XXI. Provisions, contingent liabilities and contingent assets
A provision is recognized when an enterprise has a present obligation (legal or constructive) as result of past event and it is probable that an
outflow of embodying economic benefits of resources will be required to settle a reliably assessable obligation. Provisions are determined based
on best estimate required to settle each obligation at each Balance Sheet date. 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 recognised as a finance cost.
Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. A contingent liability also
arises, in rare cases, where a liability cannot be recognised because it cannot be measured reliably.
Contingent assets are neither recognised nor disclosed in the financial statements.
XXII. Interest in Joint Arrangements
As per Ind AS 111 - Joint Arrangements', investment in Joint Arrangement is classified as either Joint Operation or Joint Venture. The classification
depends on the contractual rights and obligations of each investor rather than legal structure of the Joint Arrangement. The Company classifies
its Joint Arrangements as Joint Ventures.
The Company recognizes its interest in Joint Venture as an investment and accounts for that investment using the Equity method in accordance
with Ind AS 28.
Footnotes:
a) The Company's lease assets mainly comprise of Premises taken on lease.
b) Excluded the initial direct costs from the measurement of the right-to-use asset at the date of initial application.
c) The aggregate depreciation expense on right-to-use assets is included under depreciation and amortization expense in the Statement of Profit
and Loss.
d) During the year Company has recognised operating lease expenses as amortisation of Right-of-Use Assets and finance cost as compared to lease
rent expenses in earlier years as per operating lease.
e) The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations
related to lease liabilities as and when they fall due.
Footnotes:
a. Due to the continued liquidity crunch being faced by Gujarat Akruti TCG Biotech Limited (GATCGBL), a subsidiary of the Company, the tenure of
the Compulsorily Convertible Debentures was extended by a further period of 2 (Two) years upto March 30 2027 and Non-Convertible Debentures
issued by GATCGBL were extended by a further period of 1 (One) year upto March 30, 2027, the other terms and conditions of issue thereof
remaining unchanged.
b. The Company had invested an amount of ? 775 lakhs in the capital of Shreenath Realtors, which had been written off in the earlier years. However,
the JV has not been dissolved as on date.
c. The company had invested an amount of ? 1.60 lakhs in the capital of Primeria, which had been written off in the earlier years. However, the JV
has not been dissolved as on date.
d The Company has investments in certain subsidiaries, jointly controlled entities and associates and loans and advances outstanding as at March
31, 2026. While some of entities have incurred losses and have negative net worth as at the year end, the underlying projects in such entities are
at various stages of real estate development and are expected to achieve adequate profitability on substantial completion and/ or have current
market values of certain properties which are in excess of the carrying values. The Company considers its investments in such entities as long term
and strategic in nature.
e During the year the company has increased its equity stake in the following earstwhile joint ventures, by virtue of which these earstwhile joint
ventures has become subsidiaries of the company w.e.f. 3rd February 2026:
1. Hubtown Bus Terminal (Adajan) Private Limited
2. Hubtown Bus Terminal (Ahmedabad) Private Limited
3. Hubtown Bus Terminal (Mehsana) Private Limited
4. Hubtown Bus Terminal (Vadodara) Private Limited
Footnotes :
a. The projects are under various stages of development and are expected to have net realisable value greater than the cost. Finished Properties
include Finished Properties valued at net realisable value of ? 6,463.06 lakhs ( As at 31st Mar 2025 : ? 696.27 lakhs )
b. Inventories include inventory with carrying value of ? 3,475.86 lakhs (As at 31st March, 2025 : ? 13,094.38 lakhs) which have been mortgaged
against the borrowings of the Company. The Company has various projects under construction, and it has obtained loan/finance facilities
against the mortgage of units to be constructed on the said projects. The total costs incurred on projects under construction is reflected as
Inventory — Incomplete Projects.
c. Inventories includes commercial premises held for sale of value ? 355.51 lakhs ( As at 31st March 2025: ? 355.51 lakhs).
b) Terms / rights attached to equity shares
The Company has a single class of equity shares having a par value of ? 10 per share. Each shareholder of equity share is entitled to one vote per
share. Dividend, as and when declared by the company is paid in Indian Rupees.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company in
proportion to the number of equity shares held by each shareholder, after settlement of all preferential obligations.
c) During the current financial year, out of the 1,25,00,000 number of Share Warrants issued in earleir year, 62,50,000 Share Warrants are converted
into 62,50,000 (Previous Year 62,50,000) number of Equity Shares having face value of ' 10 each at Share Premium of ' 210 per share.
d) Details of shares held by each shareholders holding more than 5% shares :
There is no shareholder holding more than 5% of equity shares of the company as on 31st March 2026 (Previous Year : None)
e) No shares have been issued for consideration other than cash during the period of last five years
f) Details of shares held by each Promoter:
Sensitivity Analysis:
As of 31st March, 2026, every percentage point increase in discount rate will affect our gratuity benefit obligation ? 156.05 lakhs.
As of 31st March, 2026, every percentage point decrease in discount rate will affect our gratuity benefit obligation ? 181.58 lakhs.
As of 31st March, 2026, every percentage point increase in salary escalation rate will affect our gratuity benefit obligation ? 181.58 lakhs.
As of 31st March, 2026, every percentage point decrease in salary escalation rate will affect our gratuity benefit obligation ? 155.85 lakhs.
Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation
by one percentage, keeping all other actuarial assumptions constant.
Projected service cost as on 31st March 2026 is ? 15.79 lakhs.
Narrations:1 Analysis of Defined Benefit Obligation
The number of members under the scheme have decreased by 16.07 %. Similarly the total salary increased by 64.67 % during the accounting
period. The resultant liability at the end of the period over the beginning of the period has increased by 51.61%.
2 Expected rate of return basis:
EROA is the discount rate as at previous discount valuation date as per the accounting standard.
3 Description of Plan Assets and Reimbursement Conditions
100% of the Plan Asset is entrusted to LIC of India under their Group Gratuity Scheme. The reimbursement is subject to Insurer's Surrender Policy.
4 Investment / Interest Risk
The Company is exposed to Investment / Interest risk if the return on the invested fund falls below the discount rate used to arrive at present value
of the benefit.
5 Longevity Risk
The Company is not exposed to risk of the employees living longer as the benefit under the scheme ceases on the employee separating from the
employer for any reason.
6 Risk of Salary Increase
The Company is exposed to higher liability if the future salaries rise more than the assumption of salary escalation.
7 Discount Rate
The discount rate has decreased from 6.66% to 7.07% and hence there is an increase in liability leading to actuarial loss due to change in discount
rate.
In the opinion of the Board of Directors of the Company, all items of Current Assets, Current Liabilities and Loans and Advances continue to have a
realizable value of at least the amounts at which they are stated in the Balance Sheet.
Footnotes:
a. Interest / penalty that may accrue on disputed tax demands are not ascertainable, at present. The Company has taken necessary steps to protect
its position with respect to the above referred claims, which in its opinion, based on professional / legal advice are not sustainable.
b. Contingent liabilities include corporate guarantees issued by the Company and are relied upon by the Auditors.
c. The management is of the view that it was necessary to provide the corporate guarantees to further the business interest of the Company in the
entities on whose behalf such guarantees have been provided and the management is of the view that there would be no sustainable claims on
the Company in respect of these corporate guarantees.
The rate of interest, processing fees, any other charges levied by the lenders on the entities availing loans are based on internal guidelines of the
lenders depending on the merits of the underlying projects and their estimated cash flows. Majority of the corporate guarantees issued by the
Company are basically to provide comfort by the Company as a shareholder of the Borrower entity to the Lenders. These corporate guarantees, in
any case, do not result in any additional benefits to the borrowers. Accordingly, the financial liability on account of financial guarantee contracts
have not been fair valued as these are expected to be immaterial.
The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company's focus is to foresee the
unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
1) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument which fluctuate because of changes in market prices. Market
risk comprises three types of risk: interest rate risk, currency 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.
a) Interest rate risk
Majority of the long-term borrowings of the Company bear fixed interest rate. Thus the interest rate risk is limited for the Company.
b) Foreign currency risk
The Company is engaged in real estate business and only imports certain material/services against payments for which hedging instruments
are not required.
c) Equity price risk
The Company's equity securities are not majorly susceptible to market price risk. However, the Company's Board of Directors reviews and
approves all equity investment decisions after exercising due diligence which may minimise the market related risk.
2) Credit Risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure of the financial
assets are contributed by trade receivables, cash and cash equivalents and receivables from group companies.
a) Receivables resulting from sale of properties: Customer credit risk is managed by requiring customers to pay advances before transfer of
ownership, thereby, substantially eliminating the Company's credit risk in this respect.
b) Receivables resulting from other than sale of properties: Credit risk related to such receivables is managed as per the Company's established
policy, procedures and control. Outstanding customer receivables are regularly monitored. The impairment analysis is performed at each
reporting date on an individual basis for major receivables. The Company does not hold collateral as security. The Company's credit period
generally ranges from 30 to 90 days.
c) Credit risk on cash and cash equivalents is limited as the Company generally invests deposit with banks which have high credit ratings.
3) Liquidity risk
The Company's treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies
related to such risks are overseen by senior management. The Management monitors the Company's net liquidity position through rolling
forecasts on the basis of expected cash flows.
For the purpose of the Company's capital management, capital includes issued equity capital and all other equity reserves attributable to the equity
holders of the Company. The primary objective of the Company's management is to maximise shareholders value.
The Company manages its capital structure and makes adjustments in the light of changes in economic conditions and the requirements of the financial
covenants. To maintain or adjust the capital structure, the Company may issue new shares. Consistent with others in the industry, the Company monitors
its capital using the gearing ratio which is total net debt (borrowings offset by cash and cash equivalents) divided by total capital of the Company.
Gearing Ratio
In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants
attached to the borrowings that define the capital structure requirements. Breaches in meeting the financial covenants would permit the lenders to
immediately call loans and borrowings.
The Board of Directors, at its meeting held on February 14, 2025, approved the Scheme of Arrangement in the nature of the merger/amalgamation
of Saicharan Consultancy Private Limited ("Transferor Company") with Hubtown Limited ("Transferee Company") under Sections 230 to 232 and other
applicable provisions of the Companies Act, 2013, with an Appointed Date of April 1, 2025.
Subsequently, at its meeting held on June 30, 2025, the Board of Directors approved the Scheme of Arrangement in the nature of the merger/
amalgamation of 25 West Realty Private Limited ("Transferor Company") with Hubtown Limited ("Transferee Company") under Sections 230 to 232 and
other applicable provisions of the Companies Act, 2013, with an Appointed Date of April 1, 2025.
Further, at its meeting held on August 26, 2025, the Board of Directors approved the Scheme of Arrangement providing for (i) the merger/amalgamation
of Distinctive Realty Private Limited ("Transferor Company 1") into and with Amazia Developers Private Limited ("Transferee Company 1") ("Amalgamation
I"), and (ii) immediately upon Amalgamation I becoming effective, the merger/amalgamation of Amazia Developers Private Limited ("Transferor Company
2") and Nitant Real Estate Private Limited ("Transferor Company 3") into and with Hubtown Limited ("Transferee Company 2") ("Amalgamation II"), under
Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, with an Appointed Date of July 1, 2025. The Scheme was subsequently
rejected by the Stock Exchanges.
Thereafter, at its meeting held on December 30, 2025, the Board of Directors approved a revised Scheme of Arrangement providing for (i) the merger/
amalgamation of Distinctive Realty Private Limited ("Transferor Company 1") into and with Amazia Developers Private Limited ("Transferee Company
1") ("Amalgamation I"), and (ii) immediately upon Amalgamation I becoming effective, the merger/amalgamation of Amazia Developers Private Limited
("Transferor Company 2") and Nitant Real Estate Private Limited ("Transferor Company 3") into and with Hubtown Limited ("Transferee Company 2")
("Amalgamation II"), under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, with an Appointed Date of October 1, 2025.
The above Scheme(s) are subject to the receipt of the necessary statutory, regulatory, contractual and other approvals, permissions and sanctions as may
be required under applicable laws. The Scheme(s) will become effective upon completion of all applicable approvals and the filing of the relevant orders
with the Registrar of Companies. The Company is taking the necessary steps to obtain the requisite approvals and complete the process in accordance
with the applicable legal and regulatory requirements.
NOTE 44.
Loans and advances, other receivables, debtors and creditors are subject to confirmations and are considered payable / realisable, as the case may be.
NOTE 45.
Previous year figures have been regrouped / reclassified / restated wherever necessary, to make them comparable with current year figures in the
Financial Statements.
No transactions were carried during the year with any of the stuck of companies.
NOTE 48. OTHER STATUTORY INFORMATION FOR THE YEAR ENDED 31 MARCH 2026 :
i) The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any
benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.
ii) The Company does not have any transaction during the current financial year with companies struck off under Section 248 of the Companies Act,
2013.
iii) The Company does not have any charge or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.
iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with
the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company
(Ultimate Beneficiaries); or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding
(whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party
(Ultimate Beneficiaries); or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
vii) The Company do not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income
in the tax assessments under the Income-tax Act, 1961
viii) The Company has not been declared wilful defaulter by any bank or financial institution or Government or any Government authority or other
lender in current financial year, in accordance with the guidelines on wilful defaulters issued by the Reserve Bank of India.
ix) The Company has complied 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 from the date of their implementation.
|