1.2 MATERIAL ACCOUNTING POLICIES:
1.2.1 BASIS OF PREPARATION AND PRESENTATION
The Standalone Financial Statements of the Company have been prepared in accordance with Indian Accounting
Standards (‘Ind AS’) notified under section 133 of the Companies Act 2013, read together with the Companies
(Indian Accounting Standards) Rules, 2015 and amendments if any.
The Standalone Financial Statements have been prepared on a historical cost basis, except for certain financial
instruments which are measured at fair values at the end of each reporting period, as explained in the accounting
policies below.
The Standalone Financial Statements are presented in Indian Rupee (“INR”) and all values are presented in INR
Lakh and rounded off to the extent of 2 decimals, except when otherwise indicated.
1.2.2 CURRENT AND NON-CURRENT CLASSIFICATION
The Company presents assets and liabilities in the Standalone Balance Sheet based on current/ non-current
classification.
An asset is treated as current when it is:
i) Expected to be realised or intended to be sold or consumed in normal operating cycle;
ii) Held primarily for the purpose of trading;
iii) Expected to be realised within twelve months after the reporting period, or
iv) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
i) It is expected to be settled in normal operating cycle;
ii) It is held primarily for the purpose of trading;
iii) It is due to be settled within twelve months after the reporting period, or
iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities respectively.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and
cash equivalents.
The operating cycle of the Company’s real estate operations varies from project to project depending on the size
of the project, type of development, project complexities and related approvals. Accordingly, project related assets
and liabilities are classified into current and non-current based on the operating cycle of the project. All other assets
and liabilities have been classified into current and non-current based on a period of twelve months.
1.2.3PROPERTY, PLANT AND EQUIPMENT
Recognition and measurement
All property, plant and equipment except freehold land are stated at historical cost less accumulated depreciation.
Historical cost includes expenditure that is directly attributable to the acquisitions of the items. Cost includes freight,
duties, taxes, borrowing cost and incidental expenses related to the acquisition and installation of the asset.
Freehold Land, if any is measured at fair value. Valuations are performed with sufficient frequency to ensure that
the carrying value of revalued asset does not defer materially from its fair value.
Revaluation surplus is recorded in Other Comprehensive Income and credited to the Revaluation reserve in Other
Equity.
Subsequent costs
Subsequent expenditure, including cost of the items which can be reliably estimated, is capitalised only when it
is probable that the future economic benefits of the expenditure will flow to the Company. All other repairs and
maintenance are charged to the Ind-AS Statement of Profit and Loss during the reporting period in which they are
incurred.
Derecognition
The carrying amount of an item of Property, Plant and Equipment is derecognized on disposal or when no future
economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an
item of Property, Plant and Equipment is measured as the difference between the net disposal proceeds and the
carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized.
Capital work in progress
Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work in progress.
Depreciation
Depreciation is calculated on a written down value basis over the estimated useful lives of the assets as specified in
Schedule II of Companies Act, 2013. Management believes that such estimated useful lives are realistic and reflect
fair approximation of the period over which the assets are likely to be used.
Depreciation on addition to property, plant and equipment is provided on pro-rata basis from the date of acquisition.
Depreciation on assets sold during the year is charged to the Statement of Profit and Loss up to the month
preceding the month of sale.
Depreciation methods, useful lives and residual values are reviewed periodically at each financial year end and
adjusted prospectively, as appropriate.
1.2.4INTANGIBLE ASSETS
Recognition and initial measurement
Intangible assets are stated at cost less accumulated amortisation and impairment losses, if any. Cost comprises
the acquisition price, development cost and any attributable/allocable incidental cost of bringing the asset to its
working condition for its intended use.
Subsequent measurement (amortisation)
All intangible assets with definite useful life are amortized on a straight-line basis over the estimated useful lives.
The carrying amount of intangible asset is reviewed periodically for impairment based on internal/external factors.
An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is the greater of the asset’s net selling price and value in use.
Gain or losses arising from derecognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss
when the asset is derecognised.
1.2.5INVENTORIES
Construction materials and consumables
The construction materials and consumables are valued at cost. The construction materials and consumables
purchased for construction work issued to construction are treated as consumed.
Construction work in progress
The construction work in progress is valued at cost. Cost includes cost of land, development rights, rates and taxes,
construction costs, borrowing costs, other direct expenditure, allocated overheads and other incidental expenses.
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.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost of
completion and the estimated cost necessary to make the sale.
1.2.6REVENUE RECOGNITION
Revenue from real estate projects
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 (net of transaction costs) 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 would not be able to reasonably measure its progress towards complete satisfaction of
a performance obligation if it lacks reliable information that would be required to apply an appropriate method of
measuring progress. In those circumstances, the Company recognises revenue only to the extent of cost incurred
until it can reasonably measure outcome 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 stage of completion of the project
assessed on the basis proportionate cost incurred as compared to the total estimated cost of the project along with
the project architect’s stage of completion certification to assess the stage of project.
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.
Other Income
Other Income includes Interest income from Fixed deposits with banks recognised on accrual basis and as certified
by the respective banks.
Lease income is recognised in the Statement of Profit and Loss on straight line basis over the non-cancellable
lease term, unless there is another systematic basis which is more representative of the time pattern of the lease.
Revenue from lease rentals is disclosed net of indirect taxes, if any.
Other income also includes share in the profits/(loss) after tax of the partnership firms as per the agreed profit¬
sharing ratio in which the Company holds stake as a partner.
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