f) Provisions, contingent liabilities and contingent assets:-
Provisions
Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event and 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. The expense relating to provision is presented in the
statement of profit and loss. Provisions are reviewed at each balance sheet date.
Contingent Liabilities
A contingent liability is a possible obligation that arises from the past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or a
present obligation that is not recognised because it is probable that an outflow resources will be required to settle the
obligation or it cannot be measured with sufficient reliability. The Company does not recognise a contingent liability but
discloses its existence in the financial statements.
Contingent Assets
Contingent Assets are neither recognised nor disclosed. However, when realisation of the income is virtually certain,
related asset is recognised.
Commitments
Commitments include the amount of the purchase order (net of advances) issued to the parties for completion of assets.
Commitments are reviewed at each reporting period.
g) Revenue Recognition
The Company derives revenue primarily from Information Technology Services and Solutions. Revenue is recognised
when company transfers control over a product or a service to a customer.
Time and Material Contract
It is recognised based on time /effort spent and billed to clients
Maintenance Contract
It is recognised on a pro-data basis over the period when such services is rendered
Fixed Price Contracts
Revenues from fixed price contract are recognised using the "percentage of completion” method. Percentage of completion
is determined on project costs incurred to date as percentage of total estimated project costs required to complete the
milestone wise project
If the Company doesnot have a sufficient basis to measure the progress of completion or to estimate the total contract
revenues and costs, revenue is recognised only to extent of contract cost incurred for the completion milestone of the
contract.
Sale of software products and licences
Revenue from maintenance contracts is recognised on a pro-rata basis over the period which service is rendered
Interest Income
Interest Income is recorded using Effective Interest Rate (EIR) for all the instruments measured at amortised cost. EIR
is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial
instrument or a shorter period, where appropriate, to the gross carrying amount of the financial assets or to the amortised
cost of financial liability.
Dividend Income
Dividend Income is recognised when right to receive is established.
h) Employee Benefit Expenses
1. Short Term Employee Benefits
Short Term Employee Benefits are recognized as an expense at the undiscounted amount in the statement of profit
and loss for the year in which related services are rendered.
2. Defined Contribution Obligations: -
Gratuity (Un-funded): - The cost is determined using the projected unit credit method with the actuarial valuation
being carried at each balance sheet date by independent actuary. The present value of the defined benefit obligation
denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields
at the end of the reporting period on government bonds that have terms approximating to the terms of related
obligation.
The net interest cost is calculated by applying the discount rate to the balance sheet of the defined benefit obligation.
This cost is calculated in employee benefit expense in the Statement of Profit and Loss.
Remeasurement gains or losses arising from experience adjustment, demographic adjustments and changes in
actuarial assumptions are recognised in the period, in which they occur, directly in Other Comprehensive Income.
They are included in retained earnings in the Statement of Changes in Equity and in the Balance Sheet Changes in
the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognised
immediately in Profit or Loss as past service cost.
i) Earnings Per Share:-
Basic earnings per share is calculated by dividing the net Profit or Loss for the period attributable to equity shareholders
by the weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net Profit or Loss for the year attributable to the equity
shareholders and weighted average number of share outstanding if any are adjusted for the effects of all dilutive
potential equity shares
j) Financial Instruments:-
A financial instrument is any contract that gives rise to financial asset of one entity and a financial liability or equity
instrument of another equity.
Financial Assets
Initial Recognition and Measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value
through value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Trade
Receivables are initially measured at the transaction price. Regular way of purchase and sale of financial assets are
accounted for at trade date.
Subsequent Measurement
For the purposes of subsequent measurement, financial assets are classified in three categories:
• Amortised Cost
• Fair Value through Other Comprehensive Income (FVTOCI)
• Fair Value through Profit or loss (FVTPL)
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company
changes its business model for managing financial assets.
Measured at Amortised Cost: A financial asset is measured at amortised cost if it is held within a business model
whose objective is achieved by both collecting contractual cash flowsand the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount
outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective
interest rate (EIR) method.
Measured at FVTOCI: A financial asset is measured at FVTOCI if it is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling the financial assets and the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the
principal amount outstanding.
Financial assets included within the FVTOCI category are measured initially as well at each reporting date at fair value.
Fair value measurement is recognised in Other Comprehensive Income.
Measured at FVTPL: A financial asset which is not classified in any of the above categories are measured at FVTPL.
Financial assets included within the FVTPL category are measured at fair value with all changes recognised in the
statement of profit and loss.
De-recognition
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or
when it transfers the financial asset and the transfer qualifies for de-recognition under Ind AS 109.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for the measurement and
recognition of impairment loss for financial assets.
ECL is the weighted average of the difference between all the contractual cash flows that are due to the Company in
accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original
effective interest rate, with the respective risks of default occurring as the weights. When estimating the cash flows, the
Company is required to consider:
- All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
Trade Receivables
In respect of trade receivables, the Company applies the simplified approach of Ind AS 109, which requires measurement
of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses that result from
all possible default events over the expected life of a financial instrument.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial
asset. 12 month ECL area portion of the lifetime ECL which result from default events that are possible with 12 months
from the reporting date, ECL are measured in a manner that they reflect unbiased and probability weighted amounts
determined by a range of outcomes, taking into account the time value of money and other reasonable information
available as a result of past events, current conditions and forecast of future economic conditions.
Financial Assets
In respect of other financial assets, the Company assesses if the credit risk on those financial assets has increased
significantly since initial recognition. If the credit risk has not increased significantly since initial recognition, the Company
measures the loss allowance at an amount equal to 12- month expected credit losses, else at an amount equal to the
lifetime expected credit losses.
While making the assessment, the Company uses the change in the risk of a default occurring over the expected life of
the financial asset. To make the assessment, Company compares the risk of a default occurring on the financial asset
as at the balance sheet date with the risk of a default occurring on the financial asset as at the date of initial recognition
and considers reasonable and supportable information, that is available without undue cost or effort that is indicative of
significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial
asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk
at the balance sheet date.
Financial Liabilities
Initial Recognition and Measurement
Financial liabilities are at initiaMyrecognisedat fair value plus any transaction cost that are attributable to the acquisition
of the financial liabilities except financial liabilities at fair value through profit or loss which are initially measured at fair
value.
Subsequent Measurement:
For the purpose of subsequent measurement, financial liabilities are classified in following categories: -
• Fair Value through Profit or loss (FVTPL)
• Amortised Cost
Measured at FVTPL: A financial liability is classified as at FVTPL. It is classified as held for trading or it is derivative or it
is designated as such on initial recognition. Financial liabilities as at FVTPL are measured at fair value and net gains
and losses, including any interest expense is recognised in profit and loss.
Measured at Amortised: Other financial liabilities are subsequently measured at amortised cost using the effective
interest rate method.
Derecognition
The Company derecognizes a financial liability (or a part of financial liability) only when the obligation specified in the
contract discharged or cancelled or expires.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally
enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset
and settle the liability simultaneously
k) Impairment of non- financial assets:-
At the end of each reporting period, the company reviews the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable
amount of the cash generating unit to which the asset belongs.
Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to the
individual cash-generating units, or otherwise they are allocated to the smallest group of cash generating units for which
a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less cost to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using pre-tax discount that reflects current market assessments
of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated less that its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised
immediately in the Statement of Profit and Loss, unless the relevant asset at a revalued amount, in which case the
impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is
increased to the revised estimate of its recoverable amount , but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss has been recognised immediately in the
Statement of Profit and Loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the
impairment loss is treated as a revaluation increase.
l) Fair Value:-
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value of an asset or a liability, the Company takes in to account the
characteristics of the asset or liability if market participants would take those characteristics into account when pricing
the asset or liability at the measurement date. Fair value for measurement and or disclosure purposes in the financial
statements is determined on such basis.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2, or 3 based on the
degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair
value measurements in its entirety, which are described as follows:¬
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date;
- Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly;
- Level 3 inputs are unobservable inputs for the asset or liability
m) Event after reporting date: -
Where the events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the
reporting period, the impact of such events adjusted within the financial statements. Otherwise, events after the Balance
Sheet date of material size or nature are only disclosed
n) Investment in subsidiaries: -
Investment in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of
impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less cost of disposal and value in use. On
disposal of the investments, the difference between net disposal proceeds and the carrying amount is recognized in the
Statement of Profit and Loss.
o) Segment Reporting: -
Operating Segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance
of the operating segments of the Company.Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. As per requirement of Ind AS 108 "Segment Reporting” no
disclosures are required to be made since the Company’s activities consists of a single business segment.
p) Foreign currency translation: -
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at year and exchange rates are recognised
in profit and loss.
30. Financial Risk Management
The Company’s operational activities expose to various financial risks i.e. market risk, credit risk and risk of liquidity. The
Company realizes that risks are inherent and integral aspect of any business. The primary focus is to foresee the
unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. This
note explains the sources of the risk which the entity is exposed and how the entity manages the risk and the related
impact on the financial statements.
(a) Market Risk
Market Risk is the risk of potential adverse change in the Company's income and the value of the net worth arising from
the movement in foreign exchange rates, interest rates or other market prices.The Company recognises that the effective
management of market risk is essential to the maintenance of stable earnings and preservation of shareholder value.
The objective of market risk management to manage and control market risk within acceptable parameters, while
optimising the overall returns.
(b) 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’s exposure to the risk of changes in market interest rates relates
primarily to the long-term debt obligations with floating interest rates.
The Company manages its interest rate risk by having a balanced portfolio of borrowings and equity.
(c) Price Risks
Price risk is the risks that the fair value of a financial instrument will fluctuate due to changes in the market traded price.
It arises from the financial assets such as investment in equity instruments such as bond , mutual funds etc. The
Company is exposed to price risk mainly from investments carried at FVOCI whcih are valued using quoted prices in
active markets . A sensitivity analysis demonstrating the impact on change in the market prices of these instruments
from the prices existing as at reporting date is given below:-
Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company's exposure to the
credit risk is influenced mainly by cash and cash equivalents , trade receivables and financial assets measured at cost.
The Company continously monitors defaults of customers and their counterparties and incorporates this information
into credit risk controls. Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting
highly rated banks and diversifying bank deposits. Other financial assets measured at amortised cost excluding deposits
of rent. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts
continously, while at the same time internal control system in place to ensure the amounts are within the defined limits.
Assets are written off when there is no reasonable expectation of recovery, such as debtor declaring bankruptcy or
litigation decided against the Company. The Company continues to engage with parties whose balances are written off
and attempts to enforce repayment. Recoveries made are recognised in Statement of Profit and Loss.
(i) Trade Receivables:-
The Company establishes an allowance for impairment that represents its estimates of incurred losses in respect of
trade receivables . The allowance account in respect of trade and other receivables is used to record impairment losses
unless the Company is satisfied that no recovery of the amount owing is possible. At that point, the financial asset is
considered irrecoverables and the amount charged to the allowance account is wriiten off against the carrying amount
of the impaired financial asset.
As the Company does not hold any collateral , the maximum expense to credit risk for each class of financial instrument
is the carrying amount of that class of financial instrument presented on the statement of financial position. Impairment
of trade receivables is based on expected credit loss model ( simplistic approach) depending upon the historical date,
present financial conditions of customers and anticipated regulatory changes. Company does not hold any collateral in
respect of such receivables.
(ii) Financial Instruments and Cash Deposits:-
Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and
diversifying bank deposits. Other financial assets measured at cost excluding deposits on rent. Credit risk related to
these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the
same time internal control system in place ensure amounts are within specified limits.
(iii) Credit risk exposure:-
This risk is common to all investors who invest in bonds and debt instruments and it refers to a situation where a
particular bond/debenture issuer is unable to make the expected principal payment interest rate payment, or both.
Similarly, a lender bears the risk that the borrower may default in the payment of contractual interest or principal on its
debt obligation, or both. The entity continuously monitors defaults of the customers and other counterparties and
incorporates this information into its credit risk control.
Liquidity risk is the risk that the Company will face in meeting its obligation associated with its financial liabilities. The
Company’s approach to managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due
without incurring unacceptable losses.
The Company maintained a cautious liquidity strategy , with positive cash balance through out the years ended 31 March
2025 and 31 March 2024. Cash flow from operating activities provides funds to service the financial liabilities on a day-
to day basis. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an going basis to
meet operational requirements . Any short term surlpus cash generated over and above the amount required for working
capital management and other operational requirements, is retained as cash and cash equivalents (to the extent
required) and any excess is invested in interest bearing term deposits and other highly marketable instruments with
appropriate maturities to optimise the returns on the investments while ensuring the sufficient liquidity to meet its
liabilities.
31. Segment Reporting
As per the requirments of IND AS-108, " Segment Reporting" , no disclosures are required to be made since the
Company activities consists of a single business segment i.e. Information & Technology.
32. Corporate Social Responsibility is not applicable to the Company.
(ii) The following methods and assumptions were used to estimate the fair value:-
(a) Long term fixed rates receivables/ borrowings are evaluated by the Company based on the parameters such as
interest rates and credit worthiness of the customers and the risk characteristic of the financed project. Based on the
evaluations, allowances are taken into account for the expected losses of these receivables.
(b) The fair value of the loans from banks and financial liabilities as well as other non-current financial liabilities is
estimated by discounting future cash flows using the rates currently available for debt on similar terms , credit risk and
remaining maturities. Their valuation requires managment to use observable inputs in the model , management
regularly assessses a range of reasonably possible for those significant unobservable inputs and determines the
imapct on the total fair value.
34. Post Retirement Benefit Obligation
As per Actuarial Valuation as on 31 March 2025 and 31 March 2024 recognised in the financial statement in
respect of Employee Benefit Expense
Gratuity is a post employment benefit and is a defined benefit plan. The gratuity plan is governed by the Payment of
Gratuity Act, 1972 (‘the Act’). The liability recognised in the balance sheet represents the present value of the defined
benefit obligation at the balance sheet date, together with adjustment for unrecognised actuarial gains or losses and
past service cost. Independent actuaries calculate the defined benefit obligation annually using the Projected Unit
Credit Method. Actuarial gains and losses are credited/ charged to the Statement of Other Comprehensive Income in
the year in which such gains or losses arise.
The Sensitivity analysis above have been determined based on reasonably possible changes of the respective
assumption occurring at the end of the reporting period & may not be representative of the actual change. It is based on
a change in the key assumption while holding all other assumption constant. when calculating the sensitivity to the
assumption, the method (Projected Unit Credit Method) used to calculate the liability recognised in the balance sheet
has been applied. The methods & types of assumptions used in preparing the sensitivity analysis did not change
compared with the previous period.
36. Other Additional Regulatory Information as per Schedule III
a) Disclosure in relation to undisclosed income : 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 period ending 31 March, 2025 and
also for the period ending 31 March, 2024 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).
b) Relationship with Struck off Companies : The Company do not have any transactions with Company's struck off during the
period ending 31 March, 2025 and also for the period ending 31 March, 2024.
c) Details of Benami Property held : The Company do not have any Benami property, where any proceeding has been initiated
or pending against the Company during the period ending 31 March, 2025 and also for the period ending 31 March, 2024
for holding any Benami property.
d) Registration of charges or satisfaction with Registrar of Companies (ROC) : The Company do not have any charges or
satisfaction which is yet to be registered with ROC beyond the statutory period, during the period ending 31 March, 2025
and also for the period ending 31 March, 2024.
d) Registration of charges or satisfaction with Registrar of Companies (ROC) : The Company do not have any charges or
satisfaction which is yet to be registered with ROC beyond the statutory period, during the period ending 31 March, 2025
and also for the period ending 31 March, 2024.
e) Details of Crypto Currency or Virtual Currency : The Company have not traded or invested in Crypto currency or Virtual
Currency during the period ending 31 March, 2025 and also for the period ending 31 March, 2024.
f) Utilisation of Borrowed Fund & Share Premium :
I. The Company have 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 shall: (a) 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.
II. The Company have 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.
g) The Company has not entered into any scheme of arrangement which has an accounting impact on the current or previous
financial year.
h) Audit Trail - As per the newly inserted rule 3(1) of the Companies (Accounts) Rules, 2021, the company has used accounting
software for maintaining its books of accounts which have a feature of recording audit trail(edit log) facility and the same
has been enabled and operated throughout the year for all relevant transactions recorded in the respective software.
Further there is no instance of audit trail feature being tampered with.
37. Impact of New Labour Codes
The Indian Parliament has approved 4 Labour Codes viz : The Code on Wages, 2019, The Code on Social Security, 2020,
The Industrial Relations Code, 2020 and The Occupational Safety Health and Working Conditions, 2020 subsuming many
existing labour legislations. These would impact the contributions by the Group towards Provident Fund, Bonus and
Gratuity. The effective date from which the codes and rules will be applicable is yet to be notified. The Group will assess the
impact and its valuation and will give appropriate impact in its financial statements in the period(s) in which, the Codes
become effective and the related rules to determine the financial impact are notified.
38. *Trade Receivables, Loans and Advances and Deposits of which confirmations are not received from the parties are
subject to reconciliation and consequential adjustments on determination/ receipt of such confirmation.
39. The management has evaluated all activities of the Company through May 28, 2025 and concluded that there were no
additional subsequent events required to be reflected in this financial statements.
40. Figures of the year are regrouped/rearranged in order to confirm with current year classification.
The accompanying notes 1 to 40, forms an integral part of these Standalone Financial Statements
For N H Agrawal & Associates For and on behalf of the Board
Chartered Accountants Lee & Nee Softwares (Exports) Ltd
Firm Regn. Number: 0327511E
Nitin Hukumchand Agrawal Mahesh Gupta Arpita Gupta
Partner CEO & Managing Director Director
(Membership No.: 129179) (DIN : 01606647) (DIN : 02839878)
Vikash Singh Pritika Gupta
Place: Kolkata Chief Financial Officer Company Secretary
Dated: 29th May, 2025 PAN: BMWPS0510C Membership Number: A27366
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