2.11 Provisions and contingent liabilities

Provisions are recognized 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. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as other finance expense.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measures reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

2.12 Earnings per Share

Basic earnings per share are calculated by dividing the net profit / (loss) for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

2.13 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operative leases. The company's significant leasing arrangements are in respect of operating leases of office premises. The leasing arrangements are for a period of 11 months generally and are either renewable or cancelable by mutual consent and on agreed terms. Payments made under operating leases are charged in the Statement of Profit and Loss.

2.14 Segment Reporting

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

The management assessed that cash and cash equivalents, other bank balances, trade receivables, security deposits received, receivable from related parties, inter corporate loan from related party, trade payables and security deposits paid approximate their carrying amounts largely due to the short-term maturities of these instruments.

The management assessed that the fair value of the borrowings are not materially different from the carrying value presented. The fair value of the financial assets and liabilities is included at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at measurement date.

c. Financial risk management

The Company’s activities expose it to a variety of financial risks; market risk, credit risk and liquidity risk. The Company’s overall risk management programme focuses to minimize potential adverse effects on the Company’s financial performance. The financial instruments of the Company comprise borrowings from banks/other lenders, cash and cash equivalents, bank deposits, trade receivables and other assets, trade payables and other financial liabilities and payables.

I. Market risk

Market risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of volatility of prices in the financial markets. Market risk can be further segregated into Interest rate risk and Foreign exchange risk:

i. 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 has no significant interestbearing assets other than investment in bank deposits. The Company’s income and operating cash flows are substantially independent of changes in market interest rates. As the Company’s borrowing carries fixed rate of interest and these debts are carried at amortized cost, there is no interest rate risk to the Company.

ii. Foreign exchange risk

Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

II. Credit risk

Company’s revenue is derived from sales to its off-shore subsidiaries, hence there is no potential risk of default. The company maintains banking relationships with only credit worthy banks, which it reviews on an ongoing basis. The maximum exposure to credit risk for bank deposits and bank balances at the reporting date is the fair value of the amount disclosed.

j. Taxation

Current tax is reckoned based on the current year’s income and tax payable in accordance with the prevailing tax laws. The total provision for tax during the current year is ? 22.74 Lakhs (Including Earlier Years), (Previous Year: ? 14.58 Lakhs).

In accordance with Indian Accounting Standard 12 on Accounting for Taxes on Income, the Company has computed Deferred Tax Asset amounting to ? 1.30 Lakhs (Previous Year - Deferred Tax Asset ? 1.24 Lakhs) on account of timing difference in relation to depreciation as per books vis.a.vis Tax Laws.

k. Dues to Micro and Small Enterprises

The information required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company. As on date there are no such dues to MSME.

I) Leases

a. Operating Lease: The Company has operating lease for office premises. These lease

arrangements operate for a period 11 months. The said leases are renewable for further period on mutually agreeable terms and also includes escalation Clause.

31. OTHER STATUTORY INFORMATION

a. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Group for holding any Benami property.

b. The Company does not have any transactions with companies, which are struck off.

c. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

d. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

e. The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

f. The Company has not advanced or loaned or invested any funds to any other person(s) or entity(ies), including foreign entities (Intermediaries), with the understanding that the Intermediary shall:

• 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

• provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

g. 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 Group shall:

• 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

• provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

h. The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the financial 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

32. Amount has been rounded off to nearest lakh and previous year have been rearranged, regrouped and recast wherever necessary. Figure 0.00 represent amount below Rs 500/- rounded off.

33. Previous year’s figures have been rearranged, regrouped and recast wherever necessary to confirm to this year’s classification.

As per our Report of even date attached for and on behalf of the Board

for Ramu & Ravi

Chartered Accountants ICAI FRN No. 006610S

K.V.R. Murthy (Partner) Veena Gundavelli Geetanjali Toopran Santosh Kumar D

ICAI Membership No. 200021 Managing Director Whole Time Director & CFO Company Secretary

UDIN: 24200021BKHJQI9250 DIN: 00197010 DIN:01498741 ACS 31332

Place: Secunderabad Date: 29.05.2024