(a) Represents unsecured loan given to R V Consulting Services Private Limited for financial assistance (enterprise in which relative of a KMP exercise control), bearing an interest rate in the range of 7.50% - 8.50% per annum and repayable within 12 months from the date of disbursement. During the year, the Company has renewed both the loans aggregating to I 1,300 which had fallen due for repayment.
(b) No loans are granted to promoters, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other person, that are either (i) repayable on demand; or (ii) without specifying any terms or period of repayment.
iv. Rights, preferences and restrictions attached to equity shares
The Company has only one class of issued, subscribed and paid up equity shares having a par value of 110 each per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the 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.
vi. Aggregate number of equity shares issued for consideration other than cash:
During the year ended 31 March 2022, the Company has issued 6,32,238 equity shares of 110 each to Mr. Satish Chander Reddy Kalva, against acquisition of 100% stake in ITCATS LLC, USA. The Company has not issued any equity shares pursuant to contract without payment being received in cash or by way of bonus shares or bought back any equity shares during the last five year preceding the balance sheet date, except as mentioned above.
vii. Aggregate number of equity shares issued as bonus and shares bought back during the period of five years immediately preceding the reporting date is "Nil".
Nature and purpose of reserves Securities premium
The amount received in excess of face value of the equity shares is recognised in the securities premium. This reserve will be utilised in accordance with the provisions of Section 52 of the Act.
Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distribution to the shareholders.
Remeasurement of defined benefit plan, net of tax
This amount represents actuarial gains or losses arising from the remeasurement of defined benefit obligations (i.e. gratuity), which are recognized in Other Comprehensive Income (OCI) and not reclassified to profit or loss.
a. Details of secured vehicle loans
In the FY 2024-25, the Company had availed a vehicle loan from a bank, which was fully secured by way of hypothecation of specific vehicle. The loan carried an interest rate of 8.90% per annum and was repayable in 39 equal monthly instalments starting from September 2024.
14. Leases
The Company has lease arrangements for its office premises located in Hyderabad. This leases have original terms for a period of 7 years with multiyear renewal option at the discretion of lessee. The agreements entered into by the Company have rent escalation of 5% p.a. There are no residual value guarantees provided by the third parties.
28. Categories of Financial instruments and their fair values
The carrying amount of all financial assets and financial liabilities appearing in the financial statements are carried at amortised cost and are reasonable approximation of their fair values.
The fair value of the financial assets and financial liabilities are included at an amount at which the instruments could be exchanged in a current transaction between the willing parties, other than in a forced or liquidation sale.
29. Financial risk management objectives and policies Financial Risk Management Framework
The Board of Directors is responsible for developing and monitoring the Company's risk management policies.
The Company's principal financial liabilities comprises of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include loans, trade and other receivables and cash and bank balances that the Company derives directly from its operations.
The Company is exposed primarily to credit risk, liquidity risk and market 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. 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. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk arises primarily from financial assets such as trade receivables, balances with banks and loan and other receivables.
Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, cash and bank balances and loans. None of the financial instruments of the Company result in material concentration of credit risk.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was 14,072.34 as of 31 March 2025 (31 March 2024: 14,094.39) being the total of the carrying amount of financial assets.
. Financial assets that are neither past due nor impaired
None of the Company's cash equivalents, loans and other financial assets were either past due or impaired as at 31 March 2025 and 31 March 2024. The Company has diversified its portfolio of investment in cash and cash equivalents and term deposits with various banks which have secure credit ratings, hence the risk is reduced. Loans given to related parties are tested for impairment where there is an indicator. Other financial assets represent security deposits given to lessors and other assets. Credit risk associated with such deposits and other assets is relatively low.
Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each balance sheet date whether a financial asset or a group of financial assets are impaired. Expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix if they past due. The provision matrix takes into account historical credit loss experience and is adjusted for forward-looking information. Based on such data, loss on collection of receivable is not material, hence no additional provision considered.
B. Liquidity risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining cash and cash equivalents and the cash flows generated from operations.
C. Market risk:
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company's income. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
i. Foreign exchange risk:
Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The majority of Company's revenue is generated in US dollars, as a result, as the rupee appreciates or depreciates against foreign currencies, the results of the entity's operations are impacted.
ii. Interest rate risk:
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 borrowing during the current year and previous year comprised of vehicle loans which carried a fixed rate of interest, which did not expose it to interest rate risk.
30. Capital risk management
Capital includes equity capital and all other reserves 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.
The Company monitors capital using a debt to capital employed ratio which is debt divided by total capital plus debt. The Company's policy is to keep this ratio at an optimal level to ensure that the debt related covenants are complied with.
31. Disclosure pursuant to requirements of Rule 11(e) (i) & (ii) of the Companies (Audit and Auditors) Rules
(i) 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).
(ii) 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 Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
32. Contingent liabilities and Commitments
There are no contingent liabilities and outstanding commitments as at 31 March 2025 and 31 March 2024.
33. In accordance with Ind AS 108, Operating segments, segment information has been provided in the consolidated financial statements of the Company and no separate disclosure on segment information is given in these standalone financial statements.
(i) All KMP's excluding S Sreekanth Reddy, are covered by the Company's Mediclaim insurance policy and are eligible for gratuity along with other employees of the Company. The proportionate premium paid towards this policy and provision made for gratuity pertaining to such KMP's has been included in the aforementioned disclosures as these are not determined on an individual basis.
(ii) All transactions with these related parties are priced on an arm's length basis and are to be settled in cash. None of the balances are secured and no guarantees are extended to the related parties.
(ix) The Company expects to contribute INil towards gratuity within one year from the year ended 31 March 2025 and 31 March 2024.
(x) Risk exposures:
Valuation are based on certain assumptions, which are dynamic in nature and may vary over time. As such valuations of the Company is exposed to following risks -
a) Salary escalation: Higher than expected increases in salary will increase the defined benefit obligation.
b) Discount rate: The defined benefit obligation calculated use a discount rate based on government bonds. If bond yield fall, the defined benefit obligation will tend to increase.
c) Mortality rate: If the actual death cases are lower or higher than assumed in the valuation, it can impact the defined benefit obligation.
d) Withdrawals: If the actual withdrawal are higher or lower than the assumed withdrawals or there is a change in withdrawal rates at subsequent valuations, it can impact defined benefit obligation.
36. Additional disclosures
(i) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions Prohibition Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) The Company has not taken borrowings from banks or financial institutions on the basis of security of current assets.
(iii) The Company has not been declared willful defaulter by any bank or financial Institution or other lender.
(iv) No transactions are carried out with companies struck off under section 248 of the Act or section 560 of Companies Act, 1956.
(v) No charges or satisfaction yet to be registered with ROC beyond the statutory period.
(vi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017.
(vii) No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Act.
(viii) There is no income surrendered or disclosed as
income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
(ix) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
37. Audit trial
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, which 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, in respect of financial year commencing on 1 April 2024 has used an accounting software "Tally Prime 4.0 (Edit Log)" for maintaining its books of account for the period 01 April 2024 to 31 March 2025. As the Company had migrated from Tally Prime 2.1" w.e.f. 1 June 2023, the backup of books of accounts for the period 1 April 2023 to 31 May 2023 could not be maintained.
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