2 Summary of Material Accounting Policies
2.1 Basis of Preparation
(i) Statement of compliance
These financial statements comprise the
Standalone Balance Sheet as at 31 March 2026
and 31 March 2025: the related Standalone
Statement of Profit and Loss (including Other
Comprehensive Income) for the year ended, the
Standalone Statement of Changes in Equity, and
the Standalone Statement of Cash Flows for the
year ended 31 March 2026 and 31 March 2025
and the Material accounting policies (together
referred to as 'financial statements').
The financial statements have been prepared on
a going concern basis.
The financial statements comply in all material
aspects with Indian Accounting Standards
(Ind AS) notified under Section 133 of the
Companies Act, 2013 (the Act), Companies
(Indian Accounting Standards) Rules, 2015 and
other relevant provisions of the Act and other
accounting principles generally accepted
in India.
These financial statements were approved for
issue in accordance with the resolution of the
Board of Directors on May 04, 2026.
These financial statements are presented in
Indian Rupees (INR), which is also the Group's
functional currency. All amounts have been
rounded-off to the nearest crore, unless
otherwise indicated.
(ii) Historical cost convention
These financial statements are prepared in
accordance with Indian Accounting Standards
(Ind AS) under the historical cost convention on
the accrual basis, except for the following:
• certain financial assets and liabilities which
are measured at fair value or amortised cost:
• defined benefit plans and
• share-based payments
(iii) 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 to the Companies Act, 2013. Based
on the nature of products and services and their
realisation in cash and cash equivalents, the
Company has ascertained its operating cycle
as 12 months for the purpose of current - non¬
current classification of assets and liabilities.
(iv) Use of estimates and judgements
The preparation of the financial statements
requires management to make judgments,
estimates and assumptions that affect the
application of accounting policies and the
reported amounts of assets, liabilities, income
and expenses. Actual results may differ from
those estimates.
Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to
accounting estimates are recognized in the
period in which the estimates are revised and
in any future periods affected.
Critical accounting estimates:
(a) Useful lives of Property, plant and equipment
The Company reviews the useful life of property,
plant and equipment at the end of each reporting
period. This reassessment may result in change
in depreciation expense in future periods.
(b) Income Taxes
Significant judgments are involved in
determining the provision for income taxes
including judgment on whether tax positions are
probable of being sustained in tax assessments.
A tax assessment can involve complex issues,
which can only be resolved over extended
time periods.
(c) Deferred Taxes
Deferred tax is recorded on temporary
differences between the tax bases of assets and
liabilities and their carrying amounts, at the rates
that have been enacted or substantively enacted
at the reporting date. The ultimate realization
of deferred tax assets is dependent upon the
generation of future taxable profits during the
periods in which those temporary differences
and tax loss carryforwards become deductible.
The Company considers the expected reversal
of deferred tax liabilities and projected future
taxable income in making this assessment. The
amount of the deferred tax assets considered
realizable, however, could be reduced in the
near term if estimates of future taxable income
during the carry-forward period is reduced.
(d) Expected credit losses on financial assets
The impairment provisions of financial assets
are based on assumptions about risk of default
and expected timing of collection. The Company
uses judgment in making these assumptions
and selecting the inputs to the impairment
calculation, based on the Company's past
history, customer's creditworthiness, existing
market conditions as well as forward looking
estimates at the end of each reporting period.
(e) Revenue recognition and contract assets
(to the extent of projects where revenue
is recognized on percentage completion
method)
The Company uses the percentage-of-
completion method in accounting for its fixed-
price contracts. Use of the percentage-of-
completion method requires the Company to
estimate the efforts or costs expended to date
as a proportion of the total efforts or costs to be
expended. Efforts or costs expended have been
used to measure progress towards completion
as there is a direct relationship between input
and productivity. Provisions for estimated losses,
if any, on uncompleted contracts are recorded
in the period in which such losses become
probable based on the expected contract
estimates at the reporting date. The company
appropriately applies Ind AS 115 - Revenue from
Contracts with Customers for service based
revenue recognition.
(f) Defined benefit plans and compensated
absences
The cost of the defined benefit plans,
compensated absences and the present value
of the defined benefit obligation are based on
actuarial valuation using the projected unit
credit method. An actuarial valuation involves
making various assumptions that may differ
from actual developments in the future. These
include the determination of the discount rate,
future salary increases and mortality rates. Due
to the complexities involved in the valuation
and its long-term nature, a defined benefit
obligation is highly sensitive to changes in these
assumptions. All assumptions are reviewed at
each reporting date. Ind AS 19 on Employee
Benefit Expenses are used in principle for
accounting purposes.
(g) Leases
The Company evaluates if an arrangement
qualifies to be a lease as per the requirements
of Ind AS 116. Identification of a lease requires
significant judgment. The Company uses
significant judgement in assessing the lease
term (including anticipated renewals) and the
applicable discount rate.
The Company determines the lease term as the
non-cancellable period of a lease, together with
both periods covered by an option to extend the
lease if the Company is reasonably certain to
exercise that option: and periods covered by an
option to terminate the lease if the Company is
reasonably certain not to exercise that option. In
assessing whether the Company is reasonably
certain to exercise an option to extend a lease,
or not to exercise an option to terminate a lease,
it considers all relevant facts and circumstances
that create an economic incentive for the
Company to exercise the option to extend the
lease, or not to exercise the option to terminate
the lease. The Company revises the lease term if
there is a change in the non-cancellable period
of a lease.
The discount rate is generally based on the
incremental borrowing rate specific to the lease
being evaluated or for a portfolio of leases with
similar characteristics.
2.2 Foreign currency transaction and translation
(i) Functional and presentation currency
Items included in the financial statements are
measured using the currency of the primary
economic environment in which the entity
operates ('the functional currency'). The
financial statements are presented in Indian
rupee (INR), which is the Company's functional
and presentation currency.
(ii) Transactions and balances
Transactions in foreign currency are translated
into the functional currency using the exchange
rates prevailing at the date of the transaction.
Foreign-currency denominated monetary assets
and liabilities are re-instated into the functional
currency at exchange rates at the balance
sheet date. The gains or losses resulting from
such translations are included in the statement
of profit and loss. Non-monetary assets and
non-monetary liabilities denominated in a
foreign currency and measured at fair value are
translated at the exchange rate prevalent at the
date when the fair value was determined. Non¬
monetary assets and non-monetary liabilities
denominated in a foreign currency and measured
at historical cost are translated at the exchange
rate prevalent at the date of transaction.
(iii) Foreign operations
The results and financial position of foreign
operations (none of which has the currency
of a hyperinflationary economy) that have
a functional currency different from the
presentation currency are translated into
presentation currency as follows:
• Assets and liabilities are translated at the
closing rate at the date of the Balance Sheet.
• I ncome and expense items are translated
at the average exchange rates for the
respective months (unless this is not
a reasonable approximation of the
cumulative effect of the rates prevailing on
the transaction dates, in which case income
and expenses are translated at the dates of
the transactions).
• All resulting exchange differences are
recognized in other comprehensive income
and held in foreign currency translation
reserve (FCTR), a component of equity.
When a foreign operation is disposed of,
the relevant amount recognized in FCTR is
transferred to the statement of income as
part of the profit or loss on disposal.
2.3 Revenue recognition
The Company earns revenue primarily from providing
Engineering, Research and Development (ER&D)
services, Digital Enterprise Solutions (DES) services,
solutions for education business and Product
Lifecycle Management (PLM) services and products.
Revenue is recognized upon transfer of control of
promised products or 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 time and material contracts is
recognized and measured by units delivered
and efforts expended.
• Revenue related to fixed price maintenance and
support services contracts where the Company
provides services is recognized based on time
elapsed mode and revenue is straight lined over
the period of performance.
• In respect of other fixed-price contracts, revenue
is recognized using percentage-of-completion
method ('POC method') of accounting with
contract cost incurred determining the degree
of completion of the performance obligation.
• Revenue from the sale of internally developed
software is recognized upfront at the point
in time when the software is delivered to the
customer. In cases where implementation
and/or customization services rendered
modifies or customizes the software, these
services and software are accounted for as a
single performance obligation and revenue is
recognized at the time of delivery of product.
• Revenue from the sale of third party software is
recognized at the point in time when control is
transferred to the customer.
• The Company is also in business of solutions for
education business and in business of supply
of third-party software. In such cases, revenue
for supply of such third-party products are
recorded at gross or net basis depending on
whether the Company is acting as the principal
or as an agent of the customer. The Company
recognizes revenue in the gross amount of
consideration when it is acting as a principal and
at net amount of consideration when it is acting
as an agent.
Revenue is measured based on the transaction
price, which is the consideration, adjusted for
volume discounts, service level credits, performance
bonuses, commission, price concessions and
incentives, if any, as specified in the contract with
the customer. Revenue also excludes taxes collected
from customers.
I nvoices are usually payable based on the credit
terms agreed with customers which vary up to
150 days.
Contract assets are recognized 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.
Unearned and deferred revenue ("contract liability")
is recognized when there are billings in excess
of revenues.
In accordance with Ind AS 37, the Company recognizes
an onerous contract provision when the unavoidable
costs of meeting the obligations under a contract
exceed the economic benefits to be received.
Contracts are subject to modification to account for
changes in contract specification and requirements.
The Company reviews modification to contract in
conjunction with the original contract, basis which
the transaction price could be allocated to a new
performance obligation, or transaction price of
an existing obligation could undergo a change. In
the event transaction price is revised for existing
obligation a cumulative adjustment is accounted for.
Use of significant judgements in revenue recognition
• The Company's contracts with customers could
include promises to transfer multiple products
and services to a customer. The Company
assesses the products/services promised in a
contract and identifies distinct performance
obligations in the contract. Identification
of distinct performance obligation involves
judgement to determine the deliverables and the
ability of the customer to benefit independently
from such deliverables.
• Judgement is also required to determine
the transaction price for the contract. The
transaction price could be either a fixed
amount of customer consideration or variable
consideration with elements such as volume
discounts, service level credits, performance
bonuses, commission, price concessions and
incentives. The transaction price is also adjusted
for the effects of the time value of money if
the contract includes a significant financing
component. Any consideration payable to the
customer is adjusted to the transaction price,
unless it is a payment for a distinct product
or service from the customer. The estimated
amount of variable consideration is adjusted in
the transaction price only to the extent that it is
highly probable that a significant reversal in the
amount of cumulative revenue recognized will
not occur and is reassessed at the end of each
reporting period. The Company allocates the
elements of variable considerations to all the
performance obligations of the contract unless
there is observable evidence that they pertain
to one or more distinct performance obligations.
• The Company uses judgement to determine
an appropriate standalone selling price for a
performance obligation. The Company allocates
the transaction price to each performance
obligation on the basis of the relative stand¬
alone selling price of each distinct product
or service promised in the contract. Where
standalone selling price is not observable, the
Company uses the expected cost-plus margin
approach to allocate the transaction price to
each distinct performance obligation.
• The Company exercises judgement in
determining whether the performance obligation
is satisfied at a point in time or over a period of
time. The Company considers indicators such
as how customer consumes benefits as services
are rendered or who controls the asset as it
is being created or existence of enforceable
right to payment for performance to date and
alternate use of such product or service, transfer
of significant risks and rewards to the customer,
acceptance of delivery by the customer, etc.
• Contract fulfilment costs are generally expensed
as incurred except where they meet the criteria
for capitalization. The assessment of this
criteria requires the application of judgement, in
particular when considering if costs generate or
enhance resources to be used to satisfy future
performance obligations and whether costs are
expected to be recovered.
2.4 Property, plant and equipment
(i) Recognition and measurement:
Property, plant and equipment are stated
at cost, less accumulated depreciation and
impairment, if any. Cost includes expenditures
directly attributable to the acquisition of the
asset. General and specific borrowing costs
directly attributable to the construction of a
qualifying asset are capitalized as part of the
cost. Costs directly attributable to acquisition
are capitalized until the property, plant and
equipment are ready for use, as intended
by management.
When parts of an item of property, plant and
equipment have different useful lives, they
are accounted for as separate items (major
components) of property, plant and equipment.
Subsequent expenditure 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.
The carrying amount of any component
accounted for as a separate asset is
derecognised when discarded/scrapped.
All other repairs and maintenance costs are
charged to profit and loss in the reporting period
in which they occur.
Deposits and advances paid towards the
acquisition of property, plant and equipment
outstanding as of each reporting date and
the cost of property, plant and equipment not
available for use before such date are disclosed
under capital work- in-progress.
As asset's carrying amount is written down
immediately to its recoverable amount if the
asset's carrying amount is greater than its
estimated recoverable amount.
Any gain or loss on disposal of an item of
property, plant and equipment is recognised in
profit or loss.
(ii) Depreciation:
The Company depreciates property, plant and
equipment over their estimated useful lives
using the straight-line method considering the
nature, estimated usage, operating conditions,
past history of replacement and anticipated
technological changes. Taking into account
these factors, the Company has decided to
retain the useful life hitherto adopted for various
categories of property, plant and equipment,
which are different from those prescribed in
Schedule II of the Act.
Depreciation methods, useful lives and residual
values are reviewed periodically, including at
each financial year end with the effect of any
changes in the estimate accounted for on a
prospective basis.
2.5 Intangible assets
Intangible assets are stated at cost less accumulated
amortization and impairment, if any. Intangible
assets are amortized over their respective individual
estimated useful lives on a straight-line basis,
from the month in which they are available for use.
Amortization methods and useful lives are reviewed
periodically at each financial year end.
I nternally generated intangible asset arising from
development activity is recognised at cost on
demonstration of its technical feasibility, the
intention and ability of the Company to complete,
use or sell it, only if, it is probable that the asset
would generate future economic benefit and the
expenditure attributable to the said assets during
its development can be measured reliably.
Software not exceeding ' 25,000 is charged off to
the statement of profit and loss.
2.6 Research and development cost
Research costs are expensed as incurred.
Development expenditure incurred on an individual
project is recognized 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 and
• the availability of adequate resources to
complete the development.
2.7 Financial instruments
(a) Financial assets:
(i) Classification
The Company classifies its financial assets
in the following measurement categories:
• those to be measured subsequently
at fair value (either though other
comprehensive income, or through
profit and loss), and
• those measured at amortised cost.
The classification depends on the
entity's business model for managing the
financial assets and the contractual cash
flow characteristics.
For investments in debt instruments, this
will depend on business model in which
the investment is held. For investments
in equity instruments, this will depend
on whether the company has made an
irrevocable election at the time of initial
recognition to account for the equity
investment at fair value through other
comprehensive income.
A financial asset which is not classified in any
of the above categories are subsequently
fair valued through profit or loss.
(ii) Initial recognition:
All financial assets are recognised initially at
fair value plus, in the case of financial assets
not recorded at fair value through profit or
loss, transaction costs that are attributable
to the acquisition of the financial asset.
However, trade receivables that do not
contain a significant financing component
are measured at transaction price.
(iii) Measurement:
Subsequent to initial recognition, non¬
derivative financial instruments are
measured as described below:
Cash and cash equivalents:
The Company's cash and cash equivalents
consist of cash on hand and in banks and
demand deposits with banks (three months
or less from the date of acquisition). For
the purposes of the cash flow statement,
cash and cash equivalents include cash on
hand, in banks and demand deposits with
banks (three months or less from the date
of acquisition), net of outstanding bank
overdrafts that are repayable on demand
and are considered part of the Company's
cash management system. In the balance
sheet, bank overdrafts are presented under
borrowings within current liabilities.
Investment in subsidiaries and associate:
The Company has accounted for its
investment in subsidiaries and associate
at cost less impairment.
Financial assets carried at amortised
cost:
A financial asset is subsequently measured
at amortised cost if it is held within a
business model whose objective is to hold
the asset 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.
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.
Further, in cases where the Company has
made an irrevocable election based on
its business model, for its investments
which are classified as equity instruments,
the subsequent changes in fair value are
recognized in other comprehensive income.
Financial assets at fair value through
profit or loss (FVTPL):
A financial asset which is not classified in any
of the above categories are subsequently
fair valued through profit or loss.
(iv) Impairment of financial assets:
The Company assesses at each date of
balance sheet whether a financial asset or
a group of financial assets is impaired. Ind
AS 109 requires expected credit losses to
be measured through a loss allowance. 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 rates used in the provision matrix.
For all other financial assets, expected
credit losses are measured at an amount
equal to the 12-month 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.
(v) Derecognition of financial assets:
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.
• retains contractual rights to receive
the cash flows of the financial asset
but assumes a contractual obligation
to pay the cash flows to one or
more recipients.
When the entity has neither transferred
a financial asset nor retained
substantially all risks and rewards of
ownership of the financial asset, the
financial asset is derecognised if the
Company has not retained control of
the financial asset. Where the Company
retains control of the financial asset,
the asset is continued to be recognised
to extent of continuing involvement in
the financial asset.
i.8 Financial liabilities
(i) Initial recognition and measurement
Financial liabilities are classified, at initial
recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings,
payables, or as derivatives designated as
hedging instruments in an effective hedge,
as appropriate.
All financial liabilities are recognised initially at
fair value and, in the case of loans and borrowings
and payables, net of directly attributable
transaction costs.
(ii) Subsequent measurement
The subsequent measurement of financial
liabilities depends on their classification, as
described below:
Financial liabilities at amortised cost:
Borrowings, trade and other payables are initially
recognized at fair value, and subsequently
carried at amortized cost using the effective
interest method. For these financial instruments,
the carrying amounts approximate fair value due
to the short-term maturity of these instruments.
(iii) Derecognition
A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, such an exchange or modification
is treated as the derecognition of the original
liability and the recognition of a new liability. The
difference in the respective carrying amounts is
recognised in the statement of profit or loss.
(iv) Derivative Financial Instruments
The Company is exposed to foreign currency
fluctuations on foreign currency assets,
liabilities, net investment in foreign operations
and forecasted cash flows denominated in
foreign currency.
The Company limits the effect of foreign
exchange rate fluctuations by following
established risk management policies including
the use of derivatives. The Company enters
into derivative financial instruments where the
counterparty is primarily a bank.
Although the Company believes that these
derivatives constitute hedges from an
economic perspective, they may not qualify for
hedge accounting under Ind AS 109, Financial
Instruments. Any derivative that is either not
designated a hedge, or is so designated but is
ineffective as per Ind AS 109, is categorized as a
financial asset or financial liability, at fair value
through profit or loss.
Derivatives not designated as hedges are
recognized initially at fair value and attributable
transaction costs are recognized in net profit in
the statement of profit and loss when incurred.
Subsequent to initial recognition, these
derivatives are measured at fair value through
profit or loss and the resulting exchange gains
or losses are included in other income. Assets/
liabilities in this category are presented as
current assets/current liabilities if they are either
held for trading or are expected to be realized
within 12 months after the balance sheet date.
2.9 Impairment - Non Financial Assets
Intangible assets, Property, Plant and Equipment
and Right to Use Assets
At each balance sheet date, the Company assesses
whether there is any indication that any Property,
Plant and Equipment, Intangible Assets with finite
lives and Right to use Assets may be impaired. If any
such impairment exists the recoverable amount of
an asset is estimated to determine the extent of
impairment, if any. Where it is not possible to estimate
the recoverable amount of an individual asset, the
Company estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
Intangible assets with indefinite useful lives and
intangible assets not yet available for use, are tested
for impairment annually at each balance sheet date,
or earlier, if there is an indication that the asset may
be impaired.
Recoverable amount is the higher of fair value less
costs to sell and value in use. 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 for
which the estimates of future cash flows have not
been adjusted.
I f the recoverable amount of an asset (or cash¬
generating unit) is estimated to be less than it's
carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognized
immediately in the income statement.
As at March 31, 2026, none of the Company's property,
plant and equipment, intangible assets and right to
use assets were considered impaired.
The company tests and accounts impairment
principally on Ind AS 36, "Impairment of Assets".
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