3.9 PROVISIONS, CONTINGENT LIABILITIES AND
CONTINGENT ASSETS

a. Provisions

The Company recognises provisions only when it
has a present legal or constructive obligation as a
result of a past event, it is probable that an outflow
of resources embodying economic benefits will be
required to settle the obligation and when a reliable
estimate of the amount of the obligation can be
made.

If the effect of the time value of money is material,
provisions are determined by discounting the
expected future cash flows at a pre-tax rate that
reflects current market assessments of the time
value of money and the risks specific to the liability.
The unwinding of the discount is recognised as
finance cost.

i. Warranty provisions

The Company has an obligation by way of
warranty to maintain the software during the
period of warranty, as per the contractual
requirements, for certain products/licenses.
Costs associated with such sale are accrued at
the time when related revenues are recorded
and included in cost of service delivery.

The Company accounts for the provision
for warranty on the basis of the information
available with the Management duly taking into
account the historical experience and current
estimates.

ii. Onerous contracts

Provisions for onerous contracts are recognised
when the expected benefits to be derived by
the Company from a contract are lower than
the unavoidable costs of meeting the future
obligations under the contract. The provision is
measured at the present value of the lower of
the expected cost of terminating the contract
and the expected net cost of continuing with
the contract. Before a provision is established
the Company recognises any impairment loss
on the assets associated with that contract.

b. Contingent liability
Contingent liability is:

i. Any possible obligation that arises from past
events and the existence of which will be
confirmed only by the occurrence or non¬
occurrence of one or more uncertain future

events not wholly within the control of the
Company; or

ii. Present obligations that arise from past events
but are not recognised because:

- It is not probable that an outflow of
resources embodying economic benefits
will be required to settle the obligation; or

- A reliable estimate of the amount of
obligation cannot be made.

The Company does not recognise such
obligations but are disclosed as contingent
liabilities. These are assessed continually and
only that part of the obligation for which an
outflow of resources embodying economic
benefits is probable, is provided for, except in
the extremely rare circumstances where no
reliable estimate can be made.

c. Contingent asset

Contingent assets are not recognised in the
standalone financial statements since this may
result in the recognition of income that may never
be realised.

Provisions, contingent liabilities and contingent
assets are reviewed at each balance sheet date.

3.10 TREASURY SHARES

The Company has created a KPIT Technologies
Limited Employees Welfare Trust ("EWT") which acts
as a vehicle for distributing shares to employees
under the share-based payment arrangements
to its employees. EWT purchases the Company’s
share from secondary market for issuance to the
employees on exercise of the granted stock options.
EWT is considered as an extension of the Company
and the shares held by EWT are treated as treasury
shares.

The treasury shares are recognised at the
consideration paid including any directly attributable
incremental cost and is presented as a deduction
from equity, until they are sold or reissued. No gain
or loss is recognised in the Statement of Profit and
Loss on purchase, sale, issuance, or cancellation of
treasury shares. When treasury shares are sold or
reissued, the amount received is recognised as an
increase in equity, and the resulting surplus or deficit
on the transaction is transferred to/from other equity.

3.11 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprises cash on
hand, demand deposits and short term, highly

liquid investments that are readily convertible to
known amounts of cash, which are subject to an
insignificant risk of changes in value and have a
short maturity of three months or less from the
date of investment.

3.12 REVENUE RECOGNITION

The Company derives revenues primarily from
providing engineering services which includes
design engineering services, embedded software
development with its related services and from the
sale of licenses and products.

The following is the summary of significant
accounting policies related to revenue recognition:

Revenue is measured based on the consideration
specified in a contract with a customer. The
Company recognises revenue when it transfers
control over a good or service to a customer.

Arrangements with customers for such engineering
and its related services are bifurcated into
following key categories:

a. Revenue on time and material contracts for
the reporting period is recognised as and when
the related services are performed and billed
to the end customers. If billing for the related
services is not done during the reporting period,
revenue is recognized as unbilled revenue at
the end of the reporting period.

b. Revenue from fixed price contracts where the
performance obligations are directly linked to
costs expended and are satisfied over time and
there is no uncertainty as to measurement or
collectability of consideration, is recognised
as per the percentage-of-completion method.
Percentage of completion is determined
based on project costs incurred to date as a
percentage of total estimated project costs
required to complete the project. Costs
expended have been used to measure progress
towards completion as generally there is a
direct relationship between input and output
in respect of work completed.

c. Maintenance revenue is recognised ratably
over the term of the underlying maintenance
arrangement.

d. Revenue from internally developed software
product licenses where the customer obtains
a “right to use” the license is recognised
at the time the license is made available to
the customer. Revenue from licenses where

the customer obtains a “right to access” is
recognised over the access period.

e. Revenue from sale of third party licenses is
recognised only when the sale is completed by
passing ownership.

f. Revenue from sale of hardware products is
recognized upon actual delivery of goods along
with transfer of control and significant risks
and rewards to the customers.

The following are the details of key significant

accounting policies related to revenue recognition

for all the above mentioned categories:

a. Revenue in excess of invoicing is classified
either as contract asset (unbilled revenue)
or financial asset (unbilled revenue), while
invoicing in excess of revenue is classified as
contract liabilities (unearned revenue).

b. Unbilled revenue is classified as contract
asset when there is a right to consideration
in exchange for goods or services which is
conditional on something other than the
passage of time. Whereas, it is classified as
financial asset when such right to consideration
in exchange for goods or services is conditional
only on passage of time.

c. Amount billed in advance, without services
being rendered, is classified as unearned
revenue (contract liabilities).

Revenue is measured based on the transaction
price, which is the consideration, adjusted
for volume discounts, service level credits,
performance bonuses and incentives, if any,
as specified in the contract with the customer.
Expenses reimbursed by customers during the
project execution are recorded as reduction to
associated costs.

d. The Company accounts for volume and/or
trade discounts to customers as a reduction of
revenue. Also, when the level of discount varies
with increases in levels of revenue transactions,
the Company recognises the liability based
on its estimate of the customer's future
purchases. The Company recognises changes
in the estimated amount of obligations for
discounts in the period in which the change
occurs. The discounts are passed on to the
customer either as direct payments or as a
reduction of payments due from the customer.

e. When there is an uncertainty as to measurement
or ultimate collectability, revenue recognition
is postponed until such uncertainty is resolved.

f. In accordance with Ind-AS 37, provision for
onerous contract/ estimated losses, if any,
on uncompleted contracts are recorded in a
period in which such losses become probable
based on the expected contract estimates at
the period end date. The Company recognises
an onerous contract provision when the
unavoidable costs of meeting the obligations
under a contract exceed the economic benefits
to be received.

g. The Company presents revenues net of indirect
tax in its Statement of Profit and Loss.

Significant judgments in revenue recognition:

a. 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
judgment to determine the deliverables
and the ability of the customer to benefit
independently from such deliverables.

b. Judgment 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, 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. 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.

c. The Company uses judgment 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.

d. The Company exercises judgment 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.

e. Revenue from fixed price contracts where the
performance obligations are directly linked to
costs expended and are satisfied over time and
there is no uncertainty as to measurement or
collectability of consideration, is recognised
as per the percentage-of-completion method.
The Company uses judgment to estimate the
future cost-to-completion of the contracts
which is used to determine the degree of the
completion of the performance obligation.

3.13 OTHER INCOME

Other income primarily consist of interest income,
dividend income, net gain on investments carried
at fair value through profit or loss, insurance claim
and net foreign exchange gain. Interest income is
recognised using the effective interest method.
Dividend income is recognised when right to receive
payment is established.

3.14 BORROWING COSTS

Borrowing cost includes interest, other costs
incurred in connection with the borrowing of funds
and exchange differences arising from foreign
currency borrowings to the extent they are regarded
as an adjustment to the interest cost.

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

3.15 EMPLOYEE BENEFITS

a. Defined benefit plan

The Company’s gratuity scheme is a defined
benefit plan. For defined benefit plans, the cost
of providing benefits is determined using the
Projected Unit Credit Method, with independent
actuarial valuations being carried out at each
Balance Sheet date. Remeasurement of net defined
benefit liability, which comprise actuarial gains and
losses, the return on plan assets (excluding interest)
and the effects of asset ceiling (if any, excluding
interest) are recognised in other comprehensive
income for the period in which they occur. Net
interest expense and other expenses related to
defined benefit plans are recognised in Statement
of Profit and Loss. Past service cost is recognised
as an expense at the earlier of (a) when the plan
amendment or curtailment occurs; and (b) when
the entity recognises related restructuring costs or
termination benefits.

The retirement benefit obligation recognised in
the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for
unrecognised past service cost, and as reduced by
the fair value of scheme assets, if any. Any asset
resulting from this calculation is limited to the
present value of available refunds and reductions
in future contributions to the scheme.

b. Defined contribution plan

A defined contribution plan is a post-employment
benefit plan under which an entity pays specified
contributions to a separate entity and has no
obligation to pay any further amounts. The
Company makes specified monthly contributions
towards Government administered provident fund
scheme and Employees’ State Insurance Scheme
in India which are defined contribution plans.
The Company’s contribution is recognised as an
expense in the Statement of Profit and Loss during
the period in which the employee renders the
related service.

c. Compensated absences

The employees can carry-forward a portion of the
unutilized accrued compensated absences and
utilize it in future service periods or receive cash
compensation on termination of employment.

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

Accumulated absences expected to be carried
forward beyond twelve months is treated as long¬
term employee benefit. The Company records an
obligation for such compensated absences in the
period in which the employee renders the services
that increase this entitlement. The obligation is
measured on the basis of independent actuarial
valuation using the Projected Unit Credit Method.
Remeasurement gains/losses are recognised in the
Statement of Profit and Loss in the period in which
they arise.

d. Other employee benefits

The undiscounted amount of short-term employee
benefits and discounted amount of long-term
employee benefit, expected to be paid in exchange
for the services rendered by employees, is
recognised during the period when the employee
renders the service. These benefits also include
performance incentives.

3.16 RESEARCH AND DEVELOPMENT

Costs incurred during the research phase of a
project are expensed when incurred. Costs incurred
in the development phase are recognised as an
intangible asset in accordance with policy defined
in 3.6.

3.17SHARE-BASED PAYMENTS

The Company operates equity settled share-based
plans for the employees. Employee stock options
granted are measured at fair value of stock options
at the grant date using the Black and Scholes
options pricing model. The Company recognises
employee compensation expense, using such grant
date fair value, on straight-line basis over the
vesting period, with a corresponding increase in
equity (Share-based payment reserve).

When the terms of the share-based payment
arrangement are modified, the minimum expense
recognised is the expense had the terms not
been modified. Additional expense is recognised
on modification that increase the total fair value
of the share-based payment arrangement or are
otherwise beneficial to the employee as measured
at the date of modification. Where the grant of
equity instruments is cancelled by the entity, the
remaining fair value is recognised immediately in
the Statement of Profit and Loss.

For the stock options granted to the employees of
the subsidiaries, the share-based compensation
expenses are charged to the respective subsidiary.
The said recovery is netted off from the Employee
benefits expense.

3.18 DIVIDEND

The Company declares and pays dividends in Indian
rupees. Final dividend on equity shares is recorded
as a liability on approval by the shareholders and
interim dividend is recorded as a liability on the
date of declaration by the Company’s Board of
Directors.

3.19 INCOME TAXES

Income tax expense comprises current and
deferred tax. Income tax expense is recognised
in the Statement of Profit and Loss except to the
extent that it relates to items recognised directly
in equity, in which case it is recognised in other
comprehensive income.

Current income tax for current and prior periods
is recognised at the amount expected to be paid
to or recovered from the tax authorities, using the
tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date.
The Company offsets current tax assets and current
tax liabilities, where it has a legally enforceable
right to set off the recognised amounts and where
it intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.

Deferred tax assets and liabilities are recognised
for all temporary differences arising between the
tax bases of assets and liabilities and their carrying
amounts in the Standalone Financial Statements.
Deferred tax assets and liabilities are measured
using tax rates and tax laws that have been enacted
or substantively enacted by the balance sheet date
and are expected to apply to taxable income in the
years in which those temporary differences are
expected to be recovered or settled. The effect
of changes in tax rates on deferred tax assets
and liabilities is recognised as income or expense
in the period that includes the enactment or the
substantive enactment date.

A deferred tax asset is recognised to the extent
that it is probable that future taxable profit will be
available against which the deductible temporary
differences and tax losses can be utilized unless it
arises out an asset or liability in a transaction that
is not a business combination and, affects neither
accounting and taxable profit/loss at the time of

transaction. The carrying amount of deferred tax
assets is reviewed at each reporting date and
reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be
utilized.

Deferred tax liabilities are recognized for all taxable
temporary differences except in respect of taxable
temporary differences associated with deferred
tax liability arising from initial recognition of
investments in subsidiaries, joint venture, associate
and branches where the timing of the reversal of
the temporary difference can be controlled and it
is probable that the temporary difference will not
reverse in the foreseeable future.

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

Minimum Alternate Tax

Minimum Alternate Tax ("MAT") under the provisions
of the Income-tax Act, 1961 is recognised as current
tax in the Statement of Profit and Loss. The credit
available under the Act in respect of MAT paid is
recognised as an asset only when and to the extent
there is convincing evidence that the Company
will pay normal income tax during the period for
which the MAT credit can be carried forward for
set-off against the normal tax liability. MAT credit
recognised as an asset is reviewed at each Balance
Sheet date and written down to the extent the
aforesaid convincing evidence no longer exists.

3.20 EARNINGS PER SHARE

Basic earnings per share are computed by dividing
the net profit for the year after tax by the weighted
average number of equity shares outstanding
during the financial year, adjusted for treasury
shares. Diluted earnings per share is computed
by dividing the net profit for the year after tax by
the weighted average number of equity shares
outstanding during the financial year as adjusted
for treasury shares and the effects of all dilutive
potential equity shares except where the results
are anti-dilutive.

3.21 RECENT PRONOUNCEMENTS

Ministry of Corporate Affairs (“MCA”) notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards)
Rules as issued from time to time.

a. In May 2025, MCA notified amendments to
Ind-AS 21 - The Effects of Changes in Foreign
Exchange Rates, applicable w.e.f. 1 April 2025.
The Company does not have any significant
impact of this amendment.

b. In August 2025, MCA notified the following
amendments to:

i. Ind-AS 1 - Presentation of Financial

Statements (applicable w.e.f. 1 April 2025)

The amendment relates to classification
of liabilities as current or non-current and
non-current liabilities with covenants.
In the context of classifying a liability as
current, it removes the requirement of
existence of a right to defer settlement
for at least 12 months after the reporting
date and instead requires that the said
right should exist on the reporting date
and have substance. The amendment also
introduces guidance on classification of
liabilities with covenants. The Company
does not have impact of these amendments
in its classification criteria of current and
non-current liabilities.

3.21 RECENT PRONOUNCEMENTS

b. In August 2025, MCA notified the following
amendments to:

ii. Ind-AS 7 - Statement of Cash flows
and Ind-AS 107 - Financial instruments
(applicable w.e.f. 1 April 2025)

The amendment in Ind-AS 7 requires
to inform users of financial statements
of the existence of supplier finance
arrangements and explain the nature of
the arrangements, the carrying amount of
liabilities and the range of payment due
dates. Ind-AS 107 has amended to add
supplier finance arrangements as a factor
that may cause concentration of liquidity
risk. The Company does not have any
impact on its financial statements.

iii. Ind-AS 12 - International Tax Reform

MCA has notified amendments in
relation to the OECD Pillar Two Model
Rules on international tax reform. These
amendments introduce a temporary
mandatory exception from the recognition
and disclosure of deferred taxes arising
from the implementation of Pillar Two

“top-up tax”. The exception is required to
be applied immediately and retrospectively.
The amendments also require entities to
disclose the application of this exception.

The Organization for Economic Co¬
operation and Development has issued the
Global Anti-Base Erosion (GloBE) Model
Rules under the Pillar Two framework,
which apply to multinational groups

meeting the prescribed consolidated
revenue threshold. Based on the current
assessment, as the Company does not
meet the threshold for consolidated
revenues prescribed under the OECD
framework, the Company is not within the
scope of Pillar Two legislation. Accordingly,
the above amendments to Ind AS 12 are
not applicable to the Company.

19.1 The Company has only one class of shares referred to as equity shares having a face value of 5 10. Each
shareholder of equity shares is entitled to one vote per share.

19.2 In the event of liquidation of the Company, the holders of equity shares will be entitled to receive a share in
the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.

19.3 Reconciliation of the number of equity shares outstanding at the beginning and at the end of the year:

19.6 Aggregate number of shares issued for consideration other than cash during the period of five years immediately
preceding the reporting date - Nil (Previous year Nil).

19.7 Refer note 38 for details relating to employee stock options.

19.8 Dividend

The Company declares and pays dividends in Indian rupees.

Proposed dividend:

The Board of Directors at its meeting held on 6 May 2026, has recommended a final dividend of 5 5.25 per equity
share for the year ended 31 March 2026, which is subject to the approval of shareholders at the Annual General
Meeting.

19.9 Capital Management

The Company’s Capital Management policy is aimed at maintaining a stable capital base so as to ensure overall
financial stability and operational efficiency. The Company will aim to strike the right balance between:

(a) Liquidity, required not only for the operations of the Company but also the investments required for future
growth;

(b) Returns, by investing excess funds as per the board approved investment policy; and

(c) Distribution of dividends to the shareholders of the Company with an overall objective of consistently
maximizing shareholder value over a long period of time.

The Company is predominantly equity financed and will always aim to be a Net Cash company.

20.3 Nature and purpose of reserves

(i) Capital reserve

Any profit or loss on purchase, sale, issue or cancellation of the Company’s own equity instruments is transferred to
capital reserve. Any surplus or shortfall on account of merger/demerger within common control is also transferred
to capital reserve. This reserve is not available for distribution of dividend.

(ii) General reserve

The general reserve is created by a transfer from one component of equity to another and is not an item of
other comprehensive income. Items included in the general reserve will not be reclassified subsequently to the
Standalone Statement of Profit and Loss.

(iii) Retained earnings

Retained earnings comprises of the undistributed accumulated earnings after tax of the Company as on the
balance sheet date. This amount can be used to distribute dividend to equity shareholders.

(iv) Share-based payment reserve

Share based payment reserve is used to recognise the grant date fair value of equity-settled share-based payment
transactions with employees over the vesting period. This reserve is utilised upon exercise of options. Refer note
38 for the details of employee stock options scheme and restricted stock unit plan.

(v) Special Economic Zone Re-investment reserve

The Special Economic Zone Re-investment Reserve was created out of the profit of eligible SEZ units in terms of the
provisions of Section 10AA(1)(ii) of the Income-tax Act, 1961. The reserve is utilized by the Company for acquiring new
assets for the purpose of its business as per the terms of the Section 10AA(2) of the Income-tax Act, 1961.

(vi) Effective portion of cash flow hedges (Refer note 34.3)

This comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments
related to hedged transactions that have not yet occurred. When a hedged transaction occurs or is no longer
expected to occur, the net cumulative gain or loss recognised in this reserve is transferred to the Standalone
Statement of Profit and Loss.

(vii) Remeasurement of net defined benefit plan (Refer note 37)

This represents the cumulative gains and losses arising on the remeasurement of defined benefit plans in
accordance with Ind AS 19 that have been recognised in other comprehensive income.

Notes:

(i) Term loan from bank in the previous year included a loan secured against vehicle obtained under the loan
arrangement. The loan carried interest up to 8.60 % p.a. and was repayable in equated monthly installments of
5 0.15 million each. This loan is fully repaid during the current year.

(ii) I nformation about the Company’s exposure to liquidity risk and market risk is disclosed in note 34.

Notes:

(i) This represents the dividend income on shares in Birlasoft Limited, held by KPIT Technologies Limited Employees
Welfare Trust.

(ii) This includes dividend income of 5 709.79 million (Previous year Nil) and 5 500.00 million (Previous year Nil) from
its wholly-owned subsidiaries KPIT Technologies GK, Japan and PathPartner Technology Private Limited, India
respectively.

(iii) This represents the unrealised gain on fair valuation of:

a. investment in mutual fund units;

b. shares in Birlasoft Limited, held by KPIT Technologies Limited Employees Welfare Trust in the previous year.

(iv) Previous year included a one-time taxable gain of 5 450.00 million on settlement of an insurance claim.

(v) This includes sublease rental income of 5 0.13 million (Previous year 5 0.16 million).

34.3 FINANCIAL RISK MANAGEMENT

The board of directors has overall responsibility for the establishment and oversight of the Company’s risk
management framework. The board of directors has established the Risk Management Committee, which
is responsible for developing and monitoring the Company’s risk management policies. The Company has
exposure to the following risks arising from financial instruments:

a. Credit risk

Credit risk is the risk of financial losses to the Company if a customer or counterparty to financial
instruments fails to discharge its contractual obligations. Credit risk includes the direct risk of default
and the risk of deterioration of creditworthiness as well as concentration of risks. Financial instruments
that are subject to credit risk consists of trade receivables (including unbilled receivables), deposits
with banks and financial institutions, investments, cash and cash equivalents, other balances with
banks and other financial assets.

The Company’s maximum exposure to its credit risk is primarily from trade receivables (including
unbilled receivables).

i. Trade receivables (including unbilled receivables)

The management has established accounts receivable policy under which customer accounts
are regularly monitored. The Company has a dedicated sales team at each geography which is
responsible for collecting dues from the customer within stipulated period. The management
reviews status of critical accounts on a regular basis.

ii. Other financial assets

The Company has limited credit risk on bank balances and deposits as they are held with banks
and financial institutions which have high credit rating assigned by domestic and international
credit rating agencies. Investments primarily includes investment in liquid mutual fund units.
The Company mitigates the credit risk on these investments by investing in institutions with high
credit rating.

iii. Guarantees

The Company’s policy is to provide financial guarantees in routine course of business and on
behalf of subsidiaries/joint venture.

b. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s
approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to
meet its liabilities when they are due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Company’s reputation.

The Company has a view of maintaining liquidity and to take minimum possible risk while making
investments. In order to maintain liquidity, the Company invests its excess funds in short-term liquid
assets like liquid mutual funds. The Company monitors its cash and bank balances periodically in view
of its short-term obligations associated with its financial liabilities.

c. Market risk

Market risk is a risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimizing the return.

i. Foreign currency risk

Significant portion of the Company’s revenues are in foreign currencies, while a significant portion
of the costs are in Indian rupee i.e. functional currency of the Company. The foreign currencies to
which the Company is majorly exposed to are US Dollars, Euros, Pound Sterling and Japanese Yen.

The Company evaluates net exchange rate exposure based on current revenue projections and
expected volatility in the market and covers its exposure up to 90% on net basis. For this purpose
the Company uses foreign currency derivative instruments such as forward contracts to mitigate
the risk. The counterparty to these derivative instruments is a bank. The Company has designated
certain derivative instruments as cash flow hedge to mitigate the foreign exchange exposure of
highly probable forecasted cash flows.

Exposure to Currency Risk

The below figures are INR equivalent amounts of foreign currency.

ii. Derivative assets and liabilities designated as cash flow hedges

In accordance with its risk management policy and business plan the Company has hedged its
cash flows. The Company enters into derivative contracts to offset the foreign currency risk
arising from the amounts denominated in currencies other than in Indian rupees. The counter
party to the Company’s foreign currency contracts is a bank. These contracts are entered into to
hedge the foreign currency risks of firm commitments (sales orders) and highly probable forecast
transactions. Hedge effectiveness is determined at the inception of the hedge relationship, and
through periodic prospective effectiveness assessments to ensure that an economic relationship
exists between the hedged item and hedging instrument, including whether the hedging instrument
is expected to offset changes in cash flows of hedged items.

iii. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates. The Company does not have any
investments, deposits and borrowings which are variable interest rate bearing instruments.
Therefore, the Company is not exposed to interest rate risk.

iv. Other price risk - Equity price risk

Equity price risk is the risk that the fair value of a financial instrument will fluctuate due to changes
in equity prices. The Company is exposed to equity price risk arising from below mentioned
financial instruments which are recognised at fair value through profit and loss:

35.5 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. Remaining performance obligations estimates are subject to
change and are affected by several factors, including terminations, changes in the scope of contracts, periodic
revalidations, adjustment for revenue that has not materialized and adjustments for currency.

The aggregate value of performance obligations that are completely or partially unsatisfied as of 31 March
2026, other than those meeting the exclusion criteria mentioned above, is 5 5,241.75 million. Out of this, the
Company expects to recognize revenue of around 76% within the next one year. This includes contracts that
can be terminated for convenience without a substantive penalty, since based on current assessment, the
occurrence of the same is expected to be remote.

36 EXCEPTIONAL ITEMS

Statutory impact of New Labour Laws

On 21 November 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 29 existing labour laws. The Ministry of Labour & Employment published draft
Central Rules and FAQs to enable assessment of the financial impact due to changes in regulations. The Company has
assessed and disclosed the incremental impact of these changes on the basis of professional consultation obtained
and the best information available, consistent with the guidance provided by the Institute of Chartered Accountants
of India. Considering the materiality and regulatory-driven, non-recurring nature of this impact, the Company has
presented an incremental impact on gratuity and long-term compensated absences under “Exceptional items” in the
Statement of Profit and Loss for the year ended 31 March 2026. 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.

37 GRATUITY

The Company has a defined benefit gratuity plan in India, governed by the Code of Social Security, 2020. Defined
benefit gratuity plan entitles an employee, who has rendered at least five years of continuous service, to gratuity
payable on termination of his employment at the rate of fifteen days wages for every completed year of service or part
thereof in excess of six months, based on the rate of wages last drawn by the employee concerned.

These defined benefit plans expose the Company to actuarial risks, such as interest rate risk, salary risk, investment
risk, asset liability matching risk and concentration risk.

The Company’s gratuity scheme is a defined benefit plan (funded). The Company manages the plan through a trust.
Trustees administer contributions made to the trust.

38 SHARE BASED PAYMENTS

38.1 EMPLOYEE STOCK OPTION SCHEME - 2019A

The Board of Directors and the shareholders of the Company approved Employee Stock Option Scheme at
their meetings held on 17 June 2019 and on 23 July 2019, respectively. Pursuant to this approval, the Company
instituted ESOS 2019A in July 2019. The Nomination and Remuneration (HR) Committee of the Board of Directors
(“Committee”) of the Company administers this Plan. Each option carries with it the right to purchase one equity
share of the Company. The options approved under this scheme are 3,793,923.

The options would vest not earlier than statutory minimum vesting period of 1 year and up to the maximum period
of 4 years from the date of grant of options or such period as may be decided by the Committee at the time of each
grant of options. The exact proportion in which and the exact period over which the options would vest would be
determined by the Committee, subject to the minimum vesting period of 1 year from the date of grant of options.
The maximum exercise period is 5 years from the date of vesting.

(d) The Company recorded an employee compensation cost of 5 10.24 million (Previous year 5 26.72 million) in the
Statement of Profit and Loss. This is net of recoveries from subsidiaries 5 (12.07) million (Previous year 5 30.76
million).

(e) The expected price volatility is based on the historic volatility, adjusted for any expected changes to future
volatility due to publicly available information.

38.2 KPIT TECHNOLOGIES LIMITED - RESTRICTED STOCK UNIT PLAN 2022

The Board of Directors and the shareholders of the Company approved KPIT Technologies Limited - Restricted
Stock Unit Plan 2022 (RSU 2022) at their meetings held on 25 July 2022 and on 24 August 2022, respectively.
The Nomination and Remuneration (HR) Committee of the Board of Directors (“Committee”) of the Company
administers this Plan. Each Restricted Stock Unit (“RSU”) carries with it the right to purchase one equity share of
the Company. The RSUs approved under this scheme are 4,112,157.

The RSUs would vest not earlier than statutory minimum vesting period of 1 year and up to the maximum period
of 4 years from the date of its grant or such period as may be decided by the Committee at the time of each grant.
The exact proportion in which and the exact period over which the RSUs would vest would be determined by the
Committee, subject to the minimum vesting period of 1 year from the date of grant of RSUs. The maximum exercise
period is 5 years from the date of vesting.

(c) With effect from 1 April 2026, the Company has elected to opt for the concessional tax regime introduced by
the Government of India under Section 200 of the Income-tax Act, 2025 (corresponding to Section 115BAA of the
Income-tax Act, 1961).

Under this regime, the Company is subject to a reduced corporate tax rate of 22%, plus applicable surcharge and
cess, resulting in an effective tax rate of 25.17%. Consequent to this transition, the deferred tax expense for the
year ended 31 March 2026 includes an impact of 5 47.61 million arising from the re-measurement of deferred tax
assets and liabilities based on the revised tax rate applicable from 1 April 2026.

41 LEASE TRANSACTIONS

4.1 COMPANY AS A LESSEE

The Company’s lease asset classes primarily consist of leases for land, buildings, plant & equipment and vehicles.
(a) Refer note 5 for changes in the carrying amount of right of use assets.

(i) Remuneration excludes provision for gratuity and compensated absences as separate actuarial valuation for the directors,
key management personnel and close members of key management of personnel is not available.

(ii) Commission determined and paid to Non-Executive Directors for the current year pertains to the financial year 2024-25. The
commission for the financial year 2025-26 will be paid after evaluation and approval by the Board of Directors in the next
financial year.

(iii) This includes reimbursement of salary paid by KPIT Technologies Inc. on behalf of KPIT Technologies Limited, pertaining to
Mr. Sachin Tikekar and Mr. Chinmay Pandit, amounting to Nil (Previous year 5 17.05 million) and 5 8.24 million (Previous year
5 8.24 million), respectively.

(iv) Previous year’s figures include variable performance incentive pertaining to Executive Directors, amounting to 5 23.00 million
for the financial year 2023-24, determined and paid based on the Group’s policy for payment of variable performance
incentive.

43.7 TERMS AND CONDITIONS OF TRANSACTIONS WITH RELATED PARTIES

1 All the transactions with the related parties entered during the year were in ordinary course of the business
and are priced on an arm’s length basis. Outstanding balances at the reporting dates are unsecured and
settlement occurs in cash.

2 During the year ended 31 March 2026, the Company has reversed an amount of 5 71.02 million (Previous
year recognised an amount of 5 99.52 million) as an allowance for bad and doubtful receivables due from
related parties. As at 31 March 2026, an allowance for bad and doubtful receivables from related parties
is 5 29.28 million (Previous year 5 100.30 million).

3 There have been no guarantees given or received for any related party receivables or payables.

Notes:

a. Debt includes current and non-current lease liabilities.

b. Earnings available for debt service = Net Profit after taxes Non-cash operating expenses like depreciation and
other amortisations interest other adjustments like loss on sale of fixed assets etc.

c. Debt service includes lease payments for the year. It excludes working capital repayment (if any) during the year.

d. Capital Employed = Tangible net worth Total debt.

e. Trade payables include provision for expenses.

f. Income generated from investments include interest income, net gain on sale of investments and net fair value
gain.

EXPLANATION FOR VARIANCES EXCEEDING 25%

i. Decrease in current ratio and increase in net capital turnover ratio is primarily due to reduction in current assets
pursuant to the strategic deployment of funds into the wholly owned subsidiaries to support business expansion.

ii. Decrease in Debt service coverage ratio is primarily due to increased finance costs on lease liabilities, following
the commencement of new leases and renewals during the year.

45 SEGMENT INFORMATION

Where a financial report contains both consolidated financial statements and separate financial statements of the
parent, segment information needs to be presented only in case of consolidated financial statements. Accordingly,
segment information has been provided only in the consolidated financial statements.

46 INVESTMENT IN QORIX GMBH

During the previous year, ZF Friedrichshafen AG (“ZF”) had invested EURO 1.35 million in Qorix GmbH, a wholly-owned
subsidiary of KPIT Technologies Limited (KPIT), based on definitive terms of the Joint Venture Agreement entered into
by KPIT and ZF, to make an independent company focused on the creation of worldclass automotive middleware stack.
Consequently, effective 27 June 2024, Qorix GmbH became a Joint Venture Company of KPIT and ZF, having 50:50
ownership. ZF further invested EURO 13.65 million and assigned its relevant IP into Qorix GmbH.

On 13 May 2024, Qorix GmbH incorporated a wholly-owned step-down subsidiary named “Qorix India Private Limited”.

Subsequently, in the previous year, Qualcomm Ventures LLC (“Qualcomm”) joined as a strategic minority shareholder in
Qorix GmbH with KPIT and ZF as significant shareholders. This partnership further strengthened the position of Qorix
GmbH as a leading provider of middleware solutions for Software-Defined Vehicles (SDVs). Pursuant to this, Qualcomm
had invested an amount of EUR 10.00 million, through an equity infusion, for a stake of 11.11% in Qorix GmbH.

47 INVESTMENT IN N-DREAM AG

During the financial year 2023-24, the Company had entered into Shareholders’ Agreement, Share Purchase Agreement,
and Investment and Subscription Agreement for a strategic investment in N-Dream AG (N-Dream). N-Dream AG is a
Cloud based Game Aggregation Platform company based in Switzerland. This strategic investment in N-Dream AG was
part of Company’s roadmap to enable Automotive OEMs enhance the driver & passenger experience in the Cockpit of
the Future.

In financial year 2023-24, the Company initially acquired a 13.01% stake in N-Dream for EUR 3.00 million. Subsequently,
during the previous year, an additional 12.99% stake was acquired by the Company for EUR 3.00 million, resulting in a
total shareholding of 26.00% as at 31 March 2025.

During the current year, KPIT Technologies (UK) Limited, a wholly-owned subsidiary of the Company, acquired additional
stake of 62.9% in N-Dream AG (“N-Dream”) for a total consideration of EUR 16.35 million. Pursuant to this acquisition,
N-Dream has become a step-down subsidiary of the Company with the total Group’s shareholding of 88.9%. On 17
November 2025, KPIT Technologies (UK) Limited has acquired further stake of 1.1% at a consideration of EUR 2.82
million through equity infusion, taking the total of the Group’s shareholdings to 90% in N-Dream.

A derivative asset was recognised at the initial investment date, with an initial fair value adjustment to the cost of
investment. As at 31 March 2025, the fair value of derivative asset was 5 40.32 million, which is settled during the
current year. During the previous year, fair valuation impact of 5 60.43 million was recognised in the Standalone
Statement of Profit and Loss.

Subsequently, on 23 March 2026, the Company sold its holding in N-Dream AG, to its wholly-owned subsidiary, KPIT
Technologies (UK) Limited for a total consideration of 5 750.71 million and a gain on sale of investment of 5 255.98
million is recognised under “Other income” in the Standalone Statement of Profit and Loss account.

48 The scheme of amalgamation of PathPartner Technology Private Limited (“the Transferor Company”), with KPIT
Technologies Limited (“the Transferee Company”), under Sections 230 to 232 and other applicable provisions of the
Companies Act, 2013, was approved by the Board of Directors of the Transferor Company at its meeting held on 25 April
2025 and by the Board of Directors of the Transferee Company at its meeting held on 28 April 2025. The Company has
filed an application before the Hon’ble National Company Law Tribunal and the same is pending for it’s approval.

The scheme of amalgamation aims to simplify the group structure, drive synergies, and enhance stakeholder value
through consolidated operations and unified financial strength.

49 CORPORATE SOCIAL RESPONSIBILITY (CSR)

49.1 The Company, as per section 135 of the Companies Act 2013, is required to spend towards CSR, in various activities
as specified in Schedule VII of the Companies Act 2013, read with the Rules thereunder, as direct spend for
purposes other than construction/acquisition of any asset.

51 ADDITIONAL REGULATORY INFORMATION PURSUANT TO THE REQUIREMENT IN DIVISION II OF
SCHEDULE III TO THE COMPANIES ACT, 2013

(a) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.

(b) The Company does not have any transactions with companies struck off.

(c) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible
assets or both during the current or previous year.

(d) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

(e) The Company (other than as mentioned in note 50) has not advanced or loaned or invested funds to any other
person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary
shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Company (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(f) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:

(i) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on
behalf of the Funding Party (Ultimate Beneficiaries) or

(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries

(g) The Company does not have any such 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 (such
as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(h) The Company has borrowings from banks on the basis of security of current assets. The quarterly returns or
statements of current assets filed by the Company with banks are in agreement with the books of accounts. The
Company does not have borrowings from financial institutions.

(i) None of the entities in the Company have been declared wilful defaulter by any bank or financial institution or
government or any government authority.

(j) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(k) The Company has not entered into any scheme of arrangement which has an accounting impact on current or
previous financial year.

52 The Company has established a system of maintenance of information and documents as required by the transfer
pricing legislation under Section 92-92F of the Income Tax Act 1961. The Company is in the process of updating the
documentation for the financial year 2025-2026.

The management is of the opinion that international transactions are at arm’s length and accordingly the aforesaid
legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that
of provision for taxation.