Notes to Accounts of Athena Global Technologies Ltd.

Mar 31, 2018

Note: 1 Company Information:

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

(a) Terms/Rights attached to equity shares

The company has only one class of equity shares having a face value of Rs. 10/- each. Each holder of equity share is entitled to one vote per share. The company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation of the company, the equity shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Nature and purpose of other reserves

(i) Capital reserve

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

(ii) Securities premium reserve

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

(iii) Translation Reserve

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

(iv) Money Received against Share Warrents

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

2. Employee Benefits

(i) Leave obligations

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

(ii) Defined contribution plans

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

(iii) Post- employment obligations a) Gratuity:

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

3. Segmental Reporting :

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

4. Financial instruments and risk management Fair values

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

The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

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

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

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

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

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

5. Financial risk management

The Company is exposed to market risk (fluctuation in foreign currency exchange rates, price and interest rate), liquidity risk and credit risk, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

(A) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of currency risk, interest rate risk and price risk. Financial instruments affected by market risk include loans and borrowings, trade receivables and trade payables.

(i) Foreign Currency Risks:

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

(B) Credit Risk

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

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

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

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

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

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

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

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

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

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

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

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

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

(C) Liquidity risk

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

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

6. Capital management

Capital management and Gearing Ratio

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

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

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

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

7. Confirmations

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

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

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

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

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

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

Exemptions and Exceptions availed

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

A. Ind AS optional exemptions

(i) Deemed cost

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

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

(ii) Impairment of financial assets

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

B. Ind AS mandatory exceptions

(i) Estimates

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

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

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

(ii) Classification and measurement of Financial Assets

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

Notes to first-time adoption

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

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

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

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

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

9. Assets pledged as security

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

10. Other Notes

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

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Mar 31, 2015

1.Terms / rights attached to equity shares

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

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

2. Related Party Transactions-AS 18 :

The Company has transactions with the following related parties:

a) Wholly owned Subsidiary: Mercury Outsourcing Management Ltd

b) Key Management Personnel:

Chairman & Managing Director:- M.Satyendra

c) Associate Entity in which Directors have Substantial Interest:

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

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

Shankara Kumari, RVSC Bose

3. Contingenet Liabilities not provided for

Claims against the Company not acknowledged as debt:

Particulars Amount in

Disputed Liability in respect of Income Tax demands related to

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

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

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

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

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

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

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

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

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Mar 31, 2014

Note 1. Contingenet Liabilities not provided for

Claims against the Company not acknowledged as debt:

Particulars Amount in Rs.

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

Note 2.

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

Note 3.

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

Note 4.

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

Note 5.

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

Note 6.

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

Note 7.

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

Note 8.

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

Note 9.

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

Note 10.

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

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Mar 31, 2013

Note - 1 : Related Party Disclosure :

The Company has transactions with the following related parties:

a) Wholly owned Subsidiary: Mercury Outsourcing Management Ltd

b) Key Management Personnel:

Chairman & Managing Director:- M.Satyendra

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

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

Shankara Kumari, RVSC Bose

Note - 2 : Contingenet Liabilities not provided for

Claims against the Company not acknowledged as debt:

Particulars Amount in Rs

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

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

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

Note 3.

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

Note 4.

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

Note 5.

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

Note 6.

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

Note 7.

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

Note 8: Dues to Micro Small and Medium Enterprises:

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

Note 9

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

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Mar 31, 2012

Note - 1 : Related Party Disclosure :

The Company has transactions with the following related parties:

a) Wholly owned Subsidiary: Mercury Outsourcing Management Ltd

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

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

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

Note 2.

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

Note 3.

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

Note 4.

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

Note 5.

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

Note 6.

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

Note 7.

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

Note 8:

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

Note 9:

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

Note 10: Dues to Micro Small and Medium Enterprises:

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

Note 11 Dues to Micro Small and Medium Enterprises:

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

Note. 12.

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