3.09 Provisions, Contingent liabilities and
Contingent assets
3.09.01 Provisions
Provisions are recognised when the Company
has a present obligation (legal or constructive)
as a result of past event, it is probable that
the Company will be required to settle the
obligation, and a reliable estimate can be made
of the amount of the obligation.
The amount recognised as a provision is the
best estimate of the consideration required to
settle the present obligation at the end of the
reporting period, taking into account the risks
and uncertainties surrounding the obligation.
When a provision is measured using the cash
flows estimated to settle the present obligation,
its carrying amount is the present value of those
cash flows (when the effect of the time value of
money is material).
When some or all of the economic benefits
required to settle a provision are expected to
be recovered from a third party, a receivable is
recognised as an asset if it is virtually certain that
reimbursement will be received and the amount
of the receivable can be measured reliable.
3.09.02 Contingent liabilities and assets
Contingent liability is a possible obligation that
arises from past events and the existence of
which will be confirmed only by the occurrence
or non-occurrence of one or more uncertain
future events not wholly within the control of
the Company, or is a present obligation that
arises from past events but is not recognised
because either it is not probable that an outflow
of resources embodying economic benefits will
be required to settle the obligation, or a reliable
estimate of the amount of the obligation cannot
be made. Contingent liabilities are disclosed and
not recognised. Contingent assets are neither
recognised nor disclosed.
3.10 Investments in subsidiaries, joint ventures
and associates
Investments in subsidiaries, joint ventures
and associates are initially recognised and
subsequently measured at cost less impairment
loss, if any.
3.11 Financial instruments
Financial assets and financial liabilities are
recognised when the Company becomes a party
to the contractual provisions of the instruments.
Financial assets and financial liabilities are
initially measured at fair value. Transactions
costs that are directly attributable to the
acquisition or issue of financial assets and
financial liabilities (other than financial assets
and financial liabilities at fair value through
profit and loss) are added to or deducted from
the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition.
Transactions costs directly attributable to the
acquisition of financial assets or financial
liabilities at fair value through profit and loss are
recognised immediately in profit and loss.
3.12 Financial assets
All purchases or sales of financial assets which
require delivery of assets within the time frame
established by regulation or convention in the
market place are recognised and derecognised
on a trade date basis. All recognised financial
assets are subsequently measured in their
entirety at either amortised cost or fair value,
depending on the classification of the financial
assets.
3.12.01 Classification of financial assets
Debt instruments that meet the following
conditions are subsequently measured at
amortised cost (except for debt instruments that
are designated as at fair value through profit and
loss on initial recognition):
• the asset is held within a business model
whose objective is to hold assets in order
to collect contractual cash flows; and
• the contractual terms of the instrument
give rise on specified dates to cash flows
that are solely payments of principal and
interest on the principal outstanding.
Debt instruments that meet the following
conditions are subsequently measured at fair
value through other comprehensive income
(except for debt instruments that are designated
as at fair value through profit and loss on initial
recognition):
• the asset is held within a business model
whose objective is achieved both by
collecting contractual cash flows and
selling financial assets; and
• the contractual terms of the instrument
give rise on specified dates to cash flows
that are solely payments of principal and
interest on the principal outstanding.
Interest income is recognised in profit and loss
for Fair value through other comprehensive
inome (FVTOCI) debt instruments. For the
purpose of recognising foreign exchange gains
and losses, FVTOCI debt instruments are treated
as financial assets measured at amortised cost.
Thus exchange differences on the amortised
cost are recognised in profit and loss and other
changes in the fair value of FVTOCI financial
assets in other comprehensive income and
accumulated under the heading of ‘Reserve for
debt instruments through other comprehensive
income’. When the investment is disposed of, the
cumulative gain or loss previously accumulated
in this reserve is reclassified to profit and loss.
All other financial assets are subsequently
measured at fair value.
3.12.02 Effective interest method
The effective interest method is a method
of calculating the amortised cost of a debt
instrument and of allocating interest income
over the relevant period. The effective interest
rate is the rate that exactly discounts estimated
future cash receipts (including all fees and points
paid or received that form an integral part of the
effective interest rate, transaction costs and other
premium or discounts) through the expected life
of the debt instrument, or, where appropriate,
a shorter period to the net carrying amount on
initial recognition.
Income is recognised on effective interest basis
for debt instruments other than those financial
assets classified as at FVTPL. Interest income is
recognised in Statement of Profit and Loss and is
included in the “Other income” line item.
3.12.03 Investments in equity instruments at
FVTOCI
On initial recognition, the Company make
an irrevocable election (on an instrument-by¬
instrument basis) to present the subsequent
changes in the fair value of investments in equity
instruments (other than investments held for
trading) in other comprehensive income. These
instruments are initially measured at fair value
plus transaction costs. Subsequently they are
measured at fair value with gains and losses
arising from changes in fair value recognised in
other comprehensive income and accumulated
in the ‘Reserve for Equity through other
comprehensive income’. On disposal of these
investments the cumulative gain or loss is nor
reclassified to profit and loss.
Dividends on these investments in equity
instruments are recognised in profit and loss
when the Company’s right to receive dividends
is established, it is probable that the economic
benefits associated with the dividend will flow
to the entity, the dividend does not represent a
recovery of part of cost of the investment and
the amount of dividend can be measured reliably.
Dividends are included as part of ‘Other income’
in the Statement of Profit and Loss.
3.12.04 Financial assets at fair value through profit
and loss (FVTPL)
Financial assets which meets the criteria of
financial assets held for trading are designated as
‘Financial Assets at FVTPL’. The Company has
derivatives that are not designated and effective
as a hedge instrument which are designated as
‘Financial Assets at FVTPL’. Financial assets at
FVTPL are measured at FVTPL are measured at
fair value at the end of each reporting period, with
any gains or losses arising on remeasurement
recognised in Statement Profit and Loss.
3.12.05 Impairment of financial assets
The Company applies the expected credit loss
model for recognising impairment loss on trade
receivables, other contractual rights to receive
cash or other financial instruments. Expected
credit losses are the weighted average of credit
losses with the respective risks of default
occurring as the weights. Credit loss is the
difference between all contractual cash flows that
are due to the Company in accordance with the
contract and all the cash flows that the Company
expects to receive, discounted at the original
effective interest rate. The Company estimates
cash flows by considering all contractual terms
of the financial instrument.
The Company measures the loss allowance
for a financial instrument at an amount equal
to the lifetime expected credit losses if the
credit risks on that financial instrument has
increased significantly since initial recognition.
If the credit risk on financial instrument has not
increased significantly since initial recognition,
the Company measures the loss allowance for
that financial instrument at an amount equal to
12 month expected credit losses.
If the Company measures the loss allowance for
a financial instrument at lifetime expected credit
loss model in the previous period, but determines
at the end of a reporting period that the credit
risks has not increased significantly since initial
recognition due to improvement in credit quality
as compared to the previous period, the Company
again measures the loss allowance based on 12
month expected credit losses.
For trade receivables or any contractual right
to receive cash or another financial asset that
results from transactions that are within the
scope of Ind AS 11 and Ind AS 18, the Company
always measures loss allowance at an equal to
life time expected credit losses. For the purpose
of measuring lifetime expected credit loss
allowance for trade receivables the Company
has used practical expedient as permitted under
Ind AS 109. The expected credit loss allowance
is computed based on a provision matrix
which takes into account historical credit loss
experience and adjusted for forward looking
information.
3.12.06 Derecognition of financial assets
The Company derecognises a financial asset
when the contractual rights to the cash flow
from the asset expire, or when it transfers the
financial asset and substantially all the risks and
rewards of ownership of the asset to another
party. If the Company neither transfers nor
retains substantially all the risks and rewards
of ownership and continues to control the
transferred asset, the Company recognises its
retained interest in the asset and an associated
liability for amounts it may have to pay. If the
Company retains substantially all the risks and
rewards of ownership of a transferred financial
asset, the Company continues to recognise the
financial asset and also recognises a collateralised
borrowing for the proceeds received.
On derecognition of financial asset in its entirety,
the difference between the asset’s carrying
amounts and the sum of the consideration
received and receivable and the cumulative
gain or loss that had been recognised in other
comprehensive income and accumulated in
equity is recognised in profit and loss if such gain
or loss would have otherwise been recognised in
Statement of Profit and Loss on disposal of that
financial asset.
3.13 Financial liabilities and equity instruments
3.13.01 Classification as debt or equity
Debt and equity instruments issued by a
Company entity are classified as either financial
liabilities or as equity in accordance with the
substance of the contractual arrangements and
the definition of a financial liability and an equity
instrument.
An equity instrument is any contract that
evidences a residual interest in the assets of an
entity after deducting all of its liabilities. Equity
instruments issued by a Company entity are
recognised at the proceeds received, net of direct
issue costs.
Repurchases of the Company’s own equity
instruments is recognised and deducted directly
in equity. No gain or loss is recognised in
profit and loss on the purchase, sale, issue or
cancellation of the Company’s own equity
instruments.
3.13.02 Financial liabilities
Financial liabilities are classified, at initial
recognition, as financial liabilities at FVTPL,
loans and borrowings and payables. All financial
liabilities are recognised initially at fair value
and, in the case of loans and borrowings and
payables, net of directly attributable transaction
costs.
The Company’s financial liabilities include
trade and other payables, loans and borrowings
including bank overdrafts, and derivative
financial instruments.
Financial liabilities at FVTPL are stated at
fair value, with any gains or losses arising on
remeasurement recognised in profit and loss.
The net gain or loss recognised in profit and loss
incorporates any interest paid on the financial
liability and is included in the ‘Other income’
line item.
3.13.03 Financial liabilities subsequently measured at
amortised cost
Financial liabilities that are not held-for-trading
and are not designated as at FVTPL are measured
at amortised cost at the end of subsequent
accounting periods. The carrying amounts
of financial liabilities that are subsequently
measured at amortised cost are determined based
on the effective interest method. Interest expense
that is not capitalised as part of costs of an asset
is included in the ‘Finance costs’ line item.
The effective interest method is a method of
calculating the amortised cost of a financial
liability and of allocating interest expense over
the relevant period. The effective interest rate is
the rate that exactly discounts estimated future
cash payments (including all fees and points
paid or received that form an integral part of the
effective interest rate, transaction costs and other
premiums or discounts) through the expected life
of the financial liability, or (where appropriate)
a shorter period, to the net carrying amount on
initial recognition.
3.13.04 Derecognition of financial liabilities
The Company derecognises financial liabilities
when, and only when, the Company’s obligations
are discharged, cancelled or have expired.
An exchange between with a lender of debt
instruments with substantially different terms
is accounted for as an extinguishment of the
original financial liability and the recognition of
a new financial liability. Similarly, a substantial
modification of the terms of an existing financial
liability (whether or not attributable to the
financial difficulty of the debtor) is accounted
for as an extinguishment of the original financial
liability and the recognition of a new financial
liability. The difference between the carrying
amount of the financial liability derecognised
and the consideration paid and payable is
recognised in Statement Profit and Loss.
3.14 Joint Venture Operations
In respect of contracts executed in Integrated
Joint Ventures under profit sharing arrangement
(assessed as AOP under Income tax laws),
the services rendered to the Joint Ventures are
accounted as income on accrual basis.
The profit / loss is accounted for, as and when
it is determined by the Joint Venture and the
net investment in the Joint Venture is reflected
as investments, loans and advances or current
liabilities.
3.15 Operating Cycle
Based on the nature of products / activities of
the Company and the normal time between
acquisition of assets and their realisation in cash
or cash equivalents, the Company has determined
its operating cycle as 36 months for real estate &
infrastructure projects and 12 months for others
for the purpose of classification of its assets and
liabilities as current and non-current.
3.16 Rounding Off
The financial statements have been prepared in
Indian Rupees (Rs) rounded off to two nearest
decimal places in lakhs unless otherwise stated.
33.03 Segment Reporting
The company is engaged in business of construction contracts of Infrastructure and Hotel. In accordance with Ind AS-108
“Operating Segments” the company has presented segment information on the basis of its consolidated financial statements which
form part of this report.
In the Company’s operations within India there is no significant difference in the economic conditions prevailing in the various
states of India. Further, the company does not have any revenue from foreign. Hence disclosures on geographical segment are not
applicable.
34.01 Capital management
The Company manages its capital to ensure that entities will be able to continue as going concerns while maximising the return
to stakeholders through the optimisation of the debt and equity balance. The Capital structure of the Company consists of net debt
(borrowings as detailed in notes 13 offset by cash and bank balances) and the total equity of the Company.
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 adjust the dividend payment to shareholders,
return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided
by total capital plus net debt. The Company includes within net debt, long term-term borrowings, short-term borrowings, less cash
and short-term deposits.
34.02 Financial risk management objectives and policies
The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings and trade and other payables.
The Company’s principal financial assets include loans, trade and other receivables, and cash and short-term deposits that derive
directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk.
The Company seeks to minimise the effects of these risks by using derivative financial instruments to hedge risk exposures. The use
of financial derivatives is governed by the Company’s policies approved by the board of directors, which provide written principles
on foreign exchange risks, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments.
The Company does not enter into or trade financial instruments including derivative financial instruments, for speculative purposes.
The corporate treasury management reports on quarterly basis to the board of directors that monitors risks and policies implemented
to mitigate risk exposures.
34.02.01 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. The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and
interest rates. The Company enters into derivative financial instruments to manage its exposure to foreign currency risk and interest
rate risk.
34.02.02 Credit risk management
Credit risks refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company.
Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration
risks. The Company’s Board approved financial risk policies comprise liquidity, currency, interest rate and counterparty risk.
Financial instruments that are subject to concentrations of credit risk, principally consist of trade receivables, finance receivables,
loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material
concentrations of credit risks. The Company does not engage in speculative treasury activity but seeks to manage risk and optimise
interest and commodity pricing through proven financial instruments.
The credit risk on bank balances and derivative financial instruments is limited because the counterparties are banks with high
credit ratings.
Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. On going credit
evaluation is performed on the financial condition of accounts receivable.
The credit risk on bank balances is limited because the counterparties are banks with high credit ratings.
34.02.03 Liquidity risk management
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity
risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.
The Company has obtained fund and non-fund based working capital lines from various banks. The Company manages liquidity
risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and
actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
Liquidity and interest risk tables
The following tables detail the maturity profile of Company’s non-derivative financial liabilities with agreed repayment period.
The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
Company can be required to pay.
Fair Value hierarchy
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or
unobservable and consists of the following three levels:
• Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2 — Inputs are 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 — Inputs 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.
39. Other statutory information
(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any Benami property.
(ii) The Company do not have any transactions with struck off companies.
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(iv) The Company have not traded or invested in crypto currency or any form of virtual currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Company (Ultimate Beneficiaries); or
b. provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vi) The Company has not received any fund from any person(s) or entity(ies), 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.
(vii) The Company does not have any such transaction which is not recorded in the books of accounts that 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.
(viii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government
authority.
40. Approval of financial statements
The financial statements were approved for issue by the board of directors on 30th May, 2024.
As per terms of our report attached. For and on behalf of the Board of Directors
For KASG & CO.
Firm Regn. No. 002228C Mahesh Mehra Tarak Nath Mishra Sanjay Lal Gupta
Chartered Accountants Whole-time Director Whole-time Director Whole-time Director
Roshan Kumar Bajaj & CFO & Company Secretary
Partner DIN:00086683 DIN : 08845853 DIN : 08850306
Membership No. 068523
Place : Kolkata
Date : 30th May, 2024
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