Notes to Accounts of Athena Global Technologies Ltd.

Mar 31, 2024

Terms/Rights attached to equity shares

The company has only one class of equity shares having a face value of Rs. 10/- each. Each holder of equity share 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 subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the equity shareholders 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.

Nature and purpose of other reserves

(i) Capital reserve

Capital reserve is a sum earmarked for specific purposes or long-term projects or mitigating capital losses or any other longterm contingencies.

(ii) Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.

(iii) Translation Reserve

The exchange differences arising from the translation of financial statements of Foreign operations with functional currency other than Indian rupees is recognised in Other Comprehensive Income and presented with equity in the Foreign Currency translation reserve.

(iv) Money Received against Share Warrents

During the year, the Company has issued 13,20,000-sahre Warrents ( Previous year 6,30,000 ) to Promoters and the company has converted the shares for the 6,70,000 share warrents in to equity during the year ( Previous Year Allotment 6,30,000).

Note: 1. All that part and parcel of semi-finished entire 15th Floor including Common area together with proportionate undivided share in land along with proportionate Car parking slots allottedin the IT /ITES complex named as "CENTAURUS'' in the notified SEZ area covered under Sy. No. 203/part situated at Manikonda Jagir village,Rajendernagar Mandal and GHMC Circle -11 in Ranga Reddy District in Telangana State is hypothecated against the Term Loan Availed from Axis Finance Limited.

2. All the piece and parcel of Block A on 16th Floor including Common area of 62,524.50 sq.feet together with proportionate undivided share of 706.60 Sq yards in land out of total area of 24,200 Sq yards along with proportionate Car parking slots allotted in the basement area in the IT /ITES complex named as "CENTAURUS'' in the notified SEZ area covered under Sy. No. 203/part situated at Manikonda Jagir village,Rajendernagar Mandal and GHMC Circle -11 in Ranga Reddy District in Telangana State is hypothecated against the Term Loan Availed from Aditya Birla Finance Ltd

26. Employee Benefits

(i) Leave obligations

The leave obligation covers the Company''s liability for earned leave which is unfunded.

(ii) Defined contribution plans

The Company has defined contribution plan namely Provident fund. Contributions are made to provident fund at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contributions plan is as follows:

(iii) Post- employment obligations a) Gratuity:

The Company provides for gratuity for employee''s as per the Payment of Gratuity Act, 1972. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

30. Segmental Reporting :

The company''s corporate strategy aims at creating multiple drivers of growth anchored on its core competence. The company is currently focused on two segments. The business segments comprise the following:

(i) Software services : Software development and maintenance services

(ii) Real Estate: Revenue from Sale

(iii) Leasing Activity : Lease and Other Income from Investment property

31. Financial risk management

The Company is exposed to market risk (fluctuation in foreign currency exchange rates, price and interest rate), liquidity risk and credit 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) Market risk

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 risk comprises of currency risk, interest rate risk and price risk. Financial instruments affected by market risk include loans and borrowings, trade receivables and trade payables.

(i) Foreign Currency Risks:

The Company is exposed to currency risk on account of its borrowings and other payables in foreign currency. The functional currency of the Company is Indian Rupee.

(B) Credit Risk

Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and noncurrent held-to maturity financial assets.

With respect to credit exposure from customers, the Company has a procedure in place aiming to minimise collection losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. Cash and other collaterals are obtained from customers when considered necessary under the circumstances.

The carrying amount of trade receivables, loans, advances, deposits, cash and bank balances and bank deposits represents company''s maximum exposure to the credit risk. No other financial asset carry a significant exposure with respect to the credit risk. Bank deposits and cash balances are placed with reputable banks and deposits are with reputable government, public bodies and others.

The credit quality of financial assets is satisfactory, taking into account the allowance for credit losses.

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including default risk associate with the industry and country in which customers operate. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.

An impairment analysis is performed at each reporting date on an individual basis for major receivables. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

i. Credit risk on cash and cash equivalents and other bank balances is limited as the Company generally invest in deposits with banks with high credit ratings assigned by external agencies.

(iv) Significant estimates and judgements Impairment of financial assets:

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(C) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out market positions. Company''s treasury maintains flexibility in funding by maintaining availability under deposits in banks.

Management monitors cash and cash equivalents on the basis of expected cash flows.

32. Capital management

Capital management and Gearing Ratio

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the company''s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital. The Company includes within debt, interest bearing loans and borrowings.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31 March 2024 and 31 March 2023.

35. Confirmations

Detailed breakup of Party wise/Item wise balances with regard to opening balances in respect of majority of the Assets and Liabilities are not available with the company. On the basis of review made by the management necessary provision has been made in the books of accounts.

39. Other Notes

Previous year''s figures have been regrouped/reclassified/recasted wherever necessary to confirm to the current year''s presentation.

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Mar 31, 2023

m) Provisions, Contingent Liabilities and Contingent Assets :

The Company recognises provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognised in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted to the reflect the current best estimate.

A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent Liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company.

Contingent assets are not recognized in financial statements since this may result in the recognition of income that may never be realised.

n) Financial instruments:

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial 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 of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

A. Financial assets

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows 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.

(ii) Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income 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. Further, in case where the company has made an irrevocable selection based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.

(iii) Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.

(iv) The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in statement of profit or loss.

B. Financial liabilities and equity instruments

Classification as debt or equity

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial Liabilities

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value of money is significant.

Interest bearing bank loans, overdrafts and unsecured loans are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and loss.

Derecognition of financial instruments

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company''s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

Fair value of financial instruments

In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may or may not be realized.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount is reported in the Standaloene balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.

Contingency Reserve

The Company transfers to Contingency Reserve out of the Surplus in the Statement of Profit and Loss, such amounts as the Management considers appropriate based on their assessment to meet any contingencies relating to substantial expenditure incurred during the maintenance period of a contract, non-realisation of contract bills earlier recognised as income and claims, if any, lodged by the contractees or by sub-contractors or by any third party against the Company in respect of completed projects for which no specific provision has been made.

o) Earnings Per Share :

The basic earnings per share is computed by dividing the profit/(loss) for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, profit/(loss) for the year attributable to the equity shareholders and the weighted average number of the equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

p) Cash and cash equivalents:

Cash and cash equivalents include cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

q) Transactions in Foreign Currencies:

The Stadalone financial statements of the Company are presented in Indian rupees (''), which is the functional currency of the Company and the presentation currency for the financial statements.

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction.

Foreign currency monetary assets and liabilities such as cash, receivables, payables, etc., are translated at year end exchange rates.

r) Segment Reporting - Identification of Segments:

The company''s corporate strategy aims at creating multiple drivers of growth anchored on its core competence. The company is currently focused on two segments. The business segments comprise the following:

(i) Software services : Software development and maintenance services

(ii) Real Estate: Revenue from Sale of flats

s) Leases

The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Group uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate.

t) Dividend Distribution

Dividends paid (including income tax thereon) is recognised in the period in which the interim dividends are approved by the Board of Directors, or in respect of the final dividend when approved by shareholders.

u) Rounding off amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest rupees as per the requirement of Schedule III, unless otherwise stated.

(v) Impact of COVID-19 Key accounting judgements, estimates and assumptions.

The threats posed by the coronavirus outbreak are multifold. In many countries, businesses have been forced to cease or limit their operations for long or indefinite periods of time. Even in India the outbreak has been declared epidemic and on March 24, 2020, the Government of India ordered a nationwide lockdown, limiting movement of the population of India as a preventive measure against the COVID-19 pandemic. As a result, most businesses throughout the world are dealing with lost revenue and disrupted supply chains. The disruption to global supply chains due to factory shutdowns has already exposed the vulnerabilities of many organizations.

The Company considered the uncertainty relating to the COVID-19 pandemic in assessing the recoverability of receivables, goodwill, intangible assets, investments and other assets. For this purpose, the Company considered internal and external sources of information up to the date of approval of these financial statements. The Company has also used the principles of prudence in applying judgments, estimates and assumptions including sensitivity analysis. Based on its current estimates, the Company expects to fully recover the carrying amount of receivables, goodwill, intangible assets, investments and other assets.

As the outbreak continues to evolve, the Company will continue to closely monitor any material changes to future economic conditions.

The preparation of the Financial Statements required the Management to exercise judgements and to make estimates and assumptions. The Management has considered the possible effects, if any, that may result from the pandemic relating to COVID-19 on the carrying amounts of its assets. In developing the assumptions and estimates relating to the uncertainties as at the Balance Sheet date in relation to the recoverable amounts of these assets, the Management has considered the global economic conditions prevailing as at the date of approval of these financial statements and has used internal and external sources of information to the extent determined by it. The actual outcome of these assumptions and estimates may vary in future due to the impact of the pandemic.

(w) Note on “Code on Security, 2020”

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

x) Recent Accounting Pronouncements.

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. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 01, 2023, as below:

Ind AS 1 - Presentation of Financial Statements

The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The company does not expect this amendment to have any significant impact in its standalone financial statements.

Ind AS 12 - Income Taxes

The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The company does not expect this amendment to have any significant impact in its standalone financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty”. Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The company does not expect this amendment to have any significant impact in its standalone financial statements

31. Financial risk management

The Company is exposed to market risk (fluctuation in foreign currency exchange rates, price and interest rate), liquidity risk and credit 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) Market risk

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 risk comprises of currency risk, interest rate risk and price risk. Financial instruments affected by market risk include loans and borrowings, trade receivables and trade payables.

(i) Foreign Currency Risks:

The Company is exposed to currency risk on account of its borrowings and other payables in foreign currency. The functional currency of the Company is Indian Rupee.

(B) Credit Risk

Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and noncurrent held-to maturity financial assets.

With respect to credit exposure from customers, the Company has a procedure in place aiming to minimise collection losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. Cash and other collaterals are obtained from customers when considered necessary under the circumstances.

The carrying amount of trade receivables, loans, advances, deposits, cash and bank balances and bank deposits represents company''s maximum exposure to the credit risk. No other financial asset carry a significant exposure with respect to the credit risk. Bank deposits and cash balances are placed with reputable banks and deposits are with reputable government, public bodies and others.

The credit quality of financial assets is satisfactory, taking into account the allowance for credit losses.

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including default risk associate with the industry and country in which customers operate. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.

An impairment analysis is performed at each reporting date on an individual basis for major receivables. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

i. Credit risk on cash and cash equivalents and other bank balances is limited as the Company generally invest in deposits with banks with high credit ratings assigned by external agencies.

39. Other Notes

Previous year''s figures have been regrouped/reclassified/recasted wherever necessary to confirm to the current year''s presentation.

As pe^r o^ur repod o^f even ^date For and on behalf of the Board

For RAMANATHAM & RAO

Chartered Accountants

^{Firm Re}gi^stration. No. °°^2934S M. SATYENDRA M.Sunitha

Chairman & Managing Director Director

VVlAKSIM PRASANNA A ^{(DIN: 018435571 (DI}“^7414ai)

Partner

M.No.243569 Sd/- ^Sd/-

J V RAMAKRISHNA DIVYA AGRAWAL

Place: Hyderabad CFO Company Secretary

Date: 30.05.2023 (M NO: 48143)

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Mar 31, 2018

Note: 1 Company Information:

Athena Global Technologies Limited (‘the Company’) is a public limited company incorporated in India having its registered office at Hyderabad, Telangana. The Company is engaged in Software Development & Consulting. The accompanying Financial Statements includes the accounts of Head Office in India and overseas branches in USA and UK.

(a) Terms/Rights attached to equity shares

The company has only one class of equity shares having a face value of Rs. 10/- each. Each holder of equity share 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 subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the equity shareholders 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.

Nature and purpose of other reserves

(i) Capital reserve

Capital reserve is a sum earmarked for specific purposes or long-term projects or mitigating capital losses or any other long-term contingencies.

(ii) Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Act.

(iii) Translation Reserve

The exchange differences arising from the translation of financial statements of Foreign operations with functional currency other than Indian rupees is recognised in Other Comprehensive Income and presented with equity in the Foreign Currency translation reserve.

(iv) Money Received against Share Warrents

During the year, the Company has issued Share Warrants of NIL (P.Y NIL) to Promoters, out of Which NIL are converted in to shares as on 31-03-2018. Further 6,00,000 Share Warrants issued in earlier years are converted in to shares as on 31-03-2018, totaling to109,68,600 shares.

2. Employee Benefits

(i) Leave obligations

The leave obligation covers the Company’s liability for earned leave which is unfunded.

(ii) Defined contribution plans

The Company has defined contribution plan namely Provident fund. Contributions are made to provident fund at the rate of 12% of basic salary as per regulations. The contributions are made to registered provident fund administered by the Government. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the year towards defined contributions plan is as follows:

(iii) Post- employment obligations a) Gratuity:

The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

3. Segmental Reporting :

The Company operations primarily relate to providing Information Technology(‘IT’) Services. Accordingly the company operates in a single segment.

4. Financial instruments and risk management Fair values

The carrying amounts of other financial liabilities (current), borrowings (current), borrowings(non-current), investments, loans, other financial assest(non current), other financial assets(current), trade receivables, cash and cash equivalents, and loans are considered to be the same as fair value due to their short term nature.

The fair value of financial assets and liabilities is 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.

Set out below, is a comparision by class of the carrying amounts and fair value of the Company’s financial instruments, other than those with carrying amounts that are reasonable approximation of fair values:

*Fair value of instruments is classified in various fair value hierarchies based on the following three levels: Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques, which maximise the use of observable market data and rely as little as possible on entity specific estimates. If significant inputs required to fair value an instruments are observable, the instrument is included in Level 2.

Level 3: If one or more of the significant inputs are not based on observable market data, the instruments is included in level 3.

Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date. In respect of investments as at the transaction date, the Company has assessed the fair value to be the Realisable Value.

5. Financial risk management

The Company is exposed to market risk (fluctuation in foreign currency exchange rates, price and interest rate), liquidity risk and credit 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) Market risk

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 risk comprises of currency risk, interest rate risk and price risk. Financial instruments affected by market risk include loans and borrowings, trade receivables and trade payables.

(i) Foreign Currency Risks:

The Company is exposed to currency risk on account of its borrowings and other payables in foreign currency. The functional currency of the Company is Indian Rupee.

(B) Credit Risk

Credit risk is the risk arising from credit exposure to customers, cash and cash equivalents held with banks and current and non-current held-to maturity financial assets.

With respect to credit exposure from customers, the Company has a procedure in place aiming to minimise collection losses. Credit Control team assesses the credit quality of the customers, their financial position, past experience in payments and other relevant factors. Cash and other collaterals are obtained from customers when considered necessary under the circumstances.

The carrying amount of trade receivables, loans, advances, deposits, cash and bank balances and bank deposits represents company’s maximum exposure to the credit risk. No other financial asset carry a significant exposure with respect to the credit risk. Bank deposits and cash balances are placed with reputable banks and deposits are with reputable government, public bodies and others.

The credit quality of financial assets is satisfactory, taking into account the allowance for credit losses.

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.

However, management also considers the factors that may influence the credit risk of its customer base, including default risk associate with the industry and country in which customers operate. Credit quality of a customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment.

An impairment analysis is performed at each reporting date on an individual basis for major receivables.

In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

i. Credit risk on cash and cash equivalents and other bank balances is limited as the Company generally invest in deposits with banks with high credit ratings assigned by external agencies.

ii. Credit risk on trade receivables and other financial assets is evaluated as follows:

(iii) The details of changes in allowance for credit losses during the year

(iv) Significant estimates and judgements Impairment of financial assets:

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

(C) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding to meet obligations when due and to close out market positions. Company’s treasury maintains flexibility in funding by maintaining availability under deposits in banks.

Management monitors cash and cash equivalents on the basis of expected cash flows.

6. Capital management

Capital management and Gearing Ratio

For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the company’s capital management is to maximise the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is debt divided by total capital. The Company includes within debt, interest bearing loans and borrowings.

In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings.

No changes were made in the objectives, policies or processes for managing capital during the year ended 31 March 2018 and 31 March 2017.

7. Confirmations

(i) Detailed breakup of Party wise/Item wise balances with regard to opening balances in respect of majority of the Assets and Liabilities are not available with the company. On the basis of review made by the management necessary provision has already been made in the books of accounts

(ii) Certain Long Term Borrowings of Rs. 268.39 lakhs are subect to comfirmation and reconciliation

(iii) there is a pending legal dispute against the immovable property located at Manikonda village, Ranga Reddy Dist. However the Company is of the hope in resolving the matter positively.

8. First-time adoption of Ind AS Transition to Ind AS

These are the Company’s first financial statements prepared in accordance with Ind AS.

The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 01 April 2016 (date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting standards) Rules, 2006 (as amended) and other relevant provisions of the Act(previous GAAP or Indian GAAP). An explanation on how the transition from previous GAAP to Ind AS has effected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

Exemptions and Exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Ind AS optional exemptions

(i) Deemed cost

Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of its Property, Plant & Equipment as recognised in the Financial Statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition, after making necessary adjustments for decommissioning liabilities. This exemption can also be used for Intangible Assets covered by Ind AS 38.

Accordingly, the Company has elected to measure all of its Property, Plant & Equipment and Intangible Assets at their previous GAAP carrying value.

(ii) Impairment of financial assets

The Company has applied the exception related to impairment of financial assets given in Ind AS 101. It has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial assets were initially recognised and compared that to the credit risk as at 01 April 2016.

B. Ind AS mandatory exceptions

(i) Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind As shall be consistent with the estimates made for the same date in accordance with previous GAAP(after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

-Impairment of financial asset based on expected credit loss model.

(ii) Classification and measurement of Financial Assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

Notes to first-time adoption

As per Ind AS Transition Facilitation Group (ITFG) considered clarifications issused on 1 on May 5, 2017 the company transferred balance outstanding in the Translation Reserve as on April 1 2016 Rs.1,85,00,114 to retained earnings i.e., surplus in profit and loss account.

1. Under previous GAAP, deferred taxes are computed for timing differences between accounting income and taxable income for the year i.e. using the ‘Income Statement Approach’. Under Ind AS, deferred taxes are computed for temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. This is referred to as the ‘Balance Sheet Approach’. Based on this approach, additional deferred taxes have to be recognized by the Company on all Ind AS adjustments as the same would create temporary differences between the books and tax accounts.

2. Security Deposits: Under the previous GAAP, interest free security deposits (that are refundable in cash on completion of the term) are recorded at their transaction value. Under Ind AS, all financial liabilities are required to be recognised at fair value. Accordingly, The company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as Deferred Income.

3. Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments on the date of transition.

4. Under Ind AS, all items of income and expense recognized in a period should be included in the profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profi t or loss as ‘other comprehensive income’ includes remeasurements of foreign operations. The concept of ‘other comprehensive income’ did not exist under previous GAAP

9. Assets pledged as security

The carrying amounts of assets pledged as security for current and non-current borrowings are

10. Other Notes

Previous year’s figures have been regrouped/reclassified/recasted wherever necessary to confirm to the current year’s presentation.

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Mar 31, 2015

1.Terms / rights attached to equity shares

The Company has only one class of equity shares having a face value of Rs.10/-each.Each share holder of quity share is entitled to one vote per share. The company declares and pays dividends in Indian Rupees.

In the event of liquidation of the company,the equity share holders will be entitled to receive remaining assets of the company,after distribution of all preferential amounts. The distribution will be in roportion to the number of equityshares held by the share holders.

2. Related Party Transactions-AS 18 :

The Company has transactions with the following related parties:

a) Wholly owned Subsidiary: Mercury Outsourcing Management Ltd

b) Key Management Personnel:

Chairman & Managing Director:- M.Satyendra

c) Associate Entity in which Directors have Substantial Interest:

Tholons Knowledge Management Pvt Ltd, Vishwashree Enterprises Pvt. Ltd.

d) Relatives of Key Management Personnel : M.Sunitha, Ravinder

Shankara Kumari, RVSC Bose

3. Contingenet Liabilities not provided for

Claims against the Company not acknowledged as debt:

Particulars Amount in

Disputed Liability in respect of Income Tax demands related to

F.Y.2004-05 pending at High Court of A.P. 6,041,474

4. Detailed break up of party wise/item wise balances with regard to opening balances in respect of majority of the assets and liabilities are not available with the Company. On the basis review made by the management necessary provision has already been made in the books of accounts

5. During the year the Company has physically verified the fixed assets. The old fixed assets register of the Company is not traceable and the current fixed assets register has been prepared and updated as on date.

6. Certain Long term borrowings of Rs.278.85 lakhs and other current liabilities Rs.58.78 lakhs are subject to confirmation and reconciliation.

7. The company has an investment of Rs.608.71 lakhs in Mercury Outsourcing Management Ltd, subsidiary company. In view of the long term involvement of the company in the said company no provision has been made in the accounts for the probable loss that may arise on the same.

8. There is a pendig legal dispute against the immovable property located at Manikonda villiage, Ranga Reddy District. However the Company is of the hope in resolving the matter positively.

9. Dues to Micro Small and Medium Enterprises There are no dues to the Small scale Industrial Undertaking exceeding Rupees one lakh which is outstanding for more than 30 days as per the information available with the Company as on date.

10.Previous year's figures are reclassified /regrouped and rearranged wherever necessary.

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Mar 31, 2014

Note 1. Contingenet Liabilities not provided for

Claims against the Company not acknowledged as debt:

Particulars Amount in Rs.

Disputed Liability in respect of Income Tax demands related to F.Y.2004-05 pending at High Court of A.P. 6,041,474

Note 2.

During the year the Company has not provided interest on unsecured loans received from various parties, as the Company has made request for reduction/waiver of interest due to financial position of the Company and the Company is hopefull of obtaining the reduction/waiver of interest

Note 3.

Detailed break up of party wise/item wise balances with regard to opening balances in respect of majority of the assets and liabilities are not available with the Company. On the basis of review made by the management necessary provision has already been made in the books of accounts

Note 4.

During the year the Company has physically verified the fixed assets . The old fixed assets register of the Company is not traceable. The current fixed assets register has been prepared and updated as on date.

Note 5.

Certain long term borrowings of Rs.307.60 Lakhs, other current liabilities Rs.62.46 lakhs are subject to confirmation and reconciliation.

Note 6.

The company has an investment of Rs.638.78 Lakhs in Mercury Outsourcing Management Ltd, subsidiary company. In view of the long term involvement of the company in the said company no provision has been made in the accounts for the probable loss that may arise on the same.

Note 7.

There is a pending legal dispute against the immovable property located at Manikonda village, Ranga Reddy District. However the Company is of the hope in resolving the matter positively.

Note 8.

Dues to Micro Small and Medium Enterprises: There are no dues to the Small scale Industrial Undertaking exceeding Rupees one lakh which is outstanding for more than 30 days as per the information available with the Company as on date.

Note 9.

The company has made relevant disclosures which are applicable as per revised schedule VI and the figures for the previous year are reclassified /regrouped and rearranged wherever necessary.

Note 10.

The company is in the business of Software Consulting and Development. The Company''s primary reporting segment is geographical as revenue segment.

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Mar 31, 2013

Note - 1 : Related Party Disclosure :

The Company has transactions with the following related parties:

a) Wholly owned Subsidiary: Mercury Outsourcing Management Ltd

b) Key Management Personnel:

Chairman & Managing Director:- M.Satyendra

c) Associate Entity in which Directors have Substantial Interest: Yemmen Agro Private Limited, Tholons Knowledge Management Pvt Ltd

d) Relatives of Key Management Personnel : M.Sunitha, Ravinder,

Shankara Kumari, RVSC Bose

Note - 2 : Contingenet Liabilities not provided for

Claims against the Company not acknowledged as debt:

Particulars Amount in Rs

Disputed Liability in respect of Income Tax demands related to F.Y.2004-05 pending at High Court of A.P. 6,041,474

Disputed Liability in respect of TDS demands related to F.Y.2007-08 pending at CIT (Appeals) 28,225,409

Disputed Liability in respect of TDS demands related to F.Y.2008-09 pending at CIT (Appeals) 21,798,425

Note 3.

Detailed break up of party wise/item wise balances with regard to opening balances in respect of majority of the assets and liabilities are not available with the Company. On the basis review made by the management necessary provision has already been made in the books of accounts

Note 4.

During the year the Company has physically verifed the computers and Offce Equipments . The Fixed assets register of the Company for earlier years is not traceable and the Management is in the process of updation of the Fixed Assets register. The value of fxed assets is subject to review by the Management and reconciliation. The consequential impact on the accounts is not ascertainable as at present.

Note 5.

Certain long term trade receivables of Rs. 176.29 Lakhs, Deposits of Rs.19.00 Lakhs, loans and advances of Rs.234.46 lakhs, long term borrowings of Rs.216.29 Lakhs and other current liabilities of Rs.62.46 lakhs are subject to confrmation and reconciliation.

Note 6.

The company has an investment of Rs.292.10 Lakhs in the share capital, loans and advances of Rs. 276.09 Lakhs and long term trade receivables of Rs. 45.00 lakhs in Mercury Outsourcing Management Ltd, subsidiary company. In view of the long term involvement of the company in the said company no provision has been made in the accounts for the probable loss that may arise on the same.

Note 7.

There is a pendig legal dispute against the immovable properties located at Manikonda villiage and Kondapur Village, Ranga Reddy District. However the Company is of the hope in resolving the matter positively.

Note 8: Dues to Micro Small and Medium Enterprises:

There are no dues to the Small scale Industrial Undertaking exceeding Rupees one lakh which is outstanding for more than 30 days as per the information available with the Company as on date.

Note 9

The company has made relevant disclosures which are applicable as per revised schedule VI and the fgures for the previous year are reclassifed /regrouped and rearranged wherever necessary.

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Mar 31, 2012

Note - 1 : Related Party Disclosure :

The Company has transactions with the following related parties:

a) Wholly owned Subsidiary: Mercury Outsourcing Management Ltd

b) Key Management Personnel: Chairman & Managing Director:- M.Satyendra

c) Associate Entity in which Directors have Substantial Interest: Yemmen Agro Private Limited, Tholons Knowledge Management Pvt Ltd

d) Relatives of Key Management Personnel : M.Sunitha, Ravinder, Shankara Kumari, RVSC Bose

Note 2.

Detailed break up of party wise/item wise balances with regard to opening balances in respect of majority of the assets and liabilities are not available with the Company. On the basis review made by the management necessary provision has already been made in the books of accounts

Note 3.

During the year the Company has physically verifed the computers and Offce Equipments . The Fixed assets register of the Company is not traceable and the Management is in the process of preparation and updation of the Fixed Assets register. The value of fxed assets is subject to review by the Management and reconciliation. The consequential impact on the accounts is not ascertainable as at present.

Note 4.

Certain Sundry Debtors, Deposits, loans and advances, inoperative bank accounts, unsecured loans and Sundry creditors are subject to confrmation and reconciliation.

Note 5.

Share certifcates relating to investments made by the Company are lost/misplaced and efforts are being made to locate them and/ or to obtain duplicate certifcates. The Management envisages no serious diffculties in case of obtaining duplicate certifcates for investments made by the Company.

Note 6.

The company has an investment of Rs.292.10 Lakhs in the share capital, loans and advances of Rs. 279.11 Lakhs in Mercury Outsourcing Management Ltd, subsidiary company. In view of the long term involvement of the company in the said company no provision has been made in the accounts for the probable loss that may arise on the same.

Note 7.

The company has not provided interest on unsecured loans received from various parties due to the request for reduction of interest made by the management during the year.

Note 8:

There is a pending legal dispute against the immovable property located at Manikonda village, Rangareddy Dist. However the Company is of the hope in resolving the matter positively.

Note 9:

The company is in the business of Software Consulting and Development. The Company's primary reporting segment is geographical as revenue segment.

Note 10: Dues to Micro Small and Medium Enterprises:

There are no dues to the Small scale Industrial Undertaking exceeding Rupees one lakh which is outstanding for more than 30 days as per the information available with the Company as on date.

Note 11 Dues to Micro Small and Medium Enterprises:

There are no dues to the Small scale Industrial Undertaking exceeding Rupees one lakh which is outstanding for more than 30 days as per the information available with the Company as on date.

Note. 12.

The company has made relevant disclosures which are applicable as per revised schedule VI and the fgures for the previous year are reclassifed /regrouped and rearranged wherever necessary.