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Notes to Accounts of Tata Elxsi Ltd.
Mar 31, 2025
Provisions and contingent liabilities
A provision is recognized when the
Company has a present obligation as a
result of past event and it is probable that
an outflow of resources will be required to
settle the obligation, in respect of which a
reliable estimate can be made. Provisions
(excluding retirement benefits and
compensated absences) are not discounted
to its present value and are determined
based on best estimate required to settle
the obligation at the balance sheet date.
These are reviewed at each balance sheet
date and adjusted to reflect the current
best estimates. Contingent liabilities are not
recognized in the financial statements. A
contingent asset is neither recognized nor
disclosed in the financial statements (Refer
Note 33).
Useful lives of property, plant and
equipment
The Company reviews the useful life of
property, plant and equipment at the end
of each reporting period. This reassessment
may result in change in depreciation
expense in future periods (Refer Note 2.11).
Employee benefits
The accounting of employee benefit plans
in the nature of defined benefit requires
the Company to use assumptions. These
assumptions have been explained under
employee benefits note 2.13.
Cash dividend to the equity holders of the
Company
The Company recognises a liability to
make cash distributions to equity holders
of the Company when the distribution is
authorised, and the distribution is no longer
at the discretion of the Company. Final
dividends on shares is recorded as a liability
on the date of approval by the shareholders
and dividends are recorded as a liability on
the date of declaration by the Companyâs
Board of Directors (Refer Note 42).
Leases
The Company evaluates if an arrangement
qualifies to be a lease as per the requirements
of Ind AS 116. Identification of a lease requires
significant judgement. The Company uses
significant judgement in assessing the lease
term (including anticipated renewals) and
the applicable discount rate.
The Company determines the lease term
as the non-cancellable period of a lease,
together with both periods covered by an
option to extend the lease if the Company
is reasonably certain to exercise that
option; and periods covered by an option
to terminate the lease if the Company is
reasonably certain not to exercise that
option. In assessing whether the Company
is reasonably certain to exercise an option
to extend a lease, or not to exercise an
option to terminate a lease, it considers all
relevant facts and circumstances that create
an economic incentive for the Company to
exercise the option to extend the lease, or
not to exercise the option to terminate the
lease. The Company revises the lease term
if there is a change in the non-cancellable
period of a lease.
The discount rate is generally based on the
incremental borrowing rate specific to the
lease being evaluated or for a portfolio of
leases with similar characteristics (Refer
Note 2.6).
2.4 Revenue recognition
The Company earns revenue primarily
from providing information technology,
engineering design, systems integration
and support services, sale of licenses and
maintenance of equipment. The Company
recognizes revenue as follows
Revenue is recognised upon transfer of
control of promised products or services
to customers in an amount that reflects the
consideration which the Company expects
to receive in exchange for those products
or services.
⢠Revenue from time and material and
job contracts is recognised on output
basis measured by units delivered,
efforts expended, etc.
⢠Revenue related to fixed price
maintenance and support services
contracts where the Company is ready
to provide services is recognised based
on time elapsed mode and revenue
is straight lined over the period of
performance.
⢠In respect of other fixed-price contracts,
revenue is recognised using percentage-
of-completion method (''POC methodâ)
of accounting with contract cost
incurred determining the degree
of completion of the performance
obligation. The contract cost used in
computing the revenues include cost of
fulfilling warranty obligations.
⢠Revenue from the sale of distinct
internally developed software and
manufactured systems and third party
software is recognised upfront at
the point in time when the system/
software is delivered to the customer.
In cases where implementation and/
or customisation services rendered
significantly modifies or customises
the software, these services and
software are accounted for as a single
performance obligation and revenue is
recognised over time on a POC method.
⢠Revenue from the sale of distinct third
party hardware is recognised at the
point in time when control is transferred
to the customer.
⢠The solutions offered by the Company
may include supply of third-party
equipment or software. In such cases,
revenue for supply of such third party
products are recorded at gross or
net basis depending on whether the
Company is acting as the principal
or as an agent of the customer. The
Company recognises revenue in the
gross amount of consideration when
it is acting as a principal and at net
amount of consideration when it is
acting as an agent.
Revenue is measured based on the
transaction price, which is the consideration,
adjusted for volume discounts, service
level credits, performance bonuses, price
concessions and incentives, if any, as
specified in the contract with the customer.
Revenue also excludes taxes collected from
customers.
Contract assets are recognised when there
is excess of revenue earned over billings on
contracts. Contract assets are classified as
unbilled receivables (only act of invoicing is
pending) when there is unconditional right
to receive cash, and only passage of time is
required, as per contractual terms.
Unearned and deferred revenue ("contract
liabilityâ) is recognised when there is billings
is in excess of revenues.
In accordance with Ind AS 37 , 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.
Contracts are subject to modification to
account for changes in contract specification
and requirements. The Company reviews
modification to contract in conjunction
with the original contract, basis which the
transaction price could be allocated to a
new performance obligation, or transaction
price of an existing obligation could undergo
a change. In the event transaction price is
revised for existing obligation, a cumulative
adjustment is accounted for. The Company
disaggregates revenue from contracts
with customers by geography and nature
of services.
Use of significant judgements in revenue
recognition
⢠The Companyâs 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 judgement to
determine the deliverables and the
ability of the customer to benefit
independently from such deliverables.
⢠Judgement 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. Any consideration payable
to the customer is adjusted to the
transaction price, unless it is a payment
for a distinct product or service from
the customer. 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 recognised 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.
⢠The Company uses judgement 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.
⢠The Company exercises judgement 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.
⢠Contract fulfilment costs are generally
expensed as incurred except for
certain software licence costs which
meet the criteria for capitalisation. The
assessment of this criteria requires the
application of judgement, in particular
when considering if costs generate
or enhance resources to be used to
satisfy future performance obligations
and whether costs are expected to be
recovered (Refer note 8).
2.5 Other income
I nterest income is accounted for using the
effective interest method.
Export benefits are accounted for, in the year
of exports, based on eligibility and when
there is no uncertainty in receiving the same.
Foreign currency gains and losses are
reported on net basis
2.6 Leases
Company as a lessee
A contract is, or contains, a lease if the
contract conveys the right to control the
use of an identified asset for a period of
time in exchange for consideration. To
assess whether a contract conveys the right
to control the use of an identified asset, the
Company assesses whether:
⢠the contract involves the use of an
identified asset;
⢠t he Company has the right to obtain
substantially all the economic benefits
from use of the asset throughout the
period of use; and
⢠the Company has the right to direct the
use of the asset
The Company accounts for each lease
component within the contract as a lease
separately from non-lease components of
the contract and allocates the consideration
in the contract to each lease component
on the basis of the relative stand-alone
price of the lease component and the
aggregate stand-alone price of the non¬
lease components.
The Company recognises right-of-use
asset representing its right to use the
underlying asset for the lease term at the
lease commencement date. The cost of the
right-of-use asset measured at inception
shall comprise of the amount of the initial
measurement of the lease liability adjusted
for any lease payments made at or before
the commencement date less any lease
incentives received, plus any initial direct
costs incurred and an estimate of costs to
be incurred by the lessee in dismantling
and removing the underlying asset or
restoring the underlying asset or site on
which it is located. The right-of-use assets
is subsequently measured at cost less any
accumulated depreciation, accumulated
impairment losses, if any and adjusted for
any remeasurement of the lease liability.
The right-of-use assets is depreciated
using the straight-line method from the
commencement date over the shorter of
lease term or useful life of right-of-use asset.
The estimated useful lives of right-of-use
assets are determined on the same basis
as those of property, plant and equipment.
Right-of-use assets are tested for impairment
whenever there is any indication that their
carrying amounts may not be recoverable.
Impairment loss, if any, is recognised in the
statement of profit and loss.
The Company measures the lease liability at
the present value of the lease payments that
are not paid at the commencement date of
the lease. The lease payments are discounted
using the interest rate implicit in the lease,
i f that ra te can be rea di ly determined. If
that rate cannot be readily determined,
the Company uses incremental borrowing
rate. For leases with reasonably similar
characteristics, the Company, on a lease by
lease basis, may adopt either the incremental
borrowing rate specific to the lease or the
incremental borrowing rate for the portfolio
as a whole. The lease payments shall include
fixed payments, variable lease payments,
residual value guarantees, exercise price of
a purchase option where the Company is
reasonably certain to exercise that option
and payments of penalties for terminating
the lease, if the lease term reflects the lessee
exercising an option to terminate the lease.
The lease liability is subsequently remeasured
by increasing the carrying amount to reflect
interest on the lease liability, reducing
the carrying amount to reflect the lease
payments made and remeasuring the
carrying amount to reflect any reassessment
or lease modifications or to reflect revised in¬
substance fixed lease payments.
The Company recognises the amount of
the re-measurement of lease liability as
an adjustment to the right-of-use asset.
Where the carrying amount of the right-of-
use asset is reduced to zero and there is a
further reduction in the measurement of the
lease liability, the Company recognises any
remaining amount of the re-measurement in
statement of profit and loss.
The Company has elected not to recognise
right-of-use assets and lease liabilities for
short-term leases of all assets that have a
lease term of 12 months or less and leases of
low-value assets. The Company recognizes
the lease payments associated with these
leases as an expense on a straight-line basis
over the lease term.
2.7 Foreign currency
The functional currency of the Company is
Indian Rupee.
I ncome and expenses in foreign currencies
a re recorded at excha nge ra tes preva i li ng
on the date of the transaction. Foreign
currency monetary assets and liabilities are
translated at the exchange rate prevailing
on the balance sheet date and exchange
gains and losses arising on settlement and
restatement are recognized in the statement
of profit and loss.
Non-monetary assets and liabilities that
are measured in terms of historical cost in
foreign currencies are not translated.
2.8 Taxes
I ncome tax expense comprises current tax
expense and the net change in the deferred
tax asset or liability during the year.
Current and deferred tax are recognized in
statement of profit or loss, except when they
relate to items that are recognized in other
comprehensive income or directly in equity,
in which case, the current and deferred tax
are also recognized in other comprehensive
income or directly in equity, respectively.
Current income taxes
Current income tax for the current and
prior periods are measured at the amount
expected to be recovered from or paid
to the taxation authorities based on the
taxable income for that period and reflects
the uncertainty related to income tax, if any.
The tax rates and tax laws used to compute
the amount are those that are enacted
by the balance sheet date. The Company
offsets current tax assets and current tax
liabilities, where it has a legally enforceable
right to set off the recognized amounts and
where it intends either to settle on a net
basis, or to realize the asset and settle the
liability simultaneously.
The current income tax expense includes
income taxes payable by the Company
and its branches in India and overseas. The
current tax payable by the Company in
India is Indian income tax payable for their
worldwide income after taking credit for
tax relief available for export operations in
Special Economic Zones (SEZs).
Current income tax payable by overseas
branches of the Company is computed in
accordance with the tax laws applicable
in the jurisdiction in which the respective
branch operates. The taxes paid are
generally available for set off against the
Indian income tax liability of the Companyâs
worldwide income.
Advance taxes and provisions for current
income taxes are presented in the balance
sheet after off-setting advance tax paid and
income tax provision arising in the same
tax jurisdiction and where the relevant tax
paying units intends to settle the asset and
liability on a net basis.
Deferred income taxes
Deferred income tax is recognized using the
balance sheet approach. Deferred income
tax assets and liabilities are recognized for
deductible and taxable temporary differences
arising between the tax base of assets and
liabilities and their carrying amount, except
when the deferred income tax arises from
the initial recognition of goodwill or an
asset or liability in a transaction that is not
a business combination and affects neither
accounting nor taxable profit or loss at the
time of the transaction.
Deferred income tax assets are recognized
to the extent that it is probable that taxable
profit will be available against which the
deductible temporary differences and the
carry forward of unused tax credits and
unused tax losses can be utilized.
The carrying amount of deferred income
tax assets is reviewed at each reporting
date and reduced to the extent that it is
no longer probable that sufficient taxable
profit will be available to allow all or part of
the deferred income tax asset to be utilized.
Deferred tax assets and liabilities are
measured using substantively enacted tax
rates expected to apply to taxable income in
the years in which the temporary differences
are expected to be received or settled.
For operations carried out in SEZs, deferred
tax assets or liabilities, if any, have been
established for the tax consequences of
those temporary differences between the
carrying values of assets and liabilities and
their respective tax bases that reverse after
the tax holiday ends.
Deferred tax assets and liabilities are offset
when they relate to income taxes levied by
the same taxation authority and the relevant
entity intends to settle its current tax assets
and liabilities on a net basis.
Minimum Alternative Tax (MAT) paid in
accordance with the tax laws in India, which
is likely to give future economic benefits
in the form of availability of set off against
future income tax liability. Accordingly,
MAT is recognized as deferred tax asset in
the balance sheet when the asset can be
measured reliably and it is probable that the
future economic benefit associated with the
asset will be realized.
Special Economic Zone re-investment
A portion of the profits of the Companyâs
India operations are exempt from Indian
income taxes being profits attributable
to export operations from undertakings
situated in SEZ. Under the Special Economic
Zone Act, 2005 scheme, units in designated
special economic zones providing service
on or after April 1, 2005 will be eligible for
a deduction of 100 percent of profits or
gains derived from the export of services
for the first five years from commencement
of provision of services and 50 percent
of such profits and gains for a further five
years. The tax benefits are also available for
a further five years post the initial ten years
subject to the creation of SEZ Reinvestment
Reserve which is required to be spent
within 3 financial years in accordance with
requirements of the tax regulations in India.
During the year, the Company has created
'' 2,456,44 lakhs (March 2024 - '' 2,533.58
lakhs) as SEZ reinvestment reserve for one
its such unit which entered 12th year of
operations.
2.9 Inventories
Inventory comprise of computer systems
and software, components and spares.
Components and spares are valued at lower
of cost and net realizable value.
Cost is determined on the basis of specific
identification method.
Computer systems and software,
components and spares intended for
customer support are written off over the
effective life of the systems maintained, as
estimated by the management.
2.10 Financial instruments
Financial assets and liabilities are recognized
when the Company becomes a party to the
contractual provisions of the instrument.
Financial assets and liabilities are initially
measured at fair value, except for trade
receivables which are initially measured at
transaction price. Transaction costs that
are directly attributable to the acquisition
or issue of financial assets and financial
liabilities (other than financial assets and
financial liabilities at fair value through profit
or loss) are added to or deducted from the
fair value measured on initial recognition of
financial asset or financial liability.
Cash and cash equivalents
Cash comprises cash on hand and demand
deposits with banks. Cash equivalents
are short- term balances (with an original
maturity of three months or less from the
date of acquisition), highly liquid investments
that are readily convertible into known
amounts of cash and which are subject to
insignificant risk of changes in value.
Financial assets at amortized cost
Financial assets are subsequently measured
at amortized cost if these financial assets
are held within a business whose objective
is to hold these assets in order to collect
contractual cash flows and the contractual
terms of the financial asset give rise on
specified dates to cash flows that are solely
payments of principal and interest on the
principal amount outstanding.
Financial assets at fair value through other
comprehensive income
Financial assets are measured at fair value
through other comprehensive income if
these financial assets are held within a
business whose objective is achieved by
both collecting contractual cash flows and
selling financial assets and the contractual
terms of the financial asset gives rise on
specified dates to cash flows that are solely
payments of principal and interest on the
principal amount outstanding.
Financial assets at fair value through profit
or loss
Financial assets are measured at fair value
through profit or loss (''FVTPLââ) unless it is
measured at amortized cost or at fair value
through other comprehensive income on
initial recognition. The transaction costs
directly attributable to the acquisition of
financial assets and liabilities at fair value
through profit or loss are immediately
recognized in profit or loss.
Financial liabilities at fair value through
profit or loss
Financial liabilities are classified as
measured at amortised cost or FVTPL. A
financial liability is classified as at FVTPL
if it is classified as held for trading, or it is
a derivative or it is designated as such on
initial recognition. Financial liabilities at
FVTPL are measured at fair value and net
gains and losses, including any interest
expense, are recognised in profit or loss.
Other financial liabilities are subsequently
measured at amortised cost using the
effective interest method. Interest expense
and foreign exchange gains and losses are
recognised in profit or loss. Any gain or loss
on derecognition is also recognised in profit
or loss.
Derivative financial instruments
The Company is exposed to foreign currency
fluctuations on foreign currency assets and
liabilities. The Company holds derivative
financial instruments such as foreign
exchange forward contracts to mitigate the
risk of changes in exchange rates on foreign
currency exposures. The counterparty
for these contracts is generally a bank.
Derivatives are recognized and measured at
fair value. Attributable transaction costs are
recognized in the statement of profit and
loss as expenses. Subsequent changes in
fair value of such derivative instruments are
recognized in profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are
offset and the net amounts are presented in
the standalone balance sheet when, and only
when, the Company currently has a legally
enforceable right to set off the amounts and
it intends either to settle them on a net basis
or to realize the asset and settle the liability
simultaneously.
Derecognition
Financial assets
The Company derecognises a financial asset
when the contractual rights to the cash flows
from the financial asset expire, or it transfers
the rights to receive the contractual cash
flows in a transaction in which substantially
all of the risks and rewards of ownership
of the financial asset are transferred or in
which the Company neither transfers nor
retains substantially all of the risks and
rewards of ownership and does not retain
control of the financial asset.
If the Company enters into transactions
whereby it transfers assets recognised on
its balance sheet, but retains either all or
substantially all of the risks and rewards
of the transferred assets, the transferred
assets are not derecognised.
Financial liabilities
The Company derecognises a financial
liability when its contractual obligations are
discharged or cancelled, or expire.
The Company also derecognises a financial
liability when its terms are modified and the
cash flows under the modified terms are
substantially different. In this case, a new
financial liability based on the modified
terms is recognised at fair value. The
difference between the carrying amount of
the financial liability extinguished and the
new financial liability with modified terms is
recognised in profit or loss.
2.11 Property, plant and equipment
Property, plant and equipment are stated
at costs less accumulated depreciation
(other than freehold land) and impairment
loss, if any.
The cost includes purchase price net of
any trade discounts and rebates, any
import duties and other taxes (other than
those subsequently recoverable from the
tax authorities), any directly attributable
expenditure on making the asset ready for
its intended use, other incidental expenses
and interest on borrowings attributable to
acquisition of qualifying fixed assets up to
the date the asset is ready for its intended
use. The cost of an item of property, plant
and equipment shall be recognised as an
asset if, and only if it is probable that future
economic benefits associated with the item
will flow to the Company and the cost of the
item can be measured reliably. Subsequent
expenditure on fixed assets after its
purchase/completion is capitalized only
if such expenditure results in an increase
in the future benefits from such asset
beyond its previously assessed standard of
performance.
The Company identifies and determines
cost of each component/part of property,
plant and equipment separately, if the
component/part has a cost which is
significant to the total cost of the property,
plant and equipment and has useful life
that is materially different from that of the
remaining asset.
An item of property, plant and equipment
and any significant part initially recognised
is derecognised upon disposal or when
no future economic benefits are expected
from its use. Gains or losses arising from
de-recognition of property, plant and
equipment and intangible assets are
measured as the difference between the net
disposal proceeds and the carrying amount
of property, plant and equipment and are
recognized in the statement of profit and
loss when the property, plant and equipment
is derecognized.
Depreciation is provided for property, plant
and equipment on the straight-line basis
over the estimated useful life from the date
the assets are ready for intended use. The
estimated useful lives, residual values and
depreciation method are reviewed at the
end of each reporting period, with the effect
of any changes in estimate accounted for on
a prospective basis.
The estimated useful life on a straightline
basis of amortization is mentioned below:
*The Management believes that the useful
lives as given below best represents the
period over which the management expects
to use these assets based on an internal
assessment and technical evaluation where
necessary. Hence, the useful lives of some of
these assets is different from the useful lives
as prescribed under part C of Schedule II of
the Companies Act.
Leasehold improvements are depreciated
over the lower of the lease term and their
useful lives.
Advances paid towards the acquisition of
property, plant and equipment outstanding
at each balance sheet date are disclosed
under ''other assetsâ. The cost of property,
plant and equipment not ready to use before
the balance sheet date is disclosed under
''Capital work in progressâ. Subsequent
expenditures relating to property, plant
and equipment is capitalized only when it
is probable that future economic benefits
associated with these will flow to the
Company and the cost of the item can be
measured reliably. The cost and related
accumulated depreciation are eliminated
from the financial statements upon sale or
retirement of the asset.
Changes in the expected useful life or the
expected pattern of consumption of future
economic benefits embodied in the asset
are considered to modify the amortization
period or method, as appropriate, and are
treated as changes in accounting estimates.
Capital work-in-progress
Amount paid towards the acquisition of
property, plant and equipment outstanding
as of each reporting date and the cost of
property, plant and equipment not ready for
intended use before such date are disclosed
under capital work-in-progress.
The capital work- in-progress is carried
at cost, comprising direct cost, related
incidental expenses and attributable interest.
2.12 Intangible assets
I ntangible assets purchased are measured
at cost as of the date of acquisition, as
applicable, less accumulated amortization
and accumulated impairment, if any.
Intangible assets are amortized on a straight
line basis over their estimated useful lives
from the date that they are available for use.
The estimated useful lives of the intangible
assets and the amortization period are
reviewed at the end of each financial year
and the amortization period is revised to
reflect the changed pattern, if any.
The estimated useful life on a straightline
basis of amortization is mentioned below:
2.13 Employee benefits
Employee benefits include contribution
to provident fund, superannuation fund,
gratuity fund, compensated absences,
pension and employee state insurance
scheme.
Short-term employee benefits
All employee benefits payable wholly within
twelve months of rendering the service are
classified as short-term employee benefits.
Benefits such as salaries, wages etc. and the
expected cost of ex-gratia are recognised in
the period in which the employee renders
the related service. A liability is recognised
for the amount expected to be paid when
there is a present legal or constructive
obligation to pay this amount as a result of
past service provided by the employee and
the obligation can be estimated reliably.
Defined benefit plans
Gratuity and Pension are defined benefit
plans, the cost of providing benefits is
determined using the Projected Unit Credit
Method, with actuarial valuations, being
carried out at the date of each balance
sheet date. Remeasurement, comprising
actuarial gains and losses, the effect of
the changes to the asset ceiling and the
return on plan assets (excluding interest),
is reflected immediately in the balance
sheet with a charge or credit recognised in
other comprehensive income in the period
in which they occur. Past service cost, both
vested and unvested, is recognized as
an expense at the earlier of (a) when the
plan amendment or curtailment occurs;
and (b) when the entity recognises related
restructuring costs or termination benefits.
The retirement benefit obligations
recognized in the balance sheet represents
the present value of the defined obligations
reduced by the fair value of scheme
assets. Any, asset resulting from this
calculation is limited to the present value
of available refunds and reductions in
future contributions to the scheme. Under
a defined benefit plan, it is the Companyâs
obligation to provide agreed benefits to
the employees. The related actuarial and
investment risks fall on the Company.
Defined contribution plans
Contributions to defined contribution plans
like provident fund and superannuation,
funds are recognized as expense when
employees have rendered services entitling
them to such benefits.
Compensated absences
Compensated absences which are expected
to occur within twelve months after the
end of the period in which the employee
renders the related services are stated as
undiscounted liability at the balance sheet
date. Compensated absences which are not
expected to occur within twelve months
after the end of the period in which the
employee renders the related services
are stated as an actuarially determined
liability at the present value of the defined
benefit obligation at the balance sheet date.
Actuarial gains/losses are immediately
taken to the statement of profit and loss.
Share based payments
The Company measures compensation cost
relating to share-based payments using
the fair valuation method in accordance
with Ind AS 102, Share Based Payment.
Compensation expense is amortized over
the vesting period of the option on a
graded basis. The units generally vest in a
graded manner over the vesting period.
The fair value determined at the grant date
is expensed over the vesting period of the
respective tranches of such grants.
The cost of equity-settled transactions is
determined by the fair value at the date when
the grant is made using the Black-Scholes
valuation model. Expected volatility during
the expected term of the option is based on
the historical volatility of share price of the
Company. Risk free interest rates are based
on the government securities yield in effect
at the time of the grant.
The cost of equity settled transactions is
recognised, together with a corresponding
increase in share-based payment reserve
in equity, over the period in which the
performance and/or service conditions are
fulfilled. The cumulative expense recognised
for equity-settled transactions at each
reporting date until the vesting date reflects
the extent to which the vesting period has
expired and the Companyâs best estimate of
the number of equity instruments that will
ultimately vest. Debit or credit in statement
of profit and loss for a period represents
the movement in cumulative expense
recognized as at the beginning and end of
that period and is recognized in employee
benefits expense.
The dilutive effect of outstanding options
is reflected in the computation of diluted
earnings per share.
2.14 Earnings per share
Basic Earnings Per Share
Basic earnings per share is computed
by dividing profit or loss attributable to
equity shareholders of the Company by the
weighted average number of equity shares
outstanding during the year.
Diluted Earnings Per Share
Diluted earnings per share is computed
by dividing the profit (considered in
determination of basic earnings per share)
after considering the effect of interest
and other financing costs or income (net
of attributable taxes) associated with
dilutive potential equity shares by the
weighted average number of equity shares
considered for deriving basic earnings per
share adjusted for the weighted average
number of equity shares that would have
been issued upon conversion of all dilutive
potential equity shares.
2.15 Impairment
Financial assets (other than those carried
at fair value)
The Company assesses at each date of
balance sheet whether a financial asset or
a group of financial assets is impaired. Ind
AS 109 requires expected credit losses to
be measured through a loss allowance. The
Company recognizes lifetime expected
losses for all contract assets and/or all
trade receivables that do not constitute a
financing transaction. For all other financial
assets, expected credit losses are measured
at an amount equal to the 12 month expected
credit losses or at an amount equal to the
life time expected credit losses if the credit
risk on the financial asset has increased
significantly since initial recognition.
Non-financial assets
Property, plant and equipment and
Intangible assets
Property, plant and equipment and
intangible assets with finite life are evaluated
for recoverability whenever there is any
indication that their carrying amounts may
not be recoverable. If any such indication
exists, the recoverable amount (i.e. higher of
the fair value less cost to sell and the value-
in-use) is determined on an individual asset
basis unless the asset does not generate
cash flows that are largely independent of
those from other assets. In such cases, the
recoverable amount is determined for the
cash generating unit (CGU) to which the
asset belongs.
If the recoverable amount of an asset
(or CGU) is estimated to be less than its
carrying amount, the carrying amount of the
asset (or CGU) is reduced to its recoverable
amount. An impairment loss is recognized in
the statement of profit and loss.
2.16 Recent pronouncements
Ministry of Corporate Affairs ("MCAâ)
notifies new standard or amendments to
the existing standards under Companies
(Indian Accounting Standards) Rules as
issued from time to time. For the year ended
March 31, 2025, MCA has notified Ind AS -
117 Insurance Contracts and amendments
to Ind AS 116 - Leases, relating to sale and
leaseback transactions, applicable to the
Company w.e.f. April 1, 2024. The Company
has reviewed the new pronouncements and
based on its evaluation has determined
that it does not have any significant impact
in its financial statements. standards or
amendments to the existing standards
applicable to the Company.
The tax rate used for 2024-25 reconciliation above is the corporate tax rate of 34.944% (PY 34.944%)
payable by corporate entities in India on taxable profits under Indian tax law.
The Company benefits from the tax holiday available for units set up under the Special Economic Zone
Act, 2005. These tax holidays are available for a period of fifteen years from the date of commencement
of operations. Under the SEZ scheme, the units which begins providing services on or after April 1, 2005
will be eligible for deductions of 100% of profits or gains derived from export of services for the first five
years, 50% of such profit or gains for a further period of five years and 50% of such profits or gains for the
balance period of five years subject to fulfilment of certain conditions. Pune unit 1, Thiruvananthapuram,
Chennai unit and Pune Unit 2, will be eligible for deductions of 100% of profits or gains derived from export
of services for the first five years, 50% of such profit or gains for a further period of five years and 50% of
such profits or gains for the balance period of five years subject to fulfilment of certain conditions.
28. EMPLOYEE BENEFIT PLANS
a. Defined contribution plans
The Company makes contribution to Provident Fund, Superannuation Fund and Employee State
Insurance fund for qualifying employees. Under the Schemes, the Company is required to contribute a
specified percentage of the payroll costs to fund the benefits.
The Company recognised i) '' 5,408.21 lakhs and '' 4,846.56 lakhs for Provident Fund contributions
for the year ended March 31, 2025 and March 31, 2024, respectively. ii) '' 1,116.80 lakhs and '' 1,083.33
lakhs for Superannuation Fund contributions for the year ended March 31, 2025 and March 31, 2024,
respectively. The contributions payable to these plans by the Company are at the rates specified in the
rules of the schemes.
b. Defined benefit plans
The Company offers gratuity (included as part of Contribution to Provident and other funds in Note 25
Employee benefit expenses) to its eligible employees under defined benefit plans.
The gratuity plan provides for a lump sum payment to vested employees at retirement, death while
in employment or on termination of employment of an amount equivalent to 15 days basic salary
payable for each completed year of service. Vesting occurs upon completion of five continuous years
of service. The gratuity fund is managed by third party fund (Life Insurance Corporation of India).
Future mortality assumptions are taken based on the published statistics by the Insurance Regulatory and
Development Authority of India.
The expected benefits are based on the same assumptions as are used to measure the Companyâs defined
benefit plan obligations as at March 31, 2025. The Company is expected to contribute '' 3,662.42 lakhs to
defined benefit obligations funds for the year ended March 31, 2026.
The discount rate is based on the prevailing market yields of Government of India securities as at the Balance
sheet date for the estimated term of the obligations. The estimate of future salary increases considered, takes
into account the inflation, seniority, promotion, increments and other relevant factors.
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate,
expected salary increase and employee attrition. The sensitivity analysis below have been determined based on
reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while
holding all other assumptions constant.
If the discount rate increases (decreases) by 1%, the defined benefit obligations would decrease by '' 704.15
lakhs (increase by '' 806.16 lakhs) as at March 31, 2025. If the expected salary growth increases (decreases) by
1%, the defined benefit obligations would increase by '' 805.03 lakhs (decrease by '' 715.81 lakhs) as at March 31,
2025. If the employee attrition rate increases (decreases) by 1%, the defined benefit obligation would decrease
by '' 3.60 lakhs (decrease by '' 2.01 lakhs).
The sensitivity analysis has been performed based on reasonably possible changes of the respective assumptions
occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit
obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of
the assumption may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations
has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the
same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior
years.
Each year an Asset - Liability matching study is performed in which the consequences of the strategic investment
policies are analysed in terms of risk and return profiles. Investment and contribution policies are integrated
within this study.
(b) Fair value hierarchy:
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value
that are either observable or unobservable and consists of the following three levels:
⢠Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
⢠Level 2 - Inputs are 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 are not based on observable market data (unobservable inputs). Fair values are
determined in whole or in part using a valuation model based on assumptions that are neither
supported by prices from observable current market transactions in the same instrument nor are
they based on available market data.
The investments included in Level 2 of fair value hierarchy have been valued using quotes available
for similar assets and liabilities in the active market. The investments included in Level 3 of fair value
hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted
investments approximate the fair value because there is a range of possible fair value measurements
and the cost represents estimate of fair value within that range.
The following table summarises financial assets and liabilities measured at fair value on a recurring basis
and financial assets that are not measured at fair value on a recurring basis (but fair value disclosures
are required):
(c) Financial risk management
The Company is exposed primarily to fluctuations in credit, liquidity and market risks, which may
adversely impact the fair value of its financial instruments. The Company has a risk management policy
which covers risks associated with the financial assets and financial liabilities. The risk management
policy is approved by the Board of Directors. The focus of risk management committee is to assess the
unpredictability of the financial environment and to mitigate potential adverse effects on the financial
performance of the Company.
(d) Interest rate risk
The Companyâs investments are primarily in fixed rate interest bearing fixed deposits with banks. Hence
the Company is not significantly exposed to interest rate risk.
Credit risk is the risk of financial loss arising from counter party failure to repay or service debt
according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of
default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is
controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom
the credit has been granted after necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally consist of trade
receivables, unbilled revenue, derivative financial instruments, cash and cash equivalents, other bank
balances and other financial assets. Other bank balances include bank deposits include an amount
of '' 1,58,310 lakhs (Previous year '' 1,36,400.00 lakhs) held with four scheduled banks having high
credit-rating which are individually in excess of 10% or more of the Company bank deposits for the
year ended March 31, 2025. Trade receivables- billed and Trade receivables-unbilled include an amount
of '' 26,559.60 lakhs (Previous year '' 22,967.74 lakhs) held with two customers having high credit¬
rating which are individually in excess of 10% or more of Company Trade receivables- billed and Trade
receivables- unbilled for the year ended March 31, 2025.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum
exposure to the credit risk was '' 3,00,238.66 lakhs and '' 2,57,976.60 lakhs as at March 31, 2025 and
March 31, 2024, respectively, being the total of the carrying amount of balances principally with banks,
other bank balances, Trade receivables- billed and Trade receivables- unbilled and other financial assets.
The Companyâs exposure to customers is diversified and except two customers, no single customer
contributes to more than 10% and 10% of Trade receivables- billed and Trade receivables- unbilled as
at March 31, 2025 and March 31, 2024, respectively.
Geographic concentration of credit risk
The Company also has a geographic concentration of Trade receivables- billed and Trade receivables¬
unbilled (gross and net of allowances) as given below:
Liquidity risk refers to the risk that Company cannot meet its financial obligations. The objective of
liquidity risk management is to maintain sufficient liquidity and to ensure that sufficient funds are
available for use as per requirements.
The Company consistently generates sufficient cash flows from operations to meet its financial
obligations as and when they fall due.
The table below provides details regarding the contractual maturities of significant financial liabilities
as at March 31, 2025
(g) Market risk
(a) Foreign currency exchange rate risk:
The fluctuation in foreign currency rates may have potential impact on the statement of profit or
loss and other comprehensive income and equity, where any transaction references more than
one currency or where assets/liabilities are denominated in a currency other than the functional
currency of the Company.
Considering the countries and economic environment in which the Company operates, its
operations are subject to risks arising from fluctuations in exchange rates in those countries.
The risks primarily relate to fluctuations in US Dollar, Great Britain Pound and Euro against the
functional currency of the Company.
The Company, as per its risk management policy, uses derivative instruments primarily to cover the
exchange rate risks. Further, any movement in the foreign currency of the various operations of the
Company against major foreign currencies may impact Companyâs revenue in international business.
The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure
to exchange risk. It covers a part of these risks by using derivative financial instruments in line with
its risk management policies.
The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange
rate exposure and a simultaneous parallel foreign exchange rates shift of all the currencies by 10%
against the functional currency of the Company.
The following analysis has been worked out based on the net exposures of the Company as of the
date of balance sheet which could affect the statement of profit and loss and other comprehensive
income and equity. Further the exposure indicated below is mitigated by some of the derivative
contracts entered into by the Company.
The following table sets forth information relating to foreign currency exposures as at March 31,
2025 and March 31, 2024.
1 0% appreciation/depreciation of the respective foreign currencies with respect to functional
currency of the Company would result in decrease/increase in the Companyâs profit before tax by
approximately '' 6,635.62 lakhs for the year ended March 31, 2025 and '' 7,427.54 lakhs for the year
ended March 31, 2024 respectively.
-Others include AED, AUD, CAD, JPY, KRW, MYR, SGD, ZAR etc.
The Company uses various derivative financial instruments governed by policies approved by the
board of directors such as foreign exchange forward and option contracts to manage and mitigate
its exposure to foreign exchange rates. The counter party is generally a bank. The Company can
enter into contracts for period up to one year.
The following table presents the aggregate contracted principal amounts of the Companyâs
derivative contracts outstanding:
During the years ended March 31, 2025 and March 31, 2024''23,474.13 and '' 14,461.10 of unbilled
revenue (including Contract assets) pertaining to fixed price and fixed time frame contracts as of
April 01, 2024 and April 01, 2023, respectively, has been reclassified to trade receivables upon billing
to customers on completion of milestones. During the years ended March 31, 2025 and March 31, 2024
the Company recognised revenue of '' 5,276.56 and '' 4,203.83 arising from opening uneared revenue
as of April 01, 2024 and April 01, 2023, respectively.
b. Remaining performance obligations
The remaining performance obligation disclosure provides the aggregate amount of the transaction
price yet to be recognised as at the end of the reporting period and an explanation as to when the
Company expects to recognise these amounts in revenue. Remaining performance obligation 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 materialised and adjustments
for currency.
Applying the practical expedient
Mar 31, 2024
Rights, preferences and contingencies attached to equity shares
The Company has only one class of equity shares, having a par value of '' 10/-. Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company,the holders of the equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amount. However, as on date no such preferential amounts exist. The distribution will be in proportion to number of equity shares held by the shareholders.
Provision for warranty represents present value of managementâs best estimate of the future outflow of economic benefits that will be required in respect of services provided, the estimated cost of which is accrued at the time of providing service. Management estimates the related provision for future warranty claims based on historical warranty claim information and is adjusted regularly to reflect new information. The products are generally covered under a free warranty period ranging up to 3 months.
The tax rate used for 2023-24 reconciliation above is the corporate tax rate of 34.944% (PY 34.944%) payable by corporate entities in India on taxable profits under Indian tax law.
The Company benefits from the tax holiday available for units set up under the Special Economic Zone Act, 2005. These tax holidays are available for a period of fifteen years from the date of commencement of operations. Under the SEZ scheme, the units which begins providing services on or after April 1, 2005 will be eligible for deductions of 100% of profits or gains derived from export of services for the first five years, 50% of such profit or gains for a further period of five years and 50% of such profits or gains for the balance period of five years subject to fulfilment of certain conditions. Pune unit 1, Thiruvananthapuram, Chennai unit and Pune Unit 2, will be eligible for deductions of 100% of profits or gains derived from export of services for the first five years, 50% of such profit or gains for a further period of five years and 50% of such profits or gains for the balance period of five years subject to fulfilment of certain conditions.
28. Employee benefit plansa. Defined contribution plans
The Company makes contribution to Provident Fund, Superannuation Fund and Employee State Insurance fund for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.
The Company recognised i) '' 4,846.56 lakhs and '' 3,763.57 lakhs for Provident Fund contributions for the year ended March 31, 2024 and March 31, 2023, respectively. ii) '' 1,083.33 lakhs and '' 1,468.64 lakhs for Superannuation Fund contributions for the year ended March 31, 2024 and March 31, 2023, respectively. The contributions payable to these plans by the Company are at the rates specified in the rules of the schemes.
The Company offers gratuity (included as part of Contribution to Provident and other funds in Note 25 Employee benefit expenses) to its eligible employees under defined benefit plans.
The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The gratuity fund is managed by third party fund (Life Insurance Corporation of India).
Future mortality assumptions are taken based on the published statistics by the Insurance Regulatory and Development Authority of India.
The expected benefits are based on the same assumptions as are used to measure the Companyâs defined benefit plan obligations as at March 31, 2024. The Company is expected to contribute '' 3,490.61 lakhs to defined benefit obligations funds for the year ended March 31, 2025.
The discount rate is based on the prevailing market yields of Government of India securities as at the Balance sheet date for the estimated term of the obligations. The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate, expected salary increase and employee attrition. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
If the discount rate increases (decreases) by 1%, the defined benefit obligations would decrease by '' 562.84 lakhs (increase by '' 643.68 lakhs) as at March 31, 2024. If the expected salary growth increases (decreases) by 1%, the defined benefit obligations would increase by '' 644.96 lakhs (decrease by '' 573.87 lakhs) as at March 31, 2024. If the employee attrition rate increases (decreases) by 1%, the defined benefit obligation would increase by '' 8.89 lakhs (decrease by '' 15.17 lakhs).
The sensitivity analysis has been performed based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumption may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years. Each year an Asset - Liability matching study is performed in which the consequences of the strategic investment policies are analysed in terms of risk and return profiles. Investment and contribution policies are integrated within this study.
30. Financial instruments - Fair values and Risk management
The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2.10 to the financial statements.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value
that are either observable or unobservable and consists of the following three levels:
⢠Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
⢠Level 2 - Inputs are 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 are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
The investments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.
The Company is exposed primarily to fluctuations in credit, liquidity and market risks, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which covers risks associated with the financial assets and financial liabilities. The risk management policy is approved by the Board of Directors. The focus of risk management committee is to assess the unpredictability of the financial environment and to mitigate potential adverse effects on the financial performance of the Company.
The Companyâs investments are primarily in fixed rate interest bearing fixed deposits with banks. Hence the Company is not significantly exposed to interest rate risk.
Credit risk is the risk of financial loss arising from counter party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled revenue, derivative financial instruments, cash and cash equivalents, other bank balances and other financial assets. Other bank balances include bank deposits for an amount of '' 1,36,400.00 lakhs (Previous year '' 1,10,950.00 lakhs) held with five schedule banks having high credit-rating which are individually in excess of 10% or more of the Company bank deposits for the year ended March 31, 2024. Trade receivables - billed and Trade receivables-unbilled include an amount of '' 22,967.74 lakhs (Previous year '' 21,661.10 lakhs) held with two customers having high credit-rating which are individually in excess of 10% or more of Company Trade receivables- billed and Trade receivables- unbilled for the year ended March 31, 2024.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to the credit risk was '' 2,57,976.60 lakhs and '' 2,28,384.83 lakhs as at March 31, 2024 and March 31, 2023, respectively, being the total of the carrying amount of balances principally with banks, other bank balances, Trade receivables- billed and Trade receivables- unbilled and other financial assets.
The Companyâs exposure to customers is diversified and except two customers, no single customer contributes to more than 10% and 10% of Trade receivables- billed and Trade receivables- unbilled as at March 31, 2024 and March 31, 2023, respectively.
Liquidity risk refers to the risk that Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and to ensure that sufficient funds are available for use as per requirements.
The Company consistently generates sufficient cash flows from operations to meet its financial obligations as and when they fall due.
(a) Foreign currency exchange rate risk:
The fluctuation in foreign currency rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.
Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar, Great Britain Pound and Euro against the functional currency of the Company.
The Company, as per its risk management policy, uses derivative instruments primarily to cover the exchange rate risks. Further, any movement in the foreign currency of the various operations of the Company against major foreign currencies may impact Companyâs revenue in international business.
The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange risk. It covers a part of these risks by using derivative financial instruments in line with its risk management policies.
The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a simultaneous parallel foreign exchange rates shift of all the currencies by 10% against the functional currency of the Company.
The following analysis has been worked out based on the net exposures of the Company as of the date of balance sheet which could affect the statement of profit and loss and other comprehensive income and equity. Further the exposure indicated below is mitigated by some of the derivative contracts entered into by the Company.
10% appreciation/depreciation of the respective foreign currencies with respect to functional currency of the Company would result in decrease/ increase in the Companyâs profit before tax by approximately '' 7,427.54 lakhs for the year ended March 31, 2024 and '' 7,409.42 lakhs for the year ended March 31, 2023 respectively.
-Others include AED, AUD, CAD, JPY, KRW, MYR, SGD, ZAR etc.
The Company uses various derivative financial instruments governed by policies approved by the board of directors such as foreign exchange forward and option contracts to manage and mitigate its exposure to foreign exchange rates. The counter party is generally a bank. The Company can enter into contracts for period up to one year.
Transactions with key management personnel for the year ended March 31, 2023 did not include compensated absences leave, gratuity and premium paid for group health insurance, as separate actuarial valuation / premium paid were not available.
Note-1: The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.
Note-2: All transactions with these related parties are priced on an armâs length basis.
Lease contracts entered by the Company majorly pertains for Land & buildings taken on lease to conduct its business in the ordinary course. The leases typically run for a period of 2 to 10 years, with an option to renew the lease after that date. Typically lease payments are renegotiated at the time of renewal.
Other disclosure w.r.t. leases:
i) I nterest expense (included in finance cost) for the year ended March 31, 2024 amounts to '' 1,959.54 lakhs (Previous year '' 1,583.69 lakhs)
ii) The total cash outflow for the year ended March 31, 2024 amounts to '' 4,976.76 lakhs (Previous year '' 3,808.45 lakhs)
iii) The Company incurred '' 492.78 lakhs for the year ended March 31, 2024 towards expenses relating to lease of low-value assets (Previous year '' 467.94 lakhs)
b. Lease liabilities
Maturity analysis - contractual discounted cash flows
|
33. Contingent liabilities and commitments '' lakhs |
||
|
Contingent liabilities and commitments (to the extent not provided for) |
As at March 31, 2024 |
As at March 31, 2023 |
|
(i) Contingent liabilities: |
||
|
Claims against the Company not acknowledged as debt |
||
|
Disputed demands for Income Tax aggregates. |
67.29 |
67.29 |
|
(ii) Capital Commitments: |
||
|
Estimated amount of contracts remaining to be executed on capital accounts and not provided for |
||
|
Property, plant and equipment |
1,408.49 |
1,169.05 |
|
Intangible assets |
71.05 |
- |
During the years ended March 31, 2024 and March 31, 2023''14,461.10 and '' 11,658.70 of unbilled revenue (including Contract assets) pertaining to fixed price and fixed time frame contracts as of April 01, 2023 and April 01, 2022, respectively, has been reclassified to trade receivables upon billing to customers on completion of milestones. During the years ended March 31, 2024 and March 31, 2023 the Company recognised revenue of '' 4,203.83 and '' 4,542.89 arising from opening uneared revenue as of April 01, 2023 and April 01, 2022, respectively.
b. 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 recognise these amounts in revenue. Remaining performance obligation 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 materialised and adjustments for currency. 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 Companyâs performance completed to date, typically those contracts where invoicing is on time and material, unit price basis and no information is provided about remaining performance obligations at March 31, 2024 that have an original expected duration of one year or less, as allowed by Ind AS 115.
The aggregate value of performance obligations that are completely or partially unsatisfied as of March 31, 2024 is '' 48,798.43 lakhs (March 31, 2023: '' 45,970.87 lakhs). Out of this, the Company expects to recognise revenue of around 50.60% (March 31, 2023: 47.11%) within the next one year and the remaining thereafter. 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.
Dues to micro and small enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management.
The Chief Executive Officer and Managing Director of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108 - operating segments. The CODM evaluates the Companyâs performance and allocates resources based on an analysis of various performance indicators by industry classes. Accordingly, the segment information has been presented for industry classes.
The Company has identified business segments as its primary segment. Business segments are primarily system integration & support and software development & services.
Each segment item reported is measured at the measure used to report to the CODM for the purposes of making decisions about allocating resources to the segment and assessing its performance.
Revenues and expenses directly attributable to segments are reported under each reportable segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses.
Assets and liabilities of the Company are used interchangeably amongst segments. Allocation of such assets and liabilities is not practicable and any forced allocation would not result in any meaningful segregation. Hence, assets and liabilities have not been identified to any of the reportable segments.
Information about major customers:
The revenues of '' 3,45,625.73 lakhs (Previous year '' 3,06,594.75 lakhs) arising from the software development and services segment includes '' 1,13,865.89 lakhs (Previous year '' 84,968.17 lakhs) representing revenue of more than 10% of the total revenue of the Company is from two customers.
38. Performance Stock Option Plan (PSOP)
Performance Stock Option Plan (PSOP) - 2023 (the Plan)
Effective March 04, 2023, the Company instituted the Plan. The Board of Directors of the Company and shareholders authorised to introduce, offer, issue and provide share based options to eligible employees of the Company at its meeting held on January 25, 2023 and March 04, 2023 respectively. The maximum number of shares under the 2023 plan shall not exceed 3,11,000 equity shares. Further, the maximum number of Options that can be granted to any specific Employee during the tenure of this Plan shall not exceed 20,000 Options.
The options would vest on achievement of defined performance parameters as determined by Nomination and Remuneration committee. The performance parameters are based on operating performance metrics of the Company as decided by Nomination and Remuneration committee. Each of the performance parameters will be distinct for the purpose of calculation of the quantity of the shares to vest based on performance. The instruments generally vests at 30-30-40 ratio over 12 to 36 months from the date of grant. Each option carries with a right to purchase one equity share of the Company at exercise price determined by Nomination and Remuneration committee at the time of grant. The exercise period is twelve months from the respective date of vesting or within three months from the resignation of employee whichever is earlier.
Total employee compensation cost pertaining to PSOP 2023 the Plan during the year is '' 1,502.30. Additionally, under the existing PSOP 2023 the Plan, during the current year the Company granted 931 options to the key management personnel (Refer Note 31).
Considering probability of successful outcome of such development and the ability of these entities to commercialise the product being developed, as a matter of prudence the Company has recorded these investments at '' 1/-.
40. The sitting fee and commission for non-executive directors is sitting fee and commission ''635.20 slakhs and '' 625.30 lakh for the financial year 2023-24 and 2022-23 respectively.
During the year ended March 31, 2024, the Company paid total dividends at '' 60.60 and dividend of '' 42.5 per equity share for the year ended March 31, 2023.
Dividends declared by the Company are based on the profit available for distribution. Distribution of dividend out of General Reserve and Retained earnings.
43. The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
44. No funds have been advanced / loaned / invested (from borrowed funds or from share premium or from any other sources / kind of funds) by the Company to any other person(s) or entity(ies), including foreign entities (Intermediaries), with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding (whether recorded in writing or otherwise) that the Company shall (i) 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 (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
On April 23, 2024, the Board of Directors of the Company have proposed a dividend of '' 70.00 per share in respect of the year ended March 31, 2024 subject to the approval of shareholders at the Annual General Meeting.
Mar 31, 2023
The tax rate used for 2022-23 reconciliation above is the corporate tax rate of 34.944% (PY 34.944%) payable by corporate entities in India on taxable profits under Indian tax law.
The Company benefits from the tax holiday available for units set up under the Special Economic Zone Act, 2005. These tax holidays are available for a period of fifteen years from the date of commencement of operations. Under the SEZ scheme, the units which begins providing services on or after April 1, 2005 will be eligible for deductions of 100% of profits or gains derived from export of services for the first five years, 50% of such profit or gains for a further period of five years and 50% of such profits or gains for the balance period of five years subject to fulfilment of certain conditions. Pune unit 1, Thiruvananthapuram, Chennai unit and Pune Unit 2, will be eligible for deductions of 100% of profits or gains derived from export of services for the first five years, 50% of such profit or gains for a further period of five years and 50% of such profits or gains for the balance period of five years subject to fulfilment of certain conditions.
28. Employee benefit plansa. Defined contribution plans
The Company makes contribution to Provident Fund, Superannuation Fund and Employee State Insurance fund for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.
The Company recognised i) '' 3,763.57 lakhs and '' 2,795.51 lakhs for Provident Fund contributions for the year ended March 31, 2023 and March 31, 2022, respectively. ii) '' 1,468.64 lakhs and '' 1,193.05 lakhs for Superannuation Fund contributions for the year ended March 31, 2023 and March 31, 2022, respectively. The contributions payable to these plans by the Company are at the rates specified in the rules of the schemes.
The Company offers gratuity (included as part of Contribution to Provident and other funds in Note 25 Employee benefit expenses) to its eligible employees under defined benefit plans.
The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The gratuity fund is managed by third party fund (Life Insurance Corporation of India).
The expected benefits are based on the same assumptions as are used to measure the Companyâs defined benefit plan obligations as at March 31, 2023. The Company is expected to contribute '' 1,808.77 lakhs to defined benefit obligations funds for the year ended March 31, 2024.
The discount rate is based on the prevailing market yields of Government of India securities as at the Balance sheet date for the estimated term of the obligations. The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate, expected salary increase and employee attrition. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
If the discount rate increases (decreases) by 1%, the defined benefit obligations would decrease by '' 406.72 lakhs (increase by '' 464.28 lakhs) as at March 31, 2023. If the expected salary growth increases (decreases) by 1%, the defined benefit obligations would increase by '' 466.41 lakhs (decrease by '' 415.64 lakhs) as at March 31, 2023. If the employee attrition rate increases (decreases) by 1%, the defined benefit obligation would increase by '' 20.68 lakhs (decrease by '' 26.26 lakhs).
The sensitivity analysis has been performed based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumption may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet. There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
Each year an Asset - Liability matching study is performed in which the consequences of the strategic investment policies are analysed in terms of risk and return profiles. Investment and contribution policies are integrated within this study.
30. Financial instruments - Fair values and Risk management
The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2.11 to the financial statements.
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
⢠Level 1 âInputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
⢠Level 2 âInputs are 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 âInputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. The investments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.
The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosures are required):
The Company is exposed primarily to fluctuations in Interest rate, credit, liquidity and market risks, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which covers risks associated with the financial assets and financial liabilities. The risk management policy is approved by the Board of Directors. The focus of risk management committee is to assess the unpredictability of the financial environment and to mitigate potential adverse effects on the financial performance of the Company.
The Companyâs investments are primarily in fixed rate interest bearing fixed deposits with banks. Hence the Company is not significantly exposed to interest rate risk.
Credit risk is the risk of financial loss arising from counter party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analysing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled revenue, derivative financial instruments, cash and cash equivalents, other bank balances and other financial assets. Other bank balances include bank deposits for an amount of '' 1,10,950.00 lakhs (Previous year '' 92,000.00 lakhs) held with five schedule banks having high creditrating which are individually in excess of 10% or more of the Company bank deposits for the year ended March 31, 2023. Trade receivables- billed and Trade receivables-unbilled include an amount of '' 21,661.10 lakhs (Previous year '' 16,611.84 lakhs) held with two customers having high credit-rating which are individually in excess of 10% or more of Company Trade receivables- billed and Trade receivablesunbilled for the year ended March 31, 2023.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to the credit risk was '' 2,28,384.83 lakhs and '' 1,79,169.74 lakhs as at March 31, 2023 and March 31, 2022, respectively, being the total of the carrying amount of balances principally with banks, other bank balances, Trade receivables- billed and Trade receivables- unbilled and other financial assets.
The Companyâs exposure to customers is diversified and except two customers, no single customer contributes to more than 10% and 10% of Trade receivables- billed and Trade receivables- unbilled as at March 31, 2023 and March 31, 2022, respectively.
Geographic concentration of credit risk
The Company also has a geographic concentration of Trade receivables- billed and Trade receivablesunbilled (gross and net of allowances) as given below:
Geographic concentration of credit risk is allocated based on the location of the customers.
Liquidity risk refers to the risk that Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and to ensure that sufficient funds are available for use as per requirements.
The Company consistently generates sufficient cash flows from operations to meet its financial obligations as and when they fall due.
The table below provides details regarding the contractual maturities of significant financial liabilities as at March 31, 2023
(g) Foreign currency exchange rate risk:
The fluctuation in foreign currency rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.
Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar, Great Britain Pound and Euro against the functional currency of the Company.
The Company, as per its risk management policy, uses derivative instruments primarily to cover the exchange rate risks. Further, any movement in the foreign currency of the various operations of the Company against major foreign currencies may impact Companyâs revenue in international business.
The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange risk. It covers a part of these risks by using derivative financial instruments in line with its risk management policies.
The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a simultaneous parallel foreign exchange rates shift of all the currencies by 10% against the functional currency of the Company.
The following analysis has been worked out based on the net exposures of the Company as of the date of balance sheet which could affect the statement of profit and loss and other comprehensive income and equity. Further the exposure indicated below is mitigated by some of the derivative contracts entered into by the Company.
10% appreciation/depreciation of the respective foreign currencies with respect to functional currency of the Company would result in decrease/ increase in the Companyâs profit before tax by approximately '' 7,409.42 lakhs for the year ended March 31, 2023 and '' 11,194.20 lakhs for the year ended March 31, 2022 respectively.
-Others include AED, AUD, CAD, JPY, KRW, MYR, SGD, ZAR etc.
The Company uses various derivative financial instruments governed by policies approved by the board of directors such as foreign exchange forward and option contracts to manage and mitigate its exposure to foreign exchange rates. The counter party is generally a bank. The Company can enter into contracts for period up to one year.
b. Remaining performance obligations
The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognised as at the end of the reporting period and an explanation as to when the Company expects to recognise these amounts in revenue. Remaining performance obligation 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 materialised and adjustments for currency.
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 recognised corresponds directly with the value to the customer of the Companyâs performance completed to date, typically those contracts where invoicing is on time and material, unit price basis and no information is provided about remaining performance obligations at March 31, 2023 that have an original expected duration of one year or less, as allowed by Ind AS 115.
The aggregate value of performance obligations that are completely or partially unsatisfied as of March 31, 2023 is '' 45,970.87 lakhs (March 31, 2022: '' 31,783.81 lakhs). Out of this, the Company expects to recognise revenue of around 47.11% (March 31, 2022: 56.14%) within the next one year and the remaining thereafter. 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.
Dues to micro and small enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management.
The Chief Executive Officer and Managing Director of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108 - operating segments. The CODM evaluates the Companyâs performance and allocates resources based on an analysis of various performance indicators by industry classes. Accordingly, the segment information has been presented for industry classes.
The Company has identified business segments as its primary segment. Business segments are primarily system integration & support and software development & services.
Each segment item reported is measured at the measure used to report to the CODM for the purposes of making decisions about allocating resources to the segment and assessing its performance.
Revenues and expenses directly attributable to segments are reported under each reportable segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses.
Assets and liabilities of the Company are used interchangeably amongst segments. Allocation of such assets and liabilities is not practicable and any forced allocation would not result in any meaningful segregation. Hence, assets and liabilities have not been identified to any of the reportable segments.
Information about major customers:
The revenues of '' 3,06,594.75 lakhs (Previous year '' 2,42,131.14 lakhs) arising from the software development and services segment includes '' 84,968.17 lakhs (Previous year '' 62,141.51 lakhs) representing revenue of more than 10% of the total revenue of the Company is from two customers.
38. The Company had in the earlier year entered into incubation agreement for providing services pertaining to promotion of business of the entrepreneurs and also providing infrastructure facilities and resources. In consideration for the services rendered shares has been allocated /transferred as under. These investments are valued at fair value through profit and loss.
Considering probability of successful outcome of such development and the ability of these entities to commercialise the product being developed, as a matter of prudence the Company has recorded these investments at '' 1/-.
39. The sitting fee and commission for non-executive directors is '' 625.30 lakhs and '' 539.30 lakhs for the financial year 2022-23 and 2021-22 respectively.
During the year ended March 31, 2023, the Company paid total dividends at '' 42.5 and dividend of '' 48 per equity share for the year ended March 31, 2022.
Dividends declared by the Company are based on the profit available for distribution. Distribution of dividend out of General Reserve and Retained earnings.
42. The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the Company towards Provident Fund and Gratuity. The Ministry of Labour and Employment had released draft rules for the Code on Social Security, 2020 on November 13, 2020, and invited suggestions from stakeholders which are under consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified. The Company will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.
43. No funds have been advanced / loaned / invested (from borrowed funds or from share premium or from any other sources / kind of funds) by the Company to any other person(s) or entity(ies), including foreign entities (Intermediaries), with the understanding (whether recorded in writing or otherwise) that the Intermediary shall (i) 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 (ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
No funds have been received by the Company from any person(s) or entity(ies), including foreign entities (Funding Parties), with the understanding (whether recorded in writing or otherwise) that the Company shall (i) 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 (ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
On May 18, 2023, the Board of Directors of the Company have proposed a dividend of '' 60.60 per share in respect of the year ended March 31, 2023 subject to the approval of shareholders at the Annual General Meeting.
Mar 31, 2022
The tax rate used for 2021-22 reconciliation above is the corporate tax rate of 34.944% (PY 34.944%) payable by corporate entities in India on taxable profits under Indian tax law.
The Company benefits from the tax holiday available for units set up under the Special Economic Zone Act, 2005. These tax holidays are available for a period of fifteen years from the date of commencement of operations. under the SEZ scheme, the units which begins providing services on or after April 1, 2005 will be eligible for deductions of 100% of profits or gains derived from export of services for the first five years, 50% of such profit or gains for a further period of five years and 50% of such profits or gains for the balance period of five years subject to fulfilment of certain conditions. pune unit 1, Thiruvananthapuram, Chennai unit and pune unit 2, will be eligible for deductions of 100% of profits or gains derived from export of services for the first five years, 50% of such profit or gains for a further period of five years and 50% of such profits or gains for the balance period of five years subject to fulfilment of certain conditions.
29| EMPLOYEE BENEFIT PLANS 29.1a Defined contribution plans
The Company makes contribution to Provident Fund, Superannuation Fund and Employee State Insurance fund for qualifying employees. under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.
The Company recognised i) '' 2,795.51 lakhs and '' 2,201.36 lakhs for provident Fund contributions for the year ended March 31, 2022 and March 31, 2021, respectively.ii) '' 1,193.05 lakhs and '' 963.27 lakhs for Superannuation Fund contributions for the year ended March 31, 2022 and March 31, 2021, respectively. The contributions payable to these plans by the Company are at the rates specified in the rules of the schemes.
29.1b Defined benefit plans
The Company offers gratuity (included as part of Contribution to provident and other funds in Note 25 Employee benefit expenses) to its eligible employees under defined benefit plans.
The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The gratuity fund is managed by third party fund.
The expected benefits are based on the same assumptions as are used to measure the Companyâs defined benefit plan obligations as at March 31, 2022. The Company is expected to contribute '' 894.13 lakhs to defined benefit obligations funds for the year ended March 31, 2023.
The discount rate is based on the prevailing market yields of Government of India securities as at the Balance sheet date for the estimated term of the obligations. The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors. The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate, expected salary increase and employee attrition. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
If the discount rate increases (decreases) by 1%, the defined benefit obligations would decrease by '' 368.27 lakhs (increase by '' 422.16 lakhs) as at March 31, 2022. If the expected salary growth increases (decreases) by 1%, the defined benefit obligations would increase by '' 421.99 lakhs (decrease by '' 374.70 lakhs) as at March 31, 2022. If the employee attrition rate increases (decreases) by 1%, the defined benefit obligation would increase by '' 10.64 lakhs (decrease by '' 14.12 lakhs).
The sensitivity analysis has been performed based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant. The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumption may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the projected unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
Each year an Asset - Liability matching study is performed in which the consequences of the strategic investment policies are analysed in terms of risk and return profiles. Investment and contribution policies are integrated within this study.
~| FINANCIAL INSTRUMENTS- FAIR VALUES AND RISK MANAGEMENT.
The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2.11 to the financial statements.
(b) Fair value hierarchy:
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
⢠Level 1 âInputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
⢠Level 2âInputs are 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 3âInputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
The investments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.
The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosures are required):
(c) Financial risk management
The Company is exposed primarily to fluctuations in credit, liquidity and market risks, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which covers risks associated with the financial assets and financial liabilities. The risk management policy is approved by the Board of Directors. The focus of risk management committee is to assess the unpredictability of the financial environment and to mitigate potential adverse effects on the financial performance of the Company.
(d) Interest rate risk
The Companyâs investments are primarily in fixed rate interest bearing fixed deposits with banks. Hence the Company is not significantly exposed to interest rate risk
(e) Credit risk:
Credit risk is the risk of financial loss arising from counter party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled revenue, derivative financial instruments, cash and cash equivalents, other bank balances and other financial assets. Other bank balances include bank deposits for an amount of '' 92,000.00 lakhs( Previous year '' 85,440.00 lakhs) held with five schedule banks having high creditrating which are individually in excess of 10% or more of the Company bank deposits for the year ended March 31, 2022. Trade receivables- billed and Trade receivables-unbilled include an amount of '' 16,611.84 lakhs (Previous year '' 5,901.77 lakhs) held with two customers having high credit-rating which are individually in excess of 10% or more of Company Trade receivables- billed and Trade receivablesunbilled for the year ended March 31, 2022.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to the credit risk was '' 1,79,169.74 lakhs and '' 1,48,464.71 lakhs as at March 31, 2022 and March 31, 2021, respectively, being the total of the carrying amount of balances principally with banks, other bank balances, Trade receivables- billed and Trade receivables- unbilled and other financial assets.
The Companyâs exposure to customers is diversified and except two customers, no single customer contributes to more than 10% and 10% of Trade receivables- billed and Trade receivables- unbilled as at March 31, 2022 and March 31, 2021, respectively.
Geographic concentration of credit risk
The Company also has a geographic concentration of Trade receivables- billed and Trade receivablesunbilled (gross and net of allowances) as given below:
ii) Liquidity risk:
Liquidity risk refers to the risk that Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and to ensure that sufficient funds are available for use as per requirements.
The Company consistently generates sufficient cash flows from operations to meet its financial obligations as and when they fall due.
iii) Market risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, credit, liquidity and other market changes. The Companyâs exposure to market risk is primarily on account of foreign currency exchange rate risk.
(a) Foreign currency exchange rate risk:
The fluctuation in foreign currency rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.
Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar, Great Britain Pound and Euro against the functional currency of the Company.
The Company, as per its risk management policy, uses derivative instruments primarily to cover the exchange rate risks. Further, any movement in the foreign currency of the various operations of the Company against major foreign currencies may impact Companyâs revenue in international business. The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange risk. It covers a part of these risks by using derivative financial instruments in line with its risk management policies.
The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a simultaneous parallel foreign exchange rates shift of all the currencies by 10% against the functional currency of the Company.
The following analysis has been worked out based on the net exposures of the Company as of the date of balance sheet which could affect the statement of profit and loss and other comprehensive income and equity. Further the exposure indicated below is mitigated by some of the derivative contracts entered into by the Company.
The following table sets forth information relating to foreign currency exposures as at March 31, 2022 and March 31, 2021.
The Company use various derivative financial instruments governed by policies approved by the board of directors such as foreign exchange forward and option contracts to manage and mitigate its exposure to foreign exchange rates. The counter party is generally a bank. The Company can enter into contracts for period up to one year.
34^ SEGMENT INFORMATION
The Chief Executive Officer and Managing Director of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108 - operating segments. The CODM evaluates the Companyâs performance and allocates resources based on an analysis of various performance indicators by industry classes. Accordingly, the segment information has been presented for industry classes.
The Company has identified business segments as its primary segment. Business segments are primarily software development & services and system integration and support.
Each segment item reported is measured at the measure used to report to CODM for the purposes of making decisions about allocating resources to the segment and assessing its performance.
Revenues and expenses directly attributable to segments are reported under each reportable segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Property, plant & equipment that are used interchangeably amongst segments are not allocated to primary segment.
Information about major customers:
The revenues of '' 2,42,131.14 (Previous year '' 1,78,167.42) lakhs arising from the software development and services segment includes '' 62,141.51 (previous year '' 42,556.58) lakhs representing revenue of more than 10% of the total revenue of the Company is from two customers.
B. Remaining performance obligations
The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognised as at the end of the reporting period and an explanation as to when the Company expects to recognise these amounts in revenue. Remaining performance obligation 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 materialised and adjustments for currency 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 recognised corresponds directly with the value to the customer of the Companyâs performance completed to date, typically those contracts where invoicing is on time and material, unit price basis and no information is provided about remaining performance obligations at March 31, 2022 that have an original expected duration of one year or less, as allowed by Ind AS 115.
The aggregate value of performance obligations that are completely or partially unsatisfied as of March 31, 2022 is '' 31,783.81 lakhs. Out of this, the Company expects to recognise revenue of around 56.14% within the next one year and the remaining thereafter. 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.
Mar 31, 2021
Employee benefit plans
a. Defined contribution plans
The Company makes Provident Fund, Superannuation Fund, Compensated Absences Pension and contributions to Employee State Insurance as defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.
The Company recognised i) '' 2,201.36 lakhs and '' 1,899.33 lakhs for Provident Fund contributions for the year ended March 31, 2021 and March 31, 2020, respectively. ii) '' 963.27 lakhs and '' 809.95 lakhs for Superannuation Fund contributions for the year ended March 31, 2021 and March 31, 2020, respectively. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
b. Defined benefit plans
The Company offers gratuity (included as part of Contribution to Provident and other funds in Note 25 Employee benefit expenses) to its eligible employees under defined benefit plans.
The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The gratuity fund is managed by third party fund.
The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:
The expected benefits are based on the same assumptions as are used to measure the Company''s defined benefit plan obligations as at March 31, 2021. The Company is expected to contribute '' 474.69 lakhs to defined benefit obligations funds for the year ended March 31, 2022.
The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations. The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate, expected salary increase and employee turnover. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
If the discount rate increases (decreases) by 1%, the defined benefit obligations would decrease by '' 329.43 lakhs (increase by ''379.72 lakhs) as at March 31, 2021. If the expected salary growth increases (decreases) by 1%, the defined benefit obligations would increase by '' 381.42 lakhs (decrease by '' 336.63 lakhs) as at March 31, 2021. If the employee turnover rate increases (decreases) by 1%, the defined benefit obligation would increase by '' 27.07 lakhs (decrease by '' 32.38 lakhs).
The sensitivity analysis has been performed based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumption may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
Each year an Asset - Liability matching study is performed in which the consequences of the strategic investment policies are analysed in terms of risk and return profiles. Investment and contribution policies are integrated within this study.
). Financial instruments- Fair values and Risk management
The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2.11 to the financial statements.
(b) Fair value hierarchy:
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
⢠Level 1 â Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
⢠Level 2 â Inputs are 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 â Inputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
The investments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.
(c) Financial risk management
The Company is exposed primarily to fluctuations in credit, liquidity and market risks, which may adversely impact the fair value of its financial instruments. The Company has a risk management policy which covers risks associated with the financial assets and financial liabilities. The risk management policy is approved by the Board of Directors. The focus of risk management committee is to assess the unpredictability of the financial environment and to mitigate potential adverse effects on the financial performance of the Company.
(d) Interest rate risk
The Company''s investments are primarily in fixed rate interest bearing fixed deposits with banks. Hence the Company is not significantly exposed to interest rate risk
(e) Credit risk:
Credit risk is the risk of financial loss arising from counter party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled revenue, derivative financial instruments, cash and cash equivalents, other bank balances and other financial assets. Other bank balances include bank deposits for an amount of '' 85,440.40 lakhs held with five schedule banks having high credit-rating which are individually in excess of 10% or more of the company bank deposits for the year ended March 31, 2021. Trade receivables and unbilled revenue include an amount of '' 5,901.77 lakhs held with one customer (related party of the Company) having high credit-rating which are individually in excess of 10% or more of company trade receivables and unbilled revenue for the year ended March 31, 2021.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to the credit risk was'' 1,45,884.83 lakhs and '' 1,15,873.31 lakhs as at March 31, 2021 and March 31, 2020, respectively, being the total of the carrying amount of balances principally with banks, other bank balances, trade receivables, unbilled revenue and other financial assets.
The Company''s exposure to customers is diversified and except one customer, no single customer contributes to more than 10% and 10% of outstanding accounts receivable and unbilled revenue as at March 31, 2021 and March 31, 2020, respectively.
Geographic concentration of credit risk
The Company also has a geographic concentration of trade receivables (gross and net of allowances) and unbilled revenue as given below:
ii) Liquidity risk:
Liquidity risk refers to the risk that Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and to ensure that sufficient funds are available for use as per requirements.
The Company consistently generates sufficient cash flows from operations to meet its financial obligations as and when they fall due.
iii) Market risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, credit, liquidity and other market changes. The Company''s exposure to market risk is primarily on account of foreign currency exchange rate risk.
(a) Foreign currency exchange rate risk:
The fluctuation in foreign currency rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets/ liabilities are denominated in a currency other than the functional currency of the Company.
Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar, Great Britain Pound and Euro against the functional currency of the Company.
The Company, as per its risk management policy, uses derivative instruments primarily to cover the exchange rate risks. Further, any movement in the foreign currency of the various operations of the company against major foreign currencies may impact company''s revenue in international business.
The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange risk. It covers a part of these risks by using derivative financial instruments in line with its risk management policies.
The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a simultaneous parallel foreign exchange rates shift of all the currencies by 10% against the functional currency of the company.
The following analysis has been worked out based on the net exposures of the company as of the date of balance sheet which could affect the statement of profit and loss and other comprehensive income and equity. Further the exposure indicated below is mitigated by some of the derivative contracts entered into by the company.
10% appreciation/depreciation of the respective foreign currencies with respect to functional currency of the company would result in decrease/ increase in the company''s profit before tax by approximately '' 4,341.50 lakhs for the year ended March 31, 2021 and '' 4,545.34 lakhs for the year ended March 31, 2020 respectively.
*Others include AED, CAD, JPY, KRW, MYR, SGD, ZAR, CNY, etc.
The Company use various derivative financial instruments governed by policies approved by the board of directors such as foreign exchange forward and option contracts to manage and mitigate its exposure to foreign exchange rates. The counter party is generally a bank. The Company can enter into contracts for period up to one year.
Considering the current COVID-19 situation, we have analysed the credit risk and the consequential delay in realisation from our customers. This assessment is based on market outlook and the financial strength of the customers in respect of whom amounts are receivable. Based on our assessment, the valuation of receivable, unbilled receivable, contract assets and the provision for doubtful trade receivables as at March 31, 2021 is considered adequate. The Company continues to closely monitor the business outlook and the financial stress in the market and shall consider taking appropriate steps as may be needed to secure the financial interests of the Company.
i. Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgements/decisions pending with various forums/authorities.
The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position.
34. Segment information
The Chief Executive Officer and Managing Director of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108 - operating segments. The CODM evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by industry classes. Accordingly, the segment information has been presented for industry classes.
The Company has identified business segments as its primary segment. Business segments are primarily system integration & support and software development & services.
Each segment item reported is measured at the measure used to report to CODM for the purposes of making decisions about allocating resources to the segment and assessing its performance.
Revenues and expenses directly attributable to segments are reported under each reportable segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Property, plant & equipment that are used interchangeably amongst segments are not allocated to primary segment.
Information about major customers:
The revenues of ''1,78,167.42 (Previous year ''1,56,278.24) lakhs arising from the software development and services segment includes ''42,556.58 (Previous year ''25,895.35) lakhs representing revenue of more than 10% of the total revenue of the Company is from two customers. .
B. 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. Remaining performance obligation 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
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 Company''s performance completed to date, typically those contracts where invoicing is on time and material, unit price basis and no information is provided about remaining performance obligations at March 31, 2021 that have an original expected duration of one year or less, as allowed by Ind AS 115.
The aggregate value of performance obligations that are completely or partially unsatisfied as of March 31, 2021 is '' 8,300.42 lakhs. Out of this, the Company expects to recognize revenue of around 73.66% within the next one year and the remaining thereafter. 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.
40. During the previous year, the board had approved for special retiral benefits to the Managing Director who retired in October 2019. Accordingly, the Company had made a provision of '' 2,163 lakhs towards future pension and medical benefits by giving corresponding charge in the statement of profit and loss under employee benefit expense. The pension liability is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at the date of each statement of financial position.
41. Dividends
During the year ended March 31, 2021, the Company paid total dividends at '' 16.50 per equity share for the year ended March 31, 2020.
Dividends declared by the Company are based on the profit available for distribution. Distribution of dividend out of General Reserve and Retained earnings.
Subsequent event note
On April 22, 2021, the Board of Directors of the Company have proposed a dividend of '' 24.00 and special dividend of '' 24.00 per share in respect of the year ended March 31, 2021 subject to the approval of shareholders at the Annual General Meeting.
Mar 31, 2019
Notes forming part of the financial statements
34. Segment information
The Chief Executive Officer and Managing Director of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108 - operating segments. The CODM evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by industry classes. Accordingly, the segment information has been presented for industry classes.
The Company has identified business segments as its primary segment. Business segments are primarily system integration & support and software development & services.
Each segment item reported is measured at the measure used to report to CODM for the purposes of making decisions about allocating resources to the segment and assessing its performance.
Revenues and expenses directly attributable to segments are reported under each reportable segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Property, plant & equipment that are used interchangeably amongst segments are not allocated to primary segment.
|
|
Rs lakhs |
|
|
Particulars |
Year ended March 31, 2019 |
Year ended March 31, 2018 |
|
Segment revenue |
||
|
Software development & services |
1,54,313.33 |
1,32,938.93 |
|
System integration & support services |
5,379.83 |
5,690.62 |
|
Total |
1,59,693.16 |
1,38,629.55 |
|
Segment results |
||
|
Software development & services |
45,590.46 |
39,620.14 |
|
System integration & support services |
923.20 |
842.34 |
|
Total |
46,513.66 |
40,462.48 |
|
Less: Unallocable expenditure (net of unallocable income) |
3,173.79 |
4,071.82 |
|
Profit before tax |
43,339.87 |
36,390.66 |
|
Tax expense |
14,342.98 |
12,386.87 |
|
Net profit for the period / year |
28,996.89 |
24,003.79 |
|
Segment assets |
As at March 31, 2019 |
As at March 31, 2018 |
|
Software development & services |
54,239.86 |
47,067.43 |
|
System integration & support services |
1,915.11 |
1,707.87 |
|
Unallocable assets |
58,183.91 |
45,713.97 |
|
Total |
1,14,338.88 |
94,489.27 |
|
Segment liabilities |
||
|
Software development & services |
12,683.88 |
10,639.64 |
|
System integration & support services |
1,125.11 |
1,494.45 |
|
Unallocable liabilities |
6,254.62 |
8,520.05 |
|
Total |
20,063.61 |
20,654.14 |
The geographic segments individually contributing 10 percent non-current assets are shown separately: or more of the Company''s revenues and segment
Notes forming part of the financial statements
Rs lakhs
|
Geographic Segment |
Revenues For the year ended March 31, 2019 |
Non-current assets As at March 31, 2019 |
Revenues For the year ended March 31, 2018 |
Non-current assets As at March 31, 2018 |
|
India |
19,282.17 |
11,409.49 |
17,596.39 |
12,122.85 |
|
US |
48,980.71 |
9.18 |
41,003.27 |
10.41 |
|
Europe |
70,577.16 |
7.17 |
60,680.52 |
12.32 |
|
Others |
20,853.12 |
1.35 |
19,349.37 |
2.62 |
|
Total |
1,59,693.16 |
11,427.19 |
1,38,629.55 |
12,148.20 |
Geographical non-current assets (property, plant and equipment, intangible assets, income tax assets and other non-current assets) are allocated based on the location of the assets.
Information about major customers:
The revenues of Rs 1,54,313.33 (previous year Rs 1,32,938.93) lakhs arising from the software development and services segment includes Rs 36,749.39 (Previous year Rs 35,079.76) lakhs representing revenue of more than 10% of the total revenue of the Company is from one customer.
35. Ind AS 115 - Revenue
The effect of initially applying Ind AS 115 on the Company''s revenue from contracts with customers is described in Note 2.4. Due to the transition method chosen in applying Ind AS 115, comparative information has not been restated to reflect the new requirements.
A. Contract balances
The following table provides information about receivables, contract assets and contract liabilities from contracts with customers.
|
As at March 31, 2019 |
As at March 31, 2018 |
|
|
Trade receivables |
35,654.12 |
30,666.64 |
|
Unbilled receivables (March 31, 2018: Unbilled revenue) |
5,089.10 |
7,047.45 |
|
Contract assets (previous year included in unbilled revenue) |
2,873.82 |
- |
|
Contract liabilities |
1,592.18 |
1,272.00 |
The following table discloses the movement in contract assets during the year ended March 31, 2019:
|
As at March 31, 2019 |
|
|
Balance at the beginning |
1,526.11 |
|
Add: Revenue recognized during the year |
14,184.44 |
|
Less: Invoiced during the year |
12,833.60 |
|
Less : Translation gain/(loss) |
(3.13) |
|
Balance at the end |
2,873.82 |
The following table discloses the movement in unearned revenue balances during the year ended March 31. 2019:
|
As at March 31, 2019 |
|
|
Balance at the beginning |
1,272.00 |
|
Less: Revenue recognized during the year |
11,605.46 |
|
Add: Invoiced during the year |
11,915.54 |
|
Less: Translation gain/(loss) |
(10.10) |
|
Balance at the end |
1,592.18 |
B. 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. Remaining performance obligation 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
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 Company''s performance completed to date, typically those contracts where invoicing is on time and material, unit price basis and no information is provided about remaining performance obligations at March 31, 2019 that have an original expected duration of one year or less, as allowed by Ind AS 115.
The aggregate value of performance obligations that are completely or partially unsatisfied as of March 31, 2019 is Rs 6,108.92 lakhs. Out of this, the Company expects to recognize revenue of around 93.40% within the next one year and the remaining thereafter. 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. Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006
|
Particulars |
As at March 31, 2019 |
As at March 31, 2018 |
|
(i) Principal amount remaining unpaid to any supplier as at the end of the accounting year |
- |
- |
|
(ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting year |
- |
- |
|
(iii) The amount of interest paid along with the amounts of the payment made to the supplier beyond the appointed day |
539.30 |
190.45 |
|
(iv) The amount of interest due and payable for the year |
- |
- |
|
(v) The amount of interest accrued and remaining unpaid at the end of the accounting year |
- |
- |
|
(vi) The amount of further interest due and payable even in the succeeding year, until such date when the interest dues as above are actually paid |
" |
" |
37. Corporate Social Responsibility:
a. Gross amount required to be spent by the Company during the year Rs 484.13 lakhs (March 31, 2018 Rs 375.09 lakhs)
b. Amount spent during the year on :
|
For the year ended March 31, 2019 |
For the year ended March 31, 2018 |
|||||
|
Particulars |
In cash |
Yet to be paid in cash |
Total |
In cash |
Yet to be paid in cash |
Total |
|
Construction/acquisition of any asset |
Nil |
Nil |
Nil |
Nil |
Nil |
Nil |
|
On purpose other than (i) above |
575.16 |
Nil |
575.16* |
284.86 |
Nil |
284.86* |
* Includes overhead expense of Rs 24.21 lakhs (March 31, 2018 Rs 8.75 lakhs)
38. The Company has entered into incubation agreement for providing services pertaining to promotion of business of the entrepreneurs and also providing infrastructure facilities and resources. In consideration for the services rendered shares has been allocated /transferred as under.
|
Name of the Company |
No shares allotted / transferred |
Face value of shares (Rs) |
|
Big V Telecom Private Limited |
22,250 |
10 |
|
Sismatik Solutions Private Limited |
1,000 |
10 |
|
Street Smart Mobile Technologies Private Limited |
2,000 |
10 |
Considering probability of successful outcome of such development and the ability of these entities to commercialise the product being developed, as a matter of prudence the company has recorded these investments at Rs 1/-. Any gain on such investment will be recognized on its disposal.
39. The aggregate amount of research and development expenditure recognised as an expense during the year is Rs 2,254.28 lakhs (Previous year Rs 1,990.67 lakhs)
40. The sitting fee and commission for non-executive directors is Rs 361.90 lakhs and Rs 309.00 lakhs for the financial year 2018-19 and 2017-18 respectively.
41. The disclosure regarding specified bank notes
The disclosures regarding details of specified bank notes held and transacted during November 8, 2016 to December
30, 2016 has not been made in these financial statements since the requirement does not pertain to financial year ended March 31, 2019
42. Subsequent event note Dividends
During the year ended March 31, 2019, the Company paid total dividends at Rs 11 per equity share for the year ended March 31, 2018.
Dividends declared by the Company are based on the profit available for distribution. Distribution of dividend out of General Reserve and Retained earnings is subject to applicable dividend distribution tax. On April 24, 2019, the Board of Directors of the Company have proposed a final dividend of Rs 13.50 per share in respect of the year ended March
31, 2019 subject to the approval of shareholders at the Annual General Meeting.
43. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.
As per our report of even date attached
|
for B S R & Co. LLP Chartered Accountants |
||
|
Firm Registration No.: 101248W/W-100022 |
For and on behalf of the Board |
|
|
N G Subramaniam DiN:07006215 |
Chairman |
|
|
Shyamala Gopinath DIN-. 02362921 |
Director |
|
|
Sanjay Sharma |
Madhukar Dev DIN:00082W3 |
Managing Director |
|
Partner |
Muralidharan H.V |
Chief Financial Officer |
|
Membership No,: 063980 |
G. Vaidyanathan |
Company Secretary |
|
Bengaluru, April 24, 2019 |
Bengaluru, April 24, 2019 |
|
Mar 31, 2018
1. The bonus issue in the proportion of 1:1 i.e.1 (One) bonus equity share of ''10 each for every 1 (one) fully paid-up equity share held was approved by the shareholders of the Company on September 7, 2017 through postal ballot. For this purpose, September 19, 2017, was fixed as the record date. Consequently, on September 20, 2017, the Company allotted 31,138,220 shares and of '' 311,382,200 (representing par value of '' 10 per share) has been transferred from general reserve to share capital.
2. Employee benefit plans
3.1a Defined contribution plans
The Company makes Provident Fund, Superannuation Fund and contributions to Employee State Insurance as defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.
The Company recognized i) Rs, 1239.70 lakhs and Rs, 1,170.26 lakhs for Provident Fund contributions for the year ended March 31, 2018 and March 31, 2017, respectively. ii) Rs, 604.77 lakhs and Rs, 476.91 lakhs for Superannuation Fund contributions for the year ended March 31, 2018 and March 31, 2017, respectively and iii) Rs, 6.34 lakhs and Rs, 4.77 lakhs for Employee State Insurance Scheme for the year ended March 31, 2018 and March 31, 2017, respectively in the Statement of profit and loss. The Company also had contributed towards Employee Social benefit Schemes outside India amounting to Rs, 2,309.90 lakhs and Rs, 1,925.83 lakhs for the year ended March 31, 2018 and March 31, 2017, respectively. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
4.1b Defined benefit plans
The Company offers gratuity (included as part of Contribution to Provident and other funds in Note 23 Employee benefits expense) to its eligible employees under defined benefit plans.
The gratuity plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days basic salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service. The gratuity fund is managed by third party fund.
The following table sets out the funded status of the defined benefit schemes and the amount recognized in the financial statements:
The expected benefits are based on the same assumptions as are used to measure the CompanyRs,s defined benefit plan obligations as at March 31, 2018. The Company is expected to contribute Rs, 990.00 lakhs to defined benefit obligations funds for the year ending March 31, 2019.
The discount rate is based on the prevailing market yields of Government of India securities as at the Balance Sheet date for the estimated term of the obligations. The estimate of future salary increases considered, takes into account the inflation, seniority, promotion, increments and other relevant factors.
The significant actuarial assumptions for the determination of the defined benefit obligations are discount rate, expected salary increase and employee turnover. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
If the discount rate increases (decreases) by 1%, the defined benefit obligations would decrease by Rs, 151.79 lakhs (increase by Rs, 173.95 lakhs) as at March 31, 2018. If the expected salary growth increases (decreases) by 1%, the defined benefit obligations would increase by Rs, 176.70 lakhs (decrease by Rs, 156.64 lakhs) as at March 31, 2018. If the employee turnover rate increases (decreases) by 1%, the defined benefit obligation would increase by Rs, 28.03 lakhs (decrease by Rs, 32.47 lakhs).
The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligations as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumption may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calculated using the Projected Unit Credit Method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the balance sheet.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years. Each year an Asset - Liability matching study is performed in which the consequences of the strategic investment policies are analysed in terms of risk and return profiles. Investment and contribution policies are integrated within this study.
5. Financial instruments- Fair values and Risk management
The significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2.11 to the financial statements.
(b) Fair value hierarchy:
The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:
⢠Level 1 âInputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
⢠Level 2âInputs are 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 âInputs are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.
The investments included in Level 2 of fair value hierarchy have been valued using quotes available for similar assets and liabilities in the active market. The investments included in Level 3 of fair value hierarchy have been valued using the cost approach to arrive at their fair value. The cost of unquoted investments approximate the fair value because there is a range of possible fair value measurements and the cost represents estimate of fair value within that range.
The following table summarises financial assets and liabilities measured at fair value on a recurring basis and financial assets that are not measured at fair value on a recurring basis (but fair value disclosures are required):
(c) Financial risk management
The Company is exposed primarily to fluctuations in credit, liquidity and market risks, which may adversely impact the fair value of its financial instruments. The company has a risk management policy which covers risks associated with the financial assets and financial liabilities. The risk management policy is approved by the Board of Directors. The focus of risk management committee is to assess the unpredictability of the financial environment and to mitigate potential adverse effects on the financial performance of the company.
(d) Interest rate risk
The Company''s investments are primarily in fixed rate interest bearing fixed deposits with banks. Hence the Company is not significantly exposed to interest rate risk.
(e) Credit risk:
Credit risk is the risk of financial loss arising from counter party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, unbilled revenue, derivative financial instruments, cash and cash equivalents, other bank balances and other financial assets. Other bank balances include bank deposits for an amount of Rs, 3070.00 lakhs held with two schedule banks having high credit-rating which are individually in excess of 10% or more of the company bank deposits for the year ended March 31, 2018. Trade receivables and unbilled revenue include an amount of Rs, 10,116.71 lakhs held with one customer having high credit-rating which are individually in excess of 10% or more of company trade receivables and unbilled revenue for the year ended March 31, 2018.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to the credit risk was Rs, 79,069.99 lakhs and Rs, 55,699.91 lakhs as at March 31, 2018 and March 31, 2017, respectively, being the total of the carrying amount of balances principally with banks, other bank balances, trade receivables, unbilled revenue and other financial assets.
The Company''s exposure to customers is diversified and except one customer, no single customer contributes to more than 10% and 10% of outstanding accounts receivable and unbilled revenue as at March 31, 2018 and March 31, 2017, respectively.
Geographic concentration of credit risk is allocated based on the location of the customers.
ii) Liquidity risk:
Liquidity risk refers to the risk that Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and to ensure that sufficient funds are available for use as per requirements.
The Company consistently generates sufficient cash flows from operations to meet its financial obligations as and when they fall due.
iii) Market risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the foreign currency exchange rates, credit, liquidity and other market changes. The Company''s exposure to market risk is primarily on account of foreign currency exchange rate risk.
(a) Foreign currency exchange rate risk:
The fluctuation in foreign currency rates may have potential impact on the statement of profit or loss and other comprehensive income and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.
Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in US Dollar, Great Britain Pound and Euro against the functional currency of the Company.
The Company, as per its risk management policy, uses derivative instruments primarily to cover the exchange rate risks. Further, any movement in the foreign currency of the various operations of the company against major foreign currencies may impact company''s revenue in international business.
The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange risk. It covers a part of these risks by using derivative financial instruments in line with its risk management policies.
The foreign exchange rate sensitivity is calculated by aggregation of the net foreign exchange rate exposure and a simultaneous parallel foreign exchange rates shift of all the currencies by 10% against the functional currency of the company.
The following analysis has been worked out based on the net exposures of the company as of the date of balance sheet which could affect the statement of profit and loss and other comprehensive income and equity. Further the exposure indicated below is mitigated by some of the derivative contracts entered into by the company.
10% appreciation/depreciation of the respective foreign currencies with respect to functional currency of the company would result in decrease/ increase in the company''s profit before tax by approximately Rs, 3,596.88 lakhs for the year ended March 31, 2018 and Rs, 3,507.32 lakhs for the year ended March 31, 2017 respectively.
*Others include AED, CAD, JPY, KRW, MYR, SGD, ZAR , CNY, etc.
The Company use various derivative financial instruments governed by policies approved by the board of directors such as foreign exchange forward and option contracts to manage and mitigate its exposure to foreign exchange rates. The counter party is generally a bank. The Company can enter into contracts for period up to one year.
The following table presents the aggregate contracted principal amounts of the Company''s derivative contracts outstanding:
6. Related party transactions
The Company''s material related party transactions and outstanding balances are with its group companies with whom the Company routinely enters into transactions in the ordinary course of business.
Related parties with their relationship
Names of related parties Description of relationship
Tata Sons Limited Company with significant influence
Mr. Madhukar Dev, Managing Director Key Managerial Personnel
Mr. Muralidharan H.V, Chief Financial Officer (w.e.f. July 27, Key Managerial Personnel 2017)
Mr. Ramaseshan K, Chief Financial Officer(Up to May 31, Key Managerial Personnel 2017)
Mr. G. Vaidyanathan, Company Secretary Key Managerial Personnel
Tata Elxsi Employees'' Provident Fund Trust Post-employment benefit plan of Tata Elxsi Limited
Tata Elxsi Employees'' Gratuity Fund Trust Post-employment benefit plan of Tata Elxsi Limited
Tata Elxsi Employees'' Superannuation Fund Trust Post-employment benefit plan of Tata Elxsi Limited
Tata Consultancy Services Limited Subsidiary of Tata Sons Ltd
Tata Sky Limited Subsidiary of Tata Sons Ltd
Tata Capital Financial Services Ltd Subsidiary of Tata Sons Ltd
Tata Housing Development Company Ltd Subsidiary of Tata Sons Ltd
Tata International West Asia DMCC Subsidiary of Tata Sons Ltd
Tata Limited Subsidiary of Tata Sons Ltd
Tata-Aig General Insurance Company Limited Subsidiary of Tata Sons Ltd
TC Travel And Services Ltd ( Up to Oct 30, 2017) Subsidiary of Tata Sons Ltd
The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends. The above figures do not include provisions for compensated absences leave, gratuity and premium paid for group health insurance as separate actuarial valuation / premium paid are not available.
The transactions during the year ended March 31, 2017 and balances outstanding as at March 31, 2017:
Notes:
i. Pending resolution of the respective proceedings, it is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above as it is determinable only on receipt of judgments/decisions pending with various forums/authorities.
ii. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial position.
8. Segment information
The Chief Executive Officer and Managing Director of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108 - operating segments. The CODM evaluates the Company''s performance and allocates resources based on an analysis of various performance indicators by industry classes. Accordingly, the segment information has been presented for industry classes.
The Company has identified business segments as its primary segment. Business segments are primarily system integration & support and software development & services.
Each segment item reported is measured at the measure used to report to CODM for the purposes of making decisions about allocating resources to the segment and assessing its performance.
Revenues and expenses directly attributable to segments are reported under each reportable segment. All other expenses which are not attributable or allocable to segments have been disclosed as unallocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallocable. Property, plant & equipment that are used interchangeably amongst segments are not allocated to primary segment.
The geographic segments individually contributing 10 percent or more of the Company''s revenues and segment noncurrent operating assets are shown separately:
Information about major customers:
The revenues of Rs, 132,938.93 (previous year Rs, 117,072.39) lakhs arising from the software development and services segment includes Rs, 35,079.76 (Previous year Rs, 32,763.89) lakhs representing revenue of more than 10% of the total revenue of the Company is from one customer.
9. Disclosures required under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006
10. Corporate Social Responsibility:
a. Gross amount required to be spent by the Company during the year Rs, 375.09 lakhs (March 31, 2017 Rs, 282.09 lakhs)
* Includes overhead expense of Rs, 18.75 lakhs (March 31, 2017 Rs, 14.10 lakhs)
36. The Company has entered into incubation agreement for providing services pertaining to promotion of business of the entrepreneurs and also providing infrastructure facilities and resources. In consideration for the services rendered shares has been allocated /transferred as under.
Considering probability of successful outcome of such development and the ability of these entities to commercialise the product being developed, as a matter of prudence the company has recorded these investments at Rs, 1/-. Any gain on such investment will be recognized on its disposal.
11. The aggregate amount of research and development expenditure recognized as an expense during the year is Rs, 1,990.67 lakhs (Previous year Rs, 1,689.82 lakhs ).
12. Subsequent event note Dividends
During the year ended March 31, 2018 the Company paid total dividends of Rs, 16 per equity share for the year ended March 31, 2017. During the year ended March 31, 2017 the Company paid total dividends of Rs, 14 per equity share for the year ended March 31, 2016.
Dividends declared by the Company are based on the profit available for distribution. Distribution of dividend out of General Reserve and Retained earnings is subject to applicable dividend distribution tax. On April 26, 2018, the Board of Directors of the Company have proposed a final dividend of Rs, 11 per share in respect of the year ended March 31, 2018 subject to the approval of shareholders at the Annual General Meeting.
13. Previous year''s/period figures have been regrouped / reclassified wherever necessary to correspond with the current year''s/periods classification / disclosure.
14. Previous year financial statements were audited by a firm other than B S R & Co LLP.
Mar 31, 2017
II. Forward exchange contracts and options [being derivative instruments], which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables.
1 Employee benefit plans
2 a Defined contribution plans
The Company makes Provident Fund, Superannuation Fund and contributions Employee State Insurance as defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognized Rs,,170.26 lakhs (Year ended 31 March, 2016 Rs,902.21 lakhs) for Provident Fund contributions, Rs, 476.91 lakhs (Year ended 31 March, 2016 Rs, 434.13 lakhs) for Superannuation Fund contributions and Employee State Insurance Scheme Rs,4.77 lakhs (Year ended 31 March, 2016 Rs,3.62 lakhs) in the Statement of Profit and Loss. Company also had contributed towards Employee Insurance Schemes outside India amounting to Rs, 130.87 lakhs (Year ended 31st March. 2016 Rs,87.56 lakhs). The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
3 b Defined benefit plans
The Company offers gratuity (included as part of Contribution to Provident and other funds in Note 20 Employee benefits expense) to its employees under defined benefit plans.
The following table sets out the funded status of the defined benefit schemes and the amount recognized in the financial statements:
4 Segment information
The Company has identified business segments as its primary segment and geographic segments as its secondary segment. Business segments are primarily System integration & support and Software development & services. Revenues and expenses directly attributable to segments are reported under each reportable segment.
All other expenses which are not attributable or allocable to segments have been disclosed as unallowable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as unallowable. Fixed assets that are used interchangeably amongst segments are not allocated to primary and secondary segments. Geographical revenues are allocated based on the location of the customer. Geographic segments of the Company are India, Europe, US, Japan and others.
Note: Figures in bracket with respect to statement of profit and loss items pertain to year ended 31st Mar 2016. Segment revenue in India comprises revenue from System Integration and Software development and services. Segment revenue outside India predominantly comprises revenue from software development and services. Segment assets include all assets relating to the segment and consist principally of fixed assets, receivables, inventory, other current and non-current assets. Assets located outside India primarily relate to trade receivables.
Considering probability of successful outcome of such development and the ability of these entities to commercialize the product being developed, as a matter of prudence the company has recorded these investments at Re.1/-. Any gain on such investment will be recognized on its disposal.
5. The aggregate amount of research and development expenditure recognized as an expense during the year is Rs, 1689.82 lakhs (Previous year Rs, 1556.00 lakhs )
6 The Board of Directors at its meeting held on April 27, 2017 have recommended a dividend of 160% (Rs, 16 per equity share of par value Rs,10/- each) which is subject to approval of shareholders. If approved, this would result in a cash outflow of approximately Rs,5,996.36 lakhs, inclusive of dividend distribution tax.
7. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s/ periods classification / disclosure.
Mar 31, 2015
1 Corporate information
Tata Elxsi Limited was incorporated in 1989. The Company provides
product design and engineering services to the consumer electronics,
communications & transportation industries and systems integration and
support services for enterprise customers. It also provides digital
content creation for media and entertainment industry.
The company is headquartered in Bengaluru, and operates through
delivery centers in Bengaluru, Chennai, Pune, Mumbai and
Tiruvananthapuram. Its sales operations are located in multiple cities
in India, and in multiple international locations including Dubai,
France, Germany, Japan, UK, Ireland and USA.
Rs lakhs
As at As at
31 March, 2015 31 March, 2014
2.1 Contingent liabilities and
commitments (to the extent not provided
for)
(i) Contingent liabilities
(a) Claims against the Company not
acknowledged as debt
1. Disputed demands for Income Tax
aggregates. 580.83 502.40
2. Disputed demands for Wealth Tax
aggregates. 25.89 25.89
3. Service tax matters 842.26 842.26
4. Bank Guarantees 766.16 865.07
(b) Guarantees - Guarantees given to a
Housing Finance Company for 37.06 51.85
housing loans availed by employees during
their employment with the company
(ii) Capital Commitments:
Estimated amount of contracts remaining
to be executed on capital account and
not provided for Tangible fixed assets 184.73 780.00
Intangible assets 61.94 314.99
2.2 Details on derivatives instruments and unhedged foreign currency
exposures
I. The following derivative positions are open as at 31 March, 2015.
These transactions have been undertaken to act as economic hedges for
the Company''s exposures to various risks in foreign exchange markets
and may/ may not qualify or be designated as hedging instruments. The
accounting for these transactions is stated in Notes 2.10 and 2.21
(a) Forward exchange contracts and options [being derivative
instruments], which are not intended for trading or speculative
purposes but for hedge purposes to establish the amount of reporting
currency required or available at the settlement date of certain
payables and receivables.
(i) Outstanding forward exchange contracts entered into by the Company
as on 31 March, 2015 - Nil Previous year (Nil)
In accordance with the transition provisions prescribed in Schedule II
to the Companies Act, 2013, the Company has fully depreciated the
carrying value of assets, net of residual value, where the remaining
useful life of the asset was determined to be nil as on April 1, 2014,
and has adjusted an amount of Rs. 1,329.58 lakhs (net of deferred tax of
Rs. 684.63 lakhs) against the opening Surplus balance in the Statement of
Profit and Loss under Reserves and Surplus.
The depreciation expense in the Statement of Profit and Loss for the
year is higher by Rs. 311.72 lakhs consequent to the change in the useful
life of the assets.
2.3 Employee benefit plans
2.3.a Defined contribution plans
The Company makes Provident Fund and Superannuation Fund contributions
to defined contribution plans for qualifying employees. Under the
Schemes, the Company is required to contribute a specified percentage
of the payroll costs to fund the benefits. The Company recognised Rs.
697.13 lakhs (Year ended 31 March, 2014 Rs. 608.74 lakhs) for Provident
Fund contributions and Rs. 360.38 lakhs (Year ended 31 March, 2014Rs.242.41
lakhs) for Superannuation Fund contributions, Employee state Insurance
Scheme Rs.3.86 lakhs (Year ended 31 March, 2014 Rs. 3.46 lakhs) in the
Statement of Profit and Loss.Company makes foreign contribution towards
ESIC Rs. 92.33 lakhs (Year ended 31 March, 2014Rs.60.08 lakhs) The
contributions payable to these plans by the Company are at rates
specified in the rules of the schemes.
2.4 Segment information
The Company has identified business segments as its primary segment and
geographic segments as its secondary segment. Business segments are
primarily System integration & support and Software Development &
Services. Revenues and expenses directly attributable to segments are
reported under each reportable segment. All other expenses which are
not attributable or allocable to segments have been disclosed as
unallocable expenses. Assets and liabilities that are directly
attributable or allocable to segments are disclosed under each
reportable segment. All other assets and liabilities are disclosed as
unallocable. Fixed assets that are used interchangeably amongst
segments are not allocated to primary and secondary segments.
Geographical revenues are allocated based on the location of the
customer. Geographic segments of the Company are India, US, UK, Europe,
and Others
3 The schedule III to the Companies Act, 2013 has become effective
from 01 April, 2014 for the preparation of financial statements and
accordingly, disclosure and presentation have been made in the
financial statements.
4 Previous year''s figures have been regrouped/reclassified wherever
necessary to correspond with the current year''s classification/
disclosure.
Mar 31, 2014
1 Corporate information
Tata Elxsi Limited was incorporated in 1989. The Company provides
product design and engineering services to the consumer electronics,
communications & transportation industries and systems integration and
support services for enterprise customers. It also provides digital
content creation for media and entertainment industry.
The Company is headquartered in Bangalore, and operates through
delivery centers in Bangalore, Chennai, Pune, Mumbai and
Tiruvananthapuram.
Its sales operations are located in multiple cities in India, and in
multiple international locations including Dubai, France, Germany,
Japan, UK and USA.
Rs. lakhs
As at 31 As at 31
March,
2014 March, 2013
2 Contingent liabilities and commitments
(to the extent not provided for)
(i) Contingent liabilities
(a) Claims against the Company not
acknowledged as debt
1. Disputed demands for Income Tax
aggregates 502.40 502.40
2. Disputed demands for Wealth Tax
aggregates 25.89 25.89
3. Disputed amount of Sales Tax aggregates  656.72
4. Service tax matters 842.26 842.26
5. Other claims not acknowledged as debts  484.85
(b) Guarantees- Guarantees given to a
Housing Finance Company for 51.85 73.96
housing loans availed by employees
during their employment with
the company
(ii) Capital Commitments :
Estimated amount of contracts remaining to
be executed on capital
account and not provided for
Tangible fixed assets 780.00 465.29
Intangible assets 314.99 250.39
3.1 Details on derivatives instruments and unhedged foreign currency
exposures
I. The following derivative positions are open as at 31 March, 2014.
These transactions have been undertaken to act as economic hedges for
the Company''s exposures to various risks in foreign exchange markets
and may / may not qualify or be designated as hedging instruments. The
accounting for these transactions is stated in Notes 2.10 and 2.21.
(a) Forward exchange contracts and options (being derivative
instruments), which are not intended for trading or speculative
purposes but for hedge purposes to establish the amount of reporting
currency required or available at the settlement date of certain
payables and receivables.
(i) Outstanding forward exchange contracts entered into by the Company
as on 31st March, 2014-Nil Previous year (Nil)
(ii) Outstanding option contracts entered into by the Company as on
31st March, 2014
4 Disclosures under Accounting Standards
4.1 Employee benefit plans
4.1.a Defined contribution plans
The Company makes Provident Fund and Superannuation Fund contributions
to Defined contribution plans for qualifying employees. Under the
Schemes, the Company is required to contribute a specified percentage of
the payroll costs to fund the Benefits. The Company recognised Rs. 608.74
lakhs (Year ended 31st March, 2013 Rs. 628.74 lakhs) for Provident Fund
contributions and Rs. 242.41 lakhs (Year ended 31st March, 2013 Rs. 232.69
lakhs) for Superannuation Fund contributions, Employee state Insurance
Scheme Rs. 3.46 lakhs (Year ended 31st March, 2012 Rs. 3.57 lakhs) in the
Statement of Profit and Loss. The contributions payable to these plans
by the Company are at rates specified in the rules of the schemes.
4.1.b Defined benefit plans
The Company offers gratuity (included as part of Contribution to
Provident and other funds in Note 21 Employee Benefits expense) to its
employees under Defined benefit plans.
4.2 Segment information
The Company has identified business segments as its primary segment and
geographic segments as its secondary segment. Business segments are
primarily System integration & support and Software Development &
Services. Revenues and expenses directly attributable to segments are
reported under each reportable segment. All other expenses which are
not attributable or allocable to segments have been disclosed as
un-allocable expenses. Assets and liabilities that are directly
attributable or allocable to segments are disclosed under each
reportable segment. All other assets and liabilities are disclosed as
un-allocable. Fixed assets that are used interchangeably amongst
segments are not allocated to primary and secondary segments.
Geographical revenues are allocated based on the location of the
customer. Geographic segments of the Company are India, Europe, US,
Japan and Others
Segment revenue in India comprises revenue from System Integration and
software development and services. Segment revenue outside India
predominantly comprises revenue from software development and services.
Segment assets include all assets relating to the segment and consist
principally of Fixed assets, Receivables, Inventory, Other Current and
Non-Current Assets. Assets located outside India primarily relate to
Trade Receivables.
4.3.c Advance to A Squared Elxsi Entertainment LLC, USA
Exceptional item in the previous year relates to the settlement of the
demand received from the Banker to whom the Company had given a
financial guarantee on behalf of A Squared Elxsi Entertainment LLC, USA
("A2E2"), an entity that was proposed to be a joint venture company of
the Company.
5 Previous year''s figures have been regrouped/reclassified wherever
necessary to correspond with the current year''s
classification/disclosure.
Mar 31, 2013
1 Corporate information
Tata Elxsi Limited was incorporated in 1989. The Company provides
product design and engineering services to the consumer electronics,
communications & transportation industries and systems integration and
support services for enterprise customers. It also provides digital
content creation for media and entertainment industry
The company is headquartered in Bangalore, and operates through
delivery centers in Bangalore, Chennai, Pune, Mumbai and
Thiruvananthapuram.
Its sales operations are located in multiple cities in India, and in
multiple international locations including Dubai, France, Germany,
Japan, UK and USA.
2.1 Details on derivatives instruments and unhedged foreign currency
exposures
I. The following derivative positions are open as at 31 March, 2013.
These transactions have been undertaken to act as economic hedges for
the Company''s exposures to various risks in foreign exchange markets
and may / may not qualify or be designated as hedging instruments. The
accounting for these transactions is stated in Notes 2.10 and 2.21
(a) Forward exchange contracts and options (being derivative
instruments), which are not intended for trading or speculative
purposes but for hedge purposes to establish the amount of reporting
currency required or available at the settlement date of certain
payables and receivables.
3.1 Employee benefit plans 24.1.a Defined contribution plans
The Company makes Provident Fund and Superannuation Fund contributions
to defined contribution plans for qualifying employees. Under the
Schemes, the Company is required to contribute a specified percentage
of the payroll costs to fund the benefits. The Company recognised
Rs.628.74 lakhs (Year ended 31 March, 2012 Rs. 471.93 lakhs) for
Provident Fund contributions and Rs.232.69 lakhs (Year ended 31 March,
2012 Rs. 197.99 lakhs) for Superannuation Fund contributions, Employee
state Insurance Scheme Rs. 3.57 lakhs (Year ended 31 March, 2012 Rs
5.41 lakhs) in the Statement of Profit and Loss. The contributions
payable to these plans by the Company are at rates specified in the
rules of the schemes.
3.2 Segment information
The Company has identified business segments as its primary segment and
geographic segments as its secondary segment. Business segments are
primarily System integration & support and Software Development &
Services. Revenues and expenses directly attributable to segments are
reported under each reportable segment. All other expenses which are
not attributable or allocable to segments have been disclosed as
unallocable expenses. Assets and liabilities that are directly
attributable or allocable to segments are disclosed under each
reportable segment. All other assets and liabilities are disclosed as
unallocable. Fixed assets that are used interchangeably amongst
segments are not allocated to primary and secondary segments.
Geographical revenues are allocated based on the location of the
customer. Geographic segments of the Company are India, Europe, US,
Japan and Others
3.3.a Advance to A Squared Elxsi Entertainment LLC, USA
The Company had entered into an agreement with A Squared Entertainment
LLC, USA ("A2") for carrying on business in the field of animated
content development, development of related characters/intellectual
property and licensing thereof to merchandising companies, pursuant to
which A Squared Elxsi Entertainment LLC ("A2E2") was incorporated to
carry on the activities stated in the agreement. In the previous year,
the Company remitted USD 1,000,001 as Share Application Money to A2E2
against which shares were yet to be allotted. The Company had
recognised Rs.411 lakhs (Approximately USD 7,95,000) in the previous
year ended 31.03.2012 and Rs.107 lakhs (Approximately USD 2,05,000)
during the current year as provision against such Share Application
Money. On June 22nd 2012, the company had intimated A2E2 of it''s
decision not to further finance the operation of A2E2, pursuant to
which the company ceased its association with A2 and A2E2. Subsequently
the company received a demand from the Banker of A2E2 to whom the
company had given a financial guarantee towards the outstanding dues of
Rs. 1,589.57 lakhs (USD 30.19 lakhs) due by A2E2 to its banker. The
Company has settled it''s obligation towards the bank guarantee and
accrued the said amount, which is included as exceptional item in the
financials.
4 Previous year''s figures have been regrouped / reclassified wherever
necessary to correspond with the current year''s classification /
disclosure.
Mar 31, 2012
1 Corporate information
Tata Elxsi Limited was incorporated in 1989. The Company provides
product design and engineering services to the consumer electronics,
communications & transportation industries and systems integration and
support services for enterprise customers. It also provides digital
content creation for media and entertainment industry.
The company is headquartered in Bangalore, and operates through
delivery centers in Bangalore, Chennai, Coimbatore, Pune, Mumbai and
Tiruvananthapuram.
Its sales operations are located in multiple cities in India, and in
multiple international locations including Dubai, France, Germany,
Japan, UK and USA.
Rs. lakhs
As at 31, As at 31,
March March
2012 2011
2.1 Contingent liabilities and
commitments (to the extent not provided for)
(i) Contingent liabilities
(a) Claims against the Company not
acknowledged as debt
1. Disputed demands for Income Tax aggregates. 1,038.12 1,040.69
Rs. lakhs
As at 31, As at 31,
March March
2012 2011
2. Disputed demands for Wealth Tax aggregates. 25.89 25.89
3. Disputed amount of Sales Tax aggregates. 656.83 656.83
4. Service tax matters. 842.26 193.61
5. Amount not recognised as debts. 292.44 -
(b) Guarantees- Guarantees given to a Housing
Finance Company for housing loans 104.96 122.87
availed by employees during their
employment with the company
(c) Guarantee given to a bank for a loan to
be secured by A Squared Elxsi Entertainment 1,594.50 -
LLC, USA(A2E2)
(d) Loan drawn by A2E2 against the above
guarantee 1,024.38 -
(ii) Capital Commitments :
Estimated amount of contracts remaining to be
executed on capital account and not
provided for :
Tangible assets 198.30 215.10
Intangible assets 141.50 37.51
2.2 Details on derivatives instruments and unhedged foreign currency
exposures
I. The following derivative positions are open as at 31 March, 2012.
These transactions have been undertaken to act as economic hedges for
the Company's exposures to various risks in foreign exchange markets
and may / may not qualify or be designated as hedging instruments. The
accounting for these transactions is stated in Notes 2.11 and 2.22
(a) Forward exchange contracts and options [being derivative
instruments], which are not intended for trading or speculative
purposes but for hedge purposes to establish the amount of reporting
currency required or available at the settlement date of certain
payables and receivables.
3.1 Employee benefit plans
3.1 .a Defined contribution plans
The Company makes Provident Fund and Superannuation Fund contributions
to defined contribution plans for qualifying employees. Under the
Schemes, the Company is required to contribute a specified percentage
of the payroll costs to fund the benefits. The Company recognised Rs.
471.93 lakhs (Year ended 31 March, 2011 Rs. 415.99 lakhs) for Provident
Fund contributions and Rs.197.99 lakhs (Year ended 31 March, 2011 Rs.
150.95 lakhs) for Superannuation Fund contributions in the Statement of
Profit and Loss. The contributions payable to these plans by the
Company are at rates specified in the rules of the schemes.
3.2 Segment information
The Company has identified business segments as its primary segment and
geographic segments as its secondary segment. Business segments are
primarily System Integration & Support and Software Development &
Services. Revenues and expenses directly attributable to segments are
reported under each reportable segment. All other expenses which are
not attributable or allocable to segments have been disclosed as
unallocable expenses. Assets and liabilities that are directly
attributable or allocable to segments are disclosed under each
reportable segment. All other assets and liabilities are disclosed as
unallocable. Fixed assets that are used interchangeably amongst
segments are not allocated to primary and secondary segments.
Geographical revenues are allocated based on the location of the
customer. Geographic segments of the Company are India, Europe, US,
Japan and Others Segment asset include all assets relating to the
segment and consist principally of fixed assets, receivables, other
current assets and non-current assets.
Segment liabilities include all liabilities relating to the segment and
consist principally of trade payables on other operating liabilities.
Note: Figures in bracket relates to the previous year Segment revenue
in India comprises revenue from System Integration and software
development and services. Segment revenue outside India predominantly
comprises revenue from software development and services. Segment
assets include all assets relating to the segment and consist
principally of Fixed assets, Receivables, Inventory, Other Current and
Non-Current Assets. Assets located outside India primarily relate to
Trade Receivables.
3.3.c Investment in A Squared Elxsi Entertainment LLC, USA
The Company has entered into a Joint Venture Agreement with A Squared
Entertainment LLC, USA ("A2") for carrying on business in the field of
animated content development, development of related characters/
intellectual property, and licensing thereof to merchandising
companies, pursuant to which A Squared Elxsi Entertainment LLC, USA
("A2E2") has been incorporated to carry on the activities of the joint
venture. The Company has remitted USD 1,000,001 as Share Application
Money to A2E2, against which shares are yet to be allotted as at March
31, 2012. The JV Partner, A2 is in the process of completing its
obligation under the agreement, on completion of which and issuance of
equity to both the parties, A2E2 will become a subsidiary of the Company.
4 The Revised Schedule VI has become effective from 1 April, 2011 for
the preparation of financial statements. This has significantly
impacted the disclosure and presentation made in the financial
statements. Previous year's figures have been regrouped / reclassified
wherever necessary to correspond with the current year's classification
/ disclosure.
Mar 31, 2011
1. Estimated amount of contracts remaining to be executed on capital
account (net of advances) Rs.252.61 lakhs (Previous year Rs. 248.59
lakhs).
2. Contingent liabilities
a) Disputed demands for Income Tax aggregates to Rs. 1,040.69 lakhs
(Previous year Rs. 921.90 lakhs).
b) Disputed demands for Wealth Tax aggregates to Rs. 25.89 lakhs
(Previous year Rs. 25.89 lakhs).
c) Guarantees given to Housing Finance Company for housing loans
availed by employees during their employment with the Company Rs.122.87
lakhs (Previous year Rs. 135.03 lakhs).
d) Disputed amount of Sales Tax aggregates to Rs. 656.83 lakhs
(Previous year Rs. 0.11 Lakhs).
e) Service tax matters Rs. 193.61 lakhs (Previous year: Nil)
The above information that is given in Schedule 11 - "Current
Liabilities & Provisions" regarding Micro and Small Enterprises has
been determined to the extent such parties have been identified on the
basis of information collected by the Management based on enquiries
made with the vendors. This has been relied upon by the auditors.
Basic Earnings per Share is calculated by dividing the net profit or
loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
3. Provision for tax includes Rs. 135.00 lakhs (Previous year Rs.
140.04 lakhs) in respect of overseas operations.
4. Employee benefits
The estimates of future salary increase considered in the actuarial
valuation take into account inflation, seniority, promotion and other
relevant factors such as supply and demand in the employment market.
The above information is certified by the actuary and relied upon by
the auditors.
The employers best estimates of the contribution expected to be paid to
the plan during the next year is Rs 163.61 lakhs (Previous year: Rs.
130.18 lakhs)
b) Defined contribution plans
The Company makes Provident Fund and Superannuation Fund contributions
to defined contribution retirement benefit plans for qualifying
employees. Under the schemes, the Company is required to contribute a
specified percentage of the payroll costs to fund the benefits.
The Provident Fund scheme additionally requires the Company to
guarantee payment of interest at rates notified by the Central
Government from time to time. However considering the size of the
investment in the Provident Fund and the Provident Fund liabilities
accrued to the employees at the Balance Sheet Date, the Company
believes that there would not be any shortfall in the Fund balance and
hence no actuarial valuation has been carried out towards interest
payments to be made in the future.
The Company recognised Rs. 415.99 Lakhs (Previous year Rs.425.97 Lakhs)
for provident fund contributions and Rs. 150.95 Lakhs (Previous year:
Rs. 161.62 Lakhs) for superannuation contributions in the Profit and
Loss account. The contributions payable to these plans by the Company
are at rates specified in the rules of the schemes.
5. Related party disclosure
A. Related parties and their relationships
Tata Elxsi (Singapore) Pte Ltd. Subsidiary Company
Tata Sons Limited Company with significant
influence
Mr. Madhukar Dev - Managing Director Key management personnel
Note:
Related party relationship is as identified by the Company on the basis
of information available with them and relied upon bythe auditors.
There have been no dues from or to related parties which have been
written off or written back during the year.
6. Operating Lease
The Company has entered into operating leases in respect of office
premises. The lease rentals charged to the Profit & Loss account in
respect of these leases amount to Rs. 1,193.81 lakhs. (Previous Year
Rs. 1,136.12 Lakhs).
7. Segment reporting
The Companys operations predominantly relate to providing systems
integration and software development services in the Information
Technology field.
Accordingly the Systems Integration & Support and Software Development
& Services comprise the primary basis for segmental information. The
secondary segment is geographical, determined based on the location of
the clients. Clients are classified as either India or Overseas.
8. Derivative Financial Instruments
Outstanding Forward Exchange Contracts, which are not intended for
trading or speculative purposes, but for hedge purposes, to establish
the amount of reporting currency required or available at the
settlement date of certain payables and receivables, are as follows.
9. Notes relating to Cash Flow Statement
a) The cash flow statement has been prepared under the "Indirect
Method" as set out in the Accounting Standard 3 - Cash Flow Statements
as per the Companies (Accounting Standards) Rules, 2006.
b) Cash and cash equivalents include balances with scheduled banks on
dividend account Rs.235.82 Lakhs (Previous year Rs. 220.85 Lakhs) which
are not available for use by the company.
c) Cash and cash equivalents include balances in deposit accounts Rs.
1.72 Lakhs (Previous year Rs. 1.72 Lakhs) which are not available for
use by the company.
10. The Board of Directors of the company has given consent with
regard to non-disclosure of information referred to in paragraphs
3(i)(a) and 3(ii)(b) of Schedule VI part II of the Companies Act, 1956
under notification S.0.301 (E) dated February 08,2011 issued by the
Ministry of Corporate Affairs, Government of India.
11. Figures for the previous year have been regrouped and rearranged
wherever necessary to conform to the current years classifications.
Mar 31, 2010
1. Estimated amount of contracts remaining to be executed on capital
account (net of advances) Rs.248.59 lakhs (previous year Rs. 308.11
lakhs).
2. Contingent liabilities
a) Disputed demands for Income Tax aggregates to Rs. 921.90 lakhs
(Previous year Rs. 685.99 lakhs).
b) Disputed demands for Wealth Tax aggregates to Rs. 25.89 lakhs
(Previous year Rs. 25.89 lakhs).
c) Guarantees given to Housing Finance Company for housing loans
availed by employees during their employment with the Company Rs.
135.03 lakhs (Previous year Rs. 152.88 lakhs).
d) Disputed amount of Sales Tax aggregates to Rs. 0.11 lakhs (Previous
year Rs. 1.50 Lakhs).
e) Debts discounted / factored with a banker Rs Nil ( Previous year: Rs
928 lakhs).
3. There are no Micro, Small and Medium Enterprises, to whom the
Company owes dues, as at March 31,2010.This information has been
determined to the extent such parties have been identified on the basis
of information available with the company and relied upon by the
auditors.
4. Provision for tax includes Rs. 140.04 lakhs (previous year Rs.
225.00 lakhs) in respect of overseas operations.
b Defined contribution plans
The Company makes Provident Fund and Superannuation Fund contributions
to defined contribution retirement benefit plans for qualifying
employees. Under the schemes, the Company is required to contribute a
specified percentage of the payroll costs to fund the benefits.
The Provident Fund scheme additionally requires the Company to
guarantee payment of interest at rates notified by the Central
Government from time to time. However considering the size of the
investment in the Provident Fund and the Provident Fund liabilities
accrued to the employees at the Balance Sheet Date, the Company
believes that there would not beany shortfall in the Fund balance and
hence no actuarial valuation has been carried out towards interest
payments to be made in the future.
The Company recognised Rs. 785.00 Lakhs (Previous year Rs. 776.15
Lakhs) for provident fund contributions and Rs. 161.62 Lakhs (Previous
year: Rs. 159.05 Lakhs) for superannuation contributions in the Profit
and Loss account. The contributions payable to these plans by the
Company are at rates specified in the rules of the schemes.
5. Operating Lease
The Company has entered into operating leases in respect of office
premises. The lease rentals charged to the Profit & Loss account in
respect of these leases amount to Rs. 1,136.12 lakhs. (Previous Year
Rs. 1,205.34 Lakhs)
6. Segment reporting
The CompanyÃs operations predominantly relate to providing systems
integration and software development services in the Information
Technology field.
Accordingly the systems integration & support and software development
& services comprise the primary basis for segmental information. The
secondary segment is geographical, determined based on the location of
the clients. Clients are classified as either India or overseas.
7. Notes relating to Cash Flow Statement
a) The cash flow statement has been prepared under the ÃIndirect
Methodà as set out in Ãthe Accounting Standard 3 à Cash Flow
Statementsà as per the Companies (Accounting Standards) Rules, 2006.
b) Cash and cash equivalents include balances with scheduled banks on
dividend account Rs.220.85 Lakhs (Previous year Rs. 205.94 Lakhs) which
are not available for use by the company.
8. Figures for the previous year have been regrouped and rearranged
wherever necessary to conform to the current yearÃs classifications.
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