2.15 Provisions and contingencies
Provisions are recognized when the Company has a present obligation (legal/ constructive) as a result of past event,
it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the
obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its
carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount
of receivable can be measured reliably.
Contingent Liability:
Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within
the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of
resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are not recognized in the standalone financial statements since this may result in the recognition of
income that may never be realized’.’
2.16 Segment reporting
Operating segments reflect the Company’s management structure and the way the financial information is regularly
reviewed by the Company’s senior management. The Company considers the business from both business and
product perspective based on the dominant source, nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which separate financial information is available
and for which operating profit / (loss) amounts are evaluated regularly by the senior management in deciding how to
allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment
revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their
relationship to the operating activities of the segment.
Inter-segment revenue, where applicable, is accounted on the basis of transactions which are primarily determined
based on market / fair value factors. Revenue, expenses, assets and liabilities which relate to the Company as a whole
and are not allocable to segments on reasonable basis have been included under “unallocated revenue / expenses /
assets / liabilities"
2.17 Goods and services tax input credit
Goods and services tax input credit is accounted for in the books during the period when the underlying service
received is accounted and when there is no uncertainty in availing / utilizing the credits.
2.18 Insurance claims
Insurance claims are accrued for on the basis of claims admitted / expected to be admitted and to the extent there is
no uncertainty in receiving the claims.
2.19 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes
a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All
other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the borrowing of funds.
Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalization.
2.20 Operating cycle
Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their
realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of
classification of its assets and liabilities as current and non-current.
3 Critical accounting judgements and key sources of estimation uncertainty
In the application of the Company’s accounting policies, which are described in note 2, the directors of the Company
are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if revision affects both current and future periods.
The following are the significant areas of estimation, uncertainty and critical judgements in applying accounting
policies:
• Useful lives of Property, plant and equipment and intangible assets
• Evaluation of Impairment indicators and assessment of recoverable value
• Provision for taxation
• Provision for disputed matters
• Provision for employee benefits
• Allowance for Expected Credit Loss
• Fair Valuation of Financial assets and liabilities
• Leases
Determination of functional and presentation currency:
Items included in the standalone financial statements of the Company are measured using the currency of the primary
economic environment in which the Company operates (i.e. the “functional currency"). The standalone financial
statements are presented in Indian Rupees (INR), the national currency of India, which is the functional currency of the
Company. All the financial information have been presented in Indian Rupees except for share data and as otherwise
stated.
10.1 The above includes amount receivable from related parties amounting to INR 4,570.12 lakhs as at March 31, 2025 and
INR 3,291.76 lakhs as at March 31, 2024. (refer note 36)
10.2 Credit period and risk
All trade receivables are non-interest bearing and are generally on credit terms upto 90 days.
10.3 Expected credit loss allowance
The Company has used a practical expedience by computing the expected loss allowance for trade receivables based
on provision matrix. The provision matrix takes into account the historical credit loss experience and adjustments for
forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the
forward looking estimates are analysed.
The Company has not made any provisions as per the expected credit loss model prescribed by the requirements of
Ind AS 109. This is largely owing to the fact that majority of the receivables are from group companies. Accordingly, the
Company does not have any history of credit losses and hence there being no credit risk, no allowance has been made.
(a) Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve can be utilised only for limited purposes
such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.
(b) General Reserve
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a
specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that
if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then
the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of
Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general
reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only
in accordance with the specific requirements of Companies Act, 2013.
(c) Retained Earnings
Retained earnings are the profits/(loss) that the Company has earned/incurred till date, less any transfers to general reserve,
dividends or other distributions paid to shareholders.
(d) Money Received against Warrant convertible to equity shares
Ind AS 33 - Earnings per Share defines “Warrants” as “ Financial Instruments which give the holder the right to acquire
equity shares’.’ Thus effectively, warrants are the amount which would ultimately form part of the Shareholders’ funds.
Since, shares are yet to be allotted against the same, these are not reflected as part of Share Capital but as a separate line
item - ‘Money received against share warrants’
(e) Capital Reserve
The Company allotted 45,00,000 (Forty five Lakhs) convertible warrants of INR 100/- each to Mr Suresh Venkatachari,
Promoter and CEO of the Company on March 17, 2021 on receipt of an upfront payment INR 11,25,00,000/- (Rupees
Eleven Crores Twenty-Five Lakhs Only) equal to 25% of the total consideration as per the terms of preferential issue in
compliance with Chapter V of SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2018 and Section 42 & 62
of the Companies Act, 2013 and rules made thereunder as amended from time to time. The Company has considered
equivalent shares of 45,00,000 (Forty five Lakhs) for the purpose of diluted EPS up to the period ended June 30, 2022
and 28,93,000 shares (Twenty eight lakhs ninety three thousand) for the period ended December 31, 2022 as per IND AS
33. During the nine months ended December 31, 2022, the Company has allotted 12,25,000 equity shares to Mr Suresh
Venkatachari, as partial conversion of warrants and had 16,07000 convertible warrants outstanding as at September 16,
2022. As the outstanding warrants were not exercised on or before the September 16, 2022, the Company had forfeited
the money received against such warrants amounting to INR 4,01,75,000 and credited the capital reserve in accordance
to the provisions of the Companies Act 2013.
16.2 Notes:
i. The details of Security provided against the Term Loans and loans repayable on demand are as follows:
a. The existing Term Loan facility of INR 758 lakhs and Open Cash Credit (OCC) of INR 1,500 lakhs. These loans are secured
against Hypothecation of book debts (Accounts receivable), fixed assets and personal guarantee of the CEO Mr. Suresh
Venkatachari.
b. The loan is also further secured by pledge of 16,50,000 shares of SecureKloud Technologies Limited held by CEO Mr. Suresh
Venkatachari.
II. As at March 31,2025, the Company has unsecured loan of INR 3,13761 lakhs from R.S. Ramani, Promoter. These borrowings carry
an interest rate of 8% per annum. The Company has obtained a declaration from the Directors that the loan has not been given
out of funds borrowed or deposits accepted from others.
Risk exposures Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as company
take on uncertain long term obligations to make future benefit payments
Interest rate risk: The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase
in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in
standalone financial statements).
B) Salary escalation risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate
of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in
salary used to determine the present value of obligation will have a bearing on the plan’s liability.
C) Demographic risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The
Company is exposed to the risk of actual experience turning out to be worse compared to the assumption.
D) Liquidity risk: This is the risk that the Company is not able to meet the short-term gratuity payouts. This may arise due to non
availability of enough cash and cash equivalent to meet the liabilities or holding of illiquid assets not being sold in time.
The following tables summarises the components of net benefit expense recognised in the statement of profit and loss, the
obligation amount recognised in the balance sheet towards the gratuity plan.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely
that the change in 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 defined benefit obligation has been calculated using the
projected unit credit method at the end of the reporting period which is the same as that applied in calculating the defined benefit
obligation liability recognised in the balance sheet. There is no change in the methods and assumptions used in preparing the sensitivity
analysis from the prior years.
(b) Long term compensated absences
The Company’s obligation towards long term compensated absences is unfunded. Liabilities related to the compensated
absences are determined and accrued by actuarial valuation using projected unit credit method by an independent actuary as
at the balance sheet date. The assumptions used for valuation are as follows:
32 Capital Management
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 of the Company.
The Company’s capital management is intended to maximise the return to shareholders for meeting the long term and short¬
term goals of the Company through the optimization of the debt and equity balance. The Company determines the amount of
capital required on the basis of annual and long-term operating plans and strategic investment plans. The funding requirements
are met through equity and long-term/short-term borrowings. The Company ensures that it will be able to continue as a going
concern while maximising its returns to its shareholders by managing its capital by optimisation of the debt and equity balance.
The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt
portfolio of the Company.
33 Fair value measurement
The fair value of the financial assets and labilities is 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 management assessed that the
cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other payables approximate their carrying
amounts largely due to the short-term maturities of these instruments.
34. Financial risk management objectives and policies
The Company’s principal financial liabilities, comprise term loans, bank overdraft and trade and other payables. The main
purpose of these financial liabilities is to raise finance for the Company’s operations. The Company has various financial assets
such as trade receivables and other receivables, security deposits, investments and cash and bank balances, which arise directly
from its operations.
The Company is exposed to market risk (including currency, interest rate and other market related risks), credit risk and liquidity
risk. The Company’s senior management oversees the management of these risks. The Company’s primary risk management
focus is to minimize potential adverse effects of these financial risks on its financial performance. The Company’s risk
management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to
set appropriate risk limits and controls, and to monitor risks and compliance with the same. Risk assessment and management
policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Board
of Directors oversees and reviews the management of each of these risks, which are summarised below.
(a) Liquidity Risk Management
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company
manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due,
under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation. The
Company believes that the working capital and its cash and cash equivalent are sufficient to meet its short and medium term
requirements.
The following tables detail the Company’s remaining contractual maturity for its financial liabilities with agreed repayment
periods.The contractual maturity is based on the earliest date on which the Company may be required to pay.
(b) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Company’s receivables from customers and from its financing activities,
including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. Credit risk
is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers
to which the Company grants credit terms in the normal course of business.
Trade receivables: The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The demographics of the customer, including the default risk of the industry and country in which the customer operates, also
has an influence on credit risk assessment. The Company uses financial information and past experience to evaluate credit
quality of majority of its customers and individual credit limits are defined in accordance with this assessment. Outstanding
receivables and the credit worthiness of its counter parties are periodically monitored and taken up on case-to-case basis.
Credit risk on cash and cash equivalent is limited as the Company generally transacts with banks and financial institutions with
high credit ratings assigned by international and domestic credit rating agencies.
(c) Market Risk
“Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.
Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk.
Financial instruments affected by market risk include all market risk-sensitive financial instruments, term loans, short term debts
and trade receivables. The Company is exposed to market risk primarily related to foreign exchange currency risk and interest
rate risk. Thus, the Company’s exposure to market risk is a function of investing and borrowing activities and revenue generating
and operating activities in foreign currencies.
i. 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 Company’s debt obligations with
floating interest rates. Other than overdraft facilities and term loans maintained with Indian Bank, the Company does not have any credit
facilities from any banks or financial institutions with floating interest rates.As a result, changes in interest rates are not likely to substantially
affect its business or results of operations.
ii. Foreign exchange rate risk
Foreign currency risk is the risk that the fair value or future cash flows of an expenses/ income will fluctuate because of change
in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the
Company’s operating activities (when revenue or expenses is denominated in a foreign currency) and the Company’s net
investment in foreign subsidiary.
A significant portion of the Company’s revenues is in USD, while a significant portion of its costs are in Indian rupees. As a
result, if the value of the Indian rupee appreciates relative to this foreign currency, the Company’s revenues measured in Indian
rupees may decrease and vice versa. The exchange rate between the Indian rupee and US Dollar has not been subjected to
significant changes in recent periods. The Company has a forex policy in place whose objective is to reduce foreign exchange
risk by maintaining reasonable open exposures within approved parameters depending on the future outlook on currencies. The
Company does not enter into or trade financial instruments including derivative financial instruments for speculative purpose.
Foreign Currency sensitivity analysis
The following table demonstrates the sensitivity to 5% change in USD and AUD exchange rates, with all other variables held
constant. A positive number below indicates an increase in profit / decrease in loss and increase in equity where the INR
strengthens 5% against the relevant currency. For a 5% weakening of the INR against the relevant currency, there would be
a comparable impact on the profit or loss and equity and balance below would be negative.
1. Current ratio:
The current ratio indicates a company’s overall liquidity position. It is widely used by banks in making decisions regarding the advancing
of working capital credit to their clients.
Current Ratio = Current Assets / Current Liabilities
Decrease is due to reduction in trade receivables in the current year. The Company has collected aged dues during the year. As at March
31, 2023, the Company has no oustanding aged more than 180 days.
2. Debt - Equity Ratio
Debt-to-equity ratio compares a Company’s total debt to shareholders equity. Both of these numbers can be found in a Company’s
balance sheet.
Debt - Equity Ratio = Total Debt / Shareholder’s Equity
Decrease in current year is due to reduction in debt. Company has repaid around INR 990.89 lakhs promoter loan and cleared INR 250
lakhs interest outstanding during the year.
3. Debt Service Coverage Ratio
Debt Service coverage ratio is used to analyse the firm’s ability to payoff current interest and instalments.
Debt Service Coverage Ratio = Earnings available for debt service / Debt Service
Increase in current year is due to lower losses made by the company in the current year when compared to previous year.
4. Return on Equity (ROE):
It measures the profitability of equity funds invested in the Company. The ratio reveals how profitability of the equity-holders’ funds have
been utilized by the Company. It also measures the percentage return generated to equity-holders.The ratio is computed as:
ROE = Net Profits after taxes - Preference Dividend (if any) / Average Shareholder’s Equity
Increase in current year is due to lower losses made by the company in the current year when compared to previous year.
5.Inventory Turnover Ratio
This ratio also known as stock turnover establishes the relationship between the cost of goods sold during the period or sales during the
period and average inventory held during the period. It measures the efficiency with which a Company utilizes or manages its inventory.
Inventory Turnover ratio = Cost of goods sold or sales / Average Inventory
The Company is in the business of providing software services and does not have any physical inventories. Hence, inventory turnover ratio
is not applicable to the Company.
6. Trade receivables turnover ratio
It measures the efficiency at which the firm is managing the receivables.
Trade receivables turnover ratio = Net Credit Sales / Avg. Accounts Receivable
The Company has improved the ratio in the current year by collecting all aged dues outstanding more than 180 days.
1 Trade payables turnover ratio
It indicates the number of times sundry creditors have been paid during a period. It is calculated to judge the requirements of cash for
paying sundry creditors. It is calculated by dividing the net credit purchases by average creditors.
Trade payables turnover ratio = Net Credit Purchases / Average Trade Payables
The Company has improved the ratio in the current year by prompt repayment on all dues within time.
8. Net capital turnover ratio
It indicates a company’s effectiveness in using its working capital. The working capital turnover ratio is calculated as follows: net sales
divided by the average amount of working capital during the same period.
Net capital turnover ratio = Net Sales / Working Capital
Negative impact in current year is due to provision made towards statutory penalty which in turn resulted in negative in working capital.
9. Net profit ratio
It measures the relationship between net profit and sales of the business.
Net Profit Ratio = Net Profit / Net Sales
The Company has improved the ratio in the current year due to reduction in loss
10. Return on capital employed (ROCE)
Return on capital employed indicates the ability of a company’s management to generate returns for both the debt holders and the
equity holders. Higher the ratio, more efficiently is the capital being employed by the company to generate returns.
ROCE = Earning before interest and taxes / Capital Employed
Decrease in current year is due to loss incurred by the Company in the current year.
11. Return on investment
Return on investment (ROI) is a financial ratio used to calculate the benefit an investor will receive in relation to their investment cost. The
higher the ratio, the greater the benefit earned.
i) The Company has invested in its overseas subsidairies for business expansion, therby fueling further growth in new geographies.
Hence, return on investment is not applicable for our Company.
ii) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Group for holding
any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.
iii) The Company do not have any transactions with companies struck off under section 248 of Companies Act, 2013 or section 560 of
Companies Act, 1956.
iv) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
v) The Company has not traded or invested in cryptocurrency transactions or virtual currency during the financial year
vi) 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 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.
vii) The Company has not 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).
Notes:
(i) The Company accounts for costs incurred by / on behalf of the Related Parties based on the actual invoices /
debit notes raised and accruals as confirmed by such related parties. The Related Parties have confirmed to the
Management that as at March 31, 2025 and March 31, 2024, there are no further amounts payable to / receivable
from them, other than as disclosed above. The Company incurs certain costs on behalf of other companies in the
group. These costs have been allocated/recovered from the group companies on a basis mutually agreed to with the
group companies.
(ii) Excludes gratuity and compensated absences which cannot be separately identifiable from the composite amount
advised by the actuary.
(iii) The remuneration payable to key management personnel is determined by the nomination and remuneration
committee having regard to the performance of individuals and market trends.
(iv) The amounts outstanding are unsecured and will be settled in cash. There have been no instances of amounts
due to or due from related parties that have been written back or written off or otherwise provided for during the
year.
v) The Company has provided Corporate Guarantee amounting to USD 5 million to Columbia Bank for loans
taken by SecureKloud Technologies Inc., USA (formerly 8K Miles Software Services Inc., USA), a subsidiary of
the Company.
37 Segment Reporting
The Company is engaged in Information and Technology Services. Based on the management approach as defined in Ind-AS 108 -
Operating Segments, the senior management evaluates the Company’s performance and allocates resources based on an analysis of
various performance indicators by the overall business / operating segment.
As the allocation of resources and profitability of the business is evaluated by the senior management on an overall basis, with evaluation
into individual categories to understand the reasons for variations, no separate segments have been identified. Accordingly, the amounts
appearing in these standalone financial statements relate to this operating segment.
Geographical Information:
The Company has operations within India as well as in other countries. The operations in United States of America constitute a
major part of its operations. Management has reviewed the geographical areas vis-a-vis the risks and returns that encompass
them. While arriving at this, management has reviewed the similarity of the economic and political conditions, relationships
between operations in these geographical areas, proximity of operations, and special risks if any associated with operations in
these areas.
Fixed assets used in the Company’s business have not been identified to any of the reportable segments, as the fixed assets
and services are used interchangeably between segments. The Company believes that it is currently not practicable to provide
segment disclosures relating to assets, liabilities and capital expenditure.
39 Corporate Social Responsibility
As the Company has not met the applicability threshold as prescribed under 135 of the Companies Act, 2013, the need to spend
at least 2% of its average net profit at immediately preceeding three financial years on corporate social responsibility (CSR)
activities does not arise.
40 The previous year figures have been reclassified/ regrouped to conform to the presentation of the current year. These
reclassifications have no effect on the previously reported net loss/profit.
41 Approval of Standalone Financial Statements
In connection with the preparation of the standalone financial statements for the year ended March 31, 2025, the Board of Directors have
confirmed the propriety of the contracts / agreements entered into by / on behalf of the Company and the resultant revenue earned /
expenses incurred arising out of the same after reviewing the levels of authorisation and the available documentary evidences and the
overall control environment. Further, the Board of Directors have also reviewed the realizable value of all the current assets of the Company
and have confirmed that the value of such assets in the ordinary course of business will not be less than the value at which these are
recognised in the standalone financial statements. In addition, the Board has also confirmed the carrying value of the non-current assets in
the standalone financial statements. The Board, duly taking into account all the relevant disclosures made, has approved these standalone
financial statements in its meeting held on May 30, 2025 in accordance with the provisions of Companies Act, 2013.
As per our report of even date.
For K Gopal Rao & Cov For and on behalf of the Board of Directors
Chartered Accountants
FRN:000956S
CA Gopal Krishna Raju Suresh Venkatachari Venkateswaran Kirshnamurthy
Partner Chairman & Whole-time Director
Membership No. 205929 Chief Executive Officer & Chief Revenue Officer
UDIN: 25205929BMLDMT2313 DIN: 00365522 DIN: 10886686
Place : Chennai Ramachandran Soundararajan Jayashree Vasudevan
Date: May 30, 2025 Chief Financial Officer Company Secretary
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