1.8 Provisions, contingent liabilities and contingent assets
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
The amount recognized 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).
A present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability.
Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company. Claims against the Company where the possibility of any outflow of
resources in settlement is remote, are not disclosed as contingent liabilities.
Contingent assets are not recognised but only disclosed where an inflow of economic benefits is probable.
Contingent assets are possible assets that arise from past events whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Company.
1.9 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand, in bank and demand deposits with banks. Cash equivalents are short-term balances
(with an original maturity of three months or less from the date of acquisition), highly liquid investments that are
readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. If
the contractual restrictions to use the cash extend beyond twelve months after the end of the reporting period,
the related amounts are classified as non-current in the balance sheet.
Cash flows are reported using indirect method whereby profit/(loss) before tax is adjusted for the effects of
transaction of non-cash nature and any deferrals or accruals of past or future cash receipts and payments. The
cash flows from operating, investing and financing activities of the Company are segregated based on the
available information. For the purposes of the statement of cash flows, cash and cash equivalents consist of cash
and cash equivalents as defined above, net of outstanding bank overdrafts which form an integral part of the
Company's cash management. Such overdrafts are presented as short-term borrowings in the balance sheet.
1.10 Business Combination
Business Combinations are accounted for using Ind AS 103 'Business Combination'. Acquisitions of businesses are
accounted for using the acquisition method unless the transaction is between entities under common control.
The consideration transferred in a business combination is measured at fair value, which is calculated as the sum
of the acquisition-date fair value of assets transferred by the Company, liabilities incurred by the Company to the
former owners of the acquiree and the equity interest issued by the Company in exchange of control of the
acquiree. Acquisition related costs are generally recognised in statement of profit and loss as incurred. At the
acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value at
the acquisition date, except that:
a) deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are
recognised and measured in accordance with Ind AS 12 Income Taxes and Ind AS 19 Employee Benefits
respectively;
b) liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-
based payment arrangements of the Company entered into to replace share-based payment arrangements
of the acquiree are measured in accordance with Ind AS 102 at the acquisition date (see below); and
c) assets (or disposal groups) that are classified as held for sale in accordance with Ind AS 105 are measured in
accordance with that Standard.
1.11 Investments in Subsidiaries and Associates
Investments 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. Where the carrying amount of an
investment is greater than its estimated recoverable amount, it is written down immediately to its recoverable
amount and the difference is transferred to the Statement of Profit and Loss. On disposal of investment, the
difference between the net disposal proceeds and the carrying amount is charged or credited to the Statement of
Profit and Loss.
1.12 Leases
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116.
Identification of a lease requires significant judgement. 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. The
determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement
at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is
dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets,
even if that right is not explicitly specified in an arrangement.
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: (i) the contract involves the use of an identified asset (ii) the Company has
substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the
Company has the right to direct the use of the asset. The Company uses significant judgement in assessing the
lease term (including anticipated renewals) and the applicable discount rate. The determination of whether an
arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease.
The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific
asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly
specified in an arrangement.
At the date of commencement of the lease, the Company recognises 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 recognises the lease payments as an operating expense on a straight-line basis over the term of the
lease unless another systematic basis is more representative of the time pattern in which economic benefits from
the leased assets are consumed.
The right-of-use assets are initially recognised 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 lease term and useful life of the underlying asset. The lease liability is initially measured at amortised
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 these leases. Lease liabilities are remeasured 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 have been separately presented in the Balance Sheet and lease payments have been
classified as financing cash flows. The lease liability is subsequently measured by increasing the carrying amount
to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount
to reflect the lease payments made.
1.13 Employee benefits
Employee benefits include provident fund, superannuation fund, employee state insurance scheme, gratuity fund
and compensated absences.
Defined Contribution Plans:
The Company's contribution to provident fund, superannuation fund and employee state insurance scheme are
considered as defined contribution plans and are charged as an expense to the statement of profit and loss based
on the amount of contribution required to be made and when services are rendered by the employees.
Defined Benefit Plans:
For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit
method, with actuarial valuations being carried out at the end of each annual reporting period. Re-measurement,
comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return
on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit
recognised in other comprehensive income in the period in which they occur. Re-measurement recognised in
other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit and
loss. Past service cost is recognised in statement of profit and loss when the plan amendment or curtailment
occurs. Gains or losses on settlement of a defined benefit plan are recognised when the settlement occurs. Net
interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit
liability or asset. Defined benefit costs are categorised as follows:
Ý service cost (including current service cost, past service cost, as well as gains and losses on curtailments and
settlements);
Ý net interest expense or income; and
Ý re-measurement
The Company presents the first two components of defined benefit costs in the statement of profit and loss in
the line item "Employee benefits expense."
Compensated Absences:
The employees of the Company are entitled to compensate absences. The employees can carry-forward a portion
of the unutilised accrued compensated absence and utilise it in future periods or receive cash compensation at
retirement or termination of employment for the unutilized accrued compensated absence. The Company
records an obligation for compensated absences in the period in which the employee renders the services that
increase this entitlement. The Company measures the expected cost of compensated absence based on actuarial
valuation made by an independent actuary as at the balance sheet date on projected unit credit method.
Compensated absences classified as noncurrent are those which are not expected to occur within twelve months
after the end of the period in which the employee renders the related service and are recognised based on
actuarial valuation.
Short-term employee benefits:
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services
rendered by employees are recognised during the year when the employees render the service. These benefits
include performance incentive and compensated absences which are expected to occur within twelve months
after the end of the period in which the employee renders the related service.
2.3 In the opinion of the Board of Directors of the company the value on realization of Current Assets, Loans and
Advances in the ordinary course of business will not be less than the amount at which they have been stated in the
Balance Sheet as on March 31, 2025.
2.4 Letters have been issued to parties for confirmation of balances with the request to confirm or send comment by
the stipulated date failing which balance as indicated in the letter would be taken as confirmed.
2.5 The Company has during the year sent out letters seeking confirmations from its suppliers whether they fall
under the category of micro, small and medium enterprises as mentioned under the Micro, Small and Medium
Enterprises Development Act, 2006. Based on the information available with the Company, the Company believes
that it does not have any outstanding dues to micro, small and medium enterprises. Further, the Company has not
paid any interest to the micro, small and medium enterprises.
2.6 The previous period figures have been regrouped / re-classified, wherever necessary to conform to the current
period presentation.
2.7 These financial statements were approved by the Company's Board of Directors on May 30, 2025.
2.8 Audit trial
In compliance with the requirements of the Companies Act, 2013 (as amended) and applicable MCA notifications
regarding audit trail functionality in accounting software effective from 1st April 2023, the Company has ensured
that the accounting software used (Zoho Books) maintains a proper audit trail.
During the year Zoho books were implemented in place of Microsoft Dynamics as the ERP system and all
transactions recorded in the system after the date of implementation carry complete audit trail logs, including
details of creation, modification, user credentials, and time stamps. For transactions pertaining to prior periods,
which were migrated/uploaded into Zoho Books during the current year, the system reflects the date of upload
as the entry date in the audit trail log. Therefore, while the accounting records reflect the original transaction
dates, the audit trail for such migrated data corresponds to the migration date. The ERP maintains a log of all
transactions, including creation, alteration, and deletion of accounting entries, time stamp of each transaction,
user ID / credentials of the person initiating changes, version history of modifications, if any. Therefore, while the
accounting records reflect the original transaction dates, the audit trail for such migrated data corresponds to the
migration date. The ERP maintains a log of all transactions, including creation, alteration, and deletion of
accounting entries, time stamp of each transaction, user ID / credentials of the person initiating changes, version
history of modifications, if any.
The audit trail is enabled by default in Zoho Books and cannot be disabled. This ensures compliance with
statutory requirements that audit trail functionality remains active throughout the year. The Company confirms
that no accounting entry or audit trail logs have been tampered with or disabled during the financial year, the
audit trail records are preserved as part of the books of account in electronic for and the access controls and user
rights are maintained to ensure accountability and prevent unauthorized modifications.
2.9 Dividend
The interim dividend is recorded as liability on the date of declaration by the Company's Board of Directors. The
company has paid the dividend after deducting applicable withholding income taxes. The company has paid
dividend of Rs. 0.05 per equity share for the year ended 31st March 2024 and the Company has incurred a net
cash outflow of Rs. 66.28 lakhs. During the current year ended 31st March 2025 the Company has not declared
any dividend.
2.10 Recent Pronouncements
The Code on Social Security, 2020
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 Labor 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.
2.11 Other Statutory Information
I. The Company does not have any Benami property, where any proceeding has been initiated or pending
against the Company for holding any Benami property.
II. The Company does not have any transactions with companies struck off.
III. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
IV. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
V. 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
VI. 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.
VII. The Company does 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.
VIII. The Company has not been declared a willful defaulter by any bank or financial institution or government or
any government authority.
2.12 Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006:
Dues to Micro, Small and Medium Enterprises have been determined to the extent such parties have been
identified on the basis of information collected by the Management. The amount of dues payable to micro, small
and medium enterprises are as follows:
2.13 Corporate Social Responsibility (CSR) Activities
As per Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) committee has been formed
by the Company and the amount that needs to be spent by the Company for the year is 2% of average net profits for
previous three financial years, calculated as per Section 198 of the Companies Act, 2013. The areas for CSR activities
are education & health. All these activities are covered under Schedule VII to the Companies Act, 2013. The details of
amount spent are:
2.13 Financial risk management objectives and policies Financial Risk Management Framework
The Board of Directors is responsible for developing and monitoring the Company's risk management policies.
The Company's principal financial liabilities comprise of borrowings, trade payables and other financial liabilities.
The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal
financial assets include loans, trade receivables and cash and bank balances that the Company derives directly
from its operations.
The Company is exposed primarily to credit risk, liquidity risk and market 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. Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of
deterioration of creditworthiness as well as concentration of risks. Credit risk arises primarily from financial assets
such as trade receivables, balances with banks and loan and other receivables.
Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to
whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are
subject to concentrations of credit risk principally consist of trade receivables, cash and bank balances and loans.
None of the financial instruments of the Company result in material concentration of credit risk.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to
credit risk was Rs. 14,150.84 lakhs and Rs. 12,947.44 as of 31 March 2025 and 31 March 2024 respectively, being
the total of the carrying amount of financial assets.
Financial assets that are neither past due nor impaired
None of the Company's cash equivalents, loans and other financial assets were either past due or impaired as of
31st March 2025 and 31st March 2024. The Company has diversified its portfolio of investment in cash and cash
equivalents and term deposits with various banks which have secure credit ratings, hence the risk is reduced.
B. Liquidity Risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity
risk management is to maintain sufficient liquidity and ensure that funds are available for use as per
requirements. The Company manages liquidity risk by maintaining cash and cash equivalents and the cash flows
generated from operations.
C. Market Risk:
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect
the Company's income. Market risk is attributable to all market risk sensitive financial instruments including
foreign currency receivables and payables and long-term debt. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while optimizing the return.
a) Foreign exchange risk:
Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign
exchange rates. The majority of Company's revenue is generated in US dollars, as a result, as the rupee
appreciates or depreciates against foreign currencies, the results of the entity's operations are impacted.
ii) Interest rate risk
The group is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The
risk is managed by the group by maintaining an appropriate mix between fixed and floating rate borrowers.
D. Capital risk management:
Capital includes equity capital and all other reserves attributable to the equity holders of the parent. The primary
objective of capital management is to ensure that it maintain an efficient capital structure and healthy capital
ratios in order to support its business and maximize shareholder's value. The Company manages its capital
structure and make adjustments to it, in light of changes in economic conditions or its business requirements. To
maintain or adjust the capital structure, company may adjust the dividend payment to shareholders return capital
to shareholders or issue new shares.
The Company monitors capital using a debt to capital employed ratio which is debt divided by total capital plus
debt. The Company's policy is to keep this ratio at an optimal level to ensure that the debt related covenants are
complied with.
The accompanying notes form an integral part of the Standalone financial statements. As per our report of even date
attached.
For C. Ramachandram & Co For and on behalf of the Board of Directors
Chartered Accountants XTGlobal Infotech Limited
Firm's Registration No.: 002864S
Sd/- Sd/- Sd/-
N Madhusudan Reddy Mullapudi Atchuta Ramarao Vuppuluri Sreedevi
Partner Managing Director Whole-time Director
Membership Number: 241624 DIN:02302179 DIN:02448540
Sd/- Sd/-
Kusuluri Raghuram Sridhar Pentela
Chief Financial Officer Company Secretary
Hyderabad, India Hyderabad, India
Date: May 30, 2025 Date: May 30, 2025
|