A Oneindia Venture
Click it and Unblock the Notifications
Notes to Accounts of CMS Info Systems Ltd.
Mar 31, 2025
i) Funds held relating to cash management activity, represents the net funds used by the Company for operating one of the services (Network Currency Management) of its cash management business. These include Bank balances and Cash in Vaults as reduced by the amounts payable to customers.
ii) Margin money deposits with carrying amount of '' 78.85 Million (March 31, 2024 : '' 120.27 Million) are subject to first charge to secure the Bank guarantees / fixed deposits given by banks on behalf of the Company for pending court cases and deposits of '' 55.00 Million (March 31, 2024 - '' 116.00 Million) are subject to first charge to secure the facilities for Vaulting and ATM operations.
(i) Terms and rights attached to equity shares
The Company has only one class of equity shares having par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend which is approved by the Board of Directors.
In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the 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.
(iii) Disclosure of Shareholding of Promoters
There are no shares held by the promoters of the Company as at March 31, 2025.
Notes:
a) As per records of the Company, including its register of share holders / members and other declarations received from shareholders regarding beneficial interest, the above share holding represents both legal and beneficial ownership of shares.
b) Shares reserved for issue under options
Terms attached to stock option granted plan to employees under employee stock option schemes are described in note 38
B) Nature and purpose of reserves
(i) Securities Premium : 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 the option. During the current year the company has recognised securities premium of
'' 60.33 Million ( March 31, 2024''259.55 Millions) on account of transfer to securities premium on exercise of options.
(ii) Share based payment reserves : The fair value of the equity-settled share based payment transactions is recognised in the Standalone Statement of Profit and Loss with corresponding credit to Share based payment reserves.
(iii) Capital Redemption Reserve: The Company has recognised Capital Redemption Reserve on buyback of equity shares from its retained earnings. The amount in Capital Redemption Reserve is equal to nominal amount of the equity shares bought back.
(iv) Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
As per âThe Payment of Gratuity Act, 1972â, the Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets gratuity on departure at 15 days'' salary (last drawn salary) for each completed year of service. The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the Company carries out an actuarial valuation based on the latest employee data from the certified actuary valuer.
The Company has purchased insurance policy, which is a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate in particular, the significant fall in interest rates, which could result in an increase in liability without corresponding increase in the asset.
The following tables summarizes the components of employee benefit expense recognized in the Standalone Statement of Profit and Loss and the funded status and amounts recognized in the Standalone balance sheet for the gratuity plan of the Company.
The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of reporting period.
Other long term employee benefits
In accordance with its leave policy, the Company has provided for leave benefits on the basis of an actuarial valuation carried out by an independent actuary at the end of the year.
Amount of '' 14.48 Million (March 31, 2024: '' 13.50 Million) for Compensated absences is recognised as an expense and included in âEmployee benefits expenseâ in the Statement of Profit and Loss. Accumulated noncurrent liability amount to '' 33.05 Million (March 31, 2024: '' 29.53 Million) and accumulated current liability amount to '' 13.45 Million (March 31, 2024: '' 9.29 Million).
The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.
The weighted average incremental borrowing rate applied to lease liabilities is 8.5%.
The outflow on account of lease liabilities for the year ended March 31, 2025 is ''599.96 Million.(March 31, 2024 is ''533.17 Million). Refer Standalone Cash Flow Statement.
Notes:
*In relation to the matters of Custom duty, VAT, CST, Service Tax, GST, Income tax and excise matters listed above, the Company is contesting the demands from the respective Government Departments. The management believes that its position will likely be upheld in the appellate process. No expense has been accrued in the financial statements for these demand raised. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company''s financial position and results of operations.
** The Company has given Corporate guarantees in favor of lenders of Securitrans India Private Limited, a subsidiary of the Company amounting to '' 600 Million (March 31,2024: '' 600 Million) and '' 200 Million (March 31, 2024: '' 200 Million) in favor of one of the customers of subsidiary for overnight vaulting facilities.
b) The Company has '' 93.63 Million Capital commitment for the year ended March 31, 2025 (March 31, 2024 '' Nil).
c) There has been a Supreme Court (SC) judgement dated 28th February 2019, relating to components of salary structure that need to be taken into account while computing the contribution to provident fund under the EPF Act. The Company believes, based on legal opinion, that the liability if any, in practice would be from the date of order. Based on such opinion and pending clarification from PF authorities, the Company has recorded the cost prospectively from March 2019.
d) In addition to the above, there are certain civil claims against the Company. The Management is confident, that these will not have any material impact in the Standalone financial statements.
e) The Hon''ble National Company Law Tribunal (âNCLTâ) passed an order in the proceedings on 5th December 2023, wherein it has directed the board of directors of the Company to take employees of ATM & Cash Management Division of the Transferor Company, being CMS Securitas Limited, as their employees, provided such employees were working for ATM & Cash Management Division of the Transferor Company as on Appointed Date, and such employees also continued to remain in employment on the effective date of the Scheme approved by the Hon''ble Bombay High Court on October 25, 2010 and by the Hon''ble Delhi High Court on 17 January 2011. Management has appealed the order with the National Company Law Appellate Tribunal (NCLAT) and Hon''able NCLAT has allowed the NCLAT appeal in favor of the Company and set aside the NCLAT order by a judgement 6th November 2024.The Supreme court has sqaushed the said matter.
NOTE 32 : TRADE PAYABLESa) Details of dues to Micro and Small Enterprises as per Micro, Small and Medium Enterprises Development Act, 2006
The Company has '' 99.09 Million (March 31, 2024''59.58 Million) dues outstanding to the micro and small enterprises as defined in Micro, Small and Medium Enterprise Development Act, 2006. The information regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.
NOTE 33 : IMPAIRMENT TEST OF GOODWILL Impairment test of Goodwill
Goodwill acquired through business combinations have indefinite lives. Out of the total Goodwill of the Company, the material amount of goodwill is allocated to the following:
a) '' 1,035.12 Million (March 31, 2024: '' 1,035.12 Million), relates to the Cash Management division of the Company.
b) '' 185.94 Million (March 31, 2024: '' 185.94 Million), relates to the acquisition of door step banking business from Checkmate Services Private Limited; also a part of Cash management business.
The Company performed its annual impairment test for the year ended March 31, 2025 and March 31, 2024 respectively . The Company considers the relationship between its value in use and its carrying value, among other factors, when reviewing the indicators of impairment.
The recoverable amount of the goodwill is determined based on a value in use (''VIU'') calculated using cash flow projections from financial budgets approved by management covering a period of five years and the terminal value (after considering the relevant long-term growth rate) at the end of the said forecast periods. The Company has extrapolated cash flows beyond 5 years using a growth rate and Terminal value growth rate of 5% for the year ended March 31, 2025 (March 31,2024: 5%). The pre-tax discount rate applied to the cash flow projections for impairment testing is 13.4% for March 31, 2025 ( March 31, 2024: 13.4%)
The said cash flow projections are based on the senior management past experience as well as expected trends for the future periods. The calculation of weighted average cost of capital (WACC) is based on the Company''s estimated capital structure as relevant and attributable to the CGU. The WACC is also adjusted for specific risks, market risks and premium, and other inherent risks associated with similar type of investments to arrive at an approximation of the WACC of a comparable market participant. The said WACC being pre-tax discount rates reflecting specific risks relating to the relevant CGUs, are then applied to the above mentioned projections of the estimated future cash flows to arrive at the discounted cash flows.
The key assumptions used in the determination of VIU are the revenue annual growth rates and the EBITDA growth rate.
Based on the above assumptions and analysis, no impairment was identified as at March 31, 2025. Further, on the analysis of the said calculation''s sensitivity to a reasonably possible change in any of the above mentioned key assumptions / parameters on which the Management has based determination of the CGU''s recoverable amount, there are no scenarios identified by the Management wherein the carrying value could exceed its recoverable amount.
The Company does not use forward exchange contracts to hedge its foreign exchange exposure relating to the underlying transactions in accordance with its forex policy. The Company does not use foreign exchange forward contracts for trading or speculation purposes.
The fair value for the investments is arrived at with reference to the Net asset value (NAV) of the mutual fund units as disclosed by the Asset Management Company.
The management assessed that the fair values of cash and cash equivalents, trade receivables, trade payables, and other current financial assets and financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Further the difference between carrying amount and fair value of insurance receivables, deposit measured at amortised cost is not significantly different in each of the year presented.
The fair value of the 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.
NOTE 37 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company has exposure to the following risks arising from financial instruments :-
⢠credit risk;
⢠liquidity risk; and
⢠market risk
The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the risk management committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors on its activities.
The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies are reviewed regularly to effect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Company audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to audit committee.
Credit risk is the risk of financial loss to the Company if a customer fails to meet its obligations under a financial instrument or customer contract. The carrying amount of financial assets and contract assets represents the maximum credit exposure. The Company is exposed to credit risk from its operating activities (primarily trade receivables and claims receivables).
Customer credit risk is managed by the Company''s established policy. To minimize the risk from the counter parties the Company enters into financial transaction with counter parties who are major names in the industry.
A significant risk in respect of receivables is related to the default risk and credit risk. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous Companies and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of receivables disclosed in Note 12 . The Company does not hold collateral as security.
Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Trade receivables concentration of credit risk with respect to trade receivables is limited, due to the Company''s customer base being large and diverse.
Security deposits are interest free deposits given by the Company for properties taken on Lease. Provision is taken on a case to case basis depending on circumstances with respect to non-recoverability of the amount. The gross carrying amount of Security deposit is '' 112.12 Million as at March 31 2025 , '' 106.00 Million as at 31st March 2024.
Other financial asset includes claims receivable, and other receivables (refer note 8). Provision is made where there is significant increase in credit risk of the asset.
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
Management monitors rolling forecasts of the Company''s liquidity position on the basis of expected cash flows. This monitoring includes financial ratios and takes into account the accessibility of cash and cash equivalents.
The Company has sufficient current assets comprising of Trade Receivables, Cash and Cash Equivalents, Investment in Mutual Funds, Other Bank Balances (other than restricted balances), Loans, Inventories and Other Current Financial Assets to manage the liquidity risk, if any in relation to current financial liabilities.
The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of cash credit, working capital , demand loan and bank loans. The Company has access to a sufficient variety of sources of funding. The table below provides details regarding the contractual maturities of significant financial liabilities as at year end.
Market risk is the risk that''s changes in the market prices - eg. Foreign exchange rates, interest rates and equity prices, will effect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the returns.
a) Currency Risk
Currency risk is not material, as the Company''s primary business activities are within India and does not have significant exposure in foreign currency.
b) 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.
Exposure to interest rate risk
Fair value sensitivity analysis for fixed rate instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximize 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. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents. 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. The Company does not have any loans outstanding as at March 31, 2025. It has taken adequate credit facilities from various banks to maintain its liquidity.
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2025 and March 31, 2024
For options granted under Employee scheme 2016, 21st month onward vesting will be based on Company / business unit performance for the second financial year after the financial year in which the options have been granted and so on. The performance condition are assessed as non-market conditions.
For options granted under Employee scheme 2023, 12th month onward vesting will be based on Company / business unit performance for all financial year. The performance condition are assessed as non-market conditions.
The vested options pertaining to Employee Scheme 2016 can be exercised within 2 year of the date such options are vested and vested options pertaining to Employee Scheme 2023 can be exercised within 3 year of the date such options are vested. In any other liquidity event, the vested options can be exercised within such period as may be prescribed by the Board in this regard.
The expected life of the share options is based on current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome. The historical volatility is based on price volatility of listed companies in same or similar industry. The company has allotted employee stock options to some of its employees through its Employee Stock Option Scheme. During the year 113,500 (year ended March 31, 2024; 232,500) stock options has expired and lapsed on account of employees left the organization. During the current year, reversal on account of such expired options is recognized in the profit and loss account aggregating to '' 14.48 Million. The Company has recognized '' 307.45 Million, (March 31, 2024 - '' 365.55 Million) as employee benefit expense in relation to all the active options outstanding as at March 31,2025.
Since the segment information as required by Ind AS 108-Operating Segments is provided in consolidated financial statements, the same is not provided in the Company''s standalone financial statements.
NOTE 41 : IND AS 115 REVENUE FROM CONTRACTS WITH CUSTOMERS Sale of Product
The Company applies practical expedient in paragraph 121 of Ind AS 115 for all contracts entered for sale of product and does not disclose information about remaining performance obligation that have original expected duration of one year or less.
The Company applies practical expedient in paragraph 121 of Ind AS 115 for all contract entered for revenue from services, whereby it has right to receive consideration from a customer in an amount that corresponds directly with the value to the customer of the entity''s performance completed to date. Hence the Company does not disclose information of remaining performance obligation of such contracts.
Disaggregation of revenue from contract with customers
Revenue from sale of goods is recognized at point in time when control of the products being sold is transferred to our customer and Revenue from services is recognized over time as and when services are rendered. Revenue from contracts with customers is disaggregated by primary business units as given in the note 19.
There is no obligation for returns, refunds and other similar obligation as at March 31, 2025 and March 31, 2024
Revenue from two customers of the Company represents 10% or more of the Company''s total revenue during the year ended March 31, 2025 amounting to '' 8,362.50 Million (March 31, 2024''7,130.97 Million).
NOTE 42 : REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
a) The Company has not 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.
b) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
NOTE 44 : DISCLOSURE REQUIRED FOR QUARTERLY STATEMENT SUBMITTED WITH BANKS
For borrowings from banks or financial institutions on the basis of security of current assets, quarterly returns or quarterly statements of current assets filed by the Company with banks or financial institutions during the year ended March 31, 2025 and the year ended March 31, 2024 are in agreement with the books of accounts.
Dividends declared and paid during the year ended March 31, 2025 include an amount of '' 3.25 per equity share towards final dividend for the year ended March 31, 2024 and an amount of '' 3.25 (PY : March 31, 2024 '' 2.50) per equity share towards interim dividends for the year ended March 31, 2025.
The Board of Directors, in its meeting held on May 19, 2025, has declared Special Interim Dividend of '' 3.00/-per Equity share of '' 10 each for FY 2024-25 which shall be payable within statutory limit of 30 days from the date of declaration. The board has also recommended a final dividend of '' 3.25/- per Equity share of '' 10 for FY 2024-25. The payment of final dividends, as recommended above, is subject to the approval of the Shareholders of the Company at the ensuing Annual General Meeting.
NOTE 46 : DISCLOSURE REQUIRED UNDER RULE 11(E) OF THE COMPANIES RULES, 2014
A) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) in any other persons or entities, including foreign entities (âââIntermediariesââ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (ââUltimate Beneficiariesââ) by or on behalfof the Group or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
B) The Company has not received any funds from any persons or entities, including foreign entities (âââFunding Partiesââ), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (âââUltimate Beneficiariesââ) by or on behalf of the Funding Party or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
There are no significant subsequent events that would require adjustments or disclosures in the financial statements as on the balance sheet date.
NOTE 51 : ADDITIONAL DISCLOSURE REQUIRED BY SCHEDULE III (AMENDMENTS DATED 24TH MARCH 2021) TO THE COMPANIES ACT, 2013
No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
a) Crypto Currency or Virtual Currency
b) Benami Property held under Prohibition of Benami Property Transaction Act,1988 and rules made thereunder
c) Relating to borrowed funds:
i. Wilful defaulter
ii. Utilization of borrowed funds and share premium
iii. Borrowings obtained on the basis of security of current assets
iv. Discrepancy in utilisation of borrowings
v. Current maturity of long term borrowings
d) Merger / amalgamation / reconstruction, etc.
Mar 31, 2024
n) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the Standalone Statement of Profit and Loss net of any reimbursement, if any.
I f the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
o) Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or nonoccurrence of one or more uncertain future events beyond the control of the Company or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably.
Contingent Assets
Contingent asset is not recognised in Standalone financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and is recognised. Provisions, contingent liabilities and contingent assets are reviewed at each Balance sheet date.
p) Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet and cash flow statement comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding book overdrafts and cash credits as they are considered an integral part of the Company''s cash management.
q) Share Based Payment
Employees (including senior management) of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model.
That cost is recognised, together with a corresponding increase in share-based payment (SBP) reserves in equity, over the period in which the performance and / or service conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company''s best estimate of the number of equity instruments that will ultimately vest. The Standalone Statement of Profit and Loss expense or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense.
No expense is recognised for awards that do not ultimately vest because non-market performance and / or service conditions have not been met. When an award is cancelled by the Company or by the counterparty, any remaining element of the fair value of the award is expensed immediately through the Standalone Statement of Profit and Loss.
r) Fair Value Measurement
The Company measures standalone financial instruments, such as, investment in mutual funds unit at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a nonfinancial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based
on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the standalone financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
External valuers are involved for valuation of significant assets, such as impairment testing of goodwill, non-current assets and fair value of employee stock options schemes. Involvement of external valuers is decided upon annually by the management. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
s) Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument.
Initial recognition and measurement
On initial recognition, a financial asset is recognised at fair value. In case of Financial assets which are recognised at
fair value through profit and loss (FVTPL), its transaction cost is recognised in the statement of profit and loss. In other cases, the transaction cost is attributed to the acquisition value of the financial asset. However, trade receivables without a significant financing component is initially measured at a transaction price.
Financial assets are subsequently classified and measured at:
⢠Amortised cost
⢠Fair value through profit and loss (FVTPL)
⢠Fair value through other comprehensive income (FVOCI)
Financial assets are not reclassified subsequent to their recognition, except during the period the Company changes its business model for managing financial assets.
However, an exception to this principle is financial assets in the form of trade receivables, that would be initially measured at transaction price (as defined in Ind AS 115) unless that contain a significant financing component determined in accordance with Ind AS 115 (or when an entity applies the practical expedient).
Consistency should be maintained between the accounting policy for initial measurement of trade receivables and the accounting policy for measurement of corresponding revenue.
Debt instruments at amortised cost
A debt instrument'' is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the Standalone Statement of Profit and Loss. The losses arising from impairment are recognised in the Standalone Statement of Profit and Loss. This category generally applies to trade and other receivables.
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorisation as at amortised cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortised cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch'').
Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the Standalone Statement of Profit and Loss.
Equity Investments
Investment in subsidiaries
I nvestment in subsidiaries is carried at cost in the standalone financial statements.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e., removed from the balance sheet) when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either
(a) the Company has transferred substantially all the risks and rewards of the asset, or
(b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognised in OCI. These gains/ losses are not subsequently transferred to the Statement of Profit and Loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit and loss. The Company has not designated any financial liability as at fair value through Standalone Statement of Profit and Loss.
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in the Standalone Statement of Profit and Loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Standalone Statement of Profit and Loss.
Financial guarantee contracts
Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation .
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Standalone Statement of Profit and Loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the financial assets which are not fair valued through profit or loss and equity instruments recognised in OCI. Loss allowance for trade receivables and insurance claims is measured at an amount equal to lifetime ECL at each reporting date, right from its initial recognition. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognizing impairment loss allowance based on 12-month ECL.
ECL impairment loss allowance (or reversal) recognised during the period is recognised as income or expense in the Standalone Statement of Profit and Loss. This amount is reflected under the head ''other expenses'' in the Standalone Statement of Profit and Loss.
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade
receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
t) Business Combinations And Goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each business combination, the Company elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree''s identifiable net assets. Acquisition-related costs are expensed as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable.
When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company reassesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses, if any. For the purpose of impairment testing, goodwill acquired in a business combination is from the acquisition date, allocated to each of the Company''s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained. Goodwill is tested for impairment annually as at March 31 and when circumstances indicate that the carrying value may be impaired.
Goodwill represents the excess of purchase consideration paid over the value of net assets of CMS Computers Limited taken over by the Company in accordance with the Scheme of Arrangement with the CMS Computers Limited and towards the business acquisition from Checkmate Services Private
Limited. The Scheme was effective from April 1, 2008 and business from Checkmate was acquired with effect from April 30, 2018 respectively.
u) Rounding Of Amount:
Amount disclosed in the financial statements and notes have been rounded off to the nearest million as per the requirement of schedule III, unless otherwise stated.
v) Cash Dividend Distribution To Equity Holders Of The Parent
The Company recognises a liability to make cash distributions to equity holders of the parent when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS:
The preparation of the Company''s standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Estimates and underlying assumptions are received on an ongoing basis. Revisions to estimates are recognised prospectively.
Significant judgement :
Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the standalone financial statements is included in the following notes:
Leases
The application of Ind AS 116 requires company to make judgements and estimates that affect the measurement of right-of-use assets and liabilities. The Company determines the lease term as the non-cancellable period of a lease, together with both periods covered by an option to terminate
the lease if the Company is reasonably certain not to exercise that option. In assessing whether the Company is reasonably certain to exercise an option to extend a lease, or not to exercise an option to terminate a lease, it considers all relevant facts and circumstances that create an economic incentive for the Company to exercise the option to extend the lease, or not to exercise the option to terminate the lease.
The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The Company has adopted average borrowing rate as it''s incremental borrowing rate (IBR).
Estimates
Information about assumptions and estimation uncertainties at the reporting date that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is included in the following notes:
Defined benefit plans
The cost of the defined benefit plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. Future salary increases are based on expected future inflation rates. The mortality rate is based on publicly available mortality tables for the country. Those mortality tables tend to change only at interval in response to demographic changes. Refer note 29 for sensitivity analysis in relation to this estimate.
Property, plant and equipment
Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life
and the expected residual value at the end of its life. The useful lives and residual values of Company assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets.
Impairment of goodwill and investment in subsidiaries
Goodwill is tested for impairment at-least on an annual basis and when events that occur / changes in circumstances - indicate that the recoverable amount of the CGU is less than its carrying value.
Investment in subsidiaries is tested for impairment when events occurs that indicates that the recoverable amount is less than its carrying value.
The impairment indicators, the estimation of expected future cash flows and the determination of the fair value require the Management to make significant judgements, estimates and assumptions concerning the identification and validation of impairment indicators, fair value of assets, Revenue growth rates and operating margins used to calculate projected future cash flows, relevant risk-adjusted discount rate, future economic and market conditions, etc. For the details as to carrying amount of Goodwill and impairment testing (including related sensitivity analysis), refer note 34.
Share-based payments
The Company initially measures the cost of equity-settled transactions with employees using black scholes model to determine the fair value of the liability incurred. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 39.
Claims receivable
I t represents the claims made by the Company from Insurance companies and others on account of cash loss due to theft or loot etc. at the time of
replenishment of cash in ATM''s and cash deposits and pick-ups.
The Company has recognised the claims in books, when the amount thereof can be measured reliably and ultimate collection is reasonably certain. The claims receivable balances are reviewed annually by the management and necessary doubtful provision percentage is calculated on the basis of Company''s historical experiences and recoverability of amount from Insurance companies and others.
Expected Credit Loss
The Company has large number of individual customers. Management assesses the level of allowance for doubtful debts after taking into account ageing analysis and any other factor.
Other provisions
The recognition and measurement of other provisions are based on the assessment of the probability of an outflow of resources, and on past experience and circumstances known at the balance sheet date. The actual outflow of resources at a future date may therefore, vary from the amount included in other provisions.
Recent pronouncement:
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
Material accounting policy information
The Company adopted disclosure of Accounting Policies (amendments of Ind AS 1) from 1 April, 2023. Although the amendments did not result in any changes in the accounting policies themselves, they impacted the accounting policy information disclosed in the standalone financial statements.
The amendments require the disclosure of ''material'' rather than ''significant'' accounting policies. The application of materiality to disclosure of accounting policies, arising entities to provide useful, entity specific accounting policy information that users need to understand other information in the standalone financial statements.
37 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company has exposure to the following risks arising from financial instruments :-
- credit risk;
- liquidity risk; and
- market risk
(i) Risk Management Framework
The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The board of directors has established the risk management committee, which is responsible for developing and monitoring the Company''s risk management policies. The committee reports regularly to the board of directors on its activities.
The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies are reviewed regularly to effect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Company audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company audit committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are reported to audit committee.
(ii) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer fails to meet its obligations under a financial instrument or customer contract. The carrying amount of financial assets and contract assets represents the maximum credit exposure. The Company is exposed to credit risk from its operating activities (primarily trade receivables and claims receivables).
(iii) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
Management monitors rolling forecasts of the Company''s liquidity position on the basis of expected cash flows. This monitoring includes financial ratios and takes into account the accessibility of cash and cash equivalents.
The Company has sufficient current assets comprising of Trade Receivables, Cash and Cash Equivalents, Investment in Mutual Funds, Other Bank Balances (other than restricted balances), Loans, Inventories and Other Current Financial Assets to manage the liquidity risk, if any in relation to current financial liabilities.
The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of cash credit, working capital , demand loan and bank loans. The Company has access to a sufficient variety of sources of funding. The table below provides details regarding the contractual maturities of significant financial liabilities as at year end.
Fair value sensitivity analysis for fixed rate instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
Capital management
For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximize 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. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents. 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. The Company does not have any loans outstanding as at March 31, 2024. It has taken adequate credit facilities from various banks to maintain its liquidity.
41 IND AS 115 REVENUE FROM CONTRACTS WITH CUSTOMERS Sale of Product
The Company applies practical expedient in paragraph 121 of Ind AS 115 for all contract entered for sale of product and does not disclose information about remaining performance obligation that have original expected duration of one year or less.
Revenue for services
The Company applies practical expedient in paragraph 121 of Ind AS 115 for all contract entered for revenue from services, whereby it has right to receive consideration from a customer in an amount that corresponds directly with the value to the customer of the entity''s performance completed to date. Hence the Company does not disclose information of remaining performance obligation of such contracts.
42 REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
43 UNDISCLOSED INCOME
a) The Company has not any such transaction which is not recorded in the books of account 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.
b) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
44 DISCLOSURE REQUIRED FOR QUARTERLY STATEMENT SUBMITTED WITH BANKS
For borrowings from banks or financial institutions on the basis of security of current assets, quarterly returns or quarterly statements of current assets filed by the Company with banks or financial institutions during the year ended March 31, 2024 and the year ended March 31, 2023 are in agreement with the books of account.
45 DIVIDEND
Dividends declared and paid during the year ended March 31, 2024 include an amount of ''4.75 per equity share towards final dividend for the year ended March 31, 2023 and an amount of ''2.50 (PY : March 31, 2023''1.00) per equity share towards interim dividends (including special dividend) for the year ended March 31, 2024.
Dividends declared by the Company are based on the profit available for distribution. On May 15, 2024, the Board of Directors of the Company have proposed a final dividend of ''3.25 per share in respect of the year ended March 31, 2024 subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately '' 528.97 million and hence is not recognised as a liability as at the Balance Sheet date.
46 DISCLOSURE REQUIRED UNDER RULE 11(e) OF THE COMPANIES RULES, 2014
A) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) in any other persons or entities, including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Group or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
B) The Company has not received any funds from any persons or entities, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (âUltimate Beneficiariesâ) by or on behalf of the Funding Party or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
51 ADDITIONAL DISCLOSURE REQUIRED BY SCHEDULE III (AMENDMENTS DATED MARCH 24, 2021) TO THE COMPANIES ACT, 2013
No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
a) Crypto Currency or Virtual Currency
b) Benami Property held under Prohibition of Benami Property Transaction Act, 1988 and rules made thereunder
c) Registration of charges or satisfaction with Registrar of Companies
d) Relating to borrowed funds:
i. Wilful defaulter
ii. Utilisation of borrowed funds and share premium
iii. Borrowings obtained on the basis of security of current assets
iv. Discrepancy in utilisation of borrowings
v. Current maturity of long-term borrowings
e) Merger / amalgamation / reconstruction, etc.
As per our report of even date
For B S R & Co. LLP For and on behalf of the Board of Directors of
Chartered Accountants CMS Info Systems Limited
Firm''s Registration No: 101248W/W-100022 CIN: L45200MH2008PLC180479
Glenn Dâsouza Tapan Ray Rajiv Kaul
Partner Director Executive Vice-chairman,
Membership No.: 112554 DIN: 00728682 Whole-time Director and CEO
DIN: 02581313
Place : Gandhinagar Place : Mumbai
Pankaj Khandelwal Debashis Dey
Place : Mumbai Chief Financial Officer Company Secretary
Date : 15 May 2024 Place : Mumbai Place : Mumbai
Mar 31, 2023
Capital work in progress
Capital work-in-progress as at March 31, 2023 is H 198.30 million (March 31, 2022 H 423.18 million). Additions made to capital work-in-progress during the year amount to H 197.08 million (March 31, 2022 H 419.07 million).
Asset amounting to H 421.97 million (March 31, 2022 H 222.70 million) has been capitalised during the year. (refer note 28)
The Company has amended the useful life of commercial vehicles in line with industry practice and based on guidelines issued by MHA-RBI, from 6 years to 7 years with effect from April 01, 2022 resulting in lower depreciation charge of H 46.32 million in the year ended March 31, 2023.
(i) Terms and rights attached to equity shares
The Company has only one class of equity shares having par value of H 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting, except in case of interim dividend which is approved by the Board of Directors.
In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the 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.
i) Funds held relating to cash management activity represents the net funds invested by the Company in one of the services of Cash management business. These include Bank balances and Cash in Vaults as reduced by the amounts payable to customers.
ii) Margin money deposits with carrying amount of H 34.25 million (March 31, 2022: H 32.54 million) are subject to first charge to secure the Bank guarantees/fixed deposits given by banks on behalf of the Company for pending court cases and deposits of H 77.90 million (March 31, 2022 - H 19.39 million) are subject to first charge to secure the facilities for Vaulting and ATM operations.
(i) As per records of the Company, including its register of share holders/members and other declarations received from shareholders regarding beneficial interest, the above share holding represents both legal and beneficial ownership of shares.
(ii) Shares reserved for issue under options
For details of options alloted under employee stock option schemes, refer note 39.
(iii) During the previous year 2021-22, the Board has paid H 226.44 million interim dividends. The first dividend was declared on May 4, 2021 at the rate of H 0.62 per equity share (6.2% of the face value of H 10 each) and second dividend was declared on October 19, 2021 at the rate of H 0.91 per equity share (9.1% of the face value of H 10 each). The dividend distribution tax on the said dividends is H Nil as the Company has withheld 10% TDS on the Gross dividend and remittance is done net of withholding taxes. The witholding taxes are duly deposited with the Government.
B) Nature and purpose of reserves
(i) Securities Premium: The amount received in excess of face value of the equity shares is recognized 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 the option. During the current year the company has recognized securities premium of H 35.72 million (March 31, 2022 H 136.30 million).
(ii) Share based payment reserves: The fair value of the equity-settled share based payment transactions is recognized in Statement of Profit and Loss with corresponding credit to Share based payment reserves.
(iii) Capital Redemption Reserve: The Company has recognized Capital Redemption Reserve on buyback of equity shares from its retained earnings. The amount in Capital Redemption Reserve is equal to nominal amount of the equity shares bought back.
(iv) Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
As per The Payment of Gratuity Act, 1972, the Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets gratuity on departure at 15 days'' salary (last drawn salary) for each completed year of service.The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the Company carries out a acturial valuation based on the latest employee data from the certified actury valuer. Any deficit in the assets arising as a result of such valuations is funded by the Company.
The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate in particular, the significant fall in interest rates, which should result in an increase in liability without corresponding increase in the asset.
The following tables summaries the components of benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the gratuity plan of the Company.
The estimates of future salary increases, considered in actuarial valuation, takes in account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.
The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of reporting period.
Other long term employee benefits
In accordance with its leave policy, the Company has provided for leave encashment on the basis of an actuarial valuation carried out by an independent actuary at the end of the year.
Amount of H 8.87 million (March 31, 2022: H 8.13 million) for Compensated absences is recognized as an expense and included in âEmployee benefitsâ in the Statement of Profit and Loss. Accumulated non-current liability amount to H 22.84 million (March 31, 2022: H 19.23 million) and accumulated current liability amount to H 8.25 million (March 31, 2022: H 7.28 million).
The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.
The weighted average incremental borrowing rate applied to lease liabilities is 8.5%.
The outflow on account of lease liabilities for the year ended March 31, 2023 is 512.85 million.(March 31, 2022 is 392.34 million)
*In relation to the matters of Custom duty, VAT, CST, Service Tax, GST, Income tax and excise matters listed above, the Company is contesting the demands from the respective Government Departments. The management believes that its position will likely be upheld in the appellate process. No expense has been accrued in the financial statements for these demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company''s financial position and results of operations.
** The Company has given Corporate guarantees in favour of lenders of Securitrans India Private Limited, a subsidiary of the Company amounting to H 600 million (March 31,2022: H 600 million) in favour of the lenders and H 200 million (March 31, 2022: H 200 million) in favour of one of the customers of subsidiary for overnight vaulting facilities.
c) There has been a Supreme Court (SC) judgment dated 28th February 2019, relating to components of salary structure that need to be taken into account while computing the contribution to provident fund under the EPF Act. The Company believes, based on legal opinion, that the liability if any, in practice would be from the date of order. Based on such opinion and pending clarification from PF authorities, the Company has recorded the cost prospectively from March 2019.
d) In addition, there are certain civil claims against the Company. The Management is confident, that these will not have any material impact in the financial statements.
33 TRADE PAYABLESa) Details of dues to Micro and Small Enterprises as per Micro, Small and Medium Enterprises Development Act, 2006
The Company has H 47.14 million (March 31, 2022 H 75.02 million) dues outstanding to the micro and small enterprises as defined in Micro, Small and Medium Enterprise Development Act, 2006. The information regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.
34 IMPAIRMENT TEST OF GOODWILL
Impairment test of Goodwill
Goodwill acquired through business combinations have indefinite lives. Out of the total Goodwill of the Company, the material amount of goodwill is allocated to the following:
a) H 1035.12 million (March 31, 2022: H 1035.12 million), relates to the Cash Management division of the Company.
b) H 185.94 million (March 31, 2022: H 185.94 million), relates to the acquisition of door step banking business from Checkmate Services Private Limited; also a part of Cash management business.
The Company performed its annual impairment test for years ended March 31, 2023 and March 31,2022 respectively. The Company considers the relationship between its value in use and its carrying value, among other factors, when reviewing for indicators of impairment.
The recoverable amount of the goodwill is determined based on a value in use (''VIU'') calculated using cash flow projections from financial budgets approved by management covering a period of five years and the terminal value (after considering the relevant long-term growth rate) at the end of the said forecast periods. The Company has extrapolated cash flows beyond 5 years using a growth rate of 5% for the year ended March 31, 2023 (March 31,2022: 5%). The pre-tax discount rate
applied to the cash flow projections for impairment testing is 13.4% for March 31, 2023 (March 31, 2022: 13.4%)
The said cash flow projections are based on the senior management past experience as well as expected trends for the future periods. The calculation of weighted average cost of capital (WACC) is based on the Company''s estimated capital structure as relevant and attributable to the CGU. The WACC is also adjusted for specific risks, market risks and premium, and other inherent risks associated with similar type of investments to arrive at an approximation of the WACC of a comparable market participant. The said WACC being pre-tax discount rates reflecting specific risks relating to the relevant CGUs, are then applied to the above mentioned projections of the estimated future cash flows to arrive at the discounted cash flows.
The key assumptions used in the determination of VIU are the revenue annual growth rates and the EBITDA growth rate.
Based on the above assumptions and analysis, no impairment was identified as at March 31, 2023. Further, on the analysis of the said calculation''s sensitivity to a reasonably possible change in any of the above mentioned key assumptions/parameters on which the Management has based determination of the CGU''s recoverable amount, there are no scenarios identified by the Management wherein the carrying value could exceed its recoverable amount.
The fair value for the investments is arrived at with reference to the Net asset value (NAV) of the mutual fund unit as disclosed by the Asset Management Company.
The management assessed that cash and cash equivalents, trade receivables, trade payables, and other current financial assets and financial liabilities
approximate their carrying amounts largely due to the short-term maturities of these instruments. Further the difference between carrying amount and fair value of insurance receivables, deposit measured at amortised cost is not significantly different in each of the year presented.
The fair value of the 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.
38 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company through it''s operations is exposed to credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management ensures that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The senior management reviews and agrees policies for managing each of these risks, which are summarised below.
Credit risk is the risk of financial loss to the company if a customer fails to meet its obligations under a financial instrument or customer contract. The carrying amount of financial assets and contract assets represents the minimum credit exposure. The Company is exposed to credit risk from its operating activities (primarily trade receivables).
Customer credit risk is managed by the Company''s established policy. To minimise the risk from the counter parties the Company enters into financial transaction with counter parties who are major names in the industry.
A significant risk in respect of receivables is related to the default risk and credit risk. An impairment analysis
is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous companies and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of receivables disclosed in Note 12. The Company does not hold collateral as security.
Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Trade receivables concentration of credit risk with respect to trade receivables are limited, due to the Company''s customer base being large and diverse.
Security deposits are interest free deposits given by the Company for properties taken on Lease. Provision is taken on a case to case basis depending on circumstances with respect to non-recoverability of the amount. The gross carrying amount of Security deposit is H 114.67 million as at March 31 2023, H 126.30 million as at 31st March 2022.
Other financial asset includes claims receivable, and other receivables (refer note 8). Provision is made where there is significant increase in credit risk of the asset.
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
Management monitors rolling forecasts of the Company''s liquidity position on the basis of expected cash flows. This monitoring includes financial ratios and takes into account the accessibility of cash and cash equivalents.
The Company has sufficient current assets comprising of Trade Receivables, Cash and Cash Equivalents, Investment in Mutual Funds, Other Bank Balances (other than restricted balances), Loans, Inventories and Other Current Financial Assets to manage the liquidity risk, if any in relation to current financial liabilities.
The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of cash credit, working capital, demand loan and bank loans. The Company has access to a sufficient variety of sources of funding. The table below provides details regarding the contractual maturities of significant financial liabilities as at year end.
For options granted under Employee scheme, 21st month onward vesting will be based on Company/business unit performance for the second financial year after the financial year in which the options have been granted and so on. The performance condition are assessed as non-market conditions.
The vested options can be exercised by the employees only upon happening of liquidity event. The vested options can be exercised within 2 year of the date such options are vested. In any other liquidity event, the vested options can be exercised within such period as may be prescribed by the Board in this regard.
For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximize 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. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net
debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents. 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. The Company does not have any loans outstanding as at March 31, 2023. It has taken adequate credit facilities from various banks to maintain its liquidity.
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2023 and March 31,2022.
company, entered into an agreement with Chief Executive Officer of the Company (CEO) pursuant to which, the CEO was granted options under the stock option plan of Vault L.P. These options vested immediately to entitle base units in Vault L.P. to the extent of amount equivalent to 0.61% of the value of the Company for a consideration equivalent to such value of the Company as per the terms and conditions of the agreement. As per the plan, the base units are entitled for upward adjustment subject to fulfilment of certain market and service conditions.
Upon redemption of base or adjusted base units, CEO will receive from Vault L.P., an amount equivalent to value of the Company vis-a-vis such units at the time of sale of Sion''s shareholding in the Company subject to certain conditions set out in the agreement.
Since the option granted to CEO is for the services rendered to the Company, the Option has been valued considering the various probable scenarios and using specific assumptions relating to expected volatility and risk free return. The total charge over the period of vesting estimated is H 70.20 million. The proportionate charge recognized during the current year is H Nil (March 31, 2022: H 15.10 million)
41 OPERATING SEGMENT
Since the segment information as required by Ind AS 108-Operating Segments is provided in consolidated financial statements, the same is not provided in the Company''s separate financial statement.
The expected life of the share options is based on current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome. The historical volatility is based on price volatility of listed companies in same or similar industry. The company has allotted employee stock options to some of its employees through its Employee Stock Option Scheme. Over the year''s 1,126,893 (year ended March 31, 2022; 1,053,493) stock options has expired and lapsed on account of employees left the organization. During the current year, reversal on account of such expired options is recognized in the profit and loss account aggregating to H 1.85 million. The Company has recognized H 92.80 million, (March 31, 2022 - H 57.50 million) as employee benefit expense in relation to all the active options outstanding as at March 31,2023.
The CEO ESOP 2016, Employee ESOP 2016 and Management ESOP 2016 scheme has been modified, in which exercise period is extended by 1 (One) year as approved by the shareholders on December 28, 2022. This has resulted in an additional ESOP cost of H 35.25 million for the year ended March 31, 2023.
40 AGREEMENT BETWEEN PROMOTER AND CEO
On September 26th, 2017, Vault Co-Investment Vehicle L.P. (âVault L.P.â), a limited liability partnership incorporated in the Cayman Islands and controlled by Barings Private Equity Asia GP VI Limited, the ultimate promoter of SION Investment Holdings Pte. Limited (âSionâ), the holding
The investments in the subsidiaries are accounted for at cost in the standalone financial statements.
43 IND AS 115 REVENUE FROM CONTRACTS WITH CUSTOMERSSale of Product
The Company applies practical expedient in paragraph 121 of Ind AS 115 for all contract entered for sale of product and does not disclose information about remaining performance obligation that have original expected duration of one year or less.
The Company applies practical expedient in paragraph 121 of Ind AS 115 for all contract entered
for revenue from services, whereby it has right to receive consideration from a customer in an amount that corresponds directly with the value to the customer of the entity''s performance completed to date. Hence the Company does not disclose information of remaining performance obligation of such contracts.
Disaggregation of revenue from contract with customers
Revenue from sale of goods is recognized at point in time when control of the products being sold is transferred to our customer and Revenue from services is recognized over time as and when services are rendered. Revenue from contracts with customers is disaggregated by primary business units as given in the note 19.
returns or quarterly statements of current assets filed by the Company with banks or financial institutions during the year ended March 31, 2023 and the year ended March 31, 2022 are in agreement with the books of accounts.
48 DIVIDEND
(a) The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with section 123 of the Companies Act 2013.
(b) The Board of Directors at its meeting held on May 23, 2023 recommended a Final Dividend of H 4.75 per Equity share of H 10 each for FY 2022-23. This Final dividend is subject to the approval of the Members at the ensuing Annual General Meeting which will be held on or before September 30, 2023.
49 DISCLOSURE REQUIRED UNDER RULE 11(E) OF THE COMPANIES RULES, 2014
No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
There is no obligation for returns, refunds and other similar obligation as at March 31, 2023 and March 31, 2022
Revenue for the period ended March 31, 2023 includes revenue from two customers of the Company amounting to H 6,317.50 million.
During the previous year ended March 31, 2022, the Company has completed its Initial Public offer (âIPOâ), comprising of an offer for sale of 5,09,25,925 equity shares of face value H 10 each at an issue price of H 216 per share by existing shareholders. Pursuant to the IPO, the equity shares of the Company were listed on National Stock Exchange of India (NSE) and BSE Limited (BSE) on December 31, 2021.
45 REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
a) The Company has not 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.
b) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
47 DISCLOSURE REQUIRED FOR QUARTERLY STATEMENT SUBMITTED WITH BANKS
For borrowings from banks or financial institutions on the basis of security of current assets, quarterly
52 BUSINESS COMBINATION
During the previous year ended 31 March 2022, the Company has acquired 100% of the equity share capital of Hemabh Technology Private Limited for a consideration of H 28.05 million. Assets taken over comprises of Property Plant and Equipment (H 115.49 million), Customer Contracts (H 44.70 million) and other assets (H 78.55 million) comprising H 238.74 million. Liabilities taken over comprises of borrowings (H 143.86 million), trade payables (H 69.05 million) and other liabilities (H 24.93 million) amounting to H 237.84 million. No additional intangible assets have currently been identified and the purchase consideration, over assets taken over amounting to H 27.14 million, has been recognized as goodwill. The Goodwill represents expected synergies and assembled workplace.
There are no significant subsequent events that would require adjustments or disclosures in the financial statements as on the balance sheet date.
55 ADDITIONAL DISCLOSURE REQUIRED BY SCHEDULE III (AMENDMENTS DATED 24TH MARCH 2021) TO THE COMPANIES ACT, 2013
No transactions to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
a) Crypto Currency or Virtual Currency
b) Benami Property held under Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder
c) Registration of charges or satisfaction with Registrar of Companies
d) Relating to borrowed funds:
i. Wilful defaulter
ii. Utilisation of borrowed funds & share premium
iii. Borrowings obtained on the basis of security of current assets
iv. Discrepancy in utilisation of borrowings
v. Current maturity of long term borrowings
e) Merger/amalgamation/reconstruction, etc.
Mar 31, 2022
(i) Terms and rights attached to equity shares
The Company has only one class of equity shares having par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting, except in case of interim dividend which is approved by the Board of Directors.
In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the 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.
Notes:
i) As per records of the Company, including its register of share holders / members and other declarations received from shareholders regarding beneficial interest, the above share holding represents both legal and beneficial ownership of shares.
(ii) Shares reserved for issue under options
For details of options alloted under employee stock option schemes, refer note 39.
(iii) During the year 2021-22,the Board has paid '' 226.44 million interim dividends. The first dividend was declared on May 4, 2021 at the rate of '' 0.62 per equity share (6.2% of the face value of '' 10 each) and second dividend was declared on October 19, 2021 at the rate of '' 0.91 per equity share (9.1% of the face value of ''10 each). The dividend distribution tax on the said dividends is '' Nil as the Company has withheld 10% TDS on the Gross dividend and remittance is done net of withholding taxes. The witholding taxes are duly deposited with the Government."
B) Nature and purpose of reserves
(i) Securities Premium : 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 the option. During the current year the company has recognised securities premium of '' 136.30 million.
(ii) Share based payment reserves : The fair value of the equity-settled share based payment transactions is recognised in Statement of Profit and Loss with corresponding credit to Share based payment reserves.
(iii) Capital Redemption Reserve: The Company has recognised Capital Redemption Reserve on buyback of equity shares from its retained earnings. The amount in Capital Redemption Reserve is equal to nominal amount of the equity shares bought back.
(iv) Retained Earnings: Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
As per The Payment of Gratuity Act, 1972, the Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets gratuity on departure at 15 days'' salary (last drawn salary) for each completed year of service.The Company has purchased an insurance policy to provide for payment of gratuity to the employees. Every year, the Company carries out a acturial valuation based on the latest employee data from the certified actury valuer. Any deficit in the assets arising as a result of such valuations is funded by the Company.
The Company has purchased insurance policy, which is basically a year-on-year cash accumulation plan in which the interest rate is declared on yearly basis and is guaranteed for a period of one year. The insurance Company, as part of the policy rules, makes payment of all gratuity outgoes happening during the year (subject to sufficiency of funds under the policy). The policy, thus, mitigates the liquidity risk. However, being a cash accumulation plan, the duration of assets is shorter compared to the duration of liabilities. Thus, the Company is exposed to movement in interest rate in particular, the significant fall in interest rates, which should result in an increase in liability without corresponding increase in the asset.
The following tables summaries the components of benefit expense recognized in the Statement of Profit and Loss and the funded status and amounts recognized in the balance sheet for the gratuity plan of the Company.
The estimates of future salary increases, considered in actuarial valuation, takes in account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.
The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of reporting period.
Other long term employee benefits
In accordance with its leave policy, the Company has provided for leave encashment on the basis of an actuarial valuation carried out by an independent actuary at the end of the year.
Amount of '' 8.13 million (March 31, 2021: '' 8.22 million) for Compensated absences is recognised as an expense and included in âEmployee benefitsâ in the Statement of Profit and Loss. Accumulated non-current liability amount to '' 19.23 million (March 31, 2021: '' 21.58 million) and accumulated current liability amount to '' 7.28 million (March 31, 2021: '' 5.77 million).
The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due.
The weighted average incremental borrowing rate applied to lease liabilities is 8.5%.
The outflow on account of lease liabilities for the year ended March 31, 2022 is 392.34 million.
|
NOTE 32 CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS a) Contingent liabilities: ('' in million) |
||
|
Particulars |
March 31, 2022 |
March 31, 2021 |
|
Claims against the Company not acknowledged as debt |
92.65 70.26 69.03 2.05 0.82 9.78 118.33 800.00 1,162.92 |
|
|
a) Disputed Customs matters* |
87.91 |
|
|
b) Disputed VAT matters* |
247.77 |
|
|
c) Disputed Excise matters* |
69.03 |
|
|
d) Disputed CST matters * |
6.56 |
|
|
e) Disputed GST matters * |
0.82 |
|
|
f) Disputed Service tax matters * |
7.05 |
|
|
g) Disputed Income tax matter |
118.33 |
|
|
Guarantees given by the Company on behalf of the subsidiary** |
800.00 |
|
|
1,337.47 |
||
Notes:
*In relation to the matters of Custom duty, VAT, CST, Service Tax, GST, Income tax and excise matters listed above, the Company is contesting the demands from the respective Government Departments. The management believes that its position will likely be upheld in the appellate process. No expense has been accrued in the financial statements for these demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Company''s financial position and results of operations.
** The Company has given Corporate guarantees in favour of lenders of Securitrans India Private Limited, a subsidiary of the Company amounting to '' 600 million (March 31,2021: '' 600 million) in favour of the lenders and '' 200 million (March 31, 2021: '' 200 million) in favour of one of the customers of subsidiary for overnight vaulting facilities.
|
b) Capital commitments: |
('' in million) |
|
|
Particulars |
March 31, 2022 |
March 31, 2021 |
|
Estimated amount of contracts remaining to be executed on capital account and not provided for |
980.54 |
548.27 |
c) There has been a Supreme Court (SC) judgement dated 28th February 2019, relating to components of salary structure that need to be taken into account while computing the contribution to provident fund under the EPF Act. The Company believes, based on legal opinion, that the liability if any, in practice would be from the date of order. Based on such opinion and pending clarification from PF authorities, the Company has recorded the cost prospectively from March 2019.
d) In addition, there are certain civil claims against the Company. The Management is confident, that these will not have any material impact in the financial statements.
Goodwill acquired through business combinations have indefinite lives. Out of the total Goodwill of the Company, the material amount of goodwill is allocated to the following:
a) '' 1035.12 million (March 31, 2021: '' 1035.12 million), relates to the Cash Management division of the Company.
b) '' 185.94 million (March 31, 2021: '' 185.94 million), relates to the acquisition of door step banking business from Checkmate Services Private Limited; also a part of Cash management business.
The Company performed its annual impairment test for years ended March 31, 2022 and March 31,2021 respectively . The Company considers the relationship between its value in use and its carrying value, among other factors, when reviewing for indicators of impairment.
The recoverable amount of the goodwill is determined based on a value in use (''VIU'') calculated using cash flow projections from financial budgets approved by management covering a period of five year period and the terminal value (after considering the relevant long-term growth rate) at the end of the said forecast periods. The Company has extrapolated cash flows beyond 5 years using a growth rate of 4% for the year ended March 31, 2022 (March 31,2021: 4%). The pre-tax discount rate applied to the cash flow projections for impairment testing is 13.7% for March 31, 2022 ( March 31,2021: 13.7%)
The said cash flow projections are based on the senior management past experience as well as expected trends for the future periods. The calculation of weighted average cost of capital (WACC) is based on the Company''s estimated capital structure as relevant and attributable to the CGU. The WACC is also adjusted for specific risks, market risks and premium, and other inherent risks associated with similar type of investments to arrive at an approximation of the WACC of a comparable market participant. The said WACC being pre-tax discount rates reflecting specific risks relating to the relevant CGUs, are then applied to the above mentioned projections of the estimated future cash flows to arrive at the discounted cash flows.
The key assumptions used in the determination of VIU are the revenue annual growth rates and the EBITDA growth rate.
Based on the above assumptions and analysis, no impairment was identified as at March 31, 2022. Further, on the analysis of the said calculation''s sensitivity to a reasonably possible change in any of the above mentioned key assumptions / parameters on which the Management has based determination of the CGU''s recoverable amount, there are no scenarios identified by the Management wherein the carrying value could exceed its recoverable amount.
NOTE 36 : FOREIGN CURRENCY EXPOSURE
The Company does not use forward exchange contracts to hedge its foreign exchange exposure relating to the underlying transactions in accordance with its forex policy. The Company does not use foreign exchange forward contracts for trading or speculation purposes.
The fair value for the investments is arrived at with reference to the Net asset value (NAV) of the mutual fund unit as disclosed by the Asset Management Company.
The management assessed that cash and cash equivalents, trade receivables, trade payables, and other current financial assets and financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Further the difference between carrying amount and fair value of insurance receivables, deposit measured at amortised cost is not significantly different in each of the year presented.
The fair value of the 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.
NOTE 38 : FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company through it operations is exposed to credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s senior management ensures that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The senior management reviews and agrees policies for managing each of these risks, which are summarised below.
Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables).
Trade receivables
Customer credit risk is managed by the Company''s established policy. To minimise the risk from the counter parties the Company enters into financial transaction with counter parties who are major names in the industry.
A significant risk in respect of receivables is related to the default risk and credit risk. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are Companyed into homogenous Companys and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to credit risk at the reporting date is the carrying value of receivables disclosed in Note 12 . The Company does not hold collateral as security.
Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations. Trade receivables concentration of credit risk with respect to trade receivables are limited, due to the Company''s customer base being large and diverse.
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
Management monitors rolling forecasts of the Company''s liquidity position on the basis of expected cash flows. This monitoring includes financial ratios and takes into account the accessibility of cash and cash equivalents.
The Company has sufficient current assets comprising of Trade Receivables, Cash and Cash Equivalents, Investment in Mutual Funds, Other Bank Balances (other than restricted balances), Loans, Inventories and Other Current Financial Assets to manage the liquidity risk, if any in relation to current financial liabilities.
The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of cash credit, working capital , demand loan and bank loans. The Company has access to a sufficient variety of sources of funding. The table below provides details regarding the contractual maturities of significant financial liabilities as at respecitve year end.
Security deposits are interest free deposits given by the Company for properties taken on Lease. Provision is taken on a case to case basis depending on circumstances with respect to non-recoverability of the amount. The gross carrying amount of Security deposit is '' 126.30 million as at March 31 2022, '' 75.77 million as at March 31 2021.
Other financial asset includes claims receivable, and other receivables (refer note 8). Provision is made where there is significant increase in credit risk of the asset.
For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximize 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. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents. 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. The Company does not have any loans outstanding as at March 31, 2022. It has taken adequate credit facilities from various banks to maintain its liquidity.
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2022 and March 31,2021
For options granted under Employee scheme, 21st month vesting will be based on Company / business unit performance for the second financial year after the financial year in which the options have been granted and so on. The performance condition are assessed as non-market conditions.
The vested options can be exercised by the employees only upon happening of liquidity event. The vested options can be exercised within 1 year of the date such options are vested in case of employee scheme and Management scheme within 2 years from date of such options vested in case of CEO scheme. In any other liquidity event, the vested options can be exercised within such period as may be prescribed by the Board in this regard.
The expected life of the share options is based on current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome. The historical volatility is based on price volatility of listed companies in same or similar industry. The company has allotted employee stock options to some of its employees through its Employee Stock Option Scheme. Over the year''s 1,053,493 (year ended March 31, 2022; 400243) stock options has expired and lapsed on account of employees left the organization. During the current year, reversal on account of such expired options is recognized in the profit and loss account aggregating to ''11.41 million. The Company has recognized '' 57.50 million, (March 31, 2021 - '' 4.78 million) as employee benefit expense in relation to all the active options outstanding as at March 31,2022.
NOTE 40 : AGREEMENT BETWEEN PROMOTER AND CEO
On September 26th, 2017, Vault Co-Investment Vehicle L.P. (âVault L.P.â), a limited liability partnership incorporated in the Cayman Islands and controlled by Barings Private Equity Asia GP VI Limited, the ultimate promoter of SION Investment Holdings Pte. Limited (âSionâ), the holding company, entered into an agreement with Chief Executive Officer of the Company (CEO) pursuant to which, the CEO was granted options under the stock option plan of Vault L.P. These options vested immediately to entitle base units in Vault L.P. to the extent of amount equivalent to 0.61% of the value of the Company for a consideration equivalent to such value of the Company as per the terms and conditions of the agreement. As per the plan, the base units are entitled for upward adjustment subject to fulfilment of certain market and service conditions.
Upon redemption of base or adjusted base units, CEO will receive from Vault L.P., an amount equivalent to value of the Company vis-vis such units at the time of sale of Sion''s shareholding in the Company subject to certain conditions set out in the agreement.
Since the option granted to CEO is for the services rendered to the Company, the Option has been valued considering the various probable scenarios and using specific assumptions relating to expected volatility and risk free return. The total charge over the period of vesting estimated is '' 70.20 million. The proportionate charge recognized during the current period is '' 15.10 million (March 31, 2021: '' 15.69 million)
NOTE 41 : OPERATING SEGMENT
Since the segment information as required by Ind AS 108-Operating Segments is provided in consolidated financial statements, the same is not provided in the Company''s separate financial statement.
NOTE 43 : IND AS 115 REVENUE FROM CONTRACTS WITH CUSTOMERS Sale of Product
The Company applies practical expedient in paragraph 121 of Ind AS 115 for all contract entered for sale of product and does not disclose information about remaining performance obligation that have original expected duration of one year or less.
Revenue for services
The Company applies practical expedient in paragraph 121 of Ind AS 115 for all contract entered for revenue from services, whereby it has right to receive consideration from a customer in an amount that corresponds directly with the value to the customer of the entity''s performance completed to date. Hence the Company does not disclose information of remaining performance obligation of such contracts.
Disaggregation of revenue from contract with customers
Revenue from sale of goods is recognized at point in time when control of the products being sold is transferred to our customer and Revenue from services is recognized over time as and when services are rendered. Revenue from contracts with customers is disaggregated by primary business units as given in the note 19.
NOTE 44 : IMPACT OF CORONA VIRUS OUTBREAK
In the short term, Company has adequate resources to sustain the impact of Covid-19. We do not foresee any material adverse impact in the medium to long term on the business. Based on our current assessment, no significant impact on carrying value on goodwill, inventory, trade receivables, intangible assets, investments and other financial assets is expected. The actual impact of global pandemic could be different from estimated, as the COVID scenario evolves in India. The Company will continue to closely monitor any material changes to future economic conditions.
NOTE 45 : INITIAL PUBLIC OFFERING
During the year ended March 31, 2022, the Company has completed its Initial Public offer (âIPOâ), comprising of an offer for sale of 5,09,25,925 equity shares of face value '' 10 each at an issue price of '' 216 per share by existing shareholders. Pursuant to the IPO, the equity shares of the Company were listed on National Stock Exchange of India (NSE) and BSE Limited (BSE) on December 31, 2021.
NOTE 46 : RELATIONSHIP WITH STRUCK OFF COMPANIES
The Company does not have any transactions with companies struck off.
NOTE 47 : REGISTRATION OF CHARGES OR SATISFACTION WITH REGISTRAR OF COMPANIES
The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
NOTE 48 : UNDISCLOSED INCOME
a) The Company has not 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.
b) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
NOTE 49 : DISCLOSURE REQUIRED FOR QUARTERLY STATEMENT SUBMITTED WITH BANKS
For borrowings from banks or financial institutions on the basis of security of current assets, quarterly returns or quarterly statements of current assets filed by the Company with banks or financial institutions during the year ended March 31, 2022 and the year ended March 31, 2021 are in agreement with the books of accounts.
NOTE 50 : DIVIDEND
(a) The interim dividend declared and paid by the Company during the year and until the date of this audit report is in accordance with section 123 of the Companies Act 2013.
(b) The Board of Directors at its meeting held on May 9, 2022 recommended a Final Dividend of '' 1 per Equity share of '' 10 each for FY 2021-22. This Final dividend is subject to the approval of the Members at the ensuing Annual General Meeting which will be held on or before September 30, 2022.
NOTE 51 : DISCLOSURE REQUIRED UNDER RULE 11(E) OF THE COMPANIES RULES, 2014
No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (âIntermediariesâ) with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
NOTE 53 : BUSINESS COMBINATION
During the year ended 31 March 2022, the Company has acquired 100% of the equity share capital of Hemabh Technology Private Limited for a consideration of '' 28.05 million. Assets taken over comprises of Property Plant and Equipment ('' 115.49 million), Customer Contracts ('' 44.70 million) and other assets ('' 78.55 million) comprising '' 238.74 millions. Liabilities taken over comprises of borrowings ('' 143.86 millions), trade payables ('' 69.05 millions) and other liabilities ('' 24.93 millions) amounting to '' 237.84 millions.
NOTE 54 :
The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
NOTE 56 :
The Company has presented these standalone financial information (for all the periods presented there in) in accordance with the requirement of Schedule III - of the Companies Act , 2013 including amendments thereto, effective from April 01,2021.
NOTE 57 :
Previous year figures have been regrouped / reclassified, where necessary, to conform to this year classification.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on CMS Info Systems Ltd.
-
CMS Info Systems Ltd. Tools
- Bulk Deals
- Block Deals
-
CMS Info Systems Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
- NSE Price History
-
CMS Info Systems Ltd. Key Financial Ratios
- Ratios
-
CMS Info Systems Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
CMS Info Systems Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
CMS Info Systems Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
CMS Info Systems Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
-
FY26 Market Review: Inside Nifty-Sensex's Sharpest Yearly Crash Since COVID; What's Next For Investors? -
Intraday Stocks To Buy Today, March 27: Top Picks By Anand James of Geojit Investments On Friday -
Indian equities open higher as Nifty tops 23,100 and Sensex climbs over 700 points -
Intraday Stocks To Buy Today, March 25: Top Picks By Anand James of Geojit Investments On Wednesday
-
Stock Market Today: Nifty Closes Near 23,000, Sensex Up 1.8%: IndiGo, L&T, Eternal, Asian Paints Top Gainers -
Steel Stock Gains 5.14% On Getting NCLT Nod For Key Merger; Do You Own? -
Stock Market Opens Strong: Nifty Up 1.5%, Sensex Rallies 1,516 Pts; Rupee Recovers as Trump Delays Iran Strike -
D-Street Mayhem: Rs 15 Lakh Cr Wiped Out As Nifty-Sensex Close 2.5% Lower, Rupee In Free-Fall Amid Iran-US War -
Indian equities outlook today as Bank Nifty remains weak and Nifty tests support -
Stock Market Crash: Sensex, Nifty Hit 1-Year Low; How US-Israel-Iran War Wiped Out Rs 4,753,333 Crore -
Intraday Stocks To Buy Today, March 23: Top Picks By Anand James of Geojit Investments On Monday
-
Nifty, Sensex Down 8% Amid Iran-US War, Crude Oil At Sky High: How Past Geopolitical Crises Have Shaped Market -
Stock Market Weekly Wrap: Sensex, Nifty End In Green Amid Iran-US War, Crude Surge, Rupee Slide -
Nifty Falls as Global Cues Persist and Gulf Tensions Weigh on Indian Markets -
Intraday Stocks To Buy Today, March 20: Top Picks By Anand James of Geojit Investments On Friday
-
Nifty, Sensex Stage Sharp Rebound After Biggest Crash; IT Stocks in Green | Why Is Stock Market Rising Today?
-
Block for 8 hours
-
Block for 12 hours
-
Block for 24 hours
-
Don't block
Sign in with Google- Male
- Female
- Others
- Under 18
- 18 to 25
- 26 to 35
- 36 to 45
- 45 to 55
- 55+