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நிறுவன பெயரின் முதல் சில எழுத்துக்களை நிரப்பி 'கோ' பட்டனை கிளிக் செய்யவும்

Megasoft Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2023

Note: The company has filed a Writ Petition before the Hon''ble High Court of Telangana challenging notifications relating to taxation of Joint Development transactions under which the GST authorities issued summons, detained the Company''s senior management personnel and initiated debit freeze in bank accounts of the company without any written notice or claim for their demand. The company paid Rs 5 crores under protest. The management strongly believes that there is no GST liability on the said transaction and that there is merit in its court case/ WP and is hopeful of a positive outcome. The matter is sub-judice.

c) (i) Rights and Preferences attached to equity shares

Every shareholder is entitled to such rights as to attend and vote at the meeting of the shareholders, to receive dividends distributed and also has a right in the residual interest of the assets of the Company. Every shareholder is also entitled to right of inspection of documents as provided in the Companies Act, 2013.

(ii) There are no restrictions attached to equity shares.

e) During the period of five years immediately preceding the reporting date including the current year, there were no shares issued for consideration other than cash, no issue of bonus shares and no shares bought back.

30. Additional Regulatory Requirement

a) There are no Immovable properties whose title deeds are not held in the name of the company

b) The company does not have investment property

c) The company has not revalued its Property, Plant and Equipment (including Right of Use Assets or Intangible assets)

d) The company has not granted any loans or advances in the nature of loans to promoters, Directors, KMPs and related parties (as defined under Companies Act, 2013), either severally or jointly with any other person, either repayable on demand or without specifying any terms or period of repayment.

e) The Company does not have any Capital-Work-in Progress (CWIP).

f) The Company does not have any Intangible Assets under Development..

g) There have been no proceedings initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder

h) In respect of borrowings from a bank on the basis of security of current assets, the periodic returns / statements of current assets filed by the Company with the bank are in agreement with the books of accounts. The Company does not have any borrowings from financial institutions on the basis of security of current assets.

i) The Company has not been declared as wilful defaulter by any bank or financial institution or other lender.

j) The company had no transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956.

k) There are no charges or satisfactions yet to be registered with the Registrar of Companies beyond the statutory period.

l) The company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

n) Utilization of Borrowed Funds and Share Premium

No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity (ies),including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

o) Undisclosed Income

No tax assessments under the Income Tax Act, 1961 (43 of 1961) have been received during the year and hence, there have been no transactions not recorded in the books of account which have been surrendered or disclosed as income during the year. There has also not been any previously unrecorded income or related assets.

p) The Company is not covered under the provisions of Section 135 of the Companies Act, 2013.

32. Commitments & Contingencies

(i) Bank guarantees 117.85 162.50

(ii) Income Tax

(a) The Company has appealed against the Assessment order for a demand of ^ 250.92 lakhs for the Assessment years 201213 and for the assessment year 2013-14.

(b) Tax deducted at Source amounting to ^ 8.60 lakhs for assessment years 2014-15 to 2017-18 is pending for resolution at the TDS circle.

35. Employee benefits:

Gratuity Plan (defined benefit plan): Every employee is entitled to the benefit equivalent to 15 days of total basic salary last drawn for each completed year of service. Gratuity is payable to all eligible employees of the Company on retirement or separation or death or permanent disablement in terms of the provisions of the Payment of Gratuity Act, 1972.

Based on actuarial valuation necessary provisions have been created in the books to meet the liability as per IndAS 19 - Employee Benefits. Following table presents the disclosure requirements in respect of employee benefit pursuant to IndAS 19 - Employee Benefits:

The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in the assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognized in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

36. Leases

Information on leases as per Indian Accounting Standards (Ind As) 116 on ''Leases''

(a) Lease Income

Company as a Lessor

Other Income includes ^ 3634.67 lakhs pertaining to Lease rentals received by the Company arising out of capitalization of a Property that had been given on Joint Development by the Company.

(a) Lease Expense

Company as a Lessee

(i)Future minimum lease payments* (iii)Impact of adoption of Ind AS 116

Effective 1st April 2019, the company has adopted Ind AS 116 "Leases " and applied the standard to all lease contracts existing on 1st April 2019 according to the provisions of standard.

On the transition date, the application of new accounting standard resulted in recognition of "Right of use asset" and corresponding "Lease Liability" to the extent of ^ 214.82 Lakhs.

b) Fair Value Hierarchy:

The Company has estimated all its financial assets and liabilities under Level 3 prescribed under the Indian Accounting Standards.

c) Valuation Techniques:

The discount rates considered is the borrowing rate charged by the lead lender of the Company after giving effect to the applicable tax rate. The carrying amount of current financial assets and liabilities are considered to be the same as their fair values due to their short-term nature. For financial assets and liabilities that are measured at fair value, the carrying amount is equal to their fair values.

39. Capital Management:

The Company monitors capital on the basis of total equity on periodic basis. Equity comprises of all components of equity including fair value impact and debt includes both long-term and short-term loans.

Deferred Tax asset as at 31st March,2023 and 31st March 2022 is recognized to the extent of Deferred tax liability arising out of temporary differences between accounting as per books and accounting as per IT Act,1961

b) Reconciliation of Tax expense and the accounting profit multiplied by the tax rate:

The Company is exposed to credit risk, which is the risk that counter party will default on its contractual obligation resulting in a financial loss to the Company. Credit risk arises from cash and cash equivalents, financial assets carried at amortized cost and deposits

with banks and financial institutions, as well as credit exposures to trade customers including outstanding receivables.

(i)Credit risk management

Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.

Trade Receivable

The Company closely monitors the credit-worthiness of the debtors and only sells goods to credit-worthy parties. The Company''s internal systems are configured to define credit limits of customers, thereby limiting the credit risk to pre-calculated amounts.

b.Liquidity risk:

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions.

The Company''s objective in relation to its existing operating business is to maintain sufficient funding to operate at an optimal level.

Market risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of volatility of prices in the financial markets. Market risk can be further segregated as:

i) Foreign currency risk:

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has exposure foreign currency risk in case of Trade and other payables.

ii) Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During March 31, 2022 the Company''s borrowings at variable rate were mainly denominated in Rupees. The Company''s fixed rate borrowings are carried at amortized cost. They are therefore not subject to interest rate risk as defined in Ind AS -107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

42. Previous Years Figures have been regrouped/reclassified wherever necessary to confirm to current years classification.


Mar 31, 2018

Note 1: Company information and Significant accounting policies

A Background

Megasoft Limited, a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956, on 29 June 1999 has its registered office in Chennai. The company''s shares are listed on BSE and NSE, in India. The company is a unique trans-nation company with customers, employees and operations across multiple continents and combines the best global practices with a focus on the global telecommunication domain.

B Basis of Preparation

These Financial Statements have been prepared on accrual basis of accounting in accordance with Indian Accounting Standards (IND AS) as per the Companies (Indian Accounting Standards) Rule, 2015 notified under Section 133 of Companies Act, 2013, (the ''Act'') and other relevant provisions of the Act. These are the Company''s first Financial Statements under Indian Accounting Standards (IND AS). The Financial Statements upto year ended 31st March 2017 were prepared in accordance with Generally Accepted Accounting principles (GAAP) in India, accounting standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies Act, 2013 collectively referred to as "Indian GAAP". The company followed the provisions of IND AS 101 in preparing its opening IND AS Balance Sheet as on the date of transition viz. 1st April, 2016. Some of the Company''s IND AS accounting policies used in the opening balance sheet are different from the previous GAAP policies applied as at 31st March, 2016 and accordingly adjustments were made to restate the opening balances as per IND AS. The adjustments arose from events and transactions before the date of transition of IND AS were recognised directly to Retained earnings as at 1st April, 2016, as required by IND AS 101.

Disclosures under IND AS are made only in respect of material items and in respect of the items that will be useful to the users of Financial Statements in making economic decisions.

An explanation of how the transition to IND AS has affected the previously reported financial position, financial performance and cash flows is provided in Notes 30 and 31 to the Financial statements.

C Basis of Measurement

The Financial Statements have been prepared in Going concern basis and on an accrual method of accounting. Historical cost is used in preparation of Financial Statements except for the following items which are measured at Fair value:

i) Certain Financial assets and liabilities

ii) Net Defined benefit (Asset)/ Liability

D Functional and Presentation currency

The Financial Statements are presented in Indian Rupees (INR), which is the Company''s functional currency. All financial information presented in INR has been rounded to the nearest Lakhs, except as stated otherwise.

E Use of estimates and management judgement

The preparation of Financial Statements in conformity with the accounting policies requires the management to make estimates and assumption considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the Financial Statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known/materialize.

c) (i) Rights and Preferences attached to equity shares

Every shareholder is entitled to such rights as to attend and vote at the meeting of the shareholders, to receive dividends distributed and also has a right in the residual interest of the assets of the Company. Every shareholder is also entitled to right of inspection of documents as provided in the Companies Act, 2013.

(ii) There are no restrictions attached to equity shares.

Working Capital Loan has been primarily secured by exclusive charge on the current assets and collaterally secured by the Fixed Assets of the Company. The Company has also given its land that is currently under development as collateral security for this loan. The rate of interest on this loan is 3 months MCLR 4.5% and there have been no defaults in repayments during the year.

The company has complied this information based on the current information in its possession. As at the year end, no supplier has intimated the company about its status as a Micro or Small Enterprise or its registration with the appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006.

(ii) Issuance of Stand-by Letter of credit by the company''s bankers in respect of working capital loan taken by the wholly owned subsidiary. The said loan taken by the subsidiary is further secured by way of a corporate guarantee of the company.

(iii) The Company has appealed against the Assessment order for a demand of Rs. 645.88 lakhs for the Assessment years 2012-13 and 2013-14 and 2013-14 to 2016-17 of CIT Appeals, TDS circle and Income Tax Appellate Tribunal.

2. Employee benefits:

Gratuity Plan (defined benefit plan): Every employee is entitled to the benefit equivalent to 15 days of total basic salary last drawn for each completed year of service. Gratuity is payable to all eligible employees of the Company on retirement or separation or death or permanent disablement in terms of the provisions of the Payment of Gratuity Act, 1972.

Based on actuarial valuation necessary provisions have been created in the books to meet the liability as per IndAS 19 - Employee Benefits. Following table presents the disclosure requirements in respect of employee benefit pursuant to IndAS 19 - Employee Benefits:

The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in the assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Furthermore, in presenting the above sensitivity analysis, the present value of the projected benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same method as applied in calculating the projected benefit obligation as recognized in the balance sheet.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

3. Segment Reporting

The company prepares consolidated financial statements, hence as per Accounting Standard 17 on Segment Reporting segment information has not been provided in the standalone financial statements.

4. Note on First time adoption of Ind AS:

i) Measurement of Certain Financial assets at Amortised cost:

Under Previous GAAP, all financial assets have been carried at cost or carrying value. Whereas under Ind AS, they are measured and recognized at Fair value and discounted using the post tax borrowing rate. Accordingly, the total equity as on the transition date has been decreased by NIL and profit for the year ended 31st March, 2017 has increased by Rs. 5.25 Lacs

II) Other Comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in Statement of profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the Statement of Profit or Loss as "Other Comprehensive income" includes remeasurement of Post - employment benefit obligations

iii) Remeasurements of Post employment benefits:

Under Ind AS, the actuarial gains / losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined liability are recognised in other comprehensive income instead of Profit or loss. Under the Previous GAAP, these remeasurements were forming part of the Profit and loss account . As a result of this, the Profit for the year ended 31st March 2017, has been decreased by Rs. 9.01 Lacs

iv) Prior Period items:

Under Ind AS, material prior period errors are corrected retrospectively, by restating the comparative amounts for the prior periods presented in which the error occurred.

v) Other Equity

Other equity including retained earnings as at 1st April, 2017 has been adjusted consequent to the above Ind AS adjustments, wherever necessary.

5. Reconciliation between Previous GAAP and Ind AS:

Ind AS 101 Requires an entity to reconcile equity, total comprehensive income and cash flows under the erstwhile Indian GAAP and the Ind AS for the previous financial years. The previous GAAP figures are based on the audited financial statements of the Company for the year ended 31st March, 2017.

b) Fair Value Hierarchy:

The Company has extimated all its financial assets and liabilities under Level 3 prescribed under the Indian Accounting Standards.

c) Valuation Techniques:

The discount rates considered is the borrowing rate charged by the lead lendor of the Company after giving effect to the applicable tax rate. The carrying amount of current financial assets and liabilities are considered to be the same as their fair values due to their short-term nature. For financial assets and liabilities that are measured at fair value, the carrying amount is equal to their fair values.

6. Capital Management:

The Company monitors capital on the basis of total equity on periodic basis. Equity comprises of all components of equity including fair value impact and debt includes both long-term and short-term loans.

Deferred tax asset as at 31st March, 2018 and 31st March, 2017 is recognized to the extent of Deferred tax liability arising out of temporary differences between accounting as per books and accounting as per Income Tax Act, 1961.

b) Reconciliation of Tax expense and the accounting profit multilplied by the tax rate:

7. Financial Risk Management:

The Company''s business activities expose it to a variety of financial risks, namely liquidity risk, market risks and credit risk.

a) Credit Risk:

The Company is exposed to credit risk, which is the risk that counterparty will default on its contractual obligation resulting in a financial loss to the Company. Credit risk arises from cash and cash equivalents, financial assets carried at amortised cost and deposits with banks and financial institutions, as well as credit exposures to trade customers including outstanding receivables.

Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.

b) Liquidity risk:

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions.

The Company''s objective in relation to its existing operating business is to maintain sufficient funding to operate at an optimal level.

c) Market Risk:

Market risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of volatility of prices in the financial markets. Market risk can be further segregated as:

i) Foreign currency risk:

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has exposure foreign currency risk in case of Trade and other payables.

ii) Interest rate risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During March 31, 2017 and April 01, 2016 the Company''s borrowings at variable rate were mainly denominated in Rupees. The Company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS -107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.


Mar 31, 2017

The company has only one class of shares referred to as equity shares having a par value of Rs.10 each. Each holder of the equity share, as reflected in the records of the company as of the date of the shareholder meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholder meeting.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive any of the remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Equity shareholders holding more than 5 percent of equity shares along with the number of equity shares held at the beginning and at the end of the period is as given below:

The company has not allotted any equity shares by way of bonus shares nor has bought back any equity shares during the period of five years immediately preceding the balance sheet date. The company has not allotted any equity shares without payment being received in cash during the period of five years immediately preceding the balance sheet date.

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be continuous, the Company is in the process of continually updating the documentation for the international transactions entered into with the associated enterprises during the financial year. The management is of the opinion that its international transactions are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

1 Commitments & Contingencies

(i) Estimated amount of contracts pending execution on capital account (net of advances) -

(ii) Bank guarantees 326.50 236.69

(iii) Issuance of Stand-by Letter of credit by the company''s bankers in respect of working capital loan taken by the wholly owne subsidiary. The said loan taken by the subsidiary is further secured by way of a corporate guarantee of the company.

(iv) The Company has appealed against the Assessment order for a demand of Rs. 6.27 crs for the Assessment year 2012-13 and 2013 14 to CIT Appeals and Income Tax Appellate Tribunal.

2. Related party transactions

A. Wholly owned Subsidiary companies

Megasoft Consultants Sdn Bhd, Malaysia XIUS Holding Corp , USA

XIUS Corp, USA (Step down subsidiary of XIUS Holding Corp, USA)

XIUS S DE RL DE CV, formerly Boston Communications Group De Mexico, S.R.L (Step down subsidiary of XIUS Holding Corp, USA)

B. Associates

Entities controlled by Director/s

D Sudhakar Reddy

NMR Property Development Private Limited Sricity Holdings India Private Limited

Sricity Private Limited Sricity Utility Services Private Limited

Suprani Farms Private Limited Sri Dhruva Builders Private Limited

C. Directors & Key Management Personnel

GV Kumar

D Sudhakar Reddy

28. Employee Benefit Plans

(a) Provident Fund:

Both the Employees and the company make monthly contributions to the Provident Fund Plan equal to a specified percentage of covered employee''s salary. The entire contribution in respect of employees is contributed to the Government administered

Employee Provident and Pension Fund.

(b) Defined benefit Plans:

The company offers the following Employee benefit schemes to its Employees

(i) Gratuity (unfunded) - The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment based completed years of service or part there of in excess of six months Vesting occurs on completion of five years of service.

(ii) Post-employment leave encashment (unfunded) - Leave encashment is payable to the employees on separation from the company at retirement, death while in employment or on termination of employment. Employees are not entitled to encash leave while in employment.

3. Segmental Information

The company prepares consolidated financial statements, hence as per Accounting Standard 17 on Segment Reporting, segment information has not been provided in the standalone financial statements.

4. Disclosure on Specified Bank Notes:

During the year the Company had specified bank notes or denomination note as defined in MCA notification G.S.R. 308 E dated March 30, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 08, 2016 to December 30, 2016, the denomination wise SBNs and other notes as per the notification is given below.


Mar 31, 2016

The company has only one class of shares referred to as equity shares having a par value of '' 10 each. Each holder of the equity share, as reflected in the records of the company as of the date of the shareholder meeting, is entitled to one vote in respect of each share held for all matters submitted to vote in the shareholder meeting.

The company declares and pays dividends in Indian rupees.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive any of the remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

The company has not allotted any equity shares by way of bonus shares nor has bought back any equity shares during the period of five years immediately preceding the balance sheet date. The company has not allotted any equity shares without payment being received in cash during the period of five years immediately preceding the balance sheet date.

Employees Stock Option Plans

The company had two stock option plans viz Associates Stock Option Plan 2004 and Employees Stock Option Plan 2007 which provided for the granting of stock options to employees / directors of the company and its subsidiaries (not being promoter directors of the company). The said plans lapsed during the financial year under review in accordance with the terms of the shareholders'' resolutions dated 18.06.2004, 10.05.2005, 22.06.2006 and 08.06.2007.

Vehicles are hypothecated to the Banks / Financial Institutions as security for the amounts borrowed by the company.

The Company has entered into leasing / hire purchase arrangements with banks and financial institutions for the hire / lease of motor vehicles ("the leased asset") for a period not exceeding 60 months. During the lease / hire period, the Company has agreed to hypothecate and create an exclusive charge on the vehicle in favour of the bank / financial institution and repay the principal amount of the loan along with interest thereon by way of installments as agreed upon. The charge / security created in favour of the bank / financial institution shall remain in force until such time all the dues under the agreement are fully discharged.

Pending lease / hire purchase obligations comprising minimum lease / hire payments

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be continuous, the Company is in the process of continually updating the documentation for the international transactions entered into with the associated enterprises during the financial year. The management is of the opinion that its international transactions are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

1 Investment

Investment amounting to Rs. 1238.61 has been adjusted against the Reserve &surplus based on the Legal Opinion.

2. Employee Benefit Plans

(a) Provident Fund:

Both the Employees and the company make monthly contributions to the Provident Fund Plan equal to a specified percentage of covered employee''s salary. The entire contribution in respect of employees is contributed to the Government administered Employee Provident and Pension Fund.

(b) Defined benefit Plans:

The company offers the following Employee benefit schemes to its Employees

(i) Gratuity (unfunded) - The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment based completed years of service or part thereof in excess of six months Vesting occurs on completion of five years of service.

(ii) Post -employment leave encashment (unfunded) - Leave encashment is payable to the employees on separation from the company at retirement, death while in employment or on termination of employment. Employees are not entitled to encash leave while in employment.

3. Quantitative details

The Company is in the business of development and maintenance of computer software. The development and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to furnish the quantitative details and the information required under the Companies Act, 2013

4. Segmental Information

The company prepares consolidated financial statements, hence as per Accounting Standard 17 on Segment Reporting, segment information has not been provided in the standalone financial statements.

5. Previous year comparatives

The financial statements present the results of operations of the company and its subsidiaries for the financial year ended 31 March 2016 (12 months period) and are not directly comparable for the period ended 31 March 2015 (15 months period).


Mar 31, 2015

1. Related party transactions

Wholly owned Subsidiary companies

Megasoft Consultants Sdn Bhd, Malaysia; Megasoft Consultants Pte Ltd, Singapore; XIUS Holding Corp (formerly, Boston Communications Group, Inc.), USA; XIUS Corp (formerly, Cellular Express, Inc.), USA; BCGI Wireless Private Limited.

Enterprise over which Director(s) / KMP have significant influence

NMR Property Development Private Limited, Sri City Private Limited, Suprani Farms Private Limited, Sricity Holdings India Private Limited, Sricity Utility Services Private Limited, Sumedha Estates Private Limited, Haripuram Developers Private Limited, Lamda Developers Private Limited, lota Developers Private Limited, Kappa Developers Private Limited, Gamaa Developers Private Limited, Sri Dhruva Builders Private Limited.

2. Employee benefit plans

(a) Provident Fund

Both the employees and the company make monthly contributions to the Provident Fund Plan equal to a specified percentage of the covered employee's salary. The entire contribution in respect of employees is contributed to the Government administered employee Provident and Pension Fund.

(b) Defined benefit plans

The company offers the following employee benefit schemes to its employees:

(i) Gratuity (unfunded) - The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment based on completed years of service or part thereof in excess of six months. Vesting occurs on completion of five years of service.

(ii) Post-employment leave encashment (unfunded) - Leave encashment is payable to the employees on separation from the company at retirement, death while in employment or on termination of employment. Employees are not entitled to encash leave while in employment.

3. Quantitative details

The Company is in the business of development and maintenance of computer software. The development and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to furnish the quantitative details and the information required under paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956.

4. Segmental Information

The company prepares consolidated financial statements, hence as per Accounting Standard 17 on Segment Reporting, segment information has not been provided in the standalone financial statements.

5.Previous year comparatives

The financial statements have been prepared for the fifteen months period ended 31 March 2015 due to change in accounting year-end from December to March. The comparatives presented are for the year ended 31 December 2013 (12 months) and hence, not comparable to the current fifteen months period ended 31 March 2015. The previous period figures have been regrouped / reclassified, wherever necessary to conform to the current period presentation.


Dec 31, 2012

(1) Corporate Information

Megasoft Limited, a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956, on 29 June 1999 and is having its registered office in Chennai. The company''s shares are listed on Madras Stock Exchange, The National Stock Exchange and The Bombay Stock Exchange, in India. The company is a unique Indo-American trans-national company that combines the best practices of both cultures (Indian and American), creating a high quality and cost effective entity with a focus on the global telecommunications domain.

(2) Related party transactions

Wholly owned Subsidiary companies

Megasoft Consultants Sdn Bhd, Malaysia, Megasoft Consultants Pte Ltd, Singapore, XIUS Holding Corp (f/k/a Boston Communications Group, Inc.), USA, XIUS Corp (f/k/a Cellular Express, Inc.), USA, BCGI Wireless Private Limited.

Associates - Entities controlled by Director/s

S Ravindra Babu HUF

Aries Foundations Private Limited, Innovative Water Solutions Limited, NMR Property Development Private Limited, Sannareddy Holdings Private Limited, SR Heritage Farms Private Limited, SRB Infrastructure Private Limited, Sri City Infrastructure Development Private Limited, Sri City Private Limited, Sri City Property Development Private Limited, Sricity E-World Private Limited, Sricity Holdings India Private Limited, Sricity Projects Private Limited, Sricity Utility Services Private Limited, Suprani Farms Private Limited.

Directors & Key Management Personnel

GV Kumar & D Sudhakar Reddy

(3) Quantitative details

The Company is in the business of development and maintenance of computer software. The development and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to furnish the quantitative details and the information required under paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956.

(4) Segmental Information

In accordance with AS 17 - Segment Reporting, segment information has been given in the consolidated financial statements of Megasoft Group and therefore no separate disclosure on segment information is given in these financial statements.

(5) Corporate Guarantees

The company has given a corporate guarantee for a foreign currency loan of US$ 8.00 million (Previous year - US$ 12.00 million) from Axis Bank, Hong Kong to XIUS Holding Corp (f/k/a Boston Communications Group, Inc.), USA.

(6) Forward contracts

Foreign exchange forward contracts outstanding at the end of the year is Nil (Previous year - USD 1 million approx. Rs. 48 million )

(7)Previous year comparatives

The company has prepared these financial statements as per the format prescribed by Revised Schedule VI to the Companies Act, 1956 (''the schedule'') issued by Ministry of Corporate Affairs. Previous periods'' figures have been recast / restated to conform to the classification required under revised Schedule VI.

(8) Cash flows

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing and investing activities of the company are segregated. Cash flows in foreign currencies are accounted at average monthly exchange rates that approximate the actual rates of exchange prevailing at the dates of the transactions.

(9)Subsidiary companies details

The details of subsidiary companies are given in a separate statement attached to the accounts in terms of the general circular No 2/2011 dated 8 February 2011 of the Ministry of Corporate Affairs.


Dec 31, 2011

(1) Secured loans / borrowings are secured as follows:

(a) For borrowings by the company

(i) The working capital loan facilities from Axis Bank are secured by a first charge on entire current assets and fixed assets (except company's assets acquired under hire purchase scheme), present and future, of the company.

(ii) Vehicles are hypothecated to the Banks / Financial Institutions as security for the amounts borrowed by the Company. Amount repayable within one year is Rs 1,405 (Previous year - Rs 499).

(b) Collaterals for borrowings by the company's wholly owned subsidiary

The foreign currency loan of US$ 12 million from Axis Bank, Hong Kong to XIUS Holding Corp., USA, against the SBLC from Axis Bank, Hyderabad, India, is secured by a pari passu first charge on the assets of XIUS Holding Corp., USA. Amount repayable within one year is US$ 7 million (Previous year - Nil).

(2) Leases / Hire purchase

(a) Leases / Hire purchase - Capital

The Company has entered into leasing / hire purchase arrangements with banks and financial institutions for the hire / lease of motor vehicles ("the leased asset") for a period not exceeding 60 months. During the lease / hire period, the Company has agreed to hypothecate and create an exclusive charge on the vehicle in favour of the bank / financial institution and repay the principal amount of the loan along with interest thereon by way of instalments as agreed upon. The charge / security created in favour of the bank / financial institution shall remain in force until such time all the dues under the agreement are fully discharged.

(3) Loans and advances

(i) The erstwhile VisualSoft had entered into an agreement with Andhra Pradesh Industrial Infrastructure Corporation Limited ("APIIC") to acquire land admeasuring 0.751 acres at Madhapura and 15.61 acres at Nanakramguda, Hyderabad. As per the agreement the erstwhile VisualSoft had paid the required amount towards purchase of the land, stamp duty, other expenditure, etc., and the same has been included under Loans & Advances as capital advance. On satisfaction of certain terms and conditions laid down in the agreement, the deed of conveyance shall be executed in favour of the Company after payment of differential stamp duty, if any. Non-compliance of certain terms and conditions would attract withdrawal of rebate which may increase the cost of land.

(ii) Advance income-tax include MAT credit entitlement.

* The liability towards gratuity is provided on an actuarial basis for the company as a whole. The amount pertaining to directors is not individually ascertainable and is therefore not included above. Above amount does not include remuneration paid by wholly owned subsidiary company to Managing Director of the company aggregaing to Rs 3,913 (Previous year Nil) in terms of section 314 of the companies act, 1956 with due approval of the shareholders at the annual general meeting held on 17 June 2011.

(4) Quantitative details

The Company is in the business of development and maintenance of computer software. The development and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to furnish the quantitative details and the information required under paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act, 1956.

(5) Segmental Information

In accordance with AS 17 - Segment Reporting, segment information has been given in the consolidated financial statements of Megasoft Group and therefore no separate disclosure on segment information is given in these financial statements.

(6) Taxation

Profit for taxation has been made after taking into consideration the appropriate exemptions available for operations till 31 March 2011

(7) Transfer pricing legislation

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961. Since the law requires existence of such information and documentation to be continuous, the Company is in the process of updating the documentation for the international transactions entered into with the associated enterprises during the financial year. The management is of the opinion that its international transactions are at arm's length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation.

(8) Employees Stock Option Plans

The company has two stock option plans that provide for the granting of stock options to employees / directors of the company and its subsid- iaries (not being promoter directors of the company). The objectives of these plans include attracting and retaining the best personnel, providing for additional performance incentives and promoting the success of the company by providing employees the opportunity to acquire equity shares. Remuneration / Compensation Committee administers all these stock options under various plans. The stock option plans are summarised below:

(i) Associates Stock Option Plan 2004

The shareholders of the company in the AGM held on 18 June 2004 approved the Associate Stock Option Plan (ASOP-2004). The ASOP- 2004 provides for issue of 755,000 equity shares of Rs 10 each to the employees including directors at the market price of the shares on the date of grant.

At the AGM held on 22 June 2006, the exercise price of the options to be granted was amended to enable issue of options / shares at such discounts to the Market Price as on the date of the grant of the options subject to the exercise price not being less than the face value of shares.

(ii) Employees Stock Option Plan 2007

The shareholders of the company through a postal ballot process, postal ballot notice dated 26 April 2007, results declared on 8 June 2007, approved an Employees Stock Option Plan (ESOP-2007). The ESOP-2007 provides for issue of 2,700,000 options (underlying equity shares of Rs 10 each) to the employees / Directors of both the company and its subsidiaries, at such discounts to the Market Price as on the date of the grant of the options subject to the exercise price not being less than the face value of equity shares.

(9) Related party transactions

Wholly owned Subsidiary companies Megasoft Consultants Sdn Bhd, Malaysia, Megasoft Consultants Pte Ltd, Singapore, XIUS Holding Corp, (formerly Boston Communications Group, Inc.,), USA, Xius Corp (formerly Cellular Express, Inc.,) USA, BCGI Wireless Private Limited Associates - Entities controlled by Director/s S Ravindra Babu HUF Innovative Water Solutions Limited, NMR Property Develolpment Private Limited, Sannareddy Holdings Private Limited, SR heritage Farms private Limited, SRB Infrastructure Private Limited, Sri City Infrastructure Development private Limited, Sri City Private Limited, Sri City Property Development Private Limited, Sri City E-World Private Limited, Sricity Holdings India Private Limited, Sricity Projects Private Limited, Sricity Utility Services Private Limited, Suparani Farms Private Limited.

(10) Commitments & Contingencies

(Rs 000s)

Contingent liabilities including bank guarantees, letter of credits, etc. 26,813 62,749

(20) Corporate Guarantees

The company has given a corporate guarantee for the foreign currency loan of US$ 12 million from Axis Bank, Hong Kong to XIUS Holding Corp., USA.

(11) Forward contracts

Foreign exchange forward contracts outstanding at the end of the year USD 4 million approx. Rs 193,500 (Previous year - Nil).

(12) Foreign exchange rates

Foreign exchange rates adopted for balance sheet purposes is USD = Rs 53.266 as at 31 December 2011 and USD = Rs 44.7223 as at 31 December 2010. The income and expenses accounts of the overseas subsidiaries have been translated at the annual average rate of USD = Rs 47.0322 and USD = Rs 45.7195 for the financial year 2011 and 2010, respectively. The balance sheet is to be read considering the effect of the significant USD rate variations between the two periods.

(13) Dues to micro, small and medium enterprises

As at 31 December 2011, the company had no outstanding dues to small-scale industrial (SSI) undertakings and Micro and Medium enterprises (Previous year - Nil). The list of SSI undertakings, Micro and Medium enterprises was determined on the basis of information available with the company.

(14) Previous year comparatives

Previous years' figures have been regrouped, reclassified / rearranged wherever necessary to conform to current year's presentation. Current years' figures are without IT Services Division and hence are not comparable.

(15) Cash flows

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular revenue generating, financing and investing activities of the company are segregated. Cash flows in foreign currencies are accounted at average monthly exchange rates that approximate the actual rates of exchange prevailing at the dates of the transactions.

(16) The Ministry of Corporate Affairs ("MCA") vide its circular dated 8 February 2011 has exempted the companies from attaching the financial statements of the company's subsidiaries along with the company's accounts for the financial year ended 31 December 2011.


Dec 31, 2009

5 Divestment of IT Services (BlueAlly) Division (Note No.22 of the annual standalone financial statements)

(a) The company has completed the sale / transfer of the IT Services (BlueAlly) division to an overseas company w.e.f. 1st October 2009, as approved by the members by a postal ballot process.

(b) The Company has formulated a scheme of business restructuring to deal with the divestment of the IT Services Division. Accordingly, as per a Scheme of Arrangement under sections 391 to 394 of the Companies Act 1956 ("the Scheme") between the Company and its equity shareholders approved by the High Court of Judicature at Madras vide its Order dated 30 March 2010 duly filed with the Registrar of Companies on 30 March 2010 (effective date), a separate reserve account titled as Business Reconstruction Reserve ("BRR") has been created by transferring balance standing to the credit of Securities Premium Account and the General Reserve of the Company for adjustment of certain expenses as prescribed therein. Accordingly, Rs 1,250,000 has been transferred to BRR and Rs 1,246,237 has been set-off.

(c) Any reversal of any such set-off at any time later would be adjusted to the same Business Reconstruction Reserve.

6 FCCB (Note No.3(i) of the annual standalone financial statements)

The company issued 8,000 1.5% Foreign Currency Convertible Bonds ("FCCB") of US$ 1,000 each on preferential basis on 16 September 2005 in terms of the approval of the shareholders of the Company at the Extra-ordinary General Meeting held on 26 August 2005 aggregating to US$ 8 million. Post conversion of FCCB aggregating to US$ 6 million into equity shares during earlier year, the balance FCCB aggregating to US$ 2 million payable to the FCCB holders on redemption was negotiated and settled in full by making payment of US$ 1 million during the year.

7 Quantitative details (Note No.12 of the annual standalone financial statements)

The Company is in the business of development and maintenance of computer software. The development and sale of such software cannot be expressed in any generic unit. Hence, it is not possible to furnish the quantitative details and the information required under paragraphs 3,4C and 4D of part II of Schedule VI to the Companies Act, 1956.

8 Dues to micro, small and medium enterprises (Note No.23 of the annual standalone financial statements)

As at 31 December 2009, the company had no outstanding dues to small-scale industrial (SSI) undertakings and Micro and Medium enterprises (Previous year - Nil). The list of SSI undertakings, Micro and Medium enterprises was determined on the basis of information available with the company.

9 Previous year comparatives (Note No.24 of the annual standalone financial statements)

Previous years figures have been regrouped, reclassified / rearranged wherever necessary to conform to current years presentation. Current years figures are without IT Services Division w.e.f. 1 October 2009 and hence are not comparable.

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