(i) There is no share application money pending allotment and no monies received against share warrant.
(ii) There is no increase in carrying value of asset on account of revaluation as per IND AS 16 and IND AS 38, hence revaluation reserve is not required.
(iii) Retained Earnings: The amount that can be distributed by the Company as dividends to its equity shareholders out of accumulated reserves is determined considering the requirements of the Companies Act, 2013. Thus, the closing balance amounts reported above are not distributable in entirety. It includes accumulated gains/(losses) amounting to ^ (4.70) Lakhs (PY: ^ (6.32) Lakh) (net of tax) pertaining to remeasurement gain / loss on defined employee benefit plan as classified in other comprehensive income from period to period.
(i) Earmarked balances with banks primarily relate to unclaimed dividends as a part of regulatory requirements. The balances in dividend accounts are not available for use by the Group and the money remaining unpaid will be deposited in the Investor Protection and Education Fund after the expiry of 7 years from the date they became due for payment. No amount is due at the end of the period for credit to Investor Protection and Education fund.
(i) The Company has only one class of shares viz. equity shares having a par value of ^10/- each as above. All equity shares, in present and in future, rank pari passu with the existing equity shares of the company and each shareholder is entitled to one vote per share.
(ii) The equity shareholders of the Company are entitled to get the dividend as and when proposed by the Board of Directors and approved by Share holders in the ensuing General Meeting.
(iii) In the Event of Liquidation of the Company, the share holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by shareholders.
(iv) The Company did not have outstanding calls unpaid by directors and officers of the company (Previous year NIL) and also did not have any amount of forfeited shares (Previous Year NIL).
(v) As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.
(vi) During the financial year ended 31st March 2025, the Company obtained approval from its shareholders on 20th August 2024 to increase its authorised share capital from ^10.50 crore to ^12 crore. This change has been duly incorporated in the financial statements for the year ended 31st March 2025.
1- Dividends declared by the Company are based on the profit available for distribution. The Board of Directors of the Company had proposed a Final dividend of ^ 0.5/- per share in respect of year ended 31st March, 2024 after the approval of shareholders at annual general meeting which resulted into cash outflow of ^ 51.39 lakhs (P.Y. : ^ 51.39 lakhs).
Dividends declared by the Company are based on the profit available for distribution. The Board of Directors of the Company have proposed a Final dividend of ^ 0.5/- per share in respect of year ended 31st March, 2023 after the approval of shareholders at annual general meeting which resulted into cash outflow of ^ 51.39 lakhs.
1. The above secured term loan from banks includes Vehicle Loan of ^ 15.10 Lakhs (PY: 17.67 Lakhs) from HDFC Bank Ltd., which is secured by way of Hypothecation of Toyota Hyryder (Car). The repayment of vehicle loan is required to be made in equated monthly installments having EMI of ^ 0.32 Lakhs starting from 07.12.2022 to 07.11.2029. The rate of interest is 7.90%
2. The above secured term loan from banks includes Term Loan of ^ 208.09 Lakhs (PY: 283.76 Lakhs) from IndusInd Bank Ltd., which is taken for purchase of Office Building. The said loan is secured by way of registered mortgage of Office Building situated at 801-803 PV Enclave, Bh. Black Crow, Nr. Satyam House, Sindhubhavn Road,. The repayment of said term loan is required to made in equated monthly installments having fixed principle of ^ 6.31 Lakhs for 60 months starting from 31.01.2023 and variable interest payment. The rate of interest is floating rate which is rate of 6MCD rate 1.87%. Such loans are also secured by way of personal guarantee of whole-time directors.
3. The above secured term loan from banks includes Term Loan of ^ 63.75 Lakhs (PY:84.42 lakhs) from IndusInd Bank Ltd., which is taken for Furniture and Fixtures of Office Building. The said loan is secured by way of registered mortgage of Office Building situated at 801-803 PV Enclave, Bh. Black Crow, Nr. Satyam House, Sindhubhavn Road,. The repayment of said term loan is required to made in equated monthly installments having fixed principle of ^ 1.73 Lakhs for 60 months starting from 11.05.2 023 and variable interest payment. The rate of interest is floating rate which is rate of 6MCD rate 1.87%. Such loans are also secured by way of personal guarantee of whole-time directors.
4. The above secured bank overdraft against Office Building includes secured overdraft taken from IndusInd Bank Ltd. of ^ 8.69 Lakhs taken against Office Building. The said loan is secured by way of registered mortgage of Office Building situated at 801-803 PV Enclave, Bh. Black Crow, Nr. Satyam House, Sindhubhavn Road. The rate of interest is floating rate which is rate of 6MCD rate 1.37%.
5. The above secured overdraft against fixed deposit includes overdraft of ^ 10.62 Lakhs against fixed deposit taken from Kotak Mahindra Bank Ltd.
6. The above Unsecured loan from banks includes Credit card of ^ 0.89 Lakhs (PY: Nil) from HDFC Bank Ltd., which is taken for purchase of computers. The repayment of said term loan is required to made in equated monthly installments having fixed installment of ^ 0.31 Lakhs for 9 months starting from 12.10.2024 and variable interest payment. The rate of interest is 2 0%.
7. The loan from related party includes loan taken from directors only and such loan is Repayable on demand.
# Fair value of financial assets and liabilities which are measured at amortized cost is not materially different from the carrying value (i.e. amortized cost). Accordingly, the fair value has not been disclosed separately.
Fair Value Hierarchy of Financial Assets and Liabilities:
Level 1: Level 1 hierarchy includes financial instrument measured using quoted price such as quoted price for equity security on security exchange.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities included in level 3.
C. Financial risk
managemen
t
The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk, foreign currency risk and interest rate risk. The Company's primary focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is foreign exchange risk. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below:
Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers and investment securities. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to clients, including outstanding accounts receivable and other receivables. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
Trade and other
receivables
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Ratings of customers are periodically monitored. The expected credit loss allowance is based on the ageing of the days receivables which are past due and the rates derived based on past history of defaults in the provision matrix.
Other financial assets - investments, cash, loans and security deposits and other bank balances
The Company limits its exposure to credit risk by generally investing in liquid securities and only with counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counterparties, and does not have any significant concentration of exposures to specific industry sectors. Further, the Company maintains its Cash and cash equivalents and Bank deposits with banks / financial institutions having good reputation, good past track record and high quality credit rating and also reviews their credit-worthiness on an on-going basis.
Liquidity
Risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due. Also, the Company has unutilized credit limits with banks.
Exposure to liquidity risk
Foreign Currency Risk
The Company's exchange risk arises from its foreign operations, foreign currency revenues and expenses (primarily in U.S. Dollars). A significant portion of the Company's revenues are in these foreign currencies, while a significant portion of its costs are in Indian Rupees. As a result, if the value of the Indian Rupee appreciates relative to these foreign currencies, the Company's revenues measured in Rupees may decrease. The exchange rate between the Indian Rupee and these foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. The following table presents foreign currency risk from non-derivative financial instruments as on reporting dates:
The Company is mainly exposed to changes in USD. The below table demonstrates the sensitivity to a 5% increase or decrease in the USD against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 5% represents management's assessment of reasonably possible change in foreign exchange r ate.
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 values 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.
Sensitivity
analysis
Profit or loss is sensitive to higher/lower interest expense from borrowings as a result of change in interest rates. Since no interest rate exposure is perceived on fixed rate loans, the same have been excluded from the sensitivity analysis. A reasonably possible change of 50 basis points in interest rates at the reporting date would have increased (decreased) Equity and Profit or Loss by the amount shown below:
Price Risk
The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Company has adopted disciplined practices including position sizing, diversification, valuation, loss prevention, due diligence, and exit strategies in order to mitigate losses. The Company is exposed price risk arising from investments in mutual funds recognised at FVTPL. The details of such investment are given under note 4. If the prices had been higher/lower by 5% from the market prices existing as at reporting dates, profit would increase/decrease by ^ 13.77 lakhs (F.Y. 2023-24 ^ 12.58 Lakhs) for the year ended 31st March 2025 respectively.
NOTE 27
Other Statutory Information
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami Property.
(ii) Basis the information available with the Company as on the reporting date and as on the date on which financial statements are approved and authorised for issue, the Company does not have any transactions with the companies struck off. Further, the Company has not been declared as a willful defaulter by any Bank / Financial Institution / any other lender.
(iii) The Company has duly registered all charges with the ROC within the statutory period, ensuring full compliance. All charges held by the Company have been appropriately disclosed to the ROC.
(iv) The Company have not traded or invested in Crypto currency or Virtual currency during the financial year.
(v) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries”) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).
(vi) The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vii) The Company has not 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, 1961).
(viii) Immovable Properties owned by the Company on its name, and further for immovable properties taken on lease, lease agreements are executed with Lessor.
(ix) None of borrowings are secured based on working capital of the Company and hence, the Company is not required to submit quarterly any financial document such as working capital etc. Further, the borrowings have been utilised for the purpose for which the same is obtained.
(x) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
(xi) The Company did not have any scheme of arrangement / amalgamation executed in past wherein the accounting is not in compliance with the applicable accounting principles.
(xii) The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and postemployment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come in to effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective.
(xiii) The Company has not given any loan to any parties with the terms being repayable on demand or without repayment terms.
(xiv) Provisions of Corporate Social Responsibility (CSR) are not applicable to the company for FY 2024-25 as per Section 135(1) and Rule 3(2) of Companies (CSR Policy) Rules, 2014. Accordingly, expenditure related to CSR as per section 135 of the companies act, 2013 read with schedule VII as on 31st March 2025 was NIL. ( 31st March 2024:- NIL)
The Company received a show cause notice dated 13th february 2025 from the Securities and Exchange Board of India (SEBI) alleging non-compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The notice pertains to the alleged improper utilization of proceeds raised through the company's Initial Public Offering (IPO).
Based on the assessment of the Company's legal advisors, the likelihood of an outflow of resources embodying economic benefits is considered possible but not probable. Consequently, no provision has been recognized in the financial statements. The Company has submitted its response to SEBI and is awaiting further communication.
The estimated financial impact, if any, cannot be reliably determined at this stage. The Company will continue to monitor the situation and make appropriate disclosures as necessary.
The Company was involved in a dispute with the Employees' State Insurance Corporation (ESIC) regarding a liability for the financial year 2012-13 amounting to ^ 3.76 lakh. The Company had paid ^ 3.07 lakh towards this liability in full settlement. During the reporting period, the case has been concluded. Pursuant to the final resolution, no further liability is expected to arise, and the matter stands closed. There is no material impact on the financial position of the Company as a result of this settlement.
NOTE 29
SEGMENT REPORTING
The Company is engaged in the business of providing IT services. The Board of Directors of the Company allocate the resources and assess the performance of the Company, thus BOD are the Chief Operating Decision Maker (CODM). The CODM monitors the operating results of the business as single operating segment, hence no separate segment needs to be disclosed. In the year ended March 31, 2025, 100.00% of the Company's revenue was generated from services provided to a single customer. Similarly, in the year ended March 31, 2024, 98.7% of the Company's revenue was derived from services provided to a single customer. The Company's revenue is primarily derived from services rendered in the following geographies:
A description of methods used for sensitivity analysis and its Limitations:
Sensitivity analysis is performed by varying a single parameter while keeping all the other parameters unchanged. Sensitivity analysis fails to focus on the interrelationships between underlying parameters. Hence, the results may vary if two or more variables are changed simultaneously. The method used does not indicate anything about the likelihood of change in any parameter and the extent of the change, if any.
As our defined benefit obligation encompasses gratuity, it is imperative to acknowledge and address the associated risks.
These risks are delineated below for comprehensive understanding.
A. Actuarial Risk:
It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:
Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an increase in Obligation at a rate that is higher than expected.
Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the Gratuity Benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the acceleration of cashflow will lead to an actuarial loss or gain depending on the relative values of the assumed salary growth and discount rate.
Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than the Gratuity Benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are vested as at the resignation date.
B. Investment Risk:
For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter- valuation period.
C. Liquidity Risk:
Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If some of such employees resign/retire from the Company there can be strain on the cashflows.
D. Market Risk:
Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.
E. Legislative Risk:
Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation/regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation and the same will have to be recognized immediately in the year when any such amendment is effective.