g. Provisions (other than for employee benefits)
A provision is recognised if, as a result of a past event,
the Company has a present legal or constructive
obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will
be required to settle the obligation. Provisions are
determined by discounting the expected future
cash flows (representing the best estimate of the
expenditure required to settle the present obligation
at the balance sheet date) 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. Expected future operating losses are
not provided for. Provisions are reviewed by the
management at each reporting date and adjusted
to reflect the current best estimates.
Onerous contracts
A contract is considered to be onerous when the
expected economic benefits to be derived by the
Company from the contract are lower than the
unavoidable cost of meeting its obligations under
the contract. The provision for an onerous contract
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 such a provision is made, the Company
recognises any impairment loss on the assets
associated with that contract.
h. Contingent liabilities
A contingent liability is a possible obligation that
arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of
one or more uncertain future events beyond the
control of the Company or a present obligation that
is not recognised because it is not probable that an
outflow of resources will be required to settle the
obligation, or a present obligation whose amount
cannot be estimated reliably. The Company does
not recognize a contingent liability but discloses its
existence in the financial statements.
i. Revenue
Revenues from customer's contracts are considered
for recognition and measurement when the contract
has been approved by the parties, in writing, to the
contract, the parties to contract are committed
to perform their respective obligations under the
contract, and the contract is legally enforceable.
Revenue is recognized upon transfer of control
of promised products or services ("performance
obligations”) to customers in an amount that reflects
the consideration the Company has received or
expects to receive in exchange for these products
or services ("transaction price”). When there is
uncertainty as to collectability, revenue recognition is
postponed until such uncertainty is resolved. Based
on the assessment of contractual arrangements,
there are no discounts, rebates, incentives, or other
forms of variable consideration applicable to the
revenue recognized during the reporting period.
i. Sale of License
Revenue from sale of licenses for software
products is recognised when the significant risks
and rewards of ownership have been transferred
to the buyer which generally coincides with
delivery of licenses to the customers, recovery
of the consideration is probable, the associated
costs and possible return of software sold can
be estimated reliably, there is no continuing
effective control over, or managerial involvement
with the licenses transferred and the amount of
revenue can be measured reliably.
ii. Rendering of services
Revenue from services rendered is recognized
in proportion to the stage of completion of
the transaction at the reporting date. Efforts
or costs expended have been used to measure
progress towards completion as there is a direct
relationship between input and productivity.
Software Implementation Services
The revenue from fixed price contracts for
software implementation is recognized based
on proportionate completion method based on
hours expended, and foreseeable losses on the
completion of contract, if any are recognized
immediately. Efforts or costs expended have
been used to determine progress towards
completion as there is a direct relationship
between input and productivity. Progress
towards completion is measured as the ratio of
costs or efforts incurred to date (representing
work performed) to the estimated total costs or
efforts. Estimates of transaction price and total
costs or efforts are continuously monitored over
the lives of the contracts and are recognized
in profit or loss in the period when these
estimates change or when the estimates are
revised. Revenues and the estimated total costs
or efforts are subject to revision as the contract
progresses. Provisions for estimated losses, if
any, on uncompleted contracts are recorded
in the period in which such losses become
probable based on the estimated efforts or costs
to complete the contract.
The Company is also involved in time and
material contracts and recognizes revenue as
the services are performed.
Annual Technical services
Revenue from annual technical service
and maintenance contracts is recognised
ratably over the term of the underlying
maintenance arrangement.
iii. Sale of right to use software
Software-as-a-service, that is, a right to access
software functionality in a cloud-based-
infrastructure provided by the Company.
Revenue from arrangements where the
customer obtains a "right to access” is recognized
over the access period.
Revenue from client training, support and
other services arising due to the sale of
license is recognized as the performance
obligations are satisfied.
Reimbursements of out-of-pocket expenses
received from customers have been netted
off with expense.
Amounts received or billed in advance of services
to be performed are recorded as advance
from customers/unearned revenue. Unbilled
revenue represents amounts recognized based
on services performed in advance of billing in
accordance with contract terms.
iv. Multiple deliverable arrangements
When two or more revenue generating
activities or deliverables are provided under
a single arrangement, the Company has
applied the guidance in Ind AS 115, Revenue
from contract with customer, by applying the
revenue recognition criteria for each distinct
performance obligation. The arrangements
with customers generally meet the criteria
for considering license for software products
and related services as distinct performance
obligations. For allocating the transaction price,
the Company has measured the revenue in
respect of each performance obligation of a
contract at its relative standalone selling price.
The price that is regularly charged for an item
when sold separately is the best evidence of
its standalone selling price. In cases where the
company is unable to determine the standalone
selling price, the company uses the expected
cost plus margin approach in estimating the
standalone selling price.
Arrangements to deliver software products
generally have three elements license,
implementation and Annual Technical Services
(ATS). The company has applied the principles
under Ind AS 115 to account for revenues
from these performance obligations. When
implementation services are provided in
conjunction with the licensing arrangement
and the license and implementation have
been identified as two separate performance
obligations, the transaction price for such
contracts are allocated to each performance
obligation of the contract based on their relative
standalone selling prices. In the absence of
standalone selling price for implementation, the
performance obligation is estimated using the
expected cost plus margin approach.
Deferred contract costs are incremental costs
of obtaining a contract which are recognized
as assets and amortized over the term
of the contract.
Revenue from subsidiaries is recognised based
on transaction price which is at arm's length.
Contract assets are recognised when there
is excess of revenue earned over billings on
contracts. A contract asset arises when the
company has performed under a contract but
has not yet met the conditions required to bill the
customer. The right to receive cash is conditional
upon further performance obligations.
Unearned and deferred revenue ("contract
liability”) is recognised when there is billings in
excess of revenues.
Trade Receivables
Trade receivables are amounts due from
customers for sale of license or rendering of
services in the ordinary course of business. They
are generally due for settlement within one year
and therefore are all classified as current. Where
the settlement is due after one year, they are
classified as non-current. Trade receivables are
disclosed in Note 11.
Impairment
An impairment is recognised to the extent
that the carrying amount of receivable or asset
relating to contracts with customers (a) the
remaining amount of consideration that the
Company expects to receive in exchange for
sale of license or rendering of services to which
such asset relates; less (b) the costs that relate
directly to providing those sale of license or
rendering of services and that have not been
recognised as expenses.
j. Recognition of dividend income, interest
income or expense
Dividend income is recognised in Statement of profit
or loss on the date on which the Company's right to
receive payment is established.
Interest income or expense is recognised using the
effective interest method.
The 'effective interest rate' is the rate that exactly
discounts estimated future cash payments
or receipts through the expected life of the
financial instrument to:
- the gross carrying amount of the financial asset; or
- the amortised cost of the financial liability.
In calculating interest income and expense, the
effective interest rate is applied to the gross carrying
amount of the asset (when the asset is not credit-
impaired) or to the amortised cost of the liability.
However, for financial assets that have become
credit-impaired subsequent to initial recognition,
interest income is calculated by applying the effective
interest rate to the amortised cost of the financial
asset. If the asset is no longer credit-impaired,
then the calculation of interest income reverts to
the gross basis.
k. Sale of investments
Profit on sale of investments is recorded on transfer
of title from the Company and is determined as the
difference between the sales price and the carrying
value of the investment
l. Leases
The Company as a lessee
The Company's lease asset classes primarily consist of
leases for land and buildings. The Company assesses
whether a contract contains a lease, at inception of
a contract. A contract is, or contains, a lease if the
contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys
the right to control the use of an identified asset, the
Company assesses whether: (1) the contract involves
the use of an identified asset (2) the Company has
substantially all of the economic benefits from use of
the asset through the period of the lease and (3) the
Company has the right to direct the use of the asset.
At the date of commencement of the lease, the
Company recognizes a right-of-use asset ("ROU”)
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for leases
with a term of twelve months or less (short-term
leases) and low value leases. For these short-term and
low value leases, the Company recognizes the lease
payments as an operating expense on a straight-line
basis over the term of the lease.
Certain lease arrangements includes the options to
extend or terminate the lease before the end of the
lease term. ROU assets and lease liabilities includes
these options when it is reasonably certain that they
will be exercised. In assessing whether the Company
is reasonably certain to exercise an option to extend
a lease, or not to exercise an option to terminate a
lease, it considers all relevant facts and circumstances
that create an economic incentive for the Company
to exercise the option to extend the lease, or not
to exercise the option to terminate the lease. The
Company revises the lease term if there is a change
in the non-cancellable period of a lease.
The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
prior to the commencement date of the lease plus
any initial direct costs less any lease incentives. They
are subsequently measured at cost less accumulated
depreciation and impairment losses.
Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset.
Right of use assets are evaluated for recoverability
whenever events or changes in circumstances
indicate that their carrying amounts may not be
recoverable. For the purpose of impairment testing,
the recoverable amount (i.e. the higher of the fair value
less cost to sell and the value-in-use) is determined
on an individual asset basis unless the asset does not
generate cash flows that are largely independent of
those from other assets. In such cases, the recoverable
amount is determined for the Cash Generating Unit
(CGU) to which the asset belongs.
The lease liability is initially measured at amortized
cost at the present value of the future lease
payments. The lease payments are discounted using
the interest rate implicit in the lease or, if not readily
determinable, using the incremental borrowing
rates in the country of domicile of these leases. Lease
liabilities are remeasured with a corresponding
adjustment to the related right of use asset if the
Company changes its assessment if whether it will
exercise an extension or a termination option. The
discount rate is generally based on the incremental
borrowing rate specific to the lease being evaluated
or for a portfolio of leases with similar characteristics.
Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments
have been classified as financing cash flows.
m. Income tax
Income tax comprises current and deferred tax. It is
recognised in profit or loss except to the extent that
it relates to an item recognised directly in equity or in
other comprehensive income.
i. Current tax
Current tax comprises the expected tax payable
or receivable on the taxable income or loss for
the year and any adjustment to the tax payable
or receivable in respect of previous years. The
amount of current tax reflects the best estimate
of the tax amount expected to be paid or
received after considering the uncertainty, if any,
related to income taxes. It is measured using tax
rates (and tax laws) enacted or substantively
enacted by the reporting date.
Current tax assets and current tax liabilities
are offset only if there is a legally enforceable
right to set off the recognised amounts, and it
is intended to realise the asset and settle the
liability on a net basis or simultaneously.
ii. Deferred tax
Deferred tax is recognised in respect of
temporary differences between the carrying
amounts of assets and liabilities for financial
reporting purposes and the corresponding
amounts used for taxation purposes. Deferred
tax is also recognised in respect of carried
forward tax losses and tax credits. Deferred tax
is not recognised for:
- temporary differences arising on the
initial recognition of assets or liabilities
in a transaction that is not a business
combination and that affects neither
accounting nor taxable profit or loss at the
time of the transaction;
Deferred tax assets are recognised to the extent
that it is probable that future taxable profits
will be available against which they can be
used. Deferred tax assets - unrecognised or
recognised, are reviewed at each reporting date
and are recognised/ reduced to the extent that
it is probable/ no longer probable respectively
that the related tax benefit will be realized.
Deferred tax is measured at the tax rates that are
expected to apply to the period when the asset
is realised or the liability is settled, based on the
laws that have been enacted or substantively
enacted by the reporting date.
The measurement of deferred tax reflects the
tax consequences that would follow from the
manner in which the Company expects, at the
reporting date, to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax assets and liabilities are offset if
there is a legally enforceable right to offset tax
liabilities and assets, and they relate to income
taxes levied by the same tax authority on the
same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities
and assets on a net basis or their tax assets and
liabilities will be realised simultaneously.
Minimum Alternative Tax ('MAT') under the
provisions of the Income-tax Act, 1961 is
recognised as 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.
n. Cash and cash equivalents
Cash and short-term deposits in the Balance Sheet
comprise cash at banks and cash in hand and short¬
term deposits with an original maturity of three
months or less, which are subject to insignificant risk
of changes in value.
o. Earnings per share (“EPS”)
Basic earnings per share is calculated by dividing
the profit attributable to the owners of the Company
by the weighted average number of equity shares
outstanding during the year.
Diluted earnings per share is computed using the
net profit or loss for the year attributable to equity
shareholders and the weighted average number of
common and dilutive common equivalent shares
outstanding during the year but including share
options, compulsory convertible preference shares
except where the result would be anti-dilutive.
p. Share Capital
Equity Shares
Equity shares are classified as equity. Incremental costs
directly attributable to the issuance of new equity
shares are recognized as a deduction from equity.
Dividends
The final dividend on shares is recorded as a liability
on the date of approval by the shareholders, and
interim dividend are recorded as a liability on the date
of declaration by the Company's Board of Directors.
q. Basis of segmentation
Segment reporting
Operating segments are reported in a manner
consistent with the internal reporting provided to
the chief operating decision maker (CODM).
Identification of segments:
All operating segments' results are reviewed regularly
by the Board of Directors, who have been identified
as the CODM, to allocate resources to the segments
and assess their performance. Refer note 45 for
segment information.
r. ESOP Trust
The ESOP trust has been treated as an extension of
the Company and accordingly shares held by ESOP
Trust are netted off from the total share capital.
Consequently, all the assets, liabilities, income and
expenses of the trust are accounted for as assets
and liabilities of the Company, except for profit / loss
on issue of shares to the employees and dividend
received by trust which are directly adjusted in the
Newgen ESOP Trust reserve.
s. Statement of Cash flows
Cash flows are reported using the indirect method,
whereby profit for the period is adjusted for the
effects of transactions of a non-cash nature, any
deferrals or accruals of past or future operating
cash receipts or payments and item of income or
expenses associated with investing or financing
cash flows. The cash from operating, investing and
financing activities of the company are segregated.
t. Rounding of amounts
All amounts disclosed in the financial statements
and notes have been rounded off to the nearest
lakhs as per the requirement of Schedule III, unless
otherwise stated.
On 18 January 2022, Newgen Software Technologies Limited (NSTL) entered into Share Purchase Agreement (SPA) with
existing shareholders of Number Theory Software Private Limited ("Number Theory") to acquire 100% stake. Purchase
consideration was H 1,306.41 lacs and Net identifiable net assets acquired was H 1,023.10 lacs resulting in goodwill of
H 283.31 lacs. The goodwill comprises the value of expected synergies arising from the acquisition, customer contracts
/relationships, non-compete agreement and Number Theory's Artificial Intelligence that do not qualify for separate
recognition. However, a Scheme of Amalgamation u/s 230-232 of the Companies Act, 2013 which provides for the
merger of Number Theory was filed with the Delhi Bench of National Company Law Tribunal (NCLT). NCLT through its
Order dated 27th September 2023 approved the aforesaid Scheme and Number Theory got merged with NSTL.
The AI business has been subsumed into the broader Newgen One ecosystem rather than existing as an
independent business unit. Since AI functionalities are embedded within the Unified Low-Code Platform, they do
not constitute a separate Cash Generating Unit (CGU). The carrying amount of goodwill remains fully recoverable,
as the recoverable amount exceeds the carrying amount. Consequently, no impairment loss has been recognized
for the reporting period.
The Company entered into an agreement with Bank in Qatar in FY 2022-23 for supply of software licenses and
provision of implementation services. The software license was delivered and formally accepted, and the related
consideration was fully received. Implementation services were commenced, against which partial billing was
raised and collected.
Subsequently, Bank initiated legal proceedings before the Qatar Investment and Trade Court, alleging non delivery
of contracted deliverables and sought termination of the agreements, refund of amounts paid, and damages.
The lower court appointed an expert committee, whose report resulted in an adverse order against the Company.
The Company preferred an appeal, pursuant to which the Appellate Court reconstituted the expert committee
with IT qualified members. Although the reconstituted committee submitted its report in favour of the Company,
the Appellate Court rejected the same and upheld the findings of the earlier committee. The Company's further
appeal before the Court of Cassation was dismissed, and the order of the lower courts was upheld.
Pursuant to the final judgment, the Company has recognised INR 1,285.75 lakhs (USD 1.37 million) towards refund
of fees paid and INR 51.14 lakhs (QAR 200,000) towards reimbursement of legal costs as an exceptional expense in
the Statement of Profit and Loss for the year.
34 Earnings per share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company
by the weighted average number of equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the
weighted average number of equity shares outstanding during the year plus the weighted average number of
Equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
35 Share-based payment arrangements:
A. Description of share-based payment arrangements
i. Share option programmes (equity-settled)
The company established Newgen Employees Stock Option Scheme 2014 (Newgen ESOP 2014) in the
year 2014-15, administered through a new Trust 'Newgen ESOP Trust'. The maximum numbers of shares
to be issued under this Scheme shall be limited to 3,907,023 equity shares of the company. Pursuant to the
scheme, during the year 2014-15, the company has granted 3,653,525 options at an exercise price of INR 63
per option to the employees of the company. Further, during the year 2017-18 grant of options 353,000,
130,000, and 79,250 through grant II, III and IV on 1 Jul 2017, 1 Sep 2017 and 1 Oct 2017 respectively under
the same scheme and with same vesting conditions was made. During the year 2020-21, the company
has granted 2,33,000 options through grant V under Newgen ESOP 2014 on 25 March 2021. During the
year 2022-23, the company has granted 20,000 options through grant VI under Newgen ESOP 2014 on 17
January 2023. During the year 2023-24, the company has granted 5,000 options through grant VII under
Newgen ESOP 2014 on 2 May 2023. Under the terms of the plans, these options are vested on a graded
vesting basis over a maximum period of four years from the date of grant and are to be exercised either
in part(s) or full, within a maximum period of five years from the date of last vesting. Consequent to bonus
issue in the ratio of 1:1 during the financial year ended 31 March 2024, all the outstanding options and
exercise price before the record date of 12 January 2024 have been adjusted to consider the bonus issue
impact. During the year 2024-25, the company has granted 43,000 options through grant VIII under
Newgen ESOP 2014 on 18 July 2024. There were no options granted during the financial year 2025-26.
During the year 2020-21, the company has established Newgen Software Technologies Restricted Stock
Units Scheme - 2021 (Newgen RSU - 2021), administered through a new trust "Newgen RSU Trust" The
maximum numbers of shares to be issued under this Scheme shall be limited to 28,00,000 equity shares
of the company. During the year 2021-22, the company has granted 12,11,500 and 1,73,500 options through
grant I and II respectively under this scheme at an exercise price of INR 10 per option, to the employees of
the company. During the year 2022-23, the company has granted 35,000 options through grant III under
this scheme at an exercise price of INR 10 per option, to the employees of the company. During the year
2023-24, the company has granted 10,000 and 20,000 options through grant IV and V respectively under
this scheme at an exercise price of INR 10 per option, to the employees of the company.Under the terms of
the scheme, these options are vested on a graded vesting basis over a maximum period of five years from
the date of grant and are to be exercised either in part(s) or full, within a maximum period of five years
from the date of last vesting.Consequent to bonus issue in the ratio of 1:1 during the financial year ended
31 March 2024, all the outstanding options before the record date of 12 January 2024 have been adjusted
to consider the bonus issue impact. There were no RSU options granted during the financial year 2025-26.
During the year 2022-23, the company has established Newgen Employee Stock Option Scheme - 2022
(Newgen ESOP - 2022), administered through a trust "Newgen ESOP Trust" The maximum numbers of
shares to be issued under this Scheme shall be limited to 42,00,000 equity shares of the company. During
the year 2022-23, the company has granted 9,41,800 options through grant I under this scheme at an
exercise price of INR 364.20 per option, to the employees of the company. During the year 2023-24, the
company has granted 1,58,750, 68,150 and 3,86,500 options through grant II, III and IV on 2 May 2023, 19
July 2023 and 20 March 2024 under this scheme at an exercise price of INR 452, INR 615 and INR 640.10 per
option, to the employees of the company. Under the terms of the scheme, these options are vested on a
graded vesting basis over a maximum period of four years from the date of grant and are to be exercised
either in part(s) or full, within a maximum period of five years from the date of vesting. Consequent to
bonus issue in the ratio of 1:1 during the financial year ended 31 March 2024, all the outstanding options and
exercise prices before the record date of 12 January 2024 have been adjusted to consider the bonus issue
impact. During the year 2024-25, the company has granted 1,91,400, 40,850, 5,30,100 and 73,050 options
through grant V, VI, VII and VIII on 30 April 2024, 18 July 2024, 15 October 2024 and 20 January 2025 under
this scheme at an exercise price of INR 780, INR 944.15, INR 1,216 and INR 14,27.50 per option respectively to
the employees of the company. During the year 2025-26, the company has granted 93,300 options through
grant IX on 1 May 2025 at an exercise price of INR 888 per option to the employees of the company.
#Consequent to the adjustment related to the Bonus issue in the ratio of 1:1, as approved by the shareholders of the company on
2 January 2024, the pool of the Scheme was increased by 1,23,223 ESOPs convertible into the equal number of equity shares.
##Consequent to the adjustment related to the Bonus issue in the ratio of 1:1, as approved by the shareholders of the company
on 2 January 2024, the pool of the Scheme was increased from 14,00,000 to 28,00,000 RSUs convertible into the equal number
of equity shares.
###Consequent to the adjustment related to the Bonus issue in the ratio of 1:1, as approved by the shareholders of the company
on 2 January 2024, the pool of the Scheme was increased from 14,00,000 to 28,00,000 ESOPs convertible into the equal number
of equity shares. The company further added 14,00,000 shares in the Scheme with the approval of shareholders on 25 July 2024.
Newgen ESOP trust has been treated as an extension of the company and accordingly shares held by Newgen
ESOP Trust are netted off from the total share capital. Consequently, all the assets, liabilities, income and
expenses of the trust are accounted for as assets and liabilities of the company, except for profit / loss on
issue of shares to the employees and dividend received by trust which are directly adjusted in the Newgen
ESOP Trust reserve.
B. Measurement of fair values
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
directly or indirectly observable inputs
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable
C. Financial risk management
The Company's activities expose it to a variety of financial risks: market risk (including foreign exchange risk
and interest rate risk), credit risk and liquidity risk.
i. Risk management framework
The Company's board of directors has framed a Risk Management Policy and plan for enabling the
Company to identify elements of risk as contemplated by the provisions of the Section 134 of the
Companies Act 2013. The Company's risk management policies are established to identify and analyse
the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and
adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in
market conditions and the Company's activities. The Company, through its training and management
standards and procedures, aims to maintain a disciplined and constructive control environment in which
all employees understand their roles and obligations.
The Company's audit committee oversees how management monitors compliance with the Company's
risk management policies and procedures, and reviews the adequacy of the risk management framework
in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by
internal audit.
ii. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations and arises partially from the Company's receivables
from customers, loans and investment in debt securities. The carrying amount of financial assets
represent the maximum credit risk exposure. The Company has credit policies in place and the exposures
to these credit risks are monitored on an ongoing basis.
The carrying amount of financial assets represent the maximum credit risk exposure. The maximum
exposure to credit risk at the reporting was:
To cater to the credit risk for investments in mutual funds and bonds, only high rated mutual funds/
bonds are accepted.
The Company has given security deposits to vendors for rental deposits for office properties, securing
services from them, government departments. The Company does not expect any default from these
parties and accordingly the risk of default is negligible or nil.
Trade receivables and contract assets are typically unsecured and derived from revenue earned from
customers primarily located in India, USA, EMEA and APAC.
Credit risk has always been managed by the Company through credit approval, establishing credit limits
and continuously monitoring the credit worthiness of customers to which the Company grants credit
term in normal course of business. Credit limits are established for each customers and received quarterly.
The Company establishes an allowance for impairment that represents its expected credit losses in
respect of trade receivables. The management uses a simplified approach for the purpose of computation
of expected credit loss for trade receivables. In monitoring customer credit risk, customers are grouped
according to their credit characteristics, including whether they are an individual or legal entity, industry
and existence of previous financial difficulties, if any.
Trade and other receivables
The Company's exposure to credit risk is influenced mainly by the individual characteristics of each
customer. However, management also considers the factors that may influence the credit risk of its
customer base, including the default risk of the industry and country in which customers operate.
The Company establishes an allowance for impairment that represents its expected credit losses in
respect of trade and other receivables. The management establishes an allowance for impairment that
represents its estimate of expected losses in respect of trade and other receivables. An impairment
analysis is performed at each reporting date.
For movement of loss allowance on contract assets refer note 16
The impairment provisions for financial assets disclosed above are based on assumptions about risk
of default and expected loss rates. The Company uses judgement in making these assumptions and
selecting the inputs to the impairment calculation, based on the Company's past history, existing market
conditions as well as forward looking estimates at the end of each reporting period.
Debt securities
The Company limits its exposure to credit risk by investing only in liquid debt securities and only with
counterparties that have a credit rating AA to AAA from renowned rating agencies.
The Company monitors changes in credit risk by tracking published external credit ratings. For its
investment in bonds, Company also reviews changes in government bond yields together with available
press and regulatory information about issuers
The exposure to credit risk for debt securities at FVTOCI and at FVTPL is as follows:-
Basis experienced credit judgement, no risk of loss is indicative on Company's investment in mutual
funds and government bonds.
Cash and cash equivalents and bank balances other than cash and cash equivalents
The Company held cash and cash equivalents of INR 3,588.12 lakhs at 31 March 2026 (31 March 2025: INR
4,504.64 lakhs) and bank balances other than cash and cash equivalents of INR 16,116.81 lakhs as at 31
March 2026 (31 March 2025: INR 20,139.43 lakhs). The cash and cash equivalents are held with bank and
financial institution counterparties, which are rated AA- to AAA, based on renowned rating agencies.
iii. 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's primary sources of liquidity include cash and bank balances, deposits, undrawn borrowings
and cash flow from operating activities. As at 31 March 2026, the Company had a working capital of INR
129,641.25 lakhs (31 March 2025: INR 108,931.68 lakhs) including cash and cash equivalent of INR 3,588.12
lakhs (31 March 2025: INR 4,504.64 lakhs), bank balances other than cash and cash equivalents of INR
16,116.81 lakhs ( 31 March 2025: 20,139.43 lakhs) and current investments of INR 70,307.70 lakhs (31 March
2025: INR 50,839.62 lakhs).
Consequently, the Company believes its revenue, along with proceeds from financing activities will
continue to provide the necessary funds to cover its short term liquidity needs. In addition, the Company
projects cash flows and considering the level of liquid assets necessary to meet liquidity requirement.
iv. Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and
equity prices - will affect the company's income or the value of its holdings of financial instruments.
Market risk is attributable to all market risk sensitive financial instruments including foreign currency
receivables and payables and long term debt. We are exposed to market risk primarily related to foreign
exchange rate risk, interest rate risk and the market value of our investments. Thus, our exposure to
market risk is a function of investing and borrowing activities and revenue generating and operating
activities in foreign currency. The objective of market risk management is to avoid excessive exposure in
our foreign currency revenues and costs.
v. Currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate
because of changes in foreign exchange rates. The Company is exposed to currency risk on account of
its receivables and other payables in foreign currency. The functional currency of the Company is Indian
Rupee. The Management endeavours to minimize economic and transactional exposures arising from
currency movements against the US Dollar, Euro, Great Britain Pound, Canadian dollar, United Arab
Emirates Dhiram, Saudi Riyal, Singapore dollar, Australian dollar and Malaysian Ringgit making all the US
dollar payments through EEFC account for avoiding exchange risk. The Company manages the risk by
netting off naturally-occurring opposite exposures wherever possible, and then dealing with any material
residual foreign currency exchange risks if any.
The Company has entered into foreign exchange forward contracts to mitigate the risks involved in foreign
exchange transactions and has booked forward contracts for USD 46.00 million during the year from April
2025 to March 2026.The hedging loss of INR 2,983.95 lakhs is on account of mark to market loss (realised
loss is INR 840.65 lakhs, unrealised loss is INR 2,255.73 lakhs and unrealised gain of INR 112.43 lakhs on
account of reversal of last year mark to market loss ) on foreign exchange forward contracts which do not
qualify for hedge accounting as per Ind As-109, have been recognized in the profit and loss account in the
financial statement for the year ended 31 March 2026.
Sensitivity analysis
A reasonably possible strengthening (weakening) of the Indian Rupee against US Dollar, Euro, Great
Britain Pound, Canadian dollar, United Arab Emirates Dhiram, Saudi Riyal, Singapore Dollar, Australian
Dollar and Malaysian Ringgit at reporting date would have affected the measurement of financial
instruments denominated in foreign currencies and affected equity and profit or loss by the amounts
shown below. This analysis assumes that all other variables, in particular interest rates, remain constant
and ignores any impact of forecast sales and purchases.
II. Interest rate risk
Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest
rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in
the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing
investments will fluctuate because of fluctuations in the interest rates.
a) Exposure to interest rate risk
The Company is exposed to both fair value interest rate risk as well as cash flow interest rate risk arising
both on short-term and long-term floating rate instruments.
b) Sensitivity analysis
Fair value sensitivity analysis for fixed-rate instruments
The Company accounts for investments in government and other bonds as fair value through
other comprehensive income. Therefore, a change in interest rate at the reporting date would have
impact on equity.
A reasonably possible change of 100 basis points in interest rates at the reporting date would have
increased (decreased) equity by INR 37.19 lakhs after tax (31 March 2025: INR 38.82 lakhs) and PBT by INR
57.17 lakhs (31 March 2025: INR 59.68 lakhs).
Cash flow sensitivity analysis for variable-rate instruments
There is no variable rate linked instrument and therefore, there is no cash flow sensitivity.
Market price risk
a) Exposure
The Company's exposure to mutual funds and bonds price risk arises from investments held by the
Company and classified in the balance sheet as fair value through profit and loss and at fair value
through other comprehensive income respectively.
To manage its price risk arising from investments, the Company diversifies its portfolio. Diversification
of the portfolio is done in accordance with the limits set by the Company."
b) Sensitivity analysis
Company is having investment in mutual funds, government bonds, other bonds and investment
in subsidiaries.
For such investments classified at Fair value through other comprehensive income, a 2% increase
in their fair value at the reporting date would have increased equity by INR 74.39 lakhs after tax (31
March, 2025: INR 77.65 lakhs ) and PBT by INR 114.34 lakhs (31 March, 2025: INR 119.36 lakhs). An equal
change in the opposite direction would have decreased equity by INR 74.39 lakhs after tax (31 March,
2025: INR 77.65 lakhs ) and PBT by INR 114.34 lakhs (31 March, 2025: INR 119.36 lakhs).
For such investments classified at Fair value through profit or loss, the impact of a 2% increase in
their fair value at the reporting date on profit or loss would have been an increase of INR 840.46
lakhs after tax (31 March, 2025: INR 583.87 lakhs ) and PBT by INR 1291.82 lakhs (31 March, 2025: INR
897.44 lakhs) . An equal change in the opposite direction would have decreased profit or loss by INR
840.46 lakhs after tax (31 March, 2025: INR 583.87 lakhs ) and PBT by INR 1291.82 lakhs (31 March, 2025:
INR 897.44 lakhs).
44 Capital Management
The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. Management monitors the return on capital as well as the level
of dividends to equity shareholders.
The Company manages its capital structure and makes adjustments to it as and when required. To maintain or
adjust the capital structure, the company may pay dividend or repay debts, raise new debt or issue new shares. No
major changes were made in the objectives, policies or processes for managing capital during the year ended 31
March 2026 and 31 March 2025.
The Company monitors capital using a ratio of 'adjusted net debt' to 'adjusted equity'. For this purpose, adjusted
net debt is defined as total liabilities comprising interest bearing loans and borrowings and obligations under
finance leases, less cash and cash equivalents. Adjusted equity comprises all components of equity
The Company capital consists of equity attributable to equity holders that includes equity share capital and
retained earnings.
45 Segment reporting
A. Basis for segmentation
An operating segment is a component of the Company that engages in business activities from which it may
earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the
Company's other components, and for which discrete financial information is available.
The Company's board of directors have been identified as the Chief Operating Decision Makers (CODM)
since they are responsible for all major decisions in respect of allocation of resources and assessment of
the performance on the basis of the internal reports/ information provided by functional heads. The board
examines the performance of the Company based on such internal reports which are based on operations in
various geographies and accordingly, have identified the following reportable segments:
D. Information about major customers
No customer individually accounted for more than 10% of the revenues in the year ended 31 March 2026
and 31 March 2025.
E. Unallocated assets, liabilities, revenue and expenses
Certain assets, liabilities, revenue and expenses are not specifically allocable to individual segments as the
underlying services are used interchangeably. The Company believes that it is not practicable to provide
segment disclosures relating to such assets, liabilities, revenue and expenses and accordingly such assets,
liabilities, revenue and expenses are separately disclosed as 'unallocated'.
^During the year ended 31 March 2026, unallocated expenditure includes impact of labour codes amounting to INR 3,005.76 lakhs and
Provision for legal claim amounting INR 1,336.89 lakhs.
Notes:
1. Total debts consists of borrowings and lease liabilities.
2. Earning available for debt services=profit for the year depreciation, amortization and impairment finance
cost provision for doubtful debts share based payment to employees non cash charges.
3. Debt service = Interest payment for lease liabilities principal repayments.
4. Credit sales = Total Revenue opening contract assets - closing contract assets - opening deferred revenue
closing deferred revenue.
5. Earnings before interest and taxes = profit before tax finance cost - other income
6. Capital Employed = Average tangible net worth Total debt Deferred tax.
7. Average is calculated on the basis of opening and closing balances.
Schedule III require explanation where the change in the ratio is more than 25% as compared to the preceding
year, accordingly explanation is given only for the ratios where change in percentage is more than 25%.
47 As at 31 March 2026, the Company has gross foreign currency export receivables amounting to INR 32,210.41 lakhs
(31 March 2025: INR 24,509.73 lakhs). In terms of the Foreign Exchange Management (Export of Goods and Services)
Regulations, 2015 [Notification No. FEMA 23(R)/2015-RB] read with RBI's FED Master Direction No. 16/2015-16 on
Export of Goods and Services, the full export value of goods, software and services is required to be realised and
repatriated to India within 15 months from the date of export. This limit was increased from the erstwhile nine
months by the Foreign Exchange Management (Export of Goods and Services) (Second Amendment) Regulations,
2025 [Notification No. FEMA 23(R)/(7)/2025-RB dated 13 November 2025], effective 14 November 2025. Accordingly,
the prescribed realisation period applicable as at 31 March 2026 is 15 months, whereas the comparative position as
at 31 March 2025 is determined with reference to the then-prescribed nine-month period.
Of the above receivables, INR 5,499.36 lakhs remained outstanding beyond the prescribed 15-month period as at 31
March 2026 (31 March 2025: INR 5,108.22 lakhs outstanding beyond the then-prescribed nine-month period).
Under the Master Direction, an AD Category-I bank may extend the period of realisation by up to six months
at a time, irrespective of the invoice value, subject to the prescribed conditions. Where the extension relates to
a period beyond one year from the date of export, the AD bank may grant it at its level only if the exporter's
total outstanding does not exceed USD 1 million or 10% of the average export realisations during the preceding
three financial years, whichever is higher; cases exceeding this limit are referred to the Reserve Bank of India. The
Company has applied to its AD bank for extension of time in respect of export receivables outstanding beyond
the prescribed realisation period. The management is of the view that, given the bona fide reasons for the delays
in realisation, the Company will be able to obtain the necessary approvals/extensions and realise these receivables
beyond the stipulated timeline without any levy of penalty.
48 Other statutory informations
i. The Company do not have any Benami property, where any proceeding has been initiated or pending against
the company for holding any Benami property.
ii The Company do not have any transactions with companies struck off.
iii The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.
iv The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
v The Company have 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 have 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 Company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
vii The Company have not 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 sanctioned working capital amounts from banks on the basis of security of Trade
Receivables and Fixed Deposits. The quarterly returns being filed by company with banks are in line with the
books of accounts.
ix All title deeds of Immovable Property are held in the name of the Company.
x The Company has not defaulted on any of the loan taken from banks, financial institutions or other lender.
xi 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.
xii The Company has complied with the number of layers prescribed under Companies Act, 2013.
49 Previous period's figures have been regrouped/reclassified wherever necessary to correspond with the current
period's classification/disclosure, which are not considered material to these financial statements.
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