2.13 Provisions, Contingent Liabilities and Contingent Assets
The Company estimates the provisions that have present obligations as a result of past events and
it is probable that outflow of resources will be required to settle the obligations. These provisions are
reviewed at the end of each reporting date and are adjusted to reflect the current best estimates.
The Company uses significant judgment to disclose contingent liabilities. Contingent liabilities are
disclosed when there is a possible obligation arising from past events, the existence of which will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of the Company or a present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle the obligation or a reliable estimate
of the amount cannot be made.
Contingent assets are neither recognized nor disclosed in the financial statements. However, when
inflow of economic benefit is probable, related asset is disclosed.
2.14 Employee Benefits
2.14.1 Gratuity
The Company provides for gratuity, a defined benefit retirement plan (‘the Gratuity Plan') covering
eligible employees of FCS. 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 base salary and the tenure of employment with the Company (subject to a maximum of Rs.
20 lacs per employee).
Actuarial gains/losses are recognized immediately in the balance sheet with a corresponding debit or
credit to retained earnings through other comprehensive income in the year in which they occur.
2.14.2 Provident Fund
Eligible Employees of the Company receive benefits under the provident fund, a defined benefit
plan. Both the eligible employee and the Company make monthly contributions to the provident fund
plan equal to a specified percentage of the covered employee's salary. Amounts collected under the
provident fund plan are deposited in a government administered provident fund. The companies have
no further obligation to the plan beyond its monthly contributions.
2.14.3 Compensated Absences
The employees of the Company are entitled to compensated absences which are both accumulating
and non-accumulating in nature. The employees can carry forward up to the specified portion of the
unutilized accumulated compensated absences and utilize it in future periods or receive cash at
retirement or termination of employment. The expected cost of accumulating compensated absences
is determined by actuarial valuation (using the projected unit credit method) based on the additional
amount expected to be paid as a result of the unused entitlement that has accumulated at the balance
sheet date. The expense on non-accumulating compensated absences is recognized in the statement
of profit and loss in the year in which the absences occur. Actuarial gains/losses are immediately taken
to the statement of profit and loss and are not deferred.
2.15 Earnings Per Share (EPS)
Basic earnings per share is computed by dividing the net profit attributable to the equity holders of the
Company by weighted average number of equity shares outstanding during the year in conformity with
the Ind-AS-33.
Diluted EPS amounts are computed by dividing the net profit attributable to the equity holders of the
Company by the weighted average number of equity shares considered for deriving basic earnings
per share and also the weighted average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The diluted potential equity shares are adjusted for the
proceeds receivable had the shares been actually issued at fair value (i.e. the average market value of
the outstanding shares). Dilutive potential equity shares are deemed converted as at the beginning of
the year, unless issued at a later date. Dilutive potential equity shares are determined independently for
each year presented.
The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods
presented for bonus shares.
2.16 Recently issued Accounting 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 any significant impact in its financial statements.
(vi)(b) Fair value hierachy and valuation technique
- The Company's investment properties consist of commercial properties which has been determined
based on the nature, characteristics and risks of each property. The company has revalued its Land
and Buildings during FY 2018-19 to Rs. 12741.49 Lakhs. The fair value of investment property has
been determined by external, independent registered property valuers as defined under rule 2 of
Companies (Registered Valuers and Valuation) Rules, 2017, having appropriate recognised professional
qualification.
- The Company obtains independent valuation for its investment property and fair value measurements are
categorized as level 3 measurement in the fair value hierarchy. The valuation has been taken considering
sales comparable method, which compares the price or price per unit area of similar properties being sold
inthemarketplace
Rights, preferences and restrictions attached to shares
I) . The Company has one class of equity shares having a par value of Rs 1/- each. Each shareholder is eligible
for one vote per share held. The dividend, if any as and when proposed by the Board of Directors is subject
to the approval of the shareholders in the ensuing Annual General Meeting.
II) . 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.
III) . The Company's objective 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. In order to maintain or achieve
an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to share¬
holders, issue new shares or buy back issued shares. As of March 31,2025, the Company has only one class
of equity shares and has no debt. Consequent to the above capital structure, there are no externally imposed
capital requirements.
* Capital reserve had been recognized on account of forefeiture of preferential Share warrant and is not
freely available for distribution
** Par value of the equity shares is recorded as share capital and the amount received in excess of par
value is classified as securities premium
*** Retained earnings comprises of the Company's undistributed earnings after taxes
# This reserve represents the cumulative gains arising on the revaluation of property, plant & equipment's
and investment properties on the balance sheet date measured at fair value through other comprehensive
income. The reserves accumulated will not be freely available for distribution
Others;
Changes in the fair value of financial instruments (debt or equity) measured at fair value through other
comprehensive income is recognized in other comprehensive income, net of taxes and presented within
investment in debt instruments measured at fair value through OCI or investment in equity instruments
measured at fair value through OCI. Actuarial gains and losses on remeasurements of the defined
benefit plans are recognized in other comprehensive income, net of taxes and presented within equity in
remeasurement of the defined benefit plans
33. Corporate Social Responsibility
As per Section 135 of Companies Act 2013 a Corporate Social responsibility Committee has been formed by
the Company. During the year the Company has not undertaken Corporate Social Responsibility activities
as there was no obligation to undertake CSR activities as specified in Schedule VII of the Companies Act
2013
34. Segment Reporting
The Segment reporting policy complies with the accounting policies adopted for preparation and presentation
of financial statements of the Company and is in conformity with Ind AS 108.The segmentation is based
on the Geographies (reportable business segment) in which the Company operates and internal reporting
systems. The geographical segmentation is based on the nature and type of services rendered. Based on
the “management approach” as defined in Ind AS 108.
The Company has identified two main Geographical Segments as reportable segments. The business
segments comprise:
1. Indian Segment
2. USA Segment
37 Fair Value Disclosures
i) Fair values hierarchy
Financial assets and financial liabilities measured at fair value in the statement of financial position are
divided 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: The fair value of financial instruments that are not traded in an active market is determined using
valuation techniques which maximise the use of observable market data rely as little as possible on entity
specific estimates.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is
included in level 3.
The Company's risk management is carried out by a central treasury department (of the Company) under
policies approved by the board of directors. The board of directors provides written principles for overall risk
management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk,
credit risk and investment of excess liquidity.
A) Credit risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss.
The maximum exposure to the credit risk at the reporting date is primarily from trade receivables
amounting to ? 475.18 Lakhs and 187.95 Lakhs as at March 31,2025 and March 31,2024, respectively
and unbilled revenue amounting to 69.26 Lakhs and 79.81 lakhs as at March 31, 2025 and March 31,
2024, respectively. Trade Receivables and unbilled revenue are typically unsecured and are derived from
revenue from customers.
Credit risk has always been managed by the Company and continuously monitoring the creditworthiness of
the customers to which the Company grants credit terms in the normal course of business. The Company
uses the expected credit loss model to assess any required allowances; and uses a provision matrix to
compute the expected credit loss allowance for trade receivables and unbilled revenues
The Company's exposure to credit risk is influenced mainly by the individual characteristic of each
customer and the concentration of risk from the top few customers. Exposure to customers is diversified
and there is no single customer contributing more than 10% of outstanding trade receivables and
unbilled revenues
Other financial assets measured at amortised cost
Company provides for expected credit losses on loans and advances other than trade receivables by
assessing individual financial instruments for expectation of any credit losses. Since this category includes
loans and receivables of varied natures and purpose, there is no trend that the company can draws to
apply consistently to entire population For such financial assets, the Company's policy is to provides for
12 month expected credit losses upon initial recognition and provides for lifetime expected credit losses
upon significant increase in credit risk. The Company does not have any expected loss based impairment
recognised on such assets considering their low credit risk nature, though incurred loss provisions are
disclosed under each sub-category of such financial assets.
B) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on
time. The Company's principal sources of liquidity are cash and cash equivalents and the cash flow that
is generated from operations. The Company has no outstanding borrowings as on March 31,2025 & as
on March 31,2024. The Company believes that the working capital is sufficient to meet its current require¬
ments. Accordingly, no liquidity risk is perceived.
C) Market Risk
a) Foreign currency risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily
with respect to the US Dollar and Euro. Foreign exchange risk arises from recognised assets and liabilities
denominated in a currency that is not the functional currency of any of the Company entities. Considering the
low volume of foreign currency transactions, the Company's exposure to foreign currency risk is limited and
the Company hence does not use any derivative instruments to manage its exposure. Also, the Company
does not use forward contracts and swaps for speculative purposes.
ii) Assets
The Company's fixed deposits are carried at amortised cost and are fixed rate deposits. They are therefore
not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future
cash flows will fluctuate because of a change in market interest rates.
c) Price risk
The Company does not have any significant investments in equity instruments which create an exposure
to price risk.
39 Capital management
The Company' s capital management objectives are
- to ensure the Company's ability to continue as a going concern
- to provide an adequate return to shareholders
The Company monitors capital on the basis of the carrying amount of equity less cash and cash equivalents
as presented on the face of balance sheet.
Management assesses the Company's capital requirements in order to maintain an efficient overall
financing structure while avoiding excessive leverage. This takes into account the subordination levels
of the Company's various classes of debt. The Company manages the 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, issue new shares, or sell assets
to reduce debt.
* There is no interest due or outstanding on the dues to Micro, Small and Medium Enterprises (MSME).
During the ended March 31,2025 and March 31,2024, an amount of Rs. Nil and Rs. Nil was paid beyond
the appointed day as defined in the Micro, Small and Medium Enterprises Development Act 2006.
AUDITOR'S REPORT
As per our separate report of even date
For SPMG & Company On behalf of the Board of Directors
Chartered Accountants For FCS Software Solutions Limited
Firm Regd. No.: 0509249C
Sd/- Sd/- Sd/-
CA. Vinod Gupta Dalip Kumar Ravinder Sachdeva
(Partner) (Managing Director) Director
M. No. 090687 DIN: 00103292 DIN: 10280805
UDIN: 25090687BMJORZ4354
Sd/- Sd/-
Place: New Delhi Narendra Prasad Sah Deepti Singh
Date: 23.05.2025 (Chief Financial Officer) (Company Secretary)
Place: Noida
Date: 23.05.2025
|