Notes to Accounts of Palred Technologies Ltd.

Mar 31, 2018

1. Company overview

Paired Technologies Limited (the ‘Company”) is a public limited company domiciled in India and incorporated under the provisions of the erstwhile Companies Act 1956. The Company''s equity shares are listed on Bombay Stock Exchange (‘BSE⁵) and National Stock Exchange (“NSE⁵).

Subsequent to sale of the Company''s transportation and logistics software products business in 2013-14, the management of the Company is yet to identify the business opportunities in the areas of IT solutions and services.

The Company has its registered office at H. No. 8-2-703/2/B, Plot No. 2, Road No. 12, Banjara Hills, Hyderabad, Telangana — 500 034.

2. General information and statement of compliance with Ind AS

The standalone financial statements of the Company have been prepared and presented in accordance with all the material aspects of the Indian Accounting Standards (‘Ind AS⁵) as notified under section 133 of the Companies Act 2013 read with the Companies (Indian Accounting Standards) Rules 2015 (by Ministry of Corporate Affairs (‘MCA⁵)) as amended from time to time. The Company has uniformly applied the accounting policies during the periods presented.

For all periods up to and including the year ended 31 March 2017, the Company has prepared its standalone financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP). These financial statements for the year ended 31 March 2018 are the first which the Company has prepared in accordance with Ind AS (see note 27 for explanation for transition to Ind AS). For the purpose of comparatives, financial statements for the year ended 31 March 2018 are also prepared under Ind AS.

These financial statements for the year ended 31 March 2018 were authorized and approved for issue by the Board of Directors on 30 May 2018.

3. Basis of preparation of separate financial statements

The financial statements have been prepared on going concern basis under the historical cost basis except for the following:

i. certain financial assets and liabilities are measured either at fair value or at amortised cost depending on the classification; and

ii. employee defined benefit liabilities are recognised as the net total of the fair value of plan assets, plus actuarial losses, less actuarial gains and the present value of the defined benefit obligation, if any.

4. Otandatd nnt yet effective

Information on new standard, amendment and interprttaaion thrt are expected to Ire relevani io tho financial statements is provided below.

Appendix B to Ind A0 21 - Foreign aurrenay transactions and advance consideration:

On 28 March 2018, MCA has notified tire Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction (os the .urpose of determining the exchange rate to use on initial recognition of the related asset, expense or innome, when an rntity has received or paid advance consideration in a foreign currency. The amendment will crome into force from 1 April 20l 8. Ths CompanyRs. has evaluated the effece of this on the financial statements rnd the imprnt is not mate rial.

and A0 115- Revenue from Contraat with Customers:

On 28 Mtsch .018, MCA hrs notified thn Ind lit f t5_r Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customera in an amount that refierts tie consideration io which the; entity expects to be entitled in exchange for those goods nr servites. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from tht enlity’s contracts with customero.

The standard permits two possible methods of transition:

- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors

- Modified retrospective approach - Under this approach the cumulative effect of retrospective application is recognised at the date of initial application.

The effective date for adoption of Ind AS 115 is financial periods beginning on or after 1 April 2018. The Company will adopt the standard on 1 April 2018 and accordingly comparatives for the year ended 31 March 2018 will not be retrospectivhly adjusied. Management does not expect adoption of the aforementioned requirement from 1 April 20i8 will have a maeerial effech on the financial statemrnts of the Company.

5. Key cccounting eatimates and judgements

The preparation of the Company’a financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that: require a maieriat adjusSment to the carrying amount of assets or liabilities aifected in iuture periods. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of⁷ assets and liabilities within the next financial year, are described below:

Dtfemh income ttxas

Phe atsessment of the probability of future taxable profit in which deferred tax assets can be utilized is based on the Company’s latest approved forecast, which is adjusted for significant non-taxable profit and expenses and specific limits to the use of any unused tax loss or credit. If a positive forecast of taxable profit indicates the probable use of a deferred tax asset, especially when it can be utilized without a time limit, that deferred tax asset is usually reeognized in full

Usafui liaas of various astair

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

Current income taxes

Significant judgments are involved in determining the provision for income taxes including judgment on whether tax poshtions are probable of being sustained in tax assessments. A tax: assessment can involve complex isaues, which can onlybe resolved over extended time perioPs. The recognition of tqxes that are sabjeci to ceriain legal or tconomic limies or uncertainties is assessrd individuatly by management based on the specffin farts and circumstances.

Fair value of financial tnstruments

MancfemenS uses valuation techniques in measuring the fair value of financial instruments where active market quotes are not available. Details of the assumptions used are given in the notes regarding financial assets and liabilities. In applying the valuation techniques, management makes maximum use of market inputs and uses estimates and assumptions that Me, as far as possible, consistent with observable data that market participants would use in pricing the instrument. W/here applicable data ^fs nnt obsarvable, management uses its best estimate about the assumptions that market participants would make. These estimates may ''vary frbm the actual prices that would be tchievad in an arm’s length transaction at the reporting date.

(b) Terms 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 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 holders of equity shares shall 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 shareholder.

(d) Shares reserved for issue under options

The Company has established Palred Employee Stock Option Scheme 2016 (‘ESOP 2016’) to administer for grant of options not exceeding 400,000 equity shares to eligible employees. The minimum vesting period shall be one year from the date of grant of options and maximum vesting period shall not exceed five years. The exercise price per option shall not be less than face value of equity share and shall not exceed market price of the equity share of the Company as on the date of grant of option.

(e) Capital reduction of equity shares during 5 years immediately preceding the Balance Sheet date

Subsequent to the approval of the High Court of Judicature at Hyderabad for the state of Telangana and Andhra Pradesh for reduction of 60% of the paid up equity share capital during the financial year ended 31 March 2016, the Company has returned an amount of Rs. 16.50 at a premium of Rs. 11.50 per share and cancelled and extinguished 60% of the equity shares of the Company of face value of Rs.5 each in July 2015. After reduction, the issued, subscribed and paid-up equity share capital of Rs. 195,184,850 consisting of 39,036,970 equity shares of Rs.5 each fully paid-up was reduced to 78,073,940 consisting of 15,614,788 equity shares of Rs.5 each.

(f) Consolidation of shares

The Company has consolidated its 2 equity shares of Rs.5 each into 1 equity share of Rs.10 each by issuing 8,213,083 shares of Rs.10 each and cancelled one equity share of Rs.5 from Promoter group as fractional shares can not be allotted. The Company obtained the requisite approval, including approval from the stock exchanges and resumed the trading with face of value Rs.10 each effective from 9 May 2016.

Nature and purpose of reserves

(a) Capital reserve

This reserve represents creation of capital reserve pursuant to the scheme of amalgamation.

(b) General reserve

The general reserve is used from time to time to transfer profit from retained earning for appropriation purpose.

(c) Securities premium reserve

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

(d) Actuarial gains/(losses) on remeasurement of defined benefit obligation

The reserve represents the remeasurement gains/(losses) arising from the actuarial valuation of the defined benefit obligations of the Company. The remeasurement gains/(losses) are recognized in other comprehensive income and accumulated under this reserve within equity. The amounts recognized under this reserve are not reclassified to statement of profit or loss.

(i) The Company provides for gratuity for employees in India as per the Payment of the Gratuity Act, 1972. Employees who are in continuous service for a period of five years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionally for 15 days salary multiplied for the number of the years of service. The gratuity plan is unfunded. The assumptions used in accounting for the gratuity plan are set out as below:

The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market. The Company evaluates these assumptions annually based on its long term plans of growth and industry standards.

The amounts recognized in the balance sheet and the movements in the net defined benefit obligation over the year are as follows:

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practise, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

Risk exposure

Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below:

(a) Asset volatility The plan liabilities are calculated using a discount rate set with reference to current investment patterns in the economy; if plan assets underperform this yield, this will create a deficit.

(b) Changes in bond yields A decrease in bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans’ bond holdings.

(c) Life expectancy The defined benefit obligation is to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the plans’ liabilities. This is particularly significant where inflationary increases result in higher sensitivity to changes in life expectancy.

Defined benefit liability and employer contributions

There is no compulsion on the part of the Company to prefund the liability of the plan. The Company’s philosophy is not to externally fund these liabilities but instead create an accounting provisions in its books of account and pay the gratuity to its employees directly from its own resources as and when the employee leaves the Company.

The expected future cash flows in respect of gratuity as at 31 March 2018 were as follows:

6 Exceptional item

Advance tax as at 31 March 2017 includes ^7,791,886 relating to foreign tax credits for the financial years 2010-11, 201112 and 2012-13. Upon completion of tax assessments for these financial years, the Company had the taxable losses and accordingly was not able to utilize the foreign tax credits. On a detailed evaluation of these advances and based on management’s assessment, the Board has considered to create provision against such advances which have been categorized as exceptional items for the year ended 31 March 2017.

7 Deferred taxes

The Company has deferred tax assets primarily on account of unabsorbed business loss, unabsorbed tax depreciation and other items, which have not been recognized on the grounds of prudence. Consequently, there is no deferred tax asset recorded in the financial statements as at reporting periods presented.

8 Subsequent events

(i) Subsequent to the year end, the Company has invested in 1,000,000 equity shares of Rs.10 each of Palred Technology Services Private Limited, a subsidiary of the Company, at par value aggregating to Rs. 10,000,000.

(ii) Subsequent to the year end, the Company has invested in 640,000 equity shares of Rs.10 each of Palred Online Technologies Private Limited, a subsidiary of the Company, at a premium of Rs.52.50 per share aggregating to

(iii) Palred Retail Private Limited, a subsidiary of the Company with paid up share capital of ^500,000 consisting of 50,000 equity shares of Rs.10 each, is incorporated subsequent to the year end.

(c) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

-the use of quoted market prices or dealer quotes for similar instruments

-the fair value of the remaining financial instruments is determined using discounted cash flow analysis.

AH of the resulting fair value estimates are included in level 2. For unlisted equity securities, where the fair values have been determined based on present values and the discount rates used were adjusted for counterparty or own credit risk.

9 Financial risk management

The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Board of Directors and the Audit Committee is responsible for overseeing the Company’s risk assessment and management policies and processes. Currently, as the management is evaluating multiple business options, Company’s primary risk management focus is to minimize potential adverse effects of market risk on its financial performance.

A. Credit risk

Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units and certificates of deposit which are funds deposited at a bank for a specified time period. None of the Company’s cash equivalents, including term deposits (i.e., certificates of deposit) were past due or impaired as at the reporting periods.

B. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company’s reputation.

The Company’s principle sources of liquidity are cash and cash equivalents and current investments. The Company believes that the working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived. The Company closely monitors its liquidity position and maintains adequate source of funding. The Company had following working capital at the end of the reporting years:

C. Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates (such as interest rates) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments. The Company’s exposure to market risk is a function of investing activities.

10 Capital management

The Company manages its capital to ensure that it will continue as going concern while maximising the return to stakeholders. The company manages its capital structure and make adjustment in light of changes in business condition. The overall strategy remains unchanged as compare to last year. There is no debt in the Company as on the reporting dates presented and accordingly, Gearing Ratio is nil as at various reporting dates.

11 First-time adoption (’FTA’) of Ind AS - Transition to Ind AS

These financial statements, for the year ended 31 March 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with Indian GAAP, including accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014 (previous GAAP or Indian GAAP). The Company has prepared financial statements which comply with Ind AS applicable for periods ending on or after 31 March 2018, together with the comparative period data as at and for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the Company’s date of transition), as described in the summary of significant accounting policies. In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with previous GAAP. An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.

A. Exemptions and exceptions availed

(a) Ind AS optional exemptions (i) Business combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

(ii) Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and 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. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.

(iii) Investment in subsidiaries

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its investments in subsidiaries, joint ventures and associates 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. Accordingly, the Company has elected to measure its investment in subsidiaries at their previous GAAP carrying value.

(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 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.

(ii) De-recognition of financial assets and liabilities

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.

(iii) 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.

B. Reconciliations between previous GAAP and Ind AS

(a) Reconciliation of total equity as at 31 March 2017 and 1 April 2016

The transition from Indian GAAP to Ind AS had no material impact on the total equity.

(b) Reconciliation of total comprehensive income for the year ended 31 March 2017

C. Notes to first-time adoption:

1 Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended 31 March 2017 decreased by Rs.37,548. There is no impact on the total equity as at 31 March 2017.

2 Retained earnings

Retained earnings as at 1 April 2016 has been adjusted consequent to the above Ind AS transition adjustments.

3 Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in 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 profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

4 Statement of cash flows

The transition from Indian GAAP to Ind AS had no material impact on the statement of cash flows.

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Mar 31, 2016

(b) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs,5 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing general meeting, except in case of interim dividend.

As per records of the Company’s share transfer agent, and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

(d) Shares reserved for issue under options

(i) The Company has established Four Soft Limited Employees Welfare Trust (the ‘Trust⁵) to administer the ESOP Scheme and as at 31 March 2016 had issued 1,170,200 equity shares of Rs,5 each, cumulatively. Pursuant to the ESOP Scheme the trust has granted equity shares at an exercise price of Rs,5 each to the eligible employees, which are subject to progressive vesting (1 year after date of issue of options) over a period of three years from the date of the grant. As of 31 March 2016 the total options held by the trust is Nil (2015: Nil). Mode of settlement of these stock options is equity.

The Company did not have any outstanding stock options during the year ended 31 March 2016.

(ii) The Board of directors of POT has issued Nil (2015: 2,000,000) equity shares at Rs,10 per share for consideration other than cash to the Directors of POT.

(e) Reduction of equity share capital

Subsequent to the approval of the High Court of Judicature at Hyderabad for the state of Telangana and Andhra Pradesh for reduction of 60% of the paid up equity share capital, the Company has returned an amount of Rs,16.50 at a premium of Rs,11.50 per share and cancelled and extinguished 60% of the equity shares of the Company of face value of Rs,5 each in July 2015. After reduction, the issued, subscribed and paid-up Equity share capital of Rs,195,184,850 consisting of 39,036,970 Equity Shares of Rs,5 each fully paid-up be reduced to Rs,78,073,940 consisting of 15,614,788 Equity Shares of Rs,5 each.

Aggregate number of capital reduction of equity shares 23,422,182

(g) Consolidation of shares

The Company has consolidated its 2 equity shares of if 5 each in to 1 equity shares of edl0 each in its Extra Ordinary General meeting held on 13 November 2015. Subsequent to year end 31 March. 2016, the Company obtained the requisite approval, including approval from Use stock; exchanges and resumed the grading with face of value Rs,10 iach efeecdve from 9 May 2016. The effect of this consolidation of equity shares has been given in computing earnings per share of all period presented.

1. Trade payables

There are no micro and small enterprises to whom the Company owes dues as at the reporting date. The micro and small enterprises have been identified by management on the basis of information available with the Company and have been relied upon by the auditors.

* Claims against the Company not acknowledged as debts include demand from the Income tax authorities for payment of additional tax amounting to Rs,112,260,670 (2015: Rs,100,833,723) for the assessment years 2008-09, 2009-10 and 2010-11. The claims arose on account of transfer pricing adjustments and bad debts written off. The matter for these assessment years are pending before the Income Tax Appellate Tribunal and based on the recent positive intimations received by the Company, the management believes that the ultimate outcome of this proceeding will not have an adverse effect on the Company’s financial position and results of operations.

2. Gratuity

Defined benefit plan - gratuity

The Company has a defined benefit funded gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The following tables summarize the components of net employee benefit expense recognized in the statement of profit and loss and amounts recognized in the balance sheet for the gratuity.

The Group has not invested the accrued liability as of 31 March 2016. The estimates of future salary increase, considered in actuarial valuation, take account of inflation, seniority, promotions and other relevant factors such as supply and demand in the employment market. The Company evaluates these assumptions annually based on its long term plans of growth and industry standards.

3. Related party disclosures

(a) Name of related parties and nature of relationship

Names Nature of relationship

Mr. Palem Srikanth Reddy Key managerial personnel (KMP)

Ms. Supriya Reddy Relative of KMP

Sonata Information Technology Limited Enterprises significantly influenced by KMP or their relatives

4. Segment reporting

The Company’s business model and considering the internal financial reporting has identified “Trading online in computers, mobiles and electronic products” as the only reportable segment. Further, all operations of the Company are based only in India and hence, no separate financial disclosures have been provided for the segment reporting.

The disclosure as above represents separate information for each of the consolidated entities before elimination of inter—company transactions. The net impacts on elimination of inter—company transactions/profits/consolidation adjustments have been disclosed separately. Based on the group structure, the management is of the view that the above disclosure is appropriate under requirements of the Act.

5. Comparatives

Previous year comparatives have been reclassified and regrouped wherever necessary, to conform to current year''s presentation.

6. Additional information

Additional information as required under paragraph 5 of the part II of the Schedule III to the Act to the extent either "Nil" or “Not Applicable” has not been furnished.

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Mar 31, 2015

1. Company Overview

Paired Technologies limited (the 'Company") is a public limited company domiciled in India and incorporated under the provisions of the Companies Act1956. The Company is head-quartered in Hyderabad, India and the Company's equity shares are listed on Bombay Stock Exchange ('BSE') and National Stock Exchange ('NSE'). The Company's line of business is to provide IT solutions and IT services for media and entertainment and to trade in computer peripherals.

2. Change in accounting estimate

Hitherto, depreciation on all tangible fixed assets except for building was provided on written down value method over the estimated useful lives using the rates prescribed under erstwhile Schedule XIV of the Companies Act, 1956. Effective 1 April 2014, in accordance with the requirements to Schedule II to the Act, the Company has re- assessed the useful Uves and adopted the rates prescribed under Schedule II to the Act.

Had the Company continued to use the earlier policy for depreciation of all tangible assets, the profit for the year ended 31 March 2015 would have been higher by Rs,1,087,808 and further an amount of Rs,214,712 has been charged to the opening balance of the retained earnmgs in respect of assets whose remaining useful life is nil as at 1 April 2014 in accordance with Schedule II to the Act.

3. Discontinuing operations

On 18 September 2013, the members of the Company approved the plan to sell the Company's transportation and logistics software business and investment in its wholly owned subsidiaries to Transport I.T.Solutions Pnvate Limited (a Kewill Group Company) by way of slump sale on a going concern basis and notified the stock exchanges. After obtaining necessary approvals, pursuant to the Business Transfer Agreement (BTA) dated 10 August 2013 between the Company and the acquirer company, the Company has transferred its trasportation and logistics software business and investment in subsidiaries with effect from 4 October 2013 for a lumpsum consideration of Rs.2,516,590,355. Accordingly, the transportation and logistics software business of the Company has been categorised as a discontinuing operations. The operating activities of the Company's discontinued operation are summansed as Mows:

4. Mergers

The Board of Directors at its meeting held on 24 January 2014, had approved the draft composite scheme of arrangement for the merger of 'Paired Media And Entertainment Private Limited' and 'Pal Premium Online Media Private Limited' with Paired Technologies Limited with effect from 30 November 2013 and was in the process of obtaining requisite regulatory approvals. During the year ended 31 March 2015, the Company has cancelled the scheme of arrangement for the merger.

5. Capital reduction

Subject to requisite regulatory approvals, the Board of Directors at its Meeting held on 1 December 2014 and the members of the Company at their extra-ordinary meeting held on 4 April 2015 approved 60% reduction in the issued, subscribed and paid-up share capital of the Company. Upon the above extinguishment, the issued, subscribed and paid-up share capital of the Company amounting to Rs.195,181,850 divided into 39,036,970 equity shares shall be reduced to Rs.78,073,940 divided into 15,614,788 equity shares and the shareholders of the Company shall be paid a sum of *16.50 per share cancelled.

6. Segment reporting

Pursuant to the sale of the transportation and logistics software products business, the management of the Company based on the Company's new business model and considering the internal financial reporting has identified "Trading in computer peripherals" as the only reportable segment. Further, all operations of the Company are based only in India and hence, no separate financial disclosures have been provided for the segment reporting.

7. Comparatives

The previous year comparatives have been regrouped/reclassified wherever necessary, to conform to the current year presentation.

8. Additional information as required under paragraph 5 of the part II of the Schedule III to the Act to the extent either "Nil" or "Not Applicable" has not been furnished.

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Mar 31, 2014

1. Company Overview

Paired Technologies Limited (formerly "Four Soft Limited", the ''Company'') is a public limited company domiciled in India and incorporated under the provisions of the Companies Act 1956 ("the Act"). The Company is head quartered in Hyderabad, India and the Company''s equity shares are listed on Bombay Stock Exchange (''BSE'') and National Stock Exchange (''NSE'').

Pursuant to the sale of core business and entire investment in subsidiaries with effect from 4 October 2013 ("the effective date") the Company ceases to be transportation and logistics software products Company providing integrated enterprise solutions. The Company''s new line of business is to provide IT solutions and IT services for media and entertainment, online e-commerce portals and to trade online in computers, mobiles and electronic products. Further the name of the Company has been changed to ''Paired Technologies Limited'' with effect from 9 December 2013.

(a) Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 5 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing general meeting, except in case of interim dividend.

As per records of the Company''s share transfer agent, and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

(b) Shares reserved for issue under options

(i) The Company has established Four Soft Limited Employees Welfare Trust (the ''Trust'') to administer the ESOP Scheme and as at 31 March 2014 had issued 1,170,200 equity shares of Rs. 5 each. Pursuant to the ESOP Scheme the trust has granted equity shares at an exercise price of Rs. 5 each to the eligible employees, which are subject to progressive vesting (1 year after date of issue of options) over a period of three years from the date of the grant. As of 31 March 2014 the total shares held by the trust is Nil (2013:143,987). Mode of settlement of these stock options is equity.

(ii) The stock compensation amortization expenses during the year ended 31 March 2014 amounted to Rs. 69,988 (2013: Rs. 2,300,625) including a prior period expenditure of Rs. Nil (2013:Rs. 188,295).

2. Trade payables

There are no micro and small enterprises, as defined under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006, to whom the Company owes dues as at the reporting date. The micro and small enterprises have been identified by management on the basis of information available with the Company and have been relied upon by the auditors.

* The Company is in the process of transferring Rs. 173,898 to Investor Education and Protection Fund relating to dividend payable for the year 2005-06 upon expiry of 7 years from the date they remain unclaimed.

(a) Disposals during the year includes transfer of assets as indiciated in note 36.

(b) Amortisation for the year includes Rs. 2,279,479 (2013: Rs. 5,091,318) towards the amortisation charge attributable to the discontinued operations of the Company.

(a) Defined contribution plan

During year ended 31 March 2014, the Company contributed Rs. 4,711,775 (2013: Rs. 9,800,''770) to provident fund and Rs. 60,929 (2013: Rs. 120,691) towards employee state insurance fund.

(b) Defined benefit plan

The Company has a defined benefit gratuity plan. Even,'' employee of the Company who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. Pursuant to the sale of the business of the Company all the employees of the Company and the related closing defined benefit obligation of Rs. 7,501,807 has been transferred to the acquirer Company.

During the year, the Company has created a new plan for the employees recruited for the new business of the Company.

Pursuant to the Business Transfer Agreement executed between the Company and Transport IT Solutions Private Limited (" the acquirer company") all the wholly owned foreign subsidiaries of the Company as on 4 October 2013 have been transferred to the acquirer Company for a purchase consideration of Rs. 1,381,247,877. The profit on such sale of investment amounting to Rs. 719,963,072 and the related transactions cost on sale of investments and core IT solutions business of the Company have been categorized as exceptional items.

3. Contingent Liabilities

For the year ended 31 March

2014 2013

(a) Claims against company not acknowledged as debt * 97,158,305 113,480,599

(b) Corporate guarantees given on behalf of a subsidiary - 358,633,092

* Claims against the Company not acknowledged as debts include demand from the Income tax authorities for payment of additional tax amounting to Rs. 97,158,305 for the assessment years 2008-09, 2009-10 and 2010-11. The claims arose on account of transfer pricing adjustments. The matter for these assessment years are pending before the Income Tax Appellate Tribunal and Dispute Resolution Panel and based on the recent positive intimations received by the Company, the management believes that the ultimate outcome of this proceeding will not have an adverse effect on the Company''s financial position and results of operations.

4. Value of imports calculated on CIF basis

During the year ended 31 March 2014 the Company has imported capital goods amounting to Rs. 270,930 (2013: Rs. 1,021,279).

5. Research and development

During the year ended 31 March 2014 the Company has incurred expenses amounting to Rs. Nil (2013: Rs. 54,098,117) towards research and development included under various heads of expenses.

6. Acquisition of business

The Board at its meeting held on 8 January 2014 approved the acquisition of business from "Premium Web Services Private Limited" for a purchase consideration of Rs. 2,932,969 and a contingent consideration based on a future earn-out plan, the terms of which are listed below:

* The total period for the transaction shall be 5 years i.e April 2014 to March 2019 (also called as "Transaction term").

* The valuation period for calculation of assets and stock of the e-Commerce division shall be 3 years.

* If the valuation of e-Commerce division reaches 25 crores, the transferee will be paid Rs. 25 crores and the earn-out model shall cease to exist.

* 50% of the value of shares allotted to the transferee cannot exceed 10% of paid-up share capital of the Company at the time of allotment.

* Share price shall be the price as per the date of agreement or price as per the SEBI guidelines on the date of the allotment, whichever is higher.

* The valuation should be the higher of below :

a) (60% of gross margin x 2) (40% of PBDT x 8)

b) Net asset value

7. Capital reduction and consolidation of shares

Subject to requisite regulatory approvals, the shareholders at its Annual General Meeting held on 27 November 2013 approved 50% reduction in the issued, subscribed and paid-up share capital of the Company. Upon the above extinguishment, the issued, subscribed and paid-up share capital of the Company amounting to Rs. 195,181,850 divided into 39,036,970 equity shares shall be reduced to Rs. 97,592,425 divided into 19,518,485 equity shares and the shareholders of the Company shall be paid a sum of Rs. 29 per share cancelled.

Further, the equity share capital of the Company of Rs. 97,590,925 divided into 19,518,185 equity shares of Rs. 5 each shall be consolidated into the equity share capital of Rs. 97,590,925 divided into 9,759,093 equity shares of Rs. 10 each.

8. Segment reporting

Pursuant to the sale of the transportation and logistics software products business, the management of the Company based on the Company''s new business model and considering the internal financial reporting has identified "Trading in computer peripherals" as the only reportable segment. Further, all operations of the Company are based only in India and hence, no separate financial disclosures have been provided for the segment reporting.

9. Previous year comparatives

The previous year comparatives have been regrouped/reclassified wherever necessary, to confirm to the current year presentations.

9. Additional information

Additional information as required under paragraph 5 of the part II of the Schedule VI to the Act to the extent either "Nil" or "Not Applicable" has not been furnished.

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

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Mar 31, 2013

1. Company Overview

Four Soft Limited (the ''Company'' or ''Four Soft'') is one of the world''s leading transportation and logistics software products company providing innovative and integrated enterprise solutions. Founded in 1999, Four Soft provides solutions to enterprises across the supply chain management market. Four Soft is head quartered in Hyderabad, India and has 8 development centers across the globe to cater to its large clientele. The Company''s equity shares are listed on Bombay Stock Exchange (''BSE'') and National Stock Exchange (''NSE'').

2. Trade payables

There are no micro and small enterprises, as defined under the provisions of the Micro, Small and Medium Enterprises Development Act, 2006, to whom the Company owes dues as at the reporting date. The micro and small enterprises have been identified by management on the basis of information available with the Company and have been relied upon by the auditors.

3. International transactions with related parties

The Company is required to use certain specified methods in computing arm''s length price in respect of international transactions with itsassociated enterprises and is also required to maintain prescribed information and documents in connectionwith such transactions. The appropriate methods to be adopted depends on the nature of transactions/class of transactions, class of associated persons, functions performed and other factorsas prescribed under Rule 10B of the Income Tax Rules, 1962. The Company is in the process of updating the Transfer Pricing documentation for the year ended 31 March 2013 following detailed Transfer Pricing update conducted for the financial year ended 31 March 2012. In the opinion of management, the same would not have any impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.

4. Segment information

In accordance with AS 17 ''Segment Reporting'' as notified by the Rules, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

5. Exceptional item

In the previous year the company had entered into an agreement with Four Soft Nordic A/s, Denmark for sale of intellectual property rights for the e-customs product, for consideration of `68,000,000 payable in accordance with the terms. The sale consideration had been mutually agreed between parties based on the valuation report obtained from an independent valuer.

6. Value of imports calculated on CIF basis

During the year ended 31 March 2013 the Company has imported capital goods amounting to Rs.1,021,279 (2012: Rs.396,780).

7. Research and development

During the year ended 31 March 2013 the Company has incurred expenses amounting to Rs.54,098,117 (2012: Rs.76,581,382) towards research and development included under various heads of expenses.

8. Previous year comparatives

The previous year comparatives have been regrouped/reclassifiedwherever necessary, to confirm to the current year pre- sentations.

9. Additional information

Additional information as required under paragraph 5 of the part II of the Schedule VI to the Act to the extent either "Nil" or "Not Applicable" has not been furnished.

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

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Mar 31, 2012

1. Company Overview

Four Soft Limited (the 'Company' or 'Four Soft') is one of the world's leading transportation and logistics software products company providing innovative and integrated enterprise solutions. Founded in 1999, Four Soft provides solutions to enterprises across the supply chain management market. Four Soft is head quartered in Hyderabad, India and has 8 development centers across the globe to cater to its large clientele.

(a) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.5 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(b) Shares reserved for issue under options

(i) The Company has established Four Soft Limited Employees Welfare Trust (the 'Trust') to administer the ESOP Scheme and as at 31 March 2012 had issued 1,170,200 equity shares of Rs.5 each. Pursuant to the ESOP Scheme the trust has granted equity shares at an exercise price of Rs.5 each to the eligible employees, which are subject to progressive vesting (1 year after date of issue of options) over a period of three years from the date of the grant. As of 31 March 2012 the total shares held by the Trust is 243,987 (2011: 289,327). Mode of settlement of these stock options is equity.

(ii) During the year ended 31 March 2012 the stock compensation amortization expenses/ (income) is amounting to Rs.(1,445,721) (2011: Rs.2,323,981).

The expected volatility was determined based on historical volatility data; historical volatility includes early years of the Company's life; the Company expects the volatility of its share price to reduce as it matures.

The weighted average share price at the date of exercise for stock options exercised during the year was Rs.14.19 (2011: Rs.21.11). Options outstanding at 31 March 2012 had an exercise price of Rs.10 to Rs.21.05, and a weighted average remaining contractual life of 19.24 months (2011: 17.46 months).

2. Trade payables

There are no micro and small enterprises, as defined under the provisions of Micro, Small and Medium Enterprises Development Act, 2006, to whom the Company owes dues as at the reporting date. The micro and small enterprises have been identified by management on the basis of information available with the Company and have been relied upon by the auditors.

a. Defined contribution plan

During year ended 31 March 2012, the Company contributed Rs. 12,467,987(2011: Rs.11,273,805) to provident fund and Rs.485,519 (2011: Rs.Nil) towards employee state insurance fund.

b. Defined benefit plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. The following tables summarize the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity:

Expected employer's contribution next year Rs.2,745,217(2011: Rs.2,500,000). The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors.

3. Exceptional item

During the year the Company has entered into an agreement with Four Soft Nordic A/s, Denmark for sale of intellectual property rights for the e-customs product, for a consideration of Rs.68,000,000 payable in accordance with the terms. The sale consideration has been mutually agreed between parties based on the valuation report obtained from an independent valuer.

The loss per equity share, based on diluted weighted average number of shares is anti-dilutive. Accordingly, the basic and dilutive earnings per equity share is the same.

4. Contingent liabilities

As at 31 March

2012 2011

(a) Claims against the Company not acknowledged as debt

- Income tax 52,541,539 26,454,812

- Service tax 3,563,314 3,563,314

(b) Guarantees 295,633,092 305,422,230

5. Leases

The company has entered into operating lease agreements for its development centres for the period 1-3 years. The maxi- mum obligations on non-cancellable operating leases payable as per the rentals stated in the respective agreements are as follows :

There are no restrictions imposed by lease arrangements. There are no subleases.

6. Segment information

In accordance with AS 17 'Segment Reporting' as notified by the Rules, segment information has been given in the consolidated financial statements of the company and therefore no separate disclosure on segment information is given in these financial statements.

The Company has an outstanding guarantee given on behalf of Four Soft B.V for its overdraft and term loan facility of Rs.295,633,092 as at 31 March 2012 (2011: Rs.305,422,230).

*During the year the company has allotted 20,000 shares to Mr. Raj Shekhar Roy at an exercise price of Rs.5 each.

7. International transactions with related parties

The Company is required to use certain specified methods in computing arm's length price in respect of international transactions with its associated enterprises and is also required to maintain prescribed information and documents in connection with such transactions. The appropriate methods to be adopted depends on the nature of transactions/class of transactions, class of associated persons, functions performed and other factors as prescribed under Rule 10B of the Income Tax Rules, 1962. The Company is in the process of updating the Transfer Pricing documentation for the year ended 31 March 2012 followingdetailed TransferPricing updateconducted forthe financial yearended 31 March 2011. In theopinion of management, the same would not have any impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.

8. Value of imports calculated on CIF basis

During the year ended 31 March 2012 the Company has imported capital goods amounting to Rs.396,780 (2011: Rs.4,022,577).

9. Research and development

During the year ended 31 March 2012 the Company has incurred expenses amounting to Rs.76,581,382(2011: Rs.79,174,357) towards research and development included under various heads of expenses.

10. Previous year comparatives

The previous year comparatives have been regrouped/rearranged to comply with the presentation requirement of revised Schedule VI as stated in the note 2(a).

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Mar 31, 2010

1. Background

Four Soft Limited (the Company or Four Soft) is one of the worlds leading transportation and logistics software products company providing innovative and integrated enterprise solutions. Founded in 1999, Four Soft provides solutions to enterprises across the supply chain management market. Four Soft is head quartered in Hyderabad, India and has 8 development centers across the globe to cater to its large clientele. The Companys headquarter is registered as 100% export oriented unit under the Software Technology Park scheme of Government of India. Four Soft is a public limited company since April 2003 and has been registered with recognized stock exchanges of India.

2. Related party transactions

Names of the related party Country Nature of relationship

Four Soft B.V. Netherlands Wholly owned subsidiary (WOS)

Four Soft UK Ltd. United Kingdom WOS of Four Soft BV

Four Soft NL BV Netherlands WOS of Four Soft BV

Four Soft Singapore Pte. Ltd. Singapore WOS

Four Soft Japan KK Japan WOS of Four Soft Singapore Pte. Ltd

Four Soft Australia Pty Ltd. Australia WOS of Four Soft Singapore Pte. Ltd

Four Soft Nordic A/S Denmark WOS

Four Soft (HK) Ltd. Hong Kong WOS of Four Soft Nordic A/S

Transaxiom USA Inc. USA WOS of Four Soft Nordic A/S

Four Soft Malaysia Sdn. Bhd. Malaysia WOS

Four Soft USA, Inc. USA WOS of Four Soft BV

Four Soft Employee Welfare Trust India Controlling interest

Palem Srikanth Reddy India Key management personnel (KMP)

Biju S. Nair India KMP

Raj Shekhar Roy (w.e.f 30 September 2008) India KMP Sonata Information Technology Limited India Enterprises signific- antly influenced by KMP or their relatives.

P. C Reddy Trust India Enterprises significa- ntly influenced by KMP or their relatives.

GKP Reddi India Relative of KMP

P Soujanya Reddy India Relative of KMP

P Mangamma India Relative of KMP

Dakshayani Reddy India Relative of KMP

3. Research and development

During the year ended 31 March 2010 the Company has incurred expenses amounting to Rs 80,586,288 (2009: Rs 59,608,490) towards research and development included under various heads of expenses.

4. Employee stock options (ESOP)

(a) The Company has established Four Soft Limited Employees Welfare Trust (the Trust) to administer the ESOP Scheme and as at 31 March 2010 had issued 1,170,200 equity shares of Rs 5 each, including 217,200 equity shares issued pursuant to issue of bonus shares in 2003. Pursuant to the ESOP Scheme the trust has granted equity shares at an exercise price of Rs 5 each to the eligible employees, which are subject to progressive vesting (1 year after date of issue of options) over a period of three years from the date of the grant. As of 31 March 2010 the total shares held by the Trust is 348,325 (2009: 466,318). Mode of settlement of these stock options is equity.

(b) During the year ended 31 March 2010 the Company has amortized stock compensation expenses amounting to Rs 1,350,139 (2009: Rs 2,790,587).

5. Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. The following tables summarize the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the gratuity:

6. Contingent liabilities not provided for:

Included in sundry debtors are dues from companies under the same management:

As at March 31, Particulars

2010 2009

Income tax demand in respect of which the Company has gone

on appeal. Management is of the opinion that appeal is likely

to be accepted by appellate authority. - 2,625,937

7. Additional information pursuant to the provisions of paragraphs 3, 4C and 4D of Part II of Schedule VI to the Act

The Company is primarily engaged in the development and maintenance of computer software. The production and sale of such software cannot be expressed in any generic unit. Hence it is not possible to give quantitative details of sales and certain other information as required under paragraph 3, 4C and 4D of Part II of Schedule VI to the Act.

8. Earnings per share (EPS)

ICAI has issued guidance note on Accounting for Employees Share Based Payments applicable to employee based share plan the grant date in respect of which falls on or after 1 April 2005. In accordance with such guidance note shares allotted to the ESOP Trust pursuant to an employee share based payment plan has not been included in the outstanding shares for computation of basic EPS till the employees have exercised their right after fulfilling the vesting conditions. Until such time the shares so allotted have been considered as dilutive potential equity shares for the purpose of calculating diluted EPS.

9. Segment information

In accordance with AS 17 Segment Reporting as notified by the Rules, segment information has been given in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these financial statements.

10. Sundry creditors

The identification of micro, small and medium enterprise suppliers as defined under the provisions of The Micro, Small and Medium Enterprises Development Act, 2006 is based on Managements knowledge of their status. There are no dues to micro, small and medium enterprises as on 31 March 2010.

11. Previous year comparatives

Previous years figures have been regrouped where necessary to conform to this years classification.