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Accounting Policies of Marathon Nextgen Realty Ltd. Company

Mar 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation of the Financial Statement and
its measurement:

(a) Statement of Compliance:

These Standalone Financial Statements of the Company have
been prepared in accordance with the Indian Accounting
Standards (Ind AS) to comply with the Section 133 of the
Companies Act, 2013 (“the 2013 Act”) read with Rule 3 of
the Companies (Indian Accounting Standards) Rules, 2015
and Companies (Indian Accounting Standards) Amendment
Rules, 2016, and the relevant provisions and amendments, as
applicable. The Standalone Financial Statements have been
prepared on accrual basis under the historical cost convention
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.

These standalone financial statements were authorised for issue
by the Company’s Board of Directors on 24 May 2023.

(b) Functional and presentation currency:

These standalone financial statements are presented in Indian
rupees (INR), which is the Company’s functional currency. All
financial information have been presented in Indian rupees (INR)
and all amounts have been rounded-off to the nearest Lakhs,
unless otherwise stated.

(c) Operating Cycle:

The normal operating cycle in respect of operation relating
to under construction real estate project depends on signing
of agreement, size of the project, phasing of the project, type
of development, project complexities, approvals needed.
Accordingly, project related assets & liabilities have been
classified into current & non-current based on operating cycle of
the respective projects.

(d) Use of estimates and judgments:

The preparation of the Standalone financial statements in
conformity with recognition and measurement principles of

Ind AS requires the Management to make estimates and
assumptions considered in the reported amounts of assets
and liabilities (including contingent liabilities) and the reported
income and expenses during the year. Estimates and underlying
assumptions are reviewed on an ongoing basis. They are
based on the historical experience and other factors, including
expectations of future events that may have financial impact on the
Company and are believed to be prudent and reasonable. Future
results could differ due to these estimates and the differences
between the actual results and the estimates are recognised in
the periods in which the results are known/materialise.

The areas involving critical estimates and judgments are:

(i) Evaluation of Percentage Completion:

Determination of revenues under the percentage of completion
method necessarily involves making estimates, some of which
are of a technical nature, concerning, where relevant, the
percentages of completion, costs to completion, the expected
revenues from the project or activity and the foreseeable losses
to completion. Estimates of project income, as well as project
costs, are reviewed periodically. The effect of changes, if any, to
estimates is recognised in the financial statements for the period
in which such changes are determined.

(ii) Impairment of Non Financial Assets:

The Company assesses at each reporting date whether there
is an indication that an asset may be impaired. If any indication
exists, or when annual impairment testing for an asset is
required, the Company estimates the asset’s recoverable
amount. An asset’s recoverable amount is the higher of an
asset’s fair value less costs of disposal and its value in use.
When the carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down to
its recoverable amount.

(iii) Impairment of Financial Assets:

The impairment provisions for financial assets are based on
assumptions about the risk of default and expected loss rates.
The Company uses judgment in making these assumptions and
selecting the inputs to the impairment calculation, based on
Company’s past history, existing market conditions as well as
forward looking estimates at the end of each reporting period.

(iv) Estimation of useful life of property, plant and equipments:

Useful lives of tangible assets are based on the life prescribed
in Schedule II of the Companies Act, 2013. In cases, where the
useful lives are different from that prescribed in Schedule II, they
are based on technical advice. Assumptions also need to be
made, when the Company assesses, whether an asset may be
capitalised and which components of the cost of the asset may
be capitalised.

(v) Recognition and Measurement of Defined Benefit Obligations:

The obligation arising from defined benefit plan is determined
on the basis of actuarial assumptions. Key actuarial assumptions
include discount rate, expected return on plan assets, trends
in salary escalation and attrition rate. The discount rate is
determined by reference to market yields at the end of the

reporting period on government bonds. The period to maturity
of the underlying bonds correspond to the probable maturity of
the post employment benefit obligations.

(vi) Fair Value Measurement of Financial Instruments:

When the fair values of the financial assets and liabilities recorded
in the Balance Sheet cannot be measured based on the quoted
market prices in active markets, their fair value is measured
using valuation technique. The inputs to these models are taken
from the observable market wherever possible, but where this is
not feasible, a review of judgment is required in establishing fair
values. Any changes in assumptions could affect the fair value
relating of financial instruments.

(vii) Classification of Investment property:

The Company determines whether a property is classified as
investment property or as inventory:

(a) Investment property comprises land and buildings that
are not occupied for use by, or in the operations of, the
Company, nor normally for sale in the ordinary course of
business, but are held primarily to earn rental income and
capital appreciation. These buildings are rented to tenants
and are not intended to be sold in the ordinary course
of business.

(b) Inventory comprises property that is held for sale in the
ordinary course of business. Principally these are properties
that the Company develops and intends to sell before or on
completion of construction.

(viii) Estimation of recognition of deferred tax assets, availability
of future taxable profit against which tax losses carried forward
can be used.

(ix) Estimation on discounting of retention money payable.

(e) Measurement of fair values:

The Company’s accounting policies and disclosures require
the measurement of fair values, for financial instruments:

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 if market participants would take those characteristics into
account when pricing the asset or liability at the measurement
date. Fair value for measurement and/or disclosure purposes in
these financial statements is determined on such a basis, except
leasing transactions that are within the scope of Ind AS 17, and
measurements that have some similarities to fair value but are
not fair value, such as net realizable value in Ind AS 2 or value in
use in Ind AS 36.

In addition, for financial reporting purposes, fair value
measurements are categorized into Level 1, 2 or 3 based on the
degree to which the inputs to the fair value measurements are
observable and the significance of the inputs to the fair value
measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active
markets for identical assets or liabilities that the entity can
access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included
within Level 1, that are observable for the asset or liability,
either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset
or liability.

The Company recognises transfers between levels of the fair
value hierarchy at the end of the reporting period during which
the change has occurred.

2.2 Property, Plant and Equipment:

All the items of property, plant and equipment are stated at cost
less depreciation and impairment, if any. Historical cost includes
expenditure that is directly attributable to the acquisition of
the items.

Subsequent costs are included in the asset’s carrying amount
or recognised 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. The carrying amount of any component
accounted for as a separate asset is derecognised when
replaced. All other repairs and maintenance are charged to the
Statement of Profit and Loss during the reporting period in which
they are incurred.

Depreciation methods, estimated useful lives and
residual value

The Company depreciates its property, plant and equipment
(PPE) over the useful life on straight line method in the manner
prescribed in Schedule II to the Act. Management believes that
useful life of assets are same as those prescribed in Schedule
II to the Act.

The residual values are not more than 5% of the original
cost of the asset. The assets residual values and useful lives
are reviewed, and adjusted if appropriate, at the end of each
reporting period.

Depreciation on additions/deletions is calculated pro-rata from
the date of such addition/deletion, as the case maybe.

Gains and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in the
Statement of Profit and Loss.

2.3 Investment Properties:

Investment property is property held to earn rental income or for
capital appreciation or for both, but normally 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
at cost. Subsequent to initial recognition, investment property
is measured at cost less accumulated depreciation and
accumulated impairment losses, if any.

Based on technical evaluation and consequent advice, the
Management believes a period of 60 years as representing the
best estimate of the period over which investment properties
are expected to be used. Accordingly, the Company depreciates
investment property over a period of 60 years. Any gain or
loss on disposal of investment property is recognised in the
Statement of Profit and Loss.

2.4 Inventories:

a. Inventories comprise of: (i) Finished Inventories representing
unsold premises in completed projects; (ii) Construction Work
in Progress representing properties under construction/
development; and

b. Inventories are valued at lower of cost and net
realisable value;

c. Cost of construction/development is charged to the
Statement of Profit and Loss in proportion to the revenue
recognised during the period and the balance cost is carried
over under Inventory as part of either Construction Work
in Progress or Finished inventories. Cost of construction/
development includes all costs directly related to the Project
(including finance cost attributable to the project) and other
expenditure as identified by the Management which are
incurred for the purpose of executing and securing the
completion of the Project (net off incidental recoveries/
receipts) up to the date of receipt of Occupation Certificate
of Project from the relevant authorities.

Construction Work in Progress includes cost of land,
premium for development rights, construction costs,
allocated interest and expenses incidental to the projects
undertaken by the Company.

2.5 Investments in subsidiaries, joint ventures and
associates:

Investments in subsidiaries, joint ventures and associates are
recognised at cost as per Ind AS 27. Except where investments
accounted for at cost shall be accounted for in accordance with
Ind AS 105, Non-current Assets Held for Sale and Discontinued
Operations, when they are classified as held for sale.

2.6 Financial Instruments:

(a) Financial Assets:

(i) Classification

The Company classifies financial assets as subsequently
measured at amortised cost, fair value through other
comprehensive income or fair value through profit or loss on the
basis of its business model for managing the financial assets and
the contractual cash flow characteristics of the financial asset.

(ii) Initial Recognition and Measurement

All financial assets (not measured subsequently at fair value
through profit or loss) are recognised initially at fair value plus
transaction costs that are attributable to the acquisition of the
financial asset. Purchases or sales of financial assets that require
delivery of assets within a time frame established by regulation
or convention in the market place (regular way trades) are
recognised on the trade date, i.e., the date that the Company
commits to purchase or sell the asset.

(iii) Subsequent Measurement

For purposes of subsequent measurement financial assets are
classified into two broad categories:

a. Financial asset at fair value;

b. Financial asset at amortised cost.

Where assets are measured at fair value, gains and losses are
either recognised entirely in profit or loss (i.e. fair value through
profit or loss), or recognised in other comprehensive income (i.e.
fair value through other comprehensive income).

(iv) Equity Investments

All equity investments other than investment in subsidiaries and
joint venture are measured at fair value. Equity instruments which
are held for trading are classified as at Fair Value Through Profit
& Loss (FVTPL). For all other equity instruments, the Company
decides to classify the same either as at Fair Value Through
Other Comprehensive Income (FVTOCI) or FVTPL. The Company
makes such selection on an instrument by instrument basis. The
classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at
FVTOCI, then all fair value changes on the instrument, excluding
dividends, are recognised in Other Comprehensive Income
(OCI). There is no recycling of the amounts from OCI to the
Statement of Profit and Loss, even on sale of such investments.

Equity instruments included within the FVTPL category are
measured at fair value with all changes recognised in the
Statement of Profit and Loss.

Investment in equity instruments of Subsidiaries, Joint Venture
and Associates are measured at cost.

(v) A financial asset mainly debt that meets the following
2 conditions is measured at amortised cost (net of any write
down for impairment) unless the asset is designated at fair value
through profit or loss under the fair value option.

• Business Model Test: The objective of the Company’s
model is to hold the financial asset to collect the contractual
cash flows (rather than to sell the instrument prior to its
contractual maturity to realise its fair value changes)

• Cash Flow Characteristics Test: The contractual terms of
the financial asset give rise on specified dates to cash flows
that are solely payment of principal and interest on the
principal amount outstanding.

A financial asset that meets the following 2 conditions
is measured at fair value through other comprehensive
income unless the asset is designated at fair value through
profit or loss under the fair value option.

Business Model Test: The financial asset is held within
a business model whose objective is achieved both
by collecting contractual cash flows and selling the
financial assets.

Cash Flow Characteristics Test: The contractual terms of
the financial asset give rise on specified dates to cash flows
that are solely payment of principal and interest on the
principal amount outstanding.

Even if an instrument meets the two requirements to be
measured at amortised cost or fair value through other
comprehensive income, a financial asset is measured
at fair value through profit or loss if doing so eliminates
or significantly reduces a measurement or recognition
inconsistency (sometimes referred to as an ‘accounting
mismatch’) that would otherwise arise from measuring
assets or liabilities or recognising the gains or losses on
them on different basis.

All other financial assets are measured at fair value through
profit or loss.

(v) De-recognition

A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is primarily
derecognised when:

• The rights to receive cash flows from the asset have
expired; or

• The Company has transferred its rights to receive cash
flows from the asset.

(vii) Impairment of Financial Asset

The Company assesses impairment based on expected credit
losses (ECL) model to the following:

• Financial asset measured at amortised cost;

• Financial asset measured at fair value through other
comprehensive income;

Expected credit losses are measured through a loss allowance
at an amount equal to:

• 12 months expected credit losses (expected credit losses
that result from those default events on the financial
instrument that are possible within 12 months after the
reporting date); or

• Full lifetime expected credit losses (expected credit losses
that result from all possible default events over the life of the
financial instrument).

For financial assets other than trade receivables, as per
Ind AS 109, the Company recognises 12 month expected
credit losses for all originated or acquired financial assets if at
the reporting date the credit risk of the financial asset has not
increased significantly since its initial recognition. The expected
credit losses are measured as lifetime expected credit losses if
the credit risk on financial asset increases significantly since its
initial recognition.

The Company follows ‘simplified approach’ for recognition of
impairment loss allowance on trade receivables, considering
historical trend, industry practices and the business environment
in which the Company operates or any other appropriate basis.

The Company’s trade receivables do not contain significant
financing component and loss allowance on trade receivables
is measured at an amount equal to life time expected losses i.e.
expected cash shortfall.

The impairment losses and reversals are recognised in
Statement of Profit and Loss.

(b) Financial Liabilities:

(i) Classification

The Company classifies all financial liabilities as subsequently
measured at amortised cost or at fair value through profit or loss.

(ii) Initial Recognition and Measurement

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

After initial recognition, interest bearing loans and borrowings
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.

Amortised cost is calculated by taking into account any discount
or premium on acquisition and fees or costs that are an integral

part of the EIR. The EIR amortisation is included as finance costs
in the Statement of Profit and Loss.

Any difference between proceeds (net of transaction cost) and
the redemption amount is recognised in profit or loss over the
period of borrowing using the effective interest rate method.
Fees paid on the establishment of loan facilities are recognised
as transaction cost of the loan to the extent that it is probable
that some or all of the facility will be drawn down.

(iv) Derecognition

A financial liability is derecognised 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 derecognition 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 and Loss.

Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net
amount is reported in the Balance Sheet if there is a currently
enforceable legal right to offset the recognised amounts and
there is an intention to settle on a net basis, to realise the assets
and settle the liabilities simultaneously.

(c) Equity Instruments

An equity instrument is a contract that evidences residual interest
in the assets of the Company after deducting all of its liabilities.
Equity instruments are recognised at the proceeds received net
off direct issue cost.

2.7 Cash and Cash Equivalents:

For the purpose of presentation in the statement of cash flows,
cash and cash equivalents includes cash on hand, bank overdraft,
deposits held at call with financial institutions, other short-term
highly liquid investments with original maturities of three months
or less that are readily convertible to known amounts of cash
and which are subject to an insignificant risk of changes in value.

2.8 Revenue Recognition:

(a) Revenue from contracts with customers:

The Company undertakes the business of construction of
residential and commercial properties. The ongoing contracts
with customers are construction of residential & commercial
buildings, and others.

The Company has adopted Ind AS 115, Revenue from
Contracts with Customers, with effect from 01 April 2018. The
Company has applied the following accounting policy for
revenue recognition:

Revenue from contract with customer is recognised, on
execution of agreement when control of the goods or services
are transferred to the customer, at an amount that reflects the
consideration 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 performance
obligation and recognises revenue over time. The Company

recognises revenue at the transaction price which is determined
on the basis of agreement 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 specific recognition criteria described below must also be
met before revenue is recognised.

The Company recognises revenue from contracts with customers
for ongoing contracts with customers based on a five step model
as set out in Ind AS 115:

The Company Recognised the revenue using cost based
input method. Revenue is recognised with respect to stage of
completion, which assessed with reference to the proportion of
contract cost incurred for work performed to the estimated total
cost of completion of contract. 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 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.

Consideration is adjusted for the time value of money if the
period between the transfer of goods or services and the receipt
of payment exceeds twelve months and there is a significant
financing benefit either to the customer or the Company.

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.

Consideration is adjusted for the time value of money if the
period between the transfer of goods or services and the receipt
of payment exceeds twelve months and there is a significant
financing benefit either to the customer or the Company.

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). Refer
to accounting policies of financial assets in section 2.6 financial
instruments - initial recognition and subsequent measurement.

(b) Dividend Income:

Dividend Income is accounted when the right to receive the
same is established.

(c) Interest Income:

Interest income is accounted on accrual basis on a time
proportion basis.

(d) Rental Income:

Rental Income from investment property is recognised in
standalone statement of profit and loss on straight-line basis over
the term of the lease except where the rentals are structured to
increase in line with expected general inflation.

(e) Share in Profit from LLP:

Share in Profit from partnership is recognised when rights to
receive is established.

2.9 Current and Deferred Taxes:

(a) Current Tax:

Tax expense comprises of current tax and deferred tax. Current
tax is measured at the amount expected to be paid to/recovered
from the tax authorities, based on estimated tax liability computed
after taking credit for allowances and exemption in accordance
with the tax laws as applicable.

(b) Deferred Tax:

Deferred tax is recognised using the balance sheet approach.
Deferred tax assets and liabilities are recognised for deductible
and taxable temporary differences arising between the tax base
of assets and liabilities and their carrying amount.

Deferred tax asset are recognised to the extent that it is probable
that taxable profit will be available against which the deductible
temporary differences and the carry forward of unused tax
credits and unused tax losses can be utilised.

The carrying amount of deferred tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all
or part of the deferred tax asset to be utilised.

Deferred tax liabilities and assets measured at the tax rates that
are expected to apply in the period in which the liability is settled
or the asset realized, based on tax rates (and tax laws) that have
been enacted or substantively by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects
the tax consequences that would follow from the manner in which
the Company expects, at the end of the reporting period, to
recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax for the year:

Current and deferred tax are recognized in profit or loss,
except when they relate to items that are recognized in other
comprehensive income or directly in equity, in which case,
the current and deferred tax are also recognized in other
comprehensive income or directly in equity respectively.

2.10 Employee Benefits:

(a) Short term employee benefits:

Short term Employee Benefits are recognised as an expense on
accrual basis at the undiscounted amount in the statement of
profit and loss of the year in which related service is rendered.

(b) Post Employment Benefits:

Unfunded Post employment and other long term employee
benefits are recognised as expense in the statement of profit
and loss for the year in which the Employees have rendered
services. The expense is recognised at the present value of the
amount payable determined using actuarial valuation techniques
as per actuary report obtained at the year end.

Re-measurement of Defined Benefit Plans in respect of post¬
employment are charged to the Other Comprehensive Income.

2.11 Share-Based Payments:

Employees of the Company also receive remuneration in
the form of share based payments in consideration of the
services rendered.

Equity settled share based payments to employees are
measured at fair value in accordance with Ind AS 102, share
based payments. The fair value determined at the grant date of
the share based payment is expensed over the vesting period,
based on the Company estimate of equity instruments that will
eventually vest, with a corresponding increase in equity.

2.12 Leases:

Operating 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.

As a lessee:

The Company applies a single recognition and measurement
approach for all leases, except for short - term leases and leases
of low-value assets. The Company recognises lease liabilities to
make lease payments and right-of-use assets representing the
right to use the underlying assets. Subsequently, the right of use
asset are measured at cost less accumulated depreciation and
any accumulated impairment loss. Lease liability are measured
at amortised cost using the effective interest method. The lease
payment made, are apportioned between the finance charge
and the reduction of lease liability, and are recognised as
expense in the Statement of Profit and Loss.

Lease deposits received are a financial liabilities and are
measured at amortised cost under Ind AS 109 since it satisfies
Solely Payment of Principal and Interest (SPPI) condition. The
difference between the present value and the nominal value of
deposit is considered as deferred rent and recognised over the
lease term. Unwinding of discount is treated as finance expenses
and recognised in the Statement of Profit and Loss.

The Company has elected to use the recognition exemptions for
lease contracts that, at the commencement date, have a lease
term of 12 months or less and do not contain a purchase option
(short-term leases), and lease contracts for which the underlying
asset is of low value (low-value assets).

As a lessor:

Lease income from operating leases where the Company is a
lessor is recognised in income on a straight-line basis over the
lease term unless the receipts are structured to increase in line
with expected general inflation to compensate for the expected
inflationary cost increases. The respective leased assets are
included in the balance sheet based on their nature.

Lease deposits received are financial instruments (financial
liability) and are measured at fair value on initial recognition.

The difference between the fair value and the nominal value of
deposits is considered as rent in advance and recognised over
the lease term on a straight line basis. Unwinding of discount is
treated as interest expense (finance cost) for deposits received
and is accrued as per the EIR method.

2.13 Borrowing Cost:

Borrowing costs are interest and other costs that the Company
incurs in connection with the borrowing of funds and is measured
with reference to the effective interest rate applicable to the
respective borrowing.

Borrowing costs, allocated to qualifying assets, pertaining to the
period from commencement of activities relating to construction/
development of the qualifying asset up to the time all the activities
necessary to prepare the qualifying asset for its intended use or
sale are complete.

All other borrowing costs are recognised as an expense in the
period which they are incurred.

2.14 Earnings Per Share:

The Company reports basic and diluted earnings per share
in accordance with Ind AS - 33 on ‘Earnings per Share’. Basic
earnings per share is computed by dividing the net profit or
loss for the year by the weighted average number of Equity
shares outstanding during the year. Diluted earnings per share
is computed by dividing the net profit or loss for the year by the
weighted average number of equity shares outstanding during
the year as adjusted for the effects of all diluted potential equity
shares except where the results are anti-dilutive.


Mar 31, 2018

I. Basis of Preparation of Financial Statements

a. Compliance with Ind AS

The standalone financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) as notified under section 133 of the Companies Act read with the Companies (Indian Accounting Standards) Rules 2015 (as amended).

The 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 financial statements are presented in Indian Rupee (“INR”) and all values are rounded to the nearest INR Lakh, except when otherwise indicated

b. Historical Cost Convention

The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities that are measured at fair value. [Refer Note 2(VI) regarding financial instruments].

c. Operating Cycle

The normal operating cycle in respect of operation relating to under construction real estate project depends on signing of agreement, size of the project, phasing of the project, type of development, project complexities, approvals needed & realisation of project into cash & cash equivalents and are in the range of 3 to 7 years. Accordingly, project related assets & liabilities have been classified into current & non-current based on operating cycle of the respective projects. All other assets and liabilities have been classified into current and non-current based on a period of twelve months.

d. Functional and Presentation Currency

These financial statements are presented in Indian rupees, which is also the functional currency of the Company.

II. Use of Estimates and Judgements

The preparation of the financial statements in conformity with recognition and measurement principles of Ind AS requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. Estimates and underlying assumptions are reviewed on an ongoing basis. They are based on the historical experience and other factors, including expectations of future events that may have financial impact on the Company and are believed to be prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known/ materialise. Following are the key areas of estimation and judgement.

a. Evaluation of Percentage Completion Determination of revenues under the percentage of completion method necessarily involves making estimates, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project or activity and the foreseeable losses to completion. Estimates of project income, as well as project costs, are reviewed periodically. The effect of changes, if any, to estimates is recognised in the financial statements for the period in which such changes are determined.

b. Impairment of Non Financial Assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s fair value less costs of disposal and its value in use. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

c. Impairment of Financial Assets

The impairment provisions for financial assets are based on assumptions about the risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

d. Useful life and residual value of Property, Plant and Equipment and Intangible Assets

Useful lives of tangible assets are based on the life prescribed in Schedule II of the Companies Act, 2013. In cases, where the useful lives are different from that prescribed in Schedule II, they are based on technical advice. Assumptions also need to be made, when the Company assesses, whether an asset may be capitalised and which components of the cost of the asset may be capitalised.

e. Recognition and Measurement of Defined Benefit Obligations

The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate, expected return on plan assets, trends in salary escalation and attrition rate. The discount rate is determined by reference to market yields at the end of the reporting period on government bonds. The period to maturity of the underlying bonds correspond to the probable maturity of the post employment benefit obligations.

f. Fair Value Measurement of Financial Instruments When the fair values of the financial assets and liabilities recorded in the Balance Sheet cannot be measured based on the quoted market prices in active markets, their fair value is measured using valuation technique. The inputs to these models are taken from the observable market wherever possible, but where this is not feasible, a review of judgement is required in establishing fair values. Any changes in assumptions could affect the fair value relating of financial instruments.

g. Classification of Investment property

The Company determines whether a property is classified as investment property or as inventory:

(i) Investment property comprises land and buildings that are not occupied for use by, or in the operations of, the Company, nor for sale in the ordinary course of business, but are held primarily to earn rental income and capital appreciation. These buildings are rented to tenants and are not intended to be sold in the ordinary course of business.

(ii) Inventory comprises property that is held for sale in the ordinary course of business. Principally these are properties that the Company develops and intends to sell before or on completion of construction.

III. Measurement of Fair Values

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. If third party information is used to measure fair values, then the Management assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which such valuations should be classified.

When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the asset or liability, not based on observable market data.

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

IV. Property, Plant and Equipment (PPE) & Depreciation

a. Recognition and Measurement

Items of PPE are measured at cost less accumulated depreciation and impairment losses, if any. The cost of an item of PPE comprises:

i. its purchase price, including import duties and non refundable purchase taxes, after deducting trade discounts and rebates.

ii. any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by Management.

Income and expenses related to the incidental operations, not necessary to bring the item to the location and condition necessary for it to be capable of operating in the manner intended by Management, are recognised in Statement of Profit and Loss. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

b. Subsequent Expenditure

Subsequent expenditure related to an item of PPE is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing PPE, including 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.

Any gain or loss on disposal of an item of PPE is recognised in the Statement of Profit and Loss in the year of disposal. Expenses incurred for acquisition of capital assets excluding advances paid towards the acquisition of fixed assets outstanding at each Balance Sheet date are disclosed under Capital Work in Progress. Capital Work in Progress in respect of assets which are not ready for their intended use are carried at cost, comprising of direct costs, related incidental expenses and attributable interest.

c. Depreciation

Depreciation is provided from the date the assets are ready to be put to use, on straight line method as per the useful life of the tangible assets as prescribed under Part C of Schedule II of The Companies Act, 2013.

Depreciation is calculated on a prorata basis from the date of installation / acquisition till the date the assets are sold or disposed.

Depreciable amount for assets is the cost of an asset or amount substituted for cost, less its estimated residual value.

V. Investment Property

Investment property is property held 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 at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.

Based on technical evaluation and consequent advice, the Management believes a period of 60 years as representing the best estimate of the period over which investment properties are expected to be used. Accordingly, the Company depreciates investment property over a period of 60 years.

Any gain or loss on disposal of investment property is recognised in the Statement of Profit and Loss.

The fair value of investment property is disclosed in the notes. Fair value 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.

VI. Financial Instruments

a. Financial Assets

i. Classification

The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

ii. Initial Recognition and Measurement

All financial assets (not measured subsequently at fair value through profit or loss) are recognised initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

iii. Subsequent Measurement

For purposes of subsequent measurement financial assets are classified into two broad categories:

a. Financial asset at fair value

b. Financial asset at amortised cost

Where assets are measured at fair value, gains and losses are either recognised entirely in profit or loss (i.e. fair value through profit or loss), or recognised in other comprehensive income (i.e. fair value through other comprehensive income).

iv. Equity Investments

All equity investments other than investment in subsidiaries and joint venture are measured at fair value. Equity instruments which are held for trading are classified as at Fair Value Through Profit & Loss (FVTPL). For all other equity instruments, the Company decides to classify the same either as at Fair Value Through Other Comprehensive Income (FVTOCI) or FVTPL. The Company makes such selection on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to the Statement of Profit and Loss, even on sale of such investments.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the Statement of Profit and Loss.

Investment in equity instruments of Subsidiaries, Joint Venture and Associates are measured at cost.

v. A financial asset mainly debt that meets the following 2 conditions is measured at amortised cost (net of any write down for impairment) unless the asset is designated at fair value through profit or loss under the fair value option.

- Business Model Test : the objective of the Company’s model is to hold the financial asset to collect the contractual cash flows (rather than to sell the instrument prior to its contractual maturity to realise its fair value changes

- Cash Flow Characteristics Test: The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.

A financial asset that meets the following 2 conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option.

- Business Model Test : the financial asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling the financial assets

- Cash Flow Characteristics Test: The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.

Even if an instrument meets the two requirements to be measured at amortised cost or fair value through other comprehensive income, a financial asset is measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as an ‘accounting mismatch’) that would otherwise arise from measuring assets or liabilities or recognising the gains or losses on them on different basis.

All other financial assets are measured at fair value through profit or loss.

vi. De-recognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised when:

- The rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset.

vii. Impairment of Financial Asset

The Company assesses impairment based on expected credit losses (ECL) model to the following:

- Financial asset measured at amortised cost

- Financial asset measured at fair value through other comprehensive income

Expected credit losses are measured through a loss allowance at an amount equal to:

- 12 months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or

- Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)

For financial assets other than trade receivables, as per Ind AS 109, the Company recognises 12 month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition.

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables, considering historical trend, industry practices and the business environment in which the Company operates or any other appropriate basis The Company’s trade receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall.

The impairment losses and reversals are recognised in Statement of Profit and Loss.

b. Financial Liabilities

i. Classification

The Company classifies all financial liabilities as subsequently measured at amortised cost or at fair value through profit or loss.

ii. Initial Recognition and Measurement

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

After initial recognition, interest bearing loans and borrowings 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.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

Any difference between proceeds (net of transaction cost) and the redemption amount is recognised in profit or loss over the period of borrowing using the effective interest rate method.

Fees paid on the establishment of loan facilities are recognised as transaction cost of the loan to the extent that it is probable that some or all of the facility will be drawn down.

iv. Derecognition

A financial liability is derecognised 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 derecognition 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 and Loss.

Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

c. Equity Instruments

An equity instrument is a contract that evidences residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recognised at the proceeds received net off direct issue cost.

VII. Inventories

a. Inventories comprise of: (i) Finished Realty Stock representing unsold premises in completed projects (ii) Realty Work in Progress representing properties under construction / development and (iii) Raw Material representing inventory yet to be consumed.

b. Inventories other than Raw Material above are valued at lower of cost and net realisable value. Raw Materials are valued at weighted average method.

c. Cost of Realty construction / development is charged to the Statement of Profit and Loss in proportion to the revenue recognised during the period and the balance cost is carried over under Inventory as part of either Realty Work in Progress or Finished Realty Stock. Cost of Realty construction / development includes all costs directly related to the Project (including finance cost attributable to the project) and other expenditure as identified by the Management which are incurred for the purpose of executing and securing the completion of the Project (net off incidental recoveries / receipts) up to the date of receipt of Occupation Certificate of Project from the relevant authorities.

Construction Work in Progress includes cost of land, premium for development rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company.

VIII.Revenue Recognition

a. The Company is following the “Percentage of Completion Method” of accounting. As per this method, revenue from sale of properties is recognised in the Statement of Profit & Loss in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company on transfer of significant risk and rewards to the buyer.

In accordance with the “Guidance Note on Accounting for Real Estate Transactions (for entities to whom Ind AS is applicable), construction revenue on such projects, measured at the fair value (i.e. adjusted for discounts, incentives, time value of money adjustments etc.), have been recognised on percentage of completion method provided the following thresholds have been met:

(i) All critical approvals necessary for the commencement have been obtained

(ii) The expenditure incurred on construction and development costs is not less than 25 per cent of the total estimated construction and development costs

(iii) At least 25 percent of the saleable project area is secured by contracts or agreements with buyers and

(iv) At least 10 percent of the contract consideration is realized at the reporting date in respect of such contracts and it is reasonable to expect that the parties to such contracts will comply with the payment terms as defined in the contracts. Revenue from sale of completed properties (Finished Realty Stock) is recognised upon transfer of significant risks and rewards to the buyer.

b. Income from relinquishment of rights over property is recognised on the basis of terms agreed with the party, which is based on the transfer of risks and rewards related to the asset.

c. Interest income is accounted on an accrual basis at effective interest rate.

d. Dividend income is recognised when the right to receive the payment is established.

e. Rent income is accounted on accrual basis over tenure of the lease / service agreement.

IX. Income Tax

Income Tax expense comprises current and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that it relates to items recognised directly in Equity or in Other Comprehensive Income.

a. Current Tax

Current Tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

Current tax assets and liabilities can be offset only if the Company(i) has a legally enforceable right to set off the recognised amounts; and (ii) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

b. Deferred Tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes (including those arising from consolidation adjustments such as unrealised profit on inventory etc.).

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it 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 profits improves.

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that 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 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.

Deferred tax assets and liabilities are offset only if:

(i) The Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

(ii) The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.

The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

X. Employee Benefits

a. Short term employee benefits

Short term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

b. Post Employment Benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

(ii) Defined benefit plans

Provision for Gratuity is recorded on the basis of actuarial valuation certificate provided by the actuary using Projected Unit Credit Method.

The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in Other Comprehensive Income (OCI). Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset). Net interest expense and other expenses related to defined benefit plans are recognised in the Statement of Profit and Loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in the Statement of Profit and Loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

c. Other Long Term Employee Benefits

Company’s liability towards compensated absences is determined by an independent actuary using Projected Unit Credit Method. Past services are recognised on a straight line basis over the average period until the benefits become vested. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of the estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation.

XI. Leases

a. Where Company is the Lessee

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating lease. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on straight line basis over the lease term, unless there is another systematic basis which is more representative of the time pattern of the lease

b. Where Company is the Lessor

Assets representing lease arrangements given under operating leases are included in fixed assets. Lease income is recognised in the Statement of Profit and Loss on straight line basis over the lease term, unless there is another systematic basis which is more representative of the time pattern of the lease. Initial direct costs are recognised immediately in the Statement of Profit and Loss.

c. Agreements which are not classified as finance leases are considered as operating lease.

d. Payments made under operating leases are recognised in the Statement of Profit and Loss. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

XII. Borrowing Cost

Borrowing costs are interest and other costs that the Company incurs in connection with the borrowing of funds and is measured with reference to the effective interest rate applicable to the respective borrowing.

Borrowing costs, allocated to qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the time all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

All other borrowing costs are recognised as an expense in the period which they are incurred.

XIII. Cash and Cash Equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

XIV. Earnings Per Share

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for the events for bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares).

Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares.

XV. Cash Flow Statement

Cash Flow Statement is prepared under the “Indirect Method” as prescribed under the Indian Accounting Standard (Ind AS) 7 -Statement of Cash Flows.

Cash and Cash equivalents for the purpose of cash flow statement comprise of cash at bank and in hand and short term investments with original maturity of three months or less.

The amendments to Ind AS 7 require entities to provide disclosure of changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). The Company has provided the information for both the current and the comparative period in Cash Flow Statement.

XVI. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed in the Notes. Contingent liabilities are disclosed for:

(i) possible obligations which will be confirmed only by future events not wholly within the control of the Company or

(ii) present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets.

Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognised though are disclosed, where an inflow of economic benefits is probable.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

XVII. Segment Reporting

The Chief Operational Decision Maker (CODM) monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. The operating segments are identified on the basis of nature of product/services.

The Board of Directors of the Company has appointed the Managing Director as the CODM who assesses the financial performance and position of the Company, and makes strategic decisions.

XVIII. Recent Accounting Developments

Standards issued but not yet effective

The Company intends to adopt these standards, if applicable, when they become effective. The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

1. Ind AS 115 Revenue from Contracts with Customers Ind AS 115 was issued on 29 March 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The new revenue standard will supersede all current revenue recognition requirements under Ind AS and the guidance note of real estate issued by ICAI.

Ind AS 115 is applicable to the Company for annual periods beginning on or after April 1, 2018.

Application of above standard is under evaluation by the group

2. The MCA has also carried out amendments of the following accounting standards

i. Ind AS 21 - The Effects of Changes in Foreign Exchange Rates

ii. Ind AS 40 - Investment Property

iii. Ind AS 12 - Income Taxes

iv. Ind As 28 - Investments in Associates and Joint Venture and

v. Ind AS 112 - Disclosure of Interests in Other Entities

Application of above standards are not expected to have any significant impact on the Company’s Financial Statements.

Investment in properties include a portion carved out of the slump sale where the management is of the opinion that these would be let out on long leases. This is based on the market feedback received by the company. The investment properties consist of commercial properties, which based on the intention of the Management in the normal of course of business are held for the purposes of leasing. Further, fair value of these properties in Balance Sheet approximates Rs. 10647 lakhs.

There are no rental income in respect of above investment properties for FY 2017-18. Further there are no expenses incurred in respect of these properties.

These valuation are based on valuation performed by an accredited independent valuer. The Company has no restrictions on the realisability of its investment properties and no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.


Mar 31, 2017

I. Basis of Preparation of Financial Statements

a. Compliance with Ind AS

The financial statements comply with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standard) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 to comply with the Section 133 of the Companies Act, 2013 (“the 2013 Act”), and the relevant provisions of the 2013 Act/Companies Act, 1956 (“the 1956 Act”), as applicable.

The financial statements upto the year ended 31stMarch, 2016 were prepared in accordance with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the 1956 Act/the 2013 Act.

These financial statements are the Company’s first Ind AS financial statements and are covered by Ind AS 101 -First Time Adoption of Indian Accounting Standards (Ind AS 101). The transition to Ind AS has been carried out from the accounting principles generally accepted in India (“Indian GAAP”) which is considered as the “Previous GAAP” for purposes of Ind AS 101.

Refer Note 34for an explanation of how the transition from the previous GAAP to Ind AS has affected the financial position, financial performance and cash flows of the Company.

b. Historical Cost Convention

The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities that are measured at fair value.[Refer Note 2(VI) regarding financial instruments],

c. Operating Cycle

The normal operating cycle in respect of operation relating to under construction real estate project depends on signing of agreement, size of the project, phasing of the project, type of development, project complexities, approvals needed &realisation of project into cash & cash equivalents and are in the range of 3 to 7 years. Accordingly, project related assets & liabilities have been classified into current & non-current based on operating cycle of the respective projects. All other assets and liabilities have been classified into current and non-current based on a period of twelve months.

d. Functional and Presentation Currency

These financial statements are presented in Indian rupees, which is also the functional currency of the Company.

II. Use of Estimates and Judgements

The preparation of the financial statements in conformity with recognition and measurement principles of Ind AS requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. Estimates and underlying assumptions are reviewed on an ongoing basis. They are based on the historical experience and other factors, including expectations of future events that may have financial impact on the Company and are believed to be prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known/ materialise. Following are the key areas of estimation and judgement.

a. Evaluation of Percentage Completion

Determination of revenues under the percentage of completion method necessarily involves making estimates, some of which are of a technical nature, concerning, where relevant, the percentages of completion, costs to completion, the expected revenues from the project or activity and the foreseeable losses to completion. Estimates of project income, as well as project costs, are reviewed periodically. The effect of changes, if any, to estimates is recognised in the financial statements for the period in which such changes are determined.

b. Impairment of Non Financial Assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s fair value less costs of disposal and its value in use. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

c. Impairment of Financial Assets

The impairment provisions for financial assets are based on assumptions about the risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

d. Useful life and residual value of Property, Plant and Equipment and Intangible Assets

Useful lives of tangible assets are based on the life prescribed in Schedule II of the Companies Act, 2013. In cases, where the useful lives are different from that prescribed in Schedule II, they are based on technical advice. Assumptions also need to be made, when the Company assesses, whether an asset may be capitalised and which components of the cost of the asset may be capitalised.

e. Recognition and Measurement of Defined Benefit Obligations

The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate, expected return on plan assets, trends in salary escalation and attrition rate. The discount rate is determined by reference to market yields at the end of the reporting period on government bonds. The period to maturity of the underlying bonds correspond to the probable maturity of the postemployment benefit obligations.

f. Fair Value Measurement of Financial Instruments

When the fair values of the financial assets and liabilities recorded in the Balance Sheet cannot be measured based on the quoted market prices in active markets, their fair value is measured using valuation technique. The inputs to these models are taken from the observable market wherever possible, but where this is not feasible, a review of judgement is required in establishing fair values. Any changes in assumptions could affect the fair value relating of financial instruments.

III. Measurement of Fair Values

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. If third party information is used to measure fair values, then the Management assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which such valuations should be classified.

When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the asset or liability, not based on observable market data.

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

IV. Property, Plant and Equipment (PPE) & Depreciation

a. Recognition and Measurement

Items of PPE are measured at cost less accumulated depreciation and impairment losses, if any. The cost of an item of PPE comprises:

i. its purchase price, including import duties and non refundable purchase taxes, after deducting trade discounts and rebates.

ii. any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by Management.

Income and expenses related to the incidental operations, not necessary to bring the item to the location and condition necessary for it to be capable of operating in the manner intended by Management, are recognised in Statement of Profit and Loss. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

b. Subsequent Expenditure

Subsequent expenditure related to an item of PPE is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing PPE, including 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.

Any gain or loss on disposal of an item of PPE is recognised in the Statement of Profit and Loss in the year of disposal.

Expenses incurred for acquisition of capital assets excluding advances paid towards the acquisition of fixed assets outstanding at each Balance Sheet date are disclosed under Capital Work in Progress. Capital Working Progress in respect of assets which are not ready for their intended use are carried at cost, comprising of direct costs, related incidental expenses and attributable interest.

c. Depreciation

Depreciation is provided from the date the assets are ready to be put to use, on straight line method as per the useful life of the tangible assets as prescribed under Part C of Schedule II of The Companies Act, 2013.

Depreciation is calculated on a prorata basis from the date of installation / acquisition till the date the assets are sold or disposed. Depreciable amount for assets is the cost of an asset or amount substituted for cost, less its estimated residual value.

V. Investment Property

Investment property is property held 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 at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.

Based on technical evaluation and consequent advice, the Management believes a period of 60 years as representing the best estimate of the period over which investment properties are expected to be used. Accordingly, the Company depreciates investment property over a period of 60 years.

Any gain or loss on disposal of investment property is recognised in the Statement of Profit and Loss.

The fair value of investment property is disclosed in the notes. Fair value 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.

VI. Financial Instruments

a. Financial Assets

i. Classification

The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.

ii. Initial Recognition and Measurement

All financial assets (not measured subsequently at fair value through profit or loss) are recognised initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

iii. Subsequent Measurement

For purposes of subsequent measurement financial assets are classified into two broad categories:

- Financial asset at fair value

- Financial asset at amortised cost

Where assets are measured at fair value, gains and losses are either recognised entirely in profit or loss (i.e. fair value through profit or loss), or recognised in other comprehensive income (i.e. fair value through other comprehensive income).

iv. Equity Investments

All equity investments other than investment in subsidiaries and joint venture are measured at fair value. Equity instruments which are held for trading are classified as at Fair Value Through Profit & Loss (FVTPL). For all other equity instruments, the Company decides to classify the same either as at Fair Value Through Other Comprehensive Income (FVTOCI) or FVTPL. The Company makes such selection on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognised in Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to the Statement of Profit and Loss, even on sale of such investments.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the Statement of Profit and Loss.

Investment in equity instruments of Subsidiaries, Joint Venture and Associates are measured at cost.

v. A financial asset mainly debt that meets the following 2 conditions is measured at amortised cost (net of any write down for impairment) unless the asset is designated at fair value through profit or loss under the fair value option.

- Business Model Test: the objective of the Company’s model is to hold the financial asset to collect the contractual cash flows (rather than to sell the instrument prior to its contractual maturity to realise its fair value changes)

- Cash Flow Characteristics Test: The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.

A financial asset that meets the following 2 conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option.

- Business Model Test: the financial asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling the financial assets.

- Cash Flow Characteristics Test: The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.

Even if an instrument meets the two requirements to be measured at amortised cost or fair value through other comprehensive income, a financial asset is measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as an ‘accounting mismatch’) that would otherwise arise from measuring assets or liabilities or recognising the gains or losses on them on different basis.

All other financial assets are measured at fair value through profit or loss.

vi. De-recognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised when:

- The rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset.

vii. Impairment of Financial Asset

The Company assesses impairment based on expected credit losses (ECL) model to the following:

- Financial asset measured at amortised cost

- Financial asset measured at fair value through other comprehensive income Expected credit losses are measured through a loss allowance at an amount equal to:

- 12 months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or

- Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)

The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivable,

b. Financial Liabilities

i. Classification

The Company classifies all financial liabilities as subsequently measured at amortised cost or at fair value through profit or loss.

ii. Initial Recognition and Measurement

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

After initial recognition, interest bearing loans and borrowings 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.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.

Any difference between proceeds (net of transaction cost) and the redemption amount is recognised in profit or loss over the period of borrowing using the effective interest rate method. Fees paid on the establishment of loan facilities are recognised as transaction cost of the loan to the extent that it is probable that some or all of the facility will be drawn down.

iv. Derecognition

A financial liability is derecognised 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 derecognition 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 and Loss.

v. Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

c. Equity Instruments

An equity instrument is a contract that evidences residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recognised at the proceeds received net off direct issue cost.

VII. Inventories

a. Inventories comprise of: (i) Finished Realty Stock representing unsold premises in completed projects (ii) Realty Work in Progress representing properties under construction/development and (iii) Raw Material representing inventory yet to be consumed.

b. Inventories other than Raw Material above are valued at lower of cost and net realisable value. Raw Materials are valued at weighted average method.

c. Cost of Realty construction / development is charged to the Statement of Profit and Loss in proportion to the revenue recognised during the period and the balance cost is carried over under Inventory as part of either Realty Work in Progress or Finished Realty Stock. Cost of Realty construction / development includes all costs directly related to the Project (including finance cost attributable to the project) and other expenditure as identified by the Management which are incurred for the purpose of executing and securing the completion of the Project (net off incidental recoveries/ receipts) up to the date of receipt of Occupation Certificate of Project from the relevant authorities.

Construction Work in Progress includes cost of land, premium for development rights, construction costs, allocated interest and expenses incidental to the projects undertaken by the Company.

VIII. Revenue Recognition

a. The Company is following the “Percentage of Completion Method” of accounting. As per this method, revenue from sale of properties is recognised in the Statement of Profit & Loss in proportion to the actual cost incurred as against the total estimated cost of projects under execution with the Company on transfer of significant risk and rewards to the buyer.

In accordance with the “Guidance Note on Accounting for Real Estate Transactions (for entities to whom Ind AS is applicable), construction revenue on such projects, measured at the fair value (i.e. adjusted for discounts, incentives, time value of money adjustments etc.), have been recognised on percentage of completion method provided the following thresholds have been met:

i All critical approvals necessary for the commencement have been obtained

ii The expenditure incurred on construction and development costs is not less than 25 per cent of the total estimated construction and development costs

iii At least 25 percent of the saleable project area is secured by contracts or agreements with buyers and

iv At least 10 percent of the contract consideration is realized at the reporting date in respect of such contracts and it is reasonable to expect that the parties to such contracts will comply with the payment terms as defined in the contracts.

Revenue from sale of completed properties (Finished Realty Stock) is recognised upon transfer of significant risks and rewards to the buyer.

b. Income from relinquishment of rights over property is recognised on the basis of terms agreed with the party, which is based on the transfer of risks and rewards related to the asset.

c. Interest income is accounted on an accrual basis at effective interest rate.

d. Dividend income is recognised when the right to receive the payment is established.

e. Rent income is accounted on accrual basis over tenure of the lease/service agreement.

IX. Income Tax

Income Tax expense comprises current and deferred tax. It is recognised in Statement of Profit and Loss except to the extent that it relates to items recognised directly in Equity or in Other Comprehensive Income.

a. Current Tax

Current Tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends.

Current tax assets and liabilities can be offset only if the Company

- has a legally enforceable right to set off the recognised amounts; and

- intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

b. Deferred Tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes (including those arising from consolidation adjustments such as unrealised profit on inventory etc.).

Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it 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 profits improves.

Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that 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 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.

Deferred tax assets and liabilities are offset only if:

- The Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

- The deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.

The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

X. Employee Benefits

a. Short term employee benefits

Short term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

b. Post Employment Benefits

i. Defined contribution plans: Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

ii. Defined benefit plans: Provision for Gratuity is recorded on the basis of actuarial valuation certificate provided by the actuary using Projected Unit Credit Method.

The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in Other Comprehensive Income (OCI). Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset). Net interest expense and other expenses related to defined benefit plans are recognised in the Statement of Profit and Loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in the Statement of Profit and Loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

c. Other Long Term Employee Benefits

Company’s liability towards compensated absences is determined by an independent actuary using Projected Unit Credit Method. Past services are recognised on a straight line basis over the average period until the benefits become vested. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of the estimated future cash flows using a discounted rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation.

XI. Leases

a. Where Company is the Lessee: Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating lease. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on straight line basis over the lease term, unless there is another systematic basis which is more representative of the time pattern of the lease

b. Where Company is the Lessor: Assets representing lease arrangements given under operating leases are included in fixed assets. Lease income is recognised in the Statement of Profit and Loss on straight line basis over the lease term, unless there is another systematic basis which is more representative of the time pattern of the lease. Initial direct costs are recognised immediately in the Statement of Profit and Loss.

c. Agreements which are not classified as finance leases are considered as operating lease.

d. Payments made under operating leases are recognised in the Statement of Profit and Loss. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease.

XII. Borrowing Cost

Borrowing costs are interest and other costs that the Company incurs in connection with the borrowing of funds and is measured with reference to the effective interest rate applicable to the respective borrowing.

Borrowing costs, allocated to qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the time all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

All other borrowing costs are recognised as an expense in the period which they are incurred.

XIII. Cash and Cash Equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and shortterm deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

XIV. Earnings Per Share

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for the events for bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares.

XV. Cash Flow Statement

Cash Flow Statement is prepared under the “Indirect Method” as prescribed under the Indian Accounting Standard (Ind AS) 7 -Statement of Cash Flows.

Cash and Cash equivalents for the purpose of cash flow statement comprise of cash at bank and in hand and short term investments with original maturity of three months or less.

XVI. Provisions, Contingent Liabilities and Contingent Assets

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed in the Notes. Contingent liabilities are disclosed for:

- possible obligations which will be confirmed only by future events not wholly within the control of the Company or

- present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets.

Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits. Contingent Assets are not recognised though are disclosed, where an inflow of economic benefits is probable.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

XVII. Segment Reporting

The Chief Operational Decision Maker (CODM) monitors the operating results of its business segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. The operating segments are identified on the basis of nature of product/services.

The Board of Directors of the Company has appointed the Managing Director as the CODM who assesses the financial performance and position of the Company, and makes strategic decisions.

XVIII. Recent Accounting Developments

Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment.’ The amendments are applicable to the Company from 1st April, 2017.

Amendment to Ind AS 7: The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and noncash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement. The effect on the financial statements is being evaluated by the Company.

Amendment to Ind AS 102: The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes. It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity settled awards. Market-based performance conditions and non-vesting conditions are reflected in the ‘fair values’, but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that includes a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement. As there is no such transaction of above nature at this stage, there will not be any effect due to above amendments.


Mar 31, 2016

Marathon Nextgen Realty Limited Corporate Information

Marathon Nextgen Realty Limited (“the Company") is a public Company domiciled in India. Its shares are listed on Bombay Stock Exchange (BSE) on September 19,1978 and initiated the process of listing its share with National Stock Exchange (NSE). The Company was incorporated on January13,1978 and is primarily engaged in the business of construction, development and sale of commercial and residential real estate projects. The core business activities are carried out under various business models like own development, through joint ventures and joint development and other arrangements with third parties.

NOTE 1 SIGNIFICANT ACCOUNTING POLICIES (i) Accounting convention / Basis of Preparation

These financial statements have been prepared in accordance with the Generally Accepted Accounting

Principles in India (''Indian GAAP'') to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 to the extent notified and guideline issued by the SEBI. The financial statements have been prepared under the historical cost convention on accrual basis. The accounting policies adopted in preparation of financial statements are consistent with those of previous year. The Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

(ii) Use of estimates

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates are made to the best of the management''s ability considering all necessary information. Differences, if any, between actual results and estimates are recognized in the period in which the results are ascertained. These being technical in nature the auditors rely on the judgment of the management.

(iii) Revenue

(a) The Company is in the business of Real Estate Development. Revenue from sale of properties under construction is recognized on the basis of actual bookings done (provided the significant risks and rewards have been transferred to the buyer and there is reasonable certainty of realization of the monies) using the Percentage of Completion Method. Revenue is recognized in accordance with the "Guidance Note on Accounting for Real Estate Transactions (Revised 2012)" issued by the Institute of Chartered Accountants of India, inter alia, with regard to thresholds for commencement of revenue recognition for projects and the basis for determining percentage of completion.

(b) Rent income, Car park income is accounted on cash basis.

(c) The Company''s share in profits / loss from a firm / LLP / AOP where the Company is a partner or member, is recognized when the same is credited to the Company''s current account on the basis of audited accounts of such firm / LLP / AOP, as per the terms of the partnership deed.

(d) Dividend income is recognized when the right to receive the same is established

(e) Interest income is recognized on time basis determined by the amount outstanding and the rate applicable.

(iv) Inventories

(a) Inventories comprise of: (i) Finished Realty Stock representing unsold premises in closed projects and (ii) Realty Work in Progress representing properties under construction / development. Inventory includes cost of land determined at historical value.

(b) Inventories are valued at lower of cost and net realizable value.

(c) Cost of Realty construction / development is charged to the Statement of Profit and Loss in proportion to the revenue recognized during the period and the balance cost is carried over under Inventory as part of either Realty Work- in- Progress or Finished Realty Stock. Cost of Realty construction / development includes all costs directly related to the Project and other expenditure as identified by the Management which are incurred for the purpose of executing and securing the completion of the project.

(v) Fixed assets

Fixed assets are stated at cost, less accumulated depreciation. Cost includes acquisition / construction price and includes incidental expenses.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, 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.

Expenses incurred for acquisition of capital assets excluding advances paid towards the acquisition of fixed assets outstanding at each Balance Sheet date are disclosed under Capital Work in Progress.

Gains or losses arising from de recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

(vi) Depreciation

(a) Depreciation is provided from the date the assets are ready to be put to use, on straight line method as per the useful life of the tangible assets including property held as Investment as prescribed under Part C of Schedule II of the Companies Act, 2013.

(b) Depreciation is calculated on the pro-rata basis from the date of installation/acquisition till the assets are sold or disposed.

(vii) Investments

(a) Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments.

(b) Long-term investments including investment held as land and buildings are shown at cost. Provision for diminution in the value of investments is made to recognize a decline of a permanent nature.

(c) Current investments are carried at the lower of cost and fair value as at the balance sheet date.

(d) On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

(viii) Employee Benefit

(a) Defined Contribution Plan

The Company''s liability towards Employee Provident Scheme is administered through the Employee Provident Fund Organization administrated by the Government of India. The company''s contributions paid / payable towards this defined contribution plan is recognized as expense in the Statement of Profit & Loss Account during the period in which the employee renders the related service. The interest rate payable to the beneficiaries is determined by the government.

(b) The Company provides for retirement/post retirement benefits in the form of gratuity and leave encashment. Both these funds are non funded and are provided for in the Balance Sheet on the basis of actuarial valuations. The obligation is measured at the present value using a discount rate.

(ix) Borrowing Costs

Borrowing costs incurred on constructing or acquiring a qualifying asset are capitalized as cost of that asset until it is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. Other borrowing costs are charged to Statement of Profit and Loss in the year in which they are incurred.

(x) Taxes on income

Tax expenses are the aggregate of current tax and deferred tax charged or credited in the statement of Profit and Loss for the year.

(a) Current Tax:

The current charge for Income Tax is calculated in accordance with the Income Tax Act, 1961 applicable to the Company.

(b) Deferred Tax:

Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the year. The deferred tax charge or credit and the deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future, however where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Deferred tax assets are reviewed at each Balance Sheet date.

(xi) Impairment of Fixed Assets

(a) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

(b) After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

(xii) Leases

Assets leased out under operating lease are capitalized. Rental income is recognized on accrual basis over the lease term.

(xiii) Cash Flow Statement

Cash Flow Statement is prepared under the “Indirect Method” as prescribed under the Accounting Standard 3-Cash Flow Statements.

Cash and Cash equivalents for the purpose of cash flow statement comprise of cash at bank and in hand and short term investments with original maturity of three months or less.

(xiv) Earnings Per Share (EPS)

Basic Earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue, bonus element in right issue to existing shareholders, share split, and reverse share split (Consolidation of shares). 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 equity shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(xv) Provisions, Contingent Liabilities and Contingent Assets

The Company creates a provision when there is a present obligation as a result of past events that probably required an outflow of resources and reliable estimates can be made of the amount of the obligation.

Contingent liability is a possible obligation that arises from past events and the existence will be confirmed by the occurrence or non occurrence of an uncertain future event not wholly within the control of the company or it may be an obligation that may arise out of a past event but is not recognized because it is not probable that there could be an outflow of resources or the amount of obligation cannot be reliably estimated. Accordingly contingent liabilities are disclosed after careful evaluation of facts and their legal consequences. Contingent assets are neither recognized nor disclosed.


Mar 31, 2015

(i) Accounting convention

These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India ('Indian GAAP1) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared under the historical cost convention on accrual basis.

(ii) Use of estimates

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates are made to the best of the management's ability considering all necessary information. Differences, if any, between actual results and estimates are recognized in the period in which the results are ascertained. These being technical in nature the auditors rely on the judgment of the management.

(iii) Revenue

(a) Revenue in respect of realty development activities is recognized upon the transfer of significant risks and rewards to the buyer in terms of the underlying sale agreement, provided it is not unreasonable to expect ultimate collection. The Company perceives that risk and reward stands transferred to the buyer when the underlying sale agreements are registered with the appropriate authorities.

(b) Dividend income is recognized when the right to receive the same is established

(c) Interest income is recognised on time basis determined by the amount outstanding and the rate applicable.

(iv) Inventories

(a) Inventories comprise of: (i) Finished Realty Stock representing unsold premises in closed projects and (ii) Realty Work in Progress representing properties under construction/development. Inventory includes cost of land determined at historical value.

(b) Inventories are valued at lower of cost and net realisable value.

(c) Cost of Realty construction / development is charged to the Statement of Profit and Loss in proportion to the revenue recognised during the period and the balance cost is carried over under Inventory as part of either Realty Work- in- Progress or Finished Realty Stock. Cost of Realty construction / development includes all costs directly related to the Project and other expenditure as identified by the Management which are incurred for the purpose of executing and securing the completion of the project.

(v) Fixed assets

Fixed assets are stated at cost, less accumulated depreciation. Cost includes acquisition / construction price and includes incidental expenses, but is net of CENVAT or other duty credits.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, 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.

Expenses incurred for acquisition of capital assets excluding advances paid towards the acquisition of fixed assets outstanding at each Balance Sheet date are disclosed under Capital Work in Progress.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.

(vi) Depreciation

Depreciation is provided from the date the assets are ready to be put to use, on straight line method as per the useful life of the tangible assets including property held as Investment as prescribed under Part C of Schedule II of the Companies Act, 2013.

(vii) Investments

(a) Investments that are readily realisable and Intended to be held for not more than a year are classified as current Investments. All other investments are classified as long-term investments.

(b) Long-term investments including investment held as land and buildings are shown at cost. Provision for diminution in the value of investments is made to recognize a decline of a permanent nature.

(c) Current investments are carried at the lower of cost and fair value as at the balance sheet date.

(viii) Employee Benefit

(a) Defined Contribution Plan

The Company's liability towards Employee Provident Scheme is administered through the Employee Provident Fund Organisation administrated by the Government of India. The company's contributions paid / payable towards this defined contribution plan is recognized as expense in the Statement of Profit & Loss Account during the period in which the employee renders the related service. The interest rate payable to the beneficiaries is determined by the government.

(b) The Company provides for retirement/post retirement benefits in the form of gratuity and leave encashment. Both these funds are non funded and are provided for in the Balance Sheet on the basis of actuarial valuations. The obligation is measured at the present value using a discount rate.

(ix) Borrowing Costs

Borrowing costs incurred on constructing or acquiring a qualifying asset are capitalized as cost of that asset until it is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. Other borrowing costs are charged to Statement of Profit and Loss in the year in which they are incurred.

(x) Taxes on income

Tax expenses are the aggregate of current tax and deferred tax charged or credited in the statement of Profit and Loss for the year.

(a) Current Tax:

The current charge for Income Tax is calculated in accordance with the relevant tax regulations applicable to the Company.

(b) Deferred Tax:

Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the year. The deferred tax charge or credit and the deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future, however where there is unabsorbed depreciation or carryforward of losses, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Deferred tax assets are reviewed at each Balance Sheet date.

(xi) Impairment of Fixed Assets

(a) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

(b) After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

(xii) Leases

Assets leased out under operating lease are capitalized. Rental income is recognized on accrual basis over the lease term.

(xiii) Provisions, Contingent Liabilities and Contingent Assets

The Company creates a provision when there is a present obligation as a result of past events that probably required an outflow of resources and reliable estimates can be made of the amount of the obligation.

Contingent liability is a possible obligation that arises from past events and the existence will be confirmed by the occurrence or non occurrence of an uncertain future event not wholly within the control of the company or it may be an obligation that may arise out of a past event but is not recognized because it is not probable that there could be an outflow of resources or the amount of obligation cannot be reliably estimated. Accordingly contingent liabilities are disclosed after careful evaluation of facts and their legal consequences. Contingent assets are neither recognized nor disclosed.


Mar 31, 2014

(i) Accounting convention

The financial statements have been prepared on historical costs and on the basis of going concern and are in accordance with generally accepted accounting principles in India and the provisions of the Companies Act, 1956. Incomes and expenses are recognized on accrual basis, except in case of sale of car parking rights the income is recognized on cash basis due to uncertainty of receipt of these amounts through separate agreement/letter of allotment,

(ii) Use of estimates

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates are made to the best of the management''s ability considering all necessary information. Differences, if any, between actual results and estimates are recognized in the period in which the results are ascertained. These being technical in nature the auditors rely on the judgment of the management.

(iii) Revenue

(a) Revenue in respect of realty development activities is recognized upon the transfer of significant risks and rewards to the buyer in terms of the underlying sale agreement, provided it is not unreasonable to expect ultimate collection. The Company perceives that risk and reward stands transferred to the buyer when the underlying sale agreements are registered with the appropriate authorities.

(b) Dividend income is recognized when the right to receive the same is established

(iv) Inventories

Inventory comprising of Finished Stock and construction work-in-progress, including stock of materials, is valued at cost or Net Realizable Value whichever is lower. Cost includes materials, direct expenses that is arrived at on first-in-first-out basis. Inventory includes cost of land determined at historical value.

(v) Fixed assets and depreciation

(a) Fixed assets are stated at cost less accumulated depreciation. Cost includes acquisition / construction price and include incidental expenses, but is net of CENVAT or other duty credits.

(b) Depreciation is provided on the Straight Line Basis at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956:

(c) Cost (less estimated salvage value) of fixed assets acquired for specific projects is depreciated over the duration of the project

(vi) Investments

(a) Long-term investments including investment held as land and buildings are shown at cost. Provision for diminution in the value of investments is made to recognize a decline of a permanent nature.

(b) Current investments are carried at the lower of cost and fair value as at the balance sheet date.

(vii) Employee Benefit

(a) Defined Contribution Plan

The Company:s liability towards Employee Provident Scheme is administered through the Employee Provident Fund Organisation administrated by the Govt, of India, The company''s, contributions paid / payable towards this defined contribution plan is recognized as expense in the Profit & Loss Account during the period in which the employee renders the related service. The interest rate payable to the beneficiaries is determined by the government.

(b) The company provides for retirement/po.st retirement benefits in the form of gratuity and leave encashment.. Both these funds are non funded and are provided for in the Balance Sheet on the basis of actuarial valuations. The obligation is measured at the present value using a discount rate.

(viii) Borrowing Costs

Borrowing costs incurred on constructing or acquiring a qualifying asset are capitalized as cost of that asset until it is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue and recognized as an expense in the Profit and Loss account.

(ix) Taxes on income

Current tax is ascertained on the basis of taxable income computed in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognized on timing differences between accounting income and taxable income, which arise in an accounting period and are capable of reversal in later periods. Deferred tax assets are recognized when there is reasonable certainty of realization; In case of carry forward depreciation / business losses, deferred tax assets are recognized only where there is virtual certainty that the Company will have sufficient future taxable income against which the losses /depreciation can be set off. Deferred tax assets / liabili ties are reviewed at each balance sheet date.

(x) Impairment of Fixed Assets

(i) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable, amount.

(ii) After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

(xi) Leases

Assets leased out under operating lease are capitalized. Rental income is recognized on accrual basis, over the lease term.

(xii) Contingent Liabilities

Contingent liability is a possible obligation that arises from past events and the existence will be confirmed by the occurrence or non occurrence of an uncertain future event not wholly within the control of the company or it may be an obligation that may arise out of a past event but is not recognized because it is not probable that there could be an outflow of resources or the amount of obligation cannot be reliably estimated. Accordingly contingent liabilities are disclosed after careful evaluation of facts and their legal consequences.


Mar 31, 2013

I. Accounting convention

The financial statements have been prepared on historical costs and on the basis of going concern and are in accordance with generally accepted accounting principles in India and the provisions of the Companies Act, 1956. Incomes and expenses are recognized on accrual basis, except in case of sale of car parking rights the income is recognized on cash basis due to uncertainty of receipt of these amounts through separate agreement/letter of allotment.

ii. Use of estimates

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates are made to the best of the management''s ability considering all necessary information. Differences, if any, between actual results and estimates are recognized in the period in which the results are ascertained. These being technical in nature the auditors rely on the judgment of the management.

iii. Revenue

(a) Revenue in respect of realty development activities is recognized upon the transfer of significant risks and rewards to the buyer in terms of the underlying sale agreement, provided it is not unreasonable to expect ultimate collection. The Company perceives that risk and reward stands transferred to the buyer when the underlying sale agreements are registered with the appropriate authorities.

(b) Dividend income is recognized when the right to receive the same is established

IV. Inventories

Inventory comprising of Finished Stock and construction work-in-progress, including stock of materials, is valued at cost or Net Realizable Value whichever is lower. Cost includes materials, direct expenses that is arrived at on first-in-first-out basis. Inventory includes cost of land determined at historical value.

v. Fixed assets and depreciation

(a) Fixed assets are stated at cost less accumulated depreciation. Cost includes acquisition / construction price and include incidental expenses, but is net of CENVAT or other duty credits.

(b) Depreciation is provided on the Straight Line Basis at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956:

(c) Cost (less estimated salvage value) of fixed assets acquired for specific projects is depreciated over the duration of the project

(d) Cost of Fixed Assets acquired for Club House is depreciated @ 20%.

vi. Investments

(a) Long-term investments including investment held as land and buildings are shown at cost. Provision for diminution in the value of investments is made to recognize a decline of a permanent nature.

(b) Current investments are carried at the lower of cost and fair value as at the balance sheet date.

vii. Employee Benefit

(a) Defined Contribution Plan

The Company''s liability towards Employee Provident Scheme is administered through the Employee Provident Fund Organisation administrated by the Govt, of India. The company''s contributions paid / payable towards this defined contribution plan is recognized as expense in the Profit & Loss Account during the period in which the employee renders the related service. The interest rate payable to the beneficiaries is determined by the government.

(b) The company provides for retirement/post retirement benefits in the form of gratuity and leave encashment. Both these funds are non funded and are provided for in the Balance Sheet on the basis of actuarial valuations. The obligation is measured at the present value using a discount rate.

viii. Borrowing Costs

Borrowing costs incurred on constructing or acquiring a qualifying asset are capitalized as cost of that asset until it is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue and recognized as an expense in the Profit and Loss account.

ix. Taxes on income

Current tax is ascertained on the basis of taxable income computed in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognized on timing differences between accounting income and taxable income, which arise in an accounting period and are capable of reversal in later periods. Deferred tax assets are recognized when there is reasonable certainty of realization;

In case of carry forward depreciation / business losses, deferred tax assets are recognized only where there is virtual certainty that the Company will have sufficient future taxable income against which the losses /depreciation can be set off. Deferred tax assets /liabilities are reviewed at each balance sheet date.

x. ImpairmentofFixedAssets

(i) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

(ii) After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

xi. Leases

Assets leased out under operating lease are capitalized. Rental income is recognized on accrual basis over the lease term.

xii. Contingent Liabilities

Contingent liability is a possible obligation that arises from past events and the existence will be confirmed by the occurrence or non occurrence of an uncertain future event not wholly within the control of the company or it may be an obligation that may arise out of a past event but is not recognized because it is not probable that there could be an outflow of resources or the amount of obligation cannot be reliably estimated. Accordingly contingent liabilities are disclosed after careful evaluation of facts and their legal consequences.


Mar 31, 2012

I. Accounting convention

The financial statements have been prepared on historical costs and on the basis of going concern and are in accordance with generally accepted accounting principles In India and the provisions of the Companies Act, 1956, Incomes and expenses are recognized on accrual basis, except in case of sale of car parking rights the income is recognized on cash basis due to uncertainty of receipt of these amounts through separate agreement/letter of allotment.

ii. Use of estimates

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates are made to the best of the management's ability considering all necessary information. Differences, if any, between actual results and estimates are recognized in the period in which the results are ascertained.These being technical in nature the auditors rely on the judgment of the management.

iii. Revenue

(a) Revenue in respect of realty development activities is recognized upon the transfer of significant risks and rewards to the buyer in terms of the underlying sale agreement, provided it is not unreasonable to expect ultimate collection. The Company perceives that risk and reward stands transferred to the buyer when the underlying sale agreements are registered with the appropriate authorities.

(b) Dividend income is recognized when the right to receive the same is established

iV. Inventories

Inventory comprising of Finished Stock and construction work-in-progress, including stock of materials, is valued at cost or Net Realizable Value whichever is lower. Cost includes materials, direct expenses that is arrived at on first-in-first-out basis. Inventory Includes cost of land determined at historical value.

v. Fixed assets and depreciation

(a) Fixed assets are stated at cost less accumulated depreciation. Cost includes acquisition i construction price and include incidental expenses, but is net of CENVAT or other duty credits.

(b) Depreciation is provided on the Straight Line Basis at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956:

(c) Cost (less estimated salvage value) of fixed assets acquired for specific projects is depreciated over the duration of the project

(d) Cost of Fixed Assets acquired for Club House is depreciated ffi20%.

vi. Investments

(a) Long-term investments including investment held as land and buildings are shown at cost. Provision for diminution in the value of Investments is made to recognize a decline of a permanent nature.

(b) Current investments are carried at the lower of cost and fair value as at the balance sheet date.

vii. Employee Benefit

(a) Defined Contribution Plan

The Company's liability towards Employee Provident Scheme is administered through the Employee Provident Fund Organisation administrated by the Govt, of India, The company's contributions paid / payable towards this defined contribution plan is recognized as expense in the Profit & Loss Account during the period in which the employee renders the related service. The interest rate payable to the beneficiaries is determined by the government.

(b) The company provides for retirement/post retirement benefits in the form of gratuity and leave encashment. Both these funds are non funded and are provided for in the Balance Sheet on the basis of actuarial valuations. The obligation is measured at the present value using a discount rate,

viii. Borrowing Costs

Borrowing costs incurred on constructing or acquiring a qualifying asset are capitalized as cost of that asset until it is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue and recognized as an expense in the Profit and Loss account.

ix. Taxes on income

Current tax is ascertained on the basis of taxable income computed in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognized on timing differences between accounting income and taxable income, which arise in an accounting period and are capable of reversal in later periods. Deferred tax assets are recognized when there is reasonable certainty of realization;

In case of carry forward depreciation/business losses, deferred tax assets are recognized only where there is virtual certainty that the Company will have sufficient future taxable income against which the losses/depreciation can be set off. Deferred tax assets/liabilities are reviewed at each balance sheet date.

x. Impairment of Fixed Assets

0) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/ external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

(II) After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

xi. Leases

Assets leased out under operating lease are capitalized. Rental income is recognized on accrual basis over the lease term,

xii. Contingent Liabilities

Contingent liability is a possible obligation that arises from past events and the existence will be confirmed by the occurrence or non occurrence of an uncertain future event not wholly within the control of the company or it may be an obligation that may arise out of a past event but is not recognized because it Is not probable that there could bean outflow of resources or the amount of obligation cannot be reliably estimated. Accordingly contingent liabilities are disclosed after careful evaluation of facts and their legal consequences.


Mar 31, 2011

(I) Accounting convention

The financial statements have been prepared on historical costs and on the basis of going concern and are in accordance with generally accepted accounting principles in India and the provisions of the Companies Act, 1956. Incomes and expenses are recognized on accrual basis, except in case of sale of car parking rights the income is recognized on cash basis due to uncertainty of receipt of these amounts through separate agreement/letter of allotment.

(II) Use of estimates

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates are made to the best of the management's ability considering all necessary information. Differences, if any, between actual results and estimates are recognized in the period in which the results are ascertained.These being technical in nature the auditors rely on the judgment of the management.

(III) Revenue

(a) Revenue in respect of realty development activities is recognized upon the transfer of significant risks and rewards to the buyer in terms of the underlying sale agreement, provided it is not unreasonable to expect ultimate collection. The Company perceives that risk and reward stands transferred to the buyer when the underlying sale agreements are registered with the appropriate authorities.

(b) Dividend income is recognized when the right to receive the same is established

(IV) Inventories

Inventory comprising of Finished Stockand construction work-in-progress, including stockof materials, is valued at cost or Net Realizable Value whichever is lower. Cost includes materials, direct expenses that is arrived at on first- in-first-out basis. Inventory includes cost of land determined at historical value.

(V) Fixed assets and depreciation

(a) Fixed assets are stated at cost less accumulated depreciation. Cost includes acquisition / construction price and include incidental expenses, but is net of CENVATor other duty credits.

(b) Depreciation is provided on the Straight Line Basis at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956:

(c) Cost (less estimated salvage value) of fixed assets acquired for specific projects is depreciated over the duration of the project

(d) Cost of Fixed Assets acquired for Club House is depreciated @ 20%.

(VI) Investments

(a) Long-term investments including investment held as land and buildings are shown at cost. Provision for diminution in the value of investments is made to recognize a decline of a permanent nature.

(b) Current investments are carried at the lower of cost and fair value as at the balance sheet date.

(VII) Employee Benefit

(a) Defined Contribution Plan

The Company's liability towards Employee Provident Scheme is administered through the Employee Provident Fund Organisation administrated by the Govt, of India. The company's contributions paid / payable towards this defined contribution plan is recognized as expense in the Profit & Loss Account during the period in which the employee renders the related service.The interest rate payable to the beneficiaries is determined by the government.

(b) The Company provides for retirement/post retirement benefits in the form of gratuity and leave encashment. Both these funds are non funded and are provided for in the Balance Sheet on the basis of actuarial valuations. The obligation is measured at the present value using a discount rate.

(VIII) Borrowing Costs

Borrowing costs incurred on constructing or acquiring a qualifying asset are capitalized as cost of that asset until it is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue and recognized as an expense in the Profit and Loss account.

(IX) Taxeson income

Current tax is ascertained on the basis of taxable income computed in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognized on timing differences between accounting income and taxable income, which arise in an accounting period and are capable of reversal in later periods. Deferred tax assets are recognized when there is reasonable certainty of realization.

In case of carry forward depreciation / business losses, deferred tax assets are recognized only where there is virtual certainty that the Company will have sufficient future taxable income against which the losses/depreciation can be set off. Deferred tax assets / liabilities are reviewed at each balance sheet date.

(X) Impairment of Fixed Assets

(I) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

(II) After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

(XI) Contingent Liabilities

Contingent liability is a possible obligation that arises from past events and the existence will be confirmed by the occurrence or non occurrence of an uncertain future event not wholly within the control of the company or it may be an obligation that may arise out of a past event but is not recognized because it is not probable that there could be an outflow of resources or the amount of obligation cannot be reliably estimated. Accordingly contingent liabilities are disclosed after careful evaluation of facts and their legal consequences.


Mar 31, 2010

I. Accounting convention

The financial statements have been prepared on historical costs and on the basis of going concern and are in accordance with generally accepted accounting principles in India and the provisions of the Companies Act, 1956. Incomes and expenses are recognized on accrual basis except in case of sale of car parking rights the income is recognized on cash basis due to uncertainty of receipt of these amounts.

ii. Use of estimates:

The presentation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The estimates are made to the best of the managements ability considering all necessary information. Differences, if any, between actual results and estimates are recognized in the period in which the results are ascertained. These being technical in nature the auditors rely on the judgment of the management.

iii. Revenue:

(a) Revenue in respect of realty development activities is recognized upon the transfer of significant risks and rewards to the buyer in terms of the underlying sale agreement, provided it is not unreasonable to expect ultimate collection.

(b) Dividend income is recognized when the right to receive the same is established

iv. Inventories:

Inventory comprising of Finished Stock and construction work-in-progress, including stock of materials, is valued at cost or Net Realisable Value whichever is lower. Cost includes materials, direct expenses that is arrived at on first-in- first-out basis. Inventory includes cost of land determined at historical value.

v. Fixed assets and depreciation:

(a) Fixed assets are stated at cost less accumulated depreciation. Cost includes acquisition / construction price and include incidental expenses, but is net of CENVAT or other duty credits.

(b) Depreciation is provided on the Straight Line Basis at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956:

(c) Cost (less estimated salvage value) of fixed assets acquired for specific projects is depreciated over the duration of the project

(d) Cost of Fixed Assets acquired for Club House is depreciated @ 20%.

vi. Investments:

(a) Long-term investments including investment held as land and buildings are shown at cost. Provision for diminution in the value of investments is made to recognize a decline of a permanent nature.

(b) Current investments are carried at the lower of cost and fair value as at the balance sheet date.

vii. Employee Benefit:

(a) Defined Contribution Plan:

The Companys liability towards Employee Provident Scheme is administered through the Employee Provident Fund Organisation administrated by the Govt, of India. The Companys contributions paid / payable towards this defined contribution plan is recognized as expense in the Profit & Loss Account during the period in which the employee renders the related service. The interest rate payable to the beneficiaries is determined by the government.

b) The Company provides for retirement/post retirement benefits in the form of gratuity and leave encashment. Both these funds are non funded and are provided for in the Balance Sheet on the basis of actuarial valuations. The obligation is measured at the present value using a discount rate.

viii. Borrowing Costs :

Borrowing costs incurred on constructing or acquiring a qualifying asset are capitalized as cost of that asset until it is ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to revenue and recognized as an expense in the Profit and Loss account.

ix. Taxes on income :

Current tax is ascertained on the basis of taxable income computed in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognized on timing differences between accounting income and taxable income, which arise in an accounting period and are capable of reversal in later periods. Deferred tax assets are recognized when there is reasonable certainty of realization;

In case of carry forward depreciation / business losses, deferred tax assets are recognized only where there is virtual certainty that the Company will have sufficient future taxable income against which the losses/ depreciation can be set off. Deferred tax assets / liabilities are reviewed at each balance sheet date.

(x) Impairment of Fixed Assets

(i) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

(ii) After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

(xi) Segment Reporting

(a) Segment Revenue & Expenses:

Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprises as a whole and are not allocable to a segment on a reasonable basis have been disclosed as "Unallocable".

(b) Segment Assets and Liabilities:

Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

(c) Inter segment Transfers:

Segment revenue, segment Expenses and segment results include transfer between business segments, such transfers are eliminated in consolidation.

(d) Accounting Policies:

The accounting policies consistently used in the Preparation of the financial statements are also applied to item of revenue and expenditure in individual segments

xii. Contingent Liabilities :

Contingent liability is a possible obligation that arises from past events and the existence will be confirmed by the occurrence or non occurrence of an uncertain future event not wholly within the control of the Company or it may be an obligation that may arise out of a past event but is not recognized because it is not probable that there could be an outflow of resources or the amount of obligation cannot be reliably estimated. Accordingly contingent liabilities are disclosed after careful evaluation of facts and their legal consequences.

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article

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