1.8 Contingent Liabilities and Contingent assets
A disclosure for Contingent liabilities is made in the notes on accounts when there is a possible obligation or present obligations that way, but probably will not, require an outflow of resources. A contingent liabilities arises where there isa a liability that cannot be reconginsed because it cannot bo measured reliably,
A contingent asset is not recognised unless it becomes virtually certain that an inflow of economic benefits wilt arise. When an inflow of economic benefits is probable, contingent assets are disclosed in the standalone financial statements. Contingent liabilities and contingent assets are reviewed at each balance sheet date.
1.9 Provisions
The Company recognises previsions when there is present obligation as a result of past event and it is probable that [here will be an outflow of resources and reliable estimate can be made of the amount of Ihe obligation.
1.10 Investments In subsidiaries and Joint ventures
The Company accounts for the investments in equity shares of subsidiaries and joint ventures at cost in accordance with Ind AS 27- Separate Financial Statements. Tho Company reviews its carrying value of investments carried at amortised cost annually, or more frequently when there is indication for impairment. If the recoverable amount Is lass than its carrying amount, the impairment loss Is accounted for. On disposal of investment in subsidiaries and joint venture, the difference between net disposal proceeds and the carrying amounts are recognised in the Standalone Statement of Profit and Loss.
1.11 Employee Benefits:
Provident fund is defined Contribution scheme and contributions are charged to profit and loss account of the year when the contributions to the respective funds are due. Other retirement benefits such as Gratuity, leave encashment etc., are recoghized on basis of the independent actuarial valuation.
1.12 Financial Instruments:
Financial easels and financial iiabilities are recognised when the Company becomes a party to tho contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at transaction values and where such values are different from the fair value, at fair value. Transaction costs that are directly attributable tc tine acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities al 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 recognised Immediately in profit or loss.
A. Financial Assets
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets other than trade receivables are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss is initially recognised al fair value, and transaction costs are expensed in the Statement of Profit and Loss. Subsequent Measurement
For the purpose of subsequent measurement, financial assets are classified in following categories.
(a) Financial Assets at Amortised Cost
A financial assel is subsequently measured al amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contra dual cash flows and the contractual forms of the financial asset give rise on specified dates to cash flows tin at are solely payments of principal and interest on the principal amount outstanding.
(b) Financial Assets Measured at Fair Value
A financial assel is subsequently measured at fair value through other comprehensive income if il Is held within 3 business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the: contractual terms cf the financial asset give rise on specified dates to cash flows that are solely payments of principal and interesl on the principal amount outstanding. Further, in case where the company has made an irrevocable selection based on Us business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income. In any other case, financial asset is fair valued through profit and loss.
(c) Impairment of Financial Assets
The Company recognizes loss allowances using the expected credit loss (EGL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL For all other financial assets, expected credit losses are measured at an amount equal to Ihe 12-month ECL, unless there has teen a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required lo be recognised is recognised as an impairment gain or loss in stalament of profit or loss.
(ft) De-recognition of Financial Assets
The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial assel and substantially all risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the assets ar.d an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
S, Equity Instruments end Financial Liabilities
Financial liabilities and equity instruments issued by line Company are classified according to the substance of Ihe contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
(a) Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity Instruments which are Issued for cash are recorded at the proceeds received, net of direct issue costs. Equity instruments which are issued for consideration other than cash are recorded at fair value of the equity instrument.
(b) Financial Liabilities
Financial liabilities are classified, al initial recognition, as financial liabilities at FVPL. loans and borrowings and payables as appropriate. All financial liabilities are recognised initially at -air value and, in the case of loans and borrowings and payables, net of directly attributable tran sac lion costs.
(c) Subsequent Measurement
Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate the fair value due to the short maturity of these instruments.
(d) Da-recOg nit ion of Financial Liabilities
Financial liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled or expired. 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 subsl anti ally modified, such an exchange or modification is treated as de-recognition of the original liability and recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss,
C. Offsetting Financial Instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Shagf if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis to realise the assets and settle the liabilities simultaneously.
1.13 Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and demand deposits with an original maturity of three months or less and highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value net of outstanding bank overdrafts as they are considered an integral part of the company's cash management.
1.14 Earnings per Share:
Basic earnings per equity share are computed by dividing Ihe net profit or loss for the year attributable to the Equity Shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit or loss For the year, adjusted for the effects of dilutive potential equity shares, attributable to the Equity Shareholders by the weighted average number of the equity shares and dilutive potential equity shares outstanding during the year except where the results are anti-dilutive.
1.15 Lease
The Company has no leases cr any contract containing lease and accordingly, no disclosure has been made on the same.
1.16 Impairment of non-financial assets
Non-fingnci.-jl assets other than inventories, deferred tax assets and non-current assets classified as held for sale are reviewed at each Balance Sheet date to determine whether there Is any indication oF Impairment. IT any such indication exists, or when annual Impairment testing
for an asset is required, the Corporation estimates the asset's recoverable amount. The recoverable amount is the higher of the asset's or Cash-Generating Unit's {CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.
When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
1.17 Schedule 111 amendment disclosures;
Ministry of Corporate Affaire ("MCA") issued notification dated March 24, 2021 to amend Schedule 111 of the Companies Act, 2013 to enhance the disclosures required to be made by the Company in its financial statements. These amendments ere applicable tD the Company for the financial year starting April 1, 2021 and applied to the standalone financial statements1
- Certain additional disclosures in the statement of changes in equity such as changes in equity share capital due to prior period errors and restated balances at the beginning of the ourron! reporting period.
* Additional disclosure for shareholding of promoters.
* Additional disclosure for ageing schedule of trade receivables, trade payables and capital work-in-progress.
* Specific disclosure such as compliance with approved schemes of arrangements compliance with number of layers of companies, title deeds of immovable property not held in name of company, loans and advances to promoters, directors, key managerial personnel (KMP) and related parties etc.
* Additional disclosure for relating to Corporate Social Responsibility fCSR) and undisclosed income.
1,1 B Statement of Cash Flows:
Statement of Cash flows is prepared segregating the cash flows from operating, investing and
financing activities. Cash flow from operating activities is reported using indirect method. Under the indirect method,
the net profil^loss) is adjusted for the effects of;
i. Changes during the year in inventories and operating receivables and payables and transactions of a nun-cash nature;
ii. Non-cash Items such as depreciation, provisions, unrealised foreign currency gains and losses, and undistributed profits of associates; and
iii. All other items for which the cash effects are investing or financing cash flows.
The cash flows from operating, investing and financing activities of the Company is segregated based on the available information. Cash and cash equivalents {including bank balances) are reflected as such in the Cash Fiow Statement.
1,19 Property, Riant and Equipment
Property, Plant and Equipment are stated at cost of acquisition including any directly attributable expenditure on making the asset ready for its intended use, attributable interest and finance costs. It any, till the dale af acquisition/ installation of the assets less accumulaled depreciation and impairment losses, if any. Subsequent expenditure ratal ing to Property, Plant and Equipment is capitalised only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably, An item of ?roperty, plant and equipment Is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset.
On transition to Ind AS, the Company has opted to continue with the carrying vaiues measured under the previous GAAP as at April 01 r 2015 of its Property, Plant and Equipment and use the carrying value as deemed cost of the Property, Plant and Equipment on the date of transition i,e April 01, 2015.
1.30 Intangible Assets
Identifiable intangible assets are recognised when the Company controls the asset, it is probable that future economic benefits attributed to the asset will flow to the Company and the cdsI of I ha asset Can be reliably measured. Intangible assets are stated at cost, less accumulated amortisation and accumulated impairment losses, if any. The estimated useful life and amortization method reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
1.21 Depreciation/ Amortisation
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost less its estimated residual value. Depreciation on Property, Plant and Equipment have been provided on Straight-Line m el hod in accordance with the Schedule II cf the Companies Act, 2013, based on the useful life estimated on the technical assessment as in force and proportionate depreciation are charged for additions/disposals during the year. In respect of additions I disposal to the fixed assets / leasehold improvements, depreciation is charged from the date the asset is ready to use I up to the date of disposal. The asset's useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period.
1.22 Investment property
Investment properties are properties held to earn rentals and/or for capital appreciation (including property under Construction for such purposes). Investment properties are measured initially at Cost, including transaction casts. Subsequent to initial recognition, investment properties are measured in accordance with the Ind AS16'g requirement for cost model-
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no further economic benefits expected from disposal.
Any gain or loss arising on de-recognibon of the property is included in profit cr lass in the period in which the property is derecognized.
1.23 Inventories:
Raw Materials:
Raw Materials, construction materials and stores & spares are valued at lower of weighted average cost or not realizable value Cost includes ail charges in bringing the materials to the place of usage, excluding refundable duties and taxes.
Work in Progress:
Work-in-Progress is valued ai the contracted rates less profit margin / estimates.
1.24 Interest in Joint Operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to tiie assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
When a company undertakes its activities under joint operations, the company as a joint operator recognises in relation to its interest in a joint operation:
1 its assets, including its share of any assets held jointly.
2. its liabilities, including its share of any liabilities incurred jointly,
3. its revenue, including its share any revenue arising jointly.
4. its expenses, including its share of any expenses Incurred Jointly.
The Company accounts for the assets, liabilities, revenues, and expenses relating to its intetest in a joint operation in accordance with the Ind AS applicable to the particular assets, liabilities, revenues, and expenses.
1.25 Insurance claims
Insurance claims are accounted tor on the basis of claims admitted f expected to be admitted and to the extent that Ihe amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
1.26 Claims
Claims against the company not acknowledged as debts are disclosed under contingent liabilities. Claims made by the company are recognised as and when the same is approved by the respective authorilles with whom the claim is lodged.
1.27 Commitments
Commitments are future liabilities for contractual expenditure. Commitments are classified and disclosed as follows:
a} Estimated amounl of contracts remaining to be executed on capital account and not provided for h) Uncalled liability on shares and other investments pertly paid
c) Funding related commitment to subsidiary, associate and jcint venture companies and
d) Other non-can Celia bio commitments, if any, to tho extent they are considered material and relevant in the opinion of management.
e) Other commitments related to sal os,'procurements made in the normal course of business are not disclosed to avoid excessive details.
2.33 Employee benefits
Gratuity: The Company provides for gratuity, a defined benefit retirement plan ("the Gratuity Plan'1} covering eligible employees of Madhucon. The Gratuity Plan provides a lumpsum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment with the Company.
Liabilities with regard to these defined benefit plan are determined by actuarial valuation, performed hy an external actuary, at each Balance Sheet date using the projected unit credit method. These defined benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk and market risk.
Provident Fund: Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the eligible employee and the Company mgka monthly contributions to ihE provident fund plan equal to a specified percentage of the covered employee's salary.
2.40 Some of the Dank Accounts at closed projects which are in dormant and have not been reconciled due to nonavailability of statements.
2-41 Some of the entries as per 20 AS not reflected in books of accounts and the same is under reconciliation with books of account.
2.42 Certain accounts are pending from long times which are not necDverabte/payable as per limitation Act, passed necessary entries in books of account.
'iri thft
2.43 A portion of the balance receivable from Madhucon Infra Limited (subsidiary company) has been written offIn nooks of account based Dn the internal assessment.
2.45 Going Concern
In Preparing the financial statements the Board of Directors have considered the operations of the Company as Soin9 concern notwithstanding that the Company incurred a net loss of Rs.979.59 Lakhs (Previous Year a net Profit Rs.4S9.21} Lakhs for the financial year ended 31st march 2024, and as at that dale, the Company is in net current liabilities position of Rs. 92,331.93 Lakhs (Previous year Rs. 1, 29,223.44 Lakhs) as at 31st March 2024, and has defaulted in payments of dues to Banks. However, the management believes the use of going concern assumption on the preparation of the financial statements of the company is still appropriate in view of closing some of the liabilities on OTS basis and implementation of OTS agreements already entered into in case of some banks, and its continuing discussions with its other lenders to obtain approval for and an appropriate debl resolution plan and also, that the company will continue to be in operation in the foreseeable future.
2.46 Additional Regulatory Information
i) Title Deeds of ail immovable properties are held in the name of the company.
ii) The Company is not in possession of any Investment property.
in) The Company has not revalued any of its Property, Plant and Equipment during the year.
iv) No loans and advances were granted to promoters, directors, KMPs
v) There is no capital work-in-progress
vi) There are no proceedings initiated or pending against the company for holding any ben a mi property under the Benami Transactions (Prohibition) Act, 1968 (45 of 1983) and rules made thereunder.
vii) The company has borrowings from banks on the basis of security et current assets but those borrowings have been declared as NPAs by the banks. Borrowings from some of the Banks were settled on OTS,
vlii) The company was not declared as a willful defaulter by any bank or financial institution.
ix) The company did not enter into any transactions with struck off companies.
x} There are no charges or satisfaction yet to be registered with ROC beyond the statutory period
xi)The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017,
xli) There are no Scheme of Arrangements approved by the Competent Authority in terms of sections 230 to £37 of the Companies Act, 2013.
xiii) Utilization of Borrowed funds and share premium:
(A) The company didn’t advance or lend or invest funds (either borrowed funds or share premium or any other sources or kind or' funds) to any other personas) or entity(ies),including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall
(i) Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf ot the company (Ultimate Beneficiaries) or
(ii) Provide any guarantee, security or the tike to or on behalf of the Ultimate Beneficiaries
(B) The company didn't receive any fund from any person (s) or entity (ies), Including foreign enlities (Funding Party) with the understanding (whether recorded in writing er otherwise) that the company shall
(i) Directly or indirectly lend or invest in other persons or entilios identified in any manner whatsoever by or on behaJf of the Funding Party (Ultimate Beneficiaries) or
(ii) Provide any guarantee, security or the like on behalf of the Ultimata Beneficiaries
Comments:
Current Ratio:
Current Ratio is improved due to come down of Current Liabilities due to settlemenu payment of some of the liabilities and also slight increase in the Current Assets.
Debt Service Coverage Ratio:
Significant improvement in the ratio due to increase in the revenue from operations and reduction m the liabilities by clearing long pending dues.
Return on Equity Ratio:
Reduction in the Return on Equity Ratio due to net loss incurred by the company during the current financial year. Trade payables turnover ratio:
improvement in the Ratio due to reduction in I he Trade Payables by clearing the Trade creditor's dues.
Ret capital turnover ratio:
Met Capital Turnover Ratio is improved duo to increase in the Sales turnover and rad action in liabilities by clearing the dues.
inventory turnover ratio:
Inventory Turnover Ratio is increased as result of better utilization of materials and effective management policies.
Net profit ratio:
Net profit Turnover Ratio is negative due to incurring of net loss by the company during the year Undisclosed Income
There were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax Ad, 1961 (43 of 1961) during the year.
xvi) Corporate Social Responsibility
Since the company Is incurring losses in current year and consecutively for preceding 2 financial years CSR is not applicable
xvii) Details of Crypto Currency or Virtual Currency
The company has neither traded nor Invested in Crypto currency or Virtual Currency during the financial year 2,47 Figures for the previous year have been regrouped/re-ctassified to conform to the figures of the current year
In terms of our report attached
For P.Murali & Co. For and on behalf of the Board
Chartered Accountants FRN: Q07257S
A. Krishna Rao N. Seethaiah Mohammad Shafi J, Samba siva Rao
Partner Managing Director Jt Managing Director Director {F & A)
Membership Number 02Q0S5 DIN-00704491 Dl N-Q 717 0 2 65 DIN: 095 264 7 5
U DIN: 24 020 085BK AU H M 9 560
Place: Hyderabad K, Venkateswgrlu D, Malla Reddy
Date: May 18,20.24 Director cum CFO Company Secretary
' DIN-097131OS ACS: 9559
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