m) Provisions
General provisions
Provisions are recognized when the Company has a present obligation (legal or constructive)
as a result of a past event, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. When the Company expects some or all of a provision to be
reimbursed the expense relating to a provision is presented in the statement of profit and loss
net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current
pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting
is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent Liability
A contingent liability is a possible obligation that arises from past events whose existence will
be confirmed by the occurrence or non-occurrence of one or more uncertain future events
beyond the control of the company or a present obligation that is not recognized because it is
not probable that an outflow of resources will be required to settle the obligation. A contingent
liability also arises in extremely rare cases where there is a liability that cannot be recognized
because it cannot be measured reliably.
n) Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined contribution scheme. The
Company has no obligation, other than the contribution payable to the provident fund. The
Company recognizes contribution payable to the provident fund scheme as an expense, when
an employee renders the related service. If the contribution payable to the scheme for service
received before the balance sheet date exceeds the contribution already paid, the deficit
payable to the scheme is recognized as a liability after deducting the contribution already paid.
If the contribution already paid exceeds the contribution due for services received before the
balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will
lead to, for example, a reduction in future payment or a cash refund.
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as
short-term employee benefit. The Company measures the expected cost of such absences as
the additional amount that it expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond twelve months,
as long -term employee benefit for measurement purposes. Such long-term compensated
absences are provided for based on the actuarial valuation using the projected unit credit
method at the year - end. Actuarial gains/losses are immediately taken to OCI in the period in
which they occur. The Company presents the leave as a current liability in the balance sheet,
to the extent it does not have an unconditional right to defer its settlement for 12 months after
the reporting date. Where Company has the unconditional legal and contractual right to defer
the settlement for a period exceeding 12 months, the same is presented as non- current liability.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest on the net defined benefit liability and the return
on plan assets (excluding amounts included in net interest on the net defined benefit liability),
are recognized immediately in the balance sheet with a corresponding debit or credit to retained
earnings through OCI in the period in which they occur. Remeasurements are not reclassified
to profit or loss in subsequent periods.
Past service costs are recognized in profit or loss on the earlier of:
• The date of the plan amendment or curtailment, and
• The date that the Company recognizes related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or
asset. The Company recognizes the following changes in the net defined benefit obligation as
an expense in the statement of profit and loss:
• Service costs comprising current service costs, past-service costs, gains and losses on
curtailments and non-routine settlements; and
• Net interest expense or income
o) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.
Financial asset
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not
recorded at fair value through profit or loss, transaction costs that are attributable to the
acquisition of the financial asset. Purchases or sales of financial assets that require delivery of
assets within a time frame established by regulation or convention in the market place (regular
way trades) are recognized on the trade date, i.e., the date that the Company commits to
purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
• Debt instruments at amortized cost
• Debt instruments at fair value through other comprehensive income (FVTOCI)
• Debt instruments, derivatives and equity instruments at fair value through profit or loss
(FVTPL)
• Equity instruments measured at fair value through other comprehensive income
(FVTOCI)
Debt instruments at amortized cost
A ‘debt instrument’ is measured at the amortized cost if both the following conditions are met:
a. The asset is held within a business model whose objective is to hold assets for collecting
contractual cash flows, and
b. Contractual terms of the asset give rise on specified dates to cash flows that are solely
payments of principal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Company. After initial measurement, such financial
assets are subsequently measured at amortized cost using the effective interest rate (EIR)
method. Amortized cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is
included in finance income in the profit or loss. The losses arising from impairment are
recognized in the profit or loss. This category generally applies to trade and other receivables.
Company has recognized financial assets viz. security deposit, trade receivables, employee
advances at amortized cost.
Debt instrument at FVTOCI
A ‘debt instrument’ is classified as at the FVTOCI if both of the following criteria are met:
a. The objective of the business model is achieved both by collecting contractual cash
flows and selling the financial assets, and
b. The asset’s contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at
each reporting date at fair value. Fair value movements are recognized in the other
comprehensive income (OCI). However, the Company recognizes interest income, impairment
losses & reversals and foreign exchange gain or loss in the P&L. On derecognition of the asset,
cumulative gain or loss previously recognized in OCI is reclassified from the equity to P&L.
Interest earned whilst holding FVTOCI debt instrument is reported as interest income using
the EIR method.
However, there are no instruments which have been classified under this category.
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet
the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets
amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if
doing so reduces or eliminates a measurement or recognition inconsistency (referred to as
‘accounting mismatch’).
Debt instruments included within the FVTPL category are measured at fair value with all
changes recognized in the P&L.
Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments
which are held for trading and contingent consideration recognized by an acquirer in a business
combination to which Ind AS103 applies are classified as at FVTPL. For all other equity
instruments, the Company may make an irrevocable election to present subsequent changes in
the fair value in other comprehensive income. The Company makes such election on an
instrument-by-instrument basis. The classification is made on initial recognition and is
irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value
changes on the instrument, excluding dividends, are recognized in OCI. There is no recycling
of the amounts from OCI to P&L, even on sale of investment. However, the Company may
transfer the cumulative gain or loss within equity.
For equity instruments which are included within FVTPL category are measured at fair value
and company has to recognize all changes in the P&L.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is primarily derecognized (i.e. removed from the Company’s balance sheet)
when:
• The rights to receive cash flows from the asset have expired, or
• The Company has transferred its rights to receive cash flows from the asset or has
assumed an obligation to pay the received cash flows in full without material delay to a
third party under a ‘pass-through’ arrangement; and either (a) the Company has
transferred substantially all the risks and rewards of the asset, or (b) the Company has
neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and
rewards of ownership. When it has neither transferred nor retained substantially all of the risks
and rewards of the asset, nor transferred control of the asset, the Company continues to
recognize the transferred asset to the extent of the Company’s continuing involvement. In that
case, the Company also recognizes an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights and obligations that the
Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is
measured at the lower of the original carrying amount of the asset and the maximum amount
of consideration that the Company could be required to repay.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for
the measurement and recognition of impairment loss on the following financial assets and
credit risk exposure:
a. Financial assets that are debt instruments, and are measured at amortized cost e.g.,
deposits, advances and bank balance
b. Trade receivables that result from transactions that are within the scope of Ind AS 18
c. Financial guarantee contracts which are not measured as at FVTPL.
The Company follows ‘simplified approach’ for recognition of impairment loss allowance on
Trade receivables.
The application of simplified approach does not require the Company to track changes in credit
risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting
date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company
determines that whether there has been a significant increase in the credit risk since initial
recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for
impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If,
in a subsequent period, credit quality of the instrument improves such that there is no longer a
significant increase in credit risk since initial recognition, then the entity reverts to recognizing
impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the
expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL
which results from default events that are possible within 12 months after the reporting date.
ECL 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 entity expects to receive (i.e., all
cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is
required to consider:
• All contractual terms of the financial instrument (including prepayment, extension, call
and similar options) over the expected life of the financial instrument. However, in rare
cases when the expected life of the financial instrument cannot be estimated reliably, then
the entity is required to use the remaining contractual term of the financial instrument
• Cash flows from the sale of collateral held or other credit enhancements that are integral
to the contractual terms
For assessing increase in credit risk and impairment loss, the Company combines financial
instruments on the basis of shared credit risk characteristics with the objective of facilitating
an analysis that is designed to enable significant increases in credit risk to be identified on a
timely basis.
The Company does not have any purchased or originated credit-impaired (POCI) financial
assets, i.e., financial assets which are credit impaired on purchase/ origination.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate.
The Company’s financial liabilities include trade and other payables, loans and borrowings
including bank overdrafts.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value through
profit or loss. Financial liabilities are classified as held for trading if they are incurred for the
purpose of repurchasing in the near term. This category also includes derivative financial
instruments entered into by the Company that are not designated as hedging instruments in
hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also
classified as held for trading unless they are designated as effective hedging instruments.
The company does not have any financial liabilities designated at Fair Value through Profit or
Loss.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at
amortized cost using the EIR method. Gains and losses are recognized in profit or loss when
the liabilities are derecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortization is included as
finance costs in the statement of profit and loss.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying
amounts is recognized in the statement of profit or loss.
Reclassification of financial assets
The Company determines classification of financial assets and liabilities on initial recognition.
After initial recognition, no reclassification is made for financial assets which are equity
instruments and financial liabilities. For financial assets which are debt instruments, a
reclassification is made only if there is a change in the business model for managing those
assets. Changes to the business model are expected to be infrequent. The Company’s senior
management determines change in the business model as a result of external or internal
changes which are significant to the Company’s operations. Such changes are evident to
external parties. A change in the business model occurs when the Company either begins or
ceases to perform an activity that is significant to its operations. If the Company reclassifies
financial assets, it applies the reclassification prospectively from the reclassification date
which is the first day of the immediately next reporting period following the change in business
model. The Company does not restate any previously recognized gains, losses (including
impairment gains or losses) or interest.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance
sheet if there is a currently enforceable legal right to offset the recognized amounts and there
is an intention to settle on a net basis, to realize the assets and settle the liabilities
simultaneously.
p) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks, cash on hand and
cheques on hand, 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 at
bank, cash on hand and cheques on hand as they are considered an integral part of the
Company’s cash management.
For M/S A D Gupta And Associates For and on behalf of Board of Directors
Chartered Accountants Real Growth Corporation Limited
Firm Reg. No. : 018763N
Amit Kumar Gupta Rajesh Goyal Deepak Gupta
(Partner) (Director) (Wholetime Director)
M. No. 500134 DIN: 01339614 DIN: 01890274
Place: Greater Noida
Date: 26.05.2025
UDIN: 25500134BMIBRN3367
Sahil Agarwal Bhupendra Tiwari
(Company Secretary) (Chief Financial Officer)
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