(xviii) Provisions, Contingent Liabilities and Contingent Assets:
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract.
A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably not require an outflow of resources or an obligation for which the future outcome cannot be ascertained with reasonable certainty. When there is a possible or a present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made."
Contingent assets are neither recognized nor disclosed in financial statements.
a) Purpose of the reserves:
1 Capital reserve: Capital reserve represents the forfeiture of application money received against share warrants.
2 Securities premium: The amount received in excess of face value of the equity shares is recognised in securities premium. In case of equity-settled share based payment transactions, the difference between fair value of option on grant date and exercise price of share is transferred from equity settled share based payment reserve to securities premium at the time of exercise of options.
3 Equity settled employee benefits reserve: The fair value of the equity-settled employee benefits reserve with employees is recognised in Statement of Profit and Loss with corresponding credit to Equity settled share employee benefit reserve. The same is transferred to securities premium at the time of exercise of options or to retained earnings in the event of forfeiture, non-vesting or lapses of the grant.
4 Retained earnings: Retained earnings are the profits that the Company has earned till date, less dividends or other distributions paid to shareholders.
b) Pursuant to the approval of shareholders of the Company at the Extraordinary General Meeting on November 27, 2023, the Board of Directors of the Company has considered and approved, as per resolution passed by way of circulation on December 12, 2023, the issuance and allotment of 26,32,500 equity shares of the Company having face value of ?10 each at price of ?153 per equity share (including a premium of ?143 per equity share) on a preferential basis amounting to ?4,027.72 lakhs, in accordance with the SEBI (Issue of Capital and Disclosure Requirements) Regulation, 2018, the Companies Act, 2013 and the rules made thereunder. Pending actual utilization of funds raised through Preferential Issue, unutilized funds of ?4027.72 lakhs have been temporarily parked in Fixed Deposits with Banks.
* The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.
# Remuneration excludes taxable perquisites of Nil (Previous year ?81.27 lakhs) pertaining to ESOP issued during previous year.
The above figures do not include provisions for compensated expenses, gratuity and premium paid for group health insurance as separate actuarial valuation/ premium paid are not available.
Notes:
(i) All related party transactions entered during the year were in ordinary course of the business and are on arm's length basis.
(ii) No amounts in respect of related parties have been written off / written back during the year, nor has any provision been made for doubtful debts
/ receivables during the year.
(iii) Related party relationships have been identified by the management and relied upon by the Auditors.
35 Segment Reporting
The Company is engaged in the business of Information Technology Services and its operations are regularly reviewed by Chief Operating Decision Maker for assessment of Company's performance and resource allocation. Accordingly, the Company has only one business segment in accordance with the IND AS - 108 "Operating Segments”.
36 DISCLOSURE PURSUANT TO IND AS - 19 “EMPLOYEE BENEFITS”
Defined Benefit Plan - Gratuity
In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("The Gratuity Plan”) covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes contribution to the gratuity fund administered by HDFC under Gratuity Scheme.
d) Nature of CSR activities
i) Promoting education :
- Special Scholarship for Education of Girl students
- Providing education/Cultural Heritage at Chinmaya Vishwa Vidyapeeth
- Providing Financial support to 5 students pursuing engineering from Mumbai and Thane.
ii) Promoting Social Welfare/ Health care and safe driking water -
- Construction of New Well for Safe Drinking water to the villagers of Vanganpada situated in Dabhlon Gram Panchayat, Palghar District of Maharashtra
- Supporting Skin Donation Bank - Contributing towards cost of equipments that are used to harvest the skin at Indian Burns Research Society, Navi-Mumbai
- Project 'Arogya Bhavan' to support and provide old age home that is safe, hygienic & comfortable living for elderly monks in Belur Math West Bengal.
e) Details of related party transactions in relation to CSR expenditure as per relevant Accounting Standard : NIL (Previous year-NIL)
(C) Credit risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. The Company is exposed to credit risk from its operating activities (trade receivables) and from its financing activities including investments in mutual funds, deposits with banks and financial institutions, foreign exchange transactions and financial instruments.
To manage the credit risk from trade receivables, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period.
Credit risk from investments is managed by the Company's treasury in accordance with the board approved policy and limits.
To assess whether there is a significant increase in credit risk, the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterparty's ability to meet its obligations,
iv) Significant increase in credit risk on other financial instruments of the same counterparty,
v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees.
(D) Liquidity Risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. The Company's treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related such risk are overseen by senior management. Management monitors the Company's net liquidity position through rolling forecasts on the basis of expected cash flows. The Company's objective is to maintain at all times, optimum levels of liquidity to meet its obligations.
40 Financial instruments
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions are used to estimate the fair values:
1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.
2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
The carrying amounts and fair values of financial instruments by catergory are as follows:
43 Employee Share Based payments (a) Employee option plan
The Company's Employees' Stock Option Scheme - 2007, provides for issue of equity option in each financial year up to 5% (Previous Year 5%) of the outstanding fully paid-up equity capital of the Company as on March 31,2007 on to eligible employees, and the carry forward of un-allotted options in each of the financial years to the subsequent financial years for grant, in aggregate not exceeding 9,264,970 shares (Previous Year 9,264,970 shares). The Shareholders at their meeting held on September 30, 2014 passed a new ESOP plan 2014. Under new ESOP plan, the shareholders has permitted to grant 1,323,567 equity shares to the employees of the Company and to the employees of wholly owned subsidiary viz. CyberTech Systems and Software Inc., USA. The scheme covers directors and the employees of the subsidiaries, apart from the employees and directors of the Company except directors/ employees belonging to promoter group. The options vest in a phased manner over four years with 25% of the grants vesting at the end of each year from the date of grant and the same can be exercised within seven years from the date of the grant at the market price as on the date of the grant. One option is equal to one equity share.
47 Note on 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) The Company does not have any transactions with companies struck off.
iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
v) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with
the understanding that the Intermediary shalla) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or b) provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries. .
vi) The Company has not received any fund from any person(s) or entity(ies), 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.
vii) The Company does not have 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) 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.
ix) The quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in agreement with the books of accounts.
x) The Company is not declared wilful defaulter by any bank or financial institution or lender during the year.
48 The Company has used accounting software for maintaining its books of account which have features of recording audit trail (edit log) facility and the same were not operated throughout the year for all relevant transactions recorded in the software. Such feature enabled w.e.f. September 29, 2023. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with during the period w.e.f. September 29, 2023.
49 As per the Income tax Act, 1961, read with the Income Tax Rules, 1962, Company is required to maintain prescribed transfer pricing documentation in support of and to justify the arm's length nature of the international transactions with associated enterprises for each financial year end. The preparation of the transfer pricing documentation for the international transactions entered into during the year ended March 31,2024 is currently in progress and hence adjustments, if any, which may arise there from will be made subsequently. However, in the opinion of the management, all the international transactions are conducted at arm's length and no transfer pricing adjustments would required to be made.
50 The previous year's figures have been regrouped/re-classified wherever required to conform to current year's classification.
51 The financial statements were approved for issue by the Board of Directors on April 30, 2024.
Signatures to Notes 1-51
For and on behalf of the Board of Directors
Sd/- Sd/-
Sudhir Joshi Ramasubramanian Sankaran
Director Executive Director
DIN:00349597 DIN:05350841
Sd/- Sd/-
Praveen Agarwal Sarita Leelaramani
Chief Financial Officer Company Secretary
Place : Mumbai
Date : April 30, 2024
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