Financial Liabilities
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised
cost, using the effective interest rate method where the time value of money is significant.
Interest bearing bank loans, overdrafts and unsecured loans are initially measured at fair value and are subsequently measured at
amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the
settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and loss.
Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it
transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial
liability) is derecognized from the Company's balance sheet when the obligation specified in the contract is discharged or cancelled
or expires.
Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on
market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash
flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general
approximation of value, and such value may or may not be realized.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where 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. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course
of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
x) Earnings Per Share :
The basic earnings per share is computed by dividing the profit/(loss) for the year attributable to the equity shareholders by the
weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share,
profit/(loss) for the year attributable to the equity shareholders and the weighted average number of the equity shares outstanding
during the year are adjusted for the effects of all dilutive potential equity shares.
xi) Cash and cash equivalents:
Cash and cash equivalents include cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an
original maturity of three months or less), highly liquid investments that are readily convertible into known amounts of cash and
which are subject to insignificant risk of changes in value.
xii) Transactions in Foreign Currencies:
The financial statements of the Company are presented in Indian rupees (Rs.), which is the functional currency of the Company and
the presentation currency for the financial statements.
Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction.
Foreign currency monetary assets and liabilities such as cash, receivables, payables, etc., are translated at year end exchange rates.
Exchange differences arising on settlement of transactions and translation of monetary items are recognised as income or expense
in the year in which they arise.
xiii) Leases
As a lessee:
The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess
whether a contract conveys the right to control the use of an identified asset, the company assesses whether:
(1) The Contract involves the use of an identified asset;
(2) The Company has substantially all the economic benefits from use of the asset through the period of the lease and
(3) The Company has the right to direct the use of the asset.
The Company recognizes a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a
lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low
value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and
lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives.
They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the balance lease term of the
underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that
their carrying amounts may not be recoverable.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are
discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the
country of domicile of the leases. Lease liabilities are re-measured with a corresponding adjustment to the related right of use asset
if the company changes its assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset shall be separately presented in the Balance Sheet and lease payments shall be classified as financing
cash flows.
xiv) Rounding off amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakh as per the requirement of
Schedule III, unless otherwise stated.
xv) Standards issued but not yet effective
There is no such notification is applicable from April 1, 2025.
The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to
meet the obligations related to lease liabilities as and when they fall due. The incremental borrowing rate used for the
measurement of lease liability is 8% per annum which is the rate that the individual lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value to the right- of-use asset in a similar economic environment with similar terms,
security and conditions.
Nature and purpose of other reserves
(i) Securities premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilized in accordance with the provisions of the Companies Act, 2013.
(ii) Retained earnings
Retained earnings represents the cumulative profits of the Company and effects of remeasurement of defined benefit obligations. This reserve can be utilized in accordance with the
provisions of the Companies Act, 2013.
(iii) Capital Reserve
By creating a capital reserve, a business can ensure that it has a reliable source of funds to tap into for future growth opportunities or unexpected financial needs. This can help the
business maintain financial stability and position itself for long-term success.
(iv) Money received against share warrants
During the year, the Company has allotted 2,58,000 fully Convertible Warrants (“Warrants"), each warrant convertible into 1 f ully paid-up equity share of the company, having face
value of Rs.10/- each, at an issue price of Rs.78/- (Rupees Seventy Eight) each, including a premium of Rs.68/- (Rupees Sixty Eight) each, aggregating up to Rs.2,01,24,000/- (Rupees Two
Crores One Lakh and Twenty Four Thousand Only) on a preferential basis, against the 25% application money received. (25% of the Warrant Price is paid at the time of subscription and
allotment)
The conversion of warrants into equivalent number of equity shares of the Company can be exercised by the warrant holder at any time during the period of eighteen months from the
date of allotment of Warrants i.e., May 31, 2024, in one or more tranches, upon payment of the remaining 75% of the amount payable against each such warrant before the last date of
conversion of warrants.
(i) Defined contribution plans
The company has defined contribution plans namely provident fund. Contributions are made to provident fund at the rate of 12% of basic
salary plus DA as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation
of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense
recognised during the year towards defined contributions plan is as follows:
(ii) Post- employment obligations
a) Gratuity
The company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. The amount of gratuity payable on
retirement/termination is the employees last drawn basic salary plus Dearness allowance per month computed proportionately for 15 days
salary multiplied with the number of years of service. The present value of obligation is determined based on actuarial valuation using the
Projected Unit Credit Method, which recognises each period of service giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation.
The above sensitivity analysis is based on a change in each assumption while holding all other assumptions constant. In practice, this is
unlikely to occur and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit
obligation to significant actuarial assumptions, the same method (present value of the defined benefit obligation calculated with the
projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability
recognised in the balance sheet.
iv) Risk exposure
Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are detailed below:
Interest rate risk:
The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation
Salary inflation risk:
Higher than expected increases in salary will increase the defined benefit obligation.
Demographic risk:
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and
retirement. The effect of these decrements on the defined benefit obligation is not straight forward and depends upon the com bination of
salary increase, discount rate and vesting criteria. It is important not to overstate withdrawals because in the financial analysis the
retirement benefit of a short career employee typically costs less per year as compared to a long service employee.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques, which maximise the use of
observable market data and rely as little as possible on entity specific estimates. If significant inputs required to fair value an instrument are observable, the
Level 3: If one or more of the significant inputs are not based on observable market data, the instruments are included in Level 3.
Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique.
Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could
have realized or paid in sale transactions as of respective dates. As such, the fair value of financial instruments subsequent to the reporting dates may be different
from the amounts reported at each reporting date.
The fair value of trade receivables, trade payables and other Current financial assets and liabilities is considered to be equal to the carrying amounts of these items
due to their short-term nature. Where such items are Non-current in nature, the same has been classified as Level 3 and fair value determined using discounted
cash flow basis. Similarly, unquoted equity instruments where most recent information to measure fair value is insufficient, or if there is a wide range of possible
fair value measurements, cost has been considered as the best estimate of fair value.
35. Financial Risk Management
The Company is exposed to market risk (fluctuation in foreign currency exchange rates, price and interest rate), liquidity risk and credit risk, which may adversely
impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse
effects on the financial performance of the Company.
(A) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of
currency risk, interest rate risk and price risk. Financial instruments affected by market risk include loans and borrowings, trade receivables and trade payables
involving foreign currency exposure. The sensitivity analysis in the following sections relate to the position as at March 31, 2025 and March 31, 2024.
The analysis excludes the impact of movements in market variables on the carrying values of financial assets and liabilties.
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial
liabilities held at March 31, 2025 and March 31, 2024.
(i) Foreign currency exchange rate risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company's
exposure to the risk of changes in foreign exchange rates relates primarily to trade receivables. The risks primarily relate to fluctuations in US Dollars and Euros
against the functional currencies of the Company. The Company's exposure to foreign currency changes for all other currencies is not material. The Company
evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.
The following tables demonstrate the sensitivity to a reasonably possible change in US Dollar and Euros exchange rates, with all other variables held constant. The
impact on the Company's profit before tax is due to changes in the fair value of monetary assets and liabilities.
The movement in the pre-tax effect is a result of a change in the fair value of monetary assets and liabilities denominated in Euros & Dollars where the
functional currency of the entity is a currency other than Euros & Dollars
(ii) Interest rate risk
Interest rate risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The interest risk
arises to the company mainly from long-term borrowings with variable rates. However, the company's borrowings are primarily fixed interest rate borrowings.
Hence, the company is not significantly exposed to interest rate risk.
(B) Credit Risk
Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and non-current held-to financial assets of
the Company include trade receivables, employee advances which represents Company's maximum exposure to the credit risk.
With respect to credit exposure from customers, the Company has a procedure in place aiming to minimise collection losses. Credit Control team assesses the
credit quality of the customers, their financial position, past experience in payments and other relevant factors. The Company's exposure to credit risk is influenced
mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base,
including default risk associate with the industry and country in which customers operate. Credit quality of a customer is assessed based on an extensive credit
rating scorecard and individual credit limits are defined in accordance with this assessment. With respect to other financial assets viz., loans & advances, the credit
risk is insignificant since the loans & advances are given to employees only. The credit quality of the financial assets is satisfactory, taking into account the
allowance for credit losses.
(iii) Significant estimates and judgements
Impairment of financial assets:
The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The company uses
judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the company’s past history, existing market conditions as
well as forward looking estimates at the end of each reporting period.
(C) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out market
positions. Company's treasury maintains flexibility in funding by maintaining availability under balances with banks.
Management monitors cash and cash equivalents on the basis of expected cash flows.
Capital management
A. Capital management and gearing ratio
For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the
equity holders. The primary objective of the company's capital management is to maximise the shareholder value.
The company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The
36. Code on Social Security
The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity.
The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from
stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and
will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact
are published.
A. Basis for segmentation
An operating segment is a component of the company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to
transactions with any of the Group’s other components, and for which discrete financial information is available. All operating segments results are reviewed regularly by the Group’s Chairman
and MD to make decisions about resources to be allocated to the segments and assess their performance.
The Chief Operating Decision Maker ("CODM") evaluates the Group’s performance and allocates resources based on an analysis of various performance indicators at operational unit level and
since there is single operating segment, no segment disclosures of the Group is presented. The Group’s operations fall within a single business segment “Staffing services”.
B. Geographical information
The company operates within India and therefore there is no assets or liabilities outside India.
C. Information about services provided by the company
Revenue from external customers - Back office support services ( Exports ): Rs 729.21 lakhs (P.Y Rs 788.67 lakhs)
Revenue from external customers - Recruiting services (Domestic): Rs 234.16 lakhs (P.Y Rs 248.44 lakhs)
D. Information on contract revenue
Revenue from external customers is Rs. 963.37 lakhs (P.Y. Rs 1037.11 lakhs)
The Company has made external sales to the following customers meeting the criteria of 10% or more of the entity's revenue
Customer 1- Rs.171.08 lakhs
Customer 2- Rs. 131.44 lakhs
Customer 3- Rs. 113.53 lakhs
Customer 4- Rs. 149.34 lakhs
Customer 5- Rs. 143.18 lakhs
42 The Board of Directors approved the financial statements for the year ended March 31, 2025 and authorised for issue on May 29, 2025.
43 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.
44 The accounting software being used by the company for maintaining its books of account does not have the feature of recording audit trail (edit log) facility both at the application level and data
base level. Further, the company is in the process of establishing the necessary controls and maintaining documentation relating to audit trail (edit log) as per Rule 3(1) of the Companies
(Accounts) Rules, 2014.
The accompanying notes are an integral part of the standalone financial statements.
As per our report of even date On behalf of Board of Directors
For M.Anandam & Co.,
Chartered Accountants
(Firm Registration Number: 000125S)
M.R.Vikram Subramaniyam Seetha Raman Bhuvaneswari Seetharaman
Partner Managing Director Director
Membership Number: 021012 DIN: 06364310 DIN: 01666421
Place: London, UK Place: Hyderabad
Date: 29th May, 2025 Date: 29th May, 2025
Place: Hyderabad Makkena Ramakrishna Prasad Ashwini Mangalampalle
Date: 29th May, 2025 Chief Financial Officer Company Secretary
PAN: AHIPM0313M PAN: BXZPM8624F
Place: Hyderabad Place: Hyderabad
Date: 29th May, 2025 Date: 29th May, 2025
|