X. Provisions, Contingent Assets/ 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 economic benefits will be required
to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
Show cause notices issued by Government Authorities where the probability of outflow of
economic resources is remote are not considered as obligations. When the demands are raised
against show-cause notices and are disputed by the company, these are treated as disputed
obligations along with other contingent liabilities. Such contingent liabilities are not
recognized but are disclosed in the notes. Contingent Assets are not recognized but disclosed
in the notes to the financial statements; if any.
XI. Leases
The company is a lessee, and the Operating lease payments are recognized as expense on a
straight-line basis over the lease term.
XII. Income Tax
Income tax expense represents the sum of current tax payable and deferred tax.
Current Tax: The tax currently payable is based on the current year taxable profit for the
year. The current tax is calculated using the tax rates that have been enacted or substantively
enacted at the end of the reporting period.
Deferred tax: Deferred tax is provided using the Balance Sheet method on temporary
differences between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date. Deferred tax assets are generally recognized
for all deductible temporary differences to the extent that it is probable that the taxable profits
will be available against which those deductible temporary differences can be utilized.
Deferred tax is calculated using the tax rates that have been enacted or substantively enacted
at the end of the reporting period. The carrying amount of deferred tax assets is reviewed at
each reporting date and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred tax asset to be utilized.
XIII. Earnings per Share
The Company presents basic and diluted earnings per share data for its ordinary shares. Basic
earnings per share 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 year, adjusted for own shares held. Diluted earnings per share is determined by
adjusting the profit or loss attribute to ordinary shareholders and the weighted average number
of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive
potential ordinary shares.
XIV. Employee benefits
The company provides for Gratuity, a Defined Benefit retirement plan covering eligible
employees. The gratuity plan provides a lump sum payment to vested employees at retirement,
death or termination of employment of an amount based on the respective employee's salary
and the tenure of employment with the company. Liabilities with regard to Gratuity plan are
determined by the actuarial valuation at each balance sheet date. Actuarial gain/loss is
recognized in the statement of profit and loss. Retirement benefit in the form of provident fund
is a Defined Contribution scheme. Contribution made to statutory provident fund is accounted
on accrual basis.
XV. Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.
Non-derivative financial instruments
Non-derivative financial instruments consist of:
1. financial assets, which include cash and cash equivalents, trade receivables, other
advances and eligible current and non-current assets;
2. Financial liabilities, which include long and short-term loans and borrowings, trade
payables, eligible current and non-current liabilities.
Non derivative financial instruments are recognized initially at fair value including any
directly attributable transaction costs. Financial assets are derecognized when substantial risks
and rewards of ownership of the financial asset have been transferred. In cases where
substantial risks and rewards of ownership of the financial assets are neither transferred nor
retained, financial assets are derecognized only when the Company has not retained control
over the financial asset.
Subsequent to initial recognition, non-derivative financial instruments are measured as
described below:
1. Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents include cash in hand,
at banks and demand deposits with banks, net of outstanding bank overdrafts, if any, that are
repayable on demand and are considered part of the Company’s cash management system.
2. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are presented as current assets, except for those
maturing later than 12 months after the reporting date which are presented as non-current
assets. Loans and receivables are initially recognized at fair value plus directly attributable
transaction costs and subsequently measured at amortized cost, less any impairment losses.
Loans and receivables comprise trade receivables and other assets.
The company estimates the un-collectability of accounts receivable by analysing historical
payment patterns, customer concentrations, customer credit-worthiness and current economic
trends. If the financial condition of a customer deteriorates, additional allowances may be
required.
3. Trade and payable
Liabilities are recognized for amounts to be paid in future for goods or services received,
whether billed by the supplier or not.
4. Financial assets at fair value through other comprehensive income (FVTOCI)
A ‘Financial assets’ is classified as at the FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows
and selling the financial assets, and
b) The asset’s contractual cash flows that are solely payments of principal and interest (SPPI)
on the principal amount outstanding.
Financial assets included within the FVTOCI category are measured initially as well as at each
reporting date at fair value. Fair value movements are recognized in the other comprehensive
income (OCI). However, the Company recognizes interest income, impairment losses and
reversals in the statement of Profit and Loss. On derecognition of the asset, cumulative gain
or loss previously recognized in OCI is reclassified from the equity to Statement of Profit and
Loss.
Interest earned whilst holding FVTOCI Financial assets is reported as interest income using
the effective interest rate (EIR) method.
5. Financial assets at fair value through profit and loss (FVTPL)
FVTPL is a residual category for Financial assets. Any Financial assets, which does not
meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as
FVTPL.
In addition, the Company may elect to designate Financial assets, which otherwise meets
amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if
doing so reduces or eliminates a measurement or recognition inconsistency (referred to as
‘accounting mismatch’).
Financial assets included within FVTPL category are measured at fair value with all changes
recognized in the statement of profit and loss.
XVI. Segment Information
The Company has been identified one of Director as the Chief Operating Decision Maker
(CODM) as defined by Ind AS-108, “Operating Segments.” The CMD of the Company
evaluates the segments based on their revenue growth and operating income. The Company
has identified its Operating Segments as SAAS services to the holding company and
consulting services performed in India. The Assets and liabilities used in the Company’s
business that are not identified to any of the operating segments are shown as unallocable
assets/liabilities. Management believes that it is currently not practicable to provide segment
disclosures relating to total assets and liabilities since the assets are used interchangeably and
hence a meaningful segregation of the available data is onerous.
XVII. Events after the reporting period
Adjusting events are events that provide further evidence of condition that existed at the end
of the reporting period. The financial statements are adjusted for such events before
authorization for issue.
XVIII. Prior Period Errors
Errors of material amount relating to prior period(s) are disclosed by a note with nature of
prior period errors, amount of correction of each such prior period presented retrospectively,
to the extent practicable along with change in basic and diluted earnings per share. However,
where retrospective restatement is not practicable for a particular period then the
circumstances that lead to the existence of that condition and the description of how and from
where the error is corrected are disclosed in Notes to Accounts.
For akasam & associates For and on behalf of the Board of
Chartered Accountants Lex Nimble Solutions Limited
FRN: 005832S Sd/-
CA Ravi Kumar S. Praveen Chakravarthy Medikundam
Partner Chairperson & Director
MRN: 028881
UDIN: 25028881BMISJP1867
Swarali Sachin Shingne Udayasri Mavuleti
Company Secretary Chief Financial Officer
| 