2. MATERIAL ACCOUNTING POLICIES

The material accounting policies applied by the
Company in the preparation of its financial statements
are listed below. These accounting policies have been
applied consistently to all the periods presented in the
standalone financial statements, unless otherwise
stated.

(a) Statement of compliance

The financial statements comply in all material aspects
with the Indian Accounting Standards (“Ind AS”)
as prescribed under section 133 of the Companies
Act 2013 ("the Act”), Companies (Indian Accounting
Standards) Rules, 2015, other relevant provisions of
the Act (including subsequent amendments) and
other accounting principles generally accepted in
India.

(b) Basis of preparation

The financial statements have been prepared under
the historical cost convention and on accrual basis
with the exception of certain assets and liabilities that
are required to be carried at fair value by Ind AS.

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.

All assets and liabilities have been classified as
current and non-current as per the Company’s
normal operating cycle which is based on the
nature of businesses and the time elapsed between
deployment of resources and the realization of cash
and cash equivalents. The Company has considered
an operating cycle of 12 months.

The financial statements are presented in Indian
Rupees (“R”), which is the functional and presentation
currency of the Company. All values presented in
Indian Rupees has been rounded off to nearest Rupees
Lakh (R 1 Lakh = R 100,000) without any decimal,
unless otherwise stated. Amounts below rounding off
convention or equal to zero are represented as "0" in
the financial statements.

The Company determines materiality depending
on the nature or magnitude of information, or both.
Information is material if omitting, misstating or
obscuring it could reasonably influence decisions
made by the primary users, on the basis of those
financial statements.

(c) Use of estimates and critical accounting
judgements

The preparation of financial statements in conformity
with Ind AS requires management to make estimates,
judgments and assumptions in the application of
accounting policies that affect the reported amounts
of assets, liabilities, the disclosures of contingent
assets and liabilities at the date of the financial
statements and reported amounts of revenues and
expenses during the period. Application of accounting
policies that require critical accounting estimates
involving complex and subjective judgments and
the use of assumptions in these financial statements
are disclosed in the relevant note. Actual results
may differ from these estimates. The estimation
and judgements are reviewed on an ongoing basis
based on historical experience and other factors,
including expectations of future events that may
have a financial impact on the Company and that are
believed to be reasonable. Changes in estimates are
reflected in the financial statements in the period in
which changes are made and, if material, their effects
are disclosed in the pertaining notes.

(d) Property, plant and equipment

Property, plant and equipment are stated at cost,
less accumulated depreciation and impairment
losses except for freehold land which is carried at
historical cost. The cost comprises purchase price,
including any import duties and other taxes (other
than those subsequently recoverable from the taxing
authorities), any directly attributable expenditure
on making the assets ready for use, as intended by
the Management. The present value of obligatory
decommissioning cost related to assets, if any, are
also included in the initial cost of such assets.

Subsequent costs are included in the asset’s
carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will flow
to the Company and the cost of the item can be
measured reliably. All other repairs and maintenance
are charged to the Statement of Profit and Loss
during the period in which they are incurred.

The cost and related accumulated depreciation are
eliminated from the financial statements upon sale
or retirement of the asset. Gains or losses arising
on disposal or retirement of property, plant and
equipment are recognized in the Statement of Profit
and Loss.

Depreciation is charged so as to write off the cost
of assets, net off their residual values, over their
estimated useful lives. Depreciation is recorded
using the straight line basis. The management
estimates the useful lives of assets, which are in line
with the useful life prescribed in Schedule II to the
Companies Act, 2013, are as follows:

Depreciation methods, useful lives and residual
values are reviewed at end of each financial year
and adjusted prospectively, if required. Depreciation
commences when the assets are ready for their
intended use. When parts of an item of property, plant
and equipment have different useful lives, they are
accounted for as separate items (major components)
of property, plant and equipment.

Property, plant and equipment which are not ready
for intended use as on the date of balance sheet
are disclosed as "Capital work-in-progress”. Capital
work-in-progress is carried at cost, less accumulated
impairment loss if any. Costs associated with the
commissioning of an asset are capitalized.

(e) Lease and right-of-use assets

The Company determines whether an arrangement
contains a lease by assessing whether the fulfilment
of a transaction is dependent on the use of a specific
asset and whether the transaction conveys the right
to control the use of that asset to the Company in
return for payment.

The Company as a lessee

The Company, as a lessee, recognizes a right-of-use
asset and a lease liability for its leasing arrangements,
if the contract conveys the right to control the use of
an identified asset. The contract conveys the right
to control the use of an identified asset, if it involves
the use of an identified asset and the Company has
substantially all of the economic benefits from use
of the asset and has right to direct the use of the
identified asset. The cost of the right-of use asset shall
comprise of the amount of the initial measurement
of the lease liability adjusted for any lease payments
made at or before the commencement date plus any
initial direct costs incurred. The right-of-use assets is
subsequently measured at cost less any accumulated
depreciation, accumulated impairment losses, if any
and adjusted for any remeasurement of the lease
liability. The right-of-use assets is depreciated using
the straight-line method from the commencement
date over the shorter of lease term or useful life of
right-of-use asset.

The Company measures the lease liability at the
present value of the lease payments that are not
paid at the commencement date of the lease. The
lease payments are discounted using the interest
rate implicit in the lease, if that rate can be readily
determined. If that rate cannot be readily determined,
the Company uses incremental borrowing rate.

For short-term and low value leases, the Company
recognizes the lease payments as an operating
expense on a straight-line basis over the lease term.

The Company as a lessor

Leases for which the Company is a lessor is classified
as a finance or operating lease. Whenever the terms
of the lease transfer substantially all the risks and
rewards of ownership to the lessee, the contract
is classified as a finance lease. All other leases are
classified as operating leases.

For operating leases, rental income is recognized
in the statement of profit and loss on a straight¬
line basis over the term of the relevant lease. Initial
direct costs incurred in negotiating and arranging an
operating lease are added to the carrying value of the
leased asset and recognized on a straight-line basis
over the lease term.

When assets are leased out under a finance lease,
the present value of minimum lease payments is
recognized as a receivable. The difference between
the gross receivable and the present value of
receivable is recognized as unearned finance income.
Lease income is recognized over the term of the lease
using the net investment method before tax, which
reflects a constant periodic rate of return. Such rate is
the interest rate which is implicit in the lease contract.

(f) Investment properties

Investment properties (held to earn rentals or
for capital appreciation or both) are stated in
the standalone balance sheet at cost, less any
subsequent accumulated depreciation and
subsequent accumulated impairment losses.
Transfer to, or from, investment property is done at
the carrying amount of the property.

Depreciation is calculated on a straight-line basis
over the estimated useful lives of the assets as
follows:

(g) Intangible assets

Intangible assets acquired separately are measured
on initial recognition at cost. The cost of an intangible
asset comprises its purchase price including duties
and taxes and any costs directly attributable to
making the asset ready for their intended use.
Intangible assets acquired in a business combination
are recognized at fair value at the acquisition date.
Subsequently, intangible assets are carried at cost
less any accumulated amortization and impairment
losses, if any. Subsequent expenditure is capitalized
only when it increases the future economic benefits
embodied in the specific asset to which it relates.
All other expenditure is recognized in statement of
profit or loss as incurred.

Intangible assets are amortized over their respective
estimated useful lives on a straight-line basis, from
the date they are available for use. The estimated
useful life of an identifiable intangible asset is based

on the number of factors including the effects of
obsolescence, demand, competition and other
economic factors (such as the stability of the industry
and known technological advances) and the level
of maintenance expenditures required to obtain
the expected future cash flows from the asset. The
estimated useful lives of intangibles are as follows:

The estimated useful life and amortization method
are reviewed at the end of each annual reporting
period, with the effect of any changes in estimate
being accounted for on a prospective basis.

(h) Impairment on non-current assets

At each balance sheet date, the Group reviews the
carrying value of its property, plant and equipment
and intangible assets to determine whether there is
any indication that the carrying value of those assets
may not be recoverable through continuing use. If any
such indication exists, the recoverable amount of the
asset is reviewed in order to determine the extent of
impairment loss, if any. For the purposes of assessing
impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash
inflows which are largely independent of the cash
inflows from other assets or groups of assets (cash¬
generating units).

Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset for
which the estimates of future cash flows have not
been adjusted. An impairment loss is recognized
in the standalone statement of profit and loss as
and when the carrying value of an asset exceeds its
recoverable amount.

Where an impairment loss subsequently reverses, the
carrying value of the asset (or cash generating unit)
is increased to the revised estimate of its recoverable
amount, so that the increased carrying value does
not exceed the carrying value that would have been
determined had no impairment loss been recognized
for the asset (or cash generating unit) in prior years.
A reversal of an impairment loss is recognized in the
statement of profit and loss immediately.

(i) Inventories

Inventory comprising hardware and software are
valued at lower of cost and net realizable value. Costs
comprise cost of purchase and directly attributable
costs incurred in bringing the inventories to their
present location and condition and are net of
rebates and discounts if any. Net realizable value is
the estimated selling price in the ordinary course of
business, less estimated costs of completion and the
estimated costs necessary to make the sale.

(j) Investment in subsidiaries and associates

Investments in subsidiaries and associates are
carried at cost less accumulated impairment losses,
if any. Where an indication of impairment exists, the
carrying amount of the investment is assessed and
written down immediately to its recoverable amount.
The carrying amount of the investment is tested
for impairment as a single asset by comparing its
recoverable amount with its carrying amount, any
impairment loss recognized reduces the carrying
amount of the investment.

On disposal of investments in subsidiaries and
associates, the difference between net disposal
proceeds and the carrying amounts are recognized
in the statement of profit and loss.

(k) Financial instruments

A financial instrument is any contract that gives rise
to a financial asset of one entity and a financial liability
or equity instrument of another entity. Financial
instruments also include derivative contracts such as
foreign exchange forward contracts.

Financial assets and liabilities are recognized when
the Company becomes a party to the contractual
provisions of the instruments. Financial assets and
liabilities are initially measured at fair value.

Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are
added to or deducted from the fair value measured
on initial recognition of financial asset or financial
liability. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities
at fair value through profit or loss are recognized in
profit or loss.

Measurement and Recognition of financial
instruments

The Company’s accounting policies and disclosures
require measurement of fair values for the financial
instruments. The Company has an established
control framework with respect to measurement
of fair values. The management regularly reviews
significant unobservable inputs and valuation
adjustments. If third party information, such as
broker quotes or pricing services, is used to measure
fair values, then the management assesses evidence
obtained from third parties to support the conclusion
that such valuations meet the requirements of Ind
AS, including level in the fair value hierarchy in which
such valuations should be classified. When measuring
the fair value of a financial asset or a financial liability,
the Company uses observable market data as far as
possible. Fair values are categorized into different
levels in a fair value hierarchy based on the inputs
used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets
for identical assets or liabilities.

Level 2: inputs other than quoted prices included in
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 asset or liability that are not
based on observable market data (unobservable
inputs).

If inputs used to measure fair value of an asset or a
liability fall into different levels of fair value hierarchy,
then fair value measurement is categorized in its
entirety in the same level of fair value hierarchy as
the lowest level input that is significant to the entire
measurement. The Company recognizes transfers
between levels of fair value hierarchy at the end of
the reporting period during which the change has
occurred.

Financial assets

Financial assets at amortized cost

Financial assets are subsequently measured at
amortized cost if these financial assets are held
within a business whose objective is to hold these
assets in order to collect contractual cash flows and
contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments

of principal and interest on the principal amount
outstanding.

Financial assets at fair value through other
comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI if it is held
within a business model whose objective is achieved
by both collecting contractual cash flows and
selling financial assets and the contractual terms
of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Financial assets at fair value through profit or
loss (FVTPL)

Financial assets are measured at FVTPL unless they
are measured at amortized cost or at FVTOCI on
initial recognition. The transaction costs directly
attributable to the acquisition of financial assets
and liabilities at fair value through profit or loss are
immediately recognized in the statement of profit
and loss.

Derecognition of financial assets

The Company derecognizes a financial asset when
the rights to receive cash flows from the asset
have expired or it transfers the right to receive the
contractual cash flow on the financial assets in a
transaction in which substantially all the risk and
rewards of ownership of the financial asset are
transferred.

Impairment of financial assets

In accordance with Ind AS 109, the Company
applies the expected credit loss (ECL) model for
measurement and recognition of impairment loss.
The Company follows a ‘simplified approach’ for
recognition of impairment loss allowance on trade
receivable.

The application of a simplified approach does not
require the Company to track changes in credit risk.
Rather, it recognizes impairment loss allowance
based on lifetime ECLs at each reporting date, right
from its initial recognition.

Financial liabilities

All financial liabilities are recognized at fair value
and in case of loans, net of directly attributable cost.
Fees of recurring nature are directly recognized in
the Statement of Profit and Loss as finance cost.
Financial liabilities are carried at amortized cost using
the effective interest method. For trade and other
payables maturing within one year from the balance
sheet date, the carrying amounts approximate fair
value due to the short maturity of these instruments.

The Company derecognizes a financial liability (or
a part of a financial liability) from the Company’s
Balance Sheet when the obligation specified in the
contract is discharged or cancelled or expires.

Equity instruments

An equity instrument is a contract that evidences
residual interest in the assets of the Company
after deducting all of its liabilities. The Company
is recognized equity instrument at the proceeds
received net off direct issue cost.

Offsetting of financial instruments

the net amount is reported in the Balance Sheet if
there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to
settle on a net basis, to realize the assets and settle
the liabilities simultaneously.

(l) Cash and cash equivalents

Cash and cash equivalents comprise cash and cheque
in hand, bank balances, demand deposits with banks
and other short-term highly liquid investments with
an original maturity of three months or less that are
readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes
in value.

(m) Borrowing costs

General and specific borrowing costs directly
attributable to the acquisition, construction or
production of qualifying assets are added to the
cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. The
Company considers a period of twelve months or
more as a substantial period of time. Qualifying assets
are assets that necessarily take a substantial period of
time to get ready for their intended use or sale.

Transaction cost in respect of long-term borrowings
are amortized over the tenure of respective loans
using effective interest method, unless the impact
of utilizing the straight-line method results in an
immaterial difference. All other borrowing costs are
expensed in the period in which they are incurred.

(n) Foreign currency transactions and
translations

Transactions in currencies other than the entity’s
functional currency are recorded by the Company
using the exchange rates at the date when the
transaction first qualifies for recognition. At the end of
each reporting period, monetary items denominated
in foreign currencies are re-translated at the rates
prevailing at the end of the reporting period.
Non-monetary items carried at fair value that are

denominated in foreign currencies are retranslated
at the rates prevailing on the date when the fair
value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign
currency are not translated.

Exchange differences arising on the re-translation or
settlement of other monetary items are included in
the statement of profit and loss for the period.

(o) Employee share-based payment

Equity settled share-based payments to employees
are measured at the fair value of options at the
grant date. The fair value of options at the grant
date is expensed over the respective vesting period
in which all of the specified vesting conditions are to
be satisfied with a corresponding increase in equity
as "Employee Stock Options Account". The stock
compensation expense is determined based on the
Company’s estimate of options that will eventually
vest. In case of forfeiture of unvested option, portion
of amount already expensed is reversed. In a situation
where the vested options are forfeited or expires
unexercised, the related balance standing to the
credit of the "Employee Stock Options Account"
are transferred to the "Retained Earnings". When
the options are exercised, the Company issues new
equity shares of the Company of R 5/- each fully paid-
up. The proceeds received and the related balances
standing to credit of the Employee Stock Options
Account are credited to share capital (nominal value)
and securities premium account.

(p) Non-current assets or disposal group are
classified as held for sale and discontinued
operations

Non-current assets or disposal group are classified as
held for sale if their carrying amount will be recovered
principally through a sale transaction rather than
through continuing use. This condition is regarded
as met only when the asset or disposal group is
available for immediate sale in its present condition
subject only to terms that are usual and customary
for sales of such asset or disposal group and its sale
is highly probable. Management must be committed
to the sale, which should be expected to qualify for
recognition as a completed sale within one year from
the date of classification. As at each balance sheet
date, the management reviews the appropriateness
of such classification.

Non-current assets or disposal group classified
as held for sale are measured at the lower of their
carrying amount and fair value less costs to sell. Once
the assets are classified as "Held for sale”, those are not
subjected to depreciation till disposal. An impairment
loss is recognized for any initial or subsequent write¬

down of the asset or disposal group to fair value less
costs to sell. A gain is recognized for any subsequent
increases in fair value less costs to sell of an asset or
disposal group, but not in excess of any cumulative
impairment loss previously recognized. A gain or loss
not previously recognized by the date of the sale of
the non-current asset or disposal group is recognized
at the date of derecognition.

Non-current assets classified as held for sale and the
assets of a disposal group classified as held for sale
are presented separately from the other assets in the
balance sheet.

A discontinued operation is a component of the
entity that has been disposed off or is classified as
held for sale and that represents a separate major
line of business or geographical area of operations, is
part of a single coordinated plan to dispose of such a
line of business or area of operations, or is a subsidiary
acquired exclusively with a view to resale. The results
of discontinued operations are presented separately
in the statement of profit and loss.

(q) Income taxes

Income tax comprises current income tax and
deferred income tax. Income tax expenses is
recognized in the statement of profit and loss, except
when they relate to items that are recognized in other
comprehensive income or directly in equity, in which
case, the current and deferred tax are also recognized
in other comprehensive income or directly in equity,
respectively.

Current income tax

The tax currently payable is based on taxable profit
for the year. Taxable profit differs from ‘profit before
tax’ as reported in the statement of profit and loss
because of items of income or expense that are
taxable or deductible in other years and items that
are never taxable or deductible. The tax rates and
tax laws used to compute the current income tax
amount are those that are enacted or substantively
enacted by the reporting date and applicable for the
period.

Deferred income tax

Deferred income tax is recognized using the balance
sheet approach. Deferred income tax assets and
liabilities are recognized for deductible and taxable
temporary difference arising between the tax base
of assets and liabilities and their carrying amount
in financial statements, except when the deferred
income tax arises from the initial recognition of
goodwill or an asset or liability in a transaction that
is not a business combination and affects neither

accounting nor taxable profits or loss at the time of the
transaction. Deferred income tax asset is recognized
to the extent that it is probable that taxable profit will
be available against which the deductible temporary
difference, and the carry forward of unused tax credits
and unused tax losses can be utilized.

Deferred income tax liabilities are recognized for all
taxable temporary difference. The carrying amount
of deferred income tax assets is reviewed at each
reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income
tax asset to be utilized. Deferred income tax assets
and liabilities are measured at the tax rates that are
expected to apply in the period when the asset is
realized or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively
enacted at the reporting date.

Minimum alternative tax

Minimum Alternative Tax (MAT) is recognized as an
asset only when and to the extent there is convincing
evidence that the Company will pay normal income
tax during the specified period. In the year in which
the MAT credit becomes eligible to be recognized
as an asset, the said asset is created by way of credit
to the statement of profit and loss and included in
deferred tax assets. The Company reviews the same
at each balance sheet date and writes down the
carrying amount of MAT entitlement to the extent
there is no longer convincing evidence to the effect
that the Company will pay normal income tax during
the specified period.

(r) Employee benefits

The Company participates in various employee
benefit plans. Post-employment benefits are
classified as either defined contribution plans or
defined benefit plans.

Defined contribution plans

Contributions under defined contribution plans are
recognized as an expense for the period in which
the employee has rendered the service. Payments
made to retirement benefit schemes are dealt with
as payments to defined contribution schemes where
the Company’s obligations under the schemes are
equivalent to those arising in a defined contribution
retirement benefit scheme.

Defined benefit plans

For defined benefit retirement schemes, the cost of
providing benefits is determined using the Projected
Unit Credit Method, with actuarial valuation being

carried out at each year-end balance sheet date. Re¬
measurement gains and losses of the net defined
benefit liability/(asset) are recognized immediately in
other comprehensive income. The service cost and
net interest on the net defined benefit liability/(asset)
are recognized as an expense within employee costs.

Past service cost is recognized as an expense when
the plan amendment or curtailment occurs or
when any related restructuring costs or termination
benefits are recognized, whichever is earlier.

The retirement benefit obligations recognized in the
balance sheet represents the present value of the
defined benefit obligations as reduced by the fair
value of plan assets.

Other long-term employee benefits

Liabilities recognized in respect of other long¬
term employee benefits such as annual leave and
sick leave are measured at the present value of the
estimated future cash outflows expected to be made
by the Company in respect of services provided
by employees up to the reporting date using the
projected unit credit method with actuarial valuation
being carried out at each year end balance sheet date.
Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions
are charged or credited to the statement of profit and
loss in the period in which they arise.

(s) Revenue recognition

The Company derives revenue primarily from IT
Infrastructure Services, Enterprise Application
& Integrated Solutions and related services. The
Company recognizes revenue when the significant
terms of the arrangement are enforceable, services
have been delivered and collectability is reasonably
assured.

Revenue on time-and-material contracts is
recognized as the related services are performed
and revenue from the end of the last invoicing to the
reporting date is recognized as unbilled revenue.
Revenue from fixed-price, fixed-timeframe
contracts, where the performance obligations
are satisfied over time and where there is no
uncertainty as to measurement or collectability
of consideration, is recognized as per the
percentage-of-completion method. When there
is uncertainty as to the measurement or ultimate
collectability, revenue recognition is postponed
until such uncertainty is resolved. Efforts or costs
expended have been used to measure progress
towards completion as there is a direct relationship
between input and productivity. Maintenance

revenue is recognized ratably over the term of the
underlying maintenance arrangement. Revenues
in excess of invoicing are classified as contract
assets (which we refer to as unbilled revenue).

In arrangements for IT and ITeS related services and
maintenance services, the Company has applied the
guidance in Ind AS 115, Revenue from Contracts
with Customers, by applying the revenue recognition
criteria for each distinct performance obligation. The
arrangements with customers generally meet the
criteria for considering IT and ITeS related services as
distinct performance obligations. For allocating the
transaction price, the Company has measured the
revenue in respect of each performance obligation
of a contract at its relative standalone selling price.
The price that is regularly charged for an item when
sold separately is the best evidence of its standalone
selling price. In cases where the Company is unable to
determine the standalone selling price, the Company
uses the expected cost plus margin approach in
estimating the standalone selling price. For IT and
ITeS and related services, the performance obligations
are satisfied as and when the services are rendered
since the customer generally obtains control of the
work as it progresses. Revenue from licenses where
the customer obtains a "right to use” the licenses is
available to the customer. Revenue from licenses
where the customer obtains a "right to access” is
recognized over the access period. The Company has
applied the principles under Ind AS 115 to account
for revenues from these performance obligations.
When implementation services are provided in
conjunction with the licensing arrangement and the
license and implementation have been identified
as two separate performance obligations, the
transaction price for such contracts are allocated to
each performance obligation of the contract based on
their relative standalone selling prices. In the absence
of standalone selling price for implementation,
the performance obligation is estimated using the
expected cost plus margin approach. Where the
license is required to be substantially customized
as part of the implementation service, the entire
arrangement fee for license and implementation is
considered to be a single performance obligation
and the revenue is recognized using the percentage
of completion method as the implementation is
performed. Deferred contract costs are incremental
costs of obtaining a contract which are recognized as
assets and amortized over the term of the contract.

Contract modifications are accounted for when
additions, deletions or changes are approved
either to the contract scope or contract price. The
accounting for modifications of contracts involves
assessing whether the services added to an existing

contract are distinct and whether the pricing is at
the standalone selling price. Services added that are
not distinct are accounted for on a cumulative catch¬
up basis, while those that are distinct are accounted
for prospectively, either as a separate contract, if
the additional services are priced at the standalone
selling price, or as a termination of the existing
contract and creation of a new contract if not priced
at the standalone selling price.

The Company presents revenues net of indirect taxes
in its statement of profit and loss.

Trade receivables and contract balances

The Company classifies the right to consideration in
exchange for deliverables as either a receivable or as
unbilled revenue.

A receivable is a right to consideration that is
unconditional upon passage of time. Revenue for
fixed-price maintenance contracts is recognized on
a straight-line basis over the period of the contract.
Revenues in excess of billings is recorded as unbilled
revenue and is classified as a financial asset for these
cases as right to consideration is unconditional upon
passage of time.

Revenue recognition for fixed-price development
contracts is based on the percentage-of-completion
method. Invoicing to the clients is based on milestones
as defined in the contract. This would result in
the timing of revenue recognition being different
from the timing of billing the customers. Unbilled
revenue for fixed-price development contracts is
classified as non-financial asset as the contractual
right to consideration is dependent on completion of
contractual milestones.

Trade receivable and unbilled revenues are presented
net of impairment in the balance sheet.

Performance Obligations and Remaining
Performance Obligations

The remaining performance obligation disclosure
provides the aggregate amount of the transaction
price yet to be recognized as at the end of the
reporting period and an explanation as to when the
Company expects to recognize these amounts in
revenue. Applying the practical expedient as given in
Ind AS 115, the Company has not disclosed the
remaining performance obligation related disclosures
for contracts where the revenue recognized
corresponds directly with the value to the customer of
the entity’s performance completed to date, typically
those contracts where invoicing is on time-and-
material basis. Remaining performance obligation
estimates are subject to change and are affected

by several factors, including terminations, changes
in the scope of contracts, periodic revalidations,
adjustment for revenue that has not materialized and
adjustments for currency.