Page 190 - Kolte Patil AR 2019-20
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Notes forming part of the Consolidated Financial Statements

              liabilities) on the date of financial statements, and the reported amounts of income and expenses during the reported period and
              accompanying disclosures. The Management believes that the estimates used in preparation of the consolidated financial statements
              are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the
              estimates are recognised in the periods in which the results are known/ materialize.
          G.   The Group has assessed the Impact of COVlD-19 on its financial statements based on the internal and external information up to the
              date of approval of these financial statements. Based on current estimates, the Group expects to recover the carrying amounts of its
              assets including goodwill, inventories, receivables, investments and other assets. Given the indeterminate circumstances due to the
              pandemic, the overall business impact thereof remains uncertain. The Group will continue to monitor the future developments and
              update its assessment accordingly.
              Significant accounting judgements, estimates and assumptions used by management. Refer Note 2.1.

          H.  Inventories:
              Raw materials are valued at lower of cost and net realisable value. Cost is determined based on a weighted average basis.
              Stock of units in completed projects and work-in-progress are valued at lower of cost and net realisable value. Cost is aggregate of land
              cost, materials, contract works, direct expenses, provisions and apportioned borrowing costs.
              In case of other business, Inventories are valued at the lower of cost and the net realisable value after providing for obsolescence and
              other losses, if any.  Cost includes all charges in bringing the goods to the point of sale.

          I.   Cash Flow Statement:
              Cash flow statement is prepared under Ind AS 7 ‘Statement of Cashflows’ specified under Section 133 of the Act. Cash flows are
              reported using the indirect method, whereby profit / (loss) before tax and is adjusted for the effects of transactions of non-cash nature.
          J.   Property, Plant & Equipment and Intangible assets:
              Property, Plant & Equipment and Intangible assets are stated at actual cost less accumulated depreciation and net of impairment. The
              actual cost capitalised includes material cost, freight, installation cost, duties and taxes, eligible borrowing costs and other incidental
              expenses incurred during the construction / installation stage.

              Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation
              / amortisation on Property, Plant & Equipment is charged based on straight line method on an estimated useful life as prescribed in
              Schedule II to the Companies Act, 2013.
              Computer software is amortized over a period of six years.
              The estimated useful lives and residual values of the Property, Plant & Equipment and Intangible assets are reviewed at the end of each
              reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

          K.   Revenue Recognition :
              i.  The Group develops and sells residential and commercial properties. Revenue from contracts is recognised when control over
                 the property has been transferred to the customer. An enforceable right to payment does not arise until the development of the
                 property is completed. Therefore, revenue is recognized at a point in time, when:
                 •  the Group has transferred to the customer all significant risks and rewards of ownership and the Group retains no effective
                   control of the real estate unit to a degree usually associated with ownership;
                 •  The Group has handed over physical possession of the real estate unit to the customer or deemed possession based on the
                   contract with the customer;
                 •  No significant uncertainty exists regarding the amount of consideration that will be derived from the sale of real estate unit; and
                 •  It is not unreasonable to expect ultimate collection of revenue from customer.
                 The revenue is measured at the transaction price agreed under the contract.

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