iv. Rights, preferences and restrictions attached to equity shares

The Company has only one class of equity shares having a par value of '10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors, if any, is subject to the approval of the shareholders in the ensuing general meeting.

(a) Gratuity

The Company provides its employees with benefits under a defined benefit plan, referred to as the “Gratuity Plan”. The Gratuity Plan entitles an employee, who has rendered at least five years of continuous service, to receive 15 days salary for each year of completed service (service of six months and above is rounded off as one year) at the time of retirement/ exit, restricted to a sum of '20 laks in accordance with Payment of Gratuity Act, 1972.

24. Fair value measurements

(i) Fair value hierarchy

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the measurement, as follows:

Level 1: Quoted prices (unadjusted) in active markets for financial instruments.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data rely as little as possible on entity specific estimates.

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

The Company does not have any financial instrument measured at fair value on recurring basis under Level 2 catergory. There are no transfers between levels during the year. The Company’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.

(iii) Valuation technique used to determine fair value

Investment in equity units of venture capital fund are valued based on valuation principles, techniques and methodology adopted by such venture capital fund. Investment in equity share of subsidiary are valued based on valuation techniques, including discounted cash flow method, adopted by the Company.

25. Financial instruments risk management

“The Company’s principal financial liabilities comprises of trade and other payables. The Company’s principal financial assets include trade and other receivables, cash and cash equivalents and other bank balances that derive directly from its operations. The Company also holds FVTOCI and FVTPL investments.

The Company is exposed to credit risk, market risk and liquidity risk. The Company’s Board of Directors oversees the management of these risks. The Company’s Board of Directors are supported by the senior management that advises on financial risks and the appropriate financial risk governance framework for the Company. The senior management provides assurance to the Company’s Board of Directors that the Company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives.

A. Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for credit losses and impairment that represents its estimate of expected losses in respect of trade and other receivables.

Trade and other receivables

The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry and country in which the customer operates, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

Financial assets that are neither past due nor impaired

None of the Company’s cash equivalents, including fixed deposits, were either past due or impaired as at 31 March 2025.

(All amounts in ' lakhs, Notes to the standalone financial statements for the year ended 31 March 2025)

Other than trade receivables, the Company has no significant class of financial assets that is past due but not impaired.

On account of adoption of Ind AS 109, the Company uses Expected Credit Loss (ECL) model for assessing the impairment loss. For this purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. The provision matrix takes into account external and internal credit risk factors and historical data of credit losses from various customers. The management believes that there is no change in allowance for credit losses during the year ended 31 March 2024 and 31 March 2024.

B. Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Company’s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to meet obligations, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

The Company’s principal sources of liquidity are the cash flows generated from operations. Further the Company has no long term borrowings and working capital facilities which the management believes are not required considering its present scale of operations.

Maturities of financial liabilities

The tables below analyses the Company’s financial liabilities following into different maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is insignificant.

C. Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as foreign currency exchange rates) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all shortterm and long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk. Thus, the Company’s exposure to market risk is a function of revenue generating and operating activities in foreign currencies.

Foreign exchange risk

“The Company’s foreign exchange risk arises from its foreign currency revenues (primarily in US$). Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the company’s functional currency. A significant portion of the Company’s revenues are in US$. As a result, if the value of the Indian rupee appreciates relative to US$, the Company’s revenues measured in Indian rupees may decrease.

26. Capital risk management

The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Hence, the Company may adjust any dividend payments, return capital to shareholders or issue new shares. Total capital is the equity as shown in the statement of financial position. Currently the Company does not have any long term borrowings and working capital facilities.

27. Composite Scheme of Arrangement

(A) The Board of Directors of Covance Softsol Limited (“the Company”), in its meeting held on 14th August 2023, approved a Composite Scheme of Arrangement (“Scheme”) under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, between Softsol India Limited (“Transferor Company” or “Softsol”) and Covance Softsol Limited (“Transferee Company” or “Covance”), a wholly owned subsidiary of the Transferor Company, and their respective shareholders and creditors.

The Scheme, inter-alia, provides for the following:

1. Transfer and vesting of the IT Consulting Services Business Undertaking (“Demerged Undertaking”) from the Transferor Company to the Transferee Company;

2. Reduction and cancellation of the entire share capital of the Transferee Company held by the Transferor Company;

3. Issuance and allotment of equity shares by the Transferee Company to the shareholders of the Transferor Company in consideration for the transfer of the Demerged Undertaking.

The Hon’ble National Company Law Tribunal (NCLT), [Hyderabad Bench], sanctioned the Scheme on 12th September 2024, which became effective on 25th September 2024, being the date on which the certified copy of the NCLT Order was filed with the respective Registrar of Companies.

Pursuant to the Scheme becoming effective:

• The Demerged Undertaking of Softsol India Limited stands transferred to and vested in Covance Softsol Limited with effect from April 1, 2023, being the Appointed Date as defined in the Scheme.

• All transactions pertaining to the Demerged Undertaking from the Appointed Date to the Effective Date were carried out by Softsol on behalf of Covance.

• In accordance with the Scheme, Covance issued and allotted equity shares to the shareholders of Softsol in the agreed share exchange ratio and cancelled the equity shares earlier held by Softsol.

(B) Basis of Carve-Out Financials with respect to Demerged Undertaking till Effective Date

The financial information related to the Demerged Undertaking has been prepared in accordance with the Guidance Note on ‘Combined and Carve-out Financial Statements’ (“Guidance Note”) issued by the Institute of Chartered Accountants of India (“ICAI”), which lays down the overall framework for the preparation and presentation of carve-out financial information. In preparing the said carve-out financial statements, the principles set out in the

Guidance Note and the accounting treatment as per the Scheme have been applied as follows:

i. The directly identifiable assets, liabilities, income, and expenditure of the Demerged Undertaking are based

on the books of accounts and underlying accounting records maintained by the Company.

ii. Other common assets including current investments in mutual funds, liabilities, income, and expenditure

that are not directly attributable have been allocated other reasonable bases as approved by the Board.

(C) Issuance and Allotment of Equity Shares by Covance Softsol Limited

Pursuant to the Scheme, Covance Softsol Limited has issued and allotted equity shares to the shareholders of Softsol India Limited whose names appeared in the register of members of Softsol as on the Record Date, i.e., October 11, 2024. One equity share of '10/- each in Covance has been issued and allotted as fully paid up for every one equity share of ' 10/- each held in Softsol India Limited.

28. Additional Regulatory Information:

I. There are no immovable properties included in Property Plant and Equipment, whose title deeds are not held in the name of the Company.

II. The Company has not revalued its Property, Plant and Equipment (including Right of use assets) and intangible assets during the year ended March 31, 2025.

III. The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

IV. The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority, as per the available information.

V. The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

VI. The Company has not traded or invested in cryptocurrency transactions during the financial year and there is no balance as at year end.

VII. Audit Trail:

The Company has used accounting software and certain other related software for maintaining its books of account which has a feature of recording audit trail (edit log) facility at application level and the same has operated throughout the year for all relevant transactions recorded in the software, except that:

a. At accounting software, there are certain privileged / administrative access rights for which audit trail feature isn’t enabled at application level.

b. audit trail feature is not enabled at the database level in so far as it relates to accounting and other related software.

Further no instance of audit trail feature being tampered with was noted in respect of these software

31. Deferred tax assets have been recognised only to the extent of deferred tax liabilities i.e deferred tax assets have been recognized only to the extent that it is probable that the underlying tax loss or deductible temporary difference will be utilized against future taxable income of the Company.

32. Where ever required figures have been regrouped.