Notes to Accounts of HG Infra Engineering Ltd.

Mar 31, 2025

Provisions are measured at the present
value of management’s best estimate
of the expenditure required to settle
the present obligation at the end of
the reporting period. The discount rate
used to determine the present value
is a pre-tax rate that reflects current
market assessments of the time value
of money and the risks specific to the
liability. The increase in the provision
due to the passage of time is recognised
as interest expense.

b. Contingent liabilities are disclosed
when there is a possible obligation
arising from past events, the existence
of which will be confirmed only by
the occurrence or non-occurrence of
one or more uncertain future events
not wholly within the control of the
Company, or a present obligation that
arises from past events where it is
either not probable that an outflow of
resources will be required to settle the
obligation or a reliable estimate of the
amount cannot be made.

xx. Employee benefits

(i) Short term obligations

xix. Provisions and contingent liabilities

a. Provisions are recognised when
Company has a present legal or
constructive obligation as a result
of past events, it is probable that an
outflow of resources will be required
to settle the obligation and the amount
can be reliably estimated. Provisions
are not recognised for future
operating losses.

Liabilities for wages and salaries,
including non-monetary benefits that
are expected to be settled wholly
within 12 months after the end of the
period in which the employees render
the related service are recognized in
respect of employees’ services up to
the end of the reporting period and are
measured at the amounts expected to
be paid when the liabilities are settled.
The liabilities are presented as current
employee benefit obligations in the
Standalone Balance Sheet.

(ii) Other long term employee benefit
obligations

The liabilities for earned leave and
sick leave are not expected to be settled
wholly within 12 months after the end
of the period in which the employees
render the related service. They are
therefore measured as the present value
of expected future payments to be
made in respect of services provided
by employees up to the end of the
reporting period using the projected
unit credit method. The benefits are
discounted using the market yields at
the end of the reporting period that have
terms approximating to the terms of the
related obligation. Remeasurements as
a result of experience adjustments and
changes in actuarial assumptions are
recognized in Standalone Statement of
profit and loss.

The obligations are presented as
current liabilities in the Standalone
Balance Sheet if the Company does not
have an unconditional right to defer
settlement for at least twelve months
after the reporting period, regardless
of when the actual settlement is
expected to occur.

(iii) Post-employment obligations

The Company operates the following
post-employment schemes.

• Defined benefit plan i.e. gratuity

• Defined contribution plans

such as provident fund,

superannuation etc.

Gratuity obligations (Also, Refer
note 2(b) )

The liability or asset recognized in the
Standalone Balance Sheet in respect
of defined benefit gratuity plan is the
present value of the defined benefit
obligation at the end of the reporting
period less the fair value of plan
assets. The defined benefit obligation
is calculated annually by actuaries
using the projected unit credit method.

The present value of the defined benefit
obligation is determined by discounting
the estimated future cash outflows by
reference to market yields at the end
of the reporting period on government
bonds that have terms approximating to
the terms of the related obligation.

The net interest cost is calculated by
applying the discount rate to the net
balance of the defined benefit obligation
and the fair value of plan assets. This
cost is included in employee benefit
expense in the Standalone Statement
of profit and loss .

Remeasurement gains and losses
arising from experience adjustments
and changes in actuarial assumptions
are recognized in the period in
which they occur, directly in other
comprehensive income. They are
included in retained earnings in the
statement of changes in equity and in
the Standalone Balance Sheet.

Changes in the present value of the
defined benefit obligation resulting
from plan amendments or curtailments
are recognized immediately in
Standalone Statement of profit and
loss as past service cost.

Defined contribution plans

The Company pays contribution to
defined contribution schemes such
as provident fund etc. The Company
has no further payment obligation
once the contributions have been
paid. The contributions are accounted
for as defined contribution plans
and the contributions are recognized
as employee benefit expense
when they are due.

Bonus plans

The Company recognises a liability
and an expense for bonuses. The
Company recognises a provision
where contractually obliged or where
there is a past practice that has created
a constructive obligation.

xxi. Contributed equity

Equity shares are classified as equity.
Incremental costs directly attributable
to the issue of new shares or options are
shown in equity as a deduction, net of tax,
from the proceeds.

xxii. Dividends

Provision is made for the amount of any
dividend declared, being appropriately
authorised and no longer at the discretion
of the entity, on or before the end of the
reporting period but not distributed at the
end of the reporting period.

xxiii. Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated
by dividing:

• The profit attributable to owners
of the Company; and

• By the weighted average number
of equity shares outstanding
during the financial year, adjusted
for bonus elements in equity
shares issued during the year

(ii) Diluted earnings per share

Diluted earnings per share adjusts
the figures used in the determination
of basic earnings per share to

take into account:

• the after income tax effect of
interest and other financing costs
associated with dilutive potential
equity shares, and

• the weighted average number
of additional equity shares that
would have been outstanding
assuming the conversion of all
dilutive potential equity shares.

xxiv. Rounding of amounts

All amounts disclosed in the Standalone
financial statements and notes have been
rounded off to the nearest million as per
the requirement of Schedule III, unless
otherwise stated.

2. Critical estimates and judgments

The preparation of the Standalone financial
statements requires use of accounting estimates
which, by definition, will seldom equal the
actual results. Management also needs to
exercise judgment in applying the Company’s
accounting policies.

This note provides an overview of the areas
that involved a higher degree of judgments or
complexity, and of items which are more likely
to be materially adjusted due to estimates and
assumptions turning out to be different than
those originally assessed. Detailed information
about each of these estimates and judgments
is included in relevant notes together with
information about the basis of calculation
for each affected line item in the Standalone
financial statements.

The areas involving critical estimates or
judgments are:

(a) Estimation of useful life of Property,
plant and equipment

The Company estimates the useful life of the
Property, plant and equipment as mentioned
in note 1 (o) above, which is based on the
expected technical obsolescence of such
assets. However, the actual useful life may
be shorter or longer than the life estimated,
depending on technical innovations and
competitor actions.

(b) Estimation of defined benefit obligation

The cost of the defined benefit gratuity
plan and other post-employment employee
benefits and the present value of the
gratuity obligation are determined using
actuarial valuations. An actuarial valuation
involves making various assumptions that
may differ from actual developments in
the future. These include the determination
of the discount rate, future salary
increases and mortality rates. Due to the
complexities involved in the valuation
and its long-term nature, a defined benefit
obligation is highly sensitive to changes
in these assumptions. All assumptions
are reviewed at each reporting date.
The parameter most subject to change

is the discount rate. In determining the
appropriate discount rate for plans operated
in India, the management considers the
interest rates of government bonds in
currencies consistent with the currencies
of the post-employment benefit obligation.
The mortality rate is based on publicly
available Indian Assured Lives Mortality
(2012-14) Ultimate. Those mortality tables
tend to change only at interval in response
to demographic changes. Future salary
increases and gratuity increases are based
on expected future inflation rates for the
respective countries. Refer note 45 for key
actuarial assumptions.

(c) Estimation of fair value of level 3
financial instruments

The fair value of financial instruments
that are not traded in an active market is
determined using valuation techniques.
The Company uses its judgment to select a
variety of methods and make assumptions
that are mainly based on market conditions
existing at the end of each reporting period.
Refer note 39 on fair value measurements
where the assumptions and methods to
perform the same are stated.

(d) Revenue recognition for construction
contract - Refer note 1 (iv) and note 53

(e) Impairment of trade receivables
(including Contract Assets) - Refer note
1 (ix) and 7,11, 16 (a) and 40 (i)

Estimation of fair value

The fair valuation is based on current prices in the active market for similar properties. Where such information is
not available, the Company considers information from a variety of sources including:

• Current prices in an active market for properties of different nature or recent prices of similar properties in less
active markets, adjusted to reflect those differences

• Discounted cash flow projections based on reliable estimates of future cash flows

• Capitalised income projections based upon a property’s estimated net market income, and a capitalisation rate
derived from an analysis of market evidence.

The Company has obtained independent valuations report of investment properties from registered valuers as
defined under rule 2 of Companies (Registered Valuers & Valuation) Rule, 2017. The main inputs used are
quantum, area, location, demand, rental growth rates, expected vacancy rates, terminal yields and discount rates.

(b) Terms and rights attached to equity shares

The Company has only one class of equity shares having face value of H 10 per share. Accordingly, all equity
rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to
receive dividend as declared from time to time. The dividend proposed by the board of directors is subject to the
approval of shareholders in annual general meeting. The voting rights of an equity shareholder on a poll (not on
show of hands) are in proportion to its share of the paid-up equity capital that has not been paid. On winding up of
the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining
after distribution of all preferential amounts in proportion to the number of equity shares held.

As per the records of the Company, including its registers of shareholders (members) and other declarations received
from shareholders regarding beneficial interest, the above shareholding represents legal and beneficial ownerships.

(d) There are no shares allotted as fully paid up pursuant to contracts without being received in cash since incorporation.

(e) There are no shares which are reserved to be issued under options and there are no securities issues / outstanding
which are convertible into equity shares.

(f) No class of shares have been issued as bonus shares or for consideration other than cash by the Company during
the period of five years immediately preceeding the current year end.

(g) No class of shares have been bought back by the Company during the period of five years immediately preceding
the current year end.

*Nature of Security in relation to Working Capital loans

a) Primary Security - First Pari Passu charge in favour of the Banks by way of Hypothecation of the Company''s entire
current assets (present and future) including, but not limited to, stocks of raw materials, stock in progress, finished
goods, stores and spares and receivables, margin money deposits, security deposits etc.

b) Collateral Security - First Pari Passu charge in favor of Banks by way of mortage of certain identified immovable
properties of the Company and personal and corporate guarantors as per the collateral agreement.

c) All the working capital loans are also secured by personal guarantee of Mr. Hodal Singh, Mr. Girishpal Singh,
Mr. Vijendra Singh, Mr. Harendra Singh, Mr. Shailesh Patel, Mr. Vaibhav Choudhary and Corporate Gurantee of
M/s Hotel Marudhar (Partnership Firm), M/s H.G. Luxury Hotels Private Limited, M/s H.G. Acerage Developers
Private Limited and M/s Valencia Leisure Private Limited. During the year the Company has submitted a request
letter to the Lead Bank of the Consortium and obtained the approval to restrict the liability of Corporate Guarantors
to the extent of higher of:

1) The value of the immovable properties as on date of guarantee; (or)

2) The value of the immovable properties as per the latest valuation report obtained at the time of invocation
from valuer acceptable to the bank; (or)

3) The market value of the properties as on date of enforcement, subject to a floor value for guaranteed obligations.
The extent of guarantees given are mentioned in Note 44 against each of the guarantor.

d) The working capital Loans are repayable on demand and interest rate on the above loan from banks in consortium
are linked to the respective bank base rate/ MCLR which are floating in nature. The interest rate ranges from 7.45%
to 10.65% per annum on rupees working capital loans.

e) The Loan from Mr. Harendra Singh and Mr. Vijendra Singh, is unsecured. Interest is charged on the outstanding
principal amount at 8.25% p.a.. The loan must be repaid within 7 days after the Directors issue a written notice of
demand to the Company.

For Security details of Term loans, vehicle loans and 8% Rated, listed, senior, secured, redeemable, non convertible
debentures, Refer Note 21.1.

Compliance of Debt Covenants

Working Capital loans contain certain debt covenants relating to limitation on indebtedness, Current ratio, Net Debt to
EBIDTA ratio, Interest coverage ratio, Total outside liablity to Adjusted Tangible net worth, Minimum Credit Rating,
EBITDA Margin, Adjusted Tangible net worth and Total outside liablity to Tangible net worth. The Limitation on
indebtness covenants get suspended if the Company meets certain prescribed criteria. The Company has satisfied all
debt covenants mentioned above. The other loans do not carry any debt covenants.

Supplier financing arrangement

The Company implemented a supplier financing program available to its suppliers. Participation in this program is
voluntary for suppliers. Suppliers opting into this arrangement are eligible to receive early payment for invoices issued
to the Company through a third party financial institution. The suppliers pay a fee and/or interest to the financial
institution for this early payment service. To authorise early payments, the Company must first verify that the goods
or services have been received and that the related invoices have been approved. The financial institution processes
early payments before the original invoice due date. Regardless of early payment, the Company settles the full invoice
amount directly with the financial institution based on the original payment terms. This arrangement does not alter the
existing payment terms with suppliers.

This section explains the judgments and estimates made in determining the fair value of the financial instruments
that are measured at amortised cost and for which fair value are disclosed in the Standalone financial statements.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes instruments
like listed equity instruments, traded bonds and mutual funds that have quoted price.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds,
over-the counter derivatives etc) is determined using valuation techniques which maximise the use of observable
market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value
an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included
in level 3. This is in the case of unlisted securities.

The carrying amounts of short term loans, trade receivables, cash and cash equivalents, bank balances other than
cash and cash equivalents, other receivables, trade payables, current borrowings, interest accrued, capital creditors
and other payables are considered to be the same as their fair value due to their short-term nature. The impact
of fair value on non-current financial assets and non-current financial liabilities (not considered above) is not
expected to have material impact on the standalone financial statements, hence not dislcosed above.

The fair value of security deposits were not calculated based on their future cash flows discounted at current
lending rate as these security deposits are expected to continue to remain till the existence of the Company.

Note 40 - Financial Risk Management

The Company’s activities expose it to a variety of financial risks namely credit risk, liquidity risk and market risk. The
Company’s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects
on its financial performance.

(i) Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. Financial instruments that are subject to credit risk and concentration thereof
principally consist of trade receivables, contract assets, security deposits, deposit with banks, loans, others
receivables and cash and cash equivalents.

Impairment of Financial Assets :

The Company has three types of financial assets that are subject to expected credit loss model:

1. Trade Receivables for construction contracts

2. Contract Assets relating to construction contracts

3. Loans and Other receivables

While cash and cash equivalents and deposits with banks are subject to impairment requirements of Ind AS 109,
the identified impairment on these assets is Nil.

For Trade receivables and Contract assets for construction contracts : Management makes the assessment of
the credit risk on trade receivables and contract assets considering the customer profile. Customers of the Company
mainly consists of the government promoted entities and some large private corporates. In case of government
customers which forms the majority of the revenue, credit risk is low.

Considering the nature of business, each contract and its customer is evaluated for the purpose of assessment of
loss allowances. The reasons for loss allowances could be recovery of claims, disputes with customer, customers
ability to pay, delays in approval by government authorities, and expected time to recover the amount. Management
makes an assessment considering the overall nature of collection and facts of each contract, terms of the contract
and accordingly considers the need for loss allowances, if any.

Liquidity risk defined is as the risk that the Company will not be able to settle or meet its obligations on time or at
a reasonable price. Company''s objective is to, at all time maintain optimum levels of liquidity to meet its financial
obligations. The Company manages liquidity risk by maintaining sufficient cash and cash equivalents and by
having access to funding through an adequate amount of committed credit lines. In addition, processes and policies
related to such risks are overseen by senior management.

Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing
facilities below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried
out at by senior management in accordance with practice and limits set by the Company. These limits take into
account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management
policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to
meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and
maintaining debt financing plans.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due for less than 1 year,
equal their carrying balances as the impact of discounting is not significant.

* Guarantee issued by the Holding Company to the bankers on behalf of H.G. Raipur Visakhapatnam AP-1 Private Limited (H.G. Raipur Visakhapatnam AP-1 Private
Limited and H.G. Rewari Bypass Private Limited as at March 31, 2024) is with respect to limits availed by it. These amounts will be payable in case of default by the
respective subsidiary. As of the reporting date, the subsidiary companies has not defaulted and hence, the Holding Company does not have any present obligation to third
parties in relation to such guarantee.

(iii) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of changes in market prices. Market risk comprises two types of risks i.e. interest rate risk and currency risk.
Financial instruments affected by market risk include borrowings and creditors for capital expenditures.

(a) 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
is insignificant and relates primarily to the Company’s creditors for capital expenditures. The Company’s
foreign currency risks are identified, measured and managed at periodic intervals in accordance with
the Company’s policies. As at March 31, 2025, Company''s foreign currency exposure amounts to H NIL
( March 31, 2024 H 47.90 Million ).

(b) Interest Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company''s exposure to risk of changes in market rate is
limited to short term working capital loans at variable rate taken from banks as the Company''s long term
borrowings bear fixed interest rate.

The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest
rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate
because of a change in market interest rates.

The Company manages the interest rate risk by having a balanced portfolio of fixed and variable rate
borrowings. The exposure of the Company’s borrowing to interest rate changes at the end of the reporting
period are as follows:

2. Sensitivity

Profit or loss is sensitive to higher / lower interest expense as a result of changes in interest rates. A 20
basis point increase or decrease is used when reporting interest rate risk internally to key management
personnel and represents management’s assessment of the reasonably possible change in interest rates.
With all other variables held constant, the Company’s profit before tax will be impacted by a change in
interest rate as follows:

---

Mar 31, 2024

Estimation of fair value

The fair valuation is based on current prices in the active market for similar properties. Where such information is not available, the Company considers information from a variety of sources including:

• Current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences

• Discounted cash flow projections based on reliable estimates of future cash flows

• Capitalised income projections based upon a property’s estimated net market income, and a capitalisation rate derived from an analysis of market evidence.

The Company has obtained independent valuations report of investment properties from registered valuers as defined under rule 2 of Companies (Registered Valuers & Valuation) Rule, 2017. The main inputs used are quantum, area, location, demand, rental growth rates, expected vacancy rates, terminal yields and discount rates.

**Terms of optionally convertible unsecured loan

The SPVs have a sole option / discretion to convert loan''s in whole to equity shares at any time during the tenure of loan. If the conversion is exercised, loans shall be converted into a fixed number of equity shares at a fixed price of H 10 each. The equity shares derived from the conversion of the loan’s shall rank pari passu with the existing shares of the SPVs with respect

to all rights therein and the Company shall have the same rights in respect of such shares as the other shares held by the existing shareholder(s). Further, the SPVs have a sole option / discretion to redeem loans in whole at any time during the tenure of the loan''s.

A description of Company''s financial instrument risks, including risk management objectives and policies is given in Note 39. The methods used to measure financial assets reported at fair value are described in Note 38.

Significant changes in contract assets and liabilities

Contract assets have increased as the Company has completed work ahead of the agreed payment schedules for construction contracts. The Company also recognised a loss allowance for contract assets in accordance with Ind AS 109. Contract liabilities have decreased as Company has adjusted mobilisation advance against client billing.

(b) Terms and rights attached to equity shares

The Company has only one class of equity shares having face value of H 10 per share. Accordingly, all equity rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The dividend proposed by the board of directors is subject to the approval of shareholders in annual general meeting. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital that has not been paid. On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

As per the records of the Company, including its registers of shareholders (members) and other declarations received from shareholders regarding beneficial interest, the above shareholding represents legal and beneficial ownerships.

(d) There are no shares allotted as fully paid up pursuant to contracts without being received in cash since incorporation.

(e) There are no shares which are reserved to be issued under options and there are no securities issues / outstanding which are convertible into equity shares.

(f) No class of shares have been issued as bonus shares or for consideration other than cash by the Company during the period of five years immediately preceeding the current year end.

(g) No class of shares have been bought back by the Company during the period of five years immediately preceding the current year end.

(h) Details of shareholding of promotors:

Shares held by promoter & promoter group at the end of March 31,2024

Nature and purpose of reserves

a) Securities premium reserve :

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

b) Retained Earnings:

Retained earnings represents the profit that the Company earned till date, less remeasurement gains/ (loss) of defined benefit plans and can be distributed by the Company as dividends considering the requirements of the Companies Act, 2013.

a) The Company has obtained term loans and vehicles loans from Banks/ Financial Institutions during the Financial year as mentioned above. As per the Loan Agreement, the said loan was availed for the purpose of respective Equipment and Vehicle financing. The Company has used such borrowings for the purposes as stated in the Loan Agreement.

b) Secured term loans from banks and financial institution

All term loans have been obtained for financing the asset purchased and are secured by hypothecation of respective assets purchased out of loan, comprising Property, plant and equipment and Constructions Equipment. (Refer Note 45)

c) Secured vehicles loans from banks and financial institution

All vehicles loans are secured by hypothecation of respective vehicles financed though the loan arrangements. (Refer Note 45)

d) Secured Non convertible Debentures

Non convertible Debentures (NCD''s) are secured by:

(i) Exclusive charge, by way of hypothecation, over identified assets being construction equipment or plant & machinery; and

(ii) Personal guarantee by Mr. Harendra Singh and Mr. Vijendra Singh.

*Nature of Security in relation to Working Capital loans

a) Primary Security - First Pari Passu charge in favour of the Banks by way of Hypothecation of the Company''s entire current assets (present and future) including, but not limited to, stocks of raw materials, stock in progress, finished goods, stores and spares and receivables, margin money deposits, security deposits etc.

b) Collateral Security - First Pari Passu charge in favor of Banks by way of mortage of certain identified immovable properties of the Company and personal and corporate guarantors as per the collateral agreement.

c) All the working capital loans are also secured by personal guarantee of Mr. Hodal Singh, Mr. Girishpal Singh, Mr. Vijendra Singh, Mr. Harendra Singh, Mr. Shailesh Patel, Mr. Vaibhav Choudhary and Corporate Gurantee of M/s Hotel Marudhar (Partnership Firm), M/s H.G. Luxury Hotels Private Limited, M/s H.G. Acerage Developers Private Limited and M/s Valencia Leisure Private Limited. Personal guarantee of Mr. Jodhalal Kalma, Mr. Sanjeev Kumar Choudhary (family friends of Promoters, not to be classified as related parties) and Mrs Nisha Singh (part of promoter group) have been released in the current year.

d) The working capital Loans are repayable on demand and interest rate on the above loan from banks in consortium are linked to the respective bank base rate/ MCLR which are floating in nature. The interest rate ranges from 7.55% to 10.35% per annum on rupees working capital loans.

For Security details of Term loans, vehicle loans and 8% Rated, listed, senior, secured, redeemable, non convertible debentures, Refer Note 21.1.

Compliance of Debt Covenants

Working Capital loans contain certain debt covenants relating to limitation on indebtedness, Current ratio, Net Debt to EBIDTA ratio, Interest coverage ratio, Total outside liablity to Adjusted Tangible net worth, Minimum net working capital Limit, Minimum Credit Rating, Total outside liablity to Tangible net worth, Debt service coverage ratio and Minimum Targeted sales. The Limitation on indebtness covenants get suspended if the Company meets certain prescribed criteria. The Company has satisfied all debt covenants mentioned above. The other loans do not carry any debt covenants.

The Company has not defaulted of any loans payables during the year ended March 31,2024.

**Refer Note 39 (ii) for liquidity risk management and Refer Note 45 for Assets pledged as security".

***The carrying amounts of current borrowings includes payables in respect of vendors which are subject to a factoring arrangement (''the factors''). Under this arrangement, H.G. Infra Engineering Limited has transferred the relevant payables to the factor in exchange for timely payment to MSMED Vendors. Therefore, the amount repayable under the factoring agreement to the factors is presented as unsecured borrowings.

(b) Expenditure towards Corporate Social Responsibility (CSR) activities Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are reaching healthcare and disaster management, education, rural development projects, assistance for setting up homes and shelters, environmental sustainability and animal welfare. A CSR committee has been formed by the Company as per the Act. The funds are utilized throughout the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

(ii) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair value of the financial instruments that are measured at amortised cost and for which fair value are disclosed in the financial statements.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes instruments like listed equity instruments, traded bonds and mutual funds that have quoted price.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives etc) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is in the case of unlisted securities.

The carrying amounts of short term loans, trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents, other receivables, trade payables, current borrowings, interest accrued, capital creditors and other payables are considered to be the same as their fair value due to their short-term nature. The impact of fair value on non-current financial assets and non-current financial liabilities (not considered above) is not expected to have material impact on the standalone financial statements, hence not dislcosed above.

The fair value of security deposits were not calculated based on their future cash flows discounted at current lending rate as these security deposits are expected to continue to remain till the existence of the Company.

Note 39 - Financial Risk Management

The Company’s activities expose it to a variety of financial risks namely credit risk, liquidity risk and market risk. The Company’s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

(i) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, contract assets, security deposits, deposit with banks, loans, others receivables and cash and cash equivalents.

Impairment of Financial Assets :

The Company has three types of financial assets that are subject to expected credit loss model:

1. Trade Receivables for construction contracts

2. Contract Assets relating to construction contracts

3. Loans and Other receivables

While cash and cash equivalents and deposits with banks are subject to impairment requirements of Ind AS 109, the identified impairment on these assets is Nil.

For Trade receivables and Contract assets for construction contracts : Management makes the assessment of the credit risk on trade receivables and contract assets considering the customer profile. Customers of the Company mainly consists of the government promoted entities and some large private corporates. In case of government customers which forms the majority of the revenue, credit risk is low.

Considering the nature of business, each contract and its customer is evaluated for the purpose of assessment of loss allowances. The reasons for loss allowances could be recovery of claims, disputes with customer, customers ability to pay, delays in approval by government authorities, and expected time to recover the amount. Management makes an assessment considering facts of each contract, past trends, terms of the contract and accordingly considers the need for loss allowances, if any.

For Loans and Other receivables : The Company’s investments in debt instruments and certain loans are considered to be low risk investments.

The Company secured contracts by submitting bids in response to tenders in terms of which it is required to form Special Purpose Vehicle (SPV) Companies (Subsidiary Companies) to execute the awarded projects. As at March 31,2024 the Company has 9 SPVs (As at March 31, 2023 the Company had 10 SPVs) who have received contracts from government promoted agencies and revenue related to SPV''s for work executed by the Company has been grouped in Revenue from government promoted agencies.

Note on recoverability of amount due from certain trade receivables and other receivable

The Company has long outstanding dues amounting to t 2,274.09 Million (including contract assets of amounting to t 1,527.40 Million) as at March 31,2024 (March 31, 2023 H 1,981.05 Million) from certain customers which due to liquidity issues have remain unpaid. There is no dispute on the said balances and balances have been confirmed by the parties. The Company is very actively engaged with them for recovery of the said balance. Based on the latest discussions, correspondences exchanges, evaluation of the credit profile of the customer, the Company has considered a provision of H 590.93 Million (for the year ended March 31,2023 : H 336.58 Million) towards the said balances.

(A) As at the year end, the Company held cash and cash equivalents of H 1073.70 Million (March 31,2023 H 691.05 Million). The cash and cash equivalents are held with bank and financial institution counterparties with good credit rating.

(B) Deposit with banks are held with bank counterparties with good credit rating.

(ii) Liquidity risk

Liquidity risk defined is as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. Company''s objective is to, at all time maintain optimum levels of liquidity to meet its financial obligations. The Company manages liquidity risk by maintaining sufficient cash and cash equivalents and by having access to funding through an adequate amount of committed credit lines. In addition, processes and policies related to such risks are overseen by senior management.

Management monitors rolling forecasts of the Company’s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at by senior management in accordance with practice and limits set by the Company. These limits take into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows in major currencies and

considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due for less than 1 year, equal their carrying balances as the impact of discounting is not significant.

* Guarantee issued by the Company to the bankers on behalf of H.G. Raipur Visakhapatnam AP-1 Private Limited and H.G. Rewari Bypass Private Limited (all the Subsidiary Companies except H.G. Karnal-Ring Road Private Limited as at March 31,2023) is with respect to limits availed by them. These amounts will be payable in case of default by the subsidiary Companies. As of the reporting date, the subsidiary Companies has not defaulted and hence, the Company does not have any present obligation to third parties in relation to such guarantee.

(iii) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risks i.e. interest rate risk and currency risk. Financial instruments affected by market risk include borrowings and creditors for capital expenditures.

(a) 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 is insignificant and relates primarily to the Company’s creditors for capital expenditures. The Company’s foreign currency risks are identified, measured and managed at periodic intervals in accordance with the Company’s policies. As at March 31,2024, Company''s foreign currency exposure amounts to H 47.90 Million (as at March 31,2023 H 47.44 Million).

(b) Interest risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to risk of changes in market rate is limited to short term working capital loans at variable rate taken from banks as the Company''s long term borrowings bear fixed interest rate.

The Company’s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Note 40 - Capital Management

(a) Risk Management

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company and borrowings.

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders. The capital structure of the Company is based on management’s judgement of the appropriate balance of key elements in order to meet its strategic and day-to day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets.

The Company’s aim is to translate profitable growth to superior cash generation through efficient capital management. The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

D) Terms and conditions

All Related Party Transactions entered during the year were in ordinary course of the business and are on arm’s length basis. All outstanding balances are unsecured and repayable in cash.

There is no loss allowance has been recognised during the year in respect of receivable due from related parties except for HGIEPL - TPL JV, wherein Provision for loss allowance made amounting to H 62.09 Million during the year.

(i) Compensated Absences

The employees of the Company are entitled to compensated absences as per the policy of the Company. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken or paid within the next 12 months. Accordingly, these compensated absences have been classified as Non current liabilities as at March 31,2024.

(ii) Post employment obligations (a) Defined Contribution Plans:

Provident fund

Employers’ contribution to employees’ pension scheme 1995 Employers’ contribution to Employee State Insurance Corporation (ESIC)

The provident fund and pension scheme are operated by regional provident fund commissioner. Under the scheme, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

The Code on Social Security 2020

The Code on Social Security 2020 (‘the Code’) relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Contributions are made to a gratuity based upon actuarial valuation done at the year end of every financial year using “Projected Unit Credit” method. The charge on account of provision for gratuity has been included in Employee Benefits Expense in the Statement of Profit and Loss except remeasurements i.e. actuarial gains and losses and the return on plan assets, included in other comprehensive income.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(iii) The major categories of plans assets are as follows:

The plan asset for the funded gratuity plan is administered by Life Insurance Corporation of India (''LIC'') & Aditya Birla Sun Life Insurance Company Liimited (ABSLI) as per the investment pattern stipulated for Pension and Group Schemes fund by Insurance Regulatory and Development Authority regulations i.e. 100% of plan assets are invested in insurer managed fund. Quoted price of the same is not available in active market.

(iv) Risk Exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Demographic Risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

Asset volatility : The defined benefit plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. 100% of the plan asset investments is in insurer managed funds. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level.

Interest-Rate Risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

(v) Defined Benefit Obligations and Employer Contributions

The Company considers that the contribution rates set at the last valuation date are sufficient to eliminate the deficit over the agreed period and that regular contributions, which are based on service costs, will not increase significantly.

Expected contributions to defined benefit plans for the year ending March 31,2024 are H 99.79 Million (Year ending March 31, 2023 H 134.80 million).

The weighted average duration of the defined benefit obligation is 3.04 years (March 31, 2023: 6.16 years). The expected maturity analysis of undiscounted gratuity is as follows:

The Company has evaluated the impact of the Supreme Court (SC) judgement dated February 28, 2019 in case of "Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees’ Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the management which is supported by legal advice, the Company believes that the aforesaid judgement does not have material impact on the Company. The Company will continue to monitor and evaluate its position based on future events and developments.

Note 47 - Disclosure of operating leases under Ind AS 116

The Company rents out its equipments and flats (classified in investment property) on operating lease basis. These lease arrangements range for a period between one to eleven months and include both cancellable and non-cancellable leases. Most of the leases are renewable for further period on mutually agreeable terms. There are no contingent rents recognised as income in the period.

Note 49 - Loan & Investment in subsidiaries

The Company has been legally advised that outstanding loan aggregating to H Nil (as at March 31, 2023, H 50.74 Million) and Investments in instruments entirely equity in nature aggregating to H 2,267.57 Million (as at March 31,2023, H 2,065.68 Million) made towards financing the subsidiary do not come under the preview of Section 186 of Companies Act, 2013 as the company is in the business of constructing and developing infrastructure facilities.

Significant judgment: Classification of joint arrangements

The Company has entered into Partnership firms / Association of person whose legal form confers separation between the parties to the joint arrangement and the Company itself. Also, as per the contractual arrangements, the parties to the joint arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement. Accordingly the Joint arrangements have been identified as joint operations.

The Company recognised revenue amounting to H 2,930.47 Million (March 31,2023 H 1,953.15 million) in the current reporting period that was included in the contract liability balance of previous year (Refer Note 16 (b)).

52.2 - Unsatisfied performance obligations

The aggregate amount of transaction price allocated to performance obligations that are unsatisfied as at the end of reporting period is H 1,24,871 Million (as at March 31, 2023 H 1,27,095.99 Million), primarily represented by Construction Contracts including Road projects and Railways contracts. These contracts have a life cycle of 2-3 years. Management expects that around 45%-50% of the transaction price allocated to unsatisfied contracts as of March 31,2024 will be recognised as revenue during next reporting period depending upon the progress on each contracts.

The amount disclosed above does not include variable consideration.

52.3 - There are no reconciliation items between revenue from contracts with customers and revenue recognised with contract price.

Note 53 - Disclosure of operating leases under Ind AS 116

Leases as lessee

The Company has obtained premises (office, residential and Camp) and equipments taken on lease. The terms of lease include terms of renewals, increase in rent in future period, cancellation, etc. The agreements are executed for a period of 1 month to 36 months with a renewable clause and also provide for termination at will by either party giving a prior notice of 1 to 3 months at any time during the lease term. The Company classifies all the leases for period less than 12 months and leases of low-value assets as short term leases. Accordingly, they have been accounted for by applying paragraph 6 of Ind AS 116 - Leases and H 59.08 Million (March 31, 2023 H 43.79 Million) has been recognised as expense in standalone profit & loss account.

1. The Company has not given any loans or advances in the nature of loan to any Companies, in which Directors are interested.

2. The above loans were given to the subsidiaries for their normal business activities.

The Company is engaged in the business of providing infrastructural facilities as per Section 186 (11) of the Act. Accordingly, disclosure

under section 186 (4) of the Act, is not applicable to the Company.

Note 55 - Exceptional items and Investments classified as held for sale

a) During the year ended March 31,2024, pursuant to the share purchase agreement (SPA'') dated May 03, 2023, the Company had agreed to sell its entire shareholding in 4 of its wholly owned subsidiaries namely Gurgaon Sohna Highway Private Limited, H.G. Ateli Narnaul Highway Private Limited, H.G. Rewari Ateli Highway Private Limited and H.G. Rewari Bypass Private Limited, respectively, to Highways Infrastructure Trust ("the Buyer") and Highway Concessions One Private Limited ("The Investment Manager of the buyer"). The transaction is subject to satisfaction of the conditions as set out in the SPA which includes obtaining third-party approvals/ regulatory approvals and is subject to satisfaction of certain contractual covenants.

The certificates for ''Commercial Operation Date'' (the "COD"), related to projects execution, have been already obtained by Gurgaon Sohna Highway Private Limited, H.G. Ateli Narnaul Highway Private Limited and H.G. Rewari Ateli Highway Private Limited from their respective customers in accordance with contract between them and such customers. In the extra-ordinary general meeting held on October 31,2023, pursuant to the SPA, the Company has also obtained approval from its members to transfer its 100% shareholding in these subsidiaries. During the year, pursuant to the SPA, the Company had sold its entire shareholding in three subsidiaries on November 21,2023 i.e. Date of Transfer (DOT'') for a total sale consideration amounting to H 3,130.70 Million. The resultant gain of H 1,067.40 Million has been disclosed as an exceptional item in the standalone financial statement. Also, there is receivables of H 595.56 Million against afoersaid sale which is classified as Non-current other financial assets. (Refer Note 8).

b) H.G. Rewari Bypass Private Limited attained Provisional COD effective May 25, 2023 basis completion of most of the work under the project in accordance with its contractual commitments with the respective customer and has applied for monetization of this project to NHAI on December 04, 2023 i.e. post completion of 6 months from the date of provisional COD according to relevant guidelines issued by NHAI in this respect read with agreement between H.G. Rewari Bypass and the customer.

As at March 31,2024, the Company''s management has assessed the conditions (as set out in SPA), the process undergoing for obtaining necessary approvals and likelihood of getting them together with timelines, and accordingly, classified its investments (including subordinated debt classified as equity investments) in H.G. Rewari Bypass Private Limited as "Assets Held for Sale" under current assets, in accordance with guidance available in Indian Accounting Standard (Ind AS) - 105 "Non-current Assets Held for Sale and Discontinued Operations". The realisable value, from this sale transaction, is expected to be higher than carrying value of "Assets held for sale" (net of corresponding liabilities) as at March 31,2024.

Note 56 - Additional regulatory information required by Schedule III

(i) Details of benami property held

No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) Borrowing secured against current assets

During the year the Company has been sanctioned working capital limits in excess of H 50 Million, in aggregate, from banks on the basis of security of current assets and certain identified immovable properties. Basis discussion between the Company and the respective lenders, the Company has been filing quarterly statements on mutually agreed basis for reporting, related to adjusted balances of Accounts receivables (excluding withheld balances of the respective debtors), Accounts payable (excluding payables to service vendors, provisions and balance for retention payable), Inventory (except Goods in Transit), Contract assets (upto 3 months outstanding), Advance to suppliers, Mobilisation Advances. These statements, which have been filed for three quarters (upto December 2023) by the Company are in agreement with the unaudited books of account of the Company for such respective quarters. Further, the Company is in the process of filling quarterly returns and statements for the quarter ended March 31,2024.

(iii) Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(iv) Relationship with struck off companies

The Company has transactions during the year with companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956.

(vi) Compliance with number of layers of companies

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.

(vii) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(viii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(ix) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(x) Valuation of PPE, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets), Investment Property or intangible assets or both during the current or previous year.

(xi) Title deeds of immovable properties not held in name of the company

The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in Note 3(a) and 4 to the financial statements, are held in the name of the Company.

(xii) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

(xiii) The Company has a fund and non fund based facility limit of H 30,000 million (March 31, 2023 H 22,000.00 Million) with Bank which is secured by way of first charge on hypothecation of current assets viz. raw materials, stores and spares and receivables and certain identified immovable properties.

The Company has utilised the fund and non fund based facility during the FY 2023-24 and FY 2022-23 for working capital purposes. Further,the charge has been created on hypothecation of the aforesaid current assets and immovable properties.

(a) Reason for significant change in Debt-equity ratio

The change is on account of repayment of loans and foreclosure in certain cases on accounts of proceeds from sale of Investment in SPVs Companies.

(b) Reason for significant change in Debt service coverage ratio

The change is on account of repayment of loans and foreclosure in certain cases on accounts of proceeds from sale of Investment in SPV Companies.

(c) Reason for significant change in Net capital turnover ratio

The Change is on account of significant increase in Company''s Revenue from Operation as compared to previous year and investment in H.G. Rewari Bypass is classified as Asset held for sale under Current assets.

(xv) - Utilisation of borrowed funds and share premium

The Company has not advanced or given loans or invested funds to any other person or entity, 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.

The Company has 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.

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Mar 31, 2023

The SPVs have a sole option / discretion to convert loan''s in whole to equity shares at any time during the tenure of loan. If the conversion is exercised, loans shall be converted into a fixed number of equity shares at a fixed price of H10 each. The equity shares derived from the conversion of the loan''s shall rank pari passu with the existing Shares of the SPVs with respect to all rights therein and the Company shall have the same rights in respect of such Shares as the other Shares held by the existing Shareholder(s). Further, the SPVs have a sole option / discretion to redeem loans in whole at any time during the tenure of the loan''s.

A description of Company''s financial instrument risks, including risk management objectives and policies is given in Note 39. The methods used to measure financial assets reported at fair value are described in Note 38.

Subsequent to year end, pursuant to share purchase agreement (''SPA'') dated May 03, 2023 the Company has agreed to sell its entire shareholding in four subsidiaries namely Gurgaon Sohna Highway Private Limited, H.G. Ateli Narnaul Highway Private Limited, H.G. Rewari Ateli Highway Private Limited and H.G. Rewari Bypass Private Limited. The transaction is subject to satisfaction of the conditions precedents set out in the SPA which includes third-party approvals and regulatory approvals as well as the satisfaction of certain contractual covenants and the consideration for sale is H5,310.00 Millions.

(b) Terms and rights attached to equity shares

The Company has only one class of equity shares having face value of H10 per share. Accordingly, all equity rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The dividend proposed by the board of directors is subject to the approval of shareholders in annual general meeting. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital that has not been paid. On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

(d) There are no shares allotted as fully paid up pursuant to contracts without being received in cash since incorporation.

(e) There are no shares which are reserved to be issued under options and there are no securities issues / outstanding which are convertible into equity shares.

(f) No class of shares have been issued as bonus shares or for consideration other than cash by the company during the period of five years immediately preceeding the current year end.

(g) No class of shares have been bought back by the Company during the period of five years immediately preceding the current year end.

Nature and purpose of reserves

a) Securities premium reserve :

Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

b) Retained Earnings:

Retained earnings represents the profit that the Company earned till date, less remeasurement gains/ (loss) of defined benefit plans and can be distributed by the Company as dividends considering the requirements of the Companies Act, 2013.

* Nature of Security in relation to Working Capital loans and one term loan as sub-limit of Working Capital loan from HDFC Bank.

a) Primary Security - First Pari Passu charge in favour of the Banks by way of Hypothecation of the Company''s entire current assets (present and future) including, but not limited to, stock of raw materials, stock in progress, finished goods, stores and spares including book debts, margin money, security deposits etc.

b) Collateral Security - First Pari Passu charge in favor of banks by way of mortage of certain identified immovable properties of the Company and personal and corporate guarantors as per the collateral agreement.

c) All the working capital loans are also collaterally secured by personal guarantee of Mr. Hodal Singh, Mr. Girishpal Singh, Mr. Vijendra Singh, Mr. Harendra Singh, Mr. Jodhalal Kalma, Mr. Shailesh Patel, Ms Nisha Singh, Mr. Sajeev Kumar Choudhary, Mr. Vaibhav Choudhary, M/s Hotel Marudhar (Partnership Firm), M/s H.G. Luxury Hotels Private Limited, M/s H.G. Acerage Developers Private Limited and M/s Valencia Leisure Private Limited.

d) The working capital Loans are repayable on demand and interest rate on the above loan from banks in consortium are linked to the respective bank base rate/ MCLR which are floating in nature. The interest rate ranges from 7.55% to 9.50% per annum on rupees working capital loans.

For Security details of Term loans, vehicle loans and 8% Rated, listed, senior, secured, redeemable, non convertible debentures, Refer Note 21.1.

Compliance of Debt Covenants

Working Capital loans contain certain debt covenants relating to limitation on indebtedness, Debt-Equity ratio, Current ratio, Net Debt to EBIDTA ratio, Interest coverage ratio, Total outside liablity to Adjusted Tangible net worth, Minimum net working capital Limit. The Limitation on indebtness covenants get suspended if the Company meets certain prescribed criteria. The Company has satisfied all debt covenants mentioned above. The other loans do not carry any debt covenants. The Company has not defaulted of any loans payables during the year ended March 31,2023.

**Refer Note 39 (ii) for liquidity risk management and Refer note 45 for Assets pledged as security.

***The carrying amounts of current borrowings include payables in respect of vendors which are subject to a factoring arrangement ("the factors"). Under this arrangement, H.G. Infra Engineering Limited has transferred the relevant payables to the factors in exchange for timely payment to MSMED vendors. Therefore, the amount repayable under the factoring arrangement to the factors is presented as unsecured borrowings.

(b) Expenditure towards Corporate Social Responsibility (CSR) activities Corporate Social Responsibility

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are reaching healthcare and disaster management, education, rural development projects, assistance for setting up homes and shelters, environmental sustainability and animal welfare. A CSR committee has been formed by the Company as per the Act. The funds are utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are measured at amortised cost and for which fair values are disclosed in the financial statements.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes instruments like listed equity instruments, traded bonds and mutual funds that have quoted price.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives etc) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is in the case of unlisted securities, investment properties etc.

The carrying amounts of short term loans, trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents, other receivables, trade payables, current borrowings, interest accrued, capital creditors and other payables are considered to be the same as their fair values due to their short-term nature. The impact of fair vaue on Non current trade receivables and payables is not expected to have material impact on the standalone financial statements, hence not dislcosed above.

The fair value of security deposits were not calculated based on their future cash flows discounted at current lending rate as these security deposits are expected to continue to remain till the existence of the Company.

Note 39 - Financial Risk Management

The Company''s activities expose it to a variety of financial risks namely credit risk, liquidity risk and market risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

(i) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, contract assets, security deposits, deposit with banks, loans, others receivables and cash and cash equivalents.

Impairment of Financial Assets :

The Company has three types of financial assets that are subject to expected credit loss model:

1. Trade Receivables for construction contracts

2. Contract Assets relating to construction contracts

3. Loans

While cash and cash equivalents and deposits with banks are subject to impairment requirements of Ind AS 109, the identified impairment on theses assets were Nil."

For Trade receivables and Contract assets for construction contracts : Management makes the assessment of the credit risk on trade receivables and contract assets considering the customer profile. Customers of the company mainly consists of the government promoted entities and some large private corporates. In case of government customers which forms the majority of the revenue, credit risk is low.

Considering the nature of business, each contract and its customer is evaluated for the purpose of assessment of loss allowances. The reasons for loss allowances could be recovery of claims, disputes with customer, customers ability to pay, delays in approval by government authorities, and expected time to recover the amount. Management makes an assessment considering facts of each contract, past trends, terms of the contract and accordingly considers the need for loss allowances, if any.

For Loans : The Company''s investments in debt instruments and certain loans are considered to be low risk investments.

The Company secured contracts by submitting bids in response to tenders in terms of which it is required to form Special Purpose Vehicle ( SPV ) Companies ( Subsidiary Companies ) to execute the awarded projects. As at March 31, 2023 the Company has 10 SPV''s ( As at March 31, 2022 the company had 9 SPV''s ) who have received contracts from government promoted agencies and revenue related to SPV''s for work executed by the Company has been grouped in Revenue from government promoted agencies.

The movement in loss allowance for expected credit loss on trade and other receivables including contract assets is as below:

Note on recoverability of amount due from certain trade receivables

The Company has long outstanding dues amounting to H1,297.75 Million ( as at March 31, 2022 H305.81 Million ) from certain customers which due to liquidity issues have remain unpaid. There is no dispute on the said balances and balances have been confirmed by the parties. The Company is very actively engaged with them for recovery of the said balance. Based on the latest discussions, correspondences exchanges, evaluation of the credit profile of the customer, the Company has considered a provision of H68.48 Million ( for the year ended March 31,2022 : H194.42 Million ) towards the said balances.

( A ) As at the year end, the Company held cash and cash equivalents of H691.05 Million ( March 31,2022 H472.38 Million). The cash and cash equivalents are held with bank and financial institution counterparties with good credit rating.

( B ) Deposit with banks are held with bank counterparties with good credit rating.

(ii) Liquidity risk

Liquidity risk defined is as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. Company''s objective is to, at all time maintain optimum levels of liquidity to meet its financial obligations. The Company manages liquidity risk by maintaining sufficient cash and cash equivalents and by having access to funding through an adequate amount of committed credit lines. In addition, processes and policies related to such risks are overseen by senior management. Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at by senior management in accordance with practice and limits set by the Company. These limits take into account the liquidity of the market in which the entity operates. In addition, the Company''s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due for less than 1 year, equal their carrying balances as the impact of discounting is not significant.

* Guarantee issued by the Company to the bankers on behalf of all the Subsidiary Companies except H.G. Karnal-Ringroad Private Limited is with respect to limits availed by them. These amounts will be payable in case of default by the subsidiary Companies. As of the reporting date, the subsidiary Companies has not defaulted and hence, the Company does not have any present obligation to third parties in relation to such guarantee.

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risks i.e. interest rate risk and currency risk. Financial instruments affected by market risk include borrowings and creditors for capital expenditures.

(a) 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 is insignificant and relates primarily to the Company''s creditors for capital expenditures. The Company''s foreign currency risks are identified, measured and managed at periodic intervals in accordance with the Company''s policies. As at March 31, 2023, Company''s foreign currency exposure amounts to H47.44 Million ( as at March 31,2022 H45.03 Million ).

(b) Interest risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to risk of changes in market rate is limited to short term working capital loans at variable rate taken from banks as the Company''s long term borrowings bear fixed interest rate.

The Company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

The Company manages the interest rate risk by having a balanced portfolio of fixed and variable rate borrowings. The exposure of the Company''s borrowing to interest rate changes at the end of the reporting period are as follows:

Note 40 - Capital Management (a) Risk Management

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company and borrowings.

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders. The capital structure of the Company is based on management''s judgement of the appropriate balance of key elements in order to meet its strategic and day-to day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets.

The Code on Social Security 2020

The Code on Social Security 2020 (''the Code'') relating to employee benefits, during the employment and post-employment, has received Presidential assent on September 28, 2020. The Code has been published in the Gazette of India. Further, the Ministry of Labour and Employment has released draft rules for the Code on November 13, 2020. However, the effective date from which the changes are applicable is yet to be notified and rules for quantifying the financial impact are also not yet issued. The Company will assess the impact of the Code and will give appropriate impact in the financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published."

(b) Defined Benefit Plans:

Gratuity

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Contributions are made to a gratuity based upon actuarial valuation done at the year end of every financial year using "Projected Unit Credit" method. The charge on account of provision for gratuity has been included in Employee Benefits Expense in the Statement of Profit and Loss except remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in other comprehensive income.

(iii) The major categories of plans assets are as follows:

The plan asset for the funded gratuity plan is administered by Life Insurance Corporation of India (''LIC'') as per the investment pattern stipulated for Pension and Group Schemes fund by Insurance Regulatory and Development Authority regulations i.e. 100% of plan assets are invested in insurer managed fund. Quoted price of the same is not available in active market.

(iv) Risk Exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Demographic Risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

Asset volatility : The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. 100% of the plan asset investments is in insurer managed funds. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level.

Salary Inflation Risk : Higher than expected increases in salary will increase the defined benefit obligation.

Interest-Rate Risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

(v) Defined Benefit Liability and Employer Contributions

The Company considers that the contribution rates set at the last valuation date are sufficient to eliminate the deficit over the agreed period and that regular contributions, which are based on service costs, will not increase significantly.

Expected contributions to defined benefit plans for the year ending March 31, 2023 are H134.80 Million (Year ending March 31, 2022 H10 million).

The Company has evaluated the impact of the Supreme Court (SC) judgement dated February 28, 2019 in case of "Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees'' Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the management which is supported by legal advice, the Company believes that the aforesaid judgement does not have material impact on the Company. The Company will continue to monitor and evaluate its position based on future events and developments.

The guarantees given to lenders of subsidiaries are unlikely to be called, as subsidiaries are in a position to service principal and interest, covered by such guarantees.

Note 49

The Company has been legally advised that outstanding loan aggregating to H50.74 Million ( as at March 31, 2022, H221.69 Million) and Investments in instruments entirely equity in nature aggregating to H2,065.68 Million ( as at March 31,2022, H631.04 Million) made towards financing the subsidiary do not come under the preview of Section 186 of Companies Act, 2013 as the company is in the business of constructing and developing infrastructure facilities.

*During the year ended March 31,2023, HGIEL-RPS (JV) has been dissolved on October 4, 2022 by mutual consent of Joint operators. As at March 31,2023, H1.60 million is receivable from HGIEL-RPS (JV), classified as Other current financial assets - Other receivables.

Significant judgment: Classification of joint arrangements

The Company has entered into Partnership firms / Association of person whose legal form confers separation between the parties to the joint arrangement and the Company itself. Also, as per the contractual arrangements, the parties to the joint arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement. Accordingly the Joint arrangements have been identified as joint operations.

The Company recognised revenue amounting to H1,953.15 Million ( March 31, 2022 H2,267.28 million) in the current reporting period that was included in the contract liability balance of previous year ( Refer Note 16 (b)) .

Note 52.2 - Unsatisfied performance obligations

The aggregate amount of transaction price allocated to performance obligations that are unsatisfied as at the end of reporting period is H1,27,095.99 Million (as at March 31,2022 H79,729.02 Million). On Construction Contracts (Road Projects and Pipeline contracts) have a life cycle of 2-3 years and other businesses performance obligations are met over a period of one or less than one year. Management expects that around 30%-35% of the transaction price allocated to unsatisfied contracts as of March 31, 2023 will be recognised as revenue during next reporting period depending upon the progress on each contracts.

The remaining amount is expected to be recognised in next year.

The amount disclosed above does not include variable consideration.

Note 52.3 - There are no reconciliation items between revenue from contracts with customers and revenue recognised with contract price.

Note 53 - Disclosure of operating leases under Ind AS 116 Leases as lessee

The Company has obtained premises (office, residential and Camp) and machineries taken on lease. The terms of lease include terms of renewals, increase in rent in future period, terms of cancellation, etc. The agreements are executed for a period of 1 month to 36 months with a renewable clause and also provide for termination at will by either party giving a prior notice of 1 to 3 months at any time during the lease term. The Company classifies all the leases for period less than 12 months as short term leases. Accordingly, they have been accounted for by applying paragraph 6 of Ind AS 116 - Leases and H43.79 Million (March 31, 2022 H54.36 Million) has been recognized as expense.

Note 55 - Additional regulatory information required by Schedule III

(i) Details of benami property held

No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) Borrowing secured against current assets

During the year the Company has been sanctioned working capital limits in excess of H5 crores, in aggregate, from banks on the basis of security of current assets and certain identified immovable properties. Basis discussion between the Company and the respective lenders, the Company has been filing quartely statements on mutually agreed basis for reporting, related to adjusted balances of Accounts receivables (excluding withheld balances of the respective debtors), Accounts payable (excluding payables to service vendors, provisions and balance for retention payable), Inventory (except Goods in Transit), Contract assets (upto 3 months outstanding), Advance to suppliers, Mobilization Advances. These statements, which have been filed for three quarters (upto December 2022) by the Company are in agreement with the unaudited books of account of the Company for such respective quarters. Further, the Company is in the process of filling quarterly returns and statements for the quarter ended March 31, 2023.

(iii) Wilful defaulter

The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(vi) Compliance with number of layers of companies

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.

(vii) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(viii) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(ix) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(x) Valuation of PPE, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets), Investment Property or intangible assets or both during the current or previous year.

(xi) Title deeds of immovable properties not held in name of the company

The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in note 3(a) and 4 to the financial statements, are held in the name of the Company.

(xii) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

(xiii) The Company has a fund and non fund based facility limit of H22,000 million ( March 31, 2022 H15,400.00 Million) with Bank which is secured by way of first charge on hypothecation of current assets viz. raw materials, stores and spares and receivables and certain identified immovable properties.

The Company has utilised the fund and non fund based facility during the FY 2022-23 and FY 2021-22 for working capital purposes.

Further, the charge has been created on hypothecation of the aforesaid current assets and immovable properties.

Note 55 (xv) - Utilisation of borrowed funds and share premium

The Company has not advanced or given loans or invested funds to any other person or entity, 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.

The Company has 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.

---

Mar 31, 2022

48,557,610 Equity shares (Previous year 48,557,610 Equity shares) of H.G. Ateli Narnaul Highway Private Limited pledged with the lender for loans taken by H.G. Ateli Narnaul Highway Private Limited.

302,501 Equity shares (Previous year 274,001 Equity shares) of H.G. Rewari Bypass Private Limited pledged with the lender for loans taken by H.G. Rewari Bypass Private Limited.

*The Company secures contracts by submitting bids in response to tenders. Subsequent to award of contract the company is required to form Special Purpose Vehicle (SPV) Companies (subsidiary Companies) to execute the awarded projects. As at March 31,2022 the company has 9 SPV''s (March 31,2021 4 SPV''s) as above.

**Terms of optionally convertible unsecured loan

The SPVs have a sole option / discretion to convert loan''s in whole to equity shares at any time during the tenure of loan. If the conversion is exercised, loans shall be converted into a fixed number of equity shares at a fixed price of ''10 each. The equity shares derived from the conversion of the loan''s shall rank pari passu with the existing Shares of the SPVs with respect to all rights therein and the Company shall have the same rights in respect of such Shares as the other Shares held by the existing Shareholders). Further, the SPVs have a sole option / discretion to redeem loans in whole at any time during the tenor of the loan''s.

(b) Terms and rights attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to its share of the paid-up equity capital that has not been paid. On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the Company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

a) Secured term loans from banks and financial institution

All term loans have been obtained for financing the asset purchased and are secured by hypothecation of specific assets purchased out of loan, comprising Property, plant and equipment and Constructions Equipment.

b) Secured motor car vehicles loans from banks and financial institution

All motor car vehicles loans are secured by hypothecation of specific vehicles financed though the loan arrangements.

c) Secured Non convertible Debentures

Non convertible Debentures ( NCD''s ) are secured by Construction equipment, residential properties located at Noida and personal guarantee given by the promotors.

Nature of Security

Cash Credit facility availed from all Banks secured by:

a) First Pari Passu charge in favour of the Bank by way of Hypothecation of the Company''s entire stocks of raw materials, consumable stores spares including book debts.

b) All the bank are secured by exclusive charge on the entire movable and immovable assets of the Company (Present and Future) save and excepts assets exclusively financed by other lenders.

c) All the bank loans are secured by equitable mortgage of land and equipments mentioned in the property as per the collateral agreement.

d) All the bank loans are collaterally secured by unconditional and irrevocable personal guarantees of the promoters.

(ii) Fair value hierarchy

This section explains the judgments and estimates made in determining the fair values of the financial instruments that are measured at amortised cost and for which fair values are disclosed in the financial statements.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes instruments like listed equity instruments, traded bonds and mutual funds that have quoted price.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives etc) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The carrying amounts of short term loans, trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents, security deposits, other receivables, trade payables, current borrowings, interest accrued, capital creditors, lease liability and other payables are considered to be the same as their fair values due to their short-term nature.

Note 39 - Financial Risk Management

The Company''s activities expose it to a variety of financial risks namely credit risk, liquidity risk and market risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

(i) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, contract assets, security deposits and cash and cash equivalents.

Management makes the assessment of the credit risk on trade receivables and contract assets considering the customer profile. Customers of the company mainly consists of the government promoted entities and some large private corporates. In case of government customers which forms the majority of the revenue, credit risk is low.

Considering the nature of business, each contract and its customer is evaluated for the purpose of assessment of allowances. The reasons for allowances could be recovery of claims, disputes with customer, customers ability to pay, delays in approval by government authorities, and expected time to recover the amount. Management makes an assessment considering facts of each contract, past trends, terms of the contract and accordingly considers the need for allowances, if any.

The Company secured contracts by submitting bids in response to tenders in terms of which it is required to form Special Purpose Vehicle (SPV) Companies (subsidiary Companies) to execute the awarded projects. As at March 31,2022 the company has 9 SPV''s (As at March 31,2021 the company had 4 SPV''s) who have received contracts from government promoted agencies and revenue related to SPV''s for work executed by the Company has been grouped in Revenue from government promoted agencies.

Note on recoverability of amount due from certain trade receivables

The Company has long outstanding dues amounting to ''305.81 Million (as at March 31, 2021 ''496.53 Million) from certain customers which due to liquidity issues have remain unpaid. There is no dispute on the said balances and balances have been confirmed by the parties. The Company is very actively engaged with them for recovery of the said balance. Based on the latest discussions, correspondences exchanges, evaluation of the credit profile of the customer, the Company has considered a provision of ''194.42 Million (for the year ended March 31,2021 ''230.24 Million) towards the said balances.

The Company has started arbitration as per the terms of the contract with a customer towards recovery of outstanding claims and the arbitrator has given the award in favour of the Company. However, the arbitrator also accepted a counter claim of the customer amounting to ''111.70 Million (as at March 31,2021 ''111.70 Million) which according to the management is not justified and has been subsequently challenged in the High Court. Based on the management assessment, which is also supported by the legal opinion, the counter claim of ''111.70 Million (as at March 31,2021 ''111.70 Million) appears to be against public policy, expected to result in favor of the Company and accordingly the possibility of an outflow of resources is assessed to be remote and hence the same has not been disclosed as contingent liability.

(B) As at the year end, the Company held cash and cash equivalents of ''472.38 millions (March 31,2021 ''1,399.48 millions). The cash and cash equivalents are held with bank and financial institution counterparties with good credit rating.

(C) Other bank balances are held with bank and financial institution counterparties with good credit rating.

(ii) Liquidity risk

Liquidity defined is as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. Company''s objective is to, at all time maintain optimum levels of liquidity to meet its financial obligations. The Company manages liquidity risk by maintaining sufficient cash and cash equivalents and by having access to funding through an adequate amount of committed credit lines. In addition, processes and policies related to such risks are overseen by senior management.

* Guarantee issued by the Company to the bankers on behalf of Gurgaon Sohna Highway Private Limited, H.G. Ateli Narnaul Highway Private Limited, H.G. Rewari Ateli Highway Private Limited, H.G. Rewari Bypass Private Limited, H.G. Raipur Visakhapatnam AP-1 Private Limited and H.G. Raipur Visakhapatnam OD-5 Private Limited subsidiary Companies is with respect to limits availed by them. These amounts will be payable in case of default by the subsidiary Companies. As of the reporting date, the subsidiary Companies has not defaulted and hence, the Company does not have any present obligation to third parties in relation to such guarantee.

(iii) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risks i.e. interest rate risk and currency risk. Financial instruments affected by market risk include borrowings and creditors for capital expenditures.

(a) 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 is very less and relates primarily to the Company''s creditors for capital expenditures. The Company''s foreign currency risks are identified, measured and managed at periodic intervals in accordance with the Company''s policies. As at March 31, 2022, Company''s foreign currency exposure amounts to ''45.03 Million (as at March 31,2021 '' Nil Million).

(b) Interest risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to risk of changes in market rate is limited to short term working capital loans taken from banks as the Company''s long term borrowings bear fixed interest rate.

The Company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Note 40 - Capital Management (a) Risk Management

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company and borrowings.

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders. The capital structure of the Company is based on management''s judgement of the appropriate balance of key elements in order to meet its strategic and day-to day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets.

The Company''s aim is to translate profitable growth to superior cash generation through efficient capital management. The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

Note 41 - Segment Reporting

The Company''s managing director who is identified as the chief operating decision maker of the Company, examines the performance of the business and allocates funds on the basis of a single reportable segment i.e. ''EPC business'' The Company has no other reportable segment. The Company does not have any reportable geographical segment as it caters to the needs of only the domestic market.

Accordingly, the segment revenue, segment results, total carrying amount of segment assets and segment liability, total cost incurred to acquire segment assets and total amount of charge for depreciation during the period, is as reflected in the Financial Statements as of and for the financial year ended March 31,2022.

Non-current assets excluding financial assets, deferred tax assets amounts to ''4,621.81 Millions (March 31,2021 ''4,898.61 Millions) are located entirely in India.

Information relating to major customers

Revenue of approximately ''34,764.62 Millions (for the year ended March 31, 2021 ''20,786.04 Millions) was derived from external customers, which individually accounted for more than 10% of the total revenue.

The Company secured contracts by submitting bids in response to tenders in terms of which it is required to form Special Purpose Vehicles (SPVs) Companies (subsidiary Companies) to execute the awarded projects. As at March 31,2022 the company has 9 SPVs (As at March 31,2021 the company has 4 SPVs) who have received contracts from government promoted agencies and revenue related to SPVs for work executed by the Company has been grouped in Revenue derived from external customers.

D) Terms and conditions

All Related Party Transactions entered during the year were in ordinary course of the business and are on arm''s length basis. All outstanding balances are unsecured and repayable in cash.

There is no loss allowance has been recognised during the year in respect of receivable due from related parties.

(b) Defined Benefit Plans:

Gratuity

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years

of service. Contributions are made to a gratuity based upon actuarial valuation done at the year end of every financial year using “Projected Unit Credit" method. The charge on account of provision for gratuity has been included in Employee Benefits Expense in the Statement of Profit and Loss except remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in other comprehensive income.

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the Balance Sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(iii) The major categories of plans assets are as follows:

The plan asset for the funded gratuity plan is administered by Life Insurance Corporation of India (''LIC'') as per the investment pattern stipulated for Pension and Group Schemes fund by Insurance Regulatory and Development Authority regulations i.e. 100% of plan assets are invested in insurer managed fund. Quoted price of the same is not available in active market.

(iv) Risk Exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Demographic Risk: This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

Asset volatility:The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. 100% of the plan asset investments is in insurer managed funds. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level.

Salary Inflation Risk: Higher than expected increases in salary will increase the defined benefit obligation.

Interest-Rate Risk: The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

(v) Defined Benefit Liability and Employer Contributions

The Company considers that the contribution rates set at the last valuation date are sufficient to eliminate the deficit over the agreed period and that regular contributions, which are based on service costs, will not increase significantly.

Expected contributions to post-employment benefit plans for the year ending March 31, 2022 are ''10 Million (Year ending March 31,2021 ''10 Million)

(c) The Company has evaluated the impact of the Supreme Court (SC) judgement dated February 28, 2019 in case of “Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees'' Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of “basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the management which is supported by legal advice, the Company believes that the aforesaid judgement does not have material impact on the Company. The Company will continue to monitor and evaluate its position based on future events and developments.

Note 47 - Disclosure of operating leases under Ind AS 116

The Company rents out its equipment on operating lease basis. All the arrangements are cancellable and are generally ranging in the period of 1 months to 6 months. There are no contingent rents recognised as income in the period.

Footnote:

The guarantees given to lenders of subsidiaries are unlikely to be called, as subsidiaries are in a position to service principal and interest, covered by such guarantees.

Note 49

The holding company has been legally advised that outstanding loan aggregating to ''221.69 Million (as at March 31, 2021, ''43.90 Million) made towards financing the subsidiary do not come under the preview of Section 186 of companies Act, 2013 as the company is in the business of constructing and developing infrastructure facilities.

Significant judgment: classification of joint arrangements

The Company has entered into Partnership firms / Association of person whose legal form confers separation between the parties to the joint arrangement and the Company itself. Also, as per the contractual arrangements, the parties to the joint arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement. Accordingly the Joint arrangements have been identified as joint operations.

Financial impact of Joint controlled operations

The Company accounts for assets, liabilities, revenue and expenses relating to its interest in joint controlled operations based on the internal agreements/arrangements entered into between the parties to the joint arrangements for execution of projects. Accordingly the Company has recognised total income from operations ''51.07 Million (for the year ended March 31, 2021 ''81.48 Million), total expenditure (including tax) ''50.92 Million (for the year ended March 31,2021 ''80.91 Million), total assets as at March 31, 2022 ''54.65 Million (as at March 31,2021 ''46.04 Million) and total liabilities as at March 31,2022 ''51.41 Million (as at March 31,2021 ''40.61 Million).

The Company recognised revenue amounting to ''2,267.28 Million (as at March 31, 2021 ''1,468.42 Million) in the current reporting period that was included in the contract liability balance of previous year (Refer note 16 (b)).

Note 52.2 - Unsatisfied performance obligations

The aggregate amount of transaction price allocated to performance obligations that are unsatisfied as at the end of reporting period is ''79,729.02 Million (as at March 31,2021 ''70,401 Million). On Construction Contracts (Road Projects and Pipeline contracts) have a life cycle of 2-3 years and other businesses performance obligations are met over a period of one or less than one year. Management expects that around 30% -35% of the transaction price allocated to unsatisfied contracts as of March 31,2022 will be recognised as revenue during next reporting period depending upon the progress on each contracts.

The remaining amount is expected to be recognised in next year.

The amount disclosed above does not include variable consideration.

Note 52.3

There are no reconciliation items between revenue from contracts with customers and revenue recognised with contract price.

Leases as lessee

The Company has obtained premises (office, residential and Camp) and machineries taken on lease. The terms of lease include terms of renewals, increase in rent in future period, terms of cancellation, etc. The agreements are executed for a period of 1 months to 36 months with a renewable clause and also provide for termination at will by either party giving a prior notice of 1 to 3 months at any time during the lease term.

(i) Details of benami property held

No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) Borrowing secured against current assets

The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of accounts.

(iii) Wilful defaulter

Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

(iv) Relationship with struck off companies

The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.

(vi) Compliance with number of layers of companies

The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(vii) Compliance with approved scheme(s) of arrangements

The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

(viii) Utilisation of borrowed funds and share premium

The Company has 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

The Company has 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 group 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

(ix) Undisclosed income

There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(x) Details of crypto currency or virtual currency

The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

(xi) Valuation of PP&E, intangible asset and investment property

The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

(xii) Title deeds of immovable properties not held in name of the company

The title deeds of all the immovable properties (other than properties where the company is the lessee and the lease agreements are duly executed in favour of the lessee), as disclosed in note 3(a) and 4 to the financial statements, are held in the name of the company.

(xiii) Registration of charges or satisfaction with Registrar of Companies

There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.

(xiv) Utilisation of borrowings availed from banks and financial institutions

The borrowings obtained by the company from banks and financial institutions have been applied for the purposes for which such loans were was taken.

(xv) The Company has a fund and non fund based facility limit of ''1,540.00 million ( March 31,2021 ''1,061.01 Million) with Bank which is secured by way of first charge on hypothecation of current assets viz. raw materials, stores and spares and receivables.

The Company has utilised the fund and non fund based facility during the FY 2021-22 and 2020-21 for working capital purposes.

Note 57 - Prior year figures have been regrouped, wherever necessary.

---

Mar 31, 2018

1) Out of total amount received towards offer for sale, an amount of RS,25.98 Million is pending to be paid to the shareholders which has been disclosed as "Payable to directors" under Note 22.

2) The transaction cost of RS,194.42 Million recorded in the books is net of GST credit amounting to RS,29.22 Million availed on such expenditure. The said expenditure has been adjusted from securities premium account. (Refer note 16) and is utilised for payment of Goods and Service Tax.

3) The balance unutilised amounts have been parked in fixed deposits amounting to RS,1,592.23 Million and current account balances amounting to RS,55.04 Million, which have been disclosed in Note 10 and 11.

Nature and purpose of reserves

Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.

* Working Capital Demand Loans and Cash Credit facilities availed from banks are secured by :

(I) Nature of Security

Cash Credit and Working Capital from all Banks secured by:

a) First Pari Passu charge in favour of the Bank by way of Hypothecation of the Company''s entire stocks of raw materials, work in progress, consumable stores spares including book debts.

b) All the bank are secured by exclusive charge on the entire movable and immovable assets of the Company (Present and Future) save and excepts assets exclusively financed by other lenders.

c) All the bank loans are secured by equitable mortgage of land and equipment’s mentioned in the property as per the collateral agreement.

d) All the bank loans are collaterally secured by unconditional and irrevocable personal guarantees of the promoters and promoters group.

e) Cash Credit Loans from all the bank are charged as uniform margin of 25% against all components of inventory.

f) Cash credit from all the banks are secured by entire book debts for the cover period upto 90 days.

** Loan from Directors and Shareholders is repayable on demand and is interest free.

Note: Trade Payable represent amount retained as per the terms of contract.

Note - Dues from micro and small enterprises

Disclosure of amounts payable to vendors as defined under the "Micro, Small and Medium Enterprise Development Act, 2006" is based on the information available with the Company regarding the status of registration of such vendors under the said Act. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payments made during the year or brought forward from previous years.

(ii) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are measured at amortised cost and for which fair values are disclosed in the financial statements.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes instruments like listed equity instruments, traded bonds and mutual funds that have quoted price.

Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The fair values for Non-current trade receivable, Non-current trade payable, Non-current borrowings and deposits with original maturity of more than 12 months are calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.

The carrying amounts of short term loans, trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents, security deposits, unbilled revenue, deposit with government authorities, other receivables, trade payables, current borrowings, current maturities of long term borrowings, Interest accrued but not due on borrowings, creditors for capital expenditures and other payables are considered to be the same as their fair values, due to their short-term nature.

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.

Note 36 - Financial Risk Management

The Company''s activities expose it to a variety of financial risks namely credit risk, liquidity risk and market risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.

(i) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. Financial instruments that are subject to credit risk and concentration thereof principally consist of trade receivables, unbilled revenue, security deposits and cash and cash equivalents.

Credit risk on trade receivables and unbilled revenue is limited as the customers of the company mainly consists of the government promoted entities and private corporates having strong credit worthiness. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables and unbilled revenue. The provision matrix takes into account available external and internal credit risk factors such as credit ratings from credit rating agencies, financial condition, ageing of accounts receivable and the Company''s historical experience for customers. Based on the above factors the management has assessed that the credit risk is low.

The following table gives details in respect of percentage of revenue generated from government promoted agencies and highly rated corporate:

Trade receivables also include security deposits (retentions) that are receivable from the customers on the expiry of the defect liability period. However the Company has an option to get the refund of the above trade receivables if performance bank guarantee is provided, therefore the credit risk is limited. Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks and financial institutions with high credit ratings.

(ii) Liquidity risk

Liquidity is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. Company''s objective is to, at all-time maintain optimum levels of liquidity to meet its financial obligations. The Group manages liquidity risk by maintaining sufficient cash and cash equivalents and by having access to funding through an adequate amount of committed credit lines. In addition, processes and policies related to such risks are overseen by senior management.

Maturities of financial liabilities

The table summarises the maturity profile of company''s financial liabilities based on contractual undiscounted payments:

Note 36 - Financial Risk Management (Contd.)

(iii) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and currency risk. Financial instruments affected by market risk include borrowings and creditors for capital expenditures.

(a) 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 is very less and relates primarily to the Company''s creditors for capital expenditures. The Company''s foreign currency risks are identified, measured and managed at periodic intervals in accordance with the Company''s policies.

(b) Interest risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to risk of changes in market rate is limited to short term working capital loans taken from banks as the Company''s long term borrowings bear fixed interest rate.

The Company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Note 37 - Capital Management

(a) Risk Management

For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company and borrowings.

The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to our shareholders. The capital structure of the Company is based on management''s judgement of the appropriate balance of key elements in order to meet its strategic and day-to day needs. We consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets.

The Company''s aim is to translate profitable growth to superior cash generation through efficient capital management. The Company''s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The Company will take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

Note 38 - Segment Reporting

The Company''s managing director who is identified as the chief operating decision maker of the Company, examines the performance of the business and allocates funds on the basis of a single reportable segment i.e. ''EPC business''. The Company has no other reportable segment. The Company does not have any reportable geographical segment as it caters to the needs of only the domestic market.

Accordingly, the segment revenue, segment results, total carrying amount of segment assets and segment liability, total cost incurred to acquire segment assets and total amount of charge for depreciation during the period, is as reflected in the Financial Statements as of and for the financial year ended March 31, 2018.

Non-current assets excluding financial assets, deferred tax assets amounts to RS,4,553.91 Millions ( March 31, 2017 RS,2,196.08 Million ; April 1, 2016 RS,1,408.06 Millions ) which are located entirely in India.

Information relating to major customers

Revenue of approximately RS,9,724.60 Millions (for the year ended March 31, 2017 - RS,6,793.01 Millions ) was derived from external customers which individually accounted for more than 10% of the total revenue.

Note 40 - Related Party transactions

I. Name of related parties and nature of relationship:

A) Associate

TPL - HGIEPL JV

B) Key Management Personnel *

Mr. Hodal Singh - Director ( till May 10, 2017)

Mr. Girishpal Singh - Director ( till May 10, 2017)

- Non-Executive director ( w.e.f. May 10, 2017)

Mr. Vijendra Singh - Whole Time director

Mr. Harendra Singh - Chairman and Managing Director

Mr. Ashok Kumar Thakur - Independent director ( w.e.f. May 15, 2017)

Ms. Pooja Hemant Goyal - Independent director ( w.e.f. May 15, 2017)

Mr. Onkar Singh - Independent director ( w.e.f. September 8, 2017)

C) Relatives of Key Management Personnel *

Mr. Vaibhav Choudhary - Son of Mr. Girishpal Singh Mrs. Poonam Singh - Wife of Mr. Vijendra Singh

Mrs. Nisha Singh - Wife of Mr. Harendra Singh

Mr. Hodal Singh - Father of Mr. Harendra Singh

Mr. Rohit Choudhary - Son of Mr.Girishpal Singh

D) Enterprises over which key management personnel and their relatives are able to exercise significant influence * HG Stone Crusher

Harendra Singh HUF HG Traders

HG Luxury Hotels Private Limited HG ADPL - VLPL JV HG Foundation ( Trust )

H.G. Infra Toll Ways Private Limited

* With whom transactions have occurred during the year

(i) Compensated Absences

The employees of the Company are entitled to compensated absences as per the policy of the Company.

The entire amount of the provision of is presented as current, since the Company does not have an unconditional right to defer settlement for the obligation. However, based on past experience, the Company does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. The following amounts reflect leave that is not expected to be taken or paid within the next

12 months.

(ii) Post employment obligations

(a) Defined Contribution Plans:

Provident fund

Employers'' contribution to employees'' pension scheme 1995 Employers'' contribution to Employee State Insurance Corporation (ESIC)

The provident fund and pension scheme are operated by regional provident fund commissioner. Under the scheme, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit schemes to fund the benefits.

The Company has recognised the following amounts in the Statement of Profit and Loss for the year:

(b) Defined Benefit Plans:

Gratuity

The company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Contributions are made to a gratuity based upon actuarial valuation done at the year end of every financial year using "Projected Unit Credit" method. The charge on account of provision for gratuity has been included in ''Employee Benefits Expense in the Statement of Profit and Loss except remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability which are recognised in other comprehensive income.

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the Balance Sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(iii) The major categories of plans assets are as follows:

The plan asset for the funded gratuity plan is administered by Life Insurance Corporation of India (''LIC'') as per the investment pattern stipulated for Pension and Group Schemes fund by Insurance Regulatory and Development Authority regulations i.e. 100% of plan assets are invested in insurer managed fund. Quoted price of the same is not available in active market.

(iv) Risk Exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

Demographic Risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as compared to a long service employee.

Asset volatility : The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. 100% of the plan asset investments is in insurer managed funds. These are subject to interest rate risk and the fund manages interest rate risk with derivatives to minimise risk to an acceptable level.

Salary Inflation Risk : Higher than expected increases in salary will increase the defined benefit obligation.

Interest-Rate Risk : The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

(v) Defined Benefit Liability and Employer Contributions

The company considers that the contribution rates set at the last valuation date are sufficient to eliminate the deficit over the agreed period and that regular contributions, which are based on service costs, will not increase significantly.

Expected contributions to post-employment benefit plans for the year ending March 31, 2019 are H10. Million (Year ending March 31, 2018 H5 Million)

(b) Non-cancellable operating leases

(i) As a lessee:

Operating Lease

The Company has significant operating lease arrangements for land obtained for setting up of camp for construction project offices. These lease arrangements range for a period between 12 months and 36 months, which are cancellable at the option of the Company. Most of the leases are renewable for further period on mutually agreeable terms and also include escalation clauses.

Significant judgement: classification of joint arrangements

The company has entered into Partnership firms / Association of person whose legal form confers separation between the parties to the joint arrangement and the Company itself. Also, as per the contractual arrangements, the parties to the joint arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Accordingly the Joint arrangements have been identified as Joint operations.

Financial impact of Joint controlled operations

The Company accounts for assets, liabilities, revenue and expenses relating to its interest in joint controlled operations based on the internal agreements/ arrangements entered into between the parties to the joint arrangements for execution of projects. Accordingly the Company has recognised total income from operations RS,915.34 Million (for the year ended March 31, 2017 RS,846.11 Million), total expenditure (including tax) RS,910.96 Million (for the year ended March 31, 2017 RS,842.32 Million ), total assets as at March 31, 2018 RS,308.61 Million (as at March 31, 2017 RS,400.63 Million and as at April 1, 2016 RS,235.51 Million ) and total liabilities as at March 31, 2018 RS,166.52 Million (as at March 31, 2017 RS,330.66 Million and as at April 1, 2016 RS,234.41 Million)

Note 48 : Delay in payment of Statutory dues

During the year, there were delays in all monthly payments of GST to the authorities due to transitional challenges on account of changes in regulations and delay in receipt of invoices from suppliers, subcontractors due to which the final liability could not be determined as at due date of payments. Further, in case of income tax there have been delays in number of cases in monthly payments. As at the year end all outstanding dues with respect to income tax and GST along with interest, as applicable, has been paid. The management has put in place a process going forward to ensure timely deposit of GST and TDS.

Note 49 - First time adoption

These are the Company''s first standalone financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening IND AS Balance Sheet at April 1, 2016 (the Company''s date of transition). In preparing its opening Ind AS Balance Sheet, the company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (''''previous GAAP''''). An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

In preparing these Ind AS financial statements, the Company has availed certain optional exemptions and mandatory exceptions in accordance with Ind AS 101 from previous GAAP to Ind AS, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and previous GAAP have been recognised directly in equity (retained earnings or another appropriate category of equity). This note explains the adjustments made by the Company in restating its previous GAAP financial statements as at April 1, 2016 and the financial statements as at and for the year ended March 31, 2017.

A.1 Ind AS optional exemptions

(a) Deemed cost for property plant and equipment, intangible assets and investment properties

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 ''Intangible Assets'' and investment properties covered by Ind AS 40 '' Investment Property''. Accordingly, the company has elected to measure all of its property, plant and equipment, intangible assets and investment properties at their previous GAAP carrying value.

A2. Ind AS mandatory exemptions

(a) Estimates

An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Impairment of financial assets based on expected credit loss model;

- Asset held for sale

(b) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS. Consequently the Company has applied the above assessment based on facts and circumstances existing on the transition date.

(c) Derecognition of Financial Assets and Financial Liabilities:

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS .

B: Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following reconciliations provide the explanations and quantification of the differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:

1. Reconciliation of Equity as at April 1, 2016 and March 31, 2017;

2. Reconciliation of Statement of Total Comprehensive Income for the year ended March 31 2017; and

3. The impact on cash flows from operating, investing and financing activities for the year March 31, 2017.

Notes to first time adoption:

The following explains the material adjustments made while transition from previous accounting standards to Ind AS:

Note 1: Accounting for investments in Joint controlled operations

The management has assessed that investment in joint controlled entities are to be considered as joint operation. Under Ind AS, a joint operator shall account for the assets, liabilities, revenues and expenses relating to its interest in a joint operation in the standalone financial statements whereas under previous GAAP, the company only accounted for its share of profit or loss in the Jointly controlled operations in the standalone financial statements.

Note 2:-Deferred Tax on indexation of freehold land

Under previous GAAP, deferred tax accounting was done using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. Since Land is a non-depreciable asset, management is expecting that its carrying value will be recovered through sale only and the indexation benefit at the time of disposal will be available, accordingly deferred tax asset on the difference between carrying value and indexed value has been created. As a result of this change, the retained earnings has increased by H2.46 Million on March 31, 2017 and H2.15 million as on April 1, 2016 and a credit of H0.31 million has been accounted for in the statement of Profit and Loss for the year ended March 31, 2017.

Note 3: Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. acturial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of statement of profit and loss under the previous GAAP. Consequently, the profit for the year ended March 31, 2017 increased by H0.08 Million. There is no impact on the total equity and profit.

Note 4:- Prior period items

The company had recorded certain prior period items in the Statement of Profit or Loss for the year ended March 31, 2017. Under Ind AS, the impact of the said prior period items have been taken to retained earnings as at April 1, 2016 and accordingly it has been reversed in the Statement of Profit or Loss for the year ended March 31,2017.

Note 5:- Other Comprehensive Income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ''other comprehensive income'' includes remeasurements of defined benefit plans and fair value gains or losses on FVOCI equity instruments. The concept of other comprehensive income did not exist under previous GAAP.

Note 6:- Retained Earnings:

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.