Acquisition of Augmento Labs Private Limited.
During the current year, the Company has agreed to invest an amount upto Rs. 937.43 million to acquire 100% shareholding of Augmento Labs Private Limited, making it a wholly owned subsidiary of the Company. The Company has made an upfront consideration of Rs.350 million and the balance amount is contingent upon achievement of revenue and EBITDA in the near future. This liability has been appropriately classified as Current and Non-current depending on the timing of outflow of resources.
Acquisition of Ceptes Software Private Limited
During the current year, the Company has agreed to invest an amount up to Rs. 646.50 million to acquire 100% shareholding of Ceptes Software Private Limited, making it a wholly owned subsidiary of the Company. The Company has made an upfront consideration of Rs.347.57 million and the balance amount is contingent upon achievement of revenue and EBITDA in the near future. This liability has been appropriately classified as Current and Non-current depending on the timing of outflow of resources.
Acquisition of ZeTechno Products and Services Private Limited
During the current year, the Company has invested an amount of Rs. 30 million to acquire 100% shareholding of ZeTechno Products and Services Private Limited, making it a wholly owned subsidiary of the Company.
Effects of merger on investments carried in the books.
Pursuant to the approval of the scheme of merger, Dream Orbit Softech Inc, has become a wholly owned subsidiary of Saksoft Limited and Solveda Software India Private Limited has become a associate to Saksoft Limited, and continues to be a wholly owned subsidiary of the Saksoft Group.
17.Deferred tax assets / liabilities Contd.
During the year, the company had opted for amnesty scheme Direct Tax Vivad Se Vishwas Scheme 2024, (DTVSV Scheme ,2024) as introduced by CBDT in Finance (No.2) Act,2024 for AY's 2007-08 and 2020-21 in respect of its pending income tax litigation as on specified date (i.e.22nd July 2024)
For AY 2007-08, the tax payable under the scheme amounts to Rs.1,04,57,872 for which the company had made appropriate provision in its profit and loss account. For AY 2020-21, the net amount payable is Rs. Nil since the said demand was already adjusted with the refunds of the said assessment year and the same does not have any impact on the financials of the company.
Sensitivity Analysis:
Gratuity is a lump sum plan and the cost of providing these benefits is typically less sensitive to small changes in demographic assumptions. The key actuarial assumptions to which the benefit obligation results are particularly sensitive to are discount rate and future salary escalation rate. The following table summarizes the impact in percentage terms on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.
(e) Employee Stock option plans ('ESOP')
ESOP 2009 Plan
The ESOP 2009 Plan was introduced by the Company with the consent of the shareholders in 2009 under which the Company grants options from time to time to employees of the Company and its subsidiaries. Further the scheme was amended at the AGM held on 26th September 2014 to increase the exercise period from 5 to 10 years. This Plan complies with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014
The plan considers an aggregate of 150,00,000 options to be granted and exercised in accordance with the ESOP 2009 plan as approved by the Nomination and Remuneration Committee. The outstanding options available for exercise under the ESOP 2009 as on 31st March 2025 is 37,03,557 options, of which 13,12,500 options being unvested.
During the year, the Board of Directors have alloted 10,13,868 equity shares consequent to the exercise of options by certain eligible employees of the Company who were granted options on various dates at their respective exercise price alloted under ESOP 2009 plan.
Out of the 10,13,868 equity shares exercised during the year, all equity shares were alloted from the shares held by the Saksoft Employees Welfare Trust ('the Trust'), based on approval obtained through postal ballot in October 2023. During the year, 2,45,000 options at an exercise price of Rs.267.85 and 1,30,000 options at an exercise price of Rs.266.10 have been granted under this plan and The Company had issued a bonus in the ratio of 1:4. With record date of September 19,2024 and consequently outstanding options as on September 19, 2024 have been adjusted for the bonus issue
(h) Dividend
The Board of Directors had recommended interim dividend during the financial year 2024-25 amounting to Rs 0.40 per equity share. This has resulted in a cash flow of Rs 42.42 Million.
The Board of Directors at its meeting held on 26th May 2025 had further recommended a final dividend of 40% (Rs 0.40 per equity share of Rs.1/- face value fully paid up) subject to approval of the shareholders at The Annual General Meeting. The outflow on account of the final dividend is expected to be Rs 53.02 Million.
(i) Disclosure under Ind AS 115
The entire revenue from operations for the year ended 31st March 2025 and 31st March 2024 related to revenue from software services.
Disaggregation of revenue:
Revenue earned by the company is disaggregated by its sources based on geographical location as disclosed in Note 23 (d) to the consolidated financial statements.
Information about contract balances
The company classifies the right to consideration as Trade receivables and unbilled revenue.
Trade receivables are amounts billed to the customer on satisfaction of performance obligation. Unbilled revenue represents revenues in excess of efforts billed on software development and service contracts as at the end of the reporting period and is included as part of Other Financial Assets.
Billing in excess of revenue are classified as unearned revenue. Balances of trade receivables, unbilled revenue and unearned income are available in the relevant Schedules of the financial statements. Trade receivables and unbilled revenue are net of provision in the Balance Sheet.
Information about performance obligations
Performance obligations estimates are subject to change and are affected by several factors including change in scope of contracts, its termination, foreign currency adjustments and any other items influencing the measurement, collectability and performance of the contract.
Disclosure relating to remaining performance obligation across all live fixed bid price contracts relate to require the aggregate amounts of transaction price yet to be recognized as at the reporting date and expected timelines to recognize these amounts. In view of the fact that all outstanding contracts have an original expected duration for completion of less than a year no disclosure is warranted.
(j) Capital Management
The Company manages its capital to ensure that it will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance. The Company's policy is to maintain a strong capital base so as to maintain investors, creditors and market confidence to sustain future development of the business.
Fair Value Measurement Hierarchy
Foreign exchange forward contracts have been measured using Level 2 (Significant observable inputs) - Fair value measurement hierarchy. Balances as at March 31,2025 and March 31,2024 amounts to (Rs.2.4 million) and Rs.2.86 million respectively. There have been no transfers between Level 1 and Level 2 during the year.
Foreign Exchange Forward Contracts
The Company is exposed to foreign currency fluctuations on foreign currency assets / liabilities and forecast cash flows denominated in foreign currency. The use of derivatives to hedge foreign currency forecast cash flows is governed by the Company's strategy, which provides principles on the use of such forward contracts and currency options consistent with the Company's Risk Management Policy. The counterparty in these derivative instruments is a bank and the Company considers the risks of non-performance by the counterparty as insignificant. The Company has entered into a series of foreign exchange forward contracts that are designated as cash flow hedges. The Company does not use forward covers and currency options for speculative purposes.
The Management assessment of fair value of cash and short-term deposits, trade receivables and trade payables, bank overdrafts, and other current financial assets and liabilities approximate the carrying amounts largely due to the short-term maturities of these instruments
The Company's derivative financial instruments consist of foreign currency forward exchange contracts. Fair values for derivative financial instruments are based on market observable inputs and are classified as Level 2. The most frequently applied valuation technique include forward pricing model, using present value calculations.
(l) Financial Risk Management
The Company is exposed to a variety of financial risks; credit risk, liquidity risk and market risk,viz; foreign currency risk and interest rate risk. The Company has a risk management policy to manage & mitigate these risks.
The Company's risk management policy aims to reduce volatility in financial statements and aims to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.
The Board of Directors reviews and agrees policies for managing each of these risks as summarized below
Credit risk:
Credit risk is the risk of financial loss to the Company if a customer or counterparty to the financial instrument fails to meet its contractual obligations and arises principally from the Company's receivables from customers and investment securities.
Financial instruments that potentially subject the Company to concentration of credit risk consists of trade receivables, investments, loans, cash and cash equivalents, other balances with banks and other financial assets. The maximum exposure to credit risk is equal to the carrying value of the financial assets. By their nature, all such financial assets involve risks, including the credit risk of non-performance by counterparties.
The Company periodically assesses the credit quality of the counterparties by taking into account their financial position, past experience, ageing of accounts receivables and any other factor determined by individual characteristic of the counterparty.
Trade receivables:
The Company has used a practical expedient by computing the lifetime expected credit loss allowance for trade receivables based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information. The Company's exposure to customers is diversified. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated.
Liquidity Risk:
Liquidity risk is the risk that the Company will not be able to encounter its financial obligations associated with financial liabilities as they become due. The Company manages its liquidity risk by ensuring, as far as possible, to maintain sufficient liquid funds to meet its liabilities on the due date. The Company consistently generates sufficient cash flows from operations (with adequate reserves) and has access to multiple sources of funding (banking facilities and loans from promoter company) to meet the financial obligations and maintain adequate liquidity for use.
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. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The Company's exposure to market risk is primarily on account of foreign currency exchange rate risk.
Foreign Currency Risk:
"The fluctuation in foreign currency exchange rates may have potential impact on the Statement of Profit or Loss and Other Comprehensive Income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the Company.
The Company's exchange risk arises from its foreign currency revenues (primarily in U.S. Dollars, British Pound Sterling / Euros and Singapore Dollars). A significant portion of the Company's revenue are in these foreign currencies, while a significant portion of its corresponding costs are in Indian Rupee. As a result, if the value of Indian rupee appreciates relative to these foreign currencies, the Company's revenue measured in Indian Rupee may decrease and vice versa. The exchange rate between the Indian rupee and these foreign currencies has changed substantiallyin recent periods and may continue to fluctuate substantially in the future.
The Company periodically determines its strategy to mitigate foreign currency risk. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in line with its risk management policies.
24. Composite scheme of amalgamation in the form of a merger
The Board of Directors of the Company at its meeting held on 10th May 2024, approved a composite scheme of amalgamation in the form of a merger, whereby its wholly owned subsidiaries viz Dream Orbit Softech Private Limited and Three-sixty Logica Testing Services Private Limited together with its wholly owned step-down subsidiary Terafast Networks Private Limited are sought to be merged with Saksoft Limited (the parent) subject to necessary approvals to be obtained in this regard. The appointed date as per the scheme is 1st April 2024. The Company received the Order from the Honourable NCLT, Chennai - Order number CP ( CAA)64/2024 IN CA ( CAA)/34/CHE/2024 dated 21st March 2025 .
The Company accounted for the amalgamation by applying the common control guidance in Appendix C to Ind AS 103 -Business Combinations. Consequently, standalone financial statements have been restated for the year ended 31 March 2024 to give effect to the amalgamation along with also restating the opening balances of retained earnings and other reserves as at 1 April 2023 approving the said merger .
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