During the year ended 31st March 2024, on account of the interim dividend for FT 2023-24, the Company has incurred a net cash outflow of 357.49 lakhs.
The Board of Directors, in their meeting held on 27th May 2024, declared a interim dividend of 30.50 per equity share for the FY 2023-24. This payment would result in a net cash outflow of approximately 3:57.49 lakhs.
The carrying amounts of deposits (current), trade receivables, cash and cash equivalents, trade payables, other current financial liabilities are considered to be approximately equal to the fair value.
34 Financial Risk Management
The Company's financial risk management is an integral part of how to plan and execute its business strategies. The Company's financial risk management policy is set by the Managing Board.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign currency receivables, payables and loans and borrowings.
The Company is exposed to various financial risks majority market risk, credit risk and liquidity risk. The Company's senior management oversees the management of these risks with an objective to minimise the impact of these risks based on charters and informal policies.
A Market risk
A1 Market risk - Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. In order to optimize the Company's position with regards to interest income and interest expenses and to manage the interest rate risk, management performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio.
According to the Company, interest rate risk exposure is only for floating rate borrowings. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk
internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.
However, the company does not have any outstanding floating interest rate borrowings at the end of the reporting period.
A2 Market Risk- Foreign currency risk.
The Company operates internationally and the business is transacted in several currencies and consequently the company is exposed to foreign exchange risk through its sales and services in overseas markets and purchases from overseas suppliers in various foreign currencies.
However, the company does not have any outstanding balances in foreign currency at the end of the reporting period.
B Credit risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed- To manage this, the company periodically assesses financial reliability of customers and other counter parties, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual risk limits are set and periodically reviewed on the basis of such information.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the
reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information as well.
Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in the statement of profit and loss.
The Company measures the expected credit loss of trade receivables and loan from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends.
Trade receivables are typically unsecured and are derived from revenue earned from customers located in and outside India.
The Company also carries credit risk on lease deposits with landlords for properties taken on leases and other vendor trade deposits. The risk relating to refunds after surrender of leased property is managed through successful negotiations or appropriate legal actions, where necessary.
Refer Note no 16 for the purpose of ageing of trade receivables.
C Liquidity risk
Liquidity risk is the risk that the Company will face in meeting its obligation associated with its financial liabilities that are settled by delivering cash or another financial asset The Company's approach in managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. Any short term surplus cash generated, over and above the amount required for working capital and other operational requirements is retained as cash and cash equivalents (to the extent required).
The table below summarises the maturity profile of the Company's financial liabilities at the reporting date. The amounts are based on contractual undiscounted payments:
35 Employee Benefits A Defined Benefit Plan - Leave Encashment
The company has the policy of mandatory encashment of outstnding unutilised leaves on completion of eveiy calender year. Therefore, the leave encashment liability is
provided on basis of unutilised leave balance computed as at the end of financial year curresponding to such eligible employees as per the company’s poicy.
The company has recognised the following amounts as leave encashment expenses in the statement of profit and loss for the year:
Reason for Variances
* Increase in shareholder's equity due to Initial Public Offer of Equity shares during the year resulted in decrease of ROE.
** Increase in the current year revenue from operation as compared with last year resulted in improvement of Net Capital Turnover Ratio.
*** Increase in shareholder's equity due to Initial Public Offer of Equity shares during the year resulted in decrease of ROCE.
37 Relationship with struck-ofT companies
There is no company which has been struck off during the reported period. Hence, details of balances outstanding in respect of transactions undertaken with a company struck-off under section 248 of the companies act, 2013 is not applicable.
38 Registration & Satisfaction of Charges
The company does not have any charges or satisfaction to be registered with Registrar of Companies beyond the statutory period.
39 Balances of trade receivables and trade payables are subject to confirmation and subsequent reconciliation.
40 Previous year's figures have been reclassified/regrouped, wherever applicable to confirm to current year's classification.
41 The Financial Statements were authorised for issue by the directors on 27th May 2024.
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