5.13 Accounting for provisions, contingent liabilities and contingent assets

Provisions are recognised in the balance sheet when the Company has a present obligation (legal or

constructive) as a result of a past event, which is expected to result in an outflow of resources embodying
economic benefits which can be reliably estimated. Each provision is based on the best estimate of the
expenditure required to settle the present obligation at the balance sheet date. Where the time value
of money is material, provisions are measured on a discounted basis. The expense relating to any
provision is presented in the statement of profit and loss net of any reimbursement.

Constructive obligation is an obligation that derives from an entity’s actions where:

- by an established pattern of past practice, published policies or a sufficiently specific current
statement, the entity has indicated to other parties that it will accept certain responsibilities, and

- as a result, the entity has created a valid expectation on the part of those other parties that it will
discharge those responsibilities

Contingent liabilities are not recognised in the financial statements. Contingent liabilities are disclosed
when there is a possible obligation arising from past events, the existence of which will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
the control of the Company or a present obligation that arises from past events where it is either not
probable that an outflow of resources will be required to settle the obligation or a reliable estimate of
the amount cannot be made.

5.14 Income tax

Income tax expense comprises both current and deferred tax.

Current Income tax

Current income tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that
are enacted or substantively enacted, at the reporting date where the Company operates and generates
taxable income.

Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in
equity. Management periodically evaluates positions taken in the tax returns with respect to situations
in which applicable tax regulations are subject to interpretation and establishes provisions where
appropriate.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit.

Deferred tax assets and liabilities are not recognised for:

• temporary differences arising on the initial recognition of assets or liabilities in a transaction that
is not a business combination and that affects neither accounting nor taxable profit or loss at the
time of the transaction;

• temporary differences related to investments in subsidiaries, associates and joint arrangements to
the extent that the Group is able to control the timing of the reversal of the temporary differences

and it is probable that they will not reverse in the foreseeable future.

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

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

Minimum Alternate Tax:

Company has opted for paying Income Tax u/s 115BAA of the Income Tax Act, 1961. The MAT provisions
under Section 115JB shall not be applicable to the company that has exercised the option referred to
under section 115BAA of the Income Tax Act, 1961.

5.15 Dividends on ordinary shares

The Company recognises a liability to make cash or non-cash distributions to equity holders of the
parent when the distribution is authorised and the distribution is no longer at the discretion of the
Company. As per the corporate laws in India, a distribution is authorised when it is approved by the
shareholders. A corresponding amount is recognised directly in equity.

Non-cash distributions are measured at the fair value of the assets to be distributed with fair value
remeasurement recognised directly in equity. Upon distribution of non-cash assets, any difference
between the carrying amount of the liability and the carrying amount of the assets distributed is
recognised in the statement of profit and loss.

5.16 Segment reporting

The Company is primarily engaged in the business of Real Estate including group companies. As such
the Company’s financial statements are largely reflective of the Real Estate Business and there is no
separate reportable segment.

Pursuant to Ind AS 108 - Operating Segments, no segment disclosure has been made in these financial
statements, as the Company has only one geographical segment and no other separate reportable
business segment.

5.17 Onerous contracts

Provisions for onerous contracts are recognised when the expected benefits to be derived by the
Company from a contract are lower than the unavoidable costs of meeting the future obligations
under the contract. The provision is measured at the present value of the lower of the expected cost of
terminating the contract and the expected net cost of continuing with the contract. Before a provision is
established, the Company recognises any impairment loss on the assets associated with that contract.