(1) During the year ended 31 March 2024, building OF ' 167.32 Lakhs have been transferred to investment property from property, plant and equipment as the same have been considered by the management as not for further use for business purposes and held for the purpose of earning rental.
(2) The Company's lender "Kotak Mahindra Bank" has got the valuation done for our property (measuring super built-up area of 11,500 sq. ft.) against the loan of ?675 lacs sanctioned and disbursed in the month of January 2024, from an independent registered valuers as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017, who are specialist in valuing these types of Investment Properties, having appropriate qualifications and recent experience in the valuation of properties in relevant locations. According to their valuation report, the fair value of the Company's Property was ?2,127.50 Lacs. Out of total Super Built-up area of 11,500 sq. ft., the Company has rented out a portion of that property measuring approx. 1500 sq. ft. Since the valuation is recent, our Company believe that valuation stands valid thru 31 March 2024. Accordingly the fair value of the investment property has been arrived at ? 277.50 lacs as at 31 March 2024.
(1) The Company has not revalued its property, plant and equipment, investment property and intangible assets during the year ended 31 March 2024 and 31 March 2023 respectively.
(2) The Company has performed an assessment of its property, plant and equipment, investment property and intangible assets for possible triggering events or circumstances for an indication of impairment and has concluded that there were no triggering events or circumstances that would indicate the property, plant and equipment, investment property and intangible assets are impaired.
(i) As at the Balance Sheet date, none of the investments in equity instruments have been impaired.
(ii) The Company has given a corporate guarantee to CITI Bank N.A, on behalf of its step-down subsidiary, 123Stores, Inc., amounting to ' 6,750 lacs in India, for a loan amounting to US$ 7.5 million taken by its step-down subsidiary, 123Stores, Inc. The corporate guarantee to Yes Bank amounting to '850 lacs was closed on 30 March 2024. The financial guarantee has been fair valued as per IND AS 109.
(iii) The Company has measured its investment in subsidiaries at cost in accordance with Ind AS 27 - Separate Financial Statements.
(i) The Company has transferred an amount of ' 0.78 lacs of unpaid dividend to the Investor Education and Protection Fund for the financial year 2015-16.
(ii) The Company has deposited ' 30 Lacs against fixed deposit with HDFC Bank for bank guarantee issued in favour of Santosh Promoters Pvt. Limited as per the order of Supreme Court dated 01 May 2017.
(iii) The company has deposited ' 1 lac against fixed deposit with hdfc bank for overdraft facility of ' 0.90 lac
(iv) The Company has deposited '50 lacs in fixed deposit with Yes Bank for a corporate guarantee to Yes Bank, on behalf of its step-down subsidiary, 123Stores, Inc., for a loan of USD 1.02 million (equivalent INR ' 850 lacs). the corporate guarantee was closed on 30 March 2024.
(a) Reconciliation of equity share capital
During the year ended 31 March 2024, the Company has issued and allotted 15,80,000 equity shares of '10 each in Private Placement (PP) at an issue price of '145 per share (including securities premium of '135 per share) aggregating to ' 2,291 lacs. The net proceeds from the issue has been utilized towards investment in E-Commerce business & growth initiatives, funding technology innovation, artificial intelligence, debt reduction, team building, launching SaaS portal, expanding our supplier base and deepening partnership with our suppliers and general corporate purposes. In accordance with Ind AS 32, the costs that are attributable directly to the above transaction, have been recognised in equity.
(b) Terms and rights attached to equity shares
The Company has only one class of equity shares having a par value of '10 per share. The Company declares and pays dividends in Indian Rupees. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts if any. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.
(c) No additional shares were allotted as fully paid up by way of bonus shares or pursuant to contract without payment being received in cash during the last five years. Further, none of the shares were bought back by the Company during the last five years.
(f) Nature and purpose of reserves Capital reserve
The Company has transferred the net surplus arising from amalgamation in accordance with the terms of Scheme of amalgamation.
General reserve
The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act, 2013.
Securities premium
The amount received in excess of face value of the equity shares is recognised in Securities Premium. Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of Section 52 of the Companies Act, 2013.
Debt instruments through Other Comprehensive Income:
The debt instruments are measured at fair value and the change is recognised through Other Comprehensive Income. Upon derecognition, the cumulative fair value changes on the said instruments are reclassified to the Statement of Profit and Loss.
(#) Vehicle loan of '18.35 lacs taken from Bank of India at an effective floating interest rate of 9.23% as of 31 March 2024 (9.41% as of 31 March 2023), repayable in 84 monthly installments. The closing balance as on 31 March 2024 is '15.13 Lacs ( Previous Year : '17.02 Lacs)
(#) Term loan of '850 Lacs & ' 675 Lacs taken from Kotak Mahindra Bank at an effective interest rate of 9.15% & 8.90% respectively as of 31 March 2024 (floating interest rate) for business purpose of Company and its subsidiaries. The loan is secured against the property at 145, Rash Behari Avenue, 3rd floor, Suite no. 301, Kolkata - 700029 and it is repayable in 84 & 120 monthly installments respectively. The closing balance as on 31 March 2024 is ' 1,391.91 Lacs ( Previous Year : ' 816.78 Lacs).
($) The Company has taken an unsecured loan having a balance of 226 lacs (Previous year ' 205 lacs) @9.50% p.a. as of 31 March 2024 (8% p.a. as of 31 March 2023) from One Two Three Greetings (India) Private Limited for working capital purpose, which is repayable on demand.
(*) For maturity analysis of borrowings - refer Note 30 (b)
Contract asset is the right to consideration in exchange for services transferred to the customer. Contract liability is the entity's obligation to transfer services to a customer for which the entity has received consideration from the customer in advance.
(a) Defined contribution plans
Eligible employees of the Company receive benefits under the provident fund which is a defined contribution plan wherein both the employee and the Company make monthly contributions equal to a specific percentage of covered employees' salary. These contributions are made to the fund administered and managed by the Government of India and the Company has no further obligation beyond making its contribution. The Company's monthly contributions are charged to the Statement of Profit and Loss in the period in which they are incurred. An amount of '16.77 Lacs (Previous Year: '17.07 lacs) has been recognised as expense in the statement of profit & loss during the year.
(b) Defined benefits plan
Gratuity is a post employment benefit and is a defined benefit plan. The gratuity plan is governed by the Payment of Gratuity Act, 1972 ('the Act'). The liability recognised in the balance sheet represents the present value of the defined benefit obligation at the balance sheet date, together with adjustment for unrecognised actuarial gains or losses and past service cost. Independent actuaries calculate the defined benefit obligation annually using the Projected Unit Credit Method. Actuarial gains and losses are credited/ charged to the Statement of Other Comprehensive Income in the year in which such gains or losses arise.
Note: The assumption of discount rate is based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities. Future salary increase rate takes into account the inflation, seniority, promotion and other relevant factors on long term basis.
Methods and assumptions used in preparing sensitivity analysis and their limitations:
Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increase and mortality.
(b) The Indian Parliament has approved the Code on Social Security, 2020 which would impact contribution by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on 13 November 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code become effective.
28 SEGMENT REPORTING
(a) As per the requirements of IND-AS 108 " Segment Reporting", no disclosures are required to be made since the Company's activities consist of a single business segment of internet based delivery of services.
(b) Other Information :
The Company does not have any revenue from external customers.
(c) The Company has entered into transaction with a single customer (related party), which amounts to 10% or more of the Company's total revenue from operations. (Refer note 27)
(i) The above table does note include deemed investments.
(ii) The carrying amount of financial assets and financial liabilities measured at amortized cost are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amount would be significantly different from the values that would be eventually received or settled. Management assessed that fair values of cash and cash equivalents, other bank balances, bank deposits, loans to employees, trade receivables, trade payables and other financial liabilities approximate their carrying amounts due to the short term maturities of these instruments. For long-term borrowings at fixed/floating rates, management evaluates that their fair value will not be significantly different from the carrying amount.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a stressed or liquidation sale.
(b) Fair value hierarchy
Financial assets and financial liabilities measured at fair value in the Statement of Profit and Loss are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:
Level 1: Quoted prices (unadjusted) in active markets for financial instruments.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3: Unobservable inputs for the asset or liability
The following table shows the Levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis at 31 March 2024 and 31 March 2023:
(c) Computation of fair values
Investments in mutual funds are investments made in varied tenure funds whose fair value is considered as the net asset value (NAV) declared by their respective fund houses on a daily basis. NAV represents the price at which the fund house is willing to issue further units in such fund/the price at which the fund house will redeem such units from the investors. Thus the declared NAV is similar to fair market value for these mutual fund investments since transactions between the investor and fund houses will be carried out at such prices.
The fair value of perpetual bonds and non-convertible debentures are based on quoted prices and market-observable inputs.
30 FINANCIAL RISK MANAGEMENT
The Company's business activities expose it to a variety of financial risks such as credit risks, liquidity risk and market risks. The Company's focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the standalone financial statements.
(a) Credit risk
Credit risk is the risk that a counterparty fails to discharge its obligation to the Company. The Company's exposure to credit risk is influenced mainly by cash and cash equivalents, trade receivables and financial assets measured at amortised cost. The Company continuously monitors defaults of customers and other counterparties and incorporates this information into its credit risk controls. Credit risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits. Other financial assets measured at amortised cost includes security deposits. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.
Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognized in statement of profit and loss.
i) Trade receivables
The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The allowance account in respect of trade and other receivables is used to record impairment losses unless the Company is satisfied that no recovery of the amount owing is possible. At that point, the financial asset is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount of the impaired financial asset.
As the Company does not hold any collateral, the maximum expense to credit risk for each class of financial instrument is the carrying amount of that class of financial instrument presented on the statement of financial position. Impairment of trade receivables is based on expected credit loss model (simplistic approach) depending upon the historical data, present financial conditions of customers and anticipated regulatory changes. Company does not hold any collateral in respect of such receivables.
ii) Financial instruments and cash deposits
risk related to cash and cash equivalents and bank deposits is managed by only accepting highly rated banks and diversifying bank deposits. Other financial assets measured at amortized cost includes security deposits. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amounts are within defined limits.
Credit risk exposure
The Company is exposed to a concentration of credit risk with respect to its trade receivable balances from its subsidiary Company. At the reporting date, trade receivable balances from subsidiary Company represents Nil (31 March 2023 - Nil) of the total trade receivable balances, respectively.
(b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.
The Company has an established liquidity risk management framework for managing its short term, medium term and long-term funding and liquidity management requirements. The Company's exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. It manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
Maturities of financial liabilities
The following table shows the remaining contractual maturities of financial liabilities at the reporting date. The amounts reported are on gross and undiscounted basis. Balances due within 12 months equal their carrying balances as the impact of discounting is insignificant.
(c) Market risk
Market risk is the risk of potential adverse change in the Company's income and the value of Company net worth arising from movement in foreign exchange rates, interest rates or other market prices. The Company recognises that the effective management of market risk is essential to the maintenance of stable earnings and preservation of shareholder value. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the overall returns.
(i) Foreign currency risk
Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Foreign currency risk arises when transactions are denominated in foreign currencies.
The Company operates locally in INR and but is exposed to foreign exchange risk arising from foreign currency transactions (IT enabled services), primarily with respect to the US Dollar. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company's functional currency. The Company does not hedge its foreign exchange receivables. The Company's foreign exchange receivables is ' 2,917.84 as at 31 March 2024 and Nil as at 31 March 2023 respectively.
(ii) Price risk
The Company is mainly exposed to the price risk due to its investment in mutual funds. The price risk arises due to uncertainties about the future market values of these investments. The investments in mutual funds have been disclosed in Note 6.
The Company is also exposed to the price risk for its investment in bonds and debentures. These being debt instruments, the exposure to risk of changes in market rates is minimal. The details of such investments in bonds and debentures are given in Note 6.
The Company is mainly exposed to change in market rates of its investments in mutual funds recognised at FVTPL. A sensitivity analysis demonstrating the impact of change in market prices of these instruments from the prices existing as at the reporting date is given below:
The Company has laid policies and guidelines which it adheres to in order to minimise pricing risk arising from investments in debt mutual funds.
31 CAPITAL MANAGEMENT
For the purpose of the Company's capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.
The Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.
32 Pursuant to Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014, during the financial year, the Company was not required to spend any amount towards Corporate Social Responsibility activities.
(b) Disclosure in relation to undisclosed income : The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the period ending 31 March 2024 and also for the period ending 31 March 2023 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) Relationship with Struck off Companies : The Company do not have any transactions with company's struck off during the period ending 31 March 2024 and also for the period ending 31 March 2023.
(d) Details of Benami Property held : The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company during the period ending 31 March 2024 and also for the period ending 31 March 2023 for holding any Benami property.
(e) The company has not been declared wilful defaulter by any bank or financial institution or any government or any government authority during the current year and previous financial year.
(f) Registration of charges or satisfaction with Registrar of Companies (ROC) : The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period, during the period ending 31 March 2024 and also for the period ending 31 March 2023.
(g) Details of Crypto Currency or Virtual Currency : The Company have not traded or invested in Crypto currency or Virtual Currency during the period ending 31 March 2024 and also for the period ending 31 March 2023.
(h) Utilisation of Borrowed Fund & Share Premium or any source or kind of funds:
(i) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries during the year, except as below :
(ii) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries during the year.
(i) Audit Trail - As per the newly inserted rule 3(1) of the Companies (Accounts) Rules, 2021, the company has used accounting software for maintaining its books of accounts which have a feature of recording audit trail(edit log) facility and the same has been enabled and operated throughout the year for all relevant transactions recorded in the respective software. Further there is no instance of audit trail feature being tampered with.
(j) NBFC - As per section 45-IA of the Reserve Bank of India Act, 1934 read with press release 1998-99/1269 dated April 8, 1999, the financial assets of the Company constituted more than 50% of total assets and income from financial assets constitute more than 50% of the gross income during the year ended 31 March 2024 which makes the Company eligible for registration as non banking financial company. However the above scenario is temporary in nature and hence the company has not applied for registration.
36 SUBSEQUENT EVENTS:
The management has evaluated all activities of the Company through 14 May 2024 and concluded that there were no additional subsequent events required to be reflected in this financial statements.
37 The Previous period figures have been re-grouped/re-classified wherever necessary, to conform to current period's classification.
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