Shiprocket Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Further, the Standalone Financial Statements have
been prepared on a historical cost basis except for
following items:

Functional and presentation currency

The Standalone Financial Statements are presented in
Indian Rupees, which is also the Company''s functional
currency. All amounts disclosed in the Standalone
Financial Statements and notes have been rounded
off to the nearest millions as per the requirement
of Schedule III, unless otherwise stated. Further,
amounts which are less than 0.005 millions are
appearing as "0.00".

2.2 Summary of material accounting policies

a) Business acquisition and Goodwill

Business combinations are accounted for as follows:

Business combinations (other than common control
business combinations) - Acquisition Method

The acquisition method of accounting is used to
account for business combinations. The cost of an
acquisition is measured as the aggregate of the
consideration transferred measured at acquisition
date fair value and the amount of any non-controlling
interests in the acquiree. For each business
combination, the Company elects whether to measure
the non-controlling interests in the acquiree at fair
value or at the proportionate share of the acquiree''s
identifiable net assets. Acquisition-related costs are
expensed in the years in which the costs are incurred
and the services are received, with the exception
of the costs of issuing debt or equity securities that
are recognised in accordance with Ind AS 32 and
Ind AS 109.

The Company determines that it has acquired a
business when the acquired set of activities and
assets include an input and a substantive process
that together significantly contribute to the ability to
create outputs. The acquired process is considered
substantive if it is critical to the ability to continue
producing outputs, and the inputs acquired include
an organised workforce with the necessary skills,
knowledge, or experience to perform that process
or it significantly contributes to the ability to continue
producing outputs and is considered unique or scarce
or cannot be replaced without significant cost, effort,
or delay in the ability to continue producing outputs."

At the acquisition date, the identifiable assets
acquired, and the liabilities assumed are recognised
at their acquisition date fair values. For this purpose,
the liabilities assumed include contingent liabilities
representing present obligation and they are
measured at their acquisition fair values irrespective
of the fact that outflow of resources embodying
economic benefits is not probable. However,
the following assets and liabilities acquired in a
business combination are measured at the basis
indicated below:

- Deferred tax assets or liabilities, and the
liabilities or assets related to employee benefit
arrangements are recognised and measured in
accordance with Ind AS 12 Income Tax and Ind
AS 19 Employee Benefits respectively.

- Liabilities or equity instruments related to share
based payment arrangements of the acquiree
or share - based payments arrangements of the
Company entered into to replace share-based
payment arrangements of the acquiree are
measured in accordance with Ind AS 102 Share-
based Payments at the acquisition date.

When the Company acquires a business, it assesses the
financial assets and liabilities assumed for appropriate
classification and designation in accordance with
the contractual terms, economic circumstances and
pertinent conditions as at the acquisition date. This
includes the separation of embedded derivatives in
host contracts by the acquiree.

If the business combination is achieved in stages,
any previously held equity interest is re-measured
at its acquisition date fair value and any resulting
gain or loss is recognised in profit or loss or OCI, as
appropriate.

When additionalpayments contingent on future
events are negotiated and agreed as part of the
business combination agreement, the entity analyses
the nature as well as economic substance of these
payments, particularly, payments made to those
who remain as employees of the business after it is
acquired, to determine whether these whether they
are in the nature of payment for future employee
services or they represent contingent consideration for
business combination. In the former case, depending
on the exact terms of the arrangement, the payments
to be made are accounted for as remuneration for
services to be received subsequent to the acquisition,
rather than as part of the consideration paid for
the business. Any contingent consideration to be

transferred by the acquirer, i.e., contingent payment
to be treated as such, is recognised at fair value at the
acquisition date. Contingent consideration classified
as an asset or liability that is a financial instrument and
within the scope of Ind AS 109 Financial Instruments,
is measured at fair value with changes in fair value
recognised in profit or loss in accordance with Ind
AS 109. If the contingent consideration is not within
the scope of Ind AS 109, it is measured in accordance
with the appropriate Ind AS and shall be recognised
in profit or loss. Contingent consideration that is
classified as equity is not re-measured at subsequent
reporting dates and subsequent its settlement is
accounted for within equity.

Goodwill is initially measured at cost, being the excess
of the aggregate of the consideration transferred and
the amount recognised for non-controlling interests,
and any previous interest held, over the net identifiable
assets acquired and liabilities assumed. If the fair
value of the net assets acquired is in excess of the
aggregate consideration transferred, the Company
re-assesses whether it has correctly identified all of
the assets acquired and all of the liabilities assumed
and reviews the procedures used to measure the
amounts to be recognised at the acquisition date.
If the reassessment still results in an excess of the
fair value of net assets acquired over the aggregate
consideration transferred, then the gain is recognised
in OCI and accumulated in equity as capital reserve.
However, if there is no clear evidence of bargain
purchase, the entity recognises the gain directly in
equity as capital reserve, without routing the same
through OCI.

After initial recognition, goodwill is measured at cost
less any accumulated impairment losses. For the
purpose of impairment testing, goodwill acquired
in a business combination is, from the acquisition
date, allocated to each of the Company''s cash¬
generating units that are expected to benefit from the
combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.

A cash generating unit to which goodwill has been
allocated is tested for impairment annually, or more
frequently when there is an indication that the unit
may be impaired. If the recoverable amount of the
cash generating unit is less than its carrying amount,
the impairment loss is allocated first to reduce the
carrying amount of any goodwill allocated to the unit
and then to the other assets of the unit pro rata based
on the carrying amount of each asset in the unit. Any
impairment loss for goodwill is recognised in profit or

loss. An impairment loss recognised for goodwill is
not reversed in subsequent periods. Where goodwill
has been allocated to a cash-generating unit and part
of the operation within that unit is disposed of, the
goodwill associated with the disposed operation is
included in the carrying amount of the operation when
determining the gain or loss on disposal. Goodwill
disposed in these circumstances is measured based
on the relative values of the disposed operation and
the portion of the cash-generating unit retained.

I f the initial accounting for a business combination
is incomplete by the end of the reporting period
in which the combination occurs, the Company
reports provisional amounts for the items for which
the accounting is incomplete. Those provisional
amounts are adjusted through goodwill during the
measurement period, or additional assets or liabilities
are recognised, to reflect new information obtained
about facts and circumstances that existed at the
acquisition date that, if known, would have affected the
amounts recognized at that date. These adjustments
are called as measurement period adjustments. The
measurement period does not exceed one year from
the acquisition date.

Pooling of Interest method

Ind AS 103, Business Combinations, prescribes
significantly different accounting for business
combinations which are not under common
control and those under common control. Business
combinations involving entities or businesses under
common control shall be accounted for using the
pooling of interest method as follows:

(i) The assets and liabilities of the combining entities
are reflected at their carrying amounts from the
controlling parties'' perspective.

(ii) No adjustments are made to reflect fair values,
or recognise any new assets or liabilities.
Adjustments are only made to harmonise
accounting policies.

(iii) The financialinformation in the financial
statements in respect of prior periods is restated
as if the business combination had occurred
from the beginning of the preceding period in the
financial statements, irrespective of the actual
date of the combination. However, where the
business combination had occurred after that
date, the prior period information is restated
only from that date.

(iv) The balance of the retained earnings appearing
in the financial statements of the transferor is
aggregated with the corresponding balance
appearing in the financialstatements of the
transferee or is adjusted against general reserve.

(v) The identity of the reserves are preserved and
the reserves of the transferor become the
reserves of the transferee.

(vi) The difference, if any, between the amounts
recorded as share capital issued plus any
additional consideration in the form of cash or
other assets and the amount of share capital of
the transferor is transferred to capital reserve
and is presented separately from other capital
reserves.

Investment in Associates

Associate is the entity over which the Company has
significant influence but not control or joint control.
Significant influence is the power to participate in
the financial and operating policy decisions of the
investee but is not control or joint control over those
policies. Investments in associate is accounted for
using the equity method of accounting, after initially
being recognised at cost.

Under the equity method of accounting, the
investments are initially recognised at cost and
adjusted thereafter to recognise the Company''s
share of the post-acquisition profits or losses of
the investee in profit and loss, and the Company''s
share of other comprehensive income of the
investee in other comprehensive income.
Dividends received or receivable from associates
and joint ventures are recognised as a reduction
in the carrying amount of the investment.
When the Company''s share of losses in an equity-
accounted investment equals or exceeds its interest
in the entity, including any other unsecured long-term
receivables, the Company does not recognise further
losses, unless it has incurred obligations or made
payments on behalf of the other entity.

Unrealised gains on transactions between the
Company and its associates are eliminated to the
extent of the Company''s interest in these entities.
Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of
the asset transferred. Accounting policies of equity
accounted investees have been changed where
necessary to ensure consistency with the policies

adopted by the Company. The carrying amount
of equity accounted investments are tested for
impairment at each reporting date. At each reporting
date, the Company determines whether there is
objective evidence that the investment in the associate
is impaired. If there is such evidence, the Company
calculates the amount of impairment as the difference
between the recoverable amount of the associate
and its carrying value, and then recognises the loss
as share of profit of an associate in the Standalone
Statement of Profit and Loss.

b) Use of estimates

The preparation of Standalone Financial Statements
in conformity with the principles of Ind AS requires
the management to make judgements, estimates
and assumptions that effect the reported amounts
of revenues, expenses, assets and liabilities and
the disclosure of contingent liabilities, at the end
of the reporting period. Although these estimates
are based on the management''s best knowledge
of current events and actions, uncertainty about
these assumptions and estimates could result in the
outcomes requiring a material adjustment to the
carrying amounts of assets or liabilities in future years.

The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the year in which the
estimate is revised if the revision affects only that year,
or in the year of the revision and future years if the
revision affects both current and future years.

In particular, information about the significant areas
of estimation, uncertainty and critical judgements
in applying accounting policies that have the most
significant effect on the amounts recognised in the
Standalone Financial Statements are disclosed in
Note No. 26.

c) Current versus Non-current classification

The Company segregates assets and liabilities into
current and non-current categories for presentation
in the balance sheet after considering its normal
operating cycle and other criteria set out in Ind AS
1, "Presentation of Financial Statements". For this
purpose, current assets and liabilities include the
current portion of non-current assets and liabilities
respectively. Deferred tax assets and liabilities are
always classified as non-current.

The operating cycle is the time between the acquisition
of assets for processing and their realization in cash
and cash equivalents. The Company has identified
period up to twelve months as its operating cycle.

d) Foreign Currencies

Items included in the financial statements of each
of the Company''s entities are measured using the
currency of the primary economic environment in
which the entity operates (''the functional currency'').
The Standalone Financial Statements are presented in
Indian Rupee (Rs.), which is the Parent''s functional and
presentation currency.

Transactions and balances

Transactions in foreign currencies are initially recorded
in the respective functional currency spot rates at the
date the transaction first qualifies for recognition.
However, for practical reasons, the Company uses
an average rate if the average approximates the
exchange rates at the date of the transaction.

Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency
spot rates of exchange at the reporting date.

Exchange differences arising on settlement or
translation of monetary items are recognised in the
Standalone Statement of Profit and Loss with the
exception of the following:

i) In the Standalone Financial Statements that
include the foreign operation and the reporting
entity (e.g., financial information when the foreign
operation is a branch), such exchange differences
are recognised initially in OCI. These exchange
differences are reclassified from equity to profit
and loss on disposal of the net investment.

ii) Tax charges and credits attributable to exchange
differences on those monetary items are also
recorded in OCI.

Non-monetary items that are measured in terms of
historical cost in a foreign currency are translated
using the exchange rates at the dates of the initial
transactions. Non-monetary items measured at fair
value in a foreign currency are translated using the
exchange rates at the date when the fair value is
determined. The gain or loss arising on translation of
non-monetary items measured at fair value is treated
in line with the recognition of the gain or loss on
the change in fair value of the item, i.e., translation
differences on items whose fair value gain or loss is
recognised in OCI or profit or loss are also recognised
in OCI or profit or loss, respectively.

Foreign subsidiaries of the Company
The results and financial position of foreign operations
(none of which has the currency of a hyperinflationary

economy) that have a functional currency different
from the presentation currency are translated into
the presentation currency as follows:

- assets and liabilities are translated at the closing
rate at the date of that balance sheet

- i ncome and expenses are translated at average
exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the
rates prevailing on the transaction dates, in
which case income and expenses are translated
at the dates of the transactions), and

- All resulting exchange differences are recognised
in other comprehensive income.

e) Fair value measurement

The Company measures financialinstruments
(recorded at fair value through P&L or OCI) at fair
value at each balance sheet date.

Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date. The fair value measurement is
based on the presumption that the transaction to sell
the asset or transfer the liability takes place either:

i) In the principal market for the asset or liability, or

ii) In the absence of a principal market, the most
advantageous market must be accessible by the
Company. The fair value of an asset or a liability
is measured using the assumptions that market
participants would use when pricing the asset or
liability, assuming that market participants act in their
economic best interest.

A fair value measurement of a non-financial asset
takes into account a market participant''s ability to
generate economic benefits by using the asset in its
highest and best use or by selling it to another market
participant that would use the asset in its highest and
best use.

The Company uses valuation techniques that are
appropriate in the circumstances and for which
sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured
or disclosed in the Standalone financial statements are
categorised within the fair value hierarchy, described
as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:

i) Level 1 — Quoted (unadjusted) market prices in
active markets for identical assets or liabilities.

ii) Level 2 — Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is directly or indirectly
observable.

iii) Level 3 — Valuation techniques for which the
lowest level input that is significant to the fair
value measurement is unobservable.

For assets and liabilities that are recognised in the
Standalone financialstatements on a recurring
basis, the Company determines whether transfers
have occurred between levels in the hierarchy by re¬
assessing categorisation (based on the lowest level
input that is significant to the fair value measurement
as a whole) at the end of each reporting year.

External valuers are involved for valuation of significant
assets and liabilities. Involvement of external valuers
is decided on the basis of nature of transaction and
complexity involved. Selection criteria include market
knowledge, reputation, independence and whether
professional standards are maintained.

At each reporting date, the finance team analyses
the movements in the values of assets and liabilities
which are required to be remeasured or re-assessed
as per the Company''s accounting policies. For this
analysis, the team verifies the major inputs applied
in the latest valuation by agreeing the information
in the valuation computation to contracts and
other relevant documents. A change in fair value of
assets and liabilities is also compared with relevant
external sources to determine whether the change is
reasonable.

For the purpose of fair value disclosures, the Company
has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the
asset or liability and the level of the fair value hierarchy
as explained above.

f) Property, plant and equipment

Property, plant and equipment are stated at cost,
less accumulated depreciation and accumulated
impairment loss, if any. Such cost includes the cost
of replacing part of the plant and equipment. When
significant parts of plant and equipment are required
to be replaced at intervals, the Company depreciates
them separately based on their specific useful lives.
Likewise, when a major inspection is performed, its

cost is recognised in the carrying amount of the plant
and equipment as a replacement if the recognition
criteria are satisfied. All other repair and maintenance
costs are recognised in profit and loss as incurred.

Capital work in progress is stated at cost, net of
accumulated impairment loss, if any.

Depreciation on all property plant and equipment
are provided on a written down value based on the
estimated useful life of the asset, which is as follows:

Leasehold improvements are amortised over life
based on lease period ranging between 3 to 10 years.

The management has estimated the useful lives and
residual values of all property, plant and equipment
and adopted useful lives based on management''s
technical assessment of their respective economic
useful lives. The estimated useful lives for these
assets may differ from the useful lives prescribed
under Part C of Schedule II of the Companies Act
2013. The residual values, useful lives and methods
of depreciation of property, plant and equipment
are reviewed at each financial year end and adjusted
prospectively, if appropriate.

Depreciation on the assets purchased during the
year is provided on pro rata basis from the date of
purchase of the assets. Individual assets costing less
than Rs. 5,000 are depreciated within one year of the
date they were first put to use.

An item of property, plant and equipment and any
significant part initially recognised is derecognised
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or
loss arising on derecognition of the asset (calculated
as the difference between the net disposal proceeds
and the carrying amount of the asset) is included in
the Standalone statement of profit and loss when the
asset is derecognised.

g) Goodwill and other intangible assets

Goodwill represents the cost of acquired business as
established at the date of acquisition of the business
in excess of the acquirer''s interest in the net fair value

of the identifiable assets, liabilities and contingent
liabilities less accumulated impairment losses, if any.
Goodwill is tested for impairment annually or when
events or circumstances indicate that the implied fair
value of goodwill is less than the carrying amount.

Intangible assets acquired separately are measured
on initial recognition at cost. The cost of intangible
assets acquired in a business combination is their fair
value at the date of acquisition.

Following initial recognition, Intangible assets are
carried at cost less any accumulated amortisation and
accumulated impairment losses. Internally generated
intangibles, excluding capitalised development costs,
are not capitalised and the related expenditure is
reflected in profit or loss in the year in which the
expenditure is incurred.

The useful lives of intangible assets are assessed as
either finite or indefinite.

Intangible assets (other than those acquired in
business combination) with finite lives are amortised
on a straight line basis over the estimated useful
economic life being 3 years. All Intangible assets (other
than goodwill) are assessed for impairment whenever
there is an indication that the intangible asset may be
impaired. The amortisation year and the amortisation
method for an intangible asset with a finite useful life
are reviewed at least at the end of each reporting year.
Changes in the expected useful life or the expected
pattern of consumption of future economic benefits
embodied in the asset are considered to modify the
amortisation year or method, as appropriate, and
are treated as changes in accounting estimates. The
amortisation expense on intangible assets with finite
lives is recognised in the Standalone statement of
profit and loss unless such expenditure forms part of
carrying value of another asset.

An intangible asset is derecognised upon disposal
(i.e. at the date the recipient obtains control) or when
no future economic benefits are expected from
its use or disposal. Any gains or losses arising from
derecognition of an intangible asset are measured as
the difference between the net disposal proceeds and
the carrying amount of the asset and are recognised
in the Standalone statement of profit or loss when the
asset is derecognised.

Intangible assets acquired in business combination,
include technology platform, Customer relationship

and non-compete which are amortised on a straight
line basis over their estimated useful life which is as
follows:

h) Leases

The Company assesses at contract inception whether
a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration.

Company as a lessee

The Company applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets. The
Company recognises lease liabilities to make lease
payments and right-of-use assets representing the
right to use the underlying assets.

(i) Right of use assets

The Company recognises right-of-use assets at
the commencement date of the lease (i.e., the
date the underlying asset is available for use).
Right-of-use assets are measured at cost, less
any accumulated depreciation and accumulated
impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred,
and lease payments made at or before the
commencement date less any lease incentives
received. Right-of-use assets are depreciated on
a straight-line basis over the shorter of the lease
term and the estimated useful lives of the assets
ranging between 3 to 10 years.

If ownership of the leased asset transfers to the
Company at the end of the lease term or the
cost reflects the exercise of a purchase option,
depreciation is calculated using the estimated
useful life of the asset.

The right-of-use assets are also subject to
impairment. Refer to the accounting policies in
section (v) Impairment of non-financial assets.

(ii) Lease liabilities

At the commencement date of the lease, the
Company recognises lease liabilities measured at
the present value of lease payments to be made

over the lease term. The lease payments include
fixed payments (including in substance fixed
payments) less any lease incentives receivable,
variable lease payments that depend on an index
or a rate, and amounts expected to be paid under
residual value guarantees. The lease payments
also include the exercise price of a purchase
option reasonably certain to be exercised by
the Company and payments of penalties for
terminating the lease, if the lease term reflects
the Company exercising the option to terminate.
Variable lease payments that do not depend on
an index or a rate are recognised as expenses
(unless they are incurred to produce inventories)
in the year in which the event or condition that
triggers the payment occurs.

In calculating the present value of lease payments,
the Company uses its incremental borrowing
rate at the lease commencement date because
the interest rate implicit in the lease is not readily
determinable. After the commencement date, the
amount of lease liabilities is increased to reflect
the accretion of interest and reduced for the
lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there
is a modification, a change in the lease term, a
change in the lease payments (e.g., changes to
future payments resulting from a change in
an index or rate used to determine such lease
payments) or a change in the assessment of an
option to purchase the underlying asset.

(iii) Short-term leases

The Company applies the short-term lease
recognition exemption to its properties (i.e.,
those leases that have a lease term of 12 months
or less from the commencement date and do
not contain a purchase option). Lease payments
on short-term leases are recognised as expense
on a straight-line basis over the lease term.

i) Inventories

I nventories comprise of mainly packaging
material which are valued at lower of cost
and net realizable value. Cost includes the
cost of purchase, duties, taxes (other than
those recoverable from tax authorities)
and other cost incurred in bringing the
inventories to their present location and
condition. Cost is determined on first in first
out basis.

Net realizable value is the estimated selling
price in the ordinary course of business,
less estimated costs of completion and
those necessary to make the sale.

j) Revenue from Operations

The Company''s revenue primarily derives
from its innovative merchant solutions
deeply rooted in cutting-edge technology.
These merchant solutions revolve around
shipping, fulfilment and conversion
technology, serving as a bridge connecting
retailers, carriers, and consumers on
both national and international fronts.
The Company''s advanced technology
plays a pivotal role in powering shipping
and fulfilment for SMEs, D2C retailers,
and social commerce sellers, while also
offering a comprehensive technology
stack for retailers to seamlessly integrate
their shopping websites or their other
channels for efficient inventory and order
management.

Within the realm of merchant solutions,
the Company generates revenue through
a range of technology-driven services. This
includes one-time setup fees, subscription
charges, platform fees and value-added
services, as well as revenue derived from
shipping and logistics solutions, payment
management, capital solutions, and state-of-
the-art fulfilment solutions. The Company''s
principal method of charging its revenue is
on a pay-for-use model i.e. the Company
monetises its products or services on a
per-transaction basis. These technology-
driven services are strategically designed
to empower and optimize merchants'' use
of the tech-based platform, ultimately
constituting a significant portion of the
Company''s overall revenue.

The Company recognizes income on
facilitation services on accrual basis for
the financing arrangements between Non¬
Banking Financialcompanies (NBFCs)/
Lending Partners and the merchants.

Arrangements with merchants do not
provide the merchants with the right to
take possession of the software supporting
the Company''s hosting platform at any
time and are therefore accounted for as

GST collected from merchants and remitted to
government authorities are excluded from revenue.
Payment is received upon invoicing, with payment
terms varying by contract type but usually requiring
payment within 30 days of the invoice date. The
Company also allows its merchants to maintain
advances. The contracts do not involve significant
financing components when there are timing
differences between revenue recognition, invoicing,
and payment.

Sale ofgoods

Revenue from sale of goods is recognized at the point
in time when control of the asset is transferred to
the customer, generally on delivery of the goods. The
Company considers whether there are other promises
in the contract that are separate performance
obligations to which a portion of the transaction price
needs to be allocated.

Dividend

Dividend income is recognized when the Company''s
right to receive dividend is established by the
reporting date.

Interest

Interest income is recognized when it is probable that
the economic benefits will flow to the Company and
amount of income can be measured reliably. Interest
income is recognized using the effective interest
method.

Contract balances

The policy for Contract balances i.e. contract assets,
trade receivables and contract liabilities is as follows:

Contract assets

A contract asset is the right to consideration in
exchange for services transferred to the customer
(which consist of unbilled revenue). If the Company
performs by transferring services to a customer
before the customer pays consideration or before
payment is due, a contract asset is recognised for the
earned consideration that is unconditional. Contract
assets are subject to impairment assessment.

Trade receivables

A trade receivable represents the Company''s right to
an amount of consideration that is unconditional (i.e.,
only the passage of time is required before payment
of the consideration is due). Refer to accounting
policies of financial assets in financial instruments -
initial recognition and subsequent measurement.

Contract liabilities

A contract liability is the obligation to transfer services
to a customer for which the Company has received
consideration (or an amount of consideration is due)
from the customer. If a customer pays consideration
before the Company transfers services to the
customer, a contract liability is recognised when the
payment is made or the payment is due (whichever is
earlier). Contract liabilities are recognised as revenue
when the Company performs under the contract.

k) Employee benefits

Provident fund & National Pension Scheme

Retirement benefit in the form of provident fund
and national pension scheme ( NPS) is a defined
contribution scheme. The Company has no obligation,
other than the contribution payable to the provident
fund/NPS. The Company recognizes contribution
payable to the provident fund scheme/NPS as an
expense, when an employee renders the related
service. If the contribution payable to the scheme
for service received before the balance sheet date
exceeds the contribution already paid, the deficit
payable to the scheme is recognized as a liability
after deducting the contribution already paid. If the
contribution already paid exceeds the contribution
due for services received before the balance sheet
date, then excess is recognized as an asset to the
extent that the prepayment will lead to, for example, a
reduction in future payment or a cash refund.

Gratuity

Gratuity liability is a defined benefit obligation
and is provided for on the basis of an actuarial
valuation on projected unit credit method
made at the end of each financial year.
Remeasurements, comprising of actuarial gains and
losses, excluding amounts included in net interest
on the net defined benefit liability are recognised
immediately in the balance sheet with a corresponding
debit or credit to retained earnings through OCI in the
year in which they occur. Remeasurements are not
reclassified to profit or loss in subsequent periods.
Past service costs are recognised in the Standalone
statement of profit and loss on the earlier of:

i) The date ofthe plan amendment or curtailment, and

ii) The date that the Company recognises related
restructuring costs

Net interest is calculated by applying the discount
rate to the net defined benefit liability. The Company
recognises the following changes in the net defined

benefit obligation as an expense in the Standalone
statement of profit and loss:

i) Service costs comprising current service
costs, past-service costs, gains and losses on
curtailments and non-routine settlements; and

ii) Net interest expense
Leave encashment

Accumulated leave, which is expected to be utilized
within the next 12 months, is treated as short-term
employee benefit. The Company measures the
expected cost of such absences as the additional
amount that it expects to pay as a result of the unused
entitlement that has accumulated at the reporting
date. The Company recognizes expected cost of
short-term employee benefit as an expense, when an
employee renders the related service.

Short-term obligations

Liabilities for wages and salaries, including non
monetary benefits that are expected to be settled
wholly within 12 months after the end of the period
in which the employees render the related service
are recognized in respect of employee service up to
the end of the reporting period and are measured at
the amount expected to be paid when the liabilities
are settled. The liabilities are presented as current
employee benefit obligations in the Standalone
balance sheet.

l) Taxes

Current income tax

Current income tax assets and liabilities are measured
at the amount expected to be recovered from or paid
to the taxation authorities in accordance with the
Income Tax Act, 1961 and the Income Computation
and Disclosure Standards ("ICDS") enacted in India
by using tax rates and tax laws that are enacted
or substantively enacted, at the reporting date in
the countries where the Company operates and
generates taxable income. Current income tax
relating to items recognised outside profit and loss
is recognised outside profit and loss (either in other
comprehensive income or in equity). Current tax
items are recognised in correlation to the underlying
transaction either in OCI or directly in equity. Advance
taxes and provisions for current income taxes are
presented in the Standalone balance sheet after off¬
setting advance tax paid and income tax provision
arising in the same tax jurisdiction and where the
relevant tax paying units intends to settle the asset
and liability on a net basis

Management periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and considers whether it is probable that a taxation
authority will accept an uncertain tax treatment. The
Company shall reflect the effect of uncertainty for
each uncertain tax treatment by using either most
likely method or expected value method, depending
on which method predicts better resolution of the
treatment.

Deferred taxes

Deferred tax is provided using the liability method
on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for
financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable
temporary differences, except:

- When the deferred tax liability arises from the
initial recognition of goodwill or an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit and loss and does not give rise to equal
taxable and deductible temporary differences.

- In respect of taxable temporary differences
associated with investments in subsidiaries and
associates, when the timing of the reversal of the
temporary differences can be controlled and it is
probable that the temporary differences will not
reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible
temporary differences, the carry forward of unused
tax credits and any unused tax losses. Deferred tax
assets are recognised to the extent that it is probable
that taxable profit willbe available against which
the deductible temporary differences, and the carry
forward of unused tax credits and unused tax losses
can be utilised, except:

- When the deferred tax asset relating to the
deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination
and, at the time of the transaction, affects neither
the accounting profit nor taxable profit and loss
and does not give rise to equal taxable and
deductible temporary differences.

- In respect of deductible temporary differences
associated with investments in subsidiaries and
associates, deferred tax assets are recognised

only to the extent that it is probable that
the temporary differences willreverse in the
foreseeable future and taxable profit will be
available against which the temporary differences
can be utilized.

The carrying amount of deferred tax assets is reviewed
at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit
will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax
assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax
asset to be recovered.

Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.

Deferred tax relating to items recognised outside
profit and loss is recognised outside profit and loss
(either in other comprehensive income or in equity).
Deferred tax items are recognised in correlation to
the underlying transaction either in OCI or directly in
equity.

Deferred tax assets and deferred tax liabilities are
offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity
and the same taxation authority.

m) Share based payments

Employees of the Company receive remuneration
in the form of share-based payments, whereby
employees render services as consideration for equity
instruments (equity-settled transactions).

The cost of equity-settled transactions is determined
by the fair value at the date when the grant is made
using an appropriate valuation model.

That cost is recognised, together with a corresponding
increase in share-based payment (SBP) reserves in
equity, over the year in which the performance and/
or service conditions are fulfilled in employee benefits
expense. The cumulative expense recognised for
equity-settled transactions at each reporting date
until the vesting date reflects the extent to which
the vesting year has expired and the Company''s best
estimate of the number of equity instruments that
will ultimately vest. The statement of profit and loss

expense or credit for a year represents the movement
in cumulative expense recognised as at the beginning
and end of that year and is recognised in employee
benefits expense.

Service and non-market performance conditions
are not taken into account when determining the
grant date fair value of awards, but the likelihood
of the conditions being met is assessed as part
of the Company''s best estimate of the number of
equity instruments that will ultimately vest. Market
performance conditions are reflected within the
grant date fair value. Any other conditions attached
to an award, but without an associated service
requirement, are considered to be non-vesting
conditions. Non-vesting conditions are reflected in
the fair value of an award and lead to an immediate
expensing of an award unless there are also service
and/or performance conditions.

No expense is recognised for awards that do not
ultimately vest because non-market performance
and/or service conditions have not been met. Where
awards include a market or non-vesting condition,
the transactions are treated as vested irrespective
of whether the market or non-vesting condition is
satisfied, provided that all other performance and/or
service conditions are satisfied.

When the terms of an equity-settled award are
modified, the minimum expense recognised is the
expense had the terms had not been modified, if the
original terms of the award are met. An additional
expense is recognised for any modification that
increases the total fair value of the share-based
payment transaction, or is otherwise beneficial to the
employee as measured at the date of modification.

For cancelled options, the payment made to the
employee shall be accounted for as a deduction
from equity, except to the extent that the payment
exceeds the fair value of the equity instruments of
the Company, measured at the cancellation date. Any
such excess from the fair value of equity instrument
shall be recognised as an expense.

The dilutive effect of outstanding options is reflected
as additional share dilution in the computation of
diluted earnings per share.

n) Segment reporting

Operating segments are reported in a manner
consistent with the internal reporting provided to the
chief operating decision maker. The Chief Executive
Officer has been identified as the chief operating
decision maker (CODM).

The Company identifies primary segments based on
the dominant source, nature of risks and returns and
the internal organization and management structure.
The operating segments are the segments for which
separate financialinformation is available and for
which operating profit/loss amounts are evaluated
regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing
performance, the analysis of geographical segments is
based on the areas in which major operating divisions
of the Company operate.

Segment revenue, segment expenses have been
identified to the segments on the basis of their
relationship to the operating activities of the segment.

Revenue and expenses directly attributable to
segments are reported under each reportable
segment. Expenses which are not directly identifiable
to any reporting segment have been allocated to
respective segments based on the revenue, number
of employees etc. as reviewed by CODM.

o) Earnings per share

Basic earnings per share are calculated by dividing the
net profit and loss for the year attributable to equity
shareholders (after deducting preference dividends
and attributable taxes) by the weighted average
number of equity shares, compulsorily convertible
preference shares and vested ESOPs outstanding
during the year. For the purpose of calculating
diluted earnings per share, the net profit and loss
for the year attributable to equity shareholders and
the weighted average number of shares outstanding
during the year are adjusted for the effects of all
dilutive potential equity shares. Ordinary shares that
will be issued upon the conversion of a mandatorily
convertible instrument are included in the calculation
of basic earnings per share from the date the contract
is entered into.