3. Summary of significant accounting policies
a. 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 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.
An item of property, plant and equipment and any significant part initially recognized is de-recognized
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 derecognized.
b. 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 amortization period and the amortization method for an intangible asset with a finite useful life
are reviewed at least at the end of each reporting period
c. Revenue Recognition-
Revenue is recognized as follows:
I. The Company recognises revenue, on execution of agreement or letter of allotment and when
control of the goods or services are transferred to the customer, at an amount that reflects the
consideration (i.e. the transaction price) to which the Company is expected to be entitled in
exchange for those goods or services excluding any amount received on behalf of third party
(such as indirect taxes). An asset created by the Company's performance does not have an
alternate use and as per the terms of the contract, the Company has an enforceable right to
payment for performance completed till date. Hence the Company transfers control of a good or
service over time and, therefore, satisfies a performance obligation and recognises revenue over
time. The Company recognises revenue at the transaction price which is determined on the basis
of agreement or letter of allotment entered into with the customer. The Company recognises
revenue for performance obligation satisfied over time only if it can reasonably measure its
progress towards complete satisfaction of the performance obligation. The Company uses cost
based input method for measuring progress for performance obligation satisfied over time.
Under this method, the Company recognises revenue in proportion to the actual project cost
incurred (excluding land cost) as against the total estimated project cost (excluding land cost).
The management reviews and revises its measure of progress periodically and are considered
as change in estimates and accordingly, the effect of such changes in estimates is recognised
prospectively in the period in which such changes are determined.
A 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.
A contract liability is the obligation to transfer goods or services to a customer for which the Company
has received consideration (or an amount of consideration is due) from the customer. If a customer
pays consideration before the Company transfers goods or services to the customer, a contract liability
is recognised when the payment is made or the payment is due (whichever is earlier). Contract
liabilities are recognised as revenue when the Company performs under the contract. A receivable
represents the Company's right to an amount of consideration that is unconditional (i.e., only the
passage of time is required before payment of the consideration is due).
II. Claims, interest and transfer fees from customers are recognized on acceptance of the same.
III. Income from interest is accounted for on time proportion basis taking into account the amount
outstanding and the applicable rate of interest.
IV. Revenue from operation includes various charges recovered from the customers which is recognized
on accrual basis having regard to timing and nature of service provided.
d. 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.
e. Depreciation and amortization
Depreciation on property, plant and equipment is calculated using thewritten down value method
to allocate their cost, net of their residual values, over the useful lives of assets estimated by the
management and as given in schedule II of The Companies Act, 2013 except, life of furniture and
fixtures has been estimated as 15 years against 10 years as per Schedule II of the Companies Act,
2013. Depreciation for assets purchased / sold during a period is proportionately charged.
Software 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
f. 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 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 - Plots: Valued at lower of cost and net realizable value
g. Retirement Benefits
a. Short Term employee benefit
The employees of the company are entitled to compensate absences which are non-accumulating
in nature. Expenses of such compensated absences are recognized in the period in which such
absences occur.
b. Long Term and Post-employment benefits
a) The employees' gratuity fund scheme managed by Life Insurance Corporation ofIndia is a defined benefit
plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit
Credit Method.
b) Retirement benefits in the form of Provident Fund and Superannuation/ Pension schemes are charged to
the Profit & Loss Statement in the year when the contributions to the respective funds are due.
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
recognized 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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