2.19 Provisions, Contingent Liabilities & Assets:
A Provision is recognized when an enterprise has a present obligation as a result of past
event, it is probable that an outflow of resources will be required to settled the obligation
and a reliable estimate can be made of the amount of the obligation. Provisions are not
disclosed to its present value and are determined based on best management estimate taking
into account the risks and uncertainties surrounding the obligation required to settle the
obligation at the balance sheet date.
These are reviewed at each balance sheet date and adjusted to reflect the current best
estimates.
A contingent liability is a possible obligation that arises from past events and 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 enterprise or a present obligation that is not
recognised because it is not probable that an outflow of resources will be required to settle the
obligation.
A contingent asset is a possible asset that arises 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 enterprise.
Contingent liabilities and assets are not recognized but are disclosed in the notes.
2.20 Financial Instruments:
Financial assets and financial liabilities are recognized when the Company becomes a party to
the contractual provisions of the instruments. Financial assets and financial liabilities are
initially measured at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial assets and
financial liabilities at fair value through profit or loss) are added to or deducted from the fair
value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognized immediately in profit or loss.
Financial Assets:
(a) Classification: The Company classifies its financial assets in the following measurement
categories:
- those to be measured subsequently at fair value (either through other comprehensive
income, or through profit or loss), and
- those measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets
and the contractual terms of the cash flows.
(b) Initial Recognition: Financial assets are recognised initially at fair value considering the
concept of materiality. Transaction costs that are directly attributable to the acquisition of the
financial asset (other than financial assets at fair value through profit or loss) are added to the
fair value measured on initial recognition of financial assets.
(c) Subsequent Measurement of Financial Assets: Financial assets are subsequently
measured at amortized cost if they are held within a business whose objective is to hold these
assets in order to collect contractual cash flows and the contractual terms of the financial
asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income (FVTOCI): Financial
assets are subsequently measured at fair value through other comprehensive income
(FVTOCI), if it is held within a business model whose objective is achieved by both from
collection of contractual cash flows and selling the financial assets, where the assets’ cash
flows represent solely payments of principal and interest. Further equity instruments where
the Company has made an irrevocable election based on its business model, to classify as
instruments measured at FVTOCI, are measured subsequently at fair value through other
comprehensive income.
(d) Impairment of Financial Assets: The Company assesses on a forward looking basis the
expected credit losses associated with its assets carried at amortized cost and FVTOCI debt
instruments. The impairment methodology applied depends on whether there has been a
significant increase in credit risk.
(e) Derecognition of Financial Assets: A financial asset is primarily derecognised 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 recognise the transferred asset to the extent of the Company’s continuing
involvement. In that case, the Company also recognises 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.
Financial Liabilities:
(a) Classification: The Company classifies its financial liabilities in the following
measurement categories:
- Those to be measured subsequently at fair value through profit or loss, and
- Those measured at amortized cost using the effective interest method. The classification
depends on the entity’s business model for managing the financial liabilities and the
contractual terms of the cash flows.
(b) Initial Recognition: Financial liabilities are recognized at fair value on initial recognition
considering the concept of materiality. Transaction costs that are directly attributable to the
issue of financial liabilities that are not at fair value through profit or loss are reduced from
the fair value on initial recognition.
(c) Subsequent Measurement of Financial Liabilities: The measurement of financial
liabilities depends on their classification, as described below:
Amortised cost: After initial recognition, interest-bearing loans and borrowings are
subsequently measured at amortized cost using the Effective interest rate (EIR) method. Gains
and losses are recognised in profit or loss when the liabilities are derecognised as well as
through the EIR amortization process.
Amortised 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.
(d) Derecognition of Financial Liabilities: A financial liability is derecognised 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 recognised in the statement of profit or loss.
Offsetting of Financial Instruments
The Company offsets a financial asset and a financial liability when it currently has a legally
enforceable right to set off the recognized amounts and the Company intends either to settle
on a net basis, or to realize the asset and settle the liability simultaneously.
2.21 Fair Value Measurement:
The Company measures financial instruments, such as, equity instruments at fair value at
each reporting date.
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:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or
liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market
participants would use when pricing the asset or liability, assuming that market participants
act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s
ability to generate economic benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, maximizing the use of relevant
observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial
statements are categorized within the fair value hierarchy, described as follows, based on the
lowest level input that is significant to the fair value measurement as a whole:
- Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or
liabilities
- Level 2- Valuation techniques for which the lowest level input that is significant to the fair
value measurement isdirectly or indirectly observable
- Level 3- Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis,
the Company determineswhether transfers have occurred between levels in the hierarchy by
re-assessing categorization (based on the lowestlevel input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
The Company’s management determines the policies and procedures forboth recurring fair
value measurement, suchas instruments and unquoted financial assets measured at fair
value, and for non-recurring measurement,such as assets held for disposal in discontinued
operation.
At each reporting date, the management analyses the movements in the values of assets and
liabilities which are requiredto be re-measured or re-assessed as per the Company’s
accounting policies. For this analysis, the management verifiesthe major inputs applied in the
latest valuation by agreeing the information in the valuation computation to contractsand
other relevant documents.
The management also compares the change in the fair value ofeach asset and liability with
relevant external sources to determine whether the change is reasonable.
For the purpose of fair value disclosures, the Company has determined classes of assets and
liabilities on the basis ofthe nature, characteristics and risks of the asset or liability and the
level of the fair value hierarchy as explained above.
This note summaries accounting policy for fair value. Other fair value related disclosures are
given in the relevant notes.
2.22 Non-Current Asset Held for Sale and Discontinued Operations
Non-current assets are classified as held for sale if their carrying amount will be recovered
principallythrough a sale transaction rather than through continuing use. The criteria for held
for sale is regarded met only whenthe assets is available for immediate sale in its present
condition, subject only to terms that are usual and customaryfor sale of such assets, its sale is
highly probable; and it will genuinely be sold, not abandoned.
Non-current assets held for sale are measured at the lower of their carrying amount and fair
value less costs to sell,except for assets such as deferred tax assets.
An impairment loss is recognised for any initial or subsequent write-down of the asset to
fairvalue less costs to sell. A gain is recognised for any subsequent increases in fair value less
costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment
loss previously recognised. A gain or loss notpreviously recognised by the date of the sale of
the non-current asset (or disposal group) is recognised at the date of de-recognition.
Property, plant and equipment and intangible assets once classified as held for sale are not
depreciated or amortized.
A discontinued operation is a component of an entity that either has been disposed of, or is
classified as held for sale, and:
- represents a separate major line of business or geographical area of operations,
- is part of a single coordinated plan to dispose of a separate major line of business or
geographical area of operations.
Non-current assets classified as held for sale and the assets of a disposal group classified as
held for sale are presented separately from the other assets in the balance sheet. The
liabilities of a disposal group classified as held for sale are presented separately from other
liabilities in the balance sheet.
Discontinued operations are excluded from the results of continuing operations and are
presented as profit or loss before / after tax from discontinued operations in the statement of
profit and loss.
2.23 Segment Reporting and Accounting Policies
Operating segments are reported in a manner consistent with the internal reporting provided
to the chief operatingdecision maker. Chief operating decision maker review the performance
of the Company according to the nature ofproducts manufactured traded and services
provided, with each segment representing a strategic business unit thatoffers different
products and serves different markets. The analysis of segments is based on the activities
performed by each segment.
The Company prepares its segment information in conformity with the accounting policies
adopted for preparing andpresenting financial statements of the Company as a whole.
2.24 Cash and Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and
short-term deposits with anoriginal maturity of three months or less, which are subject to an
insignificant risk of changes in value.
2.25 Earnings per Share
(a) Basic EPS
Basic EPS is calculated by dividing the profit attributable to shareholders by the weighted
average number of shares outstanding during financial year adjusted for bonus elements in
the equity shares issued during the year.
(b) Diluted EPS
For the purpose of calculating diluted earnings per share, the net profit or loss for the year
attributable to equity shareholders and the weighted average number of shares outstanding
during the year are adjusted for the effects of all dilutive potential equity shares.
3 Key Sources of Estimation Uncertainty and Critical Accounting Judgements
In the course of applying the policies outlined in all notes under section 2 above, the Company
is required to make judgments, estimates and assumptions about the carrying amount of
assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the period in which the estimate is revised if the
revision affects only that period, or in the period of the revision and future period, if the
revision affects current and future period.
Key Sources of Estimation Uncertainty
(i) Useful lives of property, plant and equipment
Management reviews the useful lives of property, plant and equipment at least once a year.
Such lives are dependent upon an assessment of both the technical lives of the assets and
also their likely economic lives based on various internal and external factors including
relative efficiency and operating costs. Accordingly, depreciable lives are reviewed annually
using the best information available to the Management.
(ii) Impairment of property plant and equipment
Determining whether the property, plant and equipment are impaired requires an estimate in
the value in use of plant and equipment. The value in use calculation requires the
Management to estimate the future cash flows expected to arise from the property, plant and
equipment and a suitable discount rate in order to calculate present value. When the actual
cash flows are less than expected, a material impairment loss may arise.
(iii) Provisions and liabilities
Provisions and liabilities are recognized in the period when it becomes probable that there will
be a future outflow of funds resulting from past operations or events that can reasonably be
estimated. The timing of recognition requires application of judgment to existing facts and
circumstances which may be subject to change. The amounts are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of
the time value of money and the risks specific to the liability.
(iv) Impairment of investments in joint ventures and associate
Determining whether the investments in joint ventures and associate are impaired requires an
estimate in the value in use of investments. In considering the value in use, the Management
have anticipated the future commodity prices, capacity utilization of plants, operating
margins, and availability of infrastructure, discount rates and other factors of the underlying
businesses / operations of the investee companies. Any subsequent changes to the cash flows
due to changes in the above mentioned factors could impact the carrying value of investments.
(v) Contingencies
In the normal course of business, contingent liabilities may arise from litigation and other
claims against the Company. Potential liabilities that are possible but not probable of
crystallizing or are very difficult to quantify reliably are treated as contingent liabilities. Such
liabilities are disclosed in the notes but are not recognized.
(vi) Fair value measurements
When the fair values of financial assets or financial liabilities recorded or disclosed in the
financial statements cannot be measured based on quoted prices in active markets, their fair
value is measured using valuation techniques including the DCF model. The inputs to these
models are taken from observable markets where possible, but where this is not feasible, a
degree of judgment is required in establishing fair values. Judgments include consideration of
inputs such as liquidity risk, credit risk and volatility.
(vii) Taxes
Deferred tax assets are recognized for unused tax losses to the extent that it is probable that
taxable profit will be available against which the losses can be utilized. Significant
management judgment is required to determine the amount of deferred tax assets that can be
recognised, based upon the likely timing and the level of future taxable profits together with
future tax planning strategies.
(i) Company has taken assets on leases which majorly include Land & Building and Machinery.
(ii) There are exemption provided by accounting standard for following leases as defined in para 5
of IND AS-116:
a. Short term lease and
b. Leases for which the underlying asset is of low value.
(iii) Under such exemption company booked expenses of Rs 2037.16 Lacs (P.Y. Rs. 1993.81 lacs)
as Rental expenses and Machine Hiring.
(iv) Company has accounted as per guidance provided by Ind AS -116 and recognize Right to use
assets and lease liability for which complete disclosure is provided in note no. 8.
(i) General reserve
The Company created a General Reserve in earlier years pursuant to the provisions of the
Companies Act,1956 where in certain percentage of profits were required to be transferred to
General Reserve before declaring dividends. As per Companies Act 2013, the requirements to
transfer profits to General Reserve is not mandatory. General Reserve is a free reserve available to
the company.
(ii) Dividends
The Company declared and paid final dividends in Indian rupees Rs. 481.52 lacs for the year
2023- 24 and Board recommend dividend of Rs. 0.40 In Board meeting dated 30.05.2025 and
such amount will be payable after approval in annual general meeting by shareholders for FY
2024- 25.
(iii) Capital Reserve
Reserve is created on amalgamation as per statutory requirement for Rs. 81.67 crore and balance
Rs. 41.51 crore on account of sales of assets and investments.
(iv) Other Comprehensive Income (Refer Note : 45)
(A) Remeasurements of the Net Defined Benefit liability, comprising actuarial gains and losses on
remeasurement of net defined benefits, are recognized in Other Comprehensive Income. These
amounts are not reclassified to profit or loss in subsequent periods.
(B) Changes in the fair value of equity instruments designated as measured through Other
Comprehensive Income are recognized in OCI. The cumulative gains or losses are not reclassified
to profit or loss on disposal of the instruments.
(C) Foreign Currency Translation Reserve (FCTR) represents the exchange differences arising from
translating the financial statements of foreign operations into Indian Rupees. These differences
are recognized in Other Comprehensive Income and accumulated under equity.
(b) Defined Benefit Plans
Gratuity has been provided on the basis of actuarial valuation using the project unit credit
method and same is non-funded. The obligation for leave encashment is recognized in the same
manner as gratuity.
The plans in India typically expose the Company to actuarial risks such as: investment risk,
interest rate risk, longevity risk and salary risk.
Investment risk: The liability is not funded and is not relevant in Company.
Interest risk: The rate used to discount post-employment benefit obligation should be
determined by reference to market yields at the balance sheet date on Government bonds. The
currency and term of government bonds should be in consistent with the currency and estimated
term of post-employment benefit obligation.
Salary risk: Salary increase should take into account inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market.
Discount rate
Discount Rate for the valuation is based on Yield to Maturity (YTM) available on Government
bonds having similar term to decrement-adjusted estimated term of liabilities. Estimated term of
liabilities, for selection of discount rate, is calculated as average term of all future benefit
payments on account of death, retirement or resignation weighted by corresponding amount of
benefits.
Salary growth rate
Salary growth rate is company’s long term best estimate as to salary increases & takes account of
inflation, seniority, promotion, business plan, HR policy and other relevant factors on long term
basis as provided in relevant accounting standard.
Withdrawal rate
Assumptions regarding withdrawal rates are also set based on the estimates of expected long-term
future employee turnover within the organization.
Mortality rate
Indian Assured Lives Mortality (2012-14) as issued by Institute of Actuaries of India has been
used.
Projected Unit Credit Method
As required under Para 51 (b) of Ind AS 19, valuation of plan benefits is done using Projected Unit
Credit Method. Under this method, only benefits accrued till the date of valuation (i.e. based on
service unto date of valuation) are considered for valuation. Present value of Defined Benefit
Obligation is calculated by projecting salaries, exits due to death, resignation and other
decrements, if any, and benefit payments made during each month till the time of retirement of
each active member using assumed rates of salary escalation, mortality & employee turnover
rates. The expected benefit payments are then discounted back from the expected future date of
payment to the date of valuation using the assumed discount rate.
Ind AS 19 also requires 'Service Cost' to be calculated separately in respect of benefit accrued
during the current period. Service Cost is calculated using the same method as described above;
however instead of all accrued benefits, benefit accrued over the current reporting period is
considered.
Notes:
a) The discount rate is based on the prevailing market yield on government securities as at the
balance sheet date for the estimated term of obligation.
b) The estimates of future salary increase considered in actuarial valuation, takes account of
inflation, seniority, promotion and other relevant factors, such as supply and demand in the
employment market.
c) The gratuity and Leave Encashment liabilities are unfunded. Accordingly, information
regarding planned assets are not applicable.
46 Segment Reporting:
(a) Primary Segment: Business Segment
Based on the guiding principles given in “IndAccounting Standard -108 Operating Segments”
notified under Companies (Accounting standard) Rules 2006, the Company’s operating business
are organized and managed separately according to the nature of products manufactured and
services provided. The identified reportable are:
1 Engineering Segment
2 Real Estate Segment
3 Other segment which include hostel, packaging and other related activities
Secondary Segment: Geographical segment:
The analysis of Geographical segment is based on the geographical location i.e. domestic and
overseas markets of the customers.
Secondary Segment Reporting (By Geographical segment)
The following is the distribution of the company's revenue from operation (net) by Geographical
markets, regardless of where the goods were produced:
(b) Segment accounting polices
In addition to the significant accounting policies applicable to the business segment as set in
note 2.23, the accounting policies in relation to segment accounting are as under:
i) Segment revenue & expenses
Joint revenue and expenses of segments are allocated amongst them on a reasonable basis. All
other segment revenue and expenses are directly attributable to the segments.
ii) Segment assets and liabilities
Segment assets include all operating assets used by a segment and consist principally of
operating cash, receivables, inventories and fixed assets, net of allowance and provisions, which
are reported as direct off sets in the balance sheet. Segment Liabilities include all operating
Liabilities and consist principally of trade payables & accrued liabilities. Segment assets and
liabilities do not include deferred income taxes except in the Engineering division. While most
of the assets/liabilities can be directly attributed to individual segments, the carrying amount of
certain assets /liabilities pertaining to two more segments are allocated to the segments on a
reasonable basis.
iii) Inter segment sales
Inter segment sales between operating segments are accounted for at market price. These
transactions are eliminated in consolidation. The main division is engineering division and
funds provided by engineering division to other division and interest on such balances are not
charged.
iv) Other segment having revenue from sale of external customers in excess of 10% of total
revenue of all segments is shown separately and others are shown in other segment.
47.2 Risk Management
(I) Capital Risk Management
The Company being in a capital intensive industry, its objective is to maintain strong credit rating
healthy capital ratios and establish a capital structure that would maximize the return to
stakeholders through optimum mix of debt and equity.
The Company’s capital requirement is mainly to fund its capacity expansion, repayment of
principal and interest on its borrowings and strategic acquisitions. The principal source of funding
of the Company has been, and is expected to continue to be, cash generated from its operations
supplemented by funding from bank borrowings and the capital markets.
The Company regularly considers other financing and refinancing opportunities to diversify its
debt profile, reduce interest cost and elongate the maturity of its debt portfolio, and closely
monitors its judicious allocation amongst competing capital expansion projects and strategic
acquisitions, to capture market opportunities at minimum risk.
Note:
(1.) Equity includes all capital and reserves including capital reserves of the Company that are
managed as capital.
(2.) Debt is defined as long and short term borrowings (including financial guarantees contracts).
(II) Financial Risk Management
The Company manages financial Risk by its Board of Directors for overseeing the Risk
Management Framework and developing and monitoring the Company’s risk management
policies. The risk management policies are established to ensure timely identification and
evaluation of risks, setting acceptable risk thresholds, identifying and mapping controls against
these risks, monitor the risks and their limits, improve risk awareness and transparency. Risk
management policies and systems are reviewed regularly to reflect changes in the market
conditions and the Company’s activities to provide reliable information to the Management and
the Board to evaluate the adequacy of the risk management framework in relation to the risk
faced by the Company.
The risk management policies aim to mitigate the following risks arising from the financial
instruments:
(A) Market risk
(B) Credit risk; and
(C) Liquidity risk
(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 the market prices. The Company is exposed in the ordinary course
of its business to risks related to changes in foreign currency exchange rates, commodity prices
and interest rates.
(i) Foreign Currency Risk Management [As Per Annexure 47.2(A)(i)]
The Company’s functional currency is Indian Rupees (INR). The Company undertakes transactions
denominated in foreign currencies; consequently, exposure to exchange rate fluctuations arise.
Volatility in exchange rates affects the Company’s revenue from export markets and the costs of
imports, primarily in relation to raw materials. The Company is exposed to exchange rate risk
under its trade and debt portfolio.
Adverse movements in the exchange rate between the Rupee and any relevant foreign currency
result’s in increase in the Company’s overall debt position in Rupee terms without the Company
having incurred additional debt and favorable movements in the exchange rates will conversely
result in reduction in the Company’s receivables in foreign currency.
(ii) Commodity Price Risk -:
The Company’s revenue is exposed to the market risk of price fluctuations in its division is as
under:
The Company generally takes Turnkey projects from government departments. The contract price
is generally fix and free from any price risk subject to change in any government policy or rules.
Real Estate Segment: The Company is exposed to risk of prices of Residential and commercial
units. These prices may be influenced by factors such as supply and demand, and regional
economic conditions.
The Company primarily purchases its raw materials in the open market from third parties. The
Company is therefore subject to fluctuations in prices for the purchase of Building Material and
other raw material inputs. The Company purchased substantially all of its Raw Material from
third parties in the open market.
The Company aims to sell the products at prevailing market prices. Similarly the Company
procures raw materials on prevailing market rates as the selling prices of its products and the
prices of input raw materials move in the same direction.
(iii) 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 is exposed to interest rate
risk because funds are borrowed at both fixed and floating interest rates. Interest rate risk is
measured by using the cash flow sensitivity for changes in variable interest rate.
The borrowings of the Company are principally denominated in rupees with a mix of fixed and
floating rates of interest. The Company has exposure to interest rate risk, arising principally on
changes in base lending rate and LIBOR rates.
(B) Credit Risk Management:
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting
in financial loss to the Company. Credit risk encompasses of both, the direct risk of default and
the risk of deterioration of creditworthiness as well as concentration risks.
Company’s credit risk arises principally from the trade receivables, loans, investments in debt
securities, cash & cash equivalents.
Trade Receivables:
The Company’s customer profile includes public sector enterprises, state owned companies and
private corporate as well as large individuals. Accordingly Company’s customer risk is low. The
Company’s average project execution cycle is around 24 to 36 months, general payment terms
includes mobilization advances, 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.
Customer credit risk is managed centrally by the Company and subject to established policy,
procedures and control relating to customer credit risk management. Credit quality of a customer
is assessed based on an extensive credit rating scorecard. The history of trade receivables shows a
negligible allowance for bad and doubtful debts.
Cash and cash equivalents and other bank balances
The Company held cash and cash equivalents and other bank balances as at March 31, 2025 is
Rs. 7783.29 Lacs. The cash and cash equivalents are held with bank with good credit ratings and
financial institution counterparties with good market standing.
(C) Liquidity Risk Management
Liquidity risk refers to the risk of financial distress or extraordinary high financing costs arising
due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate
and requiring financing. The Company requires funds both for short term operational needs as
well as for long term capital expenditure growth projects. The Company generates sufficient cash
flow for operations, which together with the available cash and cash equivalents and short term
investments provide liquidity in the short-term and long-term. . The Company has established an
appropriate liquidity risk management framework for the management of the Company’s short,
medium and long-term funding and liquidity management requirements. The Company manages
liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities,
by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles
of financial assets and liabilities.
The following tables detail the Company’s remaining contractual maturity for its non-derivative
financial liabilities with agreed repayment periods and its non-derivative financial assets. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on
the earliest date on which the Company can be required to pay. The tables include both interest
and principal cash flows.
48 Disclosures as per IND AS -115
a) Performance Obligations and Remaining Performance Obligations
i) The remaining performance obligation disclosure provides the aggregate amount of the
transaction price yet to be recognized as at the end of the reporting period and an explanation as
to when the Company expects to recognize these amounts in revenue. Applying the practical
expedient as given in Ind AS 115, the Company has not disclosed the remaining performance
obligation related disclosures for contracts where the revenue recognized corresponds directly with
the value to the customer of the entity's performance completed to date, typically those contracts
where invoicing is on time and material basis. Remaining performance obligation estimates are
subject to change and are affected by several factors, including terminations, changes in the scope
of contracts, periodic revalidations, adjustment for revenue that has not materialized and
adjustments for currency.
b) Disaggregation of revenue of segments as required by Ind As-115, has already been disclosed
under note no. 46.
c) Out of Revenue from operations Rs 66627.77 Lacs (P.Y. Rs. 105801.07 lacs) recognized under
IndAS 115 during the year, Rs 64456.60 Lacs (P.Y. Rs. 101281.02 lacs) is recognized over a
period of time and Rs. 2171.12 Lacs (P.Y. Rs. 4520.05 lacs) is recognized at point in time.
d) There is no material impact on provision for expected credit loss so movement analysis is not
required.
e) Contract balances: Company recognized revenue as per Ind AS 115 and revenue is directly
debited in trade receivables instead of debiting it into contract assets. Retention money deducted
amounting to Rs 11328.28 Lacs (P.Y. Rs. 7812.37 Lacs) is included in Trade receivables.
Company's Trade receivables includes unbilled receivable of Rs 4981.42 (P.Y. Rs. 5860.46 lacs )
in balance sheet which are recognized as contact assets in balance sheets. Contract liabilities are
those liabilities for which revenue recognized on point in time approach and amount has been
received as booking (only in real estate activities).
Notes:
I Above loans are unsecured
II Above figures include interest accrued
(A) (i) The Company, as at 31 March 2025, has (i) a non-current investment amounting to Rs
5589.70 lacs (31 March 2024: 5589.70 Lacs), and current advances of Rs 6024.00 lacs
(31stMarch 2024 : Rs. 6492.81 Lacs) in Bhilwara Jaipur Toll Road Private Limited, subsidiary,
is holding 51.28% (P.Y. 51.28%) share in Special Purpose Vehicle (SPV). SPV had been
awarded project by Rajasthan State Govt. through PWD to Design, Build, Finance, Operate and
transfer (DBFOT) SH-12 toll road through an agreement dated 12.07.2010. SPV was granted a
right to collect toll fees for 22 years starting from 02.02.2012 till 02.02.2034. Company is
fulfilling its obligations perfectly despite of regular defaults made by government in fulfilling its
obligations.
The Special Purpose Vehicle (SPV) has filed for termination with the respective authority and
claimed the amount invested along with termination payments as per the concession
agreement, amounting to Rs. 61,200.00 Lakhs. The arbitrator has awarded Rs. 77,943.00
Lakhs in favor of the SPV. Out of this awarded amount, the SPV has received Rs. 25,054.00
Lakhs to comply with the commercial court's order. This amount has been used to repay loans
and cover other expenses. Amount Received from PWD is treated as current liability in
Financial statements of SPV.
However, neither the arbitration award nor the amount received from the government has been
accounted for in the SPV's financial statements as of the balance sheet date. This is because
the Public Works Department (PWD) has challenged the arbitrator's award in an appeal to the
High Court. Given the ongoing legal proceedings, the recognition of this amount in the financial
statements has been deferred until there is a final resolution of the case.
B) The Company, as at 31 March 2025, has a non-current investment amounting to Rs 2.50 lacs
(31 March 2024: Rs. 2.50 lacs), and non-current advances of Rs 748.43 lacs (31st March, 2024
Rs. 748.15 Lacs) in Gurha Thermal Power Company Limited, a Joint Venture, is holding 50%
share in Joint Venture.The Joint Venture has terminated the Power Purchase Agreement (PPA)
on 15-07-2015 with Rajasthan RajyaVidhyut Prasaran Nigam Ltd (RRVPNL). The Joint Venture
was formed for the Business of Power generation and selling the same to the RRVPNL. As the
agreement is terminated by the Joint Venture and the Joint Venture has also filed the claim
against the RRVPNL for the recovery of the amount invested by the Company of Rs. 750.16 Lacs
plus interest. The Joint Venture has filed petition before the Rajasthan Electricity Regulatory
Commission, Jaipur. RERC vide its order dated 09.01.2018 dismissed the petition. The Joint
Venture challenged the order of RERC, Jaipur by filing appeal before the APTEL (Appellate
Tribunal for Electricity), New Delhi.
The Joint Venture has filed for termination with the respective authority (DISCOMS) and has
claimed the amount invested along with termination payments. Initially, the Rajasthan
Electricity Regulatory Commission (RERC) dismissed the claim. Subsequently, the Joint
Venture preferred an appeal before the Appellate Tribunal for Electricity (APTEL).
APTEL ruled in favor of the Joint Venture, awarding a total of Rs. 5,390.92 Lakhs, inclusive of
interest. However, this verdict has not been accounted for in the Joint Venture's financial
statements as of the balance sheet date. The decision has not been recognized in the financial
statements due to the possibility of an appeal being filed against the APTEL's verdict in the
Honorable Supreme Court. As the final outcome remains uncertain, the Joint Venture has
deferred the recognition of the awarded amount in its financial records.
56 In every payment of running bill, project authority deduct retention amount on account of
defect liabilities arise during the contract period which is either released by submitting bank
guarantee or released after successful completion of project. This retention amount keeps
accumulating. Collection of retention money is probable and therefore debtors on account of
retention money are considered good based on the track record and previous performance of
the company. Deduction of retention money has been claimed as per the provisions of Income
Tax Computation and Disclosure Standards (ICDS). Company have created deferred tax on
retention money due to difference in tax base and accounting base as per Ind As 12 and same
has been considered for previous year as well.
57 In case of UP Amroha & Rampur (Revenue C.Y. Rs 14145.73 Lacs and P.Y Rs 41453.95 Lacs)
project, which has been allocated to OMIL-JWIL JV and SSNNL Gujrat (Revenue C.Y. Rs 550.53
lacs and P.Y. Rs. 356.71 lacs ) project which has been allotted to Om Metals -Spml JV but
being a lead partner, revenue is been recognized in comapny’s books and Income tax is
deducted in the name of Om Infra Limited itself. All payments were received by Om Infra
Limited and no objection for the same has been received from project authority .
58 Insurance cover has been taken for bulky items at Kota factory like steel plates/ Machines etc.
which are not easily subjected to for burglary or theft.
59 Due to high labour turnover at hilly or remote locations of project site some time it is very
difficult to accomplish the labour related compliances in these regions.
60 The provision of Employees benefits has been taken on the basis of best judgment policy and
prudent business practice as assessed and provided by the Board of directors and
Remuneration committee.
61 After the award of work, sometimes other partner of the JV falls short of its financial
commitment in JV and the one partner has to meet all financial obligations. This entails for
modified profit percentage to the other partner in JV depending on nature and circumstances of
the project and the JV agreement is supplemented to provide such effect.
62 Corporate Social Responsibility
As per section 135 of the Companies Act, 2013, a company meeting the applicability threshold,
needs to spend at least 2% of its average net profit for the immediately preceding three financial
years of corporate social responsibility (CSR) activities. The areas for CSR activities are
eradication of hunger and malnutrition, promoting education, art and culture, healthcare,
destitute care and rehabilitation, environment sustainability, disaster relief and rural
development projects. A CSR committee has been formed by the Company as per the Act. The
funds were primarily allocated to a corpus and utilized through the year on these activities
which are specified in Schedule VII of the Companies Act, 2013.
Company has contributed a sum of Rs 85 Lacs to Karmaputra Charitable Trust and as per
certificate of utilization received , such amount is fully utilized by the trust and company relied
on this certificate for utilization of CSR amount .
• Gross amount required to be spent by the Company during the year is Rs 93 Lacs (P.Y. Rs.
35.00 Lakhs).
63 Claims
The company raised various claims with various customer/ parties/subsidiaries of
company/Joint Ventures/Subsidiaries amounting to Rs 58116.80 (Rs. 55719.44 lacs in
Previous Years), against these claims, the Arbitrator awarded claims of Rs. 1401.70 Lacs (P.Y
Rs.1477.70 lacs). The company has not been recognizing the revenue on the aforesaid
Arbitration Awards on its claimed including interest as awarded from time to time. There are
also some counter claims by the customer / Other Parties amounting to Rs 1521.02 lacs (Rs.
1805.74 Lacs included in previous year) against these claims, the Arbitrator awarded claims to
the customer of Rs 82.24 lacs (Rs 82.24 lacs in the Previous Year). These awards are further
challenged by the customer as well as the Company in the higher courts as the case may be. In
accordance with past practice, the Company has not made adjustment because the same has
not become rule of the court due to the objections filed by customer / parties and by the
Company.
64 Amount received of Rs 1.68 lacs (P.Y. Rs. 1.30 Lacs) as profit from Joint venture namely OMIL
VKMCPL JV (Pench -II) is received as per agreement dated 15th Nov 2019 between company
and Vijay Kumar Mishra Construction Pvt. Ltd. (VKMCPL) . As per agreement company waived
its rights in OMIL-VKMCPL JV (Pench II) in lieu of 1.5% of turnover to be received as profit only
but such amount is shown as contractual work by VKMCPL and TDS is deducted accordingly.
But company has booked such amount as profit from JV only as per agreement terms.
65 The company, through its two subsidiaries namely Gujrat Warehousing Private Limited (GWPL)
& Bihar Logistics Private Limited (BLPL), had signed a concession agreement with Food
Corporation of India (FCI) for the construction of silos on a Build, Own, Develop, and Operate
(BODO) basis for a period of 30 years in Gujarat and Bihar. While a significant portion of the
required land was acquired, a small portion encountered statutory hurdles. As a result, the
subsidiaries had to surrender the project to FCI and sought a claim for the both projects. The
matter is currently under arbitration. Meanwhile, the GWPL has sold the major portion of the
acquired land in Gujarat, and the land in Bihar is in the process of monetization.
The company has invested Rs. 7.53 crores as share capital and advanced Rs. 12.07 crores in
both subsidiaries, which are considered good and recoverable.
66 In Chamera project (NHPC), NHPC has awarded the incentive for compressed schedule but due
to some delays in project, NHPC had sought BG from us and referred the matter to arbitrator.
Arbitrator awarded a claim of Rs.544.72 lacs to NHPC and company has paid such claim and
booked expenditure against the same.
67 Financial Statements includes amount of Rs 233.32 lacs ( P.y. Rs. 308.26 Lacs) as income.
Such amount written off is not receivable or payable by company as decided by management
but no confirmation/ affirmations has been received from the respective parties. Such amount
was pending in books since long.
* Reason for not being held in the name of company
The property can not be registered under the name of company as there are some judicial
proceedings continuing against the whole building.
(ii) Revaluation of Property, Plant and Equipment (PPE): The Company has not revalued its PPE,
accordingly the disclosure of information related to this point is not applicable.
(iii) Details of Benami Property Held: 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 and rules made thereunder.
(iv) Capital-Work-in Progress (CWIP): The Company have Capital Work in Process as on 31st March,
2025.
(v) Intangible Assets under Development: The Company does not have Intangible assets under
development as on 31st March, 2025.
(vi) Loans and advances granted to promoters, directors, KMPs and the related parties: The
Company has not granted loans and advances in the nature of loan to promoters, directors, KMPs
and the related parties (as defined under the Act) either severally or jointly with any other person,
that are repayable on demand or without specifying any terms or period of repayment except loans
and advance to its Joint venture and Subsidiaries (Refer Note - 10 & 17)
(vii) Security of Current Assets against Borrowings: The Company has borrowed funds from banks
for working capital management and hypothicated the Inventories and Book Debts for the same.
(viii) Willful Defaulter: The Company has not been declared a wilful defaulter by any bank or financial
institution or government, or any government authority.
(ix) Relationship with Struck off Companies : The company does not have any transactions with
companies struck-off under section 248 of Companies Act, 2013 or section 560 of Companies Act,
1956.
(x) Registration of Charges or Satisfaction with Registrar of Companies: The Company has
created charge(s) on its borrowings, and all terms and conditions relating to such charges have
been complied with as at the reporting date.
(xi) Compliance with Number of Layers of Companies: The Company has complied with the number
of layers prescribed under clause (87) of section 2 of the Companies Act 2013, read with
Companies ( Restriction on Number of Layers) Rules 2017.
(xii) Compliance with approved Scheme(s) of Arrangements: The Company has not undertaken any
such transaction, accordingly the disclosure of information related to this point is not applicable.
(xiii) Utilization of Borrowed Funds and Share Premium:
a) The Company has not advanced or loan or invested funds (either borrowed funds or share
premium or any other source or kind of funds) to any other persons or entity, including foreign
entity (intermediaries) with the understanding that the intermediary shall directly or indirectly
lend or invest in other persons or entitles identified in any manner whatsoever by or on behalf of
the Company (ultimate Beneficiaries) or provided any guarantee, security or the like to or on
behalf of the Ultimate Beneficiaries.
b) The Company has not received any fund from any person or entity, including foreign entity
(Funding Party) with the understanding that the Company shall directly or indirectly lend or
invest in other person or entity identified in any manner whatsoever by or on behalf of the
Funding Party (Ultimate Beneficiaries) or provided any guarantee, security or the like to or on
behalf of the Ultimate Beneficiaries.
(xv) Undisclosed Income: The company does not have any transaction which is not recorded books of
accounts that has been surrendered or disclosed as income during the year in the tax
assessments under the Income Tax Act, 1961 .
(xvi) Details of Crypto Currency or Virtual Currency: The company does not have any
cryptocurrency transactions during the financial year.
(xvii) The Company has not entered into any non-cash transactions with its directors or persons
connected with its directors and hence provisions of Section 192 of the Act are not applicable to
the Company.
(xviii) The other additional disclosures and information's (not specifically disclosed) as required by
Schedule III are either nil or not applicable.
69 The Company have proposed Rs 0.40 final dividend for the year ended 31 March 2025 which is
subject to the approval of the members at the ensuing Annual General Meeting. The dividend
declared is in accordance with section 123 of the Act to the extent it applies to declaration of
dividend.
72 Figures for previous year have been re-arranged/recomapnyed wherever necessary to
make them comparable.
Significant Accounting Policies and Notes To The Financial Statements
Signed in terms of our report of even date annexed
For Ravi Sharma & Company For and on behalf of Board of Directors
Chartered Accountants OM INFRA LIMITED
Firm's Registration No. 015143C
CA Sourabh Jain Dharam Prakash Kothari Vikas Kothari
(Partner) (Chairman) (MD & CEO)
M.No 431571 (DIN:00035298)
Dated : 30.05.2025
Place : Delhi
UDIN: 25431571BMOLUM216 Sunil Kothari S.K.Jain Reena Jain
(Vice Chairman) (CFO) (Company
(DIN : 00220940) Secretary)
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