1.1.11 Provision, Contingent Liabilities and Contingent Assets
Provisions are recognized for when the Company has a present, legal or contractual obligation as a result of past events, only if it is probable that an outflow of resources embodying economic outgo or loss will be required and if the amount involved can be measured reliably.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding 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 finance cost.
Contingent Liability
A possible obligation that arises from past events and 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 enterprise are disclosed as contingent liability and not provided for. Such liability is not disclosed if the possibility of outflow of resources is remote.
Contingent Asset
A contingent asset is possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
Contingent assets are not recognised but disclosed only when an inflow of economic benefits are probable.
1.1.12 Foreign currency transactions
(a) Initial recognition
Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.
(b) Conversion:
At the year-end, monetary items denominated in foreign currencies, if any, are converted into rupee equivalents at exchange rates prevailing on the balance sheet date.
(c) Exchange Differences:
All exchange differences arising on settlement and conversion of foreign currency transaction are included in the Statement of Profit and Loss.
1.1.13 Taxes on Income
Income tax expenses comprise current and deferred income tax. Income expense is recognized in net profit in the Statement of Profit and Loss except to the extent that it relates to item recognised directly in equity, in which case it is recognised in Other Comprehensive Income. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from tax authorities, using the tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date.
Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized.
Minimum alternate tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax for the year. The Company recognises MAT credit available as deferred tax asset only when there is convincing evidence that sufficient taxable profit will be available to allow all or part of MAT credit to be utilised during the specified period, i.e., the period for which such credit is allowed to be utilised. In the year in which the Company recognises MAT credit as an asset, it is created by way of credit to the Statement of Profit and Loss and shown as part of deferred tax asset. The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.
1.1.14 Retirement and other employee benefits
(a) Short Term Employee Benefits
The company has an obligation towards leave encashment, a defined benefit retirement plan covering eligible employees. The liability is provided for on the basis of the Company policy and calculations made by the Management at the end of each financial year.
(b) Post Employment Benefits
(i) Defined Benefit Plan
Gratuity being a defined benefit scheme is accrued based on the valuations (Gratuity payable) calculated by the employees of the company and were on the basis of actuarial valuations made by a qualified actuary.
For the purpose of presentation of defined benefit plans, the allocation between short term and long term provisions has been made as determined by the actuarial valuator.
(ii) Defined Contribution Plans
Company's contribution to Provident Fund and Employees' State Insurance Fund which are define contribution plans determined under the relevant schemes and/or statutes are charged to Statement of Profit and Loss when incurred.
1.1.15 Cash flow statement
Cash flows are reported using the indirect method, whereby profit before tax for the period adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
1.1.16 Borrowing Costs
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognised in the Statement of Profit and Loss in the period they occur.
1.1.17 Segment Reporting:
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
1.1.18 Earnings per Equity Share
Basic earnings per equity share are computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period.
Diluted earnings per equity share are computing by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
Financial risk factors:
The Company's activities expose it to a variety of financial risks - market risk, credit risk and liquidity risk. The Company's primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is interest rate risk. The Company's exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers.
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 foreign currency risk.
A) Interest rate risk
Interest rate risk is the risk that fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company quite often bridges its short term cash flow mismatch by availing working capital loan from banks by hypothecation of stocks and book debts. The interest rate on working capital loan is Bank Rate 2.50%.
B) Foreign currency risk
Foreign currency risk is the risk that the fair value of 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 relates primarily to the rendering of services in US. The exchange rate between the Indian rupee and US dollar has changed in recent years and may fluctuate in substantially in the future.
Credit risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to ?4,719.82 (Amount in lakhs) and ?6567.92 (Amount in lakhs) respectively as at March 31,2024 and March 31,2023 respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers primarily located in India and US. Credit risk has always managed by the Company through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. As per Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain.
Credit risk exposure
The allowance for expected credit loss on customer balances for the years ended March 31, 2024 and March 31, 2023 is ?359.12 and ? 191.88 respectively.
Liquidity risk
The Company monitors its risk of shortage of funds using cash flow forecasting models. These models consider the maturity of its financial investments, committed funding and projected cash flows from operations. The Company's objective is to provide financial resources to meet its business objective in a timely, cost effective and reliable manner and to manage its capital structure. A balance between continuity of funding and flexibility is maintained through the use of various types of borrowings.
The Company's objective when managing capital is to safeguard continuity and healthy capital ratios in order to support its business and provide adequate return to its shareholders through continuing growth. The Company's overall strategy remains unchanged from previous year.
The Company sets the amount of capital required on the basis of annual business and long term operating plans which include capital and strategic investments.
The funding requirements are met through a mixture of equity, internal fund generation, borrowings. The Company's policy is to use borrowings to meet anticipated funding requirements.
The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, that uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.
The Company uses accounting software to maintain its books of accounts. The audit trail (edit log) feature was enabled at the application level and the same operated throughout the year. Management has assured that throughout the reporting period
i.e. from 1 April 2023 to 31 March 2024, no unauthorized personnel was provided with access to prevent any changes through data base (create, change, delete)
NOTE 43 - OTHER STATUTORY INFORMATION
i. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property.
ii. The Company does not have any transections with companies struck off.
iii. The Company does not have any charges or satisfaction which is yet to registered with ROC beyond the statutory period.
iv. The Company has not traded or invested in Crypto Currency or Virtual Currency during the financial year.
v. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
vi. 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 behalf of the Ultimate Beneficiaries.
vii. 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 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.
viii. The Company has not such transaction which is not recorded in books of accounts that has been surrendered or disclosed as income during the year in the assessments under the income tax Act,1961( such as, search or survey or any other relevant provision of the income tax act,1961).
Note: 45 - Previous year figure are regrouped / reclassified wherever necessary to correspond with the current years classification/disclosure.
For akasam & associates For and on behalf of the Board of Directors of
Chartered Accountants Raminfo Limited
Firm Registration No. 005832S CIN:L72200TGI994PLC0I7598
S Ravi Kumar L.Srinath Reddy V.Anil Kumar Ambati
Partner Managing Director Director
Membership No. 28881 DIN:03255638 DIN:06535455
K. Kiran Kumar Reddy V.Maheswara Rao
Company Secretary Chief Financial Officer
ACS No: 72217
Place: Hyderabad Place: Hyderabad Place: Hyderabad
Date: May 29, 2024 Date: May 29, 2024 Date: May 29, 2024
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