p) Provisions, contingent liabilities and contingent assets:

Provisions are recognized only when there is a present obligation, as a
result of past events, and when a reliable estimate of the amount of
obligation can be made at the reporting date. These estimates are
reviewed at each reporting date and adjusted to reflect the current best
estimates. Provisions are discounted to their present values, where the
time value of money is material.

Contingent liability is disclosed for:

• Possible obligations which will be confirmed only by future events not
wholly within the control of the Company or

• Present obligations arising from past events where it is not probable that
an outflow of resources will be required to settle the obligation or a
reliable estimate of the amount of the obligation cannot be made.

Contingent assets are neither recognized nor disclosed. However, when
realization of income is virtually certain, related asset is recognized.

q) Cash and cash equivalents:

Cash and cash equivalents includes cash on hand, deposits held at call
with financial institutions, other short-term, highly liquid investments with
original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of
changes in value and bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities in the balance sheet.

r) Cash flow statement:

Cash flows are reported using the indirect method, whereby net
profit/(loss) before tax is adjusted for the effects of transactions of a non¬
cash nature and any deferrals or accruals of past or future cash receipts
or payments. The cash flows from operating, investing and financing
activities of the company are segregated.

s) Earnings per share:

Basic earnings per share is calculated by dividing the net profit or loss for
the period attributable to equity shareholders (after deducting
attributable taxes) by the weighted average number of equity shares
outstanding during the period. The weighted average number of equity
shares outstanding during the period is adjusted for events including a
bonus issue.

For calculating diluted earnings per share, the net profit or loss for the
period attributable to equity shareholders and the weighted average
number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.

The estimates of future salary increases, considered in actuarial valuation, take
account of inflation, seniority, promotion and other relevant factors, such as supply
and demand in the employment market.

The overall expected rate of return on assets is determined based on the market
prices prevailing on that date, applicable to the period over which the obligation is to be
settled.

36. Segment information

The Company’s operations predominantly consist only of business of providing
internet and intranet, data centre solutions. Thus, there are no reportable
segments as defined in Ind AS 108 “Operating Segments”. The company earns
its entire “revenue from external customers” in India, being company’s country of
domicile. All non-current assets other than financials instruments and deferred
tax assets are located in India. There are no single major customers on whom the
company’s revenue is dependent upon and revenue from none of the single
customer is more than or equal to 10% of the company’s revenue.

41. Balance Confirmations

Confirmations of receivables and payable balances have not been received by
the Company, hence, reliance is placed on the balances as per books. In the
opinion of the management, the amounts are realizable / payable in the ordinary
course of business.

42. Due to Micro and Small Enterprises

The Company has no dues to Micro and Small Enterprises as at March 31,2024
and March 31, 2023 in the financial statements based on information received
and available with the company.

43. Fair Value Measurements

i. Fair value hierarchy

Financial assets and financial liabilities measured at fair value in the statement of
financial position are grouped into three levels of a fair value hierarchy. The three
levels are defined based on the observability of significant inputs to the
measurement, as follows:

Level 1: Quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active
market is determined using valuation techniques which maximize the use of
observable market data rely as little as possible on entity specific estimates.

Level 3: If one or more of the significant inputs is not based on observable market
data, the instrument is included in level 3.

The Company’s principal financial liabilities comprise loans and borrowings, trade and
other payables. The main purpose of these financial liabilities is to finance the
Company’s operations. The Company’s principal financial assets include loans, trade
and other receivables, and cash and cash equivalents that derive directly from its
operations. The Company holds investment in its subsidiaries.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s
Board of Directors oversees the management of these risks. The Company’s Board of
Directors is supported by the senior management that advises on financial risks and
the appropriate financial risk governance framework for the Company. The senior
management provides assurance to the Company’s board of directors 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 carrying amounts reported in the statement of financial position for cash and cash
equivalents, trade and other receivables, trade and other payables and other liabilities
approximate their respective fair values due to their short maturity.

44. Financial Instruments Risk Management

i. Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange
rates, interest rates and equity prices, which 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.

a. 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. The
company has exposure only to financial instruments at fixed interest rates.
Hence, the company is not exposed to significant interest rate risk.

b. Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an
exposure will fluctuate because of changes in foreign exchange rates. The
Company’s exposure to the risk of changes in foreign exchange rates relates
primarily towards operating activities (when revenue or expense is denominated
in a foreign currency).

ii. Credit Risk

Credit risk is the risk that a counter party fails to discharge an obligation to the
Company, leading to a financial loss. The Company is mainly exposed to the risk
of its balances with the bankers and trade and other receivables.

iii. Liquidity Risk

Prudent liquidity risk management implies maintaining sufficient cash and
marketable securities and the availability of funding through an adequate amount
of committed credit facilities to meet obligations when due. Due to the nature of
the business, the Company maintains flexibility in funding by maintaining
availability under committed facilities.

Management monitors rolling forecasts of the Company’s liquidity position and
cash and cash equivalents on the basis of expected cash flows. The Company
takes into account the liquidity of the market in which the entity operates. The
Company’s principal sources of liquidity are the cash flows generated from
operations. The Company has no long-term borrowings and believes that the
working capital is sufficient for its current requirements. Accordingly, no liquidity
risk is perceived.

The tables below analysis the Company’s financial liabilities into relevant maturity
groupings based on their contractual maturities for all non-derivative financial
liabilities. The amounts disclosed in the table are the contractual undiscounted cash
flows. Balances due within 12 months equal their carrying balances as the impact of
discounting is insignificant.

45. Capital Risk Management

The Company’s objective when managing capital is to safeguard the Company’s
ability to continue as a going concern in order to provide returns for shareholders
and benefits for stakeholders. The Company also proposes to maintain an
optimal capital structure to reduce the cost of capital. Hence, the Company may
adjust any dividend payments, return capital to shareholders or issue new
shares. Total capital is the equity as shown in the statement of financial position.
Currently, the Company primarily monitors its capital structure on the basis of
gearing ratio. Management is continuously evolving strategies to optimize the
returns and reduce the risks. It includes plans to optimize the financial leverage of
the Company.

For and on behalf of the Board of Directors of
CITY ONLINE SERVICES LIMITED

Sd/- Sd/-

S. Raghava Rao Harinath Chava

Chairman and Managing Director Director

DIN:01441612 DIN:01441704

Sd/-

Deepika Vaid
Company Secretary