అకౌంట్స్ గమనికలుQuess Corp Ltd.

Mar 31, 2025

2.18 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.

2.19 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.

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.

ii) Impairment of financial assets

In accordance with Ind AS 109, the Company
applies expected credit loss (“ECL”) 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.

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.

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.

2.20 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.

2.21 Revenue recognition

The Company derives revenue primarily from staffing
services in the segments of General staffing, Professional
staffing, Overseas business and Digital platforms. Further,
it also provides training and skill development services
under the General staffing.

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 (“performance
obligations”) to customers in an amount that reflects the
consideration the Company has received or expects
to receive in exchange for these products or services
(“transaction price”). When there is uncertainty as to
collectability, revenue recognition is postponed until such
uncertainty is resolved.

The contract with customer for staffing services,
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 staffing services in the segments of
General staffing, Professional staffing, Overseas business
and Digital platforms is recognised over time since the
customer simultaneously receives and consumes the
benefits. The invoicing for these services is either based
on cost plus a service fee or fixed fee model.

Revenue from training and skill development services
are recognised over time based on satisfaction of
specific performance criteria included in contractual
arrangements with customers.

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 Company’s 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.

2.22 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.
The Company’s gratuity fund is managed by Life
Insurance Corporation of India (LIC), ICICI Prudential,
HDFC Life, Kotak Mahindra Bank and Yes Bank.
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
recognized as employee benefit expense; and

- Net interest expense or income recognized as
a finance cost.

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.

2.23 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.

2.24 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.

2.25 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.

2.26 Write offs

The Company writes off a financial asset when there is
information indicating that the trade receivables (billed
and unbilled) is in severe financial difficulty and there is
no realistic prospect of recovery, for example when the
debtor has been placed under liquidation or has entered
into bankruptcy proceedings, or in the case of trade
receivables, when the amounts are over due, whichever
occurs sooner. Financial assets written off may still be
subject to enforcement activities under the Group’s
recovery procedures, taking into account legal advice
where appropriate. Any recoveries made are recognised
in profit or loss.

2.27 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.

2.28 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.

2.29 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.

2.30 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.

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Mar 31, 2024

The tittle of the land and building is in the name of Conneqt Business Solutions Limited. As stated in note 44, Post merger the Company is in the process of transferring the title to Quess Corp Limited. Where the Company is lessee, the lease agreements are duly executed in favour of the lessee.

Description of Property	Description: Land and building located at ICC Devi Gaurav Tech Park, Building office No.301 and 302, Third Floor, Mumbai-Pune Highway, Pimpri, Plot No. 4854, B Wing, Pune, Maharashtra - 411018 Identification number: BP/Pimpri/Layout/46/2007 and BP/Pimpri/Layout/52/2009
Gross carrying value as at March 31, 2024	Land: '' 470 million Building: '' 354.40 million Total: '' 824.40 million
Held in name of	Conneqt Business Solutions Limited (Erstwhile wholly owned subsidiary of the Company)
Whether promoter, director or their relative or employee	No
Period held	Since November 01, 2012, the property is held by Conneqt Business Solutions Limited. Post merger, with effective date of December 1, 2023, and appointed date of April 1, 2021, the property is held by the Company.
Reason	The land and building is registered in the name of Conneqt Business Solutions Limited (erstwhile wholly owned subsidiary of the Company). Following the merger of Conneqt Business Solutions Limited with the Company, the registration process of transfer of name is in progress as on the balance sheet date. Refer to note 44.

4.1 Testing for impairment of goodwill:

The Company tests goodwill for impairment annually on 31 December or more frequently based on an impairment indicator. Impairment is determined by assessing the recoverable amount of cash generating unit ("CGU") (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. The recoverable amount is determined based on higher of value-in-use and fair value less cost of sale of CGU. Value-in-use is calculated using a discounted cash flow approach.

As at 31 March 2024, the Company has '' 3,427.45 million (31 March 2023: '' 3,437.78 million) of goodwill is mainly allocated to the Company''s Integrated facility management (IFM) CGU and Conneqt CGU. The recoverable value was determined based on value in use.

As at 31 March 2024, the estimated recoverable value of the IFM and Conneqt CGUs exceeded its carrying amount and hence impairment is not triggered. The carrying amount of the CGU was computed by allocating the net assets to CGUs for the purpose of impairment testing.

The discount rate used in the discounted cash flow approach is the risk adjusted weighted average cost of capital applicable to respective CGUs. The cash flow projections used for assessing the ''value in use'' are based on the most recent long-term forecast approved by management. The long-term forecast includes management''s latest estimate on Revenues and Operating cash flows. The period of projections is for five years and based on financial budgets/ forecasts which considers historical experience adjusted for uncertainties applicable for respective CGUs. The cash flows beyond the forecast period are extrapolated using appropriate long term terminal growth rates. The long term terminal growth rates used do not exceed the long-term average growth rates of the respective industry and country in which the CGU operates and are consistent with internal/external sources of information.

The cash flows related to revenue and operating margins have been estimated based on historical trends and future market expectations specific to the CGU. The growth in revenue estimations used in the impairment testing for the year ended 31 March 2024 was in the range of 15.00% to 25.00% (31 March 2023: 15.00% to 20.00%). The operating margin estimations used in the impairment testing for the year ended 31 March 2024 are in the range of 5.31% to 16.56% (31 March 2023: 6.26% to 14.20%). Key valuation assumptions used by the Group for impairment assessment of significant CGUs are captured in the table below for year ended 31st March, 2024:

*** During the year ended 31 March 2024, the Company acquired additional 46% stake in Stellarslog Technovation Private Limited (STPL) for purchase consideration of '' 72 million out of which '' 68 million of loan was converted into equity and '' 4 million was paid in cash. Consequent to additional 46% acquisition, STPL has become wholly owned subsidiary of the Company.

Also during the year, the Company assessed the recoverable value of investment in STPL and recognised an impairment loss on investment aggregating to '' 171.44 million and disclosed under exceptional item.

**** During the year ended 31 March 2024, the Company acquired additional 39.33% stake in Heptagon Technologies Private Limited ("Heptagon") for purchase consideration of '' 15 million. Also pursuant to internal restructuring, business contracts and employees of Heptagon, are being novated/transferred to the Company and other subsidiaries of the Group. Therefore, the Company recorded an impairment relating to Heptagon aggregating to '' 145.00 million during the year disclosed under exceptional item.

***** As at September 30, 2023, Quess Corp Holdings Pte. Ltd. (QHPL) held 55.68% in MFXchange Holdings Inc (MFX) and 44.32% was held by Quess Corp (USA) Inc. QHPL and Quess Corp (USA) Inc. are wholly owned subsidiaries of Quess (''the Company'').

As part of group restructuring, on 28 December 2023, Quess purchased equity shares of 55.68% relating to MFX from QHPL for '' 1,708.05 million (SGD 26.99 million) based on a fair valuation of MFX equity shares carried out by a SEBI registered merchant banker. The cost of the investment of MFX in the books of QHPL on the date of transaction was '' 215.70 million, resulting in a surplus of '' 1,492.35 million in QHPL. Out of this surplus, an amount of '' 1,317.12 million (SGD 21 million) was distributed as a dividend by QHPL on 29 December 2023 and '' 175.23 million (SGD 27.08 million) on 2 January 2024 respectively.

Under Ind AS, applying the guidance under Appendix C to Ind AS 103 and the framework relating to Ind AS, the investment made in MFX by Quess and the receipt of dividend from QHPL were considered to be linked transactions to achieve contemporaneously the objective of restructuring and therefore transferring the investment in MFX to Quess. Therefore, such dividend is considered to be a return of capital and adjusted against the purchase price of the investment in MFX.

Hence, the carrying value of investment in MFX is recorded at '' 215.70 Crore (INR 1,708.05 million less '' 1,492.35 million). Amounts received in excess of '' 1,492.35 is recorded as dividend income from QHPL. The total dividend received from QHPL during the year is '' 891.56 million (March 31, 2023: '' 379.33 million) (refer note 40)

****** During the year ended 31 March 2024, the Company sold its equity stake in Qdigi Services Limited (Qdigi) to Onsite Electro Services Limited (Onsite) for a consideration of '' 744.55 million resulting in a gain of '' 364.61 million which is disclosed as an exceptional item. The gain is net of transaction cost of '' 27.95 million. Out of the cash consideration, '' 46 million will be received after completion of closing conditions.

The Company has also contemporaneously invested '' 350.02 million for subscription of 56,500 compulsorily convertible preference shares of Onsite pursuant to Share Purchase and Investment Agreement.

******* During the year ended 31 March 2024, Quess Services Limited has gone into liquidation on 20 March 2024, the company has recognised an impairment on investment amounting to '' 3.94 million and disclosed as exceptional item.

******* During the year ended 31 March 2024, Quess Services Limited has gone into liquidation on 20 March 2024, the company has recognised net impairment of '' 3.94 million on investment and disclosed as exceptional item.

******** During the year ended 31 March 2024, non-controlling shareholder of Vedang Cellular Services Private Limited ("VCSP"), a subsidiary of the Company, exercised the put option to sell 4.5% stake to the Company resulting in a payout of '' 60.5 million. Consequently, shareholding in VCSP has increased to 97%.

********* During the year ended 31 March 2024, the Company assessed the recoverable value of investment in Quess International Services Private Limited and recognised an impairment loss on investment aggregating to '' 150.00 million and disclosed under exceptional item.

* During the year ended 31 March 2024, the Company redeemed Compulsorily Convertible Debentures ("CCDs") amounting to '' 40 million and reversed impairment booked earlier amounting to '' 17.70 million.

** During the previous year ended 31 March 2023, the Company invested in 1,250 Compulsorily Convertible Debentures ("CCDs") of Monster.com (India) Private Limited having a value of '' 80,000 per debenture amounting to '' 100 million . The Company also invested a further amount of '' 274.96 million in 3,437 equity shares during the year as per the agreement entered into by the Company with Monster.com (India) Private Limited.

* During the year ended 31 March 2023, the Company sold its 53% stake in Simptiance Technologies Private Limited (Simpliance) with a carrying value of '' 45 million to Aparajitha Corporate Services Limited (Aparajitha) and Dasa Consulting Private Limited, acting as a Trustee company of Poornatha Wellness Private Trust. Consequently, a gain on sale aggregating to '' 602.22 million is disclosed as exceptional item during the year ended 31 March 2023.

** During the year ended 31 March 2023, the Company acquired additional 5% stake in Stellarslog Technovation Private Limited (STPL) for purchase consideration of '' 38.36 million. Consequent to additional 5% acquisition, the total shareholding in STPL has increased from 49% to 54% and STPL has become subsidiary of the Company.

*** During the year ended 31 March 2023, the Company assessed the recoverable value of investment in these entities and recognised an impairment loss on investment aggregating to '' 265.01 million and disclosed under exceptional item.

**** Other adjustments pertains to repayment of corporate guarantee commission invoiced to subsidiaries and other adjustment.

* Impairment toss recognised due to nit recoverable value.

** During the year ended 31 March 2024, pursuant to internal restructuring, business contracts and employees of Heptagon Technologies ("Heptagon"), a 100% subsidiary of the Company, are being novated/transferred to the Company and other subsidiaries of the Group. Therefore, the Company recorded an impairment relating to loans given to Heptagon aggregating to '' 235.18 million disclosed under exceptional item.

*** During the year ended 31 March 2024, the Company has converted Loan of '' 68 million into equity and recognised net impairment of '' 37.52 million towards loan and advance given to Stellarslog Technovation Private Limited, disclosed as exceptional item.

**** During the year ended 31 March 2024, Quess Services limited has gone into liquidation on 20 March 2024, the company has recognised net impairment of '' 2.94 million and disclosed as exception item.

The above unsecured loans are given to subsidiaries at an interest rate equivalent to 10 years Government Bond rate except Stellarslog Technovation Private limited having the interest rate at 9% p.a. Loans do not have any fixed term and are receivable on demand. The above loans were given for the purpose of meeting working capital requirements.

* Security deposits include deposits given for premises taken under leases, electricity and water connections.

**Bank deposits to the tune of '' 198.75 million (31 March 2023: 245.28 million) are lien marked against borrowings and guarantees.

***As per the Share Purchase Agreement (''''SPA'''') and Share Holders Agreement ("SHA") dated 20 November 2017 with Conneqt Business Solutions Limited (formerly a subsidiary of the Group merged w.e.f 1 December 2023, and appointed date of April 1, 2021) and its shareholders, the Company will be indemnified for any future cash outflow on account of specific indirect tax claim which is existing as on the original date of acquisition. The claim is recognised as provision for expenses in the financial statements by recognising an equal amount as indemnification assets as part of the business combination when Conneqt Business Solutions Limited was originally acquired by the Group dated November 27, 2017.

* Net negative balances in the ageing is because of unadjusted credits and collections which are due to be allocated against specific invoices pending payment advices from customers. These credits and collections are considered in determining expected credit loss allowance for customers.

Undisputed trade receivables (billed)- considered good, includes receivables from government customers outstanding for more than one year '' 732.36 millions (31 March 2023: '' 425.18 millions)

Undisputed trade receivables (unbilled)- considered good, includes unbilled receivables from government customers aged more than one year '' 2,164.17 millions (31 March 2023: '' 1,423.14 millions)

17.2 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 its 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.

* During fiscal 2019-20, the Company had entered into a Composite Scheme of Arrangement and Amalgamation ("the Scheme AA") with Thomas Cook (India) Limited ("TCIL"), Travel Corporation (India) Limited, TC Travel and Services Limited, TC Forex Services Limited and SOTC Travel Management Private Limited and their respective shareholders and creditors, wherein TCIL had demerged its Human Resource Services business (including investment in shares of Quess Corp Limited) into the Company on a going concern basis. The Company had recorded a provision for stamp duty pursuant to the demerger under Scheme AA for '' 337.01 million out of which '' 125.16 million was paid by the Company during the year pursuant to completion of assessement and the remaining provision was credited back to securities premium account.

18.4 Capital redemption reserve

The Company had issued 12.33% cumulative redeemable preference shares having face value of '' 10 each and redeemable at '' 12 each. As per the provisions of the Companies Act, 2013, the Company is required to create a capital redemption reserve equivalent to the nominal value of shares redeemed out of the profits of the Company. Such reserve can be created out of the free reserves of the Company. Accordingly, the Company has created CRR out of the retained earnings of earlier years. As per the provisions of the Companies Act,2013, such CRR can be used for issuing fully paid up bonus shares.

19.1 Vehicle loans are repayable in equal monthly installments over a period of 5 years from the date of availing respective loan. The same is secured by hypothecation of the vehicles financed. Rate of interest is in the range of 6.60% to 9.15% p.a. (31 March 2023: 6.60% to 9.15% p.a.) and number of instalments pending for payments are ranging between 2-58 instalments. The Company''s exposure to liquidity risk related to borrowings is disclosed in Note 35(ii).

21.1 The Company has taken cash credit and overdraft facilities having interest rate linked to 3M MCLR plus 0.25% and Repo rate plus 2.5% (31 March 2023: 3M MCLR and Repo rate plus 0.45%). These facilities are repayable on demand and are secured primarily by way of pari passu first charge on the entire current assets of the Company (present and future) and additionally collaterallized by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/ equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

21.2 The Company has taken working capital loan from banks having interest rate ranging from 6.72% p.a. to 10.34% p.a.(31 March 2023: 4.5% p.a.-8.65% 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 the Company (present and future) and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future.

21.3 The Company has taken Commercial Papers having interest rates ranging from 7.45%-7.95%. These facilities are ranging for the period between 51 to 90 days.

The stock statements have been submitted quarterly to HDFC Bank, Axis Bank, Federal Bank, SBI Bank, IDFC First Bank, Standard Chartered Bank, Yes Bank.

21.5 The Company''s exposure to liquidity risk related to other current financial liabilities is disclosed in note 35.

22.1 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. However, the Company does not have any amounts payable to such enterprises as at 31 March 2024 based on the information received and available with the Company. Also the Company has not received any claim for interest from any supplier under the Micro, Small and Medium Enterprises Development Act, 2006.

24.1The demand pertains to non contribution of Provident fund, Pension fund, Deposit Linked Insurance Fund and administration charges in accordance with the definition of basic wages as contained in Section 2(b) of Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Company, based on an expert''s opinion, is of the view that the part of the claim made by the department is not probable, and accordingly a provision was recorded based on the management estimate. The Company has appealed against the ruling which is pending in Employees'' Provident Fund Appellate Tribunal, New Delhi.

24.2 The demands pertains to Aravon Services Private Limited ("ASPL") which was merged with Quess Corp Limited w.e.f 1 April 2019. The amounts provided represents the best estimate of likely outflow of resources relating to this matter.

24.3 The demands pertain to Avon Facility Management Services Limited ("Avon") which was merged with Quess Corp Limited w.e.f 1 January 2014. The demand pertains to non-payment of services tax on training services provided under Government of India initiative, the Company has not created any provision considering that Avon is a registered vocational training provider associated with the National Council for Vocational Training and service tax is not applicable on rendering of vocational education and training course.

24.4 The demands pertains to Hofincons Infotech & Industrial Services Private Limited which was merged with Quess Corp Limited w.e.f 1 July 2014. The Company, based on assessment of the demand, is of the view that the claim made by the department is not probable.

(i) Disaggregation of revenue

The above break up presents disaggregated revenues from contracts with customers by each of the business segments. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

(ii) Trade receivables, unearned revenue and advance from customers

The Company classifies the right to consideration in exchange for deliverables as either a trade receivable billed or unbilled. Invoicing in excess of revenues are classified as unearned revenue.

Trade receivables are presented net of impairment in the Balance Sheet.

(iii) 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 2024, other than those meeting the exclusion criteria mentioned above, is '' 12.35 million (31 March 2023: '' 243.80 million). Out of this, the Company expects to recognise revenue of around 75.51% (31 March 2023: 98.85%) within the next one year and the remaining thereafter.

32.2 Details of CSR expenditure

As per Section 135 of the Companies Act, 2013, a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility ("CSR") activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by the Company as per the Act. The funds required to be spent and funds spent during the year are explained below:

33.2 During the year ended 31 March 2024, the Company sold its equity stake in Qdigi Services Limited (Qdigi) to Onsite Electro Services Limited (Onsite) for a consideration of '' 744.55 million resulting in a gain of '' 364.61 million which is disclosed as an exceptional item. The gain is net of transaction cost of '' 27.95 million. Out of the cash consideration, '' 46 million will be received after completion of closing conditions.

33.3 During the year ended 31 March 2024, the Company assessed recoverable value of goodwill pertaining to certain cash generating units which resulted in impairment of '' 10.33 million and intangible asset under development amounting to '' 9.32 million which is disclosed under exceptional item.

33.4 During the year ended March 31, 2024, the Board of Directors of the Company ("Quess"), approved the Composite Scheme of Arrangement amongst the Company, Digitide Solutions Limited ("Resulting Company 1 or Digitide") and Bluspring Enterprises Limited ("Resulting Company 2 or Bluspring) and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions, if any, of the Companies Act, 2013 and the rules framed thereunder ("Scheme").

The Scheme provides for the following:

(a) the demerger of the Company''s undertakings (Divisions/investments) engaged in BPM solutions, Insurtech and HRO business into Digitide and in consideration, Digitide will issue new equity shares to all the equity shareholders of the Company in accordance with the Share Entitlement Ratio of one new equity share of Digitide to one equity share of the Company.

(b) the demerger of the Company''s undertakings (Divisions/investments) engaged in Facility Management, Industrial Services and Product led businesses into Bluspring and in consideration, Bluspring will issue new equity shares to all the equity

shareholders of the Company in accordance with the Share Entitlement Ratio of one new equity share of Bluspring to one equity share of the Company.

The Scheme is subject to receipt of requisite approvals from SEBI, the NCLT, Bengaluru Bench ("Tribunal"), the Stock Exchanges and other statutory and regulatory authorities, and approval of the requisite majority of the shareholders and creditors of the Companies, under applicable law.

During the year ended 31 March 2024, the Company incurred certain transaction costs totaling to '' 70.97 million towards scheme of demerger which is disclosed under exceptional items.

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.

*mandatorily classified as FVTPL on initial recognition

** mandatorily classified as FVTOCI on initial recognition

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

Level 1: This hierarchy includes financial instruments measured using quoted prices. This comprises of investment in mutual funds and non-convertible debentures 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.

Reconciliation of level 3 fair values

The following table shows a reconciliation from the opening balances to the closing balances for level 3 fair values:

35 Financial risk management

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''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, loans, cash and cash equivalents, bank balances other than cash and cash equivalents 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 toss 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 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 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.

Financing arrangement

The table below provides details regarding the contractual maturities of significant financial liabilities as at 31 March 2024 and 31 March 2023. The amounts are gross representing undiscounted contractual cash flows and includes contractual interest payments and exclude netting arrangements. The Company has an undrawn limit of '' 10,140 million as at 31 March 2024 (31 March 2023: 7,309.92 million).

iii) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices wilt affect the Company''s income or the value of its holdings of financial instruments. Market risk is attributable to alt 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 '' and revenues and costs are primarily denominated in '' 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 includes working capital loan which carries fixed rate of interest and which do not expose it to interest rate risk. The borrowings also includes cash credit facilities which carries variable rate of interest.

The sensitivity analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

36 Capital management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. 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 ''adjusted net debt'' to ''equity''. For this purpose, adjusted net debt is defined as aggregate of borrowings and lease liabilities less cash and cash equivalents.

The Company''s policy is to keep the ratio below 2. The Company''s adjusted net debt to equity ratio were as follows:

38 Contingent liabilities	(Amount in '' millions)
Particulars	As at 31 March 2024	As at 31 March 2023
Bonus (refer note 38.2)	325.88	325.88
Provident fund (refer note 38.3 and 24.1)	140.58	53.67
Indirect tax matters (refer note 24.2, 24.3 and 24.4)	58.44	92.15
Direct tax matters (refer note 38.4)	1,829.83	860.45
Others	18.95	18.95
	2,373.68	1,351.10

38.1 Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities. The Company is contesting the demand and the Management believes that its position will more likely there not to be upheld. The Management believes that the outcome of this proceedings will not have material adverse effect on the Company''s financial position and results of operations.

38.2 Contingent liability of '' 325.88 million pertains to retrospective application effective 1 April 2014 for amendments in the Payment of Bonus Act (Amendment Act, 2015) enacted on 31 December 2015. As per the amendment, the eligibility criteria of salary or wages has been increased from '' 10,000 per month to '' 21,000 per month [Section 2(13)] and the ceiling for computation of such salary or wages has been increased from '' 3,500 per month to '' 7,000 per month or the minimum wage for the scheduled employment, as fixed by the appropriate government, whichever is higher.

During fiscal 2015, the Company obtained a legal opinion from an external lawyer and was advised to take a position that the stay granted by the two High Courts of India on the retrospective application of the amendment would have a persuasive effect even outside the boundaries of the relevant states and accordingly no provision is required. There have been no updates during fiscal year 2023 and 2024.

38.3 (i) During fiscal 2020, the Regional PF Commissioner ("RPFC") passed an under Section 7-A of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 ("Act") demanding '' 716.56 million on the grounds that the Company failed to remit Provident Fund ("PF") on wages for its employees for the period from April 2018 to March 2019 for certain components of salary. The Company filed an appeal before the Central Government Industrial Tribunal ("CGIT") under section 7-I of the Act challenging the Employees'' Provident Fund Organisation''s ("EPFO") order along with the application under Section 7-O of the Act seeking a waiver from pre-deposit of the alleged Provident Fund Contributions till the final disposal of the Appeal. The CGIT after hearing the submissions made by the parties passed an Order allowing complete waiver from any pre-deposit and also staying the operation of the EPFO order. The matter has been adjourned to 17 May 2024. The Company has taken external independent legal advice as per which the EPFO''s order is prima facie erroneous and unsustainable in law and therefore will not be sustained on ultimate resolution. The Company considers the outflow relating to the claim to be remote.

(ii) During the year ended 31 March 2023, a division of the Company namely, Conneqt Business Solutions Private Limited (Conneqt) received a show cause notice (''notice'') dated 26 December 2022 under Section 14B and Section 7Q respectively of the Employees'' Provident Fund and Miscellaneous Provisions Act,1952 ("EPF Act"), Act for belated remittances made during the period from 14 April 2018 to 26 December 2022 show causing why damages and interest should not be levied amounting to '' 28.75 million ( including damages of '' 18.86 million and interest of '' 9.89 million. Conneqt had time and again submitted letters/ responses to the EPFO highlighting the difficulties being faced by them as regards the non-generation of the 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.

The Company, basis legal opinion from its external attorney 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 year ended 31 March 2024, the Company has received an order dated 25 September 2023 from the Ld. RPFC Pune 1 stating that the Assessee has paid allowances by way of ''conveyance'' and ''incentive'' generally to all employees but has excluded the same for computation of contributions under the Act for the relevant period. Accordingly, PF dues on the aforesaid allowance''s u/s 7A has been ordered by RPFC and directed to deposit an amount of INR.86.91 million against the alleged PF remittances. The Company contention is 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 Ld. RPFC up to the next date of hearing which has been adjourned up to 26 September 2024.

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.

38.4 Income Tax matters:

During the year ended 31 March 2023, the Company received assessment order under section 143(3) read with section 144C(13) of the Income Tax Act after completion of Dispute Resolution Panel (''DRP'') proceedings for fiscal 2018 resulting in disallowances primarily relating to deduction under section 80JJAA of the Income Tax Act and depreciation on goodwill.

Further, during the year ended March 31, 2024, the Company received: (i) assessment order for fiscal 2019 under section 143(3) of the Income Tax Act in which primarily deduction under section 80JJAA of the Income Tax Act and depreciation on goodwill has been disallowed, (ii) draft assessment order for fiscal 2020 under section 144C (1) of the Income Tax Act in which primarily deductions under 80JJAA and depreciation on goodwill has been disallowed and (iii) draft assessment order for fiscal 2021 under section 144C (1) of the Income Tax Act in which primarily deductions under 80JJAA has been disallowed.

The Income Tax department disallowed the claim under section 80JJAA of the Income Tax Act on the grounds of non-existence of employer - employee relationship in respect of associate employees of the Company. Additionally, the Income Tax Department also disputed the interpretations adopted by the Company for computing the deduction under section 80JJAA by disallowing claims for:

• additional employees whose emoluments exceed '' 25,000 in a month but the average emoluments for these additional employees does not exceed '' 25,000 in a month during the service period;

• additional employees who have served more than 240 days in a year but are not an employee on March 31 of the respective financial year for which the claim is availed; and

• employees for whom which the employer''s contribution of provident fund for any part of the year is paid by the Government under Employee Pension Scheme (EPS) but the entire employer''s contribution is not reimbursed by the Government during the year.

The Company filed an appeal with the Income Tax Appellate Tribunal against the assessment orders for fiscal 2018 and 2019 and believes that the tax treatment availed by the Company for deductions under 80JJAA and depreciation on goodwill are valid and will be sustained on ultimate resolution supported by external opinions from legal counsel and other tax experts. Additionally, the Company filed similar objections against the draft assessment order for fiscal 2020 and 2021 with the Dispute Resolution Panel.

In January 2024, National Financial Reporting Authority (''NFRA''), in an Order relating to certification for fiscal 2019 to 2021 by an external Chartered Accountant pertaining to claims under 80JJAA made by the Company, has made certain observations on the applicability of certain conditions in the Income Tax Act and related reports submitted to the Income Tax Authority in respect of these deductions. This order was subsequently stayed by the Hon''ble Delhi High Court. As specified above, the Company continues to believe that its claim under 80JJAA is valid and intends to vigorously contest its position and interpretative stance of these sections on merits and based on external third-party assessments of the claim made, believes that the deduction under 80JJAA will be sustained upon ultimate resolution by the Income Tax Authority.

Pending resolution of these Income Tax disputes, the Company has disclosed a contingent liability of '' 1,513.94 million towards demands including interest in the order for these fiscal years.

The Company continues to maintain its stand on the manner of claiming the 80JJAA deduction and accordingly 80JJAA deduction (reduced from taxable income) of '' 4,025.76 million is claimed for the year ended 31 March 2024 (31 March 2023: '' 1,824.01). The Company believes that such deduction, including its quantum, has been validly and consistently claimed, in conformity with its interpretation of the statute.

38.5 The Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business including litigation before various tax authorities. The amounts included above represent the best possible estimates arrived at on the basis of available information. The uncertainties and possible reimbursements are dependent on the outcome of the different legal processes which have been invoked by the Company or the claimants as the case may be and therefore cannot be predicted accurately. The Company engages reputed professional advisors to protect its interests and has been advised that it has strong legal positions against such dispute. The Company''s Management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company''s results of operations or financial conditions. The Company has accrued appropriate provision wherever required.

42 Share-based payments

A Description of share based payment arrangement

At 31 March 2024, the Company has the following share-based payment arrangements:

Share option plans (equity settled)

Quess Corp Limited Employee Stock Option Scheme 2015 (“Scheme 2015")

The Board of Directors of the Company in its meeting held on 22 December 2015 approved the ''Quess Corp Limited Employee Stock Option Scheme 2015'' (''Scheme 2015''), under which stock options are granted to specified employees of the Company. The Scheme 2015 provides for the issue of not more than 475,000 options (1,900,000 bonus adjusted options) with an exercise price of '' 10.00 each that would eventually convert into equity shares of '' 10.00 each. The options vest over a period of three years and

are exercisable over a period of three years from the vesting date of each tranche. As at 31 March 2024, the Company has 2,321 (31 March 2023: 27,841) exercisable options outstanding.

Quess Stock Option Plan 2020 (“Scheme 2020")

The Board of Directors of the Company in its meeting held on 31 March 2020 approved the Quess Stock Ownership Plan - 2020 ("QSOP 2020"), under which stock options are granted to specific employees of the Company and its subsidiaries. The maximum number of shares under QSOP 2020 shall not exceed 41,16,072 equity shares. The stock options granted under QSOP 2020 shall vest based on the achievement of defined annual performance parameters as determined by the administrator (Nomination and Remuneration Committee). These instruments will be equity settled and will generally vest between a minimum of 1 to maximum of 6 years from the grant date. As at 31 March 2024, the Company has 100,782 (31 March 2023: 88,130 ) exercisable options outstanding.

B Measurement of fair values Scheme 2015

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 not disclosed since no ESOP''s under this scheme was granted during the year.

No options have expired during the current year and previous year.

Scheme 2020

The fair value of Employee Stock Options has been measured using Black Scholes Model of pricing.

D Expense recognised in standalone statement of profit and loss

For details about the related employee benefits expense, refer note 29.

43 In accordance with Ind AS 108, Operating segments, segment information has been provided in the consolidated financial statements of the Company and no separate disclosure on segment information is given in these standalone financial statements.

44 The Board of Directors of the Company, at its meeting held on 7 July 2021 approved the Scheme of Amalgamation ("Scheme AAA") among Quess Corp Limited ("Transferee Company) with three of its wholly owned subsidiaries namely MFX Infotech Private Limited and Greenpiece Landscape India Private Limited and Conneqt Business Solutions Limited together known as (""Transferor Companies""). The Hon''ble National Company Law Tribunal, Bengaluru Special Bench pronounced the order on 30 October 2023, approving the aforesaid Scheme AAA from the appointed date of 1 April 2021. The certified true copy of the order was filed with the Registrar of Companies on 30 November 2023.

The Company accounted for the amalgamation by applying the common control guidance in Appendix C to Ind AS 103 - Business Combinations. Consequently, standalone financial statements have been restated for the year ended 31 March 2023 to give effect to the amalgamation along with also restating the opening balances of retained earnings and other reserves as at 1 April 2022.

The Company also incurred stamp duty of '' 58 million pursuant to amalgamation and disclosed them as an exceptional item during the year ended 31 March 2024.

Upon the Scheme AAA becoming effective, aLL the assets and Liabilities of the transferor companies were recorded at the carrying values in the consolidated financial statements. The carrying amount of the Transferee Company''s investment in the shares of the Transferor Companies was cancelled in the terms of this Scheme AAA. Intercompany balances and loans were extinguished on merger. The difference between net assets and post acquistion reserves (other equity) acquired and the cancellation of investments was recognised in Capital reserve.

EFDS= Net Profit After taxes Non cash operating expenses tike depreciation and Other amortizations Interest other adjustment tike profit/(toss) on sate of property, plant and equipment and intangible assets

^APrincipat repayments and tease payments for the current year

^AA Net worth Borrowings Lease liabilities - Goodwill - Intangible assets under development - Other intangible assets -Deferred tax assets

45.1 In the current year, total debt has decreased due to repayments made from cash generated across divisions, increased business profits, dividends received from subsidiaries, and the sate of Qdigi Services Limited.

45.2 In the current year, there has been comparativety more increase in Profit after tax as compared to increase in repayments of borrowings during the year, resutting in increase in Debt service coverage ratio.

45.3 In the current year, profit after tax has increased primarity due to the growth of business profits in the gtobat technotogy sotutions and operating asset management segments, dividends and royatty income received from subsidiaries, profit from the sate of Qdigi Services Limited and a reduction in tax expenses resutting from the merger of Conneqt Business Sotutions Limited.

47 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.

48 Interim Dividend:

The Board of Directors at their meeting held on 2 February 2024 declared interim dividend of '' 4.00 per equity share (face value of '' 10.00 each) for the financial year 2023-24 aggregating to '' 593.91 million.

The Board of Directors at their meeting held on 31 May 2022 and 9 November 2022 declared interim dividend of '' 4.00 and '' 8.00 per equity share respectively (face value of '' 10.00 each) for the financial year 2022-23 aggregating to '' 1,777.15 million.

Proposed Dividend:

The Board of Directors at their meeting held on 9 May 2024 recommended a final dividend of '' 6.00 per equity share (face value of '' 10.00 each) for the financial year 2023-24 aggregating to '' 891.06 million.

The Company is in compliance with Section 123 of the Act.

49.1 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 ("Intermediaries") 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).

49.2 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

49.3 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'' (''books of account'') in electronic mode that should be accessible in India at all the time. 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 is 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 quarterly basis.

49.4 The Company has used accounting softwares for maintaining its books of account, which has a feature for recording an audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except that:

• audit trail feature was not enabled in respect of one accounting software at the table level to log any direct data changes.

• The Company has also used two other accounting softwares, which is operated by a third-party software provider, for maintaining the books of account 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 the third-party software provider.

50 Other Disclosure

50.1 The Company has not been declared wilful defaulter by any bank or financial institution or Other provider.

50.2 The Company does not have any charges or satisfaction which is yet to be registered with Registrar of Company beyond the statutory per

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Mar 31, 2023

1. Testing for impairment of goodwill:

As at 31 March 2023, the Company has INR 2,777.73 million (31 March 2022: INR 2,777.73 million) of goodwill allocated to the Company''s Integrated facility management (IFM) CGU. The recoverable value was determined based on value in use.

The cash flows related to revenue and operating margins have been estimated based on historical trends and future market expectations specific to the CGU.

The growth in revenue estimations used in the impairment testing for the year ended 31 March 2023 was in the range of 15.00% to 20.00% (31 March 2022: 18.00% to 22.00%). The operating margin estimations used in the impairment testing for the year ended 31 March 2023 are in the range of 6.26% to 8.70% (31 March 2022: 6.96% to 8.06%).

Sensitivity to changes in assumptions:

An increase in pre-tax discount rate by 7.20 (31 March 2022: 4.72) percentage as compared to the table above of pre-tax discount rates used in value in use analysis of IFM CGU will result in recoverable amount being equal to the carrying value.

4.2 Reversal of impairment loss relating to customer relationships related to IFM business:

During the previous year, the Company had recognised reversal of impairment on these customer relationships grouped under intangible asset aggregating to INR 477.61 million which was impaired on 31 March 2020 after considering assessed impact of COVID-19. This reversal stems from the management''s demonstrable assessment of sustainable improved business performance of the Integrated Facility Management (IFM) business at the operating profit level, which is in excess of the projections prepared for the purpose of previously recognising the impairment. The presentation and classification of the reversal is consistent with that of the previously recognised impairment.

* During the year ended 31 March 2022, the Company converted Compulsorily Convertible Debentures ("CCDs") of Monster.com (India) Private Limited into 3,104 equity shares amounting to INR 107.24 million. The Company also invested a further amount of INR 574.22 million in 7,216 equity shares through right issue at INR 79,576 per share.

** The Company was holding 70% equity stake in the non-controlling shareholder of Conneqt Business Solutions Limited ("CBSL"), a subsidiary of the Company. During the year ended 31 March 2022, dated 16 April 2021, the Administration and Investment committee of the Company had approved the acquisition of the remaining 30.00% equity stake for a consideration of INR 2,080 million. Consequently, the Company completed the acquisition of equity stake in CBSL on the same date, and CBSL became wholly owned subsidiary of the Company.

*** Other adjustments pertains to repayment of corporate guarantee commission invoiced to subsidiaries and other adjustment.

**** During the year ended 31 March 2022, the Company adjusted loans which was outstanding to be received from Heptagon Technologies Private Limited ("HTPL") into 1,902 equity shares amounting to INR 30.00 million. The Company had also invested a further amount of INR 100.00 million in 6,342 equity shares at INR 15,768 per share, which resulted in a holding of 60.67% at 31 March 2022. Consequently, HTPL had become subsidiary of the Company.

***** During the year ended 31 March 2022, the Company had made an additional investment in Stellarslog Technovation Private Limited for INR 80 million which resulted in increase in holding from 16% to 49%.

17.2 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 its 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.

20.1 The Company has taken cash credit and overdraft facilities having interest rate linked to 3M MCLR and Repo rate plus 0.45% (31 March 2022: MCLR and Repo rate plus 2.5%). These facilities are repayable on demand and are secured primarily by way of pari passu first charge on the entire current assets of the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

20.2 The Company has taken working capital loan from banks having interest rate ranging from 4.5% p.a. to 8.65% p.a.(31 March 2022: 4.5% p.a.-7.00% 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 the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future.

The Company''s exposure to liquidity risk related to other current financial liabilities is disclosed in note 33.

23.2 The demands pertains to Aravon Services Private Limited ("ASPL") which was merged with Quess Corp Limited w.e.f 1 April 2019. The amounts provided represents the best estimate of likely outflow of resources relating to this matter.

23.3 The demands pertain to Avon Facility Management Services Limited ("Avon") which was merged with Quess Corp Limited w.e.f 1 January 2014. The demand pertains to non-payment of services tax on training services provided under Government of India initiative, the Company has not created any provision considering that Avon is a registered vocational training provider associated with the National Council for Vocational Training and service tax is not applicable on rendering of vocational education and training course.

23.4 The demands pertains to Hofincons Infotech & Industrial Services Private Limited which was merged with Quess Corp Limited w.e.f 1 July 2014. The Company deposited the total demand under dispute.

(i) Disaggregation of revenue

The above break up presents disaggregated revenues from contracts with customers by each of the business segments. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

(iii) 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 2023, other than those meeting the exclusion criteria mentioned above, is INR 1,036.66 million (31 March 2022: INR 1,012.52 million). Out of this, the Company expects to recognise revenue of around 38.76% (31 March 2022: 78.03%) within the next one year and the remaining thereafter.

32.2 During the year ended 31 March 2023, the Company sold its 53% stake in Simptiance Technologies Private Limited (Simpliance) with a carrying value of INR 45 million to Aparajitha Corporate Services Limited (Aparajitha) and Dasa Consulting Private Limited, acting as a Trustee company of Poornatha Wellness Private Trust. Consequently, a gain on sale aggregating to INR 602.22 million is recorded as exceptional item during the year ended 31 March 2023.

32.3 During the year ended 31 March 2022, the Company recognised an expense of INR 479.81 million related to Goods and Service Tax (GST), based on a comprehensive internal review across its businesses, geographic locations and assessment years, including reconciliations with suppliers and vendors. Due to the pandemic related disruptions, this review was finally concluded during the current year. Based on such review the Company has, on a prudent basis, identified certain ineligible credits arising from vendor reconciliations, clarifications and opinions related to input credits, delays by vendors in filing GST returns, etc. and fully reconciled the related expense which the Company believes that this is an exceptional item in the extraneous circumstances involved and in the context of paragraph 9.6 of the guidance note on Schedule III to the Companies Act, 2013 issued by the Institute of Chartered Accountants of India ("ICAI").

Fair value hierarchy

Level 1: This hierarchy includes financial instruments measured using quoted prices. This comprises of investment in mutual funds and non-convertible debentures 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.

34 Financial risk management

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, 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 wilt 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 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.

Financing arrangement

The table below provides details regarding the contractual maturities of significant financial liabilities as at 31 March 2023 and 31 March 2022. The amounts are gross and undiscounted contractual cash flows and includes contractual interest payments and exclude netting arrangements. The Company has an undrawn limit of INR 7,980 million as at 31 March 2023 (31 March 2022: 7,309.92 million).

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 fixed rate of interest and which do not expose it to interest rate risk. The borrowings also includes cash credit facilities which carries variable rate of interest.

The sensitivity analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

35 Capital management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. 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 ''adjusted net debt'' to ''equity''. For this purpose, adjusted net debt is defined as aggregate of borrowings and lease liabilities less cash and cash equivalents.

37.1 Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities. The Company is contesting the demand and the Management believes that its position will likely be upheld. The Management believes that the outcome of this proceedings will not have material adverse effect on the Company''s financial position and results of operations.

37.2 Contingent liability of INR 325.88 million pertains to retrospective application effective 1 April 2014 for amendments in the Payment of Bonus Act (Amendment Act, 2015) enacted on 31 December 2015. As per the amendment, the eligibility criteria of salary or wages has been increased from INR 10,000 per month to INR 21,000 per month [Section 2(13)] and the ceiling for computation of such salary or wages has been increased from INR 3,500 per month to INR 7,000 per month or the minimum wage for the scheduled employment, as fixed by the appropriate government, whichever is higher.

During fiscal 2015, the Company obtained a legal opinion from an external lawyer and was advised to take a position that the stay granted by the two High Courts of India on the retrospective application of the amendment would have a persuasive effect even outside the boundaries of the relevant states and accordingly no provision is required. There have been no updates during fiscal 2022 and 2023.

37.3 During fiscal 2020, the Regional PF Commissioner ("RPFC") passed an under Section 7-A of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 ("Act") demanding INR 716.56 million on the grounds that the Company failed to remit Provident Fund ("PF") on wages for its employees for the period from April 2018 to March 2019 for certain components of salary. The Company filed an appeal before the Central Government Industrial Tribunal ("CGIT") under section 7-I of the Act challenging the Employees'' Provident Fund Organisation''s ("EPFO") order along with the application under Section 7-O of the Act seeking a waiver from pre-deposit of the alleged Provident Fund Contributions till the final disposal of the Appeal. The CGIT after hearing the submissions made by the parties passed an Order allowing complete waiver from any pre-deposit and also staying the operation of the EPFO order. The matter has been adjourned to 23 May 2023. The Company has taken external independent legal advice as per which the EPFO''s order is prima facie erroneous and unsustainable in law and the liability has been incorrectly determined by the RPFC and therefore, the Company considers the claim to be remote.

37.4 Income Tax Matters:

During the year ended 31 March 2023, the Company received assessment order (''Order'') under section 143(3) read with section 144C(13) of the Income Tax Act after completion of Dispute Resolution Panel (''DRP'') proceedings for fiscal 2017-2018 resulting in disallowances primarily relating to deduction under section 80JJAA of the Income Tax Act and depreciation on goodwill. The Company has filed appeal with the Income Tax Appellate Tribunal relating to these disallowances. Further, during the year ended 31 March 2023, the Company also received a draft assessment order for fiscal 2018-2019 under section 144C(1) of the Income Tax Act in which primarily deduction under section 80JJAA of the Income Tax Act and depreciation on goodwill has been disallowed. The Company has filed objections before the DRP against the draft assessment order.

The Company intends to vigorously contest its position and interpretative stance of these sections on merits, including judicial precedents, and believes it can strongly defend its position through the legal process as defined under the Income Tax Act. Based on its internal evaluation, the Company has disclosed a contingent liability of INR 740 million for fiscal 2017-2018 and fiscal 20182019, excluding interest and penalties if any. The contingent liability will be updated as developments unfold in future.

The Company continues to maintain its stand on the manner of claiming the 80JJAA deduction and accordingly 80JJAA deduction of INR 1,824.01 million is claimed for the year ended 31 March 2023, respectively The Company believes that such deduction, including its quantum, has been validly and consistently claimed, in conformity with its interpretation of the statute.

A Funding

The Company''s gratuity scheme for core and associates employees is administered through a third party manager, the Life Insurance Corporation of India, SBI Life and ICICI Prudential. 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 549.66 million contributions to its defined benefit plans in FY 2023-24.

B Reconciliation of net defined benefit liability/assets

The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit liability/ assets and its components:

41 Share-based payments

A Description of share based payment arrangement

At 31 March 2023, the Company has the following share-based payment arrangements:

Share option plans (equity settled)

Quess Corp Limited Employee Stock Option Scheme 2015 (“Scheme 2015")

The Board of Directors in its meeting held on 22 December 2015 approved the ''Quess Corp Limited Employee Stock Option Scheme 2015'' (''Scheme 2015''), under which stock options are granted to specified employees of the Company. The Scheme 2015 provides for the issue of not more than 475,000 options (1,900,000 bonus adjusted options) with an exercise price of INR

10.00 each that would eventually convert into equity shares of INR 10.00 each. The options vest over a period of three years and are exercisable over a period of three years from the vesting date of each tranche. As at 31 March 2023, the Company has 27,841 (31 March 2022: 41,263) exercisable options outstanding.

Quess Stock Option Plan 2020 (“Scheme 2020")

The Board of Directors in its meeting held on 31 March 2020 approved the Quess Stock Ownership Plan - 2020 ("QSOP 2020"), under which stock options are granted to specific employees of the Company and its subsidiaries. The maximum number of shares under QSOP 2020 shall not exceed 3,650,000 equity shares. The stock options granted under QSOP 2020 shall vest based on the achievement of defined annual performance parameters as determined by the administrator (Nomination and Remuneration Committee). These instruments will be equity settled and will generally vest between a minimum of 1 to maximum of 6 years from the grant date. As at 31 March 2023, the Company has 88,130 (31 March 2022: 43,676) exercisable options outstanding.

B Measurement of fair values Scheme 2015

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 not disclosed since no ESOP''s under this scheme was granted during the year.

No options have expired during the current year and previous year.

Scheme 2020

The fair value of Employee Stock Options has been measured using Black Scholes Model of pricing.

EFDS= Net Profit After taxes Non cash operating expenses tike depreciation and Other amortizations Interest other adjustment tike profit/(toss) on sate of property, plant and equipment and intangible assets

^APrincipat repayments and tease payments for the current year

^AA Net worth Borrowings Lease liabilities - Goodwill - Intangible assets under development - Other intangible assets -Deferred tax assets

43.1 In the current year, there has been a decrease in Profit after tax and increase in repayment of borrowings during the year, resulting in decrease in Debt service coverage ratio.

43.2 Inventory turnover ratio has increased due to increase in cost of materials consumed as a result of increase in operations.

43.3 During the current year, the turnover has increased and the net working capital has decreased due to tower bank balances, and increased tiabitities, resutting into an increase in the Net Capitat Turnover ratio.

43.4 In the current year, there has been decrease in profits due to tesser dividend received from subsidiaries resutting in decrease in Net profit ratio.

45 The Board of Directors of the Company at its meeting hetd on 7 Juty 2021 considered and approved the revised Scheme of Amatgamation ("Scheme AAA") among Quess Corp Limited ("Transferee Company") with three of its whotty owned subsidiaries viz. MFX Infotech Private Limited ("MFXI") and Greenpiece Landscape India Private Limited ("GLPL") and Conneqt Business Sotutions Limited ("CBSL") together known as ("Transferor Companies") and their respective sharehotders and creditors under the provisions of Section 230-232 of the Companies Act, 2013 subject to the necessary approvats by the nationat Company Law Tribunat (NCLT), Bengaturu branch. The Scheme AAA witt be effected in the standatone financiat resutts once it is approved by Nationat Company Law Tribunat ("NCLT"), Bengaturu Bench. The appticant companies had fited the apptication before Hon''bte NCLT, Bengaturu bench on 21 January 2022 and received order dated 30 November 2022 for dispensation of the meetings of Equity Sharehotders, Secured Creditors and Unsecured Creditors of Appticant Companies and direction to issue notices to the creditors and the statutory authorities specified in the order. Further, the appticant companies after the due comptiance fited the Company petition on 9th January, 2023 for sanctioning of the Scheme. The Hon''bte NCLT has admitted the petition and the next date of hearing is 13 June 2023.

46 The Code on Sociat Security, 2020 ("Code") retating to emptoyee benefits during emptoyment and post-emptoyment benefits received Presidentiat assent in September 2020. The Code has been pubtished in the Gazette of India. However, the date on which the Code witt come into effect has not been notified. The Company witt assess the impact of the Code when it comes into effect and witt record any retated impact in the period the Code becomes effective.

47 "The Board of Directors at their meeting hetd on 31 May 2022 dectared interim dividend of INR 4.00 per equity share (face vatue of INR 10.00 each) for the previous financiat year aggregating to INR 591.97 mittion which was paid on 21 June 2022.

The Board of Directors at their meeting hetd on 9 November 2022 dectared interim dividend of INR 8.00 per equity share (face vatue of INR 10.00 each) for the financiat year 2022-23 aggregating to INR 1,185.18 mittion which was paid on 29 November 2022.

The Company is in comptiance with Section 123 of the Act.

48.1 No funds have been advanced or toaned 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, inctuding foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shatt tend or invest in party identified by or on behatf of the Company (Uttimate Beneficiaries). The Company has not received any fund from any party (Funding Party) with the understanding that the Company shatt whether, directty or indirectty tend or invest in other persons or entities identified by or on behatf of the Company ("Uttimate Beneficiaries") or provide any guarantee, security or the tike on behatf of the Uttimate Beneficiaries.

48.2 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

48.3 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'' (''books of account'') in electronic mode that should be accessible in India at all the time. 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 is 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 quarterly basis.

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 registered with ROC beyond the statutory period.

49.3 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

50 The Company evaluated subsequent events through 17 May 2023, which is the date on which the standalone financial statements are approved by the Board of Directors. Based on this evaluation, the Company is not aware of any other event or transaction that would require recognition or disclosure in the standalone financial statements.

51 Previous year''s figures have been regrouped / rearranged wherever necessary.

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Mar 31, 2022

4.1 Testing for impairment of goodwill:

As at 31 March 2022, the Company has INR 2,777.73 millions (31 March 2021: INR 2,777.73 millions) of goodwill allocated to the Company''s Integrated facility management (IFM) CGU. The recoverable value was determined based on value in use.

The cash flows related to revenue and operating margins have been estimated based on historical trends and future market expectations specific to the CGU.

The growth in revenue estimations used in the impairment testing for the year ended 31 March 2022 was in the range of 18.00% to 22.00% (31 March 2021: 16.00% to 22.00%). The operating margin estimations used in the impairment testing for the year ended 31 March 2022 are in the range of 6.96% to 8.06% (31 March 2021: 7.22% to 9.18%).

Sensitivity to changes in assumptions:

The impairment assessment is sensitive to changes in discount rate. Increase in discount rate by 100bps would not have resulted in any additional impairment for the current year (31 March 2021: INR Nil).

4.2 Reversal of impairment loss relating to customer relationships related to IFM business:

As at 31 March 2020, the Company had impaired INR 677.68 millions of customer relationship related intangible assets from its acquisitions of IFM business after considering the then assessed impact of COVID-19 and uncertainties in future economic condition caused by the pandemic. During the year, the Company has recognised a reversal of impairment on these customer relationships aggregating to INR 477.61 millions. This reversal stems from the management''s demonstrable assessment of sustainable improved business performance of the IFM business at the operating profit level, which is in excess of the projections prepared for the purpose of previously recognising the impairment. The presentation and classification of the reversal is consistent with that of the previously recognised impairment and therefore presented as exceptional item.

* During the year ended 31 March 2022, the Company converted Compulsorily Convertible Debentures ("CCDs") of Monster.com (India) Private Limited into 3,104 equity shares amounting to INR 107.24 millions. The Company also invested a further amount of INR 574.22 millions in 7,216 equity shares through right issue at INR 79,576 per share.

** During the year ended 31 March 2021, Tata Sons Private Limited ("Tata Sons"), the non-controlling shareholder of Conneqt Business Solutions Limited ("CBSL"), a subsidiary of the Company, exercised the Put Option and requested the Company to complete the purchase of 44,839,166 equity shares ("Shares") as per the Shareholders Agreement ("the Agreement") dated 20 November 2017. On 16 April 2021, the Administration and Investment committee of the Company has approved the acquisition of the remaining 30.00% equity stake for a consideration of INR 2,080 millions. Consequently, the Company completed the acquisition of equity stake in CBSL on the same date, and CBSL became wholly owned subsidiary of the Company.

*** Other adjustments pertains to billing of corporate guarantee income.

**** During the year ended 31 March 2022, the Company adjusted loans which was outstanding to be received from Heptagon Technologies Private Limited ("HTPL") into 1,902 equity shares amounting to INR 30.00 millions. The Company has also invested a further amount of INR 100.00 millions in 6,342 equity shares at INR 15,768 per share, which resulted in a holding of 60.67% at 31 March 2022. Consequently, HTPL has become subsidiary of the Company.

***** During the year ended 31 March 2022, the Company has made an additional investment in Stellarslog Technovation Private Limited for INR 80 millions. Investment of INR 32 millions was made in the quarter ended 30 September 2021 followed by a further investment of INR 48 millions during the quarter ended 31 December 2021 which resulted in a holding of 49% at 31 March 2022. Further, the Company has signed the First Addendum Agreement on 30 March 2022 with Stellarslog Technovation Private Limited under which the Company has agreed to make an additional investment of INR 38.40 millions.

5.2 During the year ended 31 March 2022, Terrier Security Services (India) Private Limited (''''TSSIPL'''') has allotted 150,000 optionally convertible redeemable preference shares (''''OCRPS'''') having face value of INR 10.00 each by way of bonus issue to its shareholders in the ratio of 1:0.30. Out of which 39,000 OCRPS has been converted by the other shareholders of TSSIPL into equity shares in the ratio of 1:10. As a result, the total shareholding of the Company in TSSIPL has been decreased from 74.00% to 41.57%.

OCRPS can be converted into equity shares by the Company at any point in time without any contractual restrictions and therefore considered as potential voting rights. Further, there has been no change in the composition in the Board of TSSIPL consequent to the change in shareholding. Therefore, TSSIPL continues to be a subsidiary of the Company.

17.2Rights, 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 shares 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 its 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.

18.1 Securities premium

The amount received in excess of the par value of equity shares has been classified as securities premium. The utilisation of the securities premium will be in accordance with the provisions of the Companies Act, 2013.

18.2 Share option outstanding account

The stock option outstanding account is used to recognise the grant date fair value of option issued to employees under employee stock option scheme.

18.3 Capital reserve

Represents surplus arising due to prior common control business combinations. The surplus is not eligible for distribution to shareholders under the provisions of Companies Act, 2013.

18.4 General reserve

General Reserve represents appropriation of profit by the Company. This represents a free reserve and is available for dividend distributions.

18.5 Other comprehensive loss

Re-measurement of the net defined benefit liability/ (asset) comprises actuarial gain and losses and return on plan assets (excluding interest income).

18.6 Retained earnings

Retained earnings comprises of the amounts that can be distributed by the Company as dividends to its equity share holders.

20.1 The Company has taken cash credit and overdraft facilities having interest rate linked to MCLR and Repo rate plus 2.5%. These facilities are repayable on demand and are secured primarily by way of pari passu first charge on the entire current assets of the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

20.2 The Company has taken working capital loan from banks having interest rate ranging from 4.50% p.a. to 7.00% 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 the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

23.1 The demand pertains to non contribution of Provident fund, Pension fund, Deposit Linked Insurance Fund and administration charges in accordance with the definition of basic wages as contained in Section 2(b) of Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Company, based on an expert''s opinion, is of the view that a part of the claim of the department is without foundation, while some part is still under debate and accordingly, provision is recorded based on the management estimate. The Company has appealed against the ruling which is pending in Employees'' Provident Fund Appellate Tribunal, New Delhi.

23.2 The demands pertains to Aravon Services Private Limited ("ASPL") which was merged with Quess Corp Limited w.e.f 1 April 2019. The amounts provided represents the best estimate of likely outflow of resources relating to this matter.

23.3 The demands pertains to Avon Facility Management Services Limited ("Avon") which was merged with Quess Corp Limited w.e.f 1 January 2014. The demand pertains to non-payment of services tax on training services provided under Government of India initiative, the Company has not created any provision considering that Avon is a registered vocational training provider associated with the National Council for Vocational Training and service tax is not applicable on rendering of vocational education and training course.

23.4 The demands pertains to Hofincons Infotech & Industrial Services Private Limited which was merged with Quess Corp Limited w.e.f 1 July 2014. The Company deposited the total demand under dispute.

(i) Disaggregation of revenue

The above break up presents disaggregated revenues from contracts with customers by each of the business segments. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

(iii) 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 2022, other than those meeting the exclusion criteria mentioned above, is INR 1,012.52 millions (31 March 2021: INR 772.90 millions). Out of this, the Company expects to recognise revenue of around 78.03% (31 March 2021: 51.27%) within the next one year and the remaining thereafter.

31.1 Details of rent

Represents tease rentals for short term leases.

The Company has applied practical expedient in Indian Accounting Standard (Ind AS 116) notified vide Companies (Indian Accounting Standards) Amendment Rules, 2020 by Ministry of Corporate Affairs on 24 July 2020 to all rent concessions received as a direct consequence of COVID-19 pandemic. Accordingly, the Company recognised an amount INR Nil (31 March 2021: INR 31.77 millions in the standalone financial statements as reduction of rent expenses grouped under other expenses on account of rent concessions received.

32.1 The The Company recognised an expense of INR 479.81 millions related to Goods and Service Tax (GST), based on a comprehensive internal review across its businesses, geographic locations and assessment years, including reconciliations with suppliers and vendors. Due to the pandemic related disruptions, this review was finally concluded during the current year. Based on such review the Company has, on a prudent basis, identified certain ineligible credits arising from vendor reconciliations, clarifications and opinions related to input credits, delays by vendors in filing GST returns, etc. and fully reconciled the related expense which the Company believes that this is an exceptional item in the extraneous circumstances involved and in the context of paragraph

9.6 of the guidance note on Schedule III to the Companies Act, 2013 issued by the Institute of Chartered Accountants of India ("ICAI").

Fair value hierarchy

Level 1: This hierarchy includes financial instruments measured using quoted prices. This comprises of investment in mutual funds and non-convertible debentures 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.

34 Financial risk management

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, 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 collections and actual credit loss experience over the last four quarters (31 March 2021: last six quarters) 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 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 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.

Financing arrangement

The table below provides details regarding the contractual maturities of significant financial liabilities as at 31 March 2022 and 31 March 2021. The amounts are gross and undiscounted contractual cash flows and includes contractual interest payments and exclude netting arrangements. The Company has an undrawn limit of INR 7,309.92 millions as at 31 March 2022.

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 wilt affect the Company''s income or the value of its holdings of financial instruments. Market risk is attributable to alt 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 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 fixed rate of interest and which do not expose it to interest rate risk. The borrowings also includes cash credit facilities which carries variable rate of interest.

The sensitivity analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management''s assessment of the reasonably possible change in interest rates.

35 Capital management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. 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 ''adjusted net debt'' to ''equity''. For this purpose, adjusted net debt is defined as aggregate of borrowings and lease liabilities less cash and cash equivalents.

37.1 Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities. The Company is contesting the demand and the Management believes that its position will likely be upheld. The Management believes that the outcome of this proceedings will not have material adverse effect on the Company''s financial position and results of operations.

37.2 Contingent liability of INR 325.88 millions pertains to retrospective application effective 1 April 2014 for amendments in the Payment of Bonus Act (Amendment Act, 2015) enacted on 31 December 2015. As per the amendment, the eligibility criteria of salary or wages has been increased from INR 10,000 per month to INR 21,000 per month [Section 2(13)] and the ceiling for computation of such salary or wages has been increased from INR 3,500 per month to INR 7,000 per month or the minimum wage for the scheduled employment, as fixed by the appropriate government, whichever is higher.

During fiscal 2015, the Company obtained a legal opinion from an external lawyer and was advised to take a position that the stay granted by the two High Courts of India on the retrospective application of the amendment would have a persuasive effect even outside the boundaries of the relevant states and accordingly no provision is required. There have been no updates during fiscal 2021 and 2022.

37.3 During fiscal 2020, the Regional PF Commissioner ("RPFC") passed an under Section 7-A of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 ("Act") demanding INR 716.56 millions on the grounds that the Company failed to remit Provident Fund ("PF") on wages for its employees for the period from April 2018 to March 2019 for certain components of salary. The Company filed an appeal before the Central Government Industrial Tribunal ("CGIT") under section 7-I of the Act challenging the Employees'' Provident Fund Organisation''s ("EPFO") order along with the application under Section 7-O of the Act seeking a waiver from pre-deposit of the alleged Provident Fund Contributions till the final disposal of the Appeal. The CGIT after hearing the submissions made by the parties passed an Order allowing complete waiver from any pre-deposit and also staying the operation of the EPFO order. The matter has been adjourned to 06 June 2022. The Company has taken external independent legal advice as per which the EPFO''s order is prima facie erroneous and unsustainable in law and the liability has been incorrectly determined by the RPFC and therefore, the Company considers the claim to be remote.

37.4 The I ncome Tax Department ("Department") conducted survey operations at the Company''s registered office from 08 July 2021 to 10 July 2021. The queries during the survey for financial year (FY) 2016-17 to FY 2019-20 were primarily related to the manner of availing deduction under section 80JJAA of the Income Tax Act ("Act") and the claim of tax depreciation on goodwill arising from acquisition/ mergers. Further, in the quarter ended 30 September 2021, a special audit under section 142(2A) of the Act was initiated by the Income Tax Department for FY 2017-18. During the quarter ended 31 March 2022, special audit was completed; and report was submitted to the Income Tax Department.

As per due process, and following the issue of the special audit report, the Department has issued a draft assessment order under section 144C of the Act on 24 May 2022. The draft assessment order indicates that, among others, the entire deduction under 80JJAA claimed by the Company is disallowed, along with the depreciation of goodwill arising on mergers and acquisitions. Further receipts in the nature of reimbursement of expenses from customers reduced from revenues as per applicable Accounting Standards have also been added to taxable income. As per the process laid out under section 144C of the Act, the Company has 30 days to file objections to the Dispute Resolution Panel. Therefore, the demands relating to disallowance is yet to be computed by the Income Tax Department.

The Company intends to vigorously contest its position and interpretative stance of these sections on merits, including judicial precedents, and believes it can strongly defend its position through the legal process as defined under the Act. Based on its initial internal evaluation, the Company has disclosed a contingent liability of INR 166.60 millions, excluding interest and penalties if any. This estimate will be updated as developments unfold in future.

The Company continues to maintain its stand on the manner of claiming the 80JJAA deduction and accordingly an 80JJAA deduction of INR 1,988.69 millions is claimed for the year ended 31 March 2022. The Company believes that such deduction, including it quantum, has been validly and consistently claimed, in conformity with its interpretation of the statute.

A Funding

The Company''s gratuity scheme for core and associates employees is administered through a third party manager the Life Insurance Corporation of India and SBI Life. 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 467.01 millions contributions to its defined benefit plans in FY 2022-23.

41 Share-based payments

A Description of share based payment arrangement

At 31 March 2022, the Company has the following share-based payment arrangements:

Share option plans (equity settled)

Quess Corp Limited Employee Stock Option Scheme 2015 (“Scheme 2015")

The Board of Directors in its meeting held on 22 December 2015 approved the ''Quess Corp Limited Employee Stock Option Scheme 2015'' (''Scheme 2015''), under which stock options are granted to specified employees of the Company. The Scheme 2015 provides for the issue of not more than 475,000 options (1,900,000 bonus adjusted options) with an exercise price of INR

10.00 each that would eventually convert into equity shares of INR 10.00 each. The options vest over a period of three years and are exercisable over a period of three years from the vesting date of each tranche. As at 31 March 2022, the Company has 41,263 (31 March 2021: 68,199) exercisable options outstanding.

Quess Stock Option Plan 2020 (“Scheme 2020")

The Board of Directors in its meeting held on 31 March 2020 approved the Quess Stock Ownership Plan - 2020 ("QSOP 2020"), under which stock options are granted to specific employees of the Company and its subsidiaries. The maximum number of shares under QSOP 2020 shall not exceed 3,650,000 equity shares. The stock options granted under QSOP 2020 shall vest based on the achievement of defined annual performance parameters as determined by the administrator (Nomination and Remuneration Committee). These instruments will be equity settled and will generally vest between a minimum of 1 to maximum of 6 years from the grant date. As at 31 March 2022, the Company has 43,676 (31 March 2021: Nil) exercisable options outstanding.

43.1 Debt-equity ratio has increased due to increase in current borrowings to meet working capital requirements.

43.2 There has been improvement in operating profits in the current year as compared to previous year, which was effected due to Covid-19, as well as there has been reduction in interest rates and repayment of borrowings, resulting in favourable Debt service coverage ratio.

43.3 In the current year, there has been improvement in operating profits resulting in profit after tax. However, previous year was effected due to Covid-19 and the Company had recognised significant amount of loss allowances on financial assets which contributed to loss after tax.

43.4 Inventory turnover ratio has increased due to increase in cost of materials consumed as a result of increase in operations.

43.5 There has been improvement in operating profitability along with improvement in cash flows. As a result, the Company has been able to make payments to trade payables quicker and hence there is improvement in the ratio.

43.6 In the current year, there has been improvement in operating profits resulting in profit after tax. However, previous year was effected due to Covid-19 and the Company had recognised significant amount of loss allowances on financial assets which contributed to loss after tax.

43.7 In the current year, there has been improvement in operating profits resulting in increase in earnings before interest and taxes. However, previous year was effected due to Covid-19 and the Company had recognised significant amount of loss allowances on financial assets which contributed to reduction in earnings before interest and taxes.

45 The Board of Directors of the Company at its meeting held on 18 February 2020 had considered and approved the Scheme of Amalgamation ("Scheme AAA") among Quess Corp Limited ("Transferee Company") with four of its wholly owned subsidiaries viz. Golden Star Facilities and Services Private Limited ("GSFS"), MFX Infotech Private Limited ("MFXI"), Trimax Smart Infraprojects Private Limited ("TSIP"), and Green Piece Landscape India Private Limited ("GLPL") together known as ("Transferor Companies") and their respective shareholders and creditors, subject to the approval of shareholders and other regulatory authorities as may be applicable under the Companies Act, 2013. On 19 March 2021, Regional Director, South-East region, Hyderabad had rejected the Scheme AAA vide Order no. 3/Kar/CP.No.25/RD(SER)/CAA-11/233/2020 based on non-fulfilment of provisions under Section 233(1)(b) of the Companies Act, 2013 ("Act"). The Board has considered and approved new Scheme of Amalgamation on 03 June 2021 among Quess Corp Limited with two of its wholly owned subsidiaries, GLPL and MFXI, under the provisions of Section 230232 of the Act. The new scheme will be effected in the standalone financial statements once approved by the National Company Law Tribunal ("NCLT").

46 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.

47 The Board of Directors in their meeting held on 5 May 2021 have declared an interim dividend of INR 7 per equity share (par value of INR 10 each) for the financial year 2020-21 aggregating to INR 1,033.75 millions.

The Board of Directors at their meeting held on 13 November 2021 declared an interim dividend of INR 4.00 per equity share (face value of INR 10.00 each) for the current financial year aggregating to INR 591.14 millions which was paid on 03 December 2021.

The Company is in compliance with Section 123 of the Act.

48 Other than as disclosed below, 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 ("Intermediaries") 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 ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

49 The Company evaluated subsequent events through 26 May 2022, which is the date on which the standalone financial statements are approved by the Board of Directors. Based on this evaluation, the Company is not aware of any other event or transaction that would require recognition or disclosure in the standalone financial statements.

50 Previous year''s figures have been regrouped / rearranged wherever necessary.

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Mar 31, 2021

4.1 The Company tests investments, intangibles and goodwill for impairment annually on 31 December or based on an indicator. Impairment is determined by assessing the recoverable amount of Cash Generating Unit ("CGU") (or group of CGUs) to which the investment or goodwill relates. When the recoverable amount of the CGU is less than it''s carrying amount, an impairment loss is recognised. The recoverable amount is determined higher of value-in-use and fair value less cost of sale of CGU. Value-in-use is calculated using a discounted expected cash flow approach.

As at 31 March 2021, the Company had INR 2,777.73 million (31 March 2020: INR 2,777.73 million) of goodwill allocated to the Company''s Integrated facility management (IFM) business.

During the year ended 31 March 2021, the Company has performed an impairment analysis at consolidated level (please refer consolidated financial statements for details) and no impairment has been recognised during the year.

During the year ended 31 March 2020, the Company impaired INR 2,787.83 million of goodwill and INR 677.68 million of intangible assets consequent to the impairment analysis performed after considering the impact of Corona virus (COVID-19) pandemic and uncertainties in future economic condition caused by the pandemic in the determination of recoverable amounts. The impairment was presented as an exceptional item in the statement of profit and loss.

The discount rate used in the discounted cash flow approach is the risk adjusted weighted average cost of capital applicable to respective CGUs. The cash flow projections used for assessing the ''Value-in-use'' are based on the most recent long-term forecast approved by management. The long-term forecast includes management''s latest estimate on Revenues and Operating cash flows. The period of projections is for five years and based on financial budgets/ forecasts which considers historical experience adjusted for uncertainties applicable for respective CGU''s. The cash flows beyond the forecast period are extrapolated using appropriate long term terminal growth rates. The long term terminal growth rates used do not exceed the long-term average growth rates of the respective industry and country in which the CGU operates and are consistent with internal/external sources of information.

Key judgments in determining the discounted cash flows included the anticipated reduction in revenues and EBITDA due to COVID-19 and the time to recovery post COVID-19. Specifically for the purpose of assessing the recoverable value of goodwill of INR 2,777.73 million, significant judgments were applied (adjusted for current business and market conditions) in certain cases while finalising assumptions on growth in revenues, EBITDA and discount rates. The Company continues to monitor future economic conditions for any significant changes to key assumptions. If the assumptions considered change in future, due to possible effect of uncertainties due to COVID-19, this could result in additional impairments the effects of which may not have been estimated as at the date of the approval of these standalone financial statements. Such changes, if any, will be prospectively recognised.

The growth in revenue and operating margins have been estimated based on historical trends and future market expectations specific to the CGU. The growth in revenue estimations used in the impairment testing for the year ended 31 March 2021 was in the range of 16.00% to 22.00% (31 March 2020: -10.00% to 15.00%). The operating margin estimations used in the impairment testing for the year ended 31 March 2021 was in the range of 7.22% to 9.18% (31 March 2020: 7.41% to 8.75%).

Sensitivity to changes in assumptions:

The impairment assessment is sensitive to changes in discount rate for certain CGU''s. Increase in discount rate by 100bps would not have resulted in any additional impairment for the current year (31 March 2020: INR 175.52 million).

5.1 During the year ended 31 March 2021, the Company invested INR 354.82 million as additional investment in Quess Corp (USA) Inc.

5.2 During the year ended 31 March 2021, the Company sold investment in equity and convertible debentures of Dependo Logistics Services Private Limited for a consideration of INR 100.00 million.

5.3 During the year ended 31 March 2021, the Company acquired additional 3.76% in equity stake in Vedang Cellular Services Private Limited ("VCSP"| at a consideration of INR 6.97 million (31 March 2020: 18.71% for INR 84.38 million), pursuant to the clauses relating to NCI-Put option of the original Share purchase agreement dated 25 October 2017 among Quess Corp Limited, Vedang Radio Technology Private Limited, VCSP and Ashish Kapoor. As of 31 March 2021, the Company holds 92.47% equity stake (31 March 2020: 88.71%) in VCSP.

5.4 During the year ended 31 March 2021, the Company acquired additional 25.00% equity stake in Terrier Security Services (India) Private Limited ("TSSIPL") at a consideration of INR 645.00 million. Consequent to the additional 25.00% acquisition, the total shareholding in TSSIPL has increased from 49.00% to 74.00% and TSSIPL has become subsidiary of the Company. The additional purchase consideration of INR 645.00 million was settled by adjusting loans which was outstanding to be received from Heptagon Technologies Private Limited ("HTPL").

5.5 During the year ended 31 March 2021, decrease in investment in MFXchange Holdings Inc. is due to utilisation of investment accounted at the time of giving corporate guarantee to the subsidiary in accordance with Ind AS 109, since guarantee commission income was charged to the subsidiary amounting to INR 5.94 million.

5.6 During the year ended 31 March 2021, the Company entered into a Termination agreement ("Agreement") with Quess East Bengal FC Private Limited ("QEBFC") and the East Bengal Club ("Club") for terminating the shareholders agreement ("SHA") dated 5 July 2018 among the Company, QEBFC and the Club on mutual consent. As per the agreement, the sporting rights has been surrendered to the Club with effect from 16 July 2020 and the Company has acquired the balance 30.00% equity stake in QEBFC for a nominal value of INR 1,000. On 28 July 2020 the Board of Directors had approved the proposal for voluntary liquidation of QEBFC and subsequently, the Shareholders of QEBFC had approved the Voluntary Liquidation pursuant to Section 59 of the Insolvency and Bankruptcy Code, 2016 and appointed a Liquidator on 2 September 2020 for carrying out the Voluntary Liquidation process. The effective date of commencement of liquidation is 2 September 2020.

5.7 During the year ended 31 March 2021, the Company entered into Shareholder''s Agreement ("SHA") and Share Subscription Agreement ("SSA") with Stellarslog Technovation Private Limited ("STPL") and its shareholders to acquire 49% equity stake in STPL for a consideration of INR 100 million. On 29 January 2021, the Company acquired 16.21% equity stake in STPL for a consideration of INR 20.00 million.

5.8 During the year ended 31 March 2021, the Company converted Compulsorily Convertible Debentures ("CCDs") issued by certain subsidiaries into Convertible Debentures ("CDs") amounting to INR 2,023.47 million after due approval from the Board of Directors of the Company. Consequent to the approval, CD''s amounting to INR 1,096.22 million was redeemed during the year ended 31 March 2021.

5.9 During the year ended 31 March 2020, the Company invested INR 205.94 million as additional investment in Quesscorp Holdings Pte. Ltd. During the year ended 31 March 2021, decrease in investment is due to utilisation of investment accounted at the time of giving corporate guarantee to the subsidiary in accordance with Ind AS 109, since guarantee commission income was charged to the subsidiary amounting to INR 9.35 million.

5.10 During the year ended 31 March 2020, the Company invested INR 1,931.07 million thereby increasing the total shareholding of the Company in CBSL from 51.00% to 70.00% and invested INR 780.00 million in Compulsorily Convertible Debentures ("CCDs") of CBSL. The Company also invested a further amount of INR 1,270.87 million as Intercorporate Deposits ("ICDs"). The amount given as ICDs, to the extent of INR 587.64 million utilised for open offer with respect to the acquisition of Allsec Technologies Limited was converted into CCDs and the balance was repaid back to the Company.

5.11 During the year ended 31 March 2021, the Company reassessed the recoverable value of investment made in Heptagon Technologies Private Limited ("HTPL"), an associate company and recognised an impairment of INR 112.70 million.

5.12 During the year ended 31 March 2020, the Company acquired balance 30.00% equity stake in Golden Star Facilities and Services Private Limited ("GSFS") at a consideration of INR 400.00 million, pursuant to the clauses relating to NCI-Put option of the Share holders agreement dated 18 July 2017 among Quess Corp Limited, Manipal Integrated Services Private Limited, GSFS and Anita Verghese. Consequently GSFS has become 100.00% subsidiary of the Company.

5.13 During the year ended 31 March 2020, the Company acquired remaining 10.00% equity stake in Greenpiece Landscapes India Private Limited ("GLIPL") at a consideration of INR 28.00 million and GLIPL has become 100.00% subsidiary of the Company.

5.14 During the year ended 31 March 2020, the Company invested INR 3.49 million in Quess Services Limited.

5.15 During the year ended 31 March 2020, the Company acquired balance 49.00% equity stake in TSIPL at a consideration of INR 130.00 million and TSIPL has become 100.00% subsidiary of the Company.

5.16 During the year ended 31 March 2020, the Company converted certain loans, interest receivable and other dues from subsidiaries into Compulsorily Convertible Debentures ("CCDs"), amounting to INR 3,800.40 million after due approval from the Board of Directors of the Company. The CCDs have a term of 10 years and are compulsory convertible at a fixed conversion rate contractually agreed on issue of CCDs into equity shares of the subsidiaries. The CCDs carry a coupon rate of 10.00 % p.a. on the face value of the CCDs and are payable subject to prior approval of the Board of Directors of the subsidiaries. Considering the above features, the Company recognised and presented the CCDs as Non-current Investments based on the guidance in Ind AS 109, Financial instruments.

5.17 For the purpose of assessing the recoverable value of investments in subsidiary and associate companies of INR 11,144.61 million, significant judgments were applied (adjusted for current business and market conditions) in certain cases while finalising assumptions on growth in revenues, EBITDA and discount rates. Consequently, the Company recognised an impairment provision of INR 693.99 million in statement of profit and loss for the year ended 31 March 2021 (31 March 2020: INR 1,511.00 million shown as exceptional items in the statement of profit and loss).

6.1 During the year ended 31 March 2021, the Company terminated the joint arrangements with Quess East Bengal FC Private Limited ("QEBFC") and the East Bengal Club ("Club") after considering its long term economic viability. As per the agreement, the sporting rights has been surrendered to the Club with effect from 16 July 2020 and the Company has acquired the balance 30.00% equity stake in QEBFC for a nominal value of INR 1,000. Consequently, QEBFC has become a wholly owned subsidiary of the Company. The Company reassessed the recoverable value of the loans given and investments made in this associate and recognised an impairment charge of INR 35.53 million on loan given in the statement of profit and loss (31 March 2020: INR 242.86 million on loan given and INR 100.35 million on investments made, disclosed as an exceptional item in the statement of profit and loss).

6.2 For the purpose of assessing the recoverable value of loans granted to subsidiary and associate companies of INR 285.18 million, significant judgments were applied (adjusted for current business and market conditions) in certain cases while finalising assumptions on growth in revenues, EBITDA and discount rates. During the year ended 31 March 2020, the Company recognised an impairment charge of INR 41.81 million towards loans given to Greenpiece Landscapes India Private Limited in statement of profit and loss and disclosed this as an exceptional item in the statement of profit and loss.

*The Finance Act, 2021 has introduced an amendment to section 32 of the Income Tax Act, 1961, whereby goodwill of a business will not be considered as a depreciable asset and depreciation on goodwill will not be allowed as deductible expenditure effective 01 April 2020. Consequently, the Company recorded a deferred tax expense of INR 519.61 million being the difference between the book base and tax base of goodwill on 31 March 2021. The deferred tax mainly relates to goodwill arising out of the acquisition of Manipal business in 2016.

**During the year ended 31 March 2020, the Company has decided to exercise the option of lower tax rate available under Section 115BAA of the Income Tax Act, 1961, as introduced by Taxation Laws (Amendment) Ordinance, 2019, with effect from FY 2020. Accordingly, the Company has written off through the statement of profit and loss, accumulated MAT credit of INR 1,239.45 million and re-measured other accumulated net deferred tax assets based on the rate prescribed under Section 115BAA resulting in additional expense of INR 105.33 million.

***An amount of INR 872.20 million being reversal of deferred tax liability in relation to goodwill and intangibles impairment has been adjusted to statement of profit and loss through tax expenses (refer note 4.1).

The movement of deferred tax aggregating to INR 627.13 million for the year ended 31 March 2021 (31 March 2020: INR 277.25 million) comprises INR 647.69 million (31 March 2020: INR 294.45 million) charged to standalone statement of profit and loss and INR 20.54 million (31 March 2020: INR 17.20 million) credited to other comprehensive income.

11.1 During the year ended 31 March 2021, the Company has recorded a provision of INR 137.53 million in relation to trade receivables arising from certain contracts with government customers. The collection of these trade receivables is delayed due to the protracted lockdowns arising from the pandemic situation which has also resulted in delays in completion of future milestones relating to such contracts. Further, there exists considerable uncertainty around the timelines for completion of such contracts and possibility of modification of terms, given the underlying delays. As a matter of abundant caution, the Company has made provisions, while simultaneously pursuing its efforts for the completion of such contracts and the ultimate collection of such receivables.

For terms and conditions of trade receivables owing from related parties refer note 41.

The Company''s exposure to credit and currency risk, and loss allowances related to trade receivables are disclosed in note 36.

15.1 During the year ended 31 March 2021, the Company has recorded a provision of INR 342.84 million in relation to unbilled revenues arising from certain contracts with government customers. The billings of these unbilled revenues is delayed due to the protracted lockdowns arising from the pandemic situation which has also resulted in delays in completion of future milestones relating to such contracts. Further, there exists considerable uncertainty around the timelines for completion of such contracts and possibility of modification of terms, given the underlying delays. As a matter of abundant caution, the Company has made provisions, while simultaneously pursuing its efforts for the completion of such contracts and the ultimate collection of such unbilled revenue.

(i| On 26 September 2019, the Company allotted 754,437 equity shares of face value INR 10.00 each (amounting to INR 7.54 million) at a premium of INR 666.00 each (amounting to INR 502.46 million) to Amazon.com NV Investment Holdings, LLC, a Category II Foreign Portfolio Investor ("Investor") by way of preferential allotment ("Issue") aggregating to INR 510.00 million. As per the investment agreement with the Investor and Qdigi Services Limited, a wholly owned subsidiary of the Company, the proceeds from the above allotment will be utilised in Qdigi Services Limited.

(ii) During the year ended 31 March 2019, the Company had entered into a Composite Scheme of Arrangement and Amalgamation ("the Scheme AA") with Thomas Cook (India) Limited ("TCIL"), Travel Corporation (India) Limited, TC Travel and Services Limited, TC Forex Services Limited and SOTC Travel Management Private Limited and their respective shareholders and creditors, wherein TCIL had demerged its Human Resource Services business (including investment in shares of Quess Corp Limited) into the Company on a going concern basis. The Board of Directors vide its meeting dated 23 April 2018 approved the draft Scheme AA. Subsequently, the Administration and Investment Committee duly empowered by the Board approved amendment in the share entitlement ratio in the draft Scheme AA vide its meeting dated 19 December 2018 and filed the Scheme AA with BSE and NSE and subsequently with the National Company Law Tribunal ("NCLT"). During the year ended 31 March 2020, the Company had obtained the approval from the NCLT dated 7 November 2019. The appointed date of the Scheme AA is 1 April 2019 which is the effective date of the Scheme AA approved by NCLT. As per the Scheme AA, the consideration was settled by issue of 132,744 equity shares of the Company on a net basis. As part of the Scheme AA equity shares held by Thomas Cook India Limited were extinguished and an equivalent number of equity shares were allotted to the shareholders of Thomas Cook India Limited as at 6 December 2019 being the record date fixed in this respect. The change in shareholding pattern therewith is captured in the below table.

As per the accounting specified in Scheme AA, the difference in carrying value of assets and liabilities transferred to the Company and the consideration discharged by way of issue of shares to the shareholders of TCIL has been recorded as capital reserve. The transaction has been recorded at nominal value as merger, subsequent cancellation and simultaneous issue of shares is without exchange of cash and the number of equity shares before and after the merger is the same.

(iii) During the year ended 31 March 2018, the Company has completed the Institutional Placement Programme (IPP) and raised a total capital of INR 8,739.22 million by issuing 10,924,029 equity shares of INR 10.00 each at a premium of INR 790.00 per equity share. The proceeds from IPP is INR 8475.49 million (net of issue expenses).

18.2 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 shares 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 its 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.

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.

During the year ended 31 March 2020, the Company issued 754,437 equity shares at a premium of INR 666.00 per share to Amazon. com NV Investment Holdings, LLC by way of preferential allotment. During the previous year as per the requirement of Section 52 of the Companies Act 2013, the Company utilised the securities premium for the expenses incurred in connection with the allotment of shares to the shareholders of TCIL pursuant to acquisition of ""Human Resource Services business"" amounting to INR 369.04 million.

19.2 Share option outstanding account

The stock option outstanding account is used to recognise the grant date fair value of option issued to employees under employee stock option scheme.

19.3 Capital reserve

During the year ended 31 March 2019, the Company pursuant to the scheme of amalgamation acquired Aravon Services Private Limited ("ASPL"), CentreQ Business Services Private Limited ("CBSP"), Coachieve Solutions Private Limited ("COAL"), and Master Staffing Solutions Private Limited ("MSSP") with effect from 1 April 2019. As per the accounting treatment of the scheme of amalgamation approved by the Honourable High Court of Karnataka, the differential amount between the carrying value of investments and net assets acquired from the transferor companies has been accounted as Capital reserve. Further during the previous year, the Company has sold the Coachieve division on a slump sale basis to Allsec Technologies Limited ("Allsec"), step-down subsidiary of the Company. The Company has recognized amount of INR 242.64 million in the capital reserve with respect to this transaction.

19.4 Debenture redemption reserve

During the year ended 31 March 2017, the Company issued secured redeemable non-convertible debentures C''NCDs") and has created a debenture redemption reserve (''''DRR") as per the provisions of the Act. During the year ended 31 March 2020, the Company transferred INR 37.50 million to DRR. The Company redeemed the balance 750 NCDs aggregating to INR 750.00 million and a corresponding amount has been transferred from DRR to retained earnings.

The Ministry of Corporate Affairs has amended the Companies (Share Capital & Debentures) Rules 2014 to remove the requirement for creation of DRR of 25.00% of the value of outstanding debentures in respect of listed companies. Accordingly, the Company has stopped appropriating profits to DRR from 1 October 2019. As of 31 March 2021, the DRR balance is nil (31 March 2020: INR 103.13 million).

19.5 General reserve

General Reserve represents appropriation of profit by the Company. This represents a free reserve and is available for dividend distributions.

19.6 Other comprehensive income

Re-measurement of the net defined benefit liability/ (asset) comprises actuarial gain and losses and return on plan assets (excluding interest income).

19.7 Retained earnings

Retained earnings comprises of the amounts that can be distributed by the Company as dividends to its equity share holders.

(i| The Company has received a demand notice dated 12 June 2012 from Employees'' Provident Fund (EPF) Organisation raising a demand of INR 42.89 million for the period from April 2008 to February 2012 for not contributing Provident fund, Pension fund, Deposit Linked Insurance Fund and administration charges in accordance with the definition of basic wages as contained in Section 2(b) of Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Company, based on an expert''s opinion, is of the view that a part of the claim of the department is without foundation, while some part is still under debate and accordingly, provision is created based on the management estimate. The Company has appealed against the ruling which is pending in Employees'' Provident Fund Appellate Tribunal, New Delhi. Accordingly, the Company has created INR 17.97 million provision and has paid INR 10.72 million as duty paid under protest. The balance amount of INR 14.22 million has been recognised as contingent liability.

(ii) The Company had received a demand notice dated 20 May 2017 from Assistant Commissioner of Commercial Taxes (ACCT) raising a demand of INR 37.56 million for the period from January 2016 to January 2017 for availment under composition scheme without separate registration certificate to run as a composite dealer. Avon Facility Management Services registered under the composite dealer scheme, was merged with Quess Corp Limited w.e.f. 1 January 2014. Consequent to the merger Quess Corp Limited continued to pay VAT under composite scheme. The contention of the ACCT is that there was no separate registration post merger where as Quess Corp Limited have already intimated ACCT about the merger and also have applied electronically on K-Vat portal seeking separate registration under composite scheme. During the year ended 31 March 2019, the Company has received a demand notice dated 29 January 2019 from Deputy Commissioner of Commercial Taxes (DCCT) raising a demand of INR 39.97 million (including interest and penalty) for the period April 2016 to March 2017. The Company opted for the Comprehensive

Karasamadhana Scheme, 2019 introduced by the Government of Karnataka for waiver of arrears of penalty and interest against the pending cases. Accordingly the Company created an additional provision of INR 18.27 million during the year ended 31 March 2019 for the balance amount of demand thus making the total provision amounting INR 40.80 million. During the year ended 31 March 2021, the provision has been reversed as the demand amount was paid under the Comprehensive Karasamadhana Scheme, 2019.

(iii) Service tax demands pending with the Customs, Excise and Service Tax Appellate Tribunal ("CESTAT"), Mumbai amounts to INR 154.02 million for the period from October 2007 to March 2016. Against these disputed claims Aravon Services Private Limited ("ASPL") has created provision for INR 53.21 million in its books of accounts and has paid INR 11.55 million as duty paid under protest. While performing the purchase price allocation of ASPL the Company has assessed the fair value of the remaining liability of INR 97.24 million. Accordingly, an amount of INR 42.52 million was included as provision for expenses and further provisions of INR 22.23 million was created during the year ended 31 March 2018 as part of annual assessment. ASPL was merged with Quess Corp Limited with effect from 1 April 2019 and the balance amount of INR 24.51 million has been recognised as contingent liability.

22.1 The Company has taken cash credit and overdraft facilities having interest rate ranging from MCLR to MCLR 0.45% 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 the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipment''s purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

22.2 The Company has taken working capital loan from banks having interest rate ranging from 5.25% p.a. to 10.50% 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 the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipment''s purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

24.1 Non-convertible debentures

The Company in its Board of Directors Meeting held on 28 November 2016 passed a resolution to issue 1,500 redeemable non-convertible debentures ("NCDs") at a face value of INR 1.00 million aggregating to INR 1,500.00 million. The proceeds from debentures shall be utilised for the Company''s long-term working capital, payment of transaction related expenses related to capital issue and general corporate purpose but shall not be used for any real estate business, equity trading/speculative business.

With effect from 24 January 2020, the debentures carry a coupon rate of 8.50% p.a. (previously 8.25% p.a.) payable annually. Redemption of debentures shall be on the redemption date without any redemption premium. They are secured primarily by way of pari passu first charge on all the movable and immovable assets of the Company.

During the year ended 31 March 2021, the Company decided to exercise the call option for redemption of non-convertible debentures. Accordingly the outstanding NCD''s of INR 750.00 million along with interest was repaid on 22 January 2021.

The Company''s exposure to currency and liquidity risk related to other current financial liabilities is disclosed in note 36.

(i) Disaggregation of revenue

The above break up presents disaggregated revenues from contracts with customers by each of the business segments. The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

(ii) Trade receivables, unbilled revenue and unearned revenue

The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Invoicing in excess of earnings are classified as unearned revenue.

Trade receivables and unbilled revenues are presented net of impairment in the Balance Sheet.

The unbilled revenue primarily relate to the Company''s rights to consideration for work completed but not billed at the reporting date. Unbilled revenues comprising revenues in excess of billings from time and material and fixed price maintenance contracts are classified as financial asset when the right to consideration is unconditional and is due only after a passage of time.

The unearned revenue primarily relate to the advance consideration received from customer, for which revenue is recognised on completion of contract terms.

(iii) Performance obligations and remaining performance obligations

The remaining performance obligation disclosure provides the amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the 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 (typically those contracts where invoicing is on time and material basis).

The aggregate value of performance obligations that are completely or partially unsatisfied as of 31 March 2021, other than those meeting the exclusion criteria mentioned above, is INR 772.90 million (31 March 2020: INR 1,949.97 million). Out of this, the Company expects to recognize revenue of around 51.27% (31 March 2020: 50.00%) within the next one year and the remaining thereafter.

33.1 Details of rent

Represents lease rentals for short term teases.

The Company has applied practical expedient in Indian Accounting Standard (Ind AS 116) notified vide Companies (Indian Accounting Standards) Amendment Rules, 2020 by Ministry of Corporate Affairs on 24 July 2020 to all rent concessions received as a direct consequence of COVID-19 pandemic. Accordingly, the Company recognised an amount INR 31.77 million in the standalone financial statements for the year ended 31 March 2021 as reduction of rent expenses grouped under other expenses on account of rent concessions received.

33.3 Details of CSR expenditure

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility ("CSR") activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by the Company as per the Act. The funds required to be spent and funds spent during the year are explained below:

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.

Level 1: This hierarchy includes financial instruments measured using quoted prices. This comprises of investment in mutual funds and non-convertible debentures 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.

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) The Company has not disclosed the fair values for loans, trade receivables, cash and cash equivalents including other bank balances, unbilled revenue and other financial assets because their carrying amounts are a reasonable approximation of their fair value.

2) Current investments: The fair values of investments in mutual fund units disclosed as current investments is based on the net asset value ("NAV”) as stated by the issuers of these mutual fund units in the published statements as at the reporting date. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuers will redeem such units from the investors.

B Financial liabilities:

1) Non-convertible debentures(quoted): The fair values of the Company''s interest-bearing debentures are determined by using Discounted cash flow ("DCF") method using discount rate that reflects the issuer''s coupon rate as at the end of the reporting period.

2) 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.

3) 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.

36 Financial risk management

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 ad hoc 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 from customers, loans and current asset. 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.

36 Financial risk management (Contd..)

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. Loans represent security deposits given to suppliers, lessors and others. Credit risk associated with such deposits is relatively low.

Trade receivables and unbilled revenue

The Company''s exposure to credit risk is influenced mainly by trade receivables and unbilled revenue. Trade receivables and unbilled revenue 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. The Company''s review includes external ratings, if they are available, financial statements, credit agency information, industry information and in some cases bank references. The Company does not have trade receivables for which no loss allowance is recognised because of collateral.

Expected credit loss assessment for customers as at 31 March 2021 and 31 March 2020 are as follows:

The Company uses an allowance matrix to measure the expected credit loss of trade receivables from customers and unbilled revenue.

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 during the year ended 31 March 2021.

For non-government customers, based on industry practices and the business environment in which the entity operates, the management considers that trade receivables are in default if the payments are more than 270 days past due. Loss rates are based on actual credit loss experience over the last six quarters. The Company''s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. Exposure to customers is diversified and there is no single customer contributing more than 10% of trade receivables and unbilled revenue. The loss rates considers the credit risk of the customers and have been adjusted to reflect the Management''s view of future economic conditions over the expected collection period of the receivables. For government customers, based on the industry benchmarking and insignificant credit risk, a provision matrix primarily based on the time based movement within the life cycle of customer receivable is considered. For time based ageing, the company used appropriate loss rate which is increased by yearly multiplier to arrive at effective ECL provision for respective ageing buckets. The loss rate has been adjusted with additional facts to reflect the Management''s view of future economic conditions over the expected collection period of the government receivables.

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 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 cash and cash equivalents.

As disclosed in note 22, the Company has secured bank loans that contains loan covenants. A future breach of covenants may require the Company to repay the loans earlier than indicated in the above table. Except for these financial liabilities, it is not expected that cash flows included in maturity analysis could occur significantly earlier.

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 exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the respective functional currency of the Company. The Company is not exposed to significant currency risk as majority of the transactions are primarily denominated in Indian Rupees ("INR"), which is the national currency of India.

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 fixed rate of interest and which do not expose it to interest rate risk. The borrowings also includes cash credit facilities which carries variable rate of interest.

37 Capital management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. 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 ''adjusted net debt'' to ''equity''. For this purpose, adjusted net debt is defined as aggregate on non-current borrowings, current borrowing and current maturities of long-term borrowings less cash and cash equivalents.

39.1 Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities. The Company is contesting the demand and the Management believes that its position will likely be upheld. The Management believes that the outcome of this proceedings will not have material adverse effect on the Company''s financial position and results of operations.

39.2 The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its standalone financial statements. The Company does not expect outcome of these proceedings to have a material adverse effect on its financial position.

39.3 The Company has given guarantees to banks for the loans availed by related parties to make good any default made by its related parties in repayment to banks.

39.4 The Payment of Bonus (Amendment) Act, 2015 (hereinafter referred to as the Amendment Act, 2015) has been enacted on 31 December 2015, according to which the eligibility criteria of salary or wages has been increased from INR 10,000.00 per month to INR 21,000.00 per month [Section 2(13)] and the ceiling for computation of such salary or wages has been increased from INR 3,500.00 per month to INR 7,000.00 per month or the minimum wage for the scheduled employment, as fixed by the appropriate government, whichever is higher. The reference to scheduled employment has been linked to the provisions of the Minimum Wages Act, 1948. The Amendment Act, 2015 is effective retrospectively from 1 April 2014.

For the period ended 31 March 2015, the Company has obtained a legal opinion from an external lawyer and was advised to take a position that the stay granted by the two High Courts of India on the retrospective application of the amendment would have a persuasive effect even outside the boundaries of the relevant states and accordingly no provision is currently required. The same if incurred by the Company will be billed back to customers including service charges. Accordingly an amount of INR 325.88 million being bonus for such retrospective period has been considered as contingent liability.

39.5 On 29 June 2019 the Company had received a notice from the Regional PF Commissioner ("RPFC") under Section 7-A of the Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 ("Act") stating that Company has failed to remit Provident Fund ("PF") on wages for its employees for the period from April 2018 to March 2019 on the grounds that PF deductions were not made on certain components of the Salary. Subsequently on 8 August 2019, RPFC passed an Order under Sec 7-A of the Act demanding a sum of INR 716.56 million. On 26 August 2019, the Company filed an appeal before the Central Government Industrial Tribunal ("CGIT") under section 7-I of the Act challenging the Employees'' Provident Fund Organisation''s ("E PFO") order along with the application under Section 7-O of the Act seeking a waiver from pre-deposit of the alleged Provident Fund Contributions till the final disposal of the Appeal. On 23 October 2019 the CGIT after hearing the submissions made by the parties passed an Order allowing complete waiver from any pre-deposit and also staying the operation of the EPFO order for a period of 3 months. The matter has been further adjourned to 16 July 2021. The Company has taken external independent legal advice as per which the EPFO''s order is prima facie erroneous and unsustainable in law and the liability has been wrongly determined by the RPFC. Further the Company has contractual rights with its customers wherein any such statutory liabilities could be passed on to them and the Company has obtained confirmation from the customers in this regard. Based on the legal advice, pending the hearing of the appeal and contractual arrangement with customers, no provision or contingent liability has been recognised at this stage.

For details about the related employee benefit expenses, see note 30.

*The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act,1972. It entitles an employee, who has rendered at least five years of continuous 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 employees is administered through a trust with the Life Insurance Corporation of India. 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 363.72 million contributions to its defined benefit plans in FY 2021-22.

A Description of share based payment arrangement

At 31 March 2021, the Company has the following the share-based payment arrangements:

Share option plans (equity settled)

IKYA Employee Stock Option Scheme 2009 ("Scheme 2009")

The Board of Directors in its meeting held on 19 November 2009 approved the ''IKYA Employee Stock Option Scheme 2009'' (''Scheme 2009''), under which stock options are granted to specified employees of the Company. The Scheme 2009 provides for the issue of 5,200,000 bonus adjusted options with an exercise price of INR 10.00 each that would eventually convert into 5,200,000 equity shares of INR 10.00 each. The options vest over a period of three years and are exercisable only on occurrence of the liquidity event. The Scheme 2009 defines ''liquidity event'' as an Initial Public Offering by the Company (or one of its subsidiaries) or dilution of voting right below majority of the existing shareholders. All outstanding options were vested as at 31 March 2015. As at 31 March 2021, the Company has no exercisable options outstanding. (31 March 2020: 132,660).

Quess Corp Limited Employee Stock Option Scheme 2015 ("Scheme 2015")

The Board of Directors in its meeting held on 22 December 2015 approved the ''Quess Corp Limited Employee Stock Option Scheme 2015'' (''Scheme 2015''), under which stock options are granted to specified employees of the Company. The Scheme 2015 provides for the issue of not more than 475,000 options (1,900,000 bonus adjusted options) with an exercise price of INR 10.00 each that would eventually convert into equity shares of INR 10.00 each. The options vest over a period of three years and are exercisable over a period of three years from the vesting date of each tranche. As at 31 March 2021, the Company has 68,199 exercisable options outstanding (31 March 2020: 108,067).

Quess Stock Option Plan 2020 ("Scheme 2020")

The Board of Directors in its meeting held on 31 March 2020 approved the Quess Stock Ownership Plan - 2020 ("QSOP 2020"), under which stock options are granted to specific employees of the Company and its subsidiaries. The maximum number of shares under QSOP 2020 shall not exceed 3,650,000 equity shares. The stock options granted under QSOP 2020 shall vest based on the achievement of defined annual performance parameters as determined by the administrator (Nomination and Remuneration Committee). These instruments will be equity settled and will generally vest between a minimum of 1 to maximum of 6 years from the grant date. As at 31 March 2021, the Company has no exercisable options outstanding.

B Measurement of fair values Scheme 2009

The Company does not have any unvested option as at 1 April 2015 under Employee Stock Option Scheme 2009. The Company has elected for the exemption of Employee Share based payment under Ind AS 101 and accordingly fair valuation of vested options prior to 1 April 2015 was not carried out.

Scheme 2015

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:

The above unsecured loans are given to subsidiaries at an interest rate equivalent to Government Bond rate and to associates at 10.00% p.a. Loans do not have any fixed term and are receivable on demand. The above loans were given for the purpose of meeting working capital requirements.

47 In accordance with Ind AS 108, Operating segments, segment information has been provided in the consolidated financial statements of the Company and no separate disclosure on segment information is given in these standalone financial statements.

48 Business Acquisition

The Board of Directors of the Company at its meeting held on 25 October 2018, approved the Scheme of Amalgamation ("Scheme A") among Quess Corp Limited ("Transferee Company") with four of its wholly owned subsidiaries viz. Aravon Services Private Limited ("ASPL"), CentreQ Business Services Private Limited ("CBSP"), Coachieve Solutions Private Limited ("COAL"), and Master Staffing Solutions Private Limited ("MSSP") together known as ("Transferor Companies") and their respective shareholders and creditors. Upon the Scheme A becoming effective the Transferor Companies stands dissolved, all the assets and liabilities of the transferor companies were recorded at the carrying values in the consolidated financial statements. The carrying amount of the Transferee Company''s investment in the shares of the Transferor Companies, which shall stand cancelled in the terms of this Scheme A, and the aggregate face value of such shares shall, subject to other provisions contained herein, be adjusted and reflected in the Capital Reserve of Transferee Company. The Scheme A upon approval by the Administration and Investment committee was filed with NSE and BSE on 27 March 2019 and subsequently with the Ministry of Corporate Affairs ("MCA").

During the year ended 31 March 2020, the Company obtained the approval from the Regional Director, South East Region, Ministry of Corporate Affairs ("MCA") dated 15 November 2019. The appointed date of the Scheme A is 1 April 2019 which is the effective date of the merger approved by MCA. In accordance with the requirements of Ind AS 103, Business Combination and the MCA approved Scheme A, the Company has retrospectively adjusted its financial statements from the periods commencing from 1 April 2018 to give necessary effect of the Scheme A.

49 The Board of Directors of the Company at its meeting held on 18 February 2020 had considered and approved the Scheme of Amalgamation ("Scheme AAA") among Quess Corp Limited ("Transferee Company") with four of its wholly owned subsidiaries viz. Golden Star Facilities and Services Private Limited ("GSFS"), MFX Infotech Private Limited ("MFXI"), Trimax Smart Infraprojects Private Limited ("TSIP"), and Green Piece Landscape India Private Limited ("GLPL") together known as ("Transferor Companies") and their respective shareholders and creditors, subject to the approval of shareholders and other regulatory authorities as may be applicable under the Companies Act, 2013. On 19 March 2021, Regional Director, South-East region, Hyderabad had rejected the Scheme AAA vide Order no. 3/Kar/CP.No.25/RD(SER)/CAA-11/233/2020 based on non-fulfilment of provisions under Section 233(1)(b) of the Companies Act, 2013 ("Act"). The Board has considered and approved new Scheme of Amalgamation on 03 June 2021 among Quess Corp Limited with two of its wholly owned subsidiaries, GLPL and MFXI, under the provisions of Section 230-232 of the Act. The new scheme will be effected in the standalone financial statements once approved by the National Company Law Tribunal ("NCLT").

50 During the year ended 31 March 2020, the Company has sold the HR Compliance Business division ("Coachieve") on a slump sale basis to Allsec Technologies Limited ("Allsec"), a step down subsidiary of the Company. The net liabilities of Coachieve amounting to INR 74.64 million has been transferred for a consideration of INR 168.00 million and the differential amount of INR 242.64 million has been recognised in the capital reserve.

51 On 24 December 2020, Tata Sons Private Limited ("Tata Sons"), remaining shareholder of Conneqt Business Solutions Limited ("CBSL"), a subsidiary of the Company, had exercised the Put Option and has requested the Company to complete the purchase of 44,839,166 equity shares ("Shares") as per the Shareholders Agreement ("the Agreement") dated 20 November 2017. Subsequently on 16 April 2021, the Administration and Investment committee has approved the acquisition of the remaining 30.00% equity stake for a consideration of INR 2,080.00 million. The Company completed the acquisition on the same date, consequent to which CBSL has become a wholly owned subsidiary of the Company.

52

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Mar 31, 2019

1. Company overview

Quess Corp Limited (‘the Company’) is a public limited company incorporated and domiciled in India. The registered office of the Company is located in Bengaluru, Karnataka, India. The Company is engaged in the business of providing services in technology solutions, people services, facility management, industrials and internet business.

The Company undertook an initial public offer of equity shares and subsequently got its equity shares listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) effective 12 July 2016.

Thomas Cook (India) Limited (“TCIL”) became the parent company and Fairfax Financial Holding Limited (“FFHL”) became the ultimate holding company of the Company with effect from 14 May 2013. However, Thomas Cook (India) Limited (“TCIL”) ceased to be the parent company and Fairfax Financial Holding Limited (“FFHL”) ceased to be the ultimate holding company of Quess Corp Limited with effect from 1 March 2018.

2.1 The goodwill on acquisition through business combination amounting to INR 55,301.60 lakhs relates to the acquisition of identified business of Manipal Integrated Services Private Limited. The fair value of net assets acquired on the acquisition date as part of the transaction amounted to INR 12,728.93 lakhs. The difference between purchase consideration paid amounting to INR 68,030.53 lakhs and the fair value of net assets acquired amounting to 12,728.93 lakhs has been attributed to goodwill. The Company has performed goodwill impairment testing at Consolidated level, please refer to Consolidated financial statements for details.

2.2 The Company has entered into an Asset Transfer Agreement with CAARPUS Technology Services limited (“Transferor”) and its founder Mr. L Bharani Raj dated 30 September 2016 to purchase the business asset (copyright and trademarks for using E-catalogue software and other intangibles). The Transferor is engaged in the business of providing technology based solutions for material management, coding, catalogue, inventory management etc. The total consideration paid is INR 50.00 lakhs. In accordance with Ind AS 103, Business Combinations, the consideration paid requires to be allocated across identifiable assets acquired, at their respective fair values. Accordingly, the Company has recognised copyright and trademarks aggregating INR 4.80 lakhs and remaining amount aggregating INR 45.20 lakhs is accounted as goodwill.

2.3 During the year 2014, the Company pursuant to the scheme of amalgamation acquired Avon Facility Management Services Limited with effect from 1 January 2014, Magna InfoTech Limited with effect from 1 January 2014 and Hofincons Infotech & Industrial Services Private Limited with effect from 1 July 2014. The management of Quess Corp Limited appointed external valuer to provide a valuation of the Magna brand, Avon brand and Hofincons brand (“Brand”) as on 31 December 2013 (applicable for Magna and Avon) and 30 June 2014 (applicable for Hofincons) (“Valuation Date”) in connection with restructuring exercise for valuation of brand. Subsequently, the Company on such amalgamation, has identified and recognized Brand amounting to INR 9,682.00 lakhs on such valuation.

2.4 As part of the purchase price allocation of the business combination with respect to acquisition of Identified business of Manipal Integrated Services Private Limited, the Company has allocated INR 10,150.00 lakhs as the value of Customer relationships. The value has been arrived by assessing the fair value of Customer relationships as on the date of acquisition using Multi period excess earning method (“MEEM”) which is a variant of income approach.

2.5 During the previous year ended 31 March 2018, the Company has acquired customer contracts from The People’s Choice, a proprietorship firm, for a consideration of INR 235.35 lakhs and has recognised the customer contracts as an intangible asset.

2.6 The Company has entered into an agreement with MFX Infotech Private Limited for development of its payroll management system. The contract is entered on a time and material basis at cost plus agreed markup. Software development has been completed during the previous year. Out of total capitalised amount of INR 1,315.65 lakhs in the previous year INR 1,160.30 lakhs pertains to this agreement.

3.1 During the previous year ended 31 March 2018, the Company had entered into Share Purchase Cum Shareholder’s Agreement (“SPSHA”) dated 24 January 2018 and subsequent amendment agreement dated 28 March 2018 with Greenpiece Projects Private Limited, Greenpiece Landscapes India Private Limited (“GLIPL”) and its Shareholders to acquire equity stake in GLIPL. As per these agreements, the Company agreed to acquire 100.00% equity stake in GLIPL in various tranches. During the quarter ended 30 June 2018, the Company had acquired 90.00% equity stake in GLIPL at a consideration of INR 2,160.00 lakhs and thus GLIPL has become the subsidiary of the Company. The Company has a contractual commitment to acquire the non-controlling interest. Subsequent to 31 March 2019, on 7 May 2019 the Company acquired balance 10.00% equity stake in GLIPL at a consideration of INR 280.00 lakhs and GLIPL has become 100.00% subsidiary of the Company.

3.2 During the year ended 31 March 2019, the Company acquired 100.00% equity stake in HCL Computing Products Limited (“HCPL”) at a consideration of INR 3,041.82 lakhs and thus HCPL has become the subsidiary of the Company. The name of HCPL has been changed to Qdigi Services Limited w.e.f. 21 February 2018.

3.3 During the year ended 31 March 2019, the Company had invested INR 130.60 lakhs as capital contribution in Quess Corp Vietnam Limited Liability Company.

3.4 During the year ended 31 March 2019, the Company had entered into a Share Purchase Agreement (“SPA”) dated 5 July 2018 with Quess East Bengal FC Private Limited (“QEBFC”) and its shareholders to subscribe for 70.00% shares for a consideration of INR 1,003.50 lakhs. Accordingly, QEBFC has become an associate of the Company.

3.5 During the year ended 31 March 2019, the Company had entered into an agreement (amendment to the original share subscription agreement dated 19 October 2016) with Simpliance Technologies Private Limited (“STPL”) to subscribe for additional 8.00% equity stake at a consideration of INR 200.00 lakhs. Accordingly, the Company’s equity stake has increased to 53.00% and STPL has become the subsidiary of the Company.

3.6 During the previous year ended 31 March 2018, the Company entered into Share Purchase Agreement (“SPA”) and Share Holders Agreement (“SHA”) dated 25 October 2017 with Vedang Cellular Services Private Limited (“Vedang”) and its shareholders to acquire 100.00% equity stake in Vedang. In accordance with the SPA and SHA, during the previous year the Company has acquired 70.00% stake for a consideration of INR 3,990.00 lakhs and thus Vedang has become a subsidiary of the Company. The Company has a contractual commitment to acquire the non-controlling interest.

3.7 During the previous year ended 31 March 2018, the Company entered into Share Purchase Agreement (“SPA”) and Share Holders Agreement (“SHA”) dated 20 November 2017 with Tata Business Support Services Limited (“TBSS”) and its shareholders to acquire 100.00% equity stake in TBSS at an estimated consideration of INR 32,166.68 lakhs. In accordance with the SPA and SHA, during the previous year the Company has acquired 51.00% stake for consideration of INR 15,272.82 lakhs and thus TBSS has become a subsidiary of the Company. The Company has a contractual commitment to acquire the non-controlling interest. The name of Tata Business Support Services Limited has been changed to Conneqt Business Solutions Limited w.e.f. 9 January 2018.

3.8 During the previous year ended 31 March 2018, the Company entered into an arrangement with Monster.Com Asia Ltd and Monster Worldwide, Inc. to acquire controlling stake in Monster.Com India Private Limited (“Monster”) at an consideration of INR 9,479.28 lakhs.

3.9 During the previous year ended 31 March 2018, the Company entered into a Share Subscription Agreement (“SSA”) dated 21 June 2017 with Heptagon Technologies Private Limited (“Heptagon”) and had acquired 46.00% of shares for a consideration of INR 977.00 lakhs and accordingly, Heptagon Technologies Private Limited (“Heptagon”) has become an associate of the company. During the year ended 31 March 2019, the Company entered into a Share Purchase Agreement (“SPA”) dated 5 September 2018 with Heptagon and its shareholders to acquire additional 3.00% shares for a consideration of INR 150.00 lakhs. As of 31 March 2019, the Company holds 49.00% equity stake in Heptagon.

3.10 During the previous year ended 31 March 2018, the Company has entered into Agreement dated 24 November 2017 with Trimax IT Infrastructure & Services Limited to subscribe 51.00% equity stake in Trimax Smart lnfraprojects Private Limited. In accordance with the agreement, the Company has subscribed 51.00% stake for a consideration of INR 0.51 lakhs during the previous year.

3.11 During the year ended 31 March 2019, the company has completed the sale of 74.00% equity stake in Inticore VJP Advance Systems Private Limited.

* Investments include interest on corporate guarantee given to subsidiaries amounting to INR 578.40 lakhs (31 March 2018: INR 522.90 lakhs)

(i) As per the amendment in the Finance Act 2016, deduction under Section 80JJAA of Income Tax Act, 1961 was extended across all sectors subject to fulfilment of conditions as stipulated in the said Section. The amendment was first applicable for the financial year ended 31 March 2017.

Since the provision was subject to a number of clarifications and interpretations, the Company had obtained an opinion from an external advisor establishing its eligibility and method to compute deduction under Section 80JJAA during the previous year ended 31 March 2018. Resultantly, the Company had accounted for 80JJAA deduction for the year ended 31 March 2018 and the year ended 31 March 2017, during the previous year ended 31 March 2018. The Company continued to claim the said deduction during the year ended 31 March 2019.

The movement of deferred tax aggregating to INR 2,883.59 lakhs for the year ended 31 March 2019 (31 March 2018: INR 10,680.97 lakhs) comprises INR 2,671.06 lakhs charged (31 March 2018: INR 10,515.15 lakhs credited) to standalone statement of profit and loss and INR 162.53 lakhs (31 March 2018: INR 165.82 lakhs) charged to other comprehensive income.

G recognised deferred tax assets and liabilities

Movement of deferred tax assets / liabilities presented in the balance sheet

4.1 The advance for purchase of shares relates to the advance given for the acquisition of equity shares of Greenpiece Landscape India Private Limited.

(i) During the previous year ended 31 March 2018, the Company has completed the Institutional Placement Programme (IPP) and raised a total capital of INR 87,392.23 lakhs by issuing 10,924,029 equity shares of INR 10.00 each at a premium of INR 790.00 per equity share. The proceeds from IPP is INR 84,754.90 lakhs (net of issue expenses).

Unutilised amounts of the issue have been temporarily deployed in fixed deposit with banks and invested in mutual funds which is in accordance with objects of the issue. The deployment of net proceeds is expected to be completed by 31 March 2020.

Expenses incurred by the Company amounting to INR 2,637.33 lakhs, in connection with IPP have been adjusted towards the securities premium in accordance with Section 52 of the Companies Act, 2013, during the previous year.

(ii) During the previous year ended 31 March 2018, the Company had issued 7,149,263 shares amounting to INR 714.93 lakhs for consideration for acquisition of Identified business of Manipal Integrated Services Private Limited.

5.1 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 shares 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 its 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.

5.2 shares held by the Holding company

Thomas Cook (India) Limited (“TCIL”) was the Holding Company upto 1 March 2018.

¹⁹.⁵ The Company has not made any buy back of shares or issued any shares for consideration other than cash, during the period of five years immediately preceding the reporting date. However the Company has issued bonus shares and has issued equity shares under Employee Stock option plan for which only exercise price has been received in cash as below (refer note 46).

6.1 securities premium

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.

During the previous year ended 31 March 2018, the Company made an Institutional Placement Program (IPP) and issued 10,924,029 equity shares at a premium of INR 790.00 per share. As per the requirement of section 52 of the Companies Act 2013, the Company has utilised the securities premium for the expenses incurred in connection with the Institutional Placement Program (IPP) amounting to INR 2,637.33 lakhs.

During the previous year ended 31 March 2018, the Company issued 7,149,263 equity shares at a premium of INR 633.85 per share to the shareholders of Manipal Integrated Services Private Limited pursuant to the scheme of amalgamation. As per the requirement of section 52 of the Companies Act 2013, the Company utilised the securities premium for the expenses incurred in connection with this scheme of amalgamation amounting to INR 672.85 lakhs.

7.1 stock option outstanding account

The stock option outstanding account is used to recognise the grant date fair value of option issued to employees under employee stock option scheme.

7.2 capital reserve

During the year ended 2015, the Company pursuant to the scheme of amalgamation acquired Avon Facility Management Services Limited with effect from 1 January 2014, Magna InfoTech Limited with effect from 1 January 2014 and Hofincons Infotech & Industrial Services Private Limited with effect from 1 July 2014. As per the accounting treatment of the scheme of amalgamation approved by the Honourable High Court of Karnataka, the differential amount between the carrying value of investments and net assets acquired from the transferor companies has been accounted as Capital reserve.

7.3 Debenture redemption reserve

During the year ended March 2017, the Company has issued redeemable non-convertible debentures and has created a debenture redemption reserve as per the provisions of the Act. During the year ended 31 March 2019, the Company transferred INR 750.00 lakhs to debenture redemption reserve (31 March 2018: INR 750.00 lakhs).

7.4 Other comprehensive income

Remeasurement of the net defined benefit liability/(asset) comprises actuarial gain and losses and return on plan assets (excluding interest income).

8.1 Non-convertible debentures

The Company in its Board of Directors Meeting held on 28 November 2016 passed a resolution to issue 1,500 redeemable non-convertible debentures at a face value of INR 10.00 lakh aggregating to INR 15,000.00 lakhs. The proceeds from debentures shall be utilised for the Company’s long-term working capital, payment of transaction related expenses related to capital issue and general corporate purpose but shall not be used for any real estate business, equity trading/speculative business.

The debentures carry a coupon rate of 8.25% p.a. payable annually. Redemption of debentures shall be on the redemption date i.e. 5 years from the date of allotment without any redemption premium. They are secured primarily by way of pari passu first charge on all the movable and immovable assets of the Company.

Disputed claims

The Company has received a demand notice dated 12 June 2012 from Employees’ Provident Fund (EPF) Organisation raising a demand of INR 428.90 lakhs for the period from April 2008 to February 2012 for not contributing Provident fund, Pension fund, Deposit Linked Insurance Fund and administration charges in accordance with the definition of basic wages as contained in Section 2(b) of Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The Company, based on an expert’s opinion, is of the view that a part of the claim of the department is without foundation, while some part is still under debate and accordingly, provision is created based on the management estimate. The Company has appealed against the ruling which is pending in Employees’ Provident Fund Appellate Tribunal, New Delhi. Accordingly, the Company has created INR 179.67 lakhs provision.

The Company had received a demand notice dated 20 May 2017 from Assistant Commissioner of Commercial Taxes (ACCT) raising a demand of INR 375.60 lakhs for the period from January 2016 to January 2017 for availment under composition scheme with out separate registration certificate to run as a composite dealer. Avon Facility Management Services registered under the composite dealer scheme, was merged with Quess Corp Limited w.e.f 1 January 2014. Consequent to the merger Quess Corp Limited continued to pay VAT under composite scheme. The contention of the ACCT is that there was no separate registration post merger where as Quess Corp Limited have already intimated ACCT about the merger and also have applied electronically on K-Vat portal seeking separate registration under composite scheme. During the year ended 31 March 2019, the Company has received a demand notice dated 29 January 2019 from Deputy Commissioner of Commercial Taxes (DCCT) raising a demand of INR 399.68 lakhs (including interest and penalty) for the period April 2016 to March 2017. The Company has appealed against the ruling which is pending with the Joint Commissioner of Commercial Taxes [JCCT (A)] Bangalore. The Company has opted for the Comprehensive Karasamadhana Scheme, 2019 introduced by the Government of Karnataka for waiver of arrears of penalty and interest against the pending cases. Accordingly the Company has created an additional provision of INR 182.70 lakhs for the balance amount of demand.

Information about the Company’s exposure to interest rate and liquidity risk is included in note 36.

9.1 The Company has taken cash credit and overdraft facilities having interest rate ranging from MCLR 0.35% p.a. to MCLR 0.45% 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 the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipment’s purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

9.2 The Company has taken working capital loan from banks having interest rate ranging from 8.85% p.a. to 9.95% 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 the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipment’s purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

*Current maturities of long-term borrowings includes loan outstanding of INR 3.59 lakhs (31 March 2018: INR 43.99 lakhs) towards vehicle loan taken from Mahindra & Mahindra Financial Services Limited, Kotak Mahindra Bank Limited and Kotak Mahindra Prime and is repayable in 36 equal monthly instalments.

The Company’s exposure to currency and liquidity risk related to other current financial liabilities is disclosed in note 36.

**Includes related party balances (refer note 42)

* The Company has reviewed and reassessed the presentation of revenue. Consequently, the revenue per stream is discontinued with and revenue is disaggregated according to business segments. Accordingly previous years figures are regrouped to conform with current year classification.

(i) Disaggregation of revenue

The above break up presents disaggregated revenues from contracts with customers by each of the business segments. The Company believes that this dissaggregation best depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by industry, market and other economic factors.

(ii) Trade Receivables and contract Balances

The Company classifies the right to consideration in exchange for deliverables as either a receivable or as unbilled revenue. Invoicing in excess of earnings are classified as unearned revenue.

Trade receivables and unbilled revenues are presented net of impairment in the Balance Sheet.

The contract assets primarily relate to the company’s rights to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional.

The contract liabilities primarily relate to the advance consideration received from customer, for which revenue is recognised on completion of contract terms.

The following table discloses the movement in unbilled revenue (contract assets) balances for the year ended 31 March 2019

(iii) performance obligations and remaining performance obligations

The remaining performance obligation disclosure provides the amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the 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 (typically those contracts where invoicing is on time and material basis).

The aggregate value of performance obligations that are completely or partially unsatisfied as of 31 March 2019, other than those meeting the exclusion criteria mentioned above, is INR 2,813.09 lakhs. Out of this, the Company expects to recognize revenue of around 58% within the next one year and the remaining thereafter.

10.1 Details of csR expenditure

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on Corporate Social Responsibility (“CSR”) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by the Company as per the Act. The funds required to be spent and funds spent during the year are explained below:

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

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) The Company has not disclosed the fair values for loans, trade receivables, cash and cash equivalents including other bank balances, unbilled revenue and other financial assets because their carrying amounts are a reasonable approximation of their fair value.

2) Current Investments : Fair value of quoted mutual funds units is based on quoted market price at the reporting date.

B Financial Liabilities:

1) Non-convertible debentures: The fair values of the Company’s interest-bearing debentures are determined by using Discounted cash flow (“DCF”) method using discount rate that reflects the issuer’s coupon rate as at the end of the reporting period. The Company has not disclosed the fair values because its carrying amount is a reasonable approximation of its fair value.

2) Borrowings: It includes cash credit and overdraft facilities, working capital loan and bill discounting facilities. These short-term borrowings are classified and subsequently measured in the standalone 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.

3) 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.

11 Financial risk management

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 ad hoc 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 from customers, loans and current asset. 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. Investments comprises of investment in mutual funds invested with mutual fund institutions having high credit ratings assigned by domestic credit rating agencies. Loans represent security deposits given to suppliers, employees and others. Credit risk associated with such deposits is relatively low.

Trade receivables and unbilled revenue

The Company’s exposure to credit risk is influenced mainly by its customers. However, the management also considers the factors that may influence the credit risk of its customer base. The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, financial statements, credit agency information, industry information and in some cases bank references. The Company does not have trade receivables for which no loss allowance is recognised because of collateral.

Expected credit loss assessment for customers as at 31 March 2019 and 31 March 2018 are as follows:

The Company uses an allowance matrix to measure the expected credit loss of trade receivables from customers and unbilled revenue.

Based on industry practices and the business environment in which the entity operates, the management considers that trade receivables are in default if the payments are more than 270 days past due. Loss rates are based on actual credit loss experience over the last six quarters.

These rates have been adjusted to reflect the Management’s view of economic conditions over the expected lives of the receivables.

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 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.

a) Financing arrangement

The Company maintains the following line of credit:

(i) The Company has taken cash credit and overdraft facilities having interest rate ranging from MCLR 0.35% p.a. to MCLR 0.45% 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 the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipment’s purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

(ii) The Company has taken working capital loan from banks having interest rate ranging from 8.85% p.a. to 9.95% 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 the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipment’s purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

The table below provides details regarding the contractual maturities of significant financial liabilities as at 31 March 2019 and 31 March 2018. The amounts are gross and undiscounted contractual cash flow:

As disclosed in note 21 and note 23, the Company has secured bank loans that contains loan covenants. A future breach of covenants may require the Company to repay the loans earlier than indicated in the above table. Except for these financial liabilities, it is not expected that cash flows included in maturity analysis could occur significantly earlier.

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 exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the respective functional currency of the Company. The Company is not exposed to significant currency risk as majority of the transactions are primarily denominated in Indian Rupees (“INR”), which is the national currency of India.

Sensitivity analysis

A reasonably possible strengthening (weakening) of the USD, EURO, SGD and CAD against INR at 31 March 2019 and 31 March 2018 would have affected the measurement of financial instruments denominated in foreign currency and affected equity and the standalone statement of profit and loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant:

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 vehicle loans, working capital loan and debentures which carry fixed rate of interest and which do not expose it to interest rate risk. The borrowings also includes cash credit facilities and bill discounting facilities which carries variable rate of interest.

The sensitivity analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

c) price risk

(i) price risk exposure

The Company’s exposure to price risk arises from investments held by the Company in the mutual fund units and classified as fair value through profit or loss in the standalone balance sheet.

To manage its price risk arising from investments in mutual fund units, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

The majority of the Company’s mutual fund investments are publicly traded and are listed on the recognised stock exchanges.

The exposure of the Company’s mutual fund investments to security price changes at the end of the reporting period are as follows:

The sensitivity analysis is prepared assuming the amount of mutual funds outstanding at the end of the reporting period was outstanding for the whole year. A 100 basis point increase or decrease is used when reporting price risk internally to key management personnel and represents management’s assessment of the reasonably possible change in prices.

12 capital management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. 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 ‘adjusted net debt’ to ‘equity’. For this purpose, adjusted net debt is defined as aggregate on non-current borrowings, current borrowing and current maturities of long-term borrowings less cash and cash equivalents.

i) Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities. The Company is contesting the demand and the Management believes that its position will likely be upheld. The Management believes that the outcome of this proceedings will not have material adverse effect on the Company’s financial position and results of operations.

ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its standalone financial statements. The Company does not expect outcome of these proceedings to have a material adverse effect on its financial position.

13.1 The Company has given guarantees to banks for the loans availed by related parties to make good any default made by its related parties in repayment to banks.

13.2 The Payment of Bonus (Amendment) Act, 2015 (hereinafter referred to as the Amendment Act, 2015) has been enacted on 31 December 2015, according to which the eligibility criteria of salary or wages has been increased from INR 10,000.00 per month to INR 21,000.00 per month [Section 2(13)] and the ceiling for computation of such salary or wages has been increased from INR 3,500.00 per month to INR 7,000.00 per month or the minimum wage for the scheduled employment, as fixed by the appropriate government, whichever is higher. The reference to scheduled employment has been linked to the provisions of the Minimum Wages Act, 1948. The Amendment Act, 2015 is effective retrospectively from 1 April 2014.

For the period ended 31 March 2015, the Company has obtained a legal opinion from an external lawyer and was advised to take a position that the stay granted by the two High Courts of India on the retrospective application of the amendment would have a persuasive effect even outside the boundaries of the relevant states and accordingly no provision is currently required. The same if incurred by the Company will be billed back to customers including service charges. Accordingly an amount of INR 3,258.77 lakhs being bonus for such retrospective period has been considered as contingent liability.

14 On 28 February 2019, the Hon’ble Supreme Court of India delivered a judgment clarifying the principles that need to be applied in determining the components of salaries and wages on which Provident Fund (PF) contributions need to be made by establishments. The Company has been legally advised that there are various interpretative challenges on the application of the judgment retrospectively. Based on such legal advice, the management believes that it is not practicable at this stage to reliably measure the contingencies relating to amounts payable if any on potential demands relating to PF.

15 related party disclosures

(i) Name of related parties and description of relationship:

- Entities having significant influence Fairfax Financial Holdings Limited [till 28 February 2018]

Thomas Cook (India) Limited [till 28 February 2018, refer note 19.3] National Collateral Management Services Limited Fairfax (US) Inc.

- Subsidiaries (including step subsidiaries) Aravon Services Private Limited

Brainhunter Systems Limited Mindwire Systems Limited Brainhunter Companies LLC, USA Coachieve Solutions Private Limited MFX Infotech Private Limited

MFXchange (Ireland) Limited (dissolved w.e.f. 16 September 2017) Quess (Philippines) Corp.

Quess Corp (USA) Inc.

Quesscorp Holdings Pte Ltd Quessglobal (Malaysia) SDN. BHD.

MFXchange Holdings Inc., Canada MFXchange US, Inc.

Quesscorp Lanka Private Limited Ikya Business Services (Private) Limited*

Inticore VJP Advance Systems Private Limited (till 28 August 2018)

Comtel Solutions Pte Ltd

Dependo Logistics Solutions Private Limited

Excelus Learning Solutions Private Limited

CentreQ Business Services Private Limited

Conneqt Business Solutions Limited (formerly known as Tata Business Support Services Private Limited)

Vedang Cellular Services Private Limited Master Staffing Solutions Private Limited Golden Star Facilities and Services Private Limited MFX Chile SpA Comtelpro Pte. Ltd Comtelink Sdn. Bhd Monster.com.SG PTE Limited Monster.com.HK Limited

Agensi Pekerjaan Monster Malaysia SDN. BHD (formerly known as: Monster Malaysia SDN. BHD)

Monster.com (India) Private Limited Quess Corp Vietnam Limited Liability Company Greenpiece Landscapes India Private Limited Qdigi Services Limited (formerly known as HCL Computing Products Limited)

Quesscorp Manpower Supply Services LLC Simpliance Technologies Private Limited

Quesscorp Management Consultancies (formerly known as Styracorp Management Services)

- Associates Terrier Security Services (India) Private Limited

Heptagon Technologies Private Limited Quess Recruit, Inc.

Trimax Smart Infraprojects Private Limited Quess East Bengal FC Private Limited Agency Pekerjaan Quess Recruit SDN. BHD

- Joint Venture Himmer Industrial Services (M) Sdn. Bhd.

- Entities having common directors Net Resources Investments Private Limited

Go Digit Infoworks Service Private Limited Go Digit General Insurance Limited

- Entity in which key managerial person has Care Works Foundation significant influence

Key executive management personnel

Ajit Isaac Chairman & Managing Director & Chief Executive Officer (upto 23 January 2018)

Chairman & Managing Director (w.e.f 24 January 2018)

Subrata Kumar Nag Whole time Director & Chief Finance Officer (upto 23 January 2018)

Executive Director & Chief Executive Officer (w.e.f 24 January 2018)

Manoj Jain Chief Financial Officer (w.e.f 24 January 2018)

Sudershan Pallap Company Secretary (upto 23 June 2018)

Rajesh Kumar Modi Company Secretary (w.e.f. 23 June 2018 upto 9 November 2018)

Kundan K. Lal Company Secretary (w.e.f. 17 April 2019)

* The subsidiary does not have any operation and is struck off from Register of Companies effective 11 March 2019.

^Managerial remuneration does not include cost of employee benefits such as gratuity, compensated absences and employee share-based payments since, provision for these are based on an actuarial valuation carried out for the Company as a whole.

Terms and conditions

All transactions with these related parties are priced at arm’s length basis and resulting outstanding balances are to be settled in cash within six months to one year of reporting date. None of the balances are secured.

16 Leases

Operating leases

The Company has taken offices and residential premises under operating leases. The leases typically run for a period of one to ten years, with an option to renew the lease after that period. Lease payments are renegotiated at the time of renewal.

*The Company has reviewed and reassessed the presentation of defined benefit obligations. Consequently, an amount of INR 2,507.57 lakhs representing provision for gratuity as at 31 March 2018, earlier classified under “current provisions” has been reclassified to “noncurrent provisions”.

For details about the related employee benefit expenses, see note 31.

The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act,1972. It entitles an employee, who has rendered at least five years of continuous 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 employees is administered through a trust with the Life Insurance Corporation of India. 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 286.20 lakhs contributions to its defined benefit plans in FY 2019-20

B Reconciliation of net defined benefit liability/assets

The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit liability/ assets and its components:

F sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, the defined benefit obligation would be as shown below:

17 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. However, the Company does not have any amounts payable to such enterprises as at 31 March 2019 based on the information received and available with the Company. Also the Company has not received any claim for interest from any supplier under the Micro, Small and Medium Enterprises Development Act, 2006.

18 share-based payments

A Description of share based payment arrangement

At 31 March 2019, the company has following the share-based payment arrangements: share option plans (equity settled)

IKYA Employee stock Option scheme 2009 (“scheme 2009”)

The Board of Directors in its meeting held on 19 November 2009 approved the ‘IKYA Employee Stock Option Scheme 2009’ (‘Scheme 2009’), under which stock options are granted to specified employees of the Company. The Scheme 2009 provides for the issue of 52,00,000 bonus adjusted options with an exercise price of INR 10.00 each that would eventually convert into 52,00,000 equity shares of INR 10.00 each. The options vest over a period of three years and are exercisable only on occurrence of the liquidity event. The Scheme 2009 defines ‘liquidity event’ as an Initial Public Offering by the Company (or one of its subsidiaries) or dilution of voting right below majority of the existing shareholders. All outstanding options were vested as at 31 March 2015. As at 31 March 2019, the Company has 6,71,340 exercisable options outstanding. (31 March 2018: 12,71,995).

Quess corp limited employee stock Option scheme 2015 (“scheme 2015”)

The Board of Directors in its meeting held on 22 December 2015 approved the ‘Quess Corp Limited Employee Stock Option Scheme 2015’ (‘Scheme 2015’), under which stock options are granted to specified employees of the Company. The Scheme 2015 provides for the issue of not more than 4,75,000 options (19,00,000 bonus adjusted options) with an exercise price of INR 10.00 each that would eventually convert into equity shares of INR 10.00 each. The options vest over a period of three years and are exercisable over a period of three years from the vesting date of each tranche. As at 31 March 2019, the Company has Nil exercisable options outstanding (31 March 2018: Nil).

B Measurement of fair values scheme 2009

The Company does not have any unvested option as at 1 April 2015 under Employee Stock Option Scheme 2009. The Company has elected for the exemption of Employee Share based payment under Ind AS 101 and accordingly fair valuation of vested options prior to 1 April 2015 was not carried out.

scheme 2015

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:

The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information.

The options outstanding as at 31 March 2019 have an exercise price of INR 10.00 (31 March 2018: INR 10.00) and a weighted average remaining contractual life of 2.17 years (31 March 2018: 3.17 years).

The weighted average share price at the date of exercise for share options exercised during the year ended 31 March 2019 is INR 10.00 (31 March 2018: INR 10.00).

The options outstanding as at 31 March 2019 have an exercise price of INR 10.00 (31 March 2018: INR 10.00) and a weighted average remaining contractual life of 0.58 years (31 March 2018: 1.38 years)

D Expense recognised in standalone statement of profit and loss

For details on the employee benefits expense, refer note 31.

19 In accordance with Ind AS 108, Operating segments, segment information has been provided in the consolidated financial statements of the Company and no separate disclosure on segment information is given in these standalone financial statements.

The above unsecured loans are given to subsidiaries at an interest rate equivalent to Government Bond rate. Loans do not have any fixed term and are receivable on demand. The above loans were given for the purpose of working capital requirements.

20 transfer pricing

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international as well as specified domestic transactions (if applicable) entered into with the associated enterprise during the financial year and expects such records to be in existence latest by the end of the stipulated timeline, as required by law. The Management is of the opinion that its international as well as specified domestic transactions (if any) are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that of provision for taxation.

21 During the year ended 31 March 2019, the Company entered into a Composite Scheme of Arrangement and Amalgamation (“the Scheme”) with Thomas Cook India Limited (“TCIL”), Travel Corporation (India) Limited, TC Travel and Services Limited, TC Forex Services Limited and SOTC Travel Management Private Limited and their respective shareholders and creditors, wherein TCIL will demerge its Human Resource Services business (including investment in shares of Quess Corp Limited) into the Company on a going concern basis. The Board vide its meeting dated 23 April 2018 approved the Scheme and filed the Scheme with BSE and NSE and is awaiting approval. As a part of consideration, the Company will issue its own shares to the shareholders of TCIL. The anticipated issue of shares to TCIL pursuant to the scheme of arrangement set out above is not expected to create a parent subsidiary or associate relationship with TCIL.

22 The Board of Directors of the Company at its Meeting held on 25 October 2018, approved the Scheme of Amalgamation (“Scheme”) among Quess Corp Ltd (“Transferee Company”) with four of its wholly owned subsidiaries viz. Aravon Services Private Limited (“ASPL”) , CentreQ Business Services Private Limited (“ CBSP”), Coachieve Solutions Private Limited (“COAL”), and Master Staffing Solutions Private Limited (“MSSP”) together known as (“Transferor Companies”) and their respective shareholders and creditors. Upon the Scheme becoming effective, the Transferor Companies stand dissolved, all the assets and liabilities of these Transferor Companies will be recorded at the carrying values in the consolidated financial statements. The carrying amount of the Transferee Company’s investment in the shares of the Transferor Companies, which shall stand cancelled in the terms of this Scheme, and the aggregate face value of such shares shall, subject to other provisions contained in the Scheme, be adjusted and reflected in the Capital Reserve of the Transferee Company. The Scheme upon approval by the Administration and Investment committee has been filed with NSE and BSE on 27 March 2019. The Scheme of amalgamation shall be subject to receipt of necessary approvals of shareholders and creditors, SEBI, Stock Exchanges, Regional Director and other regulatory authorities as may be required.

23 The Company through a subcontracting arrangement with its associate, Trimax Smart Infraprojects Private limited (TSIPL) provides hardware, software, maintenance and technical support to Trimax IT Infrastructure & Services Limited (“Trimax”). The joint venture partner is Trimax. Trimax executed an agreement with Smart City Ahmedabad Development Limited (“SCADL”) a government undertaking, in 2017 for supply, installation, commissioning and operation and maintenance for a Pan CIT infrastructure and intelligent command and control centre for the Ahmedabad Smart City (“Project”).

On 21 February 2019, the Hon’ble National Company Law Tribunal (“NCLT”), Mumbai Bench ordered the commencement of Corporate Insolvency Resolution Process for Trimax based on a petition filed by Corporation Bank which had declared Trimax as an NPA on 31 March 2018.

At 31 March 2019, the Company has an outstanding trade receivable of INR 4,763.85 lakhs, advance receivable of INR 1,136.51 lakhs and loan and interest receivable of INR 9,339.76 lakhs recoverable from TSIPL. Similarly, TSIPL and therefore Trimax has an outstanding trade receivable of INR 15,100.00 lakhs from Trimax and SCADL respectively.

As at 31 March 2019, the resolution professional handling the Insolvency process for Trimax, has acknowledged INR 15,100.00 lakhs as debts due to TSIPL. Further as per the Tripartite agreement between TSIPL, Trimax and Axis Bank (“Escrow Agent”), amounts recoverable from SCADL will be deposited into an escrow account and 99.00% of the money received will be paid to TSIPL. TSIPL will utilize the proceeds to settle the obligation of the Company. Currently, the Company considers the amounts due from Trimax as recoverable, based on an independent legal opinion, which provides that 99.00% of the amounts due from SCADL will be transferred to the Escrow account during the Insolvency process extending over 180 days from 21 February 2019.

Based on the current facts and circumstances, the Company considers the amounts outstanding to be eventually recoverable, although such recovery is contingent on the inherent uncertainties over the outcome and timing of the ongoing Insolvency process before the NCLT.

24 subsequent events

(a) Subsequent to 31 March 2019, the Company (“PAC”) through its subsidiary Conneqt Business Solutions Limited (“Acquirer”) has entered into a Share Purchase Agreement (“SPA”) with Mr. Ramamoorthy Jagadish and Mr. Adisheshan Saravanan (“SPA1”) and First Carlyle Ventures Mauritius (“SPA2”) and shareholders of Allsec Technologies Limited (“Target”) to acquire 1,33,11,060 fully paid equity shares. On 17 April 2019, the Acquirer has entered into a SPA with SPA1 to acquire 53,87,155 shares at INR 320.00 per share amounting to INR 17,238.90 lakhs and with SPA2 to acquire 39,61,940 shares at INR 250.00 per share amounting to INR 9,904.85 lakhs. Pursuant to Regulations 3(1) and 4 of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011, as amended (“SEBI SAST Regulations”) the Acquirer along with the PAC have made a Public Announcement (“PA”) for Open Offer (“Offer”) to the shareholders of the Target Company to acquire up to 39,61,965 fully paid equity shares of INR 10.00 each at a price of INR 320.00 per share, payable in cash. On 3 May 2019 the Draft Letter of Offer is filed with Securities and Exchange Board of India (“SEBI”). The Acquirer and the PAC have appointed Axis Capital Limited as the Managers to the Open Offer, in terms of Regulation 12 of the SEBI SAST Regulations.

(b) Subsequent to 31 March 2019, the Board of Directors of the Company at its meeting held on 17 April 2019, considered and approved additional investment of (a) INR 19,310.00 lakhs by way of subscription to equity shares to be issued and allotted by Conneqt Business Solutions Limited (“CBSL”) (“the Equity Subscription”) and (b) Not exceeding INR 21,000.00 lakhs by way of subscription to compulsorily convertible debentures (“CCDs”) to be issued and allotted by CBSL. Pursuant to the Equity Subscription, the total shareholding of the Company in CBSL will increase from 51.00% to 70.00%. The foregoing shareholding of Quess in CBSL may further increase on conversion of the CCDs.

(c) Subsequent to 31 March 2019, on 7 May 2019 the Company acquired balance 10.00% equity stake in GLIPL at a consideration of INR 280.00 lakhs and GLIPL has become 100.00% subsidiary of the Company.

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Mar 31, 2018

i) As per the amendment in the Finance Act 2016, deduction under Section 80JJAA of Income Tax Act, 1961 was extended across all sectors subject to fulfillment of conditions as stipulated in the said Section. The amendment was first applicable for the financial year ended 31 March 2017. Since the provision was subject to a number of clarifications and interpretations, the Company had obtained an opinion from an external advisor establishing its eligibility and method to compute deduction under Section 80JJAA during the current year. Resultantly, the Company had accounted for 80JJAA deduction and the related deduction/ adjustments for the year ended 31 March 2017 in the current year.

The movement of deferred tax aggregating to Rs, 10,680.97 lakhs for the year ended 31 March 2018 (31 March 2017: Rs, 1,000.67 lakhs) comprises Rs, 10,515.14 lakhs charged (31 March 2017:Rs, 1,107.19 lakhs credited) to Statement of Profit and Loss and Rs, 165.82 lakhs (31 March 2017 :Rs, 106.52 lakhs) charged to other comprehensive income.

Expenses incurred by the Company amounting to Rs, 2,961.53 lakhs, in connection with IPO have been adjusted towards the securities premium in accordance with Section 52 of the Companies Act, 2013

ii. During the year, the Company has completed the Institutional Placement Programme (IPP) and raised a total capital of Rs, 87,392.23 lakhs by issuing 10,924,029 equity shares of Rs, 10.00 each at a premium of Rs, 790.00 per equity share. The proceeds from IPP is Rs, 84,754.90 lakhs (net of estimated issue expenses).

Unutilized amounts of the issue have been temporarily deployed in fixed deposit with banks and invested in mutual funds which is in accordance with objects of the issue. The deployment of net proceeds is expected to be complete by 2020. Expenses estimated by the Company amounting to Rs, 2,637.33 lakhs, in connection with IPP have been adjusted towards the securities premium in accordance with Section 52 of the Companies Act, 2013.

iii. During the year ended 31 March 2018, the Company had issued 7,149,263 shares amounting to Rs, 714.93 lakhs for consideration for acquisition of Identified business of Manipal Integrated Services Private Limited (refer note 5.5 & note 49)

19.2 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 shares 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 its 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.

20.1 Securities premium

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013. During the previous year ended 31 March 2017, the Company has made an Initial Public Offer (IPO) and issued 12,618,297 equity shares at a premium of Rs, 307.00 per share. As per the requirement of section 52 of the Companies Act 2013, the Company has utilised the securities premium for the expenses incurred in connection with the Initial Public Offer (IPO) amounting to Rs, 2,961.53 lakhs.

During the year ended March 2018, the Company has made an Institutional Placement Program (IPP) and issued 10,924,029 equity shares at a premium of Rs, 790.00 per share. As per the requirement of section 52 of the Companies Act 2013, the Company has utilised the securities premium for the expenses incurred in connection with the Institutional Placement Program (IPP) amounting to Rs, 2,637.33 lakhs.

During the year ended March 2018, the Company has issued 7,149,263 equity shares at a premium of Rs, 633.85 per share to the shareholders of Manipal Integrated Services Private Limited pursuant to the scheme of amalgamation (refer note 49). As per the requirement of section 52 of the Companies Act 2013, the Company has utilised the securities premium for the expenses incurred in connection with this scheme of amalgamation amounting to Rs, 672.85 lakhs.

20.2 Share option outstanding account

The stock option outstanding account is used to recognise the grant date fair value of option issued to employees under employee stock option scheme.

20.3 Capital reserve

During the year ended 2015, the Company pursuant to the scheme of amalgamation acquired Avon Facility Management Services Limited with effect from 1 January 2014, Magna InfoTech Limited with effect from 1 January 2014 and Hofincons Infotech & Industrial Services Private Limited with effect from 1 July 2014. As per the accounting treatment of the scheme of amalgamation approved by the Honourable High Court of Karnataka the differential amount between the carrying value of investments and net assets acquired from the transferor companies has been accounted as Capital reserve.

20.4 Debenture redemption reserve

During the year ended March 2017, the Company has issued redeemable non-convertible debentures and has created a debenture redemption reserve as per the provisions of the Act.

20.5 Other comprehensive income

Re-measurement of the net defined benefit liability/(asset) comprises actuarial gain and losses and return on plan assets (excluding interest income).

Disputed claims

The Company has received a demand notice dated 12 June 2012 from Employees'' Provident Fund (EPF) Organization raising a demand of Rs, 428.90 lakhs for the period from April 2008 to February 2012 for not contributing Provident fund, Pension fund, Deposit Linked Insurance Fund and administration charges in accordance with the definition of basic wages as contained in Section 2(b) of Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. The Company, based on an expert''s opinion, is of the view that a part of the claim of the department is without foundation, while some part is still under debate and accordingly, provision is created based on the management estimate. The Company has appealed against the ruling which is pending in Employees'' Provident Fund Appellate Tribunal, New Delhi. Accordingly, the Company has created Rs, 179.67 lakhs provision.

The Company has received a demand notice dated 20 May 2017 from Assistant Commissioner of Commercial Taxes (ACCT) raising a demand of Rs, 375.60 lakhs for the period from January 2016 to January 2017 for availment under composition scheme with out separate registration certificate to run as a composite dealer. Avon Facility Management Services registered under the composite dealer scheme, was merged with Quess Corp Limited w.e.f 1 January 2014. Consequent to the merger Quess Corp Limited continued to pay VAT under composite scheme. The contention of the ACCT is that there was no separate registration post merger where as Quess Corp Limited have already intimated ACCT about the merger and also have applied electronically on K-Vat portal seeking separate registration under composite scheme. The Company has appealed against the ruling which is pending with the Joint commissioner of commercial taxes [ JCCT (A)] Bangalore. The Company has created a provision of Rs, 225.26 lakhs.

Information about the Company''s exposure to interest rate and liquidity risk is included in note 36.

23.1 The Company has taken cash credit and overdraft facilities having interest rate ranging from MCLR 0.35% p.a to MCLR 0.45% 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 the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

23.2 The Company has taken bill discounting facilities from banks having interest rate of MCLR 1.30% p.a. These facilities are repayable on demand and are secured primarily by way of pari passu first charge on the entire current and movable assets of the Company on both present and future excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements and assets created out of NSDC facility.

23.3 The Company has taken working capital loan from banks having interest rate ranging from 6.00% p.a. to 8.68% 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 the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

The Company''s exposure to currency and liquidity risk related to trade payables is disclosed in note 36.

*Current maturities of long-term borrowings includes loan outstanding of Rs, 43.99 lakhs (31 March 2017: Rs, 52.89 lakhs) towards vehicle loan taken from Mahindra & Mahindra Financial Services Limited, Kotak Mahindra Bank Limited and Kotak Mahindra Prime and is repayable in 36 equal monthly installments.

**Includes related party balances (refer note 41)

The Company''s exposure to currency and liquidity risk related to other current financial liabilities is disclosed in note 36.

*Current maturities of long term borrowings forms part of other financial liabilities

Investments in equity shares are not appearing as financial assets in the table above being investments in subsidiaries and associates accounted under Ind AS 27, Separate Financial Statements which is scoped out under Ind AS 109.

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 maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

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. The Company has not disclosed the fair values for loans, trade receivables, cash and cash equivalents including other bank balances, unbilled revenue and other financial assets because their carrying amounts are a reasonable approximation of their fair value.

2. Current investments: Fair value of quoted mutual funds units is based on quoted market price at the reporting date.

1. Non-convertible debentures: The fair values of the Company''s interest-bearing debentures are determined by using Discounted cash flow ("DCF") method using discount rate that reflects the issuer''s coupon rate as at the end of the reporting period. The Company has not disclosed the fair values because its carrying amount is a reasonable approximation of its fair value.

2. Borrowings: It includes cash credit and overdraft facilities, working capital loan and bill discounting facilities. These short-term borrowings are classified and subsequently measured in the standalone financial statements at amortized 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.

3. 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.

6. Financial risk management

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 ad hoc 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 from customers, loans and current asset. 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. Investments comprises of investment in mutual funds invested with mutual fund institutions having high credit ratings assigned by domestic credit rating agencies. The loan represents security deposits given to suppliers, employees and others. The credit risk associated with such deposits is relatively low.

Trade receivables and unbilled revenue

The Company''s exposure to credit risk is influenced mainly by its customers. However, the management also considers the factors that may influence the credit risk of its customer base.

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes external ratings, if they are available, financial statements, credit agency information, industry information and in some cases bank references.

The Company limits its exposure to credit risk from trade receivables by establishing a maximum payment period of one to three months for customers. The Company does not have trade receivables for which no loss allowance is recognized because of collateral.

Expected credit loss assessment for customers as at 31 March 2018 and 31 March 2017 are as follows:

The Company uses an allowance matrix to measure the expected credit loss of trade receivables from customers and unbilled revenue.

Based on industry practices and the business environment in which the entity operates, the management considers that trade receivables are in default (credit impaired) if the payments are more than 270 days past due. Loss rates are based on actual credit loss experience over the last six quarters.

These rates have been adjusted to reflect the Management''s view of economic conditions over the expected lives of the receivables.

The following table provides information about the exposure to credit risk and expected credit loss for trade receivables from customers and unbilled revenues:

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 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.

a) Financing arrangement

The Company maintains the following line of credit:

(i) The Company has taken working capital loan from banks having interest rate ranging from 8.10% p.a to 8.68% 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 the Company and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreement) both present and future of the Company.

(ii) The Company has taken cash credit and overdraft facilities having interest rate of 8.10% p.a to 8.68% p.a or 1 month MCLR. These facilities are repayable on demand and are secured primarily by way of pari passu first charge on the entire current assets of the Company and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

(iii) The Company has taken bill discounting facilities from banks having interest rate of MCLR 1.30% p.a. These facilities are repayable on demand and are secured primarily by way of pari passu first charge on the entire current and movable assets of the Company excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreement and assets created out of NSDC facility.

* includes current maturities of long-term borrowings

As disclosed in note 21 and note 23, the Company has a secured bank loan that contains a loan covenant. A future breach of covenant may require the Company to repay the loan earlier than indicated in the above table. Except for these financial liabilities, it is not expected that cash flows included in maturity analysis could occur significantly earlier.

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 optimizing the return.

a) Currency risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the respective functional currency of the Company. The Company is not exposed to significant currency risk as majority of the transactions are primarily denominated in Indian Rupees ("''"), which is the national currency of India.

A reasonably possible strengthening (weakening) of the USD, EURO, SAR and CAD against INR at 31 March 2018 and 31 March 2017 would have affected the measurement of financial instruments denominated in foreign currency and affected equity and the standalone statement of profit and loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant:

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 vehicle loans, working capital loan and debentures which carry fixed rate of interest and which do not expose it to interest rate risk. The borrowings also includes cash credit facilities and bill discounting facilities which carries variable rate of interest.

c) Price risk

(i) Price risk exposure

The Company''s exposure to price risk arises from investments held by the Company in the mutual fund units and classified as fair value through profit or loss in the standalone balance sheet.

To manage its price risk arising from investments in mutual fund units, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.

37. Capital management

The Company''s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. 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 maximize shareholder value.

The Company monitors capital using a ratio of ''adjusted net debt'' to ''equity''. For this purpose, adjusted net debt is defined as aggregate on non-current borrowings, current borrowings and current maturities of long-term borrowings less cash and cash equivalents.

i) Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgments/decisions pending with various forums/ authorities. The Company is contesting the demand and the Management believes that its position will likely be upheld. The Management believes that the outcome of this proceedings will not have material adverse effect on the Company''s financial position and results of operations.

ii) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its standalone financial statements. The Company does not expect outcome of these proceedings to have a material adverse effect on its financial position.

39.1 The Company has given guarantee to banks forthe loans given to related parties to make good any default made by its related parties in payment to banks on the loan availed by those related parties.

39.2 The Payment of Bonus (Amendment) Act, 2015 (hereinafter referred to as the Amendment Act, 2015) has been enacted on 31 December 2015, according to which the eligibility criteria of salary or wages has been increased from Rs, 10,000.00 per month to Rs, 21,000.00 per month [Section 2(13)] and the ceiling for computation of such salary or wages has been increased from Rs,

3,500.00 per month to Rs, 7,000.00 per month or the minimum wage for the scheduled employment, as fixed by the appropriate government, whichever is higher. The reference to scheduled employment has been linked to the provisions of the Minimum Wages Act, 1948. The Amendment Act, 2015 is effective retrospectively from 1 April 2014. Based on the same, the Company has computed the bonus for the year ended 31 March 2016 and 31 March 2017 aggregating to Rs, 4,440.46 lakhs and Rs, Nil respectively.

For the period ended 31 March 2015, the Company has obtained a legal opinion from an external lawyer and advised to take a position that the stay granted by the two High Courts of India on the retrospective application of the amendment would have a persuasive effect even outside the boundaries of the relevant states and accordingly no provision is currently required. The same if incurred by the Company will be billed back to customers including service charges.

41 Related party disclosures

i. Name of related parties and description of relationship:

- The Ultimate Holding Company Fairfax Financial Holdings Limited [till 28 February 2018]

- The Holding Company Thomas Cook (India) Limited (till 28 February 2018, refer note 19.3)

- Subsidiaries (including step su bsidiaries)

Aravon Services Private Limited Brainhunter Systems Limited., Canada Mindwire Systems Limited., Canada Brainhunter Companies LLC, USA Coachieve Solutions Private Limited MFX Infotech Private Limited

MFXchange (Ireland) Limited (dissolved w.e.f. 16 September 2017)

Quess (Philippines) Corp.

Quess Corp (USA) Inc.

Quesscorp Holdings Pte Limited, Singapore Quessglobal (Malaysia) SDN.BHD MFXchange Holdings Inc., Canada MFXchange US, Inc.

Quess Lanka Private Limited (formerly known as Randstad Lanka Private Limited)

Ikya Business Services (Private) Limited Inticore VJP Advanced Solutions Private Limited Comtel Solutions Pte Limited Dependo Logistics Solutions Private Limited Excelus Learning Solutions Private Limited CentreQ Business Services Private Limited

Conneqt Business Solutions Limited (formerly known as Tata Business Support Services Private Limited)

Vedang Cellular Services Private Limited

Master Staffing Solutions Private Limited

Golden Star Facilities and Services Private Limited

MFX Chile SpA

Comtelpro Pte. Limited

Comtelink SDN.BHD

Monster.com.SG PTE Limited

Monster.com.HK Limited

Monster Malaysia SDN.BHD

Monster.com (India) Private Limited

Quess Corp Vietnam Limited Liability Company

- Associates Terrier Security Services (India) Private Limited

Simpliance Technologies Private Limited Heptagon Technologies Private Limited Quess Recruit, Inc.

Trimax Smart Infraprojects Private Limited

- Joint venture Himmer Industrial Services (M) SDN.BHD

- Fellow subsidiary National Collateral Management Services Limited

- Entities having common directors Net Resources Investments Private Limited

Go Digit Infoworks Service Private Limited Go Digit General Insurance Limited -Entities in which key managerial Styracorp Management Services

personnel have significant influence IME Consultancy (till 31 March 2017)

Key executive management personnel

Ajit Isaac Chairman & Managing Director & Chief Executive Officer (upto 23 January

2018). Chairman and Managing Director (w.e.f 24 January 2018)

Subrata Kumar Nag Whole time Director & Chief Finance Officer (upto 23 January 2018).

Executive Director and Chief Executive Officer (w.e.f 24 January 2018)

Manoj Jain Chief Financial Officer (w.e.f 24 January 2018)

Balasubramanian S Chief Financial Officer (from 24 January 2017 to 4 April 2017)

Sudershan Pallap Company Secretary

N.V.S Pavan Kumar Company Secretary (till 28 November 2016)

42. Leases

Operating Leases

The Company has taken offices and residential premises under operating leases. The leases typically run for a period of one to ten years, with an option to renew the lease after that period. Lease payments are renegotiated at the time of renewal.

For details about the related employee benefit expenses, see note 31.

The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act,1972. It entitles an employee, who has rendered at least five years of continuous 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, currency risk, interest rate risk and market (investment) risk.

A. Funding

The Company''s gratuity scheme for core employees is administered through a trust with the Life Insurance Corporation of India. 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 Nil contributions to its defined benefit plans in FY 2018-19.

44. 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. However, the Company does not have any amounts payable to such enterprises as at 31 March 2018 based on the information received and available with the Company. Also the Company has not received any claim for interest from any supplier under the Micro, Small and Medium Enterprises Development Act, 2006.

45. Share-based payments

A. Description of share based payment arrangement

At 31 March 2018, the Company has the following the share-based payment arrangements:

Share option plans (equity settled)

IKYA Employee Stock Option Scheme 2009 (“Scheme 2009”)

The Company has introduced the ''IKYA Employee Stock Option Scheme 2009'' (''the Option Scheme 2009'') and has issued stock options of its own shares to specified employees of the Company. The scheme was approved by the Board of Directors in its meeting held on 19 November 2009. The Option Scheme 2009 provides for the creation and issue of 5,200,000 (bonus adjusted) options that would eventually convert into equity shares of '' 10.00 each in the hands of the employees. The options has a vesting schedule over a three year period and are exercisable only upon the occurrence of the liquidity event. The scheme defines ''liquidity event'' as an Initial Public Offering by the Company (or one of its subsidiaries) or dilution of voting right below majority of the existing shareholders. The exercise price of these stock options is '' 10.00. All outstanding options were vested as at 31 March 2015. As at 31 March 2018, the Company had 1,271,995 exercisable options outstanding (31 March 2017:

1,891,920).

Scheme 2015

The Company has introduced the ''Scheme 2015'' (''''the scheme'''') and has issued stock options of its own shares to specified employees of the Company. The scheme was approved by the Board of Directors in its meeting held on 22 December 2015. The Scheme 2015 provides for the creation and issue of 475,000.00 options that would eventually convert into equity shares of '' 10.00 each in the hands of the employees. The options has a vesting schedule over a three year period and are exercisable within 3 years from the vesting date of each tranche. The exercise price of these stock options is Rs, 10.00. None of the outstanding options has been vested as at 31 March 2018. As at 31 March 2018, the Company had nil exercisable options outstanding (31 March 2017: nil).

B. Measurement of fair values Scheme 2009

The Company does not have any unvested option as at 1 April 2015 under Employee Stock Option Scheme 2009. The Company has elected for the exemption of Employee Share based payment under Ind AS 101 and accordingly fair valuation of vested options prior to 1 April 2015 was not required.

Scheme 2015

The fair value of Employee Stock Options has been measured using Black Scholes Model of pricing. The fair value per Stock option of grant with vesting period of 1 year, 2 years and 3 years are Rs, 885.10, Rs, 885.60 and Rs, 886.10 respectively based on the Black Scholes Formula. The fair value has been calculated on the date of grant i.e. 18 August 2017.

The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information.

C. Reconciliation of outstanding share options

The number and weighted average exercise prices of share options under the share option plans were as follows:

The options outstanding as at 31 March 2018 have an exercise price of Rs, 10.00 (31 March 2017: Rs, 10.00) and a weighted average remaining contractual life of 3.17 years (31 March 2017: 4.17 years)

The weighted average share price at the date of exercise for share options exercised during the year ended 31 March 2018 is Rs, 10.00 (31 March 2017: Rs, 10.00)

* For the purposes of this clause, the term ‘Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016

48. In accordance with Ind AS 108, Operating segments, segment information has been provided in the consolidated financial statements of the Company and no separate disclosure on segment information is given in these standalone financial statements.

49. Business Acquisition

During the previous year ended 31 March 2017, the Company had entered into definitive agreement with Manipal Integrated Services Private Limited ("MIS") dated 28 November 2016 to demerge the Facility Management Business and Catering Business (together means "Identified Business" or "Merged Business") of MIS through the Scheme of Arrangement ("the Scheme") at a consideration of '' 67,909.00 lakhs. The Board vide its meeting dated 28 November 2016 had approved the draft Scheme of Arrangement and filed the Scheme with BSE and NSE. The Company in the previous year had received the approval from BSE and NSE dated 23 March 2017 and 27 March 2017 respectively.

During the year ended 31 March 2018, the Company has obtained approval from the National Company Law Tribunal ("NCLT") dated 30 November 2017, to merge Identified Business of MIS. The scheme has been filed with Registrar of Companies ("ROC") on 13 December 2017. The appointed date of the scheme is 1 December 2016 which is the effective date of merger approved by NCLT. The NCLT order override the requirements under Ind AS 103, Business Combinations, and hence the Company has considered the date of acquisition as 1 December 2016. The Company has considered the said merger as a business acquisition from the appointed date and accordingly have restated its previous years numbers including Earnings Per Share ("EPS").

The identified business includes two subsidiaries namely Master Staffing Solutions Private Limited (100.00% owned) and Golden Star Facilities & Services Private Limited (60.00% owned). The Company has a contractual commitment to acquire the no controlling interest in Golden Star Facilities & Services Private Limited. During the year, the Company has completed the purchase price allocation and has recognized assets and liabilities of the acquired business at its fair value including intangible assets. Post allocation of purchase price, the Company has recorded a goodwill of Rs, 55,301.60 lakhs.

(i) As per the Scheme, the Company subscribed to preference shares amounting to INR 22,000.00 lakhs of MISP for securing an interest in the facility management business and catering business, development of the same and facilitating the proposed demerger as contemplated in the Scheme. This initial investment shall stand cancelled as on the appointed date and the Scheme becoming effective, and will be evaluated for the computation of goodwill/ capital reserve/ intangible assets. As per the terms of scheme of arrangement, on the date of NCLT order, the preferred shares stands cancelled and it forms part of the purchase consideration.

(ii) As per the Scheme, upon the Scheme becoming effective, as consideration for the proposed merger, the Company shall issue equity shares as fully paid to the equity shareholders of MISP as per the share entitlement ratio. The share entitlement ratio shall be: 165 equity shares of Quess Corp Limited of INR 10.00 each fully paid for every 280 equity shares of MISP of INR 10.00 each fully paid up. Accordingly, the Company had issued 7,149,263 equity shares.

The above unsecured loans are given to subsidiaries at an interest rate equivalent to Government Bond rate. Loans do not have any fixed term and are receivable on demand. Out of total repayment of Rs, 3,261.57 lakhs (31 March 2017: Rs, 2,955.43 lakhs) an amount of Rs, 58.58 lakhs (31 March 2017: Rs, 873.92 lakhs) has been adjusted against trade payables. The above loans were given for the purpose of working capital requirements.

52. Transfer pricing

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international as well as specified domestic transactions (if applicable) entered into with the associated enterprise during the financial year and expects such records to be in existence latest by the end of the stipulated timeline, as required by law. The Management is of the opinion that its international as well as specified domestic transactions (if any) are at arm''s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that of provision for taxation.

53. Post balance sheet events

Subsequent to the year ended 31 March 2018, the Company has acquired the controlling stakes in Green Piece Landscapes India Private Limited and Qdigi Services Limited (formerly known as HCL Computing Products Limited).

Post 31 March 2018, the Company has entered into a Composite Scheme of Arrangement and Amalgamation ("Scheme") with TCIL, Travel Corporation (India) Limited, TC Travel and Services Limited, TC Forex Services Limited and SOTC Travel Management Private Limited and their respective shareholders and creditors, wherein TCIL will demerge its Human Resource business (including investment in shares of Quess Corp Limited) into Quess Corp Limited. As a part of the consideration, the Company will issue its own shares to the shareholders of TCIL and cancel their own shares received from TCIL. Accordingly, TCIL will cease to be the shareholder of Quess Corp Limited upon the Scheme becoming effective.

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Mar 31, 2017

1 Company overview

Quess Corp Limited (formerly known as IKYA HUMAN CAPITAL SOLUTIONS LIMITED) (‘the Company’) is a public limited company incorporated and domiciled in India. The registered office of the Company is located at Bengaluru, Karnataka, India. The Company is engaged in the business of providing services in global technology solutions, people and services, integrated facility management and industrials segments.

The Company changed its name to Quess Corp Limited effective from 2 January 2015. The Company undertook an Initial public offer of equity shares and subsequently got its equity shares listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) effective 12 July 2016.

With effect from 14 May 2013, Thomas Cook (India) Limited (“TCIL”) has become the parent company and Fairfax Financial Holdings Limited (‘FFHL’) has become the ultimate holding company of the Company.

2.1 During the year, the Company has entered into an Asset Transfer Agreement with CAARPUS Technology Services Limited (“Transferor”) and its founder Mr. L Bharani Raj dated 30 September 2016 to purchase the business asset (copyright and trademarks for using E-catalogue software and other intangibles). The transferor is engaged in the business of providing technology based solutions for material management, coding, catalogue, inventory management etc. The total consideration paid is Rs.50.00 lakhs.

In accordance with Ind AS 103, the consideration paid requires to be allocated across identifiable assets acquired, at their respective fair values. Accordingly, the Company has recognised intangible assets aggregating to Rs.4.80 lakhs and remaining amount aggregating to Rs.45.20 lakhs is accounted as goodwill.

2.2 During the year, 2014 the Company pursuant to the scheme of amalgamation acquired Avon Facility Management Services Limited with effect from 1 January 2014, Magna InfoTech Limited with effect from 1 January 2014 and Hofincons Infotech & Industrial Services Private Limited with effect from 1 July 2014. The management of Quess Corp Limited appointed external valuer to provide a valuation of the Magna brand, Avon brand and Hofincons brand (“Brand”) as on 31 December 2013 (applicable for Magna and Avon) and 30 June 2014 (applicable for Hofincons) (“Valuation Date”) in connection with restructuring exercise for valuation of brand. Subsequently, the Company on such amalgamation, has identified and recognised Brand amounting to Rs.9,682.00 lakhs on such valuation.

Brand is amortised over a period of 15 years and the written down value as at 31 March 2017 is Rs.7,656.51 lakhs (31 March 2016: Rs.8,301.50 lakhs)

2.3 The Company has entered into an agreement with MFX Infotech Private Limited for development of its payroll management system and other applications. The contract is entered on a time and material basis at cost plus agreed markup. The estimated cost for these software development is Rs.1,048.67 lakhs out of which cost incurred amounting to Rs.711.37 lakhs is shown as intangible assets under development.

3.1 During the year, the Company has entered into a Share Subscription Agreement dated 28 November 2016 with Inticore VJP Advance Systems Private Limited (“Inticore”) to subscribe 73.99% of shares for a consideration of Rs.349.99 lakhs. The Company acquired controlling stake on 1 December 2016 and Inticore has become the subsidiary of the Company.

3.2 During the year, the Company has incorporated Dependo Logistics Solutions Private Limited as a wholly owned subsidiary on 8 September 2016 by subscribing to 10,000 equity shares of Rs.10 each.

3.3 During the year, the Company has incorporated CenterQ Business Solutions Private Limited as a wholly owned subsidiary on 9 November 2016 by subscribing to 10,000 equity shares of Rs.10 each.

3.4 During the year, the Company has incorporated Excelus Learning Solutions Private Limited as a wholly owned subsidiary on 23 November 2016 by subscribing to 10,000 equity shares of Rs.10 each.

3.5 During the year, the Company has entered into Share Purchase Agreement (SPA) with Terrier Security Services (India) Private Limited (“Terrier”) and its shareholders on 19 October 2016, to acquire 74% stake in Terrier subject to the approval of Foreign Investment Promotion Board (“FIPB”) for consideration as per the terms mentioned in the SPA. The Company has currently acquired 49% stake on 9 December 2016 for a consideration of Rs.7,200 lakhs and accordingly, Terrier has become an associate of the Company.

3.6 During the year, the Company has entered into Share Subscription Agreement (“SSA”) dated 19 October 2016 with Simpliance Technologies Private Limited (“Simpliance”) and its shareholders to acquire equity stake of 45% in Simpliance for a consideration of Rs.250 lakhs. The Company has currently acquired 27% equity stake for a consideration of Rs.113 lakhs and accordingly Simpliance has become an associate of the Company.

3.7 During the year, the Company has entered into definitive agreement with Manipal Integrated Services Private Limited (“MIS”) dated 28 November 2016 to demerge the Facility Management Business and Catering Business (together means “Identified Business”) of MIS through the Scheme of Arrangement (“the Scheme”) into the Company. The Board vide its meeting dated 28 November 2016 has approved the draft scheme of arrangement and filed the Scheme with BSE and NSE. The Company has received the approval from BSE and NSE dated 23 March 2017 and 27 March 2017 respectively and has further filed it with National Company Law Tribunal (“NCLT”), subsequent to the balance sheet date. In pursuance of the Scheme, Company has invested Rs.22,000 lakhs by subscribing to Compulsory Convertible Preference Shares of MIS as part of the purchase consideration.

The Scheme requires the Company to account for the acquisition, on and from 1 December 2016, i.e. appointed date. In accordance with Indian Accounting Standard 103, Business Combinations, (Ind AS 103), the accounting for the acquisition has to be done on and from the “Acquisition date”. As per paragraph 9 of Ind AS 103, the acquisition date is the date on which the acquirer obtains control of the acquiree and is generally the date on which the acquirer legally transfers the consideration, acquires the assets and assumes the liabilities of the acquiree as on the closing date. The appointed date (1 December 2016) as per the Scheme is not the same as the acquisition date, as defined under Ind AS 103. The accounting from the appointed date as mentioned in the Scheme is subject to regulatory approval.

* Investments include interest on corporate guarantee given to subsidiaries amounting to Rs.476.34 lakhs (31 March 2016: Rs.128.10 lakhs)

4.1 Reconciliation of number of shares outstanding at the beginning and at the end of the reporting period

(i) During the year ended 31 March 2017, the Company has completed the Initial Public Offering (IPO) and raised a total capital of Rs.40,000 lakhs by issuing 12,618,297 equity shares of Rs.10 each at a premium of Rs.307 per equity share. The equity shares of the Company got listed on NSE and BSE effective from 12 July 2016. The proceeds from IPO is Rs.37,038.47 lakhs (net of estimated issue expenses).

Unutilised amounts of the issue as at 31 March 2017 have been temporarily deployed in fixed deposit with banks which is in accordance with objects of the issue. The same needs to be utilised by 2018.

Expenses incurred by the Company estimated at Rs.2,961.53 lakhs, in connection with IPO have been adjusted towards the securities premium in accordance with Section 52 of the Companies Act, 2013. Till 31 March 2017, the Company has incurred Rs.2,746.04 lakhs of IPO expenses and the remaining amount of Rs.215.49 lakhs is accrued and expected to be utilized by June 2017.

(ii) Right issue

During the previous year ended 31 March 2016, the Company vide its Board meeting dated 6 November 2015, has offered 2,560,000 equity shares of Rs.10 each on right basis, in pursuance of the requirements of Section 62 of the Companies Act, 2013 read with the Companies (Share capital and Debentures) Rules, 2014 in the ratio of 0.099 equity shares for every equity share held in the Company as on date to the existing shareholders. Thomas Cook (India) Ltd had resolved not to subscribe to the right issue and had obtained the shareholders approval on 12 December 2015 and accordingly a resolution of renunciation was approved by the Board of Directors of the Thomas Cook (India) Ltd vide circular resolution dated 18 December 2015 for renouncing 1,957,302 equity shares in favour of Net Resources Investments Private Limited. On 21 December 2015, Mr. Ajit Isaac renounced his rights of 461,516 shares in favour of Net Resources Investments Private Limited.

(iii) Bonus issue

During the year ended 31 March 2016, the Company in pursuant of the requirements of Section 63(1) of the Companies Act, 2013 and after obtaining the consent of shareholders at the Extraordinary General Meeting held on 23 December 2015 and vide its Board meeting held on 5 January 2016 had passed a resolution to issue 3 fully paid up equity shares of Rs.10 each for every 1 fully paid up equity share of Rs.10 each to the existing shareholder whose name appeared in the register of members as on 23 December 2015 by utilizing securities premium account. The bonus shares shall rank pari passu in all respects including dividend with the existing equity shares of the Company. The Company accordingly has issued the bonus shares as follows:

4.2 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 shares 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 its 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.

4.3 The Company has not made any buy back of shares or issued any shares for consideration other than cash, during the period of five years immediately preceding the balance sheet date. However, the Company has issued bonus shares in the previous financial year and equity shares have been issued under Employee Stock Option Plan for which only exercise price has been received in cash i.e. Rs.10 per share (refer note 47).

5.1 Securities premium account

Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013. During the year, the Company has made an Initial Public Offer (IPO) and issued 12,618,297 equity shares at a premium of Rs.307 per share. As per the requirement of Section 52 of the Companies Act, 2013 the Company has utilised the securities premium for the expenses incurred in connection with the Initial Public Offer (IPO) amounting to Rs.2,961.53 lakhs.

5.2 Stock options outstanding account

The stock option outstanding account is used to recognise the grant date fair value of option issued to employees under employee stock option scheme.

5.3 Capital reserve account

During the year ended 2015, the Company pursuant to the scheme of amalgamation acquired Avon Facility Management Services Limited with effect from 1 January 2014, Magna InfoTech Limited with effect from 1 January 2014 and Hofincons Infotech & Industrial Services Private Limited with effect from 1 July 2014. As per the accounting treatment of the scheme of amalgamation approved by the Honourable High Court of Karnataka the differential amount between the carrying value of investments and net assets acquired from the transferor companies has been accounted as Capital reserve.

5.4 Debenture redemption reserve

During the year, the Company has issued redeemable non-convertible debentures and has created a debenture redemption reserve as per the requirement of Companies Act, 2013 .

5.5 Other comprehensive income

Remeasurement of the defined benefit liability/ (asset) comprises actuarial gain and losses and return on plan assets (excluding interest income).

6.1 Non-convertible debentures

During the year ended 31 March 2017, the Company in its Board of Directors meeting held on 28 November 2016 passed a resolution to issue 1,500 redeemable non-convertible debentures at a face value of Rs.10 lakh aggregating to Rs.15,000 lakhs. The proceeds from debentures shall be utilised for Company’s long-term working capital, payment of transaction related expenses related to capital issue and general corporate purpose but shall not be used for any real estate business, equity trading/speculative business.

The debentures carry a coupon rate of 8.25% p.a. payable annually and is to be redeemed after 5 years from the date of allotment without any redemption premium. These debentures are secured by way of exclusive charge on all the movable and immovable assets of the Company.

Disputed claims

The Company has received a demand notice dated 12 June 2012 from Employees’ Provident Fund (EPF) Organisation raising a demand of Rs.428.90 lakhs for the period from April 2008 to February 2012 for not contributing Provident fund, Pension fund, Deposit Linked Insurance Fund and administration charges in accordance with the definition of basic wages as contained in Section 2(b) of Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The Company, based on an expert’s opinion, is of the view that a part of the claim of the department is without foundation, while some part is still under debate and accordingly, provision is created based on the management estimate. The Company has appealed against the ruling which is pending in Employees’ Provident Fund Appellate Tribunal, New Delhi.

7.1 The Company has taken working capital loan from banks having interest rate ranging from 6% to 9.95%. These facilities are repayable on demand and are secured primarily by way of pari passu first charge on the entire current assets of the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company

7.2 The Company has taken cash credit and overdraft facilities having interest rate ranging from MCLR 0.35% to MCLR 2.10%. These facilities are repayable on demand and are secured primarily by way of pari passu first charge on the entire current assets of the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

7.3 The Company has taken bill discounting facilities from banks having interest rate of MCLR 1.30%. These facilities are repayable on demand and are secured primarily by way of pari passu first charge on the entire current and movable assets of the Company on both past and future excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements and assets created out of NSDC facility.

8.1 Details of CSR expenditure

As per Section 135 of the Companies Act, 2013 a Company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief and rural development projects. A CSR committee has been formed by the Company as per the Act. The funds required to be spent and funds spent during the year are explained below.

9 Financial instruments - fair value and risk management 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 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.

Investment in equity shares are not appearing as financial asset in the table above being investment in subsidiaries and associates accounted under Ind AS 27, Separate Financial Statements which is scoped out under Ind AS 109.

Fair value hierarchy

Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes investment in equity, preference securities, mutual funds and debentures 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 maximize the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for investment in unquoted preference securities and non-convertible debentures 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 Fair value of all these financial assets are measured at balance sheet date value, as most of them are settled within a short period and so their fair value are assumed to be almost equal to the balance sheet date value.

2 Investment in preference shares (unquoted): The fair values of the unquoted investments have been estimated using a discounted cash flow model (“DCF”). The valuation requires management to make certain assumptions with respect to inputs used, including revenue, EBITDA and discount rate. The probabilities of the various estimates within the range can be reasonably assessed and are used in management’s estimate of fair value for this investment.

B Financial Liabilities:

1 Non-convertible debentures (quoted): The fair values of the Company’s interest-bearing debentures are determined by using DCF method using discount rate that reflects the issuer’s coupon rate as at the end of the reporting period. The debentures are issued during the year, therefore fair value of the debentures is almost equal to balance sheet date value.

2 Borrowings: It also includes cash credit and overdraft facilities, working capital loan and bill discounting facilities. These short-term borrowings are classified and subsequently measured in the financial statements at amortized 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.

3 National Skill Development Centre Loan: This includes term loan from National Skill Development Centre of Rs.300 lakhs taken by the Company which is secured against hypothecation of project assets. The loan is taken at 6% p.a. simple interest. As the specific project for which the loan was sanctioned could not be implemented and the entire loan became due for repayment in 2015, this has been classified under other current financial liabilities. Therefore, the fair value of the loan is equal to the balance sheet date value.

4 Trade payables and other liabilities: Fair values of trade and other liabilities are measured at balance sheet value, as most of them are settled within a short period and so their fair values are assumed to be almost equal to the balance sheet values.

Valuation inputs and relationships to fair value

The following tables show the valuation techniques used in measuring Level 3 fair values, as well as the significant unobservable inputs used (refer note (A)(2) above for valuation technique adopted):

10 Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk ;

- Liquidity risk ; and

- Market risk.

Risk management framework

The Company’s Board of Directors 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 auditors. Internal Audit function includes both regular and ad hoc 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 from customers, loans and current 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.

Trade and other receivables

The Company’s exposure to credit risk is influenced mainly by its customers. However, the management also considers the factors that may influence the credit risk of its customer base. The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, if they are available, financial statements, credit agency information, industry information and in some cases bank references.

The Company limits its exposure to credit risk from trade receivables by establishing a maximum payment period of one to three Months for customers. The Company does not have trade receivables for which no loss allowance is recognised because of collateral.

Expected credit loss assessment for corporate customers as at 1 April 2015, 31 March 2016 and 31 March 2017 are as follows:

The Company uses an allowance matrix to measure the expected credit loss of trade receivable from customers. Based on industry practices and the business environment in which the entity operates, the management considers that trade receivables are in default (credit impaired), if the payments are more than 270 days past due. Loss rates are based on actual credit loss experience over the last six quarters.

These rates have been adjusted to reflect the management’s view of economic conditions over the expected lives of the receivables.

Movement in allowance for impairment in respect of trade receivables.

The movement in the allowance for impairment in respect of trade and other receivables during the year is as follows.

There is no significant movement in the impairment loss allowance during 2016-17.

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.

i) Financing arrangement

The Company maintains the following line of credit:

(i) The Company has taken working capital loan from banks having interest rate ranging from 6% to 9.95%. These facilities are repayable on demand and are secured primarily by way of pari passu first charge on the entire current assets of the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

(ii) The Company has taken cash credit and overdraft facilities having interest rate ranging from MCLR 0.35% to MCLR 2.10%. These facilities are repayable on demand and are secured primarily by way of pari passu first charge on the entire current assets of the Company on both present and future and collateral by way of pari passu first charge on the entire movable assets of the Company (excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements) both present and future of the Company.

(iii) The Company has taken bill discounting facilities from banks having interest rate of MCLR 1.30%. These facilities are repayable on demand and are secured primarily by way of pari passu first charge on the entire current and movable assets of the Company on both past and future excluding charge on vehicles/equipments purchased /to be purchased under lease agreements/ hire purchase agreements and assets created out of NSDC facility.

The table below provides details regarding the contractual maturities of significant financial liabilities as at 31 March 2017, 31 March 2016 and 1 April 2015. The amounts are gross and undiscounted contractual cash flows and includes contractual interest payments and excludes netting arrangements:

As disclosed in note 20 and note 23, the Company has a secured bank loan that contains a loan covenant. A future breach of covenant may require Company to repay the loan earlier than indicated in the above table. Except for these financial liabilities, it is not expected that cash flows included in maturity analysis could occur significantly earlier.

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.

i) Currency risk

The Company is exposed to currency risk to the extent that there is a mismatch between the currencies in which sales, purchases and borrowings are denominated and the respective functional currency of the Company. The Company is not exposed to significant currency risk as majority of the transactions are primarily denominated in Indian Rupees (“‘“), which is the national currency of India.

Sensitivity analysis

A reasonably possible strengthening/(weakening) of the USD, EURO, SAR and CAD against ’ at 31 March 2017 and 31 March 2016 would have affected the measurement of financial instruments denominated in foreign currency and affected equity and profit and loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.

ii) 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 borrowings comprises of vehicle loans, working capital loan and debentures which carries fixed rate of interest, which do not expose it to interest rate risk. However, non-convertible debentures have a fixed coupon rate but there is a condition of call/put option associated with change in interest rate exposing it to interest rate risk .

11 Capital management

The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. 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 maximize shareholder value.

The Company monitors capital using a ratio of ‘adjusted net debt’ to ‘equity’. For this purpose, adjusted net debt is defined as aggregate of Non-current borrowing and current borrowing, less cash and cash equivalents.

12.1 The Payment of Bonus (Amendment) Act, 2015 (hereinafter referred to as the Amendment Act, 2015) has been enacted on 31 December 2015, according to which the eligibility criteria of salary or wages has been increased from Rs.10,000 per month to Rs.21,000 per month (Section 2(13)) and the ceiling for computation of such salary or wages has been increased from Rs.3,500 per month to Rs.7,000 per month or the minimum wage for the scheduled employment, as fixed by the appropriate government, whichever is higher. The reference to scheduled employment has been linked to the provisions of the Minimum Wages Act, 1948. The Amendment Act, 2015 is effective retrospectively from 1 April 2014. Based on the same, the Company has computed the bonus for the year ended 31 March 2016 and 31 March 2017 aggregating to Rs.4,440.46 lakhs and Rs.NIL respectively.

For the period ended 31 March 2015, the Company has obtained a legal opinion from an external lawyer and advised to take a position that the stay granted by the two High Courts of India on the retrospective application of the amendment would have a persuasive effect even outside the boundaries of the relevant states and accordingly no provision is currently required. The same if incurred by the Company will be billed back to customers including service charges.

13 Segment reporting

The Chief Executive Officer and Managing Director of the company has been identified as the Chief Operating Decision Maker (“CODM”) as defined by Ind AS 108, Operating Segments. The CODM evaluates the Company’s performance and allocates resources based on an analysis of various performance indicators by service offerings. Accordingly, segment information has been presented for service offerings.

Operating Segment

The Company’s business is concentrated in various service offerings like temporary staffing services, executive search, contingency recruitment, housekeeping and facility management services, food services, skill development and training services and accordingly, primary segment information is presented on the following service offerings:

Segment information is prepared in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole. The Company has a corporate center, which provides various accounting and administrative support functions. Segment information for this activity has been aggregated under “Unallocated”. Revenue identifiable to business segments have been disclosed under the respective business segment. Segment costs include employee benefit expenses, cost of material consumed, recruitment and training expenses, stores and tools consumed, subcontractor charges and operating expenses that can be allocated on a reasonable basis to respective segments. Assets and liabilities in relation to segments are categorized based on items that are individually identifiable to that segment. Certain assets and liabilities are not specifically allocable to individual segments as these are used interchangeably. The Company therefore believes that it is not practical to provide segment disclosures relating to such assets and liabilities and accordingly, these are separately disclosed as ‘unallocated’. All fixed assets of the Company are located in India.

14 Related party disclosures

(i) Name of related parties and description of relationship:

- Ultimate Holding Company Fairfax Financial Holdings Limited

- Holding Company Thomas Cook (India) Limited

- Subsidiaries (including step subsidiaries) Coachieve Solutions Private Limited

MFX Infotech Private Limited Brainhunter Systems Ltd., Canada

Mindwire Systems Ltd., Canada (formerly known as ZYLOG SYSTEMS (OTTAWA) LTD.)

Brainhunter Companies Canada Inc., Canada Brainhunter Companies LLC, USA

Quess (Philippines) Corp. (formerly known as Magna Ikya Infotech Inc., Philippines)

Quess Corp (USA) Inc. (formerly known as Magna Infotech Inc.)

Quesscorp Holdings Pte Ltd, Singapore

Quessglobal (Malaysia) SDN. BHD. (formerly known as Brainhunter SDN. BHD., Malaysia)

Aravon Services Private Limited (formerly known as ARAMARK India Private Limited)

Ikya Business Services (Private) Limited MFXchange Holdings Inc., Canada MFXchange (Ireland) Limited MFXchange US, Inc.

MFX Roanoke Inc., USA (merged with MFXchange US, Inc. effective 31 December 2015)

Quess Lanka Private Limited (formerly known as Randstad Lanka Private Limited)

Dependo Logistics Solutions Private Limited

Inticore VJP Advanced Solutions Private Limited

Comtel Solutions Pte Ltd

CenterQ Business Solutions Private Limited

Excelus Learning Solutions Private Limited

- Associates Terrier Security Services (India) Private Limited

Simpliance Technologies Private Limited

- Joint Venture of a subsidiary Himmer Industrial Services (M) SDN. BHD.

- Fellow subsidiary National Collateral Management Services Limited

- Entity having common directors Net Resources Investments Private Limited

- Entities in which key managerial personnel have significant influence

Styracorp Management Services IME Consultancy

Key executive management personnel

Ajit Isaac Chairman & Managing Director & CEO

Subrata Kumar Nag Executive, Whole-time Director & Chief Financial Officer (till 23 January 2017 and from 4 April 2017)

Whole time Director (24 January 2017 to 4 April 2017)

Balasubramanian S Chief Financial Officer (from 24 January 2017 to 4 April 2017)

N.V.S. Pavankumar Company Secretary (till 28 November 2016)

Sudershan Pallap Company Secretary (from 28 November 2016)

**Renunciation of right issues

During the previous year ended 31 March 2017, the Company vide its Board meeting dated 6 November 2015, has offered 2,560,000 equity shares of Rs.10 each on right basis, in pursuance of the requirement of Section 62 of the Companies Act, 2013 read with the Companies (Share capital and Debentures) Rules, 2014 in the ratio of 0.099 equity shares for every equity share held in the Company as on date to the existing shareholders. Thomas Cook (India) Limited had resolved not to subscribe to the right issue and had obtained the shareholders approval on 12 December 2015 and accordingly, a resolution of renunciation was approved by the Board of Directors of the Thomas Cook (India) Limited vide circular resolution dated 18 December 2015 for renouncing 1,957,302 equity shares in favour Net Resources Investments Private Limited. On 21 December 2015, Mr. Ajit Isaac renounced his rights of 461,516 shares in favour of Net Resources Investments Private Limited.

15 Leases

Operating Leases

The Company has taken, offices and residential premises under operating leases. The leases typically run for a period of one to ten years, with an option to renew the lease after that period. Lease payments are renegotiated at the time of renewal.

Non-cancellable operating lease rentals payable (minimum lease payments) under these leases are as follows:

The Company does not have any assets relating to employee benefits. For details about the related employee benefit expenses, see note 31.

The Company has a defined benefit gratuity plan in India, governed by the Payment of Gratuity Act,1972. It entitles an employee, who has rendered at least five years of continuous 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, currency risk, interest rate risk and market (investment) risk.

A Funding

The Company’s gratuity scheme for core employees is administered through a trust with the Life Insurance Corporation of India. 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.

B Reconciliation of the net defined benefit liability/asset

The following table shows a reconciliation from the opening balances to the closing balances for the net defined benefit liability/ asset and its components:

C Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below:

16 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. However, the Company does not have any amounts payable to such enterprises as at 31 March 2017 based on the information received and available with the Company.

Also, the Company has not received any claim for interest from any supplier under the Micro, Small and Medium Enterprises Development Act, 2006.

17 Employee stock options

A Description of share based payment arrangement

The Company has introduced the ‘IKYA Employee Stock Option Scheme 2009’ (‘the Option Scheme 2009’) and has issued stock options of its own shares to specified employees of the Company. The scheme was approved by the Board of Directors in its meeting held on 19 November 2009. The Option Scheme 2009 provides for the creation and issue of 5.200.000 (bonus adjusted) options that would eventually convert into equity shares of Rs.10 each in the hands of the employees. The options have a vesting schedule over a three year period and are exercisable only upon the occurrence of the liquidity event. The scheme defines ‘liquidity event’ as an Initial Public Offering by the Company (or one of its subsidiaries) or dilution of voting right below majority of the existing shareholders. The exercise price of these stock options is Rs.10. All outstanding options were vested as at 31 March 2015. As at 31 March 2017, the Company had 1,891,920 exercisable options outstanding [31 March 2016: 2,729,528 (bonus adjusted)]

The Company, pursuant to resolutions passed by the Board and its Shareholders resolutions dated 22 December 2015 and 23 December 2015, respectively, adopted Quess Corp Limited Employee Stock Option Scheme 2015 (“ESOP 2015”). Pursuant to ESOP 2015, options to acquire Equity Shares may be granted to eligible employees (as defined in ESOP 2015). The aggregate number of Equity Shares, which may be issued under ESOP 2015, shall not exceed 1.900.000 (bonus adjusted) equity shares. The Company has not granted any options till 31 March 2017 under ESOP 2015 scheme.

B Measurement of fair values

The Company does not have any unvested option as at 1 April 2015 under Employee Stock Option Scheme 2009. The Company has elected for the exemption of Employee Share based payment under Ind AS 101 and accordingly fair valuation of vested options prior to 1 April 2015 was not required.

C Reconciliation of outstanding share options

The number and weighted average exercise prices of share options under the share option plans were as follows:

During the previous year, 188,618 options were forfeited and resultantly an amount of Rs.12,655,982 was transferred from share option outstanding account to General Reserve. Further, as detailed in note 3, the Company has issued Bonus shares and accordingly, has passed a resolution vide its board meeting dated 22 December 2015 that the bonus will be equally applicable to the option holders at the time of exercise. Resultantly, 682,382 options were converted into 2,729,528 shares.

The options outstanding as at 31 March 2017 have an exercise price of Rs.10 (31 March 2016: Rs.10) and a weighted average remaining contractual life of 4.17 years (31 March 2016: 5.17 years)

The weighted average share price at the date of exercise for share options exercised in 2016-17 is Rs.10 (2015-16: no options exercised)

18 Disclosure on Specified Bank Notes (SBNs)

During the year, the Company had specified bank notes or other denomination notes as defined in the MCA notification G.S.R. 308(E) dated 31 March 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from 8 November 2016 to 30 December 2016, the denomination wise SBNs and other notes as per the notification is given below:

50 During the year ended 31 March 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 31 March 2015, the Company had received a notice from the official liquidator of Zylog, 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 subsequent 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 the equity shares of BSL until the winding up proceedings of ZSL have been completed and resolved. The Company is of the view, that they have a strong case and has taken a legal opinion.

The legal opinion reiterates that the case does not have merit and the sale is bonafide on the basis of the following:

a. There is 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 realise its rights as a secured creditor and the sale is in compliance with Canadian law

c. That the sale of equity shares of Brainhunter is not prejudicial to the parties and that the same has been undertaken in accordance with the provisions of the law

The Company has also obtained legal opinion from Canadian law firm which has confirmed that the acquisition is appropriate from a Canadian jurisdiction perspective.

Based on the legal opinions the management believes that the acquisition of BSL is appropriate.

19 First time adoption

As stated in note 2, these are the Company’s first standalone financial statements prepared in accordance with Ind AS. For the purpose of transition from previous GAAP to Ind AS, the Company has followed the guidance prescribed under Ind AS 101 - First time adoption of Indian Accounting Standards (“Ind AS 101”), with effect from 1 April 2015 (“transition date”). For the year ended 31 March 2016, the Company had prepared its standalone financial statements in accordance with Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act and other relevant provisions of the Act (‘previous GAAP’ or the ‘Indian GAAP’).

The accounting policies set out in note 2 have been applied in preparing these standalone Ind AS financial statements for the year ended 31 March 2017 including the comparative information for the year ended 31 March 2016 and the opening standalone Ind AS balance sheet on the date of transition i.e. 1 April 2015.

In preparing its standalone Ind AS balance sheet as at 1 April 2015 and in presenting the comparative information for the year ended 31 March 2016, the Company has adjusted amounts reported previously in standalone financial statements prepared in accordance with previous GAAP. This note explains the principal adjustments made by the Company in restating its standalone financial statements prepared in accordance with previous GAAP, and how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows.

A. Optional exemptions availed

In preparing these standalone financial statements, the Company has applied the below mentioned optional exemptions.

(i) Business combination:

As per Ind AS, at the date of transition, an entity may elect not to restate business combinations that occurred before the date of transition. If the entity restates any business combinations that occurred before the date of transition, then it restates all later business combinations, and also applies Ind AS 110, Consolidated Financial Statements from that date. The Company has elected to apply Ind AS 103, Business combinations prospectively to business combinations occurred after 1 April 2015 i.e. the transition date. Business combinations occurred prior to the transition date have not been restated.

(ii) Share based payments:

Ind AS 101 allows a first-time adopter to elect not to apply Ind AS 102, Share-based payments to equity instruments that were vested before the transition date. Accordingly, the Company has elected the optional exemption.

(iii) Property, plant and equipment and intangible assets:

As per Ind AS 101 an entity may elect to:

(a) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed cost at that date;

(b) use a previous GAAP revaluation of an item of property, plant and equipment at or before the date of transition as deemed cost at the date of the revaluation, provided the revaluation was, at the date of the revaluation, broadly comparable to:

- fair value;

- or, cost or depreciated cost under Ind AS adjusted to reflect, for example, changes in a general or specific price index.

The elections under (a) and (b) above are also available for intangible assets that meets the recognition criteria in Ind AS 38, Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation (including the existence of an active market).

(c) use carrying values of property, plant and equipment and intangible assets as on the date of transition to Ind AS which are measured in accordance with previous GAAP.

As permitted by Ind AS 101, the Company has elected to continue with the carrying values under previous GAAP for all the items of property, plant and equipment. The same election has been made in respect of intangible assets also. The Company has disclosed the net carrying amount of property, plant and equipment and intangible assets as its deemed cost as at the date of transition.

(iv) Investments in subsidiaries, associates and joint ventures:

Ind AS 101 provides an exemption to the first-time adopter to measure an investment in subsidiaries, associates and joint ventures at:

a) cost determined in accordance with Ind AS 27, Consolidated and Separate Financial Statements; or

b) deemed cost, which shall be its:

i) fair value at the entity’s date of transition to Ind AS in its separate financial statements; or

ii) previous GAAP carrying value at that date.

The Company has chosen to avail the exemption provided by Ind AS 101 and value all its investments in subsidiaries at deemed cost being the previous GAAP carrying value at the transition date.

B. Mandatory exceptions availed

Ind AS 101 also allows first-time adopters certain mandatory exceptions to be applied for retrospective application of certain requirements under Ind AS for transition from the previous GAAP (IGAAP):

(i) Estimates:

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. However, the estimates should be adjusted to reflect any differences in accounting policies.

As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP, those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).

Ind AS estimates as at 1 April 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Fair valuation of financial instruments carried at fair value through profit and loss or fair value through other comprehensive income;

- Impairment of financial assets based on expected credit loss model and

- Determination of the discounted value for financial instruments carried at amortised cost.

Upon the assessment of the estimate made under previous GAAP, the Company has concluded that there was no necessity to revise such estimates under Ind AS, other than those which are required due to application of Ind AS.

(ii) Derecognition of financial assets and liabilities:

As per Ind AS 101, an entity should apply the derecognition requirements in Ind AS 109, Financial Instruments, prospectively for transactions occurring on or after the date of transition to Ind AS. However, an entity may apply the derecognition requirements retrospectively from a date chosen by it if the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognised as a result of past transactions were obtained at the time of initially accounting for those transactions.

The Company has chosen to avail the exception to apply the derecognition provision of Ind AS 109 prospectively from the date of transition.

(iii) Classification and measurement of financial assets:

Ind AS 101 requires an entity to classify and measure its financial assets into amortised cost, fair value through profit or loss or fair value through other comprehensive income based on the business model assessment and solely payment of principal and interest (“SPPI”) criterion based on facts and circumstances that exist at the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on the facts and circumstances existing at the date of transition if retrospective application is impracticable.

Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively.

C. Reconciliations

The following reconciliations provides the effect of transition to Ind AS from IGAAP in accordance with Ind AS 101

1. Equity as at 1 April 2015 and 31 March 2016.

2. Net profit for the year ended 31 March 2016.

Explanations for Reconciliation of Balance Sheet as previously reported under IGAAP to Ind AS:

(a) Impairment of goodwill and reversal of amortisation

The Company has availed the exemption under Ind AS 101 and accordingly business combinations prior to 1 April 2015 was not restated and goodwill is carried at cost. The Company has carried the impairment testing of goodwill as at 1 April 2015 and as the recoverable amount was less than the carrying value, goodwill is impaired leading to decrease in equity . As the goodwill is impaired on 1 April 2015, the amortisation on such goodwill amortised as per previous GAAP is reversed leading to an increase in income.

(b) Investments/Other financial liabilities

Under Ind AS, the fair value of the financial guarantee given to subsidiaries is considered as deemed capital contribution by Company to its subsidiary since the guarantee has been provided by the Company in its capacity as a share holder and accounts for the issuance of the guarantee as a capital contribution to the subsidiary. Subsequently, this guarantee is to be measured at the higher of an amount determined based on the expected loss method (as per guidance in Ind AS 109) or the amount originally recognised less the cumulative amount recognised as income on a straight-line basis in accordance with Ind AS 18, Revenue.

(c) Loans and other current assets - Security deposits

Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the Company has fair valued these security deposits under Ind AS.

Difference between the fair value and transaction value of the security deposits has been recognised as prepaid rent. Consequent to this change, the amount of security deposits decreased by Rs.210.09 lakhs as at 31 March 2016 (1 April 2015: Rs.195.25 lakhs). The prepaid rent increased by Rs.316.86 lakhs as at 31 March 2016 (1 April 2015: Rs.187.91 lakhs). Total equity decreased by Rs.7.33 lakhs as on 1 April 2015. The profit for the year and total equity as at 31 March 2016 decreased by Rs.61.60 lakhs due to amortisation of the prepaid rent and is partially off-set by the notional interest income of Rs.55.79 lakhs recognised on security deposits.

(d) Deferred taxes

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12, Income taxes requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for deferred tax on such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity. The net impact on deferred tax liabilities is of Rs.154.90 lakhs (1 April 2015: Rs.629.00 lakhs).

(e) Trade receivables

Under Previous GAAP, loss provision for trade receivables was created based on credit risk assessment. Under Ind AS, these provisions are based on assessment of risk of default and timing of collection. The Company uses an allowance matrix to measure the expected credit loss over the last six quarters under which the Company impaired its trade receivables by Rs.1661.59 lakhs on 1 April 2015 which has been eliminated against retained earnings. Impact of Rs.563.42 lakhs for year ended on 31 March 2016 has been recognised in the statement of profit and loss.

(f) Other equity

Adjustments to retained earnings has been made in accordance with Ind AS, for the above mentioned line items. In addition, as per Ind AS 19, Employee benefits, actuarial gain and losses are recognised in other comprehensive income as compared to being recognised in the statement of profit and loss under IGAAP.

(g) Other income

Adjustment in other income pertains to interest income on present valuation of financial instruments i.e on security deposits and financial guarantees given to subsidiaries as an Ind AS adjustment of security deposits and financial guarantee contracts.

(h) Employee benefit expenses - Remeasurements of post employment defined benefit obligation

Under Ind AS, Remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended 31 March 2016 decreased by Rs.655.98 lakhs. There is no impact on the total equity as at 31 March 2016.

(i) Depreciation and amortisation expenses

Under Ind AS, acquired goodwill is not amortised as it has indefinite useful life and tested for impairment annually and when there is an indication of impairment the same is impaired whereas in Indian GAAP, purchased goodwill was amortised over 5 years. Therefore, on Ind AS transition the amortisation of goodwill as per IGAAP has been written back.

(j) Other expenses

Ind AS adjustments in relation to other expenses pertains to amortisation of prepaid rent recognised against security deposits and impairment loss recognised against trade receivables as per expected credit loss model.

(k) Deferred tax

Deferred tax adjustments has been made in accordance with Ind AS, under balance sheet approach for all the items which have differential book base from that of tax base and which temporarily gets reversed due to timing difference.

(U) Other comprehensive income

Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.

20 Transfer pricing

The Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under Sections 92-92F of the Income-tax Act. Since the law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international as well as specified domestic transactions (if applicable) entered into with the associated enterprise during the financial year and expects such records to be in existence latest by the end of the stipulated timeline, as required by law. The Management is of the opinion that its international as well as specified domestic transactions (if any) are at arm’s length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that of provision for taxation.

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Mar 31, 2016

1. The Company had issued 4001% compulsory convertible preface shares {CCPS} of Rs 100 each to Thomas Cook (India) Limited at a premium of Rs 24 38 vide Share Subscription Agreement (SSA) dated 5 February SOUL During the previous period, is per the terms and conditions of SSA. the Company vide is Board meeting dated M October 2014 has converted 7,717.912 CCPS into 6.776,957 equity shares at a premium of Rs .31166 per share. Out of the total premium of Rs 892,230.430 arising on this arrangement. Rs 188.208,800 collected on the Initial issue of CCPS as above adjusted against the share premium m the year of issue of preference shares, and Rs 704.021.630 was recognized as premium on conversion of CCPS In the previous period.

2. Right Issues

During the year, the Comply vide its Board meeting dated 6 Number 2015 has offered 2,560,000 equity shares of Rs 10 each on right basis, in pursuance of the requirements of section 62 of the Companies Act 2013 read with the Companies (Share capita} and Debentures) Rules 2014 in the ratio of 0.099 equity shares for every equity share held in the Company as on date to in existing shareholders Thomas Cook (India) . Ltd has resolved not to subscribe to the right issue and has obtained the shareholders approval on 12 December 2015 by way of postal ballot and accordingly a resolution of renunciation was approved by the Board of Directors of the Thomas Cook (India) Ltd vide circular resolution dated IB December 2015 for renouncing 1.957.302 equity shares in favour of Net Resources investments Private Limited On 21 December 2015. Mr, Ajtl Isaac renounced hrs rights of 461,516 shares in favour of Net Resources Investments Private Limited.

Accordingly, the Company in its Board meeting dated 22 December 2015 has approved the allotment of equity shares on right basis as follows;

The Company had issued 0-001% compulsory convertible preface shares {CCPS} of Rs 100 each to Thomas Cook (India) Limited at a premium of Rs 24 38 vide Share Subscription Agreement (SSA) dated 5 February KH3* During the previous period, is per the terms and coition’s of SSA, the Company vide is Board meeting dated 14 October 2014 has converted 7,717.912 CCPS into 6.776,957 equity shares at a premium of Rs \ 31,66 per share. Out of die total premium of Rs 892,230.430 arising on this arrangement. Rs 188.208,800 collected on the initial issue of CCPS as above, was adjusted agitated share premium i» the year of issue of preference shares, and Rs 704.021.630 was recognized as premium on conversion of CCPS In the previous period

3.Boons issue

During the year, the Company is pursuant of the requirements of Section 63(1) of the Companies Act, 2013 and after obtaining the consent of«, shareholders at the Extra ordinary general meeting held on 23 December 2015 and vide in Board mating held on 5 January 2016 has passed a resolution is issue 3 folly pay up equity shares of Rs 10 each for every 1^st July paid Up equity share of Rs 10 each to the existing shareholder whose name appears in the register of members as on 23 December 20f5 by utilizing securities premium account The bonus shares shall rank pari passu in all respects including dividend with the existing equity shares of the Company The Company accordingly has issued the bonus shares as follows:

4. Rights preferences and restrictions attached lo equity shares

The Company has a single class of equity stares Accordingly, all equity shares rank equally with regard to dividends and share in the Company’s residual assets The equity shares are entitled to receive dividend was declared from time to time The voting rights of art equity shareholder on 8 poll (not on show of hands) are in proportion to its share of the paid-up equity coital 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;