2.13 Provisions, Contingent Liabilities and Contingent Assets
The Company creates a provision where there is present obligation as a result of a past event that
probably requires an outflow of resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there is a possible or a present
obligation that may, but probably will not require an outflow of resources. When there is a possible
obligation in respect of which the likelihood of outflow of resources is remote, no provision or
disclosure is made. Contingent Assets are disclosed only when an inflow of economic benefit is
probable.
2.14 Cash and Cash Equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The
Company considers all highly liquid investments with a remaining maturity at the date of purchase of
three months or less and that are readily convertible to known amounts of cash to be cash
equivalents.
2.15 Impairment of Assets
i) Non-Financial Assets:
Intangible assets that have an indefinite useful life are tested annually for impairment or more
frequently if events or changes in circumstances indicate that they may be impaired. Other assets are
tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the
year in which an asset is identified as impaired. The impairment loss recognised in prior accounting
period is increased/ reversed where there has been change in the estimate of recoverable value.
The recoverable value is the higher of the assets' net selling price and value in use
ii) Financial Assets (other than a fair value):
The Company recognised loss allowances using the expected credit loss (ECL) model for the financial
assets which are not fair valued through profit and loss. Loss allowance for the trade receivables with
no significant financing component is measured at amount equal to life time ECL. For all other
financial assets, ECLs are measured at an amount equal to the 12 month ECL, unless there has been
significant increase in credit risk from initial recognisation in which case those are measured at
lifetime ECL. The amount of ECLs (or reversal) that is required to adjust the loss allowance at reporting
date to the amount that is required to be recognised is recognised as an impairment gain or loss in
profit and loss.
2.16 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 instruments also include derivative contracts
such as foreign exchange forward contracts.
Financial assets and liabilities are recognised when the Company becomes a party to the contractual
provisions of the instruments.
Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial
assets and financial liabilities at fair value through profit or loss) are added to or deducted from the
fair value measured on initial recognition of financial asset or financial liability. Transaction costs
directly attributable to the acquisition of financial assets or financial liabilities at fair value through
profit or loss are recognised in profit or loss.
Measurement of Fair Value of Financial Instruments
The Company's accounting policies and disclosures require measurement of fair values for the
financial instruments. The Company has an established control framework with respect to
measurement of fair values. The management regularly reviews significant unobservable inputs and
valuation adjustments. If third party information, such as broker quotes or pricing services, is used to
measure fair values, then the management assesses evidence obtained from third parties to support
the conclusion that such valuations meet the requirements of Ind AS, including level in the fair value
hierarchy in which such valuations should be classified. When measuring the fair value of a financial
asset or a financial liability, the Company uses observable market data as far as possible. Fair values
are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
If inputs used to measure fair value of an asset or a liability fall into different levels of fair value
hierarchy, then fair value measurement is categorised in its entirety in the same level of fair value
hierarchy as the lowest level input that is significant to the entire measurement. The Company
recognises transfers between levels of fair value hierarchy at the end of the reporting period during
which the change has occurred.
(a) Financial Assets
(i) Financial Assets At Amortised Cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within
a business whose objective is to hold these assets in order to collect contractual cash flows and
contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
(ii) Financial Assets At Fair Value Through Other Comprehensive Income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling financial assets and the contractual
terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
(iii) Financial Assets At Fair Value Through Profit or Loss (FVTPL)
Financial assets are measured at fair value through profit or loss unless they are measured at
amortised cost or at fair value through other comprehensive income on initial recognition. The
transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value
through profit or loss are immediately recognised in statement of profit and loss.
(iv) Investment in Subsidiaries, Associates and Joint Venture
The Company has accounted for its investments in subsidiaries, associates and joint venture at cost
less impairment loss, if any.
(v) Derecongnition
The Company derecognises a financial asset when the rights to receive cash flows from the asset
have expired or it transfers the right to receive the contractual cash flow on the financial assets in a
transaction in which substantially all the risk and rewards of ownership of the financial asset are
transferred
b) Financial Liabilities
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost.
Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
Financial liabilities are carried at amortized cost using the effective interest method. For trade and
other payables maturing within one year
from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of
these instruments.
Derecognition
The Company derecognizes a financial liability (or a part of a financial liability) from the Company's
Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
C) Equity Instruments
An equity instrument is a contract that evidences residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments recognised by the Company are recognised at the
proceeds received net off direct issue cost.
D) Offsetting of Financial Instruments
Offsetting of financial instruments financial assets and financial liabilities are offset and the net
amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the
recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle
the liabilities simultaneously
2.17 Recent Pronouncement
The Ministry of Corporate Affairs ("MCA") notifies new standards or amendment to the existing
standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the
year ended March 31, 2025, MCA has notified Ind AS - 117 Insurance contracts and amendments to Ind
AS 116 - Leases, relating to sale and leaseback transactions, applicable to the Company w.e.f. April 1,
2024. The Company has reviewed the new pronouncements based on its evaluation has determined
that it does not have any significant impact in its financial statements.
ii) 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. In the event of liquidation of the Company, the
holder of equity shares will be entitled to receive remaining assets of the Company. The distribution
will be in proportion to the number of equity shares held by the shareholders.
(i) Securities Premium
Securities Premium is used to record premium on issuance of shares. The reserve shall be utilised in
accordance with provisions of the Companies Act, 2013.
(ii) Retained Earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general
reserve, dividends or other distributions paid to shareholders.
(iii) Other Comprehensive Income
Other Comprehensive Income refers to items of income and expenses that are not recognised as a part
of the profilt and loss account.
Equity share capital and other equity are considered for the purpose of Company's capital
management. The Company manages its capital so as to safeguard its ability to continue as a
going concern and to optimise returns to shareholders. The capital structure of the Company is
based on management's judgement of its strategic and day-to-day needs with a focus on total
equity so as to maintain investor, creditors and market confidence.
N0te 3i: The Company does not have any Contingent Liabilities and Capital Commitment
N0te 32: Segment Reporting
As the Company operates in only one Segment i.e. of Software Consultancy Services,details regarding
Segment Reportingis not applicable persuant to Ind AS 108.
N0te 33: Financial Instruments
(i)Fair Value measurement
Financial Instrument by categoryand hierarchy.
The fair value of financial assets and liabilities are included at the amount at which the instrument could
be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values:
The carrying amount of trade receivable, trade payable, capital creditors, loans, cash and cash
equivalents and other bank balances as at 31st March, 2025 and 31st March, 2024 are considered to be
the same as their fair values, due to their short term nature. Difference between carrying amounts and
fair values of other financial assets, other financial liabilities and short term borrowings subsequently
measured at amortised cost is not significant in each of the year presented.
Financial Instruments with fixed and variable interest rates are evaluated by the Company based on
parameters such as interest rate and individual credit worthiness of the counterparty. Based on this
evaluation, allowances are taken to account for the expected losses of these receivables.
Fair value hierarchy
The financial instruments are categorized into three levels based on the inputs used to arrive at fair
value measurements as described below:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; and
Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
The Company's business activities expose it to a variety of financial risks, namely market risks, credit
risk and liquidity risk.
The Company's primary focus is to foresee the unpredictability of financial markets and seek to
minimize potential adverse effects on its financial performance.
The Company's financial liabilities comprise of borrowings, trade payable and other liabilities to
manage its operation and the financial assets include trade receivables, deposits, cash and bank
balances, other receivables etc. arising from its operation.
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices. Market prices comprise three types of risk: Foreign currency
rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk.
Interest Rate Risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value
interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of
fluctuations in the interest rates, in cases where the borrowings are measured at fair value through
profit or loss. Cash flow interest rate risk is the risk that the future cash flows of floating interest
bearing investments will fluctuate because of fluctuations in the interest rates.
Exposure to Interest Rate Risk
Interest rate risk of the Company arises from borrowings. The Company endeavor to adopt a policy of
ensuring that maximum of its interest rate risk exposure is at fixed rate. The Company's interest¬
bearing financial instruments are reported as below:
Fair Value Sensitivity Analysis for Fixed-Rate Instruments
The Company does not accountfor any fixed-rate financial assetsor financial liabilities at fair value
through profit or loss. Therefore, a change in interest rates at the reporting date would not affect
profitor loss.
Cash Flow Sensitivity Analysis for Floating-Rate Instruments :
Since there is not any floating-rate instruments, hence impact for the reportingperiod is Nil.
Equity Price Risk
The Company is exposed to equity price risks arising from equity investments which is not material
Derivative Financial Instruments
The Company does not hold derivative financial instruments
Derivative Financial Instruments
The Company does not hold derivative financialinstruments
Credit Risk
Credit risk arises from the possibility that the counter party will default on its contractualobligations
resulting in financial loss to the Company. To manage this, the Company periodically assesses the
financial reliability of customers, taking into account the financial conditions, current economic
trends,and analysis of historical bad debts and ageing of accounts receivable.
Trade Receivables
Our historical experience of collecting receivables is that credit risk is low. Hence, trade receivables
are considered to be a single class of financial assets. Credit risk has always been managed by each
business segment through credit approvals, establishing credit limits and continuously monitoring
the credit worthiness of customers to which the Company grants credit terms in the normal course of
business.
Other Financial Assets
Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with
banks and financial institutions with high credit ratingsassigned by international and/or domestic
credit rating agencies. Investments primarily include investment in liquid mutual fund units, quoted
bonds issued by Government and Quasi Government organizations and certificates of deposit
whichare funds deposited at a bank for a specified time period.
Liquidity Risk
Liquidity risk refers to risk of financial distress or extra ordinary high financing cost arising due to
shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and
require financing. The Company's objective is to maintain at all times optimum levels of liquidity to
meet its cash and collateral requirements. Processes and policies related to such risk are overseen
by senior management and management monitors the Company's net liquidity position through
rolling forecast on the basis of expected cash flows.
The tables below analyse the Company's financial liabilities into relevant maturities based on their
contractual maturities for:
Note 35: Employee Benefits
"Defined Contribution Plans
The Company makes contributions, determined as a specified percentage of employee salaries, in
respect of qualifying employees towards provident fund, ESIC and other funds which is a defined
contribution plan. The Company has no obligations other than to make the specified contributions. The
contributions are charged to the Statement of Profit and Loss as they accrue.''
"Defined Benefit Plans
The Company has a scheme for payment of gratuity to all its employees as per the provisions of the
Payment of Gratuity Act, 1972. The Company provides for period end liability using the projected unit
credit method as per the actuarial valuation carried out by independent actuary. The gratuity plan is a
funded plan.'
The movement in the defined benefit liability over the year is as follows:
The estimates, of future salary increases, considered in actuarial valuation, take into account inflation,
seniority, promotion and other relevant factors such as supply and demand factors in the employment
market.
Note 36: Employee Stock Option Scheme, 2019
The Company had instituted an Employee Stock Option Scheme, 2019 ('Scheme 2019') as approved by
the Board on December 20, 2019 and Shareholders on January 28, 2020 for issuance of stock option to
eligible employees of the Company.
During the year ended 31st March 2025, under the subject Scheme 2019, 11,11,500 Options exercisable into
an aggregate of 11,11,500 Equity Shares in the Company of face value of Rs. 10/- each fully paid-up, would
be available for grant to the eligible employees of the Company under the Scheme 2019, in one or more
tranches.
The objective of the Scheme 2019, is to provide an incentive to attract and retain the key employees by
way of rewarding their performance and motivate them to contribute to the overall corporate growth
and profitability.
Where the Company opts for expensing of the options using the intrinsic value of the options, the
difference between the employee compensation cost so computed and the employee compensation
cost that shall have been recognized if it had used the fair value of the options shall be disclosed. The
impact of this difference on profits and on EPS of the Company shall also be disclosed.
The Company has used intrinsic value of the options for expensing of the options for the year.
The fair value as on 28th March, 2025 as per Black & Sholes Method is Rs. 46/- per option.
The employee compensation cost would have been lower by Rs. 1,96,850 if expensing of the options was
based on the fair value of the options. Further effect on profit and EPS of the Company if expensing of
the options was based on the fair value of the options for the year is as under:
Note 37: Disclosure requirements as notified by MCA pursuant to amended Schedule III
Additional Regulatory Information pursuant to Clause 6L of General Instructions for preparation of
Balance Sheet as given in Part I of Division II of Schedule III to the Companies Act, 2013, are given
hereunder to the extent relevant and other than those given elsewhere in any other notes to the
Financial Statements
(ii) The Company did not have any transactions with companies struck off under Section 248 of the
Companies Act, 2013 or Section 560 of Companies Act, 1956 during the financial year.
(iii) The Company does not have any Benami property, where any proceeding has been initiated or
pending against the Company for holding any Benami property.
(iv) The Company has not been declared as a willful defaulter by any lender who has powers to declare
a Company as a willful defaulter at any time during the financial year or after the end of reporting period
but before the date when the financial statements are approved.
(v) The Company does not have any charges or satisfaction which is yet to be registered with the
Registrar of Companies (ROC) beyond the statutory period
(vi) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial
year
(vii) "The Company has not advanced or loaned or invested funds to any other person(s)or entity(is),
including foreign entities(intermediaries), with the understanding that the intermediary shall"
(a) directly or indirectly lend or invest in other persons or entities identified in any mannerwhatsoever by
or on behalfof the Company (Ultimate Beneficiaries) , or
(b) provide any guarantee, securityor the like to or on behalf of the Ultimate Beneficiaries
(viii) "The Company has not received any funds from any person(s) or entity(ies), including foreign
entities (Funding Party)with the understanding (whether recorded in writing or otherwise) that the
Company shall"
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by
or on behalf of the FundingParty (Ultimate Beneficiaries) or,
(b) provide any guarantee, securityor the like on behalf of the Ultimate Beneficiaries,
(ix) The Company does not have any transactions which is not recorded in the books of accounts but
has been surrendered or disclosed as income during the year in the tax assessments under the Income
Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)
(x) The Company has complied with the number of layers prescribed under clause (87) of section2 of
the Companies Act 2013 read with Companies (Restrictions on number of Layers) Rules, 2017.
Note 38: Prior Period of Comperative
The previous figures have been regrouped/ reclassified wherever make them comparable with those of
the current year.
As per our report of even date
For and on behalf of the Board of Directors
SECMARK CONSULTANCY LIMITED
For D. Kothary & Co.
Chartered Accountants
Firm Registration. No. 105335W
Ravi Vijay Ramaiya Sagar Mansukhbhai Thanki
Managing Director &CEO Executive Director & CFO
Deepak O. Narsaria
DIN: 03510258 DIN : 08281489
Partner
Membership No. : 121190
Sunil Kumar Bang
Place: Mumbai Company Secretary
Date: April 28, 2025
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