3.3 Summary of material accounting policies

a. Current versus non-current classification

All assets and liabilities have been classified as current or non-current as per the Company’s operating cycle
and other criteria set out in the Schedule III of the Act. Operating cycle is the time between the acquisition
of resources / assets for processing and their realisation in cash and cash equivalents. Based on the nature of
products / services and the time between the acquisition of assets for processing and their realisation in cash and
cash equivalents, the Company has ascertained its operating cycle as 12 months.

b. Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment
losses, if any. Capital work-in-progress includes cost of Property, plant and equipment that are not ready to be put
to use and is stated at cost. The cost comprises the purchase price and directly attributable costs of bringing the
asset to its working condition for its intended use, cost of replacing part of the Property, plant and equipment, cost
of asset retirement obligations and borrowing costs for long term construction projects if the recognition criteria
are met. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of Property, plant and equipment is added to its original cost only
if it is probable that future economic benefits associated with the item will flow to the Company. All other
expenses on existing Property, plant and equipment, including day-to-day repair and maintenance expenditure
and cost of replacing parts, are charged to the statement of profit and loss for the period during which such
expenses are incurred.

Gains or losses arising from disposal of Property, plant and equipment are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss
when the asset is disposed.

c. Intangible assets

Intangible assets including software licenses of enduring nature and contractual rights 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
accumulated amortisation which is recognised from the date they are available for use and accumulated
impairment losses, if any. Cost comprises the purchase price and any directly attributable cost of preparing the
asset for its intended use.

Gains or losses arising from disposal of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss
when the asset is disposed.

Research and development cost

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

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

• its intention to complete the asset;

• its ability to use or sell the asset;

• how the asset will generate probable future economic benefits;

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

• the ability to measure reliably the expenditure attributable to the intangible asset during development.

Such development expenditure, until capitalization, is reflected as intangible assets under development.

Following the initial recognition, internally generated intangible assets are carried at cost less accumulated
amortisation and accumulated impairment losses, if any. Amortisation of internally generated intangible asset
begins when the development is complete and the asset is available for use.

d. Depreciation and amortisation

Depreciation on Property, plant and equipment is provided from the date the asset is made avaiable for use using
the Straight Line Method (‘SLM’) over the useful lives of the assets.

The estimated useful lives for the Property, plant and equipment except for leasehold improvements are as follows:

*For these classes of assets, based on a technical evaluation, the Management believes that the useful lives as
given above best represent the period over which the Management expects to use these assets. Thus useful lives
of these assets are different from useful lives as prescribed under Part C of Schedule II of the Act.

Leasehold improvements are amortised over the period of lease or useful life, whichever is lower.

Where cost of a part of the asset (“asset component”) is significant to total cost of the asset and useful life of
that part is different from the useful life of the remaining asset, useful life of that significant part is determined
separately and such asset component is depreciated over its separate useful life.

Intangible assets are amortised on a straight-line basis over their estimated useful lives ranging from 3 to 7 years
from the day the asset is made available for use.

Depreciation and amortisation methods, useful lives and residual values are reviewed periodically.

e. Borrowing costs

Borrowing cost includes interest and amortisation of ancillary costs incurred in connection with the arrangement
of borrowings.

Borrowing costs directly attributable to the acquisition, construction or development of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the
respective asset. All other borrowing costs are expensed in the period in which they occur.

f. Leases

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

To assess whether a contract conveys the right to control the use of an identified asset, the Company
assesses whether:

• the contract involves the use of an identified asset

• the Company has substantially all of the economic benefits from use of the asset through the period of
the lease and

• the Company has the right to direct the use of the asset

Where the Company is a lessee

The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term
at the lease commencement date. The cost of the right-of-use asset measured at inception shall comprise of the
amount of the initial measurement of the lease liability adjusted for any lease payments made at or before the
commencement date less any lease incentives received, plus any initial direct costs incurred and an estimate of
costs to be incurred by the lessee in dismantling and removing the underlying asset or restoring the underlying
asset or site on which it is located.

The right-of-use assets is subsequently measured at cost less any accumulated depreciation, accumulated
impairment losses, if any and adjusted for any remeasurement of the lease liability. The right-of-use assets is
depreciated using the straight-line method from the commencement date over the shorter of lease term or useful
life of right-of-use asset. The estimated useful lives of right-of use assets are determined on the same basis as
those of property, plant and equipment.

Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not
be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.

The Company measures the lease liability at the present value of the lease payments that are not paid at the
commencement date of the lease. The lease payments are discounted using the interest rate implicit in the lease,
if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental
borrowing rate.

The lease payments shall include fixed payments, variable lease payments based on an index or rate, residual value
guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option
and payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to
terminate the lease.

The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease
liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount
to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments.

When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or
statement of profit and loss if the right-of-use asset is already reduced to zero.

The Company has elected not to apply the requirements of Ind AS 116 to short-term leases of all assets that have
a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease expenses
associated with these leases are recognised in the statement of profit and loss on a straight line basis.

g. 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
Companys 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. To estimate cash flow
projections 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 services, industries, or
country or countries in which the Company operates, or for the market in which the asset is used.

Impairment losses of continuing operations are recognised in the statement of profit and loss, except for assets
previously revalued with the revaluation surplus taken to OCI. For such assets, the impairment is recognised in OCI
up to the amount of any previous revaluation surplus.

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 on an annual basis and whenever there is an indication that the recoverable
amount of a cash generating unit is less than its carrying amount based on a number of factors including operating
results, business plans, future cash flows and economic conditions. The recoverable amount of cash generating
units is determined based on higher of value in-use and fair value less cost to sell. The goodwill impairment test is
performed at the level of the cash-generating unit or groups of cash-generating units which are benefiting from
the synergies of the acquisition and which represents the lowest level at which goodwill is monitored for internal
management purposes. If recoverable amount cannot be determined for an individual asset, an entity identifies
the lowest aggregation of assets that generate largely independent cash inflows.Market related information and
estimates are used to determine the recoverable amount. Key assumptions on which management has based
its determination of recoverable amount include estimated long term growth rates, weighted average cost of
capital and estimated operating margins. Cash flow projections take into account past experience and represent
management’s best estimate about future developments.

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the CGU or
groups of CGUs, which benefit from the synergies of the acquisition. The synergy benefits derived from Goodwill
are enjoyed interchangeably among segments and the company is of the view that it is not practical to reasonably
allocate the same and an ad-hoc allocation will not be meaningful.

h. Financial instruments

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

Initial recognition and measurement

The Company recognises financial assets and financial liabilities when it becomes a party to the contractual
provisions of the instrument. All financial assets and liabilities are recognised at fair value on initial recognition,
except for trade receivables which are initially measured at transaction price. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities, which are not at fair value through
profit or loss, are added to the fair value on initial recognition.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Company’s business model for managing them. The Company’s business model refers
to how it manages it’s financial assets to generate cash flows. The business model determines whether the cash
flows will result from collecting contractual cash flows, selling the financial assets, or both.

The company offsets a financial asset and a financial liability when it currently has a legally enforceable right to
set off the recognised amounts and the company intends either to settle on a net basis, or to realize the asset and
settle the liability simultaneously.

Subsequent measurement
Non-derivative financial instruments

Financial assets

Financial assets at amortised cost

Financial assets that are held within a business model whose objective is to hold assets for collecting contractual
cash flows and whose contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding are subsequently measured at amortised cost using the
effective interest rate method. The change in measurements are recognised as finance income in the statement of
profit and loss.

Financial assets at fair value through other comprehensive income (FVTOCI)

Financial assets that are held within a business model whose objective is achieved both by collecting contractual
cash flows and selling the financial assets and the assets’ contractual cash flows represent solely payments of
principal and interest on the principal amount outstanding are subsequently measured at fair value. Fair value
movements are recognised in other comprehensive income.

Financial assets at fair value through profit or loss (FVTPL)

Any financial asset which does not meet the criteria for categorization as financial asset at amortised cost or
at FVTOCI, is classified as financial asset at FVTPL. Financial assets except derivative contracts included within
the FVTPL category are subsequently measured at fair value with all changes recognised in the statement of
profit and loss.

Net gains or net losses on items at fair value through profit or loss include interest or dividend income received
from these assets.

Investments in subsidiaries

Investment in subsidiaries are carried at cost less impairment.

Cash and cash equivalents

Cash and cash equivalents in the cash flow statement comprises of cash at bank, cash in hand and short term
deposits with an original maturity period of three months or less.

Financial liabilities

Financial liabilities are subsequently carried at amortised cost using the effective interest method, except for
contingent consideration recognised 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.

Derivative financial instruments

The Company uses derivatives for economic hedging purposes. At the inception of hedging relationship, the
Company documents the hedging relationship between the hedging instrument and hedged item including
whether the changes in cash flows of the hedging instruments are expected to offset the changes in cash flows of
the hedged items. The Company documents its objective and strategy for undertaking its hedging transactions.

Derivatives are initially recognised at fair value on the date a derivative contract is entered and are subsequently
re-measured at fair value at each reporting date.

For cash flow hedges that qualify for hedge accounting, the effective portion of fair value of derivatives are
recognised in cash flow hedging reserve within equity through OCI.

Gains or losses relating to the ineffective portion is immediately recognised in profit or loss.

Amounts accumulated in equity are reclassified to profit or loss in the period when the hedged item affects profit
and loss or hedged future cash flows are no longer expected to occur.

Derivatives which do not qualify for hedge accounting are accounted classified as FVTPL.

Derecognition

The Company derecognises 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 derecognised from the Company’s Balance Sheet when the obligation
specified in the contract is discharged or cancelled or expired. On derecognition of a financial asset in its entirety,
the difference between the asset’s carrying amount and the sum of the consideration received and receivable
and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in
equity, if any, is recognised in profit or loss, except in case of equity instruments classified as FVOCI, where such
cumulative gain or loss is not recycled to statement of profit and loss.

The Company derecognises financial liabilities when the Company’s obligations are discharged, cancelled or have
expired. The difference between the carrying amount of the financial liability derecognised and the consideration
paid and payable is recognised in statement of profit or loss.

Financial guarantee contracts

Financial guarantee contracts issued by the Company are those contracts that require a payment to be made
to reimburse the holder for a loss it incurrs because the specified debtor fails to make a payment when due
in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a
liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment
requirements of Ind AS 109 and the amount recognised less cumulative amortisation.

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, dealer quotes.

For equity instruments of unlisted companies, in limited circumstances, insufficient more recent information is
available to measure fair value, or if there are a wide range of possible fair value measurements and cost represents
the best estimate of fair value within that range. The Company recognises such equity instruments at cost, which
is considered as appropriate estimate of fair value.

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 of financial assets

The Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss
on financial assets measured at amortised cost and financial assets that are debts instruments and are measured
at fair value through other comprehensive income (FVTOCI). ECL is the difference between contractual cash
flows that are due and the cash flows that the Company expects to receive, discounted at the original effective
interest rate.

For trade receivables, the Company recognises impairment loss allowance based on lifetime ECL at each
reporting date, right from its initial recognition.The Company recognises lifetime expected losses for all contract
assets and / or all trade receivables that do not constitute a financing transaction. In determining the allowances
for doubtful trade receivables, the Company has used a practical expedient by computing the expected credit
loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical
credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is
based on the ageing of the receivables that are due and allowance rates used in the provision matrix. For all other
financial assets, expected credit losses are measured at an amount equal to the 12-months expected credit losses
or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased
significantly since initial recognition.

i. Revenue recognition

Revenues from customer contracts are considered for recognition and measurement when the contract has been
approved by the parties to the contract, the parties to the contract are committed to perform their respective
obligations under the contract, and the contract is legally enforceable. Revenue is recognised 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 recognised will not occur when the uncertainty associated with the variable consideration is resolved.

Income from software services and licenses

The company derives revenues primarily from IT services comprising of software development and related
services and from the licensing of software products.

Arrangements with customers for software related services are either on a time-and-material or a fixed-price basis.

Revenue on time-and-material contracts are recognised as and when the related services are performed.

Revenue from fixed-price contracts, where the performance obligations are satisfied over time and where there
is no uncertainty as to measurement or collectability of consideration, is recognised as per the percentage-of-
completion method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is
postponed until such uncertainty is resolved.

Revenue from licenses where the customer obtains a “right to use” the licenses is recognised at the time the
license is made available to the customer. Revenue from licenses where the customer obtains a “right to access” is
recognised over the access period.

When support services are provided in conjunction with the licensing arrangement and the license and the
support services have been identified as two separate performance obligations, the transaction price for such
contracts are allocated to each performance obligation of the contract based on their relative standalone selling
prices. Maintenance revenue is recognised proportionately over the period in which the services are rendered.

Revenue from revenue share is recognised in accordance with the terms of the relevant agreements.

Unbilled revenue represents revenue recognised in relation to work done until the balance sheet date for which
billing has not taken place.

Unearned revenue represents the billing in respect of contracts for which the revenue is not recognised.

The Company collects Goods and Services Tax on behalf of the government and, therefore, these are not
economic benefits flowing to the Company. Hence, they are excluded from revenue.

Interest

Interest income is recognised on a time proportion basis taking into account the carrying amount and the
effective interest rate.

Dividend

Dividend income is recognised when the Company’s right to receive dividend is established. Dividend income is
included under the head ‘Other income’ in the statement of profit and loss.

Contract balances
Contract assets

Contract assets are recognised when there are 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.

Contract liabilities

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

j. Foreign currency translation

Foreign currency transactions and balances

The functional currency of the company is ? (INR).

Initial recognition

Foreign currency transactions are recorded in the functional currency of the Company, by applying to the
foreign currency amount the exchange rate between the functional currency and the foreign currency at the date
of the transaction.

Conversion

Foreign currency monetary items are converted using the exchange rate prevailing at the reporting date. Non¬
monetary items, which are measured in terms of historical cost denominated in a foreign currency are reported
using the exchange rate at the date of the transaction. Non-monetary items which are carried at fair value or other
similar valuation denominated in a foreign currency are reported using the exchange rates at the date when the
values were determined. For foreign currency transactions recognised in profit and loss statement the Company
uses average rate if the average approximates the actual rate at the date of the transaction.

Exchange differences

Exchange differences arising on conversion / settlement of foreign currency monetary items and on foreign
currency liabilities relating to Property, Plant and Equipment acquisition are recognised as income or expenses in
the period in which they arise.

Translation of foreign operations

The company presents the financial statements in INR. For the purpose of the financial statements, the assets and
liabilities of the company’s foreign operations are translated using exchange rates prevailing at the end of each
reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange
differences arising on translation are recognised in other comprehensive income and accumulated in equity.

k. Employee benefits

Defined contribution plan

Provident fund

Provident fund is a defined contribution plan covering eligible employees. The Company and the eligible
employees make a monthly contribution to the provident fund maintained by the Regional Provident Fund
Commissioner equal to the specified percentage of the eligible salary of the entitled employees as per the scheme.
The contributions to the provident fund are charged to the statement of profit and loss for the period / year
when the contributions are due. The Company has no obligation, other than the contribution payable to the
provident fund.

Superannuation

Superannuation is a defined contribution plan covering eligible employees. The contribution to the superannuation
fund managed by the insurer is equal to the specified percentage of the basic salary of the eligible employees as
per the scheme. The contribution to this scheme is charged to the statement of profit and loss on an accrual basis.
There are no other contributions payable other than contribution payable to the respective fund.

Defined benefit plan

Gratuity

Gratuity is a defined benefit obligation plan operated by the Company for its employees covered under Company
Gratuity Scheme. The cost of providing benefit under gratuity plan is determined on the basis of actuarial valuation
performed by independent actuary using the projected unit credit method at the reporting date and are charged
to the statement of profit and loss, except for the remeasurements, comprising of actuarial gains and losses which
are recognised in full in the statement of other comprehensive income in the reporting period in which they occur.
Remeasurements are not reclassified to profit and loss subsequently.

Compensated absences and long service awards

Leave encashment

Accumulated leave, which is expected to be utilised within the next twelve months, is treated as short-term
employee benefit. The company measures the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The company treats accumulated leave expected to be carried forward beyond twelve months, as long-term
employee benefit for measurement purposes. Such long-term compensated absences are provided for based
on the actuarial valuation using the projected unit credit method at the reporting date. Remeasurements,
comprising of actuarial gains and losses are recognised in full in the statement of profit and loss. Expense on non¬
accumulating compensated absences is recognised in the period in which the absences occur.

The company presents the entire leave encashment liability as a current liability in the balance sheet, since it does
not have an unconditional right to defer its settlement beyond twelve months after the reporting date.

The expected cost of accumulating leave encashment is determined by actuarial valuation performed by an
independent actuary at each Balance Sheet date using projected unit credit method on the additional amount
expected to be paid / availed as a result of the unused entitlement that has accumulated at the Balance Sheet
date. Expense on non-accumulating leave encashment is recognised in the period in which the absences occur.

Long service awards

Long service awards are other long term benefits to all eligible employees, as per Company’s policy. The cost of
providing benefit under long service awards scheme is determined on the basis of actuarial valuation performed
by independent actuary using the projected unit credit method at the reporting date. Remeasurements,
comprising of actuarial gains and losses are recognised in full in the statement of profit and loss.

Other employee benefits

Other short-term employee benefits such as overseas social security contributions and performance incentives
expected to be paid in exchange for services rendered by employees, are recognised in the statement of profit
and loss during the period when the employee renders the service.

l. Income taxes

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to
be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India and tax laws prevailing
in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to
items recognised directly in equity is recognised in equity and not in statement of profit and loss.

Deferred income taxes reflect the impact of temporary differences between tax base of assets and liabilities and
their carrying amounts. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively
enacted at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except deferred tax liability arising
from initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and,
affects neither accounting nor taxable profit/ loss at the time of transaction. Deferred tax assets are recognised for
all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses, except
deferred tax assets arising from initial recognition of goodwill or an asset or liability in a transaction that is not a
business combination and, affects neither accounting nor taxable profit/ loss at the time of transaction. Deferred

tax assets are recognised only to the extent that sufficient future taxable income will be available against which
such deferred tax assets can be realized.

In the situations where the Company is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India
or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is
recognised in respect of temporary differences which reverse during the tax holiday period, to the extent the
Company’s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect
of temporary differences which reverse after the tax holiday period is recognised in the period in which the
temporary differences originate.

The carrying amount of deferred tax asset is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available against which such deferred tax assets can be
realised realised.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the same
taxable entity and the same taxation authority.

Deferred tax relating to items recognised outside the statement of profit and loss is recognised in co-relation to
the underlying transaction either in other comprehensive income or directly in equity.

m. Segment reporting

In accordance with para 4 of Indian Accounting Standard 108 (Ind AS-108) “Operating Segments” the Company
has disclosed segment information only in consolidated financial statements which are presented together with
the standalone financial statements.

n. Earnings per share (EPS)

Basic earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders
by the weighted average number of equity shares outstanding during the year. The weighted average number of
equity shares outstanding during the reporting period is adjusted for events such as bonus issue, bonus element
in a rights issue, share split, and reverse share split (consolidation of shares), if any occurred during the reporting
period, that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit for the year attributable to the equity
shareholders and the weighted average number of equity shares outstanding during the year, are adjusted for the
effects of all dilutive potential equity shares.

The number of shares and potential dilutive equity shares are adjusted retrospectively for all periods presented
for any bonus shares issues including for changes effected prior to the approval of the financial statements by the
Board of Directors.