h. PROVISIONS AND CONTINGENT LIABILITIES AND ASSETS
Provisions
Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past events,
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability. When discounting is used,
the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liabilities
Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed
by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Company. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be
estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic
benefits is remote.
i. EMPLOYEE BENEFITS
Employee benefit liabilities such as salaries, wages and bonus, etc. that are expected to be settled wholly within twelve
months after the end of the reporting period in which the employees render the related service are recognized in
respect of employee's services up to the end of the reporting period and are measured at an undiscounted amount
expected to be paid when the liabilities are settled.
Post Retirement Employee Benefits
Gratuity
(a) Defined contribution plans:
Defined contribution plans are employee state insurance scheme and Government administered pension
fund scheme for all applicable employees and superannuation scheme for eligible employees. The Company's
contribution to defined contribution plans is recognized in the Standalone Statement of Profit and Loss in the
financial year to which they relate.
(b) Defined benefit plans
Defined Benefit plans are the plans for which the benefits has been defined for the eligible employees which are
meant to be paid to then at the time of retirement.
j. INCOME TAXES
Current Tax
C urrent tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any
adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best
estimate of the tax amount expected to be paid or received after considering the uncertainty, if any relating to income
taxes. It is measured using tax rates enacted for the relevant reporting period. It is determined as the amount of tax
payable under the provisions of Income Tax Act, 1961, in respect of taxable income for the year.
Deferred Tax
Deferred income taxes reflect the impact of current year timing difference between taxable income and accounting
income for the year and reversal of timing difference of earlier year. Deferred tax is measured based on the tax rates and
the tax laws enacted or substantively enacted at the balance sheet date.
Current Tax for the year
Current Tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive
income or directly in equally, in which case, the current and deferred tax are also recognized in other comprehensive
income or directly in equity respectively.
k. FOREIGN CURRENCY TRANSACTIONS AND TRANSLATIONS
Monetary and non-monetary transactions in foreign currencies are initially recorded in the functional currency of the
Company at the exchange rates at the date of the transactions.
Monetary foreign currency assets and liabilities remaining unsettled on reporting date are translated at the rates of
exchange prevailing on reporting date. Gains/(losses) arising on account of realisation/settlement of foreign exchange
transactions and on translation of monetary foreign currency assets and liabilities are recognised in the Standalone
Statement of profit and loss.
Foreign exchange gains / (losses) arising on translation of foreign currency monetary loans are presented in the
Standalone Statement of profit and loss on net basis. However, foreign exchange differences arising from foreign
currency monetary loans to the extent regarded as an adjustment to borrowing costs are presented in the Standalone
Statement of profit and loss, within finance costs.
Foreign operations
The assets and liabilities of foreign operations including goodwill and fair value adjustments arising on acquisition are
translated into Indian rupees (INR), the functional currency of the Company at the exchange rate at the reporting date.
The income and expenses of foreign operations are translated to Indian rupees (INR) at exchange rates at the date of
transactions or an average rate if the average rate approximates the actual rate at the date of transaction.
Foreign currency translation differences are recognised in statement of profit and loss and accumulated in equity.
l. REVENUE RECOGNITION
Sales of services comprises of income arising from IT consulting contracts which includes software development, domain
hosting services, other hosting services and reimbursement of expenses incurred on projects. Income is recognized on
accrual basis based on the regular invoices raised on the clients as per the terms of Agreements or other arrangements
as the case may be.
Revenue is measured at fair value of consideration received/receivable taking into account contractually defined terms
of payment and excluding taxes or duties collected on behalf of the government.
Other Income
Other Income is accounted for on accrual basis except where the receipt income is uncertain.
m. INVESTMENTS
Long-term Investments are carried at cost. However, provision for diminution in value is made to recognize a decline,
other than temporary, in the value of the investments.
Current Investments are carried at lower of cost or market value. The cost of securities sold is determined on the first-in¬
first-out (FIFO) method.
n. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity share holder, by
weighted average number of equity share outstanding during the period.
Diluted earnings per share is computed by dividing the net profit or loss attributable to equity share holder by weighted
average number of equity and equivalent diluted equity share outstanding during the year except where the result
would be antidilutive.
o. CASH AND CASH EQUIVALENTS
Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of
non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or
expenses associated with investing or financing cash flows. Cash flows from operating, investing and financing activities
of the Company are segregated, accordingly. Cash and cash equivalents in the cash flow comprise cash at bank, cash/
cheques in hand and short-term investments with an original maturity of three months or less.
Income Tax Demand
The company has an Income Tax Demand of Rs. 1031.07 lakhs having demand reference number 2021201737005359281C
dated 31-Mar-2022. The company has filed a writ petition against the demand whose outcome is yet to come.
Non-Filing of Satisfaction of Charge
As of 31.03.2024, the Company has identified an instance where a charge, previously registered with the Registrar of Companies
(ROC), has been fully satisfied. The charge in question was associated with WEST BENGAL FINANCIAL CORPORATION created
as on 17.12.2003, and the outstanding amount was fully settled in accordance with the terms of the agreement. While the
loan or obligation underlying the charge has been repaid, and the charge has been effectively satisfied, there remains a non¬
compliance issue regarding the filing of the satisfaction of the charge with the ROC. Despite the completion of all relevant
obligations, the necessary documentation to officially register the satisfaction with the ROC has not been filed within the
prescribed timeline. However, the non-filing with the ROC may result in regulatory implications and potential penalties. It has
been indicated that the potential penalty for non-compliance could amount to Rs. 25.50 lakhs. Although the charge has been
satisfied, and there is no financial liability associated with it, the non-filing with the ROC may impact the Company's regulatory
standing. Therefore, the Company is diligently working towards rectifying this situation and ensuring proper adherence to
legal and regulatory obligations. This note is intended to provide transparency regarding the non-filing of the satisfaction of
the charge with the ROC, despite the underlying obligation being fully discharged. Shareholders and other stakeholders are
encouraged to consider this information in conjunction with the financial statements.
29 Disclosure pursuant to Accounting Standard - 15 'Employee Benefits' as notified u/s 133 of the Companies Act,
2013
29.1 Defined Benefit Plan:
The following are the types of defined benefit plans:
a Gratuity Plan
15 days salary for every completed year of service. Vesting period is 5 years and payment is restricted to Rs. 20 lacs. The
present value of defined obligation and related current cost are measured using the Projected Credit Method with
actuarial valuation being carried out at each balance sheet date.
b Risk Exposure
Through its defined benefit plans, the company is exposed to a number of risks, the most significant of which are
detailed below:
Interest Rates Risk
The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the
defined benefit obligation will tend to increase. Thus the plan exposes the Company to the risk of fall in interest rates.
Some times, the fall can be permanent, due to a paradigm shift in interest rate scenarios because of economic or fiscal
reasons. 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). Even for funded schemes, a paradigm
downward shift in bond yields may affect the reinvestment yields and may increase ultimate costs.
Salary Inflation Risk
The present value of the defined benefit plan is calculated with the assumption of salary escalation rate(SER), which is
applied to find the salary of plan participants in future, at the time of separation Higher than expected increases in salary
will increase the defined benefit obligation and will have an exponential effect.
Demographic Risk
Demographic assumptions are required to assess the timing and probability of a payment taking place. This is the risk
of volatility of results due to unexpected nature of decrements that include mortality, attrition, disability and retirement.
The effects of this decrement on the DBO depend upon the combination salary increase, discount rate, and vesting
criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of
retirement benefit of a short serving employees will be less compared to long service employees.
Actuarial Risk
It is the risk that benefits will cost more than expected. This can arise due to one of the following reasons:
Adverse Salary Growth Experience: Salary hikes that are higher than the assumed salary escalation will result into an
increase in Obligation at a rate that is higher than expected.
Variability in mortality rates: If actual mortality rates are higher than assumed mortality rate assumption than the
Gratuity benefits will be paid earlier than expected. Since there is no condition of vesting on the death benefit, the
acceleration of cash flow will lead to an actuarial loss or gain depending on the relative values of the assumed salary
growth and discount rate.
Variability in withdrawal rates: If actual withdrawal rates are higher than assumed withdrawal rate assumption than
the Gratuity benefits will be paid earlier than expected. The impact of this will depend on whether the benefits are
vested as at the resignation date.
Liquidity Risk
Employees with high salaries and long durations or those higher in hierarchy, accumulate significant level of benefits. If
some of such employees resign / retire from the company there can be strain on the cash flows.
Asset Liability Mismatch
This will come into play unless the funds are invested with a term of the assets replicating the term of the liability
Investment Risk:
For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the
fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future
discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes
in the discount rate during the inter-valuation period.
Market Risk:
Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. One
actuarial assumption that has a material effect is the discount rate. The discount rate reflects the time value of money.
An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This
assumption depends on the yields on the corporate / government bonds and hence the valuation of liability is exposed
to fluctuations in the yields as at the valuation date.
Legislative Risk/Regulatory Risk:
Legislative risk is the risk of increase in the plan liabilities or reduction in the plan assets due to change in the legislation
/ regulation. The government may amend the Payment of Gratuity Act thus requiring the companies to pay higher
benefits to the employees. This will directly affect the present value of the Defined Benefit Obligation. The new labour
code is a case in point. And the same will have to be recognized immediately in the year when any such amendment is
effective.
Note - 40
The Company was originally incorporated on May 28, 2001 as a Private Limited Company as "Euphoria Infotech (India) Private
Limited'' vide Registration No. 093236 under the provisions of the Companies Act, 1956 with the Registrar of Companies,
Kolkata, West Bengal. Subsequently, pursuant to a special resolution passed by the Shareholders at their Extraordinary General
Meeting held on January 18, 2023, the Company was converted from a Private Limited Company to Public Limited Company
and consequently, the name of the Company was changed to 'Euphoria Infotech (India) Limited' and a Fresh Certificate of
Incorporation consequent to Conversion was issued on May 22, 2023 by the Registrar of Companies, Kolkata, West Bengal.
Note - 41
Other Statutory Information
i) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the
Companies (Restriction on number of Layers) Rules, 2017
ii) The company do not have any Benami property, where any proceeding has been initiated or pending against the
company for holding any Benami Property.
iii) The company do not have any transactions with struck off companies under Section 248 of the Companies Act, 2013 or
section 560 of Companies Act, 1956.
iv) The company do not have any charges or satisfaction which is yet to be registered with Registrarof Companies beyond
the statutory period.
v) The company has not traded or invested in Crypto currency or Virtual currency during the financial year.
vi) The Company has not advanced or loaned or invested any fund to any person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding (whether recorded in writing or otherwise) that the intermediary shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Company (Ultimate Beneficiaries); or
b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries,
vii) The Company has not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the Company shall:
a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the funding party (Ultimate Beneficiaries); or
b) provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
viii) The Company do not have any such transactions 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.
ix) The Company has not been declared a wilful defaulter by any bank or financial institution or other lender (as defined
under the Companies Act, 2013) or consortium thereof, in accordance with the guidelines on wilful defaulters issued by
the Reserve Bank of India during the year.
Note - 42
Previous year's figures have been regrouped and/or re-arranged wherever necessary, to conform the current year classification.
As per our report of even date attached
For Baid, Agarwal Singhi & Co. For and on behalf of the Board
Chartered Accountants Euphoria Infotech (India)Limited
Firm's Registration No. with ICAI:0328671E
(Dhruv Narayan Agarwal) Bappaditya Dasgupta Shamba Bhanja
Partner Director Director
Membership No.: 306940 DIN: 07449680 DIN: 01546020
Place : Kolkata Place : Kolkata Place : Kolkata
Amalendu Chatterjee Md. Talha
Chief Financial Officer Company Secretary
Place : Kolkata Place : Kolkata
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