VII) The significant actuarial assumptions for the determination of the defined obligations are discount rate and expected salary increase. The sensitivity for actuarial assumptions has been computed by varying respective actuarial assumption used for valuation of the defined benefit obligation by 1%, while holding all other assumptions constant.
If the discount rate increases/decreases by 1%, the defined obligations would decrease by ' 8.90 crore / increase by ' 9.54 crore as on 31stMarch, 2023 and if the expected salary growth increases /decreases by 1%, the defined benefit obligations would increase by ' 3.40 crore/ decrease by ' 3.59 crore as on 31st March, 2023.
However, the actual change in assumptions would not necessarily behave in isolation to each other. The defined benefit obligations would change accordingly.
Remeasurement (gain)/loss of defined employee benefit plans in Other Comprehensive Income (OCI) for the year ended 31.03.2023 and 31.03.2022 are ' (8.60) crore and ' (0.95) crore respectively.
VII) The significant actuarial assumptions for the determination of the defined obligations are discount rate and expected salary increase. The sensitivity for actuarial assumptions has been computed by varying respective actuarial assumption used for valuation of the defined benefit obligation by 1%, while holding all other assumptions constant.
If the discount rate increases /decreases by 1%, the defined obligations would decrease by ' 0.62 crore /increase by ' 0.68 crore as on 31st March, 2023 and if the expected salary growth increases /decreases by 1%, the defined benefit obligations would increase by ' 0.69 crore/ decrease by ' 0.64 crore as on 31st March, 2023.
However, the actual change in assumptions would not necessarily behave in isolation to each other. The defined benefit obligations would change accordingly.
The Company is expected to contribute ' 1.33 crore to defined benefit plan obligations towards gratuity during the year 2023-24. Remeasurement (gain)/loss of defined employee benefit plans in Other Comprehensive Income (OCI) for the year ended 31.03.2023 and 31.03.2022 are ' 0.85 crore and ' (0.06) crore respectively.
iii) Provident Fund (Funded)
The Company pays fixed contribution to provident fund at predetermined rates to a separate trust, which invests the funds in permitted securities. The Company has an obligation to ensure minimum rate of return to the members as specified by GOI. Accordingly, the Company has obtained report of the actuary, based on which overall interest earnings and cumulative surplus is more than the statutory interest payment requirement for all the periods presented. Further, contribution to employees pension scheme is paid to the appropriate authorities.
As per the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the Company has no right to the benefits either in the form of refund from the plan or lower future contribution to the plan towards the net surplus of ' 6.76 crore (previous year ' 1.05 crore) determined through actuarial valuation. Accordingly, Company has not recognized the surplus as assets as it pertains to the provident fund trust and not to the Company.
The Company contributed ' 24.54 crore and ' 23.61 crore to the provident fund during the year ended 31st March, 2023 and 31st March, 2022 respectively.
b) Defined Contribution Plansi) Post Retirement Benefits (Pension & Medical):
All eligible employees are entitled to benefit under defined contribution plans towards pension under EPFO scheme, post retirement pension fund and medical schemes as defined contribution plans. The Company has no obligations other than the contribution payable to such funds/schemes. The Company recognizes such contributions as expenses when an employee renders the related service.
During the year, Company contributed/ provided ' 20.07 crore (previous year ' 18.89 crore) towards post retirement pension fund, ' 3.27 crore (previous year ' 3.52 crore) towards pension under EPFO and ' 5.62 crore (previous year ' 5.45 crore) towards medical schemes.
ii) Performance Related Pay:
Eligible employees are entitled to benefit of performance related pay. The provision for performance related pay is of short-term nature and has been recognized as per the procedure laid by management based on the guidelines of the Department of Public Enterprises.
c) Foreign Service Contribution
Foreign Service Contribution is recognized on accrual basis in the Statement of Profit and Loss Account as per the deputation terms with parent organizations in respect of officers taken on deputation from other organizations.
41. INDIAN ACCOUNTING STANDARD (IND AS-20), DISCLOSURES ON ACCOUNTING FOR GOVERNMENT GRANTS AND DISCLOSURE OF GOVERNMENT ASSISTANCE ARE AS FOLLOWS:
The Company is receiving government grant in the form of export incentive on export of Rolling Stock and Spare parts. There are two types of export incentive i.e duty drawback and RoDTEP (Remission of Duties & Taxes on Exported Products). The Company has recognized/presented ' 23.57 crore (previous year ' 21.12 crore) as export incentive. The export incentive receivable at the end of the year is ' 0.50 crore (previous year ' 10.52 crore).
42. INDIAN ACCOUNTING STANDARD (IND AS) 21, DISCLOSURES ON THE EFFECTS OF CHANGES IN FOREIGN EXCHANGE RATES ARE AS FOLLOWS:
The amount of exchange differences (net) credited to the statement of profit and loss account during the Financial Year is ' 40.64 crore (Previous Year ' 17.19 crore).
As per the agreements with the customers, warranty years are varying from two to five years, i.e., extending beyond one year, require discounting to work out net present value of such provisions made towards warranty.
Effect of change in the discount rates
3 years SBI MCLR rate as on 31.03.2023 ie. 8.70% is used as discount rate during the reporting period. The effect of change in discount rate ie. 8.70% for FY 2022-23 vice 7.30% for FY- 2021-22, is ' 0.32 crore.
For movement of provision for unspent amount of Corporate Social Responsibility-refer 57(c)(iii) b) Contingent liabilities and Commitments to the extent not provided for include: i) Contingent Liabilities
I) Claims (excluding interest) against the Company not acknowledged as debts are ' 27.06 crore (previous year ' 27.15 crore).
II) The Company is subject to legal/arbitration proceeding and claims, which have arisen in the ordinary course of business. Management does not reasonably expect that when these cases ultimately conclude and determined, will have any material and adverse effect on the Company's results of operations or financial conditions.
III) Disputed taxes and duty:
A) Demand on account of income tax includes of ' 6.66 crore (excluding interest) (previous year ' 5.21 crore) which are being contested by the Company. This excludes ' 4.51 crore (previous Year ' 2.31 crore) relating to cases where Company has already won at different appellate authorities during earlier years, against which income tax department has gone for appeal at higher appellate authorities. In similar cases of past years, the appeal of the income tax department has been dismissed.
B) Demand on account of service tax, VAT etc. amounting to ' 8.87 crore (previous year ' 2.85 crore) is being contested by the Company at different forums.
IV) The company has entered into a contract with the Ministry of Housing & Urban Affairs for purchase of commercial built up in the complex at Nauroji Nagar New Delhi through NBCC. The company has paid GST under reverse charge from third demand onward along with the GST on earlier demand excluding interest of ' 1.40 crore on delay payment of GST under reverse charge prior to third demand. Company is of the view that liability to pay GST is with NBCC under Sec 9(1) of CGST Act. AAR (Authority for Advance Ruling) under Sec 37 (1) and Delhi Appellate Authority also held the same view. As such, the company does not foresee any liability of interest as on 31.03.2023. However, as an abundant precaution, the same is being disclosed as Contingent Liability.
V) A number of cases are lying for adjudication at various forums or under arbitration, which Company is contesting on behalf of Clients. The Company is not subject to any liability that may result pursuant to adjudication / arbitral award.
VI) The above contingent liabilities do not include contingent liabilities on account of pending cases in respect of service matters & others where amount cannot be quantified.
ii) Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for amounting to ' 104.19 crore (previous year ' 199.97 crore).
c) Contingent Assets
i) In a pre-closed contract in the year 2005-06, Company invokes arbitration for a claim of ' 233.93 crore (previous year ' 233.93 crore) against a client. Client also submits counter claims of ' 469.10 crore (previous year ' 469.10 crore) before arbitrator. The sole arbitrator awarded ' 88.31 crore in favour of the Company against the claim of ' 233.93 crore, while rejecting the counter claims of the client. Since the awarded amount is less than the claimed amount, Company appealed against the aforesaid award. Appellate authority awarded ' 231.68 crore with applicable interest in favour of the Company. Client filed a petition in the Civil Court for setting aside the aforesaid award, which was dismissed by the court on 22.11.2017and preliminary objections of Company are allowed. Thereafter the Company filed writ petition before Hon'ble Jharkhand High court on 05.07.2018 to issue the direction to client to pay the awarded amount. Hearing in the matter is yet to be scheduled.
ii) In the above contract, executing agency also raised claims (excluding interest) of ' 184.41crore (previous year ' 184.41 crore) against the Company before the arbitration tribunal. The Company also submitted a counter claim of ' 644.53 crore (previous year ' 644.53 crore) againstthe executing agency. Both the parties had concluded their arguments before the Tribunal and award was published on 18th October 2016 in favour of the Company. As per the award, Company was to get ' 63 crore from executing agency effective from the date of publication of award i.e., 18thOctober 2016. The executing agency had filed two petitions i.e. arbitration appeal before hon'ble Jharkhand high court on 25.05.2017 and commercial revocation to set aside the award before the commercial court, Ranchi on 06.01.2018. The arbitration appeal has already been dismissed by hon'ble Jharkhand high courton 11.03.2019. The commercial revocation has also been dismissed on 29.06.2019. Now RITES limited filed the commercial execution case no. 03 of 2020 on 16.01.2020 before commercial court Ranchi to execute the award amount. Same is pending and next date of hearing is fixed on 16.06.2023. In view of above, the Company has not recognized the award amount in the books of account.
b) Fair value hierarchy & valuation techniques
To provide an indication about the reliability of method used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the Indian Accounting Standard (Ind AS-113) on fair value measure.
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Fair value of financial instruments that are not traded in an active market is determined using valuation techniques and observable inputs for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3: Inputs for the assets or liabilities that are not based on observable market data (observable inputs).
c) Financial Risk Management
The Company's activities are exposed to a variety of financial risks: market risk, credit risk and liquidity risk. The Company's focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The Company's exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from few customers.
i) Market Risk
The Company operates internationally and a considerable portion of the business is transacted in several currencies and consequently the Company is exposed to foreign exchange risk for its sales and services in the Middle East, Africa and South Asian countries. The exchange rates between the rupee and foreign currencies have changed substantially in recent years which may also fluctuate substantially in the future. However, Company has currency risk management policy and exchange fluctuations are regularly monitored by the risk management committee to mitigate this risk. Policy covers various aspects of currency risk management, benchmarking, hedging and risk appetite, permissible instruments, hedging policy, structure of the risk management committee and treasury group, reporting procedures etc.
For the year ended 31st March, 2023 and 31st March, 2022, every percentage increase/decrease in the exchange rate between the INR & US Dollar has affected the Company's incremental margins by approximately 0.45% (previous year 0.52%) each. For the year ended 31stMarch, 2023 and 31st March, 2022, every percentage increase/decrease in the exchange rate between the INR & MUR has an insignificant affect on the Company's incremental margins.
Sensitivity analysis is computed based on the changes in the income and expenses in foreign currency upon conversion into functional currency, due to exchange rate fluctuations between the previous reporting year and the current reporting year.
The above foreign currency exposure is unhedged as these are covered through foreign currency risk management policy.
ii) Credit Risk
Credit Risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. Primarily exposure to the credit risk is from trade receivables amounting to ' 993.65 crore (previous year ' 783.19 crore) and unbilled revenue amounting to ' 99.35 crore (previous year ' 50.75 crore) which are typically unsecured. Credit risk is being managed by continuously monitoring the outstanding dues from the customers. Trade Receivables towards export sales are generally managed by establishing Letter of Credit with the clients. Further, most of the clients of the Company are Government or Government Undertakings; hence credit risk is bare minimum and Company also does not foresee any impact on credit risk of the Company. Company has impaired, as a prudent measure, the trade receivables and unbilled revenue towards expected credit loss as per Company accounting policy to the extent of ' 124.73 crore (previous year ' 102.34 crore). Keeping in view the nature of business expected credit loss is provided for on case-to-case basis as per the policy on impairment of financial assets.
No significant credit risk on cash and bank balances including clients' funds amounting to ' 3481.46 crore (previous year ' 3398.58 crore) is expected as Company parks surplus funds with Schedule Banks having good capital adequacy ratio and least NPA as determined by RBI and guidelines of the Company. Company has parked its owned funds in fixed deposits of ' 803.60 crore (previous year ' 743.31 crore) with Schedule banks with negligible credit risks.
Non-Strategic Investments primarily include investments in tax-free bonds of ' 45 crore (previous year ' 95 crore) and liquid mutual fund units of ' NIL (previous year ' 25.92 crore) issued by Public Sector Undertaking where risk is minimal.
The Company has given House building, multi-purpose loans etc. to the employees which are insured and house properties/ other assets are mortgaged / hypothecated against these loans in line with the policies of the Company. The risk of default in respect of these loans is considered negligible.
iii) Liquidity Risk
Company's principal sources of liquidity are "cash and bank balances” and the cash flow that is generated from operations. The Company has no outstanding borrowings. The Company has a working capital of ' 1769.45 crore (previous year ' 1562.16 crore) including cash and bank balance (owned funds) of ' 837.83 crore (previous year ' 674.23 crore) and current investment ' 25 crore (previous year ' 75.92 crore). Company believes that the working capital is sufficient to meet its requirements, accordingly no liquidity risk is perceived by the Company.
50. INDIAN ACCOUNTING STANDARD (IND AS) 108, DISCLOSURES ON OPERATING SEGMENTS ARE AS FOLLOWS:
Operating segments are defined as components of an enterprise for which discrete financial information is available which is being evaluated regularly by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources and assessing performance. The Company's chief operating decision maker is the Chairman & Managing Director who is also Chief Executive Officer.
a) Company has identified four operational reportable segments based on operations being carried out which are as under:-
• Consultancy Services
• Leasing of railway rolling stock & equipments
• Export of rolling stock, equipments and spares
• Turnkey Construction Projects
b) Geographical wise revenue segment is disclosed as under:-
i) Revenue within India from consultancy includes quality assurance & project management services, turnkey construction projects and domestic lease rental services to clients located inside India.
ii) Revenue from outside India includes services rendered and export sales of rolling stock & spare parts to the clients located outside India.
c) The accounting principles used in the preparation of the financial statements are consistently applied to record revenue & expenditure in individual segment, as set out in the note of significant accounting policies.
d) Revenue and expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to each reporting segment have been allocated on the basis of attributed direct cost. All other expenses which are not attributable or allocable to the segments have been disclosed as un-allocable expenses.
e) Assets and liabilities used in the Company's business are not identified to the reportable segments as these are used interchangeably between segments. Depreciation, amortization& impairment on Property, Plant & Equipment and Intangible Assets cannot be allocated to a specific segment. Company believes that it is currently not practicable to provide segmental disclosure relating to total assets, total liabilities and depreciation, amortization& impairment since a meaningful segregation of the available data could be onerous.
51. INDIAN ACCOUNTING STANDARD (IND AS) 115, DISCLOSURES ON REVENUE FROM CONTRACTS WITH CUSTOMERS ARE AS FOLLOWS:a) Significant management judgments on Revenue Recognition:
Recognised amounts of contract revenues and related receivables reflect management's best estimate of each contract's outcome and stage of completion which is determined based on physical progress, efforts, cost incurred to date bear to the total estimated cost of the transaction, time spent, service performed or any other method that management considered appropriate. For more complex contracts in particular, costs to complete and contract profitability are subject to significant estimation and uncertainty.
b) Company has contracts with customers for different services which are given below:-
• Consultancy Services
• Export of rolling stock, equipments and spares
• Turnkey Construction Projects
Beside above, Company has contracts with customers for wet leasing which are covered under Indian Accounting Standard (Ind AS) 116, Leases
c) Company has recognized revenue either on the basis of over time or point in time depending upon satisfaction of performance obligation on transferring control of goods or services to customers. Revenue has been recognized by the Company over time basis if any one of the following condition is met:
• Customer simultaneously receives and consumes the benefits
• Company's performance creates or enhances an assets that the customer controls as the assets is created or enhanced
• Company's performance does not create with alternative use and Company has enforceable right to payment for performance completed to date.
In case, none of the above condition is met, revenue recognized by the Company on the basis of point in time.
d) Disaggregation Revenue information:
The below presents Disaggregated Revenues from contract with customer for the year ended 31st March 2023 from various streams of revenue. The Company believe that this Disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factor.
e) Company is rendering many project management consultancy services for and on behalf of clients where fee is due to Company for professional services.
f) In most of the cases, payments from customers are linked with performance obligations. Wherever on the reporting date work has been performed and payment is not due as per the contract, in such cases contract assets have been created. However, where payment has been received including advance but performance has not been completed, in such cases contract liabilities have been created. Advances received by the Company for execution of work are in the nature of security i.e a source of protection and are not for financing the project.
g) Company provides warranty in the nature of assurance for which provisions are made as per the Indian Accounting Standard (Ind AS) 37, Provisions, Contingent Liabilities and Contingent Assets.
h) During the year, impairment of amount receivable from client for services rendered/goods supplied charged to Statement of Profit and Loss amounting to ' 24.11 crore (previous year ' 10.89 crore), which includes impairment for lease services amounting to ' 0.22 crore (previous year ' 0.05 crore).
j) During the year ended March 31st, 2023, ' 45.84 crore and March 31st 2022, ' 74.96 crore of unbilled revenue as of April 1st, 2022 and April 1st 2021 respectively has been reclassified to Trade receivables upon billing to customers on completion of milestones.
k) During the year ended March 31, 2023'59.45 crore and March 31, 2022'195.81 crore of contract liabilities as of April 1, 2022 and April 1,2021 has been recognized as revenue after completion of milestones.
l) The aggregate value of performance obligations that are completely or partially unsatisfied as at March 31, 2023 is ' 5543 crore which pertains to various segment of the Company. Company is likely to recognize this revenue over a period ranging from one year to three years. The aggregate value of performance obligations that was completely or partially unsatisfied as at March 31, 2022 was ' 4621 crore which pertains to various segment of the Company.
m) Company has not incurred any cost for obtaining contracts except administrative cost required for preparation of offers and the same is charged to statement of Profit and Loss.
n) Company has recognized unamortized contract assets of ' Nil crore (previous year ' Nil crore) on account of costs incurred in fulfilling the contract.
52. INDIAN ACCOUNTING STANDARD (IND AS-116): DISCLOSURES ON LEASES ARE AS FOLLOWS:a) Company as Lessee:
The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability. The right-of-use assets are depreciated using the straight-line method from the commencement date over the term of useful life of right-of-use asset.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. Company has no borrowing, as such 3 year SBI MCLR rate 8.70% and 7.30% has been considered as weighted average incremental borrowing rate for calculation of present value of lease liability for the FY- 2022-23 and 2021-22 respectively.
The Company has elected not to apply the requirements of Ind AS 116 Leases to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognised as an expense on a straight-line basis over the lease term.
i) The following is the summary of practical expedients applied:
I) The Company has used a single discount rate to a portfolio of leases with similar characteristics.
II) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application
III) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.
The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to
meet the obligations related to lease liabilities as and when they fall due.
vi) During the year ended 31 March 2023, the Company incurred expenses amounting to ' 14.78 crore (Previous year ' 12.73 crore) on accounts of short-term leases and leases of low-value assets. For the year ended 31 March 2023, the total cash outflows for leases, including short-term leases and low-value assets amounted to ' 17.71 crore (Previous year ' 15.37 crore).
vii) ROU Assets includes staff quarters at Liluah Howrah, Kolkata from Indian Railways, for which lease has been expired in the month of March, 2009. The extension has been sought from Indian Railways.
viii) The Company does not have any lease restrictions and commitment towards variable lease rent as per the contract.
ix) The Company has no commitments towards Leases yet to be commenced as on 31.03.2023.
x) The Company has not sub-leased any of the assets taken on lease.
Deferred tax assets and liabilities have been offset wherever the Company has a legally enforceable right to set off current tax assets against current tax liabilities and where the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority.
The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the year in which the temporary differences become deductible. Management considers the scheduled reversals of deferred income tax liabilities, projected future taxable income and tax planning strategies in making the assessment.
Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, management believes that the group will realize the benefits of those deductible differences. The amount of deferred income tax assets considered realizable could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.
57. OTHER DISCLOSURES:
a) Ministry of Railway (MoR) vide letter dated 18.10.2021 has decided in principle for closure of Indian Railway Station Development Corporation Limited (IRSDC), in which Company has an investment of ' 48 crore. Closure activities are underway and Board of IRSDC has decided to transfer the assets & liabilities of IRSDC to Rail Land Development Authority on slump sale basis (excluding investment in Subsidiary & Associate of IRSDC) for consideration not less than book value. Financial statement of IRSDC has been prepared on liquidation basis. As at 31.03.2023, IRSDC has reported a net worth of ' 225 crore, out of which 24% share i.e. ' 54 crore belongs to RITES, therefore management does not perceive any impairment in the value of investment in IRSDC.
b) Assets and liabilities are classified between current and non-current considering 12 months period as operating cycle.
c) Information on CSR expenditure:
i) Gross amount required to be spent including advances given during the year 2022-23 ' 14.10 crore (previous year 2021-22'13.87 crore).
iv) Short fall other than ongoing projects of CSR - Nil (Previous Year- Nil)
(i) Reasons for short fall other than ongoing projects of CSR - Not Applicable.
(ii) Nature of CSR Activities: The primary focus of CSR activity is on creation of necessary infrastructure, and avenues for employment and income generation, and empowering the people by inclusion in economic mainstream and facilitating sustainable development of marginalized and under privileged sections of the society in and around areas of Company's operations and in backward regions or such other areas as may be defined by the Board. These infrastructure assets then can be taken over by local community/ NGOs/ SHGs for day-to-day operations and maintenance.
k) Balances shown under trade receivable, advances and trade payables including Indian Railway are subject to confirmation / reconciliation/adjustment, if any. The Company has been sending letters for confirmation to parties. However, the Company does not expect any material dispute w.r.t. the recoverability/payment of the same.
In the opinion of the management, the value of current assets, loans and advances on realization in the ordinary course of business, will not be less than the value at which these are stated in the balance sheet.
l) Information as regard to loans, investments made as required under section 186(4) of the Companies Act, 2013 have been given vide note no.7,8, & 16.
m) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
n) No funds have been received by the company from any person(s) or entity(ies), including foreign entities ("Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
o) The Code on Social Security, 2020 ("the Code”) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020.The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the code becomes effective.
p) During the year company has created a joint venture namely MMG-Metro Management Group Ltd. in Israel with 24.50% share. The other two joint venture partners are Poran Shrem Engineering and Appraisal Ltd (Israel company) with 51% share and DMRC Limited with 24.50% share. During the year the company has not made any capital contribution. However, group company has committed to subscribe 2450 number of ordinary shares of NIS (New Israel Shekel) 1/- each.
q) Recent pronouncements
Ministry of Corporate Affairs ("MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:
Ind AS 1 - Presentation of Financial Statements- This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company does not expect the amendments to have any significant impact in its financial statement.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors- This amendment has introduced a definition of 'accounting estimates' and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company does not expect the amendments to have any significant impact in its financial statement.
Ind AS 12 - Income Taxes- This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The Company does not expect the amendments to have any significant impact in its financial statement.
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