In assessing the reliability of deferred income tax assets, the Management considers whether some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. The Management considers the scheduled reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, the Management believes that the Company will realize the benefits of those deductible differences. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.
1. The Company has pledged its book debts, fixed deposit with the bank and Commercial property as on March 31, 2024 and March 31, 2023 to fulfil collateral requirements. Refer to Note 35 for further details.
2. No trade or other receivables are due from directors or other officers of the Company either severally or jointly with any other person nor from firms or private companies respectively in which any director is a partner, or director or a member (other than wholly owned subsidiaries, referred to in Note 44).
3. Trade receivables are non-interest bearing and are generally on credit terms of 30 to 75 days. The Company does not hold any collateral security Refer Note 33 for information about the Company exposure to financial risks, and
ii) Terms/Rights and restrictions attached to the equity shares:
The Company has only one class of equity shares having a face value of INR. 1/-. Each shareholder is eligible for one vote per share held. The Company declares and pays dividends in INR. The final dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
iv) Employee stock based compensation
The Company instituted the Employee Stock Purchase Plan 2015 ('ESOP 2015') and Employee Stock Purchase Scheme (ESPS 2018) during the fiscal 2019; and Tanla Platforms Limited-Restricted Stock Unit Plan 2021 during fiscal year 2021 have been approved by the Board of Directors. Refer note 39 for further details.
v) Buyback of Equity shares
The Board of Directors at their meeting held on September 08, 2022, approved the Buyback of the fully paid up equity shares having face value of Re. 1/- each not exceeding 14,16,666 equity shares at a price of INR 1,200/- (Indian Rupees Twelve Hundred Only) per Equity Share for an aggregate maximum amount not exceeding INR 17,000.00 (Indian Rupees One Hundred and Fifty Four Crores Only). Subsequent to the Board Meeting, the Company obtained the Shareholders' approval for buy-back on October 11, 2022. The Public Announcement was published on October 12, 2022 and the Draft Letter of Offer was filed with SEBI on October 17, 2022. Total cost incurred towards buyback was INR 21,241.32, of which INR 3,893.54 was paid towards buyback tax @ 23.36% and transaction cost of INR 317.07 was incurred as part of buyback. The buyback was closed on January 14, 2023. In accordance with section 69 of the Act, the Company has created 'Capital Redemption Reserve' of INR 14.16 equivalent to the nominal value of the shares bought back.
vi) No class of shares have been issued as bonus shares or for consideration other than cash by the Company in the last five preceeding financial years.
Nature and purpose of reserves:
1. Capital Reserve: Represents capital reserve balances of acquired entities which are transferred to the Company upon mergers in the earlier years.
2. Capital Redemption Reserve: In accordance with Section 69 of the Act, capital redemption reserve is created equal to the nominal value of the shares bought back as an appropriation from securities premium reserve.
3. 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 Act.
4. Securities premium: The amount received in excess of face value of the equity shares is recognised in securities premium. In case of equity-settled share based payment transactions, the difference between fair value on grant date and nominal value of share is accounted as securities premium, on exercise of options. This reserve will be utilised in accordance with provisions of Section 52 of the Act.
5. Employee stock options outstanding account: The fair value of the equity-settled share based payment transactions with employees is recognised in statement of profit and loss with corresponding credit to Employee Stock Options Outstanding Account. This will be utilised for allotment of equity shares against outstanding employee stock options.
6. Retained earnings: Retained earnings are the profits that the Company has earned till date less any transfers to general reserve, dividends or other distribution to shareholders.
7. Foreign currency translation reserve: The exchange differences arising from the translation of financial statements of foreign branch with functional currency other than Indian rupees is recognised in other comprehensive income and is presented within equity.
8. Items of other comprehensive income: Represents re-measurement of defined employee benefit plan, i.e. Difference between the interest income on plan assets and the return actually achieved, any changes in the liabilities over the year due to changes in actuarial assumptions or experience adjustments within the plans, are recognised in other comprehensive income and subsequently not reclassified into Statement of profit and loss.
Note 2: During the previous year ended March 31, 2023, an amount of Rs. 19.48 has been received from the liquidator of Capitalsiri Investments Private Limited, as part of its liquidation and has been adjusted towards the carrying value of the investment. Accordingly during the previous year, net loss on liquidation of Rs. 35.37 has been shown under other expenses in theStatement of profit and loss. Order of National Company Law Tribunal for the liquidation is received in current year.
Note 32
Fair values of financial assets and financial liabilities
(All amounts are in INR Lakhs, except for share data and where otherwise stated)
The fair value of other current financial assets, cash and cash equivalents, trade receivables , trade payables, and other financial liabilities approximate the carrying amounts because of the short term nature of these financial instruments.
Financial assets that are neither past due nor impaired include cash and cash equivalents, security deposits, term deposits, and other financial assets.
Similarly, carrying values of non-current security deposits and non-current term deposits are not significant and therefore the impact of fair value is not considered for disclosure.
Fair value hierarchy
The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
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 assets or liabilities that are not based on observable market data (unobservable inputs).
No financial assets/liabilities have been valued using level 1 fair value measurements.
The carrying amounts of trade receivables, trade payables and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature. The difference between carrying amounts and fair values of bank deposits, other financial assets and other financial liabilities subsequently measured at amortised cost is not significant in each of the years presented. For all other amortised cost instruments, carrying value represents the best estimate of fair value.For financial assets measured at fair values, the carrying amounts are equal to the fair values.
Note 33
Financial risk management
(All amounts are in INR Lakhs, except for share data and where otherwise stated)
The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk and liquidity risk. The Company's risk management is coordinated by the Board of Directors and focuses on securing long term and short term cash flows. The Company does not engage in trading of financial assets for speculative purposes.
(a) 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 risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.
(i) Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Company's operating activities (when revenue or expense is denominated in a different currency from the Company's functional currency). The Company operates in Dubai through its branch and is exposed to foreign currency rate risk through operating activities.
(ii) 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's investment in deposits with banks are for short durations and therefore do not expose the Company to significant interest rate risk.
(b) 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.
(c) 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. Credit risk arises principally from the Company's receivables from deposits with landlords and other statutory deposits with regulatory agencies and also arises from cash held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions and retaining sufficient balances in bank accounts required to meet a month's operational costs. The Management reviews the bank accounts on regular basis and fund drawdowns are planned to ensure that there is minimal surplus cash in bank accounts. The Company does a proper financial and credibility check on the landlords before taking any property on lease and hasn't had a single instance of non-refund of security deposit on vacating the leased property. The Company also in some cases ensure that the notice period rentals are adjusted against the security deposits and only differential, if any, is paid out thereby further mitigating the non-realization risk. The Company does not foresee any credit risks on deposits with regulatory authorities.
Trade receivables
The customer's credit risk is managed by the Company's established policy, procedures and control relating to customer credit risk management.
Credit quality of a customer is assessed based on the individual credit limits are defined in accordance with the assessment and outstanding customer receivables are regularly monitored.
The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of trade and other receivables. The maximum exposure to credit risk as at reporting date is primarily from trade receivables amounting to Rs.26,341.17 (March 31, 2023: Rs. 17,631.19). The movement in allowance for impairment in respect of trade and other receivables during the year was as follows:
Note 34
Capital Management
(All amounts are in INR Lakhs, except for share data and where otherwise stated)
The Company's objective when managing capital is to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefits for stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Hence, the Company may adjust any dividend payments, return capital to shareholders or issue new shares or sell assets to reduce debt. Total capital is the equity as shown in the statement of financial position. Currently, the Company primarily monitors its capital structure on the basis of the following gearing ratio. Management is continuously evolving strategies to optimize the returns and reduce the risks. It includes plans to optimize the financial leverage of the Company.
1. Sanctioned limit has been secured by giving security as collateral being books debts, fixed deposits with the bank and commerical property.
2. The bank's rights over the pledged security at the maximum facility utilised and outstanding during the period.
3. Assets given as pledge in the above table , is towards security given for Bank Guarantees and other working capital limits sanctioned by Bank (to Tanla) to the tune of INR 7,095 from which the utilisation amount is INR 1,059 towards bank guarantees. The bank's right on recovery is restricted only to the extent of amount utilised and not paid beyond the due dates.
Note 36
Employee benefits
(All amounts are in INR Lakhs, except for share data and where otherwise stated)
The Company has a defined benefit gratuity plan and governed by the Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to a gratuity on departure at 15 days salary for each completed year of service. The scheme is funded through a policy with Life Insurance Corporation of India. The following table summarise net benefit expense recognized in the statement of Profit and Loss, the status of funding and the amount recognised in the balance sheet for the gratuity plan.
Note 37
Dividend Final Dividend
(All amounts are in INR Lakhs, except for share data and where otherwise stated)
The Board of Directors of the Company in their meeting held on April 25, 2024 (PY: April 26, 2023) have proposed final dividend of Rs. 6/- (PY: Rs. 4/-) per equity share amounting to Rs. 8,067.59 Lakhs (PY: 5,376.01 Lakhs) subject to approval of shareholders at the ensuing Annual General Meeting ('AGM') and the same was not recognised as liability as at the balance sheet date.
Interim dividend:
The Board of Directors of the Company in their meeting held on January 23, 2024 have declared and paid an interim dividend of Rs. 6/- per equity share amounting to Rs. 8,067.59 Lakhs. Effective from April 01, 2020, dividends are taxed in the hands of recipient, hence there exists be no liability in the hands of Company.
Note 38
Corporate Social Responsibility
(All amounts are in INR Lakhs, except for share data and where otherwise stated)
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities.
Note 39
Employee Stock Based Compensation
(All amounts are in INR Lakhs, except for share data and where otherwise stated)
A. Employee Stock Option Plan (ESOP) :
The Company instituted the Tanla ESOP Plan 2015, in which 50,00,000 stock options were approved by the Shareholders at 19th AGM held on September 16, 2015.
Tanla ESOP Plan :
The Company has allotted as at March 31, 2024 Nil (March 31, 2023: Nil ) equity shares of face value Rs. 1/- each under Employee Stock Option Scheme. Options under this program has been granted to eligible employees at an grant price of Rs. 26.51/-. The fair value of share option grant amounting to Rs. 14.26/- is estimated at the date of the grant using
Black-Scholes method, taking into account the terms and conditions upon which the share option where granted. No of options granted under this plan is 30,87,000. There is no option outstanding as of March 31, 2024.
B. Employee Stock Purchase Scheme (ESPS) :
The Company instituted the Tanla ESPS Plan 2018, in which 80,00,000 shares were approved by the Shareholders at EGM held on September 17, 2018 and 74,76,126 shares were granted and exercised till March 31, 2022 and the balance remaining in the pools is 5,23,875 shares as at March 31, 2024. During the year, no ESPS were granted out of this pool.
(a) Guarantees outstanding
Total Guarantees outstanding as of March 31, 2024 amounting to INR 16,959 (March 31, 2023: INR 14,669.67) have been issued by banks on behalf of the Company, includes INR 15,900 (INR 13,688.87) towards bank guarantees on behalf of subsidiary. These guarantees have been given to telcos/banks/public sector undertakings towards performance guarantee of the Company and its subsidiary.
b) Demand of service tax under ITSS and DSC service
The Company received service tax orders from the Department of Customs, Central excise and Service tax for the financial years 2007-08 to 2009-10 demanding INR 900.30 on account of taxable service on import of information technology and software services including interest and penalty amounting to INR 745.92. Against this demand, the Commissioner of Central Tax vide order no. HYD-EXCUS-004-COM-010 2020-21 dated 25-03-2021 has dropped demand of INR 557.08 as the demand is eligible to take cenvat credit as per Cenvat Credit Rules, 2004. The order has confirmed a final demand of INR 193.69. Based on the strength of the case, management does not expect the same to have materially adverse effect on its financial position, as it believes the likelihood of any loss is not probable.
(c) Denial of cenvat credit on various input services
The department conducted audit during the year financial year 2011 and raised a demand for INR 121.78 and INR 14.94 along with interest and penalty under Section 78 of the Finance Act, 1994. The Company preferred an appeal to the
Commissioner against the order of the department. The Commissioner allowed the CENVAT credit to the extent of INR
121.78. Aggrieved by the order, the department has filed an appeal with CESTAT seeking denial of cenvat credit of INR
121.78, while the Company filed further appeal before CESTAT for the allowance remaining of balance cenvat credit of INR 14.94. The legal consultants advised that the Company has a strong case to be allowed the Cenvat credit of INR 121.78 (Department appeal). Hence, no provision is considered necessary for interest and penalty of INR 14.94.
Note 43
Segment Information
The Company publishes this standalone financial statements along with the consolidated financial statements.
In accordance with Ind AS 108 Operating segments, the Company has disclosed the segment information in the consolidated financial statements.
Notes:
During the previous year ended March 31, 2023, an amount of Rs. 19.48 was received from the liquidator of Capitalsiri Investments Private Limited, as part of its liquidation and has been adjusted towards the carrying value of the investment. As at March 31, 2024, the liquidation of Capitalsiri Investments Private Limited has been completed and the order is yet to be received. (refer note 5)
Note 45
Earnings Per Share (EPS)
(All amounts are in INR Lakhs, except for share data and where otherwise stated)
Basic earnings per share is calculated by dividing the profit/(loss) for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is calculated by dividing the profit/(loss) attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
Note 47
Other Statutory information
I. The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property under the Benami Transactions (Prohibitions) Act, 1988 and the rules made thereunder.
II. The Company does not have any transactions with companies struck off under section 248 of the Companies Act, 2013.
III. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
IV. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
V. The Company has not been declared as a willful defaulter by any bank or financial institution or government or any government authority.
VI. The Company has not advanced or loaned or invested funds to any other person or entity, 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.
VII. The Company has not received any fund from any person or entity, 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 does not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).
IX. The Company has been sanctioned working capital limits from Banks on the basis of security of current
assets. Quarterly returns / statements are filed with such Banks are in agreement with the books of accounts.
Note 48
Previous year figures have been regrouped/reclassified wherever necessary to correspond with current year's classification/disclosures.
|