(i) The Company had earlier given an unsecured loan of USD 38 Million during the Financial Year 2002 to 2008 to Xchanging Solutions USA Inc, wholly owned subsidiary of the Company which was fully provided as at March 31,2023. On June 21, 2023 and December 22, 2023, the Company has received Usd 23 Million (INR 18,315) and USD 15 Million (INR 12,650) respectively as repayment of this loan. Accordingly, the amount of INR 30,965 is recognized as other income and disclosed as exceptional items during the current financial year. The tax expenses of INR 3,443 on account of exchange gain on repatriation of loans are included in the current tax expenses during the current financial year.

(ii) During the current financial year the Compnay has received Rs. 1,618 due from fellow subsidiaries.

b) Terms/ rights attached to equity shares

The Company has only one class of shares referred to as equity shares having a par value of Rs.10 each. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Note:

(i) The Board of Directors of the Company had considered and recommended Interim dividend of INR 15 per equity share (face value of INR 10 each) amounting to INR 16,711 for the financial year ending March 31,2024 at their meeting held on July 10, 2023 and the same was approved by the shareholders at their annual general meeting held on August 25, 2023. Also the Board of Directors of the Company at their meeting held on February 13, 2024, has approved second interim dividend of INR 15 per equity share (face value of INR 10 each) amounting to INR 16,711 for the financial year ending March 31,2024. These dividends have been paid during the year.

(ii) The Board of Directors of the Company has considered and recommended final dividend of INR 4 per equity share (including special dividend of INR 2 per equity share) (face value of INR 10 each) amounting to INR 4,456 for the financial year ended March 31, 2024 at their meeting held on May 23, 2024. The recommended final dividend (including special dividend) on equity shares is subject to approval at the ensuing annual general meeting.

Note: The Code on Social Security, 2020 (“Code”) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

(i) On the basis of confirmation obtained from suppliers who have registered themselves under the Micro, Small Medium Enterprise Development Act, 2006 (MSMED Act, 2006) and based on the information available with the Company, the following are the details:

(a) Principal amount remaining unpaid* - -

(b) Interest due thereon remaining unpaid - -

(c) Interest paid by the Company in terms of Section 16 of the Micro, Small and - -

Medium Enterprises Development Act, 2006, along-with the amount of the

payment made to the supplier beyond the appointed day during the period

(d) Interest due and payable for the period of delay in making payment (which - -

have been paid but beyond the appointed day during the period) but without

adding interest specified under the Micro, Small and Medium Enterprises Act, 2006

(e) Interest accrued and remaining unpaid - -

(f) Interest remaining due and payable even in the succeeding years, until such - -

date when the interest dues as above are actually paid to the small enterprises

(i) The Company has paid the first interim dividend for FY 2023-24 of INR 15 per share on September 1,2023 through online mode. Further, the Company issued demand drafts to the shareholders whose bank details were not updated with their depository participants or Company’s Registrar and Transfer Agent. The Company has sent the demand drafts to the shareholder via registered post. After expiry of 90 days of issuing of such demand drafts, the amount of demand drafts was credited to the unpaid and unclaimed first interim dividend account for the financial year 2023-24. As per section 124 and 125 of the Companies Act, 2013, unpaid or unclaimed dividend shall be transferred to the Investor Education and Protection Fund after expiry of seven years from the date of transfer of dividend amount to the unpaid dividend account of the Company.

(i) The Company has received an interim dividend from Xchanging Solutions (Singapore) Pte Limited, wholly owned subsidiary of the Company, amounting to INR 6,868 (SGD 11 Million) on December 15, 2023. According to the provisions of section 80M of Income tax Act, 1961 the Company can claim the dividend paid as deduction against the dividend income for the year in the income tax return. Hence, the Company is not liable to pay income tax on this dividend income.

31 EMPLOYEE BENEFITS EXPENSE

(Refer note 2.6)

(a) Defined Contribution Plans

Provident Fund and Other Funds: .During the year, the Company has recognised Rs. 85 (2023: Rs. 88) in the Statement of Profit and Loss relating to provident fund and other funds, which is included in the ‘Contribution to provident and other funds’.

(b) Defined Benefit Plan

Gratuity (funded):.The Company provides for gratuity, a defined benefit plan (the “gratuity plan”) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The gratuity plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee’s last drawn salary and years of employment with the Company.

The Company is exposed to various risks in providing the above gratuity benefit which are as follows:

Interest risk: A decrease in the bond interest rate will increase the plan liability.

Investment risk : The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

The following tables summarise the components of expense recognised in the Statement of Profit and Loss and amounts recognised in the Balance Sheet for the gratuity plan:

ix) Sensitivity analysis

Significant actuarial assumptions for the determination of the defined obligation are discount rate and expected salary increase. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The following table summarizes the impact on defined benefit obligation arising due to increase / decrease in key actuarial assumptions by 50 basis points:

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

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

32 FINANCIAL INSTRUMENTS32.1 Capital management

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.

The capital structure of the Company consists of net debt and total equity of the Company.

The Company is not subject to any externally imposed capital requirements.The Company is fully funded by equity.

32.3 Financial risk management

The Company is exposed to foreign currency risk, liquidity risk, credit risk and interest risk which may impact the fair value of its financial instruments. The Company has a risk management policy to manage & mitigate these risks.

The Company’s risk management policy aims to reduce volatility in financial statements while maintaining balance between providing predictability in the Company’s business plan along with reasonable participation in market movement.

32.4 Market Risk

The Company’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (see note 32.5).

32.5 Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise.

32.5.1 Foreign currency sensitivity analysis

The Company is mainly exposed to USD.

The following table details the Company’s sensitivity to a 10% increase and decrease in the Rs. against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Company where the denomination of the loan is in a currency other than the functional currency of the lender or the borrower. A positive number below indicates an increase in profit or equity where the Rs. strengthens 10% against the relevant currency. For a 10% weakening of the Rs. against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year. This is mainly attributable to the exposure outstanding on USD receivable and payable in the Company at end of the reporting period.

32.6 Interest rate risk management

The Company is exposed to interest rate risk because the Company lend/ borrow funds at fixed interest rates. There is no exposure to market rate fluctuations.

The Companies exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

32.7 Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Company uses other publicly available financial information and its own trading records to rate its major customers. The Company’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties.

Trade receivables consist various customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivables.

The Company does not have significant credit risk exposure to any single counterparty.

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

32.8 Liquidity risk management

The Company manages liquidity risk by maintaining adequate reserves and banking facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

32.8.1 Liquidity and interest risk tables

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can be required to pay. The tables include both interest and principal cash flows.

32.9 Fair value measurements Fair value hierarchy

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

There are no financial assets and liabilities measured at fair value as at March 31,2024 and March 31,2023 There have been no transfers between Level 1 and Level 2 during the year ended March 31,2024 and March 31,2023

Valuation Methodologies

Fair value of financial assets and financial liabilities that are not measured at fair value

The management assessed that fair value of cash and cash equivalents, trade receivables, trade payables, other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

34 LEASES

(Refer note 2.4)

The Company has operating lease arrangements for its office premises. The lease arrangements for premises have been entered up to a maximum of five years from the respective dates of inception. Some of these lease arrangements have price escalation clauses.

(a) Capital Commitments

Estimated value of contracts in capital account remaining to be executed - -

(net of advances)

(b) Other Commitments

(i) As at March 31, 2024, Xchanging Solutions (USA) Inc, USA, Company’s wholly owned subsidiary, has negative net assets amounting to Rs. 8,423 (2023: Rs. 10,463). While the subsidiary is confident of generating funds from their operations, the Company intends to support the shortfall, if any.

Notes:

(a) Represents various income tax demands under appeal.

(b) The Company had received a Show Cause Notice (‘SCN’) from the Commissioner of Service Tax, Bangalore in October 2012 proposing a demand of service tax of Rs. 2,359 on import of certain services made by company during the FYs 200708 to 2011-12. In March 2013, a suitable reply to above SCN was filed by company stating the legal grounds in defence of the matter. In November 2020, the adjudicating authority i.e. the Principal Commissioner of Service Tax, Noida passed the Order In Original (‘OIO’) confirming the demand of service tax proposed in the SCN along with penalty of Rs. 2,359 and applicable interest. The company has filed an appeal before CESTAT in Allahabad against above OIO in April, 2021 after paying a pre-deposit amount of Rs. 177. Also refer note 11.

(c) The Company has received a Show Cause Notice (‘SCN’) from the GST authority, Chennai in December 2023 proposing a demand of GST of Rs. 14.37 on account of disallowance of Input Tax Credit availed by company during the FY 2018-19. In April 2024 the GST authority passed the order confirming the demand of GST along with penalty of Rs. 1.44 and applicable interest of Rs 14.39. The company is reviewing the demand order and will file an appeal before appellate authority against said order in due course.

(d) The above contingent liabilities are possible obligation or present obligation that may (but probably will not) require an outflow of resources.

(e) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.

(f) The Company does not expect any reimbursements in respect of the above contingent liabilities.

38 The Company has strategic gross investment amounting to Rs. 11,224 (2023: Rs. 11,224) in Xchanging Solutions (USA) Inc, USA (“XSUI”), its wholly owned subsidiary. Based on assessment of value in use from continuing operations, the Company has made a provision of Rs. 6,045 (2023: Rs. 6,045) in prior years considering it to be “a decline other than temporary”. The Company has tested the investments for impairment as at year end using cash flow projections based on financial forecast approved by the management covering a five-year period. The Company considers Xchanging Solutions (USA) Inc as a strategic long term investment and based on future growth projections, in the opinion of the management, the remaining value of the investments is not required to be impaired. The company also has receivables (net of payables) from the subsidiary amounting to Rs. 65 (2023: Rs. 128), based on the evaluation of recoverability, the net receivables is considered good and recoverable.

39 TRANSFER PRICING

The Company has carried out international transactions with associated enterprises. The Company appoints independent consultants to conduct a Transfer Pricing Study to determine whether the transactions with associated enterprises undertaken during the period are on an “arms length basis”. For the current year, the transfer pricing study shall be completed within the permissible time under the legislation and adjustments, if any, arising from the transfer pricing study shall be accounted for as and when the study is completed. However, the Management is confident that its international transactions with associated enterprises are at arm’s length so that the aforesaid legislation/transactions will not have any material impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation for the current year.

41 As per the MCA notification dated August 5, 2022, the Central Government has notified the Companies (Accounts) Fourth Amendment Rules, 2022. As per the amended rules, the Companies are required to maintain daily back-up of the books of account and other relevant books and papers on servers physically located in India on a daily basis. The books of account along with other relevant records and papers of the Company are maintained in electronic mode. These are readily accessible in India at all times and currently a backup is maintained on a daily basis on servers physically located in India.

42 Proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company w.e.f. April 1,2023.

The company has used accounting softwares for maintaining its books of account for the year ended March 31,2024 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that in respect of accounting software operated by third party service provider for maintaining payroll records, independent auditor’s service organisation report did not cover the audit trail requirements. However, Independent auditor’s service organisation report included a clean opinion for design, implementation and operating effectiveness of the adequate controls for the purpose of internal financial controls with reference to the financial statements.

Additionally, there were no instances of audit trail feature being tampered with in respect of the accounting software for which the audit trail feature was operating.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1,2023, reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statutory requirements for record retention is not applicable for the year ended March 31,2024.

43 APPROVAL OF FINANCIAL STATEMENTS

The financial statements of the Company have been reviewed and recommended by the Audit Committee to the Board, and approved by the Board of Directors at its meeting held on May 23, 2024.

44 OTHER STATUTORY DISCLOSURES

44.1 As per section 248 of the Companies Act, 2013, there are no balances outstanding with struck off companies.

44.2 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, whether recorded in writing or otherwise, 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.

45 PREVIOUS YEAR FIGURES

The financial statements have been prepared in accordance with the amended Schedule III and accordingly previous year’s numbers have been regrouped/reclasses (as necessary) and incremental disclosures have been made to compare with current year disclosures.