xvii. Provisions
Provisions are recognised when the Company has a
present obligation, legal or constructive, as a result of
a past event, 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.
Where a provision is measured using the cash flows
estimated to settle the present obligation, it carrying
amount is the present value of those cash flows. 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.
xviii. Contingent Liabilities
A contingent liability is a possible obligation that arises
from past events whose existence will be confirmed by the
occurrence or non-occurrence of one or more uncertain
future events beyond the control of the Company or a
present obligation that is not recognized because it is not
probable that an outflow of resources will be required to
settle the obligation. The Company does not recognize
a contingent liability but discloses its existence in the
financial statements. Payments in respect of such
liabilities, if any are shown as advances.
xix. Earnings Per Share
Basic earnings per share are calculated by dividing
the net profit or loss for the year attributable to equity
shareholders by the weighted average number of equities
shares outstanding during the year.
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to consider
• The after-income tax effect of interest and other
financing costs associated with dilutive potential
equity shares, and
• Weighted average number of equity shares that would
have been outstanding assuming the conversion of all
the dilutive potential equity.
xx. Cash and Cash Equivalents
Cash comprises cash on hand and demand deposits with
banks. Cash equivalents are short-term balances (with an
original maturity of three months or less from the date of
acquisition), and highly liquid time deposits that are readily
convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
xxi. Employee Benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary
benefits that are expected to be settled wholly within 12
months after the end of the period in which the employees
render the related service are recognised in respect of
employee's services up to the end of the reporting period
and are measured at the undiscounted amounts of the
benefits expected to be paid when the liabilities are
settled. The liabilities are presented as current employee
benefit obligations in the balance sheet.
Other Long-term employee benefit obligations
The liabilities for compensated absences (annual leave)
which are not expected to be settled wholly within 12
months after the end of the period in which the employee
render the related service are presented as non-current
employee benefits obligations. They are therefore
measured as the present value of expected future
payments to be made in respect of services provided by
employees up to the end of the reporting period using the
Projected Unit Credit method. The benefits are discountec
using the market yields at the end of the reporting period
on government bonds that have terms approximating to
the terms of the related obligations. Remeasurements
as a result of experience adjustments and changes in
actuarial assumptions (i.e. actuarial losses/ gains) are
recognised in Other comprehensive income.
The obligations are presented as current in the balance
sheet if the Company does not have an unconditional righ
to defer settlement for at least twelve months after the
reporting period, regardless of when the actual settlement
is expected to occur.
Post- employment obligations
The Company operates the following post-employment
schemes:
I. Defined benefit plans such as gratuity
II. Defined contribution plans such as provident fund.
Defined benefit plan - Gratuity Obligations
The Company provides for gratuity, a defined benefit
plan (the "Gratuity Plan”) covering eligible employees
in accordance with the Payment of Gratuity Act, 1972.
The Gratuity Plan provides a lump sum payment to
vested employees at retirement, death, incapacitation
or termination of employment, of an amount based
on the respective employee's salary and the tenure of
employment.
The liability or asset recognised in the balance sheet in
respect of defined benefit gratuity plans is the present
value of the defined benefit obligation at the end of the
reporting period less the fair value of plan assets. The
defined benefit obligation is actuarially determined using
the Projected Unit Credit method.
The present value of the defined benefit obligation is
determined by discounting the estimated future cash
flows outflows by reference to market yields at the end
of the reporting period on government bonds that have a
term approximating to the terms of the obligation.
The net interest cost, calculated by applying the discount
rate to the net balance of the defined benefit obligation
and the fair value of the plan assets, is recognised as
employee benefit expenses in the statement of profit and
loss.
Remeasurements gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the other comprehensive
income in the year in which they arise and are not
subsequently reclassified to Statement of Profit and Loss.
Changes in the present value of the defined benefit
obligation resulting from plan amendments or
curtailments are recognised immediately in profit or loss
as past service cost.
Defined Contribution Plan
The Company pays provident fund contributions to
publicly administered provident funds as per local
regulatory authorities. The Company has no further
obligations once the contributions have been paid. The
contributions are accounted for as defined contribution
plans and the contributions are recognised as employee
benefit expense when they are due.
xxii. Share-based Payments
Shared based compensation benefits are provided to
employees via Vakrangee Limited Employee Stock Option
Plan.
Employee options
The cost of equity-settled transactions is determined by
the fair value of the options granted at the date when the
grant is made. The fair value of options granted under
the Employee Option Plan is recognised as an employee
benefits expense with a corresponding increase in equity.
The total amount to be expensed is determined by
reference to the fair value of the options granted:
• including any market performance conditions (e.g., the
Company's share price)
• excluding the impact of any service and non-market
performance vesting conditions (e.g. profitability, sales
growth targets and remaining employee of the entity
over a specified time period), and
• Including the impact of any non-vesting conditions
(e.g. the requirement for employee to save or holding
shares for a specific period of time.
The total expense is recognised over the vesting period,
which is the period over which all the specified vesting
conditions are to be satisfied. At the end of each period,
the Company revises its estimates of the number of
options that are expected to be vest based on the non¬
market vesting and service conditions. It recognises the
impact of the revision to original estimates, if any, in profit
or loss, with a corresponding adjustment to equity.
Recent pronouncements
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 March 31,
2025, MCA has notified Ind AS - 117 Insurance Contracts
and amendments to Ind AS 116 - Leases, relating to sale
and leaseback transactions, applicable to the Company
w.e.f April 1, 2024. The Company has reviewed the
new pronouncements and based on its evaluation has
determined that it does not have a significant impact in its
financial statements.
Note 3 (a) - Critical Accounting Judgements and
Estimates
The preparation of financial statements in conformity with
Ind AS requires judgements, estimates and assumptions
to be made by the management of the Company that
affect the reported amount of assets, liabilities, revenue,
expenses, accompanying disclosures and the disclosures
relating to contingent liabilities as at the date of the
financial statements and the reported amounts of income
and expense for the periods presented.
The estimates and associate's assumptions are based on
historical experience and other factors that are considered
to be relevant. Actual results could differ from those
estimates. These estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimates are revised if the revision affects only that
period, or in the period of the revision and future periods if
the revision affects both current and future period.
Application of accounting policies that require critical
accounting estimates and the use of assumptions in the
financial statements are as follows:
• Share-based payments
Estimating fair value for share-based payment
transactions requires determination of the most
appropriate valuation model, which is dependent on the
terms and conditions of the grant. This estimate also
requires determination of the most appropriate inputs
to the valuation model including the expected life of the
share option, volatility and dividend yield and making
assumptions about them. The assumptions and models
used for estimating fair value for share-based payment
transactions are disclosed in Note 45.
• Defined benefit plans
The cost of the defined benefit gratuity plan and other
post-employment medical benefits and the present value
of the gratuity obligation are determined using actuarial
valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments in
the future. These include the determination of the discount
rate; future salary increases and mortality rates. Due to
the complexities involved in the valuation and its long¬
term nature, a defined benefit obligation is highly sensitive
to changes in these assumptions. All assumptions are
reviewed at each reporting date.
The parameter most subject to change is the discount
rate. In determining the appropriate discount rate for plans
operated in India, the management considers the interest
rates of government bonds in currencies consistent with
the currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality
tables. Those mortality tables tend to change only at
interval in response to demographic changes. Future
salary increases and gratuity increases are based on
expected future inflation rates.
Further details about gratuity obligations are given in Note
44.
Fair value measurement of financial instruments
When the fair values of financial assets and financial
liabilities recorded in the balance sheet cannot be
measured based on quoted prices in active markets,
their fair value is measured using valuation techniques.
The inputs to these models are taken from observable
markets where possible, but where this is not feasible,
a degree of judgement is required in establishing fair
values. Judgements include considerations of inputs
such as liquidity risk, credit risk and volatility. Changes in
assumptions about these factors could affect the reported
fair value of financial instruments. See Note 46 for further
disclosures.
Depreciation and useful lives of Property, Plant and
Equipment
Property, Plant and Equipment are depreciated over the
estimated useful lives, after taking into account estimated
residual value. Management reviews the estimated useful
lives and residual values of the assets annually in order
to determine the amount of depreciation to be recorded
during any reporting period. The useful lives and residual
values are based on the Company's historical experience
with similar assets and taken into account anticipated
technological changes. The depreciation for future periods
is revised if there are significant changes from previous
estimates.
Provision and Contingent Liabilities
A provision is recognised when the Company has a
present obligation as a result of past event and it is
probable that an outflow of resources will be required to
settle the obligation, in respect of which a reliable estimate
can be made. These are reviewed at each balance sheet
date and adjusted to reflect the current best estimates.
Contingent liabilities are not recognised in the financial
statements. Contingent assets are neither recognised nor
disclosed in the financial statements.
(v) Detailed note on the terms of the rights, preferences and restrictions relating to each class of shares including restrictions
on the distribution of dividends and repayment of capital.
The Company has only one class of Equity Shares having a par value of ? 1/- per share. Each holder of Equity Share is
entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. During the year ended March 31,
2025, the amount of per share dividend recognised as distributions to Equity Shareholders is ? 0.05/- per share of ? 1/- each
for the year ended March 31,2024.
In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive remaining assets of the
Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity shares
held by the shareholders.
(vii) Capital Management
The Company's objectives when managing capital are to :
(i) Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and
benefits for other stakeholders, and
(ii) Maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio:
Net debt (total borrowings net of cash and cash equivalents) divided by total 'equity' (as shown in the balance sheet,
including non-controlling interests).
The Company's strategy is to maintain a gearing ration within 1:1. The gearing ratios were as follows :
Nature of Reserves
(a) Securities Premium
Securities premium is used to record the premium on issue of shares. The reserve is utilised in accordance with the
provisions of Companies Act, 2013.
(b) Share Options Outstanding Account
It is a reserve which is represents the difference between to the market value and issue price of the shares issued to the
employees under Employees Stock Option of Scheme.
(c) Deferred Employee Compensation Expense
The deferred employee compensation expenses means the total cost incurred by the company towards the stock options
granted by the Company to the eligible employees. Deferred Employee Compensation will appear in the Balance Sheet as a
negative item as part of Net Worth or Shareholders' Equity.
(d) General Reserve
The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the
general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive
income, Items included in the general reserve will not be reclassified subsequently to statement of profit and loss.
(e) Amalagamation Reserve / Capital Reserve
This reserve is outcome of business combinations carried out during the current year (Refer Note 51).
(f) Share application money pending allotment
Share Application Money Pending Allotment means the amount received on the application on which allotment is not yet
made (pending allotment). It has been classified under Other Equity unless actual allotment of equity shares takes place.
(g) Retained Earnings
Retained earnings are the profits that Company has earned to date, less any dividends or other distributions paid to
investors.
For movement in other equity during the year, refer Standalone Statement of Changes in Equity.
Note :
1 Pursuant to the Scheme of Arrangement (the 'Scheme'), duly sanctioned by the National Company Law Tribunal, Mumbai
Bench, vide its Order dated May 19, 2023 ('Order') with effect from the Appointed Date, i.e. April 1,2021, the business of
E-Governance and IT/ITES including certain assets, liabilities, and obligations of the demerged company, including indirect
tax liabilities stands transferred to and vested in VL E-Governance and IT Solutions Limited as a going concern.
As per the scheme and applicable provisions of law, including the Goods and Services Tax Act, 2017 and the applicable
State VAT laws (or CST Act, as the case may be), all pending proceedings, tax assessments, demands, and show cause
notices pertaining to the transferred undertaking(s) are deemed to be transferred to and assumed by the resulting company.
Consequently, any existing or future demands raised under VAT and/or GST laws relating to the demerged undertaking are
the responsibility of the resulting company and will be dealt by the resulting company.
Accordingly, the Company has transferred the corresponding demand amounts to the books of the resulting company, and
no further liability in this regard is expected to arise on the demerged company.
2 For Capital Commitment ,the amount of liabilities, which may occur on levying of penalty and/or charges by clients for
delays in execution of contracts within the time prescribed in the agreement, is unascertained.
(ii) Gratuity (post-employment benefits)
The Company provides for gratuity to employees in India as per the Payment of Gratuity Act, 1972. Employees who are in
continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination
is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number
of years of service. The gratuity plan is a funded plan and the Company makes contributions to recognised/approved funds
in India. The Company has funded group gratuity plan against this liability with LIC of India. The Company has accounted for
provision of gratuity as per Ind-AS 19 based on acturial valuation undertaken by a registered valuer.
(iii) Defined contribution plans
The Company also has certain defined benefit obligations. Contributions are made to provident fund in India for employees
at the specified rate of basic salary as per regulations. The contributions are made to registered provident fund administered
by the government. The obligations of the Company is limited to the amount contributed and it has no further contractual
nor any constructive obligation. The expense recognised during the period towards defined contribution plan is ? 57.77 lakhs
(March 31,2024 - ? 45.85 lakhs).
The company has formulated Employee Stock Option Scheme, 2008 (ESOP Scheme) which was approved by the members/
shareholders of the Company at their annual general meeting held on September 23, 2008, as modified on January 10, 2011
and June 1,2012 annual general meeting. Further the company has formulated the new "ESOP Scheme 2014” approved by the
members of the company through postal ballot on May 23, 2014. The Employee Option Plan is designed to provide incentives to
all the existing employees serving with the Company. Under the plan, employees are granted options which vest proportionately
from 2 - 6 years from the grant date which includes lock in period.
Once vested, the options remain exercisable for a period of 4 /5 years.
Options are granted under the plan for no consideration and carry no dividend or voting rights. When exercisable, each option
is convertible into one equity share. The exercise price of the options is a price which is determined on the basis of market
price of the scrip of the company (on the highest traded Stock Exchange) as decided by the Nomination and Remuneration and
Compensation Committee. During the year the committee has decided to grant options at closing price on previous day of grant
of options.
(i) Method and assumptions used to estimate the fair value
A number of the Company's accounting policies and disclosures require the determination of fair value, for both financial as
well as non-financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes
that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability
or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal market or the
most advantageous market must be accessible to the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in their economic best interest.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. The fair value
hierarchy is described as below:
Level 1 : Unadjusted quoted prices in active markets for identical assets and liabilities.
Level 2 : Inputs other than 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 Board of Directors has overall responsibility for the establishment and overview of the company's risk management
framework. The Board of Directors has established a risk management policy to identify and analyse the risks faced by
the Company, to set appropriate risk limits and controls, and to monitor risk and adherence to limits. Risk management
systems are reviewed periodically to reflect changes in market conditions and the company's activities. The Audit Committee
oversees how management monitors compliances with the company's risk management policies and procedures, and
reviews the risk management framework. The Audit Committee is assisted in its role by Internal Audit. Internal Audit covers
review of risk management controls and procedures, the results of which are reported to the Audit Committee.
The Company's activities are exposed to various risk viz. Credit Risk, Liquidity Risk and Market Risk. In order to minimise any
adverse effects on the financial performance of the Company, it uses various instruments and follows policies set up by the
Board of Directors / Management of the Company.
a) Credit Risk :
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the
contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration
of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and
creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary
approvals for credit.
Credit risks from balances with banks and financial institutions are managed in accordance with the Company policy. For
derivative and financial instruments, the Company attempts to limit the credit risk by only dealing with reputable banks
and financial institutions having high credit ratings assigned by credit rating agencies.
In addition, the Company is exposed to credit risk in relation to financial guarantees given to banks and other counter
parties for the facilities availed by subsidiary. The Company's maximum exposure in this respect is the maximum
amount the Company would have to pay if the guarantee is called upon.
Trade receivables consists of large number of customers spread across diverse industries and geographical areas with
no significant concentration of credit risk. The outstanding trade receivables are regularly monitored and appropriate
action is taken for collection of overdue receivables.
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that
are settled by delivering cash or another financial asset. The Company's approach for managing liquidity is to ensure that it will
have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to Company's reputation, typically the company ensures that it has sufficient cash on
demand to meet expected operational expenses, servicing of financial obligations.
Maturities of financial liabilities
The table below provides details regarding the remaining contractual maturities of financial liabilities :
c) Market Risk :
Market risk is the risk of loss of future earnings or fair values or future cash flows that may result from a change in the
price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest
rates, foreign exchange rates and other market changes that affect market risk sensitive instruments.
(i) Market Risk - Foreign Exchange
Foreign currency Risk is that risk in which fair value or future cash flows of a financial instrument will fluctuate
because of changes in the foreign exchange rates. The Company operates internationally and a portion of its
business is transacted in several currencies and therefore the Company is exposed to foreign exchange risk through
its overseas sales and purchases in various foreign currencies. The Company hedges the receivables as well as
payables by forming view after discussion with Forex consultant and as per policies by Management. The Company
is also exposed to the Foreign currency loans availed from various banks to reduce the overall interest cost.
Note 52 - Statutory Information
(a) There are no proceedings initiated or are pending against the Company for holding any benami property under the
Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.
(b) The Company has not entered into any transactions with struck off companies during the year.
(c) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.
(d) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(e) 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)
(f) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) to or in any other person or entity, 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.
Further, the Company has not received any funds 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.
(g) The Company has complied with the number of layers prescribed under clause (87) of the Section 2 of the Companies Act
read with the Companies (Restrictions on Number of Layers) Rule, 2017.
(h) The Company is not declared wilful defaulter by bank or financial institutions or any lender during the financial year.
(i) Quarterly returns or statements of current assets filed by the Company with banks or financial institutions are in
agreement with the books of accounts.
(j) The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was
obtained.
Note 55 - Previous year figures
The financial statements have been prepared in accordance with the Companies (Indian Accounting Standards) Rules, 2015
(Ind AS) prescribed under Section 133 of the Companies Act, 2013 and other recognised accounting practices and polices
to the extent applicable. The previous year's figures have been regrouped / reclassified wherever necessary, to make them
comparable.
As per our report of even date attached
For S K Patodia & Associates LLP For and on behalf of the Board of Directors
Chartered Accountants Vakrangee Limited
Firm's Registration No. : 112723W/W100962 CIN : L65990MH1990PLC056669
Dhiraj Lalpuria Divya Nandwana Vedant Nandwana Ajay Jangid
Partner Chairperson & Whole-time Director Managing Director Chief Financial Officer
Membership No.: 146268 DIN : 08085537 DIN: 08420950
Place : Mumbai Place : Mumbai Amit Gadgil
Date : April 26, 2025 Date : April 26, 2025 Company Secretary
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