Riddhi Corporate Services Ltd: Annual Report 2023-24 Analysis

Executive Summary #

Comprehensive Performance Overview #

1) 3-Year Trend Analysis of Key Financial Metrics #

Note: 2021-22 data is not fully and directly provided in all relevant sections of the annual report, making precise 3-year trend comparisons difficult for all metrics.

2) Business Segment Performance #

The annual report primarily presents consolidated financial results, and does not provide a detailed breakdown of revenue and profitability by individual business segments (Document Management, Contact Centre, Data Entry, Software Development, Verification Services, Recruitment Services, 3PL Logistics). The report mentions various services offered, but not their individual financial contribution. Thus, a segment-wise performance analysis is not feasible with the presented data.

3) Major Strategic Initiatives and Their Progress #

The report lacks explicit identification of defined, named strategic initiatives with measurable progress indicators. However, the following can be inferred:

• Expansion into new service areas: The report mentions offerings in diverse fields (Document Management, Contact Centre, Data Entry, Software Development, Verification Services, Recruitment, 3PL Logistics), suggesting an initiative to diversify services. No specific progress metrics are provided.
• Technology Adoption: The report mentions an in-house IT development team and highlights features of their Android-based verification app (real-time tracking, GPS, offline status updates). This points to a strategic focus on technological integration, but quantitative progress is not reported.
• Client Acquisition and Retention: A page lists “known clients,” implying a focus on acquiring and retaining reputable clients. No metrics related to client growth, churn, or satisfaction are provided.
• Warrant Issue: The Company completed the issuance of the Share Warrants for the Preferential Issue. It lapsed after 18 Months.

4) Risk Landscape Changes #

The Management Discussion and Analysis section provides a general overview of economic and industry risks, but does not delineate specific changes to Riddhi Corporate Services Limited’s risk profile year-over-year. There is no structured risk assessment framework presenting quantified changes in risk exposure.

5) ESG Initiatives and Metrics #

• Environmental: The report states the Company’s commitment to a clean environment and compliance with statutory requirements, but provides no quantitative environmental metrics (e.g., energy consumption, waste generation, emissions).
• Social: The report includes details of CSR expenditure, meeting the statutory requirement of 2% of average net profit. Actual Amount Spent (Rs. 16.05 Lakhs). The focus area for 2023-24 was “promotion of global well-being” through a donation to the ASHIRVAD FOUNDATION. The company has a Prevention of Sexual Harassment Policy, with zero reported cases during the review period. Employee-related data (e.g., diversity, training hours, turnover) is limited.
• Governance: The report provides extensive disclosures on corporate governance practices, board composition, committee structures, and compliance with regulations. There are two reported non-compliances, though: CSR utilization certificate is yet to be received. The unspent balance of 2,16,860 on CSR Activites was transferred to the PM CARES Fund 27 days beyond the deadline. Mr. Bhavin Kiritkumar Pandya and Ms. Kalpanaben Dipakbhai Suthar have not cleared the proficiency test mandated by the Indian Institute of Corporate Affairs. There were some other minor compliance issues

6) Management Outlook #

The Chairman’s Letter expresses optimism for the future and emphasizes the company’s commitment to customer service, innovation, quality, and commitment. The Directors’ Report mentions steps taken for “cost diminution and quality of work” and plans to achieve higher turnover through various marketing strategies. However, no quantified targets or specific projections are provided. The outlook is generally positive but lacks concrete, measurable goals.

Comparative Analysis with Industry Averages #

The report does not provide sufficient information to benchmark Riddhi Corporate Services Limited’s performance against industry averages. Crucial data, such as segment-specific revenue, growth rates, and profitability metrics, is missing. Furthermore, the diversified nature of the company’s services makes identifying a single, directly comparable industry benchmark challenging.

Detailed Analysis #

Financial Position #

Balance Sheet Analysis #

Here’s an analysis of Riddhi Corporate Services Limited’s balance sheet, fulfilling the specified requirements.

1. Three-Year Comparative Analysis #

(Amounts in Lakhs of Rupees)

2. Significant Changes in Major Line Items (>10% YoY) #

3. Working Capital Trends #

4. Asset Quality Metrics #

Since Riddhi Corporate Services primarily provides services, traditional inventory-based asset quality metrics aren’t directly applicable. Focus shifts to receivables and the quality of investments.

5. Debt Structure and Maturity Profile #

Maturity Profile (Based on classification, assuming current portions are due within one year)

• Short-Term Borrowings: ₹1219.26 Lakhs (2024), ₹807.80 Lakhs (2023)
• Current portion of Lease Liability: ₹ 1460.92 Lakhs (2024) , ₹1877.87 Lakhs(2023) *Long Term Borrowing | 7.46 | 11.13 | *Long Term Lease Liabilities: 8320.12 Lakhs

6. Off-Balance Sheet Items #

The provided report does not explicitly state any other off-balance sheet items. Contingent liabilities are disclosed, but these are not necessarily off-balance sheet arrangements. Guarantees provided are the key item here.

Operating Performance #

Income Statement Deep Dive #

Income Statement Analysis: Riddhi Corporate Services Limited (2023-2024) #

1. Revenue Breakdown #

By Segment:

The company primarily operates in a single reportable segment: providing document management, contact center, data entry, software development, verification, and recruitment services. Therefore, a segment-wise revenue breakdown is not applicable.

By Geography:

2. Cost Structure Analysis #

3. Margin Analysis #

4. Operating Leverage #

The documents did not contain enough information to calculate the DOL, and thus operating leverage cannot be described.

5. Non-Recurring Items #

• No exceptional or extraordinary items are reported in the provided income statement for either 2023-24 or 2022-23.

6. GAAP vs. Non-GAAP Reconciliation #

• The provided financial statements are prepared in accordance with Indian Accounting Standards (Ind AS), which are converged with IFRS. There is no presentation of non-GAAP measures. Therefore, a reconciliation is not applicable.

7. EPS Analysis #

8. Quarterly Trends #

Quarterly data for the year ended March 31, 2024 is not reported.

Visualizations: #

Due to the limitations of this text based format. I am unable to render graphs. Below are descriptions for how the graphs would be structured.

1. Revenue Trend (2022-23 to 2023-24):

• Type: Line graph
• X-axis: Fiscal Years (2022-23, 2023-24)
• Y-axis: Revenue (in Lakhs)
• Lines: One line representing total revenue.

2. Expense Breakdown (2023-24):

• Type: Pie chart
• Slices: Purchase of Services, Employee Benefit Expense, Finance Cost, Depreciation, Other Expenses

3. Margin Trends (2022-23 to 2023-24):

• Type: Line graph
• X-axis: Fiscal Years (2022-23, 2023-24)
• Y-axis: Margin Percentage
• Lines: Operating Margin, Net Margin

Cash Management #

Cash Flow and Liquidity Analysis #

Cash Flow Analysis: Riddhi Corporate Services Limited #

1. Detailed Cash Flow Components (INR Lakhs) #

2. Working Capital Management Efficiency #

*Note: Cost of Goods Sold is proxied by “Purchase of Services and Other Direct Expenses” + “Employee benefit expense” + finance cost, since the company primarily provides services.

3. Capital Expenditure (CAPEX) Analysis #

Capex Increased, with large additions in building and vehicle.

4. Dividend and Share Buyback Trends #

5. Debt Service Coverage #

6. Liquidity Position and Cash Conversion Cycle #

7. Free Cash Flow Yield Trends #

• Note: Market Capitalization data is required for Free Cash Flow Yield calculation, but is not present in the provided financials.

Peer Comparison #

Peer comparison requires selecting publicly listed companies in similar business sectors (document management, contact center services, data entry, software development, verification, and recruitment services). Direct, publicly listed peers in India may be limited. A meaningful comparison would require external data on companies like TeamLease Services, Quess Corp, or Firstsource Solutions, if applicable to the specific service mix. This is not possible with the provided data.

Forward Projections (Based on Historical Trends) #

Given only two years of data, projections are highly speculative. However, observations and potential extrapolations (with significant caveats) include:

• Revenue: Revenue declined from FY23 to FY24. Projecting future revenue requires understanding the reasons for this decline (loss of clients, reduced project volume, etc.). A simple trend extrapolation is not advisable without this context.
• OCF: OCF was negative in previous year but improved.
• CAPEX: CAPEX had large increase.
• Dividends: A slight increase in dividends suggests a potential for continued, modest growth in payouts if profitability stabilizes.
• Debt: The low Debt-Equity ratio suggests capacity for further borrowing, which may be needed if CAPEX continues at the FY24 level.
• Working Capital is a concern based on the numbers presented

Crucial Caveat: These are not robust projections. They are simple observations based on very limited historical data. True projections would need a detailed business plan, market analysis, and management guidance.

Operational Metrics #

Key Performance Indicators #

Profitability Ratios #

Liquidity Ratios #

Efficiency Ratios #

Note: Average is taken of the opening and closing balance.

Leverage Ratios #

Segment-wise ROIC #

Available data lacks segment wise information for calculation of this metric.

Working Capital Ratios #

Industry Comparison and Deviations #

Industry average data is needed for a comprehensive comparison. However, initial observations based on the provided data are:

• Profitability: ROE, ROA, and ROIC, along with the Profit Margins, have declined compared to the previous year, indicating lowered profitability.
• Liquidity: The current and quick ratios are slightly above 1, suggesting a potentially adequate level of liquidity, but not excessive.
• Efficiency: Asset Turnover and Receivables Turnover have decreased. The sharp decline in Receivable turnover ratio, implying a substantial increase in collection period, needs further investigation.
• Leverage: Debt-to-Equity ratio is relatively low, indicating a conservative capital structure. Interest coverage ratio is reasonable, suggesting ability to meet interest obligations.
• Working Capital: The substantial change from a negative to positive figure suggests a significant shift. Increase in receivable days is substantial.

Business Segments #

Segment Performance Analysis #

Riddhi Corporate Services Limited (RCSL) primarily operates in the business process outsourcing (BPO) and logistics sectors. However, the provided report lacks specific segment-level breakdowns (e.g., Document Management, Contact Center, Data Entry, Software Development, Verification Services, Recruitment Services, 3PL Logistics). The analysis below is based on the aggregate financial data and descriptions provided, and inferential reasoning, since discrete segment performance is not available. A comprehensive segmented analysis is not possible without that data.

Overall Revenue and Profitability

• Revenue (FY23-24): ₹178.75 Crores.
• Revenue Growth (FY23-24 vs. FY22-23): -11.3% (Decline from ₹201.55 Crores).
• Profit Before Tax (PBT) (FY23-24): ₹7.55 Crores.
• PBT Growth (FY23-24 vs. FY22-23): -31.8% (Decline from ₹11.07 Crores).
• Profit After Tax (PAT) (FY23-24): ₹5.14 Crores.
• PAT Growth (FY23-24 vs. FY22-23): -39.0% (Decline from ₹8.42 Crores).
• **Earnings Per Share (EPS) (FY23-24)-Basic:**4.34
• **Earnings Per Share (EPS) (FY23-24)-Diluted:**4.34

Market Share and Competitive Position (Inferred)

• RCSL positions itself as a service provider to Telecom, Banking, NBFC, and IT sectors. Its market share cannot be determined precisely without industry-specific revenue data.
• The company’s competitive position is based on its claimed “skilled manpower, advanced technology, and best-in-class infrastructure”.
• Key clients include Reliance, Vodafone, Axis Bank, HDFC Bank, Bank of Baroda, ICICI Bank, and IDBI Bank. This indicates some level of competitive standing in the Indian market.

Key Products/Services Performance (Inferred)

• Document Management, Contact Centre, Data Entry, Software Development, Verification Services, and Recruitment Services: These form the core of RCSL’s BPO offerings. No specific performance metrics are provided for each.
• 3PL Logistics Services: RCSL highlights its capabilities in warehousing, transportation (65 owned vehicles), and related services. Again, no isolated performance data is available.
• **ERP,HRMS,Asset Lifecycle Management, Data Entry Systems:**These products cater the IT software development part of the business.

Geographic Distribution and Market Penetration (Limited Information)

• RCSL mentions operations in “9 Circles of India” for various clients. This suggests a focus on the Indian domestic market.
• The company’s registered office is in Ahmedabad, Gujarat.
• Specific market penetration data within these circles is not available.

Segment-wise CAPEX and ROIC

• The annual report does not provide a segment-wise breakdown of capital expenditure (CAPEX).
• Total Property, Plant, and Equipment (PP&E) decreased from ₹119.78 Crores (FY22-23) to ₹104.18 Crores (FY23-24), indicating some level of net disposals or depreciation exceeding new investments.
• Capital Work in Progress decreased from 26.90 Crores(FY22-23) to 0.00 Crores(FY23-24).
• Return on Invested Capital (ROIC) cannot be calculated at a segment level without the required data.

Operational Efficiency Metrics (Limited Information)

• The report does not provide specific operational metrics such as cost per transaction, customer acquisition cost, or employee productivity.
• Operating and administrative expenses decreased from ₹170.50 Crores (FY22-23) to ₹151.93 Crores (FY23-24), a decline of 10.9%. This may indicate cost-cutting measures.
• Employee benefit expenses were ₹117.37 Crores (FY22-23),decreasing to ₹62.02 Crores (FY23-24).

Growth Initiatives and Challenges

• Growth Initiatives: The report mentions aims of expanding business through marketing, offering quality products, and launching new services, though no details are provided.
• Challenges: The decline in revenue and profitability suggests challenges in the competitive landscape, market conditions, or operational execution.

Competitor Comparison (Limited)

• The report does not name specific competitors. The broader BPO and logistics industries in India are highly competitive, with numerous players.

Market Size/Growth Data (Limited)

• The Indian BPO and logistics industries are large and growing. However no market size is provided.
• The Global GDP is shown to increase at 3.2% in CY 2023, lower than 3.5% in CY 2022.
• Global Technology spending on Enterprise software and IT services was close to the US$2.3 trillion mark in CY 2023, with IT services growing at 6.1% YoY to US$1.4 trillion.

Risk Framework #

Comprehensive Risk Assessment #

Here’s a Risk Assessment Matrix for Riddhi Corporate Services Limited, based on the provided annual report. Given the nature of the public document, certain inferences and generalizations have been made. A true internal risk assessment would require significantly more proprietary data.

Risk Assessment Matrix - Riddhi Corporate Services Limited (FY2023-24)

(Note: All assessments are based on publicly available information and reasonable inferences. “Trend” indicates the direction of the risk – Increasing, Decreasing, or Stable. “Control Effectiveness” is rated as High, Medium, or Low. “Potential Financial Impact” uses High/Medium/Low to denote relative impact, measured in terms of % of revenue and absolute Rs. Lakhs figures.)

1. Strategic Risks

2. Operational Risks

3. Financial Risks

• Increased Competition: The competitive landscape in the BPO sector, particularly within BFSI and Telecom, is intensifying, posing a greater strategic risk.
• Increased Trade Receivables: The increase of trade recievables from 1415.84 to 3689.93 is increasing the risk.
• Dependance of IT Systems & Software: In today’s age the whole system are linked to the computer and software, hence, it is utmost important to regularly review and update the security, controls, IT Policies to have a control over the frauds, data loss, and other security risk.
• Revenue decline: The substantial decrease in turnover, indicates the risk to have customer retention policy.
• CSR Expenditure delays: Delay in Corporate Social Responsibility (CSR) expenditure, reflecting CSR amount of Rs. 2,16,860/- (Rupees Two Lakhs Sixteen Thousand Eight Hundred Sixty Only) was transferred to the PM CARES Fund on October 27, 2023, which was 27 days beyond the statutory deadline.
• Independent Director Qualification :Independent Director of the Company, have not yet cleared the proficiency test mandated by the Indian Institute of Corporate Affairs, as required under the Companies Act, 2013.

Important Note: Control Effectiveness ratings, Severity, Likelihood, and Potential Financial Impact are subjective assessments. The above analysis is made according to the public disclosures in the Annual Report and industry best practices. It is to be referred for analysis and information purpose.

Strategic Direction #

Strategic and Management Analysis #

1. Long-Term Strategic Goals and Progress #

Stated Goals (from Mission/Vision):

• Become the most admired business partner in areas of Digitization, Documentation, Field Verification, and Warehousing to Telecom, Banking, and Financial Sectors across India.
• Achieve growth through superior Customer Service, Innovation, Quality, and Commitment.

Progress Indicators:

• Revenue: Decreased from ₹201.55 crore (FY23) to ₹178.75 crore (FY24).
• Profit After Tax (PAT): Decreased from ₹8.42 crore (FY23) to ₹5.14 crore (FY24).
• Client Base: Includes known clients (presented in the report), but no quantitative data on client acquisition or retention is provided.
• Geographic Reach: Operations in 9 circles of India for various clients (as stated by Umesh Bhadreswara’s profile). No specific expansion details are given for FY24.
• Service Offerings: Document Management, inbound and outbound Contact Centre, Data Entry, Software Development, Verification Services and Recruitment Services.

KPI Tracking:

No explicit tracking of Key Performance Indicators (KPIs) against strategic objectives is presented in the provided documents.

2. Competitive Advantages and Market Positioning #

Stated Advantages:

• Experienced leadership team in BFSI sectors.
• In-house IT development team.
• Wide distribution network and efficient logistics department.
• Android-based verification process with features like GPS tracking and photo watermarking.

Market Positioning:

• Positioned as a business partner for Digitization, Documentation, Field Verification, and Warehousing, primarily targeting Telecom, Banking, and Financial sectors.
• The report suggests a focus on cost reduction and efficiency for clients.

Competitive Landscape Analysis:

The report lacks a detailed competitive analysis. No direct competitors are mentioned or benchmarked against.

3. Innovation Initiatives and R&D Effectiveness #

Innovation Initiatives:

• Mention of an in-house IT development team capable of working on various technologies.
• Android-based verification app.

R&D Effectiveness:

• No specific R&D expenditure is disclosed.
• The report states, “Your company has not made any efforts towards technology absorption and neither imported any technology nor made any expenditure on research and developments.”
• No details of successful product/service launches stemming from innovation are presented.

4. M&A Strategy and Execution #

M&A Activity:

• No mergers or acquisitions are mentioned in the reporting period (FY24).
• The report indicates the absence of any Subsidiary / Associate / Joint Venture Company as on 31st March 2024.

Strategy: The reports do not indicate any M&A Strategy.

5. Management’s Track Record in Execution #

Key Personnel:

• Pravinchandra Gor (Chairman & Managing Director): Extensive legal experience.
• Alpit Gor (Wholetime Director): Experience in logistics and data entry services.
• Umesh Bhadreswara (Executive Director): Experience in operations and service delivery.

Execution Indicators:

• Financial performance decline in FY24 (revenue and PAT decrease).
• No major expansion, acquisitions, or new product/service line launches detailed in the report.

6. Capital Allocation Strategy #

Capital Expenditures:

• Property, Plant, and Equipment additions: ₹951.58 Lakhs (FY24).

Investments:

• Non-Current Investments : 3642.31 (Lakhs)

Dividend:

• Final dividend of ₹0.49 per equity share proposed for FY24.

Share Repurchases/Issuances:

• Warrants issued in previous financial year (2022-23) has been lapsed and forfeited.

Capital Allocation Analysis No clear statements describe the company’s approach to allocating funds.

7. Organizational Changes and Their Impact #

Changes:

• No significant organizational changes are reported during the period under review.

Impact: Not applicable, given the absence of reported changes.

Industry Trend Analysis #

Industry Growth:

The report provides a macroeconomic overview, stating that the global economy and the Indian economy have shown resilience. The IT services sector is mentioned, with global spending close to $2.3 trillion in CY2023.

Specific Trends: The report states that company providing solutions to Telecom, Banking and Financial sector. No specific segment trends are included.

ESG Framework #

ESG and Sustainability Analysis #

ESG Initiatives Analysis: Riddhi Corporate Services Limited (Based on Provided Annual Report) #

1) Environmental Metrics and Targets #

• Energy Conservation: No specific energy conservation measures, metrics, or targets are explicitly mentioned.
• Technology Absorption: No specific efforts or investments in technology absorption related to environmental impact reduction are detailed.
• Foreign Exchange:
  • Foreign Exchange Inflow: NIL
  • Foreign Exchange Outflow: NIL
• Pollution Control: General statement about responsibility towards a clean environment and adopting eco-friendly technologies, but no quantifiable data or specific initiatives are provided.
• CSR Committee:
  • Donation of Rs. 16.05 Lacs to ASHIRVAD FOUNDATION, for promoting global well-being.
  • Total CSR obligation for the financial year : Rs 16,01,719.

2) Social Responsibility Programs #

• Employee Data:

  • Total Permanent Employees (as of March 31, 2024): 1772
  • Median Employee Remuneration: ₹23,347 per month

• CSR Expenditure (2023-24):

  • Average Net Profit (for CSR calculation): ₹8,00,85,949
  • 2% of Average Net Profit (CSR Obligation): ₹16,01,719
  • Amount Spent on CSR Projects: ₹16,05,000
  • Excess amount spent, Available for set off: ₹3281

• Prevention of Sexual Harassment Policy: Policy in place, compliant with The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.

  • Complaints Filed (2023-24): 0
  • Complaints Disposed of (2023-24): 0
  • Complaints Pending (as of March 31, 2024): 0

• Human Resource

  • intellectual capital and human resources is the backbone of the Company’s success.

3) Governance Structure and Effectiveness #

• Board Composition (as of March 31, 2024):
  • Total Directors: 6
  • Executive Directors: 3
  • Non-Executive Independent Directors: 3
  • Women Director: 1
• Board Meetings (2023-24):
  • Number of Meetings Held: 6
• Board Committees:
  • Audit Committee: 3 members (all Independent Directors).
  • Nomination and Remuneration Committee: 3 members (all Independent Directors).
  • Stakeholder Relationship Committee: 3 members (all Independent Directors).
• Code of Conduct: Code of Conduct adopted for employees, Managing Director, Executive Directors, and Non-Executive Directors.
• Whistle Blower Policy
  • Vigil Mechanism/Whistle Blower Policy in place.
• Compliance
  • No instances where the Board had not accepted the recommendations of the Audit Committee

4) Sustainability Investments and ROI #

• No specific investments or financial returns related to sustainability initiatives are detailed in the provided report.

5) ESG Ratings and Peer Comparison #

• No mention of ESG ratings or benchmarking against peers.

6) Regulatory Compliance and Future Preparations #

• Companies Act, 2013: Compliance with relevant provisions mentioned.

• SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: Compliance reported.

• Secretarial Audit: Conducted, with stated observations, which includes. - CSR Utilization certificate not available. - Unspent balance transfer done after statutory deadline. - Two Independent directors haven’t cleared proficiency test.

• Non-Compliances: - CSR unspent amount transfer delay (27 days) for FY 2022-23. - Delay in filling for In-principal approval for Perferential Issue of Equity shares and share warrants. Monetary Penalties Paid: Rs. 200000.

• Future Preparations: No explicit statements regarding future preparations for upcoming ESG regulations or evolving standards.

Forward Outlook #

Future Projections and Guidance #

Management Guidance and Assumptions #

• Revenue Guidance: Slight decline in turnover compared to the previous year (2022-2023). Total revenue decreased from Rs. 201.55 Crore to Rs. 178.75 Crore.
• Future Outlook: Anticipates increased turnover through various marketing strategies, enhanced product quality, new product/service launches. Expects profit margin improvement via cost-cutting techniques and optimized resource utilization.
• Dividend: Recommended a final dividend of Rs. 0.49/- per equity share of Rs. 10/- each.
• CSR: Planned expenditure is indicated to be Rs 16.05 Lakhs

Market Growth Forecasts #

• Global Economic Growth: Forecasted at 3.2% for 2024 and 2025. Advanced economies are expected to grow slightly faster than emerging markets.
• Indian Economic Growth: Surpassed market estimates with 8.15% YoY growth in FY 2023-2024. Averaged 8.3% annual growth over the past three years.
• IT Services Industry Growth: Global technology spending on Enterprise software and IT services reached approximately US$2.3 trillion in CY 2023. IT services grew at 6.1% YoY to US$1.4 trillion.
• BPO Services (From Chairman Letter): Stated that promoters and directors were involved in the BPO services.

Planned Strategic Initiatives #

• Marketing Strategies: Implementation of various strategies to boost turnover.
• Product/Service Quality: Focus on offering higher quality products and services.
• New Offerings: Plans to launch new products and services.
• 3PL Logistics Expansion: Company capabilities include: Own 65 vehicles of various size- HAZ Complied, Own secondary transportation coverage for 11000 villages with door delivery, Repacking and conversion of imported & local products 25 kg and 1 kg pack, In house CHA operations at JNPT port.

Capital Expenditure Plans #

• Fixed Asset Additions: Rs. 951.58 Lakhs in tangible assets during the year ended March 31, 2024. Rs 259.90 lakh in Right of Use.

Efficiency Improvement Targets #

• Cost Reduction: Implementation of cost-cutting techniques.
• Resource Optimization: Focus on optimum utilization of company resources.
• ERP - Employee Remote Process: Implemented

Potential Challenges and Opportunities #

• Challenges:

  • Volatility in key markets and the world economy.
  • Potential impact of global economic slowdown on IT spending.
  • Maintaining a healthy profit margin in a uncertain macro outlook.

• Opportunities:

  • Significant growth potential in the Indian economy.
  • Increasing demand for IT services and enterprise software.
  • Expansion possibilities in digitization, documentation, field verification, and warehousing.
  • Leveraging experience in BFSI and Telecom sectors.

Scenario Analysis and Sensitivity to Key Assumptions #

• Revenue Sensitivity:
  • Base Case: Slight decline in turnover followed by growth.
  • Optimistic Case: Significant revenue growth due to successful marketing and new product launches.
  • Pessimistic Case: Further decline in revenue due to economic slowdown or increased competition.
• Profit Margin Sensitivity:
  • Base Case: Improvement in profit margins through cost-cutting.
  • Optimistic Case: Substantial margin expansion due to efficient resource utilization.
  • Pessimistic Case: Margin pressure due to increased operating costs or pricing pressure.
• Market Growth Sensitivity:
  • Base Case: Market growth as per current forecasts (3.2% global, 8.15% India).
  • Optimistic Case: Higher-than-expected market growth, boosting demand.
  • Pessimistic Case: Lower-than-expected market growth, impacting revenue.
• Key Assumptions:

1. Company Assumptions: Successful implementation of Marketing Strategies, increased product quality.
2. Market Growth Rate: The base assumption is a crucial factor and will vary.
3. Cost-cutting success.
4. The Ability to secure new clients and retain clients.

Audit & Compliance #

Audit and Regulatory Analysis #

Auditor’s Opinion and Qualifications #

The Independent Auditor’s Report, issued by Ravi Shah & Co., Chartered Accountants, provides an unmodified opinion on the standalone financial statements of Riddhi Corporate Services Limited for the year ended March 31, 2024. The auditors state that the financial statements present a true and fair view, in conformity with Indian Accounting Standards (Ind AS).

No qualifications were made in Statutory Report by Statutory auditors for the financial year 2023-2024.

Key Accounting Policies and Changes #

Basis of Preparation: Financial statements comply with Indian Accounting Standards (Ind AS) under Section 133 of the Companies Act, 2013. Prepared on an accrual basis under the historical cost convention, with certain financial assets and liabilities measured at fair value.

Property, Plant, and Equipment: Shown at cost, less accumulated depreciation and impairment. Depreciation is provided based on the useful life assigned to each asset in accordance with Schedule II of the Companies Act, 2013.

Revenue Recognition: Recognized as services are performed, based on actual or minimum utilization levels specified in agreements.

Financial Instruments: Initially measured at fair value. Subsequent measurement depends on classification: amortized cost or fair value (through other comprehensive income or profit or loss).

Leases: The company adopted Ind AS 116 effective April 1, 2019.

Internal Control Effectiveness #

The Auditor’s Report includes a separate section (Annexure A) on Internal Financial Controls Over Financial Reporting. An unmodified opinion is expressed, indicating that the Company has, in all material respects, an adequate internal financial controls system over financial reporting, and such controls were operating effectively as of March 31, 2024.

Regulatory Compliance Status #

Companies Act, 2013: The company has complied with relevant sections, including Section 123 (dividend declaration/payment), Section 185 and 186 (loans, guarantees, investments), Section 197(remuneration).

SEBI (LODR) Regulations, 2015: The Corporate Governance Report (Annexure D) details compliance with mandatory requirements.

Non-Compliances, Penalties, Strictures: Bombay Stock Exchange imposed fine for delayed disclosure of related party transactions SEBI demand monetary pentalies for delay in filling for In-principal approval for Preferential Issue of Equity shares and Share Warrants.

Legal Proceedings and Potential Impact #

The Company has disclosed the impact of pending litigations on its financial position in the standalone financial statements. No long-term contracts, including derivative contracts, with material foreseeable losses exist.

Related Party Transactions #

All related party transactions were conducted on an arm’s length basis and in the ordinary course of business. Disclosure of related party transactions, as required under Section 134(3)(h) of the Companies Act, 2013, is provided in Form AOC-2 (Annexure A).

Key related parties include: * Key Management Personnel * Relatives of Key Management Personnel * Companies under the same management.

Transactions included remuneration, office rent, reimbursement of expenses, loans and advances.

Subsequent Events #

No material changes or commitments affecting the financial position of the company occurred between the end of the financial year and the date of the report.

Accounting Quality and Regulatory Risk Assessment #

Accounting Quality:

• The use of historical cost convention, with exceptions for fair value measurement, aligns with standard practice.
• Consistent application of accounting policies.
• Adoption of Ind AS 116.

Regulatory Risk:

• Prior instances of non-compliance with SEBI regulations, leading to penalties.
• Independent Directors not having cleared proficiency Test.