Note 2.2 Significant accounting policies

(a) Revenue from Contracts with Customers

I. Revenue from contracts with customers

Revenue from contracts with customers is recognised when control of the goods or services are
transferred to 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 is measured based on the transaction price,
which is the consideration, adjusted for discounts and other credits, if any, as specified in the contract
with the customer. The Company presents revenue from contracts with customers net of indirect taxes
in its statement of profit and loss.

The Company considers whether there are other promises in the contract that are separate performance
obligations to which a portion of the transaction price needs to be allocated. In determining the transaction
price, the Company considers the effects of variable consideration, the existence of significant financing
components, non-cash consideration, and consideration payable to the customer (if any).

The Company has applied five step model as per Ind AS 115 ‘Revenue from contracts with customers’
to recognise revenue in the standalone financial statements. The Company satisfies a performance
obligation and recognises revenue over time, if one of the following criteria is met:

a) The Customer simultaneously receives and consumes the benefits provided by the Company’s
performance as the Company performs; or

b) The Company’s performance creates or enhances an asset that the customer controls as the asset is
created or enhanced; or

c) 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 of the above conditions are not met, revenue is recognised at the
point in time at which the performance obligation is satisfied.

Revenue is recognised either at point of time or over a period of time based on various conditions as
included in the contracts with customers.

The billing schedules agreed with customers include periodic performance-based billing and/or
milestone-based progress billings. Revenues in excess of billing are classified as unbilled revenue,
while billing in excess of revenues is classified as contract liabilities (which we refer to as deferred
revenues).

i) Recognition of revenue from sale of real estate property

Revenue from real estate development of residential unit is recognised at the point in time, when
the control of the asset is transferred to the customer, which generally coincides with transfer of
physical possession of the residential unit to the customer ie., handover/deemed handover of the
residential units. Deemed handover of the residential units is considered upon intimation to the
customers about receipt of occupancy certificate and receipt of substantial sale consideration.

Revenue consists of sale of undivided share of land and constructed area to the customer, which have
been identified by the Company as a single performance obligation, as they are highly interrelated/
interdependent.

For contracts involving sale of real estate unit, the Company receives the consideration in
accordance with the terms of the contract in proportion of the percentage of completion of such real
estate project and represents payments made by customers to secure performance obligation of the
Company under the contract enforceable by customers.

Such consideration is received and utilised for specific real estate projects in accordance with
the requirements of the Real Estate (Regulation and Development) Act, 2016. Consequently, the
Company has concluded that such contracts with customers do not involve any financing element
since the same arises for reasons explained above, which is other than for provision of finance to/
from the customer.

ii) Recognition of revenue from contractual projects

Revenue from contractual project is recognised over time, using an input method with reference to
the stage of completion of the contract activity at the end of the reporting period, measured based on
the proportion of contract costs incurred for work performed to date relative to the estimated total
contract costs.

The Company recognises revenue only when it can reasonably measure its progress in satisfying
the performance obligation. Until such time, the Company recognises revenue to the extent of
cost incurred, provided the Company expects to recover the costs incurred towards satisfying the
performance obligation.

When it is probable that total contract costs will exceed total contract revenue, the expected loss is
recognised as an expense immediately when such probability is determined.

iii) Recognition of revenue from sale of land and development rights

Revenue from sale of land and development rights is recognised upon transfer of all significant
risks and rewards of ownership of such real estate/property, as per the terms of the contracts entered
into with buyers, which generally coincides with the firming of the sales contracts/agreements.
Revenue from sale of land and development rights is only recognised when transfer of legal title to
the buyer is not a condition precedent for transfer of significant risks and rewards of ownership to
the buyer.

iv) Contract balances

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 unconditional.

Trade 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). 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

v) Cost to obtain a contract

The Company recognises as an asset the incremental costs of obtaining a contract with a customer
if the Company expects to recover those costs. The Company incurs costs such as sales commission
when it enters into a new contract, which are directly related to winning the contract. The asset
recognised is amortised on a systematic basis that is consistent with the transfer to the customer of
the goods or services to which the asset relates.

II. Rental income from operating leases

Rental income receivable under operating leases (excluding variable rental income) is recognized in the
statement of profit and loss on a straight-line basis over the term of the lease including lease income on
fair value of refundable security deposits. Rental income under operating leases having variable rental
income is recognized as per the terms of the contract.

III. Dividend income

Revenue is recognised when the shareholders’ or unit holders’ right to receive payment is established,
which is generally when shareholder approve the dividend.

IV. Interest income

Interest income, including income arising from other financial instruments, is recognised using the
effective interest rate method.

V. Insurance

Claims are accounted for based on claims admitted/expected to be admitted and to the extent that there
is no uncertainty in receiving the Claims

(b) Borrowing costs

Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of
funds.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalized/inventorised as part
of the cost of the respective asset. All other borrowing costs are charged to statement of profit and loss.

The Company treats as part of general borrowings any borrowing originally made to develop a qualifying
asset when substantially all of the activities necessary to prepare that asset for its intended use or sale are
complete.

(c) Inventories

Inventories are valued at the lower of cost and net realisable value. Cost is determined based on a weighted
average basis. Net realizable value is the estimated selling price in the ordinary course of business, less
estimated costs of completion and estimated costs necessary to make the sale.

I. Related to real estate and contractual activity

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. Cost
incurred/items purchased specifically for projects are taken as consumed as and when incurred/received.

i. Work-in-progress (Real Estate): Represents cost incurred in respect of projects where the revenue is
yet to be recognised and includes cost of land (including development rights, internal development
costs, external development charges, construction costs, overheads, borrowing cost etc.

ii. Stock of Units/plots in completed real estate project: Valued at lower of cost and net realizable
value: Represents cost incurred in respect of completed real estate projects net of revenue

iii. Building materials: Cost comprises of purchase price and other costs incurred in bringing the
inventories to their present location and conditions.

iv. Land stock: Represents land other than area transferred to work-in-progress at the time of
commencement of construction. It is Valued at lower of cost and net realizable value. Net realizable
value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and estimated costs necessary to make the sale.

(d) Advance paid towards land procurement

Advances paid by the Company to the seller/ intermediary toward outright purchase of land is recognized
as land advance under other assets during the course of obtaining clear and marketable title, free from all
encumbrances and transfer of legal title to the Company, whereupon it is transferred to land stock under
inventories/ capital work in progress. Management is of the view that these advances are given under normal
trade practices and are neither in the nature of loans nor advance in the nature of loans

Foreign currency transactions and balances

i) Initial recognition

Foreign currency transactions are recorded in the functional currency, by applying the exchange rate
between the functional currency and the foreign currency at the date of the transaction.

ii) Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting
date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign
currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which
are measured at fair value or other similar valuation denominated in a foreign currency, are translated
using the exchange rate at the date when such value was determined.

iii) Exchange differences

The Company accounts for exchange differences arising on translation/settlement of foreign currency
monetary items as income or as expense in the period in which they arise.

(e) Property, plant and equipment

i) Recognition and initial measurement

Property, plant and equipment at their initial recognition are stated at their cost of acquisition. Cost of
an item of property, plant and equipment comprises its purchase price, borrowing costs (if capitalization
criteria are met), import duties, non-refundable taxes and directly attributable cost of bringing the asset
to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving
at the purchase price. The Company identifies and determines cost of each component/part of the asset
separately, if the component/part have a cost which is significant to the total cost of the asset and has
useful life that is materially different from that of the remaining asset.

The cost of a self-constructed item of property, plant and equipment comprises the cost of materials,
direct labour, borrowing costs (if capitalization criteria are met) and any other costs directly attributable
to bringing the asset to working condition for its intended use. Advances paid towards the acquisition
of property, plant and equipment outstanding at each balance sheet date is classified as capital advances
under other non-current assets.

ii) Subsequent measurement

Items of property, plant and equipment are measured at cost, less accumulated depreciation and any
accumulated impairment losses, if any. When significant parts of plant and equipment are required to
be replaced at intervals, the Company depreciates them separately based on their specific useful lives.
Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the
plant and equipment as a replacement if the recognition criteria are satisfied.

iii) Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated
with the expenditure will flow to the Company and the cost of the item can be measured reliably. All
other expenses on existing property, plant and equipment, including day-to-day repair and maintenance
expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period
during which such expenses are incurred.

iv) Derecognition

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 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 de-recognized.

(f) Investment property

i) Recognition and initial measurement

Investment property is held either to earn rental income or for capital appreciation or for both. Upon
initial recognition, an investment property is measured at cost, including related transaction costs. The
cost comprises purchase price, cost of replacing parts, borrowing cost, if capitalization criteria are met
and directly attributable cost of bringing the asset to its working condition for the intended use. Any
trade discount and rebates are deducted in arriving at the purchase price.

The cost of a self-constructed item of Investment property comprises the cost of materials, direct labour,
borrowing costs (if capitalization criteria are met) and any other costs directly attributable to bringing
the asset to working condition for its intended use.

ii) Subsequent measurement

Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation
and accumulated impairment losses, if any. When significant parts of the investment property are
required to be replaced at intervals, the Company depreciates them separately based on their specific
useful lives.

iii) Subsequent expenditure

Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated
with the expenditure will flow to the Company and the cost of the item can be measured reliably. All
other repair and maintenance costs are recognised in statement of profit or loss as incurred.

iv) Derecognition

Investment property is derecognised either when control of the same is transferred to the buyer or when
it is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any
gain or loss on disposal of investment property (calculated as the difference between the net proceeds
from disposal and the carrying amount of the item) is recognised in profit or loss.

v) Reclassification from / to investment property

Transfers to (or from) investment property are made only when there is a change in use. Transfers
between investment property, owner-occupied property and inventories do not change the carrying
amount of the property transferred and they do not change the cost of that property for measurement or
disclosure purposes.

vi) Fair value disclosure

Though the Company measures investment property using cost-based measurement, the fair value of
investment property is disclosed in the notes. Fair values are determined based on an annual evaluation
performed by an accredited external independent Valuer.

(g) Depreciation and amortisation

Depreciation commences when the assets are ready for their intended use. Depreciable amount for assets is
the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation is
recognised so as to write off the cost of assets less their residual values over their useful lives, using straight¬
line method as per the useful lives and residual value prescribed in Schedule II to the Act as under.

The Company, based on technical assessment made by technical expert and management estimate,
depreciates certain items of building and plant and equipment over estimated useful lives which are different
from the useful life prescribed in Schedule II to the Companies Act, 2013. Leasehold land is amortized on a
straight-line basis over the balance period of lease. Free hold land is not depreciated and is stated at cost less
impairment loss, if any. The management believes that these estimated useful lives are realistic and reflect
fair approximation of the period over which the assets are likely to be used. The estimated useful lives,
residual value and depreciation/amortisation method are reviewed annually and, if expectations differ from
previous estimates, the change is accounted for as a change in accounting estimate on a prospective basis.

(h) Capital work-in-progress and intangible assets under development

Capital work-in-progress and intangible assets under development represents expenditure incurred in respect
of capital projects/intangible assets under development which are not yet ready for their intended use and are
carried at cost less accumulated impairment loss, if any. Depreciation/amortisation is not provided on capital
work-in-progress and intangible assets under development until construction/installation are complete and
the asset is ready for its intended use

(i) Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if
any. Intangible assets, comprising of software and intellectual property rights are amortized on a straight¬
line basis over a period of 3 years, which is estimated to be the useful life of the asset and assessed for
impairment whenever there is an indication that the intangible asset may be impaired. The amortisation
period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the
end of each reporting period. Gains 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 or Loss when the asset is derecognised.

(j) Lease

The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

i) Right-of-use assets

The Company recognises right-of-use assets at the commencement date of the lease (i.e. the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred and
lease payments made at or before the commencement date less any lease incentives received. Right-of-
use assets are depreciated on a straight-line basis over the lease term. If ownership of the leased asset
transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase
option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are
also subject to impairment. Refer to the accounting policies in note 2.2(p)(ii) on impairment of non¬
financial assets.

ii) Lease liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease payments
that depend on an index or a rate and amounts expected to be paid under residual value guarantees. The
lease payments also include the exercise price of a purchase option reasonably certain to be exercised by
the Company and payments of penalties for terminating the lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are
recognised as expenses in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at
the lease commencement date because the interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities
is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g.
changes to future payments resulting from a change in an index or rate used to determine such lease
payments) or a change in the assessment of an option to purchase the underlying asset.

iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition exemption to its short-term leases (i.e. those
leases that have a lease term of 12 months or less from the commencement date and do not contain a
purchase option). It also applies the lease of low-value assets recognition exemption to leases of assets
that are considered to be low value. Lease payments on short term leases and leases of low value assets
are recognised as expense on a straight-line basis over the lease term.

iv) Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards incidental to
ownership of the asset are classified as operating leases. Assets subject to operating leases are included
under Investment property.

Lease income from operating lease is recognized on a straight-line basis over the term of the relevant
lease including lease income on fair value of refundable security deposits, unless the lease agreement
explicitly states that increase is on account of inflation. Costs, including depreciation, are recognized as
an expense in the statement of profit and loss. Initial direct costs incurred in negotiating and arranging
an operating lease are added to the carrying amount of the leased asset and recognised over the lease
term on the same basis as rental income.

(k) Employees Benefit

Retirement benefits in the form of state-governed Employee Provident Fund, Employee State Insurance,
Employee Pension Fund Schemes and Gratuity are defined contribution schemes (collectively the ‘Schemes’)
are not applicable to the company since there no employees eligible for retirement and other employees’
benefits.

Various workman law not applicable to the company

i. Retirement and other employee benefits

ii. Employee Provident Fund and Employee State Insurance

iii. Compensated absences
Other short-term benefits

Short-term employee benefits comprising employee costs including performance bonus is recognized in the
statement of profit and loss on the basis of the amount paid or payable for the period during which services
are rendered by the employee.