(x) Provisions, Contingent Assets and Contingent
Liabilities
A provision is recognized when:
• the Company has a present obligation as a result of a past event;
• it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
• a reliable estimate can be made of the amount of the obligation.
A disclosure for a contingent liability is made when there is
a possible obligation or a present obligation that may, but
probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
(xi) Earnings Per Share
Basic earnings per share are calculated by dividing the total Profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the total Profit 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 share.
(xii) Leases
In accordance with IND AS 116, the Company recognizes right of use assets representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of right of use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payment made at or before commencement date less any lease incentive received plus any initial direct cost incurred and an estimate of cost to be incurred by lessee in dismantling and removing underlying asset or restoring the underlying asset or site on which it is located. The right of use asset is subsequently measured at cost less accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of lease liability. The right of use assets is depreciated using the straight line method from the commencement date over the shorter of lease term or useful life of right of use asset. The estimated useful lives of right of use assets are determined on the same basis as those of property, plant and equipment. Right of use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognized in statement of profit and loss. The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined; the Company uses incremental borrowing rate. Lease arrangements where the risk and rewards incident to ownership of an asset substantially vest with the lessor are recognised as operating lease. Lease rent under operating lease are charged to statement of profit and loss on a straight line basis over the lease term except where scheduled increase in rent compensate the lessor for expected inflationary costs.
The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modification or to reflect revised-insubstance fixed lease payments, the Company recognizes amount of remeasurement of lease liability due to modification as an adjustment to right of use assets and statement of profit and loss depending upon the nature of modification. Where the carrying amount of right of use assets is reduced
to zero and there is further reduction in measurement of lease liability, the Company recognizes any remaining amount of the remeasurement in statement of profit and loss.
(xiii) Income Taxes
(i) Provision for current tax is made based on the tax payable under the Income Tax Act, 1961. Current income tax relating to items recognised outside profit and loss is recognised outside profit and loss (either in other comprehensive income or in equity).
(ii) Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of Deferred tax liabilities and assets are reviewed at the end of each reporting period.
(xiv) Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
• 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 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 date are available to measure fair value, maximizing the use of relevant observable inputs:
• 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 is directly 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 determines whether transfer have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosure, the Company has determined classes of assets and liabilities on the basis of nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
(xv) Cash and Cash Equivalent
Cash and Cash equivalent in the balance sheet comprises cash at bank and cash on hand, demand deposits and short term deposits which are subject to an insignificant change in value.
The amendment to IND AS-7 requires entities to provide disclosure of change in the liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gain or loss). The Company has provided information for both current and comparative period in cash flow statement.
(xvi) Business Combinations
The acquisition method of accounting is used to account for all business combinations, except common control transactions, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of the transferor Companies comprises the:
• fair values of the assets transferred;
• liabilities incurred to the former owners of the acquired business;
• equity interests issued by the Company; and
• fair value of any asset or liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are with limited exceptions, measured initially at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred and acquisition-date fair value of any previous equity interest in the acquired entity over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the difference is recognised in other comprehensive income and accumulated in equity as capital reserve provided there is clear evidence of the underlying reasons for classifying the business combination as a bargain purchase. In other cases, the bargain purchase gain is recognised directly in equity as capital reserve.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently re-measured to fair value with changes in fair value recognised in profit or loss. There is no contingent consideration in respect of all the years presented.
Business combinations involving entities that are controlled by the Company are accounted for using the pooling of interests method as follows:
• The assets and liabilities of the combining entities are reflected at their carrying amounts.
• No adjustments are made to reflect fair values or recognise any new assets or liabilities. Adjustments are only made to harmonise accounting policies.
• The financial information in the financial statements in respect of prior periods is restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. In case of Court approved Scheme the business combination is recognised from the appointed date following the accounting treatment approved by the Court.
• The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee.
• The identity of the reserves are preserved and the reserves of the transferor become the reserves of the transferee.
• The difference, if any, between the amounts recorded as share capital issued plus any additional consideration in the form of cash or other assets and the amount of share capital of the transferor is transferred to capital reserve and is presented separately from other capital reserves.
(xvii) Significant Management Judgement in Applying Accounting Policies and Estimation of Uncertainty
Significant management judgement
When preparing the financial statements, management undertakes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.
The following are significant management judgement in applying the accounting policies of the Company that have the most significant effect on the financial statements.
(a) Recognition of deferred tax assets
The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company's future taxable income against which the deferred tax assets can be utilised.
(b) Estimation of uncertainty
(a) Recoverability of advances/receivables
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding receivables and advances.
(b) Defined benefit obligation (DBO)
Management's estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of assumptions such as standard rates of inflation, medical cost trends, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
(c) Provisions
At each balance sheet date on the basis of management judgement, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding warranties and guarantees. However the actual future outcome may be different from this judgement.
(d) Inventories
Inventory is stated at the lower of cost and net realisable value (NRV).
NRV for completed inventory is assessed including but not limited to market conditions and prices existing at the reporting date and is determined by the Company based on net amount that it expects to realise from the sale of inventory in the ordinary course of business.
NRV in respect of inventories under construction is assessed with reference to market prices (by referring to expected or recent selling price) at the reporting date less estimated costs to complete the construction and estimated cost necessary to make the sale. The
costs to complete the construction are estimated by management.
(e) Fair value measurements
Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument/assets. Management bases its assumptions on observable date as far as possible but this may not always be available. In that case Management uses the best relevant information available. Estimated fair values may vary from the actual prices that would be achieved in an arm's length transaction at the reporting date.
(f) Lease
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of IND AS 116. Identification of a lease requires significant judgement. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.
The Company determines the lease term as the non-cancellable period of lease, together with both periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. In exercising whether the Company is reasonably certain to exercise an option to extend a lease or to exercise an option to terminate the lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease or to exercise the option to terminate the lease. The Company revises lease term, if there is change in non-cancellable period of lease. The discount rate used is generally based on incremental borrowing rate.
(g) Classification of assets and liabilities into current and non-current
The Management classifies assets and liabilities into current and non-current categories based on its operating cycle.
Nature and purpose of each reserve within equity:
1. Capital Reserve
This reserve has been transferred to the Company in earlier years and can be utilized in accordance with the provisions of the Companies Act, 2013.
2. Security Premium
Security premium is used to record the premium for issue of shares and can be utilized in accordance with the provisions of the Companies Act, 2013.
3. General Reserve
The reserve used to transfer profits from retained earnings for appropriation purposes. The amount is to be utilized in accordance with the provisions of the Companies Act, 2013.
4. Retained Earnings
These are the profits that Company has earned till date less transfers to general reserve.
5. Other Comprehensive Income (OCI)
This includes remeasurement loss/gain on defined benefit plans (net of taxes) that will not be reclassified to the statement of profit and loss.
Nature of Security provided against Term Loan from ICICI Bank:
• All the piece & parcel of land located at khasra no. 234 and 331 kha, admeasuring 0.2410 Hectare or 2,410 Sq. Meter situated at village Muttakipur, Pargana, Tehsil and District-Lucknow, Uttar Pradesh-226020 together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth, both present and future owned by Artistry Construction Private Limited.
• All the piece & parcel of land located at khasra no. 239, 317, 361 and 194 total admeasuring 6,097.50 Sq. Meter situated at village Muttakipur, Pargana, Tehsil and District-Lucknow, Uttar Pradesh-226020 together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth, both present and future owned by Erudite Constructions Private Limited.
• All the piece & parcel of land located at khasra no. 315 and 240 admeasuring 1.5040 Hectare or 15,040 Sq. Meter situated at village Muttakipur, Pargana, Tehsil and District-Lucknow, Uttar Pradesh-226020 together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth, both present and future owned by Frozen Constructions Private Limited.
• All the piece & parcel of land located at khasra no. 313 admeasuring 1.1650 Hectare or 11,650 Sq. Meter situated at village Muttakipur, Pargana, Tehsil and District-Lucknow, Uttar Pradesh - 226020 together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth, both present and future owned by Company.
• All the piece & parcel of land located at khasra no. 330 admeasuring 0.2740 Hectare or 2,740 Sq. Meter situated at village Muttakipur, Pargana, Tehsil and District-Lucknow, Uttar Pradesh-226020 together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth, both present and future owned by Utsav Constructions Private Limited.
• All the piece & parcel of land located at khasra no. 329 admeasuring 0.1770 Hectare or 1,770 Sq. Meter situated at village Muttakipur, Pargana, Tehsil and District-Lucknow, Uttar Pradesh-226020 together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth, both present and future owned by Company.
• All the piece & parcel of land located at khasra no. 314 admeasuring 0.0230 Hectare or 230 Sq. Meter, khasra no. 316 admeasuring 0.0270 Hectare or 270 Sq. Meter and khasra no. 319 admeasuring 0.1210 Hectare or 1,210 Sq. Meter situated at village Muttakipur, Pargana, Tehsil and District-Lucknow, Uttar Pradesh - 226020 together with all buildings and structures thereon and all plant and machinery attached to the earth or permanently fastened to anything attached to the earth, both present and future owned by Company.
• The Borrower's/Property owner's receivables/cash flows/revenues (including booking amounts and/or security deposits) arising out of or in connection with or relating to the Project and all insurance proceeds both present and future.
Further secured by Corporate Guarantee jointly and severally of Artistry Construction Private Limited, Erudite Constructions Private Limited, Frozen Constructions Private Limited, Utsav Constructions Private Limited, the wholly owned subsidiaries of the Company.
Interest Rate:
The rate of interest for each drawal of the Facility will be stipulated by ICICI Bank at the time of disbursement of each drawal, which shall be sum of I-MCLR 1Y "Spread" per annum, subject to minimum of I-MCLR-1Y plus applicable statutory levy, if any. As on date the I-MCLR 1Y is 8.95% and "Spread" is 2.2%. ICICI Bank shall reset the above interest rate, at the end of every 1 year from the date of disbursement of the first drawal of the facility as a sum of I-MCLR-1Y "Spread" prevailing on the reset date plus applicable statutory levy, if any. Any change in Spread would be as communicated by the Bank from time to time.
Description of Risk Exposures
Valuations are based on certain assumptions, which are
dynamic in nature and vary over time. As such Company is
exposed to various risks as follows:
A) Salary Increase: Actual salary increase will increase the Plan's liability. Increase in salary increase rate assumption in future valuations will also increase the liability.
B) Investment Risk: If Plan is funded then assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date can impact the liability.
C) Discount Rate: Reduction in discount rate in subsequent valuations can increase the plan's liability.
D) Mortality & disability: Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.
E) Withdrawals: Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Plan's liability.
Leave encashment (Unfunded)
The valuation of Leave Encashment has been done on the basis of acturial valuation on projected unit (PUC) method and is provided in the financial statement and does not require disclosure as mentioned in Para 158 of IND AS 19. Provision of leave encashment as per actuarial is less than the liability provided in books of accounts, hence the management has made the provision for leave encashment on accrual basis.
Defined Contribution Plan
Provident Fund: The Company contributes Provident Fund (Employer as well as Employee Share) to Provident Fund Commissioner (U.P) and Employers Contribution to such fund is charged to Statement of Profit and Loss. The Provident fund contribution charged to Statement of Profit and Loss for the year ended 31.03.2024 amounted to ' 12.96 Lacs (Previous Year ' 12.46 Lacs).
42. FINANCIAL RISK MANAGEMENT
The Company activities exposes it to variety of financial risk i.e. Credit Risk, Liquidity Risk, Capital Risk, Interest Rate Risk, etc. These risks are managed by senior management of the Company and is supervised by Board of Directors of the Company to minimise potential adverse effects on the financial performance of the Company.
(i) Credit Risk:
Credit risk from cash and cash equivalents and bank deposits is considered immaterial in view of the creditworthiness of the banks the Company works with. Credit risk is the risk i.e a customer or the counter party fails to pay to the Company causing financial loss. The credit risk primarily arises from outstanding receivables from customer. The Company has
specific policies for managing customer credit risk on an ongoing basis. These policies factor in the customer financial position, past experience and other customer specific factor.
Financial assets are written off when there is no reasonable expectation of recovery such as a debtor failing to engage in a repayment plan with the Company. The Company makes provision for doubtful debt or write off when a debtor fails to make contractual payments. When loans or receivables have either been provided for or written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. When recoveries are made, these are recognised in the Statement of Profit and Loss. The Company has low credit risk in respect to cash and cash equivalent, other bank balances, other financial assets, trade receivables and security deposits paid.
(ii) Liquidity Risk:
Liquidity Risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company approach to managing liquidity is to ensure as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due. Management monitors rolling forecasts of the liquidity position and cash and cash equivalent on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates.
(iii) Capital Risk Management:
The Company's capital risk management objective is to ensure that at all times it remains a going concern and safeguards the interest of the shareholders and other stakeholders. The Company monitors capital on the basis of carrying amount of equity plus its subordinated loan, less cash and other cash equivalents as presented on the face of the statement of financial position and cash flow hedges recognised in other comprehensive income.
The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to the shareholders, return capital to shareholders or issue new shares. The amount managed as capital by the Company are summarised as follows:
(v) Market Risk:
The Company is engaged into the business of real estate properties for residential and commercial purpose. The Company sales and collection has been increased. The Company has assessed the carrying amounts of Receivables, Inventories, Investments and other assets/liabilities. The Company will continue to monitor developments to identify significant uncertainties in future periods, if any. The Company has low market risk.
(vi) Foreign Currency Risk:
The Company do not deal in foreign currency transactions. The Company do not have any foreign currency risk.
49. OTHER STATUTORY INFORMATION
(i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company has not availed working capital limits in excess of Rupees five crore in aggregate at any point of time during the year from banks or financial institution on the basis of security of current assets.
(iii) The Company do not have any transactions with Companies struck off.
(iv) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
(v) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(vi) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vii) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the Funding Party (Ultimate Beneficiaries); or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(viii) The Company have not, any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
(ix) The Company has not been declared a wilful defaulter by any bank or financial institution or government authorities during the year.
(x) During the year, there is no scheme or arrangement approved by the competent authority in terms of Section 230 to 237 of the Companies Act, 2013.
50. AUDIT TRAIL
The Company has used an accounting software for maintaining its books of accounts for the financial year ended 31.03.2024, which has a feature of recording audit trail (Edit log) facility and the same has been operating for all relevant transactions recorded in the software. Although the accounting software has inherent limitations, there were no instances of the audit trail feature being tampered.
51 . Previous years figures have been regrouped, rearranged or reclassified, wherever necessary to confirm the current year's classification.
As per our report of even date attached
For Doogar & Associates For and on behalf of the Board of Directors
Chartered Accountants
Firm Registration Number: 000561N
CA Udit Bansal Pankaj Bajaj Shrikant Jajodia
Partner (Chairman cum Managing Director) (Director)
Membership number: 401642 DIN: 00024735 DIN: 00602511
Kapil Saluja Chandni Vij
Place: New Delhi (Chief Financial Officer) (Company Secretary)
Date: 16th May, 2024 M.No.: 436292 M.No.: A46897
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