Notes to Accounts of SoftTech Engineers Ltd.

Mar 31, 2025

xv. Provisions and contingent liabilities

A Provision is recognized when the Company has a present obligation as a result of a past event and it
is probable that an outflow of resources is expected to settle the obligation, in respect of which a
reliable estimate can be made.

If 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.

Provision for warranty is recognized when the product is sold. Provision is made on historical
experience. The estimate of such warranty related costs is revised annually.

Contingent liability is disclosed in case of

a) a present obligation arising from past events, when it is not probable that an outflow of
resources will be required to settle the obligation.

b) present obligation arising from past events, when no reliable estimate is possible

c) a possible obligation arising from past events where the probability of outflow of resources is
not remote.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

xvi. Leases

Lease is a contract that provides to the customer (lessee) the right to use an asset for a period of time
in exchange for consideration.

Company as a Lessee

A lessee is required to recognize assets and liabilities for all leases with a term that is greater than 12
months, unless the underlying asset is of low value, and to recognize depreciation of leased assets
separately from interest on lease liabilities in the statement of Profit and Loss.

Initial Measurement
Right to use asset

At the commencement date, the Company measures the right-of-use asset at cost. The cost of the right-of-use
asset shall comprise:

• the amount of the initial measurement of the lease liability

• any lease payments made at or before the commencement date, less any lease incentives received;

• any initial direct costs incurred by the lessee; and

• an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset,
restoring the site on which it is located or restoring the underlying asset to the condition required by the terms
and conditions of the lease, unless those costs are incurred to produce inventories. The lessee incurs the
obligation for those costs either at the commencement date or as a consequence of having used the underlying
asset during a particular period.

Lease liability

At the commencement date, the Company measures the lease liability at the present value of the lease
payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in
the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses
its incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise the following payments:

• fixed payments (including in-substance fixed payments), less any lease incentives receivable;

• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at
the commencement date;

• amounts expected to be payable by the Company under residual value guarantees;

• the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and

• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option
to terminate the lease.

Subsequent measurement
Right to use asset

Subsequently the Company measures the right-of-use asset at cost less any accumulated depreciation and any
accumulated impairment losses.

Lease Liability

Subsequently the Company measures the lease liability by:

• increasing the carrying amount to reflect interest on the lease liability at the interest rate implicit in the
lease, if that rate can be readily determined or the Company''s incremental borrowing rate.

• reducing the carrying amount to reflect the lease payments made; and

• re-measuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised
in-substance fixed lease payments.

xvii. Impairment of non-financial assets

The company assesses at each balance sheet date whether there is any indication that an asset or cash
generating unit (CGU) may be impaired. If any such indication exists, the company estimates the
recoverable amount of the asset. The recoverable amount is the higher of an asset''s or CGU''s net
selling price or its value in use. Where the carrying amount of an asset or CGU exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount.

Impairment losses are recognized in the statement of profit and loss.

xviii. Fair value measurement

Fair value is the amount for which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm''s length transaction. Quoted market prices, when available,
are used as the measure of fair value. In cases where quoted market prices are not available, fair values
are determined using present value estimates or other valuation techniques which maximize the use
of relevant observable inputs and minimize the use of unobservable inputs, for example, the present
value of estimated expected future cash flows using discount rates commensurate with the risks
involved. Fair value estimation techniques normally incorporate assumptions that market participants
would use in their estimates of values, future revenues, and future expenses, including assumptions
about interest rates, default, prepayment and volatility. Because assumptions are inherently
subjective in nature, the estimated fair values cannot be substantiated by comparison to independent
market quotes and, in many cases, the estimated fair values would not necessarily be realised in an
immediate sale or settlement of the instrument.

For cash and other liquid assets, the fair value is assumed to approximate to book value, given the
short-term nature of these instruments. For those items with a stated maturity exceeding twelve
months, fair value is calculated using a discounted cash flow methodology.

The financial instruments carried at fair value are categorized under the three levels of the Ind AS fair
value hierarchy as follows:

Level 1: Quoted market prices (unadjusted) in active markets for identical assets or liabilities that the
Company has the ability to access. This level of the fair value hierarchy provides the most reliable
evidence of fair value and is used to measure fair value whenever available.

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable
inputs). These inputs reflect the Company''s own assumptions about the assumptions that market
participants would use in pricing the asset or liability (including assumptions about risk). These inputs
are developed based on the best information available in the circumstances, which include the
Company''s own data. The Company''s own data used to develop unobservable inputs is adjusted if
information indicates that market participants would use different assumptions.

xix. 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: Initial recognition and measurement

All financial assets except Trade Receivables are recognised initially at fair value. Purchases or sales of
financial assets that require delivery of assets within a time frame established by regulation or
convention in the market place (regular way trades) are recognised on the trade date, i.e., the date
that the Company commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

a. Debt instruments at amortised cost

b. Debt instruments at fair value through other comprehensive income (FVTOCI)

c. Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)

d. Equity instruments measured at fair value through other comprehensive income (FVTOCI)

Derecognition

The Company derecognizes a financial asset when the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in
which substantially all of the risks and rewards of ownership of the financial asset are transferred or
in which the company neither transfers nor retain substantially all of the risks and rewards of
ownership and it does not retain control of the financial asset.

Impairment of financial asset

Company applies expected credit loss (ECL) model for measurement and recognition of impairment
loss on the following financial assets and credit risk exposure:

• Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt
securities, deposits, trade receivables and bank balance

• Financial assets that are debt instruments and are measured as at FVTOCI

• Lease receivables

• Trade receivables or any contractual right to receive cash or another financial asset that result
from transactions that are within the scope of Ind AS 115

• Loan commitments which are not measured as at FVTPL

• Financial guarantee contracts which are not measured as at FVTPL

The company follows ''simplified approach'' for recognition of impairment loss allowance on Trade
receivables or contract revenue receivables

The application of simplified approach does not require the company to track changes in credit risk. Rather,
it recognises impairment loss allowance based on expected lifetime loss at each reporting date, right from
its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the company determines
that whether there has been a significant increase in the credit risk since initial recognition. If credit risk
has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk
has increased significantly, lifetime ECL is used.

Financial liabilities: Initial recognition and measurement

The company initially recognises loans and advances, deposits, debt securities issued and subordinated
liabilities at their fair value on the date on which they are originated. All other financial instruments
(including regular-way purchases and sales of financial assets) are recognised on the trade date, which
is the date on which the company becomes a party to the contractual provisions of the instrument.

A financial liability is measured initially at fair value minus, for an item not at fair value through profit
or loss, transaction costs that are directly attributable to its acquisition or issue. Transaction costs of
financial liabilities carried at fair value through profit or loss are expensed in profit or loss.

Subsequent Measurement

For purposes of subsequent measurement, financial liabilities are classified and measured as follows:
1) 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.

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 at the initial date of recognition, and 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 risks are
recognized in OCI. These gains/ loss are not subsequently transferred to P&L. 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 profit and loss.

2) Loans and Borrowings at amortised Cost

This is the category most relevant to the Company. After initial recognition, interest-bearing
borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are
recognised in the 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
statement of profit and loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
when it 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 statement of
profit or loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated
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 realize the assets and settle the liabilities simultaneously.

xx. Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to
equity shareholders by the weighted average number of equity shares outstanding during the period
as reduced by number of shares bought back, if any. The weighted average number of equity shares
outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights
issue, share split, and reverse share split (consolidation of shares) that have changed the number of
equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period
attributable to equity shareholders and the weighted average number of shares outstanding during
the period are adjusted for the effects of all dilutive potential equity shares.

xxi. Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating
resources and assessing performance of the operating segments, has been identified as the Board of
Directors that makes strategic decision.

Segment accounting policies are in line with the accounting policies of the Company.

The company has complied with the number of layers of companies as prescribed under clause (87) of section
2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

On 31st October 2024, the company acquired an 80% stake in Envee IT Pvt Ltd, thereby making it a subsidiary
through acquisition

Refer Note 33 (i) for Fair value measurements of financial assets and liabilities and refer Note 33 (ii) for Fair
value hierarchy disclosures for financial assets and liabilities.

Disclosure pursuant to section 186(4) of the Act

There are no guarantees issued or loans given by the Company as at 31st March, 2025 and 31st March, 2024.
Details of Investments made are given in note above.

Details of investment made by the Company in its wholly owned subsidiary for further investment in its
step-down subsidiary

Details of bank deposits pledged:

(1) Deposit of INR Nil (March 31, 2024: INR 184.00 lakhs) are pledged as security against the long¬
term borrowings.

(2) Deposit of INR 689.88 lakhs (March 31, 2024: INR 611.56 lakhs) are pledged as security against
the short-term borrowings.

(3) Deposit of INR 144.56 lakhs (March 31, 2024: INR 178.64 Lakhs) are held against bank guarantees.

(4) Deposit of INR 1.54 lakhs (March 31, 2024: INR 0.16 Lakhs) are held as security deposit

Refer Note 33 (i) for Fair value measurements of financial assets and liabilities and refer Note 33 (ii)
for Fair value hierarchy disclosures for financial assets and liabilities.

On December 23, 2024, the company allotted 987,998 equity shares through a preferential issue at a face
value of Rs. 10 each, with a premium of Rs. 395 per share. The total proceeds of Rs. 40,01,39,190 were raised
to support business expansion and for general corporate purposes.

d) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares, having par value of ^ 10 per share. Each holder of equity
share is entitled for one vote per share and has a right to receive dividend as recommended by the Board of
Directors subject to the necessary approval from the shareholders. In the event of liquidation of the Company

ai. During financial year 2023-24, company had received the demand order from Dy. Commission of sales tax
under The Maharashtra Goods and Services Tax Act, 2017 aggregating to Rs. 115.95 Lakhs (Rs. 108.43 lakhs as
on March 2024) (including interest and penalty) for FY 2017-21 pertaining to certain delay in filing tax returns
and late payment of tax.

Company has filed appeal against the show cause notices stating that the relevant tax, interest and penalty
has already been paid by the company at the time of filing of returns of respective periods.

aii. During the year 2024-25 Company has received the demand order from Sales tax officer under The
Maharashtra Goods & Service tax Department amounting to Rs. 48.95 Lakhs (including interest and penalty)
against excess ITC claimed while filing the GSTR 3B for FY 2022-23.

Company has filed reply against the same stating that no excess credit been availed for the same year and
hence company is not liable to pay the same.

aiii. During the Previous year company had received notice u/s.148A for reopening the assessment for AY
2018-19 by Assessing officer raising demand of Rs. 274.75 lakhs. The Company has filed the appeal to the Joint
Commissioner (Appeals)/ Commissioner of Income-tax (Appeals).

aiv. During the year 2024-25 company has received notice u/s. 148A for reopening the assessment for AY
2018-19 by Assessing officer raising demand of Rs. 75.62 lakhs. The Company has filed the appeal to the Joint
Commissioner (Appeals)/ Commissioner of Income-tax (Appeals).

Management of the company is confident that none of the above contingent liabilities will result in material
cash outflow.

1. Equity investment in Subsidiaries are shown at Cost in balance sheet as per Ind AS 27: Separate Financial
Statements

2. Equity instruments designated as measured at fair value through OCI.

a) There are designated as such upon initial recognition in accordance with paragraph 5.7.5 of Ind AS 109. This
presentation is required as the asset is a strategic non-held for trading investment and fails the SPPI test.

b) There are no dividends recognised during the period for this investment.

c) There have been no transfer of cumulative gain/loss within equity during the period for this investment.

3. The management assessed that the fair value of cash and cash equivalents, trade receivables, trade
payables, investments in equity shares of others at FVTPL and other current financial assets and liabilities
approximate their carrying amounts, largely due to the short-term nature of these balances.

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

5. The management assessed that the carrying amounts of its financial instruments are reasonable
approximations of fair values.

ii) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial
instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for
which fair values are disclosed in the financial statements. To provide an indication about the reliability of the
inputs used in determining fair value, the Company has classified its financial instruments into three levels
prescribed under the Indian Accounting Standard. An explanation of each level follows underneath the table.

Level 1: The fair value of financial instruments traded in active markets is based on quoted market prices at
the end of the reporting period. The mutual funds are valued using the closing NAV.

Level 2: The fair value of derivatives is determined using valuation techniques which maximise the use of
observable market data and rely as little as possible on entity-specific estimates. If all significant inputs
required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
Fair values are determined in whole or in part using a valuation model based on assumptions that are neither
supported by prices from observable current market transactions in the same instrument nor are they based
on available market data.

iv) Financial assets and liabilities measured at amortised cost

The fair value of all financial instruments carried at amortised cost are not materially different from
their carrying amounts, since they are either short-term in nature or the interest rate applicable are
equal to the current market rate of interest.

Note: 34 Financial risk management

The Company is exposed to market risk, 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.

(a) Credit risk

The Company is exposed to credit risk from counterparties defaulting on their obligations, primarily related to
trade receivables and unbilled revenue. To manage this risk, the Company regularly monitors and limits
exposure, focusing on the financial reliability of its customers, which are mostly state government bodies, thus
having a low inherent risk of payment default.

To manage this risk, the Company periodically reviews the financial reliability of its customers, taken into
account their financial conditions, current economic trends, analysis of historical bad debts and ageing of trade
receivables.

The Company uses the simplified approach to calculate expected credit losses for impairment on trade
receivables and other financial assets, providing for them where necessary. All of the Company''s other
financial assets measured at amortised cost and the loss allowance recognised during the period was therefore
limited to 12 months'' expected losses. Management considers instruments to be low credit risk when there is
a low risk of default and the issuer has a strong capacity to meet its obligations. Refer to Notes 10 and 13 for
the ageing of receivables, contract assets, and movement in loss allowance.

(b) Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time
or at reasonable price. The Company''s objective is to at all times maintain optimum levels of liquidity to meet
its cash and liquidity requirements. The Company closely monitors its liquidity position and maintains
adequate source of financing, if required, through the use of short term bank deposits. Processes and policies
related to such risks are overseen by senior management.

(c) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because
of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk
and other price risks, such as equity price risk and commodity price risk.

i) Foreign currency rate risk

Foreign currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rate. The company transacts majority of it''s business in local currency
INR and therefore has minimal foreign currency exposure from trade payables and trade receivables.
However, the Company has significant investments in overseas subsidiaries. These investments are long term
in nature and won''t be impacted for any short term fluctuation in the currency. The company has not hedged
it''s foreign currency exposure by derivative instruments as on 31 March, 2025. There are no forward contracts
outstanding as on 31 March, 2025.

iii) Price risk

The Company does not hold any quoted equity investments and, therefore, is not exposed to equity securities
price risk. Its only equity investment is a strategic holding in Qi Square Pte Ltd.

Note 35: Capital Management

For the purpose of the Company''s capital management, capital includes issued equity share capital and all
other equity reserves attributable to the equity holders of the Company. The primary objective of the
Company''s capital management is to ensure that it maintains a strong credit rating in order to support its
business activities and maximize brand value.

The Company manages its capital and makes adjustments to it in light of the changes in economic and market
conditions.

The Company monitors capital gearing ratio, which is net debt divided by total capital. Net debt comprises of
long term and short-term borrowings less cash and cash equivalents and bank balances, equity includes equity
share capital and reserves that are managed as capital. The gearing at the end of the reporting period was as
follows.

Note 36: Issue of equity shares on preferential allotment basis

On October 8, 2021 and October 5, 2022, company had made private placement by way of equity shares, compulsory
convertible debenture and share warrants the proceeds of which are Rs 1,000 lakhs, 828.90 lakhs and 2,500 lakhs
respectively for expanding its business and general corporate purpose. During the year 2023-24, compulsory convertible
debenture and share warrants were converted into equity shares.

On December 23, 2024, the company allotted 987,998 equity shares through a preferential issue at a face value of Rs. 10
each, with a premium of Rs. 395 per share. The total proceeds of Rs. 40,01,39,190 were raised to support business
expansion and for general corporate purposes.

Following are the details of utilization of proceeds from private placement raised on October 8, 2021, October 5, 2022
and December 23, 2024 done till March 31, 2025.

There is no deviation in use of proceeds from the objects stated in the resolution done till year end.
The remaining funds of Rs. 3,701.07 lakhs (March 2024: Rs. 910.07 lakhs) have been invested in
mutual funds & short-term fixed deposits (Refer note 9)

(March 2025: Rs 265.18 lakhs in mutual funds & Rs. 3,435.88 lakhs in short term fixed deposits; March
2024: Rs. 910.07 in mutual funds)

Note 37: Segment Information

The business segment have been identified on the basis of the nature of products and services, the risks and
returns, internal organisation and management structure and the internal performance reporting systems.

1. In accordance with Indian Accounting Standard 108 - Segment Reporting, the Company has determined its
single business segment as ""design, development, installation and servicing of information technology related
resource"". Operating segments are reported in a manner consistent with the internal reporting provided to
the board of directors based in India regarded as the Chief Operating Decision Maker ("CODM"). Since the
entire Company''s business is from information technology related resource there are no other primary
reportable segments. Thus, the segment revenue, segment results, total carrying value of segment assets,
total carrying amount of segment liabilities, total cost incurred to acquire segment assets, total amount of
charge of depreciation and amortisation during the year are all as reflected in the financial statements as at
and for the year ended March 31, 2025, and March 31, 2024.

Disclosure applicable to entities that have single reportable segment are given in consolidated financial
statement.

The Company is an information technology and software services organisation, delivering end to end solution
in Architectural-Engineering-Construction (AEC) space, catering to Government bodies, municipalities,
property developers, investors, real estate companies, contractors, architects and consultants.

1. Background:

Revenues from customer contracts are considered for recognition and measurement when the contract has
been approved by the parties to the contract, the parties to contract are committed to perform their
respective obligations under the contract, and the contract is legally enforceable. Revenue is recognised upon
transfer of control of promised products or services to customers in an amount that reflects the consideration
the Company expects to receive in exchange for those products or services. To recognise revenues, the
Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the
performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price
to the performance obligations in the contract, and (5) recognise revenues when a performance obligation is
satisfied. When there is uncertainty as to collectability, revenue recognition is postponed until such
uncertainty is resolved.

2. Performance Obligations

At contract inception, the Company assesses its promise to transfer products or services to a customer to
identify separate performance obligations. The Company applies judgement to determine whether each
product or service promised to a customer is capable of being distinct, and are distinct in the context of the
contract, if not, the promised product or service is combined and accounted as a single performance
obligation. A performance obligation is typically satisfied as services are rendered and in some cases upon the
completion of service.

The company allocates the transaction price to separately identifiable performance obligations based on their
relative stand-alone selling price. In cases where the company is unable to determine the stand-alone selling
price the Group uses expected cost-plus margin approach in estimating the stand-alone selling price.

The billing schedules agreed with customers include periodic performance-based payments and / or milestone
based progress payments. Invoices are payable within contractually agreed credit period.

3. Revenue Recognition

1) Fixed-price contracts: Revenue for fixed-price contracts is recognised over the period of time using
percentage-of-completion method. The percentage of completion is determined by the company using output
method, which is measured by the number of units/plan approved by the customer, the number of
transactions processed from the software etc.

2) Operation and maintenance contract: Revenue related to these contracts is recognised based on time
elapsed mode and revenue is straight-lined over the period of performance.

3) Sale of licenses: Revenue from licenses where the customer obtains a "right to use "the licenses is
recognized at the time the license is made available to the customer. Revenue from licenses where the
customer obtains a "right to access" is recognized over the access period. Revenue from sale of traded
software licenses is recognised on delivery to the customer. Cost and earnings in excess of billings are classified
as unbilled revenue while billings in excess of cost and earnings are classified as unearned revenue.

4. Contract Assets

Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract
assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right

40 Other notes

a. To the best of our knowledge and information available the Company has not transacted with any company
struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 during the
year.

b. The Company does not have any 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).

c. No funds have been received by the Company from any person or entity, including foreign entities (''Funding
Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether,
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 provide any guarantee, security or the like on behalf
of the Ultimate Beneficiaries.

As per our report of even date attached For and on behalf of the Board of Directors

For P G BHAGWAT LLP Vijay Gupta Priti Gupta

Chartered Accountants Managing Director Director

Firm Registration No.: DIN: 01653314 D I N : 01735673

101118W/W100682

Place: Pune Place: Pune

Abhijeet Bhagwat Shalaka Khandelwal Kamal Agrawal

Partner Company Secretary Chief Financial Officer

Membership No.: 136835 Membership No. A62774

Place: Pune Place: Pune

Date: 26 May 2025 Date: 26 May 2025

---

Mar 31, 2024

The Company is an information technology and software service organisation, delivering end to end solutions in architectural-Engineering-Construction (AE) space. The Company internally develops softwares to deliver aforesaid services. The software development cost and its upgradation cost is capitalised as internally generated software.

Projects whose completion is overdue or has exceeded its cost compared to its original plan the year ended March 31, 2024 ^ NIL (March 31, 2023 ^ Nil).

There is significant management judgement and estimate involved in identifying the amount, nature of expenses to be allocated to an internally generated intangible asset (software).

Other Information:

The company''s leasing activities are restricted to leasing premises for their corporate and regional offices. These lease contracts provide for lease rentals to increase each year on account of inflation.

The company does not face 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. There are no variable lease payments and guaranteed residual value in existing lease agreements.

During the previous financial year, in accordance with Ind AS 116, the company has reassessed the lease term for the premises that it is currently occupying as it''s corporate office, leading to a remeasurement of lease liability.

Note: Number of shares/debentures are in full figures

The company has complied with the number of layers of companies as prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.

Refer Note 33 (i) for Fair value measurements of financial assets and liabilities and refer Note 33 (ii) for Fair value hierarchy disclosures for financial assets and liabilities.

Disclosure pursuant to section 186(4) of the Act

There are no guarantees issued or loans given by the Company as at 31st March, 2024 and 31st March, 2023. Details of Investments made are given in note above.

Details of investment made by the Company in its wholly owned subsidiary for further investment in its step down subsidiary.

* The company has complied with relevant provisions of the Foreign Exchange Management Act,1999 and the Companies Act, 2013 and the above transactions are not violative of the Prevention of Money Laundering Act, 2002.

The investment will be used for general corporate purposes by SoftTech Government Solutions Inc.

Details of bank deposits pledged:

1) Deposit of INR 184 lakhs (March 31, 2023: INR 284.00 lakhs) are pledged as security against the long-term borrowings.

2) Deposit of INR 611.56 lakhs (March 31, 2023: INR 664.38 lakhs) are pledged as security against the shortterm borrowings.

3) Deposit of INR 178.64 lakhs (March 31, 2023: INR 178.64 Lakhs) are held against bank guarantees.

4) Deposit of INR 0.16 lakhs (March 31, 2023: INR Nil) are held as security deposit.

Refer Note 33 (i) for Fair value measurements of financial assets and liabilities and refer Note 33 (ii) for Fair value hierarchy disclosures for financial assets and liabilities.

*Refer Note 31(b) for Security deposits receivable from related parties.

Amount receivable from related parties which includes debts due by companies in which any director is a director or member includes receivable from SoftTech Govt Solutions Inc and SoftTech Digital Software LLC of Rs. 43.21 lakhs and 23.78 lakhs respectively.

The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

There are no repatriation restrictions with regard to cash and cash equivalents as at the end of the reporting period and prior period.

d) Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares, having par value of ^ 10 per share. Each holder of equity share is entitled for one vote per share and has a right to receive dividend as recommended by the Board of Directors subject to the necessary approval from the shareholders. In the event of liquidation of the Company the holders of equity share will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts in proportion to their shareholding. The distribution will be in proportion to the numbers of equity shares held by the shareholder.

Employee stock compensation (ESOP 2017 Scheme)

The Company had instituted Employees'' Stock Option Plan "ESOP 2017" under which the stock options have been granted to the employees. The scheme was approved by the shareholders at the annual general meeting held on September 22, 2017.

The expected life of the options is based on historical data and current expectations and is not necessarily indicative of the 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 differ from the actuals.

* Terms of securities convertible into equity (CCD): The Holding Company had made a preferential issue of CCDs on 23rd August, 2022. The CCDs are convertible into equity shares at any time on or before the expiry of 18 months from the date of allotment of the CCDs in one or more tranches. The CCD are convertible into equity shares at a conversion price of Rs. 125/- per equity share i.e. face value of Rs. 10/- per share and premium of Rs 115/- per equity share. During the year, the CCDs have been converted into equity shares as per the terms of conversion.

** Terms of securities convertible into equity (Share Warrants): The Holding Company had made a preferential issue of share warrants on 23rd August, 2022 with an issue price of Rs 125/- per warrant with a right to the warrant holder to apply for and be allotted 1 equity share of face value Rs. 10/- each of the company at a premium of Rs 115/- per share for each warrant within a period of 18 months from the date of allotment of the warrants. In the event the warrant holder would not have exercised the warrants within 18 months from the date of allotment, the warrants would have been lapsed and the amount paid to the Holding Company at the time of subscription of the warrants would have been forfeited. During the year, shares have been issued against share warrants.

Nature and purpose of reserves

a) Share options outstanding account represents the balance that would be utilised for allotting the shares under the Stock option scheme.

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

The Company has not been declared wilful defaulter by any bank or financial institution or other lender or government or any government authority.

ai. During the financial year 2019-20, the Company had received communication under section 70 of the CGST Act, 2017 from the DGGI, Zonal Unit, Pune in relation to input tax credit allegedly wrongly availed by the Company. The GST officers had taken the relevant records of the Company for further investigation. The management of the company based on discussions and frequent meetings with the GST officers, had paid the input tax credit availed of INR 186.61 Lakhs under protest. At the time, the company had obtained appropriate legal opinion which indicated that they had a case to claim refund of the amount paid under protest and accordingly, the amount paid had been disclosed under the head "Balances with Government Authorities in the financial statements. However, during the previous year 2022-23, the management had decided to not pursue this claim so the entire Rs. 186.61 Lakhs along with penalty and interest has been written off in the statement of profit and loss.

aii. The Assessing officer had filed an appeal with Income Tax Appellate Tribunal (''ITAT'') against the order passed by Commissioner of Income Tax (Appeals) under section 143 (3) of the Income tax Act, 1961 for the Assessment Year (A.Y.) 2014 - 2015, resulting in net tax liability of Rs. 201.01 Lakhs. Amount of Rs. 30 Lakhs had been paid under protest for the same (refer note 8). In the current financial year, the ITAT released an order dismissing all appeals of the Revenue and refund is received by the company.

aiii. During current financial year, company has received the demand order from Dy. Commission of sales tax under The Maharashtra Goods and Services Tax Act, 2017 aggregating to Rs. 108.43 lakhs (including interest and penalty) pertaining to certain delay in filing tax returns and late payment of tax.

Company has filed appeal against the show cause notices stating that the relevant tax, interest and penalty has already been paid by the company at the time of filing of returns of respective periods.

aiv. During the year company has received notice u/s. 148A for reopening the assessment for AY 2018-19 by Assessing officer raising demand of Rs. 274.75 lakhs. The Company has filed the appeal to the Joint Commissioner (Appeals)/ Commissioner of Income-tax (Appeals).

Terms and conditions:

Management is of the view that all transactions with related parties are in ordinary course and on an arm''s length basis.

All outstanding balances are unsecured and payable in cash.

Note 32: Employee benefit obligations

A. Defined contribution plans (Refer Note 25)

The Company''s state governed provident fund, employee state insurance scheme and labour welfare are defined contribution plan. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the service. During the year, the Company has contributed Rs. 67.30 Lakhs ( March 31, 2023 Rs. 63.46 Lakhs) to these schemes.

B. Defined benefit plans

The Company provides for gratuity benefit under a defined benefit retirement scheme (the "Gratuity Scheme") as laid out by the Payment of Gratuity Act, 1972 of India covering eligible employees. The Gratuity Scheme provides for a lump-sum payment to employees who have completed at least five years of service with the Company, based on salary and tenure of employment. Liabilities with regard to the Gratuity Scheme are determined by actuarial valuation carried out using the Projected Unit Credit Method by an independent actuary. The Gratuity Scheme is a non-funded scheme and the Company intends to discharge this liability through its internal resources.

Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by 1%, keeping all other actuarial assumptions constant. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of defined benefit obligation calculated with the projected unit credit method at the end of reporting period) has been applied while calculating the defined benefit liability recognised in the balance sheet. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.

(i) Average Duration

Weighted average duration of the plan (based on discounted cash flows using mortality, withdrawal rate and interest rate) is 3.63 years

(j) Risk Exposure And Asset Liability Matching

Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as companies take on uncertain long term obligations to make future benefit payments.

1. Liability Risks

a. Discount Rate Risk

Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practise can have a significant impact on the defined benefit liabilities.

b. Future Salary Escalation and Inflation Risk

Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at management''s discretion may lead to uncertainties in estimating this increasing risk.

3. The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables, investments in equity shares of others at FVTPL and other current financial assets and liabilities approximate their carrying amounts, largely due to the short term nature of these balances.

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

5. The management assessed that the carrying amounts of its financial instruments are reasonable approximations of fair values.

ii) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the Indian Accounting Standard. An explanation of each level follows underneath the table.

Level 1: The fair value of financial instruments traded in active markets is based on quoted market prices at the end of the reporting period. The mutual funds are valued using the closing NAV.

Level 2: The fair value of derivatives is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

iv) Financial assets and liabilities measured at amortised cost

The fair value of all financial instruments carried at amortised cost are not materially different from their carrying amounts, since they are either short-term in nature or the interest rate applicable are equal to the current market rate of interest.

Note: 34 Financial risk management

The Company is exposed to market risk, 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.

(a) Credit risk

The Company is exposed to credit risk from counterparties defaulting on their obligations, primarily related to trade receivables and unbilled revenue. To manage this risk, the Company regularly monitors and limits exposure, focusing on the financial reliability of its customers, which are mostly state government bodies, thus having a low inherent risk of payment default.

To manage this risk, the Company periodically reviews the financial reliability of its customers, taken into account their financial conditions, current economic trends, analysis of historical bad debts and ageing of trade receivables.

The Company uses the simplified approach to calculate expected credit losses for impairment on trade receivables and other financial assets, providing for them where necessary. All of the Company''s other financial assets measured at amortised cost and the loss allowance recognised during the period was therefore limited to 12 months'' expected losses. Management considers instruments to be low credit risk when there is a low risk of default and the issuer has a strong capacity to meet its obligations. Refer to Notes 10 and 12 for the ageing of receivables, contract assets, and movement in loss allowance.

(b) Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. The Company''s objective is to at all times maintain optimum levels of liquidity to meet its cash and liquidity requirements. The Company closely monitors its liquidity position and maintains adequate source of financing, if required, through the use of short term bank deposits. Processes and policies related to such risks are overseen by senior management.

Exposure to liquidity risk

The table below analyzes the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprises three types of risk: currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity price risk.

i) Foreign currency rate risk

Foreign currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rate. The company transacts majority of it''s business in local currency INR and therefore has minimal foreign currency exposure from trade payables and trade receivables. However, the Company has significant investments in overseas subsidiaries. These investments are long term in nature and won''t be impacted for any short term fluctuation in the currency. The company has not hedged it''s foreign currency exposure by derivative instruments as on 31 March, 2024. There are no forward contracts outstanding as on 31 March, 2024.

Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The company''s exposure to the risk of changes in market interest rates relates primarily to the company''s debt obligations with floating interest rates.

iii) Price risk

The Company''s exposure to equity securities price risk arises from investments in mutual fund held by the Company and classified in the balance sheet at fair value through profit or loss. At the reporting date the exposure to quoted equity securities is Rs. 980.64 lakhs. A decrease of 100 bps on the NAV would decrease the profit and loss or equity attributable to the company by approximately Rs. 9.81 lakhs. On the other hand, an increase of 100 bps in the value of the quoted securities would increase the profit and loss and equity of the company by approx. Rs. 9.81 Lakhs.

Note 35: Capital Management

For the purpose of the Company''s capital management, capital includes issued equity share capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to ensure that it maintains a strong credit rating in order to support its business activities and maximize brand value.

The Company manages its capital and makes adjustments to it in light of the changes in economic and market conditions.

Note 36: Issue of equity shares on preferential allottment basis

On October 8, 2021 and October 5, 2022, company had made private placement by way of equity shares, compulsory convertible debenture and share warrants the proceeds of which are Rs 1000 lakhs, 828.90 lakhs and 2500 lakhs respectively for expanding its business and general corporate purpose. During the year, compulsory convertible debenture and share warrants are converted into equity shares.

There is no deviation in use of proceeds from the objects stated in the resolution done till year end. The remaining funds of Rs. 910.07 lakhs have been invested in mutual funds during the year (Refer note 9).

Note 37: Segment Information

The business segment have been identified on the basis of the nature of products and services, the risks and returns, internal organisation and management structure and the internal performance reporting systems.

1. In accordance with Indian Accounting Standard 108 - Segment Reporting, the Company has determined its single business segment as "design, development, installation and servicing of information technology related resource". Operating segments are reported in a manner consistent with the internal reporting provided to the board of directors based in India regarded as the Chief Operating Decision Maker ("CODM"). Since the entire Company''s business is from information technology related resource there are no other primary reportable segments. Thus, the segment revenue, segment results, total carrying value of segment assets, total carrying amount of segment liabilities, total cost incurred to acquire

segment assets, total amount of charge of depreciation and amortisation during the year are all as reflected in the financial statements as at and for the year ended March 31, 2024, and March 31, 2023.

2. Further, the Company operates primarily in India and there is no other significant geographical segment.

Disclosure applicable to entities that have single reportable segment are given in consolidated financial statement.

The Company is an information technology and software services organisation, delivering end to end solution in Architectural-Engineering-Construction (AEC) space, catering to Government bodies, municipalities, property developers, investors, real estate companies, contractors, architects and consultants.

1. Background:

Revenues from customer contracts are considered for recognition and measurement when the contract has been approved by the parties to the contract, the parties to contract are committed to perform their respective obligations under the contract, and the contract is legally enforceable. Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. To recognise revenues, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognise revenues when a performance obligation is satisfied. When there is uncertainty as to collectability, revenue recognition is postponed until such uncertainty is resolved.

2. Performance Obligations

At contract inception, the Company assesses its promise to transfer products or services to a customer to identify separate performance obligations. The Company applies judgement to determine whether each product or service promised to a customer is capable of being distinct, and are distinct in the context of the contract, if not, the promised product or service is combined and accounted as a single performance obligation. A performance obligation is typically satisfied as services are rendered and in some cases upon the completion of service.

The company allocates the transaction price to separately identifiable performance obligations based on their relative stand-alone selling price. In cases where the company is unable to determine the stand-alone selling price the Group uses expected cost-plus margin approach in estimating the stand-alone selling price.

The billing schedules agreed with customers include periodic performance-based payments and / or milestone-based progress payments. Invoices are payable within contractually agreed credit period.

3. Revenue Recognition

1) Fixed-price contracts: Revenue for fixed-price contracts is recognised over the period of time using percentage-of-completion method. The percentage of completion is determined by the company using output method, which is measured by the number of units/plans approved by the customer, the number of transactions processed from the software etc.

2) Operation and maintenance contract: Revenue related to these contracts is recognised based on time elapsed mode and revenue is straight-lined over the period of performance.

3) Sale of licenses: Revenue from licenses where the customer obtains a "right to use "the licenses is recognized at the time the license is made available to the customer. Revenue from licenses where the customer obtains a "right to access" is recognized over the access period. Revenue from sale of traded software licenses is recognised on delivery to the customer. Cost and earnings in excess of billings are classified as unbilled revenue while billings in excess of cost and earnings are classified as unearned revenue.

4. Contract Assets

Contract assets are recognised when there is excess of revenue earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash, and only passage of time is required, as per contractual terms. Unearned and deferred revenue ("contract liability") is recognised when there is billings in excess of revenues.

40: Other notes

a. To the best of our knowledge and information available the Company has not transacted with any company struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 during the year.

b. The Company does not have any 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).

c. No funds have been received by the Company from any person or entity, including foreign entities (''Funding Parties''), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

Notes 3 to 40 form an integral part of the standalone financial statements.

---

Mar 31, 2018

1. Background of the Company

SoftTech Engineers Private Limited (the “Company”) was founded in 1996 and is based out of Pune. The Company was converted from private limited to public limited company and consequently, has changed its name from “SoftTech Engineers Private Limited” to “SoftTech Engineers Limited”, the same being registered with Registrar of Companies on 1 March 2018. The equity shares of the Company have been listed in the SME portal of National Stock Exchange of India Limited ( NSE ) on 11 May 2018.

The Company is an information technology and software services organisation, delivering end to end solution in Architectural-Engineering-Construction (AEC) space, catering to property developers, investors, real estate companies, contractors, architects and consultants.

a) Rights, preferences and restrictions attached to equity shares

The Company has equity shares, having par value of Rs. 10 per share. E ach holder of equity s hare is entitled for o ne vote per share and has a right to receive dividend as recommended by the Board of Directors subject to the necessary app roval from the shareholders.

Pursuant to the investor agreement entered into with the shareholders , in the event of oc c urre n ce of a liquidatio n event or winding up subject to applicable laws, the total proceeds from such an event will be distributed to the Rajasthan Trustee Company Private Limited (the “Investor”) in preference to all other shareholders of the Company (including the Promoters) from the assets, cash and/or property of the Company and/or cash or other consideration payable on the occurrence of the liquidation event, as the case may be, prior and in preference to payment of any dividend or distribution of any of the assets or surplus funds of the Company to the shareholders of the Company by reason of their ownership thereof, so that the Investor receives the higher of (liquidation preference amount) :-

(i) the investment amount plus all declared but unpaid dividends until the date of such payment plus an IRR of 20% p.a; or

(ii) proportionate share of the valuation as accorded by an independent third party valuer to be mutually appointed by the Investor and Company; or

(iii) proportionate share of actual liquidation proceeds.

Any proceeds remaining after its distribution to the Investor shall be distributed to all the shareholders (excluding the Investor), in proportion to their shareholding.

In accordance with the investor agreement indicated in the preceding paragraph, subsequent to the listing of the equity shares of the Company on NSE on 11 May 2018, the shares held by the investor rank pari passu with the remaining shares of the Company without any preferential rights.

b) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the Balance Sheet date

1. 3,525,638 Equity shares of Rs. 10 each have been allotted as fully paid up bonus shares by way of capitalisation of general reserves.

2. Pursuant to the resolution passed by the Board of Directors on 21 August 2017 and shareholders on 22 September 2017, the Company has instituted “SoftTech Employees Stock Option Plan 2017” (ESOP 2017) for issue of stock options to the eligible employees. During the financial year ended 31 March 2018, the Company had granted 35,116 shares under ESOP 2017 Plan where in part consideration will be received in the form of employees’ services.

Loans from related parties

These are interest free loans and do not have any repayment schedule. However, as per the terms of the loans, repayment of loans cannot be demanded before 1 April 2019.

Unsecured term loans

Repayable in monthly instalments ranging between Rs. 9,649 to Rs. 254,023 along with interest ranging between 15.00% to 19.84% p.a. The Company has pre-paid these term loans subsequent to the year end and these balances have been classified as ‘Current maturities of long-term borrowings’.

Defined Benefit Plan: - The Company provides for gratuity benefit under a defined benefit retirement scheme (the “Gratuity Scheme”) as laid out by the Payment of Gratuity Act, 1972 of India covering eligible employees . T h e Gratuity Sche me p rovides for a lump-sum payment to employees who have completed at least five years of service with the Company, based on salary and tenure of employment. Liabilities with regard to the Gratuity Scheme are determined by actuarial valuation carried out using the Projected Unit Credit Method by an independent actuary. The Gratuity Scheme is a non-funded scheme and the Company intends to discharge this liability through its internal resources.

The following table sets out the status of the Gratuity Scheme in respect of employees of the Company:

b Compensated absences

The obligation for compensated absences is recognised in the same manner as gratuity and net charge to the Statement of Profit and Loss for the period is Rs. 165,974 (Previous Year - Credit: Rs. 229,669).

c Employee stock compensation (ESOP 2017 Scheme)

The Company had instituted Employees’ Stock Option Plan “ESOP 2017” under which the stock options have been granted to the employees. The scheme was approved by the shareholders at the annual general meeting held on 22 September 2017.

* WAEP denoted weighted average exercise price

# During the year ended 31 March 2018, the Company has issued bonus shares in the ratio of 1:1 on December 2017. The effect of the weighted average exercise price has been consequently adjusted.

The Company incurred Rs. 707,895 (Previous Year - nil) towards employee stock compensation during the year.

The weighted average fair value of the options granted during the year was Rs. 61.43 per share option issued. Black Scholes valuation model has been used for computing the weighted average fair value considering the following inputs:

The expected life of the options is based on historical data and current expectations and is not necessarily indicative of the 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 differ from the actuals.

The Company measures the cost of ESOP using intrinsic value method. Had the Company used fair value model to determine compensation, its profit after tax and earnings per share as reported would have changed to the amounts indicated below:

The Company is in the process of obtaining necessary confirmations from suppliers regarding their status under the Micro, Small and Medium Enterprises (MSME) Development Act, 2006 (the ‘Act’ ) and hence disclosures regarding the following have not been made:

i. Amount due and outstanding to MSME suppliers as at the end of the accounting period.

ii. Interest paid during the period to MSME.

iii. Interest payable at the end of the accounting period to MSME.

iv. Interest accrued and unpaid at the end of the accounting period to MSME.

Management believes that the figures for disclosures, if any, will not be significant.

2 (a) Note:

Details of bank deposits pledged:

(i) Deposits of Rs. 21,500,000 (Previous year: Rs. 21,500,000) are pledged as security against the long-term borrowings

(ii) Deposits of Rs. 3,775,000 (Previous year: Rs. 1,200,000) are pledged as security against the short-term borrowings

(iii) Deposits of Rs. 16,255,682 (Previous year: Rs. 16,255,682) are held against bank guarantees.

*Unamortised share issue expenses incurred in connection with the Initial Public Offering (IPO) of the Company, include fees paid to bankers, stock exchanges, lawyers, auditors etc., These expenses will be adjusted against securities premium, arising on public issue of equity shares of the Company on 11 May 2018, in accordance with Section 52 of the Companies Act, 2013.

3 Segment reporting

The Company is primarily an information technology and software services organisation. For the purpose of disclosure of segment information, the Company considers this business as a single business segment (ie. Business consulting and software implementation and related support activities). Further, the Company operates primarily in India and there is no other significant geographical segment. In view of the above, both primary and secondary additional reporting disclosures for business / geographical segments as envisaged in Accounting Standard 17, “Segment Reporting” are not applicable to the Company.

4 The Company has entered into operating lease agreements for office facilities and such leases are basically cancellable in nature.

Lease rental expense recognised in the Statement of Profit and Loss for the period 1 April 2017 to 31 March 2018 in respect of operating lease is Rs. 3,360,042. (Previous years: Rs. 3,209,974).

5 Earning per share (EPS)

The amount considered in ascertaining the Company’s earnings per share constitutes the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares which could have been issued on conversion of all dilutive potential shares.

6 The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

7 Corporate Social Responsibility (CSR)

Section 135 of the Companies Act, 2013 and Rules made thereunder prescribe that every company having a net worth of Rs. 500 crore or more, or turnover of Rs. 1,000 crore or more or a net profit of Rs. 5 crore or more during any financial year shall ensure that the company spends, in every financial year, at least 2% of the average net profits earned during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy. The provisions pertaining to corporate social responsibility as prescribed under the Companies Act, 2013 are applicable to the Company. The financial details as sought by the Companies Act, 2013 are as follows :

8 The Board of Directors at its meeting held on 31 August 2018 have recommended final dividend of Rs. 0.50 per equity share. The recommended dividend is subject to shareholders’ approval.