Notes to Accounts of Infronics Systems Ltd.

Mar 31, 2024

Note 2.14 : Provisions and contingent liabilities

Provisions are recognised 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 recognised 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.

Note 2.15 : Leases

The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) the contract involves the use of an identified asset

(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and

(iii) the Company has the right to direct the use of the asset.

At the date of commencement of the lease, the Company recognizes a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.

The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are re-measured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: a. In the principal market for the asset or liability, or

b. In the absence of a principal market, in the most advantageous market for the asset or liability

c. The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For recurring and non-recurring fair value measurements categorised within Level 3 of the fair value hierarchy, mention a description of the valuation processes used by the entity (including, for example, how an entity decides its valuation policies and procedures and analyses changes in fair value measurements from period to period). For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above

Note 2.17 : Recent Accouting pronouncements

Ministry of Corporate affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

Note 27.1 : Fair Valuation

Financial assets and liabilities Fair value hierarchy

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 — Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 — Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

Fair value of the financial assets that are measured at fair value on a recurring basis

The management considers that the carrying amount of financial assets and financial liabilities recognised in these financial statements at amortised cost approximate their fair values.

The company''s financial liabilites mainly comprise of Unsecured term loan, trade payables and other payables. The company''s financial assets comprises mainly cash and cash equivalence, trade receivables and other receivables. The company has financial risk exposure in form of Credit risk, Liquidity risk and Interest rate risk.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The company is exposed to credit risk from its operating activities mainly Trade receivables. The Company has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. Credit risk is managed by the Company through approved credit norms, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

The provision for doubtful receivables has been historically negligible. The assessment is done at regular intervals and allowance for doubtful trade receivables as at 31 March 2024 is currently not required.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, 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 damage to the Company''s reputation. Ultimate responsibility for liquidity risk management rests with the management, which has established an appropriate liquidity risk management framework for the management of the Company''s short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual short term and long term cash flows, and by matching the maturity profiles of financial assets and liabilities. The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted.

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. Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rate. The borrowings of the Company are principally denominated in rupees at Fixed rates of interest. Hence, the company is not exposed to Interest Rate Risk

Foreign currency risk exposure as at balance sheet date

The Company doesn''t not have any foreign currency exposure as at the balance sheet date.

The Company''s objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long term and other strategic investment plans. The funding requirement are met through equity, borrowings and operating cash flows required.

30 : Employee Benefits

(a) Defined Contribution Plan

The Company''s contribution to provident fund aggregating ^ 0.21 lakh (previous year : Rs. 0.16 Lakhs) has been recognised in the statement of profit and loss under the head employee benefits expense.

(b) Defined Benefit Plans:

The disclosure as per IND AS 19 is not required as the company is not currently covered under the requirements of the Standard

33 The Company primarily operates in only one segment ie providing of SMS service to its customer. Hence separate disclosure under Ind AS 108 does not arise.

34 Other Matters

Information with regard to other matters specified in Schedule III to the Act for the years ended 31 March 2023 and 31 March 2024.

(i) The company does not own any immovable properties accordingly, no disclosure as per Amended Schedule III is made.

(ii) The Company has no investment property, hence no disclosure is required.

(iii) The Company has not revalued Property, Plant and Equipment and Intangible assets, hence no disclosure has been made.

(iv) The Company has no Capital Work In Progress and Intangible Assets under Development, hence no disclosure has been made.

(v) The Company do not have any charges or satisfaction, which is yet to be registered with Registrar of Companies beyond the statutory period.

(vi) The Company do not have any transactions with struck off companies.

(vii) The Company has no associate, subsidiary and Joint Venture companies, accordingly no disclosure is regard compliance with No of Layers prescribed under clause 87 of Section 2 of the Companies Act is made.

(viii) The Company do not have any Benami property.

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

(x) The Company has not advanced or loaned or invested funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(xi) The Company has not received any fund from any persons or entities, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) 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

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(xii) The Company has not entered in any such transaction which is not recorded in the books of accounts 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,

(xiii) There are no borrowings secured against current assets and accordingly no disclosure is required.

(xiv) The company is not declared as a wilful defaulter by any bank or financial institution or any other lender, hence no disclosure is required.

(xv) No scheme of Arrangement has been approved or pending for approval by the competent authority in terms of Section 230 to 237 of the Companies

(xvi) Analytical Ratios are disclosed under Note 32

35 Previous year figures have been reclassified/regrouped to conform to this year''s classification.

36 The figures has been rounded off to nearest Lakhs

For R Subramanian & Company LLP For and on behalf of the Board of Directors

Chartered Accountants FRN: 004137S/S200041

Sd/- Sd/- Sd/-

K. Jayasankar Neerad Kumar Gajula Vishnu Sri Ram Gurumurthy

Partner Whole-Time Director Additional Director

M.N0: 014156 DIN:06810058 DIN:09688088

UDIN: 24014156BKGADV6544

Place: Chennai Place: Hyderabad Place: Hyderabad

Date: 29th May 2024 Date: 29th May 2024 Date: 29th May 2024

Sd/- Sd/-

Navya Surpaneni Shubhi Singhal

Chief Financial officer Company Secretary

Place: Hyderabad Place: Hyderabad

Date: 29th May 2024 Date: 29th May 2024

---

Mar 31, 2015

1. Company overview

Infronics Systems Ltd a technology-enabled IT solutions company, foreseeing future needs & exigencies, delivering excellent products of high quality and reliability with unflinching commitment and having emphatic global market presence. Infronics specializes in industry-specific software and hardware solutions, with proven reputation for delivering high quality solutions to a broad spectrum of industry verticals.

2. Particulars of Employees required in pursuant to the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 - Nil.

3. Contingent Liabilities not provided for:

Particulars 2014-15 2013-14 Rs. Rs.

Bank Guarantees 1900000 6243500

4. Segment Reporting

There are no separate reportable segments (business and/or geographical) in accordance with the requirements of Accounting Standard 17 - 'Segment Reporting' issued by the Institute of Chartered Accountants of India. ,

5. Transactions with the Related Parties pursuant to Accounting Standard 18

a) List of Related Parties

Subsidiary Companies - Infronics Inc., USA

Associate Companies controlled by - Mobiprise Systems Limited key management personnel / relatives - Biomorf Systems Limited who are substantially interested - Biomorf Inc., USA

Key managerial personnel K. Sambasiva Rao, Director

M. Madhusudan Raju,

Managing Director

6. Disclosure under Micro, Small and Medium Enterprises Development Act, 2006

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31,2015. This information as 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.

7. Deferred Tax

In compliance with the Accounting Standard "AS-22 Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the company has recognized Rs.86,05,167/- towards net deferred tax asset in the year 2014-15 and an amount of Rs 2,08,66,193/- has been adjusted in opening balance due to change in accounting policy of fixed assets (see Note No:33). The major components of deferred tax asset / liability is on account of timing differences in carried forward losses and depreciation.

8. Pursuant to the Schedule II of Companies Act, 2013 effective from 1st April, 2014, the company has charged depreciation on the remaining useful life of the fixed assets w.e.f April 1.2014. An amount of Rs.466.62 Lakhs representing the carrying amount of the assets with revised use full life as nil has been adjusted against the opening balance of retained earnings and Depreciation for the current year is higher by Rs.202.70 Lakhs.

9. Operation and other expenses include stocks and work in process of Rs. 361.28 Lakhs which have become obsolete due to change in technology and sundry receivables of Rs. 36.23 Lakhs which are pending for long period and not realizable are debited to profit & loss account.

10. Project expenses include Rs. 135.45 Lakhs being products under development transferred to profit & loss account.

11. Exceptional item includes Rs. 909.15 Lakhs being loss on sale of investments held in various companies.

12. Previous year figures have been regrouped wherever if thought necessary in conformity with the current year groupings. Paise have been rounded off to the nearest rupee.

---

Mar 31, 2014

Terms attached to equity shares

The company has one class of equity shares having a par value of Rs.5/- per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholdings.

NOTE NO. 1

Particulars of Employees required in pursuant to the Provisions of Sec. 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

NOTE NO. 2

Contingent Liabilities not provided for:

Particulars 2013-14 2012-13 Rs. Rs.

Bank Guarantees 7457000 7838000

NOTE NO. 3

Segment Reporting

There are no separate reportable segments (business and/or geographical) in accordance with the requirements of Accounting Standard 17 - ''Segment Reporting'', notified in the companies (Accounting Standards) Rules 2006.

NOTE NO. 4

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

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2014. This information as 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.

NOTE NO. 5

Deferred Tax

In compliance with the Accounting Standard "AS-22 Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the company has recognized Rs. 38,53,087/- towards deferred tax asset in the year 2013-14. The major components of deferred tax asset / liability is on account of timing differences in carried forward losses and depreciation

NOTE NO. 6

Sundry Debtors, Sundry Creditors and advances are subject to confirmation with the respective parties.

NOTE NO. 7

Previous year figures have been regrouped wherever if thought necessary in conformity with the current year groupings. Paise have been rounded off to the nearest rupee.

Notes on financial statements, Cash Flow Statement and statement on accounting policies form an integral part of the balance sheet and profit and loss statement.

---

Mar 31, 2013

NOTE NO. 1

Particulars of Employees required in pursuant to the Provisions of Sec. 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

NOTE NO. 2

Contingent Liabilities not provided for:

Particulars 2012-13 2011-12 Rs. Rs.

Bank Guarantees 7838000 6257000

NOTE NO. 3

Segment Reporting

There are no separate reportable segments (business and/or geographical) in accordance with the requirements of Accounting Standard 17 – ''Segment Reporting'', notified in the companies (Accounting Standards) Rules 2006.

NOTE NO. 4

Transactions with the Related Parties pursuant to Accounting Standard 18

NOTE NO. 5

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

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at March 31, 2013. This information as 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.

NOTE NO. 6

Deferred Tax

In compliance with the Accounting Standard "AS-22 Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the company has recognised Rs.1,27,23,582/- towards deferred tax asset in the year 2012-13. The major components of deferred tax asset / liability is on account of timing differences in depreciation

NOTE NO. 7

Sundry Debtors, Sundry Creditors and advances are subject to confirmation with the respective parties.

NOTE NO. 8

Previous year figures have been regrouped wherever if thought necessary in conformity with the current year groupings. Paise have been rounded off to the nearest rupee.

---

Mar 31, 2012

NOTE NO. 1

Particulars of Employees required in pursuant to the Provisions of Sec. 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 - Nil.

NOTE NO. 2

Contingent Liabilities not provided for:

Particulars 2011-12 2010-11 Rs. Rs.

Bank Guarantees 6257000 3938800

NOTE NO. 3

Exceptional Items:

During the year, the company has written off investment made in UK based subsidiary company Infronics Technologies Limited as the said company has been closed. Therefore, the investment written off has grouped under the head Exceptional Items in Profit and Loss Statement.

NOTE NO. 4

Segment Reporting

There are no separate reportable segments (business an d/or geogr aphical) in accordance with the requirements of Accounting Standard 17 — Segment Reporting , notified in the companies (Accounting Standards) Rules 2006.

NOTE NO. 5

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

There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at M arch 31, 2012. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 ha s been determined to the extent such parties have been identified on the basis of information available with the Company.

NOTE NO. 6

Income Tax:

a) Current Tax

Provision for current tax has been made as per the provisions of Sec. 115JB of the Income Ta x Act, 1961.

b) Deferred Tax

In compliance with the Accounting Standard AS'22 Accounting for Taxes on Income issued by the Institute of Chartered Accountants of India, the company has additionally provided Rs.56,89,410/ - towards deferred tax liability in the year 2011-12. T he major components of the net deferred tax liability is as follows.

NOTE NO. 8

Sundry Debtors, Sundry Creditors and advances are subject to confirmation with the respective parties.

NOTE NO. 9

These financial statements have been prepared in the format prescribed by the Revised Schedule Vi to the Companies Act, 1956. Previous year figures have been regrouped wherever if thought necessary in conformity with the current year groupings. Paise have been rounded off to the nearest rupee.