Note 6.3: Non-current trade receivables and current trade receivables as at March 31,2025 includes '646.52 crore (March 31, 2024: '654.99 crore) and '1,004.65 crore (March 31,2024: '596.53 crore) respectively, representing claims awarded in arbitration in favour of the Company and which have been challenged by the customers in courts.
Note 6.4: There are no trade receivables due from any director or any officer of the Company, either severally or jointly with any other person, or from any firms or private companies in which any director is a partner, a director or a member.
Note 6.5: Trade receivables (other than receivables on account of claims awarded in arbitration in favour of the Company) are noninterest bearing and are generally on terms of 30 to 90 days except retention deposits, which are due after completion of the defect liability period of the respective projects.
Note 9.6: During the year, the Company has exercised the option to adopt the new tax regime for previous year 2023-24 (Assessment Year: 2024-2025) onwards, while filing income tax return, which provides an option for paying corporate tax at reduced rates as per provisions/conditions of Section 115BAA of the Income Tax Act, 1961. Pursuant to the adoption of the new tax regime, current tax expenses recognised in previous year '54.74 crore have been reversed during the year ended March 31,2025. Further as a result of adoption of the new tax regime, the unused tax credits recognised are no longer utilizable and the net deferred tax assets on temporary taxable differences have been recognised using lower tax rate resulting in reversal of deferred tax assets aggregating '301.22 crore. As at March 31, 2025, the Company has net deferred tax assets amounting to '204.90 crore (March 31, 2024: '613.09 crore), which mainly represents deferred tax assets on carried forward unused tax losses and other taxable temporary differences. The Company is confident of generating sufficient taxable profits from the unexecuted orders on hand/future projects and expected realisation of claims/arbitration awards against which such deferred tax assets can be utilised and therefore considered good and recoverable.
The Company has only one class of equity shares having a par value of '1 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting, except interim dividend, if any.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Western Securities Limited, a erstwhile subsidiary company, holds Nil (March 31, 2024: 52,000) equity shares in the Company.
As per the records of the Company, including its register of shareholders/members the above shareholding represents both legal and beneficial ownership of shares.
(i) Aggregate number and class of shares allotted as fully paid up pursuant to contracts without payment being received in cash - Nil
(ii) Aggregate number and class of shares allotted as fully paid up by way of bonus shares - Nil
(iii) Aggregate number and class of shares bought back- Nil
As at March 31,2025, the Company has 185,874 (March 31, 2024; 371,748) employee stock option issued under ESOP for its employees.
During the year, the Company had issued and allotted 166,666,666 equity shares of '1 each at a price of '21 per equity share (including a premium of '20 per equity share) aggregating '350.00 crore to the eligible equity shareholders on rights basis in the ratio of 13 equity shares for every 118 equity shares held. Pursuant to the aforesaid, basic and diluted earnings per share for the year ended March 31, 2024 have been retrospectively adjusted for effect of rights issue.
During the year, the Company has issued and allotted 139,502,441 equity shares of face value of '1 each at a price of '43.01 per Equity Share, including a premium of '42.01 per Equity Share, aggregating '600 crore to 41 qualified institutional investors. The QIP issue proceeds are utilised in accordance with the objects of the issue as stated in the placement document.
For Listed Company creation of Debenture redemption reserve (DRR) is dispensed with, as a result, during the current year the Company has transferred debenture redemption reserve to general reserve.
The Company recognizes profit or loss on purchase or cancellation (including forfeiture) of its own equity instruments to capital reserve.
The Company recognizes profit or loss on purchase or cancellation (including forfeiture) of its own debentures to forfeited debentures account.
Securities premium is used to record the premium received on issue of shares. This account is utilised in accordance with the provisions of the Companies Act, 2013.
The Act requires that where a Company issues debentures, it shall create a debenture redemption reserve out of profits of the Company available for payment of dividend. The Company is required to maintain a Debenture Redemption Reserve of 25% of the value of the debentures issued, either by a public issue or a private placement basis. The amounts credited to the debenture redemption reserve cannot be utilised by the Company except to redeem debentures. Consequent to the amendment in the provision of Act, requirement to create reserve in respect of certain debenture have been withdrawn.
Under the erstwhile Companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of the Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of net profit to general reserve has been withdrawn.
The share option outstanding account represents reserve in respect of equity settled share options granted to the Company's employees in pursuance of the Employee Stock Option Scheme.
Retained earnings represents the profits/ losses that the Company has earned/incurred till date including gain/(loss) on remeasurement of defined benefits plans as adjusted for distributions to owners, transfer to other reserves, etc.
The Company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within FVTOCI reserve within equity. The Company transfers amount from this reserve to retained earnings when the relevant equity securities are disposed off.
(a) Optionally Convertible Debentures (OCDs)
OCDs issued to the lenders with a tenure of 10 years and carry a coupon of 0.01% with an interest yield of 11.50% p.a. in yield equalization compounded on a quarterly basis. The lenders have an option to convert the OCDs into equity shares of the Company, in accordance with the terms thereof including in case of any event of default or default in payment during the 10 years from the date of issuance of respective OCDs. In accordance with the resolution plan implemented in FY 2022-2023, the repayment tenure of OCDs has been extended and the revised repayment of the OCDs commenced from March 31,2023.
1. A land parcel admeasuring to 100 sqm as First Mortgage and all the present and future movable assets of the Borrower (excluding 'Current Assets' and 'Specified Assets') as the Second Mortgaged Properties.
2. All the present and future current assets of the Borrower (other than those forming part of 'Additional Assets') as the Third Mortgaged Properties.
3. All of the 'Additional Assets' collectively referred to as the Fourth Mortgaged Properties.
The terms 'Current Assets', 'Specified Assets' and Additional Assets' have been defined in the Financing Document.
The above security having ranking in respect to OCD are as below:
1. Pari Passu security interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.
2. Pari Passu security interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.
These NCDs carry an interest yield of 11.50% p.a. compounded quarterly and a coupon of 0.01% p.a. These are repayable in 7 structured annual instalments commencing March 31, 2023 and ending on March 31, 2029. Refer note below for security details.
2. All the present and future current assets of the Borrower (other than those forming part of Additional Assets') as the Third Mortgaged Properties.
3. All of the Additional Assets' collectively referred to as the Fourth Mortgaged Properties.
The above security having ranking in respect to LIC -NCD are as below:
1. A first ranking and pari passu security interest by way of legal mortgage over the First Mortgaged Properties and Second Mortgaged Properties.
2. A second ranking and pari passu security interest by way of legal mortgage over the Third Mortgaged Properties, Fourth Mortgaged Properties and the Fifth Mortgaged Properties.
1. HREL Real Estate Limited, an erstwhile subsidiary, has provided Corporate guarantee for the above outstanding facilities of the Company.
2. First pari-passu charge on 154,151,669 shares of the Company and second charge on 85,767,617 equity shares of the Company held by Hincon Holdings Limited and Hincon Finance Limited.
3. First Pari passu charge over Prolific Shares of 50,000 of HCC Holding.
4. Personal guarantee of Chairman and Non-Executive Director of the Company.
During the earlier year, the Company has implemented debt resolution plan pursuant to which the FCTL has been restructured and is payable in 7 structured annual instalments commencing from March 31, 2023. The FCTL carries a floating interest rate equal to 3 Month SOFR plus 350 basis point. The facility is secured by first charge by way of hypothecation of plant and machinery acquired under the facility described in the first schedule to the memorandum of hypothecation.
These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. These NCDs are repayable on March 31,2026 and are secured by exclusive charge upto 0.19% on specific claims of the Company.
These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. These are repayable in 2 structured instalments on March 31,2026 and June 30, 2029 and are secured by exclusive charge upto 49.53% on specific claims of the Company.
During the earlier years, the Company has entered into an amendment agreement with the lender wherein the parties have agreed to restructure the outstanding amounts for USD 6.89 Million with fixed interest rate of 1.91% compounded annually, repayable in 3 structured instalments commencing from December 31, 2028 and ending on December 31, 2030.
These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. These NCDs are repayable in 7 structured annual instalments commencing March 31,2023 and ending on March 31, 2029. The Company has paid its March 2023, March 2024 and March 2025 instalment on time.
These NCDs carry an interest yield of 9.5% p.a. compounded quarterly and a coupon of 0.01% p.a. and are repayable in 3 structured instalments commencing on June 30, 2029 and ending on June 30, 2031.
Loan from Steiner India Limited (step down subsidiary till December 20, 2024), repayable on demand is interest free. (Refer note 373)
Overdraft facility availed by HCC-HDC Joint Venture carry an interest rate of 8.71% p.a. (March 31,2024: 8.71%) which was repayable on demand, paid during the current year.
In accordance with the provisions of existing financing document executed between the Company and its lenders, as amended from time to time and pursuant to deliberations between the parties, lenders have agreed for the recompense amount to be settled by the Company in the form of equity shares to be issued at a future date, which is inter-alia dependent upon various factors including improved financial performance of the Company and other conditions, and which would be restricted to a maximum of 2.87% of equity share capital of the Company on the date of issue of such equity shares. This is valid as on the Balance Sheet date under MRA dated July 20, 2022.
Note 22.1 During the previous year, the Company has recognized interest income on arbitration awards of '7749 crore. This has been presented net of reversal of interest in respect of a project, where Supreme Court while upholding the award, has modified the interest. This resulted in a cumulative interest reversal of '83.23 crore. The net charge of '5.74 crore has been grouped in "Miscellaneous expenses" under the head "Other expenses'.'
Note 22.2.1 Disaggregation of revenue - Company's entire business falls under one operational segment of 'Engineering and Construction'. Contract revenue represents revenue from Engineering and Construction contracts wherein the performance obligation is satisfied over a period of time. Further, the management believes that the nature, amount, timing and uncertainty of revenue and cash flows from all its contracts are similar. Accordingly, disclosure of revenue recognised from contracts disaggregated into categories has not been made.
Note 22.2.2 Performance obligations - The aggregate amount of transaction price allocated to performance obligations that are unsatisfied as at the end of reporting period is '11,852.00 crore (March 31,2024: '10,475 crore). Most of Company's contracts have a life cycle of three to five years. Management expects that around 40%- 50% of the transaction price allocated to unsatisfied contracts as of March 31, 2025 will be recognised as revenue during next reporting period depending upon the progress on each contracts. The remaining amounts are expected to be recognised over the next two years. The amount disclosed above does not include variable consideration.
Note 22.2.3 (a) I ncrease in contract assets is primarily due to lesser certification of progress bills as compared to revenue for the year. Further, contract liability has decreased due to higher recognition of revenue as compared to progress bills raised during the year.
Note 22.2.3 (b) Revenue recognised during the year from opening balance of contract liability (i.e. due to customers) amounts to '16.82 crore (March 31, 2024: '1.27 crore).
Note 22.2.3 (c) Revenue recognised during the year from the performance obligation satisfied upto previous year amounts to '21723 crore (March 31, 2024: Nil).
Note 22.2.4 Out of the total revenue recognised during the year, '4,793.31 crore (March 31, 2024: '4,988.03 crore) is recognised over a period of time and '774 crore (March 31, 2024: '54.75 crore) is recognised at a point in time.
Note 22.2.5 There are no reconciliation items between revenue from contracts with customers and revenue recognised with contract price.
Note 22.2.6 Cost to obtain or fulfil the contract:
a) Amount of amortisation recognised in Statement of Profit and Loss during the year : Nil
b) Amount recognised as contract assets as at March 31,2025 : Nil
Note 23.1 During the previous year, the Company entered into a revised sanction letter with a holder of Optionally Convertible Debentures ('OCD') which provides for a waiver on the interest accrued on prepayment of OCD's. The Company made prepayments towards outstanding OCD's during the previous year which resulted in gains on settlement of debt, representing waiver of interest (net of processing charges), amounting to '46.16 crore.
Note 29.1 During the previous year, the Company sold a land parcel situated in Village Karnala (Tara), Panvel, Maharashtra along with the structures standing thereon for a consideration of '95.00 crore. The resultant gain of '8793 crore has been presented as an exceptional item.
Note 29.2 During the previous year, the Company has entered into a Share Purchase Agreement ('SPA') with HREL Real Estate Limited ('HREL) for acquisition of HRL Thane Real Estate Limited ('HRL Thane'), wholly owned subsidiary of HREL. Pursuant to the SPA, HRL Thane has become a direct subsidiary of the Company. Further, HREL has assigned certain inter corporate deposits ('ICD') receivable from HRL Thane in favor of HCC. As per the terms of the agreement between the parties, the considerations in respect of the above have been adjusted against the Company's receivable from HREL, which were written off in the earlier years. The effect of these transactions has resulted in a net gain of '80.63 crore, which has been presented as an exceptional item.
NOTE 31 CONTINGENT LIABILITIES AND COMMITMENTS
A. Contingent liabilities
As at March 31, 2025
As at
March 31, 2024
(i) Claims against the company not acknowledged as debts
3.65
741
(ii) Income tax liability that may arise in respect of matters in which the Company is in appeals
11.45
51.93
(iii) Indirect tax liability that may arise in respect of matters in which the Company is in appeals
159.38
179.35
Note 31.1 It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above contingent liabilities. Future cash outflows in respect of the above are determinable only on receipt of judgments/decisions pending with various forums/authorities. The Company does not expect any outflow of economic resources in respect of the above and therefore no provision is made in respect thereof.
B. Commitments
Capital commitments (net of advances)
14.41
4.43
NOTE 32 As at March 31,2025, the Company has investments (including deemed investments) in its wholly owned subsidiary HCC Infrastructure Company Limited ('HICL) aggregating '1,294.33 crore (March 31, 2024: '1,294.45 crore) classified as non-current investment '1,159.48 crore (March 31, 2024: '1,294.45 crore) and current investment of '134.85 crore (March 31, 2024: Nil). While the consolidated net worth of HICL as at March 31,2025 has been substantially eroded, the management has assessed the fair value of HICL based on a valuation report from an independent valuation expert. The valuation includes significant judgements and estimates in respect of future business plans, expected share of future revenues of subsidiaries sold and outcome of litigations for favourable arbitration awards in a step-down subsidiary. Accordingly, based on aforementioned valuation report and future business plan, the management believes that the recoverable amount of investment in HICL is higher than its carrying value.
NOTE 33 Unbilled work-in-progress (contract assets), current trade receivables and non-current trade receivable includes '308.59 crore, '214.27 crore and '5752 crore, respectively, outstanding as at March 31, 2025, representing receivables from customers based on the terms and conditions implicit in the contracts and other receivables in respect of closed/substantially closed/suspended projects. These aforementioned receivables are mainly in respect of cost over-run arising due to client caused delays, deviation in design and change in scope of work, for which Company is at various stages of negotiation/ discussion with the clients or under arbitration/litigation. Considering the contractual tenability, progress of negotiations/discussions/arbitration/litigations and as legally advised in certain contentious matters, the Company is confident that these receivables are good and fully recoverable.
The aforementioned entities are joint arrangements whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. The Company (i.e. Joint Operator) recognises its direct right to assets, liabilities, revenue and expenses of Joint Operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses and are incorporated in the standalone financial statements under the respective financial statement line item.
Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation, keeping all other actuarial assumptions constant. The significant actuarial assumptions are discount rate, salary escalation rate, and attrition rate.
Sensitivities due to mortality are not material and hence the impact of change due to these are not calculated. 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 year) has been applied when calculating the provision for defined benefit plan recognised in the Balance Sheet.
The method and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous years.
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it provides an approximation of the sensitivity of the assumptions shown.
The defined plan is exposed to a number of risks, the most significant of which are detailed below:
i. Salary increases - Actual salary increases will increase the plan's liability. Increase in salary increase rate assumption in future valuations will also increase the liability.
ii. Discount rate - Reduction in discount rate in subsequent valuations can increase the plan's liability.
iii. Mortality and disability - Actual deaths and disability cases proving lower or higher than assumed in the valuation can impact the liabilities.
In respect of certain employees, provident fund contributions are made to a trust administered by the Company. The interest rate payable to the members of the trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. Accordingly, the contribution paid or payable and the interest shortfall, if any, is recognised as an expense in the period in which services are rendered by the employee.
In accordance with an actuarial valuation of provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the assumptions as mentioned below, there is no deficiency in the interest cost as the present value of the expected future earnings of the fund is greater than the expected amount to be credited to the individual members based on the expected guaranteed rate of interest of Government administered provident fund.
NOTE 36 FAIR VALUE
The fair value of the financial assets are included at amounts at which the instruments could be exchanged in a current transaction between willing parties other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair value:
(a) Fair value of cash and short term deposits, trade and other short term receivables, trade payables, other current liabilities, approximate their carrying amounts largely due to the short-term maturities of these instruments.
(b) Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for the expected losses of these receivables.
37.1 Including through subsidiary companies.
372 During the current year, the Company has sold its entire shareholding in Western Securities Limited ('WSL), a subsidiary of the Company. Consequently, WSL has ceased to be a subsidiary of the Company w.e.f. August 14, 2024. The Company has recognised a gain of '5.62 crore on this transaction which has been presented under the head "other income."
373 During the current year, pursuant to moratorium, the Zurich District Court has passed an Order approving a scheme of arrangement in respect of Steiner AG ('SAG'), Switzerland, (including its subsidiaries, joint ventures and associates), a material step down wholly owned subsidiary of the Company. This scheme which is approved by the Court based on recommendation of administrator covers a) Divestment of entire shareholding of SAG held by HCC Mauritius Investment Limited and HCC Mauritius Enterprises Limited, (collectively, 'HMILEL), the wholly owned subsidiaries of the Company to Uniresolv SA, an affiliate of m3 Geneva ('Uniresolv SA) and, b) Divestment of entire shareholding of Steiner Development AG ('SDAG') by SAG to m3 Steiner Development SA, an affiliate of m3 Geneva ('m3SD') c) Divestment of Steiner India Limited ('SIL), by SAG to Uniresolv SA, d) Asset transfer (receivables) to SAG's wholly owned subsidiary, Steiner Eagle AG ('SEAG') and the immediate subsequent sale of SEAG to Uniresolv SA. Further, pursuant to the aforesaid Court Order, HMILEL has acquired the entire equity shareholding in SEAG from Uniresolv SA, against a swap of SAG shares and deferred payment of 5 million CHF Accordingly, SAG along with its subsidiaries, joint ventures and associates ceased to be part of the Company and SEAG became direct subsidiary of HMILEL w.e.f. December 20, 2024. Further, pending transfer of shares of SIL by Uniresolv SA to HMILEL, SIL is not related party as on March 31, 2025.
374 During the current year, pursuant to Scheme of Amalgamation, the National Company Law Tribunal, Mumbai has approved the merger of Raiganj-Dalkhola Highways Limited (RDHL), a step-down subsidiary of the Company with HCC Infrastructure Company Limited (HICL), a subsidiary of the Company with the appointed date as January 1, 2024. As a result RDHL is ceased to be step-down subsidiary of the Company w.e.f. February 14, 2025 and merged with the HICL, a subsidiary of the Company.
375 Pursuant to the Share Purchase Agreement dated March 31 2024, HREL Real Estate Limited alongwith its subsidiaries i.e. Nashik Township Developers Limited, Powai Real Estate Developers Limited, HCC Aviation LImited and HCC Reality Limited have ceased to be subsidiaries of Hindustan Construction Company Limited (w.e.f. March 31,2024). Further, during the previous year, the Company has entered into a Share Purchase Agreement ('SPA') with HREL Real Estate Limited ('HREL) for acquisition of HRL Thane Real Estate Limited ('HRL Thane'), wholly owned subsidiary of HREL. Pursuant to the SPA, HRL Thane has become a direct subsidiary of the Company.
376 During the previous year, Prolific Resolution Private Limited ('PRPL) issued 52,040 equity shares to Jadeja Investments Management Private Limited ('JIPL) on preferential basis for a consideration of '25 crore. Pursuant to aforementioned issue of equity shares, JIPL holds 51% of equity share capital of PRPL. Consequently, w.e.f. September 30, 2023, PRPL ceases to be a subsidiary of the Company and based on the terms of the Investment Agreement and Service Agreement, JIPL and HCC have joint control over the relevant activities of PRPL.
NOTE 38 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company's focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
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 three types of risk: interest rate risk, foreign currency risk and other price risk, such as equity price risk. Major financial instruments affected by market risk includes loans and borrowings.
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 the risk of changes in market interest rates relates primarily to the Company's total debt obligations with floating interest rates.
The Company's total debt obligation with floating interest rate as on March 31, 2025 is '52.87 crore (March 31, 2024; '63.38 crore)
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company's profit/ (loss) before tax is affected through the impact on floating rate borrowings, as follows:
Although, the exchange rate between the rupee and foreign currencies has changed in recent years, it has not materially affected the results of the Company. The Company evaluates exchange rate exposure arising from foreign currency transaction and follows established risk management policies.
The Company's listed and non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company's senior management on a regular basis. The Company's Board of Directors review and approve all equity investment decisions.
i) unlisted equity securities at fair value through other comprehensive income is '25.47 crore (March 31, 2024:
'33.38 crore).
ii) unlisted equity in subsidiaries at cost of '1,588.65 crore (March 31, 2024: '1,594.15 crore).
As at March 31,2025, the exposure to listed equity securities at fair value is '5.60 crore (March 31, 2024: '4.53 crore).
A movement (decrease /increase) of 10% in the value of listed securities could have an impact of approximately '0.56 crore (March 31, 2024: '0.45 crore) on the Other Comprehensive Income.
ii 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. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, financial assets. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount.
In determining allowance for credit losses of trade receivables, the Company has used the practical expedient by computing the expected credit loss allowance based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information.
Financial assets other than trade receivables mainly comprise of cash and cash equivalents, bank balances other than cash and cash equivalents, loan to subsidiaries and other financial assets. The Company monitors the credit exposure on these financial assets on a case-to-case basis. Loans to subsidiaries are assessed for credit risk based on the underlying valuation of the entity and their ability to repay within the contractual repayment terms. Cash and cash equivalents and bank balances other than cash and cash equivalents are held with bank and financial institutions with good credit rating. Based on the Company's historical experience, the credit risk on other financial assets is also extremely low.
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. The Company's treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company's net liquidity position through rolling forecasts on the basis of expected cash flows.
NOTE 39 CAPITAL MANAGEMENT
The primary objective of the Company's capital management is to maximise the shareholder's wealth. The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors monitor the return on capital employed as well as the level of dividend to shareholders.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a debt equity ratio, which is total debt divided by total capital.
Note 39.2 In the long run, the Company's strategy is to maintain the gearing ratio of less than 1. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the borrowings that define the capital structure requirements.
NOTE 40 LEASES - IND AS 116
a) Right-of-use Assets:
The net carrying value of right-of-use assets as at March 31, 2025 amounts to Nil (March 31, 2024:Nil). (Refer Note 3B).
b) Lease liabilities:
(i) As at March 31,2025, the obligations under finance leases amounts to Nil (March 31, 2024:Nil), which have been disclosed as lease liabilities on the face of the balance sheet.
NOTE 42 DISCLOSURES REQUIRED PURSUANT TO IND AS 102 SHARE BASED PAYMENT
The Company has granted stock options under the HCC Employees Stock Option Scheme ('ESOS'). These options would vest based on the vesting conditions as per letter of grant executed between the Company and its employees. Each option when exercised would be converted into one fully paid up equity share of '1 each of the Company. The relevant details of the scheme, grant and activity under ESOS are summarised below:
NOTE 43 OTHER STATUTORY INFORMATION
a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company & its joint operations for holding any Benami property.
b) The Company does not have any transactions with struck off companies.
c) The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Companies beyond the statutory period.
d) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
e) 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:
i) 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
ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
f) The Company does not have any such transaction which is not recorded in the books of account that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
g) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.
h) The Company has complied with the number of layers prescribed under the Companies Act, 2013.
i) The Company has not entered into any scheme of arrangement which has an accounting impact on the standalone financial statements for the current or previous year.
NOTE 44: DETAILS OF LOAN GIVEN TO ULTIMATE BENEFICIARY THROUGH FUNDING PARTY
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: i) 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 ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries, except the below transaction during the previous year ended March 31, 2024 :
Note 44.1 The Company has compiled with the relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and Companies Act, 2013, for above transactions and are not in violation of the Prevention of Money-Laundering Act, 2002 (15 of 2003).
Note 45 The Company is principally engaged in a single business segment viz. "Engineering and Construction" Also, refer note 38 (ii) b for information on revenue from major customers.
Note 46 Figures for the previous year have been regrouped/rearranged, wherever considered necessary, to confirm to current period's classification. The impact of such reclassification/ regrouping is not material to the standalone financial statements.
This is a summary of material accounting policies and other explanatory information referred to in our audit report of even date