2 Significant accounting policies
This note provides a list of the significant accounting
policies adopted in the preparation of the financial
statements. These policies have been consistently
applied to all the years presented, unless otherwise
stated.
a) Statement of compliance:
The financial statements are prepared in accordance
with Indian Accounting Standards (Ind AS) notified
under the Companies (Indian Accounting Standards)
Rules, 2015 as amended by the Companies (Indian
Accounting Standards) Amendment Rules, 2016
and Companies (Indian Accounting Standards)
Amendment Rules, 2017, the relevant provisions of
the Companies Act, 2013 ('the Act') and guidelines
issued by the Securities and Exchange Board of
India (SEBI), as applicable. Accounting policies
have been consistently applied except where a
newly issued accounting standards are initially
adopted or a revision to an existing accounting
standard requires a change in the accounting policy
hitherto in use.
The Financial Statements of the Company as at
and for the year ended 31st March, 2025 (including
comparatives) were approved and authorised
for issue by the Board of Directors of the
Company.
b) Basis of preparation:
The financial statements have been prepared under
the historical cost convention with the exception
of certain assets and liabilities that are required to
be carried at fair values by Ind AS. 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.
c) Revenue recognition
i. Sale of Services
Unbilled Revenue on incomplete service
contracts are estimated based on the extent of
completion.
Revenue is recognised upon transfer of control
of promised services to customers in an
amount that reflects the consideration which
the Company expects to receive in exchange
for those products or services.
• Revenue from fixed price development
contracts is recognised on output basis
measured by units delivered, efforts
expended, number of transactions
processed, etc.
• Revenue related to fixed price maintenance
and support services contracts where the
Company is standing ready to provide
services is recognised based on time elapsed
mode and revenue is straight lined over the
period of performance.
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.
ii. Other income:
Interest income is recognized on time propor¬
tion basis taking into account the amount out¬
standing and the rate applicable.
Export Benefit under the Duty Free Credit
Entitlements is recognized in the statement
of profit and loss, when right to receive such
entitlement is established as per terms of the
relevant scheme in respect of exports made
and where there is no significant uncertainty
regarding compliance with the terms and
conditions of such scheme.
d) Borrowing costs
Documentation, Commitment and Service Charges
are spread over the tenure of the finance facil¬
ity.
Borrowing costs include interest, amortization
of ancillary costs incurred and exchange differ¬
ences arising from foreign currency borrowings
to the extent they are regarded as an adjustment
to the interest cost. Costs in connection with the
borrowing of funds to the extent not directly re¬
lated to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over
the tenure of the loan. Borrowing costs, allocated
to and utilized for qualifying assets, pertaining to
the period from commencement of activities relat¬
ing to construction / development of the qualify¬
ing asset upto the date of capitalization of such
asset are included in the cost of the assets. Capi¬
talization of borrowing costs is suspended and
charged to the Statement of Profit and Loss dur¬
ing extended periods when active development
activity on the qualifying assets is interrupted.
Investment income earned on the temporary in¬
vestment of specific borrowings pending their ex¬
penditure on qualifying assets is deducted from
the borrowing cost eligible for capitalization.
Other borrowings costs are expensed in the period
in which they are incurred.
e) Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, including
non-monetary benefits that are expected to
be settled wholly within 12 months after the
end of the period in which the employees
render the related service are recognized in
respect of employees' services up to the end
of the reporting period and are measured
at the amounts expected to be paid when
the liabilities are settled. The liabilities
are presented as current employee benefit
obligations in the balance sheet.
(ii) Other long-term employee benefit obligations
The liabilities for earned leave is not expected
to be settled wholly within 12 months after
the end of the period in which the employees
render the related service. They are therefore
measured at the present value of expected
future payments to be made in respect of
services provided by employees up to the end
of the reporting period using the projected unit
credit method. The benefits are discounted
using the market yields at the end of the
reporting period that have terms approximating
to the terms of the related obligations.
Remeasurements as a result of the experience
adjustments and changes in actuarial
assumptions are recognized in profit or loss.
The obligations are presented as current
liabilities in the balance sheet if the entity
does not have an unconditional right to
defer settlement for at least twelve months
after the reporting period, regardless of when
the actual settlement is expected to occur.
The liability for earned leave is covered
through a recognized Fund managed by
Life Insurance Corporation of India and the
contributions made under the scheme are
charged to Statement of Profit and Loss.
(iii) Gratuity obligations
The liability or assets recognized in the
balance sheet in respect of gratuity plans is the
present value of the defined benefit obligation
at the end of the reporting period less the
fair value of plan assets. The defined benefit
obligation is calculated annually by actuaries
using the projected unit credit method.
The present value of the defined benefit
obligation is determined by discounting the
estimated future cash outflows by reference
to market yields at the end of the reporting
period on government bonds that have terms
approximating to the terms of the related
obligation.
The net interest cost is calculated by applying
the discount rate to the net balance of the
defined benefit obligation and the fair value of
plan assets. This cost is included in employee
benefit expense in the statement of profit and
loss.
Remeasurement gains and losses arising
from experience adjustments and changes in
actuarial assumptions are recognized in the
period in which they occur, directly in other
comprehensive income. They are included
in retained earnings in the statement of
changes in equity and in the balance sheet.
Changes in the present value of the defined
benefit obligation resulting from plan
amendments or curtailments are recognized
immediately in profit or loss.
The gratuity liability is covered through a
recognized Gratuity Fund managed by Life
Insurance Corporation of India and the
contributions made under the scheme are
charged to Statement of Profit and Loss.
iv) Defined contribution plans
The company pays provident fund contributions
to publicly administered funds as per local
regulations. The Company has no further
payment obligations once the contributions
have been paid, the contributions are
accounted for as defined contribution plans
and the contributions are recognized as
employee benefit expense when they are due.
v) Employee share based payments
Stock Options are granted to eligible employees
in accordance with the MTTL Employee Stock
Option Schemes ("MTTL ESOS"), as may be
decided by the Nomination & Compensation
Committee. Eligible employees for this purpose
include (a) such employees of the Company
including Directors and (b) such employees of
the Company's subsidiary companies including
Managing Director / Wholetime Director of a
subsidiary.
Equity- settled share-based payments to
employees are measured at the fair value of
the employee stock options at the grant date.
The fair value determined at the grant date
of the equity-settled share-based payments is
amortised over the vesting period, based on
the Company's estimate of equity instruments
that will eventually vest, with a corresponding
increase in equity. At the end of each
reporting period, the Company revises its
estimate of the number of equity instruments
expected to vest. The impact of the revision
of the original estimates, if any, is recognised
in the Statement of Profit and Loss such that
the cumulative expense reflects the revised
estimate, with a corresponding adjustment to
the equity-settled employee benefits reserve.
f) Income taxes
Tax expense for the year comprises current and
deferred tax.
Current Tax is the amount of tax payable on the
taxable income for the year as determined in
accordance with the applicable tax rates and the
provisions of the Income-tax Act, 1961 and other
applicable tax laws that have been enacted or
substantively enacted by the end of the reporting
period.
Deferred tax is recognised on temporary differences
between the carrying amounts of assets and
liabilities in the 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 can be utilised. Such deferred tax assets
and liabilities are not recognised if the temporary
differences arise 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. In
addition, deferred tax liabilities are not recognised
if the temporary difference arises from the initial
recognition of goodwill.
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.
Deferred tax assets and liabilities 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.
Tax relating to items recognized directly in equity
or other comprehensive income is recognised in
equity or other comprehensive income and not in
the Statement of Profit and Loss.
Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax
liabilities and assets, and they are related to income
taxes levied by the same tax authority, but they
intend to settle current tax liabilities and assets on
a net basis or their tax assets and liabilities will be
realized simultaneously.
g) Property, plant and equipment:
Freehold land is carried at historical cost. Property,
plant and equipment are stated at historical cost less
depreciation. Historical cost includes expenditure that
is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's
carrying amount or recognized 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. The carrying amount of any
component accounted for as separate asset is
derecognized when replaced. All other repairs and
maintenance are charged to profit or loss during the
reporting period in which they are incurred.
Property, Plant and equipment retired from active
use and held for sale are stated at the lower of their
net book value and net realizable value and are
disclosed separately.
An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. Any 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 profit or
loss.
Lease Hold improvements are stated at original
cost including taxes, freight and other incidental
expenses related to acquisition/installation and
after adjustment of input taxes less accumulated
depreciation in accordance with lease hold period.
h) Expenditure during construction period:
Expenditure during construction period (including
finance cost related to borrowed funds for
construction or acquisition of qualifying PPE)
is included under Capital Work-in-Progress and
the same is allocated to the respective PPE on
the completion of their construction. Advances
given towards acquisition or construction of PPE
outstanding at each reporting date are disclosed
as Capital Advances under "Other non-current
Assets".
i) Depreciation
Depreciation is the systematic allocation of the
depreciable amount of PPE over its useful life and is
provided on the straight line method over the useful
lives as prescribed in Schedule II to the Act.
j) Intangible assets and amortization:
Intangible assets acquired separately are measured
on initial recognition cost and are amortized on
straight line method based on the estimated useful
lives.
The amortized period and amortization method are
reviewed at each financial year end.
Cost of Software is amortized over a period of five
years.
k) Impairment of assets:
Intangible assets and property, plant and equipment:
Intangible assets and 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
amortization or depreciation) had no impairment
loss been recognized for the asset in prior years.
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