3.14 Provisions, contingent assets and contingent liabilities
The company recognizes a provision when there is a present obligation as a result of a past event that probably
requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. These
provisions are reviewed at the end of each reporting date and are adjusted to reflect the current best estimates.
The Company uses significant judgement to disclose contingent liabilities.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of
which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company or a present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the
amount cannot be made. Contingent Liability or Contingent assets are disclosed in Note 33 of the standalone
financial statement.
3.15 Earning per Equity Share
Basic earnings per equity share is calculated by dividing the net profit or loss for the period attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period. The weighted
average number of equity shares outstanding during the period is adjusted for events including a bonus issue,
bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of
shares), if any. For the purpose of calculating diluted earnings per equity share, the net profit or loss for the
period attributable to equity shareholders and the weighted average number of shares outstanding during the
period are adjusted for the effects of all dilutive potential equity shares. The company has disclosed earning per
share in Note 32 of the standalone financial statement.
3.16 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of past or future receipts or payments. In the
cash flow statement, cash and cash equivalents includes cash in hand, cheques on hand, balances with banks in
current accounts and other short- term highly liquid investments with original maturities of 3 months or less, as
applicable.
3.17 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are
capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or
sale. Other borrowing costs are expensed in the period in which they are incurred and reported in finance costs.
3.18 Foreign Currency Transactions
Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the
transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at
the exchange rates prevailing at the reporting date. Exchange differences arising on settlement or translation
of monetary items are recognized in the Statement of Profit and Loss in the period in which they arise.
Non-monetary items measured at historical cost in a foreign currency are translated using the exchange rate at
the date of the transaction. Non-monetary items measured at fair value are translated using the exchange rates
at the date when the fair value is determined.
The Company did not have any foreign currency transactions during the year.
3.19 Significant management judgment in applying accounting policies and estimation uncertainty
When preparing the financial statements, management makes a number of judgments, estimates and
assumptions about the recognition and measurement of assets, liabilities, income and expenses.
(A) Significant management judgment
The following are significant management judgments in applying the accounting policies of the Company that
have the most significant effect on the financial statements.
• Recognition of construction contract revenues
Recognising construction contract revenue requires significant judgement in determining actual work
performed and the estimated costs to complete the work.
• Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the probability that
future taxable income will be available against which the deductible temporary differences and tax loss carry¬
forwards can be utilised. In addition, significant judgment is required in assessing the impact of any legal or
economic limits or uncertainties in various tax jurisdictions.
(B) Estimation Uncertainity
Information about estimates and assumptions that have the most significant effect on recognition and
measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially
different.
• Impairment of non-financial assets
In assessing impairment, management estimates the recoverable amount of each asset or cash- generating units
based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates
to assumptions about future operating results and the determination of a suitable discount rate.
• Defined Benefit Obligation (DBO)
Management's estimate of the DBO is based on a number of critical underlying assumptions such as attrition
rate, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may
significantly impact the DBO amount and the annual defined benefit expenses
• Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the
expected utility of the assets. Uncertainties in these estimates relate to technological obsolescence that may
change the utility of certain software and IT equipment.
• Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
i. In the principal market for the asset or liability, or
ii. In the absence of a principal market, in the most advantageous market for the asset or liability.
Management uses valuation techniques to determine the fair value of financial instruments (where active
market quotes are not available) and non-financial assets. This involves developing estimates and assumptions
consistent with how market participants would price the instrument. Management bases its assumptions on
observable data as far as possible but this is not always available. In that case management uses the best
information available.
Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company's normal operating
cycle and other criteria set out in the Schedule III to the Companies Act, 2013.
Considering the nature of business activities of the Company, the time between deploying of resources for
projects / contracts and their realisation in cash and cash equivalents, the Company has ascertained its operating
cycle as twelve months for the purpose of current or noncurrent classification of assets and liabilities.
3.20 Related Party Transactions
Disclosure is being made separately for all the transactions with related parties in Note 37 of the financial
statement as specified under IND AS 24 "Related Party Disclosure" issued by the Institute Chartered Accountants
of India. All the transactions with related party are at arm length price.
3.21 Segment Reporting
M/s Technocraft Ventures Limited (formerly known as Technocraft Ventures Private Limited) is a
multidisciplinary public infrastructure development company specializing in turnkey EPC government projects
primarily focusing on the Wastewater Treatment and Water Supply field. The Company's core operations span
several critical infrastructure sectors such as Wastewater Treatment/Supply Schemes , Operation and
Maintenance, Water Supply Scheme Projects (WSSPs) Electricity Transmission Distribution Networks and
Electrical Substations, Road and Highway Construction and Housing, Residential Buildings, and Sector
Development. Information is reported to and evaluated regularly by the Chief Operating Decision Maker (CODM)
i.e. Managing Director for the purpose of resource allocation and assessing performance focuses on the business
as whole. Based on similarity of activities, risk and reward structure, organisation structure and internal reporting
system, the company has structured its operations into single operating segment and hence there is no
reportable segment as per Ind AS 108 “ Operating Segments”. Accordingly, there is no other separate reportable
segment as defined by IND AS 108 "Operating Segments"
3.22 Recent Accounting Pronouncements
Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. Key amendments to Indian
Accounting Standards (Ind AS) which are applicable for the year ended 31st March 2026 are as follows:
Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. Key amendments to Indian
Accounting Standards (Ind AS) which are applicable for the year ended 31st March 2026 are as follows:
A) Amendments to Ind AS 1 - Classification of Liabilities as Current or Non-current and Non-current Liabilities
with Covenants
The Ministry of Corporate Affairs notified amendments to paragraphs 69 to 76 of Ind AS 1 Presentation of
Financial Statements to specify the requirements for classifying liabilities as current or non-current. The
amendments clarify:
What is meant by a right to defer settlement-
-That a right to defer must exist at the end of the reporting period
- That classification is unaffected by the likelihood that an entity will exercise its deferral
right
- That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a
liability not impact its classification
In addition, a requirement has been introduced to require disclosure when a liability arising from a loan
agreement is classified as non-current and the entity's right to defer settlement is contingent on compliance with
future covenants within twelve months. The amendments are effective for annual reporting periods beginning
on or after 1 April 2025 and must be applied retrospectively. The Company is currently assessing the impact the
amendments will have on current practice and whether existing loan agreements may require renegotiation.
The company has considered the impact of this amendment on the financial statement.
B) Amendments to Ind AS 7 and Ind AS 107 - Supplier Finance Arrangements
The Ministry of Corporate Affairs notified amendments to Ind AS 7 Statement of Cash Flows and Ind AS 107
Financial Instruments: Disclosures to clarify the characteristics of supplier finance arrangements and require
additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to
assist users of financial statements in understanding the effects of supplier finance arrangements on an entity's
liabilities, cash flows and exposure to liquidity risk. The amendments will be effective for annual reporting
periods beginning on or after 1 April 2025. There is no impact of this amendment on the financial statement.
C) Amendments to Ind AS 21 - Lack of exchangeability
The MCA notified amendments to Ind AS 21 The effects of changes in foreign exchange rates to specify how an
entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate
when exchangeability is lacking.
The amendments also require disclosure of information that enables users of its Ind AS financial statements to
understand how the currency not being exchangeable into the other currency affects, or is expected to affect,
the entity's financial performance, financial position and cash flows. The amendments are effective for annual
reporting periods beginning on or after 1 April 2025. When applying the amendments, an entity cannot restate
comparative information. There is no impact of this amendment on the financial statement.
D) Amendments to Ind AS 116 Leases - Lease Liability in a Sale and Leaseback
The MCA notified the Companies (Indian Accounting Standards) Second Amendment Rules, 2024, which amend
Ind AS 116, Leases, with respect to Lease Liability in a Sale and Leaseback. The amendment specifies the
requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction,
to ensure the seller-lessee does not recognise any amount of the gain or loss that relates to the right of use it
retains. There is no impact of this amendment on the financial statement.
E) Ind AS 117 Insurance Contracts
The Ministry of Corporate Affairs (MCA) notified the Ind AS 117, Insurance Contracts, vide notification dated 12
August 2024, under the Companies (Indian Accounting Standards) Amendment Rules, 2024.
Ind AS 117 Insurance Contracts is a comprehensive new accounting standard for insurance contracts covering
recognition and measurement, presentation and disclosure. Ind AS 117 replaces Ind AS 104 Insurance Contracts.
Ind AS 117 applies to all types of insurance contracts, regardless of the type of entities that issue them as well as
to certain guarantees and financial instruments with discretionary participation features; a few scope exceptions
will apply. Ind AS 117 is based on a general model, supplemented by:
• A specific adaptation for contracts with direct participation features (the variable fee approach)
• A simplified approach (the premium allocation approach) mainly for short-duration contracts.
There is no impact of this amendment on the financial statement.
F) International Tax Reform Pillar Two Rules - Amendments to Ind AS 12 Income Taxes
The OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS) addresses the tax challenges arising
from the digitalization of the global economy to ensure profits are taxed where economic activities take place
and value is created. In August 2025, the Ministry of Corporate Affairs (MCA) amended Ind AS 12 to clarify its
application to income taxes arising from tax law enacted or substantively enacted to implement the BEPS Pillar
Two model rules. The amendments introduce:
A mandatory temporary exemption to the accounting of deferred taxes arising from the jurisdictional
implementation of the Pillar Two model rules.
Disclosure requirements for affected entities to help users of financial statements better understand an entity's
exposure to Pillar Two income taxes arising from that legislation. There is no impact of this amendment on the
financial statement.
v) Risk Expsoure
The defined benefit obligations have the undermentioned risk exposures :
Interest rate risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit
obligation will tend to increase.
Salary Inflation risk : Higher than expected increases in salary will increase the defined benefit obligation.
Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and
retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase,
discount rate and vesting criteria.
Investment risk : The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high quality
corporate bond yields; if the return on plan asset is below this rate, it will create a plan deficit.
vi) Defined benefit liability and employer contributions
The weighted average duration of the defined benefit obligation is years ( 31st March 2026 : 12.02 years, 31st March 2025 : 12.13 years, 1st April 2024 :
11.55 years).
B) Defined Contribution Plan
The Company has a defined contribution plan in respect of provident fund. Contributions are made to provident fund and employees state insurance in
India for employees at the rate as prescribed in the regulations.The obligation of the group is limited to the amount contributed and it has no further
contractual nor any constructive obligation.
b) Based on Timing of revenue recognition
Revenues from construction contracts and operation & maintenance contracts are recognised on 'Over a point in
time' basis and 'At a point in time' basis respectively.
c) Transaction price allocated to the remaining sales contracts
Revenues expected to be recognised in the future related to performance obligations that are unsatisfied or
partially unsatisfied as at March 31, 2026 amounting to INR 112881 Lakhs.
Construction contracts are progressively executed over a period of upto 3 years and based on specific project
schedules. Operation and maintenance contracts are expected to be executed over a period of 1 to 10 years.
Section 135(6) of the Companies Act, 2013 mandates that any unspent Corporate Social Responsibility (CSR) funds allocated for ongoing
projects must be transferred by the company within 30 days from the end of the financial year to a special account called the "Unspent
Corporate Social Responsibility Account." This account must be opened in a scheduled bank and is designated specifically for CSR
purposes. The unspent amount in this account must be utilized for the intended CSR activities within a period of three financial years
from the date of transfer. If the company fails to utilize the funds within this period, the remaining unspent amount must be transferred
to a fund specified in Schedule VII of the Act within 30 days from the completion of the third financial year.
Note for the CSR Expenditure for the financial year ended 31st March 2025
With respect to the CSR obligation pertaining to FY 2024-2025 of Rs 33.34 Lacs , the company has deposited the amount in CSR Account
on 29.04.2026.
Note for the CSR Expenditure for the financial year ended 31st March 2026
As told by the management of the company, With respect to the CSR obligation pertaining to FY 2025-2026 of Rs 54.00 Lacs the company
is required either to spend the amount on or before 31st March 2027 or to deposit the amount in unspent CSR Account within the time
prescribed as per the provision of section 135 of the Companies Act 2013.
Out of the total CSR amount of ?15.15 lacs transferred to the Company's CSR Account opened on 18 August 2024, an amount of ?3.09 lacs
has been utilized towards eligible CSR activities during FY 2025-2026. As told by the management of the company , The balance amount
remains in the CSR Account and shall be utilized in accordance with the provisions of Section 135 of the Companies Act, 2013 and the
applicable CSR Rules.
Note No : 39 : FIRST TIME ADOPTION OF IND AS
In preparing these financial statements, the Company s opening balance sheet was prepared as at 1st April 2024, the Company's date of transition to Ind AS. This note explains
the principal adjustments made by the Company in restating its IGAAP financial statements, including the balance sheet as at 1st April 2024 and the financial statements as at and
for the year ended 31st March 2026 and how the transition from IGAAP to Ind AS has affected the Company's financial position, financial performance and cash flows.
A) IND AS ADJUSTMENTS
Optional exemptions availed on first time adoption of IND AS under "IND AS 101".
I. Deemed Cost
The Company has availed the deemed cost exemption as per IND AS 101 in relation to property, plant and equipment and Intangible assets as on the date of transition i.e.1st
April 2024 and hence the net block carrying amount (as per Previous GAAP) has been considered as the gross block carrying amount (as per Ind AS) on that date i.e. 1st April
2024
II. Remeasurement gain/loss of net defined plan
Under Ind AS, all actuarial gains and losses are recognised in the other comprehensive income.
III. Leases
Ind AS 116 'Leases' requires an entity to assess whether a contract or arrangement contains a lease.In accordance with Ind AS 116,this assessment should be carried out at the
inception of the contract or arrangement.Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind
AS,except where the effect is expected to be not material.
IV. Deferred Tax
Under Previous GAAP, Deferred tax is calculated using the income statement approach which focuses on differences between taxable profits and accounting profits for the
period. Under Ind AS 12 deferred tax is calculated using balance sheet approach which focuses on differences between taxable profits and accounting profits for the period. The
application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under IGAAP. In addition, the various
transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are
recognised in correlation to the underlying transaction either in retained earnings or profit and loss respectively.
V. Expected Credit losses
Under Previous GAAP, The Company had recognised provision on trade receivables based on the expectation of the Company. Under Ind AS, the Company has to provide loss
allowance on receivables based on the Expected Credit Loss (ECL) model which is measured following the "simplified approach". The Company uses an provision matrix to
measure the expected credit losses of trade receivables. The provision matrix is based on its historical observed default rates, adjusted for forward looking estimates.
VI. Borrowings
Under Previous GAAP, processing fee on borrowings are recognised as expense when incurred. Under Ind AS 109, these costs are recognised under EIR method. Although it has
negligible impact on borrowings under IND AS.
VII. Business Combination
In accordance with Ind AS transitional provision, the company opted not to restate business combination which occurred prior to transition date.
B) Reconciliations from previous GAAP
The following reconciliations provide a quanitification of the effect of differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101
whereas the notes explain the significant differences thereto.
(i) Balance sheet reconciliations as of 1st April 2024
(ii) Balance sheet reconciliations as of 31st March 2025
(iii) Reconciliations of total equity as at 31st March 2025 and 1st April 2024
(iv) Reconciliations of statement of profit and loss for the financial year ended 31st March 2025
(v) Reconciliations of total comprehensive income for the financial year ended 31st March 2025
(vi) Explanation of material adjustments to statement of cash flows
Note No : 40
A) FINANCIAL RISK MANAGEMENT
The Company's principal financial liabilities comprises of borrowings, trade payables, other payables and other financial liabilities . The main purpose of
these financial liabilities is to finance the Company's operations. The Company's principal financial assets include loans, trade and other receivables, and
cash and cash equivalents that derive directly from its operations. The Company also holds investments.
The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the management of these risks.
The Company's senior management ensures that the Company's financial risk activities are governed by appropriate policies and procedures and that
financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. It is the Company's policy that no
trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks,
which are summarised 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 three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by
market risk include loans and borrowings.
The Company has no direct exposure to foreign currency risk.
-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 has fixed deposits as margin money for a period between 3 months to exceeding 12 months. All the fixed deposits are with banks, accordingly
there is no significant interest rate risks pertaining to these deposits.
(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
investments, deposits with banks and financial institutions and other financial instruments.
(i) Trade receivables
The Company's customer profile include public sector enterprises. Accordingly , the Company's customer credit risk is very low. The Company's average
project execution cycle is around 18 to 36 months. General payment terms include mobilisation advance, monthly progress payments with a credit period
ranging from 45 to 90 days and certain retention money to be released at the end of the project. In some cases, retentions are substituted with bank
guarantees. The Company has a detailed review mechanism of overdue customer receivables at various levels within the organisation to ensure proper
attention and focus for realisation.
(c) Liquidity risk
Liquidity risk is the risk that the Company may encounter difficulty in meeting its present and future obligations associated with financial liabilities that are
required to be 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 overdrafts, bank loans and finance leases. The Company closely monitors its liquidity position and deploys a robust cash
management system. It aims to minimise these risks by generating sufficient cash flows from its current operations, which in addition to the available cash
and cash equivalents and sufficient committed fund facilities, will provide liquidity.The liquidity risk is managed on the basis of expected maturity
dates of the financial liabilities. The carrying amounts are assumed to be reasonable approximation of fair value.
B) Capital management
For the purpose of the Company's capital management, capital includes issued equity capital, compulsorily convertible preference shares, securities
premium and all other equity reserves attributable to the equity holders. The primary objective of the Company's capital management is to maximise the
shareholder value.The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of
the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company's policy
is to keep the gearing ratio between 0% and 25%. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash
equivalents.
The Company's overall strategy remains unchanged from previous year. The funding requirements are met through a mixture of equity, internal fund
generation.
The Company monitors capital on the basis of the gearing ratio which is net debt divided by total capital (equity plus net debt).
Net debt are non-current and current debts as reduced by cash and cash equivalents, other bank balances and current investments. Equity comprises all
components including other comprehensive income.
Note: 41 : ADDITIONAL REGULATORY INFORMATION
The Company has not been declared a wilful defaulter by any bank or financial institution or consortium thereof in accordance with the
guidelines on wilful defaulters issued by the RBI.
(B) The Company has not advanced, loaned any fund to/from any person or entity for lending or investing and has also not provided
guarantee on behalf of the ultimate beneficiary during the reporting years.
(C) There is no charge or satisfaction of charge which is yet to be registered with ROC beyond the statutory period.
(D) The company has working capital limit and is required to submit statements with banks and other financial institutions, the statement
submitted to the bank is in agreement with the books of account as told by the management of the company.
No proceedings have been initiated or pending against the Company for holding any Benami Property under the Benami Transactions (
v ' Prohibitions) Act, 1988 and the rules made thereunder.
No transactions have been found which were not recorded in the books of accounts or that has been surrendered or disclosed as income
(F)
during the year in the tax assessments.
The company does not have any relationship with companies struck off (as defined by Companies Act, 2013) and did not enter into
( ) transactions with any such company for the year ended 31st March 2026.
(H) The company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(I) Balance of Other Non Current Assets, Inventories, Trade Receivables, Advances to Suppliers, GST Recoverable & Payable , Security
Deposits (Received) & (Paid), Other Current & Non Current Financial Assets , Unsecured Loans, Trade Payables and Other Financial
Liabilities Current and have been taken at their book value and are subject to confirmation and reconciliation. . Cost of Sales & Services
as well as Gross Turnover as per GST Returns, GST Payable/ Recoverable have been taken at their book value and are subject to
confirmation and reconciliation. The Company has not deposited GST on Mobilisation Advance received from U.P Jal Nigam Kanpur and
Indore Municipal Corporation. Provision for Interest on Delayed Payment of MSME creditors under Section 22 of the MSME Act, 2006, if
any, made to concerned MSME creditors has been made by the management of the company.
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