Nature and purpose of reserves:1) Capital Reserve
The capital reserve is created from capital profits in the earlier years.
2) General Reserve
General reserve is transfer of profits from retained earnings for appropriation purposes.
3) Share Premium
Securities premium is created due to shares being issued on premium. The reserve can be utilised only for certain purpose as per the provisions of the Companies Act, 2013.
4) Retained earning
The retained earnings represents balance of accumulated net profit or loss from business operations.
5) Transaction Cost on the Equity Instruments
This reserve represents the transaction cost incurred for issue of equity share capital and recognised due to Ind AS adjustment.
During the FY 24-25, the Company increased its authorised share capital by Rs 2,700 lakhs (which comprises 270,00,000 equity shares with the face value of Rs 10 each). The Company has incurred Rs 25.65 lakhs with respect to duty payable on an increase in authorized share capital and Rs. 7.11 lakhs other transaction costs pertaining to issue of share warrants. In the year 23-24, the Company has incurred Rs. 4.04 lakhs with respect to prefential allotment of shares etc. As per the relevant Ind AS, the said transaction costs is recognised and disclosed under “Other Equity”.
6) Money received against share warrants
During the financial year 2024-25, the Board of Directors, in its meeting held on 13th November 2024, approved the issuance of up to 3,71,80,555 convertible warrants, aggregating to Rs.6,292.49 lakhs, at an issue price of Rs.18 per warrant, on a preferential basis. Subsequently, on 10th December 2024, the shareholders approved the issuance of 3,71,80,555 convertible warrants (aggregating to Rs.6,292.49 lakhs) through a resolution passed at the Extraordinary General Meeting. The Company received in-principle approval from the Bombay Stock Exchange on 17th December 2024 for the proposed issue of 3,71,80,555 convertible warrants, each convertible into one equity share of face value Rs.10, at a price not less than Rs.18 per warrant, to non-promoters on a preferential basis. Further, on 18th December 2024, the Board of Directors approved the allotment of 1,16,89,473 convertible warrants, representing 25% of the total consideration (i.e., Rs.1,573.12 lakhs, being 25% of Rs. 6,292.49 lakhs), in accordance with applicable regulations. As on 31st March 2025, the Company had received Rs.1,673.12 lakhs towards application money for the convertible warrants.
16.3 Under the Micro, Small and Medium Enterprises Development Act, 2006, certain disclosures are required to be made relating to dues to Micro, Small and Medium enterprises. Based on the information available with the Company, parties who have been identified as micro, small and medium enterprises as at reporting date other than mentioned above based on the confirmations circulated and responses received as at reporting date by the management. Any updated information received by the management post reporting date regarding change in the status to micro, small and medium enterprises would be given effect of status change in the next financial year. The Company has made necessary provision for interest on delayed payment to parties registered under MSME Act, 2006.
21.1 The Payment of Gratuity Act, 1972 is not applicable to the Company as the numbers of employees are less than ten and hence, the Company has not made provision towards defined benefit plan in the form of gratuity. Further, there are no outstanding leave benefits for which provision is required to be made in the books of account.
Financial Instrument by category and hierarchy
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation .
The following methods and assumptions were used to estimate the fair values:
i) The management assessed that fair value of cash and cash equivalents, borrowing, other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments and are equal to the fair values.
ii) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.
The fair values of non-current borrowings are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of unobservable inputs, including own credit risk.
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled except investment in subsidiary which is carried at cost.
Hierarchy used for determining and disclosing the fair value of financial instruments by valuation technique:
The different levels have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
26.1 Fair value hierarchy
The following table provides the fair value measurement hierarchy of the Company’s financial instruments along with their carrying amounts and fair value.
The Company’s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company’s financial assets comprise mainly of investments and other assets.
The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company has adopted a Risk Management Charter and Policy for self-regulatory processes and procedures for ensuring the conduct of the business in a risk conscious manner. The Risk Management Policy of the Company states the Company’s approach to address uncertainties in its endeavour to achieve its stated and implicit objectives. It prescribes the roles and responsibilities of the Company’s management, the structure for managing risks and the framework for risk management. The framework seeks to identify, assess and mitigate financial risks in order to minimize potential adverse effects on the Company’s financial performance.
The Company has exposure to the following risks arising from financial instruments:
I. Market Risk
II. Credit Risk
III. Liquidity Risk
I. Market Risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments.
Market risk comprises three types of risks:
a. Interest Rate Risk,
b. Currency Risk,
c. Other Price Risk.
Financial instruments affected by market risk includes borrowings, investments and trade payables.
a. 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.
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing instruments because of fluctuations in the interest rates, in cases where the borrowings are measured at fair value. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing instruments will fluctuate because of fluctuations in the interest rates.
b. Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities i.e. when revenue or expense is denominated in a foreign currency. The Company is not exposed to foreign currency risk.
c. Price Risk :
Price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. The Company has investment in securities which is not exposed to price risk except investment in 15% Compulsory Convertible Debentures which is recognised under the category of Fair value through profit and loss (under level 3) which is made in previous year.
II. Credit Risk
Credit risk refers to risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as Investment, Cash and cash equivalent, balances with banks and other financial assets . The Company’s exposure to credit risk is disclosed in note 6, 8, 9 and 10.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations,
iv) Significant increase in credit risk on other financial instruments of the same counterparty,
v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
Financial assets are written off when there is no reasonable expectations of recovery. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in the standalone statement of profit and loss.
The Company measures the expected credit loss based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.
Other Financial assets
Credit risk arising from other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies.
For other financial assets e.g. Investments and other assets, Company periodically assesses financial reliability counter parties, taking into account the financial condition, current economic trends, and analysis of historical credit losses and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.
III. Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities.
The table below analyse financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Capital Management
For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.
As at March 31, 2025 and March 31, 2024, the Company has one class of shares in the nature of equity. Further company had raised fund through loans from related parties. Consequent to such capital structure, there are no externally imposed capital requirements.
The information disclosed is based on the names of the parties as identified by the management and same has been relied by the Auditor. Further, above transactions (including outstanding balances) are after considering the fair value adjustments under Ind AS.
Note 29 : Segment Reporting
There are no reportable segments under Ind AS-108 ‘Operating Segments’ as all the activities relate to only one segment i.e. civil construction. Further the management of the Company is also reviewing the results / operations of the Company as single segment i.e. civil construction.
Note 30 : Deferred Tax Assets / Liabilities:
As at 31st March 2025, the Company has unrecognised deferred tax assets aggregating to ?157.76 lakhs (Previous year: ?107.12 lakhs) arising mainly from carried forward business losses and other timing differences. While the Company has prepared its financial statements on a going concern basis considering the expected commencement of manufacturing operations during FY 2025-26 and continued financial support from promoters and group entities (as detailed in Note No. 38), there is presently no virtual certainty, supported by convincing evidence, that sufficient future taxable income will be available to realize these deferred tax assets.
Accordingly, in compliance with Ind AS 12 - Income Taxes, the Company has not recognised these deferred tax assets in its books and has disclosed them by way of note only.
Since the Company does not have any revenue from operations and inventories, the relevant ratios pertaining to it is not applicable and hence, not disclosed.
Note 32 : The fair value of the investments in the subsidiary, Modulex Modular Buildings Private Limited (MMBPL), as assessed by Independent valuer for the year ended March 31, 2025, is sufficient to cover the cost of investments. The valuer has factored in the impact of the subsidiary’s project progress and projected business in coming years. Based on management’s outlook for long-term improvement in MMBPL’s performance and the commitment to future business outlook, management believes that no impairment is required for the Investment in the subsidiary.
(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 do not have any transactions with Companies struck off.
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) 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
(vi) 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,
(vii) The Company does not have 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).
(viii) The Company has complied with provisions of downstream layers of companies as per Section 2(87) of the Companies Act, 2013 read with Companies (Restriction on number of Layers) Rules, 2017.
(ix) Reporting/disclosures is not made/applicable to the Company with respect to submission of statement of current assets to the bank as credit facility is not sanctioned against current assets of the Company.
(x) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(xi) Any other disclosure with respect to the amendment of Schedule III of the Act is either Nil or not applicable.
Interest expense on borrowings was Rs 45.66 Lakhs and Rs Rs 54.87 lakhs for the year ended 31st March 2025 and 31st March 2024 respectively.
Note 35 : The Company has incurred a net loss (before Other Comprehensive Income) during the current period and in previous years, primarily due to delays in the implementation of the project at Pune through its subsidiary, Modulex Modular Buildings Private Limited (MMBPL). These delays, along with other contributing factors, have resulted in a situation where the Company’s current assets are insufficient to meet its current liabilities, thereby indicating the existence of a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern.
However, in June 2024, the subsidiary received a land re-allotment order from MIDC and subsequently executed a 95-year long-term lease agreement with the Sub-Registrar at Indapur on August 9, 2024. As previously committed, the management has initiated the factory construction project at Indapur, District Pune, through MMBPL and is actively working towards its completion. The promoters and other investors have extended financial support to facilitate the completion of this project. In view of these developments, the Standalone Financial Results have been prepared on a going concern basis.
Note 36 : Other Commitments:
The Company has given the commitment to provide the financial support to Subsidiary Company (Modulex Modular Buildings Private Limited) as and when required.
Note 37 : Contingent liabilities, Capital & Other Commitments
As per Note 6.3, during the year 23-24, the Company has given Corporate Guarantee to its subsidiary Modulex Modular Buildings Pvt. Ltd. against the loan of Rs. 200 lakhs. As on 31.03.2025, loan outstanding is Rs.200 lakhs.
Note 38 : Comparatives
The figures of the previous year have been regrouped and re-arranged wherever necessary to conform to current presentation. The figures for the current year and previous year have been presented in INR in Lakhs.
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