2.11 Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a
result of a past events and it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre -
tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used,
the increase in the provision due to the passage of time is recognised as a finance cost. Provisions
are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
Contingent liability is disclosed in the case of :
- a present obligation arising from past events, when it is not probable that an outflow of resources
will be required to settle the obligation.
- a present obligation arising from past events, when no reliable estimate is possible.
Contingent assets are neither recognised nor disclosed in the Financial Statements.
2.12 Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in
hand and short-term investments with an original maturity of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value.
2.13 Equity, Reserves and Dividend Payments
Equity shares are classified as equity. Incremental costs directly attributable to the issue of new
shares are shown in equity as a deduction, net of tax, from the proceeds.
Retained earnings include current and prior period retained profits. All transactions with owners of
the Company are recorded separately within equity.
Dividend distributions payable to equity shareholders is included in other liabilities when the divi¬
dends have been approved in a general meeting prior to the reporting date.
2.14 Rounding off amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest
lakhs with two decimals as per the requirement of Schedule III, unless otherwise stated.
2.15 Standards issued but not effective
There is no such notification is applicable from 01.04.2024.
The above sensitivity analysis is based on a change in each 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.
v) Risk exposure
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:
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.
Salary inflation risk:
Higher than expected increases in salary will increase the defined benefit obligation.
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.
24 EARNINGS PER SHARE
Basic and Diluted EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the company by the
weighted average number of equity shares outstanding during th the year. Diluted EPS amounts are calculated by dividing the profit
attributable to equity holders of the company by the weighted average number of equity shares outstanding during the year plus the
weighted average number of equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity
shares.
31. Financial instruments and risk management
Fair values
1. The carrying amounts of other financial liabilities(current), cash and cash equivalents, investments and other financial liabilities (current) are
considered to be the same as fair value due to their short term nature.
2. The fair value of financial assets and liabilities is included 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.
3. Set out below is a comparision by class of the carrying amounts and fair value of the Company's financial instruments, other than those with carrying
amounts that are reasonable approximation of fair values:
*Fair value of instruments is classified in various fair value hierarchies based on the following three levels:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques, which maximise the use
of observable market data and rely as little as possible on entity specific estimates. If significant inputs required to fair value an instruments are
observable, the instrument is included in Level 2.
Level 3: If one or more of the significant inputs are not based on observable market data, the instruments is included in level 3.
Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation
technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts
that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of financial instruments subsequent to
the reporting dates may be different from the amounts reported at each reporting date. In respect of investments as at the transaction date, the Company
has assessed the fair value to be the carrying value of the investments as these companies are in their initial years of operations obtaining necessary
regulatory approvals to commence their business.
The management assessed that fair value of financial assets and liabilities significantly approximate their carrying amounts largely due to the short term
maturities of these instruments. The fair value of the financial assets and liabilities is included 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 Company determines fair values of financial assets or liabilities by discounting the contractual cash inflows / outflows using prevailing interest rates
of financial instruments with similar terms. The initial measurement of financial assets and financial liabilities is at fair value. Further, the subsequent
measurements of all assets and liabilities is at amortised cost, using effective interest rate method.
The following methods and assumptions were used to estimate fair values:¬
- The fair value of the Company's interest bearings borrowings are determined using discount rate that reflects the entity's discount rate at the end of the
reporting period. The own non-performance risk as at the reporting period is assessed to be insignificant.
For other non-current financial assets and liabilities the fair value is the same as the amortized cost, measured using the discount rate at the time of
initial recognition of financial assets and liabilities
A one percent change in the unobserved inputs used in fair valuation of level 3 Assets and liabilities does not have a significant impact in its value.
Fair value of financial assets and financial liabilities
The carrying value of the current financial assets and current financial liabilities are considered to be same as their values, due to their short-term nature.
The non-current borrowings and securities deposits are carried at amortized cost which is considered as their fair value.
33. Financial risk management
The Company is exposed to market risk (fluctuation in foreign currency exchange rates, price and interest rate), liquidity risk and credit risk, which may
adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate
potential adverse effects on the financial performance of the Company.
(a) Market Risk
Market risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate because of changes in market prices such as
currency risk, interest rate risk, and commodity price risk.
(i) Interest rate risk
The Company is not exposed to significant interest rate risk as at the respective reporting dates.
(b) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out
market positions. Company's treasury maintains flexibility in funding by maintaining availability under deposits in banks.
Management monitors cash and cash equivalents on the basis of expected cash flows.
34. Capital Management
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. The primary objective of the company's capital management is to maximise the shareholder value.
The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial
covenants. The company monitors capital using a gearing ratio, which is debt divided by total capital.
35. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the
Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or
otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not
received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other
persons or entities identified by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
36. The Company is using Focus 6 SQL version accounting software and the audit trail feature is not enabled. The company is in the process of
establishing necessary controls and maintaining documentation relating to audit trail (edit log) as per Rule 3(1) of Companies (Accounts) Rules, 2014
37. Relationship with Struck off companies
The company does not have any transaction with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act,
1956, during the current year and in the previous year.
Summary of material accounting policies 2
The accompanying notes are an integral part of the financial statements.
As per our report of even date For and on behalf of the Board of Directors
For M. Anandam & Co
Chartered Accountants
(Firm Regn.No.000125S)
Sd/- Sd/- Sd/-
S.V.S Narayana Soobharani Nandury Sarath Kumar Jutur
Partner Whole Time Director Director
Membership No: 222296 (DIN: 00567002) (DIN: 05187764)
Place : Hyderabad Sd/- Sd/-
Date : 30-05-2024 Sreedhar Babu K Shruthi Agarwal
Chief Financial Officer Company Secretary
PAN:AHHPK2225R PAN:BZMPA0946B
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