1.13 Provisions, Contingent Liabilities and Contingent Assets (Ind AS 37)
Provisions
Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it
is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.
The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at
the reporting date. Provisions are not recognized for future operating losses.
Where the effect of the time value of money is material, provisions are discounted using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the obligation.
Contingent Liabilities
A contingent liability is disclosed when there is a possible obligation arising from past events, the existence of which will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of
the Company. A present obligation that arises from past events but is not recognized because:
It is not probable that an outflow of resources will be required; or
The amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognized but are disclosed in the notes to the financial statements unless the possibility of an
outflow is remote.
Contingent Assets
A contingent asset is disclosed where an inflow of economic benefits is probable, but not recognized until the realization
of income is virtually certain. When the inflow of benefit becomes virtually certain, the asset is recognized in the financial
statements.
1.14 Segment Reporting (Ind AS 108)
The Company operates in one primary business segment: Sale of Services and hence they are identified as reportable
segments in accordance with Ind AS 108 - Operating Segments.
Sale of Services: This segment includes the provision of Renting of property and related services,Manpower supply services,
and Facilities management services. The revenue under this segment is derived from contracts for rental and related services
provided to clients.
Measurement and Reporting
• Segment revenue, segment expenses, and segment results include respective amounts directly attributable to each
segment and a portion of common costs allocated on a reasonable basis.
• Segment assets and liabilities are reported only to the extent they are regularly provided to the CODM.
• The accounting policies used for segment reporting are consistent with those followed in the preparation of the financial
statements.
Disclosures relating to segment revenue, profit/loss, assets, and liabilities are made in the notes to accounts, along with
reconciliations as required under Ind AS 108.
1.15 Financial Instruments: (Ind AS 109)
Initial Recognition
The Company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of
the instrument. Financial assets and liabilities are initially measured at fair value. For instruments not measured at fair value
through profit or loss, transaction costs directly attributable to acquisition or issue are added to the carrying amount on initial
recognition.
Subsequent Measurement
Financial Assets at Amortized Cost: Includes trade receivables, loans and advances, and other receivables. These are
measured at amortized cost using the effective interest method, where applicable. Financial Liabilities at Amortized Cost:
Includes borrowings, trade payables and other financial obligations.
Financial assets at fair value through other comprehensive income:
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business
model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual
terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity instruments to present the
subsequent changes in fair value in other comprehensive income based on its business model. Further, in cases where the
Company has made an irrevocable election based on its business model, for its investments which are classified as equity
instruments, the subsequent changes in fair value are recognized in other comprehensive income.
Financial assets at fair value through profit or loss:
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
Impairment of Financial Assets
The Company applies the Expected Credit Loss (ECL) model for impairment of financial assets as per Ind AS 109. However,
in practice, the following simplified approach is used:
Trade Receivables (Sundry Debtors):
A provision for expected credit losses is recognized at 10% of the outstanding balance for receivables that are outstanding
for more than 2 years based on historical default rates and management's assessment.
Loan Receivables:
Similar to trade receivables, a 10% provision is made on loans receivable that remain outstanding for more than 2 years,
considering credit risk and recovery experience.
No ECL is recognized on other financial assets due to their low credit risk and immaterial nature.
This approach is reviewed periodically by management to ensure reasonableness.
Derecognition
Financial Assets: Derecognized when contractual rights to receive cash flows expire or are transferred without retaining
control or substantial risks and rewards.
.16 Critical accounting estimates
(a) Revenue recognition: (Ind AS 115 - Revenue from Contracts with Customers)
Revenue is recognized upon the completion of services to customers in an amount that reflects the consideration the
Company expects to receive in exchange for those services. The Company applies the five-step model under Ind AS 115 to
recognize revenue:
• Identify the contract with the customer
• Identify the performance obligations
• Determine the transaction price
• Allocate the transaction price to performance obligations
• Recognize revenue when (or as) performance obligations are satisfied
(b) Expenditure:
Expenses are accounted on accrual basis and provisions are made for all known losses and liabilities.
• Sale of Services - Renting of property, Manpower Services and Facilities Management services
Revenue from the abovementioned services is recognized over time as the performance obligation is fulfilled, based on the
terms of the rental and service agreement with the customer. The output method (e.g., time elapsed, milestones) is used to
measure progress towards complete satisfaction of the performance obligation. Revenue is recognized on an accrual basis
in accordance with the contract terms, provided that control of the service has been transferred to the customer and recovery
of consideration is probable.
• Other Income
Interest Income: Recognized using the Effective Interest Rate (EIR) method in accordance with Ind AS 109 - Financial
Instruments. This includes interest earned on fixed deposits and other interest-bearing instruments.
.17 Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakh as per the requirement
of Schedule III, unless otherwise stated.
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