15. Provisions & Contingencies
Provisions are recognised when the Company has a
present legal or constructive obligation as a result of
past events for which it is probable that an outflow
of resources will be required to settle the obligation
and the amount can be reliably estimated as at the
balance sheet date. Provisions are measured based
on management’s estimate required to settle the
obligation at the balance sheet date and are discounted
using a rate that reflects the time value of money. When
discounting is used, the increase in the provision due
to the passage of time is recognised as a finance cost.
Other Litigation claims
Provision for litigation related obligation represents
liabilities that are expected to materialize in respect of
matters in appeal.
Onerous contracts
A provision for onerous contracts is measured at
the present value of the lower expected costs of
terminating the contract and the expected cost of
continuing with the contract. Before a provision is
established, the Company recognizes impairment on
the assets with the contract.
Contingencies
A disclosure for a contingent liability is made when
there is a possible obligation or a present obligation
that may, but will probably not, require an outflow
of resources. Information on contingent liabilities is
disclosed in the notes to financial statements unless
the possibility of an outflow of resources embodying
economic benefit is remote.
A contingent asset is not recognised but disclosed in
the financial statements where an inflow of economic
benefit is probable and are reviewed at each balance
sheet date.
16. Provision for Defect liability period
The Company provides for contractual obligations to
periodically service, repair or rectify any defective
work during the defect liability period as well
as towards contractual obligations to restore the
infrastructure at periodic intervals. Provisions are
measured based on management’s estimate required
to settle the obligation at the balance sheet date and
are discounted using a rate that reflects the time value
of money. When discounting is used, the increase in
the provision due to the passage of time is recognised
as a finance cost. The same is reviewed at each balance
sheet date and adjustments if any to the carrying
amount is provided for accordingly.
17. Leases
Company as a lessee
The Company applies a single recognition and
measurement approach for all leases, except for short¬
term leases and leases of low-value assets.
Lease term which is a non-cancellable period together
with 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. The Company uses judgement
in assessing the lease term (including anticipated
renewals/ termination options).
The Company recognizes lease liabilities to make
lease payments and right-of-use assets representing
the right to use the underlying assets.
i. Right-of-use assets
The Company recognizes right-of-use assets at
the commencement date of the lease. Right-of-use
assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The
cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs
incurred, lease payments made at or before the
commencement date less any lease incentives
received. Right-of-use assets are depreciated on
a straight-line basis from the commencement
date to the end of lease term.
If ownership of the leased asset transfers to the
Company at the end of the lease term or the
cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset.
The right-of-use assets are also subject to
impairment. Refer to the accounting policies of
Impairment of non-financial assets.
ii. Lease liabilities
At the commencement date of the lease, the
Company recognizes lease liabilities measured
at the present value of lease payments to be
made over the lease term. The lease payments
include fixed payments less any lease incentives
receivable, variable lease payments that depend
on an index or a rate, and amounts expected to
be paid under residual value guarantees. The
lease payments also include the exercise price
of a purchase option reasonably certain to be
exercised by the Company and payments of
penalties for terminating the lease, if the lease
term reflects the Company exercising the option
to terminate. Variable lease payments that do
not depend on an index or a rate are recognised
as expenses in the period in which the event or
condition that triggers the payment occurs.
In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement date
because the interest rate implicit in the lease is
not readily determinable.
After the commencement date, the amount of
lease liabilities is increased to reflect the accretion
of interest and reduced for the lease payments
made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification,
a change in the lease term, a change in the lease
payments or a change in the assessment of an
option to purchase the underlying asset.
iii. Short term leases and leases of low value of
assets
The Company applies the short-term lease
recognition exemption to its short-term leases
of machinery and equipment. It also applies the
lease of low-value assets recognition exemption
to leases that are considered to be low value.
Lease payments on short-term leases and leases
of low-value assets are recognised as expense 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 incidental
to ownership of an asset are classified as operating
leases. Rental income arising is accounted for on
a straight-line basis over the lease terms. Initial
direct costs incurred in negotiating and arranging an
operating lease are added to the carrying amount of
the leased asset and recognised over the lease term on
the same basis as rental income. Contingent rents are
recognised as revenue in the period in which they are
earned.
Leases are classified as finance leases when
substantially all of the risks and rewards of ownership
transfer from the Company to the lessee.
18. Taxes
Income tax expense for the period is the tax payable
on the current period’s taxable income based on the
applicable income tax rate and changes in deferred
tax assets and liabilities attributable to temporary
differences. The current income tax charge is
calculated in accordance with the provisions of the
Income Tax Act 1961.
Tax expense comprises current tax expense and
deferred tax.
Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted
at the end of the reporting period and are expected to
apply when the related deferred income tax asset is
realised, or the deferred income tax liability is settled.
Deferred tax liabilities are recognized for all taxable
temporary differences and deferred tax assets are
recognized for all deductible temporary differences
and brought forward losses only if it is probable that
future taxable profit will be available to realize the
temporary differences, excluding exceptions cases.
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 realize the
asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit
or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly
in equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity,
respectively.
19. Employee benefits
a. Short-term obligations
All employee benefits falling due wholly within
twelve months of rendering the service are
classified as short-term employee benefits. These
are expensed as the related service is provided.
A liability is recognised for the amount expected
to be paid if the Company has a present legal or
constructive obligation to pay this amount as a
result of past service provided by the employee
and the obligation can be estimated reliably.
b. Post-employment obligations i.e.
• Defined benefit plans and
• Defined contribution plans.
Defined benefit plans:
The employees’ gratuity fund scheme, managed
by Life Insurance Corporation (LIC) is a defined
benefit plan. The present value of obligation is
determined based on actuarial valuation carried
out as at the end of each financial year using the
Projected Unit Credit Method.
The obligation is measured at the present value
of the estimated future cash flows. The discount
rate used for determining the present value of the
obligation under defined benefit plans, is based
on the market yield on government securities,
of a maturity period equivalent to the weighted
average maturity profile of the related obligations
at the Balance Sheet date.
Re-measurement, comprising actuarial gains
and losses, the effect of the changes to the asset
ceiling (if applicable) and the return on plan assets
(excluding net interest), is reflected immediately
in the balance sheet with a corresponding
debit or credit to other comprehensive income
(OCI) in the period in which they occur. Re¬
measurements are not reclassified to profit or
loss in subsequent periods. Past service cost is
recognised in the statement of profit or loss in
the period of a plan amendment. Net interest is
calculated by applying the discount rate at the
beginning of the period to the net defined benefit
liability or asset.
Defined contribution plans:
The Company’s contribution to provident fund,
employee state insurance scheme, superannuation
fund and National Pension Scheme (NPS) are
considered as defined contribution plans and are
charged as an expense as they fall due based on
the amount of contribution required to be made
and when services are rendered by the employee.
c. Other long term employee benefits
The Company’s net obligation in respect of
long-term employee benefits other than post¬
employment benefits is the amount of future
benefit that employees have earned in return for
their service in the current and prior periods; that
benefit is discounted to determine its present
value, and the fair value of any related assets is
deducted.
The obligation is measured on the basis of an
annual independent actuarial valuation using the
projected unit credit method. Remeasurements
gains or losses are recognised in profit or loss in
the period in which they arise.
20. Cash and cash equivalents
Cash and cash equivalent in the balance sheet
comprise cash at banks and on hand and short-term
deposits with an original maturity of three months
or less, which are subject to an insignificant risk of
changes in value.
For the purpose of the statement of cash flows, cash
and cash equivalents consist of cash and short-term
deposits, as defined above.
21. Segment Reporting
Operating segments are reported in a manner
consistent with the internal reporting provided to
the Chief Operating Decision Maker, who regularly
monitors and reviews the operating result for
following operating segments of the Company:
i. “Construction & Contract Related Activity”,
includes Engineering, Procurement and
Construction activity for Road, Rail, Power
projects etc.;
ii. “Built, Operate and Transfer (BOT) / Annuity
Projects” includes business operation with
respect to Toll collection and Hybrid Annuity
road projects;
iii. “Sale of Goods” consist mainly Sale of
construction material which includes Ready Mix
Concrete and Real estate.
22. Business Combination
Acquisition of business are accounted for using the
acquisition method. The consideration transferred in
business combination is measured at the aggregate of
fair values of assets given, liabilities incurred by the
Company to the former owners of the acquiree and
consideration paid by the Company in exchange for
control of the acquire. Acquisition related costs are
recognised in the statement of profit and loss.
23. Revenue recognition
A) Revenue
Revenue from contracts with customers is
recognised when control of the goods or services
are 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 or services before transferring them to the
customer.
Revenue from construction contracts
Performance obligation in case of long - term
construction contracts is satisfied over a period
of time, since the Company creates an asset that
the customer controls as the asset is created and
the Company has an enforceable right to payment
for performance completed to date if it meets the
agreed specifications.
Revenue from long term construction contracts,
where the outcome can be estimated reliably and
5% of the project cost is incurred, is recognized
under the percentage of completion method
by reference to the stage of completion of the
contract activity. For projects wherein progress
achieved via the Percentage of completion
methods is less than 5%, revenue is recognized
upto the extent of cost incurred.
The stage of completion is measured by input
method i.e. the proportion that costs incurred
to date bear to the estimated total costs of a
contract. The percentage-of-completion method
(an input method) is the most faithful depiction
of the company’s performance because it directly
measures the value of the services transferred to
the customer.
The total costs of contracts are estimated based
on technical and other estimates. In the event
that a loss is anticipated on a particular contract,
provision is made for the estimated loss after
review of budgets and if contract cost exceed
contract price.
Contract revenue earned in excess of billing is
reflected under as “contract asset” and billing
in excess of contract revenue is reflected under
“contract liabilities”.
Retention money receivable from project
customers does not contain any significant
financing element, these are retained for
satisfactory performance of contract.
The major component of contract estimate is
“budgeted cost to complete the contract” and on
assumption that contract price will not reduce
vis-a-vis agreement values. While estimating
the various assumptions are considered by
management such as:
• Work will be executed in the manner
expected so that the project is completed
timely unless there are circumstances to
indicate that the project due dates will not
be met, in which case, costs are estimated
upto the expected date of completion;
• Consumption norms will remain same;
• Cost escalation comprising of increase in
cost to compete the project are considered
as a part of budgeted cost to complete the
project including known contingencies etc.
Due to technical complexities involved in the
budgeting process, contract estimates are highly
sensitive to changes in these assumptions. All
assumptions are reviewed at each reporting date.
Service Contracts
For service contracts (including maintenance
contracts) in which the Company has the right
to consideration from the customer in an amount
that corresponds directly with the value to
the customer of the Company’s performance
completed to date, revenue is recognized when
services are performed and contractually billable.
Revenue from sale of Ready Mix Concrete
(RMC) and other materials
Revenue from sale of goods is recognized at
the point in time when control of the asset is
transferred to the customer, generally on delivery
of the goods. The normal credit term is 30 to 90
days upon delivery.
Revenue from scrap sales and other ancillary
sales is recognised when the control over the
goods is transferred to the customers.
Variable Consideration
The nature of the Company’s contracts gives
rise to several types of variable consideration,
including claims, unpriced change orders, award
and incentive fees, change in law, liquidated
damages and penalties. The company recognizes
variable consideration in the transaction price
/ revenue when it is probable that a significant
reversal in the amount of cumulative revenue
recognized will not occur. The Company
estimates the amount of revenue to be recognized
on variable consideration using the expected
value (i.e., the sum of a probability-weighted
amount) or the most likely amount method,
whichever is expected to better predict the
amount.
The Company’s claim for extra work, incentives
and escalation in rates relating to execution of
contracts are recognized as revenue in the year
in which said claims are finally accepted by
the clients. Claims under arbitration/disputes
are accounted as income based on final award.
Expenses on arbitration are accounted as
incurred. Claims - are recognized on its approval
from client/authority/court decision or its surety
of receipt (Not on assessment).
Contract modifications
Contract modifications are accounted for when
additions, deletions or changes are approved
either to the contract scope or contract price.
The accounting for modifications of contracts
involves assessing whether the services added to
the existing contract are distinct and whether the
pricing is at the standalone selling price. Services
added that are not distinct are accounted for on a
cumulative catch-up basis, while those that are
distinct are accounted for prospectively, either
as a separate contract, if additional services are
priced at the standalone selling price, or as a
termination of existing contract and creation of
a new contract if not priced at the standalone
selling price.
B) Contract Balances
Contract Assets
A contract asset is the right to consideration
in exchange for goods or services transferred
to the customer. If the Company performs by
transferring goods or services to a customer
before the customer pays consideration or before
payment is due, a contract asset is recognised for
the earned consideration that is conditional.
Contract assets represent revenue recognized
in excess of amounts billed and include
unbilled receivables. Unbilled receivables,
which represent an unconditional right to
payment subject only to the passage of time, are
reclassified to accounts receivable when they are
billed under the terms of the contract.
Trade Receivables
A receivable represents the Company’s right to
an amount of consideration that is unconditional
(i.e., only the passage of time is required before
payment of the consideration is due). Refer to
accounting policies of financial assets in point 9
of Accounting Policies - Financial Instruments.
Contract Liabilities
A contract liability is the obligation to transfer
goods or services to a customer for which
the Company has received consideration (or
an amount of consideration is due) from the
customer. If a customer pays consideration
before the Company transfers goods or services
to the customer, a contract liability is recognised
when the payment is made, or the payment is
due (whichever is earlier). Contract liabilities
are recognised as revenue when the Company
performs under the contract.
Contract liabilities include unearned revenue
which represents amounts billed to clients
in excess of revenue recognized to date and
advances received from customers. For contracts
where progress billing exceeds, the aggregate of
contract costs incurred to date plus recognised
profits (or minus recognised losses, as the case
may be), the surplus is shown as contract liability
and termed as unearned revenue. Amounts
received before the related work is performed
are disclosed in the balance sheet as contract
liability and termed as advances received from
customers.
24. Significant accounting judgments, estimates &
assumptions
The preparation of the Company’s financial
statements requires management to make estimates
and assumptions that affect the reported values
of revenues, expenses, assets and liabilities, and
the accompanying disclosures, and the disclosure
of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes
that require a material adjustment to the carrying
amount of assets or liabilities affected in future
periods.
Estimates and assumptions
The key assumptions concerning future and other
key sources of estimating uncertainty at the reporting
date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described
below. The Company based its assumptions and
estimates on parameters available when the financial
statements were prepared. Existing circumstances and
assumptions about future developments, however,
may change due to market changes or circumstances
arising that are beyond the control of the Company.
Such changes are reflected in the assumptions when
they occur.
Estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting
estimates are recognised prospectively.
Significant Estimates in Application of Ind AS 115
The Company applied the following estimates that
significantly affect the determination of the amount
and timing of revenue from contracts with customers:
Project revenue and costs
The percentage-of-completion method places
considerable importance on accurate estimates of the
extent of progress towards completion (i.e actual costs
incurred / total estimated costs of the project). These
estimates include costs to complete the contract,
estimating expected dates of completion in case of
delays, contingencies and various contract risks,
including technical, political and regulatory risks,
and other judgement. The Company re-assesses these
estimates on periodic basis and makes appropriate
revisions accordingly.
Determining method to estimate variable
consideration and assessing the constraint
Before including any amount of variable consideration
in the transaction price, the Company estimates
whether the amount of variable consideration is
constrained in similar projects based on its historical
experience, various correspondence with customer,
time expectation to settle the amount of variable
consideration etc.
Other Significant Accounting judgements,
estimates and assumptions
Taxes
Uncertainties exist with respect to the interpretation of
complex tax regulations, changes in tax laws, and the
amount and timing of future taxable income. Given
the wide range of business relationships and the long¬
term nature and complexity of existing contractual
agreements, differences arising between the actual
results and the assumptions made, or future changes to
such assumptions, could necessitate future adjustments
to tax income and expense already recorded. The
Company establishes provisions, based on reasonable
estimates. The amount of such provisions is based on
various factors, such as experience of previous tax
audits and differing interpretations of tax regulations
by the taxable entity and the responsible tax authority.
Such differences of interpretation may arise on a
wide variety of issues depending on the conditions
prevailing in the respective domicile of the companies.
Significant management judgment is required to
determine the amount of deferred tax assets that can
be recognised, based upon the likely timing and the
level of future taxable profits together with future tax
planning strategies.
Employee benefit plans
The cost of defined benefit gratuity plan and other
post-employment benefits are determined using
actuarial valuations.
An actuarial valuation involves making various
assumptions that may differ from actual developments
in the future. These include the determination of the
discount rate, future salary increases and mortality
rates. Due to the complexities involved in the valuation
and its long-term nature, a defined benefit obligation
is highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount
rate. In determining the appropriate discount rate for
plans operated in India, the management considers
the interest rates of government bonds in currencies
consistent with the currencies of the post-employment
benefit obligation.
The mortality rate is based on publicly available
mortality tables for India. Those mortality tables tend
to change only at interval in response to demographic
changes. Future salary increases and gratuity increases
are based on expected future inflation rates for the
respective countries.
Further details about gratuity obligations are given in
Note 51.
Fair value measurement of financial instruments
When the fair values of financial assets and financial
liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets,
their fair value is measured using valuation techniques
including the Discounted Cash Flows (DCF) model.
The inputs to these models are taken from observable
markets where possible, but where this is not feasible,
a degree of judgement is required in establishing fair
values with respect to estimated cash flows, growth
rates, discount rates etc. Changes in assumptions
about these factors could affect the reported fair value
of financial instruments.
Impairment of financial assets
The impairment provision for financial assets are
based on assumptions about risk of default and
expected loss rates. The Company uses judgement in
making these assumptions and selecting the inputs to
the impairment calculation, based on the Company’s
past history, existing market conditions as well as
forward looking estimates at the end of each reporting
period.
Impairment of investments in / loans given to
subsidiaries and associates
Impairment exists when the carrying value of an
asset or cash generating unit exceeds its recoverable
amount, which is the higher of its fair value less costs
of disposal and its value in use. The fair value less
costs of disposal calculation is based on available data
for similar assets or observable market prices less
incremental costs for disposing of the asset. The value
in use calculation is based on a DCF model. The cash
flows are derived from the budget generally covering
a period of the concession agreements using long
terms growth rates and do not include restructuring
activities that the Company is not yet committed to
or significant future investments that will enhance
the asset’s performance being tested. The recoverable
amount is sensitive to the discount rate used for the
DCF model as well as the expected future cash-inflows
and the growth rate used for extrapolation purposes.
Further, the Company considers favorable arbitration
awards towards its claim from various authorities
in the impairment assessment of subsidiaries and
associates on the basis of probability assessment.
Allowance for expected credit loss
The Company uses a provision matrix to calculate
Expected Credit Loss (ECL) for trade receivables
and contract assets. The provision rates are based on
days past due for Companyings of various customer
segments that have similar loss patterns (i.e., by
project type, customer type and other identifiable
factors).
The provision matrix is initially based on the
Company’s historical observed default rates. The
Company will calibrate the matrix to adjust the
historical credit loss experience with forward-looking
information. At every reporting date, the historical
observed default rates are updated and changes in the
forward-looking estimates are analysed.
The assessment of the correlation between historical
observed default rates, forecast economic conditions
and ECLs is a significant estimate. The amount of
ECLs is sensitive to changes in circumstances and
of forecast economic conditions. The Company’s
historical credit loss experience and forecast of
economic conditions may also not be representative
of customer’s actual default in the future.
Litigations and Contingencies - Refer Note 15
above
25. New and Amended standards
The Ministry of Corporate Affairs (MCA) notified
the Ind AS 117, Insurance Contracts, vide notification
dated August 12, 2024, under the Companies (Indian
Accounting Standards) Amendment Rules, 2024,
which is effective from annual reporting periods
beginning on or after 1 April 2024.
i. Ind AS 117 Insurance Contracts is a
comprehensive new accounting standard for
insurance contracts covering recognition and
measurement, presentation and disclosure. Ind
AS 117 replaces Ind AS 104 Insurance Contracts.
Ind AS 117 applies to all types of insurance
contracts, regardless of the type of entities
that issue them as well as to certain guarantees
and financial instruments with discretionary
participation features; a few scope exceptions
will apply. Ind AS 117 is based on a general
model, supplemented by:
• A specific adaptation for contracts with
direct participation features (the variable
fee approach)
• A simplified approach (the premium
allocation approach) mainly for short-
duration contracts.
The application of Ind AS 117 does not have
a material impact on the Company’s financial
statements.
ii. Amendments to Ind AS 116 Leases - Lease
Liability in a Sale and Leaseback. The MCA
notified the Companies (Indian Accounting
Standards) Second Amendment Rules, 2024,
which amend Ind AS 116, Leases, with respect
to Lease Liability in a Sale and Leaseback. The
amendment specifies the requirements that a
seller-lessee uses in measuring the lease liability
arising in a sale and leaseback transaction,
to ensure the seller-lessee does not recognise
any amount of the gain or loss that relates to
the right of use it retains. The amendment is
effective for annual reporting periods beginning
on or after April 01, 2024 and must be applied
retrospectively to sale and leaseback transactions
entered into after the date of initial application of
Ind AS 116.
The amendments do not have a material impact on the
Company’s financial statements.
Nature and purpose of Reserves
Securities Premium :
Securities Premium is used to record the premium on issue of shares and utilised in accordance with the provisions of the
Companies Act, 2013.
General Reserve :
General Reserve is used from time to time to transfer profits from Retained Earnings for appropriation purposes. As the
General Reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive
income, items included in General Reserve will not be reclassified subsequently to Statement of Profit and Loss.
Debenture Redemption Reserve :
The Company had created a Debenture Redemption Reserve at the time of issue of Non Convertible Debentures out of the
profits which are available for payment of dividend to be utilised for Redemption of these Debentures. During the year ended
March 31, 2020, the Company had redeemed all the outstanding Non Convertible Debentures, and transferred the balance of
Debenture Redemption Reserve to the General Reserve.
Retained Earning : Retained Earnings are the profits of the Company earned till date net of appropriation
Valuation technique used to determine fair value:
• Level 1 - This level includes those financial instruments which are measured by reference to quoted prices (unadjusted) in
active markets for identical assets or liabilities.
• Level 2 - This level includes financial assets and liabilities measured using inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
• Level 3 - This level includes financial assets and liabilities measured using inputs that are not based on observable market data
(unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are
neither supported by prices from observable current market transactions in the same instrument nor are they based on available
market data.
Note: All financial instruments for which fair value is recognised or disclosed are categorised within the fair value hierarchy
described as above, based on the lowest level input that is significant to the fair value measurement as a whole. Recoverable value
of investment in Ashoka Concessions Limited is determined based on the fair value as per the share purchase agreements executed
with respect to its investments in toll / annuity assets.
Note 48 : Financial risk management objectives and policies
The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly
to reflect changes in market conditions and the Company’s activities.
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.
The Company has exposure to the following risks arising from financial instruments:
(A) Credit risk:
(B) Liquidity risk: and
(C) Market risk:
(A) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Company’s receivables from customers and loans and advances.
The Company’s customer profile include public sector enterprises, state owned companies, group companies, individual and
corporates customer. General payment terms include mobilisation advance, monthly progress payments with a credit period
ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases retentions are
substituted with bank/corporate guarantees. The Company has a detailed review mechanism of overdue customer receivables
at various levels within organisation to ensure proper attention and focus for realisation.
Cash and cash equivalents
Cash and cash equivalents (excluding cash on hand) of ? 13,470.36 Lakhs at March 31, 2025 (March 31, 2024: ? 35,762.35
Lakhs) The cash and cash equivalents (excluding cash on hand) are held with bank and financial institution counterparties
with good credit rating.
Bank Balances other than Cash & cash equivalents
Bank Balances other than Cash and cash equivalents of ? 10,505.50 Lakhs at March 31, 2025 (March 31, 2024: ? 15,271.57
Lakhs). The Bank Balances other than cash and cash equivalents are held with bank and financial institution counterparties
with good credit rating.
Investments & Loan
Investments & Loan are with only group companies in relation to the project execution which are closely monitored to avoid
any impairment risk on there investment / loans.
(B) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity
to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or
risking damage to the Company’s reputation.
The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to
funding through an adequate amount of committed credit lines. Management regularly monitors the position of cash and cash
equivalents vis-a-vis projections. Assessment of maturity profiles of financial assets and financial liabilities including debt
financing plans and maintenance of Balance Sheet liquidity ratios are considered while reviewing the liquidity position.
Maturities of financial liabilities noted in Note 23, 24, 25, 28, 29 & 30 is given below at undiscounted value :-
Interest Rate Risk
As infrastructure development and construction business is capital intensive, the Company is exposed to interest rate
risks. The Company's infrastructure development and construction projects are funded to a large extent by debt and
any increase in interest expense may have an adverse effect on our results of operations and financial condition. The
Company current debt facilities carry interest at variable rates with the provision for periodic reset of interest rates. As
of March 31, 2025, majority of the Company's indebtedness was subject to variable/fixed interest rates.
The interest rate risk exposure is mainly from changes in floating interest rates. The interest rate are disclosed in the
respective notes to the financial statement of the Company. The following table analysis the breakdown of the financial
assets and liabilities by type of interest rate:
Note 50 : Leases
Disclosures pursuant to Ind AS 116 "Leases"
The Company has elected not to apply the requirements of Ind AS 116 to short term leases of all the assets that have a lease term of
twelve months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are
recognized as an expense on a straight line basis over the lease term.
The Company had total cash outflows for leases of ' 339.06 Lakhs for the year ended March 31, 2025 (March 31, 2024 : ' 476.98
Lakhs)
Refer Note 2A for additions to right-of-use assets and the carrying amount of right-of-use assets as at March 31, 2025.
The effective interest rate for lease liabilities is between the range of 9% to 10%
5. Terms and conditions of transations with related parties
i) Contract billings to related parties and concerned balances
Contract billings with related parties are made under the terms that are consistent with those applied to third-party
transactions, adhering to the principles of arm's length pricing. These billings are based on contracts entered with related
parties, reflecting prevailing prices / costs estimated at the time of bidding, as well as standard industry practices. Such
billings generally include payment terms requiring related party to make payment within 30 to 90 days from the date of
invoice. Trade receivables outstanding balances are unsecured, interest free and require settlement in cash. No guarantee
or other security has been received against these receivables.
ii) Purchases of goods / availing of services and concerned balances
Purchases of goods and services from related parties are made on the same terms as applicable to third parties in an arm’s
length transaction and in the ordinary course of business. Purchase transactions are made on normal commercial terms,
conditions and market rates. Trade payables outstanding balances are unsecured, interest free and require settlement in
cash. No guarantee or other security has been given against these payables.
iii) Loans (including perpetual debt) given to related parties
The Company has given unsecured loans (including perpetual debt) to related parties for general corporate purposes.
Perpetual debts are interest free loans given by the Company to its subsidiaries, associates and joint venture which are
repayable at the discretion of the borrower and the Company has classified these investments as Equity Instrument in
the Financial Statements. The other loans carries interest reflecting prevailing market rates / standard industry practices.
These loans have been utilized by the related parties for the purpose it was given. For the year ended March 31, 2025, the
Company has recorded impairment on loans (including perpetual debt) due from subsidiaries amounting to ' 900 lakhs
(March 31, 2024: ' 375 lakhs).
iv) Loans taken from the related parties
The Company has taken borrowings from related parties for general corporate purposes. These borrowings are unsecured
and carries interest reflecting prevailing market rates / standard industry practices (refer Note 28 & 23). The loans has
been utilized by the Company for the purpose it was obtained.
v) Guarantees given on behalf of related parties
Guarantees provided to the lenders of the subsidiaries are for availing term loans facilities from the lender banks. The
Company expects that subsidiaries will make payment to the banks when these loans are repayable. For the year ended
March 31, 2025, the Company has not recorded any impairment on guarantee arrangement (3l March 2024: Nil).
vi) Remuneration paid to Key managerial personnel (KMPs)
The amounts represents the expense recognised, which includes remuneration paid during the financial year related to
KMPs as approved by the respective committees. The amounts do not include expense, if any, recognised toward post¬
employment benefits and other long-term benefits of key managerial personnel. Such expenses are measured based on an
actuarial valuation done for the Company as a whole. Hence, amounts attributable to KMPs are not separately determinable.
vii) The transactions other than mentioned above are also in the ordinary course of business and at arms’ length basis.
Note 53 : Segment Reporting
As permitted by paragraph 4 of Ind AS 108, "Operating Segments", notified under section 133 of the Companies Act, 2013, read
together with the relevant rules issued thereunder, if a single financial report contains both consolidated financial statements and
the Separate financial statements of the parents, segment information need to be presented only on the basis of the consolidated
financial statements. Thus disclosures regarding Operating segment is not presented in Standalone Financial Statements.
Note 54 : Earnings per share (EPS)
Basic EPS amounts are calculated by dividing the profit for year attributable to equity holders by the weighted average number
of Equity shares outstanding during the year.
Note: During the year ended March 31, 2018, pursuant to the search proceedings carried out in April 2016, the Company had
received income tax assessment orders under section 153A for the financial year 2010-11 to 2016-17. Income tax authorities had
disallowed certain sub-contractors payments by treating them as not genuine. The Company had the underlying documents to
substantiate the genuineness of the work performed by these sub-contractors and no incriminating documents were found during the
search proceedings. Accordingly, the Company had filed appeals against these assessment orders before the first appellate authority.
Accordingly, as the outcome of the appeal is pending, additional tax payable for these years amounting to ' 72,489.00 Lakhs
(including interest) is treated as contingent liability.
Note 57 : Other Matter
Pursuant to the first information report filed by a law enforcement agency (‘CBI’) in earlier year alleging bribery of certain NHAI
officials by Company personnel for providing undue advantage to the aforesaid persons and the Company with respect to a project
executed in Bihar, on February 28, 2025, the Company has received the final chargesheet dated February 15, 2024 from the Ld.
Court of Special Judge, CBI, Bihar (‘Ld. Court’) whereby the Company has been arraigned in the matter primarily for alleged non¬
completion / deviation in the executed work and minor irregularities in quality of work during the period from April 2021 to August
2022.
As of March 31, 2025, the execution of the said project has been substantially completed and the management believes that the
Company has adhered to the contractual obligations and is of view that there would not be any material impact on the financial
statements in this regard. Further, the Company is in the process of reviewing and evaluating the chargesheet in consultation with
its legal experts for the next steps to challenge the matter, including filing of a writ petition with the High Court for quashing of the
allegations made in the chargesheet.
As the matter is sub-judice, pending outcome of the same with the Ld. Court, no adjustments have been made to the standalone
financial statements.
Note 58 : Financial Guarantees and Other Commitments
a) Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the
holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt
instrument and it is based on the maximum amount that can be called for under the financial guarantee contract.
Note 64: Ashoka Concessions Limited (ACL), a subsidiary company, had issued Compulsorily Convertible Debentures (CCD) to its
investors and to the Company (Parent) which has been classified as equity instrument in the separate financial statements of ACL.
The Company has agreed additional terms with the investors and assumed obligations towards investors which would be settled
through the some portion of equity shares to be received from ACL on conversion of CCDs held by parent Company. Accordingly
the said obligations has been recognised at its fair value as at March 31, 2025 amounting to ' 36,131.28 Lakhs (March 31, 2024 -
' 37,200 Lakhs).
Note 65: Exceptional items:
During the year ended March 31, 2024, pursuant to compliance with the conditions precedent in the share purchase agreement
(‘SPA’) entered into with Mahanagar Gas Limited (‘MGL’), the Company had sold its investment in Unison Enviro Private Limited
('UEPL'), a subsidiary of the Company to MGL for a consideration of ' 28,666.71 lakhs. Accordingly, the Company had recognised
the gain on sale of investment of ' 21,663.93 lakhs in the statement of profit and loss for the year ended March 31, 2024 and
disclosed the same as an exceptional item.
Note 66: Assets Held for Sale :
i) The Company and its subsidiary Ashoka Concessions Limited ('ACL') have entered into share subscription and purchase
agreements and other transaction documents for sale of its entire stake in five of its wholly owned subsidiaries namely Ashoka
Belgaum Dharwad Tollway Limited, Ashoka Highways (Durg) Limited, Ashoka Highways (Bhandara) Limited, Ashoka
Dhankuni Kharagpur Tollway Limited and Ashoka Sambalpur Baragarh Tollway Limited which are engaged in construction
and operation of road projects on Build Operate Transfer (BOT) basis. Further, the Company and ACL have executed the
share subscription and purchase agreements and other transaction documents for divestment of their entire stake in certain
subsidiaries (completed projects), engaged in construction and operation of Road Projects on Hybrid Annuity Mode (HAM)
basis awarded by National Highways Authority of India ('NHAI'). The above transactions are subject to completion of certain
conditions precedent including approval from the lenders of the respective subsidiaries and other regulatory approvals.
Besides the above, the Company is also in the process of divesting its 100% stake in GVR Ashoka Chennai ORR Limited.
Considering the high probability of the sale transactions getting completed, as per Ind AS 105, the investments made, loans
given to these subsidiaries and related current assets/liabilities have been classified as held for sale. Out of the above, BOT
subsidiaries have been classified as held for sale in the current year.
ii) During the year, the Company along with its subsidiaries viz. Viva Highways Ltd (“VHL”) and ACL have entered into an
agreement on October 30, 2024, with Macquarie SBI Infrastructure Investments Pte. Limited and SBI Macquarie Infrastructure
Trust (collectively, the “Investors”) to acquire entire investments of Investors in ACL (comprising of equity shares and
Compulsorily Convertible Debentures) and in Jaora Nayagaon Toll Road Company Private Limited (‘JTCL’), which is subject
to completion of certain conditions precedent including sale of certain project assets of ACL and the Company.
Note 67: Impact on Indexation benefit on assets held for sale
Pursuant to the enactment of the Finance (No.2) Bill, 2024, ‘index cost of acquisition’ has been replaced with 'cost of acquisition'
for the purposes of computation of long-term capital gains, resulting in withdrawal of indexation benefits available to the Company.
As a result, the deferred tax asset of ? 1,268.64 lakhs recognised earlier with respect to taxable temporary difference between the
carrying value and tax base of investments in equity shares (index cost of acquisition) classified as held for sale has been reversed
during the year ended March 31, 2025.
Note 68: The Code on Social Security, 2020
The Code on Social Security 2020 ('Code') has been notified in the Official Gazette on 29th September, 2020.The Code is not yet
effective and related rules are yet to be notified. Impact if any of the change will be assessed and recognized in the period in which
said Code becomes effective and the rules framed thereunder are notified.
Note 69: Other Statutory Information
1. No proceedings have been initiated or are pending against the Company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 and rules made thereunder.
2. The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act, 2013
read with the Companies (Restriction on number of Layers) Rules, 2017 (as amended).
3. The Company has neither traded nor it holds any investment in Crypto currency or Virtual Currency.
4. The Company has not received any fund from any persons or entities, including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
(a) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries), or
(b) Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
5. The Company does not have any transaction which is not recorded in the books of accounts but has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any
other relevant provisions of the Income Tax Act, 1961).
6. The Company has not been declared as wilful defaulter by any bank or financial institution or other lender.
7. Returns and statements of current assets filled by the Company with bank are in agreement with the books of accounts and there
are no material discrepancies
8. The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
9. The Company has used two accounting software’s for maintaining its books of account which has a feature of recording audit
trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software,
except that audit trail feature is not enabled for certain changes made using privileged/ administrative access rights to the
SAP HANA application and the underlying HANA database. Tally ERP accounting software used for maintaining its books
of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for
all relevant transactions recorded in the software. Further no instance of audit trail feature being tampered with was noted
in respect of accounting software where the audit trail has been enabled. Additionally, the audit trail of prior years has been
preserved by the Company as per the statutory requirements for record retention to the extent it was enabled and recorded in
the respective years.
10. The Company is currently operating on two softwares - SAP HANA and Tally ERP Systems. With respect to the Tally ERP
system, the Company has a defined process to take daily back-up of books of account maintained electronically however
the current accounting application does not support maintenance of logs of backups taken on a daily basis. The management
is in the process of taking necessary steps to configure systems to ensure that logs of daily backup for books of account is
maintained in order to ensure compliance with the requirements of the applicable statute.
Note 70: Events after reporting period
There were no significant adjusting events that occurred subsequent to the reporting period other than the events disclosed in the
relevant notes.
As per our report of even date attached
For S R B C & CO LLP For & on behalf of the Board of Directors of Ashoka Buildcon Limited
Chartered Accountants
ICAI Firm Registration Number:
324982E/E300003
per Pramod Kumar Bapna Satish Parakh Sanjay Londhe Paresh Mehta Manoj Kulkarni
Partner Managing Director Whole-Time Director Chief Financial Company Secretary
Membership No.: 105497 DIN : 00112324 DIN : 00112604 Officer Membership No.: FCS-7377
Place: Mumbai Place: Nashik
Date: May 23, 2025 Date: May 23, 2025
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