1.21 Provisions, Contingent Liabilities and Contingent Assets (Ind AS 37):
Provisions are recognised in the balance sheet when the company has a present obligation
(legal or constructive) as a result of a past event, which is expected to result in an outflow of
resources embodying economic benefits which can be reliably estimated. Each provision is
based on the best estimate of the expenditure required to settle the present obligation at the
balance sheet. Where the time value of money is material, provisions are made on a discounted
basis.
Disclosure for Contingent liabilities is made when there is a possible obligation or present
obligation arising from past events, 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 company or a present obligation that arises from the past events where it is
either not probable that an outflow of resources embodying in economic benefits will be
required to settle or a reliable estimate of amount cannot be made.
Disclosure for Contingent assets are made when there 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. However
Contingent assets are neither recognized nor disclosed in the financial statements.
1.22 Prior Period and Extraordinary and Exceptional Items:
(i) All Identifiable items of Income and Expenditure pertaining to prior period are accounted
through " Prior Period Items' ' .
(ii) Extraordinary items are income or expenses that arise from events or transactions that
are clearly distinct from the ordinary activities of the enterprise and, therefore, are not
expected to recur frequently or regularly. The nature and the amount of each
extraordinary item be separately disclosed in the statement of profit and loss in a manner
that its impact on current profit or loss can be perceived.
(iii) Exceptional items are generally non-recurring items of income and expenses within profit
or loss from ordinary activities, which are of such, nature or incidence.
1.23 Financial Instruments (Ind AS 107 Financial Instruments: (Disclosures)
I. Financial assets:
A. Initial recognition and measurement
All financial assets and liabilities are initially recognized at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities, which
are not at fair value through profit or loss, are adjusted to the fair value on initial recognition.
B. Subsequent Measurement
a) Financial assets measured at amortized cost (AC)
A financial asset is measured at amortized cost if it is held within a business model whose
objective is to hold the asset in order to collect contractual cash flows and the contractual
terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
b) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business model whose Objective
is achieved by both collecting contractual cash flows and selling financial assets and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
c) Financial assets measured at fair value through profit or loss (FVTPL)
A Financial asset which is not classified in any of above categories are measured at FVTPL e.g.
investments in mutual funds. Financial assets are reclassified subsequent to their recognition, if
the Company changes its business model for managing those financial assets. Changes in
business model are made and applied prospectively from the reclassification date which is the
first day of immediately next reporting period following the changes in business model in
accordance with principles laid down under Ind AS 109 -Financial Instruments.
II. Financial Liabilities
A. Initial recognition
All financial liabilities are recognized at fair value and in case of borrowings, net of directly
attributable cost. Fees of recurring nature are directly recognized in the Statement of Profit
and Loss as finance cost.
B. Subsequent measurement
Financial liabilities are carried at amortized cost using the effective interest method. For trade
and other payables maturing within one year from the balance sheet date, the carrying
amounts approximate fair value due to the short maturity of these instrument
Operating segment is a component of an entity:
a. That engages in business activities from which it may earn revenues and incur expenses
(including revenues and expenses relating to transactions with other components of the same
entity).
b. Whose operating results are regularly reviewed by the entity' s chief operating decision maker
to make decision about resources to be allocated to the segments and assess its performance,
and
c. For which discrete financial information is available.
The Company is engaged in business of Software Services. As there no separate reportable
segments, Segment Reporting as per Ind AS -108, "Operating Segments" is not applicable.
1.26 Events After the Reporting Period (Ind AS 10)
Events after the reporting period are those events, favorable and unfavourable, that occur
between the end of the reporting and the date when the financial statements are approved
by the Board of Directors in case of a company, and, by the corresponding approving
authority in case of any other entity for issue. Two types of events can be identified:
a. Those that provide evidence of conditions that existed at the end of reporting period
(adjusting events after the reporting period);
b. Those that are indicative of conditions that arose after the reporting period (non¬
adjusting events after the reporting period).
An entity shall adjust the amounts recognized in its financial statements to reflect adjusting
events after the reporting period.
As per the information provided and Books of Accounts no such events are identified during
the reporting period. Hence Ind AS 10 Events After the Reporting Period is not applicable.
1.27 Construction Contracts (Ind AS 11)
Construction contract is a contract specifically negotiated for the construction of an asset or
a combination of assets that are closely interrelated or interdependent in terms of their
design, technology, and function or their ultimate purpose or use.
The company is business of Software Services, hence Ind AS 11 "Construction Contract" is
not applicable.
1.28 Income Taxes (Ind AS 12)
The Tax Expense for the period comprises of current and deferred tax.
• Current Tax:
Current Tax Assets and Liabilities are measured at the amount expected to be recovered
from or paid to the Income tax authorities, based on tax rates and laws that are enacted
at the Balance Sheet date.
• Deferred Tax:
Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are
recognized for deductible timing differences only to the extent that there is reasonable
certainty that sufficient future taxable income will be available against which such deferred
tax assets can be realized. In situations where the Company has unabsorbed depreciation
or carry forward tax losses, all deferred tax assets are recognized only if there is virtual
certainty supported by convincing evidence that they can be realized against future
taxable profits.
At each reporting date, the Company re-assesses unrecognized deferred tax assets. It
recognizes unrecognized deferred tax asset to the extent that it has become reasonably
certain or virtually certain, as the case may be, that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each reporting date. The
Company writes-down the carrying amount of deferred tax asset to the extent that it is no
longer reasonably certain or virtually certain, as the case may be, that sufficient future
taxable income will be available against which deferred tax asset can be realized. Any such
write-down is reversed to the extent that it becomes reasonably certain or virtually certain,
as the case may be, that sufficient future taxable income will be available.
New and Amended Standards
1.29 Amendment to Ind AS 116: COVID -19 Related Rent Concessions:
The amendments provide relief to lessees from applying Ind AS 116 guidance on lease
modification accounting for rent concessions arising as a direct consequence of Covid-19
pandemic. As a practical expedient, a lessee may elect not to access whether a Covid-19
related rent concession from a lessor is lease modification. A lessee that makes this election
accounts for any change in lease payments resulting from COVID-19 related rent concession
the same way it would account for the changes under Ind AS 116, if changes were not lease
modifications. This Amendment had no impact on the standalone financial statements of the
Company.
1.30 Amendment to Ind AS 1 and Ind AS 8: Definition of material:
The Amendments provide a new definition of material that states "information is material
if omitting, misstating or obscuring it is reasonably be expected to influence decisions that
the primary uses of general purpose financial statements make on the basis of those financial
statements, which provide financial information about specific reporting entity" . The
amendments clarify that materiality will depend on the nature of magnitude of information,
either individually or in combination with other information, in the context of the financial
year statements. A misstatement of information is material if it could reasonably be expected
to influence decisions made by the primary users. These amendments had no impact on
standalone financial statements of the company.
1.31 Amendment to Ind AS 107 and Ind AS 109: Interest Rate Benchmark Reform:
The amendments to Ind AS 109 Financial Instruments: Recognition and Measurements
provide number of reliefs, which apply to all hedging relationships that are directly affected
interest rate benchmark reform. A hedging relationship is affected if the reform gives raise
to uncertainty about the timing and/or amount of bench mark -based cash flow of hedging
items or hedging instrument. These amendments have no impact on the standalone financial
statements of the company as it does not have any interest rate hedge relation.
The amendment to Ind AS 107 prescribe the disclosure which entities are reguired to make
for hedging relationship to which the reliefs as per the amendments in Ind AS 109 are apply.
This amendment had no impact on the standalone financial statement of the company
40. Details of Loans given. Investments made and Guarantee given covered Under Section
186(4) of the Companies Act, 2013.
The company has not extended any Corporate Guarantees in respect of loans availed by any
company/firm as at March 31, 2024.
The information has been given in respect of such vendors to the extent they could be
identified as micro and small enterprises on the basis of information available with company.
As per the information provided / submitted by the Company, there are no dues to Micro,
Small and Medium Enterprises covered under ( 'MSMED' Act, 2006).
42. Financial Risk Management
In course of its business, the company is exposed to certain financial risk such as market risk
(Including currency risk and other price risks), credit risk and liquidity risk that could have
significant influence on the company' s business and operational/financial performance. The
Board of directors 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.
43. 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 adopted a policy of only dealing
with creditworthy counterparties 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.
44. 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 pre requirements. The Company' s exposure to liquidity risk is minimal
as the promoters of the company is infusing the funds based on the requirements.
45. Amounts have been rounded off to nearest Rupee.
The notes are an integral part of the financial statements
As per our report of even date For and on behalf of the Board
For V. RAVI & CO., For MUDUNURU LIMITED
Chartered Accountants
Sd/ Sd/
Firm Reg No.006492S M Madhusudan Raju T Kiran
CA D. Ramesh Kumar Director Director
Partner DIN: 00471678 DIN: 007585133
Membership No.217139
UDIN: 24217139BKBMGH1976
Sd/- Sd/-
P Rajashekar Neha Singhal
Place: Visakhapatnam CFO CS
Date : 30th May 2024
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