2. MATERIAL ACCOUNTING POLICIES2.1 Statement of Compliance and basis of
preparation

The standalone financial statements (SFS) of the Company
have been prepared in accordance with Indian Accounting
Standards (Ind AS) notified under the Companies (Indian
Accounting Standards) Rules, 2015 (as amended from time
to time) and presentation requirements of Division II of
Schedule III to the Companies Act, 2013, (Ind AS compliant
Schedule III), as applicable to the SFS.

The standalone financial statements have been prepared on
a historical cost basis, except for the following assets and
liabilities which have been measured at fair value:

• Derivative financial instruments (refer note 37),

• Certain financial assets and liabilities measured at
fair value (refer accounting policy regarding financial
instruments) (refer note 34); and

• Equity settled ESOP at grant date fair value

• Defined benefit plans, plan assets measured at fair
value; (refer accounting policy on defined benefit plans
for details).

The accounting policies and related notes further described
the specific measurements applied for each of the assets
and liabilities.

The Standalone financial statements are presented in
INR and all values are rounded off to the nearest lakhs
(INR 00,000), except when otherwise indicated.

The Company has prepared the standalone financial
statements on the basis that it will continue to operate as a
going concern.

2.2 Summary of material accounting policies

This note provides a list of the material accounting policies
adopted in preparation of these standalone financial
statements. These policies have been consistently applied
for all the years presented, unless otherwise stated.

a. Use of Estimates and judgements

The preparation of standalone financial statements in
conformity with Ind AS requires the management to
make judgments, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the
end of the reporting year. Although these estimates are
based on the management's best knowledge of current
events and actions, uncertainty about these assumptions
and estimates could result in the outcomes requiring a
material adjustment to the carrying amounts of assets or
liabilities in future periods.

The key assumptions concerning the future and other key
sources of estimation uncertainty at the reporting date,
that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the
next financial year. The Company based its assumptions
and estimates on parameters available when the standalone
financial statements were prepared. Existing circumstances
and assumptions about future developments, however, may
change due to market changes or circumstances arising
that are beyond the control of the Company. Such changes
are reflected in the assumptions when they occur.

The areas involving higher degree of judgement or
complexity, or areas where assumptions and estimates
are significant to the financial statements are disclosed
in Note 38.

b. Current versus non current classification

The Company segregates assets and liabilities into current
and non current categories for presentation in the balance
sheet after considering its normal operating cycle and
other criteria set out in Ind AS 1, "Presentation of Financial
Statements”. For this purpose, current assets and liabilities
include the current portion of non current assets and
liabilities respectively. Deferred tax assets and liabilities are
always classified as non current.

The operating cycle is the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents. The Company has identified period up to twelve
months as its operating cycle.

c. Foreign currencies

The Company's standalone financial statements are
presented in INR, which is also the Company's functional
currency.

(i) Transactions and balances

Transactions in foreign currencies are initially recorded by
the Company at functional currency spot rates at the date
the transaction first qualifies for recognition. However, for
practical reasons, the Company uses average rate if the
average approximates the actual rate at the date of the
transaction.

Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency spot
rates of exchange at the reporting date.

Exchange differences arising on settlement or translation of
monetary items are recognised in profit or 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 transactions.

d. Investment in subsidiaries

The Company's investments in its subsidiaries are accounted
at cost less accumulated impairment losses (if any).

Impairment of investments

The Company reviews its carrying value of investments
carried at cost annually, or more frequently when there is
indication for impairment. If the recoverable amount is less
than its carrying amount, the impairment loss is recorded in
the Statement of Profit and Loss.

When an impairment loss subsequently reverses, the
carrying amount of the Investment is increased to the
revised estimate of its recoverable amount, so that the
increased carrying amount does not exceed the cost of the
Investment. A reversal of an impairment loss is recognised
immediately in P&L.

e. Fair value measurement

The Company measures financial instruments, such as,
investments in mutual funds, 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.

A fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the
asset in its highest and best use.

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) market prices in 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.

For assets and liabilities that are recognised in the financial
statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the
hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement
as a whole) at the end of each reporting period.

For the purpose of fair value disclosures, the Company has
determined classes of assets and liabilities on the basis of
the nature, characteristics and risks of the asset or liability
and the level of the fair value hierarchy as explained above.

This note summarises accounting policy for fair value. Other
fair value related disclosures are given in the relevant notes.

• Disclosures for valuation methods, significant estimates
and assumptions (note 38)

• Quantitative disclosures of fair value measurement
hierarchy (note 35)

• Financial instruments (including those carried at
amortised cost) (note 9)

f. Revenue Recognition

Revenue from contracts with customers

Revenue from information technology and related services
include revenue earned from services rendered on 'time and
material' basis and fixed price development contracts.

Revenue is recognised upon transfer of control of promised
services to customers in an amount that reflects the
consideration the Company expects to receive in exchange
for those services, net of indirect taxes, discounts, rebates,

credits, price concessions, or other similar items. Revenue
from time and material contracts is recognised as the
related services are performed and revenue from the end
of the last invoicing to the reporting date is recognised as
unbilled revenue.

Revenue on fixed price development contracts is
recognised using the 'percentage of completion' method of
accounting, unless work completed cannot be reasonably
estimated. Percentage of completion is determined based
on project costs incurred to date as a percentage of total
estimated project costs required to complete the project.
The cost expended (or input) method has been used to
measure progress towards completion as there is a direct
relationship between input and productivity. If the Company
does not have a sufficient basis to measure the progress of
completion or to estimate the total contract revenues and
costs, revenue is recognised only to the extent of contract
cost incurred for which recoverability is probable. When
total cost estimates exceed revenues in an arrangement,
the estimated losses are recognised in the statement of
profit and loss in the period in which such losses become
probable based on the current contract estimates.

Contract assets

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

Contract liabilities

A contract liability ("Unearned revenue”) is recognised if
a payment is received or a payment is due (whichever is
earlier) from a customer before the Company transfers
the related goods or services. Contract liabilities are
recognised as revenue when the Company performs under
the contract (i.e., transfers control of the related goods or
services to the customer).

g. Taxes

Current income tax

Current income tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted,
at the reporting date in the countries where the Company
operates and generates taxable income.

Current income tax relating to items recognised outside
profit or loss is recognised outside profit or loss (either in
other comprehensive income or in equity). Current tax items
are recognised in correlation to the underlying transaction
either in OCI or directly in equity. Management periodically
evaluates positions taken in the tax returns with respect to
situations in which applicable tax regulations are subject to
interpretation and considers whether it is probable that a
taxation authority will accept an uncertain tax treatment.
The Company shall reflect the effect of uncertainty for each
uncertain tax treatment by using either most likely method
or expected value method, depending on which method
predicts better resolution of the treatment.

The Company has availed certain tax incentives that
the Government of India has provided to the export of
software services for the units registered under the Special
Economic Zones Act, 2005 (SEZ). SEZ units which began the
provision of services on or after April 1, 2005 are eligible for
a deduction of 100 % of profits or gains derived from the
export of services for the first five years from the financial
year in which the unit commences the provision of services
and 50 % of such profits or gains for further five years.

Deferred tax

Deferred tax is provided using the balance sheet approach
on temporary differences between the tax base of assets and
liabilities and their carrying amounts for financial reporting
purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable
temporary differences, except:

• When the deferred tax liability arises from the initial
recognition of goodwill or an asset or liability in a
transaction that is not a business combination and,
at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss and does
not give rise to equal taxable and deductible temporary
differences;

• In respect of taxable temporary differences associated
with investments in subsidiaries, when the timing of the
reversal of the temporary differences can be controlled
and it is probable that the temporary differences will
not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible
temporary differences and the carry forward of unused tax
credits. Deferred tax assets are recognised to the extent
that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry
forward of unused tax credits can be utilised, except:

• When the deferred tax asset relating to the deductible
temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss
and does not give rise to equal taxable and deductible
temporary differences;

• In respect of deductible temporary differences
associated with investments in subsidiaries, deferred
tax assets are recognised only to the extent that it is
probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be
available against which the temporary differences can
be utilised.

The carrying amount of deferred tax assets is reviewed at
each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available
to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each
reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the
deferred tax asset to be recovered.

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

Deferred tax relating to items recognised outside profit
or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Deferred tax items
are recognised in correlation to the underlying transaction
either in OCI or directly in equity.

The Company offsets deferred tax assets and deferred
tax liabilities if and only if it has a legally enforceable right
to set off current tax assets and current tax liabilities and
the deferred tax assets and deferred tax liabilities relate to
income taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities which
intend either to settle current tax liabilities and assets on
a net basis, or to realise the assets and settle the liabilities
simultaneously, in each future period in which significant
amounts of deferred tax liabilities or assets are expected to
be settled or recovered.

Minimum alternate tax (MAT) paid in a year is charged to
the statement of profit and loss as current tax for the year.
The deferred tax asset is recognised for MAT credit available
only to the extent that it is probable that the concerned
company will pay normal income tax during the specified
period, i.e., the period for which MAT credit is allowed to
be carried forward. In the year in which the company
recognizes MAT credit as an asset, it is created by way of
credit to the statement of profit and loss and shown as part
of deferred tax asset. The Company reviews the "MAT credit
entitlement” asset at each reporting date and writes down
the asset to the extent that it is no longer probable that it will
pay normal tax during the specified period.

Goods and Services Tax (GST)/value added taxes paid on
acquisition of assets or on incurring expenses.

Expenses and assets are recognised net of the amount of
GST/value added taxes paid, except:

• When the tax incurred on a purchase of assets or
services is not recoverable from the taxation authority,
in which case, the tax paid is recognised as part of the
cost of acquisition of the asset or as part of the expense
item, as applicable;

• When receivables and payables are stated with the
amount of tax included.

The net amount of tax recoverable from, or payable to, the
taxation authority is included as part of other current/non
current assets/liabilities in the balance sheet.

h. Property, plant and equipment

Items of property, plant and equipment are stated at
cost, net of accumulated depreciation and accumulated
impairment losses, if any. Likewise, when a major inspection
is performed, its cost is recognised in the carrying amount of
the plant and equipment as a replacement if the recognition
criteria are satisfied. All other repair and maintenance costs
are recognised in profit or loss as incurred.

Capital work in progress is stated at cost, net of accumulated
impairment loss, if any.

Depreciation is calculated on a straight-line basis over
the estimated useful lives of the assets as follows. When
significant parts of plant and equipment are required to
be replaced at intervals, the Company depreciates them
separately based on their specific useful lives.

The management believes that these estimated useful lives
are realistic and reflect fair approximation of the period over
which the assets are likely to be used.

Depreciation on additions is provided on pro-rata basis from
the date of such additions.

An item of property, plant and equipment and any significant
part initially recognised is derecognised upon disposal or
when no future economic benefits are expected from its
use or disposal. Any gain or loss arising on derecognition
of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is
included in the statement of profit and loss when the asset
is derecognised.

The residual values, useful lives and methods of depreciation
of property, plant and equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate.
The residual values are not more than 5% of the original cost
of the asset.

i. Intangible assets

Intangible assets acquired separately are measured on initial
recognition at cost. The cost of intangible assets acquired
in a business combination is their fair value at the date of
acquisition. Following initial recognition, intangible assets
are carried at cost less any accumulated amortisation and
accumulated impairment losses.

Intangible assets with finite lives are amortised over the useful
economic life and assessed for impairment whenever there
is an indication that the intangible asset may be impaired.
The amortisation period and the amortisation method for an
intangible asset with a finite useful life are reviewed at least at
the end of each reporting period. Changes in the expected
useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to
modify the amortisation period or method, as appropriate,
and are treated as changes in accounting estimates. 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.

An intangible asset is derecognised upon disposal (i.e., at
the date the recipient obtains control) or when no future
economic benefits are expected from its use or disposal.
Any gain or loss arising upon derecognition of the asset
(calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included
in the statement of profit and loss when the asset is
derecognised.

Research and development costs

Research costs are expensed as incurred. Development
expenditures on an individual project are recognised as an
intangible asset when the Company can demonstrate:

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

• Its intention to complete and its ability and intention to
use or sell the asset

• How the asset will generate future economic benefits

• The availability of resources to complete the asset

• The ability to measure reliably the expenditure during
development

Following initial recognition of the development
expenditure as an asset, the asset is carried at cost less any
accumulated amortisation and accumulated impairment
losses. Amortisation of the asset begins when development
is complete, and the asset is available for use. It is amortised
over the period of expected future benefit. Amortisation
expense is recognised in the P&L unless such expenditure
forms part of carrying value of another asset. During the
period of development, the asset is tested for impairment
annually.

j. Leases

The Company assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for
a period of time in exchange for consideration.

Company as a lessee

The Company applies a single recognition and measurement
approach for all leases, except for short-term leases and
leases of low-value assets. The Company recognises lease
liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.

i) Right-of-use assets

The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are
measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement
of lease liabilities. The cost of right-of-use assets includes
the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the
commencement date less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis
over the shorter of the lease term and the estimated useful
lives of the assets, as follows:

• Office Premises 5-7 years

If ownership of the leased asset transfers to the Company
at the end of the lease term or the cost reflects the exercise
of a purchase option, depreciation is calculated using the
estimated useful life of the asset.

The right-of-use assets are also subject to impairment.
Refer to the accounting policies in section (k) Impairment of
non-financial assets.

ii) Lease Liabilities

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present value of
lease payments to be made over the lease term. The lease
payments include fixed payments (including in substance
fixed payments) less any lease incentives receivable,
variable lease payments that depend on an index or a rate,
and amounts expected to be paid under residual value
guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised
by the Company and payments of penalties for terminating
the lease, if the lease term reflects the Company exercising
the option to terminate. Variable lease payments that do not
depend on an index or a rate are recognised as expenses in
the period in which the event or condition that triggers the
payment occurs.

In calculating the present value of lease payments, the
Company uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the
lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the
accretion of interest and reduced for the lease payments
made. In addition, the carrying amount of lease liabilities is
remeasured if there is a modification, a change in the lease
term, a change in the lease payments (e.g., changes to
future payments resulting from a change in an index or rate
used to determine such lease payments) or a change in the
assessment of an option to purchase the underlying asset.

iii) Short-term leases and leases of low-value assets

The Company applies the short-term lease recognition
exemption to its short-term leases of computers and
equipment (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).

The Company applies the low-value assets recognition
exemption on a lease-by-lease basis, to leases of office
equipment that are considered to be low value. Lease
payments on short-term leases and leases of low-value
assets are recognised as expense on a straight-line basis
over the lease term.

k. Impairment of non-financial assets

The Company assesses, at each reporting date, whether
there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for
an asset is required, the Company estimates the asset's
recoverable amount. An asset's recoverable amount is
the higher of an asset's or cash-generating unit's (CGU)
fair value less costs of disposal and its value in use. The
recoverable amount is determined for an individual asset,
unless the asset does not generate cash inflows that are
largely independent of those from other assets or group
of assets. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered
impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. In
determining fair value less costs of disposal, recent market
transactions are taken into account. If no such transactions
can be identified, an appropriate valuation model is used.
These calculations are corroborated by valuation multiples,
quoted share prices for publicly traded companies or other
available fair value indicators.

The Company bases its impairment calculation on detailed
budgets and forecast calculations, which are prepared
separately for each of the Company's CGUs to which the
individual assets are allocated. These budgets and forecast
calculations generally cover a period of five years. For longer
periods, a long-term growth rate is calculated and applied
to project future cash flows after the fifth year. To estimate
cash flow projections beyond periods covered by the most
recent budgets/forecasts, the Company extrapolates cash
flow projections in the budget using a steady or declining
growth rate for subsequent years, unless an increasing
rate can be justified. In any case, this growth rate does not
exceed the long-term average growth rate for the products,
industries, or country or countries in which the Company
operates, or for the market in which the asset is used.

Impairment losses of non-financial assets are recognised in
the statement of profit and loss.

For assets excluding goodwill, an assessment is made
at each reporting date to determine whether there is an
indication that previously recognised impairment losses
no longer exist or have decreased. If such indication exists,
the Company estimates the asset's or CGU's recoverable
amount. A previously recognised impairment loss is reversed
only if there has been a change in the assumptions used
to determine the asset's recoverable amount since the last
impairment loss was recognised. The reversal is limited so
that the carrying amount of the asset does not exceed its

recoverable amount, nor exceed the carrying amount that
would have been determined, net of depreciation, had
no impairment loss been recognised for the asset in prior
years. Such reversal is recognised in the statement of profit
and loss unless the asset is carried at a revalued amount, in
which case, the reversal is treated as a revaluation increase.

Goodwill is tested for impairment annually as at 31 December
and when circumstances indicate that the carrying value
may be impaired.

Impairment is determined for goodwill by assessing the
recoverable amount of each CGU (or group of CGUs) to
which the goodwill relates. When the recoverable amount
of the CGU is less than it's carrying amount, an impairment
loss is recognised. Impairment losses relating to goodwill
cannot be reversed in future periods.