Click it and Unblock the Notifications
అకౌంట్స్ గమనికలుDigitide Solutions Ltd.
2.17 Provisions
A provision is recognised if, as a result of a
past event, the Company has a present legal or
constructive obligation that can be estimated
reliably, and it is probable that an outflow of
economic benefits will be required to settle the
obligation. Provisions are recognised at the best
estimate of the expenditure required to settle
the present obligation at the reporting date,
taking into account the risks and uncertainties
surrounding the obligation. Provisions are
determined by discounting the expected future
cash flows at a pre-tax rate that reflects current
market assessments of the time value of
money and the risk specific to the liability. The
unwinding of discount is recognised as finance
cost.
Provisions for onerous contracts are recognised
when the expected benefits to be derived by
the Company from a contract are lower than
the unavoidable costs of meeting the future
obligations under the contract. Provisions for
onerous contracts are measured at the present
value of lower of the expected net cost of
fulfilling the contract and the expected cost of
terminating the contract.
A financial instrument is any contract that gives
rise to a financial asset of one entity and a
financial liability or equity instrument of another
entity. Financial instruments are recognised
in the Companyâs balance sheet when the
Company becomes a party to the contractual
provisions of the instrument.
a) Recognition and initial measurement
Trade receivables and debt securities
issued are initially recognised when
they are originated. All other financial
assets and financial liabilities are initially
recognised when the Company becomes
a party to the contractual provisions of
the instrument.
All financial instruments are recognised
initially at fair value except for trade
receivables which are initially measured
at transaction price. Transaction costs
that are attributable to the acquisition of
the financial asset (other than financial
assets recorded at fair value through
profit or loss) are included in the fair
value of the financial assets. Regular way
purchase and sale of financial assets are
accounted for at trade date.
b) Financial assets(i) Classification and subsequent
measurement
For the purpose of subsequent
measurement, a financial asset is
classified and measured at
> amortised cost;
> fair value through other
comprehensive income (FVTOCI) -
debt investment;
> fair value through other
comprehensive income (FVTOCI) -
equity investment; or
> fair value through profit and loss
(FVTPL).
1. A financial asset is measured at amortised
cost if both the following conditions are
met:
- the asset is held within a business model
whose objective is to hold assets to
collect contractual cash flows; and
- the contractual terms of the financial
assets give rise on a specified date to
cash flows that are solely payments of
principal and interest on the principal
amounts outstanding.
2. A debt investment is measured at FVTOCI
if both of the following conditions are
met:
- the asset is held within a business model
whose objective is achieved by both
collecting contractual cash flow and
selling financial assets ; and
- the contractual terms of the financial
assets give rise on a specified date to
cash flows that are solely payments of
principal and interest on the principal
amounts outstanding.
3. On initial recognition of an equity
investment that is not held for trading, the
Company irrevocably elects to present
subsequent changes in the fair value
in OCI (designated as FVTOCI-equity
investment). This election is made on an
investment-to-investment basis.
4. All financial assets not classified as
amortised cost or FVTOCI as described
above are measured at FVTPL. On
initial recognition, the Company may
irrevocably designate a financial asset
that otherwise meets the requirements
to be measured at amortised cost or at
FVOCI as at FVTPL, if doing so eliminates
or significantly reduces an accounting
mismatch that would otherwise arise.
Financial assets: Subsequent
measurement and gains and losses
Financial assets at FVTPL
These assets are subsequently measured
at fair value. Net gains and losses,
including any interest or dividend income
are recognised in the statement of profit
and loss.
Financial assets at amortised cost
These assets are subsequently measured
at amortised cost using the effective
interest reduced by impairment losses.
Interest income, foreign exchange
gains and losses and impairment are
recognised in the statement of profit and
loss. Any gain or loss on derecognition is
recognised in the statement of profit and
loss.
These assets are subsequently
measured at fair value. Interest income
under the effective interest method,
foreign exchange gains and losses
and impairment are recognised in the
statement of profit and loss. Other net
gains and losses are recognised in OCI.
On derecognition, gains and losses
accumulated in OCI are reclassified to
the statement of profit and loss.
Equity investments at FVTOCI
recognised
These assets are subsequently measured
at fair value. Dividends are recognised
as income in the statement of profit and
loss unless the dividend clearly represents
a recovery of part of the cost of the
investment. Other net gains and losses are
recognised in OCI and are not reclassified
to the statement of profit and loss.
(ii) Impairment of financial assets
In accordance with Ind AS 109, the
Company applies expected credit loss
(âECLâ) model for measurement and
recognition of impairment loss. The
Company follows ''simplified approach''
for recognition of impairment loss
allowance on trade receivables (billed
and unbilled) based on expected lifetime
credit losses at each reporting date after
initial recognition.
For recognition of impairment loss on
other financial assets, the Company
determines whether there has been
a significant increase in the credit risk
since initial recognition. If credit risk has
not increased significantly, 12-month ECL
is used to provide for impairment loss.
However, if credit risk has increased
significantly, lifetime ECL is used. If in
subsequent period, credit quality of the
instrument improves such that there
is no longer a significant increase in
credit risk since initial recognition, then
the Company reverts to recognising
impairment loss allowance based on
12-month ECL.
As a practical expedient, the Company
uses a provision matrix to determine
impairment loss on portfolio of its
trade receivable and contract assets.
Depending on the diversity of its
customer base, the company has
considered to group its customers into
two types: government customers and
non-government customers.
The provision matrix for non-government
customers is based on its historically
observed default rates over the expected
life of the trade receivable and is
adjusted for forward-looking estimates.
The provision matrix for government
customers is primarily based on the time-
based movement within the life cycle of
customer receivable further adjusted for
forward-looking estimates
ECL impairment loss allowance (or
reversal) is recognised as an income/
expense in the statement of profit and
loss during the period.
(iii) Derecognition of financial assets
A financial asset is derecognised 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 company 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 derecognised. Where the entity
has not transferred substantially
all risks and rewards of ownership
of the financial asset, the financial
asset is not derecognised.
Where the company has neither
transferred a financial asset nor
retains substantially all risks and
rewards of ownership of the
financial asset, the financial asset is
derecognised if the Company has
not retained control of the financial
asset.
The Company writes off a financial
asset when there is information
indicating that the trade receivables
(billed and unbilled) is in severe
financial difficulty or the dispute
with the customer is not resolved
and there is no realistic prospect of
recovery. Any recoveries made are
recognised in profit or loss.
c) Financial liabilities(i) Classification, subsequent measurement
and gains and losses
Financial liabilities are initially measured
at fair value, net of transaction costs, and
are subsequently measured at amortised
cost through effective interest method.
Financial liabilities are subsequently
carried at amortised cost using the
effective interest method, except for
contingent consideration recognised
in a business combination which is
subsequently measured at fair value
through profit or loss. For trade and other
payables maturing within one year from
the balance sheet date, the carrying
amounts approximate fair value due to
the short maturity of these instruments.
(ii) Financial guarantee contracts
Financial guarantee contracts are those
contracts that require the issuer to make
specified payments to reimburse the
holder for a loss it incurs because the
specified party fails to make payments
when due in accordance with the terms
of a debt instrument. Financial guarantee
contracts are initially recognised at fair
value, adjusted for transaction costs that
are directly attributable to the issuance of
the guarantee. Subsequently, the liability
is measured at the higher of the amount
of loss allowance determined as per
impairment requirements of Ind AS 109
and the amount initially recognised less
cumulative amortisation.
A financial liability is derecognised when
the Companyâs obligations are discharged
or cancelled or have expired. An exchange
with a lender of debt instruments with
substantially different terms is accounted
for as an extinguishment of the original
financial liability and the recognition
of a new financial liability. Similarly, a
substantial modification of the terms of
an existing financial liability (whether or
not attributable to the financial difficulty
of the debtor) is accounted for as an
extinguishment of the original financial
liability and the recognition of a new
financial liability. The difference between
the carrying amount of the financial liability
derecognised and the consideration paid
and payable is recognised in profit or
loss.
Financial assets and financial liabilities
are offset and the net amount presented
in the balance sheet when, and only
when, the Company currently has a
legally enforceable right to set off the
amounts and it intends either to settle
on a net basis or to realise the asset and
settle the liability simultaneously.
2.19 Measurement of fair values
Fair values are categorised into different levels
in a fair value hierarchy based on the degree
to which the fair value measurements are
observable and significance of the inputs to fair
value measurements:
- Level 1: quoted prices (unadjusted) in
active markets for identical assets or
liabilities
- Level 2: inputs other than quoted prices
included in Level 1 that are observable
for the asset or liability, either directly or
indirectly
- Level 3: inputs for the asset or liability
that are not based on observable market
data (unobservable inputs)
In determining the fair value of an asset or a
liability, the Company uses different methods
and assumptions based on observable market
inputs. All methods of assessing fair value
result in general approximation of value, and
such value may not actually be realised.
The Company recognises transfers between
levels of the fair value hierarchy at the end of
the reporting period during which the change
has occurred. For financial assets and liabilities
maturing within one year from the balance sheet
date and which are not carried at fair value, the
carrying amounts approximate fair value due to
the short maturity of these instruments.
The Company earns revenue primarily from
providing business process management
services and tech and digital services.
Revenues from customer contracts are
considered for recognition and measurement
when the contract has been approved by the
parties to the contract, the parties to contract
are committed to perform their respective
obligations under the contract, and the contract
is legally enforceable. Revenue is recognised
upon transfer of control of promised products
or services (âperformance obligationsâ) to
customers in an amount that reflects the
consideration the Company has received
or expects to receive in exchange for these
products or services (âtransaction priceâ). When
there is uncertainty as to collectability, revenue
recognition is postponed until such uncertainty
is resolved.
The contract with customers, generally
contains a single performance obligation and
is measured based on the transaction price,
which is the consideration, adjusted for volume
discounts, service level credits, performance
bonuses, price concessions and incentives,
if any, as specified in the contract with the
customer. Revenue also excludes taxes
collected from customers.
Revenue from business process management
and tech and digital is recognised over time
as the customer simultaneously receives
and consumes the benefits as the Company
renders the services. The invoicing for these
services is either based on cost plus a service
fee or fixed fee model.
The Company has concluded that it is the
principal in all of its revenue arrangements since
it is the primary obligor and has pricing latitude
which establishes control before transferring
products and services to the customer.
The Companyâs receivables are rights to
consideration that are unconditional. Unbilled
revenues comprising revenues in excess of
invoicing are classified as financial asset when
the right to consideration is unconditional
and is due only after a passage of time.
unbilled revenues are presented under Trade
receivables, while invoicing in excess of
revenues are classified as unearned revenue.
Other income comprises primarily interest
income on deposits, dividend income and gain/
(loss) on disposal of financial assets and non¬
financial assets. Interest income is recognised
using the effective interest method. Dividend
income is recognised when the right to receive
payment is established.
2.21 Employee benefitsa) Short-term employee benefits
A liability is recognised for benefits
accruing to employees in respect of
wages and salaries in the period the
related service is rendered at the
undiscounted amount of the benefits
expected to be paid in exchange for that
service. Short-term employee benefits
are measured on an undiscounted basis
as the related service is provided.
The employees of the Company are
entitled to compensated absences. The
employees can carry forward a portion of
the unutilised accumulating compensated
absences and utilise it in future periods or
receive cash at retirement or termination
of employment. The Company records
an obligation for compensated absences
in the period in which the employee
renders the services that increases this
entitlement. The obligation is determined
by actuarial valuation performed by an
external actuary at each balance sheet
date using projected unit credit method.
However, the Company classifies the
entire liability towards accumulated
compensated absences as current. This
is on the basis that the Company does
not have any an unconditional right to
defer settlement beyond 12 months.
Accordingly, the entire obligation is
presented as a current liability.
under a defined contribution plan, the
Companyâs only obligation is to pay a
fixed amount with no obligation to pay
further contributions if the fund does
not hold sufficient assets to pay all
employee benefits. The Company makes
specified monthly contributions towards
Employee Provident Fund to Government
administered Provident Fund Scheme
which is a defined contribution plan. The
expenditure for defined contribution
plan is recognised as expense during
the period when the employee provides
service.
In accordance with the Code of Social
Security, 2020, the Company provides
for a lump sum payment to eligible
employees, at retirement or termination
of employment based on the last drawn
salary and years of employment with
the Company. This gratuity scheme
for eligible employees is administered
through a third party manager. The
present value of gratuity obligation under
such defined benefit plan is determined
based on actuarial valuations carried
out by an external actuary using the
Projected unit Credit Method. The
Company recognises the net obligation
of a defined benefit plan in its balance
sheet as an asset or liability.
The Company recognises the following
changes in the net defined benefit
obligation as an expense in the statement
of profit and loss:
- Service costs comprising current
service costs, past service costs,
gains and losses on curtailments
and non-routine settlements; and
- Net interest expense or income.
Actuarial gains or losses are recognised
in other comprehensive income. Further,
the statement of profit and loss does
not include an expected return on plan
assets. Instead, net interest recognised
in the statement of profit and loss is
calculated by applying the discount rate
used to measure the defined benefit
obligation to the net defined benefit
liability or asset. The actual return on
the plan assets above or below the
discount rate is recognised as part of
re-measurement of net defined liability
or asset through other comprehensive
income.
Re-measurement comprising actuarial
gains or losses and return on plan assets
(excluding amounts included in net
interest on the net defined benefit liability)
are not reclassified to the statement of
profit and loss in subsequent periods.
On November 21, 2025, the Government
of India notified provisions of the Code
on Wages, 2019, the Industrial Relations
Code, 2020, the Code on Social
Security, 2020 and the Occupational
Safety, Health and Working Conditions
Code, 2020, (âLabour Codesâ) which
consolidate twenty-nine existing labour
laws into a unified framework governing
employee benefits during employment
and post-employment. The Labour
Codes, amongst other things introduces
changes, including a uniform definition
of wages and enhanced benefits relating
to leave. The Company has assessed the
financial implications of these changes
which has resulted in increase in gratuity
liability, a defined benefit plan arising
out of past service cost and increase in
compensated absences. (Refer note 38)
Borrowing costs directly attributable to
the acquisition, construction or production
of qualifying assets, which are assets that
necessarily take a substantial period of time
to get ready for their intended use or sale, are
added to the cost of those assets, until such
time as the assets are substantially 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
capitalisation.
All other borrowing costs are recognised in
profit or loss in the period in which they are
incurred.
When items of income and expense within
profit or loss from ordinary activities are of such
size, nature or incidence that their disclosure
is relevant to explain the performance of
the Company for the period, the nature and
amount of such items is disclosed separately
as Exceptional items.
Restructuring expenses is recognised when
the Company develops a detailed formal
plan for the restructuring and has raised valid
expectation in those affected that it will carry
out the restructuring by starting to implement
the plan or announcing its main features to
those affected by it. The measurement of
restructuring provision includes only the direct
expenditures arising from the restructuring,
which are those amounts that are both
necessarily entailed by the restructuring and
not associated with the ongoing activities of
the entity.
Income tax expense comprises current and
deferred income tax. Income tax expense
is recognised in the statement of profit and
loss except to the extent that it relates to
items recognised directly in equity or in other
comprehensive income.
Current income tax for current and prior periods
is recognised at the amount expected to be
paid to or recovered from the tax authorities,
using the tax rates and tax laws that have
been enacted or substantively enacted by the
reporting date. Deferred income tax assets
and liabilities are recognised for all temporary
differences arising between the tax bases of
assets and liabilities and their carrying amounts
in the standalone financial statements. Deferred
tax assets are reviewed at each reporting date
and are reduced to the extent that it is no
longer probable that the related tax benefit will
be realised.
Deferred income tax assets and liabilities are
measured using tax rates and tax laws that
have been enacted or substantively enacted
by the reporting date and are expected to
apply to taxable income in the years in which
those temporary differences are expected to
be recovered or settled. The effect of changes
in tax rates on deferred income tax assets and
liabilities is recognised as income or expense
in the period that includes the enactment or the
substantive enactment date.
Deferred tax assets are recognised to the
extent that it is probable that future taxable
profits will be available against which the
deductible temporary differences can be used.
Deferred income tax liabilities are recognised
for all taxable temporary differences. Deferred
tax assets, unrecognised or recognised, are
reviewed at each reporting date and are
recognised/reduced to the extent that it is
probable/no longer probable respectively that
the related tax benefit will be realised.
The Company offsets current tax assets and
current tax liabilities, where it has a legally
enforceable right to set off the recognised
amounts and where it intends either to settle
on a net basis, or to realise the asset and settle
the liability simultaneously.
Contingent liability is a possible obligation
that arises from past events whose existence
will be confirmed by the occurrence or non¬
occurrence of one or more uncertain future
events beyond the control of the Company,
or a present obligation that arises from past
events where it is not probable that an outflow
of resources will be required to settle the
obligation. A contingent liability also arises in
extremely rare cases where there is a liability
that cannot be measured reliably. The Company
does not recognise a contingent liability but
discloses its existence in the standalone
financial statements.
Cash flows are reported using the indirect
method, whereby profit for the period is
adjusted for the effects of transactions of a non¬
cash nature, any deferrals or accruals of past
or future operating cash receipts or payments
and item of income or expenses associated
with investing or financing cash flows. The cash
flows from operating, investing and financing
activities of the Company are segregated.
In accordance with Ind AS 108, Operating
segments, segment information has been
disclosed in the consolidated financial
statements of the Company and no separate
disclosure on segment information is given in
these standalone financial statements.
5.1 During the financial year ended 31 March 2015, Quess Corp Limited (âQuessâ) acquired 100% equity shares of Brainhunter
Systems Limited (âBSLâ) from ICICI Bank pursuant to enforcement of a pledge following default by Zylog Systems Limited.
The transaction was challenged before the Hon''ble Madras High Court; however, in the year ended 31 March 2022, the
Court upheld the validity of the acquisition, limiting the matter only to determination of any differential consideration
based on valuation, with ownership not being in dispute. Pursuant to the approved Scheme of Arrangement, the
investment in BSL was transferred to Digitide Solutions Limited during the year ended 31 March 2025. During the current
year, independent valuations obtained from two Canadian valuers concluded that BSL was value-deficient as of the
acquisition date, indicating that no additional consideration is payable; accordingly, an impleading application filed by
Digitide Solutions Limited along with Quess on 17 February 2026 for closure of the matter is pending adjudication before
the Hon''ble Madras High Court.
"Movement of impairment loss allowance on investments
There is no movement in impairment loss allowance on investments during the current year and previous financial year.
5.2 There is no movement in investment in equity of subsidiaries during the period ended 31 March 2025 and 31 March
2026.
5.3 The Company has incorporated a wholly owned subsidiary âDigitide IT Solutions L.L.C S.O.Câ in the mainland of Dubai,
united Arab Emirates on 11 March 2026, with an authorized capital of AED 300,000. This entity will be engaged in the
business of providing IT services and infrastructure support services to its customers.
*The record date for determining the eligibility of the shareholders of Quess Corp Limited for the allotment of equity
shares in Digitide Solutions Limited, in the ratio of one fully paid-up new equity share of INR 10 each in the Company
for every one equity share of INR 10 each in Quess Corp Limited (pursuant to the Scheme of Arrangement), was fixed
on 15 April 2025. The Company recorded INR 1,489.49 million (148,949,413 equity shares of par value INR 10 each) as
âPending allotment of shares pursuant to the Schemeâ and disclosed it under Equity Share Capital. This amount (net
of existing Equity Share Capital) has been adjusted against the Capital Reserve in accordance with the Scheme of
Arrangement (Refer to Note 40).
Subsequent to 31 March 2025, the Company allotted these shares on 21 April 2025, and necessary corporate actions
were undertaken in accordance with the Scheme of Arrangement. The shares of the Company were listed on both NSE
and BSE and commenced trading on 11 June 2025.
14.2 Rights, preferences and restrictions attached to equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends
and share in the Company''s residual assets. The equity shareholders are entitled to receive dividend as declared from
time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are in proportion to the share
of the paid-up equity capital of the Company. On winding up of the Company, the holders of the equity shares will be
entitled to receive the residual assets of the Company, after distribution of all preferential amounts (if any) in proportion
to the number of equity shares held.
As of 31 March 2025, Quess Corp Limited (along with its nominees) held 99.94% shares of the Company. Pursuant to
Composite Scheme of Arrangement (âSchemeâ) approved by the Hon''ble National Company Law Tribunal, Bengaluru
bench vide its order dated 4 May 2025, the Company allotted equity shares to the eligible shareholders of the
demerged company/Quess Corp Limited as on the record date, i.e., 15 April 2025, in the ratio of one fully paid-up new
equity share of INR 10 each in the Company for every one equity share of INR 10 each held in Quess Corp Limited as
on the record date. Allotment was made on 21 April 2025 in accordance with the Scheme. The shares of the Company
were listed and traded on both NSE and BSE w.e.f 11 June 2025.
As of 31 March 2025, Fairbridge Capital (Mauritius) Limited, Ajit Isaac and Isaac Enterprises LLP holds 34.15%
(5,08,53,455 equity shares), 12.02% (1,78,96,832 equity shares) and 10.32% (1,53,65,824 equity shares) respectively in
Quess Corp Limited.
1. Capital reserve: Capital Reserve represents the surplus arising from capital transactions, including the difference
between the fair value of net assets acquired and the consideration paid in business combinations or under
schemes of arrangement. Capital reserve is not freely available for distribution.
2. Stock options outstanding account: The Share options outstanding account is used to record the value of equity-
settled share-based payment transactions with employees. The amounts recorded in share options outstanding
account are transferred to securities premium upon exercise of stock options and restricted stock unit options
by employees.
3. Other comprehensive income/loss: Actuarial gains and losses on remeasurements of the defined benefit plans
are recognised in other comprehensive income, net of taxes and presented within equity in remeasurement of
the defined benefit plans.
4. Retained earnings: Retained earnings comprises of the Company''s undistributed earnings after taxes.
5. Security preminum- Premium on allotment of stock option during the year is transferred to security premium.
6. Share application money pending allotment : Amount received from the various ESOP holders but pending for
allotment is transferred to share application money pending allotment.
19.1 Dues to micro, small and medium enterprises
The Ministry of Micro, Small and Medium Enterprises has issued an Official Memorandum dated 26 August
2008 which recommends that the Micro and Small Enterprises should mention in their correspondence
with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum.
The Company has not received any claim for interest from any supplier under the Micro, Small and Medium
Enterprises Development Act, 2006.
30.1 The Company has considered restructured compensation of its employees with effect from 1 April 2026, and
assessed the impact of the changes, consistent with the Labour Codes, rules and FAQs. Considering the materiality
and regulatory driven, non-recurring nature of this impact, the Company has presented incremental impact of
INR 334.08 million related to Employee Benefit Obligations under âExceptional itemâ in the financial statements for
year ended 31 March 2026.
30.2 During the year ended 31 March 2026, the Company incurred certain demerger expenses for professional
services and stamp duty aggregating to INR 235.36 millions, which have been included under âExceptional itemsâ.
(March 31, 2025: 265.42 million).
30.3 During the financial year ended 31 March 2025, the Company assessed the recoverable value of advance given to one
of its subsidiary and recognised an impairment loss of INR 15.00 million.
30.4 During the financial year ended 31 March 2025, the Company has written off certain receivables and other assets
amounting to INR 182.27 million pursuant to management decision to discontinue certain projects.
Investment in subsidiaries carried at cost is not appearing as financial asset in the table above being investment in
subsidiaries and associates accounted under Ind AS 27, Separate Financial Statements and is hence scoped out under
Ind AS 109.
Fair value hierarchy
The section explains the judgment and estimates made in determining the fair values of the financial instruments that are:
a) recognised and measured at fair value
b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified
its financial instruments into the three levels prescribed under the Indian Accounting Standard:
Fair value hierarchy
Level 1: This hierarchy includes financial instruments measured using quoted prices. This comprises of investment in
mutual funds that have quoted price.
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 maximise 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.
Fair valuation method
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and
assumptions were used to estimate the fair values.
A Financial assets:
1) Trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents and other financial
assets are short term and their carrying amounts are reasonable approximation of their fair value.
B Financial liabilities:
1) Borrowings: The current borrowings which includes vehicle loan, cash credit and overdraft facilities and working capital
loan, are classified and subsequently measured in the financial statements at amortised cost. Considering that the
interest rate on the loan is reset on a monthly/quarterly basis, the carrying amount of the loan would be a reasonable
approximation of its fair value.
2) Trade payables and other financial liabilities: Fair values of trade payables and other financial liabilities are measured
at carrying value, as most of them are settled within a short period and so their fair values are assumed to be almost
equal to the carrying values.
The Company has exposure to the following risks arising from financial instruments:
⢠Credit risk;
⢠Liquidity risk; and
⢠Market risk
Risk management framework
The Board of Directors of the Company has overall responsibility for the establishment and oversight of the Company''s
risk management framework. The Company''s risk management policies are established to identify and analyse the
risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits.
Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the
Company''s activities. The Company, through its training and management standards and procedures, aims to maintain
a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Company''s audit committee oversees how management monitors compliance with the Company''s risk
management policies and procedures, and reviews the adequacy of the risk management framework in relation to
the risks faced by the Company. The audit committee is assisted in its oversight role by internal audit. Internal audit
undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are
reported to the audit committee.
i) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from the Company''s receivables (both billed and unbilled)
from customers and other financial assets. The objective of managing counterparty credit risk is to prevent losses
in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial
position, past experience and other factors. The carrying amount of financial asset represent the maximum credit
exposure.
Credit risk on cash and cash equivalents and other bank balances and bank deposits is limited as the Company
generally invests in deposits with banks with high credit ratings assigned by domestic credit rating agencies. Other
financial assets represent security deposits given to suppliers, lessors and others. Credit risk associated with such
deposits is relatively low.
Trade receivables (including unbilled)
Trade receivables (including unbilled) are typically unsecured and are derived from revenue from customers primarily
located in India.
The Company has established a credit policy under which each customer is analysed individually for creditworthiness
before the Company''s standard payment and delivery terms and conditions are offered.
Expected credit loss assessment for customers are as follows:
The Company uses an allowance matrix to measure the expected credit loss of trade receivable (billed and unbilled).
The Company derives the loss rates based on historical credit loss experience, which is adjusted for forward looking
information over the expected collection period. Exposure to customers is diversified and there is no single customer
contributing more than 10% of trade receivable billed and unbilled. Further, specific provision is recorded for customer
specific disputes.
ii) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity
is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
Management monitors rolling forecast of the Company''s liquidity position and cash and cash equivalents on the basis
of expected cash flows. The Company''s objective is to maintain a balance between cash outflow and inflow. usually,
the excess of funds is invested in fixed deposits. This is generally carried out in accordance with practice and limits
set by the Company. The limits vary to take into account the liquidity of the market in which the Company operates.
Financing arrangement
The table below provides details regarding the contractual maturities of significant financial liabilities as at
31 March 2026 and 31 March 2025. The amounts are gross and undiscounted contractual cash flows and includes
contractual interest payments and exclude netting arrangements.
The Company has a strong focus on liquidity and maintains a robust cash position to ensure adequate cover for
responding to potential short-term market dislocation. Cash generated through operating activities remains the
primary source for liquidity along with undrawn borrowing facilities and levels of cash and cash equivalents.
iii) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices
will affect the Company''s income or the value of its holdings of financial instruments. Market risk is attributable to
all market risk sensitive financial instruments including foreign currency receivables and payables and long term
debt. The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return.
a) Currency risk
The Company is not significantly exposed to currency risk as the Company''s functional currency in INR and revenues
and costs are primarily denominated in INR and therefore disclosures required under "Ind AS 107 - Financial Instruments:
Disclosures" have not been given.
b) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company''s borrowing comprises of working capital loan which carries variable
rate of interest.
35.1 (i) The Company received a show cause notice (ânotice'') dated 26 December 2022 under Section 14B and
Section 7Q respectively of the Employees'' Provident Fund and Miscellaneous Provisions Act,1952 (âEPF Actâ),
Act for belated remittances of provident fund (PF) made during the period from 14 April 2018 to 26 December
2022 show causing as to why the damages and interest should not be levied amounting to INR 28.75 million
(including damages of INR 18.86 million and interest of INR 9.89 million). The Company had time and again
submitted letters/ responses to the Employees'' Provident Fund Organisation highlighting the difficulties being
faced by them as regards the non-generation of the universal Account Number(uAN)/ non-seeding of uAN with
Aadhaar during onboarding process of the new employees which caused the delay in the timely payment of the
necessary Provident Fund dues for the period 14 April 2018 to 26 December 2022.
The Company filed writ petition before the Hon''ble High Court of Telangana on 05 October 2023 & awaiting
Court proceedings to commence. Amount paid under protest is INR 28.75 million till date.
The Company has disclosed INR 28.75 million as a contingent liability. The management is of the view that the
above claims shall be contested by the Company and no provision is required to be made at this stage, pending
outcome of the matter.
(ii) The Company has received an order dated 25 September 2023 from the Regional Provident Fund Commissioner
- Pune 1(RPFC) stating that the Company has paid allowances by way of ''conveyance'' and ''incentive'' generally
to all employees but has excluded the same for computation of contributions under the EPF Act for the period
of September - 2015 to August - 2022. Accordingly, PF dues on the aforesaid allowance''s under section 7A
has been ordered by RPFC and directed to deposit an amount of INR. 86.90 million against the alleged PF
remittances. The Company''s contention is that the incentive has been paid by the Company to its employees in
accordance with an incentive scheme which prescribes the rates at which it is earned by the employees on the
basis of additional targets achieved by them. The said incentive, therefore, would not qualify as basic wages in
terms of the law laid down in the authorities.
The Company filed a writ petition with the Hon''ble High Court of Bombay challenging the order and seeking
stay. The honourable High court dated 23 November 2023 granted a stay on order and directed that no coercive
action should be taken by the RPFC up to the next date of hearing.
The Company has disclosed INR 86.90 million as a contingent liability. The management is of the view that
the above claims are being contested by the Company and no provision is required to be made at this stage,
pending outcome of the matter.
35.2 During the year ended 31 March 2026, the Company has received an assessment order under the Maharashtra State
Tax on Professions, Trades, Callings and Employments Act, 1975 (âPT Actâ) from the Office of the Profession Tax Officer
(PUN-PTO-C-0001), Pune, in respect of the financial year 2017-18. Pursuant to the assessment, total dues aggregating
to approximately INR 13.62 million have been determined, comprising tax, interest and penalty under the relevant
provisions of the PT Act. The Company has paid an amount of INR 2.60 million under protest against the said demand.
The Company has disclosed INR 13.62 million as a contingent liability in its financial statements. Management is of the
view that the demand is not tenable and intends to contest the matter. Accordingly, no provision has been recognised
at this stage pending the final outcome of the proceedings.
âManagerial remuneration does not include cost of employee benefits such as gratuity and compensated absences since provision
for these are based on valuation carried out for the Company as a whole.
Note : The transactions with Quess Corp Limited (âQuessâ) for the year ended 31 March 2026 comprise invoices raised by Quess in
respect of certain customer contracts that continue to remain with Quess and have not yet been novated. In cases where contract
novation was pending, Quess raised invoices to the end customers, against which the Company issued corresponding back-to-back
invoices to Quess. These arrangements represent pass-through transactions with no margin, profit, or economic benefit accruing to
Quess. Accordingly, such transactions have not been considered as related party transactions for disclosure purposes.
For the year ended 31 March 2025, transactions between the Remaining undertakings of Quess Corp Limited and the Demerged
undertakings 1 (Digitide Solutions Limited) and 2 (Bluspring Enterprises Limited), which were transferred pursuant to the demerger,
have not been disclosed as related party transactions. This is because such transactions occurred within the same legal entity prior
to the effective date of the business combination.
(vi) Loans granted to promoters, directors, KMPs and related parties:
During the financial year ended 31 March 2026, the Company has not granted any loans, advances in the nature of
loans, guarantees, securities, or other credit facilities to its Directors, Promoters, Key Managerial Personnel, or Related
Parties, either directly or indirectly.
Accordingly, there are no outstanding balances as at 31 March 2026 in respect of loans or advances granted to
Directors, Promoters, or Related Parties.
For details about the related employee benefits expense, refer note 26.
*The Company has a defined benefit gratuity plan in India, governed by the Code of Social Security, 2020. It entitles
an employee, who has rendered at least five years of continuous service(for fixed term employee 1 year of continous
service) , to gratuity at the rate of fifteen days wages for every completed year of service or part thereof in excess of
six months, based on the rate of wages last drawn by the employee concerned.
These defined benefit plans expose the Company to actuarial risks, such as longevity risk, interest rate risk and
market (investment) risk.
A Funding
The Company''s gratuity scheme for core and associates employees is administered through a third party manager. The
funding requirements are based on the gratuity funds actuarial measurement framework set out in the funding policies
of the plan. The funding is based on a separate actuarial valuation for funding purpose for which assumptions are same
as set out below. Employees do not contribute to the plan. The Company has determined that, in accordance with
the terms and conditions of gratuity plan, and in accordance with statutory requirements (including minimum funding
requirements) of the plan, the present value of refund or reduction in future contributions is not lower than the balance
of the total fair value of the plan assets less the total present value of obligations.
The Company expects to pay INR 572.60 million contributions to its defined benefit plans in FY 2026-27.
*As of 31 March 2026, there is no bifurcation for core & associate employees . Same has been disclosed on a
consolidated basis for sensetivity analysis.
Effective 21 November 2025, the Government of India notified the four new Labour Codes, replacing the existing 29
labour laws. Based on the guidance issued by the Institute of Chartered Accountants of India, along with the Central
Rules and FAQs released by the Ministry of Labour & Employment, the Company has assessed and disclosed the
incremental impact on its employee benefit liabilities arising from these changes using the best information currently
available.
The Company has considered restructured compensation of its employees with effect from 1 April 2026, and assessed
the impact of the changes, consistent with the Labour Codes, rules and FAQs. Considering the materiality and
regulatory driven, non-recurring nature of this impact, the Company has presented incremental impact of INR 334.08
Million related to Employee Benefit Obligations under âExceptional itemâ in the Standalone Statement of Profit and
Loss for the year ended 31 March 2026 respectively.
A Description of share based payment arrangement
At 31 March 2026, the Company has the following share-based payment arrangements:
Special Purpose Stock Option Plan 2025 (equity settled)
As per the Composite Scheme of Arrangement, the unvested Restricted Stock units (RSus) granted to transferred
employees (who were transferred as part of business undertaking from Quess Corp Limited), shall stands cancelled
on the Effective Date of the Composite Scheme and in lieu thereof and as per terms of the Composite Scheme of
Arrangement, the Company will grant new RSus to eligible transferred employes, subject to fair value adjustments.
Subsequent to 31 March 2025, the Company has adopted a Special Purpose Stock Ownership Plan 2025 ("Special
SOP 2025), based on the principles of the Quess Stock Ownership Plan 2020 ("QSOP 2020") of Quess Corp Limited
(âDemerged Company'') on terms and conditions no less favorable than those provided under the QSOP 2020, to
create, offer, issue and allot upto 26,68,102 restricted stock units to eligible transferred employees.
Accordingly, Quess Corp Limited has transferred the opening ESOP Reserve (Stock options outstanding account),
relating to the cancelled RSus of these employees to the Company. Further, ESOP expenses in respect of these
employees pertaining to QSOP 2020 Scheme, has been apportioned on a reasonable basis between the Company,
Quess Corp Limited and Bluspring Enterprises Limited (Resulting Company -2).
Employee Stock Option Scheme 2026 (ESOS 2026):
The Board of Directors of Digitide Solutions Limited, at its meeting held on 29 January 2026, based on the
recommendation of the Nomination and Remuneration Committee, approved the introduction of âDigitide Solutions
Limited - Employee Stock Option Scheme 2026 (ESOS 2026)â, which got subsequently approved by shareholder on
13 April 2026. Under the Scheme, the Company may grant up to 49,65,568 (Forty-Nine Lakhs Sixty-Five Thousand Five
Hundred Sixty-Eight) employee stock options, each convertible into one equity share of the Company, subject to the
terms and conditions specified therein.
For the purpose of administration and implementation of ESOS 2026 and any other employee stock option schemes
that may be introduced from time to time, the Company has constituted an ESOP trust named âDigitide ESOP Trustâ
on 18 April 2026.
B Measurement of fair values
Special purpose stock option plan 2025
The fair value of Employee Stock Options has been measured using Black Scholes Model of pricing.
The fair value of the options and the inputs used in the measurement of the grant-date fair values of the equity-
settled share based payment plans are as follows:
#Pursuant to the Scheme of Arrangement and subsequent to 31 March 2025, the Company determined an RSU
entitlement ratio of 3.34 new RSus for every RSu cancelled in Quess Corp Limited. This entitlement ratio is based on
a valuation assessment carried out by the external valuer.
The options outstanding as at 31 March 2026 have an exercise price of INR 10.00 and a weighted average remaining
contractual life of 3.74 years.
D Expense recognised in standalone statement of profit and loss
For details about the related employee benefits expense, refer note 26.
40 Composite scheme of arrangement between Quess Corp Limited (âDemerged Companyâ), Digitide Solutions Limited
(âResulting Company 1â) and Bluspring Enterprises Limited (âResulting Company 2â) and their respective shareholders
and creditors:
The Company received a certified true copy of the Hon''ble National Company Law Tribunal, Bengaluru Bench (âNCLTâ)
order dated 17 March 2025, approving the Scheme of Arrangement between Quess Corp Limited (âDemerged
Companyâ), Digitide Solutions Limited (âResulting Company 1â/"the Company), Bluspring Enterprises Limited (âResulting
Company 2â), and their respective shareholders and creditors (âScheme of Arrangement''), with an appointed date of
1 April 2024. The certified true copy of the Order was filed with the Registrar of Companies on 31 March 2025 (the
âEffective Dateâ). The Company considered the receipt of NCLT approval as an adjusting event and accounted for it in
accordance with Appendix C to Ind AS 103 âBusiness Combinationsâ.
Pursuant to the approval of the Scheme, the Company recorded the assets (including its related investments in
subsidiaries) and liabilities pertaining to Transferred Businesses 1 (as defined in Scheme of Arrangement) at their
carrying values appearing in the books of accounts of Quess Corp Limited, retrospectively from the appointed date.
Consequent
2.17 Provisions
A provision is recognised if. as a result of a past event,
the Company has a present legal or constructive
obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will be
required to settle the obligation.
Provisions are recognised at the best estimate of the
expenditure required to settle the present obligation at
the reporting date, taking Into account the risks and
uncertainties surrounding the obligation. Provisions
are determined by discounting the expected future
cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and the risk
specific to the liability. The unwinding of discount is
recognised as finance cost.
Provisions for onerous contracts are recognised when
the expected benefits to be derived by the Company
from a contract are lower than the unavoidable costs
of meeting the future obligations under the contract.
Provisions for onerous contracts are measured at the
present value of lower of the expected net cost of
fulfilling the contract and the expected cost of
terminating the contract.
2.18 Financial instruments
A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity. Financial
instruments are recognised in the Company''s balance
sheet when the Company becomes a party to the
contractual provisions of the instrument.
a) Recognition and initial measurement
Trade receivables and debt securities issued are
initially recognised when they are originated. All other
financial assets and financial liabilities are initially
recognised when the Company becomes a party to
the contractual provisions of the instrument.
All financial instruments are recognised initially at fair
value except for trade receivables which are initially
measured at transaction price. Transaction costs that
are attributable to the acquisition of the financial asset
(other than financial assets recorded at fair value
through profit or loss) are included in the fair value of
the financial assets. Regular way purchase and sale of
financial assets are accounted for at trade date.
(i) Classification and subsequent measurement
For the purpose of subsequent measurement, a
financial asset is classified and measured at
⢠amortised cost;
⢠fair value through other comprehensive income
(FVTOCI) - debt investment;
⢠fair value through other comprehensive income
(FVTOCI) - equity investment; or
⢠fair value through profit and loss (FVTPL).
1. A financial asset is measured at amortised cost if
both the following conditions are met:
⢠the asset is held within a business model whose
objective is to hold assets to collect contractual
cash flows; and
⢠the contractual terms of the financial assets give
rise on a specified date to cash flows that are
solely payments of principal and interest on the
principal amounts outstanding.
2. A debt investment is measured at FVTOCI if both of
the following conditions are met:
⢠the asset is held within a business model whose
objective is achieved by both collecting contractual
cash flow and selling financial assets ; and
⢠the contractual terms of the financial assets give
rise on a specified date to cash flows that are
solely payments of principal and interest on the
principal amounts outstanding.
3. On initial recognition of an equity investment that is
not held for trading, the Company irrevocably
elects to present subsequent changes in the fair
value In OCI (designated as FVTOCI-equity
investment). This election is made on an
investment-to-investment basis.
4. All financial assets not classified as amortised cost
or FVTOCI as described above are measured at
FVTPL. On initial recognition, the Company may
irrevocably designate a financial asset that
otherwise meets the requirements to be measured
at amortised cost or at FVOCI as at FVTPL. if doing
so eliminates or significantly reduces an
accounting mismatch that would otherwise arise.
Financial assets: Subsequent measurement and gains
and losses
These assets are subsequently measured at fair
value. Net gains and losses, including any interest
or dividend income are recognised in the
statement of profit and loss.
These assets are subsequently measured at
amortised cost using the effective interest
reduced by impairment losses. Interest income,
foreign exchange gains and losses and
impairment are recognised in the statement of
profit and loss. Any gain or loss on derecognition
is recognised in the statement of profit and loss.
These assets are subsequently measured at fair
value. Interest income under the effective interest
method, foreign exchange gains and losses and
impairment are recognised in the statement of
profit and loss. Other net gains and losses are
recognised in OCI. On derecognition, gains and
losses accumulated in OCI are reclassified to the
statement of profit and loss
These assets are subsequently measured at fair
value. Dividends are recognised as income in the
statement of profit and loss unless the dividend
clearly represents a recovery of part of the cost of
the investment. Other net gains and losses are
recognised in OCI and are not reclassified to the
statement of profit and loss.
(ii) Impairment of financial assets
In accordance with Ind AS 109. the Company applies
expected credit loss (âECL") model for measurement
and recognition of impairment loss. The Company
follows ''simplified approach'' for recognition of
impairment loss allowance on trade receivables (billed
and unbilled) based on expected lifetime credit losses
at each reporting date after initial recognition.
For recognition of impairment loss on other financial
assets, the Company determines whether there has
been a significant increase in the credit risk since
Initial recognition. If credit risk has not increased
significantly, 12-month ECL is used to provide for
impairment loss. However, if credit risk has increased
significantly, lifetime ECL is used. If in subsequent
period, credit quality of the instrument improves such
that there is no longer a significant increase in credit
risk since initial recognition, then the Company reverts
to recognising impairment loss allowance based on 12-
month ECL.
As a practical expedient, the Company uses a
provision matrix to determine impairment loss on
portfolio of its trade receivable and contract assets.
Depending on the diversity of its customer base, the
company has considered to group its customers into
two types: government customers and non¬
government customers.
The provision matrix for non-government customers is
based on Its historically observed default rates over
the expected life of the trade receivable and is
adjusted for forward-looking estimates. The provision
matrix for government customers is primarily based on
the time-based movement within the life cycle of
customer receivable further adjusted for forward-
looking estimates
ECL impairment loss allowance (or reversal) is
recognised as an income/expense in the statement of
profit and loss during the period.
(iii) Derecognition of financial assets
A financial asset Is derecognised 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 company 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
derecognised. Where the entity has not transferred
substantially all risks and rewards of ownership of the
financial asset, the financial asset is not derecognised.
Where the company has neither transferred a financial
asset nor retains substantially all risks and rewards of
ownership of the financial asset, the financial asset is
derecognised if the Company has not retained control
of the financial asset.
The Company writes off a financial asset when there is
information indicating that the trade receivables (billed
and unbilled) is in severe financial difficulty or the
dispute with the customer is not resolved and there is
no realistic prospect of recovery. Any recoveries made
are recognised in profit or loss.
(i) Classification, subsequent measurement and gains
and losses
Financial liabilities are initially measured at fair value,
net of transaction costs, and are subsequently
measured at amortised cost through effective interest
method. Financial liabilities are subsequently carried at
amortised cost using the effective interest method,
except for contingent consideration recognised in a
business combination which Is subsequently
measured at fair value through profit or loss. For trade
and other payables maturing within one year from the
balance sheet date, the carrying amounts approximate
fair value due to the short maturity of these
Instruments.
(ii) Financial guarantee contracts
Financial guarantee contracts are those contracts that
require the issuer to make specified payments to
reimburse the holder for a loss it incurs because the
specified party fails to make payments when due in
accordance with the terms of a debt instrument.
Financial guarantee contracts are initially recognised
at fair value, adjusted for transaction costs that are
directly attributable to the issuance of the guarantee.
Subsequently, the liability is measured at the higher of
the amount of loss allowance determined as per
impairment requirements of Ind AS 109 and the
amount initially recognised less cumulative
amortisation.
(iii) Derecognition
A financial liability is derecognised when the
Company''s obligations are discharged or cancelled or
have expired. An exchange with a lender of debt
instruments with substantially different terms is
accounted for as an extinguishment of the original
financial liability and the recognition of a new financial
liability.
Similarly, a substantial modification of the terms of an
existing financial liability (whether or not attributable to
the financial difficulty of the debtor) is accounted for as
an extinguishment of the original financial liability and
the recognition of a new financial liability. The
difference between the carrying amount of the
financial liability derecognised and the consideration
paid and payable is recognised in profit or loss.
(iv) Offsetting
Financial assets and financial liabilities are offset and
the net amount presented in the balance sheet when,
and only when, the Company currently has a legally
enforceable right to set off the amounts and it intends
either to settle on a net basis or to realise the asset
and settle the liability simultaneously.
2.19 Measurement of fair values
Fair values are categorised into different levels in a fair
value hierarchy based on the degree to which the fair
value measurements are observable and significance
of the inputs to fair value measurements:
⢠Level 1: quoted prices (unadjusted) in active
markets for identical assets or liabilities
⢠Level 2: inputs other than quoted prices included in
Level 1 that are observable for the asset or liability,
either directly or indirectly
⢠Level 3: inputs for the asset or liability that are not
based on observable market data (unobservable
inputs)
In determining the fair value of an asset or a liability,
the Company uses different methods and assumptions
based on observable market inputs. All methods of
assessing fair value result in general approximation of
value, and such value may not actually be realised.
The Company recognises transfers between levels of
the fair value hierarchy at the end of the reporting
period during which the change has occurred. For
financial assets and liabilities maturing within one year
from the balance sheet date and which are not carried
at fair value, the carrying amounts approximate fair
value due to the short maturity of these instruments.
.2.20 Revenue recognition
The Company earns revenue primarily from providing
business process management services and tech and
digital services.
Revenues from customer contracts are considered for
recognition and measurement when the contract has
been approved by the parties to the contract, the
parties to contract are committed to perform their
respective obligations under the contract, and the
contract is legally enforceable. Revenue is recognised
upon transfer of control of promised products or
services (âperformance obligations") to customers in
an amount that reflects the consideration the
Company has received or expects to receive in
exchange for these products or services (âtransaction
price"). When there is uncertainty as to collectability,
revenue recognition is postponed until such
uncertainty is resolved.
The contract with customers, generally contains a
single performance obligation and is measured based
on the transaction price, which is the consideration,
adjusted for volume discounts, service level credits,
performance bonuses, price concessions and
incentives, if any, as specified in the contract with the
customer. Revenue also excludes taxes collected from
customers.
Revenue from business process management and
tech and digital is recognised over time as the
customer simultaneously receives and consumes the
benefits as the Company renders the services. The
invoicing for these services is either based on cost
plus a service fee or fixed fee model.
The Company has concluded that it is the principal in
all of its revenue arrangements since it is the primary
obligor and has pricing latitude which establishes
control before transferring products and services to
the customer.
The Companyâs receivables are rights to consideration
that are unconditional. Unbilled revenues comprising
revenues in excess of invoicing are classified as
financial asset when the right to consideration is
unconditional and is due only after a passage of time.
Unbilled revenues are presented under Trade
receivables, while invoicing In excess of revenues are
classified as unearned revenue.
Other income
Other Income comprises primarily interest income on
deposits, dividend income and gain/ (loss) on disposal
of financial assets and non-financial assets. Interest
income is recognised using the effective interest
method. Dividend income is recognised when the right
to receive payment is established.
2.21 Employee benefits
a) Short-term employee benefits
A liability is recognised for benefits accruing to
employees In respect of wages and salaries in the
period the related service is rendered at the
undiscounted amount of the benefits expected to be
paid in exchange for that service. Short-term employee
benefits are measured on an undiscounted basis as
the related service is provided.
b) Compensated absences
The employees of the Company are entitled to
compensated absences. The employees can carry
forward a portion of the unutilised accumulating
compensated absences and utilise it in future periods
or receive cash at retirement or termination of
employment. The Company records an obligation for
compensated absences in the period in which the
employee renders the services that increases this
entitlement.
The obligation is determined by actuarial valuation
performed by an external actuary at each balance
sheet date using projected unit credit method.
Accumulated compensated absences, which are
expected to be availed or encashed within 12 months
from the end of the year are treated as short term
employee benefits and those expected to be availed
or encashed beyond 12 months from the end of the
year are treated as other long term employee benefits
c) Defined contribution plan
Under a defined contribution plan, the Company''s only
obligation is to pay a fixed amount with no obligation
to pay further contributions if the fund does not hold
sufficient assets to pay all employee benefits. The
Company makes specified monthly contributions
towards Employee Provident Fund to Government
administered Provident Fund Scheme which is a
defined contribution plan. The expenditure for defined
contribution plan is recognised as expense during the
period when the employee provides service.
d) Defined benefit plans
In accordance with the Payment of Gratuity Act, 1972,
the Company provides for a lump sum payment to
eligible employees, at retirement or termination of
employment based on the last drawn salary and years
of employment with the Company. This gratuity
scheme for eligible employees is administered through
a third party manager. The present value of gratuity
obligation under such defined benefit plan is
determined based on actuarial valuations carried out
by an external actuary using the Projected Unit Credit
Method. The Company recognises the net obligation
of a defined benefit plan in its balance sheet as an
asset or liability.
The Company recognises the following changes in the
net defined benefit obligation as an expense in the
statement of profit and loss:
⢠Service costs comprising current service costs,
past service costs, gains and losses on
curtailments and non-routine settlements; and
⢠Net interest expense or income.
Actuarial gains or losses are recognised in other
comprehensive income. Further, the statement of
profit and loss does not include an expected return on
plan assets. Instead, net Interest recognised in the
statement of profit and loss is calculated by applying
the discount rate used to measure the defined benefit
obligation to the net defined benefit liability or asset.
The actual return on the plan assets above or belov;
the discount rate is recognised as part of re¬
measurement of net defined liability or asset through
other comprehensive income.
Re-measurement comprising actuarial gains or losses
and return on plan assets (excluding amounts included
in net interest on the net defined benefit liability) are
not reclassified to the statement of profit and loss in
subsequent periods.
2.22 Borrowing Cost
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which
are assets that necessarily take a substantial period of
time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as
the assets are substantially 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 capitalisation.
All other borrowing costs are recognised in profit or
loss in the period in which they are incurred.
2.23 Exceptional Items
When items of income and expense within profit or
loss from ordinary activities are of such size, nature or
incidence that their disclosure is relevant to explain
the performance of the Company for the period, the
nature and amount of such items is disclosed
separately as Exceptional items.
2.24 Restructuring Expenses
Restructuring expenses is recognised when the
Company develops a detailed formal plan for the
restructuring and has raised valid expectation In those
affected that it will carry out the restructuring by
starting to implement the plan or announcing its main
features to those affected by it. The measurement of
restructuring provision includes only the direct
expenditures arising from the restructuring, which are
those amounts that are both necessarily entailed by
the restructuring and not associated with the ongoing
activities of the entity
2.25 Taxes
Income tax expense comprises current and deferred
Income tax. Income tax expense is recognised in the
statement of profit and loss except to the extent that it
relates to items recognised directly in equity or in
other comprehensive income.
Current income tax for current and prior periods is
recognised at the amount expected to be paid to or
recovered from the tax authorities, using the tax rates
and tax laws that have been enacted or substantively
enacted by the reporting date. Deferred income tax
assets and liabilities are recognised for all temporary
differences arising between the tax bases of assets
and liabilities and their carrying amounts in the
standalone financial statements. Deferred tax assets
are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the
related tax benefit will be realised.
Deferred income tax assets and liabilities are
measured using tax rates and tax laws that have been
enacted or substantively enacted by the reporting
date and are expected to apply to taxable income in
the years in which those temporary differences are
expected to be recovered or settled. The effect of
changes in tax rates on deferred income tax assets
and liabilities is recognised as income or expense in
the period that includes the enactment or the
substantive enactment date. Deferred tax assets are
recognised to the extent that it is probable that future
taxable profits will be available against which the
deductible temporary differences can be used.
Deferred income tax liabilities are recognised for all
taxable temporary differences. Deferred tax assets,
unrecognised or recognised, are reviewed at each
reporting date and are recognised/reduced to the
extent that it is probable/no longer probable
respectively that the related tax benefit will be
realised.
The Company offsets current tax assets and current
tax liabilities, where it has a legally enforceable right to
set off the recognised amounts and where it intends
either to settle on a net basis, or to realise the asset
and settle the liability simultaneously.
2.26 Contingent liability
Contingent liability is a possible obligation that arises
from past events whose existence will be confirmed by
the occurrence or non-occurrence of one or more
uncertain future events beyond the control of the
Company, or a present obligation that arises from past
events where it is not probable that an outflow of
resources will be required to settle the obligation. A
contingent liability also arises in extremely rare cases
where there is a liability that cannot be measured
reliably. The Company does not recognise a
contingent liability but discloses its existence in the
standalone financial statements.
2.27 Cash flow statement
Cash flows are reported using the indirect method,
whereby profit for the period is adjusted for the effects
of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or
payments and item of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of the
Company are segregated.
2.28 Segment reporting
In accordance with Ind AS 108, Operating segments,
segment information has been disclosed in the
consolidated financial statements of the Company and
no separate disclosure on segment information is
given In these standalone financial statements.
5.1 During the year ended March 31. 2015. the Company acquired 100% interest in Brainhunter Systems (Canada)
Limited ("BSL") from ICICI Bank, India. Prior to acquisition of BSL by the Company, equity shares of BSL were
originally owned by Zylog Systems Limited ("ZSL") and were pledged in favour of ICICI Bank as security for loans
availed by ZSL from ICICI Bank. ZSL defaulted on loan repayments and ICICI Bank invoked the pledge and sold the
shares to the Company.
During the year ended March 31. 2015, the Company received a notice from the official liquidator of ZSL, alleging
that the acquisition of the equity shares of BSL by the Company was not in accordance with law and therefore void-
ab-initio, as such sale and transfer of the equity shares of BSL had taken place subsequently to an order passed by
the Honorable Madras High Court appointing the official liquidator for ZSL liquidation. Further, the Company has
also received letter from the RBI stating its inability to take on record the transfer of equity shares of BSL until the
winding up proceedings of ZSL have been completed and resolved. The Company obtained a legal opinion dated
May 2, 2016, which specifies that the case does not have merit and the sale is bonafide based on the following
analysis:
a. There is an adequate precedent that upholds the principle that a secured creditor can independently exercise his
rights outside winding up proceedings;
b. ICICI Bank has enforced its security to realize its rights as a secured creditor and the sale is in compliance with
Canadian Law; and
c. That the sale of equity shares of BSL is not prejudicial to the parties and that the same has been undertaken in
accordance with the provisions of the law.
The Company also obtained an opinion dated March 14. 2016. from Canadian legal counsel, which has confirmed
that the acquisition is appropriate from a Canadian jurisdiction perspective.
14.2 Rights, preferences and restrictions attached to equity shares
The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to
dividends and share in the Company''s residual assets. The equity shareholders are entitled to receive dividend as
declared from time to time. The voting rights of an equity shareholder on a poll (not on show of hands) are In
proportion to the share of the paid-up equity capital of the Company. On winding up of the Company, the holders of
the equity shares will be entitled to receive the residual assets of the Company, after distribution of all preferential
amounts (if any) in proportion to the number of equity shares held.
As of 31 March 2025. Quess Corp Limited holds 99.94% stake In the Company. Pursuant to the approval of the
Scheme of Arrangement, the Company is yet to allot equity shares to the eligible shareholders of Quess Corp
Limited in the ratio of one fully paid-up new equity share of INR 10 each in the Company for every one equity share
of INR 10 each in Quess Corp Limited. As of 31 March 2025. Fairbridge Capital (Mauritius) Limited. Ajit Isaac and
Isaac Enterprises LLP holds 34.15% (5,08.53.455 equity shares). 12.02% (1,78.96.832 equity shares) and 10.32%
(1.53.65.824 equity shares) respectively in Quess Corp Limited.
Subsequent to March 31, 2025, the Company allotted these shares on April 21, 2025, and necessary corporate
actions were undertaken in accordance with the Scheme of Arrangement The shares of the Company were listed
on both NSE and BSE and commenced trading on June 11. 2025
As of 31 March 2025. Quess Corp Limited holds 99.94% stake in the Company. Pursuant to the approval of the
Scheme of Arrangement, the Company is yet to allot equity shares to the eligible shareholders of Quess Corp
Limited in the ratio of one fully paid-up new equity share of INR 10 each in the Company for every one equity share
of INR 10 each In Quess Corp Limited. As of 31 March 2025, Fairbridge Capital (Mauritius) Limited. Ajit Isaac. Isaac
Enterprises LLP and Hwlc Asia Fund Class A Shares are the existing promoters of Quess Corp Limited holding
34.15% (5.08.53,455 equity shares). 12.02% (1.78.95.832 equity shares). 10.32% (1.53.65.824 equity shares) and
0.50% (7.48.100 equity shares) respectively in Quess Corp Limited.
Subsequent to March 31. 2025. the Company allotted these shares on April 21. 2025. and necessary corporate
actions were undertaken in accordance with the Scheme of Arrangement. The shares of the Company were listed
on both NSE and BSE and commenced trading on June 11. 2025
1. Capital reserve: Capital Reserve represents the surplus arising from capital transactions, including the difference
between the fair value of net assets acquired and the consideration paid in business combinations or under
schemes of arrangement. Capital reserve is not freely available for distribution.
2. Stock options outstanding account: The Share options outstanding account is used to record the value of equity-
settled share-based payment transactions with employees. The amounts recorded in share options outstanding
account are transferred to securities premium upon exercise of stock options and restricted stock unit options by
employees.
3. Other comprehensive loss: Actuarial gains and losses on remeasurements of the defined benefit plans are
recognised in other comprehensive income, net of taxes and presented within equity in remeasurement of the
defined benefit plans.
4. Retained earnings: Retained earnings comprises of the Companyâs undistributed earnings after taxes.
18.1 . Quess Corp Limited (Demerged Company) took working capital loan from banks having interest rate ranging
from 7.65% p.a to 10.60% p.a. These facilities are repayable on demand and are secured primarily by way of pari
passu first charge on the entire current assets of Demerged Company on both present and future and collateral by
way of pari passu first charge on the entire movable assets of the Demerged Company (excluding charge on
vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both
present and future.
Pursuant to the Scheme of Arrangement, these borrowings were allocated to the Company. Quess Corp Limited
(Demerged Company) submitted the quarterly book debt statements to its banks, which includes the receivables
pertaining to the Company. Quess Corp Limited and Bluspring Enterprises Limited for the quarters ended 30 June
2024, 30 September 2024, 31 December 2024, and 31 March 2025. The quarterly statements comprising book
debt statements filed by Quess Corp Limited with such banks, are in agreement with the unaudited books of
account of the Company. Quess Corp Limited and Bluspring Enterprises Limited for the respective quarters.
(ii) Performance obligations and remaining performance obligations
The remaining performance obligation disclosure provides the amount of the transaction price yet to be
recognised as at the end of the reporting period and an explanation as to when the Company expects to
recognise these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Company has
not disclosed the value of remaining performance obligations for:
(i) contracts with an original expected duration of one year or less and
(ii) contracts for which the Company recognises revenue at the amount to which it has the right to invoice for
services performed.
The aggregate value of performance obligations that are completely or partially unsatisfied as of 31 March 2025.
other than those meeting the exclusion criteria mentioned above, is INR 20.66 million. Out of this, the Company
expects to recognise revenue of around 29.14% within the next one year and the remaining thereafter.
30.1 During the finacial year ended 31 March 2025, the Company incurred charges for professional services, certain
employee benefits expense and Stamp duty aggregating to INR 265.42 million.
30.2 During the financial year ended 31 March 2025. the Company assessed the recoverable value of advance
given to one of its subsidiary and recognised an impairment loss of INR 15.00 million
30.3 During the financial year ended 31 March 2025. the Company has written off certain receivables and other
assets amounting to INR 182.27 million pursuant to management decision to discontinue certain projects.
Investment in subsidiaries carried at cost is not appearing as financial asset in the table above being investment in
subsidiaries and associates accounted under Ind AS 27. Separate Financial Statements and is hence scoped out
under Ind AS 109.
Accounting classification and fair value
The following table shows the carrying amount and fair value of financial assets and financial liabilities:
Fair value hierarchy
The section explains the judgment and estimates made in determining the fair values of the financial instruments
that are:
a) recognised and measured at fair value
b) measured at amortised cost and for which fair values are disclosed in the standalone financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified
its financial instruments into the three levels prescribed under the Indian Accounting Standard:
Fair value hierarchy
The following table shows the carrying amount and fair value of financial assets and financial liabilities:
Level 1: This hierarchy includes financial instruments measured using quoted prices. This comprises of investment
in mutual funds that have quoted price.
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 maximise 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.
Fair valuation method
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following
methods and assumptions were used to estimate the fair values.
A Financial assets:
1 Loans, trade receivables, cash and cash equivalents, bank balances other than cash and cash equivalents and
other financial assets are short term and their carrying amounts are reasonable approximation of their fair value.
B Financial liabilities:
1 Borrowings: The current borrowings which includes cash credit and overdraft facilities and working capital loan,
are classified and subsequently measured in the financial statements at amortised cost. Considering that the
interest rate on the loan is reset on a monthly/quarterly basis, the carrying amount of the loan would be a
reasonable approximation of its fair value.
2 Trade payables and other financial liabilities: Fair values of trade payables and other financial liabilities are
measured at carrying value, as most of them are settled within a short period and so their fair values are
assumed to be almost equal to the carrying values.
The Company has exposure to the following risks arising from financial instruments:
⢠Credit risk
⢠Liquidity risk; and
⢠Market risk
The Company was incorporated on 10 February 2024 and core business of the Company acquired from Quess
Corp Ltd.("Quess") which was operating as division of Quess till 31 March 2025. This Financial risk management is
extracted from Quess to the extent it is applicable till 31st March 2025. Subsequent to the perioed end. Board of
Directors of the Company approved its Risk Management policy.
Risk management framework
The Board of Directors of the Company has overall responsibility for the establishment and oversight of the
Companyâs risk management framework. The Companyâs risk management policies are established to identify and
analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and
adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Companyâs activities. The Company, through its training and management standards and
procedures, aims to maintain a disciplined and constructive control environment in which all employees understand
their roles and obligations.
The Company''s audit committee oversees how management monitors compliance with the Companyâs risk
management policies and procedures, and reviews the adequacy of the risk management framework in relation to
the risks faced by the Company. The audit committee is assisted in its oversight role by Internal audit. Internal audit
undertakes both regular and adhoc reviews of risk management controls and procedures, the results of which are
reported to the audit committee.
(i) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument falls to
meet its contractual obligations, and arises principally from the Companyâs receivables (both billed and unbilled)
from customers, loans and other financial assets. The objective of managing counterparty credit risk Is to prevent
losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their
financial position, past experience and other factors. The carrying amount of financial asset represent the maximum
credit exposure.
Credit risk on cash and cash equivalents and other bank balances and bank deposits is limited as the Company
generally invests in deposits with banks with high credit ratings assigned by domestic credit rating agencies. Other
financial assets represent security deposits given to suppliers, lessors and others. Credit risk associated with such
deposits is relatively low. Loans are given to subsidiaries and associates and are tested for impairment where there
is an indicator.
Trade receivables (including unbilled)
Trade receivables (including unbilled) are typically unsecured and are derived from revenue from customers
primarily located in India.The Company has established a credit policy under which each customer is analysed
individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are
offered.
Expected credit loss assessment for customers are as follows:
The Company uses an allowance matrix to measure the expected credit loss of trade receivable (billed and
unbilled). The Company''s customers are bifurcated into two groups - Government and Non-Government customers.
For Non-Government customers, the Company derives the loss rates based on historical credit loss experience,
which is adjusted for forward looking information over the expected collection period. Exposure to customers is
diversified and there is no single customer contributing more than 10% of trade receivable billed and unbilled. For
government customers, given the insignificant credit risk, provision is recorded to reflect allowances for time value
based on historical pattern of collections. Further, specific provision is recorded for customer specific disputes.
ii) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to
managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they
are due. under both normal and stressed conditions, without incurring unacceptable losses or risking damage to
the Companyâs reputation.
Management monitors rolling forecast of the Company''s liquidity position and cash and cash equivalents on the
basis of expected cash flows. The Companyâs objective is to maintain a balance between cash outflow and inflow.
Usually, the excess of funds is invested In fixed deposits and other financial instruments. This is generally carried
out in accordance with practice and limits set by the Company. The limits vary to take into account the liquidity of
the market in which the Company operates.
The Company has a strong focus on liquidity and maintains a robust cash position to ensure adequate cover for
responding to potential short-term market dislocation. Cash generated through operating activities remains the
primary source for liquidity along with undrawn borrowing facilities and levels of cosh and cosh equivalents.
iii) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices
will affect the Companyâs income or the value of its holdings of financial instruments. Market risk is attributable to all
market risk sensitive financial instruments including foreign currency receivables and payables and long term debt.
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return.
a) Currency risk
The Company is not significantly exposed to currency risk as the Company''s functional currency in INR and
revenues and costs are primarily denominated In INR and therefore disclosures required under "Ind AS 107 -
Financial Instruments: Disclosures" have not been given.
b) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company''s borrowing comprises of working capital loan which carries
variable rate of interest.
The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Company monitors the return on capital as well
as the level of dividends on its equity shares. The Company''s objective when managing capital is to maintain an
optimal structure so as to maximise shareholder value.
The Company monitors capital using a ratio of âadjusted net debt'' to ''equity''. For this purpose, adjusted net debt is
defined as aggregate of borrowings and lease liabilities less cash and cash equivalents.
35.1 (i) The Company received a show cause notice (ânoticeâ) dated 26 December 2022 under Section 14B and
Section 7Q respectively of the Employeesâ Provident Fund and Miscellaneous Provisions Act.1952 (âEPF Actâ). Act
for belated remittances of provident fund(PF) made during the period from 14 April 2018 to 26 December 2022
show causing as to why the damages and interest should not be levied amounting to INR 28.75 million (including
damages of INR 18.86 million and interest of INR 9.89 million). The Company had time and again submitted letters/
responses to the Employees'' Provident Fund Organisation highlighting the difficulties being faced by them as
regards the non-generation of the Universal Account Number(UAN)/ non-seeding of UAN with Aadhaar during
onboarding process of the new employees which caused the delay in the timely payment of the necessary
Provident Fund dues for the period 14 April 2018 to 26 December 2022.
The Company filed writ petition before the Honâble High Court of Telangana on 05 October 2023 & awaiting Court
proceedings to commence.
The Company has disclosed INR 28.75 million as a contingent liability. The management is of the view that the
above claims shall be contested by the Company and no provision is required to be made at this stage, pending
outcome of the matter.
(ii) The Company has received an order dated 25 September 2023 from the Regional Provident Fund
Commissioner - Pune 1(RPFC) stating that the Company has paid allowances by way of âconveyance'' and ''incentive''
generally to all employees but has excluded the same for computation of contributions under the EPF Act for the
period of September-15 to August-2022. Accordingly, PF dues on the aforesaid allowanceâs under section 7A has
been ordered by RPFC and directed to deposit an amount of INR. 86.90 million against the alleged PF remittances.
The Company''s contention is that the incentive has been paid by the Company to its employees in accordance with
an incentive scheme which prescribes the rates at which it is earned by the employees on the basis of additional
targets achieved by them. The said incentive, therefore, would not qualify as basic wages in terms of the law laid
down in the authorities.
Company filed a writ petition with the Hon''ble High Court of Bombay challenging the order and seeking stay. The
honourable High court dated 23 November 2023 granted a stay on order and directed that no coercive action
should be taken by the RPFC up to the next date of hearing.
Amount paid under protest is INR 35.44 million till date.
The Company has disclosed INR 86.90 million as a contingent liability. The management is of the view that the
above claims shall be contested by the Company and no provision is required to be made at this stage, pending
outcome of the matter.
iii) During the previous years, the Company has received an order from the Regional Provident Fund Commissioner
(RPFC) stating that the Company has paid allowances by way of âconveyanceâ and âincentive'' generally to all
employees but has excluded the same for computation of contributions under the Act for the FY 2014-15.
Accordingly. PF dues on the aforesaid allowances u/s 7A of EPF Act has been ordered by RPFC and the Company
is directed to deposit an amount of INR. 22.01 million against the alleged PF remittances. The Company''s
contention is that incentive has been paid by the Company to its employees in accordance with an incentive
scheme which prescribes the rates at which it is earned by the employees on the basis of additional targets
achieved by them. The said incentive, therefore, would not qualify as basic wages in terms of the law laid down by
the authorities.
The Company has already filed writ petition in respect of similar matter against RPFC Pune-I and outcome of the
matter Is pending. The Company has disclosed INR 22.01 million as a contingent liability. Hence, the management is
of the view that the above claims shall be contested by the Company and no provision is required to be made at
this stage, pending outcome of the matter.
A. Funding
The Company''s gratuity scheme for core and associates employees is administered through a third party manager.
The funding requirements are based on the gratuity funds actuarial measurement framework set out in the funding
policies of the plan. The funding is based on a separate actuarial valuation for funding purpose for which
assumptions are same as set out below. Employees do not contribute to the plan. The Company has determined
that, in accordance with the terms and conditions of gratuity plan, and in accordance with statutory requirements
(including minimum funding requirements) of the plan, the present value of refund or reduction in future
contributions is not lower than the balance of the total fair value of the plan assets less the total present value of
obligations.
39. Share-based payments
A. Description of share based payment arrangement
At 31 March 2025. the Company has the following share-based payment arrangements:
Special Purpose Stock Option Plan 2025 (equity settled)
As per the Composite Scheme of Arrangement, the unvested Restricted Stock Units (RSUs) granted to transferred
employees (who were transferred as part of business undertaking from Quess Corp Limited), shall stands cancelled
on the Effective Date of the Composite Scheme and in lieu thereof and as per terms of the Composite Scheme of
Arrangement, the Company will grant new RSUs to eligible transferred employes, subject to fair value adjustments.
Subsequent to 31 March 2025, the Company has adopted a Special Purpose Stock Ownership Plan 2025 ("Special
SOP 2025), based on the principles of the Quess Stock Ownership Plan 2020 ("QSOP 2020") of Quess Corp
Limited (âDemerged Companyâ) on terms and conditions no less favorable than those provided under the QSOP
2020. to create, offer, issue and allot upto 26,68.102 restricted stock units to eligible transferred employees.
Accordingly, Quess Corp Limited has transferred the opening ESOP Reserve (Stock options outstanding account),
relating to the cancelled RSUs of these employees to the Company. Further. ESOP expenses In respect of these
employees pertaining to QSOP 2020 Scheme, has been apportioned on a reasonable basis between the Company,
Quess Corp Limited and Bluspring Enterprises Limited (Resulting Company -2).
# Pursuant to the Scheme of Arrangement and subsequent to 31 March 2025, the Company determined an RSU entitlement
ratio of 3.34 new RSUs for every RSU cancelled in Guess Corp Limited. This entitlement ratio is based on a valuation assessment
carried out by the external valuer.
The options outstanding as at 31 March 2025 have an exercise price of INR 10.00 and a weighted average
remaining contractual life of 4.74 years
D. Expense recognised in standalone statement of profit and loss
For details about the related employee benefits expense, refer note 26.
40. Composite scheme of arrangement between Ouess Corp Limited (âDemerged Companyâ), Digitide Solutions
Limited (âResulting Company 1") and Bluspring Enterprises Limited (âResulting Company 2") and their respective
shareholders and creditors:
The Company received a certified true copy of the Hon''ble National Company Law Tribunal, Bengaluru Bench
(âNCLT") order dated 17 March 2025, approving the Scheme of Arrangement between Quess Corp Limited
("Demerged Company"), Digitide Solutions Limited ("Resulting Company 17*the Company), Bluspring Enterprises
Limited (âResulting Company 2"), and their respective shareholders and creditors (âScheme of Arrangement''), with
an appointed date of 1 April 2024. The certified true copy of the Order was filed with the Registrar of Companies on
31 March 2025 (the âEffective Dateâ). The Company considered the receipt of NCLT approval as an adjusting event
and accounted for it in accordance with Appendix C to Ind AS 103 âBusiness Combinations".
Pursuant to the approval of the Scheme, the Company recorded the assets (including its related investments in
subsidiaries) and liabilities pertaining to Transferred Businesses 1 (as defined in Scheme of Arrangement) at their
carrying values appearing in the books of accounts of Quess Corp Limited, retrospectively from the appointed date.
Consequently, the difference between the face value of new equity shares required to be issued (net of existing
share capital) and the net assets of Transferred Businesses 1 has been credited to Capital Reserve.
In accordance with the Scheme, till the Effective Date. Demerged Company carried out the activities of Transferred
Businesses 1 in trust for the Company. These Standalone Financial Statements of the Company have been prepared
as of and for the period from 10 February 2024, (Date of Incorporation) to 31 March 2025, in accordance with
Appendix C to Ind AS 103 "Business Combinations" by using the financial information maintained by the Demerged
Company. Common expenses incurred by Demerged Company were apportioned to the Company based on
reasonable basis.
44. No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any
other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities
(âIntermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend
or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received
any fund from any party (Funding Party) with the understanding that the Company shall whether, directly or
indirectly lend or invest in other persons or entities identified by or on behalf of the Company (âUltimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
45. The Company has not received any fund from any persons 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.
46. As per the MCA notification dated August 05, 2022, the Central Government has notified the Companies
(Accounts) Fourth Amendment Rules, 2022. As per the amended rules. Companies are required to maintain back¬
up of the ''books of account and other relevant books and papers'' (âbooks of account'') in electronic mode that
should be accessible in India at all times. Also, the Companies are required to create backup of accounts on
servers physically located in India on a daily basis.
The books of account of the Company are maintained in electronic mode on servers physically located in India and
are readily accessible in India at all times. The Company is maintaining backup of books of account on a daily basis,
except for one application where the Company has maintained the backup on weekly basis.
47. The Company has used accounting softwares for maintaining its books of account, which have a feature for
recording an audit trail (edit log) facility and the same have operated throughout the year for all relevant
transactions recorded in the software, except that:
⢠In respect of one accounting software, audit trail feature was not enabled at certain tables and database level to
log any direct data changes.
⢠In respect of another accounting software, for maintaining the books of account in respect of Revenue processes,
audit trail feature was not enabled.
⢠The Company has used two other accounting softwares, which is operated by a third-party software provider, for
maintaining the books of account in relating to financial reporting and payroll processes. There is no reporting on
audit trail in the System and Organisation Controls (SOC 1) Type 2 Report of third party service provider.
Further, except for the instances noted above, wherein audit trail feauture was not enabled, there were no
instances where audit trail feature was being tampered with in respect of the accounting softwares for which the
audit trail feature was operating.
48. The Code on Social Security. 2020 ("Code") relating to employee benefits during employment and post¬
employment benefits received Presidential assent In September 2020. The Code has been published in the
Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company
will assess the impact of the Code when it comes into effect and will record any related impact in the period the
Code becomes effective.
49. Other Disclosure
49.1 The Company has not been declared wilful defaulter by any bank or financial institution or Other lender.
49.2 The Company does not have any charges or satisfaction which is yet to be registere
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
Sign in with Google