1. Company Overview and Accounting Policies
1.01. Company Overview
Ksolves India Limited (the "Company") is a Company incorporated on 17 July 2014, under the
Companies Act, 2013 with the Registrar of Companies, Delhi bearing Registration No. 269020
and limited by shares (CIN: L72900DL2014PLC269020). Its authorized share capital is Rs.
120000000 and its paid up capital is INR 11,85,60,000. It is involved in Other computer related
activities [for example maintenance of websites of other firms/ creation of multimedia
presentations for other firms etc.]. The address of the Company's registered office is 317/276,
Second floor, Lane no.3, Mehrauli Road, Sailaja, Saket, New Delhi South Delhi DL 110030 IN.
The Company has its primary listings on the Bombay Stock Exchange Ltd and National Stock
Exchange of India Limited.
The Standalone financial statements are approved for issue by the Company's Board of
Directors on May 03, 2025
1.02. Basis of Preparation of Financial Statements
Statement of compliance and basis of preparation and presentation
These financial statements are prepared on going concern basis following accrual basis of
accounting and comply with the Indian Accounting Standards (Ind AS) notified under the
Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto,
the Companies Act, 2013 (to the extent notified and applicable).
Basis of preparation
"These Standalone financial statements are prepared in accordance with Indian Accounting
Standard (Ind AS), under the historical cost convention on accrual basis except for certain
financial instruments which are measured at fair values, the provisions of the Companies Act,
2013 (""the Act"") (to the extent notified) and guidelines issued by the Securities and Exchange
Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3
of the Companies (Indian Accounting Standards) Rules, 2015 and relevant amendment rules
issued there after."
a. Use of Estimates
The preparation of the financial statements in conformity with Ind AS requires management to
make estimates, judgments and assumptions. These estimates, judgments and assumptions affect
the application of accounting policies and the reported amounts of assets and liabilities, the
disclosures of contingent assets and liabilities at the date of the financial statements and reported
amounts of revenues and expenses during the period. Application of accounting policies that
require critical accounting estimates involving complex and subjective judgments and the use of
assumptions in these financial statements have been disclosed in Note 2. Accounting estimates
could change from period to period. Actual results could differ from those estimates. Appropriate
changes in estimates are made as management becomes aware of changes in circumstances
surrounding the estimates. Changes in estimates are reflected in the financial statements in the
period in which changes are made and, if material, their effects are disclosed in the notes to the
financial statements.
b. Classification of Assets and Liabilities as Current and Non-Current
The Company presents assets and liabilities in the balance sheet based on current/non-current
classification.
An asset is current when it is:
- Expected to be realized or intended to be sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realized 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 settlement of the liability for at least twelve months
after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets/liabilities are classified as non-current.
c. Operating Cycle
Based on the nature of products/activities of the Company and the normal time between
acquisition of assets and their realisation in cash or cash equivalents, the Company has
determined its operating cycle as 12 months for the purpose of classification of its assets and
liabilities as current and non current.
1.03 Revenue recognition
"The Company derives revenues primarily from IT services comprising software development and
related services, cloud and infrastructure services, maintenance, consulting and package
implementation, licensing of software products and platforms across the Company's core and
digital offerings (together called as "software related services"). Contracts with customers are
either on a time-and-material, unit of work, fixed price or on a fixed-timeframe basis.
Revenues from customer contracts are considered for recognition and measurement when the
contract has been approved in writing, by the parties to the contract, the parties have committed
to perform their obligations under the contract and the contract is legally enforceable. Revenue is
recognized upon transfer of control of promised products or services ('performance obligations')
to customers in an amount that reflects the consideration the Company has received or expects
to receive in exchange for these products or services ('transaction price'). When there is
uncertainty as to collectability, revenue recognition is postponed until such uncertainty is
resolved."
"The Company assesses the services promised in a contract and identifies distinct performance
obligations in the contract. The Company allocates the transaction price to each distinct
performance obligation based on the relative standalone selling price. The price that is regularly
charged for an item, when sold separately, is the best evidence of its standalone selling price. In
the absence of such evidence, the primary method used to estimate standalone selling price is
the expected cost plus a margin, under which the Company estimates the cost of satisfying the
performance obligation and then adds an appropriate margin based on similar services.
The Company's contracts may include variable consideration including rebates, volume discounts
and penalties. The Company includes variable consideration as part of transaction price when
there is a basis to reasonably estimate the amount of the variable consideration and when it is
probable that a significant reversal of cumulative revenue recognized will not occur when the
uncertainty associated with the variable consideration is resolved."
"The billing schedules agreed with customers include periodic performance-based billing and / or
milestone-based progress billings. Revenues in excess of billing are classified as unbilled
revenues, while billing in excess of revenues is classified as contract liabilities (which we refer to
as ""unearned revenues""). In arrangements for software development and related services and
maintenance services, the revenue recognition criteria for each distinct performance obligation is
applied and the arrangements with customers generally meet this criteria for considering
software development and related service as distinct performance obligations. For allocating the
transaction price, the Company measures the revenue in respect of each performance obligation
of a contract at its relative standalone selling price.
The price that is regularly charged for an item when sold separately is the best evidence of its
standalone selling price. In cases where the Company is unable to determine the standalone
selling price, the Company uses the expected cost plus margin approach in estimating the
standalone selling price. For software development and related services, the performance
obligations are satisfied as and when the services are rendered, since the customer generally
obtains control of the work as it progresses.
The Company presents revenues net of indirect taxes in its Statement of Profit and Loss.
1.04 Dividends
Dividends and interim dividends payable to a Company's shareholders are recognized as changes
in equity in the period in which they are approved by the shareholders' meeting and the Board of
Directors respectively.
1.05 Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment,
if any. Costs directly attributable to acquisition are capitalized until the property, plant and
equipment are ready for use, as intended by the management. The charge in respect of periodic
depreciation is derived at after determining an estimate of an asset's expected useful life and the
expected residual value at the end of its life. 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.
The cost of assets not ready to use before such date are disclosed under 'Capital
work-in-progress'. Subsequent expenditures relating to property, plant and equipment is
capitalized 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 recognized in the Statement of Profit and Loss when incurred. The cost and related
accumulated depreciation are eliminated from the financial statements upon sale or retirement of
the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.
1.06 Impairment
Property, plant and equipment 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.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 depreciation) had no impairment loss been recognized for
the asset in prior years.
1.07 Income tax
Tax expense comprises current tax and deferred tax. Current tax expense is recognized in the
statement of profit or loss except to the extent that it relates to items recognized directly in other
comprehensive income or equity, in which case it is recognized in OCI or equity. Current tax is
the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted and as applicable at the reporting date, and any adjustment to tax payable
in respect of previous years. Current taxes are recognized under 'Income tax payable' net of
payments on account, or under 'Tax receivables' where there is a debit balance.
Deferred tax is recognized using the balance sheet method, providing for temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected
to be applied to temporary differences when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are
offset if there is a 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 on 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 realized simultaneously.
Deferred tax is recognized in the statement of profit or loss except to the extent that it relates to
items recognized directly in OCI or equity, in which case it is recognized in OCI or equity. A
deferred tax asset is recognized to the extent that it is probable that future taxable profits will be
available against which the temporary difference can be utilized. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that
the related tax benefit will be realized. Additional income taxes that arise from the distribution of
dividends are recognized at the same time that the liability to pay the related dividend is
recognized.
1.08 Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks, cash in hand and
short-term deposits with an original maturity of twelve months or less, which are subject to an
insignificant risk of changes in value.
1.09 Financial assets and financial liabilities
Financial assets and financial liabilities (financial instruments) are recognised when the Company
becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that
are directly attributable to the acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair value through profit or loss) are added
to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs directly attributable to the acquisition of financial assets or
financial liabilities at fair value through profit or loss are recognised immediately in the Statement
of Profit and Loss.
The financial assets and financial liabilities are classified as current if they are expected to be
realized or settled within operating cycle of the company, otherwise they are classified as
non-current. The classification of financial instruments whether to be measured at Amortized
Cost, at Fair Value Through Profit and Loss (FVTPL) or at Fair Value Through Other
Comprehensive Income (FVTOCI) depends on the objective and contractual terms to which they
relate. Classification of financial instruments are determined on initial recognition.
(i) Financial Assets measured at amortized cost
Financial Assets held within a business whose objective is to hold these assets in order to collect
contractual cash flows 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 are measured at amortized cost using effective interest rate.
The above Financial Assets subsequent to initial recognition are measured at amortized cost
using Effective Interest Rate (EIR) method.The effective interest rate is the rate that exactly
discounts estimated future cash payments or receipts (including all fees and points paid or
received, transaction costs and other premiums or discounts) through the expected life of the
Financial Asset or Financial Liability to the gross carrying amount of the financial asset or to the
amortised cost of financial liability, or, where appropriate, a shorter period, to the net carrying
amount on initial recognition.
(ii) Financial assets at fair value through other comprehensive income (FVOCI)
A financial asset is subsequently measured at fair value through other comprehensive income if it
is 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. The Company has made an irrevocable election for its investments which
are classified as equity instruments to present the subsequent changes in fair value in other
comprehensive income based on its business model.
(iii) Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories are subsequently fair
valued through profit or loss.
(iv) Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest
method, except for contingent consideration recognized in a business combination which is
subsequently measured at fair value through profit or loss. For trade and other payables maturing
within one year from the Balance Sheet date, the carrying amounts approximate fair value due to
the short maturity of these instruments.
(v) Investment in subsidiaries
Investment in subsidiaries is carried at cost in the separate financial statements.
Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from
the financial asset expire or it transfers the financial asset and the transfer qualifies for
derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is
derecognized from the Company's Balance Sheet when the obligation specified in the contract is
discharged or cancelled or expires.
Fair value of Financial Instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods
and assumptions that are based on market conditions and risks existing at each reporting date.
The methods used to determine fair value include discounted cash flow analysis, available
quoted market prices and dealer quotes. All methods of assessing fair value result in general
approximation of value, and such value may never actually be realized.
For financial assets and liabilities maturing within one year from the Balance Sheet date and
which are not carried at fair value, the carrying amounts approximate fair value due to the short
maturity of these instruments.
Impairment
A financial asset is assessed for impairment at each reporting date. A financial asset is
considered to be impaired if objective evidence indicates that one or more events have had a
negative effect on the estimated future cash flows of that asset. However, for trade receivables
or contract assets that result in relation to revenue from contracts with customers, the company
measures the loss allowance at an amount equal to lifetime expected credit losses.
1.10 Employee benefits
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are
expensed as the related service is provided.
A liability is recognized for the amount expected to be paid under performance related pay if the
Company has a present legal or constructive obligation to pay this amount as a result of past
service provided by the employee and the obligation can be estimated reliably.
Post-Employment benefits
Employee benefit that are payable after the completion of employment are Post-Employment
Benefit (other than termination benefit). These are of two types:
i. Defined contribution plans
Defined contribution plans are those plans in which an entity pays fixed contribution into
separate entities and will have no legal or constructive obligation to pay further amounts.
Provident Fund and Employee State Insurance are Defined Contribution Plans in which the
company pays a fixed contribution and will have no further obligation.
ii. Defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
Company pays Gratuity as per provisions of the Gratuity Act, 1972. The Company's net obligation
in respect of defined benefit plans is calculated separately for each plan by estimating the
amount of future benefit that employees have earned in return for their service in the current and
prior periods; that benefit is discounted to determine its present value. Any unrecognized past
service costs and the fair value of any plan assets are deducted. The discount rate is based on
the prevailing market yields of Indian government securities as at the reporting date that have
maturity dates approximating the terms of the Company's obligations and that are denominated
in the same currency in which the benefits are expected to be paid. The calculation is performed
annually by a qualified actuary using the projected unit credit method. When the calculation
results in a liability to the company, the present value of liability is recognized as provision for
employee benefit. Any actuarial gains or losses are recognized in Other Comprehensive Income
("OCI") in the period in which they arise.
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