(o) Contingencies and Provisions
A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources
embodying economic benefit will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are not
discounted to their present value and are determined based on the best estimate of the expenditure required to settle the obligation at the balance
sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate.
A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the economic benefit is remote. Contingent
liabilities are disclosed after careful evaluation of the facts and legal aspects of matter involved.
Contingent assets are neither recognised nor disclosed. However, where an inflow of economic benefits is probable, the Company discloses the
same in financial statements.
(?) Segment reporting
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.
2. Other Accounting Policies
(a) Intangible assets
Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and
provision for impairment of losses, if any.
(b) Impairment of assets
The carrying amounts of property, plant and equipment, investment property and intangible assets are reviewed at each Balance Sheet date if
there is any indication of impairment based on internal/external factors.
An impairment loss will be recognised wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable
amount is greater of the asset's net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to
the present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the assets
over its remaining useful life. Previously recognised impairment loss is further provided or reversed depending on changes in circumstances.
(?) Borrowing Cost
The borrowing cost is capitalised, when the cost is incurred and is directly attributable to either construction or acquisition or production of
qualifying assets. It is capitalised as part of cost of the qualifying asset. Other borrowing cost, not directly attributable to qualifying asset is
recognised as expenses in period in which it incurs.
Effective Interest Rate method as enumerated under Ind AS 39:Financial Instruments: Recognition and Measurement, is applied to calculate
amount of interest cost eligible for capitalisation. Qualifying assets are those, which takes substantial amount of time for construction or
production either for ready to use or intended to ready to use.
Capitalisation of the borrowing cost is commenced when
a) expenditure is incurred on qualifying assets which has resulted in payment of cash
b) borrowing cost is incurred and
c) necessary activities are undertaken to prepare the asset for intended use.
Capitalisation of borrowing cost is ceased, when substantially all the activities necessary to prepare the qualifying asset for its intended use are
complete. When the construction of a qualifying asset is completed in parts and each part is capable of being used while construction continues
on other parts, capitalisation of borrowing costs is ceased when it completes substantially all the activities necessary to prepare that part for its
intended use.
(d) Research and Development
Revenue expenditure pertaining to research is charged to the Statement of Profit and Loss. Development costs of products are also charged to
the Statement of Profit and Loss unless a product's technical and economic feasibility and marketability has been established, in which case
such expenditure is capitalised. The amount capitalised comprises expenditure that can be directly attributed or allocated on a reasonable and
consistent basis to creating, producing and making the asset ready for its intended use. Property, Plant and Equipment utilised for research and
development are capitalised and depreciated in accordance with the policies stated for Property, Plant and Equipment.
(e) Leases
(i) As a Lessor
The each lease is analysed and based on the substance of contract is classified as either finance lease or operating lease. Whenever the
terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease.
All other leases are classified as operating leases.
Lease payments from operating leases are recognised as income on a straight line basis. Cost, including depreciation which is incurred in
earning lease income is recognised as expenses. (refer note 2.2). Depreciation expenses applied on underlying asset is as per the policy
of depreciation of the Company.
(ii) As a Lessee
At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
1 the contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should be physically distinct or
represent substantially all of the capacity of a physically distinct asset. If the lessor has a substantive substitution right, then the asset
is not identified.
2 the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and
3 the Company as a lessee has the right to direct the use of the asset. The Company has this right when it has the decision-making
rights that are most relevant to changing how and for what purpose the asset is used. In rare cases where the decision about how
and for what purpose the asset is used is predetermined, the Company has the right to direct the use of the asset if either:
a) the Company as a lessee has the right to operate the asset; or
b) the Company as a lessee designed the asset in a way that predetermines how and for what purpose it will be used
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to
restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use assets are subsequently depreciated using the straight-line method from the 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. In addition, the right-of-use asset is periodically reduced by
impairment losses, if any, and adjusted for certain re-measurements of the lease liability.
The lease liability is initially measured at amortised cost at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, using the incremental borrowing rate.
It is re-measured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the
estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it
will exercise a purchase, extension or termination option.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or
is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12
months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases as an expense
on a straight-line basis over the lease term.
(f) Recent accounting pronouncements
Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting
Standards) Rules as issued from time to time.
Ind AS 21 - The Indian Accounting Standard governing the effects of changes in foreign exchange rates.
The Ministry of Corporate Affairs (MCA) issued a notification on May 7, 2025, enacting the Companies (Indian Accounting Standards) Amendment
Rules, 2025. These rules amend the Companies (Indian Accounting Standards) Rules, 2015, primarily focusing on Indian Accounting Standard
(Ind AS) 21, which deals with the effects of changes in foreign exchange rates. The amendments introduce detailed guidance on assessing
whether a currency is exchangeable into another currency, estimating the spot exchange rate when a currency is not exchangeable, and the
required disclosures in such circumstances. The Ministry of Corporate Affairs (MCA) notified the Companies (Indian Accounting Standards)
Second Amendment Rules, 2025 in August 2025, with most changes effective from April 1, 2025.
Ind AS Amendments (Effective April 1, 2025):
• Ind AS 1 (Presentation of Financial Statements): Clarifies that classification of liabilities as current or non-current depends on rights at the
reporting date, particularly regarding covenants.
• Ind AS 7 & 107 (Supplier Finance Arrangements): Enhanced disclosures required regarding terms, carrying amounts, and cash flow
impacts of supply chain financing.
• Ind AS 12 (Income Taxes): Introduces a temporary exception to accounting for deferred taxes arising from OECD Pillar Two global minimum
tax rules, requiring specific disclosures.
• Other Amendments: Refinements to Ind AS 101, 108, 109, 115, 10, 28, and 32 to improve technical consistency and align with global
practices.
• Ind AS 116 (Leases): Clarifies sale and leaseback transaction accounting for seller-lessees.
These amendments aim to align Indian Accounting Standards with recent IFRS developments, enhancing transparency in financial
statements.
I The fair value of the Company's investment properties as at March 31, 2026 and March 31, 2025 have been arrived at on the basis of a valuation
carried out as on the respective dates by an independent registered valuer not related to the Company, having appropriate recognised professional
qualification and experience in the category of the property being valued.
II Valuation techniques and key inputs to determine the fair value:
Level 3 - Fair valuation of residential premises has been done by direct comparison method under market approach for March, 2026 and March, 2025.
A comparison is made for the purpose of valuation with similar properties that have been sold in the market and thus have a similarity to the subject
property considering attributes like age, size, shape, quality of construction, building features condition, design, gentry etc. Accordingly a market value
for the subject property is estimated from the adjusted sales price of the comparable properties.
Fair valuation of freehold land is based on Government rates, market trends and comparable values as considered appropriate
Trade receivables includes retentions ' 34528.94 lakhs (March 31,2025'40167.03 lakhs)
Trade Receivables are hypothecated as security by creating 1st pari passu charge for securing working capital facilities loans from banks (refer note
no. 2.15)
In accordance with Ind AS 109, the Company has used the practical expedient by computing the expected credit loss allowance for trade receivables
by following simplified approach. The expected credit loss model takes into account historical credit loss experience and adjusted for forward looking
information.
The Company's customer profile includes government departments and large private corporates. Accordingly, the Company's customer credit risk
is low. The Company's average project execution cycle is around 36 to 60 months.
General payment terms include mobilisation advance, monthly progress payments and certain retention money to be released at the end of the
project. In some cases retentions are substituted with bank 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.
There are no trade receivables due from any director or any officer of the Company, either severally or jointly with any other person, or from any firms
or private companies in which any director is a partner, a director or a member.
Note The Company had signed Development Agreement with M/s. Kalpataru Ltd., for development of real estate project on its land situated
at Sinhagad Road, Vadgaon, Pune, in the previous year. In pursuance of compulsory acquisition by Pune Municipal Corporation (PMC) as per
development plan, the Company has transferred part of its land admeasuring around 11921.59 Square Meters reserved for DP Road to PMC vide
agreement dated May 30, 2024. As a consideration of this transfer, the Company has opted for Transferable Development Rights (TDR) equivalent
to two times the area of land transferred. During the year ended March 31, 2025, revenue of '3136.57 lakhs from this transfer is considered as
fair value of consideration and is measured on the basis of ready reckoner value of land transferred. The TDR admeasuring 23843.18 Square Meter
receivable on transfer of land and valued at '3136.57 lakhs is shown under the head of “Stock-in-trade” under current assets. As per the terms of
development agreement, the Company has to provide FSI/TDR, which will be utilized in development of real estate project being developed by M/s.
Kalpataru Ltd., on this land.
~~ a. The Company has incurred CSR expenditure of '195.05 lakhs (March 31,2025 '165.54 lakhs) .
b. The areas for CSR activities undertaken by the Company are health, medical aid, and education grants etc. The Company has formed its CSR
Committee as per the Companies Act, 2013 and Rules thereon.
c. The contribution for CSR activities to corpus of Ratanchand Hirachand Foundation, a Section 8 Company promoted by the promoters of the
Company for undertaking CSR activities on behalf of the Company as per CSR Policy read with schedule VII of the Companies Act 2013.
As per Section 135 of the Companies Act, 2013 (the Act) a company meeting the applicability threshold, needs to spend at least 2% of its average
net profit for the immediately preceding three financial years (calculated in accordance with the provisions of section 198 of the Companies Act,
2013 ) on corporate social responsibility (CSR) activities/programs in terms of its CSR policy and schedule VII of the Act. The report on CSR
activities and CSR expenditure incurred by the Company for the financial year 2025-26 is given in the Directors' Report.
d. For the year 2025-26 the Company has spent '195.05 lakhs (March 31, 2025 '165.04 lakhs) as against the committed CSR obligations of
'195.19 lakhs (March 31, 2025 '164.43 lakhs).The Company has short spent amount of '0.14 lakhs towards CSR expenditure / contribution
during the Financial Year 2025-26. In accordance with the provisions of Section 135(5) of the Companies Act, 2013, read with Rule 7(3) of the
Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company can set off / adjust the excess amount against the short spent
amount of '0.14 lakhs towards CSR expenditure / contribution during the Financial Year 2025-26. In accordance with that the Company has
set off / adjusted short spent amount of '0.14 lakhs from the carried forward excess CSR Expenditure made during the Financial Year 2024¬
25 of '0.61 lakhs. The net balance of excess CSR expenditure / contribution for the Financial Year 2024-25, available for set-off/adjustment is
'0.47 lakhs , which can be utilised in the next two consecutive financial years, i.e. in Financial Years 2026-27 & 2027-28.
2.31 (a) During the year ended March 31, 2026, the Company has sold its freehold land situated at Azamabad Industrial Area, Hyderabad, Telangana
admeasuring about 15310.80 Sq. mtrs. to M/s. ASBL Private Limited (formerly known as M/s. Ashoka Builders India Private Limited) for
consideration of '17395.99 lakhs resulting in a net gain of '6433.35 lakhs shown as "Exceptional Item". Further, tax on such gain amounting
to '1619.15 lakhs is included in the current tax for the year ended March 31,2026.
2.31 (b) During the previous year ended March 31,2025, the Company has sold its freehold land in Yelhanka, Bengaluru admeasuring about 40875.668
Sq. mtrs. to M/s. Godrej SSPDL Green Acres LLP a subsidiary of Godrej Properties Ltd. for consideration of '55900 lakhs resulting in a net
gain of '54522.05 lakhs shown as "Exceptional Item". Further, tax on such gain amounting to '7734.23 lakhs is included in the current tax
for the previous year ended March 31, 2025.
2.37 Note on Capital management and financial risk management
For the purpose of the Company's capital management, capital includes issued equity capital and all other equity reserves attributable to the
equity holders of the Company. The Company strives to safeguard its ability to continue as a going concern so that it can maximise returns for the
shareholders and benefits for other stake holders. The aim is to maintain an optimal capital structure and minimize cost of capital.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial
covenants. To maintain or adjust the capital structure, the Company may return capital to shareholders, issue new shares or adjust the dividend
payment to shareholders (if permitted) consistent with others in the industry.
The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company's focus is to foresee the
unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
1 Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.
Market risk comprises mainly of risk such as interest rate risk and currency risk. Major financial instruments affected by market risk includes
loans and borrowings.
(i) Interest rate risk
The Company is working capital intensive and is rated in “A” band category due to which it is in a position to negotiate competitive pricing for
its working capital requirement from Consortium member banks and also from outside consortium banks.
With regard to Term Loans, exposure of the Company is not very significant and hence does not pose much threat towards unforeseen and
unprecedented & volatile interest risk.
Sensitivity Analysis
Interest Rate Sensitivity
The sensitivity analysis below have been determined based on the exposure to interest rates for both long term and short term borrowings.
The following table demonstrates the sensitivity in interest rates with all other variables held constant. The sensitivity analysis has been done
on the closing balance of the loans outstanding.
2.37 Note on Capital management and financial risk management (Contd.)
(ii) Foreign currency risk
The Company has insignificant transactions in foreign currency and hence the Company is not exposed to significant foreign exchange
risk.The Coompany evaluates exchange rate exposure arising from foreign currency transactions and follows established risk management
policies.
Sensitivity analysis
The Company's exposure in foreign currency is not material and hence the impact of any significant fluctuation in the exchange rates is not
expected to have a material impact on the operating profits of the Company.
2 Credit Risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure of the financial
assets are contributed by trade receivables, unbilled work-in-progress and cash and cash equivalents.
a Credit risk on trade receivables and unbilled work-in-progress is limited as the customers of the Company mainly consist of government
entities having a strong credit worthiness. For other customers, the Company normally secures recoverability of dues by means of
getting Letters of Credits established on first class banks in favour of the Company if the material is sold on credit or against receipt of
advances from the customers for such supplies and unbilled work-in-progress.
b Credit risk on cash and cash equivalents is limited as the Company invests in deposits with banks mainly for the purpose of offering
EMDs for the tenders floated by prospective customers.
In accordance with Ind AS 109, the Company has used the practical expedient by computing the expected credit loss allowance for trade
receivables by following the simplified approach. The Expected credit loss model takes into account historical credit loss experience and
adjusted for forward looking information. Simplified approach does not require the Company to track changes in credit risk. Rather, it
recognises impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition.
2.37 Note on Capital management and financial risk management (Contd.)3 Liquidity Risk
Liquidity is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The
Company's Finance department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies
related to such risks are overseen by senior management.
The Company makes contributions towards Provident Fund, Superannuation Fund, Employee's State Insurance Corporation (ESIC) for qualifying
employees. The Company has recognised ' 904.52 lakhs (March 31, 2025'837.32 lakhs) for the year being Company's contribution to Provident
Fund, Superannuation Fund and ESIC, as an expense and included in Employee Benefit Expenses in the Statement of Profit and Loss.
C Through its gratuity fund the Company is exposed to a number of risks, the most significant of which are detailed below :
Interest risk
A decrease in the bond interest rate will increase the plan liability; however, in case of gratuity fund, this will be partially offset by an increase
in the return on the fund's assets
Longevity risk
The present value of Gratuity fund and leave plan liability is calculated by reference to the best estimate of the mortality of plan participants.
An increase in the life expectancy of the plan participants will increase the plan's liability.
Salary risk
The present value of the Gratuity fund and leave plan liability is calculated by reference to the future salaries of plan participants. As such, an
increase in the salary of the plan participants will increase the plan's liability.
Investment risk
Funded plans being managed by insurers, the value of assets certified by the insurer may not be the fair value of instruments backing the
liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the
net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.
2.42 Research and Development Expenditure
The revenue expense on research and development during the year under various heads amounts to '595.00 lakhs (March 31,2025 '575.00 lakhs).
Assets for research and development capitalised during the year under various heads amounts to '7.91 lakhs (March 31,2025 '227.33 lakhs)
* Contract assets includes amounts related to our contractual right to consideration for completed performance obligations not yet invoiced.
** Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue
recognized under the contract.
Significant changes in the contract asset balances
Decrease in contract balances amounting to ' 5699.69 lakhs, is primarily due to higher invoicing over revenue recognition and advances received
from contractees during the previous year.
Increase in contract balances amounting to ' 9557.22 lakhs, is primarily due to higher advances received from contractees during the year.
Transaction price allocated to the remaining performance obligations
The following table shows the aggregate amount of the transaction price allocated to (partially) performance obligations that are unsatisfied.
2.48 The Company intends to sale some of its Freehold Land and land held as investment property. Accordingly these lands having book value of ' 43.42
lakhs are classified as "Asset held for sale", as per Ind AS 105. No impairment was recognized on such reclassification, as the fair value (estimated
on the recent market prices of similar properties in similar location) less cost to sell, is expected to be higher than the book value.
2.50 Additional regulatory information
i No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other source or kind of funds) by
the Company to or in any other person or entities, including foreign entities ("Intermediaries") with the understanding that the Intermediary
shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from
any parties (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or
entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
ii The Company did not have any charges or satification which were yet to be registered with ROC beyond the statutory period.
iii The Company did not have any transaction which had not been recorded in the books of account that had 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).
iv The Company has not been declared wilful defaulter by any bank or financial institutions or government or any government authority.
v No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions
(Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
vi The Company does not have any layers as prescribed under clause (87) of section 2 of the Act read with Companies (restriction on number
of layers) Rules, 2017.
vii The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
viii The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
ix The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets during the current or
previous year.
x The Company does not have any derivative contracts.
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