Subdivision of nominal values of equity shares

The shareholders of the company vide its Annual General meeting held on 12th August 2021 have approved the Sub Division of nominal value of equity shares with Face value of Rs. 10/- each to face value Rs. 2/- each. Pursuant to the above resolution, the existing no of equity shares of 16,99,790 with nominal value of Rs. 10/- each sub-divided to 8498950 shares with nominal value of |Rs. 2/- each.

Bonus issue of equity shares:

"*The shareholders of the company vide its Annual General meeting held of 12th August 2021 has approved the Issue of Bonus share in the ratio of 1:4 (i.e. 4 fully paid up equity share for every 10 equity share held)”.

The Shareholders of the Company vide its extra ordinary General meeting held on 03rd September 2021 have approved the Issue of Bonus shares in the ratio of 10:1 (i.e. i fully paid up equity share for every 10 equity share held)”.

Pursuant to the above resolutions, the Company issued and alloted 3,82,45,275 bonus equity shares of Rs. 2/- each to its shareholders by capitalising General reserves amounting to Rs. 7.65 crores.

Nature and purpose of reserves

Capital Reserve: The above capital reserve represents the difference between the net assets acquired and the carrying value of investment in the wholly owned subsidiary on merger.

General Reserve: Represents appropriation from one component of equity to another, not being an item of Other Comprehensive Income.

Securities Premium: Represents the premium on issue of equity shares.

Surplus in Statement of Profit and Loss: Represents retained earnings to the extent not appropriated to the general reserve or distributed otherwise.

Items of Other Comprehensive Income

i) Re-measurement of Net Defined Benefit Plan: Differences between the interest income on plan assets and the return actually achieved, and any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised in other comprehensive income.

Auto Premium Term Loan from HDFC Bank

HDFC sanctioned a auto premium term loan of Rs. 0.99 crore during the Financial year 2021 22. The loan is repayable in 39 monthly installments. Interest rate for the loan is 7.20%.The term loan is secured by exclusive charge on the vehicle purchased by the company as mentioned in the loan schedule.

The company does not have any borrowings from banks and financial institutions which have not been used for the specific purpose for which it was taken as at March 31,2023.

Sales tax and service tax demands disputed by the Company and appeals filed against these disputed demands are pending before respective appellate authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decision of the appellate authorities and the Company's rights for future appeals.

Uncertainly over Income tax treatment

The Company has on-going disputes with Income Tax Authorities against demands arising on completion of assessment proceedings under Income Tax Act, 1961. The Company has evaluated the above pending disputes and expects that its position will likely be upheld on ultimate resolution and these will not have a material adverse effect on the Company's financial position and results of operations.

The Company is exposed to various risks in providing gratuity benefit which are as follows:

(a) Interest Rate Risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).

(b) Investment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

(c) Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future, based on past experience. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan's liability.

(d) Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out adverse compared to the assumptions.

Note:

* The shareholders of the company vide its Annual General meeting held on 12th August 2021 have approved the following

a) Sub Division of nominal value of equity shares with Face value of Rs 10 each to Face value of Rs 2/- each

b) Issue of Bonus shares in the ratio of 1:4 (i.e 4 fully paid up equity share for every 1 equity share held)

The shareholders of the company vide its extra ordinary general meeting held on 03rd September 2021 have approved the issue of bonus shares in the ratio of 10:1 (i.e 1 fully paid up equity share for every 10 equity share held)

The Basic and Diluted Earnings per share have been calculated considering the above changes in the number of shares for all the prior periods reported.

Note No. 38 : Capital Management

The Company's capital management is intended to create value for shareholders by facilitating the meeting of long-term and short-term goals of the Company. The funding requirements are met through internal accruals, long-term and short-term borrowings.

The Company manages its capital to ensure that it will be able to continue as going concern while maximizing the return to stakeholders through the optimisation of the debt and equity balance. The following table summarizes the capital of the Company:

The total carrying values of the above financial assets and liabilities are equal to their fair values as at their respective reporting date.

Financial risk management objectives

The Company is broadly exposed to credit risk, liquidity risk and market risk (fluctuations in exchange rates and price risk) as a result of financial instruments.

Board of Directors have the overall responsibility for the establishment, monitoring and supervision of the Company's Risk Management framework.

The Company has an established Risk Management Policy that outlines risk management structure and provides a comprehensive frame work for identification, evaluation, prioritization, treatment of various risks associated with different areas of finance and operations

Credit Risk

Credit risk is the risk that counter party will not meet its obligations under a financial instrument or customer contract, leading to financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its investing activities, including deposits with banks and financial institutions and other financial instruments.

Significant amount of trade receivables are due from Government /Government Departments and Public sector undertakings (PSU) consequent to which the Company does not have a credit risk associated with such receivables. The impairment of trade receivables is based on modified expected credit loss model. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 39.

The cash and cash equivalents and margin money deposits are held with banks. The Company has not incurred any losses on account of default from banks on deposits.

Liquidity Risk

Liquidity Risk is the risk that the company could encounter if it faces difficulty in meeting the obligations associated with financial liabilities by delivering cash and other financial asset or the risk that the Company will face difficulty in raising financial resources required to fulfill its commitments. The company's exposure to liquidity risk is very minimal as it has a prudent liquidity risk management process in place which ensures maintaining adequate cash and marketable securities to pay its liabilities when they are due. To ensure continuity of funding, the Company has access to shortterm bank facilities in the nature of bank overdraft facility, cash credit facility and short-term borrowings to fund its ongoing working capital requirements and growth needs when necessary.

Market Risk

Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates will affect the company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The company's activities expose it to the financial risks of changes in foreign exchange rates and interest rate movements (refer to notes below on currency risk and interest risk).

Currency Risk

The company is exposed to foreign exchange risk arising from foreign currency transactions primarily relating to purchases and sales made in foreign currencies such as US Dollar, Euro etc. Foreign exchange risk arises from existing and future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company's functional currency (INR).

Issue of equity shares through IPO :

The Company has completed Initial public Offering (IPO) of its equity shares, comprising a fresh issue of 51,42,425 equity shares (including Pre IPO placement of 10,39,861 equity shares) and offer for sale of 59,52,550 equity shares by the existing selling shareholders at an offer price of Rs. 585 per equity share (Rs 577 for Pre IPO placement) . Pursuant to the IPO, the equity shares were allotted on December 22, 2021 and listed on the BSE Limited and National Stock Exchange of India Limited on December 24, 2021.

IPO expenses:

The total IPO expenses incurred INR 42.56 crores (on provisional basis) (inclusive of taxes) have been proportionately allocated between the selling shareholders and the company. The Company's share of expenses (net of tax of INR 0.75 crore) of INR 15.10 crores has been adjusted against securities premium account.

a) Fixed Deposits with monitoring agency amounting to INR 50 crores

b) Bank balances in monitoring agency account amounting to INR 1.21 crores (Refer Note 8)

Issue of equity shares through QIP :

During the FY 22-23, the Company allotted 40,97,319 Equity shares of Rs. 2/- each at an issue price of Rs. 1,220.31 per equity share through Qualified Institutional Placement (QIP) process to the Qualified Institutional Buyers . These equity shares were allotted on March 13, 2023 and will rank pari-passu with the existing equity shares.

QIP expenses:

The Company has spent Rs. 12.24 Cr towards the Qualified Institutional Placement process and the same is adjusted in Securities Premium account.

A The Company has paid final dividend of Rs 11.9 crores for the FY 2020-21 during August 2021 upon receipt of approval from members in the Annual General meeting.

The Company has paid final dividend of Rs 18.16 crores for the FY 2021-22 during September 2022 upon receipt of approval from members in the Annual General meeting.

The Board of Directors have recommended a dividend of Rs 4.50 /- per share on equity shares of 2/- each for the Financial Year 2022-23 subject to approval of Members at the Annual General Meeting.

B The company has not been declared as a wilful defaulter by any bank or financial institution or other lenders as defined under the guidelines on wilful defaulters issued by the Reserve Bank of India.

C The company has not transacted with other companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

D The Company does not have Investments in other companies and hence compliance 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 does not apply.

E No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

F There are no proceedings initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

G The Company has borrowings from banks on the basis of security of current assets and the quarterly returns filed by the Company with banks are in accordance with the books of accounts of the Company for the respective quarters.

H There are no charges / satisfaction yet to be registered with ROC beyond the statutory period as prescribed under the Companies Act, 2013.

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

J The Company does not have any transactions, which are not recorded in the books of account, 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)