2.2 Significant accountingpoHctes
a) (i) Property plant and equipment
Recognition and measurement
Items* of property, plant and equipment, other than freehold land we measured at cost less accumulated depreciation
and any accumulated impairment losses.
Freehold land is earned at cost and is not depreciated. The cost of un item of property, plant und equipment
comprises its purchase price, including import duties and non -refundable purchase taxes, (after deducting trade
discounts and rebates), any directly attributable costs of bringing the asset to its working condition for its intended
use and estimated costs of dismantling and removing the item and restoring the item and restoring the site on which
it is located.
If significant parts of on item of,property, plain and equipment have different useful lives, then they ore accounted
for a^ separate items (major components) of property, plant and equipment.
Any gain or loss on derecognition of an item of properly, plant and equipment is included in statement of prolit and
loss when the item is derecognized
Subsequent costs are included in the assets carrying amount or recognized as a separate asset, as appropriate onl> if
it is probable that the future economic benefits associated with the item will flow to the Company and that the cost
of the item can he reliably measured The carrying amount of any component accounted for as n separate asset is
derecognized when replaced. All other repair and maintenance arc charged to statement of protit and loss during the
reporting year in which they arc incurred.
Depreciation;
Depreciation on property, plant and equipment, i? provided under the written down value method in the manner
prescribed under Schedule II of The Act
Depreciation methods, useful lives and residual values arc reviewed at each reporting date and adjusted if
appropriate.
(II) 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 arc 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 project.** if the recognition criteria are met. When significant purl> of the investment property arc
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 l.o.ss us incurred
b) Impairment or noivfinancial assets
The Company's non-financial assets* other than inventories and deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment If any such indication exists, then the asset’s
recoverable amount i> estimated
The recoverable amount of an individual asset tor where applicable, that of cash generating unit (CGU) to which thee
asset belongs) is the higher of its value in use and its fair value less costs to sell Value in use is based on the
estimated future cash Hows, 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 tor CGU).
An impairment loss i% recognised it the currying amount of an asset or CGU exceeds its estimated recoverable
amount Impairment losses are recognised in the statement of profit and loss.
An impairment loss in respect of goodwill is not subsequently reversed. In respect of other assets for which
impairment hiss has been recognised in prior periods, the Company rev lews at each reporting date whether there is
any indication that the loss has decreased or uu longer exists. An impairment loss is reversed if there has been a
change in the estimates used to determine the recoverable amount.. Such a reversal is made only to the extent that
the asset’s currying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been recognised,
c) Recognition Of Revenue
Revenue from contracts with customers is recognised when control of the goods or services are transferred 10 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 ts measured based on the transaction price, which i> the consideration, adtusted
for discount# and other credits, if any, as specified in the contract with the customer. The Company presents revenue
from contracts with customers net of indirect tuxes in its statement of profit and loss
The Company considers whether there are other promises in the contract that are separate performance obligation#
to which a portion of The transaction price needs to he allocated. In determining the transaction price, the Company
considers the effects of \ {triable consideration, the existence of significant financing components, non cash
consideration, and consideration payable to the customer (if any)
a. Value of Contract completed is accounted as sales/income on raising of invoices on the basis of \ .due of works
completed as certified by the architects
b. In the case of sales of Apartments under construction by the company of its own;
i. Value of sales of undivided share af title and interest in the land are accounted on execution of the agreement to
sell
li The values receivable towards the construction of the apartments under the construction agreement arc accounted
on the basis of the proportionate value determined and invoiced on the basis of certificate of the \ nine of the works
completed
in. The proportionate cost of construction apportioned to the apartments not yet sold its at the year-end are reckoned
as work in progress at cost.
c. In ease of sale of Apartments under construct ion by the company under joint development agreements:
i. Value of sale of company's share of undivided ‘•hare of title and intereM in land in eases where the agreement to
sell is executed :md the values receivables towards the construction of the Apartments under the construction
agreements arc accounted on the basis of the proportionate sale value realizable on total sale of company's share in
the built up area in the same ratio us the total cost incurred would bear to the total estimated cost of construction of
the project.
ii. The proportionate cost of the units in respect of which the agreement to sell «s not vet executed are reckoned us
work in progress at cost.
d. The percentage of completion of the various projects carried by the Company is ranging from iu 98%. And
accordingly, the revenues arc recognized for these projects. The balance work will be completed in the coming
years.
c. Ln respect of Sale of Railway Sleeper
i. Sales are accounted at tendered price on dispatch of Railways Sleepers
ii The balance of the escalation w ill be accounted cm availability of the latest applicable rates and as and when the
company makes claims.
f All other Sales revenues are accounted on accrual basis.
g. All incomes, to the extent they are ascertained, ate accounted on accrual basis
h. Incomes which ;ire not ascertained and quantum whereof cannot be determined ate accounted in the year in which
the some arc ascertained and determined or received, whichever »s earlier
d) Expenditure Recognition
1. Purchases are accounted at cost on accrual basis excluding input tax credit, if any, available thereon.
2. Liabilities in respect of all expenditure are accounted on accrual basis.
3. The liability in respect of any other expenditure which ore not easily ascertainable arc accounted in the year in
which such liabilities are either ascertained or actually paid whichever is earlier.
4. The liability in respect of levies payable in respect of the escalation in price on sale of Railway Sleepers are
accounted ns and when the quantum of the escalation in price i- finally determined by the Railways
5. Liability in respect of gratuity and leave encashment payable to employee's on retirement is estimated and
provided for iu the accounts on the basis of the liability on the company as at the last day of the accounting period
e) Inventory Valuation
a. Work-in-progress of Mousing projects are valued at cost as staled in 2.2 (c) (b) (iii) and 2.2 (e) (c) (ii) subpnra
b. Land & repurchased Hats held in stuck are valued at cost.
c. Raw Materials of Railway Sleeper Project axe valued at cost; and
d. Finished products and work'- in progress at railway sleeper project are valued at cost or net realizable value
whichever is lower.
f) Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity anil a financial liability or
equity instrument of another entity. Financial instruments also include derivative contracts such ns call options to
buy nut stake in subsidiary.
g. I Financial assets
Initial recognition and measurement
Financial assets are initially recognized when the Company becomes a puny to the contractual provisions of the
instrument Ml financial assets other than those measured subsequently at fair value through profit and loss, arc
recognized initially at lair value plus transaction costs that are attributable to the acquisition of the financial asset.
Subsequentneasurement
For Ihc purpose of subsequent measurement, financial assets hit classified in four categories:
• Amortized cost.
• Fair value through profit (FVTPL)
• fair value through other comprehensive income (FVTOCI)
on the hosi* of its business model I'oi managing the financial assets ;tnd the contractual cash flow, characteristics of
the rinancinl asset.
Amortized cost:
A financial instrument is measured at the unionized cost if both the following conditions are met:
The asset is held wilhin o business model whose objective is lo hold assets for collecting contractual cash Hows, and
cuatructuui terms of the asset give rise on specified dates to cash flows liul are solely payments of principal and
interest (SPP1) on the principal amount outstanding
After initial measurement. Mich financial assets are .subsequently measured at amortized cost using the effective
interest rule (I IK I method.
Fair value through profit and loss('FVTPL’):
Ail financial assets that do not meet the criteria for amortised cost or fair value through other comprehensive income
are measured at fair value through profit or loss with nil changes recognized in the statement of profit and loss.
Interest income (basis EIR method), from financial assets at fuir value through profit or loss is recognised in the
statement of profit and lo*s within finance income/ finance costs separately from the other gains- losses arising from
changes in the fair Value.
Derivative financial instruments (call option over shares of subsidiaries) are classified as financial instruments at
fair value through profit or loss Such derivative financial instruments arc initially recognised at fair value
They arc Subsequently rc -measured ul their fair value, with changes in fail value being recognised in the statement
of profit and loss.
Fair valuolhrough Other ConiprohensivdncomeCFVOCn
Financial assets are measured at FVOC1 if both the follow ing conditions-arc met
Hie asset is held within a business model whose objective is achieved by both
- collecting contractual cash flows and selling financial assets and
- contractual term* of the asset give rise on specified dates to cash flows that are SIMM on the principal amount
outstanding.
Alter initial measurement, these assets: are subsequently mauiunfd at fair value. Dividends. Interest income under
effective interest method, foreign exchange gains and losses and impairment losses are recognized in the Statement
of Profit and Loss. Other net gums and losses arc recognized in oilier comprcbensiv c Income
Derecognition:
A financial asset (or. where applicable, a pan of a financial asset or a pan of a group of similar financial assets) is
primarily derecognized | i.e. removed from the Company's balance sheet) when
The contractual rights to receive cash flows from the financial asset have expired, or
The Company lias transferred its rights to receive cash flow - from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to .1 third party under a 'pass-through’ arrangement: and either
- (a) flic Company lias transferred substantially oil the risks and rewards of the asset or
- (b) the Company has neither transferred nor retained substantially jll the risks and rewards of flic asset, but lias
transferred control uf the asset.
On de-recognition, any gains or losses mi alt equity instruments (measured at FVTPL) and debt instruments (other
than debt instruments measured At FVOCT) are recognized in Ihc Statement of Profit and I oss. Gains and losses in
respect of debt instruments measured at FVOCI and thill are accumulated in OCI are reclassified to profit or loss on
de-recognition
Impairment of financial assets
In accordance with Ind -AS 109. the Company applies Expected Credit Loss ("ECL") model for measurement and
recognition of impairment loss on the financial assets measured at amortized cost and debt instruments measured at
FVOCI.
Loss allowances on trade receivables uic measured following the ‘simplified uppioaeli* at an amount equal to the
lifetime ECL at each reporting dale In respect of other financial assets, the loss allowance is measured at 12 month
ECL only i I there is no significant deterioration in the credit risk since initial recognition of the asset or asset is
determined to have a low credit risk at the reporting date.
g.2 Financial liabilities
Initial recognition and measurement
financial liabilities arc initially recognized when the Company becomes n party to the contractual pnn ivions of the
instrument
Financial liability is initially measured at fair value plus, for an item not at fair value dirough profit and loss,
transaction costs that aa* directly attributable to its acquisition or issue.
Subsequentmeasurement
Subsequent measurement i> determined with reference to the classification of die respective iiiiiinci.il Uahilitic-.
FHinficia.!. LlO.hii ificsLtiEi.iiir Value jlirongh Profit or Lq&lFVITL j;
A financial liability is classified as Fair Value through Profit or I .oss |FV fPIj if it is classified as held -for trading
or is designated a* such on initial recognition Financial liabilities at FVTPI are measured at fair value and changes
therein, including any interest expense, are recognized in the Statement of Profit and Loss.
financial Liabilities at amortized cost:
Aftei initial recognition, financial liabilities other than those which arc classified as FVTPL are subsequently
measured at amortized cost using the effective interest rate method.
Amortized cost is calculated by taking into account any discount or premium and fees or costs that arc ui integral
part of the It IR I he amortization done using the FIR method is included as finance costs in the Statement of Profit
and Loss
Derecognition
A financial liability is derecognized 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 arc substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective currying
amounts is recognized in the statement of profit or loss.
Derivative financial instruments
Derivative financial instruments arc initially recognised at fair value on the date on which a derivative contract is
entered into and arc subsequently re-measured at fair value through profit or loss account Derivatives arc carried as
financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Offsetting of financial instruments
Financial asset* and financial liabilities arc offset and the net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognized amounts and there is an intention to settle on u net basis, or
to realize the assets and settle the liabilities .simultaneously.
h) Investmentsln subsidiaries.associales and joint ventures:
No Investment held during the financin'] year by the company.
I) CashandCashEquIvalerits
Cash ami cash equivalents in the balance sheet and cash flow statement includes cash at bank and on hnrid. deposits
held at call with banks, with original maturities less than three months which are readily convertible into cash and
which arc subject to insignificant nsk of changes in value.
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