Notes to Accounts of Fone4 Communications (India) Ltd.

Mar 31, 2025

(b) Rights, preferences and restrictions attached to equity shares Equity Shares

The Company has one class of equity shares having par value of ? 10 per share. Each holder of equity shares is entitled to one vote per share. All shareholders are equally entitled to dividend. In the event of liquidation, the equity shareholders are entitled to receive remaining assets of the Company (after distribution of all preferential amounts, if any) in the proportion of equity shares held by the shareholders.

27 Contingent liabilities and capital commitments
	For the year ended	For the year ended
	31 March 2025	31 March 2024
(a)	Contingent liabilities - Outstanding Bank Guarantees -
	- Claim received but not acknowledged by the Company 611.72	338.26
(b)	Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) -	-
(c)	The Company has commitments for services, purchase of goods and employee benefits, in normal course of
	business. The Company does not have any long-term commitments/contracts including derivative contracts for
	which there will be any material foreseeable losses.
(d)	The Company has been registered under PF Act, however, the provisions of the Act have not been followed up during the year under review. The impact of the same cannot be ascertained. -	-

30 Balances appearing under loans & advances, trade receivables, trade payables, current assets and current liabilities are subject to confirmation in certain cases.

31 The Company has not filed the Income Tax Return (“ITR”) under section 139 of the IT Act and Tax Audit Report (“TAR”) under section 44AB of the IT Act for the

assessment year 2022-23, 2023-24 and 2024-25.

32 As per the inventory risk management policy introduced by the management during the year, a provision of Rs. 237.01 lacs (Previous year Rs. 576.67 lacs) have been recognized on account of slow moving and/or non-moving inventory in the books of account.

33 The Company had given advances amounting to Rs. 1,150.40 lacs during the course of business wherein the Company is not able to track the progress of the work being assigned. Subsequently, the management has issued legal notices to the respective parties as a recovery proceeding against the advances being given.

34 The Company had a credit facility of Rs. 170.00 lacs with ICICI Bank Limited, secured by creating a charge on 2 (two) immovable properties owned by directors of the Company. As on the date of notice, an aggregate amount of Rs. 171.56 lacs were outstanding against this loan. On 1 December 2023, the bank declared the loan as NonPerforming Assets (“NPA”) and subsequently, attached one of the properties for recovery of the outstanding amount. Further, the notice for symbolic possession was issued by the bank on 3 April 2024. The outstanding balance of the credit facility as on 31 March 2025 is Rs. 127.15 lacs.

In response, the Company has applied to the Debt Recovery Tribunal-1 ("DRT") at Ernakulam to challenge the property attachment process. The application was submitted on 22 April 2024. Currently, the matter is pending for hearing before the DRT, and the next hearing date has been fixed on 25 June 2025.

# The details of amounts outstanding to micro and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 are as per available information

36 In opinion of the Board, the loans & advances and other current assets have a value, which if realized in the ordinary course of business, will not be less than the value stated

37 Additional regulatory information

(i) There are no proceedings that have been initiated or pending against the Company for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended from time to time) (earlier Benami Transactions (Prohibition) Act, 1988) and the rules made thereunder.

(ii) The Company has not been declared wilful defaulter by any bank or financial institution or other lender.

(in) There are no transactions / relationship with struck off companies.

(iv) The Company does not have any transaction 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, 1961). Further, there was no previously unrecorded income and no additional assets were required to be recorded in the books of account during the year.

(v) The Company has neither traded nor invested in Crypto currency or Virtual Currency during the year ended March 31, 2025. Further, the Company has also not received any deposits or advances from any person for the purpose of trading or investing in Crypto Currency or Virtual Currency.

(vi) The Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person or entity, including foreign entities ("Intermediaries") with the understanding (whether recorded in writing or otherwise) that the Intermediary shall, whether directly or indirectly lend or invest in other persons/entities identified in any other manner whatsoever by or on behalf of the Company Cultimate beneficiaries'') or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(vii) The Company has not been sanctioned working capital limits from banks or financial institutions during any point of time of the year on the basis of security of current assets.

(viii) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017, and there are no companies beyond the specified layers.

(ix) Valuation of PP&E, intangible asset and investment property: The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current year.

38 The Company has a single reportable segment for the purpose of Accounting Standard 17.

39 Figures for the previous year have been regrouped/reclassified/reinstated, wherever considered necessary.

This is the summary of material accounting policies and other explanatory information referred to in our report of even date.

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Mar 31, 2024

(j) Contingent liabilities and provisions

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 recognised 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 recognised because it cannot be
measured reliably.

a) possible obligation, the existence of which will be confirmed by the occurrence/non-occurrence of
one or more uncertain events, not fully with in the control of the Company;

b) present obligation, where it is not probable that an outflow of resources embodying economic
benefits will be required to settle the obligation;

c) present obligation, where a reliable estimate cannot be made.

A provision is recognised when the Company has a present obligation as a result of past events, 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. Provisions are not
disclosed to their present value and are determined based on best estimates required to settle the
obligation at the reporting date. These estimates are reviewed at each reporting date and are adjusted
to reflect the current best estimates.

(k) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to
equity shareholders by the weighted average number of equity shares outstanding during the year.

(l) Cash, Cash Equivalents and Bank Balances

Cash, Cash Equivalents and Bank Balances for the purpose of Cash Flow Statement comprise Cash
at Bank, Cash in Hand, Cheques / Drafts in Hand, Deposits with Bank within 12 months maturity
and other permissible instruments as per Accounting Standard AS-3.

(m) Prior Period Expenditure:

The change in estimate due to error or omission in earlier period is treated as prior period items. The
items in respect of which liability has arisen/crystallized in the current year, though pertaining to
earlier year is not treated as prior period expenditure.

(n) Extra Ordinary Items:

The income or expenses that arise from event or transactions which are clearly distinct from the
ordinary activities of the Company and are not recurring in nature are treated as extra ordinary items.
The extra ordinary items are disclosed in the statement of profit and loss as a part of net profit or
loss for the period in a manner so as the impact of the same on current profit can be perceived.

(o) Others

Amounts related to previous years, arisen / settled during the year have been debited / credited to
respective heads of accounts.