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NOTES TO ACCOUNTS

Atishay Ltd.

You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (₹) 61.11 Cr. P/BV 1.87 Book Value (₹) 29.70
52 Week High/Low (₹) 94/46 FV/ML 10/1 P/E(X) 14.56
Bookclosure 28/08/2019 EPS (₹) 3.82 Div Yield (%) 1.08
Year End :2018-03 

1: Intangible Assets under Development

Intangible Assets under development reflect an amount of Rs,143.33 lakhs C 46.43 lakhs for F.Y. 2016-17) which relate to the development of Hotel Management Software and the development cost for the same is capitalized as per the requirement of Ind AS - 38 Intangible Assets.

2: Sales Tax Deposit under CDA

Maharashtra VAT department has issued an intimation of findings of Computerized Desk Audit under sub section 7 of section 63 of Maharashtra Vat Act under which it was informed that Input Tax Rebate of Rs, 19.03 lakhs (Rs, 5.31 lakhs for F.Y. 2012-13, Rs, 9.58 lakhs for F.Y. 2013-14 and Rs, 4.14 lakhs for F.Y. 2014-15) is proposed to be denied on account of suppliers not showing taxable sales and supplies for which registration was cancelled. Company as an abandon precaution has deposited sum of Rs,5.31 lakhs as on 24.06.2016, Rs, 9.58 lakhs on 18.03.2017 and Rs, 4.14 lakhs on 14.08.2017 and recorded it under head other current assets (Note - 12 of Notes to Account to Balance Sheet). Company has not recognized this amount as expense because company had disputed such demand of Input Tax Rebate. In case demand is raised then appeal shall be filed by the company.

3: Employee benefits:

(i) Contribution to Provident Fund and Employees State Insurance

The Company makes contributions to the Provident Fund and Employees State Insurance for eligible employees. Under these plans, the Company is required to contribute a specified percentage of payroll costs. The Company has recognized Rs, 12.73 lakhs (Previous year Rs, 9.33 lakhs) as expense in the statement of profit and loss during the year towards contribution to these funds.

(ii) Gratuity

The company has defined benefit gratuity plan for its employees, which requires contributions to be made to a separately administered fund. The fund has the form of a trust and it is governed by the Board of Trustees, in which benefits are defined as per such policy. The Trust has taken "Group Gratuity Scheme of LIC"

4: Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

Under the Micro, Small and Medium Enterprises Development Act, 2006 read with notification no. 8/7/2006 - CDN dated 17/05/2007, certain disclosures are required to be made relating to Micro, Small and Medium Enterprises. The Company is in the process of compiling relevant information from its suppliers about the applicability of the said Act. Since the relevant information is not readily available, no disclosures have been made in the accounts. However, in the view of the management, the impact of interest, if any, that may be payable as per the provisions of this Act is not expected to be material.

5: Operating Segment (Ind AS 108)

Factors used to identify the reportable segments:

The Company has following business segments, which are its reportable segments. These segments offer different services and products that are managed separately. Operating segment disclosures are consistent with the information provided to and reviewed by the chief operating decision maker.

6: Dividend

Proposed Dividend

The Board of Directors at its meeting held on May 25, 2018 have recommended a final dividend of Rs,0.60 per equity share of Rs, 10/each for the year ended March 31, 2018, which is subject to the approval of members at the Annual General Meeting.

7: Related Party Disclosure (Ind AS 24)

Related party transactions are being reported as per Ind AS-24 Rs,Related Party Disclosures' for the year ended March 31, 2018 -

- Key Managerial Personnel (KMP's):

S. No. Name Designation

1. Mr. Akhilesh Jain Chairman and Managing Director

2. Mr. Archit Jain Whole Time Director

3. Mr. Arjun Singh Dangi Chief Financial Officer

4. Ms. Iti Tiwari Company Secretary & Compliance Officer

5. Mrs. Rekha Jain Non-Executive Director

6. Mr. Arvind V Lowlekar Non-Executive Director

7. Mr. Ajay Majumdar Non-Executive Director

8. Mrs. Poonam Agarwal Non-Executive Director

9. Mr. Kavindra Singh Non-Executive Director

- Other Entity where significant influence exists:

Post-Employment Benefit Plan Entity - Atishay Infotech Limited Bhopal Employees Group Gratuity Assurance Scheme

- Particulars of Transactions with Related Parties:

42: Financial Instruments

a) Financial Risk Management objects and policies

In its ordinary operations, the company's activities expose it to the various types of risks, which are associated with the financial instruments and markets in which it operates. The Company has a risk management policy which covers the foreign exchanges risks and other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the board of directors. The following is the summary of the main risks.

- Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates (currency risk) and interest rates (interest rate risk), will affect the Company's income or value of its holding of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

i) Interest Rate Risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair value of fixed interest-bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest-bearing investments will fluctuate because of fluctuations in the interest rates. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations.

Interest Rate Sensitivity

The sensitivity analysis below have been determined based on exposure to interest rates for term loans at the end of the reporting period and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period in case of term loans that have floating rates. If the interest rates had been 50 basis points higher or lower and all the other variables were held constant, the effect on Interest expense for the respective financial years and consequent effect on companies profit in that financial year would have been as below:

ii) Foreign Currency Risk

The Company is not exposed to any foreign currency risk.

- Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.

The company's revenue combination is of government and private parties, the company is having majority of receivables from Government undertakings and hence they are secured from credit losses in the future.

In case of private customers, the Company considers factors such as credit track record in the market and past dealings for extension of credit to customers. The Company monitors the payment track record of the customers. Outstanding customer receivables are regularly monitored. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets.

The impairment for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the Company's past history, existing market conditions as well as forward looking estimates at the end of each balance sheet date.

Financial assets are written off when there is no reasonable expectation of recovery, however, the Company continues to attempt to recover the receivables. Where recoveries are made, these are recognized in the Statement of Profit and Loss.

The ageing analysis of the receivables has been considered from the date the invoice falls due -

- Liquidity Risk

The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

b) Capital Management

For the purpose of the Company's capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity shareholders of the Company. The Company's objective when managing capital is to safeguard its ability to continue as a going concern so that it can continue to provide returns to shareholders and other stakeholders. The Company manages its capital structure and makes adjustments in light of changes in the financial condition and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders (buy back its shares) or issue new shares.

In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. The Company has complied with these covenants and there have been no breaches in the financial covenants of any interest-bearing loans and borrowings.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2018 and March 31, 2017.

The management assessed that cash and cash equivalents, trade receivables, trade payables, other bank balances, other current asset and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

The following methods and assumptions were used to estimate the fair values:

Long-term floating and variable-rate receivables/borrowings are evaluated by the Company based on parameters such as interest rates, specific country risk factors, individual credit worthiness of the customer and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into account for the expected credit losses of these receivables.

The fair value of loans from banks and other financial liabilities, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities. In addition to being sensitive to a reasonably possible change in the forecast cash flows or the discount rate, the fair value of the equity instruments is also sensitive to a reasonably possible change in the growth rates. The valuation requires management to use unobservable inputs in the model, of which the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range of reasonably possible alternatives for those significant unobservable inputs and determines their impact on the total fair value.

The fair values of the quoted Mutual Funds recognized at FVTPL financial assets have been estimated using per unit value provided by the respective asset management company.

There have been no transfers between Level 1 to Level 2 during the period.

8: First time adoption of Ind AS

These are the Company's first financial statements prepared in accordance with Ind AS.

The accounting policies set out in "Note 2" have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet at April 01, 2016 (the Company's date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act ("previous GAAP or IGAAP"). An explanation of how the transition from IGAAP to Ind AS has affected the Company's financial position, financial performance and cash flows is set out in the following tables and notes.

- Exemptions and Exceptions availed on first time adoption of Ind AS 101

In preparing these Ind AS financial statements, the Company has availed certain optional exemptions and mandatory exceptions in accordance with Ind AS 101 from IGAAP to Ind AS, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and IGAAP have been recognized directly in equity (retained earnings or another appropriate category of equity). This note explains the adjustments made by the Company in restating its IGAAP financial statements, including the Balance Sheet as at April 01, 2016 and the financial statements as at and for the year ended March 31, 2017.

- Ind AS optional exemptions

a) Deemed Cost for Property, Plant and Equipment, Intangible Assets and Investment Property

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value of all item of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the IGAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38 'Intangible Assets' and Investment Properties covered by Ind AS 40 'Investment Property'. Accordingly, the Company has elected to measure all items of property, plant and equipment, capital work in progress, intangible assets and investment property at their IGAAP carrying value as at the transition date i.e. April 01, 2016.

b) Designation of Previously recognized Financial Instruments

The Company has opted to apply this exemption for its investment in equity instruments i.e. Investment in Mutual Funds.

- Ind AS mandatory exceptions a) Estimates

An entity's estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 01, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP except where Ind AS required a different basis for estimates as compared to the previous GAAP

- Reconciliations between IGAAP and Ind AS

Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from IGAAP to Ind AS.

The presentation requirements under IGAAP differs from Ind AS and hence the IGAAP information has been reclassified for ease of reconciliation with Ind AS. The reclassified IGAAP information is derived based on the audited financial statements of the Company for the year ended March 31, 2016 and March 31, 2017.

43.1 Footnotes to Reconciliation

a. Under Previous GAAP , the transaction cost (i.e. Processing Cost) incurred towards borrowings was capitalised with Property, Plant and Equipment. Upon transition to Ind AS, the transaction cost has been amortized over the loan period with interests as per effective interest rate method.

b Depreciation Under Ind AS: The Investment Properties were classified under the head "Investments" under the previous GAAP. On transition to Ind AS, the same has been reclassified under the head "Investment Property" and depreciation on the same has been adjusted and provided for accordingly.

c Share Issue Expense & Unamortized Pre Operating expense appearing as on April 01, 2016 under previous GAAP has been derecognized through Equity as per the prescribed Ind AS.

d The deferred tax adjustment include the impact of transition adjustments together with adjustments in relation to Ind AS making it mandatory of using balance sheet approach against profit and loss approach as in the previous GAAP. On the date of transition, deferred tax impact on transition provision has been accounted in the Reserves, and consequential impact in the statement of profit and loss for the subsequent periods.

e Under the Previous GAAP, Revenue was presented inclusive of Indirect Taxes as "Gross Revenue". Under Ind AS, revenue is presented on Net Basis i.e. Exclusive of Indirect Taxes.

f Under Previous GAAP, actuarial gains and losses were recognized in the Statement of Profit and Loss. Under Ind AS 19, the actuarial gains and losses is considered as remeasurement of net defined benefit liability / asset and is recognized in other comprehensive income and therefore the same is recorded accordingly and resultant change due to this transition from Previous GAAP to Ind AS has been recognized accordingly.

g Exceptional Items appearing under previous GAAP Financial Statement have been reclassified to other expenses due to change in nature of item as per Ind AS 1.

h Under previous GAAP, the Company was not required to present other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind-AS. Further, Ind-AS profit or loss is reconciled to total comprehensive income as per Ind-AS.

9: Previous year comparatives

Previous year's figures have been regrouped, rearranged or recast wherever necessary to conform to current year's classification.

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