2. Material accounting policies
This note provides a list of the material accounting policies adopted in the preparation of these financial statements.
These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1 Basis of preparation and measurement
() Basis of preparation
These standalone financial statements have been prepared in accordance with the Indian Accounting
Standards ('Ind AS') as per the Companies (Indian Accounting Standards) Rules, 2015, as amended from
time to time, notified under section 133 of the Companies Act, 2013 ('Act') and other relevant provisions
of the Act.
The statement of cash flows have been prepared under indirect method.
These standalone financial statements have been prepared in Indian Rupee () which is the functional
currency of the Company. All amounts have been rounded to the nearest lakhs, unless otherwise indicated.
(ii) Basis of measurement
The financial statements have been prepared on a going concern basis using historical cost convention
and on accrual method of accounting, except for the certain financials assets and liabilities which have
been measured at fair value except for the following items:
a. Certain financial assets and liabilities (including derivative instruments) measured at fair value
where Ind AS requires a different accounting treatment (refer accounting policy regarding financial
instruments).
b. Defined benefit assets / (liability) measured at fair value of plan assets (if any) less the present
value of defined benefit obligation.
c. Optionally Convertible Debentures measured at fair value
(iii) Current /non-current classification
Based on the time involved between the acquisition of assets for processing and their realization in cash
and cash equivalents, the Company has identified twelve months as its operating cycle for determining
current and non-current classification of assets and liabilities in the balance sheet.
2.1 Recent Pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31 March
2026, MCA has notified Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 - Leases relating to
sale and leaseback transactions. The Group has reviewed the new pronouncements and based on its evaluation
has determined that it does not have any significant impact in its financial statements.
2.2 Use of estimates
The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires
the management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
income and expenses disclosure of contingent liabilities and contingent assets at the date of the financial
statements and the results of operations during the reporting period. The actual results could differ from
those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.
2.3 Critical accounting estimates, assumptions and judgements
In the process of applying the Company's accounting policies, management has made the following estimates,
assumptions and judgements, which have significant effect on the amounts recognised in the financial
statement:
a) Income taxes
Management judgment is required for the calculation of provision for income taxes and deferred tax
assets and liabilities. The Company reviews at each balance sheet date the carrying amount of deferred
tax assets. The factors used in estimates may differ from actual outcome which could lead to significant
adjustment to the amounts reported in the financial statements. (refer note 46)
b) Contingencies
Management judgement is required for estimating the possible outflow of resources, if any, in respect
of contingencies/claim/litigations against the Company as it is not possible to predict the outcome of
pending matters with accuracy. (refer note 35)
c) Allowance for uncollected trade receivable, unbilled revenue, contract assets and advances
Trade receivables do not carry any interest and are stated at their amortised cost as reduced by
appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off
when management deems them not to be collectible. Impairment is made on the expected credit losses,
which are the present value of the cash shortfall over the expected life of the financial assets. (refer note
32 (ia))
d) Liquidated damages
Liquidated damages payable are estimated and recorded as per contractual terms; estimate may vary
from actual as levied by customer.
e) Impairment of investments
Investments in subsidiaries are reviewed for impairment, whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. Such circumstances include, though are not
limited to, significant or sustained decline in revenues or earnings and material adverse changes in the
economic environment. (refer note 5)
Impairment test is performed at entity level. An impairment loss is recognised whenever the carrying
amount of investment exceeds its recoverable amount.
The recoverable amount is the greater of its fair value less costs to sell and value in use. To calculate
value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market rates and the risks specific to the asset. The calculation involves
use of significant estimates and assumptions which include turnover and gross margin, growth rate and
net margin used to calculate projected future cash flows, discount rate and long term growth rate.
Estimation of fair value of Optionally Convertible Debentures issued by a wholly owned subsidiary is
estimated basis the future collection of assigned assets.
f) Revenue recognition
The Company's contracts with customers could include promises to transfer multiple products and
services to a customer. The Company assesses the products / services promised in a contract and
identifies distinct performance obligations in the contract. Identification of distinct performance obligation
involves judgement to determine the deliverables and the ability of the customer to benefit independently
from such deliverables. (refer note 25)
Judgement is also required to determine the transaction price for the contract. The transaction price
could be either a fixed amount of customer consideration or variable consideration with elements such
as volume discounts, service level credits, performance bonuses, price concessions and incentives. The
transaction price is also adjusted for the effects of the time value of money if the contract includes a
significant financing component. Any consideration payable to the customer is adjusted to the transaction
price, unless it is a payment for a distinct product or service from the customer. The estimated amount
of variable consideration is adjusted in the transaction price only to the extent that it is highly probable
that a significant reversal in the amount of cumulative revenue recognised will not occur and is reassessed
at the end of each reporting period. The Company allocates the elements of variable considerations to
all the performance obligations of the contract unless there is observable evidence that they pertain to
one or more distinct performance obligations.
The Company uses judgement to determine an appropriate standalone selling price for a performance
obligation. In case of multiple performance obligations the Company allocates the transaction price to
each performance obligation on the basis of the relative standalone selling price of each distinct product
or service promised in the contract. Where standalone selling price is not observable, the Company
uses the expected cost plus margin approach to allocate the transaction price to each distinct performance
obligation.
The Company exercises judgement in determining whether the performance obligation is satisfied at a
point in time or over a period of time. The Company considers indicators such as how customer consumes
benefits as services are rendered or who controls the asset as it is being created or existence of enforceable
right to payment for performance to date and alternate use of such product or service, transfer of
significant risks and rewards to the customer, acceptance of delivery by the customer, etc.
Revenue for fixed-price contract is recognised using percentage-of-completion method. The Company
uses judgement to estimate the future cost-to-completion of the contracts which is used to determine
the degree of completion of the performance obligation.
2.4 Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment (including capital-
work-in progress) are stated at historical cost less accumulated depreciation and any accumulated impairment
losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. The
gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined
as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the
statement of profit and loss on the date of disposal or retirement.
Cost of any item of property, plant and equipment comprises its purchase price, including import duties and
non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of
bringing the item to its working condition for its intended use.
Subsequent costs are capitalised on the carrying amount or recognised as a separate asset, as appropriate,
only when future economic benefits associated with the item are probable to flow to the Company and cost
of the item can be measured reliably. All other repair and maintenance are charged to statement of profit and
loss during the reporting period in which they are incurred.
Depreciation is calculated on the cost of items of property, plant and equipment less their estimated residual
values using the straight-line method over their estimated useful lives and is generally recognised in the
statement of profit and loss. Freehold land is not depreciated.
The estimated useful lives of property, plant and equipment for current and comparative periods are as
follows:
Assets residual values, depreciation method and useful lives are reviewed at each financial year end considering
the physical condition of the assets or whenever there are indicators for review and adjusted residual life
prospectively. An asset's carrying amount is written down immediately to its recoverable amount if the asset's
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount.
2.5 Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets
acquired in a business combination is recognised at fair value at the date of acquisition. An intangible asset is
recognised only if it is probable that future economic benefits attributable to the asset will flow to the Company
and the cost of the asset can be measured reliably. Following initial recognition, other intangible assets,
including those acquired by the Company in a business combination and have finite useful lives are measured
at cost less accumulated amortisation and any accumulated impairment losses
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates and the cost of the asset can be measured reliably. All other expenditure,
including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using
the straight-line method over their estimated useful lives and is generally recognised in depreciation and
amortisation in Statement of profit and loss. Goodwill is not amortised.
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if
appropriate. Intangible assets (other than Goodwill) are amortised at straight line basis as follows:
Intellectual Property Rights 7 years
Software 1-5 years
2.6 LeasesAs a lessee
As a lessee, the Company leases many assets including properties and office equipment. The Company
previously classified leases as operating or finance leases based on its assessment of whether the lease
transferred significantly all of the risks and rewards incidental to ownership of the underlying asset to the
Company. Under IND AS 116, the Company recognises right-of-use assets and lease liabilities for most of
these leases - i.e. these leases are on-balance sheet.
At commencement or on modification of a contract that contains a lease component, the Company allocates
the consideration in the contract to each lease component on the basis of its relative stand-alone price.
However, for leases of property the Company has elected not to separate non-lease components and account
for the lease and associated non-lease components as a single lease component
As a lessor
Lease income from operating leases where the Company is a lessor is recognised as income on a straight-line
basis over the lease term unless the receipts are structured to increase in line with expected general inflation
to compensate for the expected inflationary cost increases. The respective leased assets are included in the
balance sheet based on their nature.
Assets given under finance lease are recognised as receivables at an amount equal to the net investment in
the lease. Inventories given on finance lease are recognised as deemed sale at fair value. Lease income is
recognised over the period of the lease so as to yield a constant rate of return on the net investment in the
lease.
2.7 Financial instruments
A. Financial instruments - Initial recognition and measurement
Financial assets and financial liabilities are recognised in the Company's balance sheet when the Company
becomes a party to the contractual provisions of the instrument. The Company determines the
classification of its financial assets and liabilities at initial recognition. All financial assets and liabilities
are initially recognised at fair value plus directly attributable transaction costs in case of financial assets
and liabilities not at fair value through profit or loss. Financial assets and liabilities carried at fair value
through profit or loss are initially recognised at fair value, and transaction costs are expensed in the
statement of profit and loss.
B. Financial assets
1. Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Debt instrument
a. Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading
and those designated upon initial recognition at fair value through profit or loss. Financial
assets are classified as held for trading if they are acquired for the purpose of selling in the
near term. Derivatives are classified as held for trading unless they are designated as effective
hedging instruments. Financial assets are designated upon initial recognition at fair value
through profit or loss when the same are managed by the Company on the basis of their fair
value and their performance is evaluated on fair value basis in accordance with a risk
management or investment strategy of the Company. Financial assets at fair value through
profit or loss are carried in the balance sheet at fair value with changes in fair value recognised
in other income in the statement of profit and loss.
b. Financial assets measured at amortised cost
Loans and receivables are non-derivative financial assets that are held for collection of
contractual cash flows, where the assets' cash flows represent solely payments of principal
and interest, are measured at amortised cost. Interest income from these financial assets is
included in other income in the statement of profit and loss.
c. Fair value through other comprehensive income (FVOCI):
Financial assets are measured at fair value through other comprehensive income (OCI) if
these financial assets are held within a business model whose objective is achieved by both
collecting contractual cash flows and selling financial assets and the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding. 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 statement of 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.
Investment in subsidiaries
Investment in subsidiaries is carried at cost in standalone financial statement.
2. Derecognition
The Company derecognises a financial asset only when the contractual rights to the cash flows
from the asset expires or it transfers the financial asset and substantially all the risks and rewards
of ownership of the asset.
C. Financial liabilities
1. Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities measured at amortised cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest rate method. Amortised cost is calculated by taking
into account any discount or premium on acquisition and fee or costs that are an integral part of
the effective interest rate method. The effective interest rate method's amortisation is included in
finance costs in the statement of profit and loss.
2. Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires. 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 a derecognition of the original liability and the recognition
of a new liability, and the difference in the respective carrying amounts is recognised in the statement
of profit and loss.
3. Financial Liabilities - Non-Convertible Debentures
Non-convertible debentures (NCDs) issued by the Company are recognised as financial liabilities.
Initial Measurement
The debentures are initially recognised at fair value, determined using market based discount
rate. Any difference between fair value and transaction proceeds is accounted for as an equity
contribution in case of related parties.
Subsequent Measurement
The debentures are subsequently measured at amortised cost using the effective interest rate
(EIR) method, where the EIR approximates the market rate (8%).
Put Option Consideration
As the holder has a put option exercisable after one year, the liability is considered to have a
contractual maturity of one year for measurement and classification purposes.
D. Offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if,
and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
E. Derivative financial instruments - current versus non-current classification
Derivative instruments will be held for a period beyond twelve months after the reporting date, are
classified as noncurrent (or separated into current and non-current portions) consistent with the
classification of the underlying item. These are classified as current, when the remaining holding period
is up to twelve months after the reporting date.
F. Fair value measurement
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the 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) marked prices in the active markets for identical assets or liabilities
Level 2- Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
Level 3- Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
2.8 Income 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 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 tax is recognised in respect of temporary difference between the carrying amounts of assets and
liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred
tax is also recognised of carried forward tax losses and tax credits. Deferred tax is not recognised for:
- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not
a business combination and that affects neither accounting nor taxable profit or loss at the time of
transaction; and
- Taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available
against which they can be used. The existence of unused tax losses is strong evidence that future taxable
profit may not be available. Therefore in case of a history of recent losses, the Company recognised a deferred
tax assets only to the extent that it has sufficient taxable temporary differences or there is convincing other
evidence that sufficient taxable profit will be available against which such deferred tax assets can be realised.
Deferred tax assets-unrecognised or recognised, are reviewed at each reporting date and are recognised /
reduced to the extent that it is probable/no longer probable respectively that the related tax benefit will be
realised.
Deferred tax is measured at the tax rates that are expected to apply to the period when the assets is realised
or the liability is settled based on the laws that have been enacted or substantively enacted by the reporting
date.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in which
the Company expects, at the reporting date, to recover or settle the carrying amounts of its assets and
liabilities.
Deferred tax assets and liabilities are offset if there is legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or no
different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets
and liabilities will be realised simultaneously.
2.9 Inventories
Raw materials, stock-in-trade and finished goods are stated at the lower of cost and net realisable value.
Cost of raw materials and stock-in-trade comprises cost of purchases. Cost of finished goods comprises
direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the
latter being allocated on the basis of normal operating capacity. Cost of inventories also includes all other
costs incurred in bringing the inventories to their present location and condition. Cost is determined on the
basis of weighted average. Costs of purchased inventory are determined after deducting rebates and discounts.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs
of completion and the estimated costs necessary to make the sale.
Goods in-transit is valued inclusive of custom duty, where applicable.
2.10 Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on
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.
2.11 Impairment of assets
a. Financial assets
The Company assesses on a forward looking basis the expected credit losses associated with its assets
carried at amortised cost and FVOCI. The impairment methodology applied depends on 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.
b. Non-financial assets
Intangible assets and property, plant and equipment
Intangible assets and property, plant and equipment are reviewed for impairment, whenever events or
changes in circumstances indicate that the carrying amount 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 CGU to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the statement of profit
and loss is measured by the amount by which the carrying value of the assets exceeds the estimated
recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if
there has been a change in the estimates used to determine the recoverable amount. The carrying
amount of the asset is increased to its revised recoverable amount, provided that this amount does not
exceed the carrying amount that would have been determined (net of any accumulated amortization or
depreciation) had no impairment loss been recognized for the asset in prior years.
c. Investment in subsidiaries
Investments in subsidiaries are reviewed for impairment, whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. Such circumstances include, though are not
limited to, significant or sustained decline in revenues or earnings and material adverse changes in the
economic environment.
Impairment test is performed at entity level. An impairment loss is recognised whenever the carrying
amount of Investment exceeds its recoverable amount.
The recoverable amount is the greater of its fair value less costs to sell and value in use. To calculate
value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market rates and the risks specific to the asset.
Fair value less costs to sell is the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants less the costs of disposal. Impairment losses, if
any are recognised in the statement of profit and loss.
Other impairment losses are only reversed to the extent that the asset's carrying amount does not
exceed the carrying amount that would have been determined if no impairment loss had previously
been recognised.
2.12 Non-current assets (or disposal groups) held for sale
Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to
be recovered principally through a sale transaction and a sale is considered highly probable. The sale is
considered highly probable only when the asset or disposal group is available for immediate sale in its present
condition, it is unlikely that the sale will be withdrawn and sale is expected within one year from the date of
the classification. Disposal groups classified as held for sale are stated at the lower of carrying amount and
fair value less costs to sell. Property, plant and equipment and intangible assets are not depreciated or amortised
once classified as held for sale. Assets and liabilities classified as held for sale are presented separately in the
balance sheet.
If the criteria stated by Ind AS 105 "Non-current Assets Held for Sale and Discontinued Operations" are no
longer met, the disposal group ceases to be classified as held for sale. Non-current asset that ceases to be
classified as held for sale are measured at the lower of (i) its carrying amount before the asset was classified
as held for sale, adjusted for depreciation that would have been recognised had that asset not been classified
as held for sale, and (ii) its recoverable amount at the date when the disposal group ceases to be classified as
held for sale.
2.13 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 and are usually paid in accordance with the
terms with the vendors. 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.
2.14 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 statement of profit and 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 statement of profit and loss as other gains/(losses).
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.
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