k. Provisions and Contingent Liabilities
A provision is recognized when the Company has a present obligation as a result of past events and it is
probable that an outflow of resources will be required to settle the obligation in respect of which a reliable
estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present values
and are determined based on the best estimate required to settle the obligations at the Balance Sheet date.
These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent
liabilities are not recognized in the Financial Statements and are disclosed in the Notes. A Contingent asset
is neither recognized nor disclosed in the Financial Statements.
l. Business Combination
As part of the transition to IND AS, the company has decided to apply the IND AS 103, Business combinations,
to only those business combinations that occurred on or after 1st April, 2015.
In respect of Business combinations, prior to 1st April, 2015, goodwill represents the amount recognised
under the company’s previous accounting framework under Indian GAAP and the same is tested annually
for impairment.
m. Financial Instruments
All Financial Assets and Liabilities are recognised and measured initially at fair value adjusted by transaction
cost, except for those carried at fair value through Profit or Loss which are measured initially at fair value.
For the purpose of subsequent measurement, Financial Assets are classified into following categories upon
initial recognition:
> Financial assets
Amortised Cost
A financial asset is measured at amortised cost using effective interest rates if both of the following conditions
are met:
the financial asset is held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows; and
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding.
The Company’s cash and cash equivalents, trade and most other receivables fall into this category of financial
instruments.
Financial assets at FVTPL
Financial assets at FVTPL include financial assets that either do not meet the criteria for amortised cost
classification or are equity instruments held for trading or that meet certain conditions and are designed at
FVTPL upon initial recognition. All derivative financial instruments also fall into this category. Assets in
this category are measured at fair value with gains or losses recognised in profit and loss. The fair values
of financial assets in this category are determined by reference to active market transactions or using a
valuation technique where no active market exists.
Financial assets at FVOCI
FVOCI financial assets are either debt instruments that are managed under hold to collect and sell business
model or are non - trading equity instruments that are designated to this category. FVOCI financial assets
are measured at fair value. Gains and losses are recognised in Other Comprehensive Income, except for
interest and dividend income and foreign exchange differences on monetary assets, which are recognised
in statement of profit and loss.
> Financial Liabilities
Initial recognition and measurement
All financial liabilities are initially recognised at Book value and in the case of loans and borrowings and
payables, net of attributable transaction costs (example: Upfront processing fees).
The company’s financial liabilities include trade and other payables, loan and borrowings including bank
overdrafts and financial guarantee contracts.
Classification and subsequent measurement of financial liabilities
Financial liabilities are measured subsequently at amortised cost using the effective interest method, except
for financial liabilities held for trading or designated at FVTPL, that are carried subsequently at fair value
with gains or losses recognised in profit or loss. All derivate financial instruments are accounted for at
FVTPL.
d) The company has not granted any loans or advances in the nature of loans to promoters, Directors,
KMPs and related parties (as defined under Companies Act, 2013), either severally or jointly with any
other person, either repayable on demand or without specifying any terms or period of repayment.
e) The Company does not have any Capital-Work-in Progress (CWIP).
f) The Company does not have any Intangible Assets under Development.
g) There have been no proceedings initiated or are pending against the Company for holding any
benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made
thereunder.
h) In respect of borrowings from a bank on the basis of security of current assets, the periodic returns
/ statements of current assets filed by the Company with the bank are in agreement with the books
of accounts. The Company does not have any borrowings from financial institutions on the basis of
security of current assets.
i) The Company has not been declared as wilful defaulter by any bank or financial institution or other
lender.
j) The company had no transactions with companies struck off under section 248 of the Companies Act,
2013 or section 560 of Companies Act, 1956.
k) There are no charges or satisfactions yet to be registered with the Registrar of Companies beyond the
statutory period.
l) 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.
n) Utilisation of Borrowed funds and share premium:
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). 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.
30. Undisclosed Income:
There have been no transactions recorded in the books of account which have been surrendered or
disclosed as income during the year. There has also not been any previously unrecorded income or
related assets.
32. The Company has neither traded nor invested in Crypto currency or Virtual Currency during the financial year.
33. Note on Merger:
Megasoft Limited (Transferee) has entered into a Scheme of Amalgamation with Sigma Advanced Systems
Private Limited (Transferor) and has been approved by the respective Boards. The company will make
necessary filings before the Honourable NCLT, Chennai in due course. The necessary entries will be passed
in the financial statements after obtaining the required Regulatory Approvals.
34. Note on Sale of Landed Property:
The company has sold its share in the constructed property at Nanakramguda in Hyderabad on 4th April,
2025 and the necessary entries have been passed in the financial year 2025-26.
The sensitivity analysis has been determined based on reasonably possible changes of the respective
assumptions occurring at the end of the reporting period, while holding all assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the projected
benefit obligation as it is unlikely that the change in the assumptions would occur in isolation of one another
as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation
has been calculated using the projected unit credit method at the end of the reporting period, which is the
same method as applied in calculating the projected benefit obligation as recognized in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior
years.
40. Segment Reporting
The Company prepares consolidated financial statements, hence as per INDAS 108 on Segment Reporting,
segment information has not been provided in the standalone financial statements.
41. Leases
Information on leases as per Indian Accounting Standards (Ind As) 116 on ‘Leases’
(a) Lease Income
Company as a Lessor
Other Income includes ? 3,673.04 lakhs pertaining to Lease rentals received by the Company arising
out of capitalization of a Property that had been given on Joint Development by the Company.
b) Fair Value Hierarchy:
The Company has estimated all its financial assets and liabilities under Level 3 prescribed under the Indian
Accounting Standards.
c) Valuation Techniques:
The discount rates considered is the borrowing rate charged by the lead lender of the Company after giving
effect to the applicable tax rate. The carrying amount of current financial assets and liabilities are considered
to be the same as their fair values due to their short-term nature. For financial assets and liabilities that are
measured at fair value, the carrying amount is equal to their fair values.
44. Capital Management:
The Company monitors capital on the basis of total equity on periodic basis. Equity comprises of all
components of equity including fair value impact and debt includes both long-term and short-term loans.
The Company is exposed to credit risk, which is the risk that counterparty will default on its contractual
obligation resulting in a financial loss to the Company. Credit risk arises from cash and cash equivalents,
financial assets carried at amortized cost and deposits with banks and financial institutions, as well as credit
exposures to trade customers including outstanding receivables.
(i) Credit risk management
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss.
Trade Receivable
The Company closely monitors the credit-worthiness of the debtors and only sells goods to credit-worthy
parties. The Company’s internal systems are configured to define credit limits of customers, thereby limiting
the credit risk to pre-calculated amounts.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the
availability of funding through an adequate amount of committed credit facilities to meet obligations when
due and to close out market positions.
The Company’s objective in relation to its existing operating business is to maintain sufficient funding to
operate at an optimal level.
c. Market Risk:
Market risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because
of volatility of prices in the financial markets. Market risk can be further segregated as:
i) Foreign currency risk:
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. The Company has exposure foreign currency risk in case of
Trade and other payables.
ii) 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 main interest rate risk arises from long-term
borrowings with variable rates, which expose the Company to cash flow interest rate risk. During March
31, 2022 the Company’s borrowings at variable rate are denominated in Rupees. The Company’s fixed rate
borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in
Ind AS -107, since neither the carrying amount nor the future cash flows will fluctuate because of a change
in market interest rates.
*Holding all other variables constant.
47. Previous Years Figures have been regrouped/reclassified wherever necessary to confirm to current
years classification.
As per our Report of even date attached For and on behalf of the Board of Megasoft Limited
for N.C.Rajagopal & Co. Sunil Kumar Kalidindi Kalyan Vijay Sivalenka
Chartered Accountants Executive Director & CEO Independent Director
Firm Registration No: 003398 S DIN: 02344343 DIN: 06404449
Arjun S. Shridhar Thathachary Thakur Vishal Singh
Membership No: 230448 Chief Financial Officer Company Secretary & Compliance
Place: Hyderabad Officer
Date: 29th May, 2025
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