t) Provisions, contingent liabilities and contingent assets
Provisions are recognized only when:
• the company has a present obligation (legal or constructive) as a result of a past event;
• 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.
Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of
money is material, the carrying amount of the provision is the present value of those cash flows.
Contingent assets are disclosed where an inflow of economic benefits is probable.
Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.
Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be
received under such contract, the present obligation under the contract is recognized and measured as a provision.
u) Statement of Cash Flows
Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities based on
the available information. Cash flow from operating activities is reported using indirect method, adjusting the net profit for
the effects of:
i) changes during the period in inventories and operating receivables and payables transactions of a non-cash nature;
ii) non-cash items such as depreciation, provisions, deferred taxes, unrealized foreign currency gains and losses, and
undistributed profits of associates; and
iii) all other items for which the cash effects are investing or financing cash flows.
Cash comprises cash on hand and demand deposits with banks.
Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition),
highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk
of changes in value.
v) Earnings Per Share:
Basic earnings per equity share are computed by dividing the net profit for the year attributable to the Equity Shareholders
by the weighted average number of equities shares outstanding during the year. Diluted earnings per share is computed
by dividing the net profit for the year, adjusted for the effects of dilutive potential equity shares, attributable to the Equity
Shareholders by the weighted average number of the equity shares and dilutive potential equity shares outstanding during
the year except where the results are anti-dilutive.
w) Critical Accounting Judgments and key sources of estimation uncertainty
The preparation of the Company’s financial statements requires management to make judgement, estimates and
assumptions that affect the reported amount of revenue, expenses, assets and liabilities and the accompanying disclosures.
Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the
carrying amount of assets and liabilities affected in future periods. The following are the critical judgments, apart from
those involving estimations, that the directors have made in the process of applying the Company’s accounting policies
and that have the most significant effect on the amounts recognized in the financial statement.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end
of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year.
Depreciation / amortization and Useful life of Property, Plant and equipment
The company reviews the estimated useful lives of property plant and equipment at the end of each reporting period. The
useful lives and residual values are based on the Company’s historical experience with similar assets and take into account
anticipated technological changes. The depreciation/amortization for future periods is revised if there are significant
changes from previous estimates. During the current year, there has been no change in life considered for the assets.
Recoverability of trade receivables
Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision
against those receivables is required. Factors considered to determine the provision include the credit rating of the
counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate
the risk of non-payment.
Estimation of net realizable value of inventories
Inventories are stated at the lower of cost and Fair value. In estimating the net realizable value / Fair value of Inventories
the Company makes an estimate of future selling prices and costs necessary to make the sale.
Provision for employee benefits
The Company uses actuarial assumptions to determine the obligations for employee benefits at each reporting period.
These assumptions include the discount rate, expected long-term rate of return on plan assets, rate of increase in
compensation levels and mortality rates.
Fair value measurements and valuation processes
Some of the Company’s assets and liabilities are measured at fair value for the financial reporting purposes. The valuation
committee which is headed by the Chief Financial Officer of the Company determines the appropriate valuation techniques
and inputs for fair value measurements.
29. Segment Reporting
The Company’s operations predominantly relate to providing Integrated Solutions, Technical Division, Projects Division
and Software Development Services to customers globally operating. Accordingly, the primary basis of segmental
information set out in these financial statements, and secondary segmental reporting is performed on the basis of the
geographical location.
Income & Direct expenses in relation to segments are categorized based on items that are individually identifiable to that
segment, while the remainders of the costs are allocated on the bases of available information. Certain expenses, which
form a significant component of total expenses, are not specifically allocable to specific segments. The Company believes
that it is not practicable to provide segmental disclosures relating to those costs and expenses, and accordingly these
expenses are separately disclosed as “unallocable” and directly charged against total income.
31. Financial instruments:
Disclosure pursuant to Ind AS 107 “Financial Instruments: Disclosures”
Capital Management
The company ensures financial flexibility and diverse sources of financing and their maturities to minimize liquidity risk
while meeting investment requirements. The objectivity of company’s capital management is to maximize the total
shareholder return by optimizing cost of capital through flexible capital structure that supports growth. The company
maintains financial strength to maintain/enhance credit ratings.
The Company determines the amount of capital required on the basis of budgets and estimates made annually and
eviewing periodically the operating plan and long-term strategic plans. The company meets its funding requirement
through internal accruals and long-term/short-term borrowings. The Company monitors the capital structure on the basis
of Net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
For the purpose of capital management, capital includes issued equity capital, securities premium and all other revenue
reserves. Net debt includes all long and short-term borrowings as reduced by cash and cash equivalents.
F 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. Such changes in the values of financial instruments may result from changes in
the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The company’s
exposure to market risk is primarily on account of foreign currency exchange rate risk.
F Interest rate risk
The company’s total borrowings represent short term borrowings (WCDL) and the interest rate primarily basing on
the company’s credit rating and also the changes in the financial market. Company continuously monitoring over
all factors influence rating and also factors which influential the determination of the interest rates by the banks to
minimize the interest rate risks.
F Foreign currency risk
The company has several balances in foreign currency and consequently the company is exposed to foreign
exchange risk. The risk on company’s foreign currency changes commensurate with the size of the company is not
material. The company evaluates exchange rate exposure arising from foreign currency transactions and follows
established risk management policies.
We summarize below the financial instruments which have the foreign currency risks as at March 31, 2025, and
March 31, 2024.
Credit risk management
Credit Risk is the risk that a customer or counterparty to a financial asset fails to perform or pay the amount due causing
financial loss to the company. The maximum exposure of the financial assets represents trade receivables and work in
progress.
The company has a prudent and conservative process for managing its credit risk in the course of its business activities.
The risk on trade receivables, work in progress is limited as the customers of the company mainly consist of Government
promoted entities having strong credit worthiness. For doubtful receivables the company uses a provision matrix to
compute the expected credit loss allowances for trade receivables. The provision Matrix takes into account ageing of
accounts receivables and the company’s historical experience of the customers and financial conditions of the customers.
Liquidity risk management
Liquidity risk arises from the company’s inability to meet its cash flow commitments on time. The Company manages
liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring
forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Assessment of
maturity profiles of financial assets and financial liabilities including debt financing plans and maintenance of Balance
Sheet liquidity ratios are considered while reviewing the liquidity position.
35. Corporate Social Responsibility Expenditure
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spent at least
2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility (CSR)
activities. The areas for CSR activities are education of hunger and malnutrition, promoting education, art and culture,
healthcare, destitute care and rehabilitation, environment suitability, disaster relief, Covid-19 relief and rural development
projects, A CSR committee has been formed by the company as per the Act. The funds were primarily utilized through
the year on these activities which are specified in schedule VII of the Companies Act, 2013.
42. Figures for the corresponding year ended March 31, 2024, wherever necessary, have been regrouped, recast, rearranged
as per the Schedule III of Companies Act, 2013.
As per our report of even date attached
For Narven Associates T. Madhu Mitra T. Gopichand
Chartered Accountants Whole Time Director Chairman & Managing Director
FRN:005905S DIN:07124242 DIN:00107886
CA. G V Ramana D. Pravallika Ch. Mallikarjuna
Partner Chief Financial Officer Company Secretary
M.No: 025995 M.No. A47545
Place: Hyderabad
Date: 16-05-2025
|