has been a change in the estimate of recoverable amount.
(o) Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the
period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive
potential equity shares except when the results would be anti-dilutive.
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