Particulars
As at 31 March 2024
As at 31 March 2023
Contingent liabilities
Income tax demand & disputes pending before appellate authorities (refer note below)
0.00
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
(*) The fair value of these investments in equity shares are calculated based on discounted cash flow approach for unquoted market instruments which are classified as level III fair value hierarchy.
(A) The carrying values of these accounts are considered to be the same as their fair value, due to their short term nature. Accordingly, these are classified as level 3 of fair value hierarchy.
The Company has exposure to following risks arising from financial instruments- credit risk
- market risk
- liquidity risk
The Company's board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company's risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities.
Credit risk is the risk that counter party will not meet its obligations under a financial instruments or customer contract leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) from its financing activities including deposits with banks and i nvestment in quoted and un-quoted equity instrume nts.
Credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Outstanding customer receivables are regularly monitored.
The impairment analysis is performed at each reporting date on an individual basis for major customers. In addition, a large number of minor receivables are grouped into homogeneous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company does not hold collateral as security.
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (including but not limited to past payment history, security by way of deposits, external ratings, audited financial statements, management accounts and cash flow projections and available press information about customers) and applying experienced credit judgement.
Credit risk on cash and cash equivalent is limited as (including bank balances, fixed deposits and margin money with banks) the Company generally transacts with banks with high credit ratings assigned by international and domestic credit rating agencies.
The Company is exposed to equity price risk from investments in equity securities measured at fair value through profit
and loss. The Management monitors the proportion of equity securities in its investment portfolio based on market indices and based on company performance for un-equity instruments. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are approved by the Board of Directors. Further, major investments in un-quoted equity instruments are strategic in nature and hence invested for long-term purpose.
Interest rate risk is the risk that the 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 its short term borrowings in nature of working capital loans, which carry floating interest rates. Accordingly, the Company’s risk of changes in interest rates relates primarily to the Company’s debt obligations with floating interest rates.
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant. The impact on entity’s loss before tax due to change in the interest rate/ fair value of financial liabilities are as disclosed below:
Liquidity is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing the liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
The Company’s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. The Company believes that the cash and cash equivalents is sufficient to meet its current requirements. Accordingly no liquidity risk is perceived.
The Company’s objective is to maintain a strong capital base to ensure sustained growth in business and to maximize the shareholders value. The Capital Management focuses to maintain an optimal structure that balances growth and maximizes shareholder value.
32 The company has availed the facility from M/s IL & FS Financial Services Ltd during F.Y. 2017-2018 and the same was advanced to M/s MP Border Checkpost Development Company Limited (a subsidiary of IL & FS Transportation Networks Limited) vide agreement dated 28/03/2018. In June 2018, the problems in IL & FS Group surfaced as a result MP Border Checkpost Development Company Limited was unable to service its obligations. In light of the above developments the complete transaction was restructured as under:
The obligation of MP Border Checkpost Development Company Limited was taken over IL & FS Transportation Networks Limited vide assignment deed dated 07.09.2018 which was further transferred to Srinagar Sonamarg Tunnelway Limited (a subsidiary of IL & FS Transportation Limited) vide assignment deed dated 22/09/2018.
The insolvency proceedings have been initiated against the IL & FS group. Pursuant to the Order passed by Hon’ble National Company Law Tribunal the IL & FS Group are under moratorium. The claim by IL & FS Financial Services Limited is being contested by the Company before Hon’ble National Company Law Tribunal.
As the claim of IL & FS Financial Services Limited and the company’s claim against Srinagar Sonamary Tunnelway Limited are dependent upon the outcome of the proceedings before Hon’ble National Company Law Tribunal, the necessary treatment shall be given to the transactions on the outcome of the proceedings.
For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to maximize the shareholder value. The following table summarizes the capital of the Company.
There are no contingent liabilities and commitments.
The figures of the previous year have been regrouped/reclassified, where necessary, to conform with the current year's classification.