2.13 Provisions
Provisions for legal claims, service warranties are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation
and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
2.14 Employee Benefits
(i) Employee Benefits
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(ii) Post-employment benefits
The Company operates the following statutory post-employment schemes:
• defined benefit plans such as gratuity and
• defined contribution plans such as provident fund and superannuation fund Gratuity Obligations
The liability recognised in the balance sheet in respect of defined benefit gratuity plans is the present value of the defined benefit obligation at the end of the reporting period. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Premeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised immediately in profit or loss as past service cost.
Defined contribution plans
The Company pays provident fund contributions to publicly administered provident funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due.
(iii) Bonus Plan
The Company recognises a liability and an expense for bonus. The Company recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
2.15 Dividend
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
2.16 Earnings per share
(i) Basic Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.
(ii) Diluted Earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
2.17 Statement of cash flows
The company's statements of cash flows are prepared using the Indirect method, whereby profit for the period is adjusted for the effect of transaction of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payment and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
Cash and cash equivalents comprise cash and bank balances and short-term fixed bank deposits that are subject to an insignificant risk of changes in value.
The Company, as at 31st March 2024, has a non-current investment amounting to Rs. 1,040.92/- Lakhs (31st March 2023: Rs.1,040.92/- Lakhs), noncurrent loans amounting to Rs.2,679.30/- Lakhs (31st March 2023: Rs.2,679.30/- Lakhs) and other assets amounting to Rs. 879.46/-Lakhs (31st March 2023: Rs.921.50/- Lakhs) in B L K Lifestyle Ltd, a subsidiary. While such entity has been incurring losses and the net-worth of Entity as at 31st March 2024 has been fully eroded, this entity is operating at at lower than its installed capacity due to current market situation leading to low private investment and is expected to achieve adequate profitability on revival of private investment in coming years. The net-worth of this subsidiary does not represent its true market value as the value of the underlying assets/installed capacity, based on valuation report of an independent valuer, is substantially higher. Therefore, based on certain estimates like future business plans, growth prospects and other factors, the management believes that the realizable amount of this subsidiary is substantially higher than the carrying value of the non-current investment, non-current loans and other current financial assets due to which these are considered as good and recoverable.
The Company, as at 31st March 2024, has a non-current investment amounting to Rs. 205.00/- Lakhs (31st March 2023: Rs. 205.00/- Lakhs), non-current loans amounting to Rs. 35,527.75/ Lakhs(31st March 2023: Rs.35,647.75/- Lakhs) and other current financial assets amounting to Rs.2,927.93/- Lakhs (31st March 2021: Rs.2,927.93/- Lakhs in Soul Space Project Ltd, a subsidiary (97.91%), which is holding 100% in Soul Space Hospitality Limited and 100% in Soul Space Reality Limited. While Soul Space Project Ltd has been incurring losses, the underlying projects/assets are expected to achieve adequate realizable value. The net-worth of this subsidiary does not represent its true market value as the value of the underlying investments/ assets, based on valuation report of an independent valuer, is higher. Therefore, based on certain estimates like future business, growth prospects and other factors, the management believes that the realizable amount of the subsidiary is higher than the carrying value of the investments, noncurrent loans and other current financial assets due to which these are considered as good and recoverable.
The Provision matrix developed by the company considers several factors, including: Grouping receivable based on significant differences in loss patterns among customer groups, such as Government entites, Disputed accounts, and Non-Government institutions (excluding related paties).
The management has ascertained the credit risk in respect of each outstanding separately and has made allownaces where ever the credit risk has enhanced. In case of others, the management is confident of full recovery despite outstanding for a longer period. Hence no allowances have been made in such cases.
For terms and conditions of receivables due from related parties, refer note 31 of standalone Ind AS financial statements.
The Company exposure to credit and currency risks, and loss allowances related to receivables are disclosed in note 34 of standalone Ind AS financial statements.
in the opinion of the management, trade receivable, which are non moving for more than Twelve Months, and hence being outside operating cycle, are Classified as non Current.
Sundry Debtors as at 31st March, 2024 include debtors aggregating to ' 4,792.31/- Lakhs (31st March 2023 ' 3,152.68/- Lakhs). These represent amounts of work done and retention which have been disputed by the Clients. However, the matters has been referred to arbitration. The management is reasonably confident of establishing its claims for the said amount supported by proper evidences and consequently no change have been made to the values and classification of these amounts in the financial statements.
11.1 CORPORATE DEBT RESTRUCTURING (CDR)
In case of the Company, Corporate Debt Restructuring (CDR) package was approved by the Empowered Group (now an erstwhile body) on 31.12.2014 for a period upto 30th September, 2019 . For the said CDR Package, the Participant Lenders were State Bank of India, Canara Bank, ICICI Bank, Oriental Bank of Commerce (now merged with Punjab National Bank), IndusInd Bank, Syndicate Bank (now merged with Canara Bank) and the Non-CDR Members were Yes Bank Ltd, SREI Equipment Finance Ltd, Standard Chartered Bank Ltd and HDFC Bank. Thereafter, all restructuring schemes, including CDR Scheme, have been superseded by a new framework in terms of the RBI's Circular dated 7th June, 2019, however, the Company is continued to be governed by the CDR Package as previously approved. Now, all the major financial terms stipulated in the CDR Package stands complied except the amount of Right of Recompense with the Participant Lenders" which is yet to be quantified till now. However as per Master restructuring agreement dated 31.12.2014 the year on year Recompense amount of Rs 6,950/- lakhs was estimated for all lenders however the amount for existing lenders is being worked out by lenders . Borrowings from related parties include interest free loan provided by the directors amounting to Rs. 2,338.83 lakhs, in according with the covenants of the CDR package.
11.2 Secured Loans
Working Capital Facility From Banks
(Secured by way of first pari passu charge on Current Assets of the company and second pari passu charge on Fixed Assets of the Company except those specifically charged to Financial Institutions/banks/others for term Loans of machinery & vehicles and Personal Guarantees of whole time Directors). Interest on cash credit facility is charged at rate of 13-15% p.a.
In addition, pledge of Un-encumbered share holding of B. L. Kashyap and Sons Limited in favour of lenders by the Whole Time Directors.
Further in addition to above, Canara Bank Credit Facility is secured by way of Equitable mortgage of third party property of M/s Ahuja Kashyap Malts Private Limited
Note 30 Retirement Benefits
a. Defined Contribution Plan
The Company makes contribution towards provident fund and superannuation fund which are defined contribution retirement plans for qualifying employees. The provident fund plan is operated by the regional provident fund commissioner. Under the schemes, the Company is required to contribute a specified percentage of payroll cost to the retirement contribution schemes to fund benefits.
The Code of Social Security, 2020 (Code) passed by the Parliament subsumes various legislations relating to employee Benefits including Provident fund and Gratuity. Pending notification of the effective date of the Code, all the employee benefits have been accounted as per the existing laws
The Company recognised Rs.942.61/- Lakhs (31st March 2023: Rs. 820.41/- Lakhs) for Provident Fund contributions in the Statement of Profit & Loss. The contribution payable to these plans by the Company are at rates specified in the rules.
b. Defined Benefit Plan
The scheme provides for lump sum payment to vested employees at retirement, upon death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service.
The present value of the defined benefit obligation and the related current service cost are measured using the projected unit credit method as per actuarial valuation carried out at balance sheet date.
Note 33 Micro and small enterprises
Under the Micro, Small and Medium Enterprises Development Act, 2006 ('MSMED') which came into force from 2 October 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. On the basis or the information and records available with the management, there are no outstanding dues to the Micro and Small enterprises as defined in the Micro, Small mid Medium Enterprises Development Act, 2006 as set out in the following disclosures.
The disclosure in respect of the amount payable to enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 has been made in the standalone Ind AS financial statement as at March 31, 2024 based on the information received and available with the Company. On the basis of such information, credit balance as at March 31, 2024 of such enterprises is ? 2,861.72/- Lakhs (31st March 2023: ? 2,549.74/- Lakhs). Auditors have relied upon the information provided by the Company.
Note 34 Financial instruments - Fair values and risk management Risk management framework
The business of the Company involves market risk, credit risk and liquidity risk. Among these risks, market risk is given paramount importance so as to minimize its adverse affects on the Company's performance. The Company has policies and process to identify, evaluate and manage risks and to take corrective actions, if required, for their control and mitigation on continuous basis. And regular monitoring of the said policies and process for their compliance is responsibility of the management under the supervision of the Board of Directors and Audit Committee. The policies and process are regularly reviewed to adapt them in tune with the prevailing market conditions and business activities of the Company. The Board of Directors and Audit Committee are responsible for the risk assessment and management through formulation of policies and processes for the same.
Credit risk
Credit risk is part of the business of the Company due to extension of credit in its normal course having a potential to cause financial loss to the Company. It mainly arises from the receivables of the Company due to failure of its customer or a counter party to a financial instrument to meet obligations under a contract with the Company. Credit risk management starts with checking the credit worthiness of a prospective customer before entering into a contract with him by taking into account, his individual characteristics, demographics, default risk in his industry. A customer's credit worthiness is also continuously is checked during the period of a contract. However, risk on trade receivables and unbilled work in progress is limited as the customers of the company are either government promoted entities or have strong credit worthiness. In order to make provisions against dues from the customers other than government promoted entities, the Company takes into account available external and internal credit risk factors such as credit rating from credit rating agencies, financial condition, aging of accounts receivables and the Company's historical experience for customers.
Cash and Cash equivalents
The Company held cash and cash equivalents with credit worthy banks of Rs. 1,608.97 Lakhs & Rs. 996.33 Lakhs as at 31st March 2024, and 31st March 2023 respectively. The credit worthiness of such banks is evaluated by the management on an ongoing basis and is considered to be good.
Guarantees
The Company's policy is to provide financial guarantee only for its subsidiaries liabilities (BLK lifestyle). The Company has issued a guarantee of Rs. 300.00/- Lakhs ( Rs. 300.00/- Lakhs) to certain banks in respect of credit facilities granted to subsidiaries.
Security deposits given to lessors
The Company has given security deposit to lessors for premises leased by the Company as at 31st March 2024 and 31st March 2023.The company monitors the credit worthiness of such lessors where the amount of security deposit is material.
Loans, investments in Subsidiaries Companies
The Company has given unsecured loans to its Subsidiaries as at 31st March 2024 Rs 38,551.90/- Lakhs and 31st March 2023 Rs 38,671,90/- Lakhs . The Company does not perceive any credit risk pertaining to loans provided to subsidiaries or the investment in such subsidiaries except the Allowance for impairment of investment & Loan as mentioned in Note No 5(a) and 5(c).
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company's reputation.
The Company has obtained fund and non-fund based working capital lines from various banks. Furthermore, the Company has access to funds from loans from banks. The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.
Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments and all short term and long-term debt. The Company is exposed to market risk primarily related to interest rate risk . Thus, the Company's exposure to market risk is a function of borrowing activities .
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 market risk for changes in interest rates relates to fixed deposits and borrowings from financial institutions.
For details of the Company's Current Borrowings and Non Current Borrowings, including interest rate profiles, refer to Note 11a & 11b of these Ind AS financial statements.
Interest rate sensitivity - fixed rate instruments
The Company's long-term borrowings consists interest free loans from Directors amounting to Rs. 2,338.83 lakhs and fixed rate borrowings amounting to Rs.1,005.47 lakhs from relaties & other parties. The Compoany's short-term borrowing consit credit facility from banks with floating interest rates.
Interest rate sensitivity - variable rate instruments
A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased / decreased equity and profit or loss by amounts shown below. This analyses assumes that all other variables, in particular, foreign currency exchange rates, remain constant. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.
Note 35 Capital Management
The Company's objectives when managing capital are to:-
(i) safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
(ii) maintain an optimal capital structure to reduce the cost of capital.
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital, as well as the level of dividends to equity shareholders.
The Company monitors capital using a ratio of 'net debt' (total borrowings net of cash & cash equivalents) to 'total equity' (as shown in the balance sheet).
The Company's policy is to keep the Debt Equity ratio below 2. The Company's net debt to equity ratio is as follows.
Note 36 Additional Regulatory Information:
(i) The title deeds of all the immovable properties held by the Company are held in the name of the Company
(ii) The Company does not hold any investment property.
(iii) The required disclosures regarding Loans or Advances in the nature of loans granted by th Company to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013) are given under Note No.5c
(iv) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Group
for holding any Benami property.
(v) In respect of the Company's borrowing from banks or financial institutions on the security of current assets, all the quarterly returns or statements of currents assets filed by the Company with banks or financial institutions are generally in agreement with the books of accounts and have no material discrepancies so as to adversely affect the drawing power limit sanctioned by the banks or financial institutions.
(vi) During the current year and/or in the previous year, the Company has not been declared willful defaulter by any bank or financial institution or other lender.
(vii) During the current year and/or in the previous year, the Company has no transactions with the companies struck off U/s 248 of the Companies Act, 2013 or U/s 560 of the Companies Act, 1956.
(viii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
(ix) The Company is in compliance with the number of layers prescribed under clause (87) of section 2 of the Companies Act,
2013 read with the Companies (Restriction on number of Layers) Rules, 2017 (as amended).
Note 39
Previous year's figures have been regrouped and / or rearranged wherever necessary Note 40
Balances outstanding in the name of the parties are subject to the confirmation
General Information and Significant Accounting Policies 1 & 2
Other Notes on Accounts 23-40
The Notes are an integral part of these financial statements
In terms of our report of even date attached For and on behalf of the Board of Directors
For Rupesh Goyal & Co. Vikram Kashyap Vineet Kashyap
Chartered Accountants Joint Managing Director Managing Director
Firm Regn.no. 021312N DIN-00038937 DIN-00038897
Rupesh Goyal Pushpak Kumar Ganesh Kumar Bansal
Proprietor VP & Company Secretary Chief Financial Officer
Membership No 507856
Place : New Delhi Dated : 30.05.2024
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