Notes to Accounts of KPIT Technologies Ltd.

Mar 31, 2025

3.9 PROVISIONS, CONTINGENT LIABILITIES AND
CONTINGENT ASSETS

a. Provisions

The Company recognises provisions only when it
has a present legal or constructive obligation as a
result of a past event, it is probable that an outflow
of resources embodying economic benefits will be

- A reliable estimate of the amount of
obligation cannot be made.

The Company does not recognise such obligations
but are disclosed as contingent liabilities. These
are assessed continually and only that part of
the obligation for which an outflow of resources
embodying economic benefits is probable,
is provided for, except in the extremely rare
circumstances where no reliable estimate can be
made.

c. Contingent asset

Contingent assets are not recognised in the
standalone financial statements since this may
result in the recognition of income that may never
be realised.

Provisions, contingent liabilities and contingent
assets are reviewed at each balance sheet date.

3.10 TREASURY SHARES

The Company has created a KPIT Technologies
Limited Employees Welfare Trust ("EWT") which acts
as a vehicle for distributing shares to employees
under the share-based payment arrangements
to its employees. EWT purchases the Company''s
share from secondary market for issuance to the
employees on exercise of the granted stock options.
EWT is considered as an extension of the Company
and the shares held by EWT are treated as treasury
shares.

The treasury shares are recognised at the
consideration paid including any directly attributable
incremental cost and is presented as a deduction
from equity, until they are sold or reissued. No gain
or loss is recognised in the Statement of Profit and
Loss on purchase, sale, issuance, or cancellation
of treasury shares. When treasury shares are sold
or reissued, the amount received is recognised as
an increase in equity, and the resulting surplus or
deficit on the transaction is transferred to/from
other equity.

3.11 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprises cash on
hand, demand deposits and short term, highly
liquid investments that are readily convertible to
known amounts of cash, which are subject to an
insignificant risk of changes in value and have a
short maturity of three months or less from the
date of investment.

3.12 REVENUE RECOGNITION

The Company derives revenues primarily from
providing engineering services which includes
design engineering services, embedded software
development with its related services and from the
sale of licenses and products.

The following is the summary of significant
accounting policies related to revenue recognition:

Revenue is measured based on the consideration
specified in a contract with a customer. The
Company recognises revenue when it transfers
control over a good or service to a customer.

Arrangements with customers for such engineering
and its related services are bifurcated into following
key categories:

a. Revenue on time and material contracts for
the reporting period is recognised as and when
the related services are performed and billed
to the end customers. If billing for the related
services is not done during the reporting period,
revenue is recognized as unbilled revenue at
the end of the reporting period.

b. Revenue from fixed price contracts where the
performance obligations are directly linked to
costs expended and are satisfied over time and
there is no uncertainty as to measurement or
collectability of consideration, is recognised
as per the percentage-of-completion method.
Percentage of completion is determined
based on project costs incurred to date as a
percentage of total estimated project costs
required to complete the project. Costs
expended have been used to measure progress
towards completion as generally there is a
direct relationship between input and output
in respect of work completed.

c. Maintenance revenue is recognised ratably
over the term of the underlying maintenance
arrangement.

d. Revenue from internally developed software
product licenses where the customer obtains
a “right to use” the license is recognised
at the time the license is made available to
the customer. Revenue from licenses where
the customer obtains a “right to access” is
recognised over the access period.

e. Revenue from sale of third party licenses is
recognised only when the sale is completed by
passing ownership.

f. Revenue from sale of hardware products is
recognized upon actual delivery of goods along
with transfer of control and significant risks
and rewards to the customers.

The following are the details of key significant
accounting policies related to revenue recognition
for all the above mentioned categories:

a. Revenue in excess of invoicing is classified
either as contract asset (unbilled revenue)
or financial asset (unbilled revenue), while
invoicing in excess of revenue is classified as
contract liabilities (unearned revenue).

b. Unbilled revenue is classified as contract
asset when there is a right to consideration
in exchange for goods or services which is
conditional on something other than the
passage of time. Whereas, it is classified as
financial asset when such right to consideration
in exchange for goods or services is conditional
only on passage of time.

c. Amount billed in advance, without services
being rendered, is classified as unearned
revenue (contract liabilities).

Revenue is measured based on the transaction price,
which is the consideration, adjusted for volume
discounts, service level credits, performance
bonuses and incentives, if any, as specified in the
contract with the customer. Expenses reimbursed
by customers during the project execution are
recorded as reduction to associated costs.

d. The Company accounts for volume and/or
trade discounts to customers as a reduction of
revenue. Also, when the level of discount varies
with increases in levels of revenue transactions,
the company recognises the liability based
on its estimate of the customer''s future
purchases. The Company recognises changes
in the estimated amount of obligations for
discounts in the period in which the change
occurs. The discounts are passed on to the
customer either as direct payments or as a
reduction of payments due from the customer.

e. When there is an uncertainty as to measurement
or ultimate collectability, revenue recognition
is postponed until such uncertainty is resolved.

f. In accordance with Ind-AS 37, provision for
onerous contract/ estimated losses, if any,
on uncompleted contracts are recorded in a
period in which such losses become probable

based on the expected contract estimates at
the period end date. The Company recognises
an onerous contract provision when the
unavoidable costs of meeting the obligations
under a contract exceed the economic benefits
to be received.

g. The Company presents revenues net of indirect
tax in its Statement of Profit and Loss.

Significant judgments in revenue recognition:

a. The Company’s contracts with customers could
include promises to transfer multiple products
and services to a customer. The Company
assesses the products/services promised in a
contract and identifies distinct performance
obligations in the contract. Identification
of distinct performance obligation involves
judgment to determine the deliverables
and the ability of the customer to benefit
independently from such deliverables.

b. Judgment is also required to determine
the transaction price for the contract. The
transaction price could be either a fixed
amount of customer consideration or variable
consideration with elements such as volume
discounts, service level credits, performance
bonuses, price concessions and incentives.
The transaction price is also adjusted for
the effects of the time value of money if
the contract includes a significant financing
component. The estimated amount of variable
consideration is adjusted in the transaction
price only to the extent that it is highly probable
that a significant reversal in the amount of
cumulative revenue recognized will not occur
and is reassessed at the end of each reporting
period. The Company allocates the elements of
variable considerations to all the performance
obligations of the contract unless there is
observable evidence that they pertain to one
or more distinct performance obligations.

c. The Company uses judgment to determine
an appropriate standalone selling price for a
performance obligation. The Company allocates
the transaction price to each performance
obligation on the basis of the relative stand¬
alone selling price of each distinct product
or service promised in the contract. Where
standalone selling price is not observable, the
Company uses the expected cost plus margin
approach to allocate the transaction price to
each distinct performance obligation.

d. The Company exercises judgment in
determining whether the performance
obligation is satisfied at a point in time or
over a period of time. The Company considers
indicators such as how customer consumes
benefits as services are rendered or who
controls the asset as it is being created or
existence of enforceable right to payment for
performance to date and alternate use of such
product or service, transfer of significant risks
and rewards to the customer, acceptance of
delivery by the customer, etc.

e. Revenue from fixed price contracts where the
performance obligations are directly linked to
costs expended and are satisfied over time and
there is no uncertainty as to measurement or
collectability of consideration, is recognised
as per the percentage-of-completion method.
The Company uses judgment to estimate the
future cost-to-completion of the contracts
which is used to determine the degree of the
completion of the performance obligation.

3.13 OTHER INCOME

Other income primarily consist of interest income,
dividend income, net gain on investments carried
at fair value through profit or loss, insurance claim
and net foreign exchange gain. Interest income is
recognised using the effective interest method.
Dividend income is recognised when right to receive
payment is established.

3.14 BORROWING COSTS

Borrowing cost includes interest, other costs
incurred in connection with the borrowing of funds
and exchange differences arising from foreign
currency borrowings to the extent they are regarded
as an adjustment to the interest cost.

Borrowing costs that are directly attributable to
the acquisition, construction or production of an
asset that necessarily takes a substantial period
of time to get ready for its intended use or sale
are capitalised as part of the cost of that asset. All
other borrowing costs are expensed in the period in
which they are incurred.

3.15 EMPLOYEE BENEFITS

a. Defined benefit plan

The Company’s gratuity scheme is a defined
benefit plan. For defined benefit plans, the cost
of providing benefits is determined using the
Projected Unit Credit Method, with independent

actuarial valuations being carried out at each
Balance Sheet date. Remeasurement of net defined
benefit liability, which comprise actuarial gains and
losses, the return on plan assets (excluding interest)
and the effects of asset ceiling (if any, excluding
interest) are recognised in other comprehensive
income for the period in which they occur. Net
interest expense and other expenses related to
defined benefit plans are recognised in Statement
of Profit and Loss. Past service cost is recognised
immediately to the extent that the benefits are
already vested or amortized on a straight-line basis
over the average period until the benefits become
vested.

The retirement benefit obligation recognised in
the Balance Sheet represents the present value
of the defined benefit obligation as adjusted for
unrecognised past service cost, and as reduced by
the fair value of scheme assets, if any. Any asset
resulting from this calculation is limited to the
present value of available refunds and reductions
in future contributions to the scheme.

b. Defined contribution plan

A defined contribution plan is a post-employment
benefit plan under which an entity pays specified
contributions to a separate entity and has no
obligation to pay any further amounts. The
Company makes specified monthly contributions
towards Government administered provident fund
scheme and Employee State Insurance Scheme
in India which are defined contribution plans.
The Company’s contribution is recognised as an
expense in the Statement of Profit and Loss during
the period in which the employee renders the
related service.

c. Compensated absences

The employees can carry-forward a portion of the
unutilized accrued compensated absences and
utilize it in future service periods or receive cash
compensation on termination of employment.

Accumulated absences expected to be utilised
within twelve months is treated as short-term
employee benefit. The Company measures the
expected cost of such accumulated absences
as the additional amount that it expects to pay
as a result of the unused entitlement that has
accumulated at the end of the reporting period.

Accumulated absences expected to be carried
forward beyond twelve months is treated as long¬
term employee benefit. The Company records an

obligation for such compensated absences in the
period in which the employee renders the services
that increase this entitlement. The obligation is
measured on the basis of independent actuarial
valuation using the Projected Unit Credit Method.
Remeasurement gains/losses are recognised in the
Statement of Profit and Loss in the period in which
they arise.

d. Other employee benefits

The undiscounted amount of short-term employee
benefits and discounted amount of long term
employee benefit, expected to be paid in exchange
for the services rendered by employees, is
recognised during the period when the employee
renders the service. These benefits also include
performance incentives.

3.16 research and development

Costs incurred during the research phase of a
project are expensed when incurred. Costs incurred
in the development phase are recognised as an
intangible asset in accordance with policy defined
in 3.6.

3.17 sHARE BAsED pAYMENTs

The Company operates equity settled share-based
plans for the employees. Employee stock options
granted are measured at fair value of stock options
at the grant date using the Black and Scholes
options pricing model. The Company recognises
employee compensation expense, using such
grant date fair value, on straight line basis over the
vesting period, with a corresponding increase in
equity (Share based payment reserve).

When the terms of the share-based payment
arrangement are modified, the minimum expense
recognised is the expense had the terms not
been modified. Additional expense is recognised
on modification that increase the total fair value
of the share-based payment arrangement or are
otherwise beneficial to the employee as measured
at the date of modification. Where the grant of
equity instruments is cancelled by the entity, the
remaining fair value is recognised immediately in
the Statement of Profit and Loss.

For the stock options granted to the employees of
the subsidiaries, the share based compensation
expenses are charged to the respective subsidiary.
The said recovery is netted off from the Employee
benefits expense.

3.18 DiviDEND

The Company declares and pays dividends in Indian
rupees. Final dividend on equity shares is recorded
as a liability on approval by the shareholders and
interim dividend is recorded as a liability on the
date of declaration by the Company''s Board of
Directors.

3.19 iNcOME TAxEs

Income tax expense comprises current and deferred
income tax. Income tax expense is recognised in
the Statement of Profit and Loss except to the
extent that it relates to items recognised directly
in equity, in which case it is recognised in other
comprehensive income. Current income tax for
current and prior periods is recognised at the
amount expected to be paid to or recovered from
the tax authorities, using the tax rates and tax laws
that have been enacted or substantively enacted by
the Balance Sheet date. Deferred income tax assets
and liabilities are recognised for all temporary
differences arising between the tax bases of assets
and liabilities and their carrying amounts in the
standalone financial statements.

Deferred income tax assets and liabilities are
measured using tax rates and tax laws that
have been enacted or substantively enacted
by the Balance Sheet date and are expected to
apply to taxable income in the years in which
those temporary differences are expected to be
recovered or settled. The effect of changes in tax
rates on deferred income tax assets and liabilities
is recognised as income or expense in the period
that includes the enactment or the substantive
enactment date. A deferred income tax asset is
recognised to the extent that it is probable that
future taxable profit will be available against
which the deductible temporary differences and
tax losses can be utilized. Deferred income taxes
are not provided on the undistributed earnings of
branches where it is expected that the earnings
of the branch will not be distributed in the
foreseeable future. The Company offsets current
tax assets and current tax liabilities, where it has
a legally enforceable right to set off the recognised
amounts and where it intends either to settle on
a net basis, or to realise the asset and settle the
liability simultaneously.

Minimum Alternate Tax

Minimum Alternate Tax ("MAT") under the provisions
of the Income-tax Act, 1961 is recognised as current
tax in the Statement of Profit and Loss. The credit

available under the Act in respect of MAT paid is
recognised as an asset only when and to the extent
there is convincing evidence that the Company
will pay normal income tax during the period for
which the MAT credit can be carried forward for
set-off against the normal tax liability. MAT credit
recognised as an asset is reviewed at each Balance
Sheet date and written down to the extent the
aforesaid convincing evidence no longer exists.

3.20 EARNINGS PER SHARE

Basic earnings per share are computed by dividing
the net profit for the year after tax by the weighted
average number of equity shares outstanding
during the financial year, adjusted for treasury
shares. Diluted earnings per share is computed
by dividing the net profit for the year after tax by
the weighted average number of equity shares
outstanding during the financial year as adjusted
for treasury shares and the effects of all dilutive
potential equity shares except where the results
are anti-dilutive.

3.21 RECENT PRONOUNCEMENTS

Ministry of Corporate Affairs (“MCA”) notifies
new standards or amendments to the existing
standards under Companies (Indian Accounting
Standards) Rules as issued from time to time. For
the year ended 31 March 2025, MCA has notified
amendements to Ind AS 116 - Leases in respect of
sale and leaseback transactions and notified new
standard Ind AS 117 - Insurance contracts. The
Company does not expect these amendments to
have any impact on its financial statements.

19.9 Capital Management

The Company’s Capital Management policy is aimed at maintaining a stable capital base so as to ensure overall
financial stability and operational efficiency. The Company will aim to strike the right balance between:

(a) Liquidity, required not only for the operations of the company but also the investments required for future
growth;

(b) Returns, by investing excess funds as per the board approved investment policy; and

(c) Distribution of dividends to the shareholders of the Company with an overall objective of consistently
maximizing shareholder value over a long period of time.

The Company is predominantly equity financed and will always aim to be a Net Cash company.

ii. Cash and bank balances

The Company has limited credit risk on bank balances and deposits as they are held with banks
and financial institutions which have high credit rating assigned by domestic and international
credit rating agencies. Investments primarily includes investment in liquid mutual fund units.
The Company mitigates the credit risk on these investments by investing in institutions with high
credit rating.

iii. Guarantees

The Company’s policy is to provide financial guarantees in routine course of business and on
behalf of subsidiaries/joint ventures.

b. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s
approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to
meet its liabilities when they are due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Company’s reputation.

The Company has a view of maintaining liquidity and to take minimum possible risk while making
investments. In order to maintain liquidity, the Company invests its excess funds in short term liquid
assets like liquid mutual funds. The Company monitors its cash and bank balances periodically in view
of its short term obligations associated with its financial liabilities.

The liquidity position at each reporting date is given below:

c. Market risk

Market risk is a risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimizing the return.

i. Foreign currency risk

Significant portion of the Company’s revenues are in foreign currencies, while a significant portion
of the costs are in Indian rupee i.e. functional currency of the Company. The foreign currencies to
which the Company is majorly exposed to are US Dollars, Euros, Pound Sterling and Japanese Yen.

The Company evaluates net exchange rate exposure based on current revenue projections and
expected volatility in the market and covers its exposure up to 90% on net basis. For this purpose
the Company uses foreign currency derivative instruments such as forward contracts to mitigate
the risk. The counterparty to these derivative instruments is a bank. The Company has designated
certain derivative instruments as cash flow hedge to mitigate the foreign exchange exposure of
highly probable forecasted cash flows.

ii. Derivative assets and liabilities designated as cash flow hedges

In accordance with its risk management policy and business plan the Company has hedged its
cash flows. The Company enters into derivative contracts to offset the foreign currency risk
arising from the amounts denominated in currencies other than in Indian rupees. The counter
party to the Company’s foreign currency contracts is a bank. These contracts are entered into to
hedge the foreign currency risks of firm commitments (sales orders) and highly probable forecast
transactions. Hedge effectiveness is determined at the inception of the hedge relationship, and
through periodic prospective effectiveness assessments to ensure that an economic relationship
exists between the hedged item and hedging instrument, including whether the hedging instrument
is expected to offset changes in cash flows of hedged items.

iii. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market interest rates. The Company does not have any
investments, deposits and borrowings which are variable interest rate bearing instruments.
Therefore, the Company is not exposed to interest rate risk.

iv. Other price risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to
changes in market traded price. Other price risk arises from financial assets such as investments
in quoted equity instruments and investments in mutual funds. The Company is mainly exposed
to other price risk arising from investments in mutual funds which are recognised at fair value
through profit and loss.

35.5 PERFORMANCE OBLIGATIONS AND REMAINING PERFORMANCE OBLIGATIONS

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet
to be recognized as at the end of the reporting period and an explanation as to when the company expects to
recognize these amounts in revenue.

Applying the practical expedient as given in Ind AS 115, the company has not disclosed the remaining
performance obligation related disclosures for contracts where the revenue recognized corresponds directly
with the value to the customer of the entity’s performance completed to date, typically those contracts
where invoicing is on time and material basis. Remaining performance obligations estimates are subject to
change and are affected by several factors, including terminations, changes in the scope of contracts, periodic
revalidations, adjustment for revenue that has not materialized and adjustments for currency.

The aggregate value of performance obligations that are completely or partially unsatisfied as of 31 March
2025, other than those meeting the exclusion criteria mentioned above, is ? 4,280.83 million. Out of this, the
Company expects to recognize revenue of around 82% within the next one year. This includes contracts that
can be terminated for convenience without a substantive penalty, since based on current assessment, the
occurrence of the same is expected to be remote.

36 GRATUITY

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Gratuity is a benefit
to an employee in India based on 15 days last drawn salary for each completed year of service with a vesting period of
five years.

These defined benefit plans expose the Company to actuarial risks, such as interest rate risk, salary risk, investment
risk, asset liability matching risk and concentration risk.

The Company’s gratuity scheme is a defined benefit plan (funded). The Company manages the plan through a trust.
Trustees administer contributions made to the trust.

Scheme, the stock options had been granted at an exercise price which was the pre-demerger exercise price
suitably adjusted in the manner of share exchange ratio. Further, as per the Composite Scheme, the Company had
taken into account the vesting period completed, under the plan in the Demerged Company, prior to the grant of
options to the employee under the ESOS 2019. The maximum exercise period is 5 years from the date of vesting.

The outstanding stock options held by employees of the Demerged Company as at 31 March 2025 are 10,000 and
10,000 of Birlasoft options and KPIT options respectively. The employee compensation cost for such employees is
not eligible for recognition in the books of the Company.

The number of outstanding Birlasoft options held by employees of the Company as at 31 March 2025 are Nil. The
Company recorded an employee compensation cost of ? Nil (Previous year ? Nil) in this respect in the Statement
of Profit and Loss.

Below are the details pertaining to the KPIT options held by employees of the Company:

Number and weighted average exercise prices of options granted, exercised and cancelled/lapsed during the
financial year:

37 SHARE BASED PAYMENTS

37.1 EMPLOYEE STOCK OPTION SCHEME - 2019

In accordance with the terms of the approved Composite Scheme, KPIT Engineering Limited (now known as KPIT
Technologies limited) (“Resulting Company”) had issued the stock options to the employees holding options of the
KPIT Technologies Limited (now known as BirlaSoft Limited) (“Transferee Company” or “Demerged Company”) as
at the appointed date. The options issued consisted of:

i. 1,807,450 options of the Transferee Company (“Birlasoft options”), equivalent to the number of options
outstanding as at the appointed date;

ii. 1,807,450 options of the Resulting Company (“KPIT options”), in the ratio of 1:1 for every outstanding stock
options held by the employees in the Transferee Company.

The Board of Directors of the Company approved the Employees Stock Option Scheme at their meeting held on
15 May 2019. Pursuant to this approval, the Company instituted ESOS 2019 in May 2019. The compensation committee
of the Company administers this Plan. Each type of option carries with it the right to purchase one equity share of
the Demerged Company or the Resulting Company as the case may be. In terms of clause 18.5 of the Composite

The weighted average share price of the options exercised under Employees Stock Option Scheme -2019 on the
date of exercise during the previous year was ? 667.89.

The Company recorded an employee compensation cost of ? Nil (Previous year ? Nil) in the Statement of Profit and
Loss.

37.2 EMPLOYEE STOCK OPTION SCHEME - 2019A

The Board of Directors and the shareholders of the Company approved another Employee Stock Option Scheme
at their meetings held on 17 June 2019 and on 23 July 2019, respectively. Pursuant to this approval, the Company
instituted ESOS 2019A in July 2019. The compensation committee of the Company administers this Plan. Each
option carries with it the right to purchase one equity share of the Company. The options approved under this
scheme are 3,793,923.

The options would vest not earlier than statutory minimum vesting period of 1 year and up to the maximum period
of 4 years from the date of grant of options or such period as may be decided by the Committee at the time of each
grant of options. The exact proportion in which and the exact period over which the options would vest would be
determined by the Committee, subject to the minimum vesting period of 1 year from the date of grant of options.
The maximum exercise period is 5 years from the date of vesting.

The Company recorded an employee compensation cost of ? 26.72 million (Previous year ? 44.83 million) in the
Statement of Profit and Loss. This is net of recoveries from subsidiaries ? 30.76 million (Previous year ? 46.44
million).

The expected price volatility is based on the historic volatility, adjusted for any expected changes to future
volatility due to publicly available information.

37.3 KPIT TECHNOLOGIES LIMITED - RESTRICTED STOCK UNIT PLAN 2022

The Board of Directors and the shareholders of the Company approved KPIT Technologies Limited - Restricted
Stock Unit Plan 2022 (RSU 2022) at their meetings held on 25 July 2022 and on 24 August 2022, respectively.
The Nomination and Remuneration (HR) Committee of the Board of Directors (“Committee”) of the Company
administers this Plan. Each Restricted Stock Unit (“RSU”) carries with it the right to purchase one equity share of
the Company. The RSUs approved under this scheme are 4,112,157.

During the current year, RSUs under the said scheme have been granted to employees of the Company and its
subsidiaries at an exercise price equivalent to the face value of the Company’s shares as on the date of grant.

The RSUs would vest not earlier than statutory minimum vesting period of 1 year and up to the maximum period
of 4 years from the date of its grant or such period as may be decided by the Committee at the time of each grant.
The exact proportion in which and the exact period over which the RSUs would vest would be determined by the
Committee, subject to the minimum vesting period of 1 year from the date of grant of RSUs. The maximum exercise
period is 5 years from the date of vesting.

Number and weighted average exercise prices of options granted, exercised and cancelled/lapsed during the
financial year:

(i) Remuneration excludes provision for gratuity and compensated absences as separate actuarial valuation
for the directors, key management personnel and their relatives is not available.

(ii) The commission paid to Non-Executive Directors pertains to the financial year 2023-24, which was
determined and paid during the current financial year. The commission for the financial year 2024-25 will be
paid after evaluation and approval by the Board of Directors.

(iii) Includes variable performance incentive pertaining to Executive Directors, amounting to ? 23.00 million
for the financial year 2023-24 (Previous year ? 23.99 million for the financial year 2022-23), determined
and paid in the current financial year, based on the Group’s policy for payment of variable performance
incentive.

(iv) Includes reimbursement of salary paid by KPIT Technologies Inc. on behalf of KPIT Technologies Limited,
pertaining to Mr. Sachin Tikekar and Mr. Chinmay Pandit, amounting to ? 17.05 million (Previous year ? 18.67
million) and ? 8.24 million (Previous year ? 7.10 million), respectively.

42.7 TERMS AND CONDITIONS OF TRANSACTIONS WITH RELATED PARTIES

1 All the transactions with the related parties entered during the year were in ordinary course of the business
and are priced on an arm’s length basis. Outstanding balances at the reporting dates are unsecured and
settlement occurs in cash.

2 During the year ended 31 March 2025, the Company has reversed an amount of ? 99.52 million (Previous
year recognised an amount of ? 126.04 million) as an allowance for bad and doubtful receivables due from
related parties. As at 31 March 2025, an allowance for bad and doubtful receivables from related parties
is ? 100.30 million (Previous year ? 199.82 million).

3 There have been no guarantees given or received for any related party receivables or payables.

Notes:

a. Debt includes current and non-current lease liabilities.

b. Earnings available for debt service = Net Profit after taxes Non-cash operating expenses like depreciation and
other amortisations interest other adjustments like loss on sale of fixed assets etc.

c. Debt service includes lease payments for the year. It excludes working capital repayment (if any) during the year.

d. Capital Employed = Tangible net worth Total debt.

e. Trade payables include provision for expenses.

f. Income generated from investments include interest income, net gain on sale of investments and net fair value
gain.

EXPLANATION FOR VARIANCES EXCEEDING 25%

i. The ratio has improved due to increase in investments and settlement of purchase consideration payable.

ii. Increase in Debt-equity ratio is on account of higher lease liabilities during the year.

iii. Revenue growth with higher operational efficiency has resulted into improvement in the respective ratios.

iv. Increase in the ratio is mainly on account of increased business operations.

44 SEGMENT INFORMATION

Where a financial report contains both consolidated financial statements and separate financial statements of the
parent, segment information needs to be presented only in case of consolidated financial statements. Accordingly,
segment information has been provided only in the consolidated financial statements.

45 INVESTMENT IN QORIX GMBH

During the current year, ZF Friedrichshafen AG (“ZF”) has invested EURO 1.35 million in Qorix GmbH, a wholly owned
subsidiary of KPIT Technologies Limited (KPIT), based on definitive terms of the Joint Venture Agreement entered into
by KPIT and ZF to make an independent company focused on the creation of worldclass automotive middleware stack.
Consequently, effective 27 June 2024, Qorix GmbH has become a Joint Venture Company of KPIT and ZF having 50:50
ownership. ZF has further invested EURO 13.65 million till date and assigned its relevant IP into Qorix GmbH.

On 13 May 2024, Qorix GmbH has incorporated a wholly owned step-down subsidiary named “Qorix India Private
Limited”.

Subsequently, Qualcomm Ventures LLC (“Qualcomm”) joins as a strategic minority shareholder in Qorix GmbH with
KPIT and ZF as significant shareholders. This partnership further strengthen the position of Qorix GmbH as a leading
provider of middleware solutions for Software-Defined Vehicles (SDVs). Pursuant to this, Qualcomm has invested an
amount of EUR 10.00 million, through an equity infusion, for a stake of 11.11% in Qorix GmbH.

46 INVESTMENT IN N-DREAM AG

During the previous year, the Company had entered into Shareholders’ Agreement, Share Purchase Agreement, and
Investment and Subscription Agreement for a strategic investment in N-Dream AG (N-Dream). N-Dream AG is a Cloud
based Game Aggregation Platform company based in Switzerland. This strategic investment in N-Dream AG is part
of Company’s roadmap to enable Automotive OEMs enhance the driver & passenger experience in the Cockpit of the
Future.

During the previous year, the Company had done an initial strategic investment of 13.01% stake in N-Dream for a total
cash consideration of EUR 3.00 million.

Further, in accordance with the agreements entered into, the Company has multiple options to increase its shareholding
over the period of next 4 years in a staggered manner. Pursuant to this, during the current year, the Company has
acquired an additional 12.99% stake in N-Dream for a cash consideration of EUR 3.00 million. With this additional share
purchase, total shareholding of the Company is 26.00% in N-Dream. The Company continues to hold non-controlling
equity holding in N-Dream.

As at the initial investment date, the Company had recognised derivate asset for the same. The derivative asset was
initially measured at fair value and correspondingly adjusted in the cost of investment amounting to ? 184.45 million.
The fair value of derivative asset is ? 40.32 million and ? 179.23 million as at 31 March 2025 and 31 March 2024,
respectively. Fair valuation impact of ? 60.43 million and ? 5.46 million is recognised in the Statement of Profit & Loss
for the year ended 31 March 2025 and 31 March 2024, respectively.

47 The proposed amalgamation of PathPartner Technology Private Limited (“the Transferor Company”), with KPIT
Technologies Limited (“the Transferee Company”), under Sections 230 to 232 and other applicable provisions of the
Companies Act, 2013, has been approved by the Board of Directors of the Transferor Company at its meeting held on
25 April 2025 and by the Board of Directors of the Transferee Company at its meeting held on 28 April 2025. This is
subject to approval of the National Company Law Tribunal.

The proposed amalgamation aims to simplify the group structure, drive synergies, and enhance stakeholder value
through consolidated operations and unified financial strength.

48 CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company, as per section 135 of the Companies Act 2013, is required to spend towards CSR, in various activities
as specified in Schedule VII of the Companies Act 2013, read with the Rules thereunder, as direct spend for purposes
other than construction/acquisition of any asset.

50 ADDITIONAL REGULATORY INFORMATION PURSUANT TO THE REQUIREMENT IN DIVISION II OF
SCHEDULE III TO THE cOMpANIEs Act 2013

(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 transactions with companies struck off.

(iii) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible
assets or both during the current or previous year.

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

(v) The Company (other than as mentioned in note 49) has not advanced or loaned or invested funds to any other
person(s) or entity(ies), 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.

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:

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

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

(vii) The Company does 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.

(viii) The Company has borrowings from banks and financial institutions on the basis of security of current assets. The
quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in
agreement with the books of accounts.

(ix) None of the entities in the Company have been declared wilful defaulter by any bank or financial institution or
government or any government authority.

(x) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(xi) The Company has not entered into any scheme of arrangement which has an accounting impact on current or
previous financial year.

51 The Company has used accounting softwares for maintaining its books of account, which have a feature of recording
audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the
respective softwares, except for the instances mentioned below:

(i) The feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data
changes for the accounting softwares used for maintaining all books of accounts for the period from 1 April 2024
to 9 May 2024.

(ii) The feature of recording audit trail (edit log) facility was not enabled for certain fields and a table at the application
layer of the accounting software used for maintaining books of accounts relating to Revenue and Receivables and
Payroll for the period from 1 April 2024 to 24 April 2024.

For the periods where audit trail (edit log) facility was enabled and operated throughout the year for the respective
accounting software there were no instance of the audit trail feature being tampered with. Further, in all material
respects, adequate internal financial controls with reference to financial statements and such internal financial
controls (including IT General Controls) were operating effectively as at 31 March 2025 and have no impact on the
Financial Statements of the Company.

52 The Company has established a system of maintenance of information and documents as required by the transfer
pricing legislation under Section 92-92F of the Income Tax Act 1961. The Company is in the process of updating the
documentation for the financial year 2024-2025.

The management is of the opinion that international transactions are at arm’s length and accordingly the aforesaid
legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that
of provision for taxation.

As per our report of even date attached

For B s R & co. LLp For and on behalf of the Board of directors of

chartered Accountants KpIT Technologies Limited

Firm Registration Number: 101248w/w-100022 CIN: L74999PN2018PLC174192

shiraz Vastani s. B. (Ravi) pandit Kishor patil

Partner Chairman of The Board CEO & Managing Director

Membership No. 103334 DIN : 00075861 DIN : 00076190

priyamvada Hardikar Ashish Malhotra

Chief Financial Officer Company Secretary

Place: Pune Place: Pune

Date: 28 April 2025 Date: 28 April 2025

---

Mar 31, 2024

3.10 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

The Company recognises provisions only when it has a present legal or constructive obligation 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 when a reliable estimate of the amount of the obligation can be made.

Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

No provision is recognised for -

a. Any possible obligation that arises from past events and the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future

NOTES FORMING PART OF THE STANDALONE FINANCIAL STATEMENTS

for the year ended 31^st March, 2024

events not wholly within the control of the Company; or

b. Present obligations that arise from past events but are not recognised because-

1) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

2) A reliable estimate of the amount of obligation cannot be made.

Such obligations are disclosed as contingent liabilities. These are assessed continually and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made.

Contingent assets are not recognised in the standalone financial statements since this may result in the recognition of income that may never be realised.

Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established the Company recognises any impairment loss on the assets associated with that contract.

Warranty

The Company has an obligation by way of warranty to maintain the software during the period of warranty, as per the contractual requirements, for certain products/licenses. Costs associated with such sale are accrued at the time when related revenues are recorded and included in cost of service delivery.

The Company accounts for the provision for warranty on the basis of the information available with the Management duly taking into account the historical experience and current estimates.

3.11 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprises cash on hand, demand deposits and short term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and have a short maturity of three months or less from the date of investment.

3.12 Revenue Recognition

The Company derives revenues primarily from providing engineering services which includes design engineering services, embedded software development with its related services and from the sale of licenses and products.

The following is the summary of significant accounting policies related to revenue recognition:

Revenue is measured based on the consideration specified in a contract with a customer. The Company recognises revenue when it transfers control over a good or service to a customer.

Arrangements with customers for such engineering and its related services are bifurcated into following key categories:

a. Revenue on time and material contracts for the reporting period is recognised as and when the related services are performed and billed to the end customers. If billing for the related services is not done during the reporting period, revenue is recognized as unbilled revenue at the end of the reporting period.

b. Revenue from fixed price contracts where the performance obligations are directly linked to costs expended and are satisfied over time and there is no uncertainty as to measurement or collectability of consideration, is recognised as per the percentage-of-completion method. Percentage of completion is determined based on project costs incurred to date as a percentage of total estimated project costs required to complete the project. Costs expended have been used to measure progress towards completion as generally there is a direct relationship between input and output in respect of work completed.

c. Maintenance revenue is recognised ratably over the term of the underlying maintenance arrangement.

d. Revenue from internally developed software product licenses where the customer obtains a “right to use” the license is recognised at the time the license is made available to the customer. Revenue from licenses where the customer obtains a “right to access” is recognised over the access period.

e. Revenue from sale of third party licenses is recognised only when the sale is completed by passing ownership.

f. Revenue from sale of hardware products is recognized upon actual delivery of goods along with transfer of control and significant risks and rewards to the customers.

The following are the details of key significant

accounting policies related to revenue recognition

for all the above mentioned categories:

a. Revenue in excess of invoicing is classified either as contract asset (unbilled revenue) or financial asset (unbilled revenue), while invoicing in excess of revenue is classified as contract liabilities (unearned revenue).

b. Unbilled revenue is classified as contract asset when there is a right to consideration in exchange for goods or services which is conditional on something other than the passage of time. Whereas, it is classified as financial asset when such right to consideration in exchange for goods or services is conditional only on passage of time.

c. Amount billed in advance, without services being rendered, is classified as unearned revenue (contract liabilities).

Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, service level credits, performance bonuses and incentives, if any, as specified in the contract with the customer. Expenses reimbursed by customers during the project execution are recorded as reduction to associated costs.

d. The Company accounts for volume and/or trade discounts to customers as a reduction of

revenue. Also, when the level of discount varies with increases in levels of revenue transactions, the Company recognises the liability based on its estimate of the customer''s future purchases. The Company recognises changes in the estimated amount of obligations for discounts in the period in which the change occurs. The discounts are passed on to the customer either as direct payments or as a reduction of payments due from the customer.

e. When there is an uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved.

f. In accordance with Ind-AS 37, provision for onerous contract/ estimated losses, if any, on uncompleted contracts are recorded in a period in which such losses become probable based on the expected contract estimates at the period end date. The Company recognises an onerous contract provision when the unavoidable costs of meeting the obligations under a contract exceed the economic benefits to be received.

g. The Company presents revenues net of indirect tax in its Statement of Profit and Loss.

h. Arrangements to deliver software products

generally have three elements: license, implementation and Annual Technical

Services(ATS). The Company has applied the principles under Ind-AS 115 to account for revenues from these performance obligations. When implementation services are provided in conjunction with the licensing arrangement and the license and implementation have been identified as two separate performance obligations, the transaction price for such contracts is allocated to each performance obligation of the contract based on its relative standalone selling prices. In the absence of standalone selling price for implementation, the performance obligation is estimated using the expected cost plus margin approach. Where the license is required to be substantially customised as part of the implementation service, the entire arrangement fee for license and implementation is considered to be a single performance obligation and the revenue is recognised using the percentage-

of-completion method as the implementation is performed. Revenue from client training, support and other services arising due to the sale of software products is recognised as the performance obligations are satisfied. ATS revenue is recognised ratably over the period in which the services are rendered.

Significant judgments in revenue recognition:

a. The Company’s contracts with customers could include promises to transfer multiple products and services to a customer. The Company assesses the products/services promised in a contract and identifies distinct performance obligations in the contract. Identification of distinct performance obligation involves judgment to determine the deliverables and the ability of the customer to benefit independently from such deliverables.

b. Judgment is also required to determine the transaction price for the contract. The transaction price could be either a fixed amount of customer consideration or variable consideration with elements such as volume discounts, service level credits, performance bonuses, price concessions and incentives. The transaction price is also adjusted for the effects of the time value of money if the contract includes a significant financing component. The estimated amount of variable consideration is adjusted in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur and is reassessed at the end of each reporting period. The Company allocates the elements of variable considerations to all the performance obligations of the contract unless there is observable evidence that they pertain to one or more distinct performance obligations.

c. The Company uses judgment to determine an appropriate standalone selling price for a performance obligation. The Company allocates the transaction price to each performance obligation on the basis of the relative standalone selling price of each distinct product or service promised in the contract. Where standalone selling price is not observable, the Company uses the expected cost plus margin

approach to allocate the transaction price to each distinct performance obligation.

d. The Company exercises judgment in determining whether the performance obligation is satisfied at a point in time or over a period of time. The Company considers indicators such as how customer consumes benefits as services are rendered or who controls the asset as it is being created or existence of enforceable right to payment for performance to date and alternate use of such product or service, transfer of significant risks and rewards to the customer, acceptance of delivery by the customer, etc.

e. Revenue from fixed price contracts where the performance obligations are directly linked to costs expended and are satisfied over time and there is no uncertainty as to measurement or collectability of consideration, is recognised as per the percentage-of-completion method. The Company uses judgment to estimate the future cost-to-completion of the contracts which is used to determine the degree of the completion of the performance obligation.

3.13 OTHER INCOME

Other income primarily consist of interest income, dividend income, net gain on investment and net foreign exchange gain. Interest income is recognised using the effective interest method. Dividend income is recognised when right to receive payment is established.

3.14 FINANCE COSTS

Finance costs include interest cost on borrowings, lease liabilities and other financial instruments. Borrowing costs are recognised using effective interest rate method.

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of that asset. All other borrowing costs are charged to the Statement of Profit and Loss.

The exchange differences arising from foreign currency borrowings, to the extent that they are regarded as an adjustment to interest costs, are regrouped from foreign exchange differences to finance costs.

3.15 EMPLOYEE BENEFITS

i. Defined benefit plan

The Company’s gratuity scheme is a defined benefit plan (funded). For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with independent actuarial valuations being carried out at each Balance Sheet date. Remeasurement of net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effects of asset ceiling (if any, excluding interest) are recognised in other comprehensive income for the period in which they occur. Net interest expense and other expenses related to defined benefit plans are recognised in the Statement of Profit and Loss. Past service cost is recognised immediately to the extent that the benefits are already vested or amortised on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of scheme assets, if any. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the scheme.

ii. Defined contribution plan

A defined contribution plan is a postemployment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company makes specified monthly contributions towards employee provident fund to Government administered provident fund scheme which is a defined contribution plan. The Company’s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

iii. Compensated absences

The employees can carry-forward a portion of the unutilized accrued compensated absences

and utilize it in future service periods or receive cash compensation on termination of employment. Since the compensated absences do not fall due wholly within twelve months after the end of the period in which the employees render the related service and are also not expected to be utilized wholly within twelve months after the end of such period, the benefit is classified as a long-term employee benefit. The Company records an obligation for such compensated absences in the period in which the employee renders the services that increase this entitlement. The obligation is measured on the basis of independent actuarial valuation using the projected unit credit method. Remeasurement gains/losses are recognised in the Statement of Profit and Loss in the period in which they arise.

iv. Other employee benefits

The undiscounted amount of short-term employee benefits and discounted amount of long term employee benefit, expected to be paid in exchange for the services rendered by employees, are recognised during the period when the employee renders the service.

3.16 RESEARCH AND DEVELOPMENT:

Costs incurred during the research phase of a project are expensed when incurred. Costs incurred in the development phase are recognised as an intangible asset in accordance with policy defined in 3.6.

3.17 EMploYEE stock option

In respect of stock options granted pursuant to the Company’s Employee Stock Option Scheme, the Company recognises employee compensation expense, using the grant date fair value in accordance with Ind-AS 102 - Share Based Payment, on straight line basis over the period over which the employees would become unconditionally entitled to apply for the shares.

When the terms of the share-based payment arrangement are modified, the minimum expense recognised is the expense had the terms not been modified. Additional expense is recognised on modification that increase the total fair value

of the share-based payment arrangement or are otherwise beneficial to the employee. Where the grant of equity instruments is cancelled by the entity, the remaining fair value is recognised immediately in the Statement of profit and Loss.

For the stock options granted to the employees of the subsidiaries, the share based compensation expenses are charged to the respective subsidiary.

3.18 DIVIDEND

The Company declares and pays dividends in Indian rupees. Final dividend and interim dividend on equity shares are recorded as a liability on approval by the shareholders and on declaration by the Company''s Board of Directors respectively. Dividends declared by the Company are based on profits available for distribution.

3.19 INCOME TAXES

Income tax expense comprises current and deferred income tax. Income tax expense is recognised in the Statement of Profit and Loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in other comprehensive income. Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred income tax assets and liabilities are recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the standalone financial statements.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognised as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognised to the extent that it is probable that

future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. Deferred income taxes are not provided on the undistributed earnings of branches where it is expected that the earnings of the branch will not be distributed in the foreseeable future. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognised amounts and where it intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Minimum Alternate Tax

Minimum Alternate Tax ("MAT") under the provisions of the Income-tax Act, 1961 is recognised as current tax in the Statement of Profit and Loss. The credit available under the Act in respect of MAT paid is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the period for which the MAT credit can be carried forward for set-off against the normal tax liability. MAT credit recognised as an asset is reviewed at each Balance Sheet date and written down to the extent the aforesaid convincing evidence no longer exists.

3.20 EARNINGS PER SHARE

Basic earnings per share are computed by dividing the net profit for the year after tax by the weighted average number of equity shares outstanding during the year adjusted for treasury shares held. Diluted earnings per share is computed by dividing the net profit for the year after tax by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares except where the results are anti-dilutive.

3.21 recent pronouncements

Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31^st March 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Group.

19.9 Capital Management

The Company’s Capital Management policy is aimed at maintaining a stable capital base so as to ensure overall financial stability and operational efficiency. The Company will aim to strike the right balance between:

(a) Liquidity, required not only for the operations of the Company but also the investments required for future growth;

(b) Returns, by investing excess funds as per the board approved investment policy; and

(c) Distribution of dividends to the shareholders of the Company with an overall objective of consistently maximizing shareholder value over a long period of time.

The Company is predominantly equity financed and will always aim to be a Net Cash company.

34.2 FAIR VALUE HIERARCHY

Financial assets and liabilities include cash and cash equivalents, bank balances other than cash and cash equivalents, trade receivables (billed and unbilled), other financial assets, trade payables, borrowings and other financial liabilities, whose fair values approximate their carrying amounts. Fair value of lease liabilities approximate its carrying amount, as lease liabilities are valued using discounted cash flow method. Except for quoted investments, which are Level 1, rest of the financial assets and financial liabilities are classified as Level 2 or Level 3.

Level 1 - Quoted prices (unadjusted) in active markets 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).

34.3 FINANCIAL RISK MANAGEMENT

The board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The Company has exposure to the following risks arising from financial instruments:

a. Credit risk

Credit risk is the risk of financial losses to the Company if a customer or counterparty to financial instruments fails to discharge its contractual obligations and arises primarily from the Company’s billed trade receivables from customers amounting to '' 3,494.73 million and '' 3,554.64 million and unbilled trade receivables amounting to '' 727.78 million and '' 690.58 million and other current financial assets pertaining to receivable from related and other than related parties amounting to '' 1,054.49 million and '' 170.43 million as on 31 March 2024 and 31 March 2023 respectively. To manage this, the Company periodically assesses the key accounts receivable balances. As per Ind-AS 109 : Financial Instruments, the Company uses expected credit loss model to assess the impairment loss or gain.

I. Trade receivables

The management has established accounts receivable policy under which customer accounts are regularly monitored. The Company has a dedicated sales team at each geography which is responsible for collecting dues from the customer within stipulated period. The management reviews status of critical accounts on a regular basis.

iii. Cash and bank balances

The Companyheld cashandbankbalancesof?1,223.03millionand?949.59millionasat31 March2024and 31 March 2023 respectively. The cash and bank balances are held with banks which have high credit ratings assigned by international credit rating agencies.

iv. Guarantees

The Company’s policy is to provide financial guarantees in routine course of business and on behalf of subsidiaries/joint ventures.

b. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company has a view of maintaining liquidity and to take minimum possible risk while making investments. In order to maintain liquidity, the Company invests its excess funds in short term liquid assets like liquid mutual funds. The Company monitors its cash and bank balances periodically in view of its short term obligations associated with its financial liabilities.

c. Market risk

Market risk is a risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

I. Foreign currency risk

Significant portion of the Company’s revenues are in foreign currencies, while a significant portion of the costs are in Indian rupee i.e. functional currency of the Company. The foreign currencies to which the Company is majorly exposed to are US Dollars, Euros and Pound Sterling.

The Company evaluates net exchange rate exposure based on current revenue projections and expected volatility in the market and covers its exposure up to 90% on net basis. For this purpose the Company uses foreign currency derivative instruments such as forward contracts to mitigate the risk. The counterparty to these derivative instruments is a bank. The Company has designated certain derivative instruments as cash flow hedge to mitigate the foreign exchange exposure of highly probable forecasted cash flows.

For the period ended 31 March 2023, every 1% appreciation/depreciation of the exchange rate between respective foreign currencies and the Indian rupee would impact the operating margins by approximately 0.86%/0.86%.

ii. Derivative assets and liabilities designated as cash flow hedges

Inaccordancewithitsrisk managementpolicyandbusinessplantheCompany hashedged i tscashflows. The Company enters into derivative contracts to offset the foreign currency risk arising from the amounts denominated in currencies other than in Indian rupees. The counter party to the Company’s foreign currency contracts is a bank. These contracts are entered into to hedge the foreign currency risks of firm commitments (sales orders) and highly probable forecast transactions. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.

III. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company do not have any investments and borrowings which are variable interest rate bearing instruments. Therefore, the Company is not exposed to interest rate risk.

IV. Other price risk

Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in quoted equity instruments and investments in mutual funds. The Company is mainly exposed to other price risk arising from investments in mutual funds which are recognised at fair value through profit and loss.

Performance obligations and remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the company expects to recognize these amounts in revenue.

Applying the practical expedient as given in Ind AS 115, the company has not disclosed the remaining performance obligation related disclosures for contracts where the revenue recognized corresponds directly with the value to the customer of the entity’s performance completed to date, typically those contracts where invoicing is on time and material basis. Remaining performance obligations estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.

The aggregate value of performance obligations that are completely or partially unsatisfied as of 31 March 2024, other than those meeting the exclusion criteria mentioned above, is ? 2,544.00 million. Out of this, the Company expects to recognize revenue of around 83% within the next one year. This includes contracts that can be terminated for convenience without a substantive penalty, since based on current assessment, the occurrence of the same is expected to be remote.

¦ 36 GRATUITY

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Gratuity is a benefit to an employee in India based on 15 days last drawn salary for each completed year of service with a vesting period of five years.

These defined benefit plans expose the Company to actuarial risks, such as longevity risk and interest rate risk.

The Company’s gratuity scheme is a defined benefit plan (funded). The Company manages the plan through a trust. Trustees administer contributions made to the trust.

Changes in the present value of the defined benefit obligation representing reconciliation of opening and closing balances thereof are as follows:

¦ 37 SHARE BASED PAYMENTS

37.1 EMPLOYEE STOCK OPTION SCHEME - 2019

In accordance with the terms of the approved Composite Scheme, KPIT Engineering Limited (now known as KPIT Technologies limited) (“Resulting Company”) had issued the stock options to the employees holding options of the KPIT Technologies Limited (now known as BirlaSoft Limited) (“Transferee Company” or “Demerged Company”) as at the appointed date. The options issued consisted of:

i. 1,807,450 options of the Transferee Company (“Birlasoft options”), equivalent to the number of options outstanding as at the appointed date;

ii. 1,807,450 options of the Resulting Company (“KPIT options”), in the ratio of 1:1 for every outstanding stock options held by the employees in the Transferee Company.

The Board of Directors of the Company approved the Employees Stock Option Scheme at their meeting held on 15 May 2019. Pursuant to this approval, the Company instituted ESOS 2019 in May 2019. The compensation committee of the Company administers this Plan. Each type of option carries with it the right to purchase one equity share of the Demerged Company or the Resulting Company as the case may be. In terms of clause 18.5 of the Composite Scheme, the stock options had been granted at an exercise price which was the predemerger exercise price suitably adjusted in the manner of share exchange ratio. Further, as per the Composite Scheme, the Company had taken into account the vesting period completed, under the plan in the Demerged Company, prior to the grant of options to the employee under the ESOS 2019. The maximum exercise period is 5 years from the date of vesting.

The outstanding stock options held by employees of the Demerged Company as at 31 March 2024 are 22,200 and 20,000 of Birlasoft options and KPIT options respectively. The employee compensation cost for such employees is not eligible for recognition in the books of the Company.

The number of outstanding Birlasoft options held by employees of the Company as at 31 March 2024 are Nil. The Company recorded an employee compensation cost of ? Nil (Previous year ? Nil) in this respect in the Statement of Profit and Loss.

The Board of Directors and the shareholders of the Company approved another Employee Stock Option Scheme at their meetings held on 17 June 2019 and on 23 July 2019, respectively. Pursuant to this approval, the Company instituted ESOS 2019A in July 2019. The compensation committee of the Company administers this Plan. Each option carries with it the right to purchase one equity share of the Company. The options approved under this scheme are 3,793,923.

The options had been originally granted to employees of the Company and its subsidiaries at an exercise price equivalent to the fair market price of the Company’s share as on the date of grant of options. The Nomination and Remuneration Committee of the Board of Directors of the Company, in its meeting held on 30 July 2020 approved the modification in the exercise price of the options granted. The exercise price is modified to ? 10 per option.

The options would vest not earlier than statutory minimum vesting period of 1 year and up to the maximum period of 4 years from the date of grant of options or such period as may be decided by the Committee at the time of each grant of options. The exact proportion in which and the exact period over which the options would vest would be determined by the Committee, subject to the minimum vesting period of 1 year from the date of grant of options. The maximum exercise period is 5 years from the date of vesting.

The Board of Directors and the shareholders of the Company approved Employee Share Purchase Scheme at their meeting on 17 June 2019 and on 23 July 2019, respectively. Pursuant to this approval, the Company instituted ESPS 2019 in July 2019. The compensation committee of the Company administers this Plan. The shares approved under this scheme are 40,000 equity shares. The shares have been granted to employees of the Company and its subsidiaries at a price not less than the face value per share of the Company at the time of the offer.

¦ 42 DISCLOSURE AS PER THE REQUIREMENT OF SECTION 22 OF THE MICRO, SMALL AND MEDIUM

ENTERPRISE DEVELOPMENT ACT, 2006:

a. Principal amount payable to Micro and Small Enterprises (to the extent identified by the Company from available information) as at 31 March 2024 is '' 16.25 million (Previous year - '' 3.14 million). Estimated interest due thereon is '' Nil (Previous year - '' Nil).

b. Amount of payments made to suppliers beyond the appointed date during the year is ? Nil (Previous year -'' Nil). Interest paid thereon is '' Nil (Previous year - '' Nil) and the estimated interest due and payable thereon is '' Nil (Previous year - '' Nil).

c. The amount of estimated interest accrued and remaining unpaid as at 31 March 2024 is '' Nil (Previous year -'' Nil).

d. The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the MSMED Act 2006 is ? Nil.

¦ 46 SEGMENT INFORMATION

Where a financial report contains both consolidated financial statements and separate financial statements of the parent, segment information needs to be presented only in case of consolidated financial statements. Accordingly, segment information has been provided only in the consolidated financial statements.

¦ 47 iNVESTMENT iN N-DREAM AG

During the current year, the Company has entered into Shareholders’ Agreement, Share Purchase Agreement, and Investment and Subscription Agreement for a strategic investment in N-Dream AG (N-Dream). N-Dream AG is a Cloud based Game Aggregation Platform company based in Switzerland. This strategic investment in N-Dream AG is part of Company’s roadmap to enable Automotive OEMs enhance the driver & passenger experience in the Cockpit of the Future.

The Company has done an initial strategic investment of 13.01% stake in N-Dream for a total cash consideration of EUR 3.00 million.

Further, in accordance with the agreements entered into, the Company has multiple options to increase its shareholding over the period of next 4 years in a staggered manner. As at the investment date, the Company has recognised derivate asset for the same. The derivative asset is initially measured at fair value and correspondingly adjusted in the cost of investment amounting to '' 184.45 million. As at 31 March 2024, the fair value of derivative asset is '' 179.23 million. Fair valuation impact of '' 5.46 million is recognised in the Statement of Profit & Loss for the year ended 31 March 2024.

¦ 50 ADDITIONAL REGULATORY INFORMATION PURSUANT TO THE REQUIREMENT IN DIVISION II OF SCHEDULE III TO THE cOMPANIES Act 2013

(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 transactions with companies struck off.

(iii) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

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

(v) The Company (other than as mentioned in note 48) has not advanced or loaned or invested funds to any other person(s) or entity(ies), 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

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

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

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

vii) The Company does 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.

(viii) The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of accounts.

(ix) None of the entities in the Company have been declared wilful defaulter by any bank or financial institution or government or any government authority.

(x) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(xi) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

¦ 51 The Company has used accounting softwares for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the respective softwares, except for the instances mentioned below:

(i) The feature of recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes for the accounting softwares used for maintaining all books of accounts.

(ii) The feature of recording audit trail (edit log) facility was not enabled for certain fields and tables at the application layer of the accounting software used for maintaining books of accounts relating to Revenue and Receivables, Payroll, Financial reporting, Property, plant and equipments, Purchase and payables.

For the periods where audit trail (edit log) facility was enabled and operated throughout the year for the respective accounting software there were no instance of the audit trail feature being tampered with. Further, in all material respects, adequate internal financial controls with reference to financial statements and such internal financial controls (including IT General Controls) were operating effectively as at 31 March 2024 and have no impact on the Financial Statements of the Company.

M 52 The Company has established a system of maintenance of information and documents as required by the transfer pricing legislation under Section 92-92F of the Income Tax Act 1961. The Company is in the process of updating the documentation for the financial year 2023-2024.

The management is of the opinion that international transactions are at arm’s length and accordingly the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that of provision for taxation.

As per our report of even date attached

For B S R & Co. LLP For and on behalf of the Board of Directors of

Chartered Accountants KPIT TEcHNOLOGIES Limited

Firm Registration number: 101248w/w-100022 CIN: L74999PN2018PLC174192

Swapnil Dakshindas S. B. (Ravi) Pandit Kishor Patil

Partner Chairman of The Board CEO & Managing Director

Membership No. 113896 DIN : 00075861 DIN : 00076190

Priyamvada Hardikar Mda Deshpande

Chief Financial Officer Company Secretary

Place: Pune Place: Pune

Date: 29 April 2024 Date: 29 April 2024

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Mar 31, 2023

a. Debt includes current and non-current Lease Liabilities.

b. Earnings available for debt service = Net Profit after taxes Non-cash operating expenses Like depreciation and other amortisations interest other adjustments like loss on sale of fixed assets etc.

c. Debt service includes lease payments for the year. It excludes working capital repayment (if any) during the year.

d. Capital Employed = Tangible net worth Total debt

e. Trade payables include provision for expenses.

f. Income generated from investments include interest income, net gain on sale of investments and net fair value gain.

Explanation for variances exceeding 25%

i. Usage of fund towards acquisition of subsidiaries has majorly resulted into decrease in the ratio.

ii. Debt-equity ratio has improved majorly on account of repayment of borrowings and payment of lease rentals.

iii. Increase in the ratio is mainly on account of increased business operations.

iv. Revenue growth and reduction in working capital due to point i. above resulted in increase in the ratio.

v. Return on investment increased due to external market conditions and interest rate movement during the year ended 31 March 2023

44 Segment information

Where a financial report contains both consolidated financial statements and separate financial statements of the parent, segment information needs to be presented only in case of consolidated financial statements. Accordingly, segment information has been provided only in the consolidated financial statements.

45 Business combinationScheme of Merger of Impact Automotive Solutions Limited

The Board of Directors of the Company at its meeting held on 26 July 2019 had approved the Composite Scheme of Arrangement (the ‘Scheme’) for merger of Impact Automotive Solutions Limited (‘Transferor Company’), wholly owned subsidiary of the Company with the Company. Application seeking approval of the Scheme was subsequently filed with Hon’ble National Company Law Tribunal (NCLT), Mumbai Bench on 27 September 2019.

On receipt of the certified copy of the order dated 15 June 2021 from NCLT, Mumbai Bench sanctioning the Scheme, with appointed date 1 April 2019, and upon filing the same with Registrar of Companies, Maharashtra on 22 June 2021 the Scheme became effective. Accordingly, the Company had given effect to the Scheme from the Appointed date of 1 April 2019 by revising the standalone financial statements for the year ended 31 March 2020 and 31 March 2021.

Pursuant to the Scheme, all the assets, liabilities, reserves and surplus of the transferor company had been transferred to and vested in the Company with effect from the appointed date at their carrying values.

Pursuant to the approved Scheme of Merger by Absorption, the Transferee Company has accounted for merger in its books as per the applicable accounting principles prescribed under relevant Indian Accounting Standards.

a) Accounting Treatment

i. The Transferee Company had recorded all the assets, liabilities and reserves of the Transferor Company vested in it pursuant to this Scheme, at their book values and in the same form as appearing in the books of the Transferor Company as on the Appointed Date, by applying the principles as set out in Appendix C of IND AS 103 ‘Business Combinations’ and prescribed under Companies (Indian Accounting Standards) Rules, 2015 issued by the Institute of Chartered Accountants of India.

ii. The financial statements of the Transferee Company reflect the financial position on the basis of consistent accounting policies.

iii. Any loans, advances or other obligations (including but not limited to any guarantees, letters of credit, letters of comfort or any other instrument or arrangement which may give rise to a contingent liability in whatever form) that were due between the Transferor Company and the Transferee Company, if

any, ipso facto, stand discharged and come to end and the same was eliminated by giving appropriate elimination effect in the books of account and records of the Transferee Company.

iv. Investments in shares of the Transferor Company held by the Transferee Company had been adjusted against Share Capital of the Transferor Company and the difference, between cost of investment of the Transferor Company in the books of the Transferee Company had been adjusted against balance of reserves and surplus of the Transferee Company post-merger.

v. The identity of the reserves had been preserved and appear in the financial statements of the Transferee Company in the same form in which they appeared in the financial statements of the Transferor Company.

d) As a consequence of the aforesaid merger, the Company recognized tax benefits accrued amounting to H 11.62 million directly under equity as at 1 April 2019. Tax benefits amounting to H 9.92 million and H 57.06 million are recognized under the revised statement of profit and loss for the financial year ending 31 March 2020 and 31 March 2021 respectively.

e) The authorised share capital of the Transferee Company, automatically stands increased, by clubbing the authorised share capital of the Transferor Company which was H 1,500.00 million divided into 150 million equity shares of H 10 each.

46 Investment in PathPartner Technology Private Limited

Effective 1 October 2021, the Company had acquired the controlling stake in PathPartner Technology Private Limited (“PathPartner”). PathPartner is engaged in design service and solution provider for Automotive, Camera, Internet of Things (IoT), Multimedia devices, Driver Monitoring Systems, Asset tracking platform, Camera module platform and several re-usable IP building blocks. PathPartner is an Indian company which currently employs 350 people including 290 embedded software engineers. It is headquartered in Bengaluru, with R&D centers in Kochi, India, California, USA and a office in Frankfurt, Germany.

The total cash consideration for the controlling stake in PathPartner was H 890.00 million. The purchase consideration of H 147.49 million is outstanding to be payable to the Tranche 1 shareholders as at 31 March 2023.

Further, the Share Purchase Agreement also provided for an acquisition of the balance stake under Tranche 2 and Tranche 3. Accordingly, during the previous year, the Company had recognised a contractual obligation of H 871.84 million towards the said acquisition. During the current year, the Company has acquired the stake under Tranche 2.

49 Additional regulatory information pursuant to the requirement in Division II of Schedule III to the Companies Act 2013

(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 transactions with companies struck off.

(iii) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.

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

(v) The Company (other than as mentioned in note 48) has not advanced or loaned or invested funds to any other person(s) or entity(ies), 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

(vi) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:

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

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

(vii) The Company does 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.

(viii) The Company has borrowings from banks and financial institutions on the basis of security of current assets. The quarterly returns or statements of current assets filed by the Company with banks and financial institutions are in agreement with the books of accounts.

(ix) None of the entities in the Company have been declared wilful defaulter by any bank or financial institution or government or any government authority.

(x) The Company has complied with the number of layers prescribed under the Companies Act, 2013.

(xi) The Company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.

50 The Company has established a system of maintenance of information and documents as required by the transfer pricing legislation under Section 92-92F of the Income Tax Act 1961. The Company is in the process of updating the documentation for the financial year 2022-2023.

The management is of the opinion that international transactions are at arm’s length and accordingly the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that of provision for taxation.

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Mar 31, 2022

Proposed dividend:

The Board of Directors at its meeting held on 27 April 2022, has recommended a final dividend of ? 1.85 per equity share for the year ended 31 March 2022, which is subject to the approval of shareholders at the Annual General Meeting.

Capital Management

The Company’s objective is to safeguard its ability to continue as a going concern and to maintain investor, creditor and market confidence and to maximize shareholder value. In order to fulfil its objective, the management of the Company monitors the return on capital as well as the level of dividends to ordinary shareholders.

(i) Term loans from bank includes a loan secured against fixed assets obtained under the loan arrangement. The loan carries interest upto 8.60 % p.a. and is repayable in equated monthly installments of ? 0.15 million each upto July 2025.

(ii) Term loans from bank includes a loan secured against fixed assets obtained under the loan arrangement. The loan carries interest upto 8.70 % p.a. and is repayable in equated monthly installments of ? 0.22 million each upto November 2023.

(iii) Term loan from institution other than banks consist of unsecured loan, carrying interest rate of 3% p.a. The loan will be repaid upto October 2029.

(iv) Information about the Company’s exposure to market risk and liquidity risk is disclosed in note 34.

34.2 Fair value hierarchy

Financial assets and liabilities include investments (other than in subsidiary, joint venture and associate), cash and cash equivalents, other balances with banks, trade receivables (billed and unbilled), loans, other financial assets, trade payables, borrowings and other financial liabilities, whose fair values approximate their carrying amounts largely due to the short term nature of such assets and liabilities. Fair value of lease liabilities approximate its carrying amount, as lease liabilities are valued using discounted cash flow method. Except for quoted investments, which are Level 1, rest of the financial assets and financial liabilities are classified as Level 2 or Level 3.

Level 1 - Quoted prices (unadjusted) in active markets 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).

34.3 Financial risk management

The board of directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The board of directors has established the Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The Company has exposure to the following risks arising from financial instruments:

a. Credit risk

Credit risk is the risk of financial losses to the Company if a customer or counterparty to financial instruments fails to discharge its contractual obligations and arises primarily from the Company’s billed trade receivables from customers amounting to ? 2,331.66 million and ? 1,637.06 million and unbilled trade receivables amounting to ? 328.96 million and ? 235.69 million and other current financial assets pertaining to receivable from related and other than related parties amounting to ? 91.24 million and ? 229.84 million as on 31 March 2022 and 31 March 2021 respectively. To manage this, the Company periodically assesses the key accounts receivable balances. As per Ind-AS 109 : Financial Instruments, the Company uses expected credit loss model to assess the impairment loss or gain.

i. Trade receivables

The management has established accounts receivable policy under which customer accounts are regularly monitored. The Company has a dedicated sales team at each geography which is responsible for collecting dues from the customer within stipulated period. The management reviews status of critical accounts on a regular basis.

iii. Cash and bank balances

The Company held cash and bank balances of ? 4,481.39 million and ? 3,086.73 million as at 31 March 2022 and 31 March 2021 respectively. The cash and bank balances are held with banks which have high credit ratings assigned by international credit rating agencies.

iv. Guarantees

The Company’s policy is to provide financial guarantees in routine course of business and on behalf of subsidiaries/joint ventures.

b. Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

The Company has a view of maintaining liquidity and to take minimum possible risk while making investments. In order to maintain liquidity, the Company invests its excess funds in short term liquid assets like liquid mutual funds. The Company monitors its cash and bank balances periodically in view of its short term obligations associated with its financial liabilities.

c. Market risk

Market risk is a risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

i. Foreign currency risk

Significant portion of the Company’s revenues are in foreign currencies, while a significant portion of the costs are in Indian rupee i.e. functional currency of the Company. The foreign currencies to which the Company is majorly exposed to are US Dollars, Euros and Pound Sterling.

The Company evaluates net exchange rate exposure based on current revenue projections and expected volatility in the market and covers its exposure up to 90% on net basis. For this purpose the Company uses foreign currency derivative instruments such as forward covers to mitigate the risk. The counterparty to these derivative instruments is a bank. The Company has designated certain derivative instruments as cash flow hedge to mitigate the foreign exchange exposure of highly probable forecasted cash flows.

The above figures exclude amounts in local currency of foreign subsidiaries.

For the period ended 31 March 2022, every 1% appreciation/depreciation of the exchange rate between respective foreign currencies and the Indian rupee would impact the operating margins by approximately 0.76%/0.76%.

For the period ended 31 March 2021, every 1% appreciation/depreciation of the exchange rate between respective foreign currencies and the Indian rupee would impact the operating margins by approximately 0.77%/(0.77)%.

ii. Derivative assets and liabilities designated as cash flow hedges

In accordance with its risk management policy and business plan the Company has hedged its cash flows. The Company enters into derivative contracts to offset the foreign currency risk arising from the amounts denominated in currencies other than in Indian rupees. The counter party to the Company’s foreign currency contracts is a bank. These contracts are entered into to hedge the foreign currency risks of firm commitments (sales orders) and highly probable forecast transactions. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.

iii. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s investments and borrowings are fixed interest rate bearing instruments. Therefore, the Company is not exposed to interest rate risk.

35 Revenue from operationsDisaggregate revenue information

The Company disaggregates revenue from contract with customers by geography and contract type.

The Company believes that this disaggregation best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by industry, market and other economic factors.

Performance obligations and remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the company expects to recognize these amounts in revenue.

Applying the practical expedient as given in Ind AS 115, the company has not disclosed the remaining performance obligation related disclosures for contracts where the revenue recognized corresponds directly with the value to the customer of the entity’s performance completed to date, typically those contracts where invoicing is on time and material basis. Remaining performance obligations estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.

The aggregate value of performance obligations that are completely or partially unsatisfied as of 31 March 2022, other than those meeting the exclusion criteria mentioned above, is ? 2,551.96 million. Out of this, the Company expects to recognize revenue of around 97% within the next one year. This includes contracts that can be terminated for convenience without a substantive penalty, since based on current assessment, the occurrence of the same is expected to be remote.

36 Gratuity

The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Gratuity is a benefit to an employee in India based on 15 days last drawn salary for each completed year of service with a vesting period of five years.

These defined benefit plans expose the Company to actuarial risks, such as longevity risk and interest rate risk.

The Company’s gratuity scheme is a defined benefit plan (funded). The Company manages the plan through a trust. Trustees administer contributions made to the trust.

a. The discount rate is based on prevailing yields of Indian Government Securities as at the Balance Sheet date for the estimated term of the obligation.

b. Salary Escalation Rate: The estimates of future salary increases takes into account the inflation, seniority, promotion and other relevant factors.

c. Assumptions regarding future mortality rates are the rates as given under Indian Assured Lives Mortality 201212 (Urban).

37 Share based payments37.1 Employee Stock Option Scheme - 2019

In accordance with the terms of the approved Composite Scheme, KPIT Engineering Limited (now known as KPIT Technologies limited) (“Resulting Company”) had issued the stock options to the employees holding options of the KPIT Technologies Limited (now known as BirlaSoft Limited) (“Transferee Company” or “Demerged Company”) as at the appointed date. The options issued consisted of:

i. 1,807,450 options of the Transferee Company (“Birlasoft options”), equivalent to the number of options outstanding as at the appointed date;

ii. 1,807,450 options of the Resulting Company (“KPIT options”), in the ratio of 1:1 for every outstanding stock options held by the employees in the Transferee Company.

The Board of Directors of the Company approved the Employees Stock Option Scheme at their meeting held on 15 May 2019. Pursuant to this approval, the Company instituted ESOS 2019 in May 2019. The compensation committee of the Company administers this Plan. Each type of option carries with it the right to purchase one equity share of the Demerged Company or the Resulting Company as the case may be. In terms of clause 18.5 of the Composite Scheme, the stock options had been granted at an exercise price which was the pre-demerger exercise price suitably adjusted in the manner of share exchange ratio. Further, as per the Composite Scheme, the Company had taken into account the vesting period completed, under the plan in the Demerged Company, prior to the grant of options to the employee under the ESOS 2019. The maximum exercise period is 5 years from the date of vesting.

The outstanding stock options held by employees of the Demerged Company as at 31 March 2022 are 193,950 and 257,350 of Birlasoft options and KPIT options respectively. The employee compensation cost for such employees is not eligible for recognition in the books of the Company.

The number of outstanding Birlasoft options held by employees of the Company as at 31 March 2022 are 158,050. The Company recorded an employee compensation cost of ? Nil in this respect in the Statement of Profit and Loss.

The fair value of each option is estimated on the date of grant using Black and Scholes option pricing model.

The Company recorded an employee compensation cost of ? Nil (Previous year ? Nil) in the Statement of Profit and Loss.

The expected price volatility is based on the historic volatility, adjusted for any expected changes to future volatility due to publicly available information.

37.2 Employee Stock Option Scheme - 2019A

The Board of Directors and the shareholders of the Company approved another Employee Stock Option Scheme at their meetings held on 17 June 2019 and on 23 July 2019, respectively. Pursuant to this approval, the Company instituted ESOS 2019A in July 2019. The compensation committee of the Company administers this Plan. Each option carries with it the right to purchase one equity share of the Company. The options approved under this scheme are 3,793,923.

The options had been originally granted to employees of the Company and its subsidiaries at an exercise price equivalent to the fair market price of the Company’s share as on the date of grant of options. The Nomination and Remuneration Committee of the Board of Directors of the Company, in its meeting held on 30 July 2020 approved the modification in the exercise price of the options granted. The exercise price is modified to ? 10 per option.

The options would vest not earlier than statutory minimum vesting period of 1 year and up to the maximum period of 4 years from the date of grant of options or such period as may be decided by the Committee at the time of each grant of options. The exact proportion in which and the exact period over which the options would vest would be determined by the Committee, subject to the minimum vesting period of 1 year from the date of grant of options. The maximum exercise period is 5 years from the date of vesting.

The Company recorded an employee compensation cost of ? 51.61 million (Previous year ? 67.61 million) in the Statement of Profit and Loss.

The expected price volatility is based on the historic volatility, adjusted for any expected changes to future volatility due to publicly available information.

37.3 Employee Share Purchase Scheme - 2019

The Board of Directors and the shareholders of the Company approved Employee Share Purchase Scheme at their meeting on 17 June 2019 and on 23 July 2019, respectively. Pursuant to this approval, the Company instituted ESPS 2019 in July 2019. The compensation committee of the Company administers this Plan. The shares approved under this scheme are 40,000 equity shares. The shares have been granted to employees of the Company and its subsidiaries at a price not less than the face value per share of the Company at the time of the offer.

38 Details of exceptional items

In line with the Company’s operational efficiency measures, it had consolidated its presence during the previous year, resulting into early termination of some of its existing leased office premises in Pune, India. Accordingly, as per Ind-AS 116 “Leases”, remeasured the lease liability and on prudent assessment, also written-off its property, plant and equipment at the said location. The net impact of ? 32.03 million was recognised as an exceptional item in the Statement of Profit and Loss.

The Company benefits from the tax holiday available for units set up under the Special Economic Zone Act, 2005 (SEZ). Accordingly, units designated in SEZ are eligible for a deduction of 100% of profits or gains derived from the export of services for the first five years from the financial year in which the unit commenced the provision of services and 50% of such profits or gains for a further five years. Certain tax benefits are also available for a further five years subject to the unit meeting defined conditions. The tax holiday period being currently available to the Company expires in various years through fiscal year 2027. From 1 April 2011, units set up under SEZ scheme are subject to Minimum Alternate Tax (MAT).

42.3 Contingent liabilities Guarantees

Particulars	31 March 2022	|^31 March 2021
Outstanding bank guarantees in routine course of business	12.34	| 15.57

42.4 Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances):

a. Property, plant and equipment - ? 13.34 million (Previous year ? 380.21 million).

b. Intangible assets - ? 4.46 million (Previous year ? 9.85 million).

43 Disclosure as per the requirement of section 22 of the Micro, Small and Medium Enterprise

Development Act, 2006:

a. Principal amount payable to Micro and Small Enterprises (to the extent identified by the Company from available information) as at 31 March 2022 is ? 4.38 million (Previous year - ? 2.47 million). Estimated interest due thereon is ? Nil (Previous year - ? Nil).

b. Amount of payments made to suppliers beyond the appointed date during the year is ? Nil (Previous year - ? Nil). Interest paid thereon is ? Nil (Previous year - ? Nil) and the estimated interest due and payable thereon is ? Nil (Previous year - ? Nil).

c. The amount of estimated interest accrued and remaining unpaid as at 31 March 2022 is ? Nil (Previous year - ? Nil).

d. The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the MSMED Act 2006 is ? Nil.

(i) The investee is a associate as defined under section 2(87) of the Companies Act, 2013. For the purpose of Ind-AS financial statements, the entity has been considered as a Joint Venture as defined under Ind-AS 28 : Investments in Associates and Joint Ventures.

(ii) All transactions with these related parties are priced on an arm''s length basis.

(iii) Remuneration excludes provision for gratuity and compensated absences as separate actuarial valuation for the directors, key management personnel and their relatives is not available.

(iv) Deputed on secondment to KPIT Technologies Inc., USA, a wholly owned subsidiary, with effect from 26 July 2021.

Notes:

a. Debt includes current and non-current lease liabilities.

b. Earnings available for debt service = Net Profit after taxes Non-cash operating expenses like depreciation and other amortisations interest other adjustments like loss on sale of fixed assets etc.

c. Debt service includes lease payments for the year. It excludes working capital repayment (if any) during the year.

d. Capital Employed = Tangible net worth Total debt

e. Trade payables include provision for expenses.

f. Income generated from investments include interest income, net gain on sale of investments and net fair value gain.

Explanation for variances exceeding 25%

i. The recognition of contractual obligation for acquisitions of non-controlling interest has majorly resulted into decrease in the ratio.

ii. Revenue growth with higher operational efficiency has resulted into improvement in the respective ratios. Current year profits also include dividend income from subsidiary companies, which further improved the ratio.

Where a financial report contains both consolidated financial statements and separate financial statements of the parent, segment information needs to be presented only in case of consolidated financial statements. Accordingly, segment information has been provided only in the consolidated financial statements.

Scheme of Merger of Impact Automotive Solutions Limited

The Board of Directors of the Company at its meeting held on 26 July 2019 had approved the Composite Scheme of Arrangement (the ‘Scheme’) for merger of Impact Automotive Solutions Limited (‘Transferor Company’), wholly owned subsidiary of the Company with the Company. Application seeking approval of the Scheme was subsequently filed with Hon’ble National Company Law Tribunal (NCLT), Mumbai Bench on 27 September 2019.

On receipt of the certified copy of the order dated 15 June 2021 from NCLT, Mumbai Bench sanctioning the Scheme, with appointed date 1 April 2019, and upon filing the same with Registrar of Companies, Maharashtra on 22 June 2021 the Scheme has become effective. Accordingly, the Company has given effect to the Scheme from the Appointed date of 1 April 2019 by revising the standalone financial statements for the year ended 31 March 2020 and 31 March 2021.

Pursuant to the Scheme, all the assets, liabilities, reserves and surplus of the transferor company have been transferred to and vested in the Company with effect from the appointed date at their carrying values.

Name of the Transferor Company Impact Automotive Solutions Limited

General nature of business Engaged in the production of Integrated Systems, hybrid

automotive product and electric vehicle.

Appointed Date of the Scheme 1 April 2019

Description and number of shares issued Nil

% of Company''s equity shares exchanged Nil

Pursuant to the approved Scheme of Merger by Absorption, the Transferee Company has accounted for merger in its books as per the applicable accounting principles prescribed under relevant Indian Accounting Standards.

a) Accounting Treatment

i. The Transferee Company has recorded all the assets, liabilities and reserves of the Transferor Company vested in it pursuant to this Scheme, at their book values and in the same form as appearing in the books of the Transferor Company as on the Appointed Date, by applying the principles as set out in Appendix C of IND AS 103 ‘Business Combinations’ and prescribed under Companies (Indian Accounting Standards) Rules, 2015 issued by the Institute of Chartered Accountants of India.

ii. The financial statements of the Transferee Company reflect the financial position on the basis of consistent accounting policies.

iii. Any loans, advances or other obligations (including but not limited to any guarantees, letters of credit, letters of comfort or any other instrument or arrangement which may give rise to a contingent liability in whatever form) that are due between the Transferor Company and the Transferee Company, if any, ipso facto, stand discharged and come to end and the same is eliminated by giving appropriate elimination effect in the books of account and records of the Transferee Company.

iv. Investments in shares of the Transferor Company held by the Transferee Company have been adjusted against Share Capital of the Transferor Company and the difference, between cost of investment of the Transferor Company in the books of the Transferee Company has been adjusted against balance of reserves and surplus of the Transferee Company post-merger.

v. The identity of the reserves has been preserved and appear in the financial statements of the Transferee Company in the same form in which they appeared in the financial statements of the Transferor Company.

d) As a consequence of the aforesaid merger, the Company recognized tax benefits accrued amounting to ? 11.62 million directly under equity as at 1 April 2019. Tax benefits amounting to ? 9.92 million and ? 57.06 million are recognized under the revised statement of profit and loss for the financial year ending 31 March 2020 and 31 March 2021 respectively.

e) The authorised share capital of the Transferee Company, automatically stands increased, by clubbing the authorised share capital of the Transferor Company which is ? 1,500.00 million divided into 150 million equity shares of ? 10 each.

50 Investment in PathPartner Technology Private Limited

Effective 1 October 2021, the Company has acquired the controlling stake in PathPartner Technology Private Limited (“PathPartner”). PathPartner is engaged in design service and solution provider for Automotive, Camera, Internet of Things (loT), Multimedia devices, Driver Monitoring Systems, Asset tracking platform, Camera module platform and several re-usable IP building blocks. PathPartner is an Indian company which currently employs 350 people including 290 embedded software engineers. It is headquartered in Bengaluru, with R&D centers in Kochi, India, California, USA and a office in Frankfurt, Germany.

The total cash consideration for the controlling stake in PathPartner is ? 890 million. The purchase consideration of ? 263.96 million is outstanding to be payable to the Tranche 1 shareholders as at 31 March 2022.

Further, the Share Purchase Agreement also provides for an acquisition of the balance stake under Tranche 2 and Tranche 3. Accordingly, the Company has recognised a contractual obligation of ? 871.84 million towards the said acquisition.

52 The Company has established a system of maintenance of information and documents as required by the transfer pricing legislation under Section 92-92F of the Income Tax Act 1961. The Company is in the process of updating the documentation for the financial year 2021-2022.

The management is of the opinion that international transactions are at arm’s length and accordingly the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that of provision for taxation.