111.11 Provisions, Contingent Liabilities and Contingent Assets
a) Provisions
Provisions are recognised 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.
b) Contingent liabilities
A contingent liability is disclosed when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
111.12 Revenue recognition
Revenue from sale of goods, services and from contracts is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms and excluding taxes or duties collected on behalf of the government.
i. Revenue from contracts
Revenue from contracts with customers is recognized only to the extent of performance obligations relating to the goods and services to be provided by the Entity itself as a principal after excluding the goods or services to be provided by a third party though it may act as a lead member of a consortium because the third party is responsible for his performance obligations to the customer on a joint and several basis; and the entity is a mere agent in respect of such goods or services.
Subject to above, the Entity allocates the transaction price by assessing the components of goods or services to be transferred under the performance obligations of the contract. Revenue is recognized when control of the respective goods or services is transferred to the customer and the amount due is shown as Receivables.
In respect of these contracts where milestone billing is applicable, the costs incurred to date pending customer acceptance for performance obligations completed are carried as part of inventories.
ii. Revenue from services
Service income is recognised as per the terms of contracts with the customer, when the related services are performed.
iii. Sale of goods
Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs can be estimated reliably, there is no continuing effective control or management involvement with the goods, and the amount of revenue can be measured reliably.
iv. Interest Income
Interest income is accrued on a time proportion basis, by reference to the principal outstanding and effective interest rate applicable.
MI.13 Employee Benefits Expense
i. Short Term Employee Benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.
ii. Post-Employment Benefits
a) Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions to a separate entity. The Company's contributions to defined contribution plans are recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.
b) Defined Benefit Plans
The liability in respect of gratuity benefit is determined using the Projected Unit Credit Method based on acturial valuation, performed by an independent qualified actuary.
Re-measurement of defined benefit plans in respect of post-employment are charged to the Other Comprehensive Income.
c) Other Long term employee benefits
The Entity does not have a scheme of providing the facility for encashment of annual or sick leave during the period of service or on retirement. Consequently, an assumption is made that accumulated leaves will not be compensated in monetary terms and hence no provision is made in the financial statements.
MI.14 Finance cost
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale are capitalized as part of the cost of such assets.
All other borrowing costs are charged to the statement of profit and loss for which they are incurred.
NI.15 Foreign currencies transactions and translation
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.
MI.16 Deferred tax
Deferred tax is recognised at the expected rates of tax based on prevailing tax laws using the balance sheet method on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding amounts used in the computation of taxable profit.
Deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. 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 benefit will be realised.
Deferred tax asset is not recognised in respect of brought forward business losses due to uncertainties associated with respect to availment of set off from future taxable profits
MI.17. Earnings per share
The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS would arise only in cases of potential dilutive entitlements.
38. EMPLOYEE BENEFITS
a. Defined contribution plan
Eligible employees of the Company receive benefits from a provident fund, which is a defined contribution plan. Both the employee and Company make monthly contributions to the provident fund plan equal to a specified percentage of the eligible employee’s qualifying salary. The Company has no further obligations under the plan beyond its monthly contributions. The Company contributed INR 34.48 Lakhs (Previous year INR 18.74 Lakhs) towards provident fund plan during the years ended 31-Mar-24.
b. Defined Benefit Plan
The Company provides for gratuity, a defined benefit plan ("Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum gratuity payment to eligible employees at retirement or termination of their employment. The amount of the payment is based on the respective employee’s last drawn salary and the years of employment with the Company. The company does not provide the facility of leave encashment to its employees. Hence there is no plan for the latter benefits.
The following table sets out the amounts recognised in the financial statements in respect of retiring gratuity plan:
40 CAPITAL MANAGEMENT
The company manages its capital to ensure that it will be able to continue as going concern while creating value for share holders by facilitating the meeting of long term and short term goals of the Company. The company determines the amount of capital required on the basis of annual business plan and five year's corporate plan coupled with long term and short term strategic investment and expansion plans.The Company monitors the capital structure on the basis of net debt to equity ratio on a periodical basis.
41 Financial Risk Management
In course of its business, the company is exposed to certain financial risk such as market risk , credit risk and liquidity risk that could have significant influence on the company's business and operational/financial performance. The Board of directors and the Audit Committee reviews and approves risk management framework and policies for managing these risks and monitor suitable mitigating actions taken by the management to minimize potential adverse effects and achieve greater predictability to earnings.
a. Credit risk
Credit Risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the company. The Company has a prudent and conservative process for managing its credit risk raising in the course of its business activities. Credit risk is managed through continuously monitoring the creditworthiness of customers and obtaining sufficient collateral, where appropriate, a means of mitigating the risk of financial loss from defaults.
The company makes an allowance for doubtful debts/advances using expected credit loss model. i. Trade Receivables:
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed 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.
The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgment. Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macro economic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue. The company however made provision for expected credit loss based on the age of the outstanding's.
ii. Cash and Cash Equivalents
The Company held cash and cash equivalents of INR 384.80 Lakhs at 31-Mar-24 (Previous year INR 1511.26 Lakhs). This includes the cash and cash equivalents held with the bank and the cash on hand with the Company.
b. Liquidity risk
Liquidity Risk refers to the risk that the company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.
The Company has obtained fund and non-fund based working capital loans from banks. The borrowed funds are generally applied for Company’s own operational activities
Sensitivity analysis
A reasonably possible strengthening (weakening) of the Indian Rupee against US dollars and Egyptian Pounds at March 31 would have affected the measurement of financial instruments denominated in US dollars and Egyptian Pounds and affected equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular, interest rates, remain constant and ignores any impact of forecast sales and purchases.
45. Other Statutory Information
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company does not have any transactions with struck off companies
(iii) The Company does not have any charges or satisfaction which is yet to be 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 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 on behalf of the Ultimate Benefit carries.
vi) 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 the Company 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 Benefit carries.
(vii) The Company has not entered in to any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
(viii) The Company has not been declared as wilful defaulter by any bank or financial institution or other lender
(ix) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017
(x) No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013, during the year.
46. Previous year figures have been regrouped/reclassified wherever necessary to conform to the current year’s classification.
FOR AND ON BEHALF OF THE BOARD OF DIRECTORS Sd/- Sd/-
BADARI NARAYANA RAJU MANTHENA SITARAMA RAJU MANTHENA
Whole Time Director Whole Time Director
DIN 07993925 DIN 08576273
Sd/- Sd/-
PAMIDI SRIKANTH PRASADA RAO KALLURI
Hyderabad Chief Financial Officer Company Secretary
13-07-2024
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