Notes to Accounts of TeamLease Services Ltd.

Mar 31, 2025

3.14 Provisions and contingent liability
Provision

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

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

Contingent liability

Contingent liability is:

(a) a possible obligation arising from past events and whose
existence will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events
not wholly within the control of the entity or

(b) a present obligation that arises from past events but is
not recognized because:

- it is not probable that an outflow of resources
embodying economic benefits will be required to
settle the obligation, or

- the amount of the obligation cannot be measured
with sufficient reliability.

The Company does not recognize a contingent liability
but discloses its existence and other required disclosures
in notes to the financial statements, unless the possibility
of any outflow in settlement is remote.

3.15 Dividend

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

3.16 Earnings Per Share (EPS)

Basic EPS is calculated by dividing the profit/loss for the
year attributable to equity shareholders of the Company
by the weighted average number of equity shares
outstanding during the year.

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

3.17 Operating segment

Operating segments are identified as those components
of the Company (a) that engage in business activities to
earn revenues and incur expenses (including transactions
with any of the Company''s other components (b) whose
operating results are regularly reviewed by the Company''s
Chief Executive Officer to make decisions about resource
allocation and performance assessment and (c) for which
discrete financial information is available. The accounting
policies consistently used in the preparation of the
financial statements are also applied to record revenue
and expenditure in individual segments.

The Company is engaged in the business relating to
rendering manpower staffing services and related
activities. These activities of the Company are reviewed
regularly by the chief operating decision maker from an
overall business perspective, rather than reviewing its
products/services as individual standalone components
and therefore subject to the same risk and reward and
accordingly falls within single business segment.

3.18 Significant accounting judgments, estimates and
assumptions

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

Estimates and assumptions

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

Defined benefit plans

The cost of the defined benefit plans and other post¬
employment benefits and the present value of the
obligation are determined using actuarial valuations. An

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

The calculation is most sensitive to changes in the
discount rate. In determining the appropriate discount
rate for plans operated in India, the management
considers the interest rates of government bonds where
remaining maturity of such bond correspond to expected
term of defined benefit obligation.

The mortality rate is based on publicly available mortality
tables. Those mortality tables tend to change only at
interval in response to demographic changes. Future
salary increases and gratuity increases are based on
expected future inflation rates. Further details about
gratuity obligations are given in Note 36.

Taxes

Deferred tax assets are recognised on deductible
temporary differences to the extent that it is probable
that taxable profit will be available against which the
deductible temporary differences can be utilised.
Significant management judgement is required to
determine the amount of deferred tax assets that can
be recognised, based upon the likely timing and the
level of future taxable profits together with future tax
planning strategies.

Impairment of non-current assets

Determining whether long-term investments and loans
are impaired requires an estimation of the value in use of
the individual investments in subsidiaries, associate and
joint venture or the relevant cash generating units. The
value in use calculation is based on Discounted Cash
Flow (''DCF'') model. Further, the cash flow projections
are based on estimates and assumptions relating to
operational performance, growth rate, operating margins
of the CGU, etc.

Other estimates

The preparation of financial statements involves estimates
and assumptions that affect the reported amount of
assets, liabilities, disclosure of contingent liabilities at the
date of financial statements and the reported amount
of revenues and expenses for the reporting period.
Specifically, the Company estimates the probability of
collection of accounts receivable by analysing historical

payment patterns, customer concentrations and current
economic trends. If the financial condition of a customer
deteriorates or there is an overall deterioration in the
credit risk macro environment, additional allowances
may be required in future.

3.19 Events after the reporting period

If the Company receives information after the reporting
period, but prior to the date of approved for issue, about
conditions that existed at the end of the reporting period, it
will assess whether the information affects the amounts that
it recognises in its financial statements. The Company will
adjust the amounts recognised in its financial statements
to reflect any adjusting events after the reporting period
and update the disclosures that relate to those conditions
in light of the new information. For non-adjusting events
after the reporting period, the Company will not change
the amounts recognised in its financial statements but
will disclose the nature of the non-adjusting event and an

estimate of its financial effect, or a statement that such an
estimate cannot be made, if applicable.

3.20 New and amended standards (Ind AS)

Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules
as issued from time to time. For the year ended 31
March 2025, MCA has not notified any new standards
or amendments to the existing standards applicable
to the Company.

Notes:

1) The Board of directors of TeamLease Digital Private Limited (TDPL), I.M.S.I. Staffing Private Limited (I.M.S.I.) and Keystone
Business Solutions Private Limited (Keystone), in their respective meetings held on 16 August 2022 approved the Scheme
of Amalgamation of I.M.S.I and Keystone with TDPL ("Scheme") pursuant to Sections 230 to 232 of the Companies Act,
2013 ("the Act") and other relevant provisions of the Act, to the extent applicable, with appointed date as April 01, 2022. The
Scheme was filed with the relevant jurisdictional office of National Company Law Tribunal (NCLT) on 6 September 2022.
During the previous year ended 31 March 2024, NCLT had approved Scheme with the appointed date as April 01, 2022.

2) On 20 December 2024, the Company entered into a Share Sale and Purchase Agreement with TSR Darashaw Private
Limited (''Seller'') and its promoters and acquired 90% stake in TSR Darashaw HR Services Private Limited (''TSR'') by
way of allotment of equity shares on fully diluted basis at an agreed consideration of H16.08 crores with an undertaking to
acquire the balance 10% stake in TSR for a fixed consideration of H1.60 crores and an additional consideration of an amount
equivalent to 10% of the profits earned by TSR for the period commencing 21 December 2024 until 30 September 2025.

3) On 6 January 2025, the Company entered into a Share Purchase Agreement with Crystal HR & Security Solutions Private
Limited (''CHSSPL'') and its promoters to acquire 30% stake by way of allotment of equity shares on fully diluted basis with
an intention to acquire the balance stake of 70% in multiple tranches, subject to approval of the Board of Directors of the
Company and on completion of the various terms and conditions set out in the Share Purchase Agreement.

Nature and purpose of other reserves

(i) Securities premium

Securities premium reserve is used to record the premium on issue of shares. The reserve is to be utilised in accordance
with the provisions of Section 52 of Companies Act, 2013.

(ii) Retained earnings

Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or
other distributions paid to shareholders. Retained earnings include re-measurement loss / (gain) on defined benefit plans,
net of taxes that will not be reclassified to standalone statement of profit and loss.

(iii) Share based payment reserves

This reserve relates to stock options and stock appreciation rights granted by the Company to employees under TeamLease
Employee Stock Option Plan and Employee Stock Appreciation Rights Plan 2019 respectively. Refer note 37 and note 38.

(iv) Capital redemption reserve

In accordance with section 69 of the Companies Act, 2013, the Company created capital redemption reserve equal to the
nominal value of shares bought back, as an appropriation from the free reserves.

Note 36: Employee benefit obligation

a. Gratuity (associates with reimbursement right from customers)

The Company has defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity
Act, 1972. Under the Act, every employee who has completed 5 years of service are eligible for gratuity on departure at 15
days salary (last drawn salary) for each completed year of service. The level of benefits provided depends on the member''s
length of service and salary at retirement age. The gratuity plan of the Company is unfunded.

In case of associates with reimbursement right from customers, the Company recognises the net benefit expense net of
reimbursement from its customers and recognises a right to reimbursement from customers in the balance sheet equivalent
to the net defined benefit liability.

The following table summarise the components of net benefit expense recognised in the standalone statement of profit and
loss and amounts recognised in the balance sheet for the gratuity benefit:

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined
benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.
The sensitivity analysis are based on a change in a significant assumption, keeping all other assumptions constant.
The sensitivity analysis may not be representative of an actual change in the defined benefit obligation as it is unlikely
that changes in assumptions would occur in isolation from one another.

Note:

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

2) Plan Characteristics and Associated Risks:

The Gratuity scheme is a Defined Benefit Plan that provides for a lump sum payment made on exit either by way
of retirement, death or disability. The benefits are defined on the basis of final salary and the period of service
and paid as lump sum at exit. The Plan design means the risks commonly affecting the liabilities and the financial
results are expected to be:

a) Discount rate risk : The defined benefit obligation calculated uses a discount rate based on government
bonds. If bond yields fall, the defined benefit obligation will tend to increase

b) Salary inflation risk : Higher than expected increases in salary will increase the defined benefit obligation

c) Demographic risk : This is the risk of variability of results due to unsystematic nature of decrements that include mortality,
withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward
and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate
withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year
as compared to a long service employee.

Note 37: Share based payments
Employee Share Option Scheme (ESOP)

The Company has granted stock options to employees of the Company and its subsidiaries under ''TeamLease Services Limited
ESOP Plan'' 2015. The options issued under the plan has term of 3-4 years and vest based on the terms of individual grants. When
exercisable, each option is convertible into one equity share. The exercise price of option is H 10. The stock options are restricted
for sale, pledge or transfer.

Tranche I and II - Total number of options granted were 126,640 out of which 110,522 options were exercised and 16,118 options
expired in earlier years.

Fair value of options granted

The fair value of stock options granted is estimated using Black-Scholes valuation model, which incorporates various assumptions
including expected life, volatility, risk free rate, interest rates and dividend yield. As no stock options were granted for the year
ended 31 March 2025 and 31 March 2024, valuation assumptions are not disclosed.

The weighted average remaining contractual life for the share options outstanding as at 31 March 2025 was Nil (31 March 2024: Nil).
The weighted average exercise price of the outstanding option is H 10 (31 March 2024: H 10).

Stock Option Compensation expense is H Nil (31 March 2024: H Nil) for the year.

(b) Fair value hierarchy

The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value,
grouped into Level 1 to Level 3, as described below:

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by
reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of
investment in quoted equity shares and mutual fund investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities,
measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e., as prices) or indirectly (i.e., derived from prices).

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets
and liabilities measured using inputs that 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.

(i) Short-term financial assets and liabilities are stated at carrying value which is approximately equal to their fair value.

(ii) Management uses its best judgement in estimating the fair value of its financial instruments. However, there are
inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value
estimates presented above are not necessarily indicative of the amounts that the Company could have realised or
paid in sale transactions as of respective dates. As such, fair value of financial instruments subsequent to the reporting
dates may be different from the amounts reported at each reporting date.

(iii) There have been no transfers between Level 1, Level 2 and Level 3 for the year ended 31 March 2025 and 31 March 2024.
Note 40: Financial risk management objectives and policies

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

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

• Market risk;

• Credit risk; and

• Liquidity risk.

Risk management framework

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk
management framework. The Company''s risk management policies are established to identify and analyse the risks faced by
the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through
its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in
which all employees understand their roles and obligations.

The Company''s audit committee oversees how management monitors compliance with the Company''s risk management policies
and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.
The audit committee is assisted in its oversight role by internal auditors. Internal Audit function includes regular reviews of risk
management controls and procedures, the results of which are reported to the Audit Committee.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises two types of risk: interest rate risk and foreign currency risk.

(i) Foreign Currency Risk

Foreign currency risks is the risk that the fair value or future cash flows of an exposure will fluctuate because of
changes in foreign currency rates. The Company does not have significant foreign currency exposure and hence is
not exposed to any significant foreign currency risks.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company''s financial instruments will fluctuate
because of changes in market interest rates.

(b) Credit risk

Credit risk is the risk that counterparty will not meet its contractual obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade
receivables and unbilled revenue) and loans receivables, investments and other financial assets.

i. Trade receivables (including unbilled revenue) and other financial assets

With respect to trade receivables/unbilled revenue, the Company has framed the policies to review the receivables
on periodic basis and to take necessary mitigations, wherever required. The Company follows ''simplified approach''
for recognition of provision for ECL on trade receivables. The application of simplified approach does not require
the Company to track changes in credit risk. Rather, it recognizes provision for ECL based on lifetime ECLs at each
reporting date, right from its initial recognition.

Management does not expect any significant loss from non-performance by counterparties on credit granted that has
not been provided for.

ii. Credit risk from balances with the banks and financial institutions are managed by the Company''s treasury department
in accordance with the Company''s policy. Investment of surplus fund is made only with approved counterparties
within credit limits assigned to each counterparty.

Counterparty credit limits are reviewed by the Company periodically and the limits are set to minimise the concentration
of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

iii. The Company''s investments and loans are primarily to its subsidiaries and joint venture, the performance of which are
reviewed on a periodic basis.

(c) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The
objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Company''s reputation. The Company''s objective is to maintain a balance between continuity of funding and flexibility
through the use of bank borrowings.

Note 41: Capital management

The key objective of the Company''s capital management is to ensure that it maintains a stable capital structure with the focus
on total equity to uphold investor, creditor and customer confidence and to ensure future development of its business. The
Company is focused on keeping strong capital base to ensure independence and sustained growth in business.

The Company is predominantly equity financed. To maintain and adjust capital structure, the Company may adjust the dividend
payment to shareholders, return capital to shareholders or issue new shares.

The Company has very minimal amount of borrowings. The existing surplus funds along with the cash generated by the Company,
are sufficient to meet its current/non-current obligation and working capital requirement.

Note 42: Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision
Maker (CODM). As the Company is primarily engaged in rendering manpower staffing services, its business activities falls
within a single business segment and accordingly there are no additional disclosures to be provided under Ind AS 108 ''Segment
Reporting'' The Company operates primarily in India and there is no other significant geographical segment.

Terms and conditions of transactions with related parties

i) All transactions entered into with related parties defined under the Companies Act, 2013 were as per the contractual terms
with the respective related parties on arm''s-length pricing basis. The loans to subsidiaries are generally for periods upto
5 years and interest charged is prevalent to the market interest rate. Outstanding balances at the year-end are unsecured
and settlement occurs in cash as per the credit terms with the respective related parties. This assessment of impairment
is undertaken each financial year through examining the financial position of the related party and the market in which the
related party operates.

ii) The non-interest bearing advance to key management personnel is for 1.5 years, repayable in monthly instalments.

1. In addition to aforesaid service tax matters in dispute, the Company has filed writ petition with the Hon''ble High Court

of Kolkata for service tax demands pertaining to the period April 2006 to December 2008 aggregating to H 8.88 crores

(including penalty etc.) against which the Company has already settled H 4.43 crores and balance is largely provided for as
a matter of abundant caution (Refer note 21).

2. Bonus liability pursuant to the amendment of Payment of Bonus Act, 1965, for financial year 2014-15 is considered as
contingent liability, based on expert legal opinion obtained by the Company and stay orders from various High Courts
across the country. As per the contractual agreement with the customers, both bonus liability and minimum wages in
respect of associate employees is recoverable from the customers in case such liability arises.

3. In addition to above tax demands, there are certain tax litigations for earlier years in respect of deduction claimed by

the Company under Section 80JJAA of the Income Tax Act, 1961 ("Act"), with respect to eligible expenditure incurred for

net additional employees hired in each year with effect from financial year 2016-17 till date. The Company''s claim for the

financial years 2016-17 and 2017-18 was allowed in tax assessments completed earlier under Section 143(3) of the Act.
Subsequently, the Income Tax authorities disallowed the deduction u/s 80JJAA for financial year 2018-19 (AY 2019-20)
and issued notice for reassessment u/s 148 of the Act for financial year 2016-17 (AY 2017-18) and 2017-18 (AY 2018-19). The
Company filed appeal before National Faceless Appeal Centre under Section 246(1)(a) of the Act for AY 2019-20 and a
writ petition before the Hon''ble Karnataka High Court for AY 2017-18 and AY 2018-19, challenging the stand taken by tax
authorities and has obtained a stay as of 31 March 2025.

The Company believes that deduction under Section 80JJAA has been claimed in accordance with the provisions of the
Act, and as advised by the legal experts, is reasonably confident of favourable outcome in the matter. Accordingly, no
provision is considered necessary by the management in the said matter.

During the year, the Company has also received re-assessment notice u/s 148 of the Income Tax Act for AY 2019-20,
AY 2020-21, AY 2021-22 and AY 2022-23 to reassess or recompute the loss or the depreciation allowance or any other
allowance or deduction and submit a return in a prescribed form.

4. In addition to aforesaid GST matters:

(a) There are certain demands where the probability assessment is remote and hence not disclosed above.

(b) The Company has received various show cause notices from GST authorities for various years on account of
mismatches/pending reconciliations, etc. that are pending final assessment.

5. The aforementioned amounts under disputes are as per the demands from various authorities for the respective periods
and has not been adjusted to include further interest and penalty leviable, if any, at the time of final outcome of the appeals.

6. The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment
benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. Certain
sections of the Code came into effect on 3 May 2024. However, the final rules/interpretation have not yet been issued. The
Company will assess the impact of the Code when it comes into effect and will record any related impact in the period such
final rules/interpretation will be issued.

(b) Leases

Company as a Lessee

The Company has lease contracts of building used in its operations. Leases of building have lease terms between 2 to
9 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. These lease
agreements have escalation clauses primarily linked to inflation rates over the lease period and includes extension and
termination option. The Company applies judgement in evaluating whether it is reasonably certain whether or not to exercise
the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to
exercise either the renewal or termination. After the commencement date, the Company reassesses the lease term if there
is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise
the option to renew or to terminate (e.g., construction of significant leasehold improvements or significant customisation to
the leased asset).

The Company has complied with the relevant provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and the
Companies Act, 2013 for the above transactions and the transactions are not violative of the Prevention of Money-Laundering
Act, 2002 (15 of 2003)

The Company has not advanced any fund to intermediaries for further advancing to other person on behalf of ultimate
beneficiaries for the year ended 31 March 2024.

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

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

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

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

(vii) The Company has not been declared as wilful defaulter by any bank or financial institution or other lender.

(viii) MCA has amended the Rule 3 of the Companies (Accounts) Rules, 2014 (the "Accounts Rules") vide notification dated 5
August 2022, relating to the mode of keeping books of account and other books and papers in electronic mode. Back-ups
of the books of account and other books and papers of the Company maintained in electronic mode are now required to be
retained on a server located in India on daily basis (instead of back-ups on a periodic basis as provided earlier) as prescribed
under Rule 3(5) of the Accounts Rules. With respect to the above, the Company has complied with the requirement.

(ix) The Company has used accounting softwares for maintaining its books of account which has a feature of recording audit
trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the softwares,
except that, audit trail feature is not enabled for direct changes to data using privileged/ administrative access rights.
Additionally for one of the accounting software edit log is enabled for master data changes w.e.f. 11 April 2024. Further,
during the course of our audit we did not come across any instance of audit trail feature being tampered with, in respect of
accounting softwares where the audit trail has been enabled. Additionally, the audit trail of prior year has been preserved
by the Company as per the statutory requirements for record retention to the extent it was enabled and recorded.

Note 53: Certain amounts (currency value or percentages) shown in the various tables and paragraphs included in these
financial statements have been rounded off or truncated as deemed appropriate by the management of the Company. The
figures of the previous year end have been regrouped or reclassified, wherever necessary.

As per our report of even date attached

For S.R. Batliboi & Associates LLP For and on behalf of the Board of Directors of

Chartered Accountants TeamLease Services Limited

ICAI Firm Registration Number: 101049W/E300004

per Sandeep Karnani Ashok Kumar Nedurumalli Subramaniam Somasundaram

Partner Managing Director Independent Director

Membership Number: 061207 DIN: 00151814 DIN: 01494407

Ramani Dathi Alaka Chanda

Chief Financial Officer Company Secretary

F10911

Place: Bengaluru Place: Bengaluru

Date: 21 May 2025 Date: 21 May 2025

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Mar 31, 2024

1) The Board of directors of TeamLease Digital Private Limited (TDPL), I.M.S.I. Staffing Private Limited (I.M.S.I.) and Keystone Business Solutions Private Limited (Keystone, a 100% subsidiary of TDPL), in their respective meetings held on 16 August 2022 approved the Scheme of Amalgamation of I.M.S.I and Keystone with TDPL ("Scheme") pursuant to Sections 230 to 232 of the Companies Act, 2013 ("the Act") and other relevant provisions of the Act, to the extent applicable, with appointed date as 01 April 2022. The Scheme was filed with the relevant jurisdictional office of National Company Law Tribunal (NCLT) on 06 September 2022.

During the year ended 31 March 2024, TDPL, I.M.S.I. and Keystone has received NCLT approval for the Scheme with the appointed date as 01 April 2022.

Pursuant to the Scheme, TDPL has issued and allotted 1,204,076 equity shares of face value H 10 each fully paid-up for 5,318,000 equity shares of face value H 10 each fully paid-up held by the Company in I.M.S.I Staffing Private Limited (12 fully paid-up equity shares for every 53 equity shares of face value H 10 each fully paid-up).

2) The CCD''s are convertible into equity shares on or before 10 years from the date of allotment (ranging between FY 2016-17 to 2022-23), at the fair value as at the conversion date.

3) Based on impairment analysis, the Company had provided for impairment of H 12.93 crores in respect of Investments in HRTech.

Note: On 23 Dec 2022, Department of Higher Education vide notification number F.No.36-27/2018.NVEQF had discontinued National Employability Enhancement Mission Scheme and TLSU would not be eligible to take fresh enrolments of apprentices under the said Scheme, leading to uncertainty around recovery of loan from TLSU. Accordingly, management had impaired above outstanding loan.

As per amendment in the Finance Act, 2016, deduction under Section 80JJAA of the Income tax Act, 1961, was extended across to all the sectors. As per the provisions of Section 80JJAA, an assessee will be allowed a deduction of an amount equal to thirty per cent of additional wages paid to the new regular workmen employed by the assessee in the previous year for three assessment years including the assessment year relevant to the previous year in which such employment is provided subject to fulfilment of the other conditions mentioned in the Section 80JJAA. The Company has started availing such deduction from financial year 2016-17 onwards. Also refer note 46 in respect of certain tax litigations.

(iv) Terms/ rights attached to equity shares

The Company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(v) Aggregate numbers of shares bought back during the period of five years immediately preceding the Balance sheet date

The shareholders approved the proposal of buy back of equity shares recommended by its Board of Directors by way of e-voting on the postal ballot, the results of which were declared on 16 March 2023. The buy back was offered to all equity shareholders of the Company (including the Promoters, the Promoter Group and Persons in Control of the Company) under the tender offer route through the stock exchange. The buy back of equity shares through the stock exchange commenced on 12 May 2023 and was completed on 25 May 2023. During this buy back period, the Company purchased and extinguished 327,869 equity shares at a buy back price of H 3,050 per equity share comprising 1.92% of the pre buy back paid-up equity share capital of the Company. The buy back resulted in a cash outflow of H 100 crores (excluding transaction costs and tax on buy back). The Company funded the buy back from its free reserves including securities premium. In accordance with section 69 of the Companies Act, 2013, the Company has created ''Capital redemption reserve'' of H 0.33 crores equal to the nominal value of the shares bought back as an appropriation from retained earnings.

Nature and purpose of other reserves

(i) Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is to be utilised in accordance with the provisions of Section 52 of Companies Act, 2013.

(ii) Share based payment reserves

This reserve relates to stock options and stock appreciation rights granted by the Company to employees under TeamLease Employee Stock Option Plan and Employee Stock Appreciation Rights Plan 2019 respectively.

(iii) Capital redemption reserve

In accordance with section 69 of the Companies Act, 2013, the Company created capital redemption reserve equal to the nominal value of shares bought back, as an appropriation from the general reserve.

Note 36: Employee benefit obligation Gratuity (Associate)

The Company has defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, every employee who has completed 5 years of service are eligible for gratuity on departure at 15 days salary (last drawn) for each completed year of service. The level of benefits provided depends on the member''s length of service and salary at retirement. The Company has recognised gratuity liability and reimbursement rights in respect of associate employees in accordance with IND AS 19.

The weighted average duration of defined benefit obligation at the end of the reporting period is 2.36 years (31 March 2023: 2 years) Gratuity (Core employees)

The Company has defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, every employee who has completed 5 years of service are eligible for gratuity on departure at 15 days salary (last drawn) for each completed year of service. The level of benefits provided depends on the member''s length of service and salary at retirement.

The following table summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the gratuity plan:

Note 37: Share based payments Employee Share Option Scheme (ESOP)

TeamLease Services Limited has granted stock options to employees of the Company under ''TeamLease Services Limited ESOP Plan'' 2015. The options issued under the plan has term of 3-4 years and vest based on the terms of individual grants. When exercisable, each option is convertible into one equity share. The exercise price of option is H 10. The stock options are restricted for sale, pledge or transfer.

Tranche I and II - Total number of options granted were 126,640, out of which 110,522 options were exercised and 16,118 options were expired in earlier years.

Fair value of options granted

The fair value of stock options granted is estimated using Black-Scholes valuation model, which incorporates various assumptions including expected life, volatility, risk free rate, interest rates and dividend yield. As no stock options were granted for the year ended 31 March 2024 and 31 March 2023, valuation assumptions are not disclosed.

The weighted average remaining contractual life for the share options outstanding as at 31 March 2024 was Nil (31 March 2023: Nil).

The weighted average exercise price of the outstanding option is H 10 (31 March 2023: H 10).

Stock Option Compensation expense is H Nil (31 March 2023: H Nil) for the year.

Note 38: Employee Stock Appreciation Rights Plan 2019 (ESAR 2019)

On recommendation of the Nomination and Remuneration Committee, the Board of Directors and Shareholders approved the ESAR 2019 plan at its meeting held on 9 June 2021, 3 September 2021, 17 May 2022, 21 September 2022, 8 November 2023 and 22 May 2024 respectively. The ESAR 2019 plan provides stock appreciation rights to eligible employees of the Company and its subsidiaries.

There are no transfers between levels during the year.

Management has assessed that the fair value of cash and cash equivalents, bank balances other than cash and cash equivalents, investments, loans, trade receivables, unbilled revenue, trade payables, borrowings, lease liabilities, other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments and these are measured at amortised cost.

The fair value of the financial assets and liabilities is included in the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Note 40: Financial risk management objectives and policies

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

• Market risk;

• Credit risk; and

• Liquidity risk.

Risk management framework

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company''s audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal auditors. Internal Audit function includes regular reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and foreign currency risk.

Financial instruments affected by market risks include trade receivable, unbilled revenue, trade payable and borrowings.

(i) Foreign Currency Risk

Foreign currency risks is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign currency rates. The Company does not have significant foreign currency exposure and hence is not exposed to any significant foreign currency risks.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company''s financial instruments will fluctuate because of changes in market interest rates. The Company does not have significant debt obligation with floating interest rates, hence is not exposed to any significant interest rate risks.

(b) Credit risk

Credit risk is the risk that counterparty will not meet its contractual obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and loans receivables, investments and other financial instruments.

Trade receivables

With respect to trade receivables/unbilled revenue, the Company has framed the policies to review the receivables on periodic basis and to take necessary mitigations, wherever required. The Company follows ''simplified approach'' for recognition of provision for ECL on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes provision for ECL based on lifetime ECLs at each reporting date, right from its initial recognition.

Financial instruments

Credit risk from balances with the banks and financial institutions and current investments are managed by the Company''s treasury team based on the Company''s policy. Investment of surplus fund is made only with approved counterparties.

Counterparty credit limits are reviewed by the Company periodically and the limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

(c) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank borrowings. The summary of the maturity profile of the Company''s financial liabilities is as below:

Note 41: Capital management

The key objective of the Company''s capital management is to ensure that it maintains a stable capital structure with the focus on total equity to uphold investor, creditor and customer confidence and to ensure future development of its business. The Company is focused on keeping strong capital base to ensure independence and sustained growth in business.

The Company is predominantly equity financed. To maintain and adjust capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Company has very minimal amount of borrowings. The existing surplus funds along with the cash generated by the Company, are sufficient to meet its current/non-current obligation and working capital requirement.

Note 42: Segment information Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The Board of Directors of the Company is identified as the Chief Operating Decision Maker ("CODM") as defined by Ind AS 108, Operating Segment. The CODM evaluates the Company''s performance and allocate resources based on analysis of various performance indicators of the Company.

The reportable business segments are in line with the segment wise information which is being presented to the CODM and for which discrete financial information is available.

The accounting policies consistently used in the preparation of the financial statements are also applied to record revenue and expenditure in individual segments. Assets, liabilities, revenues and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment, while other items, wherever allocable, are apportioned to the segments on an appropriate basis. Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably and accordingly such items are separately disclosed as ''unallocated''

(i) Reportable segments:

Reportable operating segments of the Company are as follows:

a) General Staffing and Allied Services - Comprises of Staffing, Temporary Recruitment and Payroll & NETAP.

b) Other HR Services - Comprises of Regulatory Compliance and Training etc.

Note 46: Contingent liabilities
	31 March 2024	31 March 2023
(a) Service tax matters1	4.63	4.63
(b) Disputed bonus liability2	33.49	33.49
(c) Income tax matters3	10.30	0.92
(d) Professional tax matters	0.67	0.67
(e) Goods and services tax (GST) matters4	0.25	-
(f) Corporate guarantee given for credit facility taken by related parties	41.00	51.00

1. In addition to aforesaid service tax matters in dispute, the Company has filed writ petition with the Hon''ble High Court

of Kolkata for service tax demands pertaining to the period April 2006 to December 2008 aggregating to H 8.88 crores

(including penalty etc.) against which the Company has already settled H 4.43 crores and balance is largely provided for as a matter of abundant caution (Refer note 22).

2. Bonus liability pursuant to the amendment of Payment of Bonus Act, 1965, for financial year 2014-15 is considered as contingent liability, based on expert legal opinion obtained by the Company and stay orders from various High Courts across the country. As per the contractual agreement with the customers, H 33.49 crores in respect of associate employees is recoverable from the customers in case such liability arises.

3. In addition to above tax demands, there are certain tax litigations for earlier years in respect of deduction claimed by

the Company under Section 80JJAA of the Income Tax Act, 1961 ("Act"), with respect to eligible expenditure incurred for

net additional employees hired in each year with effect from financial year 2016-17 till date. The Company''s claim for the

financial years 2016-17 and 2017-18 was allowed in tax assessments completed earlier under Section 143(3) of the Act. Subsequently, the Income Tax authorities have disallowed deduction u/s 80JJAA for financial year 2018-19 (AY 2019-20) and issued notice for reassessment u/s 148 of the Act for financial year 2017-18 (AY 2018-19). The Company filed appeal before National Faceless Appeal Centre under Section 246(1)(a) of the Act for AY 2019-20 and a writ petition before the Hon''ble Karnataka High Court for AY 2018-19, challenging the stand taken by tax authorities.

Subsequent to the year end 31 March 2024, the Income Tax authorities issued notice for reassessment u/s 148A of the act for the financial year 2016-17 (AY 2017-18) towards disallowance of 80JJAA of the Act. The Company is in the process of filing the appeal against the said order.

The Company believes that deduction under Section 80JJAA has been claimed in accordance with the provisions of the Act, and as advised by the legal experts, is reasonably confident of favourable outcome in the matter. Accordingly, no provision is considered necessary by the management in the said matter.

4. In addition to aforesaid GST matters:

(a) There are certain demands where the probability assessment is remote and hence not disclosed above.

(b) The Company has received various show cause notices from GST authorities for various years on account of mismatches/pending reconciliations, etc. that are pending final assessment.

Note 47: Commitments
Capital commitments
	31 March 2024	31 March 2023
Estimated amount of contracts remaining to be executed on capital account and not provided for	0.55	010

Note 51: Disclosure for struck off companies

The Company has undertaken certain transactions in normal course of business with struck off companies, i.e, Galaxe E Solutions India Pvt Ltd, Perfekt Labs Pvt Ltd, Protishruti Marketing Pvt Ltd, A2R Skills Pvt Ltd, Excell Media Pvt Ltd and Akarshan People Management Pvt Ltd. The aggregate of transactions with such companies for sale of services is H 0.04 crores (31 March 2023: H 0.05 crores) and for purchases is H 0.05 crores (31 March 2023: H 0.76 crores). Outstanding net payable balance is H 0.04 crores (31 March 2023: H 0.02 crores).

Note 52: Other Statutory Information

(i) No proceeding has been initiated or are pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made thereunder.

(ii) There are no charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

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

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

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

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

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

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

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

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

(vii) The Company has not been declared as wilful defaulter by any bank or financial institution or other lender.

(viii) The Company is maintaining its books of account in electronic mode and these books of account are accessible in India at all times and the back-up of books of account has been kept in servers physically located in India on a daily basis from the applicability date of the Companies (Accounts) Rules, 2014, as amended i.e. 5 August, 2022 onwards.

(ix) The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software, except that, audit trail feature is not enabled for direct changes to data using privileged/ administrative access rights in so far it relates to Associate Life Cycle System (ALCS), Trainee Life Cycle System (TLCS) and Sage Accpac. Additionally for Sage Accpac, edit log feature is not enabled for master data changes. Further, there is no known instance of audit trail feature being tampered with in respect of the accounting software used by the Company.

Note 53: The Code on Social Security, 2020

The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/ interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

---

Mar 31, 2023

Notes:

1) During the previous year ended 31 March 2022, the Company entered into a definitive agreement and acquired additional equity stake of 14.96% in TRPL at an agreed consideration of H 538.46 Lakhs, thereby increasing the total stake in TRPL to 59.71% on fully diluted basis. Accordingly, TRPL has been accounted as a subsidiary with effect from 3 April 2021. The Company further subscribed to 16,146 equity shares via rights issue for total value of H 310.52 Lakhs, thereby increasing the total stake in TRPL to 61.50%. On 7 February 2022, 307,018 CCCPS of TRPL has been converted into 56,000 equity shares of H 1 each at a premium of H 1,301.59 per share.

2) The CCD''s are convertible into equity shares on or before 10 years from the date of allotment (ranging between FY 2016-17 to 2022-23), at the fair value as at the conversion date.

3) Based on impairment analysis, the Company had provided for impairment of H 1,292.81 Lakhs in respect of Investments in HRTech as at 31 March 2022, which has been disclosed as an ''exceptional item'' for the year ended 31 March 2022. HRTech has accumulated losses of H 823.72 Lakhs (31 March 2022: H 1,051.46 Lakhs) as at 31 March 2023.

Note: On Dec 23, 2022, Department of Higher Education vide notification number F,No,36-27/2018,NVEQF has discontinued National Employability Enhancement Mission Scheme, which will have adverse impact on continuation of business activities of TeamLease Skills University (TLSU), since TLSU will not be eligible to take fresh enrolments of apprentices under the said Scheme, leading to uncertainty around recovery of loans from TLSU in foreseeable future.

Out of loan given to TLEF, H 1,580 Lakhs was utilised by TLEF for granting loan to TLSU in current year. As at year end, the balance outstanding from TLSU was H 980 Lakhs. Accordingly, management has impaired above outstanding loan from TLEF that has been utilised by TLEF for granting loan to TLSU.

As per amendment in the Finance Act, 2016, deduction under Section 80JJAA of the Income tax Act, 1961, was extended across to all the sectors. As per the provisions of Section 80JJAA, an assessee will be allowed a deduction of an amount equal to thirty per cent of additional wages paid to the new regular workmen employed by the assessee in the previous year for three assessment years including the assessment year relevant to the previous year in which such employment is provided subject to fulfilment of the other conditions mentioned in the Section 80JJAA. The Company has started availing such deduction from financial year 2016-17 onwards. Also refer note 46 in respect of certain tax litigations.

(iv) Terms/ rights attached to equity shares

The Company has one class of equity shares having a par value of H 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(v) The Company has sought the approval of the shareholders by way of a Special Resolution through notice of postal ballot dated February 03, 2023 for buyback of 327,869 equity shares at a price of 3,050 per equity share for an aggregate consideration of H 100 Crores, which was duly passed and the results of which were announced on March 16, 2023. The offer size of the buyback was 14.79% and 14.50% of the aggregate fully paid-up equity share capital and free reserves, respectively as per audited standalone financial statements and audited consolidated financial statements of the Company as at March 31, 2022. The buyback offer period is open from May 12, 2023 to May 25, 2023.

Nature and purpose of other reserves

(i) Securities premium reserve

Securities premium reserve is used to record the premium on issue of shares. The reserve is to be utilised in accordance with the provisions of Section 52 of Companies Act, 2013.

(ii) Share based payment reserves

This reserve relates to stock options and stock appreciation rights granted by the Company to employees under TeamLease Employee Stock Option Plan and Employee Stock Appreciation Rights Plan 2019 respectively.

Note 36: Employee benefit obligation

Gratuity (Associate)

The Company has defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, every employee who has completed 5 years of service are eligible for gratuity on departure at 15 days salary (last drawn) for each completed year of service. The level of benefits provided depends on the member''s length of service and salary at retirement. The Company has recognised gratuity liability and reimbursement rights in respect of associate employees in accordance with IND AS 19.

The weighted average duration of defined benefit obligation at the end of the reporting period is 2 years (31 March 2022: 2 years) Gratuity (Core employees)

The Company has defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, every employee who has completed 5 years of service are eligible for gratuity on departure at 15 days salary (last drawn) for each completed year of service. The level of benefits provided depends on the member''s length of service and salary at retirement.

Note 37: Share based payments

Employee Share Option Scheme (ESOP)

TeamLease Services Limited has granted stock options to employees of the Company under ''TeamLease Services Limited ESOP Plan'' 2015. The options issued under the plan has term of 3-4 years and vest based on the terms of individual grants. When exercisable, each option is convertible into one equity share. The exercise price of option is H 10. The stock options are restricted for sale, pledge or transfer.

Tranche I and II - Total number of options granted were 126,640, out of which 110,522 options were exercised and 16,118 options were expired in earlier years.

Fair value of options granted

The fair value of stock options granted is estimated using Black-Scholes valuation model, which incorporates various assumptions including expected life, volatility, risk free rate, interest rates and dividend yield. As no stock options were granted for the year ended 31 March 2023 and 31 March 2022, valuation assumptions are not disclosed.

The weighted average remaining contractual life for the share options outstanding as at 31 March 2023 was Nil (31 March 2022: Nil).

The weighted average exercise price of the outstanding option is H Nil (31 March 2022: H 10).

Stock Option Compensation expense is Nil (31 March 2022: H 39.75 Lakhs) for the year.

Note 38: Employee Stock Appreciation Rights Plan 2019 (ESAR 2019)

On recommendation of the Nomination and Remuneration Committee, the Board of Directors and Shareholders approved the ESAR 2019 plan at its meeting held on 9 June 2021, 3 September 2021, 17 May 2022 and 21 September 2022 respectively. The ESAR 2019 plan provides stock options appreciation rights to eligible employees of the Company and its subsidiaries.

There are no transfers between levels during the year.

Management has assessed that the fair value of cash and cash equivalents, bank balances other than cash and cash equivalents, investments, loans, trade receivables, unbilled revenue, trade payables, borrowings, lease liabilities, other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments and these are measured at amortised cost.

The fair value of the financial assets and liabilities is included in the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Note 40: Financial risk management objectives and policies

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

• Market risk;

• Credit risk; and

• Liquidity risk.

Risk management framework

The Company''s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company''s audit committee oversees how management monitors compliance with the Company''s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal auditors. Internal Audit function includes regular reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and foreign currency risk.

Financial instruments affected by market risks include trade receivable, trade payable and borrowings.

(i) Foreign Currency Risk

Foreign currency risks is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign currency rates. The Company does not have significant foreign currency exposure and hence is not exposed to any significant foreign currency risks.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company''s financial instruments will fluctuate because of changes in market interest rates. The Company does not have significant debt obligation with floating interest rates, hence is not exposed to any significant interest rate risks.

(b) Credit risk

Credit risk is the risk that counterparty will not meet its contractual obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and loans receivables, investments and other financial instruments.

Trade receivables

With respect to trade receivables/unbilled revenue, the Company has framed the policies to review the receivables on periodic basis and to take necessary mitigations, wherever required. The Company follows ''simplified approach'' for recognition of provision for ECL on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes provision for ECL based on lifetime ECLs at each reporting date, right from its initial recognition.

Management does not expect any significant loss from non-performance by counterparties on credit granted during the financial year that has not been provided for.

Financial instruments

Credit risk from balances with the banks and financial institutions and current investments are managed by the Company''s treasury team based on the Company''s policy. Investment of surplus fund is made only with approved counterparties.

Counterparty credit limits are reviewed by the Company periodically and the limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.

(c) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank borrowings. The summary of the maturity profile of the Company''s financial liabilities is as below:

Note 41: Capital management

The key objective of the Company''s capital management is to ensure that it maintains a stable capital structure with the focus on total equity to uphold investor, creditor and customer confidence and to ensure future development of its business. The Company is focused on keeping strong capital base to ensure independence and sustained growth in business.

The Company is predominantly equity financed. To maintain and adjust capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Company has very minimal amount of borrowings. The existing surplus funds along with the cash generated by the Company, are sufficient to meet its current/non-current obligation and working capital requirement.

Note 42: Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The Board of Directors of the Company is identified as the Chief Operating Decision Maker ("CODM") as defined by Ind AS 108, Operating Segment. The CODM evaluates the Company''s performance and allocate resources based on analysis of various performance indicators of the Company.

The reportable business segments are in line with the segment wise information which is being presented to the CODM and for which discrete financial information is available.

The accounting policies consistently used in the preparation of the financial statements are also applied to record revenue and expenditure in individual segments. Assets, liabilities, revenues and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment, while other items, wherever allocable, are apportioned to the segments on an appropriate basis. Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably and accordingly such items are separately disclosed as ''unallocated''

(i) Reportable segments:

Reportable operating segments of the Company are as follows:

a) Staffing and Allied Services - Comprises of Staffing, Temporary Recruitment and Payroll & NETAP.

b) Other HR Services - Comprises of Regulatory Compliance and Training etc.

* In addition to aforesaid service tax matters in dispute, the Company has filed writ petition with the Hon''ble High Court of Kolkata for service tax demands pertaining to the period April 2006 to December 2008 aggregating to H 887,81 Lakhs (including penalty etc.) against which the Company has already settled H 442.46 Lakhs and balance is largely provided for as a matter of abundant caution (Refer note 22).

** Bonus liability pursuant to the amendment of Payment of Bonus Act, 1965, for financial year 2014-15 is considered as contingent liability, based on expert legal opinion obtained by the Company and stay orders from various High Courts across the country, As per the contractual agreement with the customers, H 3,332,97 Lakhs in respect of associate employees is recoverable from the customers in case such liability arises,

***The Company is claiming deduction under Section 80JJAA of the Income Tax Act, 1961 ("Act”) with respect to eligible expenditure incurred for net additional associate employees hired in each year with effect from financial year 2016-17 till date, The Company''s claim for the financial years 2016-17 and 2017-18 was allowed in tax assessments completed earlier under Section 143(3) of the Act, Subsequently, the Income Tax authorities have disallowed deduction u/s 80JJAA for financial year 2018-19 (AY 2019-20) and issued notice for reassessment u/s 148 of the Act for financial year 2017-18 (AY 2018-19), The Company has filed appeal before National Faceless Appeal Centre under Section 246(1)(a) of the Act for AY 2019-20 and a writ petition before the Hon''ble Karnataka High Court for AY 2018-19, challenging the stand taken by tax authorities, The Company believes that deduction under Section 80JJAA has been claimed in accordance with the provisions of the Act, and as advised by the legal experts, is reasonably confident of favourable outcome in the matter, Accordingly, no provision is considered necessary by the management in the said matter,

Further, the Company has received various show cause notices from GST authorities for various years on account of mismatches / pending reconciliations, etc, that are pending final assessment,

Till February 2022, the Company had its own Provident Fund Trust i.e. "TeamLease Services Ltd. Employees Provident Fund Trust" ("PF Trust") through which it managed provident fund liability for its employees. Accordingly, the PF Trust was considered as a defined benefit plan. The Company was responsible for meeting the shortfall in the value of the assets of the PF Trust, if any, in meeting its obligations, to settle PF dues of the employees. The PF Trust had made investments of H 17,373.78 Lakhs in two non-banking financial companies (''NBFCs'') which had maturities between FY 2020-21 to FY 2026-27, which were undergoing insolvency proceedings.

During the year ended 31 March 2022, investment in one of the NBFC was realised through NCLAT proceedings and PF Trust recovered H 5,458 Lakhs resulting into a realised loss of H 5,894 Lakhs on such investment. Basis such recoveries, on prudent basis, the management also estimated additional loss of H 1,606 Lakhs on realisation of the investments in other NBFC. Accordingly, the Company recorded a provision of H 7,500 Lakhs to meet the anticipated shortfall in the PF Trust during quarter ended 30 September 2021.

The Company filed an application with Employee Provident Fund Organisation (EPFO) for surrender of the PF Trust exemption granted under para 27 read with section 17(2) of the Employees Provident Fund Act. The said exemption was granted w.e.f. 1 March, 2022 and PF contribution for the month of March 2022 was remitted to EPFO by the Company.

The Company disposed all its investments in PF Trust during March 2022 (except for investment in IL&FS) and deposited the realised funds with EPFO amounting to H 154,535 Lakhs (including H 5,719.87 Lakhs contributed by TeamLease) to settle the cumulative obligations of the PF Trust.

Accordingly, the Company reversed provision of H 1,780.13 Lakhs based on settlement of the aforesaid matter and H 5,719.87 Lakhs (net) was disclosed as an exceptional item in the Standalone financial statements during the year ended 31 March 2022.

During the year, PF Trust has further recovered H 922.25 Lakhs against IL&FS investments, which has been paid to the Company and hence accounted for as exceptional income in the Standalone financial statements.

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

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

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

(iv) Except as detailed in note 10 and note 43 in respect of loans of H 1,580 Lakhs given to TLEF and simultaneously lent to TLSU, a related party during the year, the Company has not advanced or loaned or invested funds to any other persons or entities, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

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

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

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

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

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

(vi) The Company has not surrendered or disclosed any income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).

(vii) The Company is maintaining its books of account in electronic mode and these books of account are accessible in India at all times and the back-up of books of account has been kept in servers physically located in India on a daily basis from the applicability date of the Companies (Accounts) Rules, 2014, as amended i.e. 5 August, 2022 onwards.

The Code on Social Security, 2020 (''Code'') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/ interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

Note 54: Previous year

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

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Mar 31, 2018

1 Corporate information

TeamLease Services Limited (the “Company”) is a HR Services Company incorporated on 2 February 2000 and the registered office is located at Office No. 6, 3rd Floor, C wing Laxmi Towers, Bandra Kurla Complex, Mumbai, Maharashtra - 400 051. The Company provides to its clients, solution for their staffing and HR requirements offering a gamut of services that include Temporary Staffing, Permanent Recruitment, Payroll Process Outsourcing, Regulatory Compliance Services, Vocational Training / Education and Assessments.

The Company has been converted into a Public Limited company, changed its name from TeamLease Services Private Limited to TeamLease Services Limited and obtained a fresh certificate of incorporation dated 15 May 2015. The equity shares of the Company got listed on National Stock Exchange of India Limited (“NSE”) and BSE Limited (“BSE’) w.e.f. 12 February 2016.

The standalone financial statements are approved by the board of directors and authorized for issue in accordance with a resolution of the directors on 16 May 2018.

2 Basis of preparation

(i) Compliance with Ind AS

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) specified under section 133 of Companies Act, (the act) read with the Companies (Indian Accounting Standards) Rules, 2015, (as amended).

The standalone financial statements of the Company for all the periods upto and including the year ended 31 March 2017 were prepared in accordance with the accounting standards notified under section 133 of the Companies Act 2013 (‘the Act’), read together with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) and other relevant provisions of the Act. These standalone financial statements for the year ended March 31 2018 are the first the Company has prepared in accordance with Ind AS. Refer note 45 for information on how the Company has adopted IND AS.

(ii) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for the following:

a) Certain financial assets and liabilities measured at fair value as explained in the accounting policies;

b) Defined benefit plan assets measured at fair value; and

c) Share-based payments are measured at fair value.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services as at the date of respective transactions.

The standalone financial statements are presented in Indian Rupee and all values are rounded to nearest lakhs except when otherwise stated.

1) Provision for diminution in the value of investments includes RS.2,198.38 lakhs (31 March 2017 RS.2,198.38 lakhs and 1 April 2016: RS.2,198.38 lakhs) towards investment in IIJT and Rs. Nil (Previous Year Rs. Nil and 01 April 2016: RS.1 lakh) towards investment in ITHS.

2) The Company entered into a definitive agreement on 29 May 2017 to acquire 30% stake in Cassius Technologies Private Limited (‘CTPL’). CTPL is engaged in rendering end to end online services for software product engineering.

3) The Company entered into a definitive agreement on 8 November 2017, with School Guru Eduserve Private Limited (‘School Guru’) to acquire 16.31% equity stake in School Guru (on fully diluted basis) and further subscribed to CCCPS. School Guru is engaged in rendering technology-led specialized academic services.

4) On 31 March 2018, the Company subscribed to 1,325,000 equity shares 0 RS.50 per share (Face Value of RS.10 per share) and CCDs of RS.10 lakhs each in TDPL. The CCD’s are convertible into equity shares on or before 10 years from the date of allotment, at the fair value as at the conversion date.

5) On 27 December 2016, the Company has disposed off 100% of its investments in the equity shares of ITHS and NEAS at RS.1 lakh each. Accordingly ITHS and NEAS ceases to be subsidiaries of the Company.

a) No receivable is due from directors or other officers of the Company either severally or jointly with any other person. For trade or other receivable due from firms or private companies respectively in which any director is a partner, a director or a member, refer note 37.

b) Trade receivables are non-interest bearing and with credit period upto 90 days.

(iv) Terms/ rights attached to equity shares

The Company has one class of equity shares having a par value of RS.10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

(vi) There are no shares reserved for issue under options, except held by TeamLease Employee Stock Option Plan Trust. Also refer note 32.

(vii) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

(a) On 25 June 2015, the shareholders of the Company approved the issue and allotment of 29 Bonus equity shares of Re. 1 each for every equity share of Re. 1 each held by the members as on that date. Post such bonus issue, every 10 equity shares of Re 1 of the Company are consolidated into 1 equity share of RS.10 each thereby, 153,320,640 shares of Re.1 each had been consolidated into 15,332,064 shares of RS.10 each w.e.f. 10 July 2015.

(b) There are no shares allotted as fully paid up pursuant to contract without payment being received in cash during the period of five years immediately preceding the year ended 31 March 2018.

(c) There are no shares bought back by the Company during the period of five years immediately preceding the year ended 31 March 2018.

(viii) Pursuant to Initial Public Offering (IPO) during the year ended 31 March 2016, 1,764,705 equity shares of the Company of RS.10 each were allotted at RS.850 per equity share on 10 February 2016.

Nature and purpose of other reserves (i) Securities premium reserve

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

(ii) Stock option outstanding reserve

This reserve relates to stock options granted by the Company to employees under TeamLease Employee Stock Option Plan.

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

The following reflects the income and share data used in the basic and diluted EPS computation:

Note 3: Employee benefit obligation Provident fund

Provident Fund for eligible employees is managed by the Company through TeamLease Employees Provident Fund Trust (‘Trust’), in line with the Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to the employees at the time of their separation from the Company or retirement, whichever is earlier. The benefits vests immediately on rendering of the services by the employee.

The expense recognised during the year towards provident fund is RS.16,080.43 lakhs (31 March 2017 RS.14,492.29 lakhs).

Gratuity (Associate)

The Company has recognised gratuity liability and reimbursement right in respect of associate employees in accordance with Ind AS 19.

The following table summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the gratuity plan:

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

2) The employee benefits expense towards gratuity and related reimbursement right for associate employees for year ended 31 March 2018 RS.2,436.24 lakhs (31 March 2017: RS.1,883.61 lakhs) have been netted off in the Statement of Profit and Loss.

Sensitivity analysis

A quantitative sensitivity analysis for significant assumptions on defined benefit obligation as at 31 March 2018 and 31 March 2017 are as shown below:

The Company expects to contribute RS.3,407.39 lakhs (31 March 2017: RS.3,725.53 lakhs) in 2018-19.

The weighted average duration of defined benefit obligation at the end of the reporting period is 2 years (31 March 2017: 2 years)

Gratuity (Core employees)

The Company has defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the Act, every employee who has completed 4 years and 240 days of service are eligible for gratuity on departure at 15 days salary (last drawn) for each completed year of service. The level of benefits provided depends on the member’s length of service and salary at retirement.

The following table summarise the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the gratuity plan:

1) The estimates of future salary increase, considered in actuarial valuation, takes into account inflation, seniority, parameter and other relevant factors such as supply and demand factors in employment matter.

Sensitivity analysis

A quantitative sensitivity analysis for significant assumptions on defined benefit obligation as at 31 March 2018 and 31 March 2017 are as shown below:

The Company expects to contribute RS.194.90 lakhs (31 March 2017: RS.165.37 lakhs) in 2018-19.

The weighted average duration of defined benefit obligation at the end of the reporting period is 4 years (31 March 2017: 4 years).

Note 4: Share based payments Employee Share Option Scheme (ESOP)

TeamLease Services Limited has granted stock options to employees of the Company. The purpose of the ‘TeamLease Services Limited ESOP Plan’ 2015 is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees and to promote the success of the business. The options issued under the plan has a term of 4 years as provided in the stock grant agreement and vest based on the terms of individual grants. When exercisable, each option is convertible into one equity share. The exercise price of option is RS.10.

The stock options are restricted for sale, pledge or transfer. The Company has carried out an independent valuation of its ESOP grants for accounting and reporting purposes as on the grant dates.

The weighted average remaining contractual life for the share options outstanding as at 31 March 2018 was 0.82 years (31 March 2017: 1.82 years).

The weighted average exercise price of the outstanding option is RS.10 (31 March 2017: RS.10).

The weighted average fair value of options granted during the year was Rs. Nil (31 March 2017: RS.1,083).

The impact of the fair value of the options granted as an expense is RS.154.25 lakhs (31 March 2017: RS.294.06 lakhs) for the Company.

Note 5: Fair value measurements

Financial assets measured at fair value through profit/ loss:

There are no transfers between levels during the year.

Management has assessed that the fair value of cash and cash equivalents, bank balances other than cash and cash equivalents, investments, loans, trade receivables, trade payables, other financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments and these are measured at amortised cost.

The fair value of the financial assets and liabilities is included in the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

Note 6: Financial risk management objectives and policies

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

- Market risk;

- Credit risk; and

- Liquidity risk.

Risk management framework

The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework. The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company’s audit committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The audit committee is assisted in its oversight role by internal auditors. Internal Audit function includes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and foreign currency risk.

Financial instruments affected by market risks include trade receivable and trade payable.

(i) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign currency rates. The Company does not have significant foreign currency exposure and hence is not exposed to any significant foreign currency risks.

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company’s financial instruments will fluctuate because of changes in market interest rates. The Company does not have significant debt obligation with floating interest rates, hence is not exposed to any significant interest rate risks.

(b) Credit risk

Credit risk is the risk that counterparty will not meet its contractual obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and loans receivables, investments and other financial instruments.

Trade receivables

With respect to trade receivables/unbilled revenue, the Company has framed the policies to review the receivables on periodic basis and to take necessary mitigations, wherever required. The Company follows simplified approach’ for recognition of provision for ECL on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes provision for ECL based on lifetime ECLs at each reporting date, right from its initial recognition.

Management does not expect any significant loss from non-performance by counterparties on credit granted during the financial year that has not been provided for.

The following table summarises the changes in the loss allowance measured using ECL:

Financial instruments

Credit risk from balances with the banks and financial institutions and current investment are managed by the Company’s treasury team based on the Company’s policy. Investment of surplus fund is made only with approved counterparties.

Counterparty credit limits are reviewed by the company periodically and the limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.

(c) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The Company monitors its risk of a shortage of funds on a regular basis. The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts.

All financial liabilities are due within 1 year from the balance sheet date.

Note 7: Capital management

The key objective of the Company’s capital management is to ensure that it maintains a stable capital structure with the focus on total equity to uphold investor, creditor and customer confidence and to ensure future development of its business. The Company focused on keeping strong capital base to ensure independence, to ensure sustained growth in business.

The Company is predominantly equity financed. To maintain and adjust capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

The Company has very minimal amount of borrowings. The existing surplus funds along with the cash generated by the Company are sufficient to meet its current/non-current obligation and working capital requirements.

Note 8: Segment information Segment information

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM). The Board of Directors of the Company is identified as the Chief Operating Decision Maker (‘CODM’) as defined by Ind AS 108, Operating Segment. The CODM evaluates the Company’s performance and allocate resources based on analysis of various performance indicators of the Company. Accordingly, segment information has been presented for the nature of services rendered by the Company.

Segment Policies:

a) The reportable business segments are in line with the segment wise information which is being presented to the CODM and for which discrete financial information is available.

b) The accounting policies consistently used in the preparation of the financial statements are also applied to record revenue and expenditure in individual segments. Assets, liabilities, revenues and direct expenses in relation to segments are categorised based on items that are individually identifiable to that segment, while other items, wherever allocable, are apportioned to the segments on an appropriate basis. Certain items are not specifically allocable to individual segments as the underlying services are used interchangeably and accordingly such items are separately disclosed as unallocated’.

(i) Reportable segments:

An operating segment is classified as reportable segment if reported revenue (including inter-segment revenue) or absolute amount of result or assets exceed 10% or more of the combined total of all the operating segments.

(ii) Segment results:

Performance of a segment is measured based on segment profit (before interest and tax), as included in the internal management reports that are reviewed by the CODM.

The Operative segment comprises of the following:

a) General Staffing and Allied Services - Comprises of Staffing Operations, Temporary Recruitment and Payroll & NETAPP.

b) Other HR Services - Comprises of Permanent Recruitment, Regulatory Compliance and Training Operations.

1. As the liability for gratuity and leave encashment is provided on actuarial valuation basis for the company as a whole, the amount pertaining to directors are not included.

2. The above includes RS.36.03 lakhs (31 March 2017: RS.55.45 lakhs) for share based compensation.

Note 9: Commitments

(a) Capital commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for as at:

(b) Other commitments

Bank guarantees to customers as at 31 March 2018 RS.2,033.13 lakhs (31 March 2017 : RS.828.67 lakhs 1 April 2016 : RS.759.97 lakhs)

(c) Non-cancellable operating leases

The Company has entered into various cancellable and non-cancellable operating lease agreements for office premises at various locations. The lease period ranges between 1 year to 9 years. The lease rental charged during the year and obligation on the long term non-cancellable operating lease as per the lease agreement are as follows :

Note 10: Deduction under section 80JJAA

As per the amendment in the Finance Act, 2016, deduction under Section 80JJAA of the Income tax Act, 1961, was extended across to all the sectors. As per the provisions of Section 80JJAA, an assessee will be allowed a deduction of an amount equal to thirty per cent of additional wages paid to the new regular workmen employed by the assessee in the previous year for three assessment years including the assessment year relevant to the previous year in which such employment is provided subject to fulfilment of the other conditions mentioned in the Section 80JJAA. The Company has started availing such deduction from financial year 2016-17 onwards.

Note 11: Corporate Social Responsibility expenditure

Consequent to the requirements of Section 135 and Schedule VII of the Companies Act, 2013, the Company is required to contribute 2% of its average net profits during the immediately three preceding financial years in pursuance of its Corporate Social Responsibility Policy.

Gross amount required to be spent by the Company towards corporate social responsibility expense (CSR) during the year is RS.80.15 lakhs (31 March 2017 RS.61.12 lakhs). The Company has not spent any amount towards CSR expenditure.

Amount utilised for share issue expenses of RS.1,219.70 lakhs includes payments made to merchant bankers, attorneys, consultants and registrars towards Initial Public Offering of shares.

The Board of Directors in their meeting held on 8 August 2017 approved to seek the shareholder’s approval through Postal Ballot for the variation/deviation in the utilisation of the un-utilised portion of the IPO proceeds. The resolution was passed by the shareholders with requisite majority on 18 September 2017.

Note 12: First time adoption

A. First time adoption

For periods up to and including the year ended 31 March 2016, the Company prepared its financial statements in accordance with generally accepted accounting principle in India (Indian GAAP or IGAAP).

Accordingly, the Company has prepared standalone financial statements which comply with Ind AS applicable for year ending on 31 March 2018, together with the comparative period data as at and for the year ended 31 March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening statement of financial position was prepared as at 1 April 2016, i.e., the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the statement of financial position as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017.

Exemptions and exceptions availed

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

a) Ind AS 101 permits a first-time adopter to elect to continue with the net carrying value for investments in subsidiaries as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. Accordingly, the Company has elected to measure its investments in subsidiaries in the standalone financial statements at their previous GAAP net carrying value.

b) Appendix C to Ind AS 17, Leases, requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, Leases, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101, Firsttime Adoption of Indian Accounting Standards, provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS. The Company has elected to apply this exemption for such contracts/arrangements.

c) Ind AS 101 permits a first-time adopter to elect to continue with the net carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition. This exemption can also be used for intangible assets covered by Ind AS 38, Intangible Assets. Accordingly, the Company has elected to measure all of its property, plant and equipment, intangible assets at their previous GAAP net carrying value.

d) Business combinations

Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.

The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date.

e) Share based payment

Ind AS 102 Share Based Payment has not been applied to equity settled share-based payment transactions that vested before date of transition to Ind AS.

f) Estimates

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

Ind AS estimates as at 1 April 2016 and as at 31 March 2017 are consistent with the estimates as at the same date made in conformity with previous GAAP apart from the impairment of financial assets based on expected credit loss model where the previous GAAP did not require estimate.

g) Classification and measurement of financial assets and liabilities

The classification and measurement of financial assets are made in accordance with Ind AS 109 Financial Instruments on the basis of facts and circumstances that exist at the date of transition to Ind AS.

h) De-recognition of financial assets and liabilities

The Company has elected to apply the de-recognition provisions of Ind AS 109, Financial Instruments, prospectively from the date of transition to Ind AS.

B. Reconciliations between previous GAAP and Ind AS

The following tables represent the reconciliations from previous GAAP to Ind AS.

A: Income tax

Under previous GAAP, deferred tax was accounted using the income statement approach, on the timing differences between the taxable profit and accounting profits for the period. Under Ind AS 12, Income Tax, requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of asset or liability in the balance sheet and its tax base.

The application of Ind AS approach has resulted in recognition of deferred tax on new temporary differences which was not required under previous GAAP.

B: Stock option compensation expense

Under the Previous GAAP, the share based compensation cost was not recognised. Under Ind AS, the share based compensation cost is determined based on the Company’s estimate of equity instruments that will eventually vest and amortized over the vesting period on an accelerated basis. However, the same does not result in difference in equity.

C: Actuarial (loss)/ gain

Under Ind AS, remeasurement i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability/asset are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were accounted for in profit or loss for the year.

D: Impact of provision for expected credit loss

The provision is made against trade receivable based on expected credit loss model as per Ind AS 109. Under I-GAAP the provision was made when the receivables turned doubtful based on the assessment on case to case basis.

E: Other comprehensive income

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

F: Fair valuation of security deposits

Under previous GAAP, interest free lease security deposits that are refundable in cash on completion of the lease term were recorded at their transaction value. Under Ind AS, effect of discounting/ unwinding of refundable security deposits is recognised.

G: Statement of cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows except for bank overdrafts, which has been netted off with the cash and cash equivalents.

During the financial year ended 31 March 2018, the Employees’ Provident Fund Organisation vide circular No. Pension-I/17(10)/2016-17/Jeevan Pramaan-Aadhar/4792 dated 5 June 2017 directed employers to link Aadhar number for all new members who join Employees’ Pension Scheme, 1 995 under Employees’ Provident Funds and Miscellaneous Provisions Act, 1 952 after 1 July 2017, thereby linking the Unique Account Number (UAN) with Aadhaar so as to make their provident fund (‘PF’) account linked.

Delay in remittance of the PF contributions was on account of the non-availability / mis-match of personal information of Aadhar number of employees who joined after the said notification came into force. The Company is constantly working towards getting this matter resolved by having the linking of UAN completed with the Aadhar information.

Note 13: Previous year

The figures of previous year were audited by a firm of chartered accountants other than S.R. Batliboi & Associates LLP. Previous years figures have been reclassified wherever necessary to conform to the current year classifications.

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Mar 31, 2017

1. General Information

TeamLease Services Limited (the “Company”) is an HR Services Company incorporated on February 2, 2000. The Company currently provides clients, solution for their staffing and HR requirements offering a gamut of services that include Temporary Staffing, Permanent Recruitment, Payroll Process Outsourcing, Regulatory Compliance Services, Vocational Training / Education and Assessments.

The Company has been converted into a Public Limited company, changed its name from TeamLease Services Private Limited to TeamLease Services Limited and obtained a fresh certificate of incorporation dated May 15, 2015. The equity shares of the Company got listed on National Stock Exchange of India Limited (“NSE”)and BSE Limited (“BSE”) w.e.f February 12, 2016.

2.1 Rights, Preferences and restrictions attached to shares

Equity Shares: The company has one class of equity shares having a par value of RS.10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend.

2.2 There are no shares reserved for issue under options, except held by TeamLease Employee Stock Option Plan Trust, as on March.31, 2017 and for the previous year.

2.3 There are no shares allotted as fully paid up pursuant to contract without payment being received in cash during the period of five years immediately preceding the year ended March.31, 2017.

2.4 There are no shares bought back by the Company during the period of five years immediately preceding the year ended March.31, 2017.

2.5 There are no securities that are convertible into equity / preference shares.

2.6 The shareholders of the Company on April 02, 2015 approved for increase of the Authorized Share Capital from RS.27,000,000 to RS.150,000,000 divided into 133,000,000 equity shares of RS.1 each and 170,000 12% Cumulative Convertible Redeemable Preference Shares of RS.100 each by way of additional 123,000,000 equity shares of RS.1 each. Further, on June 25, 2015, the shareholders of the Company approved for increase of the Authorized Share Capital from RS.150,000,000 to RS.250,000,000 divided into 233,000,000 equity shares of RS.1 each and 170,000 12% Cumulative Convertible Redeemable Preference Shares of RS.100 each by way of additional 100,000,000 equity shares of RS.1 each. Accordingly, the Authorized Share Capital of the Company is increased to RS.150,000,000 effective from April 02, 2015 and further increased to RS.250,000,000 effective from June 25, 2015 comprising 23,300,000 equity shares of RS.10 each and 170,000 preference shares of RS.100 each.

2.7 On June 25, 2015, pursuant to the provisions of the Companies Act, 2013, the shareholders of the Company approved for issue and allotment of 29 Bonus Equity Shares of RS.1 each for every equity share of RS.1 each held by the members as on that date of this meeting and accordingly a sum of RS.148,209,952 is capitalized out of the Company’s Securities Premium Account outstanding as on June 30, 2015 and transferred to the Share Capital Account towards issue of fully paid-up bonus shares pursuant to which the paid-up Capital of the Company has increased from RS.5,110,688 to RS.153,320,640 and the balance in the Securities Premium account reduced to RS.1,003,220,349 (also Refer Note 3.10).

2.8 During the previous year ended March.31, 2016, the Company had issued 148,209,952 bonus shares out of securities premium account thereby increasing the number of equity shares to 153,320,640 of RS.1 each and every 10 equity shares of RS.1 of the Company are consolidated into 1 equity share thereby increasing the face value of the equity share to RS.10 per share. Accordingly total 153,320,640 shares of RS.1 each post-bonus have been consolidated into 15,332,064 shares of RS.10 each by reducing 137,988,576 number of shares w.e.f July 10,2015.

2.9 During the previous year ended March.31, 2016, Directors of the Company i.e., Ashok Reddy, Manish Sabharwal and Mohit Gupta formed three Limited Liability Partnership firms namely NED Consultants LLP, MKS Management Consultancy Services LLP and Dhana Management Consultancy LLP. Post consolidation of equity shares, HR Offshoring Ventures Pte Limited (HROV) transferred 1,379,886 equity shares to Dhana Management Consultancy LLP, 1,709,900 equity shares to NED Consultants LLP, 300 equity shares to MKS Management Consultancy Services LLP, 201,114 equity shares to the ESOP Trust of the Company. Pursuant to these transfers, the shareholding of HROV in the Company reduced to 26.74% as on March.31, 2017 (Previous Year 31.74%).

2.10 Pursuant to Initial Public Offering (IPO) during the previous year ended March.31, 2016, 1,764,705 equity shares of the Company of RS.10 each were allotted at RS.850 per equity share.

2.11 During the previous year ended March.31, 2016 the Board of Directors of the Company on August 03, 2015 approved to cancel the previous ESOP Scheme which was issued by the Company on July 27, 2011 and to implement new “TeamLease Employee Stock Option Plan 2015” (“ESOP 2015 scheme”) which has been formulated and the existing ESOP Trust has been re-constituted in line with the Securities and Exchange Board of India (Share based employee benefits) Regulations, 2014, provisions of the Articles of Association of the Company and Companies Act, 2013 and Rules. The shareholders of the Company approved the ESOP 2015 Scheme on July 10, 2015. All unvested and unexercised ESOPs granted to employees under the previous ESOP scheme have been cancelled with effect from August 03, 2015. TeamLease Employee Stock Option Plan Trust (the “Trust”) has granted 97,170 options on October 01, 2015 to the employees of the Company and 29,470 options on October 01, 2016, which is out of the transfer of 201,114 equity shares by HROV. Since the options are issued by the Trust and not by the Company, there is no impact on the Financial Statements of the Company towards grant / allotment of ESOP. Refer Note 34 for further details.

3.1 Provision for Diminution in the Value of Investments includes RS.219,837,780 (Previous Year RS.219,837,780) towards investment in IIJT and RS.NIL (Previous Year RS.100,000) towards investment in ITHS.

3.2 On December 27, 2016, the Company has disposed off 100% of its investments in the equity shares of India Tourism and Hospitality Skills Education Private Limited (“ITHS”) and National Employability Apprenticeship Services (“NEAS”) at RS.100,000 each, resulting into no gain/(loss) in the transaction. Accordingly, ITHS and NEAS ceases to be subsidiary of the Company.

3.3 During the year ended March.31, 2017, the Company incorporated a wholly owned subsidiary (“WOS”) in the name of TeamLease Staffing Services Private Limited (“TSSPL”) by subscribing to 10,000 equity shares face value of RS.10. The WOS got Certificate of Incorporation on July 04, 2016. Through this WOS, the Company acquired ASAP Info Systems Private Limited (“ASAP”), a company incorporated under Companies Act, 1956 w.e.f. September 01, 2016 at an agreed consideration of RS.670,000,000. This includes contingent consideration up to RS.100,500,000 lakhs depending upon the performance of ASAP and the same if any, will be appropriately accounted for at the time of certainty of the amount i.e. as at August 31, 2017. Further, TSSPL signed a definitive agreement on September 20, 2016 to acquire Nichepro Technologies Private Limited (“Nichepro”), a company incorporated under Companies Act, 1956 at an agreed consideration of RS.295,000,000. The control of Nichepro got transferred on completion of transaction on October 01, 2016. On January 16, 2017, the Company through TSSPL signed a definitive agreement to acquire Keystone Business Solutions Private Limited (“Keystone”), a company incorporated under Companies Act, 1956 at an agreed consideration of RS.82,000,000. The control of Keystone got transferred to TSSPL on February 01, 2017.

3.4 On December 30, 2016, the Company was alloted by TSSPL, 3,400,000 equity shares @ RS.50 per share (Face Value of RS.10 per share) and 686 Series “A” Compulsory Convertible Debentures (‘CCD’) of RS.1,000,000 each bearing interest @9% payable annually. On March.30, 2017, the Company was further allotted 111 Series “B” CCD of RS.1,000,000 each bearing interest @9% payable annually, aggregating investment in TSSPL to RS.967,100,000. The debentures are convertible into equity shares on or before 10 years from the date of allotment. On maturity date, the CCDs will be converted into appropriate number of equity shares of the Company for a price not less than RS.50 per equity share.

4.1 During the previous year ended March.31, 2016, the Company had adjusted share issue expenses with the securities premium account. During the year ended March.31, 2017, deferred tax asset of RS.33,670,556 related to share issue expenses has been recognized and adjusted with the securities premium account which is pertaining to previous year. Accordingly, tax expense for the year ended March.31, 2017, includes adjustments on account of current income tax reversal and reversal of deferred corresponding deferred tax charge for previous year of RS.6,734,111 (Net impact is RS.NIL). Further, deferred tax asset of RS.6,734,111 has been reversed which is pertaining to tax benefit for the current year.

4.2 Gross amount required to be spent by the Company towards corporate social responsibility expense (CSR) during the year is RS.6,111,792 (Previous Year RS.4,084,379). The Company has not spent any amount towards CSR expenditure and also has not created any provision thereof during the year and previous year. Accordingly, the movement in provision during the year is Nil.

5 CONTINGENT LIABILITIES AND COMMITMENTS

(a) Contingent Liability

i. With respect to Employee State Insurance (“ESI”) demand raised in 2006, the Company had furnished documents in the prior years to justify no ESI liability for the balance amount of RS.504,467 (Previous Year RS.504,467), which is pending for approval from ESI department.

ii. The Company had received Demand Order in the prior years under section 201(1) and 201(1A) of the Income Tax Act, 1961 for tax deducted at source of RS.770,794 (Previous Year RS.770,974) for the Assessment Year 2010-11. The Company had filed appeal against the aforesaid demand in the prior years with the Commissioner of Income Tax (Appeals). The matter is pending as on date.

iii. The Company has received Demand Order under section 156 of the Income Tax Act, 1961 of RS.2,965,803 for the Assessment Year 2013-14. The Company has filed appeal against the aforesaid demand on October 29, 2016 with the Commissioner of Income Tax (Appeals). The matter is pending as on date.

iv. The Company had received a demand of RS.14,941,812 (Previous year: RS.14,941,812) inclusive of penalty during the prior years from the Commissioner of Service Tax disallowing the cenvat availed against Group Medical Insurance and Personal Accident Policy for the period from October 2010 to July 2013. The said demand was disposed off in the Company’s favor by Central Excise and Service Tax Appellate Tribunal (CESTAT). The Commissioner of Service Tax Department had filed the case against this CESTAT order with the Hon’ble High court of Karnataka, Bangalore (‘High Court’). This petition was disposed off by the High court on April 2, 2014 in Company’s favor. In May 2015, the Commissioner of ServiceTax Department had filed a petition with Supreme Court of India for condonation of delay in filing the special leave to appeal. Against this petition, condonation is granted by Supreme Court of India and there has been no further update as of the reporting date. Further on April 19, 2016, the Company received show cause notice from the Commissioner of Service Tax, Bengaluru in respect of the above matter for the period from August 2013 to September 2015 for an amount of RS.13,928,550. The Company has responded against the show cause notice on June 17, 2016 and have not received any further communication from the Commissioner of Service Tax, Bengaluru.

v. During the prior year, the Company has provided a corporate guarantee on behalf of TeamLease Skills University (‘TLSU’) to Tata Capital Financial Services Limited (“TCFSL”) whereby the Company has guaranteed all the obligations of TLSU under the Operating Lease Agreement between TCFSL and TLSU dated July 24, 2014 executed in relation to the lease of computer equipment by TCFSL to TLSU of value not exceeding RS.20,000,000 (Previous year RS.20,000,000).

vi. Pursuant to the amendment of Payment of Bonus Act, 1965, the Company considers statutory bonus of RS.334,933,022 in respect of the financial year 2014-15 as contingent liability. This is based on expert legal opinion obtained by the Company and stay orders from various High Courts across the country, the amendment to the Payment of Bonus Act to the extent that it gives retrospective effect from 1.4.2014 in respect of statutory bonus has not been recognised. As per the contractual agreement with the customers, RS.333,296,946 in respect of associate employees is recoverable from the customers in case this liability arises.

(b) Capital Commitments

Estimated amount of contract remaining to be executed on capital account and not provided for (net of capital advance of Rs.NIL) as at March.31, 2017 is RS.NIL and (Previous Year RS.739,214).

(c) Other Commitments

Guarantees given by banks against Fixed Deposits as at March.31, 2017 is RS.82,867,169 (Previous year RS.75,996,838)

6 LEASES

(a) The Company has taken on operating lease office premises at various locations. The agreements are executed for a period ranging from 1 year to 9 years. Rents are accounted as per agreement and the effect of lease equalisation are accepted based on the inflation factor.

(b) Rent payments are recognised in the Statement of Profit and Loss under the head “Rent” in Note 26 “Other Expenses” for the year ended March.31, 2017 amounting to RS.118,224,153 (Previous year: RS.99,297,953).

(c) The future minimum lease payments under non-cancellable operating lease are as below:

7 a) EMPLOYEE BENEFITS - GRATUITY (Un-funded)

The following tables summarize the components of the net employee benefit expenses recognised in the Statements of Profit and Loss the fund status and the amount recognised in the Balance Sheet for the Gratuity.

Disclosure relating to actuarial valuation of Gratuity:

7 d) EMPLOYEE BENEFITS - GRATUITY (Un-funded)

The Company has recognised gratuity liability and reimbursement right in respect of associate employees pursuant to paragrapRs.103 of Accounting Standard -15 notified under Companies (Accounting Standards) Rules, 2006 and accordingly disclosure has been made as required and to the extent provided by actuary.

8 SEGMENT REPORTING

(a) Business Segment:

The business segment has been considered as the primary segment.

The Company is primarily engaged in the business of providing manpower services. The Company had earlier disclosed reportable segments as “Staffing Operations”, “Recruitment Operations” and “Training Operations” for the year ended March.31, 2016. With effect from April 01, 2016, based on the risk, rewards and nature, the Company has revised the business segments into the following broad categories, which in context of Accounting Standard 17 on ‘Segment Reporting’ constitute reportable segments:

a) Staffing and Allied Services - Comprises of Staffing Operations, Temporary Recruitment and Payroll.

b) Other HR Services - Comprises of Permanent Recruitment, Regulatory Compliance and Training Operations.

Revenue and expenses directly attributable to segments are reported under each reportable segment. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segments. Revenue and expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis have been included under unallocated expenses/income.

Assets (including fixed assets) and liabilities that are directly attributable to segments are disclosed under each reportable segment. Common assets and liabilities have been allocated to each segment on the basis of their relationship to the operating activities of their segments. All other assets and liabilities are disclosed as unallocable.

Consequently, previous year’s figures have been reclassified to conform to the current reportable segments of the Company.

(b) Geographical Segment:

The Company operates in one Geographic segment namely “Within India” and hence no separate information for Geographic segment wise disclosure is required.

9 During the prior years, TeamLease received service tax Order for RS.37,850,377 from Commissioner of Central Excise. As per the Order there is a penalty of equivalent amount. Further, interest at the applicable rate has also been levied. The management has already filed an appeal against this Order. The penalty and interest has neither been accounted for nor disclosed as contingent liability in the financial statements since in the opinion of the management and based on the legal opinion obtained from a Service Tax Practitioner, possibility of outflow of funds are remote. The appeal is pending before the Tribunal, Kolkata, which is yet to come up for hearing.

10 During the previous year ended March.31, 2016, Payment of Bonus Act, 1965 (“the Act”) has been amended by the Payment of Bonus (Amendment) Act, 2015. The Company has recognized additional statutory bonus of RS.261,866,742 for the year ended March.31, 2016 forming part of salaries, wages and bonus with a corresponding amount included in provision for employee benefits payable as at March.31, 2016. Based on the contractual agreements with the customers, the amount in respect of associate employees is recoverable from them with the stated mark-ups and accordingly, revenue from sale of services to the tune of RS.266,732,063 (net of service tax) had been recognised with a corresponding amount included in unbilled revenue of RS.305,408,213 with service tax thereon as at March.31, 2016. During the year ended March.31, 2017, the Company has raised the invoice for the aforesaid unbilled revenue. Out of the total invoice raised, RS.142,004,505 is recoverable from client and also the corresponding amount of bonus liability appearing in provision for employee benefits payable. There are stay orders from various High Courts on the applicability of the Act. Considering the same, there have delays on receipt of the said billed amounts from clients. The Company has obtained legal opinion on the said matter and is confident of recovering the said amounts as per the contractual agreements alongwith consequential payments to the respective employees on legal determination of the above matters by relevant judicial authorities.

10 A) Amount utilised for share issue expenses

Amount utilised for share issue expenses of RS.121,970,622 includes payments made to merchant bankers, attorneys, consultants and registrars towards Initial Public Offering of shares.

B) Utilisation of funds raised through fresh issue of equity shares pursuant to Initial Public Offering (IPO) is as follows:

11 As per the amendment in the Finance Act 2016, deduction under section 80JJAA was extended across to all sectors. The Company has taken the benefit during the current year and the benefit will be available to the Company for the next two assessment years subject to fulfilment of the conditions. As a result of this, the Company is required to pay MAT as per Section 115JB of the Income Tax Act, 1961.

12 Previous Year Figures

Figures of previous year have been regrouped, re-arranged and reclassified wherever necessary to conform to the Current Period’s Classification.

The accompanying notes are an integral part of these Financial Statements.

---

Mar 31, 2016

1. Rights, Preferences and restrictions attached to shares

Equity Shares: The company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for
one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the
Company after distribution of all preferential amounts, in proportion to their shareholding.

The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General
Meeting, except in case of interim dividend.

2. There are no shares reserved for issue under options, except held by Team Lease Employee Stock Option Plan Trust, as on March
31, 2016 and for the previous year.

3. There are no shares allotted as fully paid up pursuant to contract without payment being received in cash during the period
of five years immediately preceding the year ended March 31, 2016.

4. There are no shares bought back by the Company during the period of five years immediately preceding the year ended March 31,
2016.

5. There are no securities that are convertible into equity / preference shares.

6. The shareholders of the Company on April 02, 2015 approved for increase of the Authorized Share Capital from Rs. 27,000,000
to Rs.150,000,000 divided into 133,000,000 equity shares of Re. 1 each and 170,000 12% Cumulative Convertible Redeemable
Preference Shares of Rs. 100 each by way of additional 123,000,000 equity shares of Re. 1 each. Further, on June 25, 2015, the
shareholders of the Company approved for increase of the Authorized Share Capital from Rs. 150,000,000 to Rs.250,000,000 divided
into 233,000,000 equity shares of Re. 1 each and 170,000 12% Cumulative Convertible Redeemable Preference Shares of Rs. 100 each
by way of additional 100,000,000 equity shares of Re. 1 each.

Accordingly, the Authorized Share Capital of the Company is increased to Rs. 150,000,000 effective from April 02, 2015 and
further increased to Rs.250,000,000 effective from June 25, 2015 comprising 23,300,000 equity shares of Rs.10 each and 170,000
preference shares of Rs.100 each.

7. On June 25, 2015, pursuant to the provisions of the Companies Act, 2013, the shareholders of the Company approved for issue
and allotment of 29 Bonus Equity Shares of Re. 1 each for every equity share of Re. 1 each held by the members as on that date of
this meeting and accordingly a sum of Rs. 148,209,952 is capitalized out of the Company''s Securities Premium Account outstanding
as on June 30, 2015 and transferred to the Share Capital Account towards issue of fully paid-up bonus shares pursuant to which
the paid-up Capital of the Company has increased from Rs.5,110,688 to Rs.153,320,640. and the balance in the Securities Premium
account reduced to Rs.1,003,220,349.

8. During the year ended March 31, 2016, the Company has issued 148,209,952 bonus shares out of securities premium account
thereby increasing the number of equity shares to 153,320,640 of Re 1 each and every 10 equity shares of Re 1 of the Company are
consolidated into 1 equity share thereby increasing the face value of the equity share to Rs. 10 per share. Accordingly total
153,320,640 shares of Re.1 each post-bonus have been consolidated into 15,332,064 shares of Rs.10 each by reducing 137,988,576
number of shares w.e.f July 10,2015.

9. During the year ended March 31, 2016, Directors of the Company i.e., Ashok Reddy, Manish Sabharwal and Mohit Gupta formed
three Limited Liability Partnership firms namely NED Consultants LLP, MKS Management Consultancy Services LLP and Dhana
Management LLP. Post consolidation of equity shares, HR Off shoring Ventures Pte Limited (HROV) transferred 1,379,886 equity
shares to Dhana Management LLP, 855,100 equity shares to NED Consultants LLP, 300 equity shares to MKS Management Consultancy
Services LLP, 201,114 equity shares to the ESOP Trust of the Company. Pursuant to these transfers, the shareholding of HROV in
the Company reduced from 52.28% to 41.97% from March 31, 2015 to July 31, 2015 and then further reduced to 31.74% as on March 31,
2016 .

Notes to the Financial Statements forming part of Balance Sheet as at March 31, 2016 and Statement of Profit and Loss for the
year ended March 31, 2016

10. As of March 31, 2015 total number of equity shares held by the employees of the Company amounting to 265,321 equity shares
of Re. 1 each and all such shares have been transferred to employees by way of dilution of shareholding of ILCHPL and HROV over
the years ended March 31, 2009, 2010, 2012, 2013, 2014 and 2015 . The Board of Directors of the Company on August 03, 2015
approved to cancel the previous ESOP Scheme which was issued by the Company on July 27, 2011 and to implement new "Team Lease
Employee Stock Option Plan 2015" ("ESOP 2015 scheme") which has been formulated and the existing ESOP Trust has been re-
constituted in line with the Securities and Exchange Board of India (Share based employee benefits) Regulations, 2014, provisions
of the Articles of Association of the Company and Companies Act, 2013 and Rules. The shareholders of the Company approved the
ESOP 2015 Scheme on July 10, 2015. All unvested and unexercised ESOPs granted to employees under the previous ESOP scheme have
been cancelled with effect from August 03, 2015. Team Lease Employee Stock Option Plan Trust (the "Trust") has granted 32,390
options on October 01, 2015 to the employees of the Company, which is out of the transfer of 201,114 equity shares by HROV. Since
the options are issued by the Trust and not by the Company, there is no impact on the Financial Statements of the Company towards
grant / allotment of ESOP.Refer Note 33 for further details.

* During the previous year, the Company had passed a special resolution in its Extraordinary General Meeting held on January 15,
2015 and made an application to the High Court of Judicature at Bombay to approve for the reduction of the Securities Premium
Account of the Company from Rs. 1,533,689,602 to Rs. 1,151,430,301 and to affect such reduction by adjusting the entire debit
balance in the Surplus/ (Deficit) in the Statement of Profit and Loss amounting to Rs. 382,259,301 as on 31st March, 2014. The
Order of the High Court was passed on March 27, 2015 and the minutes approved by the Court were registered by the Registrar of
Companies on May 29, 2015. Accordingly, Securities Premium as on March 31, 2015 had been adjusted with the debit balance of
profit and loss to the extent of Rs. 382,259,301 in accordance with Accounting Standard (AS) - 4 : Contingencies and events
occurring after the Balance Sheet Date.

11. Provision for Diminution in the Value of Investments includes Rs.219,837,780 (Previous Year Rs.219,837,780) towards
investment in IIJT and Rs.100,000 (Previous Year Rs.100,000) towards investment in ITHS.

* Fixed deposits of Rs. 250,044,142 as at March 31, 2016 (Previous year Rs. 192,332,471) which are under lien with various banks
for the Overdraft facilities and Guarantees issued by the Bank on behalf of the Company, Refer Note 26 (c).

Provident Fund Trust

Provident Fund for eligible employees is managed by the Company through "Team Lease Employees Provident Fund Trust ("Trust"), in
line with the Provident Fund and Miscellaneous Provisions Act, 1952. The plan guarantees interest at the rate notified by the
provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are
payable to the employees at the time of their separation from the Company or retirement, whichever is earlier. The benefits vests
immediately on rendering of the services by the employee.

Gratuity

Every employee is entitled to a benefit equivalent to Fifteen days salary last drawn for each completed year of service in line
with the Payment of Gratuity Act, 1972. The same is paid at the time of separation from the Company or retirement, whichever is
earlier. The benefits vest in accordance with the Payment of Gratuity Act, 1972.

Leave Encashment

Every employee is entitled to a leave encashment of 15 days of Paid Leave (Maximum carry forward of 30 days) calculated on gross
pay. The same is paid at the time of separation from the Company or Retirement whichever is earlier.

In addition to above provision, the Company had paid Auditor''s Remuneration of Rs. 15,771,992 (Previous Year Rs 2,247,200)
towards Initial Public Offer of equity shares to the Statutory Auditors of the Company. Out of above, the Company has recovered
Rs. 11,712,475 from the selling shareholders and Rs. 6,306,717 has been adjusted with the Securities Premium as share issue
expense.

12. Gross amount required to be spent by the Company towards corporate social responsibility expense (CSR) during the year is
Rs. 4,084,379 (Previous Year Rs.732,723). The Company has not spent any amount towards CSR expenditure neither has created any
provision thereof during the year and previous year. Accordingly, the movement in provision during the year is Nil.

13. CONTINGENT LIABILITIES AND COMMITMENTS

(a) Contingent Liability

i. With respect to Employee State Insurance ("ESI")demand raised in 2006, the Company had furnished documents in the prior year
to justify no ESI liability for the balance amount of Rs. 504,467 (Previous year Rs. 504,467) which is pending for approval from
ESI department.

ii. The Company had received Demand Order in the prior under section 201(1) and 201(1A) of the Income Tax Act, 1961 for tax
deducted at source of Rs. 770,794 (previous year Rs.770,974) for the Assessment Year 2010-11. The Company had filed appeal
against the aforesaid demand in the prior year with the Commissioner of Income Tax (Appeals).The matter is pending as on date.

iii. The Company had received a demand of Rs.14,941,812 (Previous year: Rs.14,941,812) inclusive of penalty during the prior year
from the Commissioner of Service Tax disallowing the cenvat availed against Group Medical Insurance and Personal Accident Policy
for the period from October 2010 to July 2013. The said demand was disposed off in the Company''s favor by Central Excise and
Service Tax Appellate Tribunal (CESTAT). The Commissioner of Service Tax Department had filed the case against this CESTAT order
with the Hon''ble High court of Karnataka, Bangalore (''High Court'') . This petition was disposed off by the High court on April 2,
2014 in Company''s favor. In May 2015, the Commissioner of Service Tax Department had filed a petition with Supreme Court of India
for condo nation of delay in filing the special leave to appeal. Against this petition, condo nation is granted by Supreme Court
of India and there has been no further update as of the reporting date.

Further on April 19, 2016, the Company received show cause notice from the Commissioner of Service Tax, Bengaluru in respect of
the above matter for the period from August 2013 to September 2015 for an amount of Rs 13,928,550. The Company on May 12, 2016,
has responded against the show cause notice received and has sought one month extension from the department which is pending as
on date.

iv. The Company has provided a corporate guarantee on behalf of Team Lease Skills University (''TLSU'') to Tata Capital Financial
Services Limited ("TCFSL") whereby the Company has guaranteed all the obligations of TLSU under the Operating Lease Agreement
between TCFSL and TLSU dated July 24, 2014 executed in relation to the lease of computer equipment by TCFSL to TLSU of value not
exceeding Rs.20,000,000 (Previous year Rs 15,000,000).

vi. Pursuant to the amendment of Payment of Bonus Act, 1965, the Company considers statutory bonus of Rs 334,933,022 in respect
of the financial year 2014-15 as contingent liability (Refer Note 35 for further details).

As per the contractual agreement with the customers, Rs 333,296,946 in respect of associate employees is recoverable from the
customers in case this liability arises.

(b) Capital Commitments

Estimated amount of contract remaining to be executed on capital account and not provided for (net of capital advance of Rs
232,332) as at March 31, 2016 is Rs 739,214 and (Previous Year Rs. NIL).

Note a: During the year ended March 31, 2016, the Company has issued 148,209,952 bonus shares thereby increasing the number of
equity shares to 153,320,640 of Re 1 each and every 10 equity shares of Re 1 of the Company are consolidated into 1 equity share
thereby increasing the face value of the equity share to Rs. 10 per share. Accordingly total 153,320,640 shares of Re.1 each
post-bonus have been consolidated into 15,332,064 shares of Rs.10 each by reducing 137,988,576 number of shares. Accordingly,
Basic and Diluted earnings per share has been adjusted for the year ended March 31, 2015 presented above in line with the
Accounting Standard (AS)- 20 "Earnings per share" (Refer Note 3.10 and 3.11).

14 LEASES

(a) The Company has taken on operating lease office premises at various locations. The agreements are executed for a period
ranging from 1 year to 9 years. Rents are accounted as per agreement and the effect of lease equalization are accepted based on
the inflation factor.

(b) Rent payments are recognized in the Statements of Profit and Loss under the head "Rent" in Notes 25 "Other Expenses" for the
year ended March 31, 2016 amounting to Rs. 99,297,953 respectively (previous year: Rs 71,239,724).

15. RELATED PARTY DISCLOSURE

(a) Related parties where control exists(Refer Note 3.3): Nature of Relationship

Subsidiary Companies IIJT Education Private Limited (''IIJT'')

Team Lease Education Foundation (''TLEF'')

India Tourism and Hospitality Skills Education Private Limited

National Employability Apprenticeship Services (''NEAS'')

(b) Other Related Parties:

Key Management personnel & their relatives Mr. Manish Sabharwal - Chairman & Promoter

Mr. Ashok Kumar Nedurumalli - Managing Director & Promoter

Mr. Mohit Gupta - Director (Resigned w.e.f July 31, 2015)

Mr. Ravi Vishwanath - Chief Financial Officer

Mr. Mruthunjaya Murthy- Company Secretary (w.e.f. May 07, 2015)

Mrs. Asha Vishwanath - relative of Mr. Ravi Vishwanath

Enterprises over which key Management Hansini Management Consultants Private Limited (''HANSINI'')

Personnel are able to exercise significant Team Lease Skills University (''TLSU'')

influence with whom transactions have taken India Life Capital Private Limited (''ILCPL'')

place HR Off shoring Ventures Pte Limited (''HROV'') (Refer Note 3.3)

16. During the prior year, Team Lease received service tax Order for Rs 37,850,377 from Commissioner of Central Excise. As per the
Order there is a penalty of equivalent amount. Further, interest at the applicable rate has also been levied. The management has
already filed an appeal against this Order. The penalty and interest has neither been accounted for nor disclosed as contingent
liability in the financial statements since in the opinion of the management and based on the legal opinion obtained from a
Service Tax Practitioner, possibility of outflow of funds are remote.

17.During the year ended March 31, 2016, Payment of Bonus Act, 1965 ('' the Act") has been amended vide the Payment of Bonus
(Amendment) Act, 2015. The Act has been amended to take retrospective effect w.e.f. April 01, 2014 and accordingly revised bonus
(including arrears related to the year ended March 31, 2015) is required to be paid to the eligible employees. Based on expert
legal opinion obtained by the Company and stay orders from various High Courts across the country, the amendment to the Payment
of Bonus Act to the extent that it gives retrospective effect from 1.4.2014 in respect of statutory bonus has not been recognized
and treated as contingent liability. Hence, the Company has recognized additional statutory bonus of Rs. 261,866,742 for the year
ended March 31, 2016 forming part of salaries, wages and bonus with a corresponding amount included in provision for employee
benefits payable as at March 31, 2016. Based on the contractual agreements with the customers, the amount in respect of associate
employees is recoverable from them with the stated mark-ups and accordingly, revenue from sale of services to the tune of Rs.
266,732,063 (net of service tax) has been recognized with a corresponding amount included in unbilled revenue of Rs. 305,408,213
with service tax thereon as at March 31, 2016.

18.A) Amount utilized for share issue expenses

Amount utilized for share issue expenses Rs. 120,377,368 includes payments made to merchant bankers, attorneys, consultants and
registrars towards Initial Public Offering of shares.

19. Previous Year Figures

Figures of previous year have been regrouped, re-arranged and reclassified wherever necessary to conform to the Current Period''s
Classification.