2. Material accounting policies followed by the
Company

2.1 Basis of Preparation of standalone financial
statement

Basis of preparation

These standalone financial statements have been prepared
in accordance with Indian Accounting Standards (Ind AS)
notified under section 133 of the Companies Act, 2013
(the Act) [Companies (Indian Accounting Standards) Rules,
2015] and other relevant provisions of the Act.

The standalone financial statements have been prepared
on a historical cost basis, except for Derivative financial
instruments, investment in mutual funds and share based
payment arrangements which are measured at fair value;
net defined benefit (asset) / liability is measured at present
value of defined obligation less fair value of plan assets
(refer note 2.10).

The standalone financial statements are presented in
Indian rupees (INR), which is the Company's presentation
and functional currency. All values are rounded off to
nearest million, except when otherwise indicated. Amount
denoted as '0' is less than C 1 million in the standalone
financial statements.

2.2 Property, plant and equipment (‘PPE’)

All items of property, plant and equipment are stated
at historical cost less accumulated depreciation and
accumulated impairment losses, if any. Historical cost
includes expenditure that is directly attributable to the
acquisition of the items. Such cost includes its purchase
price including inward freight, duties, taxes and all
incidental expenses incurred to bring the asset to its
present location and condition.

Subsequent costs are included in the asset's carrying
amount or recognised 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.

Capital work in progress includes cost of PPE under
development as at the Balance Sheet date and is
carried at cost, comprising of direct cost and directly
attributable cost.

The carrying amount of PPE is eliminated from the
standalone financial statements, either on disposal or
when retired from active use. Losses/gains arising on
derecognition of the PPE is recognised in the Standalone
Statement of Profit and Loss.

The carrying amount of any component accounted for
as a separate asset is derecognised when it is replaced or
retired or discarded. All other repairs and maintenance are
charged to standalone statement of profit or loss during
the reporting period in which they are incurred.

Depreciation

Depreciation on PPE is computed using the straight-line
method over the estimated useful lives. The management
basis its past experience has estimated the useful lives,
which is at variance with the life prescribed in Part C of
Schedule II to the Act and has accordingly, depreciated the
assets over such useful lives.

Useful life of assets considered are as below:

2.3 Intangible assets

Intangible assets are recognised when it is probable that
the future economic benefits that are attributable to the
assets will flow to the Company and the cost of the asset
can be measured reliably.

The intangible assets are stated at cost less accumulated
amortization and impairment losses, if any. Cost comprises
of the acquisition price, and any cost directly attributable
and allocable on a reasonable basis for making the asset
ready for its intended use.

Intangible assets under development includes intellectual
property under development as at the balance sheet date.
Product development costs are incurred on developing/
upgrading the software products to launch new service
modules and functionality to provide an enhanced suite
of services. These development costs are capitalized and
recognised as an intangible asset when the following can
be demonstrated:

• The technical feasibility of completing the intangible
asset so that it will be available for use or sale;

• Its ability and intention to use or sell the asset;

• The availability of adequate resources to complete
the development and to use or sell the asset; and

• The ability to measure reliably the expenditure
attributable to the intangible assets and probability of
how the same will generate future economic benefits.

Subsequent expenditure

Subsequent expenditure is capitalized only when it
increases the future economic benefits embodied in
the specific assets to which it relates and the cost of the
asset can be measured reliably. All other expenditure is
recognised in the standalone statement of profit and loss
as incurred.

Amortization

Amortization is recognised in the standalone statement of
profit and loss on a straight-line basis over the estimated
useful lives of the intangible assets from the date that they
are available for use.

The amortisation period and the amortisation method for
an intangible asset are reviewed at the end of each financia l
year. Changes in the expected useful life are considered to
modify the amortisation period and are treated as changes
in accounting estimates.

Intangible assets are amortised over their expected useful
life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired.

An intangible asset is de-recognised on disposal, or when
no future economic benefits are expected from use or
disposal. Gains and losses on disposals are determined by
comparing net disposal proceeds with carrying amount.
These are included in the standalone statement of profit
and loss.

2.4 Impairment of non-financial assets

Consideration is given at each balance sheet date to
determine whether there is any indication of impairment
of the carrying amount of the Company's each class of
non-financial assets. If any indication exists, an asset's
recoverable amount is estimated. An impairment loss
is recognized whenever the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount
is the greater of the net selling price and value in use. In
assessing value in use, the estimated future cash flows are
discounted to their present value based on an appropriate
discount factor. Intangible assets under development are
tested for impairment annually.

Goodwill represents the excess of consideration
transferred, together with the amount of non-controlling

interest in the acquiree, over the fair value of the
Company's share of identifiable net assets acquired.
Goodwill is measured at cost less accumulated impairment
losses. A cash-generating unit to which goodwill has
been allocated is tested for impairment annually, or more
frequently when there is an indication that the unit may
be impaired.

The goodwill acquired in a business combination is, for
the purpose of impairment testing, allocated to cash¬
generating units that are expected to benefit from the
synergies of the combination. Any impairment loss for
goodwill is recognised directly in standalone statement of
profit and loss. They are first used to reduce the carrying
amount of any goodwill allocated to CGU and then to
reduce the carrying amounts of the other assets in the
CGU on a pro rate basis. An impairment loss recognised
for goodwill is not reversed in subsequent periods. In
respect of other assets for which impairment loss has been
recognised in prior periods, the Company reviews at each
reporting date whether there is any indication that the loss
has decreased or no longer exists. An impairment loss is
reversed is there has been a change in the estimates used
to determine the recoverable amount. Such a reversal is
made only to the extent that the asset's carrying amount
does not exceed the carrying amount that would have
been determined, net of depreciation or amortisation, if
no impairment loss had been recognised. On disposal of
a cash-generating unit to which goodwill is allocated, the
goodwill associated with the disposed cash-generating unit
is included in the carrying amount of the cash-generating
unit when determining the gain or loss on disposal.

!.5 Foreign Currency Translation

Functional and presentation currency

Items included in the standalone financial statements of the
Company are measured using the currency of the primary
economic environment in which the entity operates
('the functional currency'). These standalone financial
statements are presented in Indian Rupees (INR), which is
functional and presentation currency of the Company.

Transactions and balances

Transactions in foreign currencies are initially recognised
using exchange rates prevailing on the date of transaction.
Monetary assets and liabilities denominated in foreign
currencies are translated to the functional currency at
the exchange rates prevailing at the reporting date and
foreign exchange gain or loss are recognised in standalone
statement of profit and loss. Non-monetary items that are
measured in terms of historical cost in a foreign currency
are translated using the exchange rates at the dates of the
initial transaction.

!.6 Revenue recognition

Revenue is recognized when the Company satisfies
performance obligations under the terms of its contracts,
and control of the services is transferred to its customers,

in an amount that reflects the consideration the Company
expects to receive from its customers in exchange
for those services. This process involves identifying
the customer contract, determining the performance
obligations in the contract, determining the transaction
price, allocating the transaction price to the distinct
performance obligations in the contract, and recognizing
revenue when the performance obligations have been
satisfied. A performance obligation is considered distinct
from other obligations in a contract when it:

(a) provides a benefit to the customer either on its own
or together with other resources that are readily
available to the customer and;

(b) is separately identified in the contract. The Company
considers a performance obligation satisfied once it
has transferred control of services to the customer,
meaning the customer has the ability to use and
obtain the benefit from the services rendered.

Revenue from time and material contracts is recognised
as and when services are performed on output basis
measured by efforts expended.

Revenue related to fixed price retainership contracts is
recognised based on time elapsed and is recognised on a
straight-line basis over the period of performance.

In respect of other fixed-price contracts, revenue is
recognised using percentage-of-completion method
('POC method') with contract costs incurred determining
the degree of completion of the performance obligation.

Revenue is measured based on the transaction price,
which is the consideration, adjusted for volume discounts,
price concessions and incentives, if any, as specified in the
contract with the customer. Revenue also excludes taxes
collected from customers.

Contract assets are recognised when there is excess
of revenue earned over billings on contracts. Contract
assets are classified as unbilled receivables (only act of
invoicing is pending) when there is unconditional right to
receive cash, and only passage of time is required, as per
contractual terms.

Unearned and deferred revenue ("contract liability”) is
recognised when there are billings in excess of revenues.

The billing schedules agreed with customers include
periodic performance-based payments and / or milestone
based progress payments. Invoices are payable within
contractually agreed credit period.

Contracts are subject to modification to account for
changes in contract specification and requirements. The
Company reviews modification to contract in conjunction
with the original contract, basis which the transaction
price could be allocated to a new performance obligation,
or transaction price of an existing obligation could undergo
a change.

In the event transaction price is revised for existing
obligation, a cumulative adjustment is accounted for.

2.7 Employee benefits
Defined contribution plans

The Company's contribution to Provident fund and Labour
Welfare Fund are considered as defined contribution plans
and are charged as an expense based on the amount of
contribution required to be made as and when services are
rendered by the employees.

Defined benefit plans

For defined benefit plans, the cost of providing benefits is
determined using the Projected Unit Credit Method, with
actuarial valuations being carried out at each balance sheet
date. Remeasurement, comprising actuarial gains and
losses, the effect of the changes to the asset ceiling and
the return on plan assets (excluding interest), is reflected
immediately in the balance sheet with a charge or credit
recognised in other comprehensive income in the period in
which they occur.

The retirement benefit obligations recognised in the
balance sheet represents the present value of the defined
benefit obligations reduced by the fair value of plan assets.
Any asset resulting from this calculation is limited to the
present value of available refunds and reductions in future
contributions to the scheme.

The Company provides benefits such as gratuity to its
employees which are treated as defined benefit plans.

Short-term employee benefits

The undiscounted amount of short-term employee
benefits expected to be paid in exchange for the services
rendered by employees are recognised during the year
when the employees render the service. These benefits
include performance linked incentive which are expected
to occur within twelve months after the end of the period
in which the employee renders the related service.

Compensated absences are measured basis accrual for
unutilized leave balance determined for the entire available
leave balance outstanding to the credit of the employees at
year-end. The leave balance eligible for carry-forward is
valued at gross compensation cost.

2.8 Taxation

Income tax expense represents the sum of the tax
currently payable and deferred tax.

Current tax

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. Taxable profit differs from 'profit
before tax' as reported in the standalone statement of
profit and loss because of items of income or expense that
are taxable or deductible in other years and items that are
not taxable or deductible.

Current tax assets and liabilities are offset only if there is a
legally enforceable right to set off the recognised amounts,
and it is intended to realise the asset and settle the liability
on a net basis or simultaneously.

Deferred tax

Deferred tax is recognised on temporary differences
between the carrying amounts of assets and liabilities in the
standalone financial statements and the corresponding tax
bases used in the computation of taxable profit. Deferred
tax liabilities are generally recognised for all taxable
temporary differences. Deferred tax assets are generally
recognised for all deductible temporary differences to
the extent that it is probable that taxable profits will
be available against which those deductible temporary
differences and the carry forward of unused tax losses
can be utilised. Such deferred tax assets and liabilities are
not recognised if the temporary difference arises from the
initial recognition (other than in a business combination)
of assets and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit at the time of
the transaction and does not give rise to equal taxable and
deductible temporary differences.

The carrying amount of deferred tax assets is reviewed
at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to
be recovered and any such reduction shall be reversed to
the extent that it becomes probable that sufficient taxable
profit will be available.

Deferred tax liabilities and assets are measured at the tax
rates that are expected to apply in the period in which the
liability is settled or the asset realised, based on tax rates
(and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow from the
manner in which the Company expects, at the end of the
reporting period, to recover or settle the carrying amount
of its assets and liabilities.

Deferred tax assets and deferred tax liabilities are offset
when there is a legally enforceable right to set off the
recognized amounts and there is an intention to settle the
asset and the liability on a net basis.

Current and deferred tax for the year

Current and deferred tax are recognised in the standalone
statement of profit and loss, except when they relate to
items that are recognised in other comprehensive income
or directly in equity, in which case, the current and deferred
tax are also recognised in other comprehensive income or
directly in equity respectively.

2.9 Leases

The Company as a lessee

The Company's lease asset classes primarily consist of
leases for office premises and vehicles. The Company
assesses whether a contract contains a lease, at inception
of the 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 recognizes a right-of-use asset ("ROU”) and a
corresponding lease liability 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.

The Company recognises right-of-use asset representing
its right to use the underlying asset for the lease term at the
lease commencement date. The cost of the right -of-use
asset measured at inception shall comprise of the amount
of the initial measurement of the lease liability adjusted for
any lease payments made at or before the commencement
date, plus any initial direct costs incurred and an estimate
of costs to be incurred by the lessee in dismantling and
removing the underlying asset or restoring the underlying
asset or site on which it is located. The right -of-use assets
is subsequently measured at cost less any accumulated
depreciation, accumulated impairment losses, if any and
adjusted for any remeasurement of the lease liability. The
right-of-use assets is depreciated using the straight -line
method from the commencement date over the lease term.

The Company measures the lease liability at the present
value of the lease payments that are not paid at the
commencement date of the lease. The lease payments are
discounted using the incremental borrowing rate. Lease
liabilities are remeasured with a corresponding adjustment
to the related right of use asset if the Company changes its
assessment as to whether it will exercise an extension or a
termination option.

Lease liability and ROU asset have been separately
presented in the Standalone Balance Sheet and lease
payments have been classified as financing activity in
standalone statement of cash flows.

The Company does not have any lease contracts wherein it
acts as a lessor.

2.10 Financial instruments

A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.

A. Financial assets

(i) Classification, recognition and
measurement:

Financial assets are recognized when the Company
becomes a party to the contractual provisions of the
instrument except for trade receivables which are
initially measured at transaction price.

The Company initially classifies its financial assets in
the following measurement categories:

a) those to be measured subsequently at fair value

(either through other comprehensive income,
or through profit and loss), and

All financial assets are recognised initially at fair value and for
those instruments that are not subsequently measured at
FVTPL, they are recorded as plus/minus transaction costs that
are attributable to the acquisition of the financial assets.

Instruments in hedging relationship

The Company is exposed to foreign currency fluctuations on
foreign currency assets, liabilities, net investment in foreign
operations and forecasted cashflows denominated in foreign
currency. The Company limits the effect of foreign exchange
rate fluctuation by following established risk management
policies including the use of derivatives. The Company enters
into derivative financial instruments where the counterparty
is primarily a bank. The Company holds derivative financial
instruments such as foreign exchange forward and
option contracts.

The hedge instruments are designated and documented
as hedges at the inception of the contract. The Company
determines the existence of an economic relationship between
the hedging instrument and hedged item based on the
currency, amount and timing of their respective cash flows.
The effectiveness of hedge instruments to reduce the risk
associated with the exposure being hedged is assessed and
measured at inception and on an ongoing basis. If the hedged
future cash flows are no longer expected to occur, then the

amounts that have been accumulated in other equity are
immediately reclassified in net foreign exchange gains in the
standalone statement of profit and loss.

The effective portion of change in the fair value of the designated
hedging instrument is recognised in the other comprehensive
income and accumulated under the heading effective portion of
gains/(Loss) on derivatives designated as cashflow hedge.

The Company separates the intrinsic value and time value of an
option and designates as hedging instruments only the change
in intrinsic value of the option. The change in fair value of the
intrinsic value and time value of an option is recognised in the
other comprehensive income and accounted as a separate
component of equity. Such amounts are reclassified into the
statement of profit and loss when the related hedged items
affect profit and loss.

Hedge accounting is discontinued when the hedging instrument
expires or is sold, terminated or no longer qualifies for hedge
accounting. Any gain or loss recognised in other comprehensive
income and accumulated in equity till that time remains and is
recognised in standalone statement of profit and loss when the
forecasted transaction ultimately affects profit and loss. Any gain
or loss is recognised immediately in the standalone statement of
profit and loss when the hedge becomes ineffective.

Instruments not in hedging relationship

The Company enters in contracts that are effective as hedges
from an economic perspective, but they do not qualify for hedge
accounting. The change in the fair value of such instrument is
recognised in the standalone statement of profit and loss.

(ii) Impairment

In accordance with Ind AS 109, the Company 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, deposits, and
bank balance.

b) Trade receivables

c) Contract assets

The Company follows 'simplified approach' for recognition
of impairment loss allowance on trade receivables which
do not contain a significant financing component.

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

For recognition of impairment loss on other financial
assets and risk exposure, the Company determines that
whether there has been a significant increase in the
credit risk since initial recognition. The Company applies
a simplified approach in calculating ECLs. Therefore, the
Company does not track changes in credit risk, but instead
recognises a loss allowance based on lifetime ECLs at each
reporting date. The Company has established a provision
matrix that is based on its historical credit loss experience,
adjusted for forward-looking factors.

(iii) Derecognition of financial assets:

A financial asset is derecognised only when

(a) The contractual terms to the cash flows from
the financial assets expire or the Company has
transferred the rights to receive cash flows from the
financial asset in which either substantially all of the
risks and rewards of ownership of the financial asset
are transferred or the Company neither transfers
nor retains substantially all of the risks and rewards
of ownership and it does not retain control of the
financial asset.

Financial liabilities and equity instruments:

Debt and equity instruments issued by an entity are
classified as either financial liabilities or as equity in
accordance with the substance of the contractual
arrangements and the definitions of a financial liability and
an equity instrument.

Classification, recognition and measurement:

(a) Equity Instruments:

An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments
issued by the Company are recognised at the
proceeds received, net of direct issue costs.

(b) Financial liabilities:

Initial recognition and measurement:

Financial liabilities are initially recognised at fair value
minus any transaction costs that are attributable to
the issue of the financial liabilities except financial
liabilities at FVTPL which are initially measured at
fair value.

Subsequent measurement:

The financial liabilities are classified for subsequent
measurement into following categories:

- at amortized cost

- at fair value through profit or loss (FVTPL)

(i) Financial liabilities at amortized cost:

The Company is classifying the following under
amortized cost;

- Borrowings from banks

- Borrowings from others

- Trade payables

Amortized cost for financial liabilities represents
amount at which financial liability is measured at
initial recognition minus the principal repayments,
plus or minus the cumulative amortization using the
effective interest method of any difference between
that initial amount and the maturity amount.

(ii) Financial liabilities at fair value through profit
or loss:

Financial liabilities held for trading are measured
at FVTPL.

Financial liabilities at FVTPL are stated at fair value
with any gains or losses arising on remeasurement,
recognised in standalone statement of profit and loss.
The net gain or loss recognised in the standalone
statement of profit and loss incorporates any interest
paid on the financial liability.

Derecognition:

A financial liability is removed from the standalone balance
sheet when the obligation is discharged, or is 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 carrying amounts
extinguished and consideration paid is recognised in the
standalone statement of profit and Loss.

2.11 Fair value measurement:

The Company measures financial instruments such as,
certain investments and derivative instruments, at fair
value at each balance sheet date.

Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.
The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability
takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most
advantageous market for the asset or liability.

The principal or the most advantageous market must be
accessible by the Company.

The fair value of an asset or a liability is measured using
the assumptions that market participants would use
when pricing the asset or liability, assuming that market
participants act in their economic best interest.

All assets and liabilities for which fair value is measured
or disclosed in the standalone financial statements are
categorised within the fair value hierarchy, described as
follows, based on the lowest level input that is significant to
the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities.

• Level 2 — Inputs other than quoted prices included in
Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived
from prices).

• Level 3 — Inputs for the asset or liability that are not
based on observable market data (unobservable
inputs).

Further information about the assumptions made in
measuring fair values is included in the following notes:

Note 2.11: Financial Instruments

Note 2.14: Share-based payment arrangements