a) Capitalised borrowing costs

The amount of borrowing costs capitalised during the year ended March 31, 2023 was INR Nil (March 31, 2022 - INR Nil).

b) Charge on Property, plant and equipment

Property, plant and equipment with a carrying amount of INR Nil (March 31,2022 - INR Nil) lakhs and Vehicles with a carrying amount of INR 141.45 lakhs (March 31,2022 - INR 237.53 lakhs) are subject to a first charge to secure the Company’s bank loans.

Note: (a) 1. includes advance to Partnership firm in which the company is partner INR 89.96 lakhs (31.03.2022 : INR 89.96 lakhs)

2. includes advance to Private Companies in which any director is director INR 1628.89 lakhs (31.03.2022 : INR 1710.93 lakhs) Note: (b) includes deposit to Director INR 500.00 lakhs ( 31.03.2022 : INR 500.00 lakhs)

(d) Terms and conditions of transactions with related parties:

The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free. For the year ended March 31, 2023, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2022 - Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

29. Segment information

The senior management of the Company monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Accordingly, the Company has identified following as its reportable segment for the purpose of Ind AS 108:

a) Real estate segment;

b) Hotels and resorts segment.

Real Estate segment (RE) is into development, sale, management and operation of all or any part of Town ships, housing projects, also includes leasing of self owned commercial premises.

Hotels and Resorts Segment (HR) is into upkeep and maintenance of Hotels, Restaurants and Resorts. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. Also, the Company’s financing (including finance costs and finance income) and income taxes are managed on a overall basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

The following table’s present revenue and profit information for the Company’s operating segments for the year ended March 31, 2023 and March 31, 2022 respectively.

30. Gratuity

The Company has a defined benefit gratuity plan (funded). The Company’s defined benefit gratuity plan is a final salary plan, which requires contributions to be made to a separately administered fund.

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age.

31. Earnings per share

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity Shares.

32. As stated in Note 3.1(ii) for recognizing profit on projects, stage of completion is determined as a proportion that project costs incurred for the work performed bear to the estimated total costs. Further, as stated in that note expected loss on projects is recognized when it is probable that the total project costs will exceed the total project revenue. For this purpose total project costs are ascertained on the basis of project costs incurred and costs to completion of projects on progress, which is arrived at by the Management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc., which being technical matters have been relied on by auditors. Further, in respect of certain properties where sale agreement has been entered with parties even though money has not been received as per stipulation in the contract, the Company has recognized revenue and debtors as management is confident that it shall be able to realize the sale proceeds.

33. As stated in Note.3.1(iii) the method used to recognize the contract revenue is percentage of completion method measured by survey of work performed. Further, as stated in the note, expected loss on contracts is recognized when it is probable that the total contract cost will exceed the total contract revenue. For this purpose total contract cost is ascertained on the basis of contract cost incurred and cost to completion of contract on progress ,which is arrived at by the management, based on current technical data, forecasts and estimate of net expenditure to be incurred in future including for contingencies etc, which being technical matters have been relied on by auditors.

34. Commitments and contingencies

a. Leases

Operating lease obligations: The Company has taken equipments and motor vehicles under Equipment /Auto Loan arrangements for which the legal ownership will be transferred to the company at the end of the Loan period as per the agreement. The Company has paid INR 64.31 lakhs (March 31, 2022 -INR 94.46 lakhs) during the year towards minimum lease payments.

b. Commitments

The estimated amount of contracts, net of advances remaining to be executed on capital account is Nil (March 31, 2022 -Nil).

c. Contingent liabilities (to the extent not provided for)

*The company has disputed the liability and replied to the show cause notice, that the short payment of service tax, if any, demanded by the Service Tax Authorities is not maintainable under law.

Further, as per Circular No.108/02/2009-ST, dated 29.01.2009 issued by CBEC, no service tax is payable on the Construction of Complex Service for the impugned period 2006-07 to 2010-11. During the impugned period, the company had deposited with the Service Tax Authorities, whatever service tax collected from the customers. The Company has filed appeal on 08.04.2013 with CESTAT, Bangalore against order dated 04.01.13 of Commissioner of Service Tax. CESTAT has pronounced stay against recovery during the pendency of appeal.

**The company has disputed the Income Tax liability for the assessment Year 2020-21 with a demand of Income tax for Rs.51,96,85,380/- by mechanical addition of contingent liabilities of Rs.1,48,05,28,000/-and replied to the demand notice. Further the company has filed a writ petition in the High Court of Telengana and the matter has been stayed by the Honourable High Court of Telangana.

35.Based on the information available with the Company, there are two suppliers who are registered as micro, small or medium enterprises under “The Micro, Small and Medium Enterprises Development Act, 2006” and as at March 31, 2023 the amount due to them by the company is Nil (March 31, 2022 Nil)

39. (a) Trade Receivables (Note 12), unsecured considered good, includes Rs.15,099.42 lakhs (31-032022: Rs.16,375.58 lakhs), outstanding for more than six months. As a result of economic slowdown and recession in realty sector, the realizations from customers are slow. The company has provided Rs.1246.96 lakhs towards doubtful debts against Trade receivables, unsecured, considered doubtful. During the year the company has written of bad and doubtful debts to the tune of Rs.1094.77 lakhs (31.03.2022: Nil)

(b) Non-current assets (Note 10) include advances given to Landlords/ developers towards certain projects amounting to Rs.5,840.53 lakhs (31-03-2022: Rs.6,090.31 lakhs) and Short Term Loans and Advances to suppliers, etc amounting to Rs.894.87 lakhs (31-03-2022: Rs.1031.46 lakhs) are outstanding. An amount of Rs.700 lakhs is set aside towards provision for advances considered as doubtful.

41. The Secured Loan (Inter Corporate Deposit) of Rs.3,200.00 Lakhs from Prajay Properties Private Limited is continuing as Interest free by virtue of the agreement Dated 6^th October ‘2009.

Since some of the statutory approvals for Prajay Megapolis project are yet to be obtained, crystallization of loan repayment time schedule has not taken place as on 31.03.23.

In furtherance to the mediation proceedings pertaining to the disputes between the Investor Entities (i.e. White Stock Limited & Belclare Limited) and Prajay Entities including Prajay Engineers Syndicate Limited (The Company), The Settlement Agreement has been executed amongst and by the parties, under the auspices of International Arbitration and Mediation Centre, (IAMC) Hyderabad and the filing of the compromise terms before the National Company Law Tribunal (NCLT), Hyderabad has been completed. The cases filed by the Investor Entities before the Hon’ble NCLT Bench, Hyderabad Bench have accordingly been disposed off.

The Government of Andhra Pradesh (Youth Advancement Tourism & Culture Department, now the Government of Telangana) and the company along with its subsidiary M/s Secunderabad Golf & Leisure Resorts Private Limited, a special purpose company to develop Golf Course, had entered into Lease Agreement and Construction & Management agreement. Subsequently, for the issues that arose between the company and the Tourism Department, the Company invoked the Arbitration clause as per the Agreements and the Hon’ble High Court vide its order dated 28.07.2022 appointed Hon’ble S.M.Rafee (retired District judge) as the Arbitrator in Arbitration Application No.86 of 2022. The Arbitration proceedings are in progress.

42. Financial risk management objectives and policies

The Company’s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance and support Company's operations. The Company’s principal financial assets include inventory, trade and other receivables, cash and cash equivalents and land advances and refundable deposits that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized 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 two types of risk: interest rate 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 and refundable deposits. The sensitivity analysis in the following sections relate to the position as at March 31, 2023 and March 31, 2022. The sensitivity analyses have been prepared on the basis that the amount of net debt and the ratio of fixed to floating interest rates of the debt.

The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other post retirement obligations; provisions.

The below assumption has been made in calculating the sensitivity analysis:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2023 and March 31, 2022.

i. 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 manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company does not enter into any interest rate swaps.

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 refundable joint development deposits, security deposits, loans to employees and other financial instruments.

Trade receivables

• Receivables resulting from sale of properties: Customer credit risk is managed by requiring customers to pay advances before transfer of ownership, therefore, substantially eliminating the Company’s credit risk in this respect.

• Receivables resulting from other than sale of properties: Credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored.

The impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security. The Company’s credit period generally ranges from 30-60 days.

Financial Instrument and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty.

Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through a counterparty’s potential failure to make payments. The Company’s maximum exposure to credit risk for the components of the statement of financial position at 31 March 2023 and 2022 is the carrying amounts.

c) Liquidity risk

The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits and loans.

43. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholder value.

The Board of Directors of the Company seek to maintain a balance between the higher returns that might be possible with higher level of borrowing and advantages by a sound capital position.

45. Prior year comparatives

The figures of the previous year have been regrouped/reclassified, where necessary, to conform with the current year’s classification.