a) The balance in project specific escrow,current and EEFC accounts have been netted off against respective project’s working capital loan accounts.

b) The Company has availed working capital loan from State Bank of India on sole banking basis for its Product business and project business which have not been specifically funded by other banks. The loan is secured by hypothecation of inventories, trade receivables and movable assets of Product Division viz AFC, ETD, OGED, EED and EPD excluding Project assets specifically charged to the banks / Consortium of banks. The loan from State Bank of India is further secured by first charge on land property at Panjetti Village, Tiruvallur Dist, Tamilnadu and first charge on the fixed assets of the Product Division.

The Loan is further secured by corporate guarantee and collateral of land held by Sravanaa Properties Limited (Subsidiary Company), pledge of shares held by BGR Investment Holdings Company Limited in BGR Energy Systems Limited and the corporate guarantee of BGR Investment Holdings Company Limited.

c) The Company has availed contract specific working capital loans from State Bank of India, IDBI Bank, Punjab National Bank, Canara Bank, Bank of Baroda, Indian Bank, Bank of India, Central Bank of India, Axis Bank, ICICI Bank, Kotak Mahindra Bank Ltd, Export Import Bank of India and Union Bank of India. These loans are secured by hypothecation of inventories, trade receivables and movable current assets of the respective contracts. The participating banks share the securities on pari-passu basis.

d) The working capital loan from Export Import Bank of India, is further secured by the second charge on current assets of the product divisions.

e) During the year the Company has availed unsecured Loans from Related Parties namely loan from Managing Director Rs.20000 Lakhs and Loan from BGR Investment Holdings Company Limited Rs.3107 Lakhs both at the interest rate of 9.75% p.a. These loans are repayable on demand subject to approval from Banks.

f) The quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.

Defined benefit plan and other long term employee benefits:

Gratuity plan

The Company operates gratuity plan wherein every employee is entitled to the benefit equivalent to fifteen days salary last drawn for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors. The discount rate has been chosen by reference to market yields on Government bonds. The above information is certified by an actuary.

The overall expected rate of return on assets is determined based on the market prices prevailing on the date applicable to the period over which the obligation is to be settled.

While one of the parameters mentioned above is changed by 100 basis points, other parameters are kept unchanged for evaluating the defined benefit obligation. While there is no change in the method used for sensitivity analysis from previous period, the change in assumptions now considered are with reference to the current assumptions.

Fair value of mutual fund and equity investments is based on quoted price.

The Management has assessed the fair value of trade receivables, trade payables, cash & cash equivalents, bank balances, bank deposits, loans and advances, bank borrowings, lease liabilities and other financial assets and liabilities approximate their carrying amounts.

33. RISK MANAGEMENT STRATEGIES Financial risk management:

The Company’s activities exposed to market risk, credit risk and liquidity risk. The company’s senior management oversees the management of these risks.

Market risk

Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables. The company is exposed to market risk primarily related to foreign exchange rate risk (currency risk), interest rate risk and the market value of its investments. Thus the Company’s exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.

Foreign currency risk

The Company has entered into various contracts in several currencies and consequently the Company is exposed to foreign exchange risk through its sales, services and purchases from suppliers in various foreign currencies. The Company holds derivative financial instruments such as foreign exchange forward contract to mitigate the risk of changes in exchange rates on foreign currency exposures. The exchange rate between the rupee and foreign currencies has changed substantially in recent years. The fluctuations in exchange rate may have an impact on Company’s operations.

An appreciation / depreciation of 0.50 percentage points in exchange rate between the INR and USD, the operating margins at the reporting date (31.03.2023) would have increased / (decreased) equity and profit by Rs.47 Lakhs (Rs.138 Lakhs)

The Sensitivity analysis is computed based on the change in the income and expenses in the foreign currency upon conversion into functional currency, due to exchange rate fluctuations between the previous reporting and the current reporting period

Interest rate risk is the risk that the fair value of 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 to the Company’s long-term debt obligations with floating interest rates.

Interest rate sensitivity

Fair value sensitivity for fixed rate instruments

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the company does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss.

Cash flow sensitivity for variable rate instruments

An decrease / increase of 50 basis points in interest rates at the reporting date (31.03.2023) would have increased / (decreased) equity and profit by Rs.872 Lakhs

The Company is affected by the price volatility of certain commodities. Its operating activities require the ongoing purchase of Steel, Cement and other materials. Due to the significantly increased volatility of the price of the raw material, the Company also entered into various purchase contracts for supply of Steel, Cement & other material. The Company has escalation clause in some of their client contracts for variation in the price of commodities.

Equity price risk

The Company’s listed securities are susceptible to market price risk arising from uncertainties about future value of the investment securities.

At the reporting date, the exposure to listed securities at fair value was Rs.126 lakhs (Rs.101 lakhs). An increase / decrease of 10% on the BSE Market Index could have an impact of approximately Rs.12.60 lakhs (Rs. 10.10 lakhs) on the OCI or equity attributable to the Group.

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 deposits with banks, foreign exchange transactions and other financial instruments.

Trade receivables

Outstanding customer receivables are regularly monitored and any major export shipments to customers are generally covered by letters of credit. The maximum exposure to the credit risk at reporting date is primarily from trade receivables amounting to Rs.86723 Lakhs

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is limited as the Company generally invests in banks and financial institutions with high credit ratings. Other financial instruments includes primarily investment in fixed deposits.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank borrowings.

Collateral risk

The Company has pledged its short-term deposits of Rs. 32692 lakhs to fulfil the security requirements for the contractual obligations. As at 31 March, 2023, 31 March, 2022 the fair values of the short-term deposits pledged were Rs. 32692 lakhs and Rs. 33047 lakhs respectively.

On application of Ind AS 116, the nature of expenses has changed from lease rent in previous periods to depreciation cost for the ROU asset, and finance cost for interest accrued on lease liability.

The lease agreements for the Company’s Corporate office measuring 96,300 SFT has expired at the starting of the financial year. However the Company continues to use the said premises during the current financial year. Accordingly the said lease rentals are treated as short term leases till renewal of existing lease\entering in to new lease agreements.

Lease payments of Rs. 644 lakhs (Rs. 479 lakhs) relating to leases with a term of 12 months or less and low value leases are charged to statement of profit and loss

Revenue of approximately INR Rs. 27379 lakhs (31.03.2022 - INR Rs.56166 lakhs) are derived from three external customers.

These revenues are attributed to the Construction and EPC contracts segment.

38. IMPAIRMENT OF ASSETS

a. Cash generating units :

There is no impairment loss in cash generating units and hence no provision was made in the financial statements.

b. Other assets :

The Company has recognised impairment loss of Rs. Nil (Rs. 312 Lakhs) in the books of accounts towards impairment of Buildings subsequent to closure of Lease period.

40. RELATIONSHIP WITH STRUCK OFF COMPANIES

The Company has no transactions \ outstanding balances as on 31.03.2023 with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

41. The project specific working capital limits outstanding as of 31.12.2022 availed from Punjab National Bank was classified as substandard by the bank. The outstanding were repaid in full and the account was upgraded as standard by the bank as of 31.03.2023.

42. During Mar-2023, Chattisgarh State Power Generation Co Ltd (CSPGCL) (Marwa Project) demanded encashment of two BGs totalling to Rs.16337 Lakhs. The Company obtained stay on encashment of bank guarantee from the Honourable Chattisgarh High Court. The said amount is included in Contingent Liability as on 31.03.2023.

43. PROVISIONS

a) The company has made a provision / transfer of Rs.91 lakhs, (Rs.132 lakhs) towards warranty and contractual obligations on the products supplied / contracts executed by the company during the year. The expenses on account of provision for warranty is grouped under other expenses.

44. PREVIOUS YEAR FIGURES

Figures of previous year have been regrouped / rearranged, wherever required to conform to the current year presentation.