Signatureglobal (India) Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்

Mar 31, 2025

3.1 Material accounting policy information

The standalone financial statements have been prepared
using the material accounting policies and measurement
basis summarised below.

(a) Historical cost basis

The standalone financial statements have been
prepared on historical cost basis except for certain
financial assets and financial liabilities which are
measured at fair value as explained in relevant
accounting policies.

(b) Current versus non-current classification

All assets and liabilities have been classified as
current or non-current as per operating cycle and
other criteria set-out in the Act. Deferred tax assets
and liabilities are classified as non-current assets
and non-current liabilities, as the case may be.

(c) Standards issued but not yet effective

The Ministry of Corporate Affairs notifies new
standard or amendment to the existing standards.
There is amendment to Ind AS 21 “Effects of Changes
in Foreign Exchange Rates” such amendment
would have been applicable from 01 April 2025.

The Effects of Changes in Foreign Exchange
Rates specify how an entity should assess
whether a currency is exchangeable and how
it should determine a spot exchange rate when
exchangeability is lacking. The amendment also
requires disclosure of information that enables
users of its financial statements to understand
how the currency not being exchangeable into the
other currency affects, or is expected to affect, the
entity’s financial performance, financial position
and cash flows.

The amendment is effective for the period on or
after 01 April 2025. When applying the amendment,
an entity cannot restate comparative information.

The Company has reviewed the new
pronouncement and based on its evaluation has
determined that above amendment does not have

a significant impact on the Company’s Standalone
Financial Statements.

(d) Standards issued/amended and became effective
The Ministry of Corporate Affairs notified new
standards or amendment to existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time. The Company
has applied following amendments for the first-time
during the current year which are effective
from 01 April 2024.

Amendments to Ind AS 116 - Lease liability in a
sale and leaseback

The amendments require an entity to recognise
lease liability including variable lease payments
which are not linked to index or a rate in a way it does
not result into gain on Right of Use asset it retains.

Ind AS 117 - Insurance Contracts

MCA notified Ind AS 117, a comprehensive
standard that prescribe, recognition, measurement
and disclosure requirements, to avoid diversities
in practice for accounting insurance contracts and
it applies to all companies i.e., to all “insurance
contracts” regardless of the issuer. However, Ind
AS 117 is not applicable to the entities which are
insurance companies registered with IRDAI.

The Company has reviewed the new
pronouncements and based on its evaluation has
determined that above amendments does not have
a significant impact on the Company’s Standalone
Financial Statements.

(e) Property, plant and equipment (‘PPE’)
Recognition, measurement and de-recognition

PPE are stated at cost; net of tax or duty credits
availed, less accumulated depreciation and
impairment losses, if any. Cost includes original
cost of acquisition, including incidental expenses
related to such acquisition and installation.

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 and

cost of the item can be measured reliably. All other
expenses on existing PPE, 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.

Gains or losses arising from de-recognition of PPE
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 de-recognised.

Subsequent measurement (depreciation and
useful lives)

Depreciation on PPE is provided on the written down
value method except for leasehold improvements
where depreciation is provided on the straight
line method, computed on the basis of useful life
prescribed in Schedule II to the Act (‘Schedule II’).

De-recognition

An item of property, plant and equipment initially
recognised is derecognised upon disposal or
when no future economic benefits are expected
from its use or disposal. Any gain or loss arising
on de-recognition of the asset (calculated as the
difference between the net disposal proceeds and
the carrying amount of the asset) is recognised
in Statement of Profit and Loss when the asset
is derecognised.

Considering the applicability of Schedule II as
mentioned above, in respect of certain class of
assets - the Management has assessed the useful
lives (as mentioned in the table below) different
than as prescribed in the Schedule II, based on the
technical assessment.

Leasehold improvements are amortized over the
period of lease.

(f) Investment property

Recognition and initial measurement

Investment properties are properties held to
earn rentals or for capital appreciation, or both.
Investment properties are measured initially at their
cost of acquisition. The cost comprises purchase
price, borrowing cost, if capitalization criteria are met
and directly attributable cost of bringing the asset to
its working condition for the intended use. Any trade
discount and rebates are deducted in arriving at the
purchase price. 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. All other
repair and maintenance costs are recognised in
Statement of Profit or Loss as incurred.

Subsequent measurement (depreciation and
useful lives)

Investment properties are subsequently measured at
cost less accumulated depreciation and impairment
losses, if any. Depreciation on investment properties
is provided on the straight-line method, computed
on the basis of useful lives prescribed in Schedule
II to the Act, as per below table:

The residual values, useful lives and method of
depreciation are reviewed at the end of each
financial year.

De-recognition

Investment properties are de-recognised either
when they have been disposed off or when they
are permanently withdrawn from use and no future
economic benefit is expected from their disposal.
The difference between the net disposal proceeds
and the carrying amount of the asset is recognised
in Statement of Profit and Loss in the period of
de-recognition.

(g) Impairment of non-financial assets
Other assets

At each balance sheet date, the Company assesses
whether there is an indication that an asset may
be impaired. If any such indication exists, the
Company estimates the recoverable amount of the
asset. If such recoverable amount of the asset or
the recoverable amount of the cash generating unit
(i.e. properties under a single license are treated as
a project which is considered as a cash generating
unit by the Company) to which the asset belongs is
less than its carrying amount, the carrying amount is
reduced to its recoverable amount and the reduction
is treated as an impairment loss and is recognised
in the statement of profit and loss. The Company
treats individual projects (properties under a single
license are treated as a project) or individual
investment in subsidiaries as separate cash
generating units for assessment of impairment. If at
the balance sheet date there is an indication that
a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and
the asset is reflected at the recoverable amount
subject to a maximum of depreciated historical cost
and impairment loss is accordingly reversed in the
Statement of Profit and Loss.

(h) Leases

Company as a lessee - Right of use assets and
lease liabilities

A lease is defined as ‘a contract, or part of a
contract, that conveys the right to use an asset (the
underlying asset) for a period of time in exchange
for consideration’.

Classification of leases

The Company enters into leasing arrangements
for various assets. The assessment of the lease is
based on several factors, including, but not limited
to, transfer of ownership of leased asset at end of
lease term, lessee’s option to extend/purchase etc.

Recognition and initial measurement of right of
use assets

At lease commencement date, the Company
recognises a right-of-use asset and a lease liability
on the balance sheet. The right-of-use asset is
measured at cost, which is made up of the initial
measurement of the lease liability, any initial direct
costs incurred by the Company, an estimate of any
costs to dismantle and remove the asset at the end
of the lease (if any), and any lease payments made
in advance of the lease commencement date (net
of any incentives received).

Subsequent measurement of right of use assets

The Company depreciates the right-of-use assets on
a straight-line basis from the lease commencement
date to the earlier of the end of the useful life of
the right-of-use asset or the end of the lease term.
The Company also assesses the right-of-use asset
for impairment when such indicators exist.

Lease liabilities

At lease commencement date, the Company
measures the lease liability at the present value of

the lease payments unpaid at that date, discounted
using the interest rate implicit in the lease if that rate
is readily available or the Company’s incremental
borrowing rate. Lease payments included in the
measurement of the lease liability are made up
of fixed payments (including in substance fixed
payments) and variable payments based on an
index or rate. Subsequent to initial measurement,
the liability will be reduced for payments made and
increased for interest. It is re-measured to reflect
any reassessment or modification, or if there are
changes in in-substance fixed payments. When the
lease liability is re-measured, the corresponding
adjustment is reflected in the right-of-use asset.

The Company has elected to account for short-term
leases using the practical expedients. Instead of
recognising a right-of-use asset and lease liability,
the payments in relation to these short-term leases
are recognised as an expense in statement of profit
and loss on a straight-line basis over the lease term.

Company as a lessor

Leases in which the Company does not transfer
substantially all the risks and rewards of ownership
of an asset are classified as operating leases.
The respective leased assets are included
in the balance sheet based on their nature.
Rental income is recognized on straight-line basis
over the lease-term.

(i) Business combinations under common control
Business combinations involving entities or
businesses under common control are accounted
for using the pooling of interest method. The assets
and liabilities of the combining entities are reflected
at their carrying amounts. No adjustments are
made to reflect fair values, or to recognise any new
assets or liabilities.

(j) Financial instruments
Recognition and initial measurement

Financial assets and financial liabilities are
recognised when the Company becomes a party to
the contractual provisions of the financial instrument
and are measured initially at fair value adjusted for
transaction costs that are directly attributable to the
financial asset/liability, except for those carried at
fair value through profit or loss which are measured

initially at fair value and also trade receivable which
are recorded initially at transaction price.

The classification depends on the Company’s
business model for managing the financial assets
and the contractual terms of the cash flows.

For assets measured at fair value, gains and
losses will either be recorded in the statement of
profit and loss or other comprehensive income.

For investments in debt instruments, this will depend
on the business model in which the investment is
held. For investments in equity instruments, this
will depend on whether the Company has made an
irrevocable election at the time of initial recognition
to account for the equity investment at fair value
through other comprehensive income (‘FVOCI’). I

Financial assets

Subsequent measurement

Financial assets carried at amortised cost - a

financial asset is measured at amortised cost if both
the following conditions are met:

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

• 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 amortised cost using the
effective interest rate (EIR) method.

Investments in other equity instruments -

Investments in equity instruments which are held for
trading are classified as at fair value through profit
or loss (FVTPL). For all other equity instruments,
the Company makes an irrevocable choice upon
initial recognition, on an instrument by instrument
basis, to classify the same either as at fair value
through other comprehensive income (FVTOCI)
or fair value through profit or loss (FVTPL).
Amounts presented in other comprehensive income
are not subsequently transferred to profit or loss.
However, the Company transfers the cumulative
gain or loss within equity. Dividends on such

investments are recognised in profit or loss unless
the dividend clearly represents a recovery of part of
the cost of the investment.

Investments in mutual funds - Investments in
mutual funds are measured at fair value through
profit and loss (FVTPL).

De-recognition of financial assets

A financial asset is de-recognised when the
contractual rights to receive cash flows from the
asset have expired or the Company has transferred
its rights to receive cash flows from the asset.

Financial liabilities

Subsequent measurement
Subsequent to initial recognition, the measurement
of financial liabilities depends on their classification,
as described below:

De-recognition of financial liabilities

A financial liability is de-recognised 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 de-recognition 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.

Derivative contracts

Derivatives embedded in all host contract (except
asset) are separated only if the economic
characteristics and risks of the embedded
derivative are not closely related to the
economic characteristics and risks of the host.
Derivatives are initially recognised at fair value on
the date a derivative contract is entered into and
are subsequently re-measured to their fair value at
the end of each reporting period.

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. The legally
enforceable right must not be contingent on future
events and must be enforceable in the normal
course of business and in the event of default,
insolvency or bankruptcy of the Company or
the counterparty.

(k) Investment in subsidiaries and associate

These are measured at cost in accordance with Ind
AS 27 ‘Separate Financial Statements’.

(l) Impairment of financial assets

The Company assesses on a forward-looking
basis the expected credit losses associated with its
financial assets and the impairment methodology
depends on whether there has been a significant
increase in credit risk.

Trade receivables

In respect of trade receivables, the Company
applies the simplified approach of Ind AS 109,
which requires measurement of loss allowance
at an amount equal to lifetime expected credit
losses. Lifetime expected credit losses are
the expected credit losses that result from all
possible default events over the expected life of a
financial instrument.

Other financial assets

In respect of its other financial assets, the Company
assesses if the credit risk on those financial assets
has increased significantly since initial recognition.
If the credit risk has not increased significantly
since initial recognition, the Company measures
the loss allowance at an amount equal to 12-month
expected credit losses, else at an amount equal to
the lifetime expected credit losses.

When making this assessment, the Company uses
the change in the risk of a default occurring over
the expected life of the financial asset. To make
that assessment, the Company compares the risk
of a default occurring on the financial asset as at
the balance sheet date with the risk of a default
occurring on the financial asset as at the date of
initial recognition and considers reasonable and
supportable information, that is available without
undue cost or effort, that is indicative of significant

increases in credit risk since initial recognition.
The Company assumes that the credit risk on a
financial asset has not increased significantly since
initial recognition if the financial asset is determined
to have low credit risk at the balance sheet date.

(m) Inventories

Inventories comprises of following: -

i. Projects in progress represents cost incurred
in respect of unsold area (including land) of
the real estate development projects or cost
incurred on projects, where revenue is yet to be
recognised. Such project in progress includes
cost of land/development cost of land, internal
development costs, external development
charges, construction costs, development/
construction materials, overheads, borrowing
costs and other directly attributable expenses
and is valued at cost or net realisable value
(‘NRV’), whichever is lower.

ii. Stock at site is valued at cost or NRV, whichever
is lower. Cost is determined on weighted
average basis. Cost includes purchase cost
and expenses to bring it to current location.

iii. Traded goods are valued at lower of cost or
NRV. Cost includes cost of purchase and other
costs incurred in bringing the inventories to
their present location and condition. Cost is
determined on a weighted average basis.

iv. Land received under collaboration
arrangements is measured at fair value of
consideration in case of revenue sharing
arrangements and fair value of the estimated
construction service rendered to the land
owner in case of area sharing arrangement
and is recognised as inventory at the time of
the launch of the project. The non-refundable
security deposits paid by the Company under
the collaboration arrangements is classified as
security deposits and presented in the balance
sheet under the heading “other current assets”.
These deposits are reclassified to inventory
once letter of intent for granting license on said
land is received from the authorities and at the
time of the launch of the project, such deposit
is adjusted with fair value of the consideration.

Net realisable value is the estimated selling price
in the ordinary course of business, less estimated
costs of completion and estimated costs necessary
to make the sale.

(n) Borrowing costs

Borrowing costs directly attributable to the
acquisition and/or construction/production of an
asset that necessarily takes a substantial period of
time to get ready for its intended use or sale are
capitalised as part of the cost of the asset. All other
borrowing costs are charged to the statement of
profit and loss as incurred. Borrowing costs consist
of interest and other costs that the Company
incurs in connection with the borrowing of funds.
Borrowing cost also includes exchange differences
to the extent regarded as an adjustment to the
borrowing costs.

(o) Revenue recognition

Revenue from contracts with customers is
recognised when control of the goods or services
is transferred to the customer at an amount that
reflects the consideration to which the Company
expects to be entitled in exchange for those goods
or services. The Company has generally concluded
that it is the principal in its revenue arrangements
because it typically controls the goods and services
before transferring them to the customers.

Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction
price, taking into account contractually defined
terms of payment and excluding taxes or duties
collected on behalf of the government.

Revenue from real estate projects

Revenue from real estate projects is recognized
when the performance obligations are essentially
complete and credit risks have been significantly
eliminated. The performance obligations are
considered to be complete when control over the
property has been transferred to the buyer i.e.
offer for possession (possession request letter) of
properties have been issued to the customers and
substantial sales consideration has been received
from the customers.

The Company considers the terms of the contract
and its customary business practices to determine
the transaction price. The transaction price is the
amount of consideration to which the Company
expects to be entitled in exchange for transferring
property to a customer, excluding amounts collected
on behalf of third parties (for example, indirect
taxes). The consideration promised in a contract
with a customer may include fixed consideration,
variable consideration (if reversal is less likely in
future), or both.

For each performance obligation identified, the
Company determines at contract inception whether
it satisfies the performance obligation over time or
satisfies the performance obligation at a point in
time. If an entity does not satisfy a performance
obligation over time, the performance obligation is
satisfied at a point in time. A receivable is recognised
by the Company when the control is transferred as
this is the case of point in time recognition where
consideration is unconditional because only the
passage of time is required.

When either party to a contract has performed,
an entity shall present the contract in the balance
sheet as a contract asset or a contract liability,
depending on the relationship between the entity’s
performance and the customer’s payment.

The costs estimates are reviewed periodically and
effect of any change in such estimate is recognized
in the period such changes are determined.
However, when the total estimated cost exceeds
total expected revenues from the contracts, the loss
is recognized immediately.

For contracts involving sale of real estate unit, the
Company receives the consideration in accordance
with the terms of the contract in proportion to the
percentage of completion of such real estate project
and represents payments made by customers to
secure performance obligation of the Company
under the contract enforceable by customers.
Such consideration is received and utilized for
specific real estate projects in accordance with
the requirements of the Real Estate (Regulation
and Development) Act, 2016. Consequently, the
Company has concluded that such contracts with
customers do not involve any significant financing

element since the same arises for reasons
explained above, which is other than for provision
of finance to/ from the customer.

Construction contracts

Construction contracts where the Company is
acting as contractor, revenue is recognised in
accordance with the terms of the construction
agreements. Under such contracts, assets
created do not have an alternative use and the
Company has an enforceable right to payment.
The estimated project cost includes construction
cost, development and construction material and
overheads of such project.

The Company uses cost based input method for
measuring progress for performance obligation
satisfied over time. Under this method, the
Company recognises revenue in proportion to the
actual project cost incurred as against the total
estimated project cost. 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. However, when
the total project cost is estimated to exceed total
revenues from the project, the loss is recognized
immediately. As the outcome of the contracts
cannot be measured reliably during the early stages
of the project, contract revenue is recognised only
to the extent of costs incurred in the statement of
profit and loss.

Sale of traded goods

Revenue from sale of goods is recognized when
the control of goods is transferred to the buyer as
per the terms of the contract, in an amount that
reflects the consideration the Company expects
to be entitled to in exchange for those goods.
Control of goods refers to the ability to direct the
use of and obtain substantially all of the remaining
benefits from goods. The Company collects goods
and services tax (GST) on behalf of the government
and, therefore, they are excluded from revenue.

Business support service income

Such income is recognized on an accrual
basis in accordance with the terms of the
relevant agreements.

Scrap sale

Scrap sales are recognised when control of scrap
goods are transferred i.e. on dispatch of goods and
are accounted for net of returns and rebates.

Interest on Delayed payments, forfeiture
income, transfer fees and holding charges

Revenue is recognized as and when the reasonable
certainty of payment/realization is established in
relation to such income

Interest income

Interest income is recorded on accrual basis using
the effective interest rate (EIR) method.

Dividend income

Dividend income is recognized when the
Company’s right to receive dividend is established
by the reporting date.

Commission income

Commission income is recognized on accrual basis
in accordance with the terms of the agreement.

Project management and branding fee

Project management and branding fee income is
recognized on an accrual basis in accordance with
the terms of the relevant agreement.

(p) Cost of revenue in respect of real estate projects

Cost of constructed properties includes cost of land
(including development rights), estimated internal
development costs, external development charges,
other related government charges, borrowing costs,
overheads construction costs and development/
construction materials, which is charged to the
Statement of Profit and Loss proportionate to the
revenue recognised, as per accounting policy on
revenue from real estate projects.

(q) Retirement and other employee benefits

i) Provident fund

The Company makes contributions to
statutory provident fund in accordance
with the Employees Provident Fund and
Miscellaneous Provisions Act, 1952, which is
a defined contribution plan. The Company’s
contributions paid/payable under the scheme

is recognised as an expense in the Statement
of Profit and Loss during the period in which
the employee renders the related service.

ii) Gratuity

Gratuity is a post-employment benefit and
is in the nature of a defined benefit plan.
The liability recognised in the balance sheet
in respect of gratuity is the present value of
the defined benefit obligation at the balance
sheet date, together with adjustments for
unrecognised actuarial gains or losses and
past service costs. The defined benefit
obligation is determined by actuarial valuation
as on the balance sheet date, using the
projected unit credit method.

Actuarial gains/losses resulting from
re-measurements of the liability are included
in other comprehensive income in the period
in which they occur and are not reclassified to
profit or loss in subsequent periods.

iii) Compensated absences

Liability in respect of compensated absences
becoming due or expected to be availed
within one year from the balance sheet date
is recognised on the basis of undiscounted
value of estimated amount required to be paid
or estimated value of benefit expected to be
availed by the employees. Liability in respect
of compensated absences becoming due or
expected to be availed more than one year
after the balance sheet date is estimated on
the basis of an actuarial valuation performed
by an independent actuary using the projected
unit credit method. Actuarial gains and losses
arising from past experience and changes in
actuarial assumptions are credited or charged
to the statement of profit and loss in the year
in which such gains or losses are determined.
As per Company’s leave policy, the employees
do not have unconditional right to avail leave
at any time within next one year.

iv) Other short-term benefits

Expense in respect of other short-term benefits
is recognised on the basis of the amount paid
or payable for the period during which services
are rendered by the employee.

(r) Initial public otter related transaction costs

The expenses pertaining to Initial Public Otter
(‘IPO’) includes expenses pertaining to tresh
issue ot equity shares and otter tor sale by selling
shareholders. Such expenses have been accounted
tor as tollows:

i. Incremental costs that are directly attributable
to issuing new shares have been deducted
trom equity (securities premium);

ii. Incremental costs that are not directly
attributable to issuing new shares or otter
tor sale by selling shareholders, has been
recorded as an expense in the statement ot
profit and loss as and when incurred; and

iii. Costs that relate to tresh issue ot equity shares
and otter tor sale by selling shareholders
has been allocated between those tunctions
on a rational and consistent basis as
per agreed terms.

(s) Commission and brokerage

The commission and brokerage cost incurred tor
obtaining the contract with customer is recognized
as an asset as “Prepaid Expenses” under “Other
current assets” and expensed ott in the statement
of profit and loss when the corresponding revenue
tor the contract is recognized and is presented
under the head “Other Expenses”.

(t) Earnings per share

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 ot equity shares outstanding during the
year. The weighted average number ot equity
shares outstanding during the year is adjusted tor
events ot bonus issue, share split and any new
equity issue. For the purpose ot calculating diluted
earnings per share, the net profit or loss for the
period attributable to equity shareholders and the
weighted average number ot shares outstanding
during the period are adjusted tor the ettects ot all
dilutive potential equity shares.

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Mar 31, 2024

3.1 Material accounting policy information

The standalone financial statements have been prepared using the material accounting policies and measurement basis summarised below.

(a) Historical cost basis

The standalone financial statements have been prepared on historical cost basis except for certain financial assets and financial liabilities which are measured at fair value as explained in relevant accounting policies.

(b) Current versus non-current classification

All assets and liabilities have been classified as current or non-current as per operating cycle and other criteria set-out in the Act. Deferred tax assets and liabilities are classified as non-current assets and non-current liabilities, as the case may be.

(c) Recent pronouncement

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules 2015, as issued from time to time. As at 31 March 2024, MCA has not notified any new standards or amendments to the existing standards, applicable to the Company.

(d) New and amended accounting standards adopted by the Company

The Ministry of Corporate Affairs has notified Companies (Indian Accounting Standards) Amendment Rules, 2023 dated 31 March 2023 to amend the following Ind AS which are effective for annual periods beginning on or after 1 April 2023. The Company has applied for these amendments, first-time.

Disclosure of Accounting Policies - Amendments to Ind AS 1

The amendments aim to help entities provide accounting policy disclosures that are more

useful by replacing the requirement for entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments have had an impact on the Company’s disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Company’s standalone financial statements.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to Ind AS 12

The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases.

The Company has considered the impact of the same in these standalone financial statements.

Definition of Accounting Estimates - Amendments to Ind AS 8

The amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates.

The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications.

These amendments did not have any material impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

(e) Property, plant and equipment (‘PPE’)

Recognition, measurement and de-recognition

PPE are stated at cost; net of tax or duty credits availed, less accumulated depreciation and impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation.

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 and cost of the item can be measured reliably. All other expenses on existing PPE, 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.

Gains or losses arising from de-recognition of PPE 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 de-recognised.

Subsequent measurement (depreciation and useful lives)

Depreciation on PPE is provided on the written down value method, computed on the basis of

useful life prescribed in Schedule II to the Act (‘Schedule II'').

De-recognition

An item of property, plant and equipment initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in Statement of Profit and Loss when the asset is derecognised.

Considering the applicability of Schedule II as mentioned above, in respect of certain class of assets - the Management has assessed the useful lives (as mentioned in the table below) lower than as prescribed in the Schedule II, based on the technical assessment.

(f) Investment property

Recognition and initial measurement Investment properties are properties held to earn rentals or for capital appreciation, or both. Investment properties are measured initially at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. 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. All other repair and maintenance costs are recognised in Statement of Profit or Loss as incurred.

Subsequent measurement (depreciation and useful lives)

Investment properties are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Depreciation on investment properties is provided on the straight-line method, computed on the basis of useful lives prescribed in Schedule II to the Act, as per below table:

The residual values, useful lives and method of depreciation are reviewed at the end of each financial year.

De-recognition

Investment properties are de-recognised either when they have been disposed off or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in Statement of Profit and Loss in the period of de-recognition.

(g) Impairment of non-financial assets Other assets

At each balance sheet date, the Company assesses whether there is an indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit (i.e. properties under a single license are treated as a project which is considered as a cash generating unit by the Company) to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognised in the statement of profit and loss. The Company treats individual projects (properties under a single license are treated as a project) or individual investment in subsidiaries as separate cash generating units for assessment of impairment. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost and impairment loss is accordingly reversed in the Statement of Profit and Loss.

(h) Leases

Company as a lessee - Right of use assets and lease liabilities

A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration’.

Classification of leases

The Company enters into leasing arrangements for various assets. The assessment of the lease is based on several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee’s option to extend/purchase etc.

Recognition and initial measurement of right of use assets

At lease commencement date, the Company recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease (if any), and any lease payments made in advance of the lease commencement date (net of any incentives received).

Subsequent measurement of right of use assets The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist.

Lease liabilities

At lease commencement date, the Company measures the lease liability at the present value of

the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Company’s incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed payments) and variable payments based on an index or rate. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is re-measured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is re-measured, the corresponding adjustment is reflected in the right-of-use asset.

The Company has elected to account for short-term leases using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these short-term leases are recognised as an expense in statement of profit and loss on a straight-line basis over the lease term.

Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. The respective leased assets are included in the balance sheet based on their nature. Rental income is recognized on straight-line basis over the lease-term.

(i) Business combinations under common control Business combinations involving entities or businesses under common control are accounted for using the pooling of interest method. The assets and liabilities of the combining entities are reflected at their carrying amounts. No adjustments are made to reflect fair values, or to recognise any new assets or liabilities.

(j) Financial instruments Recognition and initial measurement

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs that are directly attributable to the financial asset/liability, except for those carried at

fair value through profit or loss which are measured initially at fair value and also trade receivable which are recorded initially at transaction price.

The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in the statement of profit and loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (‘FVOCI’).

Financial assets

Subsequent measurement

Financial assets carried at amortised cost - a

financial asset is measured at amortised cost if both the following conditions are met:

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

- 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 amortised cost using the effective interest rate (EIR) method.

Investments in other equity instruments -

Investments in equity instruments which are held for trading are classified as at fair value through profit or loss (FVTPL). For all other equity instruments, the Company makes an irrevocable choice upon initial recognition, on an instrument by instrument basis, to classify the same either as at fair value through other comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL). Amounts presented in other comprehensive income are not subsequently transferred to profit or loss. However, the Company transfers the cumulative gain or loss within equity. Dividends on

such investments are recognised in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.

Investments in mutual funds - Investments in mutual funds are measured at fair value through profit and loss (FVTPL).

De-recognition of financial assets

A financial asset is de-recognised when the contractual rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.

Financial liabilities

Subsequent measurement Subsequent to initial recognition, the measurement of financial liabilities depends on their classification, as described below:

De-recognition of financial liabilities

A financial liability is de-recognised 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 de-recognition 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.

Derivative contracts

Derivatives embedded in all host contract (except asset) are separated only if the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period.

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. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

(k) Investment in subsidiaries and associate

These are measured at cost in accordance with Ind AS 27 ‘Separate Financial Statements’.

(l) Impairment of financial assets

The Company assesses on a forward-looking basis the expected credit losses associated with its financial assets and the impairment methodology depends on whether there has been a significant increase in credit risk.

Trade receivables

In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

Other financial assets

In respect of its other financial assets, the Company assesses if the credit risk on those financial assets has increased significantly since initial recognition. If the credit risk has not increased significantly since initial recognition, the Company measures the loss allowance at an amount equal to 12-month expected credit losses, else at an amount equal to the lifetime expected credit losses.

When making this assessment, the Company uses the change in the risk of a default occurring over the expected life of the financial asset. To make that assessment, the Company compares the risk of a default occurring on the financial asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the date of initial recognition and considers reasonable and supportable information, that is available without

undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance sheet date.

(m) Inventories

Inventories comprises of following: -

i. Projects in progress represents cost incurred in respect of unsold area (including land) of the real estate development projects or cost incurred on projects, where revenue is yet to be recognised. Such project in progress includes cost of land/development cost of land, internal development costs, external development charges, construction costs, development/ construction materials, overheads, borrowing costs and other directly attributable expenses and is valued at cost or net realisable value (‘NRV’), whichever is lower.

ii. Stock at site valued at cost or NRV, whichever is lower. Cost is determined on the basis of weighted average basis. Cost includes purchase cost and expenses to bring it to current locations.

iii. Traded goods are valued at lower of cost or NRV. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted average basis.

iv. Land received under collaboration arrangements is measured at fair value of consideration in case of revenue sharing arrangements and fair value of the estimated construction service rendered to the land owner in case of area sharing arrangement and is recognised as inventory at the time of the launch of the project. The non-refundable security deposits paid by the Company under the collaboration arrangements is classified as security deposits and presented in the balance sheet under the heading “other current assets”. These deposits is reclassified to inventory once letter of intent for granting

license on said land is received from the authorities and at the time of the launch of the project, such deposit is adjusted with fair value of the consideration.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(n) Borrowing costs

Borrowing costs directly attributable to the acquisition and/or construction/production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are charged to the statement of profit and loss as incurred. Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

(o) Revenue recognition

Revenue from contracts with customers is recognised when control of the goods or services is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods and services before transferring them to the customers.

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.

Revenue from sale of properties and developed plots

Revenue from sale of properties is recognized when the performance obligations are essentially complete and credit risks have been significantly eliminated. The performance obligations are considered to be complete when control over the property has been transferred to the buyer i.e.

offer for possession (possession request letter) of properties have been issued to the customers and substantial sales consideration has been received from the customers.

The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring property to a customer, excluding amounts collected on behalf of third parties (for example, indirect taxes). The consideration promised in a contract with a customer may include fixed consideration, variable consideration (if reversal is less likely in future), or both.

For each performance obligation identified, the Company determines at contract inception whether it satisfies the performance obligation over time or satisfies the performance obligation at a point in time. If an entity does not satisfy a performance obligation over time, the performance obligation is satisfied at a point in time. A receivable is recognised by the Company when the control is transferred as this is the case of point in time recognition where consideration is unconditional because only the passage of time is required.

When either party to a contract has performed, an entity shall present the contract in the balance sheet as a contract asset or a contract liability, depending on the relationship between the entity’s performance and the customer’s payment.

The costs estimates are reviewed periodically and effect of any change in such estimate is recognized in the period such changes are determined. However, when the total estimated cost exceeds total expected revenues from the contracts, the loss is recognized immediately.

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

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

Construction projects

Construction projects where the Company is acting as contractor, revenue is recognised in accordance with the terms of the construction agreements. Under such contracts, assets created do not have an alternative use and the Company has an enforceable right to payment. The estimated project cost includes construction cost, development and construction material and overheads of such project.

The Company uses cost based input method for measuring progress for performance obligation satisfied over time. Under this method, the Company recognises revenue in proportion to the actual project cost incurred as against the total estimated project cost. 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. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately. As the outcome of the contracts cannot be measured reliably during the early stages of the project, contract revenue is recognised only to the extent of costs incurred in the statement of profit and loss.

Sale of traded goods

Revenue from sale of goods is recognized when the control of goods is transferred to the buyer as per the terms of the contract, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. Control of goods refers to the ability to direct the use of and obtain substantially all of the remaining

benefits from goods. The Company collects goods and services tax (GST) on behalf of the government and, therefore, they are excluded from revenue.

Business support service income

Such income is recognized on an accrual basis in accordance with the terms of the relevant agreements.

Scrap sale

Scrap sales are recognised when control of scrap goods are transferred i.e. on dispatch of goods and are accounted for net of returns and rebates.

Interest on Delayed payments, forfeiture income, transfer fees and holding charges Revenue is recognized as and when the extent certainty of payment/realization is established in relation to such income

Interest income

Interest income is recorded on accrual basis using the effective interest rate (EIR) method.

Dividend income

Dividend income is recognized when the Company’s right to receive dividend is established by the reporting date.

Commission income

Commission income is recognized on accrual basis in accordance with the terms of the agreement.

Project management and branding fee Project management and branding fee income is recognized on an accrual basis in accordance with the terms of the relevant agreement.

(p) Cost of sales in respect of properties and developed plots

Cost of constructed properties includes cost of land (including development rights), estimated internal development costs, external development charges, other related government charges, borrowing costs, overheads construction costs and development/ construction materials, which is charged to the Statement of Profit and Loss proportionate to the

revenue recognised, as per accounting policy on

revenue from sale of properties.

(q) Retirement and other employee benefits

i) Provident fund

The Company makes contributions to statutory provident fund in accordance with the Employees Provident Fund and Miscellaneous Provisions Act, 1952, which is a defined contribution plan. The Company’s contributions paid/payable under the scheme is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

ii) Gratuity

Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognised in the balance sheet in respect of gratuity is the present value of the defined benefit obligation at the balance sheet date, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is determined by actuarial valuation as on the balance sheet date, using the projected unit credit method.

Actuarial gains/losses resulting from re-measurements of the liability are included in other comprehensive income in the period in which they occur and are not reclassified to profit or loss in subsequent periods.

iii) Compensated absences

Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognised on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method. Actuarial gains and losses

arising from past experience and changes in actuarial assumptions are credited or charged to the statement of profit and loss in the year in which such gains or losses are determined. This is done in line with the leave policy as employees do not have unconditional right to avail leave at any time within next one year.

iv) Other short-term benefits

Expense in respect of other short-term benefits is recognised on the basis of the amount paid or payable for the period during which services are rendered by the employee.

(r) Initial public offer related transaction costs

The expenses pertaining to Initial Public Offer (‘IPO’) includes expenses pertaining to fresh issue of equity shares and offer for sale by selling shareholders. Such expenses have been accounted for as follows:

i. Incremental costs that are directly attributable to issuing new shares have been deducted from equity (securities premium);

ii. Incremental costs that are not directly attributable to issuing new shares or offer for sale by selling shareholders, has been recorded as an expense in the statement of profit and loss as and when incurred; and

iii. Costs that relate to fresh issue of equity shares and offer for sale by selling shareholders has been allocated between those functions on a rational and consistent basis as per agreed terms.

(s) Brokerage

The brokerage cost incurred for obtaining the contract with customer is recognized as an asset as “Prepaid Expenses” under “Other current assets” and expensed off in the statement of profit and loss when the corresponding revenue for the contract is recognized and is presented under the head “Other Expenses”.

(t) Earnings per share

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 year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue, share split and any new equity issue. 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 shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

---

Mar 31, 2023

1.    Company information

Signatureglobal (India) Limited (‘SGIL’ or ‘the Company¹) was incorporated as a private limited company (‘Signatureglobal (India) Private Limited' or 'SGIPL'). During the year ended 31 March 2022, SGIL has been converted to a public company namely ‘Signatureglobal (India) Limited' vide revised ‘Certificate of Incorporation consequent upon conversion from private company to public company¹Â dated 10 March 2022 as issued by the Ministry of Corporate Affairs (‘MCA’). The Company is engaged in the business of real estate development. The Company also supplies the construction material and provides construction services. The Company is domiciled in India and the registered office is located at 13th Floor, Dr. Gopal Das Bhawan 28, Barakhamba Road, Connaught Place, New Delhi - 110001.

2.    Group information

The Company and its undermentioned subsidiaries and associate are as follows:

Name of entity	Relationship	Principal place of business	Percentage holding 31 March 2023	Percentage holding 31 March 2022
Signature Builders Private Limited	Subsidiary	India	100%	100%
Signatureglobal Developers Private Limited	Subsidiary	India	100%	100%
JMK Holdings Private Limited	Subsidiary	India	100%	100%
Signature Infrabuild Private Limited	Subsidiary	India	100%	100%
Fantabulous Town Developers Private Limited	Subsidiary	India	100%	100%
Maa-Vaishno Net-tech Private Limited	Subsidiary	India	100%	100%
Indeed Fincap Private Limited	Subsidiary	India	84.59%	63.68%
Sternal Buildcon Private Limited	Subsidiary	India	100%	100%
Forever Buildtech Private Limited	Subsidiary	India	100%	100%
Rose Building Solutions Private Limited	Subsidiary	India	100%	100%
Signatureglobal Homes Private Limited	Subsidiary	India	100%	100%
Signatureglobal Business Park Limited	Subsidiary	India	100%	100%

3. Basis of preparation and statement of compliance with Ind AS

The standalone financial statements (‘financial statements') comply in all material aspects with Indian Accounting Standards (hereinafter referred to as the ‘Ind AS') as notified by Ministry of Corporate Affairs under Section 133 of the Companies Act, 2013 (‘the Act') read with the Companies (Indian Accounting Standards) Rules 2015, as amended and other relevant provisions of the Act. Accounts have been prepared using accrual basis of accounting and going concern basis.

The Standalone Financial Statements were authorized and approved for issue by the Board of Directors on 21 June 2023. The revision to financial statements is permitted by Board of Directors after obtaining necessary approvals or at the instance of regulatory authorities as per provisions of the Act.

These financial statements are presented in Indian rupees (Rs. Lakhs), which is also the Company's functional and presentation currency. All amounts have been rounded-off to the nearest lakhs upto two place of decimal, unless otherwise indicated.

3.1 Summary of significant accounting policies

The standalone financial statements have been prepared using the significant accounting policies and measurement basis summarised below.

(a)    Historical cost basis

The special purpose standalone interim financial statements have been prepared on historical cost basis except for certain financial assets and financial liabilities which are measured at fair value as explained in relevant accounting policies.

(b)    Current versus non-current classification

All assets and liabilities have been classified as current or non-current as per operating cycle and other criteria set-out in the Act. Deferred tax assets and liabilities are classified as non-current assets and non-current liabilities, as the case may be.

(c)    Recent accounting pronouncement (As per (Indian Accounting Standards) Amendment Rules, 2023 Amendment to Ind AS 1, Presentation of Financial Statements

The Ministry of Corporate Affairs ("MCA") vide notification dated 31 March 2023, has issued an amendment to Ind AS 1 which requires entities to disclose material accounting policies instead of significant accounting policies. Accounting policy information considered together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The amendment also clarifies that immaterial accounting policy information does not need to disclose. If it is disclosed, it should not obscure material accounting information. The Company is evaluating the requirement of the said amendment and its impact on these financial statements.

Amendment to Ind AS 8, Accounting Policies, Change in Accounting Estimates and Errors

The Ministry of Corporate Affairs ("MCA") vide notification dated 31 March 2023, has issued an amendment to Ind AS 8 which specifies an updated definition of an ‘accounting estimate'. As per the amendment, accounting estimates are monetary amounts in the financial statements that are subject to measurement uncertainty and measurement techniques and inputs are used to develop an accounting estimate. Measurement techniques include estimation techniques and valuation techniques. The Company is evaluating the requirement of the said amendment and its impact on these financial statements.

Amendment to Ind AS 12, Income Taxes

The Ministry of Corporate Affairs ("MCA") vide notification dated 31 March 2023, has issued an amendment to Ind AS 12, which requires entities to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. This will typically apply to transactions such as leases of lessees and decommissioning obligations and will require recognition of additional deferred tax assets and liabilities. The Company is evaluating the requirement of the said amendment and its impact on these financial statements.

(d)    Property, plant and equipment (‘PPE’)

Recognition, measurement and de-recognition

PPE are stated at cost; net of tax or duty credits availed, less accumulated depreciation and impairment losses, if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation.

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 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.

Gains or losses arising from de-recognition of PPE 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 de-recognised.

Subsequent measurement (depreciation and useful lives)

Depreciation on PPE is provided on the written down value method, computed on the basis of useful life prescribed in Schedule II to the Act (‘Schedule II’).

Considering the applicability of Schedule II as mentioned above, in respect of certain class of assets - the Management has assessed the useful lives (as mentioned in the table below) lower than as prescribed in the Schedule II, based on the technical assessment.

Assets category	Useful life estimated by the management based on technical assessment (years)	Useful Life as per Schedule II (years)
Plant and machinery other than Mivon and electrical installations and fittings	15 years	15 years
Plant and machinery - Mivon	8 years
Office equipment	5 years	5 years
Computers	3-6 years	3-6 years
Furniture and fixture	10 years	10 years
Vehicle	8 years	8 years

Leasehold improvements are amortized on over the period of lease.

(e) Investment property

Recognition and initial measurement

Investment properties are properties held to earn rentals or for capital appreciation, or both. Investment properties are measured initially at their cost of acquisition. The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. 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. All other repair and maintenance costs are recognised in Statement of Profit or Loss as incurred.

Subsequent measurement (depreciation and useful lives)

Investment properties are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Depreciation on investment properties is provided on the straight-line method, computed on the basis of useful lives prescribed in Schedule II to the Act, as per below table:

Assets category	Useful life estimated by the management based on technical assessment (years)	Useful Life as per Schedule II (years)
Land	Not applicable	Not applicable
Building	60 years	60 years
Plant and machinery	15 years	15 years

The residual values, useful lives and method of depreciation are reviewed at the end of each financial year. De-recognition

Investment properties are de-recognised either when they have been disposed off or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in Statement of Profit and Loss in the period of de-recognition.

(f) Intangible assets

Intangible assets comprise softwares including accounting software, related licences and implementation cost of accounting software and other assets like brands/ trademark. Intangible assets are stated at cost of

acquisition less impairment (if any) and include all attributable costs of bringing intangible assets to its working condition for its indented use. These are amortised over the estimated useful economic life, which are as follows:

Particulars    Life

Computer softwares    2-5 years

Brands/trademarks    4 years

Intangible asset is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognized in the statement of profit and loss, when the asset is derecognised.

(g)    Capital work-in-progress

Property plant and equipment under construction and cost of assets not ready for use before the year-end, are classified as capital work in progress.

(h)    Intangible assets under development

Intangible assets under development represent expenditure incurred during development phase in respect of intangible asset under development and are carried at amortized cost. Cost includes computer software's cost and its related acquisition expenses.

(i)    Impairment of non-financial assets

Other assets

At each balance sheet date, the Company assesses whether there is an indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit (i.e. properties under a single license are treated as a project which is considered as a cash generating unit by the Company) to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognised in the statement of profit and loss. The Company treats individual projects (properties under a single license are treated as a project) or individual investment in subsidiaries as separate cash generating units for assessment of impairment. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost and impairment loss is accordingly reversed in the Statement of Profit and Loss.

(j)    Leases

Company as a lessee - Right of use assets and lease liabilities

A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration'.

Classification of leases

The Company enters into leasing arrangements for various assets. The assessment of the lease is based on several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee's option to extend/purchase etc.

Recognition and initial measurement of right of use assets

At lease commencement date, the Company recognises a right-of-use asset and a lease liability on the balance sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease (if any), and any lease payments made in advance of the lease commencement date (net of any incentives received).

Subsequent measurement of right of use assets

The Company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist.

Lease liabilities

At lease commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Company's incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance fixed payments) and variable payments based on an index or rate. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is re-measured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is re-measured, the corresponding adjustment is reflected in the right-of-use asset.

The Company has elected to account for short-term leases using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these short-term leases are recognised as an expense in statement of profit and loss on a straight-line basis over the lease term.

Further, the Company has also elected to apply another practical expedient whereby it has assessed all the rent concessions occurring as a direct consequence of the COVID-19 pandemic, basis the following conditions prescribed under the standard:

a)    the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

b)    any reduction in lease payments affects only payments originally due on or before the 31 March 2023; and

c)    there is no substantive change to other terms and conditions of the lease.

If all the rent concessions meet the above conditions, then, the related rent concession has been recognised in statement of profit and loss.

Company as a lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. The respective leased assets are included in the balance sheet based on their nature. Rental income is recognized on straight-line basis over the lease-term.

(k)    Business combinations under common control

Business combinations involving entities or businesses under common control have been accounted for using the pooling of interest method. The assets and liabilities of the combining entities are reflected at their carrying amounts. No adjustments have been made to reflect fair values, or to recognise any new assets or liabilities.

(l)    Financial instruments

Recognition and initial measurement

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit or loss which are measured initially at fair value and also trade receivable which are recorded initially at transaction price.

The classification depends on the Company's business model for managing the financial assets and the contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be recorded in the statement of profit and loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (‘FVOCI’).

Non-derivative financial assets

Subsequent measurement

Financial assets carried at amortised cost - a financial asset is measured at amortised cost if both the following conditions are met:

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

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 amortised cost using the effective interest rate (EIR) method.

Investments in other equity instruments - Investments in equity instruments which are held for trading are classified as at fair value through profit or loss (FVTPL). For all other equity instruments, the Company makes an irrevocable choice upon initial recognition, on an instrument by instrument basis, to classify the same either as at fair value through other comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL). Amounts presented in other comprehensive income are not subsequently transferred to profit or loss. However, the Company transfers the cumulative gain or loss within equity. Dividends on such investments are recognised in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment.

Investments in mutual funds - Investments in mutual funds are measured at fair value through profit and loss (FVTPL).

De-recognition of financial assets

A financial asset is de-recognised when the contractual rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.

Non-derivative financial liabilities

Subsequent measurement

Subsequent to initial recognition, the measurement of financial liabilities depends on their classification, as described below:

De-recognition of financial liabilities

A financial liability is de-recognised 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 de-recognition 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.

Derivative contracts

Derivatives embedded in all host contract (except asset) are separated only if the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period.

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. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

(m)    Investment in subsidiaries and associate

These are measured at cost in accordance with Ind AS 27 ‘Separate Financial Statements'.

(n)    Impairment of financial assets

The Company assesses on a forward-looking basis the expected credit losses associated with its financial assets and the impairment methodology depends on whether there has been a significant increase in credit risk.

Trade receivables

In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.

Other financial assets

In respect of its other financial assets, the Company assesses if the credit risk on those financial assets has increased significantly since initial recognition. If the credit risk has not increased significantly since initial recognition, the Company measures the loss allowance at an amount equal to 12-month expected credit losses, else at an amount equal to the lifetime expected credit losses.

When making this assessment, the Company uses the change in the risk of a default occurring over the expected life of the financial asset. To make that assessment, the Company compares the risk of a default occurring on the financial asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance sheet date.

(o)    Inventories

Inventories comprises of following: -

i.    Projects in progress represents cost incurred in respect of unsold area (including land) of the real estate development projects or cost incurred on projects, where revenue is yet to be recognised. Such project in progress includes cost of land/development cost of land, internal development costs, external development charges, construction costs, development/construction materials, overheads, borrowing costs and other directly attributable expenses and is valued at cost or net realisable value ('NRV'), whichever is lower.

ii.    Stock at site valued at cost or NRV, whichever is lower. Cost is determined on the basis of FIFO method. Cost includes purchase cost and expenses to bring it to current locations.

iii.    Traded goods are valued at lower of cost or NRV. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted average basis.

iv.    Land received under collaboration arrangements is measured at fair value of consideration in case of revenue sharing arrangements and fair value of the estimated construction service rendered to the land owner in case of area sharing arrangement and is recognised as inventory at the time of the launch of the project. The non-refundable security deposits paid by the Company under the collaboration arrangements is classified as security deposits and presented in the balance sheet under the heading “other current assets”. These deposits is reclassified to inventory once letter of intent for granting license on said land is received from the authorities and at the time of the launch of the project, such deposit is adjusted with fair value of the consideration.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(p)    Borrowing costs

Borrowing costs directly attributable to the acquisition and/or construction/production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are charged to the statement of profit and loss as incurred. Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

(q)    Revenue recognition

Revenue from contracts with customers is recognised when control of the goods or services is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that it is the principal in its revenue arrangements because it typically controls the goods and services before transferring them to the customers.

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government

Revenue from sale of properties and developed plots

Revenue from sale of properties is recognized when the performance obligations are essentially complete and credit risks have been significantly eliminated. The performance obligations are considered to be complete when control over the property has been transferred to the buyer i.e. offer for possession (possession request letter) of properties have been issued to the customers and substantial sales consideration has been received from the customers.

The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring property to a customer, excluding amounts collected on behalf of third parties (for example, indirect taxes). The consideration promised in a contract with a customer may include fixed consideration, variable consideration (if reversal is less likely in future), or both.

For each performance obligation identified, the Company determines at contract inception whether it satisfies the performance obligation over time or satisfies the performance obligation at a point in time. If an entity does not satisfy a performance obligation over time, the performance obligation is satisfied at a point in time. A receivable is recognised by the Company when the control is transferred as this is the case of point in time recognition where consideration is unconditional because only the passage of time is required.

When either party to a contract has performed, an entity shall present the contract in the balance sheet as a contract asset or a contract liability, depending on the relationship between the entity’s performance and the customer’s payment.

The costs estimates are reviewed periodically and effect of any change in such estimate is recognized in the period such changes are determined. However, when the total estimated cost exceeds total expected revenues from the contracts, the loss is recognized immediately.

For contracts involving sale of real estate unit, the Company receives the consideration in accordance with the terms of the contract in proportion to the percentage of completion of such real estate project and represents payments made by customers to secure performance obligation of the Company under the contract enforceable by customers. Such consideration is received and utilized for specific real estate projects in accordance with the requirements of the Real Estate (Regulation and Development) Act, 2016. Consequently, the Company has concluded that such contracts with customers do not involve any financing element since the same arises for reasons explained above, which is other than for provision of finance to/ from the customer.

Construction projects

Construction projects where the Company is acting as contractor, revenue is recognised in accordance with the terms of the construction agreements. Under such contracts, assets created do not have an alternative use and the Company has an enforceable right to payment. The estimated project cost includes construction cost, development and construction material and overheads of such project.

The Company uses cost based input method for measuring progress for performance obligation satisfied over time. Under this method, the Company recognises revenue in proportion to the actual project cost incurred as against the total estimated project cost. 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. However, when the total project cost is estimated to exceed total revenues from the project, the loss is recognized immediately. As the outcome of the contracts cannot be measured reliably during the early stages of the project, contract revenue is recognised only to the extent of costs incurred in the statement of profit and loss.

Sale of traded goods

Revenue from sale of goods is recognized when the control of goods is transferred to the buyer as per the terms of the contract, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. Control of goods refers to the ability to direct the use of and obtain substantially all of the remaining benefits from goods. The Company collects goods and services tax (GST) on behalf of the government and, therefore, they are excluded from revenue.

Business support service income

Such income is recognized on an accrual basis in accordance with the terms of the relevant agreements.

Scrap sale

Scrap sales are recognised when control of scrap goods are transferred i.e. on dispatch of goods and are accounted for net of returns and rebates.

Interest on Delayed payments, forfeiture income, transfer fees and holding charges

Revenue is recognized as and when the extent certainty of payment/realization is established in relation to such income

Interest income

Interest income is recorded on accrual basis using the effective interest rate (EIR) method.

Dividend income

Dividend income is recognized when the Company's right to receive dividend is established by the reporting date.

Commission income

Commission income is recognized on accrual basis in accordance with the terms of the agreement.

Project management and branding fee

Project management and branding fee income is recognized on an accrual basis in accordance with the terms of the relevant agreement.

(r) Cost of sales in respect of properties and developed plots

Cost of constructed properties includes cost of land (including development rights), estimated internal development costs, external development charges, other related government charges, borrowing costs, overheads construction costs and development/construction materials, which is charged to the Statement of Profit and Loss proportionate to the revenue recognised, as per accounting policy on revenue from sale of properties.

(s)    Foreign currency transaction and balances

Functional and presentation currency

The financial statements are presented in Indian Rupee which is also the functional and presentation currency of the Holding Company.

Transactions and balances

Foreign currency transactions are recorded in the functional currency, by applying the exchange rate between the functional currency and the foreign currency at the date of the transaction. Foreign currency monetary items outstanding at the balance sheet date are converted to functional currency using the closing rate. Non-monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date of the transactions.

Exchange differences arising on settlement of monetary items, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise.

(t)    Retirement and other employee benefits

i)    Provident fund

The Company makes contributions to statutory provident fund in accordance with the Employees Provident Fund and Miscellaneous Provisions Act, 1952, which is a defined contribution plan. The Company's contributions paid/payable under the scheme is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

ii)    Gratuity

Gratuity is a post-employment benefit and is in the nature of a defined benefit plan. The liability recognised in the balance sheet in respect of gratuity is the present value of the defined benefit obligation at the balance sheet date, together with adjustments for unrecognised actuarial gains or losses and past service costs. The defined benefit obligation is determined by actuarial valuation as on the balance sheet date, using the projected unit credit method.

Actuarial gains/losses resulting from re-measurements of the liability are included in other comprehensive income in the period in which they occur and are not reclassified to profit or loss in subsequent periods.

i i i) Compensated absences

Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognised on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees. Liability in respect of compensated absences becoming due or expected to be availed more than one year after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method. Actuarial gains and losses arising from past experience and changes in actuarial assumptions are credited or charged to the statement of profit and loss in the year in which such gains or losses are determined. This is done in line with the leave policy as employees do not have unconditional right to avail leave at any time within next one year.

iv) Other short-term benefits

Expense in respect of other short-term benefits is recognised on the basis of the amount paid or payable for the period during which services are rendered by the employee.

(u)    Initial public offer related transaction costs

The expenses pertaining to Initial Public Offer ('IPO') includes expenses pertaining to fresh issue of equity shares and offer for sale by selling shareholders. Such expenses have been accounted for as follows:

i. Incremental costs that are directly attributable to Issuing new shares have been deferred until successful consummation of IPO upon which It shall be deducted from equity;

II.    Incremental costs that are not directly attributable to Issuing new shares or offer for sale by selling shareholders, has been recorded as an expense In the statement of profit and loss as and when Incurred; and

III.    Costs that relate to fresh Issue of equity shares and offer for sale by selling shareholders has been allocated between those functions on a rational and consistent basis as per agreed terms.

(v)    Brokerage

The brokerage cost Incurred for obtaining the contract with customer Is recognized as an asset as “Prepaid Expenses” under “Other current assets” and expensed off In the statement of profit and loss when the corresponding revenue for the contract Is recognized and Is presented under the head “Other Expenses”.

(w)    Earnings per share

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 year. The weighted average number of equity shares outstanding during the year Is adjusted for events of bonus Issue, share split and any new equity issue. 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 shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(x)    Provisions, contingent assets and contingent liabilities

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.

Contingent liability is 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.

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

(y)    Cash and cash equivalents

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

(z)    Income taxes

Tax expense comprises current and deferred tax. Current and deferred tax is recognised in statement of profit and loss except to the extent that it relates to items recognised directly in equity or other comprehensive income.

The current income-tax charge is calculated on the basis of the tax laws enacted at the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred tax is provided in full, on temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

In the situations where the company is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India, no deferred tax (asset or liability) is recognized in respect of temporary differences which reverse during the tax holiday period, to the extent the concerned entity’s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of temporary differences which reverse after the tax holiday period is recognized in the year in which the temporary differences originate. However, the Company restricts recognition of deferred tax assets to the extent it is probable that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the temporary differences which originate first are considered to reverse first.

Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.

Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax for the year. The deferred tax asset is recognised for MAT credit available only to the extent that it is probable that the respective entity will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the entity recognizes MAT credit as an asset, it is created by way of credit to the statement of profit and loss and shown as part of deferred tax asset. The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.

(aa) Operating Segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (‘CODM’) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company.

(bb) Critical estimates and judgements

The preparation of the Company's financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these judgements, assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Impairment of non-financial assets

The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets.

Impairment of financial assets

The Company estimates the recoverable amount of trade receivables and other financial assets where collection of the full amount is expected to be no longer probable. For individually significant amounts, this estimation is performed on an individual basis considering the length of time past due, financial condition of the counterparty, impending legal disputes, if any and other relevant factors.

Recognition of deferred tax assets

The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company's future taxable income against which the deferred tax assets can be utilized.

Provisions

At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.

Contingencies

In the normal course of business, contingent liabilities may arise from litigation, taxation and other claims against the Company. A tax provision is recognised when the Company has a present obligation as a result of a past event; it is probable that the Company will be required to settle that obligation. Where it is management's assessment that the outcome cannot be reliably quantified or is uncertain the claims are disclosed as contingent liabilities unless the likelihood of an adverse outcome is remote. Such liabilities are disclosed in the notes but are not provided for in the financial statements. When considering the classification of a legal or tax cases as probable, possible or remote there is judgement involved. This pertains to the application of the legislation, which in certain cases is based upon management's interpretation of country specific tax law, in particular India, and the likelihood of settlement. Management uses in-house and external legal professionals to inform their decision. Although there can be no assurance regarding the final outcome of the legal proceedings, the Company does not expect them to have a materially adverse impact on the Company's financial position or profitability.

Leases

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate. The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option; and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease. The Company revises the lease term if there is a change in the non-cancellable period of a lease.

Revenue and inventories

The estimates around total budgeted cost i.e., outcomes of underlying construction and service contracts, which further require estimates to be made for changes in work scopes, claims (compensation, rebates, etc.), the cost of meeting other contractual obligations to the customers and other payments to the extent they are probable, and they are capable of being reliably measured. For the purpose of making these estimates, the Company used the available contractual and historical information and also its expectations of future costs. The estimates of the saleable area are also reviewed periodically and effect of any changes in such estimates is recognised in the period such changes are determined.

Estimation of net realisable value for inventory

Inventory is stated at the lower of cost and net realisable value (NRV). NRV for completed inventory is assessed by reference to market conditions and prices existing at the reporting date and is determined by the Company, based on comparable transactions identified by the Company for properties in the same geographical market serving the same real estate segment. NRV in respect of inventory under construction is assessed with reference to market prices at the reporting date for similar completed property, less estimated costs to complete construction and an estimate of the time value of money to the date of completion.

Accounting for revenue and land cost for projects executed through joint development arrangements with revenue sharing arrangement

For projects executed through joint development arrangements with revenue sharing arrangements, the Company has evaluated that land owners are engaged in the same line of business as the Company and such contracts are not contracts with customers, but a transaction for purchase of land/development rights.

The revenue from the development and transfer of constructed area/revenue sharing arrangement and the corresponding land/ development rights received under joint development arrangement is measured at the fair value of the estimated consideration payable to the land owner and the same is accounted on launch of the project. The fair value is estimated with reference to the terms of the joint development arrangement. Such assessment is carried out at the launch of the real estate project and is reassessed at each reporting period. The management is of the view that the fair value method and estimates are reflective of the current market condition.

Accounting for revenue and land cost for projects executed through joint development arrangements with area share arrangement

For projects executed through joint development arrangements with area share arrangement, the Company has evaluated that land owners are not engaged in the same line of business as the Company and hence has concluded that such arrangements are contracts with customers. The revenue from the development and transfer of constructed area and the corresponding land/ development rights received under joint development arrangements is measured at the fair value of the estimated construction service rendered to the land owner and the same is accounted from launch of the project. The fair value is estimated with reference to the terms of the joint development arrangements and the related cost that is allocated to discharge the obligation of the Company under the joint development arrangements.

Fair value of the construction is considered to be the representative fair value of the revenue transaction and land so obtained. Such assessment is carried out at the launch of the real estate project and is reassessed at each reporting period. The management is of the view that the fair value method and estimates are reflective of the current market condition

Useful lives ofdepreciable/amortisable assets

Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utilisation of assets.

Fair value measurement

Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available). This involves developing estimates and assumptions consistent