Nature and purpose of other reserves
(a) Securities premium
Securities premium is used to record the premium on issue of shares. The premium can only be utilized in accordance with the provisions of the Act.
(b) Retained earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to dividends or other distributions paid to shareholders.
(c) Employee stock compensation outstanding account Employee stock compensation outstanding account is used to recognize the grant date fair value of options and RSUs issued to employees under the Company's share based payment schemes over the vesting period.
(d) Capital reserve
Capital reserve represents those created on account of amalgamation. This can only be utilised in accordance with the provisions of the Act.
(e) Cash flow hedging reserve
Cash flow hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. (Refer Note no. 2.9 and Note no. 30).
(f) Other reserves
Other reserves represents the foreign currency translation difference on account of amalgamation.
Information about individual provisions and significant estimates: Due to the very nature of the above provisions, it is not possible to estimate the timing/uncertainties relating to their outflows.
Warranty
Provision is made for estimated warranty claims in respect of products sold which are still under warranty at the end of the reporting period. These claims are expected to be settled over a period of 3 years. Management estimates the provision based on historical warranty claim information and any recent trends that may suggest future claims could differ from historical amounts. Also refer note no. 27.
The Company offers warranties for a period of 1 to 3 years on its products. The assumptions made in relation to the current period are consistent with those in the prior year. Factors that could impact the estimated claim information include introduction of new products and quality initiatives. If claims costs were to differ by 10% from management's estimates, the warranty provisions would be an estimated ' 17.43 higher or lower (March 31, 2025: ' 14.65 higher or lower).
Other Claims
Includes estimated provision against claims made by a third party in relation to certain closed business operations and contested by the Company.
The Company has no significant concentration of liquidity risk with any individual finance provider.
There were no material business combinations or foreign exchange differences that would affect the liabilities under the supplier finance arrangement in either period.
The carrying amounts of liabilities under the supplier finance arrangement are considered to be reasonable approximations of their fair values, due to their short-term nature.
*The Company has not provided comparative information in respect of the amendments to Ind AS 7 and Ind AS 107 relating to supplier finance arrangements, as it has applied the transitional relief available on initial adoption of these amendments, which allows entities not to present comparative disclosures for prior periods.
(iii) Defined Benefit Plans a) Gratuity
The Company provides gratuity benefit to employees in India as per the Payment of Gratuity Act, 1972 (as amended). Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employee's last drawn basic salary per month computed proportionately for 15 days multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to recognised insurer managed funds in India.
The new Labour Codes introduced by the Government of India, inter alia, require gratuity to be calculated based on wages constituting at least 50% of total remuneration. This has resulted in an increase in gratuity benefits in respect of services rendered in prior periods, and accordingly, the Company has recognised incremental gratuity cost as past service cost amounting to ' 9.45 during the year. In accordance with Ind AS 19, the past service cost has been recognised in the Statement of Profit and Loss in the current year in which the plan amendment became effective.
The above sensitivity analysis are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may not be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as and when calculating the defined benefit liability recognised in the balance sheet.
Insurer managed funds 100% 100%
c) Risk Exposure
1. Interest rates risk : The defined benefit obligation is calculated using a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase although this will be partially offset by an increase in value of the plan assets.
2. Salary inflation risk: Higher than expected increases in salary will increase the defined benefit obligation.
3. Demographic risks: This is the risk in volatility due to unexpected nature of decrements that include mortality, attrition, disability and retirement. The effects of these decrement on the DBO depends upon the combination of salary increase, discount rate, and vesting criteria and therefore not very straight forward. It is important not to overstate withdrawal rate because the cost of retirement benefit of a short service employees will be less compared to long service employees.
4. Asset Liability Mismatch: This will come into play unless the funds are invested with the term of the assets replicating the term of the liability.
Defined benefit liability and employer contributions Expected contributions to post-employment benefit plans (Gratuity) for the year ending March 31, 2027 are ' 7.30.
The weighted average duration of the defined benefit obligation is 8 years (March 31, 2025: 8 years). The expected maturity analysis of undiscounted gratuity is as follows:
(ii) Fair value hierarchy
Level 1: Includes financial instruments measured using quoted prices. This includes mutual funds and forward contracts that have quoted price. The mutual funds are valued using the closing Net Asset Value (NAV) and foreign currency forwards are valued based on the forward exchange rates provided by the bank as at the balance sheet date.
Level 2: The fair value of financial instruments that are not traded in an active market (for example traded bonds, over-the counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
There are no transfers between levels during the year.
The Company's policy is to recognize transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
The fair value measurement of cash flow hedges is recognised through other comprehensive income.
(iii) Valuation Technique
- The fair values of lease liabilities and security deposits were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy due to the inclusion of unobservable inputs including counterparty credit risk.
- Investment in mutual funds are valued using closing NAV of the fund.
- Foreign currency forwards are valued based on the forward exchange rates provided by the bank as at the balance sheet date.
(iv) Valuation Process
The finance department of the Company includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values. The finance department reports directly to the chief financial officer (CFO). The significant level 3 inputs for determining the fair values are discount rates using a long term bank deposit rate to calculate a risk-free rate (pre-tax) that reflects the current market assessments of the time value of money and adjusted for counter-party risk and risks specific to the asset.
(v) Fair value of financial assets and liabilities measured at amortised cost
- The fair values of security deposits and non-current trade receivables approximates their carrying amounts.
- The carrying amounts of trade receivables (current), borrowings, trade payables, capital creditors, cash and cash equivalents, bank balances other than cash and cash equivalents and other financial assets and liabilities are considered to be the same as their fair values, due to their short-term nature.
- For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
Note no. 30: Financial risk management
The Company's business activities expose it to a variety of financial risks, namely credit risk, liquidity risk, market risk
and interest rate risk. The Company's senior management has overall responsibility for the establishment and oversight of the Company's risk management framework. The risk management framework is approved by the Board of Directors.
A. Credit Risk
Credit risk refers to the risk of default on its obligation by the counterparty resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables and contract assets. Trade receivables and contract assets are typically unsecured and are derived from revenue earned from customers located in various countries. Credit risk is managed by the Company through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business.
The loss allowances for financial assets 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 calculations, based on the Company's past history and existing market conditions as well as forward- looking estimates at the end of each reporting period.
The Company is also exposed to credit risk in respect of cash and cash equivalents, deposits with banks and financial institutions and investment in mutual funds. As a policy, the Company places its cash and cash equivalents and deposits with well-established banks and financial institutions and investment in mutual funds with well-established financial institutions.
Management has evaluated and determined expected credit loss for cash and cash equivalents, deposits with banks (including margin money), investment in mutual funds, security deposits and other financial assets to be immaterial.
B. Liquidity Risk
Liquidity risk is the risk that the Company will not be able to meet its obligations associated with its financial liabilities. The Company's principal source of liquidity are cash and cash equivalents, cash flows that are generated from the operations and the undrawn borrowing facilities. A material and sustained shortfall in cash flows could undermine the Company's credit rating and impair investor confidence. Management monitors rolling forecasts of the Company's liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected cash flows.
(i) Liquid assets
(iii) Maturities of financial liabilities
The amount disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equals their carrying balances (except for lease liabilities and borrowings) as the impact of discounting is not significant.
The following table shows a maturity analysis of the anticipated cash flows including future interest obligations for the Company's derivative and non-derivative financial liabilities on an undiscounted basis, which therefore differs from both carrying value and fair value. Floating rate interest is estimated using the prevailing interest rate at the end of the reporting period. Cashflows in foreign currencies are translated using the period end spot rates.
Hedge effectiveness
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic perspective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument.
For hedges of foreign currency purchases, the company enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item. The company therefore performs a qualitative assessment of effectiveness. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Company uses the hypothetical derivative method to assess effectiveness.
In hedges of foreign currency purchases, ineffectiveness may arise if the timing of the forecast transaction changes from what was originally estimated, or if there are changes in the credit risk of the company or the derivative counterparty.
Note no. 31: Capital management
For the purpose of capital management, the Company considers the following components of its Balance Sheet as capital:
Issued equity capital, securities premium and all other equity reserves attributable to the equity holders of the Company. The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimize the growth opportunities and return to the shareholders. The capital structure of the company is based on management's judgement of the appropriate balance of key elements in order to meet its strategic and day-to-day needs. The company consider the amount of capital in proportion to risk and manage the capital structure in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.
The Company foresees issue of fresh capital pursuant to exercise of vested employee stock options. Apart from the outstanding ESOPs, the Board of Directors have also approved certain Restricted Stock Units (RSUs), which may be converted into share capital in the future periods.
The Company's policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investor, creditors and market confidence and to sustain future development and growth of its business. The
Note 1: The Company had received demand orders for ' 42.92 towards additional duty and penalty from the Office of the Commissioner of Central Excise, Puducherry Commissionerate on the applicability of excise duty on software used in the multiplexer products pertaining to Financial Year (FY) 2002-03 to FY 2009-10 based on Customs, Excise and Service Tax Appellate Tribunal (CESTAT) Order No. 41771-41776/2018 dated 12.06.2018. Further, an additional penalty on certain officers of the Company amounting to ' 0.90 was raised. The Company has filed a stay application and appeal against the CESTAT Order before the Honourable Supreme Court and has also filed an appeal before CESTAT against the Order passed by Commissioner of Central Excise, Puducherry. As at March 31, 2026, the Company has paid a pre-deposit of ' 2.38 (March 31, 2025: ' 2.38) included under Balances with government authorities in Note 10 ‘Other Non-current assets'. The Company had received a demand order for ' 3.32 for FY 2010-11 to FY 2013-14 on similar matters and an appeal before CESTAT was filed by the Company for which Company has paid a pre-deposit of ' 0.23 (March 31, 2025: ' 0.23). Based on an assessment, supported by an external legal opinion, Management has concluded that the Company has a strong case to defend its position in the above matters and accordingly, no provision has been made in these standalone financial statements.
Note 2: In July 2017, Income Tax Department initiated proceedings under section 132 of the Income Tax Act, 1961 for assessment years (AY) 2012-13 to 2018-19. Subsequently, the Company received orders disallowing certain expenses resulting in reduction of brought forward/ carried forward losses for these assessment years. The Company has filed appeal against the orders disputing the disallowances. Certain other agencies sent notices as part of their inquiries, which were duly responded / attended by the Company and its officials. The management is of the view that the outcome of these proceedings/ notices has no material adverse impact on the Company's financial statements. Pursuant to proceedings under 132 mentioned above, in March 2018, the Income Tax Department sent a show cause notice to the company under Section 276C of the Income Tax Act for AY 2012-13 to 2018-19. The Company and its officials fully cooperated with the Department. During FY 2018-19, the Company and certain officers of the Company had received summons under various sections of the IT Act from the Special Court for Economic Offences, to which the Company has responded. The Company is of the view that the outcome of these summons/notices will not have any material impact on the Company's financial statements. Further the company has appealed against the proceedings under section 276C and the summons by Special Court of Economic Offences in the Karnataka High Court. The Company is of the view that the outcome of these summons/notices will not have any material impact on the Company's financial statements. There are cases pending at various forums with the concerned authorities. Outflows if any, arising out of these claims would depend on the outcome of the decision of the appellate authority and the Company's right for future appeals before judiciary.
The Company had received demand of ' 4.80 in AY 2018-19 towards disallowance of carried forward losses, ' 0.90 for AY 2022-23 towards disallowance of TDS credits and ' 0.65 and ' 3.36 for AY 2021-22 and AY 2022-23 respectively towards alleged non-deduction of TDS on certain expenses . The Company had preferred appeals against these orders and the same is currently pending with CIT(A).
Note 3: The Company had received GST demand orders of ' 4.85 and ' 1.23 for the financial years 2017-18 and 2019-20, respectively, in respect of its Karnataka GST registration, primarily on account of alleged excess availment of input tax credit in GSTR-3B vis-a-vis GSTR-2B. Appeals against the said orders have been filed before the Commissioner (Appeals), GST and are currently pending. The Company also had certain penalty matters amounting to ' 0.38 against which appeals have been filed and are currently pending.
Note 4: The Company received a demand order from the Department of Customs in January, 2025 of ' 33.42 including duty and penalty towards alleged mis-classification of finished goods. The Company has filed a writ petiion before the High Court of Karnataka against the order and obtained an interim stay on the order. The remaining amount relates to an appeal against the alleged misclassification of imported materials.
Based on the assessment, Management has concluded that the Company has a strong case to defend its position in the above matters and accordingly, no provision has been made in the financial statements.
The Company does not expect any reimbursement in respect of the above contingent liabilities.
32.2 Dues to Micro, Small and Medium Enterprises (MSMEs)
The Company has certain dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (‘MSMED Act'). The disclosures pursuant to the said MSMED Act are as follows:
'Based on periodic circularisations by the Company and responses received from the suppliers, the Company identifies Micro and Small parties registered under the MSMED Act. The information above has been compiled by the management basis such identification. No delays in payments beyond the stipulated date prescribed under the MSMED Act have been identified for such vendors based on the acceptance dates for such goods/services as agreed by the concerned vendors.
(Refer Note no. 18 for disputed dues to MSME).
32.3 Revenue from contract with customers
(i) Disaggregation of revenue from contracts with customers The table below presents disaggregated revenue from contracts with customers based on location of the customers. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by market and other economic factors (Refer Note no. 22).
32.9 Other accounting policies
This note provides a list of the other accounting policies adopted in the preparation of these standalone financial statements to the extent they have not been disclosed in the above notes. These policies have been consistently applied to all the years presented, unless otherwise stated.
a. Property, plant and equipment (including Capital work-in-progress)
Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Assets in the course of construction are capitalised under Capital work-in-progress (CWIP). At the point when the construction of the asset is completed and it is ready to be operated as per management's intended use, the cost of construction is transferred to the appropriate category of property, plant and equipment and depreciation commences.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. Net gains and losses are included in the statement of profit and loss within other income/ other expenses.
b. Intangible assets - Software
The cost of software comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxation authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on software after its purchase is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets measured as per the previous GAAP and use that carrying value as the deemed cost of the intangible assets.
c. Impairment of Non - financial assets
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Intangible assets under development are tested for impairment on an annual basis. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less cost of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets that have
suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.
d. Financial instruments
Financial assets and financial liabilities are recognized when a Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. 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 of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
e. Investments and Other financial assets
(i) Classification
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
- those measured at amortised cost.
The classification depends on entity's business model for managing the financial assets and the contractual terms of the cash flow.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in debt instruments, this will depend on the business model in which the investment is held. For investments in equity instruments, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income.
The Company reclassifies debt investments when and only when its business model for managing those assets changes.
(ii) Recognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Company commits to purchase or sell the financial asset.
(iii) Subsequent Measurement Debt instruments
Subsequent measurement of debt instruments depends on the Company's business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its debt instruments:
Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortized cost. Interest income from these financial assets is included in other income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss. Impairment losses are presented as a separate line item in statement of profit and loss.
Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets' cash flow represent solely payments of principal and interest,
are measured at fair value through other comprehensive income (FVOCI). Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognized in profit and loss. When the financial asset is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to the statement of profit and loss and recognised under other income/ other expenses. Interest income from these financial assets is included in other income using the effective interest rate method.
Fair value through profit or loss (FVTPL): Assets that do not meet the criteria for amortized cost or FVOCI are measured at FVTPL. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not part of a hedging relationship is recognized in profit or loss and presented net in the statement of profit and loss in the period in which it arises. Interest income from these financial assets is included in other income.
Equity instruments
The Company subsequently measures all equity investments at fair value. Where the Company has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments are recognized in profit or loss as other income when the Company's right to receive payments is established.
Changes in the fair value of financial assets at fair value through profit or loss are recognized in the statement of profit and loss. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other changes in fair value.
(iv) Impairment of financial assets
The Company recognizes a loss allowance for expected credit losses on financial assets that are measured at amortised cost. The credit loss is difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original effective interest rate. This is assessed on an individual or collective basis after considering all reasonable and supportable information including that which is forward-looking.
The losses arising from impairment are recognized in the Statement of profit and loss.
(v) Derecognition
A financial asset is derecognized only when
- the Company has transferred the rights to receive cash flows from the financial asset or
- retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.
Where the entity has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognized. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognized. Where the entity has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognized if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the
asset is continued to be recognized to the extent of continuing involvement in the financial asset.
(vi) Income recognition Interest income
Interest income from a financial asset at fair value through profit or loss is disclosed as interest income within other income. Interest income on financial assets at amortised cost and financial assets at FVOCI is calculated using effective interest method and is recognised in statement of profit and loss as part of other income.
Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for financial assets that subsequently become credit-impaired. For credit-impaired financial asset the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance).
Dividend income
Dividends are recognized in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Company, and the amount of the dividend can be measured reliably.
f. Financial liabilities
(i) Classification as liability or equity
Financial liability and equity instruments issued by a Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
(ii) Subsequent Measurement
Financial liabilities are subsequently measured at amortised cost using the effective interest rate method unless at initial recognition, they are classified as fair value through profit or loss.
(iii) Derecognition
A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires.
g. Trade Payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. The amounts are usually unsecured. Trade payables are presented as current liabilities unless payment is not due within twelve months after the reporting period. They are recognized initially at their fair value and subsequently measured at amortised cost using the effective interest method.
h. Provisions and Contigencies
Provisions are recognized when the Company has a present obligation (legal or constructive) as result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific
to the liability. The increase in the provision due to the passage of time is recognized as interest expense.
A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably not require an outflow of resources or an obligation for which the future outcome cannot be ascertained with reasonable certainty. When there is a possible or a present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.
Provision for warranty
The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows for warranty will be upto three years.
As per the terms of the contracts, the Company provides post sale support / warranty support to some of its customers. The Company accounts for the post-contract support / provision for warranty on the basis of the information available with the Management duly taking into account the current and past technical estimates.
i. Income taxes
The income tax expense or credit for the period is the tax payable on the current period's taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. The Company measures its tax balances for uncertain tax positions either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.
Current and deferred tax is recognized in statement of profit and loss, except to the extent that it relates to item recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively.
j. Employee Benefits
(i) Short-term employee benefits
Liabilities for wages and salaries and performance incentives that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(ii) Other long-term employee benefit obligations
The liabilities for earned leave is not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured at the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields on Government bonds that at the end of the reporting
period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in Statement of profit and loss.
The obligation for earned leave (despite not being expected to be settled wholly within 12 months) is presented as current liabilities in the balance sheet as the Company does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
(iii) Gratuity obligations (Defined Benefit Plan)
The Company provides for gratuity, a defined benefit plan (the “Gratuity Plan”) covering eligible employees in accordance with the Payment of Gratuity Act, 1972. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment.
The liability or asset recognized in the balance sheet in respect of defined benefit gratuity plan is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by an actuary using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have maturity terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss as past service cost.
(iv) Defined contribution plans
The Company pays provident fund and pension contributions to publicly administered funds as per local regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and are recognized as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent they reduce the amount of future contributions.
(v) Share-based payments
Share-based compensation benefits are provided to employees via Employee Stock Option Plans and Restricted Stock Units.
The Company has constituted the following plans - ‘Tejas Networks Limited Employee Stock Option Plan 2014', ‘Tejas Networks Limited Employee Stock Option Plan 2014 - A', ‘Tejas Networks Limited Employees Stock Option Plan 2016', ‘Tejas Networks Limited Employee Stock Option Plan 2024' ‘Tejas Networks Limited Restricted Stock Unit Plan 2017' (“RSU -2017”) and ‘Tejas Networks Limited Restricted Stock Unit Plan 2022' (“RSU - 2022”) for the benefit of eligible employees.
The fair value of options granted under the Employee Option
Plan is recognised as an employee benefits expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted:
a) including any market performance conditions
b) excluding the impact of any service and non-market performance vesting conditions
c) including the impact of any non-vesting conditions The total expense is recognized over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the Company revises its estimates of the number of ESOP/RSU that are expected to vest based on the non-market vesting and service conditions. It recognizes the impact of the revision to original estimates, if any, in statement of profit and loss, with a corresponding adjustment to equity.
k. Government grants
Grants related to assets are reduced from the carrying amount of the asset. Such grants are recognised in the statement of profit and loss over the useful life of the related depreciable asset by way of reduced depreciation charge.
l. Statement of cash flows
Cash flows from operating activities 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 items of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
m. Inventories
Inventories (raw material - components including assemblies and sub assemblies) are stated at the lower of cost and net realisable value. Cost of inventory includes cost of purchases and all other costs incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
n. Trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business and reflects company's unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain significant financing components. The company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the effective interest method, less loss allowance.
The Company classifies the right to consideration in exchange for deliverables either as receivable or unbilled revenue. A receivable is a right to consideration that is conditional only upon passage of time. Revenue recognised in excess of billings is towards unbilled revenue and is classified as a financial asset as only the passage of time is required before the payment is due.
Trade receivables and unbilled revenue are presented net of expected credit losses in the Balance Sheet.
Contract assets are recognised when there are excess of revenues earned over billings on contracts. Contract assets are classified as unbilled receivables (only act of invoicing is pending) when there is unconditional right to receive cash,
and only passage of time is required, as per contractual terms.
Invoicing in excess of earnings are classified as contract liabilities which is disclosed as deferred revenue.
o. Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
p. Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any noncash assets transferred or liabilities assumed, is recognised in statement of profit and loss under other expenses. Borrowings are classified as current liabilities unless, at the end of the reporting period, the Company has a right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.
Covenants that the Company is required to comply with, on or before the end of the reporting period, are considered in classifying loan arrangements with covenants as current or non-current. Covenants that the Company is required to comply with after the reporting period do not affect the classification at the reporting date.
q. Borrowing cost
Specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expensed in the period in which they are incurred.
r. Foreign Currency Transactions
(i) Functional and presentation currency
Items included in the standalone financial statements of the entity are measured using the currency of the primary economic environment in which the entity operates ('the functional currency'). The financial statements are presented in Indian rupee, which is the Company's functional and presentation currency.
(ii) Transactions and translations
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in statement of profit and loss. A monetary item for which settlement is neither planned nor likely to occur in the foreseeable future is considered as a part of entity's net investment in that foreign operation. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
Foreign exchange differences arising on translation of foreign currency borrowings are presented in the statement of profit and loss, within finance costs, where applicable. All other foreign exchange gains and losses are presented in the statement of profit and loss on a net basis within other income or other expense.
s. Earnings per equity share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
- the profit attributable to owners of the Company
- by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
- the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
- the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
- potentially issuable equity shares, that could potentially dilute basic earnings per share, are not included in the calculation of diluted earnings per share when they are anti dilutive for the period presented.
t. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM). The executive directors of the Company constitutes the CODM.
u. Contributed Equity
Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax from the proceeds.
v. Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
w. Exceptional Items
When an item of income or expense within Statement of profit and loss from ordinary activity is of such size, nature or incidence that its disclosure is relevant to explain the performance of the Company for the year, the nature and amount of such items is disclosed as exceptional items.
x. Rounding of amounts
All amounts disclosed in the standalone financial statements and notes have been rounded off to the nearest crore with two decimals as per the requirement of Schedule III, unless otherwise stated.
Note no. 33: Employee Stock Option Plan (ESOP) and Restricted Stock Units (RSU)
(i) . Employees Stock Option Plan - 2014 (“ESOP Plan 2014”) The Company pursuant to resolutions passed by the Board and the Shareholders, dated May 29, 2014 and September
24, 2014, respectively, has adopted ESOP Plan 2014. This was subsequently modified pursuant to the Shareholders' resolutions dated March 28, 2016 and November 19, 2016. Pursuant to ESOP Plan 2014, options to acquire Equity Shares may be granted to eligible employees (as defined in ESOP Plan 2014). The aggregate number of Equity Shares, which may be issued under ESOP Plan 2014, shall not exceed 71,01,767 Equity Shares. The options granted under the plan have a graded vesting over a period of four years, which are exercisable within fifteen years from the date of vesting. Options granted under the plan are equity settled. (Refer Note (vii)(a) below)
(ii) Employees Stock Option Plan - 2014-A (“ESOP Plan 2014-A”): The Company pursuant to resolutions passed by the Board and the Shareholders, dated June 27, 2016 and July
25, 2016, respectively has adopted ESOP Plan 2014-A. This was subsequently modified pursuant to the Shareholders resolution dated November 19, 2016. Further modified by resolution passed by board dated October 21, 2020. Pursuant to ESOP Plan 2014-A, options to acquire Equity Shares may be granted to eligible employees (as defined in ESOP Plan 2014-A). The aggregate number of Equity Shares, which may be issued under ESOP Plan 2014-A, shall not exceed 20,00,000 Equity Shares. The options granted under the plan have a graded vesting over a period of four years, which are exercisable within eight years from the date of vesting. Options granted under the plan are equity settled. (Refer Note (vii)(b) below)
(iii) Employees Stock Option Plan - 2016 (“ESOP Plan 2016”): The Company pursuant to resolutions passed by the Board and the Shareholders, dated August 02, 2016 and August 29, 2016, respectively has adopted ESOP Plan 2016. This was subsequently amended pursuant to the Shareholders resolution dated November 19, 2016. Further modified by resolution passed by board dated October 21, 2020. Pursuant to ESOP Plan 2016, options to acquire Equity Shares may be granted to eligible employees (as defined in ESOP Plan 2016). The aggregate number of Equity Shares, which may be issued under ESOP Plan 2016, shall not exceed 50,00,000 Equity Shares. The options granted under the plan have a graded vesting over a period of four years, which are exercisable within eight years from the date of vesting. Options granted under the plan are equity settled. (Refer Note (vii)(c) below)
(iv) Employees Stock Option Plan -2024 (“ESOP Plan 2024”): The Company pursuant to resolutions passed by the Board dated October 9, 2024 has adopted ESOP Plan 2024. This Plan was implemented following the merger of Saankhya Labs Private Limited with the Company, pursuant to the Scheme of Amalgamation. The aggregate number of Equity Shares, which may be issued under ESOP Plan 2024, shall not exceed 11,26,854 Equity Shares. All options granted to under the Saankhya ESOP Plans have been automatically cancelled. Pursuant to ESOP Plan 2024, options may be granted to eligible employees (as defined in ESOP Plan 2024). The options granted under the plan are equity settled. (Refer Note
(vii)(d) below)
In terms of the scheme of amalgamation, the existing Saankhya ESOP plan is discontinued and Tejas Networks Limited ESOP Plan- 2024 has been instituted for employees of the Company, including such employees who were the employees of erstwhile Saankhya Labs Private Limited (Saankhya Labs) and Saankhya Strategic Electronics Private Limited (SSE) and have become employees of the Company pursuant to the scheme of amalgamation.
(v) Restricted Stock Unit Plan 2017 (“RSU Plan 2017”): The Company pursuant to resolutions passed by the Board and the Shareholders, dated August 26, 2017 and September 27, 2017, respectively, has adopted RSU Plan 2017. Pursuant to RSU Plan 2017, restricted stock units (“RSUs”) may be granted to eligible employees (as defined in RSU Plan 2017). The
aggregate number of Equity Shares, which may be issued under RSU Plan 2017, shall not exceed 30,00,000 Equity Shares. The RSUs granted under the plan have a graded vesting over a period of four years, which are exercisable within four years from the date of vesting. The RSUs granted under the plan are equity settled. (Refer Note (vii)(e) below)
(vi) Restricted Stock Unit Plan 2022 (“RSU Plan 2022”): Restricted Stock Unit Plan 2022 (“RSU Plan 2022”) The Company pursuant to resolutions passed by the Board and the Shareholders, dated April 22, 2022 and July 26, 2022, respectively, has adopted RSU Plan 2022. Pursuant to RSU Plan 2022, restricted stock units (“RSUs”) may be granted to eligible employees (as defined in RSU Plan 2022). The aggregate number of Equity Shares, which may be issued under RSU Plan 2022, shall not exceed 50,00,000 Equity Shares. The RSUs granted under the plan have a graded vesting over a period of four years, which are exercisable within four years from the date of vesting. The RSUs granted under the plan are equity settled. (Refer Note (vii)(f) below)
As the Company has implemented RSU plan during the financial year 2017-18, the Company does not plan to grant any new options from the pool available from the current ESOP Schemes (excluding "ESOP Plan 2024"). Consequently, the options available for grant were considered as "NIL" for the current ESOP schemes (excluding "ESOP Plan 2024"). Hence, other information is not applicable for the year ended March 31, 2025 and March 31, 2026.
Note no. 39: Additional regulatory information
(i) Details of benami property held
No proceedings have been initiated on or are pending against the Company under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) (formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)) and Rules made thereunder. However, the Company has received summons from the Office of the Deputy Director Income Tax, Investigation DCIT (Benami Prohibition) Bengaluru, under section 19 of the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) and the requisite information has been shared.
(ii) Borrowing secured against current assets
The Company has borrowing limits sanctioned from banks and financial institutions on unsecured basis. The Company does not have any secured borrowings as at March 31, 2026 and March 31, 2025.
(iii) Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(iv) Relationship with struck off companies
The Company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.
(v) Compliance with number of layers of companies
The Company has complied with the number of layers prescribed under section 2(87) of the Companies Act, 2013 read with Companies (Restriction of number of layers) Rules, 2017.
(vi) Compliance with approved scheme(s) of arrangements -Refer Note no. 41
(vii) Utilisation of borrowed funds and share premium
The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) 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.
The company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
(ix) Details of crypto currency or virtual currency
The Company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(x) Valuation of property, plant and equipment, intangible asset and investment property
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.
(xi) The Company does not hold any immovable properties other than those where the Company is the lessee and the lease agreements are duly executed in favour of the lessee.
(xii) Other regulatory information
i) Registration of charges or satisfaction with Registrar of Companies
There are no charges or satisfaction which are yet to be registered with the Registrar of Companies beyond the statutory period.
ii) Core investment companies (CIC)
The Group (including entities part of the ultimate holding company) has five CICs which are registered with the Reserve Bank of India and one CIC which is not required to be registered with the Reserve Bank of India.
Note no. 40: Dividend
The Board of Directors at its meeting held on April 25, 2025, had recommended a Dividend of 25% (' 2.5 per equity share on face value of ' 10 each) for the financial year ended March 31, 2025. The proposed dividend was approved by the shareholders at the Annual General Meeting of the Company held on June 27, 2025 which was paid during the year ended March 31, 2026. This has resulted in a total outflow of ' 44.15.
Note no. 41: Business Combination
The Board of Directors of Saankhya Labs and SSE (transferor companies) and the Company, at their respective meetings held on September 29, 2022, approved the draft Scheme of Amalgamation (the “Scheme”) in relation to the amalgamation of Saankhya Labs and SSE with the Company under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 and the rules thereunder. The scheme was approved by the National Company Law Tribunal (NCLT) on August 20, 2024. The Company received the certified copy of the NCLT order on September 05, 2024 and filed the orders with the Registrar of Companies (RoC), Bengaluru on September 25, 2024. The scheme provided for an appointed date of July 01, 2022. Pursuant to filing of the orders with the RoC, Saankhya Labs and SSE stand dissolved without being wound up.
In accordance with the terms of the approved Scheme, the shareholders of Saankhya Labs were to receive 112 equity shares of the Company for every 100 equity shares of Saankhya Labs, held by them. During the previous year ended March 31, 2025, the Company had allotted 38,71,084 shares to the aforesaid shareholders of Saankhya Labs amounting to ' 3.87.
In accordance with the Scheme all assets, liabilities, reserves and surplus of the transferor companies have been transferred to and vested in the Company with effect from the appointed date.
Pursuant to scheme of amalgamation:
a) All assets, liabilities and reserves relating to the financial statements of the transferor companies have been transferred and vested in the Company.
b) The Company had credited to the Share issuance pending allotment account, the aggregate face value of the new equity shares to be issued and allotted under the Scheme to shareholders of Saankhya Labs, which has been issued subsequently.
c) The amount of any intercompany balances between the transferor companies and the Company have been cancelled.
d) The accounting policies followed by the transferor companies have been adjusted for differences (if any) between the accounting policies followed by the Company and the transferor companies. The accounting policies followed by the Company have prevailed.
e) The surplus arising out of:
(i) the values of assets over the values of liabilities and reserves taken over on amalgamation;
(ii) Existing investment of the Company in Saankhya Labs;
(iii) Face value of equity shares to be issued to the shareholders of Saankhya Labs; and
(iv) after considering adjustments for elimination of intercompany balances and differences in accounting policies followed by the transferor companies, is recorded as capital reserve amounting to ' 143.57
Note no. 42: Government grants
The Company had received approval from the Department of Telecommunication under the Production Linked Incentive (PLI) Scheme. During the year ended March 31, 2026, based on an evaluation of the eligibility criteria prescribed under the Scheme, the Company did not meet the minimum threshold requirements for the current financial year and hence no PLI incentive has been recognized under "Other operating revenue" in the financial statements. However for the year ended March 31, 2025, the Company had recognized ' 467.70 under "Other operating revenue" in the financial statements, considering there was reasonable assurance that the Company complied with the conditions attached to the PLI scheme and that the grant will be received (Refer Note no. 22).
Note no. 43:
The Company has identified "telecom and data networking related products and services" as its only reportable segment. The Company publishes the Standalone Financial Statements of the Company along with the Consolidated Financial Statements. In accordance with Ind AS 108 - Operating Segments, the Company has disclosed the segment information in the Consolidated Financial Statements.
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