p) Provisions and contingent liabilities
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset, if it is virtually certain that reimbursement will be received, and the amount of the receivable can be measured reliably.
When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
The Company uses significant judgement to disclose contingent liabilities. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Contingent assets are neither recognised nor disclosed in the financial statements.
q) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM). The CODM assesses the financial performance and position of the company and makes strategic decisions. The company operates in one reportable business segment i.e. travel and transportation vertical.
r) Investments
Investments in subsidiaries is carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
s) Government grants
Government grants are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant will be received.
t) Going concern
The directors have at the time of approving the financial statements, a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, the Company continues to adopt the going concern basis of accounting in preparing the financial statements.
u) Recent pronouncements
The Ministry of Corporate Affairs (MCA) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 30 June 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
Remaining performance obligations
While disclosing the aggregate amount of transaction price yet to be recognised as revenue towards unsatisfied (or partially satisfied) performance obligations, along with the broad time band for the expected time to recognize those revenues, the Company has applied the practical expedient in Ind AS 115. Accordingly, the Company has not disclosed the aggregate transaction price allocated to unsatisfied (or partially satisfied) performance obligations which pertain to contracts where revenue recognised corresponds to the value transferred to customer typically involving time and material, outcome based and event based contracts.
Unsatisfied (or partially satisfied) performance obligations are subject to variability due to several factors such as terminations, changes in scope of contracts, periodic revalidations of the estimates, economic factors (changes in currency rates, tax laws etc). The aggregate value of transaction price allocated to unsatisfied (or partially satisfied) performance obligations is ' 5,006.15 lakhs (30 June 2023: ' 4,940.25 lakhs) out of which approx. 33.09% (30 June 2023: approx. 60.50%) is expected to be recognised as revenue in next year and the balance thereafter.
Contract asset and liabilities
During the year ended 30 June 2024, the Company recognized revenue of ' 471.59 lakhs out of opening gross deferred revenue (Contract liabilities) of ' 474.46 lakhs.
During the year ended 30 June 2024, ' 1,128.03 lakhs of contract assets which had an amount of ' 1,137.28 lakhs as at 01 July 2023, has been billed on completion of milestones and services.
E. Unrecognised tax assets
As at 30 June 2024, unrecognised deferred tax assets on account of tax losses amount to ' Nil (30 June 2023: ' 431.61 lakhs), which can be carried forward up to a specified period.
32 Employee benefits
Defined contribution plan
The Company makes contributions in respect of qualifying employees towards Provident Fund and other funds. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognized as an expense towards contribution to Provident Fund and other funds for the year aggregated to ' 547.94 lakhs (30 June 2023: ' 518.30 lakhs).
Defined benefit plan
The Company provides for gratuity, a defined benefit plan. The present value of the defined benefit liability, and the related current service cost and past service cost, are measured using the projected unit credit method. The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). LIC administers the plan and determines the contribution required to be paid by the Company. No other retirement benefits are provided to these employees.
Investment risk
The probability or likelihood of occurrence of losses relative to the expected return on any particular investment. Interest rate risk
The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate cost of providing the above benefit and will thus result in an increase in the value of the liability (as shown in financial statements).
Financial Instruments - Fair values and risk management (Continued)
B. Measurement of fair values
Level 1 hierarchy includes financial instruments measured using quoted prices in an active market. This includes listed equity instruments, traded debentures and mutual funds that have quoted price/ declared NAV.
The financial instruments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range. The carrying value of financial instruments measured at amortized cost approximates their fair value.
C. Financial risk management
The Company has exposure to the following risks arising from financial instruments:
- Credit risk;
- Liquidity risk; and
- Market risk
i. Risk management framework
The Company's activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company's primary risk management focus is to minimize potential adverse effects of market risk on its financial performance. The Company's risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company's activities. The Board of Directors and the Audit Committee is responsible for overseeing the Company's risk assessment and management policies and processes.
ii. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company's receivables from customers, unbilled receivables and investment securities. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
Expected credit loss assessment:
Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given the critical nature of the services of the Company to its customers, the Company expects the historical trend of minimal credit losses to continue. Further, management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk. The impairment loss as at 30 June 2024 relates to several customers that have defaulted on their payments to the Company and are not expected to be able to pay their outstanding balances, mainly due to economic circumstances.
The movement in the allowance for impairment in respect of trade and other receivables during the year was as follows.
Cash and cash equivalents, deposits and mutual funds
The Company held cash and cash equivalents, deposits and mutual funds with credit worthy banks and financial institutions of ' 12,237.27 lakhs as at 30 June 2024 (30 June 2023: ' 6,886.74 lakhs). The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be good.
Other than trade and other receivables, the Company has no other financial assets that are past due but not impaired.
iii. Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company's reputation.
The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.
Exposure to liquidity risk
The table below analyses the Company's financial liabilities into relevant maturity groupings based on their contractual maturities for:
* all non derivative financial liabilities
* Derivative financial instruments for which the contractual maturities are essential for understanding the timing of the cash flows.
iv. Market risk
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates, foreign currency exchange rates and commodity prices) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk, interest rate risk and the market value of its investments. Thus, the Company's exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies.
Currency risk
The fluctuation in foreign currency exchange rates may have potential impact on the profit and loss account and equity, where any transaction references more than one currency or where assets/ liabilities are denominated in a currency other than the functional currency of the entity.
Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in USD, SGD, GBP and Euro against the respective functional currencies of the Company and its subsidiaries.
The Company, as per its risk management policy, uses forward contract derivative instruments primarily to hedge foreign exchange. The Company does not use derivative financial instruments for trading or speculative purposes.
Sensitivity analysis
A 10% strengthening/ weakening of the respective foreign currencies with respect to functional currency of Company would result in increase or decrease in profit or loss as shown in table below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. The following analysis has been worked out based on the exposures as of the date of statements of financial position.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company has no borrowings from banks and financial institutions. The Company has margin money deposit with bank at fixed interest rate. Any movement in the market interest rate is not expected to significantly impact the fair value of deposits.
Capital Management
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.
The Company has adequate cash and bank balances and has no debt. The Company monitors its capital by a careful scrutiny of the cash and bank balances, and a regular assessment of any debt requirements. In the absence of any debt, the maintenance of debt equity ratio etc. may not be of any relevance to the Company.
35 Segmental reporting
Based on the "management approach" as defined in Ind AS 108-Operating Segments, the Chief Operating Decision Maker (CODM) evaluates the Group's performance as a single business segment namely travel and transportation vertical. The Company's CODM is Managing Director.
One customer accounted for more than 10% of the revenue for the year ended 30 June 2024 (30 June 2023: Two customers accounted for more than 10% of the total revenue)
In accordance with paragraph 4 of Ind AS 108 "Operating Segments", issued by the Central Government, the Company has presented segment information only on the basis of the consolidated financial statements (refer note 35 of consolidated financial statements).
Footnote:
1) The above figures do not include provisions for encashable leave as separate actuarial valuations are not available.
2) Payable to Managing Director, Chief Financial Officer and Company Secretary.
The Company's management is of the opinion that its international transactions with related parties are at arms length and that the Company is in compliance with the transfer pricing legislation. Based on the above, the Company's management believes that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of the provision for tax.
Ultimate parent company and parent company of larger group
The Company is a subsidiary undertaking of Accelya Group Topco Limited which is the ultimate parent company incorporated in Jersey.
The ultimate controlling party as at 30 June 2024 are various private equity funds within the portfolio of Vista Equity Partners Perennial:
Vista Equity Partners Perennial, L.P., Vista Equity Partners Perennial A, L.P. and Vista Equity Partners Perennial Equity, L.P. , incorporated in Cayman Islands and Vista Co-Invest 2018-2 L.P. incorporated in the United States.
The largest group in which the results of the company are consolidated is that headed by Accelya Group Topco Limited. The consolidated financial statements are available to the public and may be obtained from Accelya Group Topco Limited.
38 Contingent liabilities (Continued)
The Company has reviewed all its pending litigation and proceedings and has adequately provided where provision is required. The Company has disclosed contingent liabilities wherever applicable. The resolution of these legal proceedings is not likely to have a material and adverse effect on the results of operations or the financial position of the Company.
41 Corporate Social Responsibility
As per the Companies Act, 2013, all companies having net worth of ' 500 crores or more, or turnover of ' 1,000 crores or more or a net profit of ' 5 crores or more during any financial year will be required to constitute a Corporate Social Responsibility ("CSR") committee of the Board of Directors comprising three or more directors, at least one of whom shall be an independent director. The Company has constituted a committee comprising Mr. James Davidson, Ms. Meena Jagtiani*, Ms. Sangeeta Singh and Mr. Ravindran Menon# as its members. The committee is responsible for formulating and monitoring the CSR policy of the Company.
* Ms. Meena Jagtiani, Independent Director, has replaced Mr. Nani Javeri as member & Chairperson of the CSR committee. Mr. Nani Javeri retired as an Independent Director on 7 July 2023.
# Mr. Ravindran Menon, Independent Director, was appointed as member of the CSR committee on 17 April 2024.
The Company has implemented CSR activities through following organizations:
- Catalysts for Social Action ("CSA"), a not-for-profit organization dedicated to the cause of child welfare and rehabilitation for children living in orphanages
- Sri Sathya Sai Health & Education Trust ("Sri Sathya Sai"), a not-for-profit organisation dedicated to provide children with congenital heart diseases with free of cost treatment.
The funds were donated to CSA and Sri Sathya Sai and utilized during the year on activities which are specified in Schedule VII of the Companies Act, 2013:
a) Gross amount required to be spent by the Company during the year is R 204.10 lakhs.
b) The Company's contribution to CSA and Sri Sathya Sai Health & Education Trust towards CSR during the year was:
43 Long term contracts
The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/ accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of account.
44 Dividend distribution
Dividends paid during the year ended 30 June, 2024 include an amount of ' 25 per equity share towards interim dividends for the year ending 30 June, 2024 and an amount of ' 30 per equity share towards final dividends for the year ending 30 June, 2023. Dividends paid during the year ended 30 June, 2023 include an amount of ' 35 per equity share towards interim dividends for the year ending 30 June, 2023 and an amount of ' 45 per equity share towards final dividends for the year ending 30 June, 2022.
Dividends declared by the Company are based on profits available for distribution.
45 Audit trail
The Ministry of Corporate Affairs (MCA) has prescribed a new requirement under the proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 inserted by the Companies (Accounts) Amendment Rules 2021 requiring companies, which uses accounting software for maintaining its books of accounts, shall use only such accounting software which has a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of accounts and ensuring that the audit trail cannot be disabled.
The software used by the Company for accounting has an audit trail feature for maintaining its books of accounts. The Company has performed an analysis and have enabled the audit trail on the tables relevant for maintaining books of accounts and the same has operated throughout the year for all the relevant transactions recorded in the accounting software. However, the audit trail feature was not enabled at database level for accounting software to log any data changes.
The Company uses another software for maintaining payroll masters, this software and its audit trail is managed by a third party who has provided the independent auditor's System and Organization Controls report, however the relevant controls on maintaining audit trail were missing in the said report.
46 Exceptional items
Exceptional items comprise of:
(a) Impairment of investment in its subsidiary, Accelya Solutions UK Limited for the year ended 30 June 2024 as a result of reassessment of future prospects on account of the business environment of the subsidiary;
(b) Profit on sale of Property, Plant & Equipment (1st floor of Building 'Sharada Arcade') at Pune, for the year ended 30 June 2023.
47 Additional regulatory information
i) Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
ii) Wilful Defaulter
The Company has not been declared wilful defaulter by any bank or financial institutions or government or any government authority during the current or previous year.
iii) Details of Benami Property held
During the current or previous year, no proceedings have been initiated on or are pending against the Company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
iv) Loans and advances
During the current or previous year, the Company has not granted loans to its promoters, directors, KMPs and the other related parties (as defined under the Companies Act, 2013) which are repayable on demand or without specifying any terms or period of repayment or any other loans or advance in the nature of loans.
v) Undisclosed income
There have been no transactions which have not been recorded in the books of accounts, that have been surrendered or disclosed as income during the year ended 30 June 2024 and 30 June 2023, in the tax assessments under the Income Tax Act, 1961. There have been no previously unrecorded income and related assets which were to be properly recorded in the books of account during the year ended 30 June 2024 and 30 June 2023.
vi) Borrowings from banks or Financial Institution on Security of Current Assets
The Company has no borrowings from banks and financial institutions on the basis of security of current assets during the current or previous year.
viii) Amount transferred to Investor Education and Protection Fund (IEPF)
There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the current or previous year.
ix) During the current or previous year, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, 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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
x) During the current or previous year, no funds have been received by the Company from any person(s) or entity(ies), 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.
xi) During the current or previous year, the Company has not made any investments during the year other than Investment in Mutual Funds. During the current or previous year, the Company has not granted secured/ unsecured loans/ advances in the nature of loans to any Company/ Firm/ Limited Liability Partnership/ Other Party during the year. During the current or previous year, the Company has not provided guarantee or Security to any Company/ Firm/ Limited Liability Partnership/ Other party during the year.
48 Subsequent events
The Board of Directors has recommended a final dividend of ' 40/- per equity share for the year ended 30 June, 2024, subject to the approval of the shareholders at the ensuing Annual General Meeting.
For and on behalf of Board of Directors Accelya Solutions India Limited CIN: L74140PN1986PLC041033
Gurudas Shenoy Saurav Adhikari
Managing Director Independent Director
DIN:03573375 DIN:08402010
Mumbai Mumbai
Uttamkumar Bhati Ninad Umranikar
Chief Financial Officer Company Secretary
Mumbai Membership No: ACS14201
Mumbai 26 July 2024
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