1. Company overview

Digitide Solutions Limited ('the Company') is a listed
public limited company incorporated and domiciled in
India. The shares of the company are listed on the
Bombay Stock Exchange and National Stock
Exchange. The registered office of the Company is
located in Bengaluru, Karnataka, India.

Pursuant to the Scheme of Arrangement, Quess Corp
Limited has transferred the Demerged Undertaking 1
to the Company. Demerged Undertaking 1 including its
subsidiaries which are primarily involved in business
process management and tech and digital services.

The Company was incorporated on 10 February 2024
and this being the first financial year of the Company,
the financial statements have been prepared for the
period 10 February 2024 to 31 March 2025 ('financial
year') in accordance with the provisions of the section
2(41) of the Companies Act 2013.

The standalone financial statements are approved by
the board of directors and authorised for issue in
accordance with a resolution of the directors on 26
June 2025.

2. Basis of preparation

2.1 Statement of compliance

This is the first financial year of the Company post its
incorporation pursuant to the demerger of Quess Corp
Limited under the approved scheme of arrangement.
The financial statements have been prepared in
accordance with the Indian Accounting Standards find
AS") as notified under Section 133 of the Companies
Act. 2013 read with Rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015 and other relevant
provisions of the Act.

The Standalone Financial Statements comprises the
Standalone Balance sheet of the Company as at 31
March 2025, Standalone Statement of Profit and Loss
(including Other Comprehensive Income), Standalone
Cash Flow Statement Standalone Statement of
Changes in Equity for the financial year ended 31
March 2025, material accounting policies and other
explanatory information have been prepared by the
Company in the following manner using information
maintained by Quess Corp Limited (Demerged
Company) for the financial year:

1. Based on a historical cost basis, except for:

a. Certain financial instruments that are measured
at fair values at the end of each reporting
period, as explained in the accounting policies
below.

b. Defined benefit and other long-term employee
benefits where plan asset Is measured at fair
value less present value of defined benefit
obligations (“DBO") and

c. Expenses relating to share based payments are
measured at fair value on the date of grant.

Historical cost is generally based on the fair value of
the consideration given in exchange for goods or
services.

2. The assets, liabilities, revenue from operations, and
expenses specifically pertaining to Transferred
Businesses 1 (as defined in Scheme of
Arrangement) were extracted from the books of
account of Quess Corp Limited (Refer Note 40),
and

3. Common expenses were apportioned based on a
reasonable basis, which includes specific
identification, headcount, usage, payroll, time
spent, net assets etc.

The material accounting policy information related to
preparation of the standalone financial statements
have been discussed below.

Going concern:

The directors have, at the time of approving the
standalone financial statements, a reasonable
expectation that the Company has adequate resources
to continue in operational existence for the
foreseeable future. Thus, they continue to adopt the
going concern basis of accounting in preparing the
standalone financial statements.

2.3 Use of estimates and judgments

The preparation of the standalone financial statements
In conformity with Ind AS requires management to
make judgments, estimates and assumptions that
affect the application of accounting policies and the
reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these
estimates.

The estimates and underlying assumptions are
reviewed on a periodic basis. Revisions to accounting
estimates are recognised in the period in which the
estimates are revised, and in any future periods
affected. The following are the significant areas of
estimation, uncertainty and critical judgments in
applying accounting policies that have the most
significant effect on the amounts recognised in the
standalone financial statements:

i) Impairment of non-financial assets:

Non-financial assets are tested for impairment by
determining the recoverable amount. Determination of
recoverable amount is based on value in use. which is
present value of future cash flows. The key inputs
used in the present value calculations include the
expected future growth in operating revenues and
margins in the forecast period, long-term growth rates
and discount rates which are subject to significant
judgement. (Refer note 4.1)

ii) Impairment of financial assets:

The Company recognises loss allowances using the
Expected credit loss (ECL) model for the financial
assets which are not fair valued through profit or loss.
Loss allowance for trade receivables (billed and
unbilled) with no significant financing component is
measured at an amount equal to lifetime ECL. For all
other financial assets, expected credit losses are
measured at an amount equal to the 12-month ECL,
unless there has been a significant increase in credit
risk from Initial recognition in which case those are
measured at lifetime ECL. The loss rates for the trade
receivables considers past collection history from the
customers, the credit risk of the customers and have
been adjusted to reflect the Management's view of
economic conditions over the expected collection
period of the receivables (billed and unbilled). (Refer
note 32(i))

iii) Measurement of defined benefit obligations:

For defined benefit obligations, the cost of providing
benefits is determined based on actuarial valuation. An
actuarial valuation is based on significant assumptions
which are reviewed on a yearly basis. (Refer note 38)

iv) Property, plant and equipment and intangible
assets:

The useful lives of property, plant and equipment and
intangible assets are determined by the management
at the time the asset is acquired and reviewed
periodically. Ind AS 103 requires the identifiable
intangible assets acquired in business combinations to
be fair valued and significant estimates are required to
be made in determining the value of intangible assets.
These valuations are conducted by external experts.
(Refer note 3(a) and 4)

v) Income taxes:

Significant judgments are involved in determining
provision for income taxes, including (a) the amounts
claimed for certain deductions under the Income Tax
Act, 1961 and (b) the amount expected to be paid or
recovered in connection with uncertain tax positions.
The ultimate realisation of deferred income tax assets
is dependent upon the generation of future taxable
Income during the periods in which the temporary
differences become deductible. Management
considers the scheduled reversals of deferred tax
liabilities and the projected future taxable income in
making this assessment. Based on the level of
historical taxable income and projections for future
taxable income over the periods in which the deferred
income tax assets are deductible, management
believes that the Company will realise the benefits of
those deductible differences. The amount of the
deferred income tax assets considered realisable,
however, could be reduced in the near term if
estimates of future taxable income during the carry
forward periods are reduced. (Refer note 7)

2.4 Current and non-current classification

Current and non-current classification: The Company
presents assets and liabilities in the balance sheet
based on current/ non-current classification. An asset
is treated as current when it is:

• Expected to be realised or intended to be sold or
consumed in normal operating cycle

• Held primarily for the purpose of trading

• Expected to be realised within twelve months after
the reporting period, or

• Cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled In normal operating
cycle

• It Is held primarily for the purpose of trading

• It Is due to be settled within twelve months after
the reporting period, or

• There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period

The terms of the liability that could, at the option of the
counterparty, result in its settlement by the issue of
equity instruments do not affect its classification.

The Company classifies all other liabilities as non-
current.

Deferred tax assets and liabilities are classified as non-
current assets and liabilities.

Operating cycle for the business activities of the
Company covers the duration of the specific project or
contract and extends up to the realisation of
receivables within the agreed credit period normally
applicable to the respective lines of business. Based
on the nature of services rendered to customers and
time elapsed between deployment of resources and
the realisation in cash and cash equivalents of the
consideration for such services rendered, the
Company has considered an operating cycle of 12
months.

2.5 Business combinations

(i) Business combinations (common control business
combinations):

Business combination involving entities that are
controlled by the company are accounted for using the
pooling of interest method are as follows:

• The assets and liabilities of the combining entities
are reflected at their carrying amounts.

• No adjustments are made to reflect fair values, or
recognise any new assets or liabilities. Adjustments
are only made to harmonise accounting policies.

• The financial information in the standalone financial
statements in respect of prior periods is restated as
if the business combination had occurred from the
beginning of the preceding period in the financial
statements, irrespective of the actual date of the
combination. However, where the business
combination had occurred after that date, the prior
period information is restated only from that date.

• The balance of the retained earnings appearing in
the standalone financial statements of the
transferor is aggregated with the corresponding
balance appearing in the standalone financial
statements of the transferee or is adjusted against
general reserve.

• The identity of the reserve are preserved and the
reserves of the transferor becomes the reserves of
the transferee.

• The difference, if any, between the amounts
recorded as share capital issued plus any
additional consideration in the form of cash or
other assets and the amount of share capital of the
transferor is transferred to capital reserve and is
presented separately from other capital reserves.

(ii) Business combinations (other than common
control business combinations):

In accordance with Ind AS 103, the Company accounts
for the business combinations (other than common
control business combinations) using the acquisition
method when control is transferred to the Company.
The cost of an acquisition is measured as the fair value
of the assets given, equity instruments issued and
liabilities incurred or assumed at the date of exchange.
The cost of acquisition also includes the fair value of
any contingent consideration. Identifiable assets
acquired and liabilities and contingent liabilities
assumed in a business combination are measured
initially at their fair value on the date of acquisition.
Transaction costs are expensed as incurred, except to
the extent related to the issue of debt or equity
securities.

2.6 Foreign currency transactions and balances

The standalone financial statements are presented in
Indian Rupees (“INR”) which is also the Company’s
functional currency and all amounts have been
rounded off to the nearest millions.

Foreign currency transactions are translated into the
functional currency using the exchange rates
prevailing at the dates of the respective transactions.
Foreign currency denominated monetary assets and
liabilities are translated Into the functional currency at
exchange rates in effect at the reporting date.

Foreign exchange gains and losses resulting from the
settlement of such transactions and such translation of
monetary assets and liabilities denominated in foreign
currencies are generally recognised in the statement
of profit and loss.

Non-monetary assets and liabilities denominated in a
foreign currency and measured at fair value are
translated at the exchange rate prevalent at the date
when the fair value was determined. Non-monetary
assets and liabilities denominated in a foreign
currency and measured at historical cost are translated
at the exchange rate prevalent at the date of
transaction. Foreign currency gains and losses are
reported on a net basis. This includes changes in the
fair value of foreign exchange derivative instruments,
which are accounted at fair value through profit or loss

except exchange differences arising from the
translation of the following items which are recognized
in OCI:

• equity investments at fair value through OCI
(FVOCI)

• a financial liability designated as a hedge of the net
investment in a foreign operation to the extent that
the hedge is effective:

• and qualifying cash flow hedges to the extent that
the hedges are effective.

2.7 Property, plant and equipment
(i) Recognition and measurement:

Property, plant and equipment are measured at cost
less accumulated depreciation and impairment losses,
if any.

Costs directly attributable to acquisition are capitalised
until the property, plant and equipment are ready for
use. as intended by the management.

Subsequent expenditures relating to property, plant
and equipment is capitalised only when it is probable
that future economic benefits associated with these
will flow to the Company and the cost of the item can
be measured reliably. Repairs and maintenance costs
are recognised in the statement of profit and loss
when incurred.

Advances paid towards the acquisition of property,
plant and equipment outstanding at each reporting
date is classified as capital advances under other non-
current assets and the cost of the assets not ready for
intended use are disclosed under ‘Capital work-in-
progress*.

ii) Depreciation:

The Company depreciates property, plant and
equipment over their estimated useful lives using the
straight-line method. The estimated useful lives of
assets are as follows:

Depreciation methods, useful lives and residual values
are reviewed periodically, including at each financial
year end. The useful lives are based on historical
experience with similar assets as well as anticipation
of future events, which may impact their life, such as
changes in technology.

If significant parts of an item of property, plant and
equipment have different useful lives, then they are
accounted for as separate items (major components)
of property, plant and equipment.

Leasehold improvements are depreciated over lease
term or estimated useful life whichever is lower.

The residual values, useful lives and methods of
depreciation of property, plant and equipment are
reviewed periodically, including at each financial year
end.

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. The gain or loss arising on
the disposal or retirement of an asset is determined as
the difference between the net disposal proceeds and
the carrying amount of the asset and is recognised in
profit or loss.

The cost and related accumulated depreciation are
derecognised from the standalone financial
statements upon sale or retirement of the asset and
the resultant gains or losses are recognised in the
statement of profit and loss.

2.8 Leases

The Company as a lessee:

The Company’s lease asset classes primarily consist of
leases for buildings. 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 contract 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 recognises a right-of-use (ROU) asset and a
corresponding lease liability for all lease arrangements
in which it is a lessee, except for leases with a term of
12 months or less (short-term leases) and low value
leases. For these short-term and low-value leases, the
Company recognises the lease payments as an
operating expense on a straight-line basis over the
term of the lease.

Certain lease arrangements includes the option 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 ROU assets are Initially
recognised at cost, which comprises the initial amount
of the lease liability 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.

ROU 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. ROU
assets are evaluated for recoverability whenever
events or changes in circumstances indicate that their
carrying amounts may not be recoverable. For the
purpose of impairment testing, the recoverable
amount (i.e. the higher of the fair value less cost to sell
and the value-in-use) is determined on an individual
asset basis unless the asset does not generate cash
flows that are largely independent of those from other
assets. In such cases, the recoverable amount is
determined for the Cash Generating Unit (CGU) to
which the asset belongs.

The lease liability is initially measured at amortised
cost at the present value of the future lease payments.
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. Lease liabilities are re¬
measured with a corresponding adjustment to the
related ROU asset if the Company changes its

assessment of whether it will exercise an extension or
a termination option.

Lease liability and ROU assets have been separately
presented in the Balance Sheet and lease payments
have been classified as financing cash flows.

Short-term leases and leases of low-value assets:

The Company applies the short-term lease recognition
exemption to its short-term leases of buildings (i.e..
those leases that have a lease term of 12 months or
less from the commencement date and do not contain
a purchase option) For these short-term and low value
leases, the Company recognises the lease payments
as an operating expense on a straight-line basis over
the term of the lease.

2.9 Goodwill

The excess of the cost of acquisition over the
Company's share in the fair value of the acquiree’s
identifiable assets, liabilities and contingent liabilities is
recognised as goodwill. If the excess is negative, it is
considered as a bargain purchase gain. Any gain on a
bargain purchase is recognised in OCI and
accumulated in equity as capital reserve if there exists
clear evidence of the underlying reasons for
classifying the business combination as resulting in a
bargain purchase. Goodwill is tested for impairment on
an annual basis and whenever there is an indication
that goodwill may be impaired, relying on a number of
factors including operating results, business plans and
future cash flows.

2.10 Intangible assets

(i) Recognition and measurement

Internally generated: Research and development
Research costs are expensed as incurred. Software
product development costs are expensed as incurred
unless technical and commercial feasibility of the
project is demonstrated, future economic benefits are
probable, the Company has an intention and ability to
complete and use or sell the software and the costs
can be measured reliably. The costs which can be
capitalised include the cost of material, direct labour,
overhead costs that are directly attributable to
preparing the asset for its intended use.

Separately acquired Intangible assets:

Intangible assets with finite useful lives that are
acquired separately are carried at cost less
accumulated amortisation and accumulated
impairment losses.

Intangible assets acquired in a business combination

Intangible assets acquired in a business combination
and recognised separately from goodwill are
recognised initially at their fair value at the acquisition
date (which is regarded as their cost).

Others

Other purchased intangible assets are initially
measured at cost. Subsequently, such Intangible
assets are measured at cost less accumulated
amortisation and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalised only when it
increases the future economic benefits embodied in
the specific asset to which it relates. All other
expenditure, including expenditure on internally
generated software is recognised in the statement of
profit and loss as and when incurred.

(iii) Amortisation

Intangible assets are amortised over their respective
individual estimated useful lives on a straight-line
basis, from the date that they are available for use. The
estimated useful life of an identifiable intangible asset
is based on a 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.
Amortisation methods and useful lives are reviewed
periodically including at each financial year end.

The amortisation expense on intangible assets with
finite lives is recognised in the statement of profit and
loss unless such expenditure forms part of carrying
value of another asset.

If the recoverable amount of an asset (or cash¬
generating unit) is estimated to be less than it’s
carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable
amount. An Impairment loss Is recognised immediately
In the statement of profit and loss. If events or changes
in circumstances indicate that they might be impaired,
they are tested for impairment more frequently.

Goodwill

Goodwill is not amortised but is reviewed for
impairment at least annually. For the purpose of
impairment testing, goodwill is allocated to each cash¬
generating units (or groups of cash-generating units)
expected to benefit from the synergies of the
combination. Cash-generating units to which goodwill
has been allocated are tested for impairment annually,
or more frequently when there is an indication that the
unit may be impaired. If the recoverable amount of the
cash-generating unit is less than the carrying amount
of the unit, the impairment loss is allocated first to
reduce the carrying amount of any goodwill allocated
to the unit and then to the other assets of the unit pro¬
rata on the basis of the carrying amount of each asset
in the unit. An impairment loss recognised for goodwill
is not reversed in a subsequent period.

On disposal of a cash-generating unit, the attributable
amount of goodwill is included in the determination of
the profit or loss on disposal.

2.12 Investments in subsidiaries

Investment in equity instruments issued by
subsidiaries are measured at cost less impairment.
Dividend income from subsidiaries is recognised when
its right to receive the dividend is established. The
acquired investment in subsidiaries are measured at
acquisition date fair value.

Where an indication of impairment exists, the carrying
amount of the investment is assessed and written
down immediately to its recoverable amount. On
disposal of investments in subsidiaries the difference
between net disposal proceeds and the carrying
amounts are recognised in the Statement of Profit and
Loss.

2.13 Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and
in banks, demand deposits with banks which can be
withdrawn at any time without prior notice or penalty
on the principal and other short-term highly liquid
investments with original maturities of three months or
less.

For the purpose of cash flow statement, cash and cash
equivalent includes cash on hand, in banks, demand
deposits with banks and other short-term highly liquid
investments with original maturities of three months or
less, net of outstanding bank overdrafts that are
repayable on demand and are considered part of the
cash management system.

2.14 Dividend

The Company recognises a liability to make cash
distributions to equity holders of the Company when
the distributions is authorised and the distribution is no
longer at the discretion of the Company. Final
dividends on shares are recorded as a liability on the
date of approval by the shareholders and interim
dividends are recorded as a liability on the date of
declaration by the Company's Board of Directors

2.15 Share-based payments

Equity instruments granted to the employees of the
Company are measured by reference to the fair value
of the instrument at the date of grant. The expense is
recognised in the statement of profit and loss with a
corresponding increase in equity (stock options
outstanding account). The equity instruments generally
vest in a graded manner over the vesting period. The
fair value determined at the grant date is expensed
over the vesting period of the respective tranches of
such grants (accelerated amortisation). The stock
compensation expense Is determined based on the
Company’s estimate of equity instruments that will
eventually vest.

2.16 Earnings per share

Basic earnings per share is computed by dividing the
net profit/ (loss) attributable to owners of the Company
by the weighted average number of equity shares
outstanding during the period. Diluted earnings per
equity share is computed by dividing the net profit/
(loss) attributable to the equity holders of the Company
by the weighted average number of equity shares
considered for deriving basic earnings per equity
share and also the weighted average number of equity
shares that could have been issued upon conversion
of all dilutive potential equity shares.

Dilutive potential equity shares are deemed converted
as of the beginning of the reporting date, unless they
have been issued at a later date. Dilutive potential
equity shares are determined independently for each
period presented. The number of equity shares and
potentially dilutive equity shares are adjusted for
bonus shares, as appropriate.