j) Provisions
A provision is recognised in the statement of profit and loss if, as a result of a past event, the Company has a
present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of
economic benefits will be required to settle the obligation. If the effect of the time value of money is material,
provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. Where discounting is
used, the increase in the provision due to the passage of time is recognised as a finance cost.
Restructuring
A provision for restructuring is recognised in the statement of profit and loss when the Company has approved
a detailed and formal restructuring plan, and the restructuring either has commenced or has been announced
publicly. Future operating costs are not provided.
Onerous contracts
A provision for onerous contracts is recognised in the statement of profit and loss when the expected benefits
to be derived by the Company from a contract are lower than the unavoidable cost of meeting its 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.
Reimbursement rights
Expected reimbursements for expenditures required to settle a provision are recognised in the statement of
profit and loss only when receipt of such reimbursements is virtually certain. Such reimbursements are
recognised as a separate asset in the balance sheet, with a corresponding credit to the specific expense for
which the provision has been made.
Contingent liabilities and contingent assets
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that
may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is
made.
Contingent assets are not recognised in the financial statements. A contingent asset is disclosed where an
inflow of economic benefits is probable. Contingent assets are assessed continually and, if it is virtually certain
that an inflow of economic benefits will arise, the asset and related income are recognised in the period in
which the change occurs.
k) Revenue Recognition
The Company's revenue is derived from sales of plots and rendering of services. Most of such revenue is
generated from the sale of plots. The Company has generally concluded that it is the principal in its revenue
arrangements.
Sale of plots
Revenue is recognised when the control of the plots has been transferred to a third party. This is usually when
the title passes to the customer upon registration of plots. At that point, the customer has full discretion over
the channel and price to sell the products, and there are no unfulfilled obligations that could affect the customer's
acceptance of the product.
Revenue from the sale of plots is measured at the transaction price which is the consideration received or
receivable, net of returns and applicable trade discounts and allowances.
Services
Revenue from services rendered, which primarily relate to contract research, is recognised in the statement of
profit and loss as the underlying services are performed. Upfront non-refundable payments received under
these arrangements are deferred and recognised as revenue over the expected period over which the related
services are expected to be performed.
Revenue from services rendered is recognized in the statement of Profit and loss only when the rendering of
services is fully completed or substantially completed.
Proportionate completion method is a method of accounting which recognizes revenue in the statement of
profit and loss proportionately with degree of completion of services under a contract.
Other Income
Other income consists of interest income on funds invested and gains on the disposal of assets. Interest
income is recognised in the statement of profit and loss as it accrues, using the effective interest method. The
associated cash flows are classified as investing activities in the statement of cash flows. Finance cost consist
of interest expense on loans and borrowings.
l) Borrowing Costs
Borrowing costs are recognised in the statement of profit and loss using the effective interest method. The
associated cash flows are classified as financing activities in the statement of cash flows.
m) Income tax
Income tax expense consists of current and deferred tax. Income tax expense is recognised in the statement
of profit and loss except to the extent that it relates to items recognised directly in equity, in which case it is
recognised in equity.
Current tax
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax
Deferred tax is recognized using the balance sheet approach. Deferred tax assets and liabilities are recognized
for deductible and taxable temporary differences arising between the tax base of assets and liabilities and
their carrying amount in financial statements, except when the deferred income tax arises from the initial
recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects
neither accounting nor taxable profits or loss at the time of the transaction.
Deferred tax assets are recognized to the extent it is probable that taxable profit will be available against which
the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can
be utilized.
Deferred tax liabilities are recognized for all taxable temporary differences except in respect of taxable temporary
differences associated with investments in subsidiaries and foreign branches where the timing of the reversal
of the temporary difference can be controlled and it is probable that the temporary difference will not reverse
in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset
to be utilized. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the
period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date.
The Company offsets deferred tax assets and liabilities, where it has a legally enforceable right to offset
current tax assets against current tax liabilities, and they relate to taxes levied by the same taxation authority
on either the same taxable entity, or on different taxable entities where there is an intention to settle the current
tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
Deferred Tax includes MAT credit, if any and it is recognized as an asset only when and to the extent there is
convincing evidence that the Company will pay income tax higher than that computed under MAT, during the
period that MAT is permitted to be set off under the Income Tax Act, 1961 for a specified period. Credit on
account of MAT is recognized as an asset based on the management's estimate of its recoverability in the future.
n) Earnings per Share
The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS
is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the
profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares
outstanding for the effects of all dilutive potential ordinary shares, which includes all stock options granted to
employees.
o) Rounding Off
All amounts in Indian Rupees disclosed in the financial statements and notes have been rounded off to the
nearest Lakhs unless otherwise stated.
p) Fair Value Measurement
The Company's accounting policies and disclosures require the determination of fair value, for certain financial
and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure
purposes based on the following methods. When applicable, further information about the assumptions made
in determining fair values is disclosed in the notes specific to that asset or liability. Fair value is the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the
transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or
liability or in the absence of a principal market, in the most advantageous market for the asset or liability. The
principal or the most advantageous market must be accessible by the Company. The fair value of an asset or
a liability is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming that market participants act in their economic best interest. A fair value measurement of a
non-financial asset takes into account a market participant's ability to generate economic benefits by using the
asset in its highest and best use or by selling it to another market participant that would use the asset in its
highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and
for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.
• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by re-assessing
categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at
the end of each reporting period.
External valuers are involved for valuation of significant assets, such as assets acquired in a business
combination and significant liabilities, such as contingent consideration. Involvement of external valuers is
determined by the Management, based on market knowledge, reputation, independence and whether
professional standards are maintained.
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