a. Rights attached to equity Shares:
The Company has only one class of equity shares having a par value of ? 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
30. Out of 70.85 acres of land costing ? 11.59 lakhs situated at Adoni, Kurnool Dist., (A.P.), the Company is in the process of obtaining Pattadar pass Books in respect of 23.93 acres in its favour. As the land is not in the possession, the Company has initiated proceedings before RDO/ Civil Court,Adoni, Kurnool Dist. to regain the possession from trespassers.
31. The Management has initiated steps to evaluate the quality of all its receivables as at the year end and found all of them to be standard and there are no Non-Performing Assets in accordance with the prudential norms issued by Reserve Bank of India.
32. In the absence of convincing evidence that the Company will pay normal Income Tax within the specified period, the Minimum Alternative Tax (MAT) credit is not recognized as at the year-end in the Books of accounts. The total amount of such credit is ?140.71 lakhs and the situation shall be reviewed at each Balance Sheet date.
33. The dividends declared by the Company are based on the profits available for distribution as reported in the financial statements of the Company. The Board of Directors of the Company has proposed a final dividend of ? 3.00/-per share in respect of the year ended March 31, 2025, subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of ?90.00 lakhs.
The above sensitivity analysis is 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 (projected unit credit method) has been applied as when calculating the defined benefit obligation recognised within the Balance Sheet.
9. Other Information:i. Plan Assets:
The Company has invested plan assets with Life Insurance Corporation of India (LIC). The expected Return on Assets is based on rate of return declared by fund managers.
ii. Present value of defined benefit obligation:
Present value of the defined benefit obligation is calculated by using Projected Unit Credit method (PUC Method). Under the PUC method a “projected accrued benefit” is calculated at the beginning of the year and again at the end of the year for each benefit that will accrue for all active Members of the Plan. The “projected accrued benefit” is based on the Plan's accrual formula and upon service as of the beginning or end of the year but using a Member's final compensation projected to the age at which the employee is assumed to leave active service. The Plan Liability is the actuarial present value of the “projected accrued benefits” as of the beginning of the year for active Members.
iii. Expected average remaining service Vs. Average Remaining Future Service:
The average remaining service can be arithmetically arrived by deducting current age from normal retirement age whereas the expected average remaining future service is arrived actuarially by applying multiple decrements to the average remaining future service namely mortality and withdrawals. Thus, the expected average remaining service is always less than the average remaining future service.
iv. The rate of escalation in compensation considered in the above valuation is estimated taking into account inflation, seniority, promotion and other relevant factors and the above information is as certified by an actuary.
36. Disclosure of Trade Payables under financial liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the “Micro, Small and Medium Enterprises Development Act, 2006” and relied upon by the Auditors. There are no amounts due to them as at the end of the year and there is no interest paid/payable during the year by the Company in terms of section 16 of the said Act.
The management assessed that cash and cash equivalents, trade receivables, trade payables and other assets/ liabilities approximate their carrying amount largely due to the short-term maturities of these instruments.
The fair value of the financials assets and liabilities is reported at the amount at which the instrument 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 values:
a. The fair values of the quoted equity shares are based on price quotations at the reporting date. The fair value of unquoted instruments in Mutual funds are based on the Net Asset Value provided by the Fund Manager as on the date of reporting.
b. Fair value of security deposits has been calculated by discounting future cashflows using rates currently available for debt on similar terms, credit risk and remaining maturities.
Description of significant observable inputs to valuation:
a. Interest free Security Deposits (assets):
Interest Rate factor has been considered at a rate of 9% p.a. by the Company for discounting the amount receivable at the time of maturity.
b. Interest free Security Deposits (liabilities):
Interest Rate factor has been considered at a rate of 10% p.a. by the Company for discounting the amount payable at the time of maturity.
Segment Information:
The executive management of Company monitors the operating results of its business as a single unit for the purpose of resource allocation and performance assessment which is “Investment Activities”. Hence segment information is not applicable.
Financial Risk Management objectives and policies:
The Company is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include market risk, credit risk and liquidity risk. The Company's risk management policies focus on the unpredictability of financial risks and seek guidelines, where appropriate, to minimize the potential adverse impact of such risks. There has been no change to the Company's exposure to these financial risks or the manner in which it manages and measures the risks.
The following sections provide the details regarding the Company's exposure to the financial risks associated with financial instruments held in the ordinary course of business and the objectives policies and processes for the management of these risks.
The Company's principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance and support the Company's operations. The Company's principal financial assets include Investments, trade and other receivables and cash and cash equivalents are derived from its operations
The Company is exposed to market risk, credit risk and liquidity risk.The Company's management oversees the mitigation of the risks. The Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured, and managed in accordance with the Company's policies and risk objectives. The management / Board reviews and agrees policies for managing each of these risks, which are summarized below.
i. Market Risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk interest rate risk and other price risks such as equity risk. Financial instruments affected by market risk include loans and advances and deposits.
a. Interest rate risk:
Interest rate risk is the risk that the fair value or future cash flows of the Company and the Company's financial instruments will fluctuate because of changes in market interest rates. The Company's exposure to interest rate risk arises primarily from the employee benefit plan, investment in debt mutual funds, fixed deposits and cash and cash equivalents.
As the Company invests primarily in fixed rate interest bearing deposits, the Company is not significantly exposed to interest rate risk. Further as there are no borrowings the Company's policy to manage its interest cost does not arise.
The Company is not exposed to significant interest risk as at the respective reporting dates.
b. Foreign Currency Risk:
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Currency risk arises when transactions are denominated in foreign currencies.
As there were no transactions denominated in foreign currencies in any of the reporting periods, the Company is not exposed to any foreign currency risk as at the respective reporting dates.
c. Other price risk:
Other price risk is the risk that the fair value or future cash flows of the Company's financial instruments will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk) whether those changes are caused by factors specific to the individual financial instrument or its issuer or by factors affecting all similar financial instruments traded in the market.
The Company is exposed to equity price risks arising from equity investments held by the Company and classified in the balance sheet as FVTPL. Mutual fund investments are susceptible to market price risk mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments. However due to the long tenor of the underlying portfolio in the equity shares and growth funds they do not pose any significant price risk.
ii. Credit risk:
Credit risk is the risk of loss that may arise on outstanding financial instruments when a counterparty default on its obligations. The Company's exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including cash and short-term deposit) the Company minimise credit risk by dealing exclusively with high credit rating counterparties. The Company's objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Company trades only with recognised and creditworthy third parties. It is the Company's policy that all customers who wish to trade on credit terms are subject to credit verification procedures.
In addition, receivable balances are monitored on an ongoing basis with the result that the Company's exposure to bad debts is not significant.
a. Exposure to credit risk:
At the end of the reporting period the Company's maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position. No other financial assets carry a significant exposure to credit risk.
b. Credit risk concentration profile:
At the end of the reporting period there were no significant concentrations of credit risk. The maximum exposures to credit risk in relation to each class of recognised financial assets is represented by the carrying amount of each financial assets as indicated in the balance sheet.
c. Financial assets that are neither past due nor impaired:
Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Company. Cash and short-term deposits that are neither past due nor impaired are placed with or entered with reputable Banks financial institutions or companies with high credit ratings and no history of default.
iii. Liquidity risk:
The risk that an entity will encounter difficulty in Meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
The Company ensures that it has sufficient cash on demand to meet expected operational demands including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted.
Excessive Risk Concentration:
Concentrations arise when a number of counterparties are engaged in similar business activities or activities in the same geographical region or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company's performance to developments affecting a particular industry.
In order to avoid excessive concentrations of risk, the Company's policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.
43. Capital Management:
Capital includes equity attributable to the equity holders of the parent. The primary objective of the capital management is to ensure that it maintain an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder's value.
The Company manages its capital structure and make adjustments to it in light of changes in economic conditions or its business requirements. To maintain or adjust the capital structure, Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.
Currently the Company doesn't have loans and borrowings and maintains the entire capital in form of equity share capital.
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