Note 2: Material Accounting Policies
a) Basis of Preparation of Financial Statements:
i) Compliance with Ind AS
These standalone financial statements have been
prepared in accordance with the Indian Accounting
Standards (Ind AS) as prescribed under section 133 of the
Companies Act, 2013 read with the Companies (Indian
Accounting Standards) Rules as amended from time to
time.
The financial statements were approved by the
Company's Board of Directors and authorised for issue on
May 21, 2026.
ii) Historical cost convention
The financial statements have been prepared on a
historical cost basis, except for the following:
* certain financial assets and liabilities (including
derivative instruments) which is measured at fair
value;
* defined benefit plans - plan assets measured at fair
value
iii) Measurement of fair values
A number of Company's accounting policies and
disclosures require the measurement of fair values, for
both financial and non-financial assets and liabilities.
The Company has establish policies and procedure with
respect to measurement of fair values. Fair values are
categorised into different levels in a fair value hierarchy
based on the inputs used in the valuation techniques as
follows:
Level 1: Level 1 hierarchy includes financial instruments
measured using quoted prices. This includes listed equity
instruments, mutual funds and forward contracts that
have quoted price. The fair value of all equity instruments
(including bonds) which are traded in the stock exchanges
is valued using the closing price as at the reporting period.
The mutual funds are valued using the closing NAV.
Level 2: The fair value of financial instruments that are
not traded in an active market (for example, traded
bonds, over-the counter derivatives) is determined
using valuation techniques which maximise the use of
observable market data and rely as little as possible on
entity-specific estimates. If all significant inputs required
to fair value an instrument are observable, the instrument
is included in level 2.
Level 3: If one or more of the significant inputs is not based
on observable market data, the instrument is included
in level 3. This is the case for unlisted equity securities,
contingent consideration.
b) Use of Estimates
The preparation of financial statements in conformity with the
generally accepted accounting principles require estimates
and assumptions to be made that affect the reported amounts
of the assets and liabilities on the date of financial statements
and the reported amounts of revenues and expenses during
the reporting period. Differences between actual results and
estimates are recognised in the year in which the results are
known / materialized.
c) Foreign currency translation
i) Functional and presentation currency
The financial statements are presented in Indian rupee
(INR), which is Company's functional and presentation
currency.
ii) Transactions and balances
Transactions in foreign currency are recorded at the rates
of exchange prevailing at the date of the transactions.
Monetary items denominated in foreign currencies at
the balance sheet date are translated at the exchange
rates prevailing at the balance sheet date. Non-monetary
assets and non-monetary liabilities denominated in a
foreign currency and measured at historical cost are
translated at the exchange rate prevalent at the date of
transaction.
Any income or expense on account of exchange difference
either on settlement or on translation at the balance
sheet date is recognised in the Statement of Profit and
Loss in the year in which it arises.
d) Revenue recognition
Revenue from services is recognised based on time and
material and billed to the clients as per the terms of the
contract.
Revenue related to fixed price maintenance and support
services contracts where the Company is standing ready to
provide services is recognised based on time elapsed mode
and revenue is straight lined over the period of performance.
In respect of other fixed-price contracts, revenue is recognised
using percentage-of-completion method ('POC method')
of accounting with contract cost incurred determining the
degrees of completion of the performance obligation.
Revenue is measured based on the transaction price, which
is the consideration, adjusted for volume discounts, service
level credits, performance bonuses, price concessions and
incentives, if any, as specified in the contract with the customer.
Revenue from subsidiaries is recognised based on transaction
price of services which is at arm's length.
The billing schedules agreed with customers include periodic
performance-based billing and / or milestone based progress
billings. Revenues in excess of billing are classified as unbilled
revenue while billing in excess of revenues are classified as
contract liabilities (which we refer to as "unearned revenues").
e) Income tax
Tax expense comprise of current and deferred tax. Current
income tax is measured at the amount expected to be paid
to the tax authorities in accordance with the Indian Income
Tax Act.
Current income taxes
The current tax expense include income tax expense payable
by the company. Advance taxes and provision for current
income taxes are presented in the balance sheet after off¬
setting advance tax paid and income tax provision arising in
same tax jurisdictions.
Deferred tax
Deferred income taxes reflects the impact of current year
timing differences between taxable income and accounting
income for the year and reversal of timing differences of earlier
years. Deferred tax is measured based on the tax rates and
the tax laws enacted at the balance sheet date. Deferred
tax assets are recognized only to the extent that there is a
reasonable certainty that sufficient future taxable income will
be available against which such deferred tax assets can be
realized.
f) Leases
The Company evaluates if an arrangement qualifies to be a
lease as per the requirements of Ind AS 116. Identification of
a lease requires significant judgment. The Company uses
significant judgement in assessing the lease term (including
anticipated renewals) and the applicable discount rate. The
Company determines the lease term as the non-cancellable
period of a lease, together with both periods covered by an
option to extend the lease if the company is reasonably certain
to exercise that option; and periods covered by an option to
terminate the lease if the Company is reasonably certain not
to exercise that option. In assessing whether the Company is
reasonably certain to exercise an option to extend a lease,
or not to exercise an option to terminate a lease, it considers
all relevant facts and circumstances that create an economic
incentive for the Company to exercise the option to extend
the lease, or not to exercise the option to terminate the lease.
The Company revises the lease term if there is a change in
the non-cancellable period of a lease. The discount rate is
generally based on the incremental borrowing rate specific
to the lease being evaluated or for a portfolio of leases with
similar characteristics.
g) Cash and cash equivalents
The Company considers all highly liquid financial instruments,
which are readily convertible into cash and have original
maturities of three months or less from date of purchase to be
cash equivalents.
h) Cash Flow Statement
Cash flows are reported using the indirect method, whereby
net profit before tax is adjusted for the effects of transactions
of a non-cash nature, any deferrals or accruals of past or
future operating cash receipts or payments and item of
income or expenses associated with investing or financing
cash flows. The cash flows from operating, investing and
financing activities of the Company are segregated.
i) Inventories
Inventories are valued at lower of cost and net realizable
value. Cost is determined using first-in-first out (FIFO) method.
Cost of inventories comprises of all costs of purchase and
other costs incurred in bringing the inventories to their present
location and condition.
j) Trade receivables
Trade receivables that do not contain a significant financing
component are measured at transaction price and trade
receivables that contain a significant financing component are
recognised initially at fair value and subsequently measured
at amortised cost using the effective interest method, less
provision for impairment.
k) Investments and other financial assets
i) Classification
The company classifies its financial assets in the following
measurement categories:
* those to be measured subsequently at fair value (either
through other comprehensive income, or through profit or
loss), and
* those measured at amortised cost.
The classification depends on the entity's business model
for managing the financial assets and the contractual
terms of the cash flows.
For assets measured at fair value, gains and losses will
either be recorded in profit or loss or other comprehensive
income. For investments in debt instruments, this will
depend on the business model in which the investment
is held. For investments in equity instruments, this
will depend on whether the company has made an
irrevocable election at the time of initial recognition to
account for the equity investment at fair value through
other comprehensive income.
The company reclassifies debt investments when and
only when its business model for managing those assets
changes.
ii) Measurement
At initial recognition, the company measures a financial
asset at its fair value plus, in the case of a financial
asset not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition of
the financial asset. Transaction costs of financial assets
carried at fair value through profit or loss are expensed in
profit or loss.
Financial assets with embedded derivatives are
considered in their entirety when determining whether
their cash flows are solely payment of principal and
interest.
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:
• Amortised cost: Assets that are held for collection of
contractual cash flows where those cash flows represent
solely payments of principal and interest are measured at
amortised cost. A gain or loss on a debt investment that
is subsequently measured at amortised cost and is not
part of a hedging relationship is recognised in profit or
loss when the asset is derecognised or impaired. Interest
income from these financial assets is included in finance
income using the effective interest rate method.
• Impairment of investment in subsidiary: The Company
reviews its carrying value of investments carried at
amortised cost annually, or more frequently, when there is
indication for impairment. If the recoverable amount is less
than carrying amount, the impairment loss is accounted
for.
• Fair value through other comprehensive income (FVOCI):
Assets that are held for collection of contractual cash flows
and for selling the financial assets, where the assets' cash
flows represent solely payments of principal and interest,
are measured at fair value through other comprehensive
income (FVOCI). Movements in the carrying amount
are taken through OCI, except for the recognition of
impairment gains or losses, interest revenue and foreign
exchange gains and losses which are recognised in profit
and loss. When the financial asset is derecognised, the
cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and recognised in
other gains/(losses). Interest income from these financial
assets is included in other income using the effective
interest rate method.
• Fair value through profit or loss: Assets that do not meet
the criteria for amortised cost or FVOCI are measured
at fair value through profit or loss. A gain or loss on a
debt investment that is subsequently measured at fair
value through profit or loss and is not part of a hedging
relationship is recognised in profit or loss and presented
net in the statement of profit and loss within other gains/
(losses) in the period in which it arises. Interest income from
these financial assets is included in other income.
Equity instruments
The company subsequently measures all equity
investments at fair value (except investment in subsidiaries
and joint venture which are at amortised cost). Where
the company's management has elected to present
fair value gains and losses on equity investments in
other comprehensive income, there is no subsequent
reclassification of fair value gains and losses to profit or
loss. Dividends from such investments are recognised in
profit or loss as other income when the company's right to
receive payments is established.
Changes in the fair value of financial assets at fair value
through profit or loss are recognised in other gain/(losses)
in the statement of profit and loss. Impairment losses
(and reversal of impairment losses) on equity investments
measured at FVOCI are not reported separately from
other changes in fair value.
iii) Impairment of financial assets
The company assesses on a forward looking basis the
expected credit losses associated with its assets carried
at amortised cost and FVOCI debt instruments. The
impairment methodology applied depends on whether
there has been a significant increase in credit risk. Note 38
details how the company determines whether there has
been a significant increase in credit risk.
For trade receivables only, the company applies the
simplified approach permitted by Ind AS 109 Financial
Instruments, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
iv) Derecognition of financial assets
A financial asset is derecognised only when
• The company has transferred the rights to receive
cash flows from the financial asset or
• retains the contractual rights to receive the cash flows
of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more
recipients.
Where the entity has transferred an asset, the company
evaluates whether it has transferred substantially all
risks and rewards of ownership of the financial asset. In
such cases, the financial asset is derecognised. Where
the entity has not transferred substantially all risks and
rewards of ownership of the financial asset, the financial
asset is not derecognised.
Where the entity has neither transferred a financial asset
nor retains substantially all risks and rewards of ownership
of the financial asset, the financial asset is derecognised
if the company has not retained control of the financial
asset. Where the company retains control of the financial
asset, the asset is continued to be recognised to the
extent of continuing involvement in the financial asset.
v) Income recognition
Interest income
Interest income from debt instruments is recognised using
the effective interest rate method. The effective interest
rate is the rate that exactly discounts estimated future
cash receipts through the expected life of the financial
asset to the gross carrying amount of a financial asset.
When calculating the effective interest rate, the company
estimates the expected cash flows by considering all the
contractual terms of the financial instrument (for example,
prepayment, extension, call and similar options) but does
not consider the expected credit losses.
Dividends
Dividends are recognised 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.
l) Derivatives and hedging activities
The Company uses foreign currency forward contracts to
hedge it's risks associated with foreign currency fluctuations
relating to certain firm commitments and forecasted
transactions. Such forward contracts are utilised against the
inflow of funds under firm commitments. The Company does
not use the forward contract for speculative purposes. The
Company designates these hedging instruments as cash
flow hedge. The use of hedging instruments is governed by
the Company's policies approved by the Board of Directors,
which provide written principles on the use of such financial
derivatives consistent with the Company's risk management
strategy.
Hedging instruments are initially measured at fair value and
are remeasured at subsequent reporting dates. Changes in
the fair value of these derivatives that are designated and
effective as hedges of future cash flows are recognised in
other comprehensive income and the ineffective portion is
recognised immediately in the Statement of Profit and Loss.
Changes in the fair value of derivative financial instruments
that do not qualify for hedge accounting are recognised in
the Statement of Profit and Loss as they arise.
The fair value of derivative financial instruments is determined
based on observable market inputs including currency spot
and forward rates, yield curves, currency volatility etc.
Hedge accounting is discontinued when the hedging
instrument expires or is sold, terminated or exercised or
no longer qualifies for hedge accounting. At that time for
forecasted transactions, any cumulative gain or loss on the
hedging instrument recognised in Other comprehensive
income is retained until the forecasted transaction occurs. If
a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in other comprehensive
income is transferred to the Statement of Profit and Loss for
the year.
m) 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 recognised amounts and there
is an intention to settle on a net basis or realise 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.
n) Property, Plant and Equipment
Property, Plant and Equipment are valued at cost, except for
certain Property, Plant and Equipment which have been stated
at revalued amounts as determined by approved independent
valuer, after reducing accumulated depreciation until the date
of the balance sheet. Direct costs are capitalised until the
assets are ready to use and include financing costs relating to
any specific borrowing attributable to the acquisition of fixed
assets. Capital work-in-progress includes assets not put to
use before the year end.
Depreciation methods, estimated useful lives and residual
value
Depreciation on property, plant and equipment is provided on
the Straight Line Method except for leasehold land, leasehold
premises and freehold land as per the useful life and in the
manner prescribed in Schedule II to Companies Act, 2013.
Leasehold Premises is amortized on the Straight Line Method
over the period of 30 years and Leasehold Land is amortized
on the Straight Line Method over the period of 75 years.
o) Intangible assets
i) Goodwill
Goodwill on merger of subsidiaries is included in
intangible assets. Goodwill is not amortised 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.
Goodwill is allocated to cash-generating units for the
purpose of impairment testing. The allocation is made
to those cash-generating units or Company's of cash¬
generating units that are expected to benefit from the
business combination in which the goodwill arose. The
units or Company's of units are identified at the lowest level
at which goodwill is monitored for internal management
purposes, which in our case are the operating segments.
ii) Trademarks, copyrights and other rights
Separately acquired Trademarks and copyrights are
shown at historical cost. Trademarks, copyrights and
non-compete acquired in a business combination are
recognised at fair value at the acquisition date. They have
a finite useful life and are subsequently carried at cost less
accumulated amortisation and impairment losses.
iii) Computer software
The intangible assets are recorded at cost and are carried
at cost less accumulated amortization and accumulated
impairment losses, if any.
Directly attributable costs that are capitalised as part of
the software include employee costs and an appropriate
portion of relevant overheads.
Capitalised development costs are recorded as intangible
assets and amortised from the point at which the asset is
available for use.
iv) Other intangible assets
Other intangible assets that do not meet the criteria in (i)
to (iii) above are recognised as an expense as incurred.
Development costs previously recognised as an expense
are not recognised as an asset in a subsequent period.
v) Amortisation methods and periods
The company amortises intangible assets with a finite
useful life using the straight-line method as following :
Particulars Useful Life
Computer Software 3 years
Non-Compete Fees 5 years
Copy Rights 3 years
Trade Mark 3 years
Other Intangible assets 3 years
p) Trade and other payables
These amounts represent liabilities for goods and services
provided to the company prior to the end of financial year
which are unpaid. The amounts are unsecured. Trade and
other payables are presented as current liabilities unless
payment is not due within 12 months after the reporting
period. They are recognised initially at their fair value and
subsequently measured at amortised cost using the effective
interest method.
q) Borrowings
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the
borrowings using the effective interest method. Fees paid
on the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this
case, the fee is deferred until the draw down occurs. To the
extent there is no evidence that it is probable that some or
all of the facility will be drawn down, the fee is capitalised as
a prepayment for liquidity services and amortised over the
period of the facility to which it relates.
Borrowings are removed from the balance sheet when the
obligation specified in the contract is discharged, cancelled
or expired. The difference between the carrying amount of a
financial liability that has been extinguished or transferred to
another party and the consideration paid, including any non¬
cash assets transferred or liabilities assumed, is recognised in
profit or loss as other gains/(losses).
Where the terms of a financial liability are renegotiated and
the entity issues equity instruments to a creditor to extinguish
all or part of the liability (debt for equity swap), a gain or loss is
recognised in profit or loss, which is measured as the difference
between the carrying amount of the financial liability and the
fair value of the equity instruments issued.
Borrowings are classified as current liabilities unless the
company has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting period. Where
there is a breach of a material provision of a long-term loan
arrangement on or before the end of the reporting period with
the effect that the liability becomes payable on demand on
the reporting date, the entity does not classify the liability as
current, if the lender agreed, after the reporting period and
before the approval of the financial statements for issue, not
to demand payment as a consequence of the breach.
r) Borrowing costs
Borrowing costs, which are directly attributable to the
acquisition, construction or production of a qualifying assets
are capitalised as a part of the cost of the assets. Other
borrowing costs are recognised as expenses in the year in
which they are incurred.
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