(l) Provisions, Contingent Assets and Contingent Liabilities

i) Provisions

Provisions are recognized only when there is a present obligation (legal or
constructive), as a result of past events and it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and
when a reliable estimate of the amount of obligation can be made at the reporting
date. Provisions are discounted to their present values, where the time value of
money is material, using a current pre-tax rate that reflects, when appropriate, the
risks specific to the liability. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.

When the Company expects some or all of a provision to be reimbursed, the
reimbursement is recognised as a separate asset, but only when the reimbursement

is virtually certain. The expense relating to a provision is presented in the statement
of profit and loss net of any reimbursement.

ii) Contingent liabilities

A contingent liability is a possible obligation that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of one or
more uncertain future events not wholly within the control of the Company or a
present obligation that is not recognized because it is not probable that an outflow
of resources will be required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be recognized because
it cannot be measured reliably. The Company does not recognize a contingent
liability but discloses it in the financial statements, unless the possibility of an outflow
of resources embodying economic benefits is remote.

iii) Contingent assets

Contingent assets are neither recognised nor disclosed except when realisation of
income is virtually certain, related asset is disclosed.

(m) Taxation

Income tax expense comprises current tax expense and the net change in the
deferred tax asset or liability during the year. Current and deferred tax are
recognized in the statement of profit and 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.

i) Current income tax

Current income tax for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities based on the
taxable income for that period. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted by the balance sheet
date

ii) Deferred income tax

Deferred income tax liability is recognized on temporary differences at the balance
sheet date between the tax bases of assets and liabilities and their carrying amounts
for financial reporting purposes, except when the deferred income tax arises from
the initial recognition of goodwill or an asset or liability in a transaction that is not a
business combination and affects neither accounting nor taxable profit or loss at the
time of the transaction. Deferred income tax assets are recognized for all deductible
temporary differences, carry forward of unused tax credits and unused tax losses,
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 utilized. The carrying amount of deferred income tax
assets is reviewed at each balance sheet 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 income tax asset to be utilized. Deferred income tax assets and
liabilities are measured at the tax rates that are expected to apply in the period when
the asset is realized or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the balance sheet date. The
Company offsets tax assets and liabilities if and only if it has a legally enforceable
right to set off current tax assets and current tax liabilities and the deferred tax
assets and deferred tax liabilities relate to income taxes levied by the same tax
authority. Deferred tax relating to items recognized outside profit or loss is
recognized outside profit or loss (either in other comprehensive income or in equity).

Deferred tax items are recognized in correlation to the underlying transaction either
in OCI or directly in equity.

(o) Financial Instrument

A financial instrument is any contract that gives rise to a financial asset of one
entity and a financial liability or equity instrument of another entity.

i) Initial recognition and measurement of financial assets and liabilities

Financial assets and liabilities are recognized when the Company becomes a party
to the contractual provisions of the instrument. Financial assets and liabilities are
initially measured at fair value, however, trade receivables and trade payables that
do not contain a significant financing component are measured at transaction value
and investments in subsidiaries are measured at cost in accordance with Ind AS 27
- Seperate financial statements. Transaction costs that are directly attributable to
the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added
to or deducted from the fair value measured on initial recognition of financial asset
or financial liability.

ii) Financial assets at amortized cost

Financial assets are subsequently measured at amortized cost if these financial
assets are held within a business whose objective is to hold these assets in order
to collect contractual cash flows and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.

iii) Financial assets at fair value through other comprehensive income

Financial assets are measured at fair value through other comprehensive income if
these financial assets are held within a business whose objective is achieved by
both collecting contractual cash flows and selling financial assets and the
contractual terms of the financial asset give rise on specified dates to cash flows
that are solely payments of principal and interest on the principal amount
outstanding.

iv) Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit or loss unless it is
measured at amortized cost or at fair value through other comprehensive income
on initial recognition. The transaction costs directly attributable to the acquisition of
financial assets and liabilities at fair value through profit or loss are immediately
recognized in statement of profit and loss.

v) Debt instruments at amortized cost

A ‘debt instrument’ is measured at the amortized cost if both the following conditions
are met:

a) The asset is held within a business model whose objective is to hold assets for
collecting contractual cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are
solely payments of principal and interest (SPPI) on the principal amount
outstanding. After initial measurement, such financial assets are subsequently
measured at amortized cost using the effective interest rate (EIR) method.
Amortized 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 amortization is included in finance income in the profit or loss. The losses
arising from impairment are recognized in the profit or loss. This category generally
applies to trade and other receivables.

vi) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held
for trading and financial liabilities designated upon initial recognition as at fair value
through profit or loss. Financial liabilities are classified as held for trading if they are
incurred for the purpose of repurchasing in the near term. This category also
includes derivative financial instruments entered into by the Company that are not
designated as hedging instruments. Gains or losses on liabilities held for trading are
recognized in the profit or loss.

vii) Financial liabilities at amortized cost

Financial liabilities are subsequently carried at amortized cost using the effective
interest (‘EIR’) method. Interest-bearing loans and borrowings are subsequently
measured at amortized cost using EIR method. For trade and other payables
maturing within one year from the balance sheet date, the carrying amounts
approximate fair value due to the short maturity of these instruments.

viii) De-recognition of financial instruments

The Company derecognizes a financial asset when the contractual rights to the
cash flows from the financial asset expire or it transfers the financial asset and the
transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part
of a financial liability) is derecognized when the obligation specified in the contract
is discharged or cancelled or expires.

ix) Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial
recognition. After initial recognition, no reclassification is made for financial
instruments.

x) 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 realize the
assets and settle the liabilities simultaneously.

xi) Fair value of financial instruments

In determining the fair value of its financial instruments, the Company uses following
hierarchy and assumptions that are based on market conditions and risks existing
at each reporting date.

Fair value hierarchy:

All assets and liabilities for which fair value is measured or disclosed in the
standalone financial statements are categorized within the fair value hierarchy,
described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical
assets or liabilities

• Level 2 — Valuation techniques for which the lowest level input that is significant
to the fair value measurement is directly or indirectly observable

• Level 3 — Valuation techniques for which the lowest level input that is significant
to the fair value measurement is unobservable

For assets and liabilities that are recognized in the standalone financial statements
on a recurring basis, the Company determines whether transfers have occurred
between levels in the hierarchy by re-assessing categorization (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end
of each reporting period.

(p) Impairment

i) Financial assets

The Company assesses at each date of balance sheet whether a financial asset or
a group of financial assets (except financial assets valued through fair value through
profit or loss) is impaired. Ind AS 109 requires expected credit losses to be
measured through a loss allowance.

The Company recognizes lifetime expected losses for all contract assets and / or
all trade receivables that do not constitute a financing transaction. For all other
financial assets, expected credit losses are measured at an amount equal to the 12-
month expected credit losses or at an amount equal to the life time expected credit
losses if the credit risk on the financial asset has increased significantly since initial
recognition.

ii) 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 assets or cash¬
generating unit’s (CGU) net selling price and its value in use. The recoverable
amount is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of
assets. Where the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable
amount. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In
determining net selling price, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate valuation model
is used. Impairment losses are recognized in the statement of profit and loss. After
impairment, depreciation is provided on the revised carrying amount of the asset
over its remaining useful life.

iii) Where an impairment loss subsequently reverses, the carrying amount of the
asset (or a cash generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss been
recognized for the asset (or cash-generating unit) in prior years. A reversal of an
impairment loss is recognized immediately in the statement of profit and loss, unless
the relevant asset is carried at a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase.

Segment reporting
i) Identification of segments

In accordance with Ind AS 108 - Operating Segment, the operating segments used
to present segment information are identified on the basis of information reviewed
by the Company’s management to allocate resources to the segments and assess
their performance. An operating segment is a component of the Company that
engages in business activities from which it earns revenues and incurs expenses,
including revenues and expenses that relate to transactions with any of the
Company’s other components. Results of the operating segments are reviewed
regularly by the Managing Director who has been identified as the chief operating

decision maker (CODM), to make decisions about resources to be allocated to the
segment and assess its performance.

(q) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the
year attributable to equity shareholders by the weighted average number of equity
shares outstanding during the year. The diluted EPS is calculated on the same
basis as basic EPS, after adjusting for the effects of potential dilutive equity shares
unless impact is anti-dilutive

(r) 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.

(s) Restatement

The Company restates its financial statements and presents a third balance sheet
as at the beginning of the preceding period if it applies an accounting policy
retrospectively, makes a retrospective restatement of items in its financial
statements or reclassifies items in its financial statements that has a material effect
on the information in the balance sheet at the beginning of the preceding period.
The Company corrects material prior period errors retrospectively in the first set of
financial statements approved for issue after their discovery by (a) restating the
comparative amounts for the prior periods presented in which the error occurred; or
(b) if the error occurred before the earliest prior period presented, restating the
opening balances of assets, liabilities and equity for the earliest prior period
presented.

(t) Statement of Cash Flow

Cash flows are reported using the indirect method, whereby profit / (loss) before
tax is adjusted for the effects of transactions of non-cash nature and any deferrals
or accruals of past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are segregated based
on the available information.

Note 3 Critical Accounting Judgements and Estimates

The preparation of the financial statements requires that the Management make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent liabilities as at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. The recognition, measurement, classification or disclosure of an
item or information in the financial statements is made relying on these estimates.

The estimates and judgments used in the preparation of the financial statements
are continuously evaluated by the Company and are based on historical
experience and various other assumptions and factors (including expectations of
future events) that the Company believes to be reasonable under the existing
circumstances. Actual results could differ from those estimates. Revisions to
accounting estimates are recognised in the period in which the estimates are
revised if the revision affects only that period, or in the period of the revision and
future periods if the revision affects both current and future periods.

Significant accounting judgements, estimates and assumptions

Significant accounting judgements, estimates and assumptions used by
management are as below”

Determination of performance obligations and timing of revenue recognition on
revenue from real estate development [Refer note 2.2(a)(I)(i)]

Computation of percentage completion for projects in progress, project cost,
revenue and saleable area estimates [Refer note 2.2(a)(I)(ii)]

Estimation of net realizable value for inventory [Refer note 2.2(c )

Classification of property as investment property or inventory [Refer note 2.2(f)]
Useful life and residual value of property, plant and equipment, investment property
and intangible assets [Refer note 2.2(g)]

Provision for litigations and contingencies [Refer note 2.2(l)]

Provision for tax [Refer note.2.2(m)]

Fair value measurement disclosures [Refer note 2.2(o)]

Evaluation of indicators and impairment of financial and non-financial assets [Refer
note 2.2(o)]

xiii. Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial
recognition. After initial recognition, no reclassification is made for financial assets
which are equity instruments and financial liabilities. For financial assets which are
debt instruments, a reclassification is made only if there is a change in the business
model for managing those assets. Changes to the business model are expected
to be infrequent. The Company’s senior management determines change in the
business model as a result of external or internal changes which are significant to
the Company’s operations. Such changes are evident to external parties. A change
in the business model occurs when the Company either begins or ceases to
perform an activity that is significant to its operations. If the Company reclassifies
financial assets, it applies the reclassification prospectively from the
reclassification date which is the first day of the immediately next reporting period
following the change in business model. The Company does not restate any
previously recognised gains, losses (including impairment gains or losses) or
interest.