Accounting Policies of IRIS RegTech Solutions Ltd. Company

Mar 31, 2025

2. Material Accounting Policies:

2.1 Statement of Compliance and Basis of
preparation and presentation of standalone
financial statements

The standalone financial statements are prepared and
presented in accordance with the Indian Accounting Standards
(Ind AS) as prescribed under section 133 of the Companies Act,
2013 (“the Act”), as amended, read with the Companies (Indian
Accounting Standards) Rules, 2015 as amended from time
to time and as per the requirements of Schedule III (Division
II) of the Companies Act, 2013 and guidelines issued by the
Securities and Exchange Board of India (SEBI), as applicable.

These Standalone Financial Statements have been prepared
and presented on the going concern basis and on historical cost
basis on accrual basis except for certain financial instruments
and defined benefits plans which are measured at Fair value or
amortised cost at the end of each reporting period

Historical cost is generally based on the fair value of the
consideration given in exchange for goods and services. Fair
value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date under current
market conditions, regardless of whether that price is directly
observable or estimated using another valuation technique. In

determining the fair value of an asset or a liability, the Company
takes into account the characteristics of the asset or liability
if market participants would take those characteristics into
account when pricing the asset or liability at the measurement
date.

Accounting policies have been consistently applied.

The Standalone Balance Sheet and the Standalone
Statement of Profit and Loss, Standalone Statement of Other
Comprehensive Income, Standalone Statement of Changes in
Equity are prepared and presented in the format prescribed in
Division II of Schedule III to the Act. The Standalone Statement
of Cash Flows has been prepared and presented under indirect
method as per Ind AS 7 “Statement of Cash Flows”.

2.2 Use of estimates and judgment:

The preparation of the standalone financial statements
requires the management to make judgements, estimates
and assumptions in the application of accounting policies and
that have the most significant effect on reported amounts of
assets, liabilities, incomes and expenses, and accompanying
disclosures, and the disclosure of contingent liabilities. The
estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
Actual results may differ from these estimates. The estimates
and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period
in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the
revision affects both current and future periods.

Key sources of estimation of uncertainty at the date of the
standalone financial statements, which may cause a material
adjustment to the carrying amounts of assets and liabilities
within the next financial year, is in respect of impairment of
investments, useful lives of property, plant and equipment,
valuation of deferred tax assets, provisions and contingent
liabilities.

2.3 Functional and Presentation Currency:

The standalone financial statements are presented in Indian
Rupees which is the functional currency of the company, and all
values are rounded to the nearest thousands except otherwise
stated. Due to rounding off, the numbers presented throughout
the document may not add up precisely to the totals and
percentages may not precisely reflect the absolute figures.

2.4 Classification of Assets and Liabilities into
Current/Non-Current:

All assets and liabilities are classified as current or non-current
as per the Company’s normal operating cycle, and other criteria
set out in Schedule III of the Companies Act, 2013.

Operating cycle

Based on the nature of products and the time lag between the
development of the products, providing of services, and their
realization in cash and cash equivalents, the Company has
ascertained its operating cycle as twelve months as its normal
operating cycle for the purpose of classification of its Assets
and Liabilities into Current and Non-Current.

2.5 Revenue Recognition:

The Company derives revenues from Software Products,
Solutions & Services.

i. Revenues from software products, in the
form of:

a) Software licensing

b) Subscription of software as a service

c) Application maintenance service

ii. Revenue from Software services are mainly
in the form of Implementation services/
Professional services.

Revenue is recognized in the standalone statement of
profit and loss upon transfer of control of promised
products or services to customers at transaction price
i.e. an amount that reflects the consideration which
the Company expects to receive in exchange for those
services or products and excluding taxes or duties.

At contract inception, the Company assesses its promise
to transfer products or services to a customer to identify
separate performance obligations. The Company
applies judgment to determine whether each product
or service promised to a customer is capable of being
distinct, and are distinct in the context of the contract,
if not, the promised products or services are combined
and accounted as a single performance obligation. The
Company allocates the contract value to separately
identifiable performance obligations based on their
relative stand-alone selling price (mostly as reflected in the
contracts) or residual method. Standalone selling prices
are determined based on sale prices for the components
when it is regularly sold separately. In cases where the
Company is unable to determine the stand-alone selling
price, the Company uses expected cost-plus margin
approach in estimating the stand-alone selling price. For
performance obligations where control is transferred over
time, revenues are recognized by measuring progress
towards completion of the performance obligation. The
selection of the method to measure progress towards
completion requires judgment and is based on the nature
of the promised products or services to be provided. The
method for recognizing revenues depends on the nature
of the products sold / services rendered.

A) Revenue from Software Products:

i. Software Licensing:

Software licensing revenues represent all fees earned
from granting customers licenses to use the Company’s
software, through initial licensing and or through the
purchase of additional modules. For software license
arrangements that do not require significant modification
or customization of the underlying software, revenue
is recognized on delivery of the software and when the
customer obtains a right to use such licenses.

ii. Subscription for Software as a Service:

Subscription fees for offering the hosted software as a
service are recognized as revenue ratably on straight line
basis, over the term of the subscription arrangement.

iii. Application Maintenance Services:

Fees for the application maintenance services, covering
inter alia the support of the customized software, are
recognized as revenue ratably on straight line basis, over
the term of the support arrangement.

B) Revenue from Software Services:

i. Product Support Services:

Fees for product support services, covering inter alia
improvement and upgradation of the basic Software,
whether sold separately (e.g., renewal period AMC, GST
and subscription services) or as an element of a multiple-
element arrangement, are recognized as revenue ratably
on straight line basis, over the term of the support
arrangement.

ii. Implementation / Professional Services:

Software Implementation / Professional Services
contracts are either fixed price or time based. Revenues
from fixed price contracts, where the performance
obligations are satisfied over time, are recognized using
the “percentage of completion” method. Percentage of
completion is determined based on project costs incurred
to date as a percentage of total estimated project costs
required to complete the project. The cost expended
(or input) method has been used to measure progress
towards completion as there is a direct relationship
between input and productivity. The performance
obligations are satisfied as and when the services are
rendered since the customer generally obtains control
of the work as it progresses. Where the Software is
required to be substantially customized as part of the
implementation service, the entire fee for licensing and
implementation services is considered to be a single
performance obligation and the revenue is recognized
using the percentage of completion method as the
implementation services are performed. Revenues from
implementation services in respect of hosting contracts
are to be recognized as revenue ratably over the longer

of the contract term or the estimated expected life of the
customer relationship.

When total cost estimates exceed revenues in an
arrangement, the estimated losses are recognized in the
standalone statement of profit and loss in the period in
which such losses become probable based on the current
contract estimates as a contract provision. In the case
of time and material contracts, revenue is recognized
based on billable time spent in the project, priced at the
contractual rate. Any change in scope or price is considered
as a contract modification. The Company accounts for
modifications to existing contracts by assessing whether
the services added are distinct and whether the pricing
is at the standalone selling price. Services added that
are not distinct are accounted for on a cumulative catch¬
up basis, while those that are distinct are accounted for
prospectively as a separate contract if the additional
services are priced at the standalone selling price.

Non-refundable one-time upfront fees for enablement /
application installation, consisting of standardization set¬
up, initiation or activation or user login creation services
in the case of hosting contracts, are recognized once the
customer obtains a right to access and use the Software.

C) Contract assets, liabilities and financing
arrangements:

A contract asset is a right to consideration that is
conditional upon factors other than the passage of time.
Contract assets primarily relate to unbilled amounts on
implementation / professional services contracts and
are classified as non- financial asset as the contractual
right to consideration is dependent on completion of
contractual milestones (which we refer to as unbilled
services revenue). Unbilled revenues on software
licensing are classified as a financial asset where the right
to consideration is unconditional upon passage of time
(which we refer to as unbilled licenses revenue).

A contract liability is an entity’s obligation to transfer
software products or software services to a customer
for which the entity has received consideration (or the
amount is due) from the customer (which we refer to as
unearned revenue). The Company assesses the timing
of the transfer of software products or software services
to the customer as compared to the timing of payments
to determine whether a significant financing component
exists. As a practical expedient, the

Company does not assess the existence of a significant
financing component when the difference between
payment and transfer of deliverables is a year or less. If
the difference in timing arises for reasons other than
the provision of finance to either the customer or us, no
financing component is deemed to exist.

Revenue from subsidiaries is recognised based on
transaction price which is at arm’s length.

2.6 Other Income:

i. Interest income is recognized on time proportion basis
taking into account the amount outstanding and rate
applicable.

2.7 Employee Benefit expenses

a) Short term employee benefits:

All employee benefits falling due wholly within twelve
months of rendering the service are classified as short¬
term employee benefits and they are recognized as an
expense at the undiscounted amount in the Standalone
Statement of Profit and Loss in the period in which the
employee renders the related service on accrual basis. A
liability is recognised for the amount expected to be paid
when there is a present legal or constructive obligation to
pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.

b) Post-employment benefits

1. Defined Contribution Plan - Provident Fund

The defined contribution plan is post - employment
benefit plan under which the Company contributes
fixed contribution to a government administered fund
and will have no obligation to pay further contribution.
The Company’s defined contribution plan comprises
of Provident Fund, Employee State Insurance Scheme,
and Labour Welfare Fund. The Company’s contribution
to defined contribution plans are recognized in the
Standalone Statement of Profit and Loss in the period in
which employee renders the related service.

2. Defined Benefit Plan - Gratuity

The obligation in respect of defined benefit plans, which
covers Gratuity Plan, is provided for on the basis of an
actuarial valuation at the end of each financial year
which represents the present value of the defined benefit
obligation reduced by the fair value of scheme assets.
The employees are covered under the Company Gratuity
Scheme of the Life Insurance Corporation of India.

Re-measurement, comprising actuarial gains and
losses, the effect of the changes to the asset ceiling (if
applicable) and the return on plan assets (excluding
net interest), is reflected immediately in the Standalone
Balance Sheet with a charge or credit recognized in other
comprehensive income in the period in which they occur.
Re- measurement recognized in other comprehensive
income is reflected immediately in retained earnings and
will not be reclassified to Standalone Statement of Profit
and Loss.

Defined benefit costs include service cost (including
current service cost, past service cost, as well as gains
and losses on curtailments and settlements), net interest
expense or income; and re-measurement. The service
cost and net interest expense or income are presented in
the Standalone Statement of Profit and Loss.

The liability for Gratuity is ascertained as at the end of
the financial year, based on the actuarial valuation by
an independent external actuary as at the reporting date
using the “projected unit credit method”

The discounted rates used for determining the present
value are based on the market yields on Government
bonds as at the reporting date. Actuarial gains and losses
are recognized in other comprehensive income, net of
taxes, for the period in which they occur. Past service cost
both vested and unvested is recognised as an expense at
the earlier of (a) when the plan amendment or curtailment
occurs; and (b) when the entity recognises related
restructuring cost or termination benefits. The Company
recognises gains and losses on the curtailment or
settlement of a defined benefit plan when the curtailment
or settlement occurs.

3. Other Long Term Employee Benefit Obligations:

The employees are eligible for leave as per leave policy
of the company. The un-utilised leave can be carried
forward and utilised during the course of employment. No
encashment is allowed of unutilised leave. The obligation
for the leave encashment is recognised based on an
independent actuarial valuation at the reporting date.
The expense is recognised in the standalone statement of
profit and loss at the present value of the amount payable
determined based on actuarial valuation using “projected
unit credit method”.

The obligation is measured at the present value of
estimated future cash flows.

The rate used to discount defined benefit obligation is
determined by reference to market yields at the reporting
date on Indian Government Bonds for the estimated term
of obligations.

2.8 Share based payment arrangements:

Stock options granted to employees of the Company and its
subsidiaries under the stock option schemes approved by
the shareholders of the Company are accounted as per the
treatment prescribed by the relevant Ind AS and as required
by the Securities and Exchange Board of India (Share Based
Employee Benefits) Regulations, 2014.

Equity-settled share-based payments to employees are
measured by reference to the fair value of the equity instruments.

The fair value determined at the grant date of the equity-settled
share-based payments, is charged to Standalone Statement of
Profit and Loss on the straight-line basis over the vesting period
of the option, based on the Company’s estimate of equity
instruments that will eventually vest, with a corresponding
increase in equity. The employee stock option outstanding
account is shown net of unamortised deferred employee
compensation expenses.

The fair value of the option being stock option granted for
purchase could be exchanged between knowledgeable, willing

parties in an arm’s length transaction is recognised as deferred
employee compensation with a credit to share options
outstanding account.

The fair value has been calculated using the Black Scholes
Option Pricing model.

2.9 Property, Plant and Equipment

The expenditure incurred for acquisition or development of
Property, Plant & Equipment is recognised as asset if, and only
if when it is probable that future economic benefits associated
with the item will flow to the Company and the cost of the item
can be measured reliably.

Property, Plant & Equipment are stated at cost less accumulated
depreciation and accumulated impairment losses/allowances,
if any.

The initial cost of Property, Plant & Equipment comprises its
purchase price, non-refundable purchase taxes and any costs
directly attributable to bringing the asset into the location and
condition necessary for it to be capable of operating in the
manner intended by management.

Subsequent costs are included in the Property, Plant &
Equipment’s carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Company and
the cost of item can be measured reliably. The carrying amount
of any component accounted for as separate asset is recognised
when replaced. All other repairs and maintenance are charged
to the Statement of Profit and Loss during the reporting period
in which they are incurred.

The carrying amount of an item of Property, Plant & Equipment
is derecognised upon disposal or when no future economic
benefit is expected to arise from its continued use. Any gain or
loss arising on the de-recognition of an item of Property, Plant
& Equipment is determined as the difference between the net
disposal proceeds and the carrying amount of the item and is
recognised in Statement of Profit and Loss.

If significant parts of an item of Property, Plant & Equipment
have different useful lives, then they are accounted for as
separate items of Property, Plant & Equipment.

If the recoverable amount of an asset (or CGU) is estimated to be
less than its carrying amount, the carrying amount of the asset
(or CGU) is reduced to its recoverable amount. An impairment
loss is recognised in the statement of profit and loss.

Depreciation method, Estimated useful lives and
residual value

Depreciation on Property, Plant & Equipment is the systematic
allocation of the depreciable amount over its estimated useful
lives and is provided on a straight-line basis from the date
the same are available for use. Useful life of Property, Plant &
Equipment is in accordance with the useful lives prescribed in
Schedule II of the Companies Act, 2013 (as amended).

Pursuant to the adoption of Ind AS, the Company has not
revised its estimate useful life of property, plant & equipment
and they continue to remain the same basis the table given
below:

Assets type	Useful life (in Years)
Laptops and Desktops	3
Servers and network	6
Office equipment	5
Furniture	10

Depreciation on Property, Plant & Equipment acquired/
disposed-off during the year is provided on pro-rata basis with
reference to the date of acquisition/disposal.

Items of Property, Plant & Equipment having cost of C 5,000 or
less are depreciated fully in the year of purchase/capitalisation.

The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period,
with the effect of any change in estimate is accounted for on a
prospective basis.

Intangible Assets

Intangible assets are recognised only if it is probable that the
future economic benefits that are attributable to that asset will
flow to the Company and the cost of the item can be measured
reliably. Intangible assets are stated at cost less accumulated
amortisation and accumulated impairment losses, if any.
Directly attributable costs, that are capitalised as part of
the software development include employee costs and an
appropriate portion of relevant overheads or expenses.

Expenditure incurred on development is capitalised if such
expenditure leads to creation of any intangible asset, otherwise,

such expenditure is charged to the Standalone Statement of
Profit and Loss.

Intangible Assets under Development

Intangible assets under development are stated at cost less
accumulated impairment losses, if any.

Expenses incurred on in-house development of courseware and
products are shown as Intangible asset under development till
the asset is ready to use. Their technical feasibility and ability to
generate future economic benefits is established in accordance
with the requirements of Ind AS 38, “Intangible Assets”.

Amortisation

Amortization is recognised over their respective individual
estimated useful lives on a straight-line basis, from the date
they are available for use, as under:

Assets type	Useful life (in Years)
Software	5

The estimated useful life and amortisation method are
reviewed at the end of each reporting period, with the effect of
any change in estimate being accounted for on a prospective
basis.

Software development costs

Research costs are expensed as incurred. Software development
expenditures on product / platform are recognised as intangible
assets when the Company can demonstrate:

• The technical feasibility of completing the intangible
asset so that the asset will be available for use or sale

• Its intention to complete and its ability and intention to
use or sell the asset

• How the asset will generate future economic benefits

• The availability of resources to complete the asset

• The ability to measure reliably the expenditure during
development.

Following initial recognition of the development expenditure
as an asset, the asset is carried at cost less any accumulated
amortization and accumulated impairment losses, if any.
Amortization of these assets begins from the year, following
the year in which such development costs are incurred.
Amortization expense is recognised in the standalone
statement of profit and loss unless such expenditure forms
part of carrying value of another asset. Costs incurred in the
development of the product, together with repository of new
business components, upon completion of the development
phase, have been classified and grouped as “Product software”
under intangible assets. The costs which can be capitalized
include direct labour, license costs and overhead costs that are
directly attributable for the development of the intangible asset
for its intended use.

2.10 Leases

A contract is, or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period of time
in exchange for consideration.

Company as a lessee

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

As a Lessee

The Company’s leased assets consist of leases for office
buildings and computers. At inception of a contract, the
Company assesses whether a contract is, or contains, a lease.
A contract is or contains, a lease if the contract conveys the
right to control the use of an identified asset for a period of time
in exchange for consideration. To assess whether a contract
conveys the right to control the use of an identified asset, the
Company assesses whether:

(i) the contract involves the use of an identified asset

(ii) the Company has the right to obtain substantially all of
the economic benefits from use of the asset throughout
the period of use; and

(iii) the Company has the right to direct the use of the asset.

The Company recognises a right-of-use asset and a lease
liability at the lease commencement date. The right-of-use asset
is initially measured at cost, which comprises the initial amount
of the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received. They are
subsequently measured at cost less accumulated depreciation
and impairment losses.

The right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the
earlier of the end of the useful life of the right-of-use asset or the
end of the lease term. The estimated useful lives of right-of-use
assets are determined on the same basis as those of Property,
Plant and Equipment. In addition, the right-of-use asset are
tested for impairment whenever there is any indication that
their carrying amounts may not be recoverable. Impairment
loss if any, is recognised in Statement of profit and loss.

The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the Company’s
incremental borrowing rate. Generally, the Company uses its
incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease
liability comprise the following:

• Fixed payments, including in-substance fixed payments.

• Variable lease payments that depend on an index or a
rate, initially measured using the index or rate as at the
commencement date;

• Amounts expected to be payable under a residual value
guarantee; and

• The exercise price under a purchase option that the
company is reasonably certain to exercise, lease
payments in an optional renewal period if the company
is reasonably certain to exercise an extension option,
and penalties for early termination of a lease unless the
company is reasonably certain not to terminate early.

The lease liability is subsequently measured at amortised cost
using the effective interest method. It is remeasured when there
is a change in future lease payments arising from a change in
an index or rate, if there is a change in the Company’s estimate
of the amount expected to be payable under a residual value

guarantee, or if the Company changes its assessment of
whether it will exercise a purchase, extension or termination
option.

When the lease liability is remeasured in this way, a
corresponding adjustment is made to the carrying amount
of the right-of-use asset or is recorded in profit or loss if the
carrying amount of the right-of-use asset has been reduced to
zero.

Short-term leases and leases of low-value assets:

The Company has elected not to recognise right-to-use assets
and lease liabilities for short-term lease that have a lease
term of 12 months or less and leases of low-value assets. The
Company recognises the lease payments associated with these
leases as an operating expense as per the terms of the lease.

Lease liability and ROU asset have been separately presented in
the Balance Sheet and lease payments have been classified as
financing cash flows.

2.11 Borrowing Costs:

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

Borrowing costs that are directly attributable to the acquisition,
development or production of a qualifying asset are capitalised
as part of cost of that asset, till such time the asset is ready for
the intended use. All other borrowing costs are recognized as
an expense in the period which are incurred and are charged to
the Statement of Profit & Loss.

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

2.12 Derivative Contracts and Accounting:

The Company enters into forward contracts to hedge the foreign
currency risk of firm commitments and highly probable forecast
transactions. Derivatives are initially recognised at fair value
at the date the derivative contracts are entered into and are
subsequently remeasured to their fair value at the end of each
reporting period. The resulting gain or loss is recognised in the
Statement of Profit and Loss immediately unless the derivative
is designated and effective as a hedging instrument, in which
event the timing of the recognition in the Statement of Profit
and Loss depends on the nature of the hedging relationship
and the nature of the hedged item. The Company does not hold
financial instruments for speculative purpose.

Hedge Accounting -

• The Company designates certain hedging instruments
in respect of foreign currency risk as cash flow hedges.
At the inception of the hedge relationship, the Company

documents the relationship between the hedging
instrument and the hedged item, along with its risk
management objectives and its strategy for undertaking
various hedge transactions. Furthermore, at the inception
of the hedge and on an ongoing basis, the Company
documents whether the hedging instrument is highly
effective in offsetting changes in fair values or cash flows
of the hedged item attributable to the hedged risk

• The effective portion of changes in the fair value of the
designated portion of derivatives that qualify as cash flow
hedges is recognized in other comprehensive income and
accumulated under the heading of cash flow hedging
reserve. The gain or loss relating to the ineffective portion
is recognized immediately in the statement of profit and
loss.

• Amounts previously recognised in other comprehensive
income and accumulated in equity relating to effective
portion are reclassified to the Statement of Profit and Loss
in the periods when the hedged item affects profit or loss.
However, when the hedged forecast transaction results in
the recognition of a non-financial asset or a non-financial
liability, such gains and losses are transferred from equity
and included in the initial measurement of the cost of the
non-financial asset or non-financial liability.

• Hedge accounting is discontinued when the hedging
instrument expires or is sold, terminated, or exercised, or
when it no longer qualifies for hedge accounting. Any gain
or loss recognised in other comprehensive income and
accumulated in equity at that time remains in equity and
is recognised when the forecast transaction is ultimately
recognised in the statement of profit and loss. When
a forecast transaction is no longer expected to occur,
the gain or loss accumulated in equity is recognized
immediately in the statement of profit and loss.

2.13 Cash and cash equivalents:

Cash and cash equivalents in the Balance Sheet comprises
of cash at banks and on hand and short-term deposits with
an original maturity of three months or less, highly liquid
investments that are readily convertible into known amounts of
cash and are subject to an insignificant risk of changes in value.

2.14 Income Tax

Income tax comprises current tax expense and the net change in
the deferred tax asset or liability during the year. It is recognised
in the Statement of Profit and Loss except to the extent that
it relates to a business combination or to an item recognised
directly in equity or in other comprehensive income.

i. Current Tax

Current tax comprises the expected tax payable or receivable
on the taxable income or loss for the year and any adjustment
to the tax payable or receivable in respect of previous years.
The amount of current tax reflects the best estimate of the
tax amount expected to be paid or received after considering
the uncertainty, if any, related to income taxes. It is measured
using tax rates (and tax laws) enacted or substantively enacted

by the reporting date in each of the applicable jurisdictions.
Management periodically evaluates positions taken in tax
returns with respect to situations in which applicable tax
regulation is subject to interpretation and considers whether it
is probable that a taxation authority will accept an uncertain tax
treatment. The Company measures its tax balances either based
on the most likely amount or the expected value, depending on
which method provides a better prediction of the resolution of
the uncertainty.

Current tax assets and current tax liabilities are offset only
if there is a legally enforceable right to set off the recognised
amounts, and it is intended to realize the asset and settle the
liability on a net basis or simultaneously.

ii. Deferred Tax

Deferred tax is recognised on temporary differences between
the carrying amounts of assets and liabilities in the Company’s
financial statements and the corresponding tax bases used
in the computation of taxable profit. Deferred tax is also
recognised in respect of carried forward tax losses and tax
credits. Deferred tax is not recognised for:

- temporary differences arising on the initial recognition of
assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor
taxable profit or loss at the time of the transaction;

- temporary differences related to investments in
subsidiaries, associates and joint arrangements to the
extent that the Company is able to control the timing of
the reversal of the temporary differences and it is probable
that they will not reverse in the foreseeable future; and

- taxable temporary differences arising on the initial
recognition of goodwill.

Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply to the period when the asset
is realised, or the liability is settled based on tax rates (and tax
laws) that have been enacted or substantively enacted by the
end of the reporting period. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would
follow from the manner in which the Company expects, at the
end of the reporting period, to recover or settle the carrying
amount of its assets and liabilities. Deferred tax liabilities are
generally recognised for all taxable temporary differences.
The company recognises deferred tax assets only when it is
probable that taxable profits will be available against which the
deductible temporary differences can be utilised.

iii. Minimum Alternate Tax (MAT):

MAT is recognised as an asset only when and to the extent
there is convincing evidence that the Company will pay
normal income tax during the specified period. In the year
in which the MAT credit becomes eligible to be recognised,
it is credited to the Standalone Statement of Profit and
Loss and is considered as (MAT Credit Entitlement).
The Company reviews the same at each reporting date
and writes down the carrying amount of MAT Credit

Entitlement to the extent there is no longer convincing
evidence to the effect that the Company will pay normal
Income Tax during the specified period. Minimum
Alternate Tax (MAT) Credit are in the form of unused tax
credits that are carried forward by the Company for a
specified period of time, hence, it is presented as Deferred
Tax Asset.

215 GST Input Tax Credit

Goods and Service tax Input tax credit is accounted in the books
in the period in which supply of goods or service received is
accounted and when there is no uncertainty in availing/utilizing
the credits. The Input tax Credit was claimed in respect of
eligible expenses and shall be adjusted against the GST payable
as per the provisions of the applicable GST Act. The unutilised
input credit under the GST provisions as on the reporting date
was disclosed as other current asset in the Balance Sheet.

2.16 Foreign Currency Transactions:

• Transactions denominated in foreign currencies are
recognised at the exchange rates prevailing on the date
of the transactions. As at reporting date, monetary
assets and liabilities designated in foreign currency are
translated at the closing exchange rate. Foreign currency
non-monetary items measured at fair value on initial
recognition are translated at the prevailing exchange
rate as at the date of initial transactions foreign currency
nonmonetary items measured in terms of historical cost
are not translated at the reporting date.

• Exchange difference arising on settlement or translation
of foreign currency monetary items are recognized as
income or expense in the year in which they arise except
for exchange differences on foreign currency borrowings
relating to assets (tangible/ intangible) under construction
for future productive use, which are included in the cost
of those assets when they are regarded as an adjustment
to interest costs on those foreign currency borrowings;
and exchange differences on transactions entered into
in order to hedge certain foreign currency risks. Revenue,
expense and cash-flow items denominated in foreign
currencies are translated into the relevant functional
currencies using the exchange rate in effect on the date of
the transaction.

• Foreign currency gain/loss are reported on a net basis

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Mar 31, 2024

2. Material Accounting Policies:

2.1 Statement of Compliance and Basis of preparation and presentation of standalone financial statements

The standalone financial statements are prepared and presented in accordance with the Indian Accounting Standards (Ind AS) as prescribed under section 133 of the Companies Act, 2013 (“the Act”), as amended, read with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and as per the requirements of Schedule III (Division II) of the Companies Act, 2013 and guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable.

These Standalone Financial Statements have been prepared and presented on the going concern basis and on historical cost basis on accrual basis except for certain financial instruments and defined benefits plans which are measured at Fair value or amortised cost at the end of each reporting period

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions, regardless of whether that price is directly observable or estimated using another valuation technique. In determining the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

Accounting policies have been consistently applied.

The Standalone Balance Sheet and the Standalone Statement of Profit and Loss, Standalone Statement of Other Comprehensive Income, Standalone Statement of Changes in Equity are prepared and presented in the format prescribed in Division II of Schedule III to the Act. The Standalone Statement of Cash Flows has been prepared and presented under indirect method as per Ind AS 7 “Statement of Cash Flows”.

2.2 Use of estimates and judgment:

The preparation of the standalone financial statements requires the management to make judgements, estimates and assumptions in the application of accounting policies and that have the most significant effect on reported amounts of assets, liabilities, incomes and expenses, and accompanying disclosures, and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Key sources of estimation of uncertainty at the date of the standalone financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of impairment of investments, useful lives of property, plant and equipment, valuation of deferred tax assets, provisions and contingent liabilities.

2.3 Functional and Presentation Currency:

The standalone financial statements are presented in Indian Rupees which is the functional currency of the company, and all values are rounded to the nearest thousands except otherwise stated. Due to rounding off, the numbers presented throughout the document may not add up precisely to the totals and percentages may not precisely reflect the absolute figures.

2.4 Classification of Assets and Liabilities into Current/Non-Current:

All assets and liabilities are classified as current or non-current as per the Company''s normal operating cycle, and other criteria set out in Schedule III of the Companies Act, 2013.

Operating cycle

Based on the nature of products and the time lag between the development of the products, providing of services, and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months as its normal operating cycle for the purpose of classification of its Assets and Liabilities into Current and Non-Current.

2.5 Revenue Recognition:

The Company derives revenues from Software Products, Solutions & Services.

i. Revenues from software products, in the form of:

a) Software licensing

b) Subscription of software as a service

c) Application maintenance service

ii. Revenue from Software services are mainly in the form of Implementation services/Professional services.

Revenue is recognized in the standalone statement of profit and loss upon transfer of control of promised products or services to customers at transaction price i.e. an amount that reflects the consideration which the Company expects to receive in exchange for those services or products and excluding taxes or duties.

At contract inception, the Company assesses its promise to transfer products or services to a customer to identify separate performance obligations. The Company applies judgment to determine whether each product or service promised to a customer is capable of being distinct, and are distinct in the context of the contract, if not, the promised products or services are combined and accounted as a single performance obligation. The Company allocates the contract value to separately identifiable performance obligations based on their relative stand-alone selling price (mostly as reflected in the contracts) or residual method. Standalone selling prices are determined based on sale prices for the components when it is regularly sold separately. In cases where the Company is unable to determine the stand-alone selling price, the Company uses expected cost-plus margin approach in estimating the stand-alone selling price. For performance obligations where control is transferred over time, revenues are recognized by measuring progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the promised products or services to be provided. The method for recognizing revenues depends on the nature of the products sold / services rendered.

A) Revenue from Software Products:

i. Software Licensing:

Software licensing revenues represent all fees earned from granting customers licenses to use the Company’s software, through initial licensing and or through the purchase of additional modules. For software license arrangements that do not require significant modification or customization of the underlying software, revenue is recognized on delivery of the software and when the customer obtains a right to use such licenses.

ii. Subscription for Software as a Service:

Subscription fees for offering the hosted software as a service are recognized as revenue ratably on straight line basis, over the term of the subscription arrangement.

iii. Application Maintenance Services:

Fees for the application maintenance services, covering inter alia the support of the customized software, are recognized as revenue ratably on straight line basis, over the term of the support arrangement.

B) Revenue from Software Services:

i. Product Support Services:

Fees for product support services, covering inter alia improvement and upgradation of the basic Software, whether sold separately (e.g., renewal period AMC, GST and subscription services) or as an element of a multiple-element arrangement, are recognized as revenue ratably on straight line basis, over the term of the support arrangement.

ii. Implementation / Professional Services:

Software Implementation / Professional Services contracts are either fixed price or time based. Revenues from fixed price contracts, where the performance obligations are satisfied over time, are recognized using the “percentage of completion” method. Percentage of completion is determined based on project costs incurred to date as a percentage of total estimated project costs required to complete the project. The cost expended (or input) method has been used to measure progress towards completion as there is a direct relationship between input and productivity. The performance obligations are satisfied as and when the services are rendered since the customer generally obtains control of the work as it progresses. Where the Software is required to be substantially customized as part of the implementation service, the entire fee for licensing and implementation services is considered to be a single performance obligation and the revenue is recognized using the percentage of completion method as the implementation services are performed. Revenues from implementation services in respect of hosting contracts are to be recognized as revenue ratably over the longer of the contract term or the estimated expected life of the customer relationship.

When total cost estimates exceed revenues in an arrangement, the estimated losses are recognized in the standalone statement of profit and loss in the period in which such losses become probable based on the current contract estimates as a contract provision. In the case of time and material contracts, revenue is recognized based on billable time spent in the project, priced at the contractual rate. Any change in scope or price is considered as a contract modification. The Company accounts for modifications to existing contracts by assessing whether the services added are distinct and whether the pricing is at the standalone selling price. Services added that are not distinct are accounted for on a cumulative catch-up basis, while those that are distinct are accounted for prospectively as a separate contract if the additional services are priced at the standalone selling price.

Non-refundable one-time upfront fees for enablement / application installation, consisting of standardization setup, initiation or activation or user login creation services in the case of hosting contracts, are recognized once the customer obtains a right to access and use the Software.

C) Contract assets, liabilities and financing arrangements:

A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets primarily relate to unbilled amounts on implementation / professional services contracts and are classified as nonfinancial asset as the contractual right to consideration is dependent on completion of contractual milestones (which we refer to as unbilled services revenue). Unbilled revenues on software licensing are classified as a financial asset where the right to consideration is unconditional upon passage of time (which we refer to as unbilled licenses revenue).

A contract liability is an entity''s obligation to transfer software products or software services to a customer for which the entity has received consideration (or the amount is due) from the customer (which we refer to as unearned revenue). The Company assesses the timing of the transfer of software products or software services to the customer as compared to the timing of payments to determine whether a significant financing component exists. As a practical expedient, the

Company does not assess the existence of a significant financing component when the difference between payment and transfer of deliverables is a year or less. If the difference in timing arises for reasons other than the provision of finance to either the customer or us, no financing component is deemed to exist.

Revenue from subsidiaries is recognised based on transaction price which is at arm''s length.

2.6 Other Income:

i. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

2.7 Employee Benefit expenses

a) Short term employee benefits:

All employee benefits falling due wholly within twelve months of rendering the service are classified as short-term employee benefits and they are recognized as an expense at the undiscounted amount in the Standalone Statement of Profit and Loss in the period in which the employee renders the related service on accrual basis. A liability is recognised for the amount expected to be paid when there is a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

b) Post-employment benefits

1. Defined Contribution Plan - Provident Fund

The defined contribution plan is post - employment benefit plan under which the Company contributes fixed contribution to a government administered fund and will have no obligation to pay further contribution. The Company’s defined contribution plan comprises of Provident Fund, Employee State Insurance Scheme, and Labour Welfare Fund. The Company’s contribution to defined contribution plans are recognized in the Standalone Statement of Profit and Loss in the period in which employee renders the related service.

2. Defined Benefit Plan - Gratuity

The obligation in respect of defined benefit plans, which covers Gratuity Plan, is provided for on the basis of an actuarial valuation at the end of each financial year which represents the present value of the defined benefit obligation reduced by the fair value of scheme assets. The employees are covered under the Company Gratuity Scheme of the Life Insurance Corporation of India.

Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the Standalone Balance Sheet with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to Standalone Statement of Profit and Loss.

Defined benefit costs include service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements), net interest expense or income; and re-measurement. The service cost and net interest expense or income are presented in the Standalone Statement of Profit and Loss.

The liability for Gratuity is ascertained as at the end of the financial year, based on the actuarial valuation by an independent external actuary as at the reporting date using the “projected unit credit method”

The discounted rates used for determining the present value are based on the market yields on Government bonds as at the reporting date. Actuarial gains and losses are recognized in other comprehensive income, net of taxes, for the period in which they occur. Past service cost both vested and unvested is recognised as an expense at the earlier of (a) when the plan amendment or curtailment occurs; and (b) when the entity recognises related restructuring cost or termination benefits. The Company recognises gains and losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs.

3. Other Long Term Employee Benefit Obligations:

The employees are eligible for leave as per leave policy of the company. The un-utilised leave can be carried forward and utilised during the course of employment. No encashment is allowed of unutilised leave. The obligation for the

leave encashment is recognised based on an independent actuarial valuation at the reporting date. The expense is recognised in the standalone statement of profit and loss at the present value of the amount payable determined based on actuarial valuation using “projected unit credit method”.

The obligation is measured at the present value of estimated future cash flows.

The rate used to discount defined benefit obligation is determined by reference to market yields at the reporting date on Indian Government Bonds for the estimated term of obligations.

2.8 Share based payment arrangements:

Stock options granted to employees of the Company and its subsidiaries under the stock option schemes approved by the shareholders of the Company on September 13, 2017 are accounted as per the treatment prescribed by the relevant Ind AS and as required by the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

Equity-settled share-based payments to employees are measured by reference to the fair value of the equity instruments.

The fair value determined at the grant date of the equity-settled share-based payments, is charged to Standalone Statement of Profit and Loss on the straight-line basis over the vesting period of the option, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. The employee stock option outstanding account is shown net of unamortised deferred employee compensation expenses.

The fair value of the option being stock option granted for purchase could be exchanged between knowledgeable, willing parties in an arm’s length transaction is recognised as deferred employee compensation with a credit to share options outstanding account.

The fair value has been calculated using the Black Scholes Option Pricing model.

2.9 Property, Plant and Equipment

The expenditure incurred for acquisition or development of Property, Plant & Equipment is recognised as asset if, and only if when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

Property, Plant & Equipment are stated at cost less accumulated depreciation and accumulated impairment losses/allowances, if any.

The initial cost of Property, Plant & Equipment comprises its purchase price, non-refundable purchase taxes and any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management.

Subsequent costs are included in the Property, Plant & Equipment’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of item can be measured reliably. The carrying amount of any component accounted for as separate asset is recognised when replaced. All other repairs and maintenance are charged to the Statement of Profit and Loss during the reporting period in which they are incurred.

The carrying amount of an item of Property, Plant & Equipment is derecognised upon disposal or when no future economic benefit is expected to arise from its continued use. Any gain or loss arising on the de-recognition of an item of Property, Plant & Equipment is determined as the difference between the net disposal proceeds and the carrying amount of the item and is recognised in Statement of Profit and Loss.

If significant parts of an item of Property, Plant & Equipment have different useful lives, then they are accounted for as separate items of Property, Plant & Equipment.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss.

Depreciation method, Estimated useful lives and residual value

Depreciation on Property, Plant & Equipment is the systematic allocation of the depreciable amount over its estimated useful lives and is provided on a straight-line basis from the date the same are available for use. Useful life of Property, Plant & Equipment is in accordance with the useful lives prescribed in Schedule II of the Companies Act, 2013 (as amended).

Pursuant to the adoption of I nd AS, the Company has not revised its estimate useful life of property, plant & equipment and they continue to remain the same basis the table given below:

Depreciation on Property, Plant & Equipment acquired/ disposed-off during the year is provided on pro-rata basis with reference to the date of acquisition/disposal.

Items of Property, Plant & Equipment having cost of 5,000 or less are depreciated fully in the year of purchase/capitalisation.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any change in estimate is accounted for on a prospective basis.

Intangible Assets

Intangible assets are recognised only if it is probable that the future economic benefits that are attributable to that asset will flow to the Company and the cost of the item can be measured reliably. Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses, if any. Directly attributable costs, that are capitalised as part of the software development include employee costs and an appropriate portion of relevant overheads or expenses.

Expenditure incurred on development is capitalised if such expenditure leads to creation of any intangible asset, otherwise, such expenditure is charged to the Standalone Statement of Profit and Loss.

Intangible Assets under Development

Intangible assets under development are stated at cost less accumulated impairment losses, if any.

Expenses incurred on in-house development of courseware and products are shown as Intangible asset under development till the asset is ready to use. Their technical feasibility and ability to generate future economic benefits is established in accordance with the requirements of Ind AS 38, “Intangible Assets”.

Amortisation

Amortization is recognised over their respective individual estimated useful lives on a straight-line basis, from the date they are available for use, as under:

The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any change in estimate being accounted for on a prospective basis.

Software development costs

Research costs are expensed as incurred. Software development expenditures on product / platform are recognised as intangible assets when the Company can demonstrate:

• The technical feasibility of completing the intangible asset so that the asset will be available for use or sale

• Its intention to complete and its ability and intention to use or sell the asset

• How the asset will generate future economic benefits

• The availability of resources to complete the asset

• The ability to measure reliably the expenditure during development.

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortization and accumulated impairment losses, if any. Amortization of these assets begins from the year, following the year in which such development costs are incurred. Amortization expense is recognised in the standalone statement of profit and loss unless such expenditure forms part of carrying value of another asset. Costs incurred in the development of the product, together with repository of new business components, upon completion of the development phase, have been classified and grouped as “Product software” under intangible assets. The costs which can be capitalized include direct labour, license costs and overhead costs that are directly attributable for the development of the intangible asset for its intended use.

2.10 Leases

A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Company as a lessee

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

As a Lessee

The Company''s leased assets consist of leases for office buildings and computers. At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

(i) the contract involves the use of an identified asset

(ii) the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

(iii) the Company has the right to direct the use of the asset.

The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. They are subsequently measured at cost less accumulated depreciation and impairment losses.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of Property, Plant and Equipment. In addition, the right-of-use asset are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss if any, is recognised in Statement of profit and loss.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

• Fixed payments, including in-substance fixed payments.

• Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• Amounts expected to be payable under a residual value guarantee; and

• The exercise price under a purchase option that the company is reasonably certain to exercise, lease payments in an optional renewal period if the company is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the company is reasonably certain not to terminate early.

The lease liability is subsequently measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company''s estimate of the amount expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

Short-term leases and leases of low-value assets:

The Company has elected not to recognise right-to-use assets and lease liabilities for short-term lease that have a lease term of 12 months or less and leases of low-value assets. The Company recognises the lease payments associated with these leases as an operating expense as per the terms of the lease.

Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.

2.11 Borrowing Costs:

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

Borrowing costs that are directly attributable to the acquisition, development or production of a qualifying asset are capitalised as part of cost of that asset, till such time the asset is ready for the intended use. All other borrowing costs are recognized as an expense in the period which are incurred and are charged to the Statement of Profit & Loss.

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

2.12 Derivate Contracts and Accounting:

The Company enters into forward contracts to hedge the foreign currency risk of firm commitments and highly probable forecast transactions. Derivatives are initially recognised at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in the Statement of Profit and Loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in the Statement of Profit and Loss depends on the nature of the hedging relationship and the nature of the hedged item. The Company does not hold financial instruments for speculative purpose.

Hedge Accounting -

• The Company designates certain hedging instruments in respect of foreign currency risk as cash flow hedges. At the inception of the hedge relationship, the Company documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk

• The effective portion of changes in the fair value of the designated portion of derivatives that qualify as cash flow hedges is recognized in other comprehensive income and accumulated under the heading of cash flow hedging reserve. The gain or loss relating to the ineffective portion is recognized immediately in the statement of profit and loss.

• Amounts previously recognised in other comprehensive income and accumulated in equity relating to effective portion are reclassified to the Statement of Profit and Loss in the periods when the hedged item affects profit or loss. However, when the hedged forecast transaction results in the recognition of a non-financial asset or a non-financial liability, such

gains and losses are transferred from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability.

• Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the statement of profit and loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in the statement of profit and loss.

2.13 Cash and cash equivalents:

Cash and cash equivalents in the Balance Sheet comprises of cash at banks and on hand and short-term deposits with an original maturity of three months or less, highly liquid investments that are readily convertible into known amounts of cash and are subject to an insignificant risk of changes in value.

2.14 Income Tax

Income tax comprises current tax expense and the net change in the deferred tax asset or liability during the year. It is recognised in the Statement of Profit and Loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income.

i. Current Tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date in each of the applicable jurisdictions. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company measures its tax balances either based on the most likely amount or the expected value, depending on which method provides a better prediction of the resolution of the uncertainty.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realize the asset and settle the liability on a net basis or simultaneously.

ii. Deferred Tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Company''s financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Deferred tax is not recognised for:

- temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction;

- temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

- taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised, or the liability is settled based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax liabilities are generally recognised for all taxable temporary differences. The company recognises deferred tax assets only when it is probable that taxable profits will be available against which the deductible temporary differences can be utilised.

iii. Minimum Alternate Tax (MAT):

MAT is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised, it is credited to the Standalone Statement of Profit and Loss and is considered as (MAT Credit Entitlement). The Company reviews the same at each reporting date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period. Minimum Alternate Tax (MAT) Credit are in the form of unused tax credits that are carried forward by the Company for a specified period of time, hence, it is presented as Deferred Tax Asset.

2.15 GST Input Tax Credit

Goods and Service tax Input tax credit is accounted in the books in the period in which supply of goods or service received is accounted and when there is no uncertainty in availing/utilizing the credits. The Input tax Credit was claimed in respect of eligible expenses and shall be adjusted against the GST payable as per the provisions of the applicable GST Act. The unutilised input credit under the GST provisions as on the reporting date was disclosed as other current asset in the Balance Sheet.

2.16 Foreign Currency Transactions:

• Transactions denominated in foreign currencies are recognised at the exchange rates prevailing on the date of the transactions. As at reporting date, monetary assets and liabilities designated in foreign currency are translated at the closing exchange rate. Foreign currency non-monetary items measured at fair value on initial recognition are translated at the prevailing exchange rate as at the date of initial transactions foreign currency nonmonetary items measured in terms of historical cost are not translated at the reporting date.

• Exchange difference arising on settlement or translation of foreign currency monetary items are recognized as income or expense in the year in which they arise except for exchange differences on foreign currency borrowings relating to assets (tangible/ intangible) under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings; and exchange differences on transactions entered into in order to hedge certain foreign currency risks. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

• Foreign currency gain/loss are reported on a net basis

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Mar 31, 2018

1 Significant accounting policies

1.1 Basis of preparation of financial statements

These financial statements are prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act, 2013 (‘Act’).

The accounts have been prepared on historical cost basis using the accrual basis of accounting. The preparation of financial statements as per this policy requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as on the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates.

All assets and liabilities have been classified as current or non-current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of services and the time between the acquisition of assets/ inputs for processing and their realisation in cash and cash equivalents, the company has ascertained its normal operating cycle as 12 months for the purpose of current / non current classification of assets and liabilities.

1.2 Revenue Recognition

Revenue is recognized when no significant uncertainty exists as to either the measurement or ultimate realization of the same.

Revenue from Operations

i. Revenue from contracts for development or customization of software is measured using the proportionate completion method and are recognised, provided at the time of performance it is not unreasonable to expect ultimate collection.

ii. Revenue from sale of software/ software licenses which do not involve any customization are recognized upon delivery of the software to the clients and subscription income is recognized as revenue are recognised over the period of the subscription.

iii. Revenue from advertisement, data conversion services is recognised after the performance of the services and it is not unreasonable to expect ultimate collection.

iv. Revenues from maintenance and content contracts are recognised on a straight line basis over the period of the contract.

v. Royalty income is recognised as and when right to receive royalty is established.

vi. When the uncertainty, relating to the collectability arises subsequent to the rendering of the service, a separate provision is made to reflect the uncertainty and the amount of revenue originally recorded is not adjusted.

vii. Unbilled revenue included in ‘Other current assets, represents amounts in respect of services performed in accordance with contract terms, not yet billed to customers at the year end. Income billed in advance included in ‘Other current liabilities’ represents amounts received/billed in excess of the value of work performed in accordance with the terms of the contracts with customers.

Other Income

i. Interest on Bank deposits is recognized on accrual basis.

ii. Rental income is recorded on accrual basis.

iii. Any other income is recognized on accrual basis, when no significant uncertainty as to measurability or collectability exists.

1.3 Fixed Assets

Tangible Fixed Assets are stated at the cost of acquisition less accumulated depreciation. Cost includes incidental expenses incurred during the acquisition/ installation, and excludes taxes and duties for which credit has been claimed.

Intangible assets are recorded at the consideration paid for acquisition of such asset and are carried at cost less accumulated amortisation and impairment.

Capitalisation of Expenses incurred for development of software:

Costs incurred in the development of proprietary software products have been classified and grouped under the heads “Software Developed In-House” & ”Intangible Assets under Development” under Fixed Assets as per the recognition criteria laid down under AS 26 . Expenditure on research is recognised as an expense when it is incurred. Development costs of products are also charged to the Statement of Profit and Loss unless all the criteria for capitalisation as set out in AS 26 - ‘Intangible Assets’ have been met by the Company.

1.4 Depreciation & Amortization

Tangible fixed assets are depreciated on straight line basis over the useful life as specified in Schedule II of Companies Act, 2013. Individual assets whose cost does not exceed RS. 5,000/- are depreciated fully in the year of purchase.

Leasehold Property is being amortised over the remaining leasehold period on straight-line basis.

Software products both proprietary and purchased are amortized over a period of 5 to 6 years on straight line basis, the amortization commences once the said product is available for use.

The useful lives used by the Company on various assets are as below:

1.5 Impairments

At each Balance Sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, management estimates the recoverable amount. Recoverable amount is higher of an asset’s net selling price and value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. If the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognised in the Statement of Profit and Loss to the extent carrying amount exceeds recoverable amount. Assessment is also done at each Balance sheet date as to whether there is any indication that an impairment loss recognised for an asset in prior accounting periods may no longer exist or many have decreased.

1.6 Investments

Long term investments are stated at cost, and provision for diminution is made when in the management’s opinion there is a decline, other than temporary, in the carrying value of such investments. Short term investments are valued at lower of cost and net realizable value.

1.7 Provisions and contingent liabilities

The Company creates a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources would be required to settle the obligation, the provision is reversed. Contingent assets are not recognized in the financial statements.

1.8 Miscellaneous Expenditure including share issue expenses

Preliminary and other miscellaneous expenses and share issue expenses are written off as and when incurred in accordance with the requirements of accounting standard 26.

1.9 Foreign Currency Transactions

The functional currency of the Company is the Indian Rupee (Rs.).

Transactions denominated in foreign currency are recorded using the RBI exchange rates prevailing on the date of transaction, with the loss or gain arising on final settlement being adjusted in the Profit & Loss A/c.

The monetary items denominated in the foreign currency as at the end of the year are translated using the RBI exchange rates prevailing on the date of the balance sheet and the corresponding loss or gain on translation adjusted in the Profit & Loss A/c.

1.10 Prepaid Expenses

Expenses which are incurred in one year and which spill over to the subsequent years are recognised as prepaid on proportionate basis.

1.11 Employee Benefits

Short-term employee benefits including salaries, wages, bonus and other benefits are recognized as expenses at the actual value as per contractual terms & charged to the profit and Loss Account for the year in which the related service is rendered.

The employees are eligible for leave as per leave policy of the company. The un-utilised leave can be carried forward and utilised during the course of employment. No encashment is allowed of unutilised leave. The obligation for the leave encashment is recognised based on an independent actuarial valuation at the Balance Sheet date. The expense is recognized in the statement of profit and loss at the present value of the amount payable determined based on actuarial valuation using “projected unit credit method”

The Company has provided for gratuity payable to employees on the basis of actuarial valuation carried out by an independent actuary as per Projected Unit Credit Method carried out at the closed of the year. The Company makes annual contributions in respect of those employees who have completed five years in service, to the Group Gratuity Cash Accumulation Scheme of the LIC, which is a funded defined benefit plan.

1.12 Taxation

Tax expense for the year comprises of current tax and deferred tax. Current tax is measured by the amount of tax expected to be paid to the taxation authorities on the taxable profits after considering tax allowances and exemptions and using applicable tax rates and laws. Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and tax laws enacted or substantively enacted as on the Balance Sheet date. Deferred tax assets are recognised and carried forward to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. Deferred tax assets in respect of unabsorbed depreciation or carry forward losses are recognised only to the extent there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets is reviewed at each balance sheet date for any write down or reversal, as considered appropriate.

Minimum Alternative Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each balance sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.

Current tax assets and liabilities are offset when there is a legally enforceable right to set off the recognised amount and there is an intention to settle the asset and liability on a net basis.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off assets against liabilities representing the current tax and where the deferred tax assets and liabilities relate to taxes on income levied by the same governing taxation laws.

1.13 Leases

Where the Company as a lessor leases assets under finance leases, such amounts are recognised as receivables at an amount equal to the net investment in the lease and the finance income is recognised based on a constant rate of return on the outstanding net investment.

Assets leased by the Company in its capacity as lessee where substantially all the risks and rewards of ownership vest in the Company are classified as finance leases. Such leases are capitalised at the inception of the lease at the lower of the fair value and the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis.

1.14 Service Tax and GST

Service tax is accounted in accordance with the Guidance note on Accounting of Service Tax issued by ICAI. Accordingly input credit to the extent not utilized for payment of service tax accounted as asset as it would be available for adjustment against Service Tax payable in the future.

With effect from 01st July 2017, Goods and Service Tax Act was made effective replacing Value Added Tax and Service Tax provisions. The Goods and Services Tax, namely CGST, SGST and IGST, hereinaftered referred to as GST, was levied on the services rendered by the Company on the similar lines as was Service tax was levied. The unutilised Cenvat credit as on 30th June 2017 was transfered under the GST provisions. The unutilised input credit under the GST provisions as on the balance sheet date was disclosed as other current asset in the balance sheet.

1.15 Segment reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.

Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under “unallocated revenue / expenses / assets / liabilities”.

1.16 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1.17 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

1.18 Accounting for Employee Stock Options

Stock options granted to employees of IRIS Business Services Limited and its subsidiaries under the stock option schemes approved by the shareholders of the Company on September 13, 2017 are accounted as per the treatment prescribed by the Guidance Note on Employee Share-based Payments issued by the Institute of Chartered Accounts of India as required by the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014. The fair value of the option being stock option granted for purchase could be exchanged between knowledgeable, willing parties in an arm’s length transaction is recognised as deferred employee compensation with a credit to share options outstanding account. The Expense on deferred employee compensation is charged to Statement of Profit and Loss on straight line basis over the vesting period of the option. The options that lapse are reversed by a credit to Expense on Employee Stock Option Scheme, equal to the amortized portion of value of lapsed portion and a debit to share options outstanding account equal to the un-amortised portion.

1.19 Cash and Bank Balance

Cash and cash equivalents include cash in hand, demand deposits with banks and other short term highly liquid investments with original maturities of three months or less.

As per records of the Company, including its Register of Members and other declarations received from them regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.