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
- 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
immediately to the extent that the benefits are
already vested or amortized on a straight-line basis
over the average period until the benefits become
vested.
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 Employee 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.
3.17 sHARE 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
income 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. Deferred income 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 income 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 income tax assets and liabilities
is recognised as income or expense in the period
that includes the enactment or the substantive
enactment date. A deferred income 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. Deferred income taxes
are not provided on the undistributed earnings of
branches where it is expected that the earnings
of the branch will not be distributed in the
foreseeable future. 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.
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. For
the year ended 31 March 2025, MCA has notified
amendements to Ind AS 116 - Leases in respect of
sale and leaseback transactions and notified new
standard Ind AS 117 - Insurance contracts. The
Company does not expect these amendments to
have any impact on its financial statements.
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.
ii. Cash and bank balances
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 ventures.
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.
The liquidity position at each reporting date is given below:
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.
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
Other price risk is the risk that the fair value of a financial instrument will fluctuate due to
changes in market traded price. Other price risk arises from financial assets such as investments
in quoted equity instruments and investments in mutual funds. The Company is mainly exposed
to other price risk arising from investments in mutual funds 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
2025, other than those meeting the exclusion criteria mentioned above, is ? 4,280.83 million. Out of this, the
Company expects to recognize revenue of around 82% 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 GRATUITY
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Gratuity is a benefit
to an employee in India based on 15 days last drawn salary for each completed year of service with a vesting period of
five years.
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.
Scheme, the stock options had been granted at an exercise price which was the pre-demerger exercise price
suitably adjusted in the manner of share exchange ratio. Further, as per the Composite Scheme, the Company had
taken into account the vesting period completed, under the plan in the Demerged Company, prior to the grant of
options to the employee under the ESOS 2019. The maximum exercise period is 5 years from the date of vesting.
The outstanding stock options held by employees of the Demerged Company as at 31 March 2025 are 10,000 and
10,000 of Birlasoft options and KPIT options respectively. The employee compensation cost for such employees is
not eligible for recognition in the books of the Company.
The number of outstanding Birlasoft options held by employees of the Company as at 31 March 2025 are Nil. The
Company recorded an employee compensation cost of ? Nil (Previous year ? Nil) in this respect in the Statement
of Profit and Loss.
Below are the details pertaining to the KPIT options held by employees of the Company:
Number and weighted average exercise prices of options granted, exercised and cancelled/lapsed during the
financial year:
37 SHARE BASED PAYMENTS
37.1 EMPLOYEE STOCK OPTION SCHEME - 2019
In accordance with the terms of the approved Composite Scheme, KPIT Engineering Limited (now known as KPIT
Technologies limited) (“Resulting Company”) had issued the stock options to the employees holding options of the
KPIT Technologies Limited (now known as BirlaSoft Limited) (“Transferee Company” or “Demerged Company”) as
at the appointed date. The options issued consisted of:
i. 1,807,450 options of the Transferee Company (“Birlasoft options”), equivalent to the number of options
outstanding as at the appointed date;
ii. 1,807,450 options of the Resulting Company (“KPIT options”), in the ratio of 1:1 for every outstanding stock
options held by the employees in the Transferee Company.
The Board of Directors of the Company approved the Employees Stock Option Scheme at their meeting held on
15 May 2019. Pursuant to this approval, the Company instituted ESOS 2019 in May 2019. The compensation committee
of the Company administers this Plan. Each type of option carries with it the right to purchase one equity share of
the Demerged Company or the Resulting Company as the case may be. In terms of clause 18.5 of the Composite
The weighted average share price of the options exercised under Employees Stock Option Scheme -2019 on the
date of exercise during the previous year was ? 667.89.
The Company recorded an employee compensation cost of ? Nil (Previous year ? Nil) in the Statement of Profit and
Loss.
37.2 EMPLOYEE STOCK OPTION SCHEME - 2019A
The Board of Directors and the shareholders of the Company approved another 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 compensation 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.
The Company recorded an employee compensation cost of ? 26.72 million (Previous year ? 44.83 million) in the
Statement of Profit and Loss. This is net of recoveries from subsidiaries ? 30.76 million (Previous year ? 46.44
million).
The expected price volatility is based on the historic volatility, adjusted for any expected changes to future
volatility due to publicly available information.
37.3 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.
During the current year, RSUs under the said scheme have been granted to employees of the Company and its
subsidiaries at an exercise price equivalent to the face value of the Company’s shares as on the date of grant.
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.
Number and weighted average exercise prices of options granted, exercised and cancelled/lapsed during the
financial year:
(i) Remuneration excludes provision for gratuity and compensated absences as separate actuarial valuation
for the directors, key management personnel and their relatives is not available.
(ii) The commission paid to Non-Executive Directors pertains to the financial year 2023-24, which was
determined and paid during the current financial year. The commission for the financial year 2024-25 will be
paid after evaluation and approval by the Board of Directors.
(iii) Includes variable performance incentive pertaining to Executive Directors, amounting to ? 23.00 million
for the financial year 2023-24 (Previous year ? 23.99 million for the financial year 2022-23), determined
and paid in the current financial year, based on the Group’s policy for payment of variable performance
incentive.
(iv) 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 ? 17.05 million (Previous year ? 18.67
million) and ? 8.24 million (Previous year ? 7.10 million), respectively.
42.7 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 2025, the Company has reversed an amount of ? 99.52 million (Previous
year recognised an amount of ? 126.04 million) as an allowance for bad and doubtful receivables due from
related parties. As at 31 March 2025, an allowance for bad and doubtful receivables from related parties
is ? 100.30 million (Previous year ? 199.82 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. The ratio has improved due to increase in investments and settlement of purchase consideration payable.
ii. Increase in Debt-equity ratio is on account of higher lease liabilities during the year.
iii. Revenue growth with higher operational efficiency has resulted into improvement in the respective ratios.
iv. Increase in the ratio is mainly on account of increased business operations.
44 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.
45 INVESTMENT IN QORIX GMBH
During the current year, ZF Friedrichshafen AG (“ZF”) has 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 has become a Joint Venture Company of KPIT and ZF having 50:50
ownership. ZF has further invested EURO 13.65 million till date and assigned its relevant IP into Qorix GmbH.
On 13 May 2024, Qorix GmbH has incorporated a wholly owned step-down subsidiary named “Qorix India Private
Limited”.
Subsequently, Qualcomm Ventures LLC (“Qualcomm”) joins as a strategic minority shareholder in Qorix GmbH with
KPIT and ZF as significant shareholders. This partnership further strengthen the position of Qorix GmbH as a leading
provider of middleware solutions for Software-Defined Vehicles (SDVs). Pursuant to this, Qualcomm has invested an
amount of EUR 10.00 million, through an equity infusion, for a stake of 11.11% in Qorix GmbH.
46 INVESTMENT IN N-DREAM AG
During the previous year, 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 is part
of Company’s roadmap to enable Automotive OEMs enhance the driver & passenger experience in the Cockpit of the
Future.
During the previous year, the Company had done an initial strategic investment of 13.01% stake in N-Dream for a total
cash consideration of EUR 3.00 million.
Further, in accordance with the agreements entered into, the Company has multiple options to increase its shareholding
over the period of next 4 years in a staggered manner. Pursuant to this, during the current year, the Company has
acquired an additional 12.99% stake in N-Dream for a cash consideration of EUR 3.00 million. With this additional share
purchase, total shareholding of the Company is 26.00% in N-Dream. The Company continues to hold non-controlling
equity holding in N-Dream.
As at the initial investment date, the Company had recognised derivate asset for the same. The derivative asset was
initially measured at fair value and correspondingly adjusted in the cost of investment amounting to ? 184.45 million.
The fair value of derivative asset is ? 40.32 million and ? 179.23 million as at 31 March 2025 and 31 March 2024,
respectively. Fair valuation impact of ? 60.43 million and ? 5.46 million is recognised in the Statement of Profit & Loss
for the year ended 31 March 2025 and 31 March 2024, respectively.
47 The proposed 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, has been 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. This is
subject to approval of the National Company Law Tribunal.
The proposed amalgamation aims to simplify the group structure, drive synergies, and enhance stakeholder value
through consolidated operations and unified financial strength.
48 CORPORATE SOCIAL RESPONSIBILITY (CSR)
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.
50 ADDITIONAL REGULATORY INFORMATION PURSUANT TO THE REQUIREMENT IN DIVISION II OF
SCHEDULE III TO THE cOMpANIEs Act 2013
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.
(ii) The Company does not have any transactions with companies struck off.
(iii) 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.
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company (other than as mentioned in note 49) 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:
(a) 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
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vi) 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:
(a) 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
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(vii) 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.
(viii) The Company has borrowings from banks and financial institutions on the basis of security of current assets. The
quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in
agreement with the books of accounts.
(ix) None of the entities in the Company have been declared wilful defaulter by any bank or financial institution or
government or any government authority.
(x) The Company has complied with the number of layers prescribed under the Companies Act, 2013.
(xi) The Company has not entered into any scheme of arrangement which has an accounting impact on current or
previous financial year.
51 The Company has used accounting softwares for maintaining its books of account, which have a feature of recording
audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the
respective softwares, except for the instances mentioned below:
(i) The feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data
changes for the accounting softwares used for maintaining all books of accounts for the period from 1 April 2024
to 9 May 2024.
(ii) The feature of recording audit trail (edit log) facility was not enabled for certain fields and a table at the application
layer of the accounting software used for maintaining books of accounts relating to Revenue and Receivables and
Payroll for the period from 1 April 2024 to 24 April 2024.
For the periods where audit trail (edit log) facility was enabled and operated throughout the year for the respective
accounting software there were no instance of the audit trail feature being tampered with. Further, in all material
respects, adequate internal financial controls with reference to financial statements and such internal financial
controls (including IT General Controls) were operating effectively as at 31 March 2025 and have no impact on the
Financial Statements of the Company.
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 2024-2025.
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.
As per our report of even date attached
For B s R & co. LLp For and on behalf of the Board of directors of
chartered Accountants KpIT Technologies Limited
Firm Registration Number: 101248w/w-100022 CIN: L74999PN2018PLC174192
shiraz Vastani s. B. (Ravi) pandit Kishor patil
Partner Chairman of The Board CEO & Managing Director
Membership No. 103334 DIN : 00075861 DIN : 00076190
priyamvada Hardikar Ashish Malhotra
Chief Financial Officer Company Secretary
Place: Pune Place: Pune
Date: 28 April 2025 Date: 28 April 2025
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