Notes to Accounts of Tanla Platforms Ltd.
Mar 31, 2023
ii) Terms/Rights and restrictions attached to the equity shares:
The Company has only one class of equity shares having a face value of Rs. 1/-. Each shareholder is eligible for one vote per share held. The Company declares and pays dividends in Indian Rupees. The final dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
iv) Employee stock based compensation
The Company instituted the Employee Stock Purchase Plan 2015 (''ESOP 2015'') and Employee Stock Purchase Scheme (ESPS 2018) during the fiscal 2019; and Tanla Platforms Limited-Restricted Stock Unit Plan 2021 during fiscal year 2021 have been approved by the Board of Directors. Refer note 40 for further details.
v) Buyback of Equity shares
The Board of Directors at their meeting held on September 08, 2022, approved the Buyback of the fully paid up equity shares having face value of Re. 1/- each not exceeding 14,16,666 equity shares at a price of Rs. 1,200/- (Indian Rupees Twelve Hundred Only) per Equity Share for an aggregate maximum amount not exceeding Rs. 17,000.00 (Indian Rupees One Hundred and Fifty Four Crores Only). Subsequent to the Board Meeting, the Company obtained the Shareholders'' approval for buy-back on October 11, 2022. The Public Announcement was published on October 12, 2022 and the Draft Letter of Offer was filed with SEBI on October 17, 2022. Total cost incurred towards buyback was Rs. 21,241.32, of which Rs. 3,893.54 was paid towards buyback tax @ 23.36% and transaction cost of Rs. 317.07 was incurred as part of buyback. The buyback was closed on January 14, 2023. In accordance with section 69 of the Act, the Company has created ''Capital Redemption Reserve'' of Rs. 14.16 equivalent to the nominal value of the shares bought back.
Nature and purpose of reserves:
1. Capital Reserve: Represents capital reserve balances of acquired entities which are transferred to the Company upon mergers in the earlier years.
2. Capital Redemption Reserve: In accordance with Section 69 of the Act, capital redemption reserve is created equal to the nominal value of the shares bought back as an appropriation from securities premium reserve.
3. General Reserve: The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Act.
4. Securities premium Account: The amount received in excess of face value of the equity shares is recognised in securities premium. In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium, on exercise of options. This reserve will be utilised in accordance with provisions of Section 52 of the Act.
5. Employee stock options outstanding account: The fair value of the equity-settled share based payment transactions with employees is recognised in statement of profit and loss with corresponding credit to Employee Stock Options Outstanding Account. This will be utilised for allotment of equity shares against outstanding employee stock options.
6. Retained earnings: Retained earnings are the profits that the Company has earned till date less any transfers to general reserve, dividends or other distribution to shareholders.
7. Foreign currency translation reserve: The exchange differences arising from the translation of financial statements of foreign branch with functional currency other than Indian rupees is recognised in other comprehensive income and is presented within equity.
8. Items of other comprehensive income: Represents re-measurement of defined employee benefit plan, i.e. Difference between the interest income on plan assets and the return actually achieved, any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised in other comprehensive income and subsequently not reclassified into Statement of profit and loss.
Notes:
1. Refer note 41 for the details of amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act).
2. Refer note 45 for the details of trade payables due to related parties.
3. Creditors other than micro and small enterprises are non-interest bearing and are settled as per the normal trade cycle.
4. The Company''s exposure to currency risks, liquidity risks and interest rate risks are disclosed in note 34.
The fair value of other current financial assets, cash and cash equivalents, trade receivables , trade payables, and other financial liabilities approximate the carrying amounts because of the short term nature of these financial instruments.
Financial assets that are neither past due nor impaired include cash and cash equivalents, term deposits, and other financial assets.
Fair value hierarchy
The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
No financial assets/liabilities have been valued using level 1 fair value measurements.
The Company is exposed to various financial risks. These risks are categorised into market risk, credit risk and liquidity risk. The Company''s risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.
(a) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprise three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.
(i) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a different currency from the Company''s functional currency). The Company operates in Dubai through its branch and is exposed to foreign currency rate risk through operating activities.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s investment in deposits with banks are for short durations and therefore do not expose the Company to significant interest rate risk.
(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
(c) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises principally from the Company''s receivables from deposits with landlords and other statutory deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions and retaining sufficient balances in bank accounts required to meet a month''s operational costs. The management reviews the bank accounts on regular basis and fund drawdowns are planned to ensure that there is minimal surplus cash in bank accounts. The Company does not foresee any credit risks on deposits with regulatory authorities.
Trade receivables
The customer''s credit risk is managed by the Company''s established policy, procedures and control relating to customer credit risk management.
Credit quality of a customer is assessed based on the individual credit limits are defined in accordance with the assessment and outstanding customer receivables are regularly monitored.
The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables. The maximum exposure to credit risk as at reporting date is primarily from trade receivables amounting to Rs. 17,631.19 (March 31, 2022: Rs. 23,414.69).
The Company''s objective when managing capital is to safeguard the Company''s ability to continue as a going concern in order to provide returns for shareholders and benefits for stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Hence, the Company may adjust any dividend payments, return capital to shareholders or issue new shares or sell assets to reduce debt. Total capital is the equity as shown in the statement of financial position. Currently, the Company primarily monitors its capital structure on the basis of the following gearing ratio. Management is continuously evolving strategies to optimise the returns and reduce the risks. It includes plans to optimise the financial leverage of the Company.
The Company has following post employment benefit plans:
(a) Defined contribution plan
Contributions were made to provident fund and Employee State Insurance in India for the employees of the Company as per the regulations. These contributions are made to registered funds administered by the Government of India. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any other constructive obligation. The expense recognised during the year in the statement of profit and loss towards defined contribution plan is Rs. 239.26 (March 31, 2022: Rs. 192.66).
(b) Defined benefit plan
The Company has a defined benefit gratuity plan and governed by the Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to a gratuity on departure at 15 days salary for each completed year of service. The scheme is funded through a policy with Life Insurance Corporation of India. The following table summarises net benefit expense recognized in the statement of Profit and Loss, the status of funding and the amount recognised in the balance sheet for the gratuity plan.
Composition of plan assets:
Plan assets comprise of 100% insurer managed funds. Fund is managed by Life Insurance Corporation as per Insurance Regulatory and Development Authority of India guidelines, category wise composition of plan assets is not available.
Note 38Dividend distribution to equity shareholders
(All amounts are in INR Lakhs, except for share data and where otherwise stated)
The Board of Directors of the Company in their meeting held on April 26, 2023 (PY: April 29, 2022) have proposed final dividend of Rs. 4/- (PY: Rs. 2/-) per equity share amounting to Rs. 5,376.01 (PY: 2,714.91) subject to approval of shareholders at the ensuing Annual General Meeting (AGM'') and the same was not recognised as liability as at the balance sheet date.
Effective from April 01, 2020, dividends will be taxed in the hands of recipient, hence there will be no liability in the hands of Company.
Note 39Corporate Social Responsibility
(All amounts are in INR Lakhs, except for share data and where otherwise stated)
As per Section 135 of the Act, a company meeting the applicable threshold needs to spend at least 2% of its average net profit of the immediately preceding three financial years as an expense towards Corporate Social Responsibility (CSR) activities. The provisions of section 135(1) of the Act is applicable to the Company.
A. Employee Stock Option Plan (ESOP) :
The Company instituted the Tanla ESOP Plan 2015, in which 50,00,000 stock options were approved by the Shareholders at 19th AGM held on September 16, 2015.
Tanla ESOP Plan :
The Company has allotted as at March 31, 2023 NIL (March 31, 2022: 4,14,750 ) equity shares of face value Rs. 1/- each under Employee Stock Option Scheme. Options under this program has been granted to eligible employees at an grant price of Rs. 26.51/-. The fair value of share option grant amounting to Rs. 14.26/- is estimated at the date of the grant using Black-Scholes method, taking into account the terms and conditions upon which the share option where granted.
B. Employee Stock Purchase Scheme (ESPS) :
The Company instituted the Tanla ESPS Plan 2018, in which 80,00,000 shares were approved by the Shareholders at EGM held on September 17, 2018 and 74,76,126 shares were granted and exercised till March 31, 2022 and the baalnce remaining in the pools is 5,23,875 shares as at March 31, 2023. During the year, no ESPS were granted out of this pool.
(b) Disaggregate revenue information
The Company disaggregates the revenue from customers by types of services rendered geographically which is A2P SMS Services. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of the revenues and cash flows are affected by industry, market and other economic factors.
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Contingent Liabilities |
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|
(All amounts are in INR Lakhs, except for share data and where otherwise stated) |
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|
Particulars |
Note |
As at |
As at |
|
March 31, 2023 |
March 31, 2022 |
||
|
Outstanding guarantees given by the Company |
a |
14,669.67 |
4,502.00 |
|
Claims against Company, not acknowledged as debts |
b & c |
330.41 |
455.41 |
Note
(a) Guarantees outstanding
Total Guarantees outstanding as of March 31, 2023 amounting to Rs. 14,669.67 (March 31, 2022: Rs. 4,502.00) have been issued by banks on behalf of the Company, includes Rs. 13,688.67 (March 31, 2022: Rs. 3,500) towards bank guarantee on behalf of Subsidiary. These guarantees have been given to telcos/banks/public sector undertakings towards performance guarantee of the Company.
b) Demand of service tax under ITSS and DSC service
The Company received service tax orders from the Department of Customs, Central excise and Service tax for the financial years 2007-08 to 2009-10 demanding INR 900.30 on account of taxable service on import of information technology and software services including interest and penalty amounting to Rs. 745.92.
Against this demand, the Commissioner of Central Tax vide order no. HYD-EXCUS-004-COM-010 2020-21 dated 25-03-2021 has dropped demand of Rs. 557.08 as the demand is eligible to take cenvat credit as per Cenvat Credit Rules, 2004. The order has confirmed a final demand of Rs. 193.69. Based on the strength of the case, management does not expect the same to have materially adverse effect on its financial position, as it believes the likelihood of any loss is not probable.
(c) Denial of cenvat credit on various input services
The department conducted audit during the year financial year 2011 and raised a demand for Rs. 121.78 and Rs. 14.94 along with interest and penalty under Section 78 of the Finance Act, 1994. The Company preferred an appeal to the Commissioner against the order of the department. The Commissioner allowed the CENVAT credit to the extent of Rs. 121.78. Aggrieved by the order, the department has filed an appeal with CESTAT seeking denial of cenvat credit of Rs. 121.78, while the Company filed further appeal before CESTAT for the allowance remaining of balance cenvat credit of Rs. 14.94. The legal consultants advised that the Company has a strong case to be allowed the Cenvat credit of INR 121.78 (Department appeal). Hence, no provision is considered necessary for interest and penalty of INR 14.94.
(d) Contemporanea Eventi matter
The Company entered into an agreement with Contemporanea Eventi SL, for the construction of a temporary building, namely an exhibition booth, in Barcelona, Spain during the MWC 2020 international exhibition, which was cancelled due to the covid19 pandemic, Contemporanea Eventi, filed suit in Dubai court demanding payment of the balance amount Rs. 125.00 (â¬154,826.18) as per the agreement. The Company has filed an appeal against the claim for payment of the balance amount for which order is passed against the company during the year. Pursuant to this, payment made is written off and charged to the statment of profit and loss as on 31-03-2023.
The Company publishes this standalone financial statements along with the consolidated financial statements. In accordance with Ind AS 108 Operating segments, the Company has disclosed the segment information in the consolidated financial statements.
(All amounts are in INR Lakhs, except for share data and where otherwise stated)
Basic earnings per share is calculated by dividing the profit/(loss) for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is calculated by dividing the profit/(loss) attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
i. The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.
ii. The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013.
iii. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
v. The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.
vi. The Company has not advanced or loaned or invested funds to any other person or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
vii. The Company has not received any fund from any person or entity, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
viii. The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
ix. The Company has been sanctioned working capital limits from Banks on the basis of security of current assets. Quarterly returns / statements are filed with such Banks are in agreement with the books of accounts.
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 had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified. The Company 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.
Previous year figures have been regrouped/reclassified wherever necessary to correspond with current year''s classification/ disclosures.
Mar 31, 2022
1. For the year ended March 31, 2021, the Company has reversed the provision for impairment of investment in Karix Mobile Private Limited (''Karix'') amounting to INR 3,971.88 in the Standalone financial statements, as Karix has achieved better results than projected and is expected to do perform well in the future.
2. During the year ended March 31, 2022, an amout of Rs. 150.00 has been received from the liquidator of Capitalsiri Investments Private Limited, as part of its liquidation and has been adjusted towards the carrying value of the investment. As at March 31, 2022, liquidation of Capitalsiri Investments Private Limited is under progress.
3. During the year ended March 31, 2022, TZ Mobile Private Limited has been voluntarily liquidated under the order of National Company Law Tribunal dated March 17, 2022 and has no impact on the standalone financial statements for the year ended March 31, 2022.
4. During the year ended March 31, 2022, the Company has disposed its investment in Jengatron Gaming Private Limited, against which provision for impairment was provided in the earlier years, hence proceeds from the disposal of investment of Rs. 0.25 is recognised as other income in the standalone financial statements for the year ended March 31, 2022 (refer note 24).
In assessing the realisability of deferred tax assets, the management considers whether some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. The management considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, the management believes that the Company will realise the benefits of those deductible differences. The amount of the deferred tax assets considered realisable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.
ii) Terms/Rights and restrictions attached to the equity shares:
The Company has only one class of equity shares having a face value of Rs. 1/-. Each shareholder is eligible for one vote per share held. The Company declares and pays dividends in Indian rupees. The final dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
iv) Employee stock based compensation
The Company instituted the Employee Stock Purchase Plan 2015 (''ESOP 2015'') and Employee Stock Purchase Scheme (ESPS 2018) during the fiscal 2019; and have been approved by the Board of Directors. During the current year, the Company has instituted Tanla Platforms Limited-Restricted Stock Unit Plan 2021. Refer note 37 for further details.
v) Buyback of Equity shares
Pursuant public announcement dated 23 July 2021, the Company has bought back 705,677 equity shares at an average price of Rs.920.88 per share. Total cost incurred towards buyback was Rs. 8,192.22, of which Rs. 1,513.87 was paid towards buyback tax @ 23.36% and transaction cost of Rs.157.37 was incurred as part of buyback. The buyback was closed on September 6, 2021. In accordance with section 69 of the Companies Act, 2013 the Company has created ''Capital Redemption Reserve'' of Rs.7.05 equivalent to the nominal value of the shares bought back.
vi) No class of shares have been issued as bonus shares or for consideration other than cash by the Company in the last five preceeding financial years.
Nature and purpose of reserves:
1. Capital Reserve:
Represents capital reserve balances of acquired entities which are transferred to the Company upon mergers in the earlier years.
2. Capital Redemption Reserve:
In accordance with Section 69 of the Companies Act, 2013, capital redemption reserve is created equal to the nominal value of the shares bought back as an appropriation from securities premium reserve.
3. General Reserve:
The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.
4. Securities premium Account:
The amount received in excess of face value of the equity shares is recognised in securities premium. In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium, on exercise of options. This reserve will be utilised in accordance with provisions of Section 52 of the Companies Act, 2013.
5. Money received against share warrants:
The 25% subscription amount received at the time of issue of warrants less utilised for conversion of warrants into equity shares.
6. Employee stock options outstanding account:
The fair value of the equity-settled share based payment transactions with employees is recognised in statement of profit and loss with corresponding credit to Employee Stock Options Outstanding Account. This will be utilised for allotment of equity shares against outstanding employee stock options.
7. Retained earnings:
Retained earnings are the profits that the Company has earned till date less any transfers to general reserve, dividends or other distribution to shareholders.
8. Foreign currency translation reserve:
The exchange differences arising from the translation of financial statements of foreign branch with functional currency other than Indian rupees is recognised in other comprehensive income and is presented within equity.shares.
9. Other items of comprehensive income:
Represents re-measurement of defined employee benefit plan, i.e. difference between the interest income on plan assets and the return actually achieved, any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised in other comprehensive income and subsequently not reclassified into statement of profit and loss.
1. Refer note 38 for the details of amounts due to suppliers under The Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act).
2. Refer note 42 for the details of trade payables due to related parties.
3. Creditors other than micro and small enterprises are non-interest bearing and are settled as per the normal trade cycle.
4. The Company''s exposure to currency risks, liquidity risks and interest rate risks are disclosed in note 32.
Fair values of financial assets and financial liabilities
The fair value of other current financial assets, cash and cash equivalents, trade receivables , trade payables, and other financial liabilities approximate the carrying amounts because of the short term nature of these financial instruments.
Financial assets that are neither past due nor impaired include cash and cash equivalents, term deposits, and other financial assets.
Fair value hierarchy:
The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
No financial assets/liabilities have been valued using level 1 fair value measurements.
The carrying amounts of trade receivables, trade payables and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature. Difference between carrying amounts and fair values of bank deposits, other financial assets and other financial liabilities subsequently measured at amortised cost is not significant in each of the years presented. For all other amortised cost instruments, carrying value represents the best estimate of fair value. For financial assets measured at fair values, the carrying amounts are equal to the fair values.
Note 32Financial risk management
The Company is exposed to various financial risks. These risks are categorised into market risk, credit risk and liquidity risk. The Company''s risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.
a. Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprise three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.
(i) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a different currency from the Company''s functional currency). The Company operates in Dubai through its branch and is exposed to foreign currency rate risk through operating activities.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s investment in deposits with banks are for short durations and therefore do not expose the Company to significant interest rate risk.
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.
c. Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises principally from the Company''s receivables from deposits with landlords and other statutory deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions and retaining sufficient balances in bank accounts required to meet a month''s operational costs. The management reviews the bank accounts on regular basis and fund drawdowns are planned to ensure that there is minimal surplus cash in bank accounts. The Company does not foresee any credit risks on deposits with regulatory authorities.
Trade receivables
The customer''s credit risk is managed by the Company''s established policy, procedures and control relating to customer credit risk management.
Credit quality of a customer is assessed based on the individual credit limits are defined in accordance with the assessment and outstanding customer receivables are regularly monitored.
The Company''s objective when managing capital is to safeguard the Company''s ability to continue as a going concern in order to provide returns for shareholders and benefits for stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Hence, the Company may adjust any dividend payments, return capital to shareholders or issue new shares or sell assets
to reduce debt. Total capital is the equity as shown in the statement of financial position. Currently, the Company primarily monitors its capital structure on the basis of the following gearing ratio. Management is continuously evolving strategies to optimise the returns and reduce the risks. It includes plans to optimise the financial leverage of the Company.
The Company is predominantly equity financed which is evident from the capital structure table. Further, the Company has always been a net cash Company with cash and bank balances along with investments which is predominantly in liquid and short term mutual funds and fixed deposits being far in excess of debt.
The Company has following post employment benefit plans:
a. Defined contribution plan
Contributions were made to provident fund and Employee State Insurance in India for the employees of the Company as per the regulations. These contributions are made to registered funds administered by the Government of India. The obligation of the Company is limited to the amount contributed and it has no further contractual nor any other constructive obligation. The expense recognised during the year in the statement of profit and loss towards defined contribution
plan is Rs. 53.13 (March 31, 2021: Rs. 49.09).
b. Defined benefit plan
The Company has a defined benefit gratuity plan and governed by the Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to a gratuity on departure at 15 days salary for each completed year of service. The scheme is funded through a policy with Life Insurance Corporation of India. The following table summarises net benefit expense recognized in the statement of Profit and Loss, the status of funding and the amount recognised in the balance sheet for the gratuity plan.
Composition of plan assets
Plan assets comprise of 100% insurer managed funds. Fund is managed by Life Insurance Corporation as per Insurance Regulatory and Development Authority of India guidelines, category wise composition of plan assets is not available.
Note 35Dividend distribution to equity shareholders
FY 2021-22:
The Board of Directors of the Company in their meeting held on April 29, 2022 have proposed final dividend of Rs. 2/-per equity share amounting to Rs. 2,714.91 subject to approval of shareholders at the ensuing annual general meeting and the same was not recognised as liability as at March 31, 2022.
FY 2020-21:
During the year, the Board of Directors of the Company have recommended an interim dividend of Rs. 1/- per share amounting to Rs. 1,357.87 declared and distributed to equity shareholders. The Board of Directors of the Company in their meeting held on May 19, 2021 have proposed final dividend of Rs. 1/- per share amounting to Rs. 1,353.30 and distributed to the equity shareholders.
Effective from April 01, 2020, dividends will be taxed in the hands of recipient, hence there will be no liability in the hands of the Company.
Note 36Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a Company meeting the applicable threshold needs to spend at least 2% of its average net profit of the immediately preceding three financial years as an expense towards Corporate Social Responsibility (CSR) activities. The provisions of section 135(1) of the Companies Act, 2013 is applicable to the Company. However, as per section 135(5) of the Companies Act, 2013, no amount is required to be spend by the Company for the year ended March 31, 2022.
Employee Stock Based Compensation
A. Employee Stock Option Plan (ESOP) :
The Company instituted the Tanla ESOP Plan 2015, in which 50,00,000 stock options were approved by the Shareholders at 19th AGM held on September 16, 2015.
Tanla ESOP Plan:
During the year, the Company has allotted 4,14,750 (March 31, 2021: 4,71,645) equity shares of face value Rs. 1/- each under Employee Stock Option Scheme. Options under this program has been granted to eligible employees at an grant price of Rs. 26.51/-. The fair value of share option grant amounting to Rs. 14.26/- is estimated at the date of the grant using Black-Scholes method, taking into account the terms and conditions upon which the share option where granted.
B. Employee Stock Purchase Scheme (ESPS) :
The Company instituted the Tanla ESPS Plan 2018, in which 80,00,000 shares were approved by the Shareholders at EGM held on September 17, 2018 and 74,76,125 shares were granted and exercised till March 31, 2020 and the balance remaining in the Pool is 5,23,875 as at March 31, 2022.
During the year, no ESPS were issued to employees.
C. Restricted Stock Unit Plan 2021
During the year, the Company has instituted Tanla Platforms Limited-Restricted Stock Unit Plan 2021, wherein shareholders of the Company have approved 30,00,000 (Thirty lakh) RSUs to the eligible employees of the Company. The RSUs will vest over a period of 1-4 years.
a. Guarantees outstanding
Total Guarantees outstanding as of March 31, 2022 amounting to Rs. 4,502.00 (March 31, 2021: Rs. 392.00) have been issued by banks on behalf of the Company, includes Rs. 3,500.00 towards bank guarantee on behalf of Subsidiary. These guarantees have been given to telcos/banks/public sector undertakings towards performance guarantee of the Company.
b. Demand of service tax under ITSS and DSC service
The Company received service tax orders from the Department of Customs, Central excise and Service tax for the financial years 2007-08 to 2009-10 demanding INR 900.30 on account of taxable service on import of information technology and software services including interest and penalty amounting to Rs. 745.92. Against this demand, the Commissioner of Central Tax vide order no. HYD-EXCUS-004-COM-010 2020-21 dated 25-03-2021 has dropped demand of Rs. 557.08 as the demand is eligible to take cenvat credit as per Cenvat Credit Rules, 2004. The order has confirmed a final demand of Rs. 193.69. Based on the strength of the case, management does not expect the same to have materially adverse effect on its financial position, as it believes the likelihood of any loss is not probable.
c. Denial of cenvat credit on various input services
The department conducted audit during the year financial year 2011 and raised a demand for Rs. 121.78 and Rs. 14.94 along with interest and penalty under Section 78 of the Finance Act, 1994. The Company preferred an appeal to the Commissioner against the order of the department. The Commissioner allowed the CENVAT credit to the extent of Rs. 121.78. Aggrieved by the order, the department has filed an appeal with CESTAT seeking denial of cenvat credit of Rs. 121.78, while the Company filed further appeal before CESTAT for the allowance remaining of balance cenvat credit of Rs. 14.94. The legal consultants advised that the Company has a strong case to be allowed the Cenvat credit of INR 121.78 (Department appeal). Hence, no provision is considered necessary for interest and penalty of INR 14.94.
d. Contemporanea Eventi Matter
The Company entered into an agreement with Contemporanea Eventi SL, for the construction of a temporary building, namely an exhibition booth, in Barcelona, Spain during the MWC 2020 international exhibition, which was cancelled due to the covid19 pandemic, Contemporanea Eventi, filed suit in Dubai court demanding payment of the balance amount Rs. 125.00 (â¬154,826.18) as per the agreement. The Company has filed an appeal against the claim and is confident that it will not result in financial impact.
The Company publishes this standalone financial statements along with the consolidated financial statements. In accordance with Ind AS 108 Operating segments, the Company has disclosed the segment information in the consolidated financial statements.
The Company continues to consider the impact of Covid-19 pandemic in assessing the recoverability of receivables, intangible assets and certain investments. For this purpose, the Company considered internal and external sources of information up to the date of the approval of these financial statements. The Company based on its judgements, estimates and assumptions including sensitivity analysis expects to fully recover the carrying amount of receivables, intangible assets, investments and other assets. Based on the assessment of the impact of COVID-19, management concluded that there has been no impact on the Company''s operations, financial performance and financial position as at and for the year ended March 31, 2022.
For the year ended March 31, 2021, the Company has reversed the provision for impairment of investment in Karix Mobile Private Limited (''Karix'') amounting to INR 3,971.88 lakhs in the standalone financial statements, as Karix has achieved better results than projected and is expected to do perform well in the future.
Note 44Earnings Per Share (EPS)
Basic earnings per share is calculated by dividing the profit/(loss) for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is calculated by dividing the profit/(loss) attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
i. The Company does not have any benami property, where any proceeding has been initiated or pending against the company for holding any benami property.
ii. The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013.
iii. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
iv. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
v. The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.
vi. The Company has not advanced or loaned or invested funds to any other person or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
vii. The Company has not received any fund from any person or entity, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Group shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
viii. The Company does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income-Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income-Tax Act, 1961).
ix. The Company has been sanctioned working capital limits from Banks on the basis of security of current assets. Quarterly returns / statements are filed with such Banks are in agreement with the books of accounts.
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 had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified. The Company 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.
The Previous year figures have been regrouped/reclassified wherever necessary to correspond with current year''s classification/ disclosures.
Mar 31, 2021
Nature and Purpose of Reserves
Capital Reserve: Represents capital reserve balances of acquired entities which are transferred to the Company upon mergers in the earlier years.
Capital Redemption Reserve: In accordance with Section 69 of the Companies Act, 2013, the Company creates capital redemption reserve equal to the nominal value of the shares bought back as an appropriation from general reserve.
Employee stock options outstanding account: The fair value of the equity-settled share based payment transactions with employees is recognised in statement of profit and loss with corresponding credit to Employee Stock Options Outstanding Account. This will be utilised for allotment of equity shares against outstanding employee stock options.
Securities premium Account: The amount received in excess of face value of the equity shares is recognised in securities premium. In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium. This reserve will be utilised in accordance with provisions of Section 52 of the Companies Act, 2013.
General Reserve: The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act, 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.
Money received against share warrants: The 25% subscription amount received at the time of issue of warrants less utilised for conversion of warrants into equity shares.
Retained earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distribution to share holders.
Foreign Currency Translation Reserve: The exchange differences arising from the translation of financial statements of foreign branch and foreign subsidiary with functional currency other than the Indian rupees is recognized in other comprehensive income and is presented within equity.
OCI represents Re-measurement on defined employee benefit plan: Difference between the interest income on plan assets and the return actually achieved, any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised in other comprehensive income and subsequently not reclassified into statement of profit and loss.
Note 29Fair values of financial assets and financial liabilities
The fair value of other current financial assets, cash and cash equivalents, trade receivables , trade payables, and other financial liabilities approximate the carrying amounts because of the short term nature of these financial instruments.
Financial assets that are neither past due nor impaired include cash and cash equivalents, security deposits, term deposits, and other financial assets.
Similarly, carrying values of non-current security deposits and non-current term deposits are not significant and therefore the impact of fair value is not considered for disclosure.
Fair value hierarchy
The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
No financial assets/liabilities have been valued using level 1 fair value measurements.
(i) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a different currency from the Companyâs functional currency). The Company operates in Dubai through its branch and Subsidiary in Singapore is exposed to foreign currency rate risk through operating activities.
The carrying amounts of trade receivables, trade payables and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature. Difference between carrying amounts and fair values of bank deposits, other financial assets and other financial liabilities subsequently measured at amortised cost is not significant in each of the years presented. For all other amortised cost instruments, carrying value represents the best estimate of fair value.
For financial assets measured at fair values, the carrying amounts are equal to the fair values.
Note 30Financial risk management
The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk and liquidity risk. The Companyâs risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.
(a) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.
(ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs investment in deposits with banks are for short durations and therefore do not expose the Company to significant interest rate risk.
(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.
(c) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk arises principally from the Companyâs receivables from deposits with landlords and other statutory deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions and retaining sufficient balances in bank accounts required to meet a monthâs operational costs. The Management reviews the bank accounts on regular basis and fund drawdowns are planned to ensure that there is minimal surplus cash in bank accounts. The Company does a proper financial and credibility check on the landlords before taking any property on lease and hasnât had a single instance of non-refund of security deposit on vacating the leased property if any. The Company also in some cases ensure that the notice period rentals are adjusted against the security deposits and only differential, if any, is paid out thereby further mitigating the non-realization risk. The Company does not foresee any credit risks on deposits with regulatory authorities.
Trade receivables
The customerâs credit risk is managed by the Companyâs established policy, procedures and control relating to customer credit risk management.
Credit quality of a customer is assessed based on the individual credit limits are defined in accordance with the assessment and outstanding customer receivables are regularly monitored.
The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables. The maximum exposure to credit risk as at reporting date is primarily from trade receivables amounting to Rs. 20,072.30 (March 31, 2020: Rs. 24,784.64). The movement in allowance for impairment in respect of trade and other receivables during the year was as follows:
The Company is predominantly equity financed which is evident from the capital structure table. Further, the Company has always been a net cash company with cash and bank balances along with investments which is predominantly in liquid and short term mutual funds and fixed deposits being far in excess of debt.
The Company has a defined benefit gratuity plan and governed by the Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to a gratuity on departure at 15 days salary for each completed year of service. The scheme is funded through a policy with Life Insurance Corporation of India. The following table summarise net benefit expense recognized in the statement of Profit and Loss, the status of funding and the amount recognised in the balance sheet for the gratuity plan.
The Companyâs objective when managing capital is to safeguard the Companyâs ability to continue as a going concern in order to provide returns for shareholders and benefits for stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Hence, the Company may adjust any dividend payments, return capital to shareholders or issue new shares or sell assets to reduce debt. Total capital is the equity as shown in the statement of financial position. Currently, the Company primarily monitors its capital structure on the basis of the following gearing ratio. Management is continuously evolving strategies to optimize the returns and reduce the risks. It includes plans to optimize the financial leverage of the Company.
During the year, the Board of Directors of the company has recommended an interim dividend of Rs. 1 /- per share declared and distributed to equity shareholders.
The Board of Directors of the Company in their meeting held on May 19, 2021 have proposed final dividend of Rs. 1/- per equity share subject to approval of shareholders at the ensuing annual general meeting and the same was not recognised as liability as at March 31,2021.
Effective from April 01,2020: Dividends will be taxed in the hands of recipient, hence there will be no liability in the hands of Company.
Note 34Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities.
A. Employee Stock Option Plan (ESOP) :
The parent company instituted the Tanla ESOP Plan 2015, in which 50,00,000 stock options were approved by the Shareholders at 19th AGM held on September 16, 2015.
Tanla ESOP Plan :
B. Employee Stock Purchase Scheme (ESPS) :
The Company instituted the Tanla ESPS Plan 2018, in which 80,00,000 shares were approved by the Shareholders at EGM held on September 17, 2018.
During the year, no shares under ESPS were issued to employees.
During the year parent company has allotted 471,645 (March 31, 2020: 2,25,360) equity shares of face value Rs. 1/- each under Employee Stock Option Scheme. Options under this program has been granted to eligible employees at an grant price of Rs. 26.51/-. The fair value of share option grant amounting to Rs. 14.26 (March 31, 2020: Rs. 32.66) is estimated at the date of the grant using Black-Scholes method, taking into account the terms and conditions upon which the share option where granted.
(a) Guarantees outstanding
Total Guarantees outstanding as of March 31, 2021 amounting to INR 3,616.95 (March 31, 2020 - INR 3,240.26) have been issued by banks on behalf of the Group. These guarantees have been given to telcos /banks/public sector undertakings towards performance guarantee from Group entities.
(b) Demand of service tax under ITSS and DSC service
Tanla had received service tax demand from the Department of Customs, Central excise and Service tax for the financial years 2007-08 to 2009-10 amounting to INR 900.30 on account of taxable service on import of information technology and software services including interest and penalty there on amounting to INR 745.92. Against this demand, the Commissioner of Central Tax vide order no. HYD-EX-CUS-004-COM-010 2020-21 dated 25-03-2021 has dropped demand of INR 557.09 as the demand is eligible for cenvat credit as per Cenvat Credit Rules, 2004. The order has confirmed a final demand of INR 193.69. Based on the strength of the case, Management does not expect the same to have materially adverse effect on its financial position, as it believes the likelihood of loss is not probable.
(c) Denial of cenvat credit on various input services
The department conducted audit during the financial year 2011 and raised a demand of INR 121.78 and INR 14.93 along with interest and penalty under Section 78 of the Finance Act, 1994. The Company preferred an appeal to the Commissioner against the order of the department. The Commissioner allowed CENVAT Credit to the extent of INR 121.78. Aggrieved by the order, the department filed an appeal with CESTAT seeking denial of cenvat credit of INR 121.78 while the company filed a further appeal before CESTAT for the allowance of balance cenvat credit of INR 14.93.
The legal consultants advised that the company has a strong case to be allowed the Cenvat Credit of INR 121.78 (Department appeal). Hence no provision is considered necessary for interest and penalty of INR 14.93.
The petition was filed on September 30, 2019 with the Hyderabad bench of Honâble National Company Law Tribunal (âNCLTâ) in respect of the scheme of merger of Karix Mobile Private Limited and Unicel Technologies Private Limited (âUnicelâ) with Tanla Corporation Private Limited , Whollyowned Subsidiary Company of Tanla Platforms Limited (formerly known as Tanla Solutions Limited) (hereinafter referred as âthe Schemeâ), the Honâble NCLT pronounced its order on June 30, 2020, approving the Scheme.
Pursuant to the order of the Honâble NCLT, Karix Mobile Private Limited and Unicel Technologies Private Limited merged into Tanla Corporation Private Limited. Further, pursuant to the order of the Honâble NCLT and subsequent to the approval of the Registrar of Companies, Ministry of Corporate Affairs, the name of Tanla Corporation Private Limited has been changed to Karix Mobile Private Limited w.e.f. August 19, 2020.
(ii) Key Managerial Personnel
D Uday Kumar Reddy - Chairman & CEO
Srinivas Gunupudi Kamoji - Chief Financial Officer
Seshanuradha Chava - General Counsel and Chief Regulatory Officer
Notes
(i) Note on Merger: The petition was filed on September 30, 2019 with the Hyderabad bench of Honâble National Company Law Tribunal (âNCLTâ) in respect of the scheme of merger of Karix Mobile Private Limited and Unicel Technologies Private Limited (âUnicelâ) with Tanla Corporation Private Limited , Whollyowned Subsidiary Company of Tanla Platforms Limited (formerly known as Tanla Solutions Limited) (hereinafter referred as âthe Schemeâ), the Honâble NCLT pronounced its order on June 30, 2020, approving the scheme.
(ii) Pursuant to the order of the Honâble NCLT, Karix Mobile Private Limited and Unicel Technologies Private Limited merged into Tanla Corporation Private Limited.
Further, pursuant to the order of the Honâble NCLT and subsequent to the approval of the Registrar of Companies, Ministry of Corporate Affairs, the name of Tanla Corporation Private Limited has been changed to Karix Mobile Private Limited w.e.f. August 19, 2020.
Previous year figures have been regrouped/reclassified wherever necessary to correspond with current yearâs classification/disclosures.
The World Health Organization announced a global health emergency because of coronavirus (âCOVID-19â) and classified its outbreak as a pandemic on March 11, 2020. On March 24, 2020, the Indian government announced a strict 21-day lockdown across the country to contain the spread of the virus. This pandemic and response thereon have impacted most of the industries. Consequent to the nationwide lock down on March 24, 2020, the Companyâs operations scaled down. Post lockdown, the Companyâs operations scaled up in a phased manner with business coming back to normal for most of the customers. The impact on future operations would, to a large extent, depend on how the pandemic would further impact the operations of the Company. The Company continues to monitor the situation and take appropriate action for business continuity, as considered necessary in due compliance with the applicable Government directions.
The management has made an assessment of the impact of COVID-19 and concluded that there has been no impact on the Companyâs operations, financial performance and position as at and for the year ended March 31,2021.
As Karix Mobile Private Limited, (Subsidiary) has achieved better results than projected and is expected to do better in the future, the Company has for the year ended March 31, 2021, reversed the provision for impairment of investment amounting to Rs. 3,971.88 in the Standalone financials.
Based on the assessment of impact of COVID 19 of management, no other adjustments have been made in the consolidated financial statements.
Basic earnings /(loss) per share amounts are calculated by dividing the profit/(loss) for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.
Diluted earnings /(loss) per share amounts are calculated by dividing the profit/(loss) attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
Mar 31, 2018
1 Corporate information
Tanla started its journey as the new millennium set in with a small group of mobile messaging experts, with base in Hyderabad, India, to create a world-class messaging service. Today, Tanla is a global leader in its domain as one of the largest Cloud Communication providers, handling over 90 bn business communications annually. Tanla is innovating the way world communicates, continuously raising the bar through enhanced speed, ease and simplicity of Cloud Communication solutions, adopting cutting-edge technologies backed by the best of IT setup, highly scalable cloud infrastructure, industry standard processes and world-class security (ISO 27001:2013) to meet the discerning needs of a diverse clientele, from enterprises to carriers across geographies. Tanla is a public limited company listed on leading Indian stock exchanges (BSE CODE: 532790 and NSE: TANLA).
The financial statements for the year ended March 31st, 2018 were approved by the Board of Directors and authorised for issue on May 18, 2018.
ii) Terms/Rights and restrictions attached to the equity shares:
The Company has only one class of equity shares having a face value of Rs. 1/-. Each share holder is eligible for one vote per share held.
Financial risk management
The Company has exposure to the following risks arising from the financial instruments
- Market Risk Liquidity Risk Credit Risk
(i) Risk management framework
The Companyâs risk management is carried out by the treasury department under policies approved by the Board of Directors. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of financial instruments and investment of excess liquidity.
(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.
(i) Foreign currency risk
The Company operates in Dubai through its branch and is exposed to foreign currency rate risk through operating activites.
(b) Liquidity Risk
The Company''s principle source of liquidity are cash and cash equivalents and the cash flow is generated from operations. The Company is a debt free company since inception. The company believes that the working capital is sufficient to meet its current requirements and accordingly, no risk is perceived
(c) Credit Risk
Credit risk is the risk that the counterparty will not meet its obligation under a financial instrument or customer contract, leading to financial loss. The credit risk arises principally from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions and other financial instruments.
Trade receivables
The customer''s credit risk is managed by the Company''s established policy, procedures and control relating to customer credit risk management
Credit quality of a customer is assessed based on the individual credit limits defined in accordance with the assessment and outstanding customer recivebles are regularly monitored.
The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables. The maximum exposure to credit risk as at reporting date is primarily from trade receivables amounting to Rs. 23,238.60 lakhs (March 31st, 2017 - Rs. 9,479.47 lakhs). The movement in allowance for impairment in respect of trade and other receivables during the year was as follows:
2 Gratuity
The Company has a defined benefit gratuity plan and governed by the Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to a gratuity on departure at 15 days salary for each completed year of service. The scheme is funded through a policy with Life Insurance Corporation of India. The following table summarise net benefit expense recognized in the statement of Profit and Loss, the status of funding and the amount recognised in the balance sheet for the gratuity plan.
3 Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities.
(a) Gross amount required to be spent by the Company during the year is Rs. 4,05,785/-
4 Dividends
On May 18, 2018, the Board of Directors of the Company has proposed a final dividend of Rs. 0.30 per equity share in respect of the year ending March 31st, 2018 subject to the approval of the Shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs. 405.93 Lakhs inclusive of dividend distribution tax of Rs. 68.66 lakhs.
5 Employee Stock Option Plan (ESOP) :
The Company instituted the Tanla ESOP Plan 2015, in which 5,000,000 stock options were approved by the Shareholders at 19th AGM i.e, September 16, 2015.
Tanla ESOP Plan :
Options under this program has been granted to eligible employees at an grant price of Rs. 26.51/-.
6 Contingent Liabilities
i) Total Guarantees outstanding as of March 31st, 2018 amounting to Rs. 25 Lakhs (March 31st, 2017 - Rs. 2,490.00 lakhs) have been issued by banks on behalf of the Company. These guarantees have been given by the banks to Telco''s against their receivable from the Company.
# The Company had received service tax orders from the Department of Customs, Central excise and Service tax for the financial years 2007-08 to 2009-10 demanding Rs. 900.3 lakhs on account of taxable service on import of information techonlogy and software services and interest and penalty amounting to Rs. 745.9 lakhs. Against this demand the Company deposited an amount of Rs. 193.7 lakhs during FY 2009-10 and FY 2010-11. Aggrieved by the demand order, the Company filed appeal before the CESTAT based on advise by its legal counsel. The appeal is pending hearing by CESTAT. During the FY 2018, the Company has deposited the balance amount of Service tax demand of Rs. 706.6 lakhs with the department and has utilised input credit against the same under the GST regime. Based on the strength of its case, Management believes that the outcome of a liability is not probable.
7 Segment Information
The Company publishes this financial statement along with the consolidated financial statements. In accordance with Ind AS 108, Operating Segments, the Company has disclosed the segment information in the consolidated financial statements.
8 Previous year figures have been regrouped/reclassified wherever necessary to correspond with current year''s classification/ disclosures.
Mar 31, 2016
ii) Terms/Rights and restrictions attached to the equity shares:
The Company has only one class of equity shares having a face value of Re. 1/-. Each share holder is eligible for one vote per share held.
1. Contingent Liabilities
i] Total Guarantees outstanding as of March 31, 2016 amounting to Rs. 280.00 Lakhs (March 31, 2015 - Rs. 2150.00 lakhs] have been issued by banks on behalf of the Company. These guarantees have been given by the banks to mobile operators against their receivable from the Company. The balance contingent liabilities are in respect of subjudice matters and represent the probable liability on account of service tax matters under appeal.
Unless otherwise stated, the Management believes that, based on legal advice, the outcome of these contingencies will be favorable and that loss is not a probable.
2. Segment Reporting
Refer Note 27 to the notes of the Consolidated Financial Statements
3. Quantitative details
The Company is engaged in the business of development & maintenance of Computer Software, offshore development and other related services. The production and sale of such software services cannot be expressed in any generic unit and hence it is not possible to give such quantitative details of sales and certain information as required under paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956. The details of Conservation of Energy, Technology absorption are given in Directors Report.
4. Previous year figures have been regrouped/reclassified wherever necessary to correspond with current year''s classification/disclosure
Mar 31, 2015
A Corporate information
Tanla Solutions Limited (hereinafter referred to as "Tanla") was
incorporated on July 28th, 1995 in Hyderabad, Andhra Pradesh. Tanla
has its head quarters and development facilities in Hyderabad, India
and serves a global customer base through its subsidiaries. Tanla's
range of services include product development and implementation in
wireless telephony industry, aggregator services and offshore
development services.
2 Contingent Liabilities
i) Total Guarantees outstanding as of March 31,2015 amounting to Rs.
2150.00 lakhs (March 31,2014 -Rs. Nil ) have been issued by banks on
behalf of the Company. These guarantees include certain financial bank
guarantees which have been given for business. The amount with respect
to these have been disclosed under capital commitments, contingencies
and liabilities, as applicable, in compliance with the applicable
accounting standards.
ii) Claims against the Company not acknowledged as debt: Rs.
Particulars 2014-2015 2013-2014
1 Outstanding guarantees given by the company 215,000,000 -
2 Claims against company, not acknowledged as 164,622,062 164,622,062
debts
3 Claims made by company, not acknowledged as - -
debts
4 Corporate Guarantee given to subsidiary - -
companies
Unless otherwise stated, the Management believes that, based on legal
advice, the outcome of these contingencies will be favourable and that
loss is not a probable.
3 Related Party Disclosures:
A) List of Related Parties:
Name of the Related Party Country Relationship with the Entity
Tanla Solutions (UK) Limited, India UK Wholly-owned subsidiary
Tanla Mobile Asia Pacific Pte Ltd Singapore Wholly-owned subsidiary
Wholly-owned subsidiary
Tanla Mobile Ireland Private Limited Ireland of Tanla Mobile Asia
Pacific Pte Ltd
Tanla Mobile Middle East FZ LLC UAE Wholly-owned subsidiary
of Tanla Mobile Asia
Pacific Pte Ltd
Wholly-owned subsidiary
Tanla Mobile Finland Oy Finland of Tanla Mobile Middle
East FZ LLC
Tania OY Finland Wholly owned subsidary of
tania mobile finland OY
Mufithumb Corportion Private Limited India Wholly-owned subsidiary
TZ Mobile Private Limited India Joint Venture with ZED
Worldwide Holdings S.L.
Spain
4 Quantitative details
The Company is engaged in the business of development & maintenance of
Computer Software, offshore development and other related services. The
production and sale of such software services cannot be expressed in
any generic unit and hence it is not possible to give such quantitative
details of sales and certain information as required under paragraph
3,4C and 4D of Part II of Schedule VI to the Companies Act, 1956. The
details of Conversation of Energy, Technology absorption are given in
Directors Report. R&D expenditure is not separately accounted for.
5 Previous year figures have been recast/reclassified wherever
necessary to correspond with the current year's classification/
disclosures.
Mar 31, 2013
1 Corporate information
Tanla Solutions limited (hereinafter referred to as "Tanla") was
incorporated on July 28th'' 1995 in Hyderabad'' Andhra Pradesh. Tanla has
its headquarters and development facilities in Hyderabad'' India and
serves a global customer base through its subsidiaries. Tanla''s range
of services include product development and implementation in wireless
telephony industry'' aggregator services and offshore development
services.
2 Segment Reporting Business Segment:
The Company is engaged in telecom infrastructure and related value
added services business and its operations constitute a single segment
in the context of Accounting Standard (AS17) "Segment Reporting"
Quantitative details
The Company is engaged in the business of development & maintenance of
Computer Software'' offshore development and other related 27 services.
The production and sale of such software services cannot be expressed
in any generic unit and hence it is not possible to give such
quantitative details of sales and certain information as required under
paragraph 3''4C and 4D of Part II of Schedule VI to the Companies Act''
1956. The details of Conservation of Energy'' Technology absorption are
given in Directors Report. R&D expenditure is not separately accounted
for.
Mar 31, 2012
1 Corporate information
Tanla Solutions Limited (hereinafter referred to as "Tanla") was
incorporated on July 28th, 1995 in Hyderabad, Andhra Pradesh. Tanla has
its headquarters and development facilities in Hyderabad, India, and
serves a global customer base through its subsidiaries. Tanla's range
of services include product development and implementation in wireless
telephony industry, aggregator services and offshore development
services.
2 CONTINGENT LIABILITIES
s.No. Particulars For the Year
2011-2012 For the Year
2010-2011
1 Outstanding guarantees given
by the company Nil 16 50 000
2 Claims against company,
not acknowledged as
debts** 8 28 22 050 8 97 95 222
3 Claims made by company,
not acknowledged as debts Nil Nil
4 Corporate Guarantee
given to subsidiary
companies Nil Nil **
Represents Service Tax
3 Segment Reporting
i) Business Segment:
The Company is engaged in telecom infrastructure and related value
added services business and its operations constitute a single segment
in the context of Accounting Standard (AS17) "Segment Reporting"
4 Quantitative details
The Company is engaged in the business of development & maintenance of
Computer Software, offshore development and other related services. The
production and sale of such software services cannot be expressed in
any generic unit and hence it is not possible to give such quantitative
details of sales and certain information as required under paragraph
3,4C and 4D of Part II of Schedule VI to the Companies Act, 1956. The
details of Conservation of Energy, Technology absorption are given in
Directors Report. R&D expenditure is not separately accounted for.
Mar 31, 2011
All amounts in the financial statements are presented in Rupees and as
otherwise stated.
1. Contingent Liabilities In Rs.
S.No. Particulars For the Year 2010-2011 For the Year
2009-2010
1 Outstanding guarantees &
letters of credit given by
the company 16 50 000 64 00 000
2 Claims against company, not
acknowledged as debts* 8 88 77 108 7 73 25 150
3 Claims made by company, not
acknowledged as debts Nil Nil
4 Corporate Guarantee given to
subsidiary companies Nil 1 07 00 150
*includes Service Tax Rs.8 28 22 050
2. Quantitative details
The Company is engaged in the business of Telecom infrastructure and
related value added services. The production and sale of such software
services cannot be expressed in any generic unit and hence it is not
possible to give such quantitative details of sales and certain
information as required under paragraph 3,4C and 4D of Part II of
Schedule VI to the Companies Act, 1956. The details of Conservation of
Energy, Technology absorption are given in Directors Report. R&D
expenditure is not separately accounted for.
3. Dues to micro & small-scale industrial undertakings
As at March 31, 2011 as per available information with the company,
there are no dues to micro & small scale Industrial Undertakings.
4. Income taxes
The provision for taxation includes tax liabilities in India on the
company's global income as reduced by exempt incomes and any tax
liabilities arising overseas on income sourced from those countries.
5. Segment reporting
The Company is engaged in telecom infrastructure and related value
added services business and its operations constitute a single segment
in the context of Accounting Standard (AS17) "Segment Reporting"
6. The previous year figures have been recast / restated, wherever
necessary, to the current period's classifi cation
7. Financial figures have been rounded off to nearest rupee.
8. Schedules 1 to 15 form part of Balance Sheet and have been
authenticated.
Mar 31, 2010
All amounts in the financial statements are presented in Rupees and as
otherwise stated.
1. Contingent Liabilities
(in Rs.)
S. No Particulars For the Year For the Year
2009-10 2008-09
1 Outstanding guarantees & letters 6,400,000 3,750,000
of credit given by the company
2 Claims against company, not 77,028,179 36,708,456
acknowledged as debts
3 Claims made by company, not NIL NIL
acknowledged as debts
4 Corporate Guarantee given to 10,112,974 43,045,000
subsidiary
companies
* Includes service tax Rs.67,870,335.
2. Aggregate Expenses
The aggregate amounts incurred on various expenses under cost of sales,
Selling & marketing expenses and General & admin- istrative expenses:
3. Quantitative details
The Company is engaged in the business of development & maintenance of
Computer Software, offshore development and other related services. The
production and sale of such software services cannot be expressed in
any generic unit and hence it is not possible to give such quantitative
details of sales and certain information as required under paragraph
3,4C and 4D of Part II of Schedule VI to the Companies Act, 1956. The
details of Conservation of Energy, Technology absorption are given in
Directors Report. R&D expenditure is not separately accounted for.
4. Dues to micro & small-scale industrial undertakings As at March 31,
2010 as per available information with the company, there are no dues
to small scale Industrial Undertakings.
5. Segment reporting
As required by the Accounting Standard (AS 17) ÃSegment ReportingÃ, the
Company is mainly engaged in the area of Software Development and
related services. Hence segment reporting is not applicable to the
Company and to the nature of its business.
6. The previous year figures have been recast / restated, wherever
necessary, to the current periods classification.
7. Financial figures have been rounded off to nearest rupee.
8. Schedules 1 to 15 form part of Balance Sheet and have been
authenticated.
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