Sagarsoft (India) Ltd. இன் கணக்கு குறிப்புகள்

Mar 31, 2025

(a) Represents unsecured loan given to R V Consulting Services Private Limited for financial assistance (enterprise in which relative of a KMP exercise control), bearing an interest rate in the range of 7.50% - 8.50% per annum and repayable within 12 months from the date of disbursement. During the year, the Company has renewed both the loans aggregating to I 1,300 which had fallen due for repayment.

(b) No loans are granted to promoters, directors, KMPs and the related parties (as defined under the Companies Act, 2013) either severally or jointly with any other person, that are either (i) repayable on demand; or (ii) without specifying any terms or period of repayment.

iv. Rights, preferences and restrictions attached to equity shares

The Company has only one class of issued, subscribed and paid up equity shares having a par value of 110 each per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive 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.

vi. Aggregate number of equity shares issued for consideration other than cash:

During the year ended 31 March 2022, the Company has issued 6,32,238 equity shares of 110 each to Mr. Satish Chander Reddy Kalva, against acquisition of 100% stake in ITCATS LLC, USA. The Company has not issued any equity shares pursuant to contract without payment being received in cash or by way of bonus shares or bought back any equity shares during the last five year preceding the balance sheet date, except as mentioned above.

vii. Aggregate number of equity shares issued as bonus and shares bought back during the period of five years immediately preceding the reporting date is "Nil".

Nature and purpose of reserves Securities premium

The amount received in excess of face value of the equity shares is recognised in the securities premium. This reserve will be utilised in accordance with the provisions of Section 52 of the Act.

Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distribution to the shareholders.

Remeasurement of defined benefit plan, net of tax

This amount represents actuarial gains or losses arising from the remeasurement of defined benefit obligations (i.e. gratuity), which are recognized in Other Comprehensive Income (OCI) and not reclassified to profit or loss.

a. Details of secured vehicle loans

In the FY 2024-25, the Company had availed a vehicle loan from a bank, which was fully secured by way of hypothecation of specific vehicle. The loan carried an interest rate of 8.90% per annum and was repayable in 39 equal monthly instalments starting from September 2024.

14. Leases

The Company has lease arrangements for its office premises located in Hyderabad. This leases have original terms for a period of 7 years with multiyear renewal option at the discretion of lessee. The agreements entered into by the Company have rent escalation of 5% p.a. There are no residual value guarantees provided by the third parties.

28. Categories of Financial instruments and their fair values

The carrying amount of all financial assets and financial liabilities appearing in the financial statements are carried at amortised cost and are reasonable approximation of their fair values.

The fair value of the financial assets and financial liabilities are included at an amount at which the instruments could be exchanged in a current transaction between the willing parties, other than in a forced or liquidation sale.

29. 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 comprises of borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other 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 14,072.34 as of 31 March 2025 (31 March 2024: 14,094.39) 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 at 31 March 2025 and 31 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. Loans given to related parties are tested for impairment where there is an indicator. Other financial assets represent security deposits given to lessors and other assets. Credit risk associated with such deposits and other assets is relatively low.

Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each balance sheet date whether a financial asset or a group of financial assets are impaired. Expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix if they past due. The provision matrix takes into account historical credit loss experience and is adjusted for forward-looking information. Based on such data, loss on collection of receivable is not material, hence no additional provision considered.

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 optimising the return.

i. 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:

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 borrowing during the current year and previous year comprised of vehicle loans which carried a fixed rate of interest, which did not expose it to interest rate risk.

30. Capital risk management

Capital includes equity capital and all other reserves attributable to the equity holders of the parent. The primary objective of the capital management is to ensure that it maintain an efficient capital structure and healthy capital ratios in order to support its business and maximise 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.

31. Disclosure pursuant to requirements of Rule 11(e) (i) & (ii) of the Companies (Audit and Auditors) Rules

(i) 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).

(ii) 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.

32. Contingent liabilities and Commitments

There are no contingent liabilities and outstanding commitments as at 31 March 2025 and 31 March 2024.

33. In accordance with Ind AS 108, Operating segments, segment information has been provided in the consolidated financial statements of the Company and no separate disclosure on segment information is given in these standalone financial statements.

(i) All KMP''s excluding S Sreekanth Reddy, are covered by the Company''s Mediclaim insurance policy and are eligible for gratuity along with other employees of the Company. The proportionate premium paid towards this policy and provision made for gratuity pertaining to such KMP''s has been included in the aforementioned disclosures as these are not determined on an individual basis.

(ii) All transactions with these related parties are priced on an arm''s length basis and are to be settled in cash. None of the balances are secured and no guarantees are extended to the related parties.

(ix) The Company expects to contribute INil towards gratuity within one year from the year ended 31 March 2025 and 31 March 2024.

(x) Risk exposures:

Valuation are based on certain assumptions, which are dynamic in nature and may vary over time. As such valuations of the Company is exposed to following risks -

a) Salary escalation: Higher than expected increases in salary will increase the defined benefit obligation.

b) Discount rate: The defined benefit obligation calculated use a discount rate based on government bonds. If bond yield fall, the defined benefit obligation will tend to increase.

c) Mortality rate: If the actual death cases are lower or higher than assumed in the valuation, it can impact the defined benefit obligation.

d) Withdrawals: If the actual withdrawal are higher or lower than the assumed withdrawals or there is a change in withdrawal rates at subsequent valuations, it can impact defined benefit obligation.

36. Additional disclosures

(i) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions Prohibition Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) The Company has not taken borrowings from banks or financial institutions on the basis of security of current assets.

(iii) The Company has not been declared willful defaulter by any bank or financial Institution or other lender.

(iv) No transactions are carried out with companies struck off under section 248 of the Act or section 560 of Companies Act, 1956.

(v) No charges or satisfaction yet to be registered with ROC beyond the statutory period.

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

(vii) No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Act.

(viii) There is no income surrendered or disclosed as

income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.

(ix) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

37. Audit trial

The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

The Company, in respect of financial year commencing on 1 April 2024 has used an accounting software "Tally Prime 4.0 (Edit Log)" for maintaining its books of account for the period 01 April 2024 to 31 March 2025. As the Company had migrated from Tally Prime 2.1" w.e.f. 1 June 2023, the backup of books of accounts for the period 1 April 2023 to 31 May 2023 could not be maintained.

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Mar 31, 2024

h) Provision and contingencies Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

When the Company expects some or all of a provision to be reimbursed, reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the standalone statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingencies

Contingent liabilities are identified and disclosed with respect to following:

• a possible obligation that arises from past events and 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 entity; or

• a present obligation that arises from past events but is not recognised because:

> it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

> the amount of the obligation cannot be measured with sufficient reliability.

• Contingent assets are neither recognized nor disclosed, unless inflow of economic benefits is probable. However, when realization of income is virtually certain, related asset is recognized.

i) Employee benefits Short term benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Defined contribution plans

The Company''s contributions to defined contribution plans are charged to the statement of profit and loss as and when the services are received from the employees.

Defined benefit plans

The liability in respect of defined benefit plans and other post-employment benefits is calculated using the projected unit credit method consistent with the advice of qualified actuaries. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds that have terms to maturity approximating to the terms of the related defined benefit obligation. The current service cost of the defined benefit plan, recognised in the statement of profit and loss in employee benefit expense, reflects the increase in the defined benefit obligation resulting from employee service in the current year, benefit changes, curtailments and settlements. Past service costs are recognised immediately in the statement of profit and loss. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions for defined benefit obligation and plan assets are recognised in OCI in the period in which they arise. The Company recognises gains or losses on the settlement of a defined benefit plan obligation when the settlement occurs.

Compensated absences

The Company operates a long-term leave encashment plan in India. Accrued liability for leave encashment including sick leave is determined on actuarial valuation basis using Projected Unit Credit (PUC) Method at the end of the year and provided completely in profit and loss account as per Ind AS - 19 "Employee Benefits". The Company presents the entire leave as a current liability in the Standalone Balance Sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date.

j) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets

Initial recognition and measurement

All financial assets are recognised initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial asset. However, trade receivables that do not contain a significant financing component are measured at transaction price.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

• Debt instruments at amortised cost

• Debt instruments at fair value through other comprehensive income (FVTOCI)

• Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

• Equity instruments measured at FVTOCI or FVTPL Debt instruments at amortised cost

A ‘debt instrument'' is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model, whose objective is to hold assets for collecting contractual cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the standalone statement of profit and loss. The losses arising from impairment are recognised in the standalone statement of profit and loss.

Debt instrument at FVTOCI

A ‘debt instrument'' is classified as at the FVTOCI if both of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

b) The asset''s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to standalone statement of profit and loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.

Debt instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the standalone statement of profit and loss.

Equity instruments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as at FVTOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to Consolidated statement of profit and loss, even on sale of investment. However, the Company transfers the cumulative gain or loss within equity.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

• Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balances.

The Company follows ‘simplified approach'' for recognition of impairment loss allowance on trade receivables that do not contain a significant financing component.

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:

• All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.

• Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the standalone statement of profit and loss. This amount is reflected under the head ‘other expenses'' in the standalone statement of profit and loss. The standalone balance sheet presentation for various financial instruments is described below:

• Financial assets measured at amortised cost: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the standalone balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the company does not reduce impairment allowance from the gross carrying amount.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings or payables, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company''s financial liabilities include trade and other payables, loans and borrowings including derivative financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the standalone statement of profit and loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ losses are not subsequently transferred to the standalone statement of profit and loss. However, the company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the standalone statement of profit and loss. The company has not designated any financial liability as at fair value through profit and loss.

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the standalone statement of profit and loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the standalone statement of profit and loss.

This category generally applies to borrowings from banks.

Trade and other payables

These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid as per agreed terms. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

De-recognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the standalone statement of profit and loss.

k) Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

l) Cash flow statement

The standalone cash flow statement is prepared in accordance with the Indirect method. Standalone cash flow statement presents the cash flows by operating, financing and investing activities of the Company. Operating cash flows are arrived by adjusting profit or loss before tax for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows.

m) Cash and cash equivalents

Cash and cash equivalent in the standalone balance sheet comprise cash at banks and on hand and shortterm deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the standalone cash flow statement, cash and cash equivalents consist of cash at banks and on hand and deposits, as defined above, net of outstanding loans repayable on demand from banks as they are considered an integral part of the Company''s cash management.

n) Cash dividends to equity holders

Annual dividend distribution to the shareholders is recognised as a liability in the period in which the dividend is approved by the shareholders. Any interim dividend paid is recognised on approval by Board of Directors. Dividend payable on distribution is recognised directly in equity.

o) Investments in subsidiary

The Company has elected to recognize its investments in equity instruments in subsidiary at cost in accordance with the option available in Ind AS 27, ‘Separate Financial Statements''.

2.3 Key accounting estimates, judgements and assumptions

The preparation of the Company''s standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below:

a. Defined benefit plans and other long-term benefit plan

The cost and present value of the defined benefit gratuity plan and leave encashment (other long-term benefit plan) are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality

rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation and other long-term benefits are highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

b. Useful lives of depreciable assets

Management reviews the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets to the Company.

c. Leases

Ind AS 116 requires lessees to determine the lease term as the non-cancellable period of a lease adjusted with any option to extend or terminate the lease, if the use of such option is reasonably certain. The Company makes an assessment on the expected lease term on a lease-by-lease basis and thereby assesses whether it is reasonably certain that any options to extend or terminate the contract will be exercised. In evaluating the lease term, the Company considers factors such as any significant leasehold improvements undertaken over the lease term, costs relating to the termination of the lease and the importance of the underlying asset to Company''s operations taking into account the location of the underlying asset and the availability of suitable alternatives.

d. Expected credit loss on financial assets

On application of Ind AS 109, the impairment provisions of financial assets are based on assumptions about risk of default and expected timing of collection. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Company''s past history of collections, customer''s credit-worthiness, existing market conditions as well as forward looking estimates at the end of the each reporting period.

2.4 Standards and recent pronouncements issued but not yet effective

Ministry of Corporate Affairs (“MCA”) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31 March 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

28. 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 comprises of borrowings, trade and other 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 and other 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 14,094.39 and 13,570.32 as of 31 March 2024 and 31 March 2023 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 at 31 March 2024 and 31 March 2023. 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. Loans given to related parties are tested for impairment where there is an indicator. Other financial assets represent security deposits given to lessors and other assets. Credit risk associated with such deposits and other assets is relatively low.

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Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each balance sheet date whether a financial asset or a group of financial assets are impaired. Expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix and loans if they past due. The provision matrix takes into account historical credit loss experience and is adjusted for forward-looking information. Based on such data, loss on collection of receivable is not material, hence no additional provision considered.

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.

The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:

35. Additional disclosures

(i) No proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.

(ii) The Company has not taken borrowings from banks or financial institutions on the basis of security of current assets.

(iii) The Company has not been declared willful defaulter by any bank or financial Institution or other lender.

(iv) No transactions are carried out with companies struck off under section 248 of the Act or section 560 of Companies Act, 1956.

(v) No charges or satisfaction yet to be registered with ROC beyond the statutory period.

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

(vii) No Scheme of Arrangements has been approved by the Competent Authority in terms of sections 230 to 237 of the Act.

(viii) There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961,

that has not been recorded in the books of account.

(ix) The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.

36. Audit trial

The Ministry of Corporate Affairs (MCA) has prescribed a new requirement for companies under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of account, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

The Company, in respect of financial year commencing on 1 April 2023 has used an accounting software "TallyPrime 2.1" for maintaining its books of account for the period 01 April 2023 to 31 May 2023. The Company has migrated to a new accounting software ‘Tally Prime (Edit log) 4.0'' from 1 June 2023 which maintains the audit trail (edit log).

Note: Reasons for change more than 25% is as under:

(i) Principal reason for change in the debt service coverage ratio is attributed to increase in earnings and decrease in lease liabilities and borrowings during the year ended 31 March 2024.

(ii) Principal reason for change in the return on equity ratio / return on investment ratio / net profit ratio / return on capital employed is attributed to the increase in profits reported during the year ended 31 March 2024 compared to the year ended 31 March 2023.

(iii) Principal reason for change in the trade payables turnover ratio is attributed to increase in trade payable balances during the year ended 31 March 2024 compared to the year ended 31 March 2023.

This is the summary of significant accounting policies and other explanatory information referred to in our report of even date.

For Walker Chandiok & Co LLP

Chartered Accountants For and on behalf of Board of Directors of

Firm''s Registration No: 001076N/N500013 Sagarsoft (India) Limited

Sanjay Kumar Jain M Jagadeesh K Pradeep Kumar Reddy T Sri Sai Manasa

Partner Managing Director Executive Director & CFO Company Secretary

Membership No.: 207660 DIN: 01590689 DIN: 02598624 M.No. A61433

Place: Hyderabad Place: Hyderabad

Date: 10 May, 2024 Date: 10 May, 2024

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Mar 31, 2019

f) Investment details:

100% invested in LIC Group gratuity (cash accumulation policy)

g) Actuarial assumptions

Mortality table (LIC) 2012-14 (ultimate)

Discounting rate - 7.65%

Expected rate of return on plan asset - 8.25%

Rate of escalation in salary - 5%

1. Estimated amount of contracts remaining to be executed on capital account and provided for is Rs.Nil.

2. Contingent Liabilities: Nil (Previous Year: Nil)

3. Segmental Reporting: As the company was engaged only in software development and Consultancy during the year, business segment reporting is not applicable. Geographic revenue is allocated based on the location of the customer:

4. 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.

5. Balances due to or due from the parties are subject to confirmation.

6. Figures of previous year have been regrouped / reclassified wherever necessary to conform to the current year’s presentation / classification.

7. Figures are rounded off to nearest rupee.

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Mar 31, 2018

1. Transition to Ind AS

The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2016 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognized assets and liabilities.

2. As required by Accounting Standard AS 18, the related parties’ disclosure issued by the Institute of Chartered Accountants of India is as follows:

3. The disclosures required under Accounting Standard 15 “Employee Benefits” notified in the Companies (Accounting Standards) Rules 2006, are given below:

a) Reconciliation of opening and closing balance of Defined benefit obligation:

b) Investment details:

100% invested in LIC Group gratuity (cash accumulation policy)

c) Actuarial assumptions

Mortality table (LIC) 2006-08 (ultimate)

Discounting rate - 7.90%

Expected rate of return on plan asset - 8.25%

Rate of escalation in salary - 5%

4. Estimated amount of contracts remaining to be executed on capital account and provided for is Rs.Nil.

5. Contingent Liabilities: Nil (Previous Year: Nil)

6. Segmental Reporting: As the company was engaged only in software development and Consultancy during the year, business segment reporting is not applicable. Geographic revenue is allocated based on the location of the customer:

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.

7. Balances due to or due from the parties are subject to confirmation.

8. Figures of previous year have been regrouped / reclassified wherever necessary to conform to the current year’s presentation / classification.

10. Figures are rounded off to nearest rupee.

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Mar 31, 2012

1. Estimated amount of contracts remaining to be executed on capital account and provided for is Rs.Nil (Previous Year: Nil)

2. Contingent Liabilities: Nil (Previous Year: Nil)

3. Deferred tax asset (Net of deferred tax liability as computed under Accounting Standard - 22) as on 31s1 March 2012 amounted to Rs.1,04,46,294/-.

4. The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006, are given below:

5) Investment details:

100% invested in LIC Group gratuity (cash accumulation policy)

6) Actuarial assumptions

Mortality table (LIC) 1994-96 (ultimate) Discounting rate - 8.7% Expected rate of return on plan asset - 9% Rate of escalation in salary - 5%

7. As the company was engaged only in software development during the year pertaining to a single country, segment wise reporting is not applicable.

8 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.

9. Balances due to or due from the parties are subject to confirmation.

10. Figures of previous year have been regrouped / reclassified wherever necessary to conform to the current year''s presentation / classification.

11. Figures are rounded off to nearest rupee.

a. Terms/rights attached to equity shares

The company has only one class of equity shares having a par value of Rs.10/- per share each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subjected to the approval of the shareholders in the ensuing Annual General Meeting.

a. Vehicle Loan from HDFC Bank was taken during the financial year 2010-11 and carries interest @ 9% pa. The loan is repayable in 36 monthly installments of Rs.9,540/- each along with interest, from the date of loan.

b. Vehicle Loan from HDFC Bank was taken during the financial year 2010-11 and carries interest @ 9% p.a. The loan is repayable in 36 monthly installments of Rs.12,745/- each along with interest, from the date of loan.

c. Vehicle Loan from AXIS Bank was taken during the financial year 2010-11 and carries interest @ 9.91% p.a. The loan is repayable in 36 monthly installments of Rs.47,940/- each along with interest, from the date of loan.

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Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account and provided for is Rs.Nil (Previous Year: Nil)

2. Contingent Liabilities. Nil (Previous Year: Nil)

3. Deferred tax asset (Net of deferred tax liability as computed under Accounting Standard - 22) as on 31st March, 2010 amounted to Rs.2,02,60,122/-.

4. The disclosures required under Accounting Standard 15 "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006, are given below.

5 As the company was engaged only in software development during the year pertaining to a single country, segment wise reporting is not applicable.

6 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.

7. Balances due to or due from the parties are subject to confirmation.

8. Figures of previous year have been regrouped / reclassified wherever necessary to conform to the current years presentation / classification.

9. Figures are rounded off to be nearest rupee

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Mar 31, 2009

1. Estimated amount of contracts remaining to be executed on capital account and provided for is Rs.Nil (Previous Year: Nil)

2. Contingent Liabilities: Nil (Previous Year: Nil)

3. The Company has adopted the Accounting Standard -22 "Accounting for taxes on Income" issued by the Institute of Chartered Accountants of India. Deferred tax asset (Net of deferred tax liability as computed under Accounting Standard - 22) as on 31st March 2009 amounted to Rs.85,55,054/-.

4. As the company was engaged only software development during the year pertaining to a single country, segment wise reporting is not applicable.

5. Balances due to or due from the parties are subject to confirmation.

6. Figures of previous year have been regrouped / reclassified wherever necessary to conform to the current years presentation / classification.

7. Figures are rounded off to be nearest rupee

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Mar 31, 2008

1. Estimated amount of contracts remaining to be executed on capital account and provided for is Rs. Nil (Previous Year: Nil)

2. Contingent Liabilities: Nil (Previous Year: Nil)

3. The Company has adopted the Accounting Standard -22 "Accounting for taxes on Income" issued by the Institute of Chartered Accountants of India. Deferred tax asset (Net of deferred tax liability as computed under Accounting Standard - 22) as on 31st March, 2008 amounted to Rs. 1,12,96,939/-.

4. As the company was engaged only software development during the year pertaining to a single country, segment wise reporting is not applicable.

5. Balances due to or due from the parties are subject to confirmation.

6. Figures of previous year have been regrouped / reclassified wherever necessary to conform to the current years presentation / classification.

7. Figures are rounded off to be nearest rupee

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Mar 31, 2007

1. Estimated amount of contracts remaining to be executed on capital account and provided for is Rs.Nil (Previous Year: Nil)

2. Contingent Liabilities: Nil (Previous Year: Nil)

3. Directors Remuneration:

Particulars 2006-07 2005-06 Rupees Rupees

Remuneration to Whole-time Director 8,30,000 4,40,000 Total 8,30,000 4,40,000

4. The Company has adopted the Accounting Standard -22 Accounting for taxes on Income" issued by the Institute of Chartered Accountants of India. Deferred tax asset (Net of deferred tax liability as computed under Accounting Standard - 22 as on 31st March, 2007 amounted to Rs.1,32,36,502/-.

5. As the company was engaged only software testing during the year 2006-07 pertaining to a single country, segment wise reporting is not applicable.

6. Balances due to or due from the parties are subject to confirmation.

7. Figures are rounded off to the nearest rupee.

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Mar 31, 2003

1. Estimated amount of contracts remaining to be executed on capital account and provided for is Rs.Nil (Previous Year: nil)

2. Contingent Liabilities:

Particulars 2002-03 2001-02 Rupees Rupees

Bank Guarantee 0 148500

Total 0 148500

3. Auditors Remuneration:

Particulars 2002-03 2001-02 Rupees Rupees

For Audit 30,000 30,000

For Tax Audit - 10,000

For Certification - 5,000

Sales Tax Audit - 5,000

TOTAL 30,000 50,000

4. a) Cash Credit from State Bank of Hyderabad is secured by first charge on Current Assets of the company and hypothecation of stocks, book debts and receivables and also personal guarantee by Sri S.Sreekanth Reddy, Managing Director and Smt. S. Rachana.

b) Term Loan from State Bank of Hyderabad is secured by first charge on all fixed assets of the company, present and future.

5. The Company has adopted the Accounting Standard-22 "Accounting for taxes on Income" issued by the Institute of Chartered Accountants of India. Deferred tax asset (Net of deferred tax liability) as computed under Accounting Standard-22 as on 31st March 2003 amounted to Rs.11209153/-.

6. As the company was engaged only in software testing during the year 2002-03, pertaining to a single country, segment wise reporting is not applicable.

7. Balances due to or due from the parties are subject to confirmation.

8. Additional information pursuant to the provisions of Paragraph 3, 4C & 4D of Part II of Schedule of the Companies Act, 1956 (As certified by the Management).

Year ended 31-03-2003 Year ended 31-3-2002 Particulars Quantity Value (Rs.) Quantity Value (Rs.)

a) Turnover NA 3069855 NA 84440815

b) Capacity NA NA NA NA

c) Opening Stock NA Nil NA 5813923

d) Closing Stock NA Nil NA Nil

e) Value of Imports:

i. Capital Goods Nil Nil Nil -

ii. Components and Spare parts Nil Nil Nil -

f) Expenditure in Foreign Currency:

i. On account of Travelling Exp. Nil - - 1813824

ii. On account of salaries Nil - - Nil

iii. On account of capital goods Nil - - Nil

g) Value of Imported and Indigenous

Raw Materials, Spare Parts and Other Materials Nil - - Nil

h) Earnings in Foreign Currencies 3684133 - - 7252772

9. Figures of previous year have been regrouped/reclassified wherever necessary to conform to the current years presentation/classification.

10. Figures are rounded off to the nearest rupee.

For C.Ramachandram & Co., M. Jagadeesh Chartered Accountants Director P.Venugopal S.Krishna Reddy Partner Director Place: Hyderabad Date: 25th June, 2003

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Mar 31, 2002

1. Estimated amount of contracts remaining to be executed on capital account and provided for is Rs. Nil (Previous Year: Nil)

2. Contingent liabilities:

Particulars 2001-02 2000-01 Rupees Rupees

Bank Guarantee 148500.00 45000.00

Total 148500.00 45000.00

3. Directors remuneration:

Particulars 001-02 2000-01 Rupees Rupees

Remuneration to Managing Director 0.00 480000.00

Total 0.00 480000.00

4. Auditors Remuneration:

Particulars 2001-02 2000-01 Rupees Rupees

For Audit 30000.00 30000.00

For Tax Audit 10000.00 10000.00

For Certification 5000.00 5000.00

Sales Tax Audit 5000.00 0.00

Total 50000.00 45000.00

5. a) Cash Credit from State Bank of Hyderabad secured by first charge on Current Assets of the company and hypothecation of stocks, book debts and receivables and also personal guarantee by Sri S. Sreekanth Reddy, Managing Director and Smt. S. Rachana, his wife,

b) Term Loan from State Bank of Hyderabad is secured by first charge on all fixed assets of the company, present and future,

6. Balances due to of due from the parties are subject to confirmation.

7. Sundry Debtors amounting to Rs. 12,83,58,496/- Include Rs. 11,43,57,108/- relating to Export Debtors, which is over due. For this the company is yet to file necessary documents with Reserve Bank of India for seeking extension of time for recovery However, the management is confident about the recovery of the same.

8. As per the provision of the AS - 11 issued by the ICAl, the company has to provide for the Exchange fluctuations, if any, arising out of converting the value of the export debtors in to Indian currency, Non compliance with this Accounting Standard has resulted in the reduction of loss by Rs. 42,84,853/- and the increase in Sundry Debtors by the similar amount. However this will be accounted at the time of realization.

9. During the year under review, due to slowdown in the Software industry the company, as a cost cutting measure vacated Its registered office and software development center and shifted them to a much smaller place, by selling the costly interiors at The old premises. Further the company had disposed of certain Computer hardware, which could not find much use in the prevail ing slowdown, and there was every possibility of their becoming obsolete if retained. These had resulted in aggregate loss of Rs. 4,29,12,805/-.

10. Figures of previous year have been regrouped/reclassified wherever necessary to conform to the current years presentation/classification.

11. Figures are rounded off to the nearest rupee.

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Mar 31, 2001

1. Estimated amount of contracts remaining to be executed on capital account and provided for is Rs. Nil. (Previous Year: Nil)

2. Contingent Liabilities:

2000-01 1999-00 Particulars Rupees Rupees

Bank Guarantee 45,000 Nil

3. a) Cash Credit from State Bank of Hyderabad secured by first charge on Current Assets of the company and hypothecation of stocks, book debts and receivables and also personal guarantee by Sri S. Sreekanth Reddy, Managing Director and Smt. S. Rachana, Director of the Company.

b) Term Loan from State Bank of Hyderabad is secured by first charge on all fixed assets of the company, present and future.

4. Balances due to or due from the parties are subject to confirmation.

5. Figures of previous year have been regrouped/reclassified wherever necessary to conform to the current year's presentation classification.

6. Figures are rounded off to the nearest rupee.

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Mar 31, 2000

1. a) The term loan from Small Industries Development Bank of India is secured by first charge of the Company, both present and future, equipments, computers, furniture and fixtures and all other movables (save and except book debts).

b) Cash Credit from State Bank of Hyderabad is secured by first charge on Current Assets of the Company and hypothecation of stocks, book debts and receivables and also personal guarantee by Shri S. Sreekanth Reddy, Managing Director and Smt. S. Rachana, Director of the Company.

c) Term Loan from State Bank of Hyderabad is secured by first charge on all fixed assets of the company, present and future, other than those charged to Small Industries Development Bank of India.

2. Balances due to or due from the parties are subject to confirmation.

3. Figures of previous year have been regrouped / reclassifled wherever necessary to conform to the current year's presentation / classification.

4. Figures are rounded off to the nearest rupee.

5. As regards to the compliance of provisions relating to the dues to the Small Scale Industries in terms of Companies (Amendment) Act, 1999, the Company has sent letter to the creditors to confirm whether they are SSI Units. The company is yet to receive the confirmation from them. Hence, the company could not Quantify the dues, if any, to the Small Scale Industries.