Note 15.2: Terms/rights attached to equity shares
The Company has only one class of equity shares having face value of Rs. 10/- each. Each holder of Equity share is entitled to one vote per share.
In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company.
The distribution will be in proportion to the number of equity shares held by the shareholders.
The Board of Directors has recommended dividend of Rs. 1.5/- per Equity share of Rs. 10/- each subject to the shareholders approval in the ' 'ensuing 43rd Annual General Meeting.
Description of nature and purpose of each reserve
Retained earnings: Retained earnings represent the amount of accumulated earnings of the Company.
Fair Value of Equity instruments through other comprehensive income - This represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, under an irrevocable option, net of amounts reclassified to retained earnings when such assets are disposed off.
Defined contribution plans
The Company makes Provident Fund and Superannuation Fund Contributions to defined contribution plans for qualifying employees. Contributions are made to provident fund in India for employees at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.
The Company recognised year ended 31st March 2025 Rs. 17.91 lakhs ( Year ended 31st March, 2024 Rs 24.07 lakhs) for Provident Fund contributions and Rs.11.24 (Year ended 31st March, 2024 Rs 1.62 lakhs) for employee State Insurance contributions in the Statement of Profit and Loss.
Defined benefit plans Gratuity
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The Company operates a gratuity plan administered by LIC. Every employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972 or Company scheme whichever is beneficial. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service.
Compensated absences
Provision for compensated absences covers the liability for sick and earned leave. Compensated absences that are not expected to occur within twelve months after the end of the period in which the employee renders the related services are measured at the present value of expected future payments to be made in respect of such services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
The fair value of financial instruments as referred to in note above has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market for identical assets or liabilities (level 1 measurement) and lowest priority to unobservable inputs (level 3 measurements). The categories used are as follows:
Level 1 : Financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds, mutual funds, bonds and debentures, that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is considered here. For example, the fair value of forward exchange contracts, currency swaps and interest rate swaps is determined by discounting estimated future cash flows using a risk-free interest rate. The mutual funds are valued using the closing NAV published by mutual fund.
Level 3: The fair value of financial instruments that are measured on the basis of entity specific valuations using inputs that are not based on observable market data (unobservable inputs). When the fair value of unquoted instruments cannot be measured with sufficient reliability, the Company carries such instruments at cost less impairment, if applicable.
The carrying amounts of trade receivables, trade payables, cash and cash equivalents and other bank balances, loans and other financial liabilities are considered to be the same as their fair values due to their short-term nature. The carrying amount of long term borrowings are considered to be same as their fair values, as these borrowings carry floating interest rates.
Note 34 - Financial Risk Management
The Company’s business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company's senior management has overall responsibility for the establishment and oversight of the Company's risk management framework. The Company has constituted a Risk Management framework, through which management develops and monitors the Company's risk management policies. The key risks and mitigating actions are also placed before the Board of directors of the Company. The Company's risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities.
"The Risk Management Framework of the Company is enforced by the finance team and experts of business division that provides assurance that the Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. The activities are designed to: - protect the Company's financial results and position from financial risks; - maintain market risks within acceptable parameters, while optimising returns; and The finance department is responsible to maximise the return on companies internally generated funds."
"The note explains the Company’s exposure to financial risks and how these risks could affect the Company’s future financial performance.
(A) Credit Risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. Credit risks from balances with banks and financial institutions are managed in accordance with the Company's policy. For derivative and financial instruments, the Company attempts to limit the credit risk by only dealing with reputable banks and financial institutions having high credit ratings assigned by the credit rating agencies. 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 throughout each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information. The outstanding trade receivables are regularly monitored and appropriate action is taken for collection of overdue receivables.
In respect of its investments the company aims to minimize its financial credit risk through the application of risk management policies.
The gross carrying amount of trade receivables is INR 3364.21 Lakhs (March 31,2024: INR 2819.31 Lakhs)
The Company maintains exposure in cash and cash equivalents, term deposits with banks, Loans, Security deposits and other financial assets.
Other advances are given for trade purpose which is in line with normal business activities of the Company . Provision is taken on a case to case basis depending on circumstances with respect to non recoverability of the amount. The gross carrying amount of such loans and advances is INR 58.36 lakhs (March 31,2024: INR 54.53 Lakhs)
(B) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Company's approach for managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking manage to Company's reputation. In addition, processes and policies related to such risks are overseen by the senior management. The management monitors the Company's net liquidity position through rolling forecasts on the basis of expected cash flows.
(C) Market risk
The Company is exposed to risk from movements in foreign currency exchange rates, interest rates and market prices that affect its assets, liabilities and future transactions.
(i) Foreign exchange risk
Foreign currency risk is that risk in which the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company operates internationally and a portion of its business is transacted in multiple currencies and therefore the Company is exposed to foreign exchange risk through its overseas sales and purchases in various foreign currencies. The Company takes decision to hedge by forming view after discussions with it's advisors and as per policies set by Management.
The Company was also exposed to the foreign currency loans availed from banks to reduce the overall interest cost. The Company had fully hedged loan exposure in foreign currency to mitigate the foreign exchange risk on the same.
(ii) 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.
The Company borrows at variable as well as fixed interest rates and the same is managed by the Company by constantly monitoring the trends and expectations. In order to reduce the overall interest cost, the Company has borrowed in a mix of short term and long term loans.
The Chief operating decision maker ("CODM") evaluates performance and allocates resources based on the analysis of various performance indicators by reportable segments. The CODM examine the group performance from a geographic perspective and has identified following as identifiable segments:
a) Ethopia
b) India
c) Rest of World
a) The Company does not have any benami property held in its name. No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder
b) The title deeds of Immovable Property as reheld in the name of the Company. The Investment property held by the company is utilised by the company & recognised at Cost less depreciation and hence reporting as per fair value is not applicable
c) The Company has not revalued its Property, Plant and Equipment (including Right-of-Use Assets);
d) The Company has not revalued its intangible assets;
e) The Company has borrowings from banks in the form of overdraft account against fixed deposits, for which no quarterly returns or statements of current assets or summary of reconciliation are required to be filed by the Company with banks;
f) The Company has not been declared wilful defaulter by any bank or financial institution or other lender
g) The company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956;
I) There are no charges or satisfaction yet to be registered with ROC beyond the statutory period;
j) The Company has complied with the requirement with respect to number of layers as prescribed under section 2(87) of the Companies Act, 2013 read with the Companies (Restriction on number of layers) Rules, 2017.;
k) There are no Scheme of Arrangements initiated by the Company or has been approved by the Competent Authority in terms of sections 230 to 237 of the Companies Act, 2013;
l) The Company has not advanced or loaned or invested funds that were either borrowed funds or share- premium.
m) There is no income surrendered or disclosed as income during the year in tax assessments under the Income Tax Act, 1961 (such as search or survey), that has not been recorded in the books of account.
n) The Company has not traded or invested in crypto currency or virtual currency during the year.
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