1 Material accounting policies

a Foreign currency translation

(i) Functional and presentation currency

Items included in the Standalone Financial
Statements of each of the Company's entities
are measured using the currency of the primary
economic environment in which the entity/
branches operates (the 'functional currency').
For each entity, the Company determines the
functional currency and items included in the
Standalone Financial Statements of each entity
are measured using that functional currency.
Standalone financial statements of the
Company are presented in Indian Rupee (IN R/
Rs.), which is the parent company's functional
and the Company's presentation currency.

(ii) Transactions & Balances

All foreign currency transactions are recorded
by applying to the foreign currency amount the
exchange rate between the functional currency
and the foreign currency at the daily rate which
approximately equals to exchange rate at the
transaction date.

As at the reporting date, non-monetary items
which are carried in terms of historical cost
denominated in a foreign currency are reported
using the exchange rate at the date of the
transaction. All monetary assets and liabilities
in foreign currency are restated at the end of
the accounting period at month end closing rate.

Exchange difference on restatement as well as
settlement of monetary items are recognized
in the Statement of Profit and Loss.

Goodwill and fair value adjustments arising
on the acquisition of a foreign operation are
treated as assets and liabilities of the foreign
operation and translated at the closing rates.

(b) Revenue from operations

The Company derives revenues primarily from
business Information Technology services comprising
of software development and related services,
consulting and package implementation and from the
licensing of software products offerings ("together
called as software related services"). The Company's
arrangements with customers for software related
services are time-and-material, fixed-price, fixed
capacity / fixed monthly, transaction based or
multiple element contracts involving supply of
hardware or software with other services. The
Company classifies revenue from sale of it's own
licenses and revenue from contracts where sale of
hardware is a distinct performance obligation as
Sale of products and the remaining software related
services as Sale of services.

Revenues from customer contracts are considered
for recognition and measurement when the contract
has been approved by the parties to the contract, the
parties to contract are committed to perform their
respective obligations under the contract, and the
contract is legally enforceable. Revenue is recognized
upon transfer of control of promised products or
services to customers in an amount that reflects
the consideration which the Company expects to
receive in exchange for those products or services.
The Company presents revenues net of indirect taxes
in its statement of Profit and loss.

In case of arrangement involving resale of third-party
products or services, the Company evaluates whether
the Company is the principal (i.e. report revenues
on a gross basis) or agent (i.e. report revenues on a
net basis). In doing so, the Company first evaluates
whether the Company controls the good or service
before it is transferred to the customer. If Company
controls the good or service before it is transferred
to the customer, the Company is the principal; if not,
the Company is the agent.

In case of multiple element contracts, at contract
inception, the Company assesses its promise to

transfer products or services to a customer to
identify separate performance obligations. The
Company applies judgement to determine whether
each product or service promised to a customer is
capable of being distinct, and are distinct in the
context of the contract, if not, the promised products
or services are combined and accounted as a single
performance obligation. The Company allocates the
arrangement consideration to separately identifiable
performance obligation based on their relative
stand-alone selling price or residual method. Stand¬
alone selling prices are determined based on sale
prices for the components when it is regularly sold
separately, in cases where the Company is unable to
determine the stand-alone selling price the Company
uses third-party prices for similar deliverables or the
Company uses expected cost-plus margin approach
in estimating the stand-alone selling price.

The Company generates revenue by providing
infrastructure as a service for customers. Under
these services, the customers do not take possession
of software or hardware used to provide the services.
Revenue in such cases is recognized rateably over the
contract period.

Method of revenue recognition

Revenue on time-and material contracts are
recognized over time as the related services
are performed.

Revenue from fixed-price, fixed-capacity and
fixed monthly contracts, where the performance
obligations are satisfied over time, is recognized
as per the percentage-of completion method.
The performance obligations are satisfied as and
when the services are rendered since the customer
generally obtains control of the work as it progresses.
Percentage of completion is determined based on
project costs incurred to date as a percentage of
total estimated project costs required to complete
the project. The cost expended (or input) method has
been used to measure progress towards completion
as there is a direct relationship between input and
productivity. If the Company is not able to reasonably
measure the progress of completion, revenue is
recognized only to the extent of costs incurred, for
which recoverability is probable. When total cost
estimates exceed revenues in an arrangement, the
estimated losses are recognized in the statement
of income in the period in which such losses become
probable based on the current contract estimates as
an onerous contract provision.

Revenue from transaction based contracts is
recognized at the amount determined by multiplying
transaction rate to actual transactions taking place
during a period.

Revenue from licenses where the customer obtains
a "right to use" the licenses is recognized at the
time the license is made available to the customer.
Revenue from licenses where the customer obtains a
"right to access" is recognized over the access period.

Contract balances

Revenues in excess of invoicing are treated as
contract assets while invoicing in excess of revenues
are treated as contract liabilities. The Company
classifies amounts due from customer as receivable
or contract assets depending on whether the
right to consideration is unconditional. If only the
passage of time is required before payment of the
consideration is due, the amount is classified as
receivable. Otherwise, such amounts are classified
as contract assets.

Contract costs

Incremental costs of obtaining a contract and costs
incurred in fulfilling a contract with customer are
recognised as contract costs assets and amortized
over the term of the contract on a systematic basis.
The Company pays deal bonus to its employees
for contract with customers in accordance with
Company's policy which is classified as cost to obtain
a contract. The deal bonus is amortized over the term
of the contract on a systematic basis is included as
part of employee benefits expense.

Others

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. Services 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 accounts for variable considerations
like, volume discounts, rebates and pricing incentives
to customers and penalties as reduction of revenue

on a systematic and rational basis over the period
of the contract. The Company estimates an amount
of such variable consideration using expected value
method or the single most likely amount in a range of
possible consideration depending on which method
better predicts the amount of consideration to
which the Company may be entitled and when
it is highly probable that a significant reversal
of cumulative revenue recognized will not occur
when the uncertainty associated with the variable
consideration is resolved.

The Company assesses the timing of the transfer
of goods or services to the customer as compared
to the timing of payments to determine whether
a significant financing component exists. As
practical expedient, the company does not adjust
the consideration for the effects of a significant
financing component if the period between the
transfer of the promised good or service and the
payment is one year or less. If the difference in timing
arises for reasons other than the provision of finance
to either the customer or us, no financing component
is deemed to exist.

(c) Income Taxes

Tax expense comprises current tax expense and
deferred tax.

The income tax expense or credit for the period is
the tax payable on the current period's taxable
income based on the applicable income tax rate for
each jurisdiction adjusted by changes in deferred
tax assets and liabilities attributable to temporary
differences and to unused tax losses.

The current income tax charge is calculated on
the basis of the tax laws enacted or substantively
enacted at the end of the reporting period in the
countries where the Company and its subsidiaries
(including branches) operate and generate taxable
income. Management periodically evaluates positions
taken in tax returns with respect to situations
in which applicable tax regulation is subject to
interpretation. It establishes provisions, where
appropriate, on the basis of amounts expected to be
paid to the tax authorities.

Deferred income tax is provided in full, using the
liability method, on temporary differences arising
between the tax basis of assets and liabilities and
their carrying amounts in the Standalone Financial
Statements. However, deferred tax liabilities are not
recognized if they arise from the initial recognition of

goodwill. Deferred income tax is also not accounted
for if it arises from initial recognition of an asset
or liability in a transaction other than a business
combination that at the time of the transaction
affects neither accounting profit nor taxable profit
(tax loss). Deferred income tax is determined using
tax rates (and laws) that have been enacted or
substantially enacted by the end of the reporting
period and are expected to apply when the related
deferred income tax asset is realized or the deferred
income tax liability is settled.

Deferred tax assets are recognized for all deductible
temporary differences and unused tax losses only
if it is probable that future taxable amounts will
be available to utilize those temporary differences
and losses.

Deferred tax assets and liabilities are offset when
there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred
tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where
the entity has a legally enforceable right to offset and
intends either to settle on a net basis, or to realize
the asset and settle the liability simultaneously.

Deferred tax liabilities are not recognised for
temporary differences between the carrying amount
and tax bases of investments in subsidiaries and
branches where the Company is able to control the
timing of the reversal of the temporary differences
and it is probable that the differences will not reverse
in the foreseeable future.

Deferred tax assets are not recognised for temporary
differences between the carrying amount and tax
bases of investments in subsidiaries and branches
where it is not probable that the differences will
reverse in the foreseeable future and taxable profit
will not be available against which the temporary
difference can be utilised.

Current tax and deferred tax are recognized in
statement of profit or loss, except to the extent that
it relates to items recognized in Other Comprehensive
Income or directly in equity. In this case, the tax is
also recognized in Other Comprehensive Income or
directly in equity, respectively.

Minimum Alternate Tax (MAT) paid as per Indian
Income Tax Act, 1961 is in the nature of unused tax
credit which can be carried forward and utilised when
the Company will pay normal income tax during the

specified year. Deferred tax assets on such tax credit
are recognised to the extent that it is probable that
the unused tax credit can be utilised in the specified
future year based on the internal projections of the
Management. The net amount of tax recoverable
from the taxation authority is included as part
of the deferred tax assets in the Standalone
Financial Statements.

(d) Leases

The Company as a lessee

The Company's lease asset classes primarily consist of
leases for land, buildings and vehicles. The Company
assesses whether a contract contains a lease, at
inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control
the use of an identified asset for a period of time
in exchange for consideration. To assess whether a
contract conveys the right to control the use of an
identified asset, the Company assesses whether: (i)
the contact involves the use of an identified asset
(ii) the Company has substantially all of the economic
benefits from use of the asset through the period of
the lease and (iii) the Company has the right to direct
the use of the asset.

At the date of commencement of the lease, the
Company recognizes a right-of-use asset ("ROU")
and a corresponding lease liabilities for all lease
arrangements in which it is a lessee, except for
leases with a term of twelve months or less (short¬
term leases) and low value leases. For these short¬
term and low value leases, the Company recognizes
the lease payments as an operating expense on a
straight-line basis over the term of the lease.

Certain lease arrangements includes the options to
extend or terminate the lease before the end of the
lease term. ROU assets and lease liabilities includes
these options when it is reasonably certain that
they will be exercised. The right-of-use assets are
initially recognized at cost, which comprises the initial
amount of the lease liabilities adjusted for any lease
payments made at or prior to the commencement
date of the lease plus any initial direct costs
less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset.

The lease payments are discounted using the
interest rate implicit in the lease or, if not readily
determinable, using the incremental borrowing rates
in the country of domicile of these leases. In addition,
the carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease term,
a change in the lease payments (e.g., changes to
future payments resulting from a change in an index
or rate used to determine such lease payments) or a
change in the assessment of an option to purchase
the underlying asset. The lease liabilities is initially
measured at amortized cost at the present value of
the future lease payments.

Lease liabilities and ROU asset have been separately
presented in the statement of financial position and
lease payments have been classified as financing
cash flows.

(e) Cash and cash equivalents

For the purpose of presentation in the statement of
cash flows, cash and cash equivalents include cash in
hand, deposits held at call with financial institutions,
other short-term highly liquid investments with
original maturities 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 and bank overdraft.

Bank overdrafts are shown within borrowings in
current liabilities in the statement of financial position.

(f) Investments and other financial assets

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.

(i) Initial recognition and measurement

All financial assets are recognised initially at
fair value plus, in the case of financial assets
not recorded at fair value through profit or loss,
transaction costs that are attributable to the
acquisition of the financial asset, except Trade
receivables that do not contain a significant
financing component or for which the Company
has applied the practical expedient are
measured at the transaction price determined
under Ind AS 115.

(ii) Subsequent measurement

For purposes of subsequent measurement,
financial assets are classified in four categories:

• Debt instruments at amortised cost

• Debt instruments at fair value through other
comprehensive income (FVTOCI)

• Debt instruments, derivatives and equity
instruments at fair value through profit or
loss (FVTPL)

• Equity instruments measured at fair value
through other comprehensive income
(FVTOCI)

Debt instruments

Subsequent measurement of debt instruments
depends on the Company's business model
for managing the asset and the cash flow
characteristics of the asset. There are three
measurement categories into which the
Company classifies its debt instruments:

Amortized cost: A 'debt instrument' is measured
at the amortised cost if both the following
conditions are met:

a) The asset is held within a business model
whose objective is to hold assets for
collecting contractual cash flows, and

b) Contractual terms of the asset give rise on
specified dates to cash flows that are solely
payments of principal and interest (SPPI)
on the principal amount outstanding.

This category is the most relevant to the entity.
After initial measurement, such financial assets
are subsequently measured at amortized cost
using the effective interest rate (EIR) method.
Amortised cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of
the EIR. The EIR amortisation is included in other
income in the profit or loss. The losses arising
from impairment are recognised in the profit
or loss. This category generally applies to trade
and other receivables.

Fair value through other comprehensive income
(FVOCI): A 'debt instrument' is classified as at
the FVTOCI if both of the following criteria
are met:

a) The objective of the business model is
achieved both by collecting contractual
cash flows and selling the financial
assets, and

b) The asset's contractual cash flows
represent SPPI.

Debt instruments included within the
FVTOCI category are measured initially as
well as at each reporting date at fair value.
Fair value movements are recognized in
the other comprehensive income (OCI).
However, the Company recognizes interest
income, impairment losses & reversals and
foreign exchange gain or loss in the P&L.
On derecognition of the asset, cumulative
gain or loss previously recognised in OCI
is reclassified from the equity to P&L.
Interest earned whilst holding FVTOCI
debt instrument is reported as interest
income using the EIR method.

Fair value through profit or loss: FVTPL is a
residual category for debt instruments. Any
debt instrument, which does not meet the
criteria for categorization as at amortized cost
or as FVTOCI, is classified as at FVTPL. In addition,
the Company may elect to designate a debt
instrument, which otherwise meets amortized
cost or FVTOCI criteria, as at FVTPL. However,
such election is allowed only if doing so reduces
or eliminates a measurement or recognition
inconsistency, however no such designation has
been made. Debt instruments included within
the FVTPL category are measured at fair value
with all changes recognized in the P&L.

Equity instruments

All equity investments in scope of Ind AS 109
are measured at fair value. Equity instruments
which are held for trading and contingent
consideration recognised by an acquirer in
a business combination to which Ind AS 103
applies are classified as at FVTPL. For all other
equity instruments, the entity may make
an irrevocable election to present in other
comprehensive income subsequent changes in
the fair value. The entity makes such election
on an instrument-by-instrument basis. The
classification is made on initial recognition and
is irrevocable.

If the entity decides to classify an equity
instrument as at FVTOCI, then all fair value
changes on the instrument, excluding dividends,
are recognized in the OCI. There is no recycling
of the amounts from OCI to P&L, even on sale of
investment. However, the entity may transfer
the cumulative gain or loss within equity.

Equity instruments included within the FVTPL
category are measured at fair value with all
changes recognized in the P&L.

(iii) Derecognition

A financial asset (or, where applicable, a part of
a financial asset or part of a entity of similar
financial assets) is primarily derecognised (i.e.
removed from the entity's balance sheet) when:

• The rights to receive cash flows from the
asset have expired, or

• The entity has transferred its rights to
receive cash flows from the asset or has
assumed an obligation to pay the received
cash flows in full without material delay
to a third party under a 'pass-through'
arrangement; and either (a) the entity
has transferred substantially all the risks
and rewards of the asset, or (b) the entity
has neither transferred nor retained
substantially all the risks and rewards of
the asset, but has transferred control of
the asset.

When the entity has transferred its rights to
receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates
if and to what extent it has retained the risks
and rewards of ownership. When it has neither
transferred nor retained substantially all of the
risks and rewards of the asset, nor transferred
control of the asset, the entity continues
to recognize the transferred asset to the
extent of the entity's continuing involvement.
In that case, the entity also recognizes an
associated liability. The transferred asset and
the associated liability are measured on a basis
that reflects the rights and obligations that the
entity has retained.

Continuing involvement that takes the form
of a guarantee over the transferred asset is
measured at the lower of the original carrying
amount of the asset and the maximum amount
of consideration that the entity could be
required to repay.

(iv) Impairment of financial assets

In accordance with Ind AS 109, the entity
applies expected credit loss (ECL) model for
measurement and recognition of impairment
loss on the following financial assets and credit
risk exposure:

a) Financial assets that are debt instruments,
and are measured at amortized cost e.g.,
loans, debt securities, deposits, trade
receivables and bank balance.

is recognized as income/ expense in the
statement of profit and loss (P&L). This
amount is reflected under the head 'other
expenses' in the P&L. The balance sheet
presentation for contractual revenue
receivables is presented as an allowance,
i.e., as an integral part of the measurement
of those assets in the balance sheet.
The allowance reduces the net carrying
amount. Until the asset meets write¬
off criteria, the entity does not reduce
impairment allowance from the gross
carrying amount.

(g) Financial liabilities

(i) Initial recognition and measurement

Financial liabilities are classified, at initial
recognition, as financial liabilities at amortized
cost or financial liabilities at fair value through
profit or loss, as appropriate. All financial
liabilities are recognized initially at fair value and,
in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Company's financial liabilities include trade
and other payables, loans and borrowings and
derivative financial instruments.

(ii) Subsequent measurement

Financial liabilities at fair value through profit
or loss

Financial liabilities at fair value through profit or
loss include financial liabilities held for trading
and financial liabilities designated upon initial
recognition as at fair value through profit
or loss.

Financial liabilities designated upon initial
recognition at fair value through profit or loss
are designated as such at the initial date of
recognition, and only if the criteria in Ind AS 109
are satisfied. For liabilities designated as FVTPL,
fair value gains/ losses attributable to changes
in own credit risk are recognized in OCI. These
gains/ losses are not subsequently transferred
to P&L. However, the Company may transfer
the cumulative gain or loss within equity. All
other changes in fair value of such liability are
recognised in the statement of profit or loss.
The Company has not designated any financial
liability as at fair value through profit and loss.

Loans and borrowings

This is the category most relevant to
the Company. After initial recognition,
interest-bearing loans and borrowings are
subsequently measured at amortised cost
using the EIR method. Gains and losses are
recognised in profit or loss when the liabilities
are derecognised as well as through the EIR
amortisation process.

Amortised cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of the
EIR. The EIR amortisation is included as finance
costs in the statement of profit and loss.

This category generally applies to borrowings.

(iii) Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expired. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, such an exchange or modification is
treated as the derecognition of the original
liability and the recognition of a new liability.
The difference in the respective carrying
amounts is recognised in the statement of
profit or loss.

(h) Offsetting financial instruments

Financial assets and liabilities are offset and the net
amount is reported in the balance sheet where there
is a legally enforceable right to offset the recognized
amounts and there is an intention to settle on a net
basis or realize the asset and settle the liability
simultaneously. The legally enforceable right must
not be contingent on future events and must be
enforceable in the normal course of business and in
the event of default, insolvency or bankruptcy of the
Company or the counterparty.

(i) Other Income

Interest income

Interest income is recognized using effective interest
rate method taking into account the amount
outstanding and the rate of Interest applicable (refer
policy to investment and other financial assets).

Dividends

Dividends are recognized in profit or loss only when
the right to receive payment is established, it is
probable that the economic benefits associated
with the dividend will flow to the Company, and the
amount of the dividend can be measured reliably.

(j) Derivatives and hedging activities

The Company uses derivative financial instruments
viz. forward currency contracts to hedge its exposure
to foreign currency risk in forecast transactions
and firm commitments. Such derivative financial
instruments are initially recognised at fair value on
the date on which a derivative contract is entered
into and are subsequently re-measured at fair value.
Derivatives are carried as financial assets when the
fair value is positive and as financial liabilities when
the fair value is negative.

Any gains or losses arising from changes in the fair
value of derivatives are taken directly to profit
or loss, except for the effective portion of cash
flow hedges, which is recognised in OCI and later
reclassified to profit or loss.

Cash flow hedges

For the purpose of hedge accounting, cash flow
hedges are designated when hedging the exposure to
variability in cash flows that is either attributable to
a particular risk associated with a recognised asset
or liability or a highly probable forecast transaction
or the foreign currency risk in an unrecognised firm
commitment. At the inception of a hedge relationship,
the Company formally designates and documents the
hedge relationship to which the Company wishes to
apply hedge accounting and the risk management
objective and strategy for undertaking the hedge.
The documentation includes the Company's risk
management objective and strategy for undertaking
hedge, the hedging/ economic relationship, the
hedged item or transaction, the nature of the risk
being hedged, hedge ratio and how the entity will
assess the effectiveness of changes in the hedging
instrument's fair value in offsetting the exposure to
changes in the hedged item's fair value or cash flows
attributable to the hedged risk. Such hedges are
expected to be highly effective in achieving offsetting
changes in fair value or cash flows and are assessed
on an ongoing basis to determine that they actually
have been highly effective throughout the financial
reporting periods for which they were designated.

The Company uses forward currency contracts as
hedges of its exposure to foreign currency risk in
forecast transactions and firm commitments.

The effective portion of the gain or loss on the hedging
instrument is recognised in OCI and accumulated in
the cash flow hedge reserve, while any ineffective
portion is recognised immediately in the statement
of profit and loss.

Amounts recognised as OCI are transferred to profit
or loss when the hedged transaction affects profit or
loss, such as when the forecast sale occurs.

When a hedging instrument expires, or is sold or
terminated, or when a hedge no longer meets
the criteria for hedge accounting, any cumulative
deferred gain or loss remains in equity until the
forecast transaction occurs. When the forecast
transaction is no longer expected to occur, the
cumulative gain or loss and deferred costs of hedging
that were reported in equity are immediately
reclassified to statement of profit and loss.

Fair Value Hedge

For the purpose of hedge accounting, fair value
hedges are designated when hedging the exposure
to changes in the fair value of a recognized asset,
liability, or an unrecognized firm commitment that
is attributable to a particular risk and could affect
profit or loss.

At the inception of a hedge relationship, the
Company formally designates and documents
the hedge relationship to which it wishes to apply
hedge accounting, along with the risk management
objective and strategy for undertaking the hedge.
The documentation includes identification of the
hedged item, the nature of the risk being hedged,
and the method by which the hedge effectiveness
will be assessed.

The hedging instrument should be expected to be
highly effective in offsetting changes in the fair
value of the hedged item attributable to the hedged
risk, and the effectiveness should be assessed on an
ongoing basis.

Changes in the fair value of the designated hedging
instrument are recognized immediately in profit or
loss, along with any changes in the fair value of the
hedged item that are attributable to the hedged

risk. The adjustment to the carrying amount of the
hedged item for which the effective portion of the
hedge has been recognized is included in the income
statement in the same line item as the hedged item.

The Company discontinues hedge accounting when
the hedging instrument expires, is sold, terminated,
or exercised, or when the hedge no longer meets
the criteria for hedge accounting. In such cases,
any remaining fair value adjustment to the carrying
amount of the hedged item is amortized to profit or
loss over the period to maturity of the hedged item.
If the hedged item is derecognized, the unamortized
fair value adjustment is recognized immediately in
profit or loss.

(k) Property, plant and equipment

Freehold land is carried at historical cost less
impairment losses, if any. All other items of property,
plant and equipment are stated at historical cost less
accumulated depreciation less impairment losses,
if any. Historical cost includes expenditure that is
directly attributable to the acquisition of the items.

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. Such cost also includes the cost
of replacing part of the plant and equipment if the
recognition criteria are met. When significant parts
of plant and equipment are required to be replaced at
intervals, the Company depreciates them separately
based on their specific useful lives. Likewise, when a
major inspection is performed, its cost is recognised
in the carrying amount of the plant and equipment
as a replacement if the recognition criteria are
satisfied. The carrying amount of any component
accounted for as a separate asset is derecognized
when replaced. All other repairs and maintenance are
charged to profit or loss during the reporting period
in which they are incurred.

Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These
are included in profit or loss within other income/
expenses as applicable.

The cost of assets not ready for used before balance
sheet date are disclosed under capital work in
progress. Capital work in progress is stated at cost,
net of accumulated impairment loss, if any.

The useful lives as given above best represent the
period over which the management expects to use
these assets, based on technical assessment. The
estimated useful lives for these assets may differ
from the useful lives prescribed under Part C of
Schedule II of the Companies Act 2013.

The asset's residual values and useful life are
reviewed, and adjusted if appropriate, at the end of
each reporting period.

(l) Intangible assets
(i) Goodwill

Goodwill on acquisitions of subsidiaries is
included in intangible assets. Goodwill is not
amortized but it is tested for impairment
annually, or more frequently if events or
changes in circumstances indicate that it
might be impaired, and is carried at cost less
accumulated impairment losses. Gains and
losses on the disposal of an entity / operations
include the carrying amount of goodwill relating
to the entity / operations sold.

Goodwill is allocated to Cash-Generating Units
(CGU) or Company of CGUs for the purpose of
impairment testing. The allocation is made to
those cash-generating units that are expected
to benefit from the business combination
in which the goodwill arose. The CGUs are
identified at the lowest level at which goodwill is
monitored for internal management purposes,
which in our case are the acquired business /
operations. In case the acquired business/

operations are spread across multiple operating
segments, the Goodwill as well as other assets
of the CGU are further allocated to ensure that
goodwill impairment testing does not cross
limits of an operating segments.

(ii) Brand, Customer Relationships and other
rights

Separately acquired patents and copyrights
are shown at historical cost. Non-Compete,
Brand and Customer relationship acquired
in a business combination are recognized at
fair value at the acquisition date. They have a
finite useful life and are subsequently carried
at cost less accumulated amortization and
impairment losses.

(iii) Computer software

Costs associated with maintaining software
programs are recognized as an expense as
incurred. Development costs that are directly
attributable to the design and testing of
identifiable and unique software products
controlled by the Company are recognized as
intangible assets when the following criteria
are met:

- It is technically feasible to complete the
software so that it will be available for use

- Management intends to complete the
software and use or sell it

- There is an ability to use or sell the software

- It can be demonstrated how the software
will generate probable future economic
benefits

- Adequate technical, financial and other
resources to complete the development and
to use or sell the software are available, and

- The expenditure attributable to the
software during its development can be
reliably measured.

Directly attributable costs that are capitalized as
part of the software include employee costs and
an appropriate portion of relevant overheads.

During the period of development, the asset
is tested for impairment annually. Capitalized
development costs are recorded as intangible
assets and amortized from the point at which
the asset is available for use.

The external computer software acquired
separately are measured on initial recognition
at cost. After initial recognition/ capitalisation,
all software are carried at cost less accumulated
amortization and impairment losses, if any.

(iv) Research and development

Research expenditure and development
expenditure that do not meet the criteria in (iii)
above are recognized as an expense as incurred.
Development costs previously recognized as
an expense are not recognized as an asset in a
subsequent period.

(v) Amortization methods and periods

The Company amortizes intangible assets with a
finite useful life using the straight-line method
over the following periods:

Computer software - external 3 years

Contract specific software are amortized over
the duration of contract agreed with customer.
The asset's residual values and useful life are
reviewed, and adjusted if appropriate, at the
end of each reporting period.

(vi) Impairment of non-financial assets

Goodwill that have an indefinite useful life are
not subject to amortization and are tested
annually for impairment, or more frequently if
events or changes in circumstances indicate that
they might be impaired. For other non financial
assets, including property, plant and equipment,
ROU assets and intangible assets having finite
useful lives, the Company assesses, at each
reporting date, whether there is an indication
that an asset may be impaired. If any indication
exists, or when annual impairment testing for
an asset is required, the Company estimates the
asset's recoverable amount. The recoverable
amount is higher of an asset's fair value less
cost of disposal or value in use. The recoverable
amount is determined for an individual asset,
unless the asset does not generate cash
inflows that are largely independent of those
from other assets or Companys of assets.
When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is
considered impaired and is written down to its
recoverable amount.

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. In determining fair value less costs
of disposal, recent market transactions are
taken into account. If no such transactions can
be identified, an appropriate valuation model
is used.

The Company bases its impairment calculation
on most recent budgets and forecast
calculations, which are prepared separately
for each of the Company's CGUs to which the
individual assets are allocated. These budgets
and forecast calculations generally cover a
period of five years. A long-term growth rate
is calculated and applied to project future cash
flows after the fifth year.

An impairment loss is recognized for the
amount by which the asset's carrying amount
exceeds its recoverable amount. Impairment
losses are recognised in the statement of
profit or loss under the head depreciation and
amortisation expense.

For assets excluding goodwill, an assessment
is made at each reporting date to determine
whether there is an indication that previously
recognised impairment losses no longer exist
or have decreased. If such indication exists,
the Company estimates the asset's or CGU's
recoverable amount.

(m) Borrowing Costs

General and specific borrowing costs that
are directly attributable to the acquisition,
construction or production of a qualifying asset
are capitalized during the period of time, that is
required to complete and prepare the asset for
its intended use or sale. Qualifying assets are
assets that necessarily take a substantial period
of time to get ready for their intended use or sale.
The Company has not capitalised any material
borrowing costs.

Other borrowing costs are expensed in the period in
which they are incurred.