e) The Company offsets tax assets & liabilities if and only if it has a legally enforceable right to set off current tax assets & current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. Significant Management judgment is required in determining provision for income tax, deferred.

Note 13.1: Includes deposits under lien with bank guarantee issued by the bank on behalf of the Company Rs. 29.47 Millions (Previous Year: Rs. 29.64 Millions).

Note 13.2: There are no repatriation restrictions with regard to Other Bank balances as at the end of the reporting year and previous year.

Note 16.1: During the previous year, pursuant to Scheme of Amalgamation, the authorised share capital of the transferor companies stands merged with the Company, and accordingly the authorised share capital of the Company stands increased from Rs. 120 Millions consisting of 12,000,000 equity shares of Rs. 10/- each to Rs. 327 Millions consiting of 32,700,000 equity shares of Rs 10/-each.

Note 16.2: In the current year, pursuant to Scheme of Amalgamation from the previous year, the Company has allotted & issued 5,267,254 equity shares of Rs 10/- each on May 09, 2023 to the eligible shareholder of the transferor company as on record date.

f) Rights, preferences and restrictions attached to Equity shares

The Company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity share is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the Annual General Meeting except in case of interim dividend. In the event of liquidation, the shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

As per the records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

h) Equity Shares Reserved for Issue Under Options

There are no equity shares reserved for issue under options.

As per provisions of Section 69 of the Companies Act, 2013, Capital Redemption Reserve is to be created when Company purchases (buys back) it’s own shares out of the free reserves for an amount equal to the nominal value of shares (Share Capital extinguished) so purchased. Accordingly during the Financial year ended March 31, 2020 an amount of Rs. 4.61 Millions, i.e., the share capital extiguished had been transferred from Retained Earnings to Capital Redemption Reserve.

Note 17.2: Capital Reserve

The debit balance of capital reserve of Rs. 1,213.51 Millions is on account of the Scheme of Amalgamation between the Company and Expleo India Infosystems Private Limited (EIIPL) (Transferor Company 1), Expleo Technologies India Private Limited (ETIPL) (Transferor Company 2), Expleo Engineering India Private Limited (EEIPL) (Transferor Company 3), and Silver Software Development Centre Private Limited (SSDC) (Transferor Company 4), in the previous financial year 2022-23. Balance amount represents credit balance created on account of previous business restructuring in EIIPL to the tune of Rs. 7.30 Millions.

Note 17.3: Secruties Premium

This balance has been recognised on issue of 334,250 equity shares of Rs.10/- each at a premium of Rs. 20/- each, by EEIPL vide an erstwhile Scheme of Amalgamation to Assystem International S.A. during the financial year 2009-10.

Note 17.4: Employee Stock Compensation Reserve

The Employee Stock Compensation Reserve is used to recognise the grant date fair value of options issued under the Group’s Stock Option Plan provided to employees as part of their remuneration.

Note 17.5: General Reserve

The Company had transferred a portion of its net profit to the General Reserve, on a voluntary basis during the previous years.

Note 17.6: Retained Earnings

Retained Earnings are the profits that the Company has earned till date, less any transfers to General Reserve, dividends or other distributions paid to shareholders.

Note 18.1: Indian Rupee Loan from a financial institution was availed by the Company in June 2021 at an interest rate of 8.80% per annum, secured against first charge on the underlying vehicle so purchased, repayable in 48 equal monthly instalments along with interest with effect from July 2021. During the current year the Company has preclosed the loan.

As per the information available with the Company, there has been no transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 during the year (Previous Year - 0.44 Mn)

Disclosure of trade payables and other liabilities is based on the information available with the Company regarding the status of the suppliers as defined under the “Micro, Small & Medium Enterprises Development (MSMED) Act, 2006”. There is no amount overdue to Micro & Small Enterprises on account of principal amount together with interest for current year ended March 31,2024.

Note 27.1: Disclosures relating to Revenue from Operations

a) Disaggregation of Revenue

The table below presents disaggregated revenues from contracts with customers for the years ended March 31, 2024 and March 31, 2023 by contract type. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of their revenues and cash flows are affected by economic factors.

The Company derives its revenue across two categories of contracts - Fixed Bid contracts and Time & Material (T&M) contracts. The Company has identified a single reportable segment namely ‘Software Validation and Verification Services, Software Development and Engineering consultancy services’ as disclosed in Note 43 to the Standalone Financial Statements. The Company has disclosed revenue generated by geographical market which is provided only as per the specific requirement of Ind AS 108 for a single reportable segment. However, the Company does not assess revenue based on geography and hence there is no disaggregation of revenue disclosed based on geography.

b) The contract liabilities (unearned revenue) primarily relate to the advance consideration received from customers for which revenue is recognised over time. An amount of Rs. 8.55 Millions (Previous Year: Rs.34.72 Millions) recognised in contract liabilities as at April 1, 2023 has been recognised as revenue for the year ended March 31, 2024.

c) There is no revenue recognised in the reporting period for performance obligations satisfied in previous periods.

d) Transaction price allocated to the remaining performance obligations

The aggregate value of transaction price allocated to unsatisfied (or partially satisfied) performance obligations is Rs. 8.48 Millions (Previous Year: Rs. 38.41 Millions)which is expected to be recognised as revenue in the next year. Remaining performance obligation estimates are subject to change and are affected by several factors, including adjustments for currency.

e) Performance obligations and remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performance obligation related disclosures for contracts where the revenue recognized corresponds directly with the value to the customer of the entity’s performance completed to date, typically those contracts where invoicing is on time and material basis and in the case of fixed bid contracts with an original expected project duration of less than one year.

Pursuant to Merger as detailed in Note 45, the Company has issued 5,267,254 equity shares to the Shareholder of the merging entities on May 9, 2023. These new shares have been considered for the purpose of computation of the earnings per share as per the requirements of Ind AS 33 for the year ended March 31, 2023.

a) Basic Earnings Per Share

The calculation of Basic Earnings Per Share is based on profit attributable to equity shareholders and weighted average number of equity shares outstanding.

The calculation of diluted earnings per share is based on the profit attributable to equity shareholders and weighted average number of equity shares outstanding after adjustment for the effects of all dilutive potential equity shares.

a) Compensated Absences

The Company provides for the encashment of leave or leave with pay to offshore employees. The employees are entitled to accumulate leave subject to certain limits, for future availment/ encashment. The liability is provided based on the number of days of unutilised days of leave at each Balance Sheet date on the basis of year-end actuarial valuation using projected unit credit method. The scheme is unfunded.

(ii) Gratuity

The Company offers gratuity benefits, a defined employee benefit scheme to its employees. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting.

The fund is managed by LIC, the fund manager. However, the said funds are subject to Market risk (such as interest risk, investment risk, etc.). The said benefit plan is exposed to actuarial risks such as longevity risk and salary risk.

Note: 34.2:

(i) The Company has no legal obligation to settle the deficit in the funded plans with an immediate contribution or additional one off contributions. The Company intends to continue to contribute to the defined benefit plans based on short term expected pay-outs in line with the actuary’s recommendations.

(ii) Usefulness & methodology adopted for sensitivity analysis

Sensitivity analysis is an analysis which will give the movement in liability if the assumptions were not to be true on a different count. This only signifies the change in the liability if the difference between the assumed & the actual is not following the parameters of the sensitivity analysis.

(iii) During the previous year, there was partially unfunded liability to the extent of Bengaluru location.

Note 35: Financial Instruments a) Fair Values and Risk Management

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.

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 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 have been no transfers among Level 1, Level 2 and Level 3 during the current year and previous year.

b) Measurement of Fair Value

The Company uses Discounted Cash Flow valuation technique (in relation to Fair Value of asset measured at amortised cost) which involves determination of present value of expected receipt/ payment discounted using appropriate discounting rates. The fair value so determined are classified as Level 2.

c) Financial Risk Management

The Company is exposed primarily to fluctuations in foreign currency exchange rates, credit and liquidity, which may impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.

Credit risk is the risk of financial loss arising from counterparty’s failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses, both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk of existing customer is controlled by continuous monitoring of the collection trend of each customer on a periodical basis. With respect to a new customer, the Company uses external/ internal sources to assess the potential customer’s credit quality.

Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, loans, cash and cash equivalents, other balances with banks and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.

Credit risk on cash and cash equivalents is limited as the Company generally invests in Fixed deposits with banks having high credit ratings.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs. 4,570.82 Millions (Previous Year: Rs. 3,951.74 Millions) being the total of the carrying amount of trade receivables, cash and cash equivalents, other balances with banks and other financial assets.

Trade Receivables

Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each Balance Sheet Date whether a financial asset or a group of financial assets is impaired. The Company recognises lifetime expected losses for all contract assets and / or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 months expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.

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 adjusted for forward-looking information. The concentration of credit risk is limited due to the fact that the customer base is large and unrelated. The expected credit loss allowance is based on the ageing of the days the receivables are due and the rates as given in the provision matrix.

The Company has computed the credit loss allowance based on the Expected Credit Loss model which excludes transactions with its wholly owned subsidiaries.

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes. The Company’s exposure to market risk is primarily on account of foreign currency exchange rate risk.

a) Foreign Currency exchange rate risk

The fluctuation in foreign currency exchange rates may have potential impact on the Statement of Profit and loss, where any transaction references more than one currency or where assets/ liabilities are denominated in a currency other than the functional currency of the Company. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in USD, EURO and GBP against the functional currency of the Company. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks.

b) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates to investments which are primarily short-term fixed deposits, which do not expose it to significant interest rate risk.

(iii) Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.

The Company manages its capital to ensure that it will be able to continue as a going concern while maximizing the return to stakeholders. The Company is not subject to any externally imposed capital requirements.

Note 37: Assets pledged as security

The Company has bank guarantee facilities with banks which are secured by Fixed deposits (Previous year secured by Fixed deposits). There is no outstanding amount due on this account as at the end of the current year and the previous year.

Note 38: Disclosure required under Ind AS 116 “Leases"

The Company has entered into operating leases on its office buildings. These leases have terms of 2 to 10 years. Future minimum contractual rentals payable under non-cancellable operating leases as at March 31, 2024 is Rs. 74.53 Millions (Previous Year: Rs.128.01 Millions)

The Company used a practical expedient, and did not recognise right-of-use assets and liabilities for leases for which the lease term ends within 12 months of the date of initial application. The Lease payments associated with these amounting to Rs. 20.21 Millions (Previous Year: Rs.8.34 Millions) are recognised as expenses on a straight line basis over the lease term.

The Lease Liabilities as at March 31, 2024 amounting to Rs. 260.56 Millions (Previous Year: Rs. 257.87 Millions ) comprises of Non-Current Lease liabilities of Rs.209.82 Millions (Previous Year: Rs.218.76 Millions) and current lease liability of Rs. 50.74 Millions (Previous Year: Rs. 39.11 Millions). The contractual maturities of lease liabilities as of March 31, 2024 is disclosed in Note 35.

The incremental borrowing rates derived by a valuer, on the basis of the borrowing rate for each lease contract for the remaining life of the lease contract, adjusted with the credit profile of the Company, are used for each of the office buildings separately and the average lessee’s incremental borrowing rate applied to lease liabilities recognised in the balance sheet at the date of initial application ranges from 5.46% to 12.52%.

Note 39: Contingent Liabilities and Commitments

The Service Tax Authorities, Chennai had made a demand for Rs. 329.14 Millions along with interest and penalty for an equivalent amount, towards tax leviable for certain services rendered by the Company for the period April, 2011 to March, 2016. The Service Tax Authorities had also made a demand for Rs.126.90 Millions along with interest and penalty of Rs. 1.2 Millions towards tax leviable for certain services rendered by the Company for the period April, 2016 to June, 2017. The Company has filed an appeal before the Central Excise and Service Tax Appellate Tribunal (CESTAT) for both the demands and the Management expects it’s position to be upheld by the Authorities in respect of both the demands.

During the FY 2019-20, the Company has received a show cause notice from the Additional Commissioner of Central Goods and Service Tax Audit -1 Commissioner at Pune towards non-payment of service tax amounting to Rs. 35.75 Millions with regards to import of service on reverse charge basis ( as recipient of service ) in respect of the onsite service received by the company from non-taxable territory for the period FY 2014-15 to FY 2017-18. The company based on the legal advise believes that the claim of the department is not tenable.

During FY 2023-24, the company received a show cause notice from the Additional Commissioner of Central Goods and Service Tax Audit -1 Commissioner in Pune regarding objections raised against submissions made during FY 2019-20. The objection concerning procedures followed regarding SEZ status, specifically the discharge of service tax liability related to services received from non-taxable territories. The issue raised by the Joint Commissioner (JC) pertains to a service tax demand for SEZ exemption nonpayment amounting to Rs. 32.40 million. This relates to import of services under reverse charge basis (as the recipient of services) for onsite services received by the company from non-taxable territories during FY 2014-15 to FY 2017-18. The company has filed an appeal and made payment under protest Rs. 0.81 Million, based on legal advice from its tax consultant. The company based on the legal advise believes that the claim of the department is not tenable.

The Company has received a notice from the Principal Commissioner Pune GST 1 at Pune pertaining to FY 2015-16 towards non payment of service tax amounting to Rs 7.26 Millions towards turnover differences. The company based on the legal advise believes that the claim of the department is not tenable.

Contingent liabilities include demand from the Income tax authorities of Chennai , Pune and Bangalore for payment of additional tax of Rs.230.77 Millions (Previous Year: Rs. 220.12 Millions) for the fiscal years 2009-10, 2011-12, 2012-13, 2013-14, 2014-15, 2015-16, 2016-17, 2017-18,2018-19 and 2019-20 . The tax demand is mainly on account of disallowance of a portion of the deduction claimed by the Company under Section 10A/10AA of the Income Tax Act and also other expenses disallowed. The Company has filed appeals before CIT (Appeals). The Company has paid under protest Rs.73.99 Millions (after adjusting the refund of Rs.13.36 Millions related to earlier years). The Management believes that its position in respect of all the years will be upheld by the Authorities.

In case of Bangalore unit , the Income Tax department has not accepted the transfer price adopted by the Company and has made adjustments to the prices charged by the Company to its associate company for the financial year2009-10 (Assessment Year 2010-11) and financial year 2016-17 (Assessment Year 2017-18) . This has resulted in additional tax demand including penalty for the said years which are disputed by the company. The Management of the Company is confident that the above matter will be ultimately settled in favour of the Company and there will not be any material adjustment on completion of the appeal proceedings. In respect of tax demands for the financial year 2009-10, the Company has paid Rs.2.50 Millions against the tax demand under protest and further the Department has adjusted tax refunds of other years aggregating to Rs.24.55 Millions against this demand, which also includes excess adjustment of Rs.5.45 Millions against which the Company had filed rectification petition. Furthermore, during the current financial year, the company received a notice for Financial Year 2020-21 (Assessment Year 2021-22) with a tax demand of Rs. 52.15 Millions. The company has already filed an appeal before CIT(A) and obtained stay petition for the same.

During the FY 20-21 the Company has made an additional tax provision of Rs.6.58 Millions for the FY 200910 and also has made a payment under protest for Rs.27.90 Millions only for the issue pertaining to Section 10A of the Income Tax Act, 1961.

The amount of exchange gain included in the Statement of Profit & Loss is Rs.9.22 Millions (Previous Year: Gain of Rs. 57.89 Millions).

Note 42: Corporate Social Responsibility

The Company has spent Rs.24.99 Millions during the current year (Previous Year: Rs. 20.11 Millions) as per provisions of Section 135 of the Companies Act, 2013 towards Corporate Social Responsibility (CSR) activities grouped under Note 30 ‘Other Expenses’.

a) The Gross amount required to be spent by the Company during the year is Rs.24.99 Millions(Previous Year: Rs. 20.11 Millions)

Note 43: Segment Information

The Company publishes these Standalone Financial Statements along with the Consolidated Financial Statements. In accordance with the Ind AS 108, Operating Segments, the Company has disclosed the segment information in the Consolidated Financial Statements