v) Provisions and contingent Liabilities
A provision is recognised when the Company has a present obligation as a resuLt of a past event and it is probabLe that an outflow of resources wiU be required to settle the obligation, in respect of which a reLiabLe estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. The policy for the same has been explained under Note 2.18.
The Company uses significant judgements to assess contingent liabilities. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Contingent assets are neither recognised nor disclosed in the standalone financial statements.
vi) Defined benefit pLans and compensated absences
The cost of the defined benefit plans, compensated absences and the present value of the defined benefit obligation are based on actuarial valuation using the projected unit credit method. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive
to changes in these assumptions. ALL assumptions are reviewed at each reporting date. The poLicy for the same has been explained under Note 2.12.
vii) Expected credit Losses on financial assets
The impairment provisions of financiaL assets are based on assumptions about risk of defauLt and expected timing of coLLection. The Company uses judgment in making these assumptions and seLecting the inputs to the impairment caLcuLation, based on the Company's past history, customer's creditworthiness, existing market conditions as weLL as forward Looking estimates at the end of each reporting period. The poLicy for the same has been expLained under Note 2.8.
viii) Other estimates
The share-based compensation expense is determined based on the Company's estimate of equity instruments that wiLL eventuaLLy vest.
1.4 Property, Plant & Equipment and Intangible assets:
Property, PLant & Equipment and intangibLe assets are stated at cost Less accumuLated depreciation/amortisation and net of impairment. Cost of an item of property, pLant and equipment comprises its purchase price, incLuding import duties and non¬ refundabLe purchase taxes, after deducting trade discounts and rebates, any directLy attributabLe costs of bringing the item to its working condition for its intended use and estimated cost of dismantLing and removing the item and restoring the site on which it is Located. Subsequent expenditure reLating to property, pLant and equipment is capitaLized onLy when it is probabLe that future economic benefits associated with these wiLL fLow to the company and the cost of the item can be measured reLiabLy.
The cost of property, pLant and equipment not avaiLabLe for use as at each reporting date is discLosed under capitaL work in progress.
DepreciabLe amount for assets is the cost of an asset, Less its estimated residuaL vaLue. Depreciation on Property, PLant & Equipment (including assets taken on lease), other than freehold land, is charged based on the straight line method on the estimated useful life as prescribed in Schedule II to the Companies Act, 2013 except in respect of the certain categories of assets, where the life of the assets has been assessed based on internal technical estimate, considering the nature of the asset and estimated usage of the asset, the operating conditions of the asset, past history of repLacement, anticipated technoLogicaL changes.
The estimated usefuL Life of intangibLe assets (software) is 1 to 10 years and these are amortised on a straight Line basis. Project specific intangibLe assets are amortised over their estimated usefuL Life on a straight Line basis or over the period of the License/ project period, whichever is Lower.
The estimated usefuL Life and residuaL vaLues of Property, PLant & Equipment and IntangibLe assets are reviewed at the end of each reporting period.
Assets acquired under LeasehoLd improvements are amortized over the shorter of estimated useful life of the asset or the reLated Lease term.
InteLLectuaL Property Rights ('IPR') comprise right to use for licensed software. The Company has recognised the IPR based on present vaLue of consideration paid. Subsequent to initiaL recognition, the intangible asset is measured at cost, less any accumulated amortization and accumulated impairment losses. The IPR's are amortised over their estimated useful life of 10 years on a straight Line basis.
An item of Property, Plant & Equipment and intangibLe asset is derecognised upon disposaL or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or Loss arising on the disposaL or retirement of an item of Property, PLant & Equipment and intangibLe assets is determined as the difference between the saLes proceeds and the carrying amount of the asset and is recognised in the StandaLone FinanciaL Statements statement of profit and Loss.
When the use of a property changes from owner occupied to investment property, the property is recLassified as investment property at it carrying amount on the date of recLassification.
:.5 Investment Property:
Investment properties are measured initiaLLy at cost, incLuding transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumuLated depreciation and accumuLated impairment losses, if any in accordance with Ind AS 16 Property, Plant and Equipment.
Depreciation on Investment Property is charged based on the straight Line method on the estimated usefuL Life as prescribed in Schedule II to the Companies Act, 2013.
An investment property is derecognised upon disposaL or when the investment property is permanentLy withdrawn from use and no future economic benefits are
expected from disposaL. Any gain or Loss arising on derecognition of the property (caLcuLated as the difference between the net disposaL proceeds and the carrying amount of the asset) is incLuded in the StandaLone FinanciaL Statements of profit and Loss in the period in which the property is derecognised.
2.6 Leases:
At inception of the contract, the Company determines whether the contract is a Lease or contains a Lease arrangement. 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.
Company as a lessee
The Company recognises right-of-use asset representing its right to use the underLying asset for the Lease term at the Lease commencement date. The cost of the right-of-use asset measured at inception shaLL comprise of the amount of the initiaL measurement of the Lease LiabiLity adjusted for any Lease payments made at or before the commencement date Less any Lease incentives received, pLus any initiaL direct costs incurred and an estimate of costs to be incurred by the Lessee in dismantLing and removing the underLying asset or restoring the underLying asset or site on which it is Located. The right-of-use assets is subsequentLy measured at cost Less any accumuLated depreciation, accumuLated impairment Losses, if any and adjusted for any remeasurement of the Lease LiabiLity.
The right-of-use assets is depreciated using the straight-Line method from the commencement date over the shorter of Lease term or usefuL Life of right-of- use asset. The estimated usefuL Lives of right-of-use assets are determined on the same basis as those of property, pLant and equipment. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverabLe. Impairment Loss, if any, is recognised in the StandaLone FinanciaL Statements of profit and Loss.
The Company measures the Lease LiabiLity at the present vaLue of the Lease payments that are not paid at the commencement date of the Lease. The Lease payments are discounted using the interest rate impLicit in the Lease, if that rate can be readiLy determined. If that rate cannot be readiLy determined, the Company uses incrementaL borrowing rate. For Leases with reasonabLy simiLar characteristics, the Company, on a Lease by Lease basis, may adopt either the incrementaL borrowing rate specific to the Lease or the incrementaL borrowing rate for the portfoLio as a whoLe. The Lease payments shaLL incLude fixed payments, variabLe Lease payments, residuaL vaLue guarantees, exercise price of a purchase option where the Company is reasonably certain to exercise that option and payments of penaLties for terminating the Lease, if the Lease term refLects the Lessee exercising an option to terminate the Lease. The Lease LiabiLity is subsequentLy remeasured by increasing the carrying amount to refLect interest on the Lease LiabiLity, reducing the carrying amount to refLect the Lease payments made and remeasuring the carrying amount to refLect any reassessment or Lease modifications or to refLect revised in-substance fixed Lease payments.
The Company recognises the amount of the re-measurement of Lease LiabiLity as an adjustment to the right-of-use asset. Where the carrying amount of the right-of- use asset is reduced to zero and there is a
further reduction in the measurement of the Lease LiabiLity, the Company recognises any remaining amount of the re-measurement in StandaLone FinanciaL Statements of profit and Loss.
The Company has eLected not to appLy the requirements of Ind AS 116 to short-term Leases of aLL assets that have a Lease term of 12 months or Less and Leases for which the underlying asset is of Low vaLue. The Lease payments associated with these Leases are recognized as an expense on a straight-Line basis over the Lease term.
Company as a lessor
At the inception of the Lease the Company classifies each of its Leases as either an operating Lease or a finance Lease. The Company recognises Lease payments received under operating Leases as income on a straight- Line basis over the Lease term. In case of a finance Lease, finance income is recognised over the Lease term based on a pattern reflecting a constant periodic rate of return on the Lessor's net investment in the Lease. When the Company is an intermediate Lessor it accounts for its interests in the head Lease and the sub-Lease separately. It assesses the Lease cLassification of a sub¬ Lease with reference to the right-of-use asset arising from the head Lease, not with reference to the underLying asset. If a head Lease is a short term Lease to which the Company appLies the exemption described above, then it cLassifies the sub-Lease as an operating Lease.
If an arrangement contains Lease and non¬ Lease components, the Company appLies Ind AS 115 Revenue from Customer Contracts to aLLocate the consideration in the contract.
2.7 Business Combination
Business Combination under common controL are accounted under "the pooLing of interest method" i.e. in accordance with Appendix C in Ind AS 103 - Business combinations, at carrying amount of assets and LiabiLities acquired and any excess of
consideration issued over the net assets acquired is recognised as capital, reserve on common control, business combination.
Business combinations are accounted for using the purchase (acquisition) method. The cost of an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the date of exchange by the Company. Identifiable assets acquired and Liabilities and contingent liabilities assumed in a business combination are measured initially at fair value at the date of acquisition. Transaction costs incurred in connection with a business acquisition are expenses as incurred.
When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent arrangement, the contingent consideration is measured at its acquisition date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates in accordance with IND AS 109 Financial Instruments or IND AS 37 Provisions, Contingent Liabilities and Contingent Assets, with the corresponding gain or loss being recognised in Standalone Financial Statements of profit and Loss.
Business Combination under common control are accounted under "the pooling of interest method" i.e. in accordance with Appendix C in Ind AS 103 - Business combinations.
Goodwill and intangible assets
GoodwiU represents the cost of acquired business as established at the date of acquisition of the business in excess of the acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities less accumulated
impairment losses, if any. Goodwill is tested for impairment annually or when events or circumstances indicate that the implied fair value of goodwill is less than its carrying amount.
Intangible assets acquired separately are measured at cost of acquisition. Intangible assets acquired in a business combination are measured at fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less accumulated amortization and impairment losses, if any.
£.8 Impairment of Asset:
i) Financial assets
The Company applies the expected credit loss model for recognizing impairment loss on financial assets.
Expected credit Loss is the difference between the contractual cash flows and the cash flows that the entity expects to receive discounted using effective interest rate.
Loss allowances for trade receivables are measured at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument. Lifetime expected credit loss is computed based on a provision matrix which takes into account historical credit loss experience adjusted for forward looking information. For other financial assets, expected credit Loss is measured at the amount equal to twelve months expected credit loss unless there has been a significant increase in credit risk from initial recognition, in which case, those are measured at lifetime expected credit loss.
ii) Non-financial assets
Property, pLant and equipment and intangible assets with finite Life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverabLe. If any such indication exists, the recoverabLe amount (i.e. higher of the fair value less cost to seU 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.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverabLe amount. An impairment Loss is recognised in the StandaLone FinanciaL Statements of profit and Loss.
iii) Goodwill
GoodwiLL is tested for impairment on an annuaL basis and whenever there is an indication that goodwiLL may be impaired, reLying on a number of factors incLuding operating resuLts, business pLans and future cash fLows.
The Company estimates the vaLue- in-use of the cash generating unit (CGU) based on the future cash fLows after considering current economic conditions and trends, estimated future operating resuLts and growth rate and anticipated future economic and reguLatory conditions. The estimated cash fLows are deveLoped using internaL forecasts. The discount rate used for the CGU's represent the weighted average cost of capitaL based on the historicaL market returns of comparable companies.
2.9 Revenue recognition:
Revenue from information technology and business process outsourcing services incLudes revenue from services rendered on time and materiaL basis, voLume/unit based contracts, time bound fixed price engagements and fixed price deveLopment contracts.
Revenue is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it transfers controL over a goods or service to a customer. Revenue is measured based on transaction price, which is the consideration, adjusted for discounts, rebates, credits, price concessions, incentives, performance bonuses, penaLties, or other similar items, as applicable. Revenue also excludes taxes.
To recognise revenues, the Company appLies the foLLowing five step approach:
(1) identify the contract with a customer,
(2) identify the performance obligations in the contract, (3) determine the Transaction Price, (4) aUocate the Transaction Price to the performance obLigations in the contract, and (5) recognise revenues when a performance obLigation is satisfied. When there is uncertainty as to coLLectabiLity, revenue recognition is postponed untiL such uncertainty is resoLved.
Revenue from time and materiaL contracts and volume/unit based contracts is measured on output basis by units deLivered, efforts expended, number of transactions processed, etc. and is recognised as the reLated services are performed. Revenue from the end of the Last invoicing to the reporting date is recognised as unbiLLed revenue.
Revenue from fixed price maintenance contracts is recognised based on the right to invoice for services performed for contracts in which the invoicing is representative of the vaLue being deLivered. If invoicing is not consistent with vaLue deLivered, revenue is recognized as the services are performed.
When services are performed through an indefinite number of repetitive acts over a specified period, revenue is recognised on a straight-Line basis over the specified period unLess some other method better represents the manner in which services are performed.
Revenue on fixed price development contracts is recognised using the
'percentage of completion' method of accounting, unLess work compLeted cannot be reasonably estimated. 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. The cost expended (or input) method has been used to measure progress towards compLetion as there is a direct reLationship between input and productivity. If the Company does not have a sufficient basis to measure the progress of completion or to estimate the totaL contract revenues and costs, revenue is recognised onLy to the extent of contract cost incurred for which recoverabiLity is probabLe. Estimates of transaction price and totaL costs or efforts are continuousLy monitored over the term of the contracts and are recognized in net profit 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. When totaL cost estimates exceed revenues in an arrangement, the estimated Losses are recognised in the StandaLone financiaL statement of profit and Loss in the period in which such Losses become probabLe based on the current contract estimates.
The Company exercises judgement 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.
The biLLing scheduLes agreed with customers incLude periodic performance- based payments and / or miLestone-based progress payments. Invoices are payabLe within contractuaLLy agreed credit period.
The soLutions offered by the Company may incLude suppLy of third party equipment or software. In such cases, revenue for suppLy of such third-party products are recorded at gross or net basis depending on whether the Company is acting as the principaL or as an agent of the customer. The Company recognises gross amount of consideration as revenue when it is acting as a principaL and net amount of consideration as revenue when it is acting as an agent. In doing so, the Company first evaLuates whether it obtains controL of the specified goods or services before they are transferred to the customer. The Company considers whether it is primariLy responsibLe for fuLfiLLing the promise to provide the specified goods or services, inventory risk, pricing discretion and other factors to determine whether it controLs the specified goods or services and therefore, is acting as a principaL or an agent.
Revenue from the saLe of distinct third party hardware is recognized at the point in time when controL is transferred to the customer.
Contracts assets are recognised when there is excess of revenue earned over biLLings on contracts. Contract assets are cLassified as unbiLLed revenue when there is unconditionaL right to receive cash, and onLy passage of time is required, as per contractuaL terms.
Contract LiabiLity ("Unearned revenue") arises when there are biLLing in excess of revenue.
In arrangements for hardware and software impLementation and integration, reLated services and maintenance services, the
Company has appLied the guidance in Ind AS 115 by appLying the revenue recognition criteria for each distinct performance obligation. 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. Fixed price deveLopment contracts and reLated services, the performance obLigation is satisfied as and when the services are rendered since the customer generaLLy obtains control of the work as it progresses.
Revenue recognition for deLivered elements is limited to the amount that is not contingent on the future deLivery of products or services, future performance obLigations or subject to customer-specified return or refund priviLeges.
Revenue from Licenses where the customer obtains a 'right to use' the licenses 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. The Company has appLied the principLes of Ind AS 115 to account for revenues for these performance obLigations.
The Company recognises revenue for a saLes- based or usage-based royaLty promised in exchange for a License of inteLLectuaL property onLy when (or as) the subsequent saLe or usage occurs.
The Company accounts for voLume discount and pricing incentives to customers as a reduction based on ratabLe aLLocation of the discounts/incentives amount to each of the underLying performance obLigation that corresponds to the progress made by
the customer towards earning the discount/ incentive. 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. If it is probabLe that the criteria for the discount wiLL not be met, or if the amount thereof cannot be estimated reLiabLy, then discount is not recognised untiL the payment is probabLe and the amount can be estimated reLiabLy. The Company recognises changes in the estimated amount of obLigations for discounts in the period in which the change occurs.
Deferred contract costs are upfront costs incurred for the contract and are amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset reLates.
The Company assesses the timing of the transfer of goods or services to the customer as compared to the timing of payments to determine whether a significant financing component exists. As a practicaL expedient, the Company does not assess the existence of a significant financing component when the difference between payment and transfer of deLiverabLes is tweLve months or Less. If the difference in timing arises for reasons other than the provision of finance to either the customer or us, no financing component is deemed to exist.
Contract modifications are accounted for when additions, deLetions or changes are approved either to the contract scope or contract price. The accounting for modifications of contracts invoLves assessing whether the services added to an existing contract are distinct and whether the pricing is at the StandaLone seLLing price. Services added that are not distinct are accounted for on a cumuLative catch up basis, whiLe those are distinct are accounted for prospectiveLy, either as a separate contract, if the additionaL services are priced at the StandaLone seLLing price,
or as a termination of the existing contract and creation of a new contract if not priced at the Standalone seLLing price.
In accordance with Ind AS 37, 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.
Revenue from subsidiaries is recognised based on transaction price which is at arm's length.
The Company disaggregates revenue from contracts with customers by nature of services, geography and industry verticals.
2.10 Foreign currency transactions:
Foreign currency transactions are recorded at exchange rates prevailing on the date of the transaction. Foreign currency denominated monetary assets and liabilities are retranslated into the functional currency using exchange rates prevailing on the date of Balance Sheet. Gains and losses arising on settlement and restatement of foreign currency denominated monetary assets and liabilities are recognised in the Standalone Financial Statements of profit and Loss. Non-monetary assets and liabilities that are measured in terms of historicaL cost in foreign currencies are not retransLated.
2.11 Financial Instruments:
Financial assets and liabilities are recognised when the Company becomes a party to the contractuaL provisions of the instruments.
FinanciaL assets and LiabiLities are initiaLLy measured at fair vaLue except for trade receivabLes which are initiaLLy measured at transaction price. Transaction costs that are directLy attributabLe to the acquisition or issue of financiaL assets and financiaL LiabiLities (other than financiaL assets and financiaL LiabiLities at fair vaLue through profit or Loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. Transaction costs directLy attributabLe to the acquisition of financial assets or financial
liabilities at fair value through profit or Loss are recognised in StandaLone statement of profit and Loss.
i) Non-derivative financial instruments: Cash and cash equivalents
The Company considers aLL highLy Liquid financiaL instruments, which are readiLy convertibLe into known amounts of cash and that are subject to an insignificant risk of change in vaLue and having originaL maturities of three months or Less from the date of purchase, to be cash equivaLents.
Financial assets at amortised cost
FinanciaL assets are subsequently measured at amortised cost using the effective interest method Less impairment Losses, if these financiaL assets are heLd within a business modeL whose objective is to hoLd these assets in order to coLLect contractuaL cash fLows and the contractuaL terms of the financiaL asset give rise on specified dates to cash fLows that are soLeLy payments of principaL and interest on the principaL amount outstanding.
Financial assets at fair value
FinanciaL assets not measured at amortised cost are carried at fair vaLue through profit or Loss (FVTPL) on initiaL recognition, unLess the Company irrevocabLy eLects on initiaL recognition to present subsequent changes in fair vaLue in 'other comprehensive income', for investment in equity instruments which are not heLd for trading.
The Company, on initiaL appLication of IND AS 109 FinanciaL Instruments, has made an irrevocabLe eLection to present in 'other comprehensive income', subsequent changes in fair vaLue of equity instruments not heLd for trading.
Financial, asset at FVTPL, are measured at fair values at the end of each reporting period, with any gains or Losses arising on remeasurement recognised in the Standalone statement of profit and Loss.
Investment in subsidiaries
Investment in subsidiaries is carried at cost less impairment as per Ind AS 27 Separate Financial Statements.
Financial liabilities
Financial liabilities are subsequently carried at amortised cost using the effective interest rate method or at FVTPL. For financial liabilities carried at amortised cost, the carrying amounts approximate fair values due to the short term maturities of these instruments. Financial liabilities are classified as at FVTPL when the financial liability is either contingent consideration recognised in a business combination, or is held for trading or it is designated as FVTPL. Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in Standalone statement of profit and loss.
ii) Derivative financial instruments and hedge accounting
The Company is exposed to foreign currency fluctuations on foreign currency assets, liabilities and forecasted cash flows denominated in foreign currency. The Company uses foreign currency forward contracts / options to hedge its risks associated with foreign currency fluctuations relating to certain forecasted transactions. The Company designates some of these forward contracts / options as hedge instruments and accounts for them as cash flow
hedges applying the recognition and measurement principles set out in Ind AS 109.
The use of foreign currency forward contracts / options is governed by the Company's risk management policy approved by the Board of Directors, which provide written principles on the use of such financial derivatives consistent with the Company's risk management strategy. The counter party to the Company's foreign currency forward contracts is generaLLy a bank. The Company does not use derivative financial instruments for speculative purposes.
Foreign currency forward contract/ option derivative instruments are initially measured at fair value and are re-measured at subsequent reporting dates. Changes in the fair value of these derivatives that are designated and effective as hedges of future cash flows are recognised in other comprehensive income and accumulated under 'effective portion of cash fLow hedges' (net of taxes), and the ineffective portion is recognised immediately in the StandaLone statement of profit and Loss.
Amounts previousLy recognised in other comprehensive income and accumuLated in effective portion of cash fLow hedges are recLassified to the StandaLone statement of profit and Loss in the same period in which gains/Losses on the item hedged are recognised in the StandaLone statement of profit and Loss.
Changes in the fair vaLue of derivative financiaL instruments that do not quaLify for hedge accounting are recognised in the StandaLone statement of profit and Loss as they arise.
Hedge accounting is discontinued when the hedging instrument expires or is soLd, terminated, or exercised, or no Longer quaLifies for hedge accounting. Cumulative gain or Loss on the hedging instrument cLassified as effective portion of cash fLow hedges is cLassified to StandaLone statement of profit and Loss when the forecasted transaction occurs. If a hedged transaction is no Longer expected to occur, the net cumuLative gain or Loss recognised in effective portion of cash fLow hedges is transferred to the StandaLone statement of profit and Loss for the period.
iii) Derecognition of financial instruments
The Company derecognises a financiaL asset when the contractuaL rights to the cash fLows from the asset expire, or when it transfers the financial asset and substantially aU the risks and rewards of ownership of the asset to another party. If the Company retains substantiaLLy aLL the risk and rewards of transferred financiaL assets, the Company continues to recognise the financial asset and also recognises the borrowing for the proceeds received.
The Company derecognises financial LiabiLities when, and onLy when, the Company's obligation are discharged, canceLLed or have expired. Cost associated with derecognition of financiaL assets incLuding trade receivabLes is recorded under the head finance cost as discount and other charges.
iv) Financial Guarantee contracts
Financial guarantee contracts issued by the Company are initiaUy measured at fair value and subsequently measured at the higher of the amount of Loss aLLowance determined in accordance with impairment
requirements of Ind AS 109; and the amount initiaLLy recognised Less, when appropriate, the cumuLative amount of income recognised in accordance with the principles of Ind AS 115.
2.12 Employee Benefits:
a. Defined benefit plans:
For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuariaL vaLuations being carried out at each baLance sheet date. Remeasurement, comprising actuariaL gains and Losses, the effect of the changes to the asset ceiLing and the return on pLan assets (excLuding interest), is refLected immediateLy in the baLance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. The gratuity plan provides for a Lump sum payment to employees at retirement, death, incapacitation or termination of the empLoyment based on the respective empLoyee's Last drawn saLary and the tenure of the empLoyment.
b. Defined contribution plans:
(i) Provident fund & National Pension Scheme (NPS):
The eLigibLe empLoyees of the Company are entitLed to receive the benefits of Provident fund, a defined contribution pLan, in which both empLoyees and the Company make monthLy contributions at a specified percentage of the covered empLoyees' saLary which are charged to the StandaLone statement of profit and Loss on accruaL basis. The provident fund contributions are paid to the RegionaL Provident Fund Commissioner by the Company. The Company has no further
obligations for future provident fund. In addition the Company and employees, as eligible also contributes to the national pension scheme. This is also a define contribution plan.
(ii) Superannuation:
Contributions to Superannuation fund which are defined contribution schemes, are charged to the Standalone statement of profit and loss on an accrual basis.
The Company has no further obligations for future superannuation fund benefits other than its annual contributions.
c. Compensated absences:
The Company provides for compensated absences and long term service awards subject to Company's rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment or availment. The liability is accrued based on the number of days of unavailed leave at each Balance Sheet date and the awards are accrued based on number of years of service of an employee. It is measured at the balance sheet date on the basis of an independent actuarial valuation using the Projected Unit Credit method.
Actuarial gains and losses are recognised in full in the Standalone statement of profit and loss in the period in which they occur.
The Company also offers a short term benefit in the form of encashment of unavailed accumulated compensated absences above certain limits as per respective policies and same is recognised as undiscounted liability at the balance sheet date.
d. Other Long Term Incentive Plans:
Other employee benefits such as overseas social security contributions, employees' state insurance scheme (ESI) and performance incentives expected to be paid in exchange for services rendered by employees, are recognised in the Standalone statement of profit and loss during the period when the employee renders the service.
2.13 Recognition of dividend income, interest income and rental income:
Dividend income is recognised when the Company's right to receive dividend is established.
Interest income is recognised using effective interest rate method.
Rental income from the investment property is recognised in Standalone statement of profit and loss on a straight-line basis over the term of lease except where the rentals are structured to increase in line with expected general inflation.
2.14 Taxation:
Tax expense comprises of current tax and deferred tax. The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted as at the reporting date and applicable for the period. Current tax is measured at the amount expected to be paid to / recovered from the tax authorities, based on estimated tax liability computed after taking credit for allowances and exemptions in accordance with the local tax laws existing in the respective countries.
Current and deferred tax are recognised in the Standalone statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the income taxes are recognised in other comprehensive income or directly in equity, respectively.
The current income tax expense includes income taxes payabLe by the Company and its branches in India and overseas. The current tax payable by the Company in India is Indian income tax payable on worldwide income. Current income tax payable by overseas branches of the Company is computed in accordance with the tax laws applicable in the jurisdiction in which the respective branch operates. The proportionate credit for the taxes paid outside India are generally available for set off against the Indian income tax liability of the Company's worldwide income.
Advance taxes and provisions for current income taxes are presented in the statement of financial position after off¬ setting advance tax paid and income tax provision arising in the same tax jurisdiction and where the relevant tax paying unit has a legally enforceable right and intends to settle the asset and liability on a net basis.
Deferred income taxes
Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount.
Deferred income tax assets are recognised to the extent it is probable that taxable profit wiLL be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit wiLL be available to aLLow aLL or part of the deferred income tax asset to be utilised.
Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be recovered or settled.
Deferred tax assets and liabilities are offset when it relates to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.
The Company recognises interest levied and penalties related to income tax assessments in interest expenses.
2.15 Employee Stock Option Plans:
Equity instruments granted are measured by reference to the fair value of the instrument at the date of grant. The equity instruments generaLLy vest in a graded manner over the vesting period. The fair value determined at the grant date is expensed over the vesting period of the respective tranches of such grants (accelerated amortization). The share-based compensation expense is determined based on the Company's estimate of equity instruments that wiLL eventually vest.
The expense is recognised in the statement of profit and loss with a corresponding increase to the 'share option outstanding account', which is a component of equity.
2.16 Research and development:
Research costs are recognised as an expense in the StandaLone statement of profit and loss in the period they are incurred. Development costs are recognised in the StandaLone statement of profit and Loss unLess technicaL and commercial feasibility of the project is demonstrated, future economic benefits are probabLe, the Company has an intention and abiLity to compLete the deveLopment project and use the asset and the costs can be measured reLiabLy.
2.17 Earnings per Share:
Basic earnings per share is caLcuLated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for any bonus shares issued during the period.
For caLcuLating diLuted earnings per share, the net profit for the period attributabLe to equity sharehoLders and the weighted average number of shares outstanding during the period are adjusted for the effects of aLL diLutive potentiaL equity shares. The diLutive potentiaL equity shares are adjusted for the proceeds receivabLe had the equity shares been actuaLLy issued at fair vaLue (i.e. the average market vaLue of the outstanding equity shares).
2.18 Provisions and Contingent Liabilities:
A provision is recognised when the Company has a present obLigation as a resuLt of past event, it is probabLe that an outfLow of resources wiLL be required to settLe the obLigation and a reLiabLe estimate can be made of the amount of the obligation. If the effect of the time value of money is materiaL, provisions are discounted using a current pre-tax rate that refLects, when appropriate, the risks specific to the LiabiLity.
When discounting is used, the increase in the provision due to the passage of time is recognised as a finance costs.
Contingent LiabiLities are discLosed when there is a possibLe obLigation arising from past events, the existence of which wiLL be confirmed only by the occurrence or non¬ occurrence of one or more uncertain future events not whoLLy within the controL of the Company or a present obLigation that arises from past events where it is either not probabLe that an outfLow of resources wiLL be required to settLe the obLigation or a reLiabLe estimate of the amount cannot be made. Contingent assets are neither recognised nor discLosed in the StandaLone FinanciaL Statements.
2.19 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. During the year ended March 31, 2025, MCA has notified Ind AS - 117 Insurance Contracts and amendments to Ind AS 116 - Leases, reLating to saLe and Leaseback transactions, appLicabLe to the Company w.e.f. ApriL 1, 2024. The Company has reviewed the new pronouncements and based on its evaLuation has determined that it does not have any significant impact in its financiaL statements.
Note :
i) Investment in these entities is not denominated in number of shares as per Laws of country of incorporation i.e. The People's Republic of China and Vietnam.
ii) The number of shares held in Tech Mahindra De Mexico, S.DE R.L.DE C.V. comprise 1 share (March 31, 2024- 1) each of Peso 2,999 and Peso 1; fuLLy paid up of Series A (fixed capital) and 1 share (March 31, 2024 - 1) of Peso 12,931,770 fuLLy paid up of Series B.
iii) The number of shares held in Sofgen Holdings Limited comprise 13,739,910 Ordinary shares (March 31, 2024 - 13,739,910) and 27,062 shares of Class A (March 31, 2024 - 27,062).
iv) The number of shares held in Tech Mahindra Fintech Holdings Limited comprise Qass A 62,500 Ordinary shares (March 31, 2024 - 62500) and Class B 62,500 Ordinary shares (March 31, 2024 - 62500)
v) As per the Scheme of merger of the earstwhiLe Mahindra Satyam Computer Services Limited with the Company with effect from June 24, 2013, the Company had created TML Benefit Trust (Trust). As per the Scheme, the Company transferred, out of its total holding in Satyam as on April 1, 2011; 204 MiLLion equity shares to the Trust, to hold the shares and any additions thereto exclusively for the benefit of the Company. Post-merger with the Company these shares were converted into Tech Mahindra Limited's shares in the ratio of 2: 17. As of date, post bonus and split approved by the shareholders from time to time by the Company; the Trust holds 94,235,629 (March 2024: 94,235,629) shares of the Company.
vi) The investment in equity shares which are not held for trading have been measured at fair value through other comprehensive income. Accordingly, no dividends have been recognised on these investments unless disclosed otherwise.
vii) Amounts less than ' 0.5 MiUion are reported as "0"
i) Each equity share entitl.es the hoLder to one vote and carries an equal, right to dividend.
ii) Refer Note 53 for detaiLs reLating to stock options. 20,100,000 shares has been reserved under empLoyee stock option scheme.
iii) On April 27, 2023 the Board of Directors of the Company had proposed a finaL dividend of ' 32 per share in respect of year ended March 31, 2023 and sharehoLders at the AnnuaL GeneraL Meeting heLd on JuLy 27, 2023 approved the dividend. The company has paid the dividend amounting to ' 31,192 MiLLion.
The Company has paid an interim dividend of ' 12 per share amounting to ' 11,710 MiLLion in the month of November 2023. On ApriL 25, 2024 the Board of Directors of the Company have proposed a finaL dividend of ' 28 per share in respect of year ended March 31, 2024 and sharehoLders at the AnnuaL GeneraL Meeting heLd on JuLy 26, 2024 approved the dividend .The company has paid the dividend amounting to ' 27,388 MiLLion in the month of August 2024.
The Board of directors of the Company have paid interim dividend of ' 15 per share amounting to ' 14,677 MiLLion in the month of November 2024.
On April. 24, 2025 the Board of Directors of the Company have proposed a final, dividend of ' 30 per share in respect of year ended March 31, 2025 subject to the approval, of shareholders at the AnnuaL GeneraL Meeting. If approved, the dividend wouLd resuLt in cash outfLow of ' 29,370 MiLLion.
iv) During the year ended March 31,2020, the Company bought back 20,585,000 equity shares for an aggregate amount of ' 19,556 MiLLion. The equity shares bought back were extinguished.
v) The Company manages its capitaL to ensure that it wiLL be abLe to continue as a going concern whiLe maximizing the return to stakeholders through the optimisation of the equity baLance. The Company is not subject to any externaLLy imposed capitaL requirements. The Company's risk management committee reviews the capitaL structure of the Company on an ongoing basis. As part of this review, the committee considers the cost of capitaL and the risks associated with capitaL.
31 COMMITMENTS AND CONTINGENCIES
31.1 Capital Commitments
The estimated amount of contracts remaining to be executed on capital, account (net of capital, advances) as at March 31, 2025 is ' 1,309 MiLLion (March 31, 2024: ' 1,454 MiLLion).
31.2 Details of investments and purchase commitments
Contractual obligation outstanding pursuant to acquisition of business as at March 31, 2025 is ' 505 MiUion (March 31, 2024 is ' 392 MiUion).
31.3 Guarantees and letters of comfort
i. Guarantees outstanding as at March 31, 2025: ' 22,894 MiUion (March 31, 2024: ' 14,904 MiUion).
ii. Letters of support/letters of comfort of USD 15 MiUion, ' 1,311 MiUion (March 31, 2024: USD 42 MiUion ' 3,505 MiUion) to banks for loans availed by step down subsidiaries of the Company.
31.4 Contingent Liability for Taxation matters
Contingent Liabilities in respect of Income Taxes/ Service Tax/ GST/ Value Added Tax/Customs and International tax to the extent not provided for
Abbreviations:
TechM Tech Mahindra Limited
ErstwhiLe MSat Satyam Computer Services Limited
31.4.1 Footnotes to the Schedule above
Petition before Hon'ble High Court of Judicature at Hyderabad:
Erstwhile Satyam had filed various petitions before Central Board of Direct Taxes (CBDT) requesting for stay of demands aggregating to ' 6,170 MiLLion for the financial years 2002¬ 2003 to 2007-2008 tiLL the correct quantification of income and taxes payable is done for the respective years. In March 2011, the CBDT rejected the petition and erstwhile Satyam filed a Special Leave Petition before the Hon'ble Supreme Court which directed erstwhile Satyam to file a comprehensive petition/ representation before CBDT and to submit a Bank Guarantee (BG) for ' 6,170 MiUion which was compiled by erstwhile Satyam. The BG has been extended up to May 14, 2025.
The Assessing Officer served an Order dated January 30, 2012, for provisional attachment of properties under Section 281B of the Income-tax Act, 1961 attaching certain immovable assets of erstwhile Satyam. Erstwhile Satyam filed a writ petition in the Hon'ble High Court of Andhra Pradesh that has granted a stay on the provisional attachment order.
The Company filed various Writs Petitions before the Andhra Pradesh High Court [now before the High Court for the State of TeLangana (hereinafter referred to as 'TeLangana High Court') ] seeking the Hon'bLe TeLangana High Court's intervention to decLare the assessments done under the Act as void and to permit ErstwhiLe Satyam to fiLe correct returns based on revised financiaL reports prepared. The Writ petitions aLso sought other remedies reLated to the correct assessment of income after aLLowing ErstwhiLe Satyam to consider permissibLe deductions and foreign tax credits.
The comprehensive hearings commenced at the end of year 2023 before the TeLangana High Court and the hearing was compLeted during the month of February 2024. The TeLangana High Court has passed its Order dated January 31, 2025 which aLLowed the Writ petitions fiLed by the Company.
The TeLangana High Court has directed the Company to fiLe fresh returns for Assessment Years 2002-03 to 2008-09 . The TeLangana High Court has directed CBDT/Income tax department to re-quantify / re-compute the income of the Company by conducting a fresh and proper assessment for the Assessment Years 2002-03 to 2008-09 based upon the revised financiaL statements of the Company by excLuding the fictitious saLes and fictitious interest income refLected in the books of accounts and aLLowing permissibLe deductions and foreign tax credit.
Consequent to favorabLe Order passed by the TeLangana High Court in respect of the Writ petitions fiLed by the Company, the Company has written to the jurisdictionaL assessing officer for canceLLation of BG as weLL as the provisionaL attachment Order attaching the properties of the Company as the said demands stand quashed at this stage, which is pending disposaL with jurisdictionaL assessing officer. In compLiance with the directions of the TeLangana High Court, the Company has aLso fiLed fresh return of income for Assessment Years 2002-03 to 2008-09 before March 31, 2025.
31.5 Other Claims on the Company not acknowledged as debts.
i. CLaims against erstwhiLe Satyam not acknowledged as debt: ' 544 MiLLion (March 31, 2024 ' 1,524 MiLLion).
ii. Claims made on the Company not acknowledged as debt: ' 3,580 MiUion (March 31, 2024 ' 420 MiUion).
Note: Post merger of Satyam Computer Services Limited ("Satyam"), there is a delay in transfer of titLe deeds of the Lease hoLd Land in the name of the Company due to which a cLaim of INR 3,304 miLLion raised on the Company by the Lessor. At this stage there is a LeveL of uncertainty invoLved in the matter and it is not possibLe to reLiabLy estimate any LiabiLity.
iii. The Company has received an order passed under section 7A of EmpLoyees Provident Fund & MisceLLaneous Provisions Act, 1952 ("the Act") for the period March 2013 to ApriL 2014 from EmpLoyees Provident Fund Organization (EPFO) cLaiming provident fund contribution amounting to ' 2,448 miLLion for empLoyees deputed to non-SSA (Countries with which India does not have SociaL Security Agreement) countries.
The Company has assessed that it has Legitimate grounds for appeaL and has contested the order by fiLing an appeaL which is pending before CentraL Government IndustriaL TribunaL. The Company has aLso submitted a bank guarantee of ' 500 miLLion towards this order.
In addition, the Company has received a notice based on inquiry under section 7A of the Act for the period May 2014 to March 2016 indicating a cLaim of ' 5,668 MiLLion on (a) empLoyees deputed to non - SSA countries and (b) certain aLLowances paid to empLoyees.
The Company has assessed the components to be incLuded in basic saLary for the purpose of contribution towards Provident Fund and based on LegaL advice beLieves that there wouLd be no additionaL LiabiLity on the Company.
iv Other contingencies ' 407 MiLLion (March 31, 2024'407 MiLLion).
In addition, the company is a party to Litigation/cLaims in the ordinary course of its business. None of these are expected to have a significant impact on the company and its operations.
The Company does not have any benami Property, where any proceedings has been initiated or pending against the company for hoLding any Benami Property under the Benami Transactions (Prohibition) Act, 1988.
32 A. The Code on Social Security, 2020 ('Code') relating to employee benefits received the PresidentiaL assent in September 2020. The effective date from which the changes are appLicabLe is yet to be notified. The Company wiLL evaLuate and wiLL give appropriate impact in the financiaL statements in the period in which the Code becomes effective and the reLated ruLes are pubLished.
B. The Organisation for Economic Co-operation and Development (OECD) has pubLished the modeL ruLes for gLobaL minimum tax (PiLLar Two modeL ruLes). PiLLar Two Legislation has been enacted, or substantiveLy enacted, in certain jurisdictions where the Company operates. The Company is within the scope of the OECD PiLLar Two modeL ruLes and has evaLuated the potentiaL exposure to gLobaL minimum tax. The Company does not expect any materiaL financiaL impact for the current period. The evaLuation of the potentiaL exposure is based on the most recent country-by-country reporting, and financiaL statements for the constituent entities in the Company.
35 MERGER/AMALGAMATION OF ENTITIES
The National. Company Law Tribunal, at Mumbai Bench have vide order dated December 19, 2024 sanctioned Scheme of Merger by Absorption ('the Scheme of Merger') of Perigord Premedia (India) Private Limited (PPIPL), Perigord Data Solutions (India) Private Limited (PDSIPL), Tech Mahindra Cerium Private Limited (Cerium) and Thirdware Solution Limited (Thirdware) (Subsidiaries of Tech Mahindra Limited) with appointed date as April. 1, 2024 with the Company. In accordance with the requirements of para 9(iii) of appendix C of Ind AS 103, the financial, statements of the Company in respect of previous year has been restated. Increase / (Decrease) in previous year numbers are as below:
Notes:
1. The financial, information in the financial, statements in respect of March 31, 2024 is restated as if the business combination had occurred from the beginning of the preceding period in the financial, statements, irrespective of the actual, date of the combination. Accordingly, business combinations is accounted with effect from ApriL 1, 2023.
2. The Company has recorded the asset and liabilities of the Merged Undertakings PPIPL, PDSIPL, Cerium and Thirdware vested in it pursuant to this Scheme at the respective book values appearing in the books of the Merged Undertakings.
3. The value of investment in PPIPL (' 133 MiUion), PDSIPL (' 101 MiUion), Cerium (' 3,693 MiUion) and Thirdware (' 3,080 MiUion) in the books of the Company have been canceUed.
4. No adjustments are made to reflect fair values or recognise any new assets or liabilities.
5. The related disclosures have also been updated in these financial statements.
6. GoodwiU as appearing in the consolidated financial statements with respect to PPIPL, PDSIPL, Cerium and Thirdware, amounting to ' 2,701 MiUion has been recorded in the standalone financial statements as on March 31, 2024.
The Company has investments in subsidiaries and associates. These investments are accounted for at cost Less impairment. Management assesses the operations of these entities, incLuding the future projections, to identify indications of diminution, other than temporary, in the value of the investments.
In case where impairment triggers are identified, the recoverable amount of the investment is estimated in order to determine the extent of the impairment Loss. An impairment Loss is recognized if the investment's carrying amount exceeds the greater of its fair value less costs to seLL and value in use.
The performance in few of the subsidiaries and the relevant economic and market indicators have led the Company to reassess recoverable amount in the subsidiaries listed below, as at March 31, 2025.
At 31 March 2025, the recoverable amount of these investments was ' 1,198 MiLLion.
The recoverabLe amount determined was Lower than the carrying vaLue of the respective investment. Accordingly, the Company has recognized an impairment Loss of ' 1,644 MiUion for the year ended March 31, 2025 (March 31, 2024'2,931 MiLLion).
The recoverable amount of beLow investments was based on higher of fair vaLue and its vaLue in use. VaLue in use is determined by discounting the future cash fLows to be generated from the investment. The carrying amount of the investment was determined to be higher than its recoverable amount of ' 2,842 MiLLion and an impairment Loss of ' 1,644 MiLLion during the year ended March 31, 2025 (March 31, 2024'2,931 MiLLion) was recognised.
Estimates of future cash fLows used in the vaLue-in-use caLcuLation are specific to the entity based on business pLans. The future cash fLows consider potentiaL risks given the current economic environment and key assumptions, such as voLume forecasts and margins. The discount rate used in the caLcuLation refLects market's assessment of the risks specific to the asset as weLL as time vaLue of money.
* On internal assessment of these entities Company observed a decline in its economic performance, alongside a reduction in operational efficiency, profit margins and negative networth. Consequently, it was determined that the carrying value of the investment exceeded its recoverable amount, leading to the recognition of an impairment loss amounting to ' 165 Million for the period ending March 31, 2025.
# Share application money, pending allotment
37 A. Certain matters relating to erstwhile Satyam Computer Services Limited (erstwhile Satyam) :
In the letter dated January 7, 2009 Mr. B. Ramalinga Raju, the then Chairman of erstwhile Satyam, stated that the Balance Sheet of erstwhile Satyam as at December 31, 2008 carried inflated cash and bank balances, non-existent accrued interest, an understated liability and an overstated debtor's position. Consequently, various regulators/investigating agencies such as the Serious Fraud Investigation Office ('SFIO')/Registrar of Companies ('ROC'), Directorate of Enforcement ('ED'), Central Bureau of Investigation ('CBI') had initiated investigations on various matters and conducted inspections and issued notices calling for information including from certain subsidiaries which have been responded to.
In 2009, SFIO initiated two proceedings against erstwhile Satyam for violations of Companies Act, 1956, which were compounded.
Further, ED issued show-cause notices for certain non-compliances of provisions of the Foreign Exchange Management Act, 1999 ('FEMA') and the Foreign Exchange Management (Realization, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 by the erstwhile Satyam. These pertained to
a) alleged non-repatriation of American Depository Receipts ('ADR') proceeds aggregating to USD 39.2 Million; and
b) non-realization and repatriation of export proceeds to the extent of foreign exchange equivalent to ' 506 Million for invoices raised during the period from July 1997 to December 31, 2002.
These have been responded to by the erstwhile Satyam/the Company, the Company has not received any further communication in this regard and with the passage of time, the Company does not expect any further proceedings in this regard.
As per the assessment of the Management, based on the forensic investigation and the information available, all identified/required adjustments/disclosures arising from the identified financial irregularities, were made in the financial statements of erstwhile Satyam as at March 31, 2009. Considerable time has elapsed after the initiation of investigation by various regulators/agencies and no new information has come to the Management's notice which requires adjustments to the financial statements. Further, as per above, the investigations have been completed and no new claims have been received which need any further evaluation/adjustment/disclosure in the books of account.
B. Proceedings in relation to 'Alleged Advances'
Erstwhile Satyam had, in the past, received letters from 37 companies seeking confirmation by way of acknowledgement of receipt of certain alleged amounts by the erstwhile Satyam (referred to as 'alleged advances'). These letters were followed with legal notices claiming repayment of the alleged advances aggregating to ' 12,304 Million together with damages/ compensation @ 18% per annum till the date of repayment. The erstwhile Satyam had not acknowledged any liability and replied to the legal notices stating that the claims are not legally tenable.
Subsequently, the 37 companies fiLed petitions for recovery against the erstwhiLe Satyam before the City Civil Court, Sundaraja (Court), of which one petition has been converted into suit and balance 36 petitions are at various stages of pauperism/suit admission.
The Hon'ble High Court of Andhra Pradesh in its Order approving the merger of the erstwhile Satyam with the Company, held that in the absence of Board resolutions and documents evidencing acceptance of unsecured loans, i.e. aUeged advances, by the former Management of the erstwhile Satyam, the new Management of the erstwhile Satyam is justified in not crediting the amounts received in the names of the said 37 companies and not disclosing them as creditors and in disclosing such amounts as 'Amounts pending investigation suspense account (net)' in the financial statements. The Hon'ble High Court held, inter-alia, that the contention that Satyam is retaining the money, i.e. the alleged advances, of the 'creditors' and not paying them does not appear to be valid and further held that any right of the objecting creditors can be considered only if the genuineness of the debt is proved. The matter is pending final adjudication.
Appeals were filed before the Division Bench of the Hon'ble High Court of Andhra Pradesh against the Order of the single judge of the Hon'ble High Court of Andhra Pradesh and the Hon'ble High Court of Bombay sanctioning the Scheme of merger of erstwhile Satyam with the Company w.e.f. April 1, 2011, which are yet to be heard.
Further, petition was filed by the 37 companies for winding-up of the erstwhile Satyam with the Hon'ble High Court of Andhra Pradesh which was subsequently rejected. One of the aforesaid companies also filed an appeal against the said order with the Division Bench of the Hon'ble High Court of Andhra Pradesh.
These matters have been combined for hearing.
The Directorate of Enforcement (ED) while investigating the matter under the Prevention of Money Laundering Act, 2002 (PMLA) had directed the erstwhile Satyam not to return the aUeged advances until further instructions.
In view of the aforesaid and based on an independent legal opinion, current legal status and lack of documentation to support the validity of the claim, the Management believes that the claim by the 37 companies for repayment of the aUeged advances, including interest thereon wiU not be payable on final adjudication. As endorsed by the Hon'ble High Court in the scheme of merger, the said amount of ' 12,304 MiUion has been disclosed as "Amounts pending investigation suspense account (net)" ("Suspense Account (net)"), which override the relevant requirement of Conceptual Framework for Financial Reporting under Indian Accounting Standards (Ind AS). Accordingly, the amounts of these aUeged advances are disclosed separately from equity and liability of the Company in the books of account.
38 DISPUTE WITH VENTURE GLOBAL ENGINEERING LLC
Pursuant to a Joint Venture Agreement in 1999, the erstwhile Satyam and Venture Global Engineering LLC ('VGE') incorporated Satyam Venture Engineering Services Private Limited ('SVES') in India with an objective to provide engineering services to the automotive industry.
On March 20, 2003, numerous corporate affiliates of VGE filed for bankruptcy and consequently the erstwhile Satyam, exercised its option under the Shareholders Agreement (the 'SHA'), to purchase VGE's shares in SVES. The erstwhile Satyam's action, disputed by VGE, was upheld in arbitration by the London Court of International Arbitration vide its award in April 2006 (the 'Award'). VGE disputed the Award in the Courts in Michigan, USA.
The Courts in Michigan, USA, confirmed and directed enforcement of the Award. They aLso rejected VGE's chaUenge of the Award. In 2008, the District Court of Michigan further held VGE in contempt for its failure to honor the Award and inter-aUa directed VGE to dismiss the nominees of VGE on its Board and replace them with individuals nominated by the erstwhile Satyam. This Order was also confirmed by the Sixth Circuit Court of Appeals in 2009. Consequently, erstwhile Satyam's nominees were appointed on the Board of SVES and SVES confirmed their appointment at its Board meeting held on September 26, 2008. The erstwhile Satyam was legaUy advised that SVES became its subsidiary with effect from that date.
In the meantime, while proceedings were pending in the USA, VGE filed a suit in April 2006, before the District Court of sundered in India for setting aside the Award. The City Civil Court, vide its judgment in January 2012, has set aside the Award, against which the erstwhile Satyam preferred an appeal (Company Appeal) before the Hon'ble High Court.
VGE also filed a suit before the City Civil Court, Secunderabad inter alia seeking a direction to the Company to pay sales commission that it was entitled to under the Shareholders Agreement. In the said suit, two ex-parte Orders were issued directing the Company and Satyam to maintain status quo with regard to transfer of 50% shares of VGE and with regard to taking major decisions which are prejudicial to the interests of VGE. The said suit filed by VGE is stiU pending before the Civil Court. The Company has chaUenged the ex-parte Orders of the City Civil Court Secunderabad before the Hon'ble High Court (SVES Appeal).
The Hon'ble High Court of Andhra Pradesh consolidated aU the Company appeals and by a common Order dated August 23, 2013 set aside the Order of the City Civil Court, Hyderabad setting aside the award and also the ex-parte Orders of the City Civil Court, Secunderabad. The Hon'bLe High Court as an interim measure ordered status quo with regard to transfer of shares. VGE has filed special leave petition against the said Order Before Supreme Court of India, which is currently pending. The Supreme Court by an interim Order dated October 21, 2013 extended the Hon'ble High Court Order of status-quo on the transfer of shares. The Company has also filed a Special Leave Petition ('SLP') before the Supreme Court of India challenging the judgment of the Hon'ble High Court only on the limited issue as to whether the Civil Court has jurisdiction to entertain VGE's chaUenge to the Award. The said Petitions are pending before the Supreme Court. The Hon'ble Bench of Supreme Court, in view of the difference of opinion by an order dated November 1, 2017 has directed the registry to place the SLP's before the Chief Justice of India for appropriate further course of action.
In December 2010, VGE and the sole shareholder of VGE (the Trust, and together with VGE, the PLaintiffs), fiLed a compLaint against the erstwhiLe Satyam in the United States District Court for the Eastern District of Michigan (District Court) inter alia asserting claims under the Racketeer Influenced and Corrupt Organization Act, 1962 (RICO), fraudulent concealment and seeking monetary and exempLary damages (the CompLaint). The District Court vide its order in March 2012 has dismissed the Plaintiffs Complaint. The District Court also rejected VGE's petition to amend the complaint. In September 2013, VGE's appeal against the order of the District Court has been aUowed by the US Court of Appeals for the Sixth Circuit. The matter is currently before the District Court and the Company has fiLed a petition before District Court seeking dismissaL of the PLaintiff's CompLaint. The said petition is pending before the District Court. On March 31, 2015, the US District Court stayed the matter pending hearing and decision by the Indian Supreme Court in the Special Leave Petitions filed by VGE and the Company.
a. The Company has assessed the fair valuation of its investment property by an accredited external,
independent valuers registered under Companies (Registered Valuer and Valuation) RuLes, 2017
In the view of management, fair valuation of investment properties carried out on March 31, 2025 by the independent valuer holds good and management estimates no material change in the fair valuation of said investment property as on March 31, 2025. Fair value of balance investment property as on March 31, 2025 are as foUows:
The Company has not revalued its Property, Plant and Equipment (including Right' of use assets) or intangible assets during the current or previous year.
The fair value measurement has been categorized as a level 2 fair value based on inputs to the valuation technique used. The valuation technique used for land is based on prevailing market rates and other assets has been determined on replacement cost.
b. Other income includes gain on sale of property of INR 4,502 MiUion which comprises of freehold land and its related buildings along with the furniture & fixtures sold for a consideration of INR 5,350 MiUion, receivable over a period of 4 years along with 8.2% p.a. interest.
The Rental Income from investment property for the year is ' 142 MiUion (March 31, 2024'262 MiUion)was included in other income. The Direct Operating expenses to earn the income is not ascertainable.
The Company has no restrictions on the realisabRity of its investment property. There are no contractual obligations to purchase, construct or develop investment property as at the year end.
40 FOREIGN CURRENCY RECEIVABLES
In respect of overdue foreign currency receivables for the period's upto March 31, 2009 pertaining to erstwhile Satyam, the Company is taking steps under the provisions of FEMA, for recovery and/or permissions to write-offs as appropriate. The Management has fuUy provided for these receivables.
41 Segment information has been presented in the Consolidated Financial Statements in accordance with Indian Accounting Standard Ind AS 108, Operating Segments as notified under the Companies (Indian Accounting Standard) Rules, 2015.
43 DETAILS OF EMPLOYEE BENEFITS AS REQUIRED BY THE IND AS-19 - EMPLOYEE BENEFITS ARE AS UNDER:
i. Defined Contribution Plans
The Company makes contributions to Provident Fund, Superannuation Fund and National. Pension Scheme which are defined contribution pLans for qualifying employees. Under these Schemes, the Company contributes a specified percentage of the payroU costs to the respective funds.
The Company has recognized as an expense in the Statement of Profit and Loss the foUowing:
' 278 MiUion (March 31, 2024: ' 229 MiUion) for National Pension Scheme contributions.
' 1,102 MiUion (March 31, 2024: ' 952 MiUion) for Superannuation Fund contributions; and ' 6,558 MiUion (March 31, 2024: ' 6,142 MiUion) for Provident Fund contributions
ii. Defined Benefit Plan
In accordance with the Payment of Gratuity Act, 1972, applicable for Indian companies, the Company operates a scheme of gratuity which is a defined benefit plan. The gratuity plan is partiaUy funded.
The foUowing table sets out the Changes in Defined Benefit Obligation ('DBO') and Trust Fund plan assets recognized in the Balance Sheet are as under:
*As part of regular review of its customer portfolio & verticals, company had reassessed the customers (groups) which are into multiple businesses and have aligned vertical which is closer to the actual nature of services or majority of services being offered. In line with that, have aligned previous year comparative as well.
No single customer represents 10% or more of the Company's total revenue during the year ended March 31, 2025 and March 31, 2024.
ii. Remaining performance obligations
The remaining performance obligations disclosure provides the aggregate amount of the transaction price yet to be recognized as of the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. While disclosing the aggregate amount of transaction price yet to be recognized as revenue towards unsatisfied (or partially satisfied) performance obligations, along with the broad time band for the expected time to recognise those revenues, the Company has applied the practical expedient in Ind AS 115. Accordingly, the Company has not disclosed the aggregate transaction price allocated to unsatisfied (or partially satisfied) performance obligations which pertain to contracts where revenue recognised corresponds to the value transferred to customer typically involving time and materials, volume/unit based contracts. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in scope of contracts, periodic revalidations, adjustments for revenue that has not materialized and adjustments for currency.
Based on the contract value agreed and committed with customers, the aggregate value of performance obligations that are completely or partially unsatisfied as of March 31, 2025'399,235 Million. Out of this, the Company expects to recognise revenue of around 66% within the next one year and the remaining thereafter. This includes contracts that can be terminated for convenience without a substantive penalty since, based on current assessments the occurrence of the same is expected to be remote.
Credit Risk
Credit risk is the risk of financial. Loss arising from counterparty faiLure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as weU as concentration of risk. Credit risk is controUed by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.
Financial instruments that are subject to concentration of credit risk principally consist of trade receivables, investments, loans, cash and cash equivalents, other balances with banks and other financial assets. None of the financial instruments of the Company result in material concentration of credit risk.
Credit risk on cash and cash equivalents is limited as the Company generally invest in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units, unquoted bonds issued by private organizations with high credit ratings.
The gross carrying amount of a financial, asset is written off where the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with Group's procedures for recovery of amounts due.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was ' 149,436 Million and ' 146,882 Million as of March 31, 2025 and March 31, 2024 respectively, being the total of the carrying amount of trade receivables, investments, cash and cash equivalents, other balance with banks, loans and other financial assets.
In addition, the Company is exposed to credit risk in relation to financial guarantees given to banks provided by the Company. The Company's maximum exposure in this respect is the maximum amount the Company would have to pay if the guarantee is called on.
Trade receivables
Ind AS requires expected credit losses to be measured through a loss allowance. The Company assesses at each Balance Sheet date whether a financial asset or a group of financial assets is impaired.
The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information. The Company's exposure to customers is diversified and no single customer contributes to more than 10% of outstanding accounts receivable and unbilled revenue as of March 31, 2025 and March 31, 2024. The concentration of credit risk is limited due to the fact that the customer base is large.
The expected credit loss allowance is based on the ageing of trade and other receivables and the rates in the provision matrix. Movement in the expected credit loss allowance is as follows:
a) Foreign currency exchange rate risk
The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar, Euro, Great Britain Pound, Australian Dollar and Canadian Dollar against the respective functional currency of the Company. The Company, as per its risk management policy, uses derivative instruments primarily to hedge foreign exchange currency risk.
The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in line with its risk management policies.
The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a simultaneous parallel foreign exchange rates shift of all the currencies by 1% against the respective functional currency of the Company.
Further the exposure as indicated below is mitigated by some of the derivative contracts entered into by the Company as disclosed in note below.
The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the end of the year are as follows:
50 RELATED PARTY RELATIONSHIPS AND TRANSACTIONS
i. List of Related Parties as of March 31, 2025
Promoter having significant influence and its related parties:
Mahindra & Mahindra Limited*
Direct / Indirect Subsidiaries
Tech Mahindra (Americas) Inc. and its foLLowing subsidiaries:
• Citisoft Inc
• Saffronic Inc
• Netops AI Inc. (Dissolved w.e.f. September 30, 2024)
• Mad*pow Media Solutions LLC (100% Subsidiary effective from November 11, 2022 and Merged with Born Group Inc effective November 1, 2023)
• Born Group Inc (Merged with its parent company (Tech Mahindra (Americas) Inc.)) effective from ApriL 1, 2024)
• TM Born Group CR Socieded de ResponsabRidad Limitada (Merged with AUyis Technology Solutions Sociedad de ResponsabRidad Limitada w.e.f December 1 , 2024)
• We Make Websites Inc (Merged with Born Group Inc. w.e.f. September 1, 2023)
• The CJS soLutions Group LLC
• HeaLthcare CLinicaL Informatics Limited
• HCI Group AustraLia Pty Ltd
• CJS Solutions Group (India) Private Limited (Earlier known as Digitalops Technology Private Ltd)(Ownership changed w.e.f June 9, 2023 and Name changed effective September 4, 2023)
• Zen3 Infosolutions (America) Inc. (Merged with Tech Mahindra (Americas) Inc. w.e.f. October 1, 2024.)
• Tech Mahindra Credit Solutions Inc. (Merged with Tech Mahindra (Americas) Inc. w.e.f. October 1, 2023)
• Tech Mahindra Consulting Group Inc.
• Digital OnUs Inc. and its foUowing Subsidiaries
• Tech Mahindra Mexico Cloud Services,S.DE R.L.DE C.V
• Healthnxt Inc (Merged with Tech Mahindra (Americas) Inc. w.e.f July 1, 2024)
• Eventus Solutions Group, LLC (Merged with Tech Mahindra (Americas) Inc. w.e.f. January 1, 2025)
• Brainscale Inc (Merged with Parent company (Tech Mahindra (Americas) Inc.) w.e.f. JuLy 1, 2023)
• Activus Connect LLC
• Activus Connect PR LLC
• AUyis Inc.
• AUyis Technology Solutions Sociedad de ResponabRidad Limitada
• AUyis Technologies S.R.L
• Tech Mahindra AUyis S.R.L. (Incorporated on October 22, 2024)
• Tech Mahindra Cerium Systems Inc. (Merged with Tech Mahindra (Americas) Inc w.e.f. February 20,2025).
• Tech Mahindra Network Services International Inc. and its foUowing subsidiaries:
• Lightbridge Communications corporation LLC (Liquidated w.e.f. January 19, 2025)
• LCC Middle East FZ-LLC
b. For other investments and loans refer note 8 and 12.
53 EMPLOYEE STOCK OPTION SCHEME i. ESOP 2014 & ESOP 2018:
The Company has instituted 'Employee Stock Option PLan 2014' (ESOP 2014) and 'Employee Stock Option PLan 2018' (ESOP 2018) for eLigibLe empLoyees and Directors of the Company and its subsidiaries. In terms of the said pLan, the Nomination and Remuneration Committee has granted options to the empLoyees of the Company and its subsidiaries. The maximum exercise period is 5 years from the date of grant for ESOP 2014 and ESOP 2018.
The maximum number of shares under ESOP 2014 and ESOP 2018 shaLL not exceed 16,000,000 and 5,000,000 respectiveLy.
ii. TML ESOP - B 2013:
ErstwhiLe Satyam has established a scheme 'Associate Stock Option PLan - B' (ASOP - B) under which 28,925,610 options were available for grant/exercise at the time the Scheme of Amalgamation became effective. Post-merger, these options were adjusted in terms of the approved Scheme of Amalgamation. Each option entitles the holder one equity share of the Company. These options vest over a period of 1 to 4 years from the date of the grant. Upon vesting, employees have 5 years to exercise the options. Post-merger, the name of the ESOP scheme has been changed to 'TML ESOP B 2013'.
iii. TML- RSU:
The erstwhile Satyam has established a scheme 'Associate Stock Option Plan - Restricted Stock Units (ASOP - RSUs)' to be administered by the Administrator of the ASOP - RSUs, a committee appointed by the Board of Directors of the erstwhile Satyam in May 2000. Under the scheme, 1,529,412 equity shares (equivalent number of equity shares post-merger) are reserved to be issued to eligible associates at a price to be determined by the Administrator which shaU not be less than the face value of the share. These RSUs vest over a period of 1 to 4 years from the date of the grant. The maximum time available to exercise the options upon vesting is five years from the date of each vesting. Post-merger, the name of the ESOP scheme has been changed to TML RSU.
vii. The employee stock compensation cost for the Employee Stock Option PLan 2018, ESOP 2014 and TML-RSU schemes has been computed by reference to the fair value of share options granted and amortized over each vesting period. For the year ended March 31, 2025, the Company has accounted for employee stock compensation cost (equity settled) amounting to ' 609 MiUion (March 31, 2024: ' 668 MiUion). This amount is net of cost of options granted to employees of subsidiaries.
For the options exercised during the year, the weighted average share price for ESOP-2014 - ' 1,416.74, ESOP-2018 - ' 1,422.93 (March 31, 2024, ESOP-2014 - ' 1,195.07, ESOP-2018 - ' 1,190.23 & TML-RSU - ' 1,050.57).
iii. The Company has not received any fund from any person(s) or entities, 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.
iv. The foUowing table summarizes the transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956 for the year ended / as at March 31, 2025:
Amounts Less than ' 0.5 Million are reported as "0“
v. The Company does not have any transaction which is not recorded in the books of account 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.
vi. The Company has complied with the number of layers for its holding in downstream companies prescribed under clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers) Rules, 2017.
vii. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
viii. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
ix. The Company has been sanctioned working capital limits in excess of five crore rupees, in aggregate, from banks or financial institutions on the basis of security of current assets. The quarterly returns or statements filed by the Company with such banks or financial institutions are in agreement with the books of account of the Company
x. The Group (as per the provisions of the Core Investment Companies (Reserve Bank) Directions, 2016) has four CICs as part of the Group.
For B S R & Co. LLP For Tech Mahindra Limited
Chartered Accountants
Firm Registration No.101248W/W-100022 Anand G. Mahindra Mohit Joshi Anish Shah
Chairman Managing Director & CEO Director
(DiN:00004695) (DiN:08339247) (DiN:02719429)
New York, USA Mumbai, India Mumbai, India
Venkataramanan Vlshwanath Puneet Renjhen Haigreve Khaitan Mukti Khaire
Partner Director Director Director
Membership No. 113156 (DiN:09498488) (DiN:00005290) (DiN:08356551)
Mumbai, India Mumbai, India Mumbai, India
Neelam Dhawan Tarun Bajaj Shikha Sharma
Director Director Director
(DiN.00871445) (DiN:02026219) (DIN.00043265)
Mumbai, India Mumbai, India Mumbai, India
Penelope Fowler Rohit Anand Ruchie Khanna
Director Chief Financial Officer Company Secretary
(DIN-.09591815) Mumbai, India Membership No.: ACS24922
Mumbai, India Mumbai, India Mumbai, India
Date: April 24, 2025 Date: April 24, 2025
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