Notes to Accounts of Xtglobal Infotech Ltd.

Mar 31, 2023

1. In the opinion of the Board of Directors of the company the value on realization of Current Assets, Loans and Advances in the ordinary course of business will not be less than the amount at which they have been stated in the Balance Sheet as on March 31,2023.

2. Letters have been issued to parties for confirmation of balances with the request to confirm or send comment by the stipulated date failing which balance as indicated in the letter would be taken as confirmed.

3. The Company has during the year sent out letters seeking confirmations from its suppliers whether they fall under the category of micro, small and medium enterprises as mentioned under the Micro, Small and Medium Enterprises Development Act, 2006. Based on the information available with the Company, the Company believes that it does not have any outstanding dues to micro, small and medium enterprises. Further, the Company has not paid any interest to the micro, small and medium enterprises.

2.6 Recent Pronouncements

Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, applicable from April 1, 2022 as below:

Ind AS 103 - Business Combination

The amendments specifies that to qualify for recognition as part of applying the acquisition method, the identifiable assets acquired and liabilities assumed must meet the definitions of assets and liabilities in the Conceptual Framework for Financial Reporting under Ind AS (Conceptual Framework), issued by the ICAI at the acquisition date. The company does not expect the amendment to have any significant impact in its financial statements.

Ind AS 16 - Property, Plant and Equipment (PPE)

The amendments clarifies that excess of net sale proceeds of items produced over the cost of testing while preparing the asset for its intended use (if any), shall not be recognise in the profit or loss but deducted from the directly attributable cost considered as part of cost of an item PPE. The company has evaluated the amendment and there is no impact in recognition of its property, plant and equipment.

Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets

The amendments specify that that the ''cost of fulfilling'' a contract comprises the ''costs that relate directly to the contract''. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property,

plant and equipment used in fulfilling the contract). The amendment is essentially a clarification and the company does not expect the amendment to have any impact in its financial statements.

Ind AS 109 - Financial Instruments

The amendment clarifies which fees an entity includes when it applies the ''10 percent'' test of Ind AS 109 in assessing whether to derecognise a financial liability or to consider as modification of existing financial liability. The company does not expect the amendment to have any significant impact in its financial statements.

The Code on Social Security, 2020

The Code on Social Security 2020 (''Code'') has been notified in the Official Gazette on September 29, 2020. The Code is not yet effective and related rules are yet to be notified. Impact if any of the change will be assessed and recognized in the period in which said Code becomes effective and the rules framed thereunder are notified.

2.7 Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any transactions with companies struck off.

(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,

(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,

(vii) The Company does 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.

(viii) The Company has not been declared willful defaulter by any bank or financial institution or government or any government authority.

2.9 Corporate Social Responsibility (CSR) Activities

As per Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) committee has been formed by the Company and the amount needs to be spent by the Company for the year is 2% of average net profits for previous three financial years, calculated as per Section 198 of the Companies Act, 2013. The areas for CSR activities are education & health. All these activities are covered under Schedule VII to the Companies Act, 2013. The details of amount spent are:

2.13 Financial risk management objectives and policies Financial Risk Management Framework

The Board of Directors is responsible for developing and monitoring the Company''s risk management policies.

The Company’s principal financial liabilities comprises of borrowings, trade payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include loans, trade receivables and cash and bank balances that the Company derives directly from its operations.

The Company is exposed primarily to credit risk, liquidity risk and market risk, which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

A. 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. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk arises primarily from financial assets such as trade receivables, balances with banks and loan and other receivables.

Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, cash and bank balances and loans. None of the financial instruments of the Company result in material concentration of credit risk.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs. 295.95 lakhs and Rs. 348.99 as of 31 March 2023 and 31 March 2022 respectively, being the total of the carrying amount of financial assets.

Financial assets that are neither past due nor impaired

None of the Company''s cash equivalents, loans and other financial assets were either past due or impaired as at 31 March 2023 and 31 March 2022. The Company has diversified its portfolio of investment in cash and cash equivalents and term deposits with various banks which have secure credit ratings, hence the risk is reduced.

B. Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining cash and cash equivalents and the cash flows generated from operations.

The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:

C. Market Risk:

''Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company''s income. Market risk is attributable to all market risk sensitive financial instruments including foreign currency receivables and payables and long term debt. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

D. Foreign exchange risk:

Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The majority of Company''s revenue is generated in US dollars, as a result, as the rupee appreciates or depreciates against foreign currencies, the results of the entity''s operations are impacted.

E. Interest rate risk

The group is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The risk is managed by the group by maintaining an appropriate mix between fixed and floating rate borrowings.

F. Capital risk management:

Capital includes equity capital and all other reserves attributable to the equity holders of the parent. The primary objective of capital management is to ensure that it maintain an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder’s value. The Company manages its capital structure and make adjustments to it, in light of changes in economic conditions or its business requirements. To maintain or adjust the capital structure, company may adjust the dividend payment to shareholders return capital to shareholders or issue new shares.

The Company monitors capital using a debt to capital employed ratio which is debt divided by total capital plus debt. The Company’s policy is to keep this ratio at an optimal level to ensure that the debt related covenants are complied with.

Rights, preferences and restrictions attached to the equity shares:

The Company has only one class of equity shares having a par value of Rs. 1 each per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Leases

The Company has lease arrangements for its office premises located in Duvvada and Madhurawada locations. These leases have original terms for a period of 25 years for Madhurawada 5 years for Duvvada locations and with multiyear renewal option at the discretion of lessee. There are no residual value guarantees provided by third parties.

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Mar 31, 2013

CORPORATE INFORMATION

Frontier Informatics Limited has been operating in the spears of Software Product Development, Training and Software Services since its incorporation in the year 1986. The company made its IPO in the year 1995 and is traded on BSE The company achieved sizable operations during the years 1994 to 2004. The company has been suffering losses continuously since 2002.

The company changed its name to FRONTIER INFORMATICS LIMITER from its previous name of Frontier Information Technologies Limited , vide''fresh Certificate issued by the Registrar of Companies, Hyderabad dated 14.10.2011.

1. In the opinion of Management, there are no small scale industrial undertaking(s). ''. creditors, to whom company owes a sum exceeding Rupees One Lakh which is outstanding for more than 30 days and hence details in respect of outstanding dues to small scale industrial undertakihg(s) are not furnished as required, as per the notification no GSR 129 (E) dated February 22. 1999 issued by Department of Company Affairs.

2. Balances of Sundry Debtors. Sundry Creditors. Loans & Advances are subject to Confirmation.

3. Foreign Exchange earnings and outgo: (On receipt basis and excluding transactions in overseas branches).

4. Prpvident Fund Dues :

The company had cleared off all dues relating to earlier year Provident Fund dues. Further dues are pursuant to demand raised by PF Department to pay interest and incidental charges on the arrears which are outstanding as at the end of the year to the extent of Rs 7.80.687 /-.

5. Contingent Liabilities (to the extent not provided for) :

i) Disputed Income tax demands relating to Asst Years 2001.02 & 2002.03

Amounting to Rs 32 16 lakhs. The issues are under appeal before appropriate Appellate Authorities and as per the opinion of the company''s tax advisers; the possibility of crystallization of liability is fairly unlikely.

ii) Interest payable on Dividend Distribution Tax amounting to Rs 10.91 lakhs is not Provided for which the company has sought waiver of interest.

6. Related Party Transactions

Related party disclosures, as required by Accounting Standard - AS 18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below:

A. Name of the related party and nature of relationship where control exists

I .Associates

a) Frontier Life Sciences Limited

There are no transactions with the companies during the year.

b) Knowledge ware Technologies Limited

There are no transactions with the companies during the year.

7. Taxation

Pursuant to the Accounting Standard AS22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India the company has to recognize any deferred tax or liability in its books of account. Accordingly the company has evaluated the various elements of tax computation to determine whether any tax asset or liability needs to be recognized TheCompany has incurred substantial losses and it is not considered prudent to identify deferred tax assets.

8. Roundingoff& Regrouping:

The previous year''s figures have been regrouped where necessary to correspond with current year''s figures. The figures are rounded off to the nearest rupee.

9. Taxation

Pursuant to the Accounting Standard AS22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India the company has to recognize any deferred tax or liability in its books of account. Accordingly the company has evaluated the various elements of tax computation to determine whether any tax asset or liability needs to be recognized TheCompany has incurred substantial losses and it is not considered prudent to identify deferred tax assets.

10. Rounding off & Regrouping:

The previous year''s figures have been regrouped where necessary to correspond with current year''s figures. The figures are rounded off to the nearest rupee.

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Mar 31, 2012

NOTE 1: CORPORATE INFORMATION

Frontier Informatics Limited has been operating in the spears of Software Product Development, Training and Software Services since its incorporation in the year 1986. The company made its IPO in the year 1996 and is actively traded on BSE. The company achieved sizable operations during the years 1994 to 2004. The company has been suffering losses continuously since 2002.

The company changed its name to FRONTIER INFORMATICS LIMITED, from its previous name of Frontier Information Technologies Limited, vided fresh Certificate issued by the Registrar of Companies, Hyderabad dated 14.10.2011.

1. In the opinion of Management, there are no small scale industrial undertaking), creditors, to whom company owes a sum exceeding Rupees One Lakh which is outstanding for more than 30 days and hence details in respect of outstanding dues to small scale industrial undertaking(s) are not furnished as required, as per the notification no GSR 129 (E) dated February 22,1999 issued by Department of Company Affairs.

2. Balances of Sundry Debtors, Sundry Creditors, Loans & Advances are subject to Confirmation.

Foreign Exchange earnings and outgo: (On receipt basis and excluding transactions in overseas branches).

Foreign Exchange inflow : Rs Nil (P.Y. Rs. 3.67 lakhs)

(Towards Inward remittances)

Foreign Exchange outgo : Rs. Nil (P.Y. Rs. Nil)

3. Provident Fund Dues:

The company had cleared off all dues relating to earlier year Provident Fund dues. Further dues are pursuant to demand raised by PF Department to pay interest and incidental charges on the arrears, which are outstanding as at the end of the year to the extent of Rs 10,03,999/-.

Contingent Liabilities (to the extent not provided for):

i) Disputed Income tax demands relating to Asst Years 2001.02 & 2002.03

Amounting to Rs 32.16 lakhs. The issues are under appeal before appropriate Appellate Authorities and as per the opinion of the company's tax advisers; the possibility of crystallization of liability is fairly unlikely,

ii) Interest payable on Dividend Distribution Tax amounting to Rs 10.91 lakhs is not provided for which the company has sought waiver of interest.

4. Write Backs

The company has written back on certain liabilities not payable being Director Remuneration payable and Salaries Payable relating to financial years 2002.03 to 2004.05. Further some items of advances which are found not receivable are also written off. The net amount so written back to the extent of Rs 21.49 lakhs is reflected under the head other incomes.

5. Taxation

Pursuant to the Accounting Standard AS22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India the company has to recognize any deferred tax or liability in its books of account. Accordingly the company has evaluated the various elements of tax computation to determine whether any tax asset or liability needs to be recognized The Company has incurred substantial losses and it is not considered prudent to identify deferred tax assets.

6. Rounding off & Re grouping:

The previous year's figures have been regrouped where necessary to correspond with current year's figures. The figures are rounded off to the nearest rupee.

The Revised Schedule VI effective from lsf April 2011 for preparation of financial statements has significant impact on the disclosures and presentations made in the financial statements. There are, however, no material issues requiring presentation of specific reconciliation statements.

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Mar 31, 2010

1. Secured Loans

a) Working Capital Term Loan of Rs. 2,25,98,693 from Bank of India, Hyderabad Overseas Branch, Hitec City, Madhapur, Hyderabad secured by Hypothecation of book debts, computers, peripherals, machinery, office equipment, air conditioners, turniture & fixtures, vehicles etc. and also by equitable mortgage by deposit of title deeds of Companys Land and Buildings, has been closed by repayment during the year.

b) The company received sanction of One time Settlement dated 28.04.2008 granted by the said bank for Rs 2, 30, 00,000/-. The loan amount has been repaid in July 2009 as per OTS sanctioned by the bank.

2 Balances of Sundry Debtors, Sundry Creditors, Loans & Advances are subject to Confirmation.

3 Provision has been made towards the liability for payment of gratuity for the Eligible employees as per the provisions of the Payment of Gratuity Act, 1972.

4 The company is engaged in the business of development of computer software and other related services. The production and sale of such software is not capable of being expressed in any generic unit and, hence, is not possible to give the quantitative details of sales and the information as required under paragraph 3, 4C and 4D of Part II of schedule VT of the Companies Act, 3956.

5. in the opinion of Management, there are no small scale industrial undertaking(s), creditors, to whom company owes a sum exceeding Rupees One Lakh which is outstanding for more than 30 days and hence details in respect of outstanding dues to small scale industrial underiaking(s) are not furnished as required, as per the notification no GSR 129 (E) dated February 22, 1999 issued by Department of Company Affairs.

6 Foreign Exchange earnings and outgo: (On receipt basis and excluding transactions in overseas branches).

Foreign Exchange inflow : Rs 6.06 Lakhs ( P. Y. Rs. 10.67 lakhs) (Towards Inward remittances)

Foreign Exchange outgo : Rs. Nil ( P.Y. Rs. Nil)

7. Contingent Liabilities :

i) Disputed Income tax demands relating to Asst Years 2001.02 & 2002.03

amounting to Rs 13.40 lakhs. The issues are under appeal before appropriate Appellate Authorities and as per the opinion of the companys tax advisers the possibility of crystallization of liability is fairly unlikely.

8. Segment Information

In terms of AS 17 issued by The Institute of Chartered Accountants of India on Segment Reporting, The Company operates in a single business segment i.e., software services. The services are provided based on geographical location is as under:

United states of America

(Through Branch operations) : Rs 150.32 lakhs

India : Rs 3.80 lakhs

9. Related Party Transactions

Related party disclosures, as required by Accounting Standard - AS 18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below:

A. Name of the related party and nature of relationship where control exists1 .Associates

a) Frontier Life Sciences Limited

There are no transactions with these companies during the year.

b) Knowledge ware Technologies Limited

There are no transactions with these companies during the year.

2. Key Management

Personnel a) V.K. Premchand - Managing Director

C. The information given above, has been reckoned on the basis of information Available with the Company.

10. Earaiags per share

Earning per share / Loss per share is calculated by dividing the profit/loss attributable to equity shareholders by the average number of shares outstanding during the year.

l. Loss as per Profit & Loss A/c Rs. 334,60,014

2. Number of shares (nos) 1,33,10,400

3. Loss Per share (Rs.) (2.51)

4. Face value per share (Rs.) 10.00

11. Taxation

Pursuant to the Accounting Standard AS22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India the company has to recognize any deferred tax or liability in its books of account. Accordingly the company has evaluated the various elements of tax computation to determine whether any tax asset or liability needs to be recognized The Company has incurred substantial losses and it is not considered prudent to identify deferred tax assets.

12. Rounding off & Regrouping:

The previous years figures have been regrouped where necessary to correspond with current years figures. The figures are rounded off to the nearest rupee.

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Mar 31, 2009

1. Secured Loans

a. Working Capital Term Loan of Rs. 2,25,98,693 (Previous year Rs. 2,89,00,393) from Bank of India, Hyderabad Overseas Branch, Hitec City, Madhapur, Hyderabad is secured by Hypothecation of book debts, computers, peripherals, machinery, office equipment, air conditioners, furniture & fixtures, vehicles etc. and also by equitable mortgage by deposit of title deeds of Companys Land and Buildings.

b. The company received sanction of One time Settlement dated 28.04.2008 granted by the said bank for Rs 2, 30, 00,000/-. The loan amount has since been repaid in July 2009 as per OTS sanctioned by the bank. The excess liability amounting to Rs 35,26,800/- is therefore written back to the profit & Loss a/c during the current year to set up the outstanding loan amount to match the out standing liability as at the end of the year.

2 Balances of Sundry Debtors, Sundry Creditors, Loans & Advances are subject to Confirmation.

3 Provision has been made towards the liability for payment of gratuity for the eligible employees as per the provisions of the Payment of Gratuity Act, 1972.

4 The company is engaged in the business of development of computer software and other related services. The production and sale of such software is not capable of being expressed in any generic unit and, hence, is not possible to give the quantitative details of sales and the information as required under paragraph 3, 4C and 4D of Part II of schedule VI of the Companies Act, 1956.

5. In the opinion of Management, there are no small scale industrial undertaking(s), creditors, to whom company owes a sum exceeding Rupees One Lakh which is outstanding for more than 30 days and hence details in respect of outstanding dues to small scale industrial undertaking(s) are not furnished as required, as per the notification no GSR 129 (E) dated February 22, 1999 issued by Department of Company Affairs.

6. Contingent Liabilities:

i) Disputed Income tax demands relating to Asst Years 2001.02 & 2002.03

amounting to Rs 13.40 lakhs. The issues are under appeal before appropriate Appellate Authorities and as per the opinion of the companys tax advisers the possibility of crystallization of liability is fairly unlikely.

7. Related Party Transactions

Related party disclosures, as required by Accounting Standard - AS 18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are given below:

A. Name of the related party and nature of relationship where control exists

1. Associates

a. Frontier Life Sciences Limited

There are no transactions with this company during the year.

b. Knowledgeware Technologies Limited

There are no transactions with this company during the year.

2. Key Management

Personnel V.K. Premchand - Chairman and Managing Director

8. Taxation

Pursuant to the Accounting Standard AS22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India the company has to recognize any deferred tax or liability in its books of account. Accordingly the company has evaluated the various elements of tax computation to determine whether any tax asset or liability needs to be recognized The Company has incurred substantial losses and it is not considered prudent to identify deferred tax assets.

9. Rounding off & Regrouping :

The previous years figures have been regrouped where necessary to correspond with current years figures. The figures are rounded off to the nearest rupee.