1. General information

Tracxn Technologies Limited (the "Company") was
incorporated as a private limited Company on 11
August 2012 under the provisions of the
Companies Act 1956. The Company converted
from a private limited company to a public limited
company, pursuant to a special resolution passed
in the extraordinary general meeting of the
shareholders of the Company held on 7 July 2021
and consequently the name of the Company has
been changed to "Tracxn Technologies Limited"
pursuant to a fresh certificate of incorporation
dated 28 July 2021 issued by the Registrar of
Companies.

The Company offers a market intelligence platform
'Tracxn' on a subscription basis to global customer
base; to provide comprehensive private company
data for deal sourcing, M&A opportunities, deal
diligence, private market analysis and tracking
emerging themes.

2. Basis of preparation

i) Compliance with Indian Accounting Standards
(Ind AS)

The financial statements comply in all material
aspects with Indian Accounting Standards
(hereinafter referred to as the 'Ind AS') as
notified under Section 133 of the Companies
Act, 2013 ('the Act') [Companies (Indian
Accounting standards) Rules, 2015, as
amended] and other related provisions of the
Act.

ii) Historical cost convention

The financial statements have been prepared
on a historical cost basis, except for the
following:

(a) Certain financial assets and
liabilities that are to be measured
at fair value; and

(b) Employee share based payments

iii) New and amended standards adopted

The Ministry of Corporate Affairs vide
notification dated 7 May 2025 and 13 August
2025 notified the Companies

(Indian Accounting Standards) Second
Amendment Rules, 2025 and Companies
(Indian Accounting Standards) Second
Amendment Rules, 2025, respectively, which
amended certain accounting standards (see
below), and are effective for annual reporting
periods beginning on or after 1 April 2025:

• Classification of liabilities as current or non¬
current and non-current liabilities with
covenants - Amendments to Ind AS 1

• Supplier finance arrangements -
Amendments to Ind AS 7 and Ind AS 107

• International tax reform - Pillar two model
rules - Amendments to Ind AS 12

• Lack of exchangeability - Amendments to
Ind AS 21

These amendments did not have any material
impact on the amounts recognised in prior
periods and are not expected to significantly
affect the current or future periods.

iv) Standard issued but not yet effective

MCA notified new standards or amendments to
the existing standards under Companies (Indian
Accounting Standards) Rules, 2015 as issued
from time to time.

Classification of liabilities as current or non¬
current and non-current liabilities with
covenants - Amendments to
Ind AS 1:

This amendment also includes specific
provisions that will take effect for reporting
periods beginning on or after 1 April 2026, as
outlined below.

Under the existing Ind AS 1, where there is a
breach of a material provision of a long-term
loan arrangement on or before the end of the
reporting period with the effect that the liability
becomes payable on demand on the reporting
date, the entity does not classify the liability as
current, if the lender agreed, after the reporting
period and before the approval of the financial
statements for issue, not to demand payment
as a consequence of the breach.

Estimates and judgements are continually
evaluated. They are based on historical data and
experience and other factors, including
expectations of future events that may have a
financial impact on the Company and that are
believed to be reasonable under the circumstances.

The areas involving critical estimates and
judgments are:

i) Defined benefit obligations - Refer Note 12

ii) Recognition and measurement of
deferred tax - Refer Note 8

iii) Impairment of trade receivables - Refer
Note 22A

4. Property, plant and equipment

Accounting Policies

All items of property, plant and equipment are
stated at historical cost less accumulated
depreciation.

Depreciation methods, estimated useful life and
residual value:

Depreciation is calculated using the written down
value method to allocate their cost, net of their
residual values, if any, over their useful life
estimated as follows:

Management estimate of useful life

Computer equipments: 3 years
Furniture and fittings: 10 years
Office equipments: 5 years

Useful life as per Schedule II

Computer equipments: 3 years
Furniture and fittings: 10 years
Office equipments: 5 years

i) Classification of financial assets at amortised cost:

The Company classifies its financial assets at amortised cost only if the following criteria are met:

• The asset is held within a business model whose objective is to collect the contractual cash flows, and

• The contractual terms give rise to cashflows that are solely payments of principal and interest.
Financial assets classified at amortised cost comprise of trade receivables and other financial assets.

ii) Classification of financial assets at fair value through profit and loss:

The Company classifies investments in mutual funds at fair value through profit and loss.

See note 34.5 and 34.6 for the other accounting policies relevant to financial assets.

Trade receivables are amounts due from customers for services rendered in the ordinary course of business and
reflects company's unconditional right to consideration (that is, payment is due only on the passage of time). Trade
receivables are recognised initially at the transaction price as they do not contain significant financing
components. The company holds the trade receivables with the objective of collecting the contractual cash flows
and therefore measures them subsequently at amortised cost using the effective interest method, less loss
allowance.

The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled
revenue. A receivable is a right to consideration that is conditional only upon passage of time. Revenue in excess
of billings is recorded as unbilled revenue and is classified as a financial asset as only the passage of time is
required before the payment is due.

For trade receivables, the company applies the simplified approach required by Ind AS 109, which requires
expected lifetime losses to be recognised from initial recognition of receivables.

8. Deferred tax asset/(liability) (net)

Accounting Policies

i) Deferred income tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the Financial Statements. Deferred income
tax is determined using tax rates and laws that have been enacted or substantively enacted by the end of the
reporting period and are expected to apply when the related deferred income tax asset is realised or the
deferred income tax liability is settled.

ii) Deferred tax assets and liabilities are recognised for temporary differences between the carrying amounts of
assets and liabilities and their respective tax bases. Deferred tax liabilities are recognised for all taxable
temporary differences, while deferred tax assets are recognised for deductible temporary differences and
unused tax losses only to the extent that it is probable that sufficient future taxable profits will be available for
their utilisation. The carrying amount of deferred tax assets on unutilised tax losses is reviewed at the end of
each reporting period based on business plans and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be
utilised. Any such reduction will be subsequently reversed to the extent that it becomes probable that
sufficient taxable profit will be available.

iii) Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the Company has a legally enforceable right to offset and intends
either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

iv) Current and deferred tax are recognised in Statement of profit and loss, except to the extent that it relates to
items recognised in other comprehensive income or directly in equity; in which case, tax is also recognised in
other comprehensive income or directly in equity, respectively.

Notes:

1. The deferred tax balance above has been arrived at by applying the tax rate of 25.168% being the rate
substantively enacted as at 31 March 2026 and 31 March 2025.

2. As at March 31, 2025, the Company had recognised Deferred Tax Asset of INR 600.21 lakhs on business
losses carried forward from the earlier years in the income tax return to the extent it is recoverable based on
the Company's projected probable taxable profits in the forthcoming years. During the year, the Company has
reviewed its position on the recoverability of such deferred tax assets and on assessment of current
performance and market conditions concluded that Company will reverse the deferred tax asset created on
brought forward losses. Consequently, deferred tax asset on brought forward business losses aggregating to
Rs. 600.21 lakhs has been reversed during the year ended March 31, 2026.

Each equity shareholder is entitled to dividend as and when proposed by the Board of Directors, subject to
approval of shareholders (except in the case of interim dividend) at the ensuing annual general meeting.

In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company
after distribution of all preferential amounts, in proportion to their shareholding.

vi) Shares reserved for issue under options and contracts:

Refer Note 24 for details of shares to be issued under the Employee Stock Option Plan.

vii) Aggregate number of bonus shares issued and shares bought back during five years immediately preceding

the reporting date i.e. 31 March 2026:

a) The Company has issued 98,417,540 equity shares as bonus shares during the year ended 31 March
2022.

b) The Board of Directors at its meeting held on May 26, 2025 had approved buyback by the company up to
10,66,666 equity shares of Rs. 1/- each representing up to 0.99% of total paid-up equity capital of the
Company as on March 31, 2025, at a price not exceeding Rs. 75/- per equity share, for an aggregate
consideration up to Rs. 799.99 lakhs (excluding taxes and expenses pertaining to Buy-back) in
accordance with the applicable provisions of the Securities and Exchange Board of India (Buy-back of
Securities)

Regulations, 2018, and the Companies Act, 2013 & Rules made thereunder (the "Buy-back"). Accordingly,
the Company bought back 10,66,666 equity shares at a price of Rs. 75 per share, aggregating to Rs. 799.99
lakhs (excluding taxes and expenses pertaining to Buy-back), and these shares were extinguished by the
Company as per the requirements of the Act.

Consequent to the said Buyback, the equity share capital of the Company stands reduced by Rs.10.67
lakhs and an equivalent amount was transferred from Securities Premium to Capital Redemption Reserve
account as per the provisions of Section 69 of the Companies Act, 2013. Further, Rs. 834.85 lakhs being
the excess of amount paid over the par value of shares bought back including taxes and expenses
pertaining to Buy-back, was debited to securities premium account.

viii) There are no shares issued for consideration other than cash during five years immediately preceding the
reporting date i.e. 31 March 2026, other than those mentioned in note (vii) above.

Securities premium account

Securities premium is used to record the premium received on issue of shares in excess to the face value of the
shares. The reserve is utilised in accordance with the provisions of the Act.

Employee stock option reserve

The reserve is used to recognise the grant date fair value, net of exercise price, issued to employees under 'Tracxn
Employee Stock Option Plans'. Refer Note 24 for more details.

Share application money

This represents the amount received by the company towards exercise of employee stock options pending
allotment.

This represents statutory reserve created on buy-back of equity shares out of distributable profits and is available
only for issuance of fully paid bonus shares.

Note 1:

The Company issues employee stock options under the plan "Tracxn Employee Stock Option Plan 2016" (herein
referred to as "plan") to its employees (refer note 24). As per the terms of the plan, 25% of the options vest at the
end of the first year and remaining 75% of the options vest over the next twelve quarters, that is, 6.25% per quarter.
During the current year, it was noted that the Company had inadvertently calculated these expenses by applying
yearly graded vesting over 4 years, that is, 25% was vested on an annual basis. This has been rectified consequent
to which, "Employee Stock Option reserve" has increased by INR 65.90 with a corresponding decrease in retained
earnings as on April 1, 2024. There is no change to the total 'Reserves and Surplus' balance as at April 01, 2024
and March 31, 2025. Refer tables given below for reconciliation of opening balance of employee stock option
reverse and retained earnings.

ii) Post-Employment Obligations

a) Gratuity

On November 21, 2025, the Ministry of Labour & Employment, Government of India, notified the
i mplementation of four labour codes: the Code on Wages, 2019; the Industrial Relations Code, 2020; the
Code on Social Security, 2020; and the Occupational Safety, Health and Working Conditions Code, 2020
(collectively referred to as "the Labour Codes").

These newly implemented Labour Codes, among other provisions, require gratuity and compensated
absences to be calculated based on wages constituting at least 50% of total remuneration. This change has
resulted in an increase in gratuity and compensated benefits in respect of services rendered in prior periods,
and accordingly, the Company has recognised total past service cost amounting to INR 102.50 lakhs during
the year. In accordance with Ind AS 19, the past service cost has been recognised in the Statement of Profit
and Loss in the current year as Exceptional item, in which the plan amendment became effective. The
gratuity and compensated absences obligation has been actuarially valued by an independent actuary using
the projected unit credit method, considering the revised definition of wages for gratuity computation. Also,
Refer Note 33.

The Company continues to monitor the finalisation of Central/ State Rules and clarifications from the
Government on other aspects of the Labour Code and would provide appropriate accounting effect on the
basis of such developments as needed.

The liability or asset recognised in the Balance Sheet in respect of defined benefit 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 at the end of the reporting period by an independent
actuary 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 recognised 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 recognised immediately in profit or loss as past service cost.

Liability is actuarially valued and recognised in the books at each reporting date by the Company. The
gratuity plan of the Company is funded as mentioned in the table.

Risk Exposure

Through its defined benefit plan, the Company is exposed to a number of risks. The most significant risks are:

i) Interest rate risk: The defined benefit obligation calculated uses a discount rate based on 5 year
(2025: 5 year) government bonds. If bond yields fall, the defined benefit obligation will tend to increase.

ii) Salary inflation risk: Higher than expected increases in salary will increase the defined benefit obligation.

iii) Demographic risk: This is the risk of variability of results due to factors like mortality, withdrawal, disability
and retirement. The effect of these on the defined benefit obligation is not linear and depends upon the
combination of salary increase, discount rate and attrition rate.

b) Defined Contribution Schemes

Contributions are made to recognised government provident funds and Employee State Insurance Scheme in
India for employees at a specified percentage of wages as per the regulations. The contributions payable to
these plans by the Company are administered by the Government. The obligation of the Company is limited to
the amount contributed and it has no further contractual nor any constructive obligation. The Company
recognised INR 159.83 (2025: INR 161.68) for Provident Fund contributions, INR 0.09 (2025: INR 0.86) for
Employee State Insurance Scheme contributions and INR 0.70 (2025: INR 0.27) for Labour welfare fund
contributions in the Statement of profit and loss.

Note:

The Company recognises a refund liability, based on management estimates, for revenue recognised in the
reporting period that is expected to be reversed in subsequent periods.

15. Revenue from operations

Accounting Policies

i) Revenue from subscription services

The Company receives revenue, towards subscription (granting access) to its online platform www.tracxn.com
for a given duration (rendering of services).

Revenue from contracts with customers is recognised when services are rendered to the customer at an
amount, net of goods and services tax, that reflects the consideration entitled in exchange for those services
and when no significant uncertainty exists regarding the amount of the consideration that will be derived from
rendering the service. The Company recognizes subscription revenues over time wherein the customer
simultaneously receives and consumes the benefits provided by the Company. The progress is measured
using the output method which measures revenue by comparing 'time elapsed' to the 'total subscription
period'.

The invoicing for the services is done upfront for the duration of the subscription with a general credit term of
10-30 days, which is consistent with market practice. The Company does not adjust the transaction prices for
any time value of money as the transfer of the promised services to the customer and payment by the
customer does not generally exceed one year.

ii) Revenue from business information services

Revenue from Business Information Service is recognised in accordance with Ind AS 115 at the point in time
when the required information is provided to the customer, which generally occurs by way of electronic
delivery/ download. Revenue is measured at the transaction price, net of goods and services tax (GST). This is
a single performance obligation satisfied upon delivery of the information. Consideration is normally received
in advance, and accordingly, the contracts do not contain a significant financing component. The transactions
are non-cancellable once delivery is made, and the Company does not expect any significant uncertainty in
collectability of consideration.

iii) Refund liabilities

The Company recognises a refund liability for the revenue recognised but likely to be cancelled in the
subsequent period. The company estimates the expected cancellations based on acknowledgements from
customers or platform usage data.

iv) Contract liabilities

A contract liability is the obligation to provide services to a customer, for such future periods for which the
Company has received consideration (or an amount of consideration is due) from the customer. Contract
liabilities are recognised as revenue with the passage of time; when the Company provides services under the
contract. Refer Note 13.

B) Fair value hierarchy

This section explains the judgements and estimates made in determining the fair values of the financial
instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which
fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used
in determining fair value, the Company has classified its financial instruments into 3 levels/hierarchy prescribed
under the accounting standard.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes mutual funds
that have quoted price. The mutual funds are valued using the closing NAV.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation
techniques which maximize the use of observable market data and rely as little as possible on entity-specific
estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in
level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included
in level 3.

There are no transfers between the levels during the year.

C) Valuation process:

The Company performs the valuation of financial assets and liabilities required for financial reporting
purposes, including those classified under Level 3 of the fair value hierarchy. These valuations are performed
by the finance department, which operates under established governance protocols and reports directly to the
Chief Financial Officer. The valuation process is designed to ensure that fair value measurements are
consistently applied in accordance with applicable accounting standards.

D) Valuation techniques:

For Level 1 and Level 2 financial instruments, the Company uses observable market data, historical trends,
and internal estimates to determine fair value.

The fair value of investments in mutual fund units is based on the net asset value ('NAV') as stated by the
issuers of these mutual fund units in the published statements as at each reported balance sheet date. NAV
represents the price at which the issuer will issue further units of mutual fund and the price at which issuers
will redeem such units from the investors.

For Level 3 instruments measured at amortised cost, the carrying amounts of trade receivables, trade
payables, cash and cash equivalents, other financial assets and other financial liabilities are considered to be
the same as their fair values due to their short-term nature.

For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair
values.

22. Financial risk management

The Company's business activities expose it to a variety of financial risks, namely credit risk, liquidity risk and
market risk. The Company's senior management has overall responsibility for the establishment and oversight
of the Company's risk management framework. The below table broadly summarizes the sources of financial
risk to which the entitv is exposed to and how the entitv manages the risk.

A) Credit risk

Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The
maximum exposure to the credit risk at the reporting date is primarily from trade receivables. Trade receivables
are typically unsecured and are derived from revenue earned from customers located in various countries.
Credit risk is managed by the Company through continuously monitoring of the outstanding receivables.

The loss allowances for financial assets are based on assumptions about risk of default and expected loss rates.
The Company uses judgement in making these assumption and selecting the inputs to the impairment
calculations, based on the Company's past history and existing market conditions as well as forward- looking
estimates at the end of each reporting period.

The Company is also exposed to credit risk in respect of cash and cash equivalents, deposits with banks and
investment in mutual funds. As a policy, the Company places its cash and cash equivalents and deposits with well
established banks and financial institutions. Management has evaluated and determined expected credit loss for
cash and cash equivalents, deposits with banks, security deposits and other financial assets to be insignificant.

B) Liquidity risk

Liquidity risk is a risk that the Company may not be able to meet its financial obligations associated with its
financial liabilities on a timely basis through:

a) Primary source - cash and cash equivalents i.e. cash generated from operations,

b) Secondary source - mutual fund investments and bank deposits (liquid investments realisable in
short term).

A material and sustained shortfall in cash flows generated from operation could expose the company to liquidity
risk. The company manages the liquidity risk by monitoring rolling cash flow forecasts and maturity profiles of its
financial assets and liabilities.

i) Maturities of financial liabilities

The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12
months are equal to the carrying balances as the impact of discounting is not significant.

C) Market risk

i) Foreign exchange risk

Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the
company's functional currency, Indian Rupee (INR). The company is exposed to foreign exchange currency risk
arising from foreign currency transactions primarily with respect to United States Dollar (USD) which are not
hedged. The risk is measured through sensitivity analysis of probable movement in exchange rate as at the
end of reporting period.

24. Employee stock option expense

Tracxn employee stock option plan 2016 ("ESOP 2016" or "the Plan"): The Board vide its resolution dated 3
October 2016 approved ESOP 2016 for granting Employee Stock Options in the form of Equity Shares linked to the
completion of a minimum period of continued employment to the eligible employees of the Company. The eligible
employees for the purpose of ESOP 2016 will be determined by the Board of Directors. Pursuant to the
Extraordinary General Meeting held on 5 October 2016, the Board of Directors have been authorized to introduce,
offer, issue and allot options to eligible employees of the Company under the ESOP 2016. The maximum number
of shares under this Plan shall not exceed 1,21,52,582 shares. These Options shall vest not less than one year and
not more than 4 years from the date of grant of such Options.

Tracxn employee stock option plan 2024 ("ESOP 2024" or "the Plan"): The Board vide its resolution dated 8
November 2024 approved ESOP 2024 for granting Employee Stock Options in the form of Equity Shares linked to
the completion of a minimum period of continued employment to the eligible employees of the Company. The
eligible employees for the purpose of ESOP 2024 will be determined by the Board of Directors. The Board of
Directors have been authorized to introduce, offer, issue and allot options to eligible employees of the Company
under the ESOP 2024. The maximum number of shares under this Plan shall not exceed 30,00,000 shares. These
Options shall vest not less than one year and not more than 5 years from the date of grant of such Options.

25. Segment Reporting

a) Description of Segments and Principal Activities

The Company generates revenues from subscription to and one-time usage of 'Tracxn' platform, with the
operating results regularly reviewed by the Company's chief operating decision maker(s), i.e. the Board of
Directors who make decisions with respect to resource allocation and performance assessment of the
Company, as a whole and as one single segment. Accordingly there are no separate reportable segments.

b) Geographical Information

The Company is domiciled in India. The breakup of Company's revenue from overseas customers, by
geographical location is shown in the table below.

a) The Company had issued equity shares in the FY 2013-14 to certain individuals at a premium for which the
assessing officer had added income in the hands of the Company amounting to INR 89.03 under Section 56(2)
(vii)(b) of the Income Tax Act, 1961. During the year ended 31 March 2020, the Company has filed an appeal
with the Income Tax Appellate Tribunal (ITAT), where the ITAT vide its order dated 23 October 2020 has ruled in
the favour of the Company. Demand amount was adjusted against refund for the FY 2017-18 vide order dated 18
September 2019. During the current financial year, the final order has been passed u/s 254 and accordingly the
pending refund of FY 2017-18 has been received.

28. Commitments

Capital commitments

There were no capital commitments as at the end of current/previous year.

Notes:

1. The Company did not have any debt outstanding as at 31 March 2026 and 31 March 2025. Accordingly, the
debt-equity ratio and the debt service coverage ratio have not been disclosed.

2. The business model of the company is services oriented hence there is no inventory. Accordingly the inventory
turnover ratio is not applicable.

3.Improved significantly, indicating enhanced collection efficiency and faster conversion of receivables into
cash.

4. Reduced significantly on account of decrease in profits before tax coupled with a slight increase in share
capital due to issue of shares on account of employee stock options and buy back of shares during the year,
resulting in decrease of total reserves and surplus of the company.

5. Lower profit before exceptional items and tax compared with 31 March 25, while the asset base remained
broadly similar.

31. Leases

The Company has taken office premises on lease. Rental contracts are typically made for 11 months, and
extendable for further periods upon mutual agreement. The notice period for such leases is 2-3 months where
either party can terminate the lease without any significant penalty or loss. Extension options have not been
included in the lease term as exercising this option is currently not reasonably certain. Accordingly, the Company
has elected to treat such leases as short term leases and taken an exemption from recognition of right-of-use
assets and related lease liabilities in accordance with Ind AS 116.

33. Exceptional item

On November 21, 2025, the Government of India notified the four Labour Codes - the Code on Wages, 2019, the
Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and
Working Conditions Code, 2020 - consolidating twenty-nine existing labour laws. The Ministry of Labour &
Employment published draft Central Rules and FAQs to facilitate assessment of the financial impact due to
changes in regulations. Based on the best information available as at the reporting date, and understanding of
the with the FAQ issued by The Ministry of Labour & Employment and guidance issued by The Institute of
Chartered Accountants of India, the Company has assessed and disclosed the incremental impact of the Labour
Codes on the employee benefit expenses.

The Company has presented such incremental impact as "Exceptional items" in the statement of unaudited
financial statments for year ended 31 March, 2026. The incremental impact consisting of gratuity of Rs. 102.50
Lakhs and long-term compensated absences of Rs. 27.83 Lakhs primarily arises due to change in wage
definition. The Company continues to monitor the finalisation of Central/ State Rules and clarifications from the
Government in this regard and would provide appropriate accounting effect on the basis of such developments
as needed.

34. Other Accounting Policies

Other than the material accounting policies
given earlier, this note provides a list of other
accounting policies adopted in the preparation
of these financial statements. These
accounting policies have been consistently
applied to all the years presented, unless
otherwise stated.

34.1. Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided
to the chief operating decision maker(s).

Refer Note 25 for segment information
presented.

34.2. Foreign currency translation

i) Functional and presentation currency

Items included in the Financial Statements
of the Company are measured using the
currency of the primary economic
environment in which the Company
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

Foreign currency transactions are
translated into the functional currency
using the exchange rates at the dates of
the transactions. Foreign exchange gains
and losses resulting from the settlement
of such transactions and from the
translation of monetary assets and
liabilities denominated in foreign
currencies at year end exchange rates are
recognised in the Statement of Profit and
Loss on a net basis within other gains/
(losses).

34.3. Income Tax

The income tax expense or credit for the
period is the tax payable on the current
period's taxable income

based on the applicable income tax rate
adjusted by changes in deferred tax assets
and liabilities attributable to temporary
differences and to unused tax losses, if any.

The current income tax charge is calculated
on the basis of the tax laws enacted or
substantively enacted at the end of the
reporting period.

Management periodically evaluates positions
taken in tax returns with respect to situations
in which applicable tax regulation is subject to
interpretation and considers whether it is
probable that a taxation authority will accept
an uncertain tax treatment. The Company
measures its tax balances either based on the
most likely amount or the expected value,
depending on which method provides a better
prediction of the resolution of the uncertainty.

34.4. Leases

Leases are recognised as a Right-of-use asset
and a corresponding liability at the date at
which the leased asset is available for use by
the company.

Assets and liabilities arising from a lease are
initially measured on a present value basis.
Lease liabilities include the net present value
of the following lease payments:

• Fixed payments (including in substance
fixed payments), less any incentives
receivable

• Variable lease payments that are based on
an index or a rate, initially measured using
the index or rate as at the commencement
date

• Amounts expected to be payable by the
company under residual value guarantees

• The exercise price of a purchase option if
the company is reasonably certain to
exercise that option, and

• Payments of penalties for terminating the
lease, if the lease term reflects the
company exercising that option.

Extension and termination options are
included in many of the leases. In determining
the lease term the management considers all
facts and circumstances that create an
economic incentive to exercise an extension
option, or not exercise a termination option.

Lease payments to be made under reasonably
certain extension options are also included in
the measurement of the liability. The lease
payments are discounted using the company's
incremental borrowing rate, which is the rate
that the Company would have to pay to borrow
the funds necessary to obtain an asset of
similar value to the right-of-use asset in a
similar economic environment with similar
terms, security and conditions.

If a readily observable amortising loan rate is
available to the Company (through recent
financing or market data) which has a similar
payment profile to the lease, then that rate is
used as the incremental borrowing rate.

Lease payments are allocated between
principal and finance cost. The finance cost is
charged to Statement of Profit and Loss over
the lease period so as to produce a constant
periodic rate of interest on the remaining
balance of the liability for each period.

Lease payments that represent payments
based on actual utilisation of common
facilities of the leased asset are recognised in
the Statement of Profit and Loss as and when
they are incurred.

Right-of-use assets are measured at cost
comprising the following:

• The amount of initial measurement of
lease liability

• Any lease payments made on or before the
commencement date less any lease
incentives received

• Any initial direct costs, and

• Restoration costs

• Right-of-use assets are generally
depreciated over the shorter of the asset's
useful life and the lease term on a straight¬
line basis.

34.5. Financial instruments

Financial assets and financial liabilities are
recognised when a Company becomes a party
to the contractual provisions of the
instruments.

Financial assets (excluding trade receivables
which do not contain significant financing
component) 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 profit or loss.

Investments and other financial
assets

A) Classification

The Company classifies its financial
assets in the following measurement
categories:

• Those to be measured subsequently at
fair value (either through other
comprehensive income, or through
profit or loss), and

• Those measured at amortised cost.

The classification depends on entity's
business model for managing the financial
assets and the contractual terms of the
cash flow. For assets measured at fair
value, gains and losses will either be
recorded in profit or loss or other
comprehensive income. For investments
in debt instruments, this will depend on
the 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. The classification depends on
entity's business model for managing the
financial assets and the contractual terms
of the cash flow. For assets measured at
fair value, gains and losses will either be
recorded in profit or loss or other
comprehensive income. For investments in
debt instruments, this will depend on the
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. The Company reclassifies debt
investments when and only when its
business model for managing those
assets changes.

B) Recognition

Regular way purchases and sales of
financial assets are recognised on trade-
date, the date on which the Company
commits to purchase or sell the financial
asset.

C) Subsequent measurement

i) At Amortised cost

Assets that are held for collection of
contractual cash flows where those cash
flows represent solely payments of
principal and interest are measured at
amortised cost. Interest income from
these financial assets is included in the
statement of profit and loss using the
effective interest rate method. Any gain or
loss arising on derecognition is
recognised directly in the statement of
profit and loss. Impairment losses are
presented in the statement of profit and
loss.

ii) Fair Value through Other Comprehensive
Income (FVOCI)

Assets that are held for collection of
contractual cash flows and for selling the
financial assets,

where the assets' cash flow represent
solely payments of principal and interest,
are measured at fair value through other
comprehensive income (FVOCI).

Movements in the carrying amount are
taken through OCI, except for the
recognition of impairment gains or losses,
interest revenue and foreign exchange
gains and losses which are recognised in
profit and loss. When the financial asset is
derecognised, the cumulative gain or loss
previously recognised in OCI is
reclassified from equity to the statement
of profit and loss and recognised under
other income/ other expenses. Interest
income from these financial assets is
included in other income using the
effective interest rate method.

iii) Fair Value through Profit and Loss
(FVTPL)

Assets that do not meet the criteria for
amortised cost or FVOCI are measured at
fair value through profit or loss. A gain or
loss on a debt investment that is
subsequently measured at fair value
through profit or loss and is not part of a
hedging relationship is recognised in
profit or loss and presented net in the
statement of profit and loss in the period
in which it arises. Interest income from
these financial assets is included in other
income.

D) Impairment of financial assets

The Company recognizes a loss allowance
for expected credit losses on financial
assets that are measured at amortised
cost. The credit loss is difference between
all contractual cash flows that are due to
an entity in accordance with the contract
and all the cash flows that the entity
expects to receive (i.e., all cash shortfalls),
discounted at the original effective interest
rate.This is assessed on an individual or
collective basis after considering all
reasonable and supportable information
including that which is forward-looking.

The losses arising from impairment are
recognised in the Statement of Profit and
Loss.

E) Derecognition

A financial asset is derecognised only
when

• The Company has transferred the
rights to receive cash flows from the
financial asset or

• Retains the 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.

Where the entity has transferred an asset,
the Company evaluates whether it has
transferred substantially all risks and
rewards of ownership of the financial
asset. In such cases, the financial asset is
derecognised. Where the entity has not
transferred substantially all risks and
rewards of ownership of the financial
asset, the financial asset is not
derecognised. Where the entity has neither
transferred a financial asset nor retains
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 the
extent of continuing involvement in the
financial asset.

F) Interest income

Interest income is recognised using
effective interest method. The effective
interest rate is the rate that exactly
discounts estimated future cash receipts
through the expected life of the financial
asset to the gross carrying amount of a
financial asset.

34.7. Cash and cash equivalents

For the purpose of presentation in the
statement of cash flows, cash and cash
equivalents include cash on hand, deposits
held at call with financial institutions, other
short-term, highly liquid investments

(excluding investment in debt mutual funds
e.g. liquid funds which are shown separately
as Investments) with original maturities of
three months or less that are readily
convertible to known amounts of cash and
which are subject to an insignificant risk of
changes in value.

34.8. Financial liabilities

A) Classification

Financial liability and equity instruments
issued by a Company are classified as
either financial liabilities or as equity in
accordance with the substance of the
contractual arrangements and the
definitions of a financial liability and an
equity instrument.

B) Subsequent measurement

Financial liabilities are subsequently
measured at amortised cost using the
effective interest rate method unless at
initial recognition, they are classified as
fair value through profit or loss.

C) Derecognition

A financial liability is derecognised when
the obligation specified in the contract is
discharged, cancelled or expires.

34.9. Trade and other payables

These amounts represent liabilities for goods
and services provided to the Company prior to
the end of financial year, which are unpaid.
The amounts are unsecured and are usually
paid within the credit period. Trade and other
payables are presented as current liabilities
unless payment is not due within twelve
months after the reporting period.

They are recognised initially at their fair value
and subsequently measured at amortised
cost using the effective interest method. 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.

34.10. Property, plant and equipment

Historical cost includes expenditure that is
directly attributable to the acquisition of the
assets.

Subsequent costs are included in the asset's
carrying amount or recognised 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 a separate asset is derecognised when
replaced. All other repairs and maintenance
are charged to profit or loss during the
reporting period in which they are incurred.

The assets' residual value and useful life are
reviewed, and adjusted if appropriate, at the
end of each reporting period. An asset's
carrying amount is written down immediately
to recoverable amount if the asset's carrying
amount is greater than its estimated
recoverable amount. Gains and losses on
disposals are determined by comparing
proceeds with carrying amount. These are
included in the Statement of Profit and Loss
within Other gains/ (losses).

34.11. Intangible assets

Software:

Operating software is capitalised along with
the related fixed assets. Costs associated with
maintaining the software are recognised as an
expense as incurred. Development costs that
are directly attributable to the design and
testing of identifiable and unique software
products controlled by the company are
recognised as intangible assets where the
following criteria are met:

• It is technically feasible to complete the
software so that it will be available for use

• Management intends to complete the
software and use or sell it

• There is an ability to use or sell the
software

• It can be demonstrated how the software
will generate probable future economic
benefits

• Adequate technical, financial and other
resources to complete the development
and to use or sell the software are
available, and

• The expenditure attributable to the
software during its development can be
reliably measured.

Amortisation methods and periods:

The Company amortizes software with a finite
useful life using the straight line method over
three years and the useful life is reviewed at
end of each reporting period, and adjusted if
appropriate. The amortisation method and the
estimated useful life of intangible assets are
reviewed at each reporting period.

34.12. Impairment of non-financial assets

Assets are tested for impairment whenever
events or changes in circumstances indicate
that the carrying amount may not be
recoverable. Intangible assets under
development are tested for impairment on an
annual basis. An impairment loss is
recognised for the amount by which the
asset's carrying amount exceeds its
recoverable amount. The recoverable amount
is the higher of an asset's fair value less cost
of disposal and value in use.

For the purposes of assessing impairment,
assets are grouped at the lowest levels for
which there are separately identifiable cash
inflows which are largely independent of the
cash inflows from other assets or groups of
assets (cash-generating units). Non-financial
assets that have suffered an impairment are
reviewed for possible reversal of the
impairment at the end of each reporting
period.