2.16 Employee slock option based compensation
The Company calculates the compensation cost based on the fair value method, wherein the excess of the fair value of the
underlying equity share as on the date of the grant of the option over the exercise price of the option given to the employees
under the employee stock option scheme of the Company is amortised over the vesting period on a straight line basis. The
Company follows the Guidance note on accounting for employee share based payments issued by Institute of Chartered
Accountants of India for accounting for employee stock options
2.17 Cash and cash equivalent
Cash and cash equivalents comprise of cash at bank and in hand and short-term investments with an original maturity of three
months or less.
2.18 Cash flow statement
Cash flows are reported rising rhe indirect method, whereby ncl proilt or loss before lax is adjusted for the effects of transactions
of non-cash nature, anv deferrals, or .accruals of past or future operating cash receipts or payments and item of expenses
associated with investing or financing cash flows I he cash flows from operating, investing and financing activities of the
Company are segregated.
28 Contingent liabilities and commitments
a) Contingent liabilities
1. The Company has appointed Pioneer Trading Limited, UK("PTL") and Cbazaar.com.Inc, USA ("CB INC") as a Business Associate who
shall assist and accept orders from various customers and also collect payment from these customers on behalf of the Company, for which the
Company pays commission charges to PTL/CB INC. The Company also reimburses certain expenditures like marketing, internet banking and
other charges which are incurred on its behalf to PTL/CB TNC. Tire Company based on a legal opinion believes that service tax/goods and
services tax is not applicable on such transactions and accordingly, no provision hits been made for service tax/Goods and Services Tax in
these financial statements.
2. Demand Raised for Rs. 17,80,880/- by Income tax authorities for AY 2011-12. die reason being challan paid was not considered by the IT
Authority
3. Demand Raised for Rs 10.77.460/- by Income tax authorities for AY 2020-21, the reason being inconsistency between tax audit report and
1TR
4. Demand Raised for Rs.33,20,270/- by Income tax authorities for AY 2022-23, the reason being disallowance of marketing expenses
claimed in 1TR.
5 Demand Raised for Rs.1,67,7)2/- by Income tax authorities for AY 2021-22. the reason being disallowance of some expenses claimed in
ITR.
32 Micro and small enterprises , „„„„ . . , . . . .
The Ministry' of Micro, Small and Medium Enterprises has issued an office memorandum dated August 26, 2008 which recommends that the
Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated
after filing of the Memorandum in accordance with the Micro. Small and Medium Enterprise Development Act, 2006 (‘the Art).
Accordingly the disclosure in respect of the amounts payable to such enterprises as at 31 March 2024 has been made in the financial
statements based on information received and available with the Company Further in view of the Management, the impact of interest, if any.
that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for
interest from any supplier as at the balance sheet date.
34 Employee benefits
Denned contribution plans
The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards
Provident Fund, 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. The amount recognised as an expense towards contribution to
Provident Fund for the year aggregated to INR 2,514K (previous year : 1NR 2,357K )
Defined benefit plans
The Company's gratuity benefit scheme is a defined benefit plan. The Company's net obligation in respect of a defined benefit plan is
calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods;
that benefit is discounted to determine its present value. Any unrecognised past service costs and the fair value of any plan assets are
deducted. The calculation of the Company’s obligation under this plan is performed annually by a qualified actuary using the projected unit
credit method The gratuity plan entitles regular employee, who has rendered atleast five years of continuous service, to receive one-half
salarv fnr each veur of romnleted service at the time of retiremenl/exil.
35 Leases
The Company has entered into operating lease arrangements for the lease of office premises. The lease payments recognised in the statement
of profit and loss for the year ended 31 March 2024 amounts to INR 344 IK (31 March 2023: [NR 3350K)
36 Payables/receivables to/from subsidiaries
As on 31st March 2023, the holding Company had long-outstanding foreign currency payable and receivable balances to/from its wholly-
owned subsidiaries. These balances relate to inter-company transactions with its subsidiaries towards procurement of services, reimbursement
of expenses, collections made by the subsidiary companies on behalf of the Holding Company etc. in the past and the current year. Owing to
operational difficulties, the Holding Company was unable to settle the aforesaid balances within the stipulated time period resulting in delays
in remittances / collections of such overdue balances in accordance with the provisions of the Foreign Exchange Management Act, 1999 and
the regulations thereunder (‘the Act’) from the subsidiaries. However, during the year, the Holding Company has paid the long-outstanding
over dues to subsidiaries and collected the dues from subsidiaries.
39 Employer shore-based payment plans
(a)
During the year ended 31 March 201*1, the Company had formed an ESOP trust. "Net Avenue Technologies Private Limited Employees Welfare Trust". The Company had
framed the guidelines on issue of shares to its employees The ESOP trust has purchased *16,980 shares from the shareholders and subscribed additionally for 38,420 shares
issued by the Company at a premium of Rs 232 pershare for the purpose of issuing it to the employees. Share premium of Rs 89.13,440 on these shares has been since
reversed from Securities premium account. Similarly 38,420 shares (Rs 38,420) have been reduced from share capital as consideration not received The Company had
accounted for the ESOP in accordance with Guidance Noie on Accounting for Employee Share Based Payments. Accordingly, the loan given to the ESOP trust has been
disclosed as "Amount recoverable from Net Avenue Technologies Private Limited Employees Welfare Trust" in the balance sheet and the shares purchased out of the loan
are shown as a pan of the share capital.
The management believes that the amount of loan receivable from the ESOP trust is fully recoverable based on budgeted plan and hence no provision is made in the books.
Post balance sheet dale, the board has approved in its meeting dated 25th May 2024 for issuance of 6 bonus options for the existing options issued prior to Aug 2023 and
also reduced the exercise price from Rs 100 to Rs 60 for 7 options and also the excercisc period is extended to 15 years. Accordingly the same is considered as
modification to the ESOP scheme and considered the effect of the same in the results for the year ended 31st March 2024
(b) Details of the shares reserved for issue under opiio ns
Tbe Company issued options under the Employees stock option policy 2013 ("2013 Plan") in the financial year 2013-2014 The 2013 Plan covers all employees on the
permanent rolls of the Organisation and who can be assigned eligibility scores using an ESOP Scoring Matrix 2013. The objective of this 2013 Plan is to encourage
ownership of the Company's equity by its employees on an ongoing basis The 2013 Plan is intended to reward rhe employees for their contribution to the successful
operation of the Company and ro provide an incentive to continue contributing to the success of the company
40 Transfer pricing
Tbe Holding Company has international transactions with related parties For the year ended 31 March 2023, the Holding Company has obtained the Accountant's Report
from a Chartered Accountant as required by the relevant provisions of the Income-tax Act, 1961 and has filed the same with ihe lax authorities. For the financial year
ending 3 I March 2024, the management confirms that it maintains documents as prescribed by the Income-tax Act, to prove that these International transactions are at
arm's length and the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of provision for taxation
41 Prior year comparatives
Prior year comparitives have been regrouped / reclassified wherever necessary to conform with current year's classification
45 Other statutory information
i The Company does not have ary benami property, where any proceeding has been initialed or pending against the Company
The Company does not have any transactions with companies struck off except for one party by name "Siddharth impex
" private limited" Fora value of 1NR 8K
Hi The Company has not been declared wilful defaulter by any bank or financial institution or other lender.
The Company has not advanced or loaned or invested funds to any other person(s) or entity! ies). including foreign entities
(intermediaries) with the understanding that the intermediary shall:
iv a. directly or indirectly lend or invest in other persons or entities identitled in any manner whatsoever by or on behalf of the
company (ultimate beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
The Company has not received any fund from any person(s) or entity!ies). including foreign entities (funding party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
v a. d i recti v or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the
funding parly (ultimate beneficiaries) or
b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries
The Company has not any such transaction which is not recorded in the books of accounts that has been surrendered or
vi 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.
vii The Company has not traded or invested in crypto currency or virtual currency during the financial year.
As per our report of even date attached
For PKF Sridhar & Santhanam LLP for and on behalf of the Board of Directors of
Chartered Accountants Net Avenue Technologies Limited
firm's Registration No: .003990S/S2000I8 C1N : U72900TN2001PTC047220
(l
P Devi rRilesh katariya Rajesh Nahar
Partner / ';5y V ,' H hole-lime director Director
Membership No. 22^3PFISMREGNf;0 U- DfN: 01019455 // Ý'Ý DIN:0I0I5059
Place : Chennai U^00mS/S2:00ly£: Place : Chennai Place : Chennai
Date 25.05.2024 Date 25.05.2024 S: 0009 date t25.05.2024
XB*' „ \
Prakash Arthanari \ . BKumisha Darshan Dadwani
Chief Financial Officer ' '---"" Company Secretary
Place Surat Place : Surat
Date : 25,05.2024 Date . 25.05.2024
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