Provision and contingent liability
On an ongoing basis, Company reviews pending cases, claims by third parties and other contingencies.
For contingent losses that are considered probable, an estimated loss is recorded as an accrual in financial
statements. Loss Contingencies that are considered possible are not provided for but disclosed as
Contingent liabilities in the financial statements. Contingencies the likelihood of which is remote are not
disclosed in the financial statements. Gain contingencies are not recognized until the contingency has
been resolved and amounts are received or receivable.
Useful lives of depreciable assets
Management reviews the useful lives of depreciable assets at each reporting. As at March 31, 2025
management assessed that the useful lives represent the expected utility of the assets to the Company.
Further, there is no significant change in the useful lives as compared to previous year.
Investment in equity instruments of subsidiary and associate companies
During the year, the Company assessed the investment in equity instrument of subsidiary and associate
companies carried at cost for impairment testing. These companies are expected to generate positive cash
flows in the future years. Detailed analysis has been carried out on the future projections and the
Company is confident that the investments do not require any impairment.
(d) Terms and conditions of transactions with related parties:
The transactions with related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Outstanding balances at the year-end are unsecured and interest free. For the year ended
March 31, 2025, the Company has not recorded any impairment of receivables relating to amounts owed
by related parties (March 31, 2024 - Nil). This assessment is undertaken each financial year through
examining the financial position of the related party and the market in which the related party operates.
29. Segment information
The senior management of the Company monitors the operating results of its business units separately for
the purpose of making decisions about resource allocation and performance assessment. Accordingly, the
Company has identified following as its reportable segment for the purpose of Ind AS 108:
a) Real estate segment;
b) Hotels and resorts segment.
Real Estate segment (RE) is into development, sale, management and operation of all or any part of
Town ships, housing projects, also includes leasing of self owned commercial premises.
Hotels and Resorts Segment (HR) is into upkeep and maintenance of Hotels, Restaurants and Resorts.
Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss
in the financial statements. Also, the Company’s financing (including finance costs and finance income)
and income taxes are managed on a overall basis and are not allocated to operating segments.
Transfer prices between operating segments are on an arm’s length basis in a manner similar to
transactions with third parties.
The following table’s present revenue and profit information for the Company’s operating segments for
the year ended March 31, 2025 and March 31, 2024 respectively.
30. Gratuity
The Company has a defined benefit gratuity plan (funded). The Company’s defined benefit gratuity plan
is a final salary plan, which requires contributions to be made to a separately administered fund.
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has
completed five years of service is entitled to specific benefit. The level of benefits provided depends on
the member’s length of service and salary at retirement age.
31. Earnings per share
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the
weighted average number of Equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted
average number of Equity shares outstanding during the year plus the weighted average number of
Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity
Shares.
32. As stated in Note 3.1(ii) for recognizing profit on projects, stage of completion is determined as a
proportion that project costs incurred for the work performed bear to the estimated total costs. Further, as
stated in that note expected loss on projects is recognized when it is probable that the total project costs
will exceed the total project revenue. For this purpose total project costs are ascertained on the basis of
project costs incurred and costs to completion of projects on progress, which is arrived at by the
Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in
future including for contingencies etc., which being technical matters have been relied on by auditors.
Further, in respect of certain properties where sale agreement has been entered with parties even though
money has not been received as per stipulation in the contract, the Company has recognized revenue and
debtors as management is confident that it shall be able to realize the sale proceeds.
33. As stated in Note.3.1(iii) the method used to recognize the contract revenue is percentage of
completion method measured by survey of work performed. Further, as stated in the note, expected loss
on contracts is recognized when it is probable that the total contract cost will exceed the total contract
revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost
to completion of contract on progress ,which is arrived at by the management, based on current technical
data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc,
which being technical matters have been relied on by auditors.
34. Commitments and contingencies
a. Leases
Operating lease obligations: The Company has taken equipments and motor vehicles under Equipment
/Auto Loan arrangements for which the legal ownership will be transferred to the company at the end of
the Loan period as per the agreement. The Company has paid INR 41.32 lakhs (March 31, 2024 -INR
52.64 lakhs) during the year towards minimum lease payments.
39. (a) Trade Receivables (Note 12), unsecured considered good, includes Rs.8595.11 lakhs (31-03¬
2024: Rs.11,932.34 lakhs), outstanding for more than six months. As a result of economic
slowdown and recession in realty sector, the realizations from customers are slow. The company
has provided in the earlier years Rs.1246.96 lakhs towards doubtful debts against Trade
receivables, unsecured, considered doubtful. During the year the company has written of bad and
doubtful debts to the tune of Rs.1026.22 lakhs (31.03.2024: Rs.1029.69 lakhs).
(b) Non-current assets (Note 10) include advances given to Landlords/ developers towards certain
projects amounting to Rs.6,696.79 lakhs (31-03-2024: Rs.6,181.23 lakhs) and Short Term Loans and
Advances to suppliers, etc amounting to Rs.956.93 lakhs (31-03-2024: Rs.818.13 lakhs) are
outstanding. An amount of Rs.700 lakhs is set aside towards provision for advances considered as
doubtful in the earlier years.
40. Details as required under Schedule III - Part I of the Companies Act, 2013 relating to investment
in partnership firm.
(a) Name of the Partnership Firm - Prajay Binjusaria Estates
(b) Total Capital of the said Firm is Rs.2055.50 lakhs (31-03-2024 : Rs.2055.50 lakhs)
(c) Share of each partner in the Profit or Loss
41. The Secured Loan (Inter Corporate Deposit) of Rs.2000.00 Lakhs from Prajay Properties Private
Limited is continuing as Interest free by virtue of the agreement Dated 6th October ‘2009.
Since some of the statutory approvals for Prajay Megapolis project are yet to be obtained, crystallization
of loan repayment time schedule has not taken place as on 31.03.25.
In furtherance to the mediation proceedings pertaining to the disputes between the Investor Entities (i.e.
White Stock Limited & Belclare Limited) and Prajay Entities including Prajay Engineers Syndicate
Limited (The Company), The Settlement Agreement has been executed amongst and by the parties, under
the auspices of International Arbitration and Mediation Centre, (IAMC) Hyderabad and the filing of the
compromise terms before the National Company Law Tribunal (NCLT), Hyderabad has been completed.
The cases filed by the Investor Entities before the Hon’ble NCLT Bench, Hyderabad Bench have
accordingly been disposed off.
The Government of Andhra Pradesh (Youth Advancement Tourism & Culture Department, now the
Government of Telangana) and the company along with its subsidiary M/s Secunderabad Golf & Leisure
Resorts Private Limited, a special purpose company to develop Golf Course, had entered into Lease
Agreement and Construction & Management agreement. Subsequently, for the issues that arose between
the company and the Tourism Department, the Company invoked the Arbitration clause as per the
Agreements and the Hon’ble High Court vide its order dated 28.07.2022 appointed Hon’ble S.M.Rafee
(retired District judge) as the Arbitrator in Arbitration Application No.86 of 2022. The Arbitration
proceedings are in progress.
The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables.
The main purpose of these financial liabilities is to finance and support Company's operations. The
Company’s principal financial assets include inventory, trade and other receivables, cash and cash
equivalents and land advances and refundable deposits that derive directly from its operations.
The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management
oversees the management of these risks. The Board of Directors reviews and agrees policies for managing
each of these risks, which are summarized below.
a) 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 two types of risk: interest rate risk and other
price risk, such as equity price risk and commodity/ real estate risk. Financial instruments affected by
market risk include loans and borrowings and refundable deposits. The sensitivity analysis in the
following sections relate to the position as at March 31, 2025 and March 31, 2024. The sensitivity
analyses have been prepared on the basis that the amount of net debt and the ratio of fixed to floating
interest rates of the debt.
The analysis excludes the impact of movements in market variables on: the carrying values of gratuity
and other post retirement obligations; provisions.
The below assumption has been made in calculating the sensitivity analysis:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market
risks. This is based on the financial assets and financial liabilities held at March 31, 2025 and March 31,
2024.
i. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates. The Company's exposure to the risk
of changes in market interest rates relates primarily to the Company's long-term debt
obligations with floating interest rates.
The Company manages its interest rate risk by having a balanced portfolio of fixed and
variable rate loans and borrowings. The Company does not enter into any interest rate swaps.
b) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating
activities (primarily trade receivables) and from its financing activities, including refundable joint
development deposits, security deposits, loans to employees and other financial instruments.
Trade receivables
• Receivables resulting from sale of properties: Customer credit risk is managed by requiring
customers to pay advances before transfer of ownership, therefore, substantially eliminating the
Company’s credit risk in this respect.
• Receivables resulting from other than sale of properties: Credit risk is managed by each business
unit subject to the Company’s established policy, procedures and control relating to customer
credit risk management. Outstanding customer receivables are regularly monitored.
The impairment analysis is performed at each reporting date on an individual basis for major clients. In
addition, a large number of minor receivables are grouped into homogeneous groups and assessed for
impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value
of each class of financial assets. The Company does not hold collateral as security. The Company’s credit
period generally ranges from 30-60 days.
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury
department in accordance with the Company’s policy. Investments of surplus funds are made only with
approved counterparties and within credit limits assigned to each counterparty.
Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and
may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits
are set to minimize the concentration of risks and therefore mitigate financial loss through a
counterparty’s potential failure to make payments. The Company’s maximum exposure to credit risk for
the components of the statement of financial position at 31 March 2025 and 2024 is the carrying amounts.
c) Liquidity risk
The Company's objective is to maintain a balance between continuity of funding and flexibility
through the use of bank deposits and loans.
The table below summarizes the maturity profile of the Company’s financial liabilities based on
contractual undiscounted payments:
43. Capital management
For the purpose of the Company’s capital management, capital includes issued equity capital, share
premium and all other equity reserves attributable to the equity holders of the Company. The primary
objective of the Company’s capital management is to maximize the shareholder value.
The Board of Directors of the Company seek to maintain a balance between the higher returns that might
be possible with higher level of borrowing and advantages by a sound capital position.
45. Prior year comparatives
The figures of the previous year have been regrouped/reclassified, where necessary, to conform with the
current year’s classification.
As per our report of even date attached
For Karumanchi & Associates For and on behalf of the Board of Directors of Prajay Engineers Syndicate Limited.
Chartered Accountants
ICAI Firm Regn.No : 001753S
N.Gopala Krishna D. Vijay Sen Reddy D. Rohit Reddy
Partner Chairman and Managing Director Director
Membership No : 211124 DIN : 00291185 DIN : 07560450
UDIN No: 25211124BMOAZV8573
P. Bhaskara Rao T.Siva Kumar
Place : Hyderabad Chief Financial Officer Company Secretary
Date : 28.05.2025 M.No : CMA 9445 M.No ; A37447
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