Notes to Accounts of Cigniti Technologies Ltd.

Mar 31, 2025

(k) Provisions, contingent liabilities and
commitments

Provisions are recognised when the Company
has a present obligation (legal or constructive)
as a result of a past event, it is probable
that an outflow of resources embodying
economic benefits will be required to settle
the obligation and a reliable estimate can
be made of the amount of the obligation.
When the Company expects some or all of a
provision to be reimbursed, for example, under
an insurance contract, the reimbursement is
recognised as a separate asset, but only when
the reimbursement is virtually certain. The
expense relating to a provision is presented
in the statement of profit and loss net of any
reimbursement.

If the effect of the time value of money is
material, provisions are discounted using
a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability.
When discounting is used, the increase in
the provision due to the passage of time is
recognised as a finance cost.

Contingent liability

Contingent liability is disclosed in the case of:

• A present obligation arising from past
events, when it is not probable that an
outflow of resources will not be required to
settle the obligation

• A present obligation arising from past
events, when it cannot be measured
reliably.

• A possible obligation arising from past
events, unless the probability of outflow of
resources is remote.

The Company does not recognize a contingent
liability but discloses its existence in the
Standalone Financial Statements.

Commitments include the amount of purchase
order (net of advances) issued to parties fo
completion of assets. Provisions, contingen
liabilities, contingent assets and commitments
are reviewed at each balance sheet date.

(l) Retirement and other employee benefits

Retirement benefit in the form of Providen
Fund and Employee State Insurance is c
defined contribution schemes. The Company
has no obligation, other than the contribution
payable to the fund. The Company recognizes
contribution payable to these schemes 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 recognised as a liability after deducting the
contribution already paid. If the contribution
already paid exceeds the contribution due fo
services received before the balance shee
date, then excess is recognised as an asset to
the extent that the pre-payment will lead to
for example, a reduction in future payment o
a cash refund.

The Company operates a defined benefi-
gratuity plan in India, which requires
contributions to be made to a separately
administered fund.

The cost of providing benefits under the
defined benefit plan is determined using the
projected unit credit method.

Remeasurements, comprising of actuaria
gains and losses, the effect of the asset ceiling
excluding amounts included in net interest on
the net defined benefit liability and the return
on plan assets (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 perioc
in which they occur. Remeasurements are
not reclassified to profit or loss in subsequen
periods.

Past service costs are recognised in profit o
loss on the earlier of:

• The date of the plan amendment oi
curtailment, and

• The date that the Company recognises
related restructuring costs

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

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

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

• Net interest expense or income

Short term employee benefits

Accumulated leave, which is expected to be
utilized within the next twelve 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 treats accumulated leave
expected to be carried forward beyond twelve
months, as long-term employee benefit for
measurement purposes. Such long-term
compensated absences are provided for
based on the actuarial valuation using the
projected unit credit method at the year-end.
Actuarial gains/losses are immediately taken
to the statement of profit and loss and are not
deferred.

However, the Company presents the entire
provision towards accumulated leave as a
current liability in the balance sheet, since it
does not have an unconditional right to defer
its settlement for twelve months after the
reporting date.

(m) Hired contractors cost

Hired contractors cost represents cost of
technical sub-contractors for service delivery
to the Company''s customers. These costs are
accrued based on services received from the
sub-contractors in line with the terms of the
contract.

(n) Share-based payments

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

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

period 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 period
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 period represents
the movement in cumulative expense
recognised as at the beginning and end of
that period 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. Where
an award is cancelled by the entity or by the
counterparty, any remaining element of the fair
value of the award is expensed immediately
through profit or loss.

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

(o) 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 assets

Initial recognition and measurement

Financial assets are classified, at initial
recognition, as subsequently measured
at amortized cost, fair value through other
comprehensive income (OCI), and fair value
through profit or loss.

The classification of financial assets at initial
recognition depends on the financial asset''s
contractual cash flow characteristics and the
Company''s business model for managing
them. With the exception of trade receivables
that do not contain a significant financing
component or for which the Company has
applied the practical expedient, the Company
initially measures a financial asset at its fair
value plus, in the case of a financial asset not
at fair value through profit or loss, transaction
costs. Trade receivables that do not contain
a significant financing component or for
which the Company has applied the practical
expedient are measured at the transaction
price determined under Ind AS 115. Refer to the
accounting policies in section Revenue from
contracts with customers.

For a financial asset to be classified and
measured at amortized cost or fair value
through OCI, it needs to give rise to cash
flows that are ‘solely payments of principal
and interest (SPPI)'' on the principal amount
outstanding. This assessment is referred to as
the SPPI test and is performed at an instrument
level.

The Company''s business model for managing
financial assets refers to how it manages
its financial assets in order to generate
cash flows. The business model determines
whether cash flows will result from collecting
contractual cash flows, selling the financial
assets, or both.

Purchases or sales of financial assets that
require delivery of assets within a time frame
established by regulation or convention in
the market place (regular way trades) are
recognised on the trade date, i.e., the date that
the Company commits to purchase or sell the
asset.

Subsequent measurement

For purposes of subsequent measurement,
financial assets are classified in three
categories:

• Financial assets at amortized cost (debt
instruments)

• Financial assets designated at fair value
through OCI with no recycling of cumulative
gains and losses upon derecognition
(equity instruments)

• Financial assets at fair value through profit
or loss

Financial assets at amortized cost (debt
instruments)

A ‘debt instrument'' is measured at the
amortized cost if both the following conditions
are met:

a) The asset is held within a business model
whose objective is to hold assets for
collecting contractual cash flows, and

b) Contractual terms of the asset give rise
on specified dates to cash flows that are
Solely Payments of Principal and Interest
(SPPI) on the principal amount outstanding.

After initial measurement, such financial assets
are subsequently measured at amortized
cost using the EIR method. Amortized cost
is calculated by taking into account any
discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The
EIR amortisation is included in finance income
in the profit or loss. The losses arising from
impairment are recognised in the profit or loss.
This category generally applies to trade and
other receivables.

Financial assets designated at fair value
through OCI with no recycling of cumulative
gains and losses upon derecognition (equity
instruments)

Upon initial recognition, the Company can elect
to classify irrevocably its equity investments
as equity instruments designated at fair value
through OCI when they meet the definition of
equity under Ind AS 32 Financial Instruments:
Presentation and are not held for trading. The
classification is determined on an instrument-
by-instrument basis. Equity instruments
which are held for trading and contingent
consideration recognised by an acquirer in
a business combination to which Ind AS103
applies are classified as at FVTPL.

Gains and losses on these financial assets are
never recycled to profit or loss. Dividends are
recognised as other income in the statement
of profit and loss when the right of payment has
been established, except when the Company
benefits from such proceeds as a recovery of
part of the cost of the financial asset, in which
case, such gains are recorded in OCI. Equity
instruments designated at fair value through
OCI are not subject to impairment assessment.

The Company elected to classify irrevocably
its non-listed equity investments under this
category.

Financial assets at fair value through profit or
loss

Financial assets at fair value through profit or
loss are carried in the balance sheet at fair
value with net changes in fair value recognised
in the statement of profit and loss.

This category includes derivative instruments
and listed equity investments which the
Company had not irrevocably elected to
classify at fair value through OCI. Dividends on
listed equity investments are recognised in the
statement of profit and loss when the right of
payment has been established.

Derecognition

A financial asset (or, where applicable, a part
of a financial asset or part of a group of similar
financial assets) is primarily derecognised (i.e.
removed from the Company''s balance sheet)
when:

a) the rights to receive cash flows from the
asset have expired, or

b) the Company has transferred its rights to
receive cash flows from the asset, and

i. the Company has transferred
substantially all the risks and rewards
of the asset, or

ii. the Company has neither transferred
nor retained substa ntia lly a ll the risks
and rewards of the asset, but has
transferred control of the asset.

When the Company has transferred its rights to
receive cash flows from an asset or has entered
into a pass-through arrangement, it evaluates
if and to what extent it has retained the risks
and rewards of ownership. When it has neither
transferred nor retained substantially all of the
risks and rewards of the asset, nor transferred
control of the asset, the Company continues to
recognise the transferred asset to the extent

of the Company''s continuing involvement. In
that case, the Company also recognises an
associated liability. The transferred asset and
the associated liability are measured on a
basis that reflects the rights and obligations
that the Company has retained.

Continuing involvement that takes the form
of a guarantee over the transferred asset is
measured at the lower of the original carrying
amount of the asset and the maximum
amount of consideration that the Company
could be required to repay.

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 on the following financial assets and credit
risk exposure:

a) Financial assets that are debt instruments,
and are measured at amortized cost
e.g., loans, debt securities, deposits, trade
receivables and bank balance

b) Trade receivables or any contractual right
to receive cash or another financial asset
that result from transactions that are within
the scope of Ind AS 115.

The Company follows ‘simplified approach'' for
recognition of impairment loss allowance on:

• Trade receivables or contract revenue
receivables; and

• Other financial assets

The application of simplified approach does
not require the Company to track changes
in credit risk. Rather, it recognises impairment
loss allowance based on lifetime ECLs at each
reporting date, right from its initial recognition.

Lifetime ECL are the expected credit losses
resulting from all possible default events over
the expected life of a financial instrument.

ECL is the difference between all contractual
cash flows that are due to the Company in
accordance with the contract and all the cash
flows that the entity expects to receive (i.e., all
cash shortfalls), discounted at the original EIR.
When estimating the cash flows, an entity is
required to consider:

• All contractual terms of the financial
instrument (including prepayment,
extension, call and similar options) over the
expected life of the financial instrument.
However, in rare cases when the expected
life of the financial instrument cannot

be estimated reliably, then the entity is
required to use the remaining contractual
term of the financial instrument

• Cash flows from the sale of collateral held
or other credit enhancements that are
integral to the contractual terms

As a practical expedient, the Company
evaluates individual balances to determine
impairment loss allowance on its trade
receivables. The evaluation is based on its
historically observed default rates over the
expected life of the trade receivables and is
adjusted for forward-looking estimates. At
every reporting date, the historical observed
default rates are updated and changes in the
forward-looking estimates are analysed.

ECL impairment loss allowance (or reversal)
recognised during the period is recognised as
expense/ income in the statement of profit and
loss. This amount is reflected under the head
‘other expenses'' in the statement of profit and
loss. Financial assets measured as at amortized
cost and contractual revenue receivables: ECL
is presented as an allowance, i.e., as an integral
part of the measurement of those assets in the
balance sheet. The allowance reduces the net
carrying amount. Until the asset meets write¬
off criteria, the Company does not reduce
impairment allowance from the gross carrying
amount. For assessing increase in credit risk
and impairment loss, the Company combines
financial instruments on the basis of shared
credit risk characteristics with the objective
of facilitating an analysis that is designed to
enable significant increases in credit risk to be
identified on a timely basis.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial
recognition, as financial liabilities at FVTPL, loans
and borrowings, payables, as appropriate.

All financial liabilities are recognised initially
at fair value and, in the case of loans and
borrowings and payables, net of directly
attributable transaction costs.

The Company''s financial liabilities include trade
and other payables, contingent consideration
and loans and borrowings including bank
overdrafts and cash credits.

Subsequent measurement

The measurement of financial liabilities
depends on their classification, as described
below:

Financial liabilities at fair value through profit
or loss (Contingent consideration)

Financial liabilities at fair value through profit or
loss include financial liabilities held for trading
and financial liabilities designated upon initial
recognition as at fair value through profit or
loss.

Financial liabilities designated upon initial
recognition at fair value through profit or loss
are designated as such at the initial date of
recognition, and only if the criteria in Ind AS 109
are satisfied. For liabilities designated as FVTPL,
fair value gains/ losses attributable to changes
in own credit risk are recognised in OCI. These
gains/ losses are not subsequently transferred
to P&L However, the Company may transfer
the cumulative gain or loss within equity. All
other changes in fair value of such liability are
recognised in the statement of profit and loss.

Financial liabilities at amortized cost (Loans
and borrowings)

After initial recognition, interest-bearing loans
and borrowings are subsequently measured
at amortized cost using the EIR method. Gains
and losses are recognised in profit or loss
when the liabilities are derecognised as well as
through the EIR amortisation process.

Amortized cost is calculated by taking
into account any discount or premium on
acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is
included as finance costs in the statement of
profit and loss.

Derecognition

A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modified, such an exchange or modification
is treated as the derecognition of the original
liability and the recognition of a new liability.
The difference in the respective carrying
amounts is recognised in the statement of
profit or loss.

Reclassification of financial assets

The Company determines classification
of financial assets and liabilities on initial
recognition. After initial recognition, no
reclassification is made for financial assets
which are equity instruments and financial
liabilities. For financial assets which are debt

instruments, a reclassification is made only
if there is a change in the business model
for managing those assets. Changes to the
business model are expected to be infrequent.
The Company''s senior management
determines change in the business model as
a result of external or internal changes which
are significant to the Company''s operations.
Such changes are evident to external parties. A
change in the business model occurs when the
Company either begins or ceases to perform
an activity that is significant to its operations.
If the Company reclassifies financial assets, it
applies the reclassification prospectively from
the reclassification date which is the first day of
the immediately next reporting period following
the change in business model. The Company
does not restate any previously recognised
gains, losses (including impairment gains or
losses) or interest.

Offsetting of financial instruments

Financial assets and financial liabilities are
offset and the net amount is reported in the
standalone balance sheet if there is a currently
enforceable legal right to offset the recognised
amounts and there is an intention to settle on
a net basis, to realise the assets and settle the
liabilities simultaneously.

(p) Cash and cash equivalents

Cash and cash equivalent in the balance sheet
comprise cash at banks and on hand and
short-term deposits with an original maturity
of three months or less, which are subject to
an insignificant risk of changes in value.

For the purpose of the statement of standalone
cash flows, cash and cash equivalents consist
of cash and short-term deposits, as defined
above, net of outstanding bank overdrafts as
they are considered an integral part of the
Company''s cash management.

(q) Segment information

The Company has only one reportable
business segment, which is rendering of Digital
Assurance and Engineering (Software testing)
Services. Accordingly, the amounts appearing
in the financial statements relate to the
Company''s single business segment.

(r) Dividend

The Company recognises a liability to pay
dividend to its equity holders when the
distribution is authorised, and the distribution is
no longer at the discretion of the Company. As
per the corporate laws in India, a distribution

is authorised when it is approved by the
shareholders. A corresponding amount is
recognised directly in equity.

(s) Earnings per share

Basic earnings per share is calculated by
dividing the net profit or loss attributable to
equity holder by the weighted average number
of equity shares outstanding during the period.
Partly paid equity shares are treated as a
fraction of an equity share to the extent that
they are entitled to participate in dividends
relative to a fully paid equity share during
the reporting period. The weighted average
number of equity shares outstanding during
the period is adjusted for events such as bonus
issue, bonus element in a rights issue, share
split, and reverse share split (consolidation
of shares) that have changed the number
of equity shares outstanding, without a
corresponding change in resources.

For the purpose of calculating diluted earnings
per share, the net profit or loss for the period
attributable to its equity shareholders and
the weighted average number of shares
outstanding during the period are adjusted
for the effects of all dilutive potential equity
shares.

2.3 New and amended standards.

The Company applied for the first-time certain
standards and amendments, which are effective
for annual periods beginning on or after April 1,
2024. The Company has not early adopted any
other standard or amendment that has been
issued but is not yet effective:

(i) Insurance contracts - Ind AS 117

Ind AS 117 Insurance Contracts is a
comprehensive new accounting standard for
insurance contracts covering recognition and
measurement, presentation and disclosure. Ind
AS 117 replaces Ind AS 104 Insurance Contracts.
Ind AS 117 applies to all types of insurance
contracts, regardless of the type of entities that
issue them as well as to certain guarantees
and financial instruments with discretionary
participation features; a few scope exceptions
will apply.

The application of Ind AS 117 had no impact on
the standalone financial statements as the
Company has not entered into any contracts
in the nature of insurance contracts covered
under Ind AS 117.

(ii) Lease liability in a sale and leaseback -
Amendment to Ind AS 116

The amendment specifies the requirements
that a seller-lessee uses in measuring the
lease liability arising in a sale and leaseback
transaction, to ensure the seller-lessee does
not recognise any amount of the gain or loss
that relates to the right of use it retains.

The amendment is effective for annual
reporting periods beginning on or after 1 April
2024 and must be applied retrospectively to
sale and leaseback transactions entered into
after the date of initial application of Ind AS 116.

The amendment does not have an impact
on the Company''s standalone financial
statements as the Company has not entered
into any sale and leaseback transactions

2.4 Standards notified but not yet effective.

There are no standards that are notified and not
yet effective as on the date.

Notes:

# Cigniti Technologies (nz) Limited, New Zealand, wholly owned subsidiary of the Company, was wound up
effective January 30, 2019.

Investment impairment testing: The carrying amount of the investment is tested annually for impairment
using discounted cash-flow models of subsidiary''s recoverable value compared to the carrying value and
comparable multiple method. A deficit between the recoverable value and the carrying value of investment
would result in impairment. The inputs to the impairment testing model which have the most significant
impact on recoverable value include:

- Projected revenue growth, operating margins and operating cash-flows in the years 1-5;

- Stable long-term growth rates beyond five years and in perpetuity; and

- Discount rates that represent the current market assessment of the risks specific to the subsidiary, taking
into consideration the time value of money.

The impairment test model includes sensitivity testing of key assumptions, including revenue growth, operating
margin and discount rate.

Based on the approved business plan and valuation assessment, the management of the Company expects
growth in operations and sustained profitability. The projections of the business is above the book value of its
investments indicating no signs of impairment. Accordingly, these financial statements do not include any
adjustment relating to impairment of investments.

* Investments value rounded off in lakhs.

There are no disputed trade receivables in the current and previous year.

No trade or other receivable are due from directors or other officers of the Company either severally or jointly
with any other person. Nor any trade or other receivable are due from firms or private companies respectively
in which any director is a partner, a director or a member.

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s
length transactions. The Company has recorded an allowance for credit loss of Rs. 20.44 lakhs on receivables
relating to amounts owed by related party (March 31, 2024: Rs. 20.44 lakhs). This assessment is undertaken

(b) Terms/rights attached to equity shares

The Company has one class of equity shares having par value of Rs. 10/- per share. Each holder of equity
shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual
General Meeting. In the event of liquidation of the Company, the holders of the equity shares will be
entitled to receive the remaining assets of the Company after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held by the shareholders.

Unbilled receivables: Unbilled receivables are initially recognised for the revenue earned in excess of amounts
billed to clients as at the balance sheet date. Upon completion of acceptance by the customer, the amounts
recognised as unbilled receivables are reclassified to trade receivables. During the year ended March 31,
2025, Rs. 1,530.24 lakhs of unbilled receivables as at March 31, 2024 has been reclassified to trade receivables
on completion of performance obligation. During the year ended March 31, 2024, Rs. 1,239.27 lakhs of unbilled
receivables as at March 31, 2023 has been reclassified to trade receivables on completion of performance
obligation.

22.3 Performance obligation

The Company has arrangements with the customer which are primarily “time and material” basis. The
performance obligation in case of time and material contracts is satisfied over time. Revenue is recognised
as and when the services are performed.

The Company also performs work under “fixed-price” arrangements. Revenue from fixed-price contracts is
recognized as per the ‘percentage- of-completion'' method, where the performance obligations are satisfied
over time and when there is no uncertainty as to measurement or collectability of consideration. When there
is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such
uncertainty is resolved. Percentage of completion is determined based on the project costs incurred to date
as a percentage of total estimated project costs required to complete the project. The input method has
been used to measure the progress towards completion as there is direct relationship between input and
productivity. There is no unrecognised revenue out of fixed-price arrangements.

The payment is due with in 0-90 days from the time the customer accepts the work performed by the
Company.

*Salaries, wages and bonus includes an amount of Rs. Nil (March 31, 2024: Rs. 2,031.00 lakhs) towards accrual
of long service rewards for certain employees on completion of 25 years of the Company.

#Certain employees of the Company are entitled to stock options granted by Coforge Limited (the Company''s
Parent Company) under the Coforge Employee Stock Option Plan 2005, in relation to services received by the
Company. The Company accrues for the cost of employees stock option determined under the fair value
method over the vesting period of the option, which is reimbursed to the Parent Company. During the year
ended March 31, 2025 Rs 39.15 lakhs (March 31, 2024: Nil) was charged to the Company by the Parent Company.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off
current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities related
to income taxes levied by the same tax authority.

The Company has established a comprehensive system of maintenance of information and documents
as required by the transfer pricing regulations under Sections 92-92F of the Income-Tax Act, 1961. Since
the law requires existence of such information and documentation to be contemporaneous in nature, the
Company continuously updates its documents for the international transactions entered into with the
associated enterprises during the financial year. The management is of the opinion that its international

transactions 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 expense for the year and that of provision for taxation.

31 Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the
parent by the weighted average number of equity shares outstanding during the year including vested and
exercisable employee stock options granted till date.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent by the
weighted average number of equity shares outstanding during the year plus the weighted average number
of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity
shares excluding vested and exercisable employee stock options granted till date.

The following reflects the profit and share data used in the basic and diluted EPS computations:

I. Defined benefit plan

The Company has a defined benefit gratuity plan, governed by Payment of Gratuity Act, 1972. Every
employee who has completed five years or more of service is entitled to a gratuity on departure at 15 days
of last drawn basic salary for each completed year of service. The scheme is funded through a policy with
LIC. The following tables summarise net benefit expenses recognised in the statement of profit and loss,
the status of funding and the amount recognised in the Balance sheet for the gratuity plan:

33 Share based payments

Under the Employee Stock Option Plan, the Company, at its discretion, may grant share options to employees
of the Company. The remuneration committee of the board evaluates the performance and other criteria
of employees and approves the grant of options. These options vest with employees over a specified period
ranging from 1 to 5 years subject to fulfilment of certain conditions. Upon vesting, employees are eligible to
apply and secure allotment of Company''s shares at a price equal to the face value. The fair value of share
options granted is estimated at the date of grant using a Black- Scholes model, taking into account the terms
and conditions upon which the share options were granted. It takes into account historical and expected
dividends, and the share price fluctuation covariance of the Company and its competitors to predict the
distribution of relative share performance.

The expense recognised for employee services received during the year is shown in the following table:

As the future liability for gratuity and leave encashment is provided on an actuarial basis for the
Company as a whole, the amount pertaining to the Key Management personnel and their relatives is not
ascertainable and, therefore, not included above.

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length
transactions. This assessment is undertaken each financial year through examining the financial position
of the related party and the market in which the related party operates. Outstanding balances at the
year-end are unsecured, interest free and settlement occurs in cash.

Transactions of the Company with related parties have not been disclosed as related party transactions
for the period after which they ceased to be related parties.

36 Significant accounting judgements, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities,
and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying
amount of assets or liabilities affected in future periods.

Other disclosures relating to the Company''s exposure to risks and uncertainties includes:

• Capital management Note 40

• Financial risk management objectives and policies Note 38

• Sensitivity analyses disclosures Notes 32 and 38.

Judgements

Determining the lease term of contracts with renewal and termination options - Company as lessee

The Company determines the lease term as the non-cancellable term of the lease, together with any periods
covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by
an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company has several lease contracts that include extension options. The Company applies judgement
in evaluating whether it is reasonably certain whether or not to exercise the option to renew the lease. That
is, it considers all relevant factors that create an economic incentive for it to exercise the renewal . After the
commencement date, the Company reassesses the lease term if there is a significant event or change in
circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew
(e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described below. The Company based its assumptions and
estimates on parameters available when the financial statements were prepared. Existing circumstances and
assumptions about future developments, however, may change due to market changes or circumstances
arising that are beyond the control of the Company. Such changes are reflected in the assumptions when
they occur.

(i) Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit
will be available against which the losses can be utilised. Significant management judgement is required
to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and
the level of future taxable profits together with future tax planning strategies (Refer note 30).

(ii) Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined
using actuarial valuations. An actuarial valuation involves making various assumptions that may differ
from actual developments in the future. These include the determination of the discount rate, future

salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term
nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions
are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount
rate for plans operated in India, the management considers the interest rates of government bonds in
currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality
tables tend to change only at interval in response to demographic changes. Future salary increases and
gratuity increases are based on expected future inflation rates for the respective countries. Further details
about gratuity obligations are given in note 32.

(iii) Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its
incremental borrowing rate (ibr) to measure lease liabilities. The IBR is the rate of interest that the Company
would have to pay to borrow over a similar term, and with a similar security, the funds necessary to
obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR
therefore reflects what the Company ‘would have to pay'', which requires estimation when no observable
rates are available (such as for subsidiaries that do not enter into financing transactions) or when they
need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in
the subsidiary''s functional currency). The Company estimates the IBR using observable inputs (such as
market interest rates) when available and is required to make certain entity-specific estimates (such as
the subsidiary''s stand-alone credit rating).

(iv) Allowance for credit losses on receivables and unbilled revenue

The Company has determined the allowance for credit losses based on the ageing status and historical
loss experience adjusted to reflect current and estimated future economic conditions. The Company
considered current and anticipated future economic conditions relating to industries the Company
deals with and the countries where it operates. In calculating expected credit loss, the Company has also
considered historical pattern of credit loss, the likelihood of increased credit risk. Further details about
allowance for credit losses are given in note 7.

The Company''s principal financial liabilities comprise borrowings, trade and other payables. The main purpose
of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets
include trade and other receivables and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s management oversees
the management of these risks. The Company''s financial risk activities are governed by appropriate policies
and procedures and that financial risks are identified, measured and managed in accordance with the
Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing
each of these risks, which are summarised below.

A Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating
activities (primarily trade receivables) and from its financing activities, including deposits with banks and
financial institutions, foreign exchange transactions and other financial instruments. None of the financial
instruments of the Company result in material concentration of credit risk, except for trade receivables.

The Company considers a counterparty whose payment is due more than 365 days after the due date as
a defaulted party. This is based on considering the market and economic forces in which the entities in the
Company are operating. The Company creates provision for the amount if the credit risk of counter-party
increases significantly due to its poor financial position and failure to make payment beyond a period
of 365 days from the due date. In calculating expected credit loss, the Company has also considered
historical pattern of credit loss, the likelihood of increased credit risk.

Trade receivables as contract assets

The customer credit risk is managed by the Company''s established policy, procedures and controls
relating to customer credit risk management. Before accepting any new customer, the Company uses an
internal credit scoring system to assess the potential customer''s credit quality and defines credit limits
by customer. Limits and scoring attributed to customers are reviewed on periodic basis. Outstanding
customer receivables are regularly monitored. The Company''s receivables turnover is quick and historically,
there were no significant defaults. Ind AS requires an entity to recognise in profit or loss, the amount of
expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to
the amount that is required to be recognised in accordance with Ind AS 109. The Company assesses at
each date of statements of financial position whether a financial asset or a group of financial assets are
impaired. Expected credit losses are measured at an amount equal to the life time expected credit losses
if the credit risk on the financial asset has increased significantly since initial recognition. The Company
has used a practical expedient by computing the expected credit loss allowance for trade receivables
based on a provision matrix. The provision matrix takes into account historical credit loss experience and

adjusted for forward-looking information.

As at March 31, 2025, the Company had 17 customers (March 31, 2024: 16 customers) that owed the
Company more than 1% each of total receivable from parties other than related parties and accounted
for approximately 90% (March 31, 2024: 94%) of receivables. There were 5 customers (March 31, 2024: 3
customers) with balances greater than 5% accounting for approximately 69% (March 31, 2024: 62%) of
total amounts receivable from parties other than related parties.

The Company has adequate provision as at March 31, 2025 amounting to Rs.402.69 lakhs (As at March 31,
2024: Rs. 187.21 lakhs) for receivables.

B Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of
liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use
as per requirements. The Company manages liquidity risk by maintaining adequate reserves, by availing
appropriate borrowing facilities from banks as and when required, by continuously monitoring forecast
and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The table below summarises the maturity profile of the Company''s financial liabilities based on contractual
undiscounted payments:

C Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and
other market changes. Financial instruments affected by market risk include deposits.

The sensitivity analysis in the following sections relate to the position as at March 31, 2025 and March 31,
2024.

The sensitivity analysis have been prepared on the basis that the amount of debt, the ratio of fixed to
floating interest rates of the debt and the proportion of financial instruments in foreign currencies are all
constant.

The following assumptions have been made in calculating the sensitivity analyses:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market
risks. This is based on the financial assets and financial liabilities held as at March 31, 2025 and March 31,
2024.

Cl 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 change in market interest rates. The Company''s exposure to the risk of changes in market
interest rates relates primarily to the Company''s working capital obligations with floating interest rates.

C2 . Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because
of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange
rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in
a foreign currency).

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit
or loss and other comprehensive income and equity, where any transaction references more than one
currency or where assets / liabilities are denominated in a currency other than the functional currency of
the respective entities.

Unhedged foreign currency exposure:

The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the volatility
of the Company''s net financial assets (which includes cash and cash equivalents, trade receivables,
other financial assets, trade payables, other financial liabilities), which are denominated in various foreign
currencies (viz. USD, AED, AUD, ZAR, GBP, CAD, EUR, SGD etc.).

For the year ended March 31, 2025 and March 31, 2024 , every 1% increase /(decrease) of the respective
foreign currencies compared to functional currency of the company would impact profit before tax and
equity before tax as follows for the respective currencies:

39 Segment reporting

In accordance with Indian Accounting Standard (ind AS) 108 on Operating segments, segment information has
been given in the consolidated financial statements of the Company, and therefore no separate disclosure
on segment information is given in these financial statements.

40 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium
and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital
management is to maximise the shareholder value.

The Company manages its capital structure in consideration to the changes in economic conditions and the
requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net
debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and
borrowings, less cash and cash equivalents.

The Company''s policy is to keep the gearing ratio at an optimal level to ensure that the debt related covenants
are complied with.

Notes:

1. It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of
the above pending resolution of the respective proceedings.

2. The Company does not expect any reimbursements in respect of the above contingent liabilities.

3. Claims against the Company not acknowledged as debts as on March 31, 2025 include demand
from the Indian Income tax authorities on certain matters relating to transfer pricing. The Company
is contesting these demands and the management including its tax and legal advisors believe
that its position will more likely be upheld in the appellate process. The management believes
that the ultimate outcome of these proceedings will not have a material adverse effect on the
Company''s financial position and results of operations. The Company has adequate provision in
the books for the potential liability, if any, which may arise.

(ii) In the earlier years, the Company has incorporated subsidiaries i.e. Cigniti Technologies Inc. in USA,
Cigniti Technologies Canada Inc. in Canada, Cigniti Technologies (nz) Limited in New Zealand (striked
off), Cigniti Technologies CR Limitada in Costa Rica, Cigniti Technologies (sg) Pte. Ltd in Singapore and
Cigniti Technologies (cz) Limited s.r.o, in Czech Republic without obtaining overseas direct investment
(odi) certificate from RBI. The Company is in the process of obtaining ODI approval from RBI and is in
the process of compounding FEMA related non compliances.

Management is in the process of addressing the above matters and in view of the administrative/
procedural nature of these non-compliances, believes that they will not have a material impact on
the consolidated financial statements.

c. Other litigations:

(i) In the earlier years, Cigniti Technologies Inc., USA (Cigniti USA), subsidiary of the Company had
filed a lawsuit against it''s former employees and an entity related to such employees, for inter alia
misappropriation of trade secrets and various breaches of contract and fiduciary duty. Subsequent
to the year ended March 31, 2024, Cigniti USA had entered into a settlement agreement with its former
employees and an entity related to such employees, to settle the dispute and withdraw the litigation,
for an amount of USD 4.01 million and received USD 1.01 million which was recognised under other
income for the year ended March 31, 2024. During the current year, the Company has recognised
remaining amount of USD 3.00 million considering there is a reasonable certainty, established based
on realisation of second and third instalments of USD 1.00 million each and binding agreement
between the parties.

(ii) In the earlier years, the Company had received a show cause notice from the Department of
Foreign Trade (DGFT) dated August 25, 2020 and from the Directorate of Revenue Intelligence (dri),
Ahmedabad dated December 28, 2020, stating that the services provided by the Company are not
covered under technical testing and analysis services and it appears that the Company provides
services through subsidiaries in the foreign countries and accordingly the services rendered by the
Company fall under the definition of service rendered through commercial presence in a foreign
country which is not eligible for Service Exports from India Scheme (seis) benefits. The notice calls
upon the Company to show cause a

---

Mar 31, 2024

(k) Provisions, contingent liabilities and commitments

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liability

Contingent liability is disclosed in the case of:

• A present obligation arising from past events, when it is not probable that an outflow of resources will not be required to settle the obligation

• A present obligation arising from past events, when it cannot be measured reliably.

• A possible obligation arising from past events, unless the probability of outflow of resources is remote.

The Company does not recognize a contingent liability but discloses its existence in the Standalone Financial Statements.

Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.

(l) Retirement and other employee benefits

Retirement benefit in the form of Provident Fund and Employee State Insurance is a defined contribution schemes. The Company has no obligation, other than the contribution payable to the fund. The Company recognizes contribution payable to these schemes 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 recognised 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 recognised as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.

The Company operates a defined benefit gratuity plan in India, which requires contributions to be made to a separately administered fund.

The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (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 period in which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.

Past service costs are recognised in profit or loss on the earlier of:

• The date of the plan amendment or curtailment, and

• The date that the Company recognises related restructuring costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:

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

• Net interest expense or income Short term employee benefits

Accumulated leave, which is expected to be utilized within the next twelve 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 treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred.

However, the Company presents the entire provision towards accumulated leave as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for twelve months after the reporting date.

(m) Hired contractors cost

Hired contractors cost represents cost of technical sub-contractors for service delivery to the Company''s customers. These costs are accrued based on services received from the sub-contractors in line with the terms of the contract.

(n) Share-based payments

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

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 period 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 period 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 period represents the movement in cumulative expense recognised as at the beginning and end of that period 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 nonvesting 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. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.

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

(o) 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 assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset''s contractual cash flow characteristics and the Company''s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient are measured at the transaction price determined under Ind AS 115. Refer to the accounting policies in section Revenue from contracts with customers.

For a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash flows that are ''solely payments of principal and interest (SPPI)'' on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

The Company''s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in three categories:

• Financial assets at amortized cost (debt instruments)

• Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

• Financial assets at fair value through profit or loss

Financial assets at amortized cost (debt instruments)

A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments of Principal and Interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables.

Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI when they meet the definition of equity under Ind AS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by-instrument basis. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are

recognised as other income in the statement of profit and loss when the right of payment has been established, except when the Company benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.

The Company elected to classify irrevocably its non-listed equity investments under this category.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are carried in the balance sheet at fair value with net changes in fair value recognised in the statement of profit and loss.

This category includes derivative instruments and listed equity investments which the Company had not irrevocably elected to classify at fair value through OCI. Dividends on listed equity investments are recognised in the statement of profit and loss when the right of payment has been established.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the Company''s balance sheet) when:

a) the rights to receive cash flows from the asset have expired, or

b) the Company has transferred its rights to receive cash flows from the asset, and

i. the Company has transferred substantially all the risks and rewards of the asset, or

ii. the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an

associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

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 on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortized cost e.g., loans, debt securities, deposits, trade receivables and bank balance

b) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 115.

The Company follows ''simplified approach'' for recognition of impairment loss allowance on:

• Trade receivables or contract revenue receivables; and

• Other financial assets

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument.

ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:

• All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is

required to use the remaining contractual term of the financial instrument

• Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms

As a practical expedient, the Company evaluates individual balances to determine impairment loss allowance on its trade receivables. The evaluation is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

ECL impairment loss allowance (or reversal) recognised during the period is recognised as expense/ income in the statement of profit and loss. This amount is reflected under the head ''other expenses'' in the statement of profit and loss. Financial assets measured as at amortized cost and contractual revenue receivables: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets writeoff criteria, the Company does not reduce impairment allowance from the gross carrying amount. For assessing increase in credit risk and impairment loss, the Company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings, payables, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

The Company''s financial liabilities include trade and other payables, contingent consideration and loans and borrowings including bank overdrafts and cash credits.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss (Contingent consideration)

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognised in OCI. These gains/ losses are not subsequently transferred to P&L. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit and loss.

Financial liabilities at amortized cost (Loans and borrowings)

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

Derecognition

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only

if there is a change in the business model for managing those assets. Changes to the business model are expected to be infrequent. The Company''s senior management determines change in the business model as a result of external or internal changes which are significant to the Company''s operations. Such changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification prospectively from the reclassification date which is the first day of the immediately next reporting period following the change in business model. The Company does not restate any previously recognised gains, losses (including impairment gains or losses) or interest.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the standalone balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

(p) Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.

For the purpose of the statement of standalone cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

(q) Segment information

The Company has only one reportable business segment, which is rendering of Digital Assurance and Engineering (Software testing) Services. Accordingly, the amounts appearing in the financial statements relate to the Company''s single business segment.

(r) Dividend

The Company recognises a liability to pay dividend to its equity holders when the distribution is authorised, and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the

shareholders. A corresponding amount is recognised directly in equity.

(s) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss attributable to equity holder by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to its equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

2.3 New and amended standards.

The Company applied for the first-time certain standards and amendments, which are effective for annual periods beginning on or after April 1, 2023. The Company has not early adopted any other standard or amendment that has been issued but is not yet effective:

(i) Definition of Accounting Estimates -Amendments to Ind AS 8

The amendments clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. It has also been clarified how entities use measurement techniques and inputs to develop accounting estimates.

The amendments had no impact on the standalone financial statements of the Company.

(ii) Disclosure of Accounting Policies -Amendments to Ind AS 1

The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ''significant'' accounting policies with a requirement to disclose their ''material'' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments have had an impact on the Company''s disclosures of accounting policies, but not on the measurement, recognition or presentation of any items in the Company''s financial statements.

(iii) Deferred Tax related to Assets and Liabilities arising from a Single Transaction -Amendments to Ind AS 12

The amendments narrow the scope of the initial recognition exception under Ind AS 12, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases.

The Company previously recognised for deferred tax on leases on a net basis. As a result of these amendments, the Company has recognised a separate deferred tax asset in relation to its lease liabilities and a deferred tax liability in relation to its right-of-use assets. Since, these balances qualify for offset as per the requirements of paragraph 74 of Ind AS 12, there is no impact in the balance sheet. There was also no impact on the opening retained earnings as at April 01, 2022.

2.4 Standards notified but not yet effective.

There are no standards that are notified and not

yet effective as on the date.

Notes:

a) Cigniti Technologies (nz) Limited, New Zealand, wholly owned subsidiary of the Company, was wound up effective January 30, 2019. The Company has made provision for the investment in the subsidiary in earlier years.

b) Gallop Solutions Private Limited, wholly owned subsidiary of the Company based on networth of the subsidiary has made provision for diminution in value of investments amounting to Rs. 52.91 lakhs (March 31, 2023: Rs. Nil).

c) Investment impairment testing: The carrying amount of the investment is tested annually for impairment using discounted cash-flow models of subsidiary''s recoverable value compared to the carrying value and comparable multiple method. A deficit between the recoverable value and the carrying value of investment would result in impairment. The inputs to the impairment testing model which have the most significant impact on recoverable value include:

- Projected revenue growth, operating margins and operating cash-flows in the years 1-5;

- Stable long-term growth rates beyond five years and in perpetuity; and

- Discount rates that represent the current market assessment of the risks specific to the subsidiary, taking into consideration the time value of money.

The impairment test model includes sensitivity testing of key assumptions, including revenue growth, operating margin and discount rate.

Based on the approved business plan and valuation assessment, the management of the Company expects growth in operations and sustained profitability. The projections of the business is above the book value of its investments except for those in (a) & (b) above, indicating no signs of impairment. Accordingly, these financial statements do not include any adjustment relating to impairment of investments.

No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. The Company has recorded an allowance for credit loss of Rs. 20.44 lakhs on receivables relating to amounts owed by related party (March 31, 2023: Rs. 20.44 lakhs). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Trade receivables are generally with the credit term of 0 to 90 days and are non interest bearing.

Expected credit losses (ECL): The Company provides for ECL under the simplified approach from 1%-5% for trade receivables outstanding between 0-90 days and freely upto 100% for trade receivables of more than 90 days based on past trends.

(a)(i) Buy-back of shares

The Board, at its meeting held on May 18, 2022, approved the buyback of the Company''s fully paid-up equity shares of face value of Rs. 10 each, from the eligible equity shareholders of the Company, other than promoters, promoter group and persons who are in control of the Company at a price not exceeding Rs. 500 per equity share (maximum buyback price), for an aggregate amount not exceeding Rs.3,800 lakhs (maximum buyback size, excluding buyback tax) from the open market through the stock exchange mechanism, in accordance with the provisions of Companies Act, 2013 and SEBI (Buyback of securities) Regulations, 2018, subject to shareholders'' approval in the ensuing Annual General Meeting. The shareholders approved the proposal of buyback of equity shares recommended by its Board of Directors

in the Annual General meeting held on June 19, 2022. The buyback was offered to all eligible equity shareholders of the Company (other than the Promoters, the Promoter Group and Persons in Control of the Company) under the open market route through the stock exchange. The buyback of equity shares through the stock exchange was completed on June 29, 2022. During this buyback period, the Company had purchased and completely extinguished a total of 8,33,050 equity shares from the stock exchange at a volume weighted average buyback price of Rs. 456.13 per equity share comprising ~1.66% of the pre buyback paid up equity share capital of the Company. The buyback resulted in a cash outflow of Rs. 3,799.77 lakhs (excluding transaction costs and tax on buyback). The Company funded the buyback from its free reserves including Securities Premium as explained in Section 68 of the Companies Act, 2013. In accordance with Section 69 of the Companies Act, 2013, as at March 31, 2023, the Company has created ''Capital Redemption Reserve'' of Rs. 83.30 lakhs equal to the nominal value of the above shares bought back as an appropriation from the retained earnings. The Company''s objective when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to shareholders, issue new shares or buy back issued shares. The Company has only one class of equity shares and has no debt. Consequent to the above capital structure, there are no externally imposed capital requirements.

(b) Terms/rights attached to equity shares

The Company has one class of equity shares having par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Contract assets

Unbilled receivables: Unbilled receivables are initially recognised for the revenue earned in excess of amounts billed to clients as at the balance sheet date. Upon completion of acceptance by the customer, the amounts recognised as unbilled receivables are reclassified to trade receivables. During the year ended March 31, 2024, Rs. 1,239.27 lakhs of unbilled receivables as at March 31, 2023 has been reclassified to trade receivables on completion of performance obligation. During the year ended March 31, 2023, Rs. 912.87 lakhs of unbilled receivables as at March 31, 2022 has been reclassified to trade receivables on completion of performance obligation.

22.3 Performance obligation

The Company has arrangements with the customer which are "time and material" basis. The performance obligation in case of time and material contracts is satisfied over time. Revenue is recognised as and when the services are performed.

The Company also performs work under "fixed-price" arrangements. Revenue from fixed-price contracts is recognized as per the ''percentage- of-completion'' method, where the performance obligations are satisfied over time and when there is no uncertainty as to measurement or collectability of consideration. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved. Percentage of completion is determined based on the project costs incurred to date as a percentage of total estimated project costs required to complete the project. The input method has been used to measure the progress towards completion as there is direct relationship between input and productivity. There is no unrecognised revenue out of fixed-price arrangements.

The payment is due with in 0-90 days from the time the customer accepts the work performed by the Company.

31 Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The following reflects the profit and share data used in the basic and diluted EPS computations:

32 Retirement and other employee benefits I Defined benefit plan

The Company has a defined benefit gratuity plan, governed by Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to a gratuity on departure at 15 days of last drawn basic salary for each completed year of service. The scheme is funded through a policy with LIC. The following tables summarise net benefit expenses recognised in the statement of profit and loss, the status of funding and the amount recognised in the Balance sheet for the gratuity plan:

33 Share based payments

Under the Employee Stock Option Plan, the Company, at its discretion, may grant share options to employees of the Company. The remuneration committee of the board evaluates the performance and other criteria of employees and approves the grant of options. These options vest with employees over a specified period ranging from 1 to 5 years subject to fulfilment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of Company''s shares at a price equal to the face value. The fair value of share options granted is estimated at the date of grant using a Black- Scholes model, taking into account the terms and conditions upon which the share options were granted. It takes into account historical and expected dividends, and the share price fluctuation covariance of the Company and its competitors to predict the distribution of relative share performance.

In the previous year, the key management personnel (Mr. C.V Subramanyam) has given personal guarantees to bankers in connection with cash credit facility whose closing balance on March 31, 2023 was Rs. 3,043.67 lakhs. There is no personal guarantee for the current year ended March 31, 2024.

As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the Key Management personnel and their relatives is not ascertainable and, therefore, not included above.

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. Outstanding balances at the year-end are unsecured, interest free and settlement occurs in cash.

*Mr. K CH Subbarao was the director of the Group until June 15, 2023 and resigned w.e.f June 16, 2023. Accordingly, any transactions of the Company with Mr. K CH Subbarao and the entities (where he is a director/member) have not been disclosed as related party transactions for the period after June 15, 2023.

36 Significant accounting judgements, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Other disclosures relating to the Company''s exposure to risks and uncertainties includes:

• Capital management Note 40

• Financial risk management objectives and policies Note 38

• Sensitivity analyses disclosures Notes 32 and 38.

Judgements

Determining the lease term of contracts with renewal and termination options - Company as lessee

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company has several lease contracts that include extension options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise the renewal . After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(i) Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies (Refer note 30).

(ii) Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Further details about gratuity obligations are given in note 32.

(iii) Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ''would have to pay'', which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary''s functional currency). The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary''s stand-alone credit rating).

(iv) Allowance for credit losses on receivables and unbilled revenue

The Company has determined the allowance for credit losses based on the ageing status and historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the Company deals with and the countries where it operates. In calculating expected credit loss, the Company has also considered historical pattern of credit loss, the likelihood of increased credit risk.

The management assessed that the fair value of cash and cash equivalents, trade receivables, other financial assets, trade payables and other financial liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Further, the management has assessed that fair value of borrowings approximate their carrying amounts largely since they are carried at floating rate of interest.

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.

Fair value hierarchy

Valuation technique and key inputs

Level 1 - Quoted prices (unadjusted) in an active market for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs)

38 Financial risk management objectives and policies

The Company''s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s management oversees the management of these risks. The Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

A Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. None of the financial instruments of the Company result in material concentration of credit risk, except for trade receivables.

The Company considers a counterparty whose payment is due more than 90 days after the due date as a defaulted party. This is based on considering the market and economic forces in which the entities in the Company are operating. The Company creates provision for the amount if the credit risk of counter-party increases significantly due to its poor financial position and failure to make payment beyond a period of 90 days from the due date. In calculating expected credit loss, the Company has also considered historical pattern of credit loss, the likelihood of increased credit risk.

Trade receivables as contract assets

The customer credit risk is managed by the Company''s established policy, procedures and controls relating to customer credit risk management. Before accepting any new customer, the Company uses an internal credit scoring system to assess the potential customer''s credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed on periodic basis. Outstanding customer receivables are regularly monitored. The Company''s receivables turnover is quick and historically, there were no significant defaults. Ind AS requires an entity to recognise in profit or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised in accordance with Ind AS 109. The Company assesses at each date of statements of financial position whether a financial asset or a group of financial assets are

impaired. Expected credit losses are measured at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information.

As at March 31, 2024, the Company had 16 customers (March 31, 2023: 18 customers) that owed the Company more than 1% each of total receivable from parties other than related parties and accounted for approximately 94% (March 31, 2023: 94%) of receivables. There were 3 customers (March 31, 2023: 6 customers) with balances greater than 5% accounting for approximately 62% (March 31, 2023: 68%) of total amounts receivable from parties other than related parties.

The Company has adequate provision as at March 31, 2024 amounting to Rs.187.21 lakhs (As at March 31, 2023: Rs. 186.04 lakhs) for receivables.

B Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, by availing appropriate borrowing facilities from banks as and when required, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

C Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other market changes. Financial instruments affected by market risk include loans and borrowings and deposits.

The sensitivity analysis in the following sections relate to the position as at March 31, 2024 and March 31, 2023.

The sensitivity analysis have been prepared on the basis that the amount of debt, the ratio of fixed to floating interest rates of the debt and the proportion of financial instruments in foreign currencies are all constant.

The following assumptions have been made in calculating the sensitivity analyses:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held as at March 31, 2024 and March 31, 2023.

Cl 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 change in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s working capital obligations with floating interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of borrowings affected. With all other variables held constant, the Company''s profit before tax is affected through the impact on borrowings, as follows:

C2 .Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities.

Unhedged foreign currency exposure:

The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the volatility of the Company''s net financial assets (which includes cash and cash equivalents, trade receivables, other financial assets, trade payables, other financial liabilities), which are denominated in various foreign currencies (viz. USD, AED, AUD, ZAR, GBP, CAD, EUR, SGD etc.).

For the year ended March 31, 2024 and March 31, 2023 , every 1% increase /(decrease) of the respective foreign currencies compared to functional currency of the company would impact profit before tax and equity before tax as follows for the respective currencies:

39 Segment reporting

In accordance with Indian Accounting Standard (Ind AS) 108 on Operating segments, segment information has been given in the consolidated financial statements of the Company, and therefore no separate disclosure on segment information is given in these financial statements.

40 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

The Company''s policy is to keep the gearing ratio at an optimal level to ensure that the debt related covenants are complied with.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year and previous year.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2024 and March 31, 2023.

41 Commitments, contingencies and other litigations

a. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2024 is Rs. 19.88 lakhs (March 31, 2023 : Rs. Nil).

b. Contingent liabilities

(i) (a) In the earlier years, the Company had received a draft Transfer Pricing (TP) assessment order for

A.Y. 2017-2018 under section 92CA(3) of Income Tax Act, 1961 proposing an adjustment of Rs. 6,285.52 lakhs involving tax implication of approximately Rs. 2078.18 lakhs, excluding interest and penalty. The adjustments majorly pertains to transfer pricing margin adjustment and interest on loans and advances to subsidiaries. Subsequently, the Company had received the final order with the proposed adjustment as mentioned in the draft order. Management had filed an appeal with the tax authorities and is currently pending with Commissioner (Appeals) /Dispute Resolution Panel (drp).

(b) In the earlier years, the Company had received an assessment order for A.Y. 2018-2019 under section 143(3) read with section 144C(13) of Income Tax Act, 1961 proposing an adjustment of Rs. 596.53 lakhs involving tax implication of approximately Rs. 268.56 lakhs, excluding interest and penalty. The adjustments majorly pertains to interest on delayed trade receivables and interest on loans and advances to subsidiaries. Management has filed an appeal with the tax authorities and is currently pending with Income Tax Appellate Tribunal (ITAT).

Management has assessed the order and based on expert advice and its documentation relating to the international transactions, believes that the Company has a strong basis to support its position and that the likelihood of any liability devolving on the Company on account of transfer pricing adjustment is remote. The Company has adequate provision in the books for the potential liability, if any, which may arise out of other adjustments.

(ii) In the earlier years, the Company had received a show cause notice from the Department of Foreign Trade (DGFT) dated August 25, 2020 and from the Directorate of Revenue Intelligence (DRI), Ahmedabad dated December 28, 2020, stating that the services provided by the Company are not covered under technical testing

---

Mar 31, 2023

a) a) Cigniti Technologies (nz) Limited, New Zealand, wholly owned subsidiary of the Company, was wound up effective January 30, 2019. The Company has made provision for the investment in the subsidiary in earlier years.

b) Investment impairment testing: The carrying amount of the investment is tested annually for impairment using discounted cash-flow models of subsidiary''s recoverable value compared to the carrying value and comparable multiple method. A deficit between the recoverable value and the carrying value of investment would result in impairment. The inputs to the impairment testing model which have the most significant impact on recoverable value include:

- Projected revenue growth, operating margins and operating cash-flows in the years 1-5;

- Stable long-term growth rates beyond five years and in perpetuity; and

- Discount rates that represent the current market assessment of the risks specific to the subsidiary, taking

into consideration the time value of money.

The impairment test model includes sensitivity testing of key assumptions, including revenue growth, operating margin and discount rate.

Based on the approved business plan and valuation assessment, the management of the Company expects growth in operations and sustained profitability. The projections of the business is above the book value of its investments, indicating no signs of impairment. Accordingly, these financial statements do not include any adjustment relating to impairment of investments.

* Investments value rounded off in lakhs.

Financial assets

There are no loans or deposits given, covered under section 186(4) of Companies Act, 2013.

There are no disputed trade receivables in the current and previous year.

No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. The Company has recorded an allowance for credit loss of Rs. 20.44 lakhs on receivables relating to amounts owed by related party (March 31, 2022: Rs. 20.44 lakhs). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Trade receivables are generally with the credit term of 30 to 90 days and are non interest bearing.

Expected credit losses (ECL): The Company provides for ECL under the simplified approach from 1%-5% for trade receivables outstanding between 0-90 days and freely upto 100% for trade receivables of more than 90 days based on past trends.

(a) Buyback of shares

The Board, at its meeting held on May 18, 2022, approved the buyback of the Company''s fully paid-up equity shares of face value of Rs. 10 each, from the eligible equity shareholders of the Company, other than promoters, promoter group and persons who are in control of the Company at a price not exceeding Rs. 500 per equity share (maximum buyback price), for an aggregate amount not exceeding Rs.3,800 lakhs (maximum buyback size, excluding buyback tax) from the open market through the stock exchange mechanism, in accordance with the provisions of Companies Act, 2013 and SEBI (Buyback of securities) Regulations, 2018, subject to shareholders'' approval in the ensuing Annual General Meeting. The shareholders approved the proposal of buyback of equity shares recommended by its Board of Directors in the Annual General meeting held on June 19, 2022. The buyback was offered to all eligible equity shareholders of the Company (other than the Promoters, the Promoter Group and Persons in Control of the Company) under the open market route through the stock exchange. The buyback of equity shares through the stock exchange was completed on June 29, 2022. During this buyback period, the Company had purchased and completely extinguished a total of 8,33,050 equity shares from the stock exchange at a volume weighted average buyback price of Rs. 456.13 per equity share comprising ~1.66% of the pre buyback paid up equity share capital of the Company. The buyback resulted in a cash outflow of Rs. 3,799.77 lakhs (excluding transaction costs and tax on buyback). The Company funded the buyback from its free reserves including Securities Premium as explained in Section 68 of the Companies Act, 2013. In accordance with Section 69 of the Companies Act, 2013, as at March 31, 2023, the Company has created ‘Capital Redemption Reserve'' of Rs. 83.30 lakhs equal to the nominal value of the above shares bought back as an appropriation from the general reserve. The Company''s objective when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. In order to maintain or achieve an optimal capital structure, the Company may adjust the amount of dividend payment, return capital to shareholders, issue new shares or buy back issued shares. The Company has only one class of equity shares and has no debt. Consequent to the above capital structure, there are no externally imposed capital requirements.

(b) Terms/rights attached to equity shares

The Company has one class of equity shares having par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognized as a liability as at March 31, 2023. The dividend declared/ paid and proposed is in accordance with Section 123 of The Companies Act, 2013.

There are no equity shares issued as bonus and issued for consideration other than cash during the period of five years immediately preceding the reporting date.

14.2 Share based payment reserve

The share-based payment reserve is used to recognise the grant date fair value of options issued to employees under Employee stock option plan. Refer note 33 for further details of these plans.

14.3 Retained earnings

Retained earnings comprises of prior year''s undistributed earnings after taxes along with current year profit.

14.4 Capital redemption reserve

Capital redemption reserve is created for the amount equal to face value of shares bought back during the current year.

(a) Cash credit from banks of Rs. 3,043.67 lakhs (March 31, 2022: Rs 2,403.51 lakhs) is secured by hypothecation of trade receivables of the Company and exclusive charge - cash collateral amounting to Rs. 1,700 lakhs in the name of Company and/or promoters. The cash credit is also secured by personal guarantee of the director, Mr. C.V Subramanyam, Managing Director. It is repayable on demand and carries floating interest rate of 8.50%p.a. (March 31, 2022: 6.50%p.a). The Company had available Rs. 556.33 lakhs (March 31, 2022: Rs. 96.49 lakhs) of undrawn committed borrowing facilities as at March 31, 2023.

The Company has taken loans against security of current assets and quarterly returns or statements of current assets filed by the Company with bank are in agreement with the books of accounts.

22.3 Performance obligation

The Company has arrangements with the customer which are “time and material” basis. The performance obligation in case of time and material contracts is satisfied over time. Revenue is recognized as and when the services are performed.

The Company also performs work under “fixed-price” arrangements. Revenue from fixed-price contracts is recognized as per the ‘percentage-of-completion'' method, where the performance obligations are satisfied over time and when there is no uncertainty as to measurement or collectability of consideration. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved. Percentage of completion is determined based on the project costs incurred to date as a percentage of total estimated project costs required to complete the project. The input method has been used to measure the progress towards completion as there is direct relationship between input and productivity. There is no unrecognized revenue out of fixed-price arrangements.

The payment is due with in 30-90 days from the time the customer accepts the work performed by the Company.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities related to income taxes levied by the same tax authority.

In the previous year, the Company has opted for the lower tax rate pursuant to Taxation Law (Amendment) Ordinance, 2019 having evaluated the benefits of the same under the Income Tax Act, 1961.

31 Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

There have been no other transactions involving equity shares or potential equity shares between the reporting date and date of authorisation of these financial statements.

32 Gratuity and other employee benefitsI Defined Benefit Plans

The Company has a defined benefit gratuity plan governed by Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to a gratuity on departure at 15 days of last drawn salary for each completed year of service. The scheme is funded through a policy with LIC. The following tables summarise net benefit expenses recognized in the statement of profit and loss, the status of funding and the amount recognized in the Balance sheet for the gratuity plan:

33 Share based payments

Under the Employee Stock Option Plan, the Company, at its discretion, may grant share options to employees of the Company. The remuneration committee of the board evaluates the performance and other criteria of employees and approves the grant of options. These options vest with employees over a specified period ranging from 1 to 5 years subject to fulfilment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of Company''s shares at a price equal to the face value. The fair value of share options granted is estimated at the date of grant using a Black- Scholes model, taking into account the terms and conditions upon which the share options were granted. It takes into account historical and expected dividends, and the share price fluctuation covariance of the Company and its competitors to predict the distribution of relative share performance.

Key management personnel (Mr. C.V Subramanyam) has given personal guarantees to bankers in connection with cash credit facility whose closing balance in total is Rs. 3,043.67 lakhs (March 31, 2022: Rs. Rs. 2,403.51 lakhs).

As the future liability for gratuity and leave encashment is provided on an actuarial basis for the Company as a whole, the amount pertaining to the Key Management personnel and their relatives is not ascertainable and, therefore, not included above.

The transactions with related parties are made on terms equivalent to those that prevail in arm''s length transactions. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. Outstanding balances at the year-end are unsecured, interest free and settlement occurs in cash.

36 Significant accounting judgments, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Other disclosures relating to the Company''s exposure to risks and uncertainties includes:

• Capital management Note 40

• Financial risk management objectives and policies Note 38

• Sensitivity analyses disclosures Notes 32 and 38.

Judgments

Determining the lease term of contracts with renewal and termination options - Company as lessee

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(i) Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies (Refer note 30).

(ii) Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Further details about gratuity obligations are given in note 32.

(iii) Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (ibr) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ‘would have to pay'', which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary''s functional currency). The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary''s stand-alone credit rating).

(iv) Allowance for credit losses on receivables and unbilled revenue

The Company has determined the allowance for credit losses based on the ageing status and historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the Company deals with and the countries where it operates. In calculating expected credit loss, the Company has also considered historical pattern of credit loss, the likelihood of increased credit risk.

The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Further, the management has assessed that fair value of borrowings approximate their carrying amounts largely since they are carried at floating rate of interest.

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.

38 Financial risk management objectives and policies

The Company''s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

A Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. None of the financial instruments of the Company result in material concentration of credit risk, except for trade receivables.

The Company considers a counterparty whose payment is due more than 90 days after the due date as a defaulted party. This is based on considering the market and economic forces in which the entities in the Company are operating. The Company creates provision for the amount if the credit risk of counter-party increases significantly due to its poor financial position and failure to make payment beyond a period of 90 days from the due date. In calculating expected credit loss, the Company has also considered historical pattern of credit loss, the likelihood of increased credit risk.

Trade receivables:

The customer credit risk is managed by the Company''s established policy, procedures and control relating to customer credit risk management. Before accepting any new customer, the Company uses an internal credit scoring system to assess the potential customer''s credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed on periodic basis. Outstanding customer receivables are regularly monitored. The Company''s receivables turnover is quick and historically, there were no significant defaults. Ind AS requires an entity to recognise in profit or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized in accordance with Ind AS 109. The Company assesses at each date of statements of financial position whether a financial asset or a Company of financial assets is impaired. Expected credit losses are measured at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information.

At March 31, 2023, the Company had 18 customers (March 31, 2022: 17 customers) that owed the Company more than 1% each of total receivable from parties other than related parties and accounted for approximately 94% (March 31, 2022: 95%) of receivables outstanding pertaining to other parties. There were 6 customers (March 31, 2022: 5 customers) with balances greater than 5% each accounting for approximately 68% (March 31, 2022: 69%) of total amounts receivable from parties other than related parties.

The Company has adequate provision as at March 31, 2023 amounting to Rs.186.04 lakhs (As at March 31, 2022: Rs. 191.89 lakhs) for receivables.

B Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking

borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

C Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other market changes. Financial instruments affected by market risk include loans and borrowings and deposits.

The sensitivity analysis in the following sections relate to the position as at March 31, 2023 and March 31, 2022. The sensitivity analysis have been prepared on the basis that the amount of debt, the ratio of fixed to floating interest rates of the debt and the proportion of financial instruments in foreign currencies are all constant.

The following assumptions have been made in calculating the sensitivity analyses:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held as at March 31, 2023 and March 31, 2022.

C1 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 change in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s working capital obligations with floating interest rates.

C2 .Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities.

Unhedged foreign currency exposure:

The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the volatility of the Company''s net financial assets (which includes cash and cash equivalents, trade receivables, other financial assets, trade payables, other financial liabilities), which are denominated in various foreign currencies (viz. USD, AED, AUD ZAR, GBP, CAD, etc.).

For the year ended March 31, 2023 and March 31, 2022 , every 1% increase / decrease of the respective foreign currencies compared to functional currency of the Company would impact profit before tax by Rs. 108.06 lakhs / Rs. (108.06) lakhs and Rs. 72.03 lakhs / Rs. (72.03) lakhs respectively.

39 Segment reporting

The Company has only one reportable business segment, which is rendering of software testing services. Accordingly, the amounts appearing in the financial statements relate to the Company''s single business segment

40 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

The Company''s policy is to keep the gearing ratio at an optimal level to ensure that the debt related covenants are complied with.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year and previous year.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2023 and March 31, 2022.

41 Commitments, contingencies and other litigationsa. Leases

Company as lessee

The Company has entered into operating leases of office premises with no restrictions and are renewable at the option of either of the parties for a period of 11 months to 5 years. The escalation rates range from 0% to 10% per annum as per the terms of the lease agreement. There are no sub-leases. The Company also has certain leases spaces including guest houses with lease terms of 12 months or less and with low value. The Company applies the ‘short-term lease'' and ‘lease of low-value assets'' recognition exemptions for these leases.

Set out below are the carrying amounts of right-of-use assets recognized and the movements during the year:

	March 31, 2023	March 31, 2022
Opening balance	2,109.24	2,001.61
Additions	-	811.24
Amortization	(766.99)	(703.61)
Closing balance	1,342.24	2,109.24

Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans and borrowings) and the movements during the year:
	March 31, 2023	March 31, 2022
Opening balance	2,861.00	2,772.03
Additions	-	811.24
Accretion of interest	151.91	256.77
Payments	(1,060.55)	(979.04)
Closing balance	1,952.36	2,861.00
Current	1,024.55	908.64
Non-current	927.81	1,952.36
The maturity analysis of lease liabilities are disclosed in note 38. The effective interest rate for lease liabilities is 6.5% with maturity in the year 2024. The following are the amounts recognized in statement of profit and loss:
	March 31, 2023	March 31, 2022
Amortization of right to use asset	766.99	703.61
Interest on lease obligation	151.91	256.77
	918.90	960.38

The Company had total cash outflows for leases of Rs. 1,060.54 lakhs in March 31, 2023 (March 31, 2022: Rs. 979.04 lakhs). The entire amount is in the nature of fixed lease payments.

The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company''s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised (refer note 36).

b. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2023 is Rs. Nil (March 31, 2022 : Rs. Nil)

c. Contingent liabilities

(i) (a) I n the earlier years, the Company had received a draft Transfer Pricing (tp) assessment order for A.Y. 2017-2018 under section 92CA(3) of Income Tax Act, 1961 proposing an adjustment of Rs. 6,285.52 lakhs involving tax implication of approximately Rs. 1,400.00 lakhs, excluding penalty. The adjustments majorly pertains to transfer pricing margin adjustment and interest on loans and advances to subsidiaries. In the previous year, the Company has received the final order with the proposed adjustment as mentioned in the draft order. Management has filed an appeal with the tax authorities and is currently pending with Commissioner (Appeals) /Dispute Resolution Panel (drp).

(b) I n the previous year, the Company had received a draft Transfer Pricing (TP) assessment order for A.Y. 2018-2019 under section 92CA(3) of Income Tax Act, 1961 proposing an adjustment of Rs. 1,122.60 lakhs involving tax implication of approximately Rs. 380.00 lakhs, excluding penalty. The adjustments majorly pertains to transfer pricing margin adjustment and interest on loans and advances to subsidiaries. Management has filed an appeal with the tax authorities and is currently pending with Dispute Resolution Panel (DRP).

Management has assessed the order and based on expert advice and its documentation relating to the international transactions, believes that the Company has a strong basis to support its position and has adequate provision in this regard.

(ii) In the earlier years, the Company had received a show cause notice from the Department of Foreign Trade (DGFT) dated August 25, 2020 and from the Directorate of Revenue Intelligence (dri), Ahmedabad dated December 28, 2020, stating that the services provided by the Company are not covered under technical testing and analysis services and it appears that the Company provides services through subsidiaries in the foreign countries and accordingly the services rendered by the Company fall under the definition of service rendered through commercial presence in a foreign country which is not eligible for Service Exports from India Scheme (SEIS) benefits. The notice calls upon the Company to show cause as to why (a) The Scrips granted amounting to Rs 659.93 lakhs for the year ended March 31, 2017, should not be cancelled/ recovered from the Company and (b) The penalty should not be imposed as per Customs Act, 1962.

The Company had filed responses against the aforesaid show cause notices as per the legal opinion. Based on their internal assessment and legal opinion, Management believes that the software testing services being provided by the Company are eligible under the SEIS and will be able to establish the services will not fall in the category of “Supply of services through commercial presence”. In view of the above, the Management believes that the export incentive recognized for the period April 1, 2015 to March 31, 2020 amounting to Rs. 1,770.78 lakhs are fully recoverable (March 31, 2022: Rs. 1,770.78 lakhs).

(iii) (a) In the earlier years, the Company has received a letter from Office of the Joint Director, Enforcement

Directorate, Hyderabad, initiating enquiry under the provisions of Foreign Exchange Management Act, 1999 (FEMA) requesting for certain documents . The Joint Director had called for an in person hearing where the Company had submitted the necessary information. The matter primarily relates to issue of shares to a resident entity against money received from an overseas entity and other procedural delays in filing documents.

(b) I n the earlier years, the Company had made foreign investments aggregating to USD 1,002 (equivalent) towards equity capital of three foreign subsidiaries without obtaining overseas direct investment (ODI) certificate from RBI. The Company is in the process of obtaining ODI approval from RBI and is in the process of compounding FEMA related non compliances.

(c) The Company has incorporated subsidiary i.e Cigniti Technologies CR Limitida in Costa Rica, US, in the current year and Cigniti Technologies (sg) Pte. Ltd in Singapore and Cigniti Technologies (cz) Limited s.r.o, in Czech Republic in the previous year. Investments with respect to share capital subscriptions of such entities is in progress as at balance sheet date as the Company is in the process of making the required filings with Reserve Bank of India.

Management is in the process of addressing the above matters and in view of the administrative/ procedural nature of these non-compliances, believes that they will not have a material impact on the standalone financial statements.

d. Other litigations:

In the previous year, Cigniti Technologies Inc., USA, subsidiary of the Company has filed a lawsuit against it''s former employees for inter alia misappropriation of trade secrets and various breaches of contract and fiduciary duty. The lawsuit is currently in progress and the Company believes that it has a strong chance of success in it''s claims.

43 Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

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

(iv) The Company has not advanced or loaned or invested funds to any other person or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(v) The Company has not received any fund from any person or entity, 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,

(vi) The Company did not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(vii) The Company does not have any transactions with companies struck off.

(viii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

44 The code of Social Security, 2020 (‘Code'') relating to employee benefits during employment and postemployment received Presidential assent in September 2020 and its effective date is yet to be notified. The Company will assess and record the impact of Code, once it is effective.

45 The Company maintains its books of account on the cloud, which is managed by a global service provider based in the USA. The service provider has confirmed that they ensure that a daily backup is taken of such data as required under law, which is stored on a separate server in the USA but not in India. The Company is currently in discussions with the service provider to establish a mechanism to ensure that a copy of such backup is taken in India as well on a daily basis and such activity is expected to be completed in the next year, given the complex nature.

46 Previous year figures have been regrouped/reclassified wherever necessary to conform to the current year''s classification.

---

Mar 31, 2022

a) Cigniti Technologies (nz) Limited, New Zealand, wholly owned subsidiary of the Company, was wound up effective January 30, 2019. The Company has made provision for the investment in the subsidiary in earlier years.

b) Investment impairment testing: The carrying amount of the investment is tested annually for impairment using discounted cash-flow models of subsidiary''s recoverable value compared to the carrying value and comparable multiple method. A deficit between the recoverable value and the carrying value of investment would result in impairment. The inputs to the impairment testing model which have the most significant impact on recoverable value include:

- Projected revenue growth, operating margins and operating cash-flows in the years 1-5;

- Stable long-term growth rates beyond five years and in perpetuity; and

- Discount rates that represent the current market assessment of the risks specific to the subsidiary, taking into consideration the time value of money.

The impairment test model includes sensitivity testing of key assumptions, including revenue growth, operating margin and discount rate.

Based on the approved business plan and valuation assessment, the management of the Company expects growth in operations and sustained profitability. The projections of the business is above the book value of its investments, indicating no signs of impairment. Accordingly, these financial statements do not include any adjustment relating to impairment of investments.

c) During the current year, the Company has incorporated subsidiaries in Singapore and Czech Republic. Investments with respect to share capital subscription of such entities is in progress as at balance sheet date as the company is in the process of making the required filing with Reserve Bank of India.

investment value rounded off in lakhs.

There are no disputed trade receivables in the current and previous year.

No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member.

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. The Company has recorded an allowance for credit loss of Rs. 20.44 lakhs on receivables relating to amounts owed by related party (March 31, 2021: Rs. 20.44 lakhs). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Trade receivables are generally with the credit term of 30 to 90 days and are non interest bearing.

No advances are due from directors or other officers of the company or any of them either severally or jointly with any other persons or advances due to firms or private companies respectively in which any director is a partner or a director or a member.

Corporate Overview

Management Reports

Financial Statement

12 Deferred tax asset, net

Opening

balance

Deferred tax assets/(liabilities) in relation to :

Property, plant and equipment and intangible asset, the impact of difference between tax depreciation/ amortisation charged to financial reporting

Provision for employee benefits

Provision for doubtful debts

Right to use assets/lease obligation

Revaluations of current investments to fair value

Recognised in

the statement of Closing balance profit and loss*

22.38 51.82 (29.44)

350.74 (152.95) 503.69

31.88 (16.42) 48.30

197.42 8.22 189.20

(73.25) 148.72 (221.97)

529.17 39.39 489.78

	March 31, 2022	March 31, 2021
Deferred tax asset
Property, plant and equipment and intangible asset, the impact of difference between tax depreciation/ amortisation charged to financial reporting	-	22.38
Provision for employee benefits	503.69	350.74
Provision for doubtful debts	48.30	31.88
Right to use assets/lease obligation	189.20	197.42
Gross deferred tax asset	741.19	602.42
Deferred tax liability
Property, plant and equipment and intangible asset, the impact of difference between tax depreciation/ amortisation charged to financial reporting	(29.44)
Revaluations of current investments to fair value	(221.97)	(73.25)
Gross deferred tax liability	(251.41)	(73.25)
	489.78	529.17

March 31, 2022

* Includes deferred tax credit of Rs. 19.09 lakhs recognised through other comprehensive income on remeasurement losses on employee defined benefit plans.

March 31, 2021

	Opening balance	Recognised in the statement of profit and loss	Closing balance
Deferred tax assets/(liabilities) in relation to :
Property, plant and equipment and intangible asset, the impact of difference between tax depreciation/ amortisation charged to financial reporting		- 22.38	22.38
Provision for employee benefits		- 350.74	350.74
Provision for doubtful debts		- 31.88	31.88
Right to use assets/Lease obligation		- 197.42	197.42
Revaluations of current investments to fair value		- (73.25)	(73.25)
		- 529.17	529.17

Annual Report 2021-22 231

(b) Terms/rights attached to equity shares

The Company has one class of equity shares having par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

(d) Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option (ESOP) plan of the Company, refer note 33.

Proposed dividends on equity shares are subject to approval at the annual general meeting and are not recognised as a liability as at March 31, 2022. The dividend declared/ paid and proposed is in accordance with Section 123 of The Companies Act, 2013.

There are no equity shares issued as bonus, issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date.

14.1 Security premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilised in accordance with the provisions of the Companies Act, 2013.

14.2 Share based payment reserve

The share-based payment reserve is used to recognise the grant date fair value of options issued to employees under Employee stock option plan. Refer note 32 for further details of these plans.

14.3 Retained earnings

Retained earnings comprises of prior year''s undistributed earnings after taxes along with current year profit.

Cash credit from banks of Rs. 2,403.51 lakhs (March 31, 2021: Rs 1,611.26 lakhs) is secured by hypothecation of property, plant and equipment, trade receivables of the Company and immovable property of Mr. C.V Subramanyam, Managing Director and his relative. The cash credit is also secured by personal guarantee of the directors, Mr. C.V Subramanyam, Managing Director and Mr. C. Srikanth, Director and their relatives. It is repayable on demand and carries floating interest rate of 6.50%p.a. (March 31, 2021: 8.20% p.a.). The Company had available Rs. 96.49 lakhs (March 31, 2021: Rs. Rs. 888.74 lakhs) of undrawn committed borrowing facilities as at March 31, 2022.

The Company has taken loans against security of current assets and quarterly returns or statements of current assets filed by the Company with bank are in agreement with the books of accounts.

There are no disputed trade payables in the current and previous year.

Terms and conditions of the above financial liabilities:

Trade payables are non-interest bearing and are normally settled on 30-120 day terms. For explanations on the Company''s credit risk management processes, refer to note 37.

Cigniti Technologies Ltd.

17. Lease obligations

Non-current Current

	March 31, 2022	March 31, 2021	March 31, 2022	March 31, 2021
Lease obligations (refer note 41 (a))	1,952.36	2,027.36	908.64	744.67
	1,952.36	2,027.36	908.64	744.67

Interest payable is normally settled monthly throughout the financial year.

18. Other financial liabilities

	March 31, 2022	March 31, 2021
At amortised cost
Advances from related parties (refer note 35)	1,822.94	2,265.64
Capital creditors	353.50	66.76
	2,176.44	2,332.40

Changes in liabilities arising from financing activities

	April 1, 2021	Addition	Cash flows	March 31, 2022
Lease obligations	2,772.03	1,068.01	(979.04)	2,861.00
Total liabilities from financing activities	2,772.03	1,068.01	(979.04)	2,861.00
Changes in liabilities arising from financing activities
	April 1, 2020	Addition	Cash flows	March 31, 2021
Lease obligations	3,436.31	358.18	(1,022.46)	2,772.03
Total liabilities from financing activities	3,436.31	358.18	(1,022.46)	2,772.03

19. Provisions

Long term Short term

	March	March 31,	March 31,	March 31,
	31, 2022	2021	2022	2021
Provisions for employee benefits
Provision for gratuity	1,768.96	1,234.54	-	-
Provision for leave benefits	-	-	232.35	131.62
	1,768.96	1,234.54	232.35	131.62

20. Current tax liability, net

	March 31, 2022	March 31, 2021
Provision for taxation (net of advance tax)	809.24	-
	809.24	-

21. Other current liabilities

	March 31, 2022	March 31, 2021
Statutory dues	525.54	329.02
Liability towards corporate social responsibility	18.26	76.87
	543.80	405.89

236 Go Digital. Go Beyond.

Unbilled revenue are initially recognised for the revenue earned in excess of amounts billed to clients as at the balance sheet date. Upon completion of acceptance by the customer, the amounts recognised as contract assets are reclassified to trade receivables.

Contract liabilities represents the obligation of the Company to perform services for which the entity has received consideration from the customer.

22.3 Performance obligation

The Company has arrangements with the customer which are “time and material” basis. The performance obligation in case of time and material contracts is satisfied over time. Revenue is recognised as and when the services are performed.

The Company also performs work under “fixed-price” arrangements. Revenue from fixed-price contracts is recognized as per the ‘percentage- of-completion'' method, where the performance obligations are satisfied over time and when there is no uncertainty as to measurement or collectability of consideration. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved. Percentage of completion is determined based on the project costs incurred to date as a percentage of total estimated project costs required to complete the project. The input method has been used to measure the progress towards completion as there is direct relationship between input and productivity. There is no unrecognised revenue out of fixed-price arrangements.

The payment is due with in 30-90 days from the time the customer accepts the work performed by the Company.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

During the current year, the Company has opted for the lower tax rate pursuant to Taxation Law (Amendment) Ordinance, 2019 having evaluated the benefits of the same under the Income Tax Act, 1961.

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The following reflects the profit and share data used in the basic and diluted EPS computations:

There have been no other transactions involving equity shares or potential equity shares between the reporting date and date of authorisation of these financial statements.

*The effect of stock options issued is anti-dilutive and hence not considered for computation of diluted earnings per share for the previous year.

32 Gratuity and other employee benefits

I Defined Benefit Plans

The Company has a defined benefit gratuity plan governed by Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to a gratuity on departure at 15 days of last drawn salary for each completed year of service. The scheme is funded through a policy with LIC. The following tables summarise net benefit expenses recognised in the statement of profit and loss, the status of funding and the amount recognised in the Balance sheet for the gratuity plan:

Under the Employee Stock Option Plan, the Company, at its discretion, may grant share options of employees of the Company. The remuneration committee of the board evaluates the performance and other criteria of employees and approves the grant of options. These options vest with employees over a specified period ranging from 1 to 5 years subject to fulfilment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of Company''s shares at a price equal to the face value. The fair value of share options granted is estimated at the date of grant using a Black- Scholes model, taking into account the terms and conditions upon which the share options were granted. It takes into account historical and expected dividends, and the share price fluctuation covariance of the Company and its competitors to predict the distribution of relative share performance.

The weighted average fair value of options granted during the year was Rs 272.16 (March 31, 20210: Rs 170.61).

The range of exercise prices for the options outstanding at the beginning, forfeited, exercised, expired and outstanding at the end of the year is Rs 10 - Rs 506 (March 31, 2021: Rs 10 - Rs 393).

The following tables list the inputs to the models used for the current year March 31, 2022 and the previous year ended March 31, 2021:

The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Other disclosures relating to the Company''s exposure to risks and uncertainties includes:

• Capital management Note 40

• Financial risk management objectives and policies Note 38

• Sensitivity analyses disclosures Notes 32 and 38.

Judgements

Determining the lease term of contracts with renewal and termination options - Company as lessee

The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

The Company has several lease contracts that include extension and termination options. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to the leased asset).

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(i) Taxes

Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies (Refer note 30).

(ii) Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Further details about gratuity obligations are given in note 32.

(iii) Estimating the incremental borrowing rate

The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (ibr) to measure lease liabilities. The IBR is the rate of interest that the Company would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Company ‘would have to pay'', which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary''s functional currency). The Company estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary''s stand-alone credit rating).

(iv) Allowance for credit losses on receivables and unbilled revenue

The Company has determined the allowance for credit losses based on the ageing status and historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the Company deals with and the countries where it operates. In calculating expected credit loss, the Company has also considered historical pattern of credit loss, the likelihood of increased credit risk.

The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Further, the management has assessed that fair value of borrowings approximate their carrying amounts largely since they are carried at floating rate of interest.

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 Company''s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

A Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. None of the financial instruments of the Company result in material concentration of credit risk, except for trade receivables.

The Company considers a counterparty whose payment is due more than 90 days after the due date as a defaulted party. This is based on considering the market and economic forces in which the entities in the Company are operating. The Company creates provision for the amount if the credit risk of counter-party increases significantly due to its poor financial position and failure to make payment beyond a period of 90 days from the due date. In calculating expected credit loss, the Company has also considered historical pattern of credit loss, the likelihood of increased credit risk.

Trade receivables:

The customer credit risk is managed by the Company''s established policy, procedures and control relating to customer credit risk management. Before accepting any new customer, the Company uses an internal credit scoring system to assess the potential customer''s credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed on periodic basis. Outstanding customer receivables are regularly monitored. The Company''s receivables turnover is quick and historically, there were no significant defaults. Ind AS requires an entity to recognise in profit or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised in accordance with Ind AS 109. The Company assesses at each date of statements of financial position whether a financial asset or a Company of financial assets is impaired. Expected credit losses are measured at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information.

At March 31, 2022, the Company had 17 customers (March 31, 2021: 14 customers) that owed the Company more than 1% each of total receivable from parties other than related parties and accounted for approximately 95% (March 31, 2021: 95%) of receivables outstanding pertaining to other parties. There were 5 customers (March 31, 2021: 6 customers) with balances greater than 5% each accounting for approximately 69% (March 31, 2021: 75%) of total amounts receivable from parties other than related parties.

The Company has adequate provision as at March 31, 2022 amounting to Rs.191.89 lakhs (As at March 31, 2021: Rs. 124.40 lakhs) for receivable where there is no reasonable expectations of recovery. These are however, still subject to enforcement activity.

B Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The table below summarises the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:

C Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other market changes. Financial instruments affected by market risk include loans and borrowings and deposits.

The sensitivity analysis in the following sections relate to the position as at March 31, 2022 and March 31, 2021.

The sensitivity analysis have been prepared on the basis that the amount of debt, the ratio of fixed to floating interest rates of the debt and the proportion of financial instruments in foreign currencies are all constant.

The following assumptions have been made in calculating the sensitivity analyses:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held as at March 31, 2022 and March 31, 2021.

C1 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 change in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s working capital obligations with floating interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of borrowings affected. With all other variables held constant, the Company''s profit before tax is affected through the impact on borrowings, as follows:

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.

C2 . Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities.

Unhedged foreign currency exposure:

The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the volatility of the Company''s net financial assets (which includes cash and cash equivalents, trade receivables, other financial assets, trade payables, other financial liabilities), which are denominated in various foreign currencies (viz. USD, AED, ZAR, GBP, CAD, etc.).

For the year ended March 31, 2022 and March 31, 2021 , every 1% increase / decrease of the respective foreign currencies compared to functional currency of the Company would impact profit before tax by Rs. 72.03 lakhs / Rs. (72.03) lakhs and Rs. 66.92 lakhs / Rs. (66.92) lakhs respectively.

39 Segment reporting

The Company has only one reportable business segment, which is rendering of software testing services. Accordingly, the amounts appearing in the financial statements relate to the Company''s single business segment.

40 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximise the shareholder value.

The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year and previous year.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2022 and March 31, 2021.

41 Commitments, contingencies and other litigationsa. Leases

Company as lessee

The Company has entered into operating leases of office premises with no restrictions and are renewable at the option of either of the parties for a period of 11 months to 5 years. The escalation rates range from 0% to 10% per annum as per the terms of the lease agreement. There are no sub-leases. The Company also has certain leases spaces including guest houses with lease terms of 12 months or less and with low value. The Company applies the ‘short-term lease'' and ‘lease of low-value assets'' recognition exemptions for these leases.

The Company had total cash outflows for leases of Rs. 979.04 lakhs in March 31, 2022 (March 31, 2021: Rs. 1022.46 lakhs). The entire amount is in the nature of fixed lease payments. The Company had non-cash additions to right-of-use assets and lease liabilities of Rs. 811.24 lakhs in March 31, 2022 (March 31,2021: Rs. Nil) on account of revision of terms of lease with respect to change in the lease payments over the period of the lease.

The Company has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Company''s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised (refer note 35).

b. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2022 is Rs. Nil (March 31, 2021 : Rs. Nil).

c. Contingent liabilities

(i) (a) I n the previous year, the Company had received a draft Transfer Pricing (tp) assessment order for A.Y. 2017-2018 under section 92CA(3) of Income Tax Act, 1961 proposing an adjustment of Rs. 6,285.52 lakhs involving tax implication of approximately Rs. 1,400.00 lakhs, excluding penalty. The adjustments majorly pertains to transfer pricing margin adjustment and interest on loans and advances to subsidiaries. During the current year, the Company has received the final order with the proposed adjustment as mentioned in the draft order. Management has filed an appeal with the tax authorities and is currently pending with Commissioner (Appeals) /Dispute Resolution Panel (drp).

(b) In the current year, the Company had received a draft Transfer Pricing (TP) assessment order for A.Y. 2018-2019 under section 92CA(3) of Income Tax Act, 1961 proposing an adjustment of Rs. 1,122.60 lakhs involving tax implication of approximately Rs. 380.00 lakhs, excluding penalty. The adjustments majorly pertains to transfer pricing margin adjustment and interest on loans and advances to subsidiaries. Management has filed an appeal with the tax authorities and is currently pending with Dispute Resolution Panel (DRP).

Management has assessed the order and based on expert advice and its documentation relating to the international transactions, believes that the Company has a strong basis to support its position and that the likelihood of any liability devolving on the Company is remote.

(ii) In the previous year, the Company has received a show cause notice from the Department of Foreign Trade (DGFT) dated August 25, 2020 and from the Directorate of Revenue Intelligence (dri), Ahmedabad dated December 28, 2020, stating that the services provided by the Company are not covered under technical testing and analysis services and it appears that the Company provides services through subsidiaries in the foreign countries and accordingly the services rendered by the Company fall under the definition of service rendered through commercial presence in a foreign country which is not eligible for Service Exports from India Scheme (SEIS) benefits. The notice calls upon the Company to show cause as to why (a) The Scrips granted amounting to Rs 659.93 lakhs for the year ended March 31, 2017, should not be cancelled/ recovered from the Company and (b) The penalty should not be imposed as per Customs Act, 1962.

The Company has filed responses against the aforesaid show cause notices as per the legal opinion. Based on their internal assessment and legal opinion, Management believes that the software testing services being provided by the Company are eligible under the SEIS and will be able to establish the services will not fall in the category of “Supply of services through commercial presence”. In view of the above, the Management believes that the export incentive recognised for the period April 1, 2015 to March 31, 2020 amounting to Rs. 1,770.78 lakhs are fully recoverable (March 31, 2021: Rs. 1,770.78 lakhs).

(iii) (a) In the previous year, the Company has received a letter from Office of the Joint Director, Enforcement

Directorate, Hyderabad, initiating enquiry under the provisions of Foreign Exchange Management Act, 1999 (FEMA) requesting for certain documents . The Joint Director had called for an in person hearing where the Company had submitted the necessary information. The matter primarily relates to issue of shares to a resident entity against money received from an overseas entity and other procedural delays in filing documents.

(b) In the earlier years, the Company had made foreign investments aggregating to USD 1,002 equivalent towards equity capital of three foreign subsidiaries without obtaining overseas direct investment (ODl) certificate from RBI. The Company is in the process of obtaining ODI approval from RBI and is in the process of compounding FEMA related non compliances.

(c) During the current year, the Company has incorporated subsidiaries i.e. Cigniti Technologies (sg) Pte. Ltd, Singapore and Cigniti Technologies (cz) Limited s.r.o, Czech Republic and is in the process of obtaining approval from RBI with respect to the initial investment of SGD 1 and CZH 5,000 respectively. Management is in the process of addressing the above matters and in view of the administrative/ procedural nature of these non-compliances, believes that they will not have a material impact on the consolidated financial statements.

(d) Other litigations:

During the year, Cigniti Technologies Inc., USA, subsidiary of the Company has filed a lawsuit against it''s former employees for inter alia misappropriation of trade secrets and various breaches of contract and fiduciary duty. The lawsuit is currently in progress and the Company believes that it has a strong chance of success in it''s claims.

43 Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

(ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

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

(iv) The Company has not advanced or loaned or invested funds to any other person or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

(v) The Company has not received any fund from any person or entity, 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,

(vi) The Company did not have any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.

(vii) The Company does not have any transactions with companies struck off.

(viii) The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.

44 The code of Social Security, 2020 (‘Code'') relating to employee benefits during employment and postemployment received Presidential assent in September 2020 and its effective date is yet to be notified. The Company will assess and record the impact of Code, once its effective.

45 Previous year figures have been regrouped/reclassified wherever necessary to conform to the current year''s classification.

---

Mar 31, 2019

Notes:

a) Cigniti Technologies (NZ) Limited, New Zealand, wholly owned subsidiary of the Company, was wound up effective January 30, 2019. The Company has made provision for the investment in the subsidiary during the current year.

b) Investment impairment testing: The carrying amount of the investment is tested annually for impairment using discounted cash-flow models of subsidiary''s recoverable value compared to the carrying value. A deficit between the recoverable value and the carrying value of investment would result in impairment. The inputs to the impairment testing model which have the most significant impact on recoverable value include:

- Projected revenue growth, operating margins and operating cash-flows in the years 1-5;

- Stable long-term growth rates beyond five years and in perpetuity; and

- Discount rates that represent the current market assessment of the risks specific to the subsidiary taking into consideration the time value of money

The impairment test model includes sensitivity testing of key assumptions, including revenue growth, operating margin and discount rate.

Based on the approved business plan and valuation assessment, the management of the Company expects that there will be increase in operations and hence sustained profitability. The projections of the business is above the book value of its investments, indicating no signs of impairment. Accordingly, these financial statements do not include any adjustment relating to impairment of investments.

*c) In the earlier years, the Company had made foreign investments aggregating to USD 1,002 equivalent towards equity capital of three foreign subsidiaries without obtaining overseas direct investment (ODI) certificate from RBI. The Company is in the process of obtaining ODI approval from RBI and is in the process of compounding FEMA related non compliances. Based on the nature of these contraventions, the management believes that the matter will not have any material impact on the standalone financial statements.

No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person. Nor any trade or other receivable are due from firms or private companies respectively in which any director is a partner, a director or a member

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. For the year ended March 31, 2019, the Company has recorded an allowance for credit loss of Rs. 20.44 lakhs on receivables relating to amounts owed by related party (March 31, 2018: Rs. Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

Trade receivables are generally with the credit term of 30 to 90 days.

The Company has provided for income tax under Minimum Alternate Tax (MAT) for the year ended March 31, 2019 as it had accumulated book losses and unabsorbed depreciation. The deferred tax asset on the tax losses carried forward and deductible temporary differences and MAT credit amounting to Rs. 3,341.32 lakhs have not been recognized as there is no convincing evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilized by the Company. Refer note 35 for further details.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

(b) Terms/rights attached to equity shares

The Company has one class of equity shares having par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting. In the event of liquidation of the Company, the holders of the equity shares will be entitled to receive the remaining assets of the Company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

As per records of the Company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.

(d) Shares reserved for issue under options

For details of shares reserved for issue under the employee stock option (ESOP) plan of the Company, refer note 32.

Nature and purpose of reserves 14.1 Security premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve can be utilized only for limited purposes such as issuance of bonus shares in accordance with the provisions of the Companies Act, 2013.

14.2 Share based payment reserve

The share-based payment reserve is used to recognize the grant date fair value of options issued to employees under Employee stock option plan. Refer note 32 for further details of these plans.

14.3 Retained earnings

Retained earnings comprises of prior year''s undistributed earnings after taxes along with current year profit.

Indian rupee term loan from a financial institution of Rs Nil (March 31, 2018: Rs. 2,037.04 lakhs) carried a floating interest rate of 14.65% (March 31, 2018: 13.51%) and was repayable on monthly basis in 54 equal installments starting from June 2017 The loan was secured by pledge of own equity shares held by promoters and personal guarantee of the directors, Mr. C.V Subramanyam, Managing Director and Mr. C. Srikanth, Director. The outstanding loan was fully repaid during the current year

^,314,04

(a) Cash credit from banks Rs. 1,094.77 lakhs (March 31, 2018: Rs 1,593.54 lakhs) is secured by hypothecation of property, plant and equipment, trade receivables of the Company and immovable property of Mr. C.V Subramanyam, Managing Director and his relative. The cash credit is secured by personal guarantee of the directors, Mr. C.V Subramanyam, Managing Director and Mr. C. Srikanth, Director and their relatives. It is repayable on demand and carries floating interest rate of 12.05%p.a. (March 31, 2018: 11.85% p.a.)

(b) Term loan from bank of Rs. Nil (March 31, 2018: Rs 725.00 lakhs) carried a floating interest rate of 11.75%-12.05% p.a. (March 31, 2018: 11.75%-12.30% p.a.) and was repayable in 12 monthly equal installments. The loan was secured by hypothecation of property, plant and equipment. Further, it was secured by personal guarantee of the directors, Mr. C.V Subramanyam (managing director) and Mr. C. Srikanth (Director) and their relatives. The outstanding loan was repaid during the current year.

(c) Loans from related parties were repayable on demand and carried an interest rate of 14% p.a. ( March 31, 2018 : 14% p.a) and have been fully repaid in the current year.

Notes

a. Income from software testing services rendered to related parties is recognized on accrual basis and billed as per the terms of specific contract, which is on the basis of cost expended plus an agreed profit margin (refer note 2.2.(e) for the revenue recognition policy).

b. Income from software testing services rendered to others mainly comprises of time and material contracts (refer note 2.2.(e) for the revenue recognition policy).

Unbilled revenue are initially recognized for the revenue earned in excess of amounts billed to clients as at the balance sheet date. Upon completion of acceptance by the customer, the amounts recognized as contract assets are reclassified to trade receivables.

22.3 Performance obligation

The Company has arrangements with the customer which are "time and material” basis. The performance obligation in case of time and material contracts is satisfied over time. Revenue is recognized as and when the services are performed.

The Company also performs work under "fixed-price” arrangements. Revenue from fixed-price contracts is recognized as per the ''percentage- of-completion'' method, where the performance obligations are satisfied over time and when there is no uncertainty as to measurement or collectability of consideration. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved. Percentage of completion is determined based on the project costs incurred to date as a percentage of total estimated project costs required to complete the project. The input method has been used to measure the progress towards completion as there is direct relationship between input and productivity.

The payment is due within 30-90 days from the time the customer accepts the work performed by the Company.

The Company has provided for income tax under Minimum Alternate Tax (MAT) for the year ended March 31, 2019 as it had accumulated book losses and unabsorbed depreciation. The deferred tax asset on the tax losses carried forward and deductible temporary differences and MAT credit amounting to Rs. 3,341.32 lakhs have not been recognized as there is no convincing evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilized by the Company. Refer note 35 for further details.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

30 Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

The following reflects the profit and share data used in the basic and diluted EPS computations:

There have been no other transactions involving equity shares or potential equity shares between the reporting date and date of authorization of these financial statements.

31 Retirement and other employee benefits I Defined Benefit Plans

The Company has a defined benefit gratuity plan and governed by Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to a gratuity on departure at 15 days of last drawn salary for each completed year of service. The scheme is funded through a policy with LIC. The following tables summaries net benefit expenses recognized in the statement of profit and loss, the status of funding and the amount recognized in the Balance sheet for the gratuity plan:

32 Share based payments

Under the Employee Stock Option Plan, the Company, at its discretion, may grant share options of employees of the Company. The remuneration committee of the board evaluates the performance and other criteria of employees and approves the grant of options. These options vest with employees over a specified period ranging from 1 to 4 years subject to fulfillment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of Company''s shares at a price equal to the face value. The fair value of share options granted is estimated at the date of grant using a Black- Scholes model, taking into account the terms and conditions upon which the share options were granted. It takes into account historical and expected dividends, and the share price fluctuation covariance of the Company and its competitors to predict the distribution of relative share performance.

The weighted average fair value of options granted during the year was Rs 91.88 (March 31, 2018: Rs Nil).

The range of exercise prices for the options outstanding at the beginning, forfeited, exercised, expired and outstanding at the end of the year is Rs 10 (March 31, 2018: Rs 10). The exercise price for the options granted during the year under Grant 2015 and outstanding at the end of the year is Rs 240 (March 31, 2018: Nil)

The expected life of the stock is based on the historical data and current expectations and is not necessarily indicative of exercise pattern that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

33 The Company has not dealt with any party as defined under the provisions of Micro, Small and Medium Enterprises Development Act, 2006 during the current and previous year.

34 Related party disclosures

a. Names of related parties and description of relationship

Name of the related party Relationship Subsidiaries

Cigniti Technologies Inc., USA 100% Wholly owned subsidiary

Cigniti Technologies (Canada) Inc., Canada 100% Wholly owned subsidiary

Cigniti Technologies (UK) Limited, UK 100% Wholly owned subsidiary

Cigniti Technologies (Australia) Pty Ltd, Australia 100% Wholly owned subsidiary

Cigniti Technologies NZ Ltd, New Zealand 100% Wholly owned subsidiary

Gallop Solutions Private Limited, India 100% Wholly owned subsidiary

Cigniti Software Services Private Limited, India 100% Wholly owned subsidiary (struck off by MCA)

Enterprise over which Key Management Personnel

exercise significant influence

Enterprise over which Key Management Personnel exercise

Kairos Technologies Inc. (upto May 16, 2017)

Key Management Personnel

Mr. C. V. Subramanyam Chairman & Managing Director

Mr. C. Srikanth Non-Executive Director

Mr. Sudhakar Pennam (resigned w.e.f from May 17, 2017) Director

Mr. Krishnan Venkatachary Chief Financial Officer

Ms. Naga Vasudha Company Secretary

Mr. Ram Krishna Agarwal Independent director (appointed w.e.f June 30, 2017)

Mr. Phaneesh Murthy Independent director (appointed w.e.f June 30, 2017)

Ms. Nooraine Fazal Independent director (appointed w.e.f June 30, 2017)

Mr. Srinath Batni Independent director (appointed w.e.f August 24, 2017)

Mr. K CH Subbarao Independent director

35 Significant accounting judgments, estimates and assumptions

The preparation of the Company''s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

(i) Share-based payments

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 32.

(ii) Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgments is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies (Refer note 29).

(iii) Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Further details about gratuity obligations are given in note 31.

The management assessed that the fair value of cash and cash equivalents, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Further the management has assessed that fair value of borrowings approximate their carrying amounts largely since they are carried at floating rate of interest. Investment in subsidiaries is carried at cost.

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.

37 Financial risk management objectives and policies

The Company''s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

A Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. None of the financial instruments of the Company result in material concentration of credit risk, except for trade receivables.

The Company considers a counterparty whose payment is due more than 90 days after the due date as a defaulted party. This is based on considering the market and economic forces in which the entities in the Company are operating. The Company creates provision for the amount if the credit risk of counter-party increases significantly due to its poor financial position and failure to make payment beyond a period of 90 days from the due date.

i. Trade receivables:

The customer credit risk is managed by the Company''s established policy, procedures and control relating to customer credit risk management. Before accepting any new customer, the Company uses an internal credit scoring system to assess the potential customer''s credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed on periodic basis. Outstanding customer receivables are regularly monitored. The Company''s receivables turnover is quick and historically, there were no significant defaults. Ind AS requires an entity to recognize in profit or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized in accordance with Ind AS 109. The Company assesses at each date of statements of financial position whether a financial asset or a group of financial assets is impaired. Expected credit losses are measured at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information.

At March 31, 2019, the Company had 17 customers (March 31, 2018: 17 customers) that owed the Company more than 1% each of total receivable from parties other than related parties and accounted for approximately 96% (March 31, 2018: 90%) of receivables outstanding pertaining to other parties. There were 8 customers (March 31, 2018: 4 customers) with balances greater than 5% each accounting for approximately 76% (March 31, 2018: 56%) of total amounts receivable from parties other than related parties.

The Company has made provision for trade receivables amounting to Rs. 116.79 lakhs (March 31, 2018: Rs 75.10 lakhs) as there was no reasonable expectations of recovery and were outstanding for more than 90 days from becoming due. These are however, still subject to enforcement activity

B Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:

C Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other market changes. Financial instruments affected by market risk include loans and borrowings and deposits.

The sensitivity analysis in the following sections relate to the position as at March 31, 2019 and March 31, 2018.

The sensitivity analysis have been prepared on the basis that the amount of debt, the ratio of fixed to floating interest rates of the debt and the proportion of financial instruments in foreign currencies are all constant.

The following assumptions have been made in calculating the sensitivity analyses:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held as at March 31, 2019 and March 31,

2018.

C1 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 change in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.

C2 . Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities.

39 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value.

The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

The Company''s policy is to keep the gearing ratio at an optimal level to ensure that the debt related covenants are complied with.

* Since the Company has cash surplus in the current year, the net debt for the purpose of computation of gearing ratio is taken as zero.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2019 and March 31, 2018.

40 Commitments and contingencies

a. Leases Operating lease commitments - Company as lessee

The Company has entered into operating leases of office premises with no restrictions and are renewable at the option of either of the parties for a period of 11 months to 5 years. The escalation rates range from 0% to 10% per annum as per the terms of the lease agreement. There are no sub-leases. There are no restrictions imposed by lease arrangements. The aggregate amount of operating lease payments recognized in the Statement of Profit and Loss is Rs. 1061.82 lakhs (March 31, 2018: Rs. 986.92 lakhs).

b. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2019 is Rs. 9.81 lakhs (March 31, 2018 : Rs. 488.44 lakhs)

c. Contingent liabilities

The contingent liabilities outstanding as at March 31, 2019 is Rs. Nil (March 31, 2018: Rs. Nil)

41 Standards issued but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

i. Ind AS 116 Leases

Ind AS 116 Leases was notified by MCA on 30 March 2019 and it replaces Ind AS 17 Leases, including appendices thereto. Ind AS 116 is effective for annual periods beginning on or after 1 April 2019. Ind AS 116 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheet model similar to the accou

the accounting for finance leases under Ind AS 17. The standard includes two recognition exemptions for lessees - leases of ''low-value'' assets (e.g., personal computers) and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognize a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the underlying asset during the lease term (i.e., the right-of-use asset). Lessees will be required to separately recognize the interest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessees will be also required to premeasure the lease liability upon the occurrence of certain events (e.g., a change in the lease term, a change in future lease payments resulting from a change in an index or rate used to determine those payments). The lessee will generally recognize the amount of the remeasurement of the lease liability as an adjustment to the right-of-use asset.

Lessor accounting under Ind AS 116 is substantially unchanged from today''s accounting under Ind AS 17. Lessors will continue to classify all leases using the same classification principle as in Ind AS 17 and distinguish between two types of leases: operating and finance leases.

The Company intends to adopt these standards from 1 April 2019. The Company is evaluating the impact of this amendment on its standalone financial statements.

ii. Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments :

On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments which is to be applied while performing the determination of taxable profit (or loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. According to the appendix, companies need to determine the probability of the relevant tax authority accepting each tax treatment, or group of tax treatments, that the companies have used or plan to use in their income tax filing which has to be considered to compute the most likely amount or the expected value of the tax treatment when determining taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates.

The standard permits two possible methods of transition -

i) Full retrospective approach - Under this approach, Appendix C will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors, without using hindsight and

ii) Retrospectively with cumulative effect of initially applying Appendix C recognized by adjusting equity on initial application, without adjusting comparatives.

The effective date for adoption of Ind AS 12 Appendix C is annual periods beginning on or after April 1, 2019. The Company will adopt the standard on April 1, 2019 and has decided to adjust the cumulative effect in equity on the date of initial application i.e. April 1, 2019 without adjusting comparatives.

42 Previous period figures have been regrouped/reclassified wherever necessary to conform to the current period classification.

---

Mar 31, 2018

1. EXCEPTIONAL ITEMS

The Company had incurred substantially on development of software testing products and tools in the past years. In view of the technological changes and the overall market outlook for software products in the testing space, the Company had carried out an impairment analysis of such products. Based on such analysis and in the absence of estimates of future cash flows arising from the sale of product licenses for these tools the Company had decided to fully impair such tool development costs amounting '' 19,023.20 lakhs in the previous year on a conservative and prudent basis in line with the requirements of the accounting standards.

2. TAXES

(a) Income tax expense:

The major components of income tax expenses for the year ended March 31, 2018 and for the year ended March 31, 2017 are:

The Company has not provided for income tax during the year as it has carried forward tax losses under income tax provisions. The Company has not provided for income tax under MAT as it had accumulated book losses and unabsorbed depreciation. The deferred tax asset on the tax losses carried forward and deductible temporary differences have not been recognized amounting to Rs, 5,058.40 lakhs as there is no convincing evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilised by the Company Refer note 35 for further details.

The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

3 EARNINGS/(LOSS) PER SHARE

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.

There have been no other transactions involving equity shares or potential equity shares between the reporting date and date of authorisation of these standalone financial statements.

*The potential equity shares for the previous year are anti-dilutive, accordingly are ignored in the calculation of diluted earnings per share. Hence, diluted loss per share is same as basic loss per share.

4 RETIREMENT AND OTHER EMPLOYEE BENEFITS I. Defined Benefit Plans

The Company has a defined benefit gratuity plan and governed by Payment of Gratuity Act, 1972. Every employee who has completed five years or more of service is entitled to a gratuity on departure at 15 days of last drawn salary for each completed year of service. The scheme is funded through a policy with LIC. The following tables summarise net benefit expenses recognized in the statement of profit and loss, the status of funding and the amount recognized in the Balance sheet for the gratuity plan:

5 SHARE BASED PAYMENTS

Under the ESOP plan, the Group, at its discretion, may grant share options to employees of the Company. The remuneration committee of the board evaluates the performance and other criteria of employees and approves the grant of options. These options vest with employees over a specified period ranging from 1 to 4 years subject to fulfilment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of Company''s shares at a price equal to the face value. The fair value of share options granted is estimated at the date of grant using a Black- Scholes model, taking into account the terms and conditions upon which the share options were granted. It takes into account historical and expected dividends, and the share price fluctuation covariance of the Company and its competitors to predict the distribution of relative share performance.

The expense recognized for employee services received during the year is shown in the following table:

The weighted average share price at the date of exercise of these options was '' 294.09 (March 31, 2017: '' 418.34)

The following table lists the weighted average remaining contractual life for the share options as at March 31, 2018 , as at March 31, 2017 and April 1, 2016

The weighted average fair value of options granted during the year was Rs, Nil (March 31, 2017: Rs, 394.37).

The range of exercise prices for the options outstanding at the beginning, granted, forfeited, exercised, expired and outstanding at the end of the year is Rs, 10 (March 31, 2017: Rs, 10 April 01, 2016: Rs, 10).

The following tables list the inputs to the models used for the years ended March 31, 2017. There were no grants

The expected life of the stock is based on the historical data and current expectations and is not necessarily indicative of exercise pattern that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

6 The Company has not dealt with any party as defined under the provisions of Micro, Small and Medium Enterprises Development Act, 2006 during the year.

7 RELATED PARTY DISCLOSURES

a. Names of related parties and description of relationship

Name of the related party Relationship

Subsidiaries

Cigniti Technologies NZ Ltd, New Zealand Wholly owned subsidiary

Gallop Solutions Private Limited, India Wholly owned subsidiary

Cigniti Technologies (UK) Limited, UK Wholly owned subsidiary

Cigniti Technologies (Australia) Pty Ltd, Australia Wholly owned subsidiary

Cigniti Technologies Inc., USA Wholly owned subsidiary

Cigniti Technologies (Canada) Inc., Canada Wholly owned subsidiary

Cigniti Software Services Private Limited, India Wholly owned subsidiary (struck off by MCA)

Enterprise over which Key Management Personnel

exercise significant influence

Kairos Technologies Inc. Enterprise over which Key Management

Personnel exercise significant influence

Key Management Personnel"

Mr. C. V. Subramanyam*_Chairman & Managing Director_

Mr. Sudhakar Pennam Director (resigned w.e.f from May 17, 2017)

Mr. C. Srikanth* Whole-time Director

Mr. Krishnan Venkatachary Chief Financial Officer

Ms. Naga Vasudha Company Secretary

Mr. Ram Krishna Agarwal Independent director (appointed w.e.f June 30,

2017)

Mr. Phaneesh Murthy Independent director (appointed w.e.f June 30,

2017)

Mr. Srinath Batni Independent director (appointed w.e.f August 24,

2017)

Mr. K CH Subbarao Independent director

Ms. Nooraine Fazal Independent director (appointed w.e.f June 30,

2017)

Relatives of Key Management Personnel

Ms. Sapna Pennam Wife of director Mr. Sudhakar Pennam

8 SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Company''s standalone financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

(A) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the standalone financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur

(i) Share-based payments

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in note 32.

(ii) Taxes

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits together with future tax planning strategies.

The Company has not provided for income tax during the year as it has carried forward tax losses under income tax provisions which expire in 8 years. The Company has not provided for income tax under MAT as it had accumulated book losses and unabsorbed depreciation. The deferred tax asset on the tax losses carried forward and deductible temporary differences have not been recognized amounting to ''5,058.40 lakhs as there is no convincing evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilized by the Company.”

(iii) Defined employee benefit plans (Gratuity)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries. Further details about gratuity obligations are given in note 31.

The management assessed that cash and cash equivalents, trade receivables, trade payables and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. Further, the management has assessed that fair value of borrowings approximate their carrying amounts largely since they are carried at floating rate of interest.

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.

9. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company''s principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations and to provide guarantees to support its operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below.

A. Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments. None of the financial instruments of the Company result in material concentration of credit risk, except for trade receivables.

The Company considers a counterparty whose payment is due more than 90 days after the due date as a defaulted party. This is based on considering the market and economic forces in which the entities in the Company are operating. The Company creates provision for the amount if the credit risk of counter-party increases significantly due to its poor financial position and failure to make payment beyond a period of 90 days from the due date.

i. Trade receivables:

The customer credit risk is managed by the Company''s established policy, procedures and control relating to customer credit risk management. Before accepting any new customer, the Company uses an internal credit scoring system to assess the potential customer''s credit quality and defines credit limits by customer. Limits and scoring attributed to customers are reviewed on periodic basis. Outstanding customer receivables are regularly monitored. The Company''s receivables turnover is quick and historically, there were no significant defaults. Ind AS requires an entity to recognize in profit or loss, the amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized in accordance with Ind AS 109. The Company assesses at each date of statements of financial position whether a financial asset or a group of financial assets is impaired. Expected credit losses are measured at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. The Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward-looking information.

At March 31, 2018, the Company had 17 customers (March 31, 2017: 18 customers, April 1, 2016: 7 customers) that owed the Company more than 1% each of total receivable and accounted for approximately 90% (March 31, 2017: 93%, April 1, 2016: 55%) of all the receivables outstanding. There were 4 customers (March 31, 2017:

4 customers, April 1, 2016: 4 customers) with balances greater than 5% each accounting for approximately 56% (March 31, 2017: 63%, April 1, 2016: 52%) of the total amounts receivable.

The above trade receivables excludes trade receivables from related parties.

The Company has made provision for trade receivables amounting to '' 75.10 during the year (March 31, 2017: Rs Nil, April 01, 2016: Rs Nil) as there was no reasonable expectations of recovery and were outstanding for more than 90 days from becoming due. These are however, still subject to enforcement activity

B. Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, banking borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments:

C. Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other market changes. Financial instruments affected by market risk include loans and borrowings and deposits.

The sensitivity analyses in the following sections relate to the position as at March 31, 2018 and March 31, 2017

The sensitivity analysis have been prepared on the basis that the amount of debt, the ratio of fixed to floating interest rates of the debt and the proportion of financial instruments in foreign currencies are all constant.

The following assumptions have been made in calculating the sensitivity analyses:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held as at March 31, 2018 and March 31, 2017

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 change in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates.

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.

C2 . Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities (when revenue or expense is denominated in a foreign currency).

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets / liabilities are denominated in a currency other than the functional currency of the respective entities.

10. CAPITAL MANAGEMENT

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders. The primary objective of the Company''s capital management is to maximize the shareholder value.

The Company manages its capital structure in consideration to the changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, less cash and cash equivalents.

The Company''s policy is to keep the gearing ratio at an optimal level to ensure that the debt related covenants are complied with.

I n order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2018 and March 31, 2017

11. COMMITMENTS AND CONTINGENCIES

a. Leases

Operating lease commitments - Company as lessee

The Company has entered into operating leases of office premises with no restrictions and are renewable at the option of either of the parties for a period of 11 months to 5 years. The escalation rates range from 0% to 10% per annum as per the terms of the lease agreement. There are no sub-leases. There are no restrictions imposed by lease arrangements. The aggregate amount of operating lease payments recognized in the Statement of Profit or Loss is '' 939.53 (March 31, 2017: '' 776.93).

b. Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2018 is Rs, 488.44 (March 31, 2017: Rs, Nil, April 01, 2016 : Rs, Nil)

c. Contingent liabilities

The contingent liabilities outstanding as at March 31, 2018 is Rs, Nil (March 31, 2017: Rs, Nil, April 01, 2016: Rs, Nil)

12 SEGMENT REPORTING

Based on the internal reporting provided to the Chief Operating Decision Maker, the standalone financial results relates to "Software testing services” as the only reportable primary segment of the Company.

13 FIRST TIME ADOPTION OF IND AS

These are the Company''s first set of standalone financial statements which have been prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2017, the Company had prepared its standalone financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these standalone financial statements, the Company''s opening balance sheet was prepared as at April 01, 2016, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP standalone financial statements, including the balance sheet as at April 01, 2016 and the standalone financial statements as at and for the year ended March 31, 2017

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

(a) Since there is no change in the functional currency, the Company has elected to regard carrying values for all of property, plant and equipment and other intangible as recognized in its Indian GAAP financials as deemed cost at the date of the transition.

(b) I n the preparation of separate financial statements, Ind AS 27 Separate Financial Statements requires an entity to account for its investments in subsidiaries either:

a) At cost, or

b) In accordance with Ind AS 109.

I f a first-time adopter measures such an investment at cost, it can measure that investment at one of the following amounts in its separate opening Ind AS balance sheet:

- Cost determined in accordance with Ind AS 27

- Deemed cost, defined as

- Fair value determined in accordance with Ind AS 113 at the date of transition to Ind AS, or

- Previous GAAP carrying amount at the transition date.

A first-time adopter may choose to use either of these bases to measure investment in each subsidiary where it elects to use a deemed cost. Accordingly, the Company has opted to carry the investment in subsidiaries at the Previous GAAP carrying amount at the transition date.

(c) Estimates: The estimates as at April 01, 2016 and March 31, 2017 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation. The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions as at April 01, 2016 (transition date) and March 31, 2017

B Footnotes to the reconciliation of equity as at April 01, 2016 and March 31, 2017 and total comprehensive income for the year ended March 31, 2017

1 Share based payments

Under Indian GAAP, the Company recognized only the intrinsic value for the long-term incentive plan as an expense. Ind AS requires the fair value of the share options to be determined using an appropriate pricing model recognized over the vesting period. An additional expense of '' 4.85 has been recognized in profit or loss for the year ended March 31, 2017. Share options totaling '' 30.01 which were granted before and still vesting at April 01, 2016, have been recognized as a separate component of equity in share based payment reserve against retained earnings at April 01, 2016.

2 Defined benefit liabilities

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements comprising of actuarial gains and losses are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus, the employee benefit cost for March 31, 2017 is reduced by '' 220.18 and remeasurement gains/ losses on defined benefit plans has been recognized in the OCI net of tax.

3 Other comprehensive income

Under Indian GAAP, the Company has not presented other comprehensive income separately. Hence, it has reconciled Indian GAAP profit or loss to profit or profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

4 Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

5 Prior period items

The Group has restated the opening retained earnings and comparatives for the impact of prior period expense. Prior period items included provision for gratuity and leave encashment based on actuary valuation and catch up cost of employee stock option.

14 STANDARDS ISSUED BUT NOT YET EFFECTIVE

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s standalone financial statements are disclosed below. The Company intends to adopt these standards, if applicable, when they become effective.

The Ministry of Corporate Affairs (MCA) has issued the Companies (Indian Accounting Standards) Amendment Rules, 2017 and Companies (Indian Accounting Standards) Amendment Rules, 2018 amending the following standard:

i. Ind AS 115 Revenue from Contracts with Customers-

Ind AS 115 was notified on March 28, 2018 and establishes a five-step model to account for revenue arising from contracts with customers. Under Ind AS 115, revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer

The new revenue standard will supersede all current revenue recognition requirements under Ind AS. This new standard requires revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the Group expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions of the Group. Ind AS 115 is effective for the Group in the first quarter of fiscal 2019 using either one of two methods:

(i) retrospectively to each prior reporting period presented in accordance with Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors, with the option to elect certain practical expedients as defined within Ind AS 115 (the full retrospective method); or (ii) retrospectively with the cumulative effect of initially applying Ind AS 115 recognized at the date of initial application (1 April 2018) and providing certain additional disclosures as defined in Ind AS 115 (the modified retrospective method).

The Group continues to evaluate the available transition methods and its contractual arrangements. The ultimate impact on revenue resulting from the application of Ind AS 115 will be subject to assessments that are dependent on many variables, including, but not limited to, the terms of the contractual arrangements and the mix of business. The Group''s considerations also include, but are not limited to, the comparability of its financial statements and the comparability within its industry from application of the new standard to its contractual arrangements. The management continues to evaluate the changes to accounting system and processes, and

additional disclosure requirements that may be necessary. A reliable estimate of the quantitative impact of Ind AS 115 on the financial statements will only be possible once the implementation project has been completed.

ii. Amendments to certain Indian Accounting Standards:

The Ministry of Corporate Affairs (MCA), on March 28, 2018, issued certain amendments to Ind AS. The amendments relate to the following standards:

- Ind AS 21, The Effects of Changes in Foreign Exchange Rates,

- Ind AS 12, Income Taxes and

- Ind AS 112, Disclosure of Interests in Other Entities

The amendments are effective April 01, 2018. The Company believes that the aforementioned amendments will not materially impact the financial

---

Mar 31, 2017

1. GRATUITY BENEFIT PLAN

Under the gratuity plan, every employee who has completed at least five years of service gets a gratuity on departure @ 15 days of last drawn salary for each completed year of service. The scheme is funded with insurance company in the form of qualifying insurance policy

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. There has been significant change in expected rate of return on assets due to change in the market scenario.

2. EMPLOYEE STOCK OPTION

The company provides share-based payment schemes to its employees. During the year ended

March 31, 2017, an employee stock option plan (ESOP) was in existence. The relevant details of the scheme and the grant are as below.

i) Employees covered under Employees Stock Option Plans are granted an option to purchase shares of the Company at the face value of shares, subject to requirements of vesting conditions. Upon vesting, the employees can acquire one equity share for every option. The minimum vesting period shall be for 1 year and the maximum vesting period shall be of 5 years from the date of grant.

ii) The remuneration committee of the board evaluates the performance and other criteria of employees and approves the grant of options. These options vest with employees over a specified period subject to fulfillment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of Company’s shares at a price determined on the date of grant of options.

iii) The Company measures the cost of ESOP using the intrinsic value method. The stock compensation cost is computed based on the market price as of grant date and amortized on a straight-line basis over the total vesting period.

3. CAPITAL AND OTHER COMMITMENTS

a) Estimated amount of contracts remaining to be executed on capital account and not provided for during the year is Nil (March 31, 2016: Nil).

b) For commitments relating to lease arrangements, please refer note 30.

4. OPERATING LEASES

The Company has entered into commercial lease agreements for use of office premises. These leases have an average life of between 11 months to five years with renewal option included in the contracts and with escalation clause. There are no restrictions placed upon the company by entering into these leases.

Lease payments made under cancellable operating leases amounting to Rs. 3,91,29,969/- (March 31, 2016: Rs. 2,30,12,679/-) have been recognized as an expense in the statement of profit or loss.

Lease payments made under non-cancellable operating leases amounting to Rs. 3,85,62,756/- (March 31, 2016: Rs. 4,43,68,977/-) have been recognized as an expense in the statement of profit or loss.

5. DISCLOSURE ON SPECIFIED BANK NOTES (SBNs)

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

*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 November 8, 2016.

6. CORPORATE SOCIAL RESPONSIBILITY

(a) Gross amount required to be spent by the Company during the year Rs. 40, 68,722/-.

(b) Amount spent during the year under Corporate Social Responsibility expenditure Rs. 31, 03,780/-(March 31, 2016: Rs. 18, 44,890/-).

7. CONTINGENT LIABILITY

There is no contingent liability as at March 31, 2017 (March 31, 2016: Rs. Nil)

8. SEGMENT REPORTING

The Company is primarily engaged in the business of providing software testing services. As such there is no separate reportable segment as defined by Accounting Standard 17 "Segment Reporting".

9. DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER THE MSMED ACT, 2006

Based on the information available with the Company there are no suppliers who are registered as micro, small or medium enterprises under "The Micro, Small and Medium Enterprises Development Act 2006" as at March 31, 2017 and March 31, 2016.

10. Previous year figures have been regrouped/reclassified, where necessary, to conform to the current year’s classification.

---

Mar 31, 2016

1. BORROWINGS

From HDFC Bank: (By Cigniti Technologies Limited)

i. Term Loan Sanction by the bank on December 06, 2014 of Rs, 200 Lakhs repayable in 60 monthly equal installments of Rs, 4,60,197/- @13.5% interest. Outstanding balance as on March 31, 2016 is Rs, Nil (Previous Year Rs, 1,95,26,966/-)

ii. WCTL Sanction by the Bank on December 06, 2014 of Rs, 300 Lakhs repayable in 36 monthly equal installments of Rs, 10,18,059/- @13.5% interest. Outstanding balance as on March 31, 2016 is Rs, Nil (Previous Year Rs, 2,86,31,229/-)

iii. Cash Credit limit sanctioned by the bank is Rs, 2,00,00,000/- Outstanding balance as on March 31, 2016 is Rs, 2,20,20,940/- (Previous Year Rs, 1,80,97,382/-)

The above loans are secured by the following:

a) PRIMARY SECURITY: Hypothecation of Book Debts and Fixed Assets of the Company

b) COLLATERAL SECURITY: Immovable Property situated at Flat No. 303, 3^rd Floor, Subramanyam Estates, 6-3-662/16, Jaffar Ali Bagh, Somajiguda, Hyderabad - 500 082 and Immovable Property situated at Unit No.1, 1/a, 6-3-456/C/F1 & 6-3-456/C/F2, 1^st Floor, MGR Estates, in Sy No.145 and 146 in Dwarakapuri Colony, Punjagutta, Hyderabad-500 082

c) GUARANTORS: Sri C.V. Subramanyam, Sri P. Sudhakar, Sri. C. Srikanth and Smt. C. Rajeshwari.

2. The Company is engaged in the testing services. The production and sale of such services cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales.

3. EMPLOYEE STOCK OPTION

i) Employees covered under Employees Stock Option Plans are granted an option to purchase shares of the Company at the face value of shares, subject to requirements of vesting conditions. Upon vesting, the employees can acquire one equity share for every option. The minimum vesting period shall be for 1 year and the maximum vesting period shall be of 5 years from the date of grant.

ii) The stock compensation cost is computed based on the market price as of grant date and amortized on a straight line basis over the total vesting period. The total stock option cost outstanding is Rs, 72,58,43,303/-(Previous Year Rs, 53,38,96,960/-) and deferred employee compensation expense is Rs, 39,41,50,074/- (Previous Year Rs, 23,65,81,058/-) for the year ended March 31, 2016, the Company has recorded stock compensation expense of Rs, 34,17,51,726/- (Previous Year Rs, 29,73,15,902/-).

4. RELATED PARTY TRANSACTION (a) Related Parties

S No. Particulars Nature of Relationship

1 Cigniti Inc., USA 100% Wholly Owned Subsidiary

2 Cigniti Software Services Pvt. Ltd. 100% Wholly Owned Subsidiary

3 Gallop Solutions Inc., USA 100% Wholly Owned Subsidiary

4 Gallop Solutions Pvt. Ltd. 100% Wholly Owned Subsidiary

5 Cigniti Technologies (UK) Limited, UK 100% Wholly Owned Subsidiary

6 Cigniti Technologies (Australia) Pty Ltd, AUS 100% Wholly Owned Subsidiary

7 Cigniti Technologies Inc., USA 100% Wholly Owned Subsidiary

8 Cigniti Technologies (Canada) Inc., Canada 100% Wholly Owned Subsidiary

9 Mr. C. V. Subramanyam Chairman and Managing Director

10 Mr. Sudhakar Pennam Director

11 Mr. C. Srikanth Whole-time Director

12 Mr. K. Ch. Subba Rao Director

13 Mr. Mani Subramanian Director

14 Mr. K. Nageswara Rao Director

15 Mrs. K. Krishna Priya Woman Director

5. CORPORATE SOCIAL RESPONSIBILITY

Amount spent by the Company towards CSR: for the Current Year Rs, 31,03,780/- For the Previous Year Rs, 18,44,890/-.

Amount spent by the Company towards CSR for the year Rs, 31,03,780/- included in the General Expenses of Rs, 63,01,364/36. SEGMENT REPORTING

Segment Reporting is not applicable as the Company is engaged only in Software Testing Services.

6. INTRA BRANCH TRANSACTION

Intra Branch Transaction have been eliminated while preparing the Financial Statement.

7. DUES TO MICRO & SMALL ENTERPRISES

There are overdue principle amounts and interest thereon payable to Micro Enterprises and Small Enterprises, as on March 31, 2016.

8. CONFIRMATION OF CLOSING BALANCES

Closing Balances of Debtors, Creditors, Loans and Advances are subject confirmations.

9. Previous year''s figures have been regrouped wherever necessary.

10. The figures have been rounded off to the nearest rupee.

---

Mar 31, 2015

NOTE 1

The Company is engaged in the testing services. The production and sale of such services cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and the information as required under Schedule III to the Companies Act, 2013.

NOTE 2 EMPLOYEE STOCK OPTION

i) Employees covered under Employees Stock Option Plans are granted an option to purchase shares of the Company at the face value of shares, subject to requirements of vesting conditions. Upon vesting, the employees can acquire one equity share for every option. The minimum vesting period shall be for 1 year and the maximum vesting period shall be of 5 years from the date of grant.

ii) The stock compensation cost is computed based on the market price as of grant date and amortized on a straight line basis over the total vesting period. The total stock option cost outstanding is Rs. 53,38,96,960/- and Deferred employee compensation expense is Rs. 23,65,81,058/- for the year ended March 31, 2015, the Company has recorded stock compensation expense of Rs. 29,73,15,902/- (2014: NIL).

iii) The compensation committee of the board evaluates the performance and other criteria of employees and approves the grant of options. These options vest with employees over a specified period subject to fulfllment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of Company's shares at a price determined on the date of grant of options. The particulars of options granted under various plans are tabulated below.

NOTE 3 CORPORATE SOCIAL RESPONSIBILITY:

Amount spent by the company towards CSR: Rs. 18,44,890/-.

NOTE 4 SEGMENT REPORTING

Segment Reporting is not applicable to the Company is engaged only in Testing Services.

NOTE 5 INTRA BRANCH TRANSACTION

Intra Branch transactions have been eliminated while preparing the financial statements.

NOTE 6 DUES TO MICRO & SMALL ENTERPRISES

There are overdue principle amounts and interest thereon payable to Micro Enterprises and Small Enterprises, as at March 31, 2015.

NOTE 7 CONFIRMATION OF CLOSING BALANCES

Closing Balances of Debtors, Creditors, Loans and Advances are subject confirmations.

NOTE 8 Previous year's figures have been regrouped wherever necessary.

NOTE 9 The figures have been rounded of to the nearest rupee.

---

Mar 31, 2014

1. CORPORATE INFORATION

M/s Cigniti technologies Limited, a listed company on the regional stock Exchanges since February 2004 onwards, was incorporated on September 03, 1998 in the name and style as Chakkilam Infotech Private Limited. Subsequently the name of the company was changed into Chakkilam Inflotech Limited in January 2000. The initial focus of the company was on generic IT Services and healthcare related services and products.

In 2008, Chakkilam Infotech Limited shifted focus and repositioned itself as a pure play independent testing services company. The strategic shift helped the company focus its energies in building delivery capability and building IP in a niche area which was growing faster than generic IT Services. The company offered software Testing Services to US, European and Asian clients in areas such as Functional Testing, Test Automation, Performance Testing, Mobile Application Testing and Compatibility Testing. The Strategic shift in focus was vindicated with the higher growth rates the company was able to show in the next few years.

In October 2011, Chakkilam Infotech Limited acquired a US based testing services and consulting company called Cigniti Inc. and rebranded itself as Cigniti Technologies Limited. With consolidated revenue run rate of $22 Million for the last quarter, Cigniti Technologies Limited emerged as India''s largest pure play independent testing services company. With aggressive organic growth plans that will be augumented in three years, the Company will emerge as the world''s leading independent testing services company.

Over the last few years, Cigniti has built world class delivery capability for testing software. Investments have been made in attracting the brightest testing talent, building test infrastructure and test labs and building IP in the form of software testing frameworks, tools and utilities that help clients speed up their testing. Cigniti has invested in building India''s first Robotics Testing Lab and other test infrastructures like Mobile Testing Lab. The Company also invested in building its brand name by participating in industry events and taking on speaker opportunities in testing events.

During the year the company has acquired 100% of shares in a US based software testing services company called Gallop Solutions Inc. based in Irving, Texas, USA and Gallop Solutions Pvt. Ltd, India. The company paid a combined acquisition price for both the entities of US $ 5.5 Million. 100% ownership of Gallop Solutions Private Limited India was acquired by paying a consideration of Rs. 11,000,000 in cash. The company is acquired 100% stake in Gallop Solutions Inc, USA for a total consideration of US $ 5.3 Million, of which US $ 3.3 Million was be paid in cash and the balance i.e., US$ 2 million aggregating to a sum of Rs. 11.16 Crores was settled by issue of 754,211 equity shares to the shareholders of Gallop Solutions Inc. USA at an issue price of Rs. 148 each (conversion price of dollars in to INR considered as on 29th May, 2013).

At Present the company is listed on Bombay Stock Exchange, Bangalore Stock Exchange and Madras Stock Exchange with the paid up Capital of Rs. 22.92 Crores. The Company''s Registered Office is Suite No. 106 & 107, 6-3-456/C, MGR Estates, 1st Floor, Dwarakapuri Colony, Punjagutta, Hyderabad – 500082.

1. Medium Term Loan Sanction by APSFC on 19th January, 2011 of Rs. 100 Lakhs repayable in 55 monthly installments. 54 Installments @ Rs. 1.80 lakhs each and 55th installment @ Rs. 2.80 lakhs with 14% interest. Period of loan 5 Years including moratorium of 6 months.

2. PRIMARY SECURITY: The above term loan secured by ways Equitable Mortgage of free hold interest in commercial Space bearing municipal No. 6-3-456/C/F1& 6-3-456/C/F2, part of First Floor Nos. 106 & 107, and measuring 4450 sft at MGR Estate, Dwarakapuri Colony, Panjagutta, Hyderabad together with undivided share of land and measuring 95 sq yds out of 2900 sa yds in the Sy. No. 145 and Hypothecation of Plant & Machinery / equipments existing and all other future acquisitions of fixed assets in nature.

3. COLLATERAL SECURITY: The above term loan is secured by way of Extension of equitable Mortgage of plots bearing Nos. 56 & 63 and measuring 976 sq yds and 986 sq yds respectively covered by Sy. Nos. 57 Part, 58 Part on Black Diamond Enclave Layout at Bachpally (V), Pragathinagar, Gram Panchayat, Qutbullapur (M), Ranga Reddy District, belonging to Smt Chakkilam Rajeswari and Sri Chakkilam Venkat Subramanyam.

4. The collateral Security holders shall guarantee the Corporation''s Medium Term Loan in their individual capacity as co-obligants.

28. The Company is engaged in the development of Computer Software and services. The production and sale of such software and services cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and the information as required under Paragraphs 3 and 4C of Part II of Schedule VI to the Companies Act, 1956.

29. RELATED PARTY TRANSACTION

During the financial year 2013-14 the Company has entered into some transaction, which can be deemed as related transactions. All these matters have been approved by the Board, wherever necessary.

34. SEGMENT REPORTING

Segment Reporting is not applicable to the Company

35. INTRA BRANCH TRANSACTION

Intra Branch transactions have been eliminated while preparing the financial statements.

36. DUES TO MICRO & SMALL ENTERPRISES

There are overdue principle amounts and interest thereon payable to Micro Enterprises and Small Enterprises, as at 31st March, 2014

37. CONFIRMATION OF CLOSING BALANCES

Closing Balances of Debtors, Creditors, Loans and Advances are subject confirmations.

38. Previous year''s figures have been regrouped wherever necessary.

39. The figures have been rounded off to the nearest rupee.

---

Mar 31, 2013

1. CORPORATE INFORMATION:

M/s. Cigniti Technologies Limited, a listed company on the Regional Stock Exchanges since February 2004 onwards, was incorporated on September 03, 1998 in the name and style as Chakkilam Infotech Private Limited. Subsequently the name of the company was changed into Chakkilam Infotech Limited in January 2000. The initial focus of the company was on generic IT services and healthcare related services and products.

In 2008, Chakkilam Infotech Limited shifted focus and repositioned itself as a pure play independent testing services company. The strategic shift helped the company focus its energies in building delivery capability and building IP in a nice area which was growing faster than generic IT services. The Company offered Software Testing services to US, European and Asia Pacific clients in areas such as Functional Testing, Test Automation, Performance Testing, Mobile Application Testing and Compatibility Testing. The strategic shift in focus was vindicated with the higher growth rates the company was able to show in the next few years.

In October 2011, Chakkilam Infotech Limited acquired a US based testing services and consulting company called Cigniti Inc. and rebranded itself as Cigniti Technologies Limited. With consolidated revenue run rate of $22 Million for the last quarter, Cigniti Technologies Limited emerged as India''s largest pure play independent testing services company. The company has aggressive organic growth plans which will be augmented with inorganic growth and hopes that within three years it will emerge as the world''s leading independent testing services company.

Over the last few years, Cigniti has built world class delivery capability for testing software. Investments have been made in attracting the brightest testing talent, building test infrastructure and test labs and building IP in the form of software testing frameworks, tools and utilities that help clients speed up their testing. Cigniti has invested in building India''s first Robotics Testing lab and other test infrastructures like Mobile Testing Lab and Cloud Based Performance Testing Lab. Cigniti has also invested in building its brand name by participating in industry events and taking on speaker opportunities in testing events.

At present the company is listed on Bombay Stock Exchange, Bangalore Stock Exchange and Madras Stock Exchange with the paid up capital of Rs.18.84 Crores. The company''s Registered office is Suite No. 106&107, 6-3-456/c, MGR Estates, Dwarakapuri Colony, Panjagutta, Hyderabad - 500082.

2. The Company is engaged in the development of Computer Software and services. The production and sale of such software and services cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and the information as required under Paragraphs 3 and 4C of Part II of Schedule VI to the Companies Act, 1956.

3. RELATED PARTY TRANSACTION

During the financial year 2012-13 the Company has entered into some transaction, which can be deemed as related transactions. All these matters have been approved by the Board, wherever necessary.

4. SEGMENT REPORTING:

Segment Reporting is not applicable to the Company

5. INTRA BRANCH TRANSACTION:

Intra Branch transactions have been eliminated while preparing the financial statements.

6. DUES TO MICRO & SMALL ENTERPRISES:

There are overdue principle amounts and interest thereon payable to Micro Enterprises and Small Enterprises, as at 31-03-2013

7. CONFIRMATION OF CLOSING BALANCES:

Closing Balances of Debtors, Creditors, Loans and Advances are subject confirmations.

8. Previous year''s figures have been regrouped wherever necessary,

9. The figures have been rounded off to the nearest rupee.

---

Mar 31, 2012

1. Corporate Loan Sanction by APSFC on 20th December, 2007 of Rs. 100 Lakhs repayable in 50 monthly installments of Rs.2 lakhs each with 15% interest. Period of loan 5 Years including moratorium of 11 months

2. Working Capital Term Loan Sanction by APSFC on 26th October, 2009 of Rs. 120 Lakhs repayable in 43 monthly installments. 42 Installments @Rs.2.80 lakhs each and 43 rd installment @ Rs.2,40 lakh s with 14% interest. P eriod of loan 4 Years including moratorium of 6 months

3. Medium Term Loan Sanction by APSFC on 19th January, 2011 of Rs. 100 Lakhs repayable in 55 monthly installments. 54 Installments @Rs.1.80 lakhs each and 55th in stallment @ Rs.2.80 lakhs with 14% interest. Period of loan 5 Years including moratorium of 6 months

4. PRIMARY SECURITY: The above all Term loans secured by ways Equitable Mortgage of free hold interest in commercial Space bearing municipal No. 6-3-456/C/F1& 6-3-456/C/F2, part of First Floor Nos. 106 & 107, admeasuring 4450 sft at MGR Estate, Dwarakapuri Colony, Panjagutta, Hyderabad together with undivided share of land admeasuring 95 sq yds out of 2900 sayds in the Sy. No. 145 and Hypothecation of Plant & Machinery / equipments existing and all other future acquisitions of fixed assets in nature

5. COLLATERAL SECURITY: The above all Term loans are secured by way of Extension of equitable Mortgage of plots bearing Nos. 56 & 63 a measuring 976 sq yds and 986 sq yds respectively covered by Sy. Nos. 57 Part, 58 P art on Black Diamond Enclave Layout at Bachpally (V) , Pragathinagar, Gram Panchayat, Qutbullapur (M), Ranga Reddy Di strict, belonging to Smt Chakkilam Raje swari and Sri Chakkilam Venkat Subramanyam.

6. The collateral Security holders shall guarantee the Corporation Medium Term Loan in their individual capacity as co-obligants

7. During the year the company has acquired a Foreign Company called Cigniti INC for a consideration of 57,00,000 Equity Shares of Rs.10/- each with premium of Rs.29/- per share towards 100% stake on preferential basis (SWAP).

8. During the year the company has acquired an Indian Company called Cigniti Software Services Private Limited for a consideration of 1,00,000 Equity Shares of Rs.10/- each with premium of Rs.29/- per share towards 100% stake on preferential bas is (SWAP).

9. The Company is engaged in the development of Computer Software and services. The production and sale of such software and services cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and the information as required under Paragraphs 3 and 4C of Part II of Schedule VI t o the Companies Act, 1956.

10. There are no dues to SSI Units outstanding for more than 30 days.

11. No confirmations were obtained from debtors/creditors as to the balances receivable from/payable to them as at year end.

12. Previous years figures have been regrouped wherever necessary.

13. The figures have been rounded off to the nearest rupee.

---

Mar 31, 2010

1 Particulars of Employees in accordance with Sub-section (2A) of Section 217 of the Companies Act , 1956 read with Companies (Particulars of Employees) Rule 1975.

2 The Company is engaged in the development of Computer Software and services. The production and sale of such software and services cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and the information as required under Paragraphs 3 and 4C of Part II of Schedule VI to the Companies Act, 1956.

3 There are no dues to SSI Units outstanding for more than 30 days.

4 No confirmations were obtained from debtors/creditors as to the balances receivable from/payable to them as at year end.

5 In accordance with Accounting Standard 22 (AS 22) issued by the ICAI, the Company has accounted for deferred income tax during the year. The deferred income tax provision for the current year amounts to Rs.4,07,716 towards deferred income tax Liability. (Previous year Rs.697,932/- towards deferred income tax Liability).

6 The term loans are secured against the personal guarantee of the directors.

7 Previous years figures have been regrouped wherever necessary.

8 The figures have been rounded off to the nearest rupee.